Simon Calder: If a 660 per cent tax bill doesn't stop us flying...
The man who pays his way
Saturday 08 May 2010
"The gift that never stops giving": that, according to David Roche, the erudite president of Hotels.com Worldwide, is how governments tend to view the travel industry.
Air Passenger Duty (APD), first introduced by the last Conservative chancellor, Ken Clarke, is the perfect example. This levy applies to everyone aged two or over with the temerity to start a journey at a UK airport. It is blissfully easy to collect; on the typical European flight, the airline multiplies £11 by the number of passengers on board and sends HM Revenue & Customs an appropriate cheque. Around half the people who pay APD do not vote in the UK, by dint of their being foreign visitors to these shores. As chancellor, Gordon Brown repeatedly raised the levy and declared it to be a "green tax" intended to dampen demand for air travel. But our appetite for flying has, instead, increased.
As Mr Clarke told me, "If you look back at what's happened to aviation since the time I introduced the passenger tax, it has gone from strength to strength". So, too, has the Treasury's income from APD. The Tories have promised a new "Airline Pollution Duty" to encourage fuller and cleaner planes. But given the gaping void where Britain's cash reserves used to be, the new chancellor is hardly likely to cancel the increase planned for November, when the tax for flying down to Rio rises by half to £75.
Airlines, understandably, squeal about the unfairness of APD, but they have themselves to blame. In 1999 British Airways sought to represent the passenger service charge levied by airports on airlines as "new tax". It was nothing of the sort, but by the time BA recanted the idea had caught on with other airlines.
Take an escape from Fylde to South Antrim (better known, outside Westminster, as Blackpool to Belfast International airport). The £5 fare on Jet2 is augmented by £22 of unspecified "taxes and charges", a £1 online check-in fee and an extra £10 levied by the folk at Blackpool as an "Airport Development Fee".
Anyone seeking to balance the nation's books will take heart from the fact that the airline can still find willing takers at an apparent tax rate of 660 per cent.
Air travel seems as addictive as nicotine, and will be increasingly seen, like tobacco, as an ideal candidate for punitive taxes.
ppp Any UK tourist undeterred by the near-Siberian May Day bank holiday weather will see the price of practically everything from admission to Alton Towers to a night at the Ritz rise when, as seems inevitable, VAT rises from 17.5 to 20 per cent.
Or will they? In these tough times I reckon many businesses will bite the bullet and absorb the sales tax increase. Travelodge, the budget-hotel chain, specialises in £19 rooms (so long as you book in advance and stay off peak). It is unlikely to undermine its price promise by adding the odd 41p to the price of its cheapest rooms. And if the Tower of London were to implement the tax hike in full, its current £47 family ticket would tip the wrong side of £50 and risk decapitating its visitor numbers.
One rise ruse I recommend against is as practised at a café in Christchurch in Dorset. On Monday morning I sought shelter from the Arctic breeze, together with a first-class breakfast. The café delivered both with panache – but the bill arrived with a 2.5 per cent surcharge to cover last January's increase in VAT.
I neither quibbled nor pedantically pointed out that the correct surcharge would be 2.174 per cent. I paid up but declined to leave a tip, thus leaving the establishment poorer and running the risk of acquiring a reputation as "the git that never starts giving".
Destinations for dispossessed MPs
Safe seats: just the subject for the noted air-safety specialist, Dr Todd Curtis. Where, I wondered, should I sit on board an aircraft to maximise the chances of surviving an accident? "Tell me the kind of crash you intend to have, and I'll tell you the safest seat," the founder of AirSafe.com replied.
Little in life is predictable. Now that so many MPs find themselves casualties of the greatest political carnage in decades, bereft of any kind of seat, where should they go?
North Korea may appeal: last year 100 per cent of the electorate voted in favour of the ruling party (the Democratic Front for the Reunification of the Fatherland), on a turn-out of 99.98 per cent.
As dispossessed politicians wonder where it all went wrong, they could do worse than aim for the New Mexico town known until 1950 as Hot Springs. Sixty years ago, the townspeople voted, in a bid for nationwide fame, to change the spa town's name to that of a radio quiz show. It is now known as Truth or Consequences.
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