Simon Buck, BATA Chief Executive has commented on today’s promise by Deputy PM Nick Clegg to give new special priority status to upto 40 of the biggest national infrastructure projects most important to Britain’s future growth prospects.
In response to the letter from 20 leading economists in today’s Financial Times arguing that the 50p tax rate is damanging the UK economy, Simon Buck, Chief Eecutive of BATA that the same logic can be applied to the “exorbitantly high” levels of Air Passenger Duty.
BATA has commented on today’s revised Government forecasts of demand for air travel that show a slashing by 25% of passengers travelling through Britain’s airports in twenty years time, compared to forecasts produced just two years ago.
A campaign to persuade the Chancellor to drop planned hikes in the tax levied on all flights leaving the UK is being launched at airports across the country as a new poll is released showing 3 out of 4 people think that Air Passenger Duty (APD) should not go up in the next Budget.
Flight Tax Costs UK 25,000 Jobs
Simon Buck, Chief Executive of BATA said:
“Britain has the highest taxes on flying in the world with a family of four paying at least £240 in tax on a sunshine holiday to Florida for example. Next April, the Chancellor is planning to increase these rates even further – by twice the rate of inflation. The tax is due to raise more from air passengers than the tax on the banks over the next five years.
Not only is this extortionate rate of tax punishing families, it also makes Britain a less attractive place to do business or for foreign tourists to visit. Tourism is Britain’s third largest export earner and is worth over £90billion to the UK economy each year. Around 75% of tourists visit Britain by air but this Government seems oblivious to the damage the high tax is causing.
The numbers of passengers travelling through Britain‟s airports is at its lowest level for 7 years. This is why we are today calling for the tax on flying to be scrapped. A number of other European countries, such as Ireland and Holland, are doing similarly and have either scrapped or are scrapping their taxes on flying because they recognise the damage such taxes have on tourism in their countries. Without the drag of the highest taxes on flying in the world, the UK would enjoy a much needed boost in tourist numbers that would help kick start the faltering British economy and ultimately prove far more beneficial for British jobs and investment than would a blunt tax on flying. If the tax was scrapped, UK tourism earnings would be boosted by over £1 billion per year and 25,000 jobs would be created.”
BATA Supports IATA Concerns About Air Tax
Simon Buck, Chief Executive of the British Air Transport Association (BATA), commenting on the International Air Transport Association (IATA) meeting in Singapore said:
“BATA supports IATA’s concerns that the high tax on aviation is damaging to the UK economy. By imposing the highest taxes on flying in the world, the UK government displays a lack of joined up thinking, when at the same time it is trying to boost the UK tourist industry by attracting more overseas visitors. High tax also disincentives inward investment and decreases the UK’s competitiveness in the global marketplace.”
The speech by Chief Executive Simon Buck at the BATA Parliamentary Reception is available here. Other speakers at the Reception included Graham Brady MP, Rt Hon Theresa Villiers MP, Aviation Minister at DfT and David Frost, Director General of the British Chambers of Commerce.
Speech by Simon Buck, Chief Executive of the British Air Transport Association at a Reception hosted by Graham Brady MP and held in the Houses of Parliament on Wednesday 18th May 2011.
Welcome on behalf of BATA to members of both houses of parliament, BATA members and associates, all of whom we are delighted to have with us today.
My name is Simon Buck, Chief Executive of the British Air Transport Association (otherwise known as BATA) and it is a pleasure to see you all today. Firstly,
May I thank you Graham for very kindly hosting this reception for us today.
I’d like to say just a few words about BATA and the key role that aviation plays in the UK economy.
BATA is the trade body for UK-registered airlines, with members representing all sectors of the industry, scheduled, charter, low-cost, regional and cargo. BATA members employ over 71,000 people, operate over four-fifths of the UK commercial aircraft fleet and are responsible for some 96% of UK airline output, carrying 119 million passengers and 1 million tonnes of cargo each YEAR.
Aviation is sometimes referred to as the real world wide web and plays a crucial role providing international connectivity for our island nation. Domestic air links also fulfil an essential role for the remoter parts of the UK regions – it’s important to note that about 85% of these air routes are over water and could not realistically be substituted by high speed rail.
In terms of economic impact, aviation contributes over £50 billion a year to UK GDP and supports almost a million jobs. Aviation also raises almost £9 billion in tax and duty each year for the government. Not bad for an industry that some say is undertaxed.
But enough of dry statistics. Airports play a vital role in the regional economies of the UK serving as a magnet for business, providing regional connections both nationally and internationally. Nearly everybody in the UK has at some time flown by plane and the vast majority hope to fly as often or more frequently in future – be they residents of West Dorset or Sheffield, no
Matter what the reported view of some politicians may be! Visits by British citizens overseas not only enrich our own lives but help provide much needed revenue for many developing countries who rely on tourism as the main part of their economy.
