Article: APD woes take the 'great' out of Great Britain


Reprinted from THE BUSINESS TRAVEL MAGAZINE May/June 2013

George Osborne's increase in Air Passenger Duty in the April budget is another nail in the coffin for UK PLC, says Colin Brain of Management Solutions UK

Can anyone tell me what good Air Passenger Duty (APD) is doing for the country? It is clear to anyone with an eye for business that it is not helping get UK Limited back on its feet.

In fact, it seems detrimental to the whole of British business, including what is left of the British airline industry. Recently the regional airline Flybe announced that 'double' APD charges left it 'no choice' other than to cut hundreds of jobs.

The Exeter-based airline has announced 300 job cuts, which amounts to ten per cent of the UK "workforce and which will affect a fifth of management team as well as support and production staff.

The group claims it is hit particularly hard by APD. as it is charged both ways on domestic flights that account for 18 per cent of its ticket revenues.

In spite of extensive lobbying from travel trade bodies (including ABTA and the STMC) and the public at large, George Osborne is determined to maintain his stranglehold on the UK aviation industry with a tax that is 30 times higher than a comparable tax paid elsewhere in Europe - a rise of 325 per cent in recent years (the pay day loanees would be happy to see such a rate of interest!).

From April this year a British businessperson needing to travel to the growing markets of Brazil, India or China starts off £180 down if he/she flies from London or Manchester.

Of course there are always ways to 'avoid tax' - just ask a comedian or an American coffee chain or indeed our 'security' for the London Olympics. To avoid APD on flights to Canada or North America, look into travelling via Belfast or Dublin.

Travelling to South America via Madrid or Lisbon with two tickets might be worth a look and, as for travelling east, then flying via Amsterdam and paying the surcharge for a suitcase might be a lot cheaper when starting off with easyJet or Ryanair from one of many regional airports across the country.

Successive UK governments have not handled the travel industry well ever since the end of World War II. Our 'London' airports have swerved from Croydon, to Northolt and then Heathrow, with satellite airports called into play at Gatwick (with an inadequate number of runways), Luton (just plain inadequate) and Stansted with its built in expansion problems.

Furthermore, we have allowed the ownership of our airlines to fall into the hands of foreign financiers, the same way we have allowed our airports to be owned and managed from overseas.

On rare occasions a politician will stick his or her head over the parapet with what is seen as a 'wild' idea by naysayers. Right now I take my hat off to 'Bojo'. An integrated transport policy could be just what we need to get Britain back into business.

Back in the 1930s the world was in a similar recessional state and one great politician felt that the only way that his country could survive was to build. And so the New Deal was created in America which saw thousands of miles of new roads built across the country.

The money paid to the workers led them to buying cars, which resulted in the growth of the car plants in Detroit and the mining industry in Minnesota where the raw iron ore was found, transported by ships across the great lakes and converted into steel.

If we ever want to be able to use the word 'Great' again for Great Britain we have got to find ways to reduce unemployment and build an entire new transport infrastructure, as envisioned by Norman Foster. He takes Boris Johnson's idea and sews it together with road and rail access, which could be our New Deal here in the UK.

Now if our taxes could be used for this kind of project then I for one would happily pay the piper and even dance to the tune!

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