Scrapping the “destructive” tax on air tickets would give a desperately needed £16 billion boost to the British economy and help create up to 60,000 jobs, a report claims today.
Ditching air passenger duty, which can be as high as £184 for a business-class flight to Australia, would encourage airlines to expand their route networks, increase tourism to the UK and foster business links with the rest of the world.
The study, from consultants PwC, was commissioned by British Airways, easyJet, Ryanair and Virgin Atlantic, which have all campaigned against the tax since its introduction in 1993.
Using a “dynamic” model to predict the impact of scrapping the £3 billion a year duty, it found that GDP would be boosted by 0.46 per cent in the first year and would “pay for itself” by boosting revenues from other taxes such as VAT. It suggests that the net gain for Chancellor George Osborne would be about £500 million in each of the first two years, then falling to £250 million annually up to 2020.
The study describes APD as a “substantial business cost” and says it is “at least as damaging to the UK economy and probably more so, than corporation tax or fuel duty”.
The airlines, in a joint statement, said: “Should APD be abolished, the aviation industry would be able to move quickly to add new flights in and out of the UK, or invest in new products and services, creating new opportunities for businesses and much needed jobs across the UK.”
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