Today, the Chancellor has ignored the voice of tourism, of British business and of ordinary travellers. Buried in his Autumn Statement are plans for a double-inflation rise in Air Passenger Duty (APD) which will hit the UK economy in 2012 and beyond.
On this site yesterday, the chair of the All Party Group on Aviation, Brian Donohoe MP, spelled out his opposition to APD and his hopes for a reform of the tax. The Government has ignored his pleas and has ignored the many voices of the A Fair Tax on Flying campaign - a group that represents over thirty airlines, airport operators and tour operators who have been making the case for no further rises in aviation duty.
The Office for Budget Responsibility's own estimates today show revenues from APD falling. It points out that "a shortfall in receipts of £0.2 billion arises by 2015-16 due to lower real household disposable incomes and GDP reducing future personal and business demand." I dare say this is also partly a result of lower demand that will be caused by travellers avoiding the skies because of the higher cost of flying which is supported by our recent research that shows 43% of passengers say that high taxes would put them off flying. The inconsistencies of this short-sighted policy are apparent: even hiking the tax by double inflation means that the Treasury will collect less than it had predicted by the end of this Parliament - down from £3.6bn to £3.4bn. That's 200 million reasons to think again.
At a time when the Chancellor wanted us to believe he had a plan for growth, taxing aviation - a driver of growth, even more seems perverse.
His speech writers may have thought they were onto a winner when they penned this killer line in the Chancellor's statement: "we shouldn't price British business out of the world economy. If we burden them with endless social and environmental goals - however worthy in their own right - then not only will we not achieve those goals, but the businesses will fail, jobs will be lost, and our country will be poorer."
The problem in this case is that actions are not matching words. Nowhere is this more apparent than with APD. The Chancellor offered extra support for the steel industry, whilst ignoring the same logic for aviation, an industry employing more people than steel and supporting more jobs in other sectors too.
But what else can we read into today's announcement. Well, firstly, not as much as we thought we would have. Leaked in an answer to a Parliamentary Question this morning, the Treasury confirmed the main thrust of announcements about APD would be delayed until next week. Why is this? Could it be an attempt to clear the media grid for infrastructure announcements? Does the Treasury need more time to finalise their documents? Or was the Treasury waiting to see the reaction to today's beige announcement before giving all the details of their tax grab? Whatever the reason, we won't actually know exactly how much tax will be on a ticket until next Tuesday - but what's for sure is that most people will be paying more in flight taxes.
The whopping increase aside, one of the biggest disappointments is the apparent decision not to offset the costs of the EU Emissions Trading Scheme, with a reduction in APD, which appears to be the case given the overall tax take the Office of Budget Responsibility expects from APD. ABTA like nearly all of the aviation industry is supportive of the Emissions Trading System (where companies buy licenses to emit carbon). We recognise the need to pay our fair share to meet our environmental costs - but of course, it isn't industry that pays for these costs - it's the customer. And with today's announcement it is the customers who are hit with a double whammy - more APD and now additional ETS costs. No wonder the Government was forced to cut its projections of how many of us would be flying in the future - we're being taxed out of the skies.
But, alas, offsetting doesn't seem to be the Government's plan - despite the fact that in our own correspondence with the Treasury, they were at pains to note they looked at APD taxes and ETS 'in the round'. For that we might as well read 'in addition'. Whereas the Chancellor gave support to other industries to deal with their ETS costs, he left out aviation, a far from healthy sector.
This seems to be the common thread of today's statement: a story of contradictions. The Government wants more overseas tourists to visit the UK so they spend £27m on adverts for VisitBritain but hike flight taxes on visitors making it more expensive to visit the UK. They want to deal with aviation taxes and ETS in the round, but they deal with them separately. They want to help UK businesses create more jobs and growth but they levy higher and higher taxes on the engines of growth that help the wider economy perform. They say they want Britain to be more competitive then they make the UK even more uncompetitive adding more tax to already the world's highest flight taxes.
Next week we will find out the Treasury's plans on the details of how the increased Air Passenger Duty will be levied. Whilst there might be some nuggets and wins for the Fair Tax on Flying campaign and its supporters in that announcement, tweaking the structure of a tax, however more fair it is made, is made pretty worthless if the overall level is simply hiked. The Chancellor had an opportunity to show the world Britain was open for business today - I'm a little disappointed he didn't seize it with both hands.