Even within the UK, the prime minister has identified tourism as the third highest export earner behind chemicals and financial services, playing a vital role in rebalancing our economy. Indeed, about three out of four overseas visitors come to the UK by air. However, the tax take on flying, known as air passenger duty, has soared by 16% in the last year and more than doubled in the last five years. At the same time, air passenger numbers have now dipped to their lowest level for seven years. While the recent decision by the chancellor not to increase the tax this year is to be welcomed, his announcement that the tax will rise by twice the rate of inflation next year will do nothing to make the UK a more affordable place to visit or boost our faltering tourist numbers. APD already raises more than the tax on the banks known as the bank levy and will cost air travellers over £15 billion the next five years. We urge him to listen to the fair tax on flying campaign, in which BATA plays a key part, and reconsider this decision – especially in the light of aviation entering the EU emissions trading scheme from 1st January next year.
ETS will offer a far smarter way of addressing aviation’s environmental impact than a blunt tax that simply makes the UK uncompetitive and increasingly unaffordable both for business and tourism alike.
We would, in fact, go further and urge the chancellor to follow the example set by the new irish coalition government that has recently announced it will be scrapping its tax on flying and instead challenging its airlines to increase tourist numbers thus boosting the Irish economy. Mr Osborne, British airlines and the entire British tourism industry would welcome a similar fiscal initiative and challenge!
Over the last few years, BATA has been playing a significant role in the sustainable aviation initiative. This initiative is unique in the UK transport sector in representing a proactive coalition of airlines, airports, engine and airframe manufacturers and air traffic management providers to address aviation sustainability issues. Great strides have been made in recent years in improving the environmental performance of aircraft but we are committed to working together further to improve aviation’s environmental performance and ensure sustainable growth. We recently published our latest progress report and copies of the two page executive summary are available for you to take away.
A sustainable aviation policy is essential for our future ability to compete in the world economy and attract new business to the uk. The government has published a scoping document as the first step in developing its aviation policy framework. We will be responding robustly and I urge all who care about
Our future as a successful trading nation, with the capacity to compete on a global level, to respond positively. We have a chronic shortage of runway capacity in the south-east of England and it is not a viable or practical solution to seek to disperse this traffic elsewhere in the UK when the vast majority of people using London’s airports do so either because they live in London or the south-east or are visiting London. In fact making these people travel further to reach an alternative airport outside London could of course increase emissions which is nonsensical.
It is vital that not only the voice of the aviation industry is heard when responding to the government’s consultation document, but that other voices from influential third party advocates are also heard. To that end, I am very pleased that David Frost CBE, director general of the British Chambers Of Commerce is with us today and will say a few words.
But just before I hand over to David, may I remind our parliamentary guests that we will shortly be making a charity prize draw for two return tickets to New York, kindly donated by Virgin Atlantic airways, to donate to a children’s or young person’s charity in your constituency or locality, so please do stay with us for that and enjoy a glass of wine and some lunch. I am pleased that representatives of BATA member airlines and BATA associate members are here today to talk to you about any issues or matters you would like to discuss with them, so please make sure they are gainfully employed.
BATA Responds to Transport Select Committee Report on Airport Winter Weather Failings
Responding to the Transport Select Committee’s report into the impact on transport of the weather last winter, Simon Buck, Chief Executive of the British Air Transport Association, which represents UK airlines, said:
“We welcome the thrust of the report and hope that it will help in the process of ensuring that passengers and airlines do not suffer a similar experience in the future. Last December BAA failed in its operations at Heathrow on many counts and we sincerely hope that lessons have been learned and acted upon. Passenger safety, security and welfare are top priorities for BATA airlines and I am sure that they will continue to engage constructively with BAA and others to meet passenger needs and allow a properly functioning air transport system.
We do however query the Committee’s call on the Government to allow airport operators to reclaim the cost of looking after passengers when there is no equivalent right of redress for airlines when airport operators so obviously fail in keeping their airports open.
It is worth also remembering that airports and airlines can only continue to function if roads and rail links to them are open and that therefore there is a wider responsibility amongst local and central government, agencies and transport providers.”
Comment on Publication of UK Government Tourism Policy
Simon Buck, Chief Executive of the British Air Transport Association (BATA), responding to today’s publication of the Government’s Tourism Policy, said:
“We very much welcome the fact that there is a Government tourism strategy, albeit one that largely ignores the three main obstacles to developing tourism to and from the UK which are the taxation of flights, the cost of visas for foreign visitors and a lack of airport capacity in the South East of England. According to ONS figures, outbound tourism contributes £15 billion to the UK economy and supports many thousands of jobs as well as enriching the life experience of millions of UK families. Regrettably, this important sector is effectively dismissed by the Government’s strategy.”
Comment on APD Announcement In Budget
Simon Buck, Chief Executive of the British Air Transport Association, in response to today’s Budget Statement by the Chancellor said:
“Two cheers for George Osborne for not increasing the tax on flying in the Budget but nul points for instituting an inflation linked increase, where none existed before, deferred to next April. Air passengers will pay £2.5 billion this year in Air Passenger Duty – far more than the assessed environmental cost of their journeys. This tax damages UK tourism and should be reduced to help boost Britain’s economic recovery.”
