Scottish agents say Chancellor’s air tax increase is ‘short-sighted’

Scottish air passenger duty
By Linsey McNeill
06/03/2024
Home » Scottish agents say Chancellor’s air tax increase is ‘short-sighted’

Travel bosses in Scotland are warning the Chancellor’s increase in air passenger duty will harm the industry’s recovery.

Scottish Passenger Agents’ Association (SPAA) President Jacqueline Dobson described the move, announced in Wednesday’s Budget, as ‘disappointing’.

“This is a short-sighted move that will damage the ongoing recovery of the travel industry and the wider economy, especially in Scotland where we rely on international connectivity,” she said.

“The level of UK APD is already one of the highest in Europe and this increase contributed further to making the country less competitive.”

The biggest rate rises are for non-economy travellers, but Jac said that increasing the cost of premium travel will make it harder for Scottish businesses to compete globally ‘and attract investment and talent to Scotland’.

“It will also discourage high value inbound visitors, who contribute significantly to our hospitality and cultural economies,” she added.

“We urge the UK Government to work with the Scottish Government and the industry to find a fairer and more sustainable way of taxing aviation. 

“We need a system that supports the growth and recovery of the travel sector, while also addressing the environmental impact of flying and encouraging the development of greener technologies and fuels. 

“APD is not the answer to either of these challenges.”

Aberdeen-based travel management company Munro’s Travel warned the rise could have a negative impact on the Scottish economy, especially in the energy sector.

“The increase will impact the cost of travel for business clients, who rely on international flights to conduct their operations and trade,” said MD Murray Burnett.

“We would like to see the UK and Scottish governments support the business travel industry, which is vital for the recovery and growth of the UK. 

“We hope that the government will listen to the voices of the business travel community and work with us to find a sustainable and balanced solution for aviation that does not penalise our customers and partners.”

However, Steve Witt, co-founder of UK travel agency franchise Not Just Travel welcomed the 2p cut in National Insurance, which was also announced in Wednesday’s Budget.

“Any move that helps put more money in the pocket of the consumer is a good thing. This will help build confidence and create more disposable income,” he said.

“Given holidays are always in the top three desirable products and spend, it is likely to help boost the travel industry. Measures that raise consumer confidence and spending are always a positive step for the travel industry.”

Meanwhile ABTA Chief Executive Mark Tanzer warned that personal tax burdens remain high, despite the 2p National Insurance cut. “Travel and tourism have flourished in the past year despite this wider economic backdrop but it remains to be seen if this move will create a new ‘feelgood factor’ which encourages bookings,” he said.

However, he said ABTA welcomes the Chancellor’s extension of the COVID recovery loan scheme, which provides access to Government-backs finance for small and medium-sized businesses.

“ABTA has been speaking regularly to government about the pressures facing ABTA members and we continue to urge the Government to work with banks to ensure leniency around repayment timelines to help businesses recover from the pandemic,” he said.

“The increase in Air Passenger Duty on non-economy-class flights must not become the thin end of the wedge. 

“ABTA’s research shows that travel and tourism can grow faster than the rest of the economy over the next few years but only with the right policy framework. 

“Any additional or new taxes on aviation have the potential to be a drag on our sector, at a time when the UK already has one of the greatest air travel tax burdens in the world.”

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