Last November there was a further increase in the Air Passenger Duty (APD) we UK based flyers pay. Next November it will go up yet again. In Ireland, a similar tax is blamed by Ryanair for a substantial fall in the number of people visiting there and its decision to maintain quite so many planes at Dublin. It has concerned some countries that their tourism is being affected so the Netherlands has abolished the tax.
The UK is one of the most heavily taxed, if not the most heavily one for airline flights. But it doesn’t only hit people in the UK. Because of the high cost, overseas countries that rely on tourism for substantial national income are worried we won’t travel there.
Take the Caribbean
Because of a badly thought out system of taxation, travelers to the Caribbean pay more APD than if you were to fly to the west coast of the USA despite the fact that the distance is less. So last week, this incongruity was raised in parliament by Roger Godsiff, an MP who has a high number of constituents with links to the Caribbean. Was the government sympathetic? No the answer that Sarah McCarthy Fry gave on their behalf was that it would not be straightforward to reform the APD. Six months after consideration began, they still have not found a solution. Despite the fact that the issue has been raised face-to-face by Caribbean politicians, nothing has happened.
For a start, if you had to have this tax at such an oppressive rate, you could tax it on the number of miles flown after you leave a UK airport. (that way you wouldn’t penalize domestic tourism) instead of the four bands, we currently have. It is not only the Caribbean that is affected. People flying to Egypt pay at the same level. The Dutch dropped the tax. They worked out that it caused a net loss of €900 million per year because of not having the tourists. Polls show people think it is unfair but you can understand why the government is reluctant to drop a cash cow that gives them billions per year. But they can’t see how much is being lost to the UK by the loss of visitors. Sooner or later as we compete for the tourism spend we will lose to those that charge less. Will their eyes ever open?