Taxes are never popular. However, the genuine loathing for air passenger duty (APD) still makes me stand up and take notice.
I cannot remember a good word being said in support of APD from anyone other than Treasury officials. Their motives are obvious APD is an easy way to pour cash into the country’s ailing coffers day in and day out.
Speak to the airline industry and there is not just anger but real concern that APD’s continued existence is actually hindering the UK’s chances of economic recovery rather than helping it.
If ever an argument needs to be heard within the walls of Number 11 Downing Street, that is it.
The campaign to ditch the duty has even brought together great foes, with the big two of BA and Virgin Atlantic, and budget carriers easyJet and Ryanair none of whom are likely to be on the others’ Christmas card lists jointly commissioning a new report by accountants PwC into APD.
The collective view of the four airlines is clear: APD should be scrapped, and the sooner the better.
It is a view echoed throughout the industry, with the effect of APD even being highlighted as a major factor in the demise of two of Dundee Airport’s scheduled flights.
Despite the known stance of those behind the commissioning of the report, PwC insists it did not set out with any bias, and the findings of its final report represent its independent analysis ofAPD.
What it found was this:
* The abolition of APD would provide a short-term boost to the UK economy of 0.45%.
* The average uplift on GDP would be 0.3% until 2020 the equivalent of a £16 billion boost between 2013 and 2015 alone.
* Investment in the UK would increase by 6% over the next two years, and exports rise by 5% over the same period.
* There would be an uptick in business expansion and an increase in overall productivity.
* A possible 60,000 extra jobs would be created between now and 2020.
The PwC number-crunchers estimated the cost to the Treasury on an annual basis of scrapping APD would be between £3bn and £4bn.
However, they said an increase in receipts from other business-related taxes would offset the cost, and concluded the UK Exchequer would actually be better off to the tune of £250 million per annum if APD was ditched.
Inevitably, the crowing chief execs of the four commissioning airlines took the opportunity to give the Chancellor a sound kicking.
They want Mr Osborne to roll over and scrap APD in next month’s Budget, and are not afraid to try strong-arm tactics to get their way. We will have to wait and see whether that happens but if ensconced in Number 11 right now the first thing I would be doing is asking the chief economists at the department to run the numbers again.
If PwC is right, there is only one thing that can reasonably be done. The Chancellor has to say RIP to APD and banish the hated tax for good.Sad loss for Fife business communityI was sorry to hear of the unexpected passing of Fife Chamber of Commerce chief executive Alan Russell last week.
Mr Russell was a strong advocate for the kingdom’s broad-based business community, and was never afraid to put forward his views in the best interests of the members he served.
His untimely death after leading the chamber since 2006 will leave a void that is difficult to fill.
My condolences go out to his family.