Willie Walsh: End this unfair tax on family holidays

Air Passenger Duty

Checks and balances: APD 'is a tax on doing business with the UK' (AFP)

Air Passenger Duty was already the highest aviation tax anywhere in the world. And today, it's just got even higher. The Government is increasing APD by more than twice the level of inflation. This means that if you are a family of four travelling to Spain this summer, you will pay a total of £52 in tax. This rises to £260 to fly to Florida. For Australia, you can make that £368. And if you're considering upgrading to business class, well then double all of those figures. You could certainly be forgiven for thinking that this Government wants to make flying the preserve of the well-off once again.

When it was introduced in 1994, APD was sold as an environmental tax. However, it is clear that it is anything but. Unlike the EU emissions trading scheme which incentivises airlines to use their aircraft more efficiently, APD is a flat-rate, regressive tax on passengers that does nothing to help the environment. It is, simply put, a poll tax on flying. Even the Treasury has now admitted that it's nothing more than a revenue raiser.

While APD is bad enough for hard-working families trying to afford a holiday, it is also a tax on visiting and doing business with the UK. The figures speak clearly for themselves. Passenger numbers at UK airports last year were at the same level as 2004. Equally as worrying is the fact that at least three times as many Chinese tourists visited Italy in 2010, compared with the UK. The same is true for France and Germany. Indeed, 22 out of the 27 countries in the EU have no equivalent flight tax at all. The £2.2bn that the Treasury collected from APD last year was almost twice as much as all other European countries combined. In the current economic climate, can we really afford to encourage people to stay away?

With unemployment at its highest level since 1996, the Government constantly says that their overriding goal is economic growth. Yet, recent research by the World Travel and Tourism Council has shown that abolishing APD could result in an increase of up to £4.2bn in GDP due to a surge in passenger numbers. Together with the additional consumer spending that this would bring, it is estimated that up to 91,000 new jobs could be created. If this doesn't count as economic growth, then what does? No grand government "get back to work" scheme required here, no significant welfare spending – all that is required is simply to axe this duty.

We're investing billions on hosting the Olympics this year and creating the greatest showcase on earth, only to raise APD and encourage people to stay away. There is no question that this country needs to reduce its deficit and pay off its debt, but there has got to be a better way to do it than this. APD makes things worse. It is an unfair tax on family holidays, an unfair tax on tourism and an unfair tax on business. Everyone would be better off without this pointless duty. The Government should scrap it. The sooner, the better.

Willie Walsh is CEO of International Airlines Group, the parent company of British Airways and Iberia