BATA: Air passenger tax is easy money

Last week, Jeremy Hunt the Culture Secretary, set out his visionto capitalise on the post-Olympic “feel good” factor that the UK has undoubtedly earned on the world stage through the delivery of what is widely acclaimed as one of the most successful Olympic Games of the modern era. In short, he announced that £8m of additional funding would be allocated to VisitBritain to market the UK in China and £2m of additional funding would be allocated to VisitEngland to continue this year's very successful domestic tourism campaign. The intention is to treble the somewhat paltry figure of 180,000 Chinese tourists visiting the UK each year by 2015.

The UK is currently underperforming compared to our European rivals in attracting foreign tourists, especially those from emerging world economies, and given the importance of tourism to the UK economy, this needs to be addressed urgently.

But will this marketing campaign be enough? Jeremy Hunt concedes that another big obstacle for many non-EU tourists in visiting the UK is the cost and complexity of applying for a visa. This is a hurdle that those same tourists visiting most other EU States do not have to jump. Mr Hunt aims to “streamline” the visa application process although it would appear that this has not gone down well with Theresa May at the Home Office and we may yet see this initiative stifled.

But this is not the only obstacle to boosting the number of tourists from the BRIC (Brazil, Russia, India and China) countries. The most visited region of the UK, the south east, is facing a potential airport capacity crisis. Our major airports capable of attracting traffic from these long haul destinations are bursting at the seams. Instead of addressing this issue with the urgency it deserves, it festers on the Coalition Government's “Too Difficult To Deal With” pile and the promised public consultation on a way forward has already been deferred twice in the last twelve months.

The other impediment to attracting more tourists is the UK's outrageously high tax on flying known as Air Passenger Duty (APD). Introduced in 1994, the tax has been seized upon by successive UK administrations as “easy money” to help fund the public deficit and has been increased by up to 1700% since that time, so much so that a family of four travelling on a round trip from China to the UK have to pay a minimum of £324 in APD. This compares to £36 from France or £132 from Germany for example.

In fact the Treasury collected more than twice as much in passenger taxes in 2011 than all other European countries that levy a tax combined. Let's be quite clear about this tax. There is no longer any pretence that APD exists for environmental reasons. It is simply a cash grab and one that has perpetuated and swollen to existing levels – approximately £2.6bn per year – simply because nobody has complained. To misquote a past Chancellor of the Exchequer, the Government no longer has this excuse because the pips are now well and truly squeaking. In the last eight weeks, over 100,000 people have sent emails to their MPs through www.afairtaxonflying.orgexpressing their opposition to the unacceptable level that APD has now reached. More people are supporting the campaign every day and it is time for George Osborne to listen