Air duty ‘adds insult to injury’ to tourism
A TOURISM boss is supporting calls to scrap air passenger duty, saying it added “insult to injury” to the UK industry in attracting foreign visitors.
Richard Ellis, chair of Visit East Anglia, said the UK needed to become a lower cost destination in order to help attract more foreign tourists, who tend to be relatively high spenders.
Four top airline chiefs this week urged the Government to axe the Air Passenger Duty (APD) airport departure tax, arguing its negative impact on the UK economy was outweighing any benefit from the revenue raised.
In a rare move, Willie Walsh, chief executive of IAG, owner of British Airways, easyJet chief Carolyn McCall, Ryanair boss Michael O’Leary and Virgin Atlantic boss Steve Ridgway joined forces to oppose the tax.
In a letter to Chancellor George Osborne, they said passenger numbers at UK airports had fallen consecutively for the last three years to a level lower than 2004.
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In 2010, there were 7.4 million fewer passengers in the UK while numbers using European airports grew by 66.3 million.
The bosses also highlighted the case of Holland, where an air tax scheme was abandoned after a year as its harmful effects on the Dutch economy were nearly four times greater than the revenue it produced.
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Mr Ellis said the added costs were putting the UK at a disadvantage to other countries.
“The problem is that the UK is already seen as a high cost destination. We have a very high rate of VAT which is applied to our restaurants and our hotels. Airline passenger duty adds layer on top of layer,” he said. “This puts us at a price disadvantage at a time when we are trying to attract more visitors to the country.”
The London 2012 Olympics looming, visitors were already facing higher VAT on meals and hospitality where in some other European countries it was set at 8%, he pointed out.
“We are already seen as a high cost destination, particularly with the rate of VAT, and this just adds insult to injury,” he said.
“At the end of the day, you want more people to come and you want them to spend more money.”
Once foreign visitors arrive in the country, they tend to spend a lot of money as they stay at destinations longer than domestic tourists, he said.
The airline chiefs have challenged the Chancellor to commission an independent report on the true economic effects of aviation tax in Britain. The �115bn tourism industry is one of the UK’s biggest earners, they said.