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Response to the Pre-Budget Report 2008

Plane at take-off

In the wake of Alistair Darling's Pre-Budget Report and the news that the Government plans to continue with Air Passenger Duty (APD), the reaction among the travel industry has one of disappointment.

In an effort to kick-start the UK economy, the report, which sees VAT cut to 15% and reductions for basic rate taxpayers, also details plans for the revision of the widely-derided APD, with those travelling the furthest - and thus having greater environmental impact - meeting the cost.

For example, under the new changes, a flight to Australia - which already features a minimum APD of £40 - will cost £20 more from November 2008, and £45 more from November 2010.

In response to the report, Andy Harrison, chief executive at easyJet, said: "I am dismayed that the Chancellor has failed to carry through his commitment to reform a bad tax. All parties agreed that APD needed to be changed to a tax on planes not people, but now the Government has succeeded in bodging-up the reform of an already bodged tax. He has made a bad situation worse by increasing the burden of APD on hard working families.

"The Chancellor said that he wouldn’t allow the economic crisis to 'push aside the importance of protecting the environment', but his green credentials have been brushed aside in a dash for cash and the emissions from cargo planes, private jets and transfer passengers continue to be tax free. So, Roman Abramovich, FedEx and Heathrow’s transfer passengers will continue to be exempt, but hard-working families going on their summer holiday on environmentally-efficient, low-fare airlines will now pay even more!"

ABTA - the Association of British Travel Agents - also released a statement expressing their disappointment at the decision.

Andy Cooper, head of development: "The travel sector has not yet felt the full effect of the recession, but travel lags behind the rest of the economy by about six months and we are facing an extremely challenging 2009. The money being raised from APD will not be hypothecated to go to environmental causes, but will just end up in general Government coffers, despite being grouped under the heading on how the Government will deliver on Environmental Goals."

Published by: Michael Johnson