Use the budget to cut flight tax to boost the regions and help working families

For a long time now I have been campaigning to reduce the burden of Air Passenger Duty (APD), the tax on passenger flights from UK airport, on working families taking a holiday. I should be pleased that governments in Scotland and Wales have backed the campaign, but this could be actually be a disaster for England.

In 2014, the Chancellor took welcome steps to reduce the amount of APD paid by UK families, firstly by reducing the amount of APD payable on the longest-haul flights, including those to the Caribbean, and, secondly, by exempting children’s flights from the tax entirely. This was a welcome relief for hard-pressed families across the country, including those in Dudley North.

Now the SNP administration in Edinburgh is pledging to take action too. Lurking within the new devolution settlement is a proposal to give Scotland complete control of APD. Recognising the negative impact that high APD rates have on the UK economy (and the competitive advantage that can be gained for Scotland), the Scottish Government has announced that it will cut APD by 50% from 2018, with a view to abolishing it in the longer term, to improve Scotland’s competiveness and boost business and inbound tourism.

Economic modelling has shown that any APD reduction in Scotland alone would have a detrimental impact on airports and other travel businesses in other parts of the UK, and distort what is a highly competitive aviation and tourism marketplace. UK passengers currently pay more than twice as much per flight than those in Germany, which charges the second highest rate in Europe. This makes the UK a less attractive destination for foreign tourists, who end up spending their dollars, yen and renminbi elsewhere. But now, Scotland is set to join the ranks of EU destinations with more competitive rates of APD than the rest of the UK.

Uneven – and unfair – treatment of APD would also make it more expensive for some families to go on holiday or visit family abroad than others. Is it fair for a family from Dudley to pay double the amount of APD to visit relatives as a family from Dundee or Dunfermline?

It’s estimated that Birmingham Airport contributes £1.1 billion to the West Midlands economy in 2014 and supported 25,300 jobs in the region.  Putting regional hubs like Birmingham at such a massive disadvantage compared to airports in Scotland or Wales could have massive implications for jobs and investment.

The Chancellor failed to use the recent Autumn Statement to deliver a further cut in APD for the UK families – he was too busy u-turning on Tax Credits. At the Budget, the Chancellor should significantly reduce APD to at least half the current levels on both short-haul and long-haul flights across all of the UK. The entirety of the UK – not just Scotland – should benefit from a cut to APD.

Ian Austin is MP for Dudley