"The UK Government's decision to increase the
Air Passenger Duty (APD) for departures from UK airports from this
coming November shows that it continues to underestimate the
economic importance of travel and tourism," said Jean-Claude
Baumgarten, President & CEO of the World Travel & Tourism Council
(WTTC), adding support to the widespread opposition already voiced
by the industry around the world.
"We strongly endorse the government's decision
to review the level of duty proposed for air travel to the
Caribbean," Baumgarten added, "since this is particularly unfair.
It is based on an illogical system of bands that means travellers
will pay a lower tax to travel to many points of the USA that are
much farther from London than any island in the Caribbean.
"But we believe the overall APD system should be scrapped," he
WTTC maintains that the government's move to increase
the APD is very short-sighted given the current recession, since
travel and tourism has the potential
to kick-start the economic recovery by stimulating continued
spending on travel, thereby generating much needed employment.
"Of equal concern is the fact that the APD is billed as an
environmental tax, yet none of the money so far collected has been
hypothecated and ploughed back into either the environment or the
industry," Baumgarten added.
Even more seriously, the
President and CEO of the WTTC noted, the fact that the imposition of
this tax will reduce UK tourism spending in developing countries
undermines the UK Government's claims to be supporting the
Millennium Development Goals, aimed at alleviating poverty and
generating employment in emerging markets.
"The APD acts as
a distortion to free trade," said Baumgarten, "and this will
ultimately work against the Millennium Development Goals by
crippling regions most in need of travel and tourism to run and
support their economies.
"Take the example of the
Caribbean," Baumgarten added. "UK spending on tourism in the
region totalled £1.45 billion in 2008 - a significant contribution
to these island nations, for which the travel and tourism economy
contributes 14.5% of total GDP."
Despite the challenges of
the current recession, the travel and tourism industry has not
requested any direct public sector subsidies, Baumgarten argued.
But it should not discourage travel - nor use the industry as a
cash cow to try to fill the Treasury's depleted coffers. Instead,
the government should be looking to provide a supportive policy
framework to help sustain demand through the downturn and ensure
that valuable aid to developing countries is not cut off by a
reduction in travel by UK citizens to those destinations.
The increased APD, which is being implemented in two stages, from
November 2009 and November 2010, and which primarily penalises
long-haul travellers, will mean a 112% rise in departure tax on a
flight to Australia from the end of 2010.
will have a very damaging effect on demand," said Baumgarten, "and
at a time when demand is already very sluggish due to the
recession and factors such as the H1N1 influenza virus.
"Moreover, the move which is intended to help reduce carbon
emissions is also likely to backfire," Baumgarten added, "since
passengers travelling to long-haul destinations will probably
choose to use airports in continental Europe as their departure
point for their long-haul flights. This would likely increase
short-haul flights out of the UK, and so end up increasing, rather
than decreasing, carbon emissions."
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