Britain is Open for Business – Almost

dale_keller

Dale Keller DipM ACIM
Chief Executive, The Board of Airline Representatives (BAR UK)

Last week businesses up and down the country welcomed the long awaited Government decision to provide additional runway capacity by announcing the expansion of Heathrow airport.

This was an important moment – not only ending years of uncertainty, but crucially, in a post-Brexit world, it was a bold statement to the rest of the world that Britain is an outward-looking, trading nation, and that it is open for business.

Well almost.

As important as the Heathrow decision was, Graham Brady MP, Chair of the Conservative Party 1922 Committee and long-time supporter of the ‘A Fair Tax on Flying’ campaign to cut air passenger duty (APD), was right to point out to the Secretary of State for Transport that this decision alone does not quite do enough to signal that Britain is open for business. Rather, what is needed is a cut to air passenger duty:

‘A global trading nation clearly needs world class infrastructure and I think this is the right judgment in the national interest. Will my Right Hon. friend reflect on the damage done to our international competitiveness by this country maintaining the highest level of taxation on aviation?’

 

As Mr Brady MP rightly points out, the UK has the highest level of aviation tax in the world – five times higher than the global average and more than twice as much as our nearest global competitor, Germany. How can Britain be considered open for business when we have such a punitive tax regime?

Furthermore, it is often overlooked that all the major airports in the UK are privately owned and funded via passenger charges collected by airlines in the airfare and other commercial revenues. The UK taxpayer benefits enormously from this level of private investment in vital national infrastructure – and yet not a penny from the £3.2bn the UK Government raises annually from passengers through APD is invested back into aviation.

What is the consequence of all this?

Layering costs onto the UK’s connectivity is harming our competitiveness, stifling economic growth, and exporting jobs. Airlines are principally economic enablers, and the true value of the UK’s aviation connectivity reaches far beyond the actual goods and persons travelling by air. Research by PwC has shown that scrapping APD altogether could create 60,000 jobs and boost the economy to the tune of £16bn.

That’s significant. And that would be the result of Britain being truly open for business.

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