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We need a proper campaign to end this insidious “holiday tax”

    About a week ago I began looking into going on holiday in February. Over the last few years, I’ve been to the US a few times, and noticed flights were quite expensive. I was thinking of flying to the Caribbean this time so suspected that I’d have to pay a fairly high amount.

    The process of organising these flights has crystallised in my mind just how out of control taxes on flying have now become.

    I happen to have a friend who works for a major airline. In the build up to Xmas, she has been able to book flights for friends and family at a significant discount. For example, a return flight to Barbados for a 10 day visit can be bought for just £330 per person, when taxes are included. 

    The actual cost of the discounted flight? Just £2. The remaining £328 is taxes, fees, and charges. The ordinary cost of a flight there is £656 – so, according to the figures presented by the airline, a full 50% of the cost of the flight is made up of various taxes and charges.

    This is extortionate. A family of four wanting to take a holiday to Barbados would face an Air Passenger Duty charge alone of £332. This has increased from a family charge of just £40 in 1997.

    In other words, as a matter of policy – particularly with Air Passenger Duty – policymakers are making it more and more difficult for ordinary families to go on well-earned long-distance breaks.

    As Kristian Niemietz’s IEA publication explained this week, the debate about Air Passenger Duty and airport capacity is now generally couched in “national infrastructure” terms, with the objectives discussed including “competitiveness” and attracting business and wealth. These are all very important, and form the basis of a detailed PwC report which suggests abolishing APD could become self-financing once all other effects are considered.

    But there is an equally important argument to be made here about aspiration, free choice and privileges that should resonate with people across the political spectrum. Aspiring to want to go on a decent holiday to an exotic destination is not something to be lamented; it is something conservatives should celebrate.

    The idea that certain destinations should only be the preserve of the very wealthy should annoy left-wingers. It costs more in tax terms to fly a family of four from the UK to elsewhere in Europe, the USA or Australia, than any other European country.

    Yet on both sides of the aisle there are those who want to make those on low incomes less likely to be able to afford long-distance travel. On the left, it’s mainly Malthusian environmentalists. On the rich right, it’s sometimes snobbish attitudes from people who think it is undesirable for certain types of people to be able to fly abroad.

    The Conservative Party is said to be looking for policies that will resonate with the public, put them on the side of “hardworking people” and cut the cost of living. As the Chancellor starts thinking about measures for his 2014 Budget, he could do worse than re-branding the air passenger duty the “holiday tax” and promising to abolish it.

    Ryan joined the Centre for Policy Studies in January 2011, having previously worked for a year at the economic consultancy firm Frontier Economics.

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