THE BLOG

The Government Should Support the Governor of the Bank of England With New Policies to Promote Jobs and Growth

10/08/2013 00:11 BST | Updated 08/10/2013 10:12 BST

Mark Carney, the new Governor of the Bank of England, made history this week with his plan to target the UK's high levels of joblessness. He is hoping that his announcement that interest rates will be kept on hold until the national unemployment rate falls will encourage business investment and growth, warning that the recovery is not yet secure.

This is a welcome innovation, but it should not be allowed to distract from the Government's own obligation to provide leadership with its own policies to support jobs and growth.

The aviation sector and the airports that the Airport Operators Association represents are important economic players in their own right, but they are also crucial to the economic success of the UK, providing connectivity for UK Plc and enabling job creation and growth. That is why we will continue to urge the Chancellor to lower Air Passenger Duty (APD), the highest tax on aviation in the world by some margin.

A compelling recent report from PwC set out just how effective such action could be in boosting GDP without taking away from the Treasury's net overall revenue. Ministers have said that they don't agree with the report's conclusions, but have failed to provide any evidence to refute the report's methodology and findings.

In a world of supposed evidence-based policy-making, that failure means we will continue to campaign with others in the sector for a fairer and lower tax that will help to secure the recovery by encouraging the kind of investment, jobs and growth that the Governor of the Bank of England wants to see. Monetary policy alone cannot take all of the strain and it is high time that the Chancellor deployed some of the fiscal tools that are available to him.

Lower APD would fit the bill perfectly. It is a policy tailor-made for the current phase of the economic cycle. Not only would it have a positive effect on the overall economy, but it could also provide welcome and timely support for hard-working families who face a continuing squeeze on their cost of living.

Ministers need to understand that the campaign for reform of APD is not going to go away. To aid that understanding, I would encourage all those who support reform of APD to continue to make their voices heard, by joining the campaign at www.afairtaxonflying.org; and we urge MPs to support Early Day Motion 244, which is calling for a review of the current system of APD, and can be found at http://www.parliament.uk/edm/2013-14/244. It is time for the Government to acknowledge that they have got it wrong on APD, and to take decisive steps to investigate and limit the negative effects that it has had on both growth and the cost of living in the UK.