MPs as a group often get a raw deal with the media but pretty much every MP I’ve ever met generally sticks up for jobs in their local area – MPs in rural areas for farming, Scottish MPs for the whisky industry, MPs in or near Portsmouth for the Royal Navy... you get my drift?
Likewise, I’ve always taken an interest in travel and tourism and associated taxes as Thomas Cook has maintained its headquarters in our city for over 40 years and what’s good for Thomas Cook is good for Peterborough.
The travel and tourism sector is the UK’s fifth largest industry, supporting 3.1m UK jobs (roughly 10% of the UK workforce) and accounts for one third of all new employment in the UK since 2010. Aviation alone contributes £50bn of UK GDP and generates £8bn in Treasury revenues.
A growing economy means more folk can think about taking family holidays and anything that deters them is a bad thing – which brings me to Air Passenger Duty – a tax on which I have campaigned for many years.
This week I signed a Commons motion and wrote to the Chancellor George Osborne ahead of next week’s Autumn Statement calling for the scrapping of APD for children under 12 in order help to make an annual holiday more affordable for hard working and hard pressed families in Peterborough and across the UK.
There is a well-established principle that children are mostly exempt from taxes such as this. For example, children’s goods are zero-rated for VAT. APD adds £52 to the cost of a family of four’s economy class flights to destinations in Europe and £276 to economy class flights to destinations such as the US. This is a significant cost on families that strive to save for their holiday each year. Research has shown that a family holiday is fundamental to the health, well-being and emotional development of children and is an essential part of a happy family life.
In August the Government pledged to put families at the heart of policy-making with a test to ensure all domestic policies help family life. APD acts against this stated aim.
Currently, only four other European countries levy a similar tax and UK passengers on average pay more than three times as much tax on their flights as German passengers and almost thirty times as much as French passengers. The Netherlands, Denmark and the Republic of Ireland have all abolished their departure taxes in recent years. Why should UK families be taxed so much more to travel on their annual holiday than their German, French, and other European counterparts?
Abolishing APD for children will I concede reduce the Exchequer’s revenues from APD by £50m-60m (equivalent to only 1.6% of the £3 billion the Treasury is expecting to raise from APD in 2014/15). Families flying abroad already contribute significantly to the economy. The outbound tourism sector contributes £54.2bn (3.8%) of UK GDP as well as generating £6 billion in tax for HM Treasury (nearly 2% of all Treasury revenues).
So more holidays are good for the family, the economy and good for our tourist industry. Good for Thomas Cook and Peterborough.
Go on George – You know it makes sense!