Job creation and economic growth at risk as UK raises APD - again

Job creation and economic growth at risk as UK raises APD - again

The news that the UK Chancellor of the Exchequer has once again chosen to raise Air Passenger Duty (APD) is economically self-defeating – as research by the World Travel & Tourism Council (WTTC) continues to show.

Research conducted for WTTC by Oxford Economics earlier this year shows that removing Air Passenger Duty would result in an additional 91,000 British jobs being created and £4.2 billion added to the economy in 12 months.

David Scowsill, WTTC President & CEO, said “Travel & Tourism, of which aviation is the fundamental driver for the UK, generates 2.3 million jobs and contributes over $100 billion to the UK economy every year. While the UK Chancellor’s statement stresses the need for the UK economy to find growth opportunities, he has chosen to further tax an industry that helps to sustain millions of jobs in the UK. This tax is damaging the economy at a crucial time, and is having a negative effect on trade with countries in the Caribbean, Africa and Asia. Rather than recognising the impact of APD on the overall economy and reducing Air Passenger Duty, the UK has opted to further harm the economy and prevent job creation.”

To view the full study: Air Passenger Duty Commissioned Research

The research was conducted by Oxford Economics for the World Travel & Tourism Council in March 2012. The research examined how sensitive passengers are to changes in fares, based on statistics from the Department for Transport and Intervistas. DFT estimates show a lower sensitivity than estimates by Intervistas.

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Oxford Economics concluded that:

- Abolishing Air Passenger Duty would have raised the UK “gross value added” by between £1.8 billion and £2.9 billion in 2012 due to the boost to aviation and tourism sectors from increased passenger numbers This would have created an extra 38,000 to 61,000 jobs

- The extra income available for consumers from lower airline ticket prices provides a stimulus to consumer spending, and could raise the UK “gross value added” by £1.3 billion and 30,000 jobs.

- The overall benefit to the UK economy could be up to 91,000 jobs and £4.2 billion