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Government urged to scrap 'hugely anti-competitive' Air Passenger Duty

Published 08/09/2016

IAG chief executive Willie Walsh said abolishing the tax would have a
IAG chief executive Willie Walsh said abolishing the tax would have a "net positive impact" on the UK economy

The UK should scrap Air Passenger Duty (APD) so foreign tourists are not charged to fly home, the boss of British Airways' parent company has said.

IAG chief executive Willie Walsh said it was wrong for the Government to "spend hundreds of millions of pounds to attract people to come to this country only to charge them when they want to leave".

Mr Walsh was speaking at a media event in north London held by Airlines for Europe (A4E), a lobby group representing carriers such as easyJet and Ryanair.

A report published by the organisation claimed that abolishing APD would boost UK GDP by 1.7% and create 61,000 new jobs by 2020.

It stated that passengers had paid £31 billion since APD was introduced in 1994 and the UK had the highest aviation tax in the world.

The tax rate for economy passengers is £13 for short-haul trips and £73 long-haul. For higher classes the rate is £26 short-haul and £146 long-haul.

EasyJet chief executive Dame Carolyn McCall told reporters: "If you're flying to Scotland and back currently you're paying nearly £30 in APD. Our tickets aren't even that. That is more than the price of a ticket."

She added: "We believe at A4E that that is hugely anti-competitive for Britain. "

Dame Carolyn went on to say there was "ample evidence" around Europe to show that flight taxes were " counterproductive ", such as in Ireland, the Netherlands and Italy.

Mr Walsh commented: " Suppressing growth is not what this economy needs. We need to pursue growth and it's very clear that a quick win is to abolish this tax because it will have a net positive impact on the UK economy."

He revealed that he had told Transport Secretary Chris Grayling that APD was a "huge factor" in IAG deciding where to put its aircraft.

"What I made very clear to him is that in this new environment with the UK outside the European Union, looking to trade with other nations in a way they believe there are opportunities, Air Passenger Duty is a huge factor and it will and does influence decisions," he said.

"I think you've got a new Cabinet, a new Government, that is very focused on these issues and probably better appreciates them than the previous Cabinet," he added.

Earlier this week the Scottish Government announced its intention to halve and eventually remove APD.

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