Air Passenger Duty rates: UK Government's tax U-turn on long-haul flights from NI
The Government has been forced to reduce Air Passenger Duty (APD) for long-haul flights from Northern Ireland after an airline threatened to cut the country's only transatlantic flights.
The U-turn on tax comes just two months ahead of a speech by the Chancellor which will discuss a proposed 10 per cent rise in APD for 2012.
The recent reduction will come into force onNovember 1, when it will fall from 60 per flight to the lower short-haul rate - currently 12 per passenger in economy and 24 for business and first class passengers.
Hike: The UK has the highest rate of flight tax in the world with passengers forking out 8.5 times the average APD in Europe
The move comes after Continental Airlines warned that Northern Ireland's only transatlantic route could be axed if APD was not reduced.
There had previously been calls for a change to help compete with the lower rates on offer in the Republic of Ireland.
The Chancellor, in consultation with the Secretary of State Owen Paterson and the Northern Ireland Executive, announced plans to reduce the levy, saying the change would ensure the U.S. air link remained open.
They added that they hoped the reduced rate could even attract other long haul carriers.
The Chancellor said: 'The Government has taken proactive measures to protect the only direct long-haul service operating from Northern Ireland and with it the jobs of those who serve the Belfast route.
'Northern Ireland faces a unique challenge in attracting traffic - including very valuable business customers - into its airports.'
There had been fears that the differ! ent rate s of air passenger tax on either side of the Irish border could threaten to make long-haul flights from Belfast uneconomic.
Squeeze: Any rises in APD will be a strain for many already cash-strapped travellers
Mr Robinson said: 'Reducing APD on direct long haul flights will ensure that our airports remain competitive.'
But the move has reignited the debate about APD, which could see another 10 per cent increase in April 2012.
Fora family of four, this adds 48 to the economy ticket price for a holiday to Europe, 240 on a holiday to the USA, and 340 on a holiday to Australia.
MPs and senior members of the travel industry have warned the Chancellor that rises in APD will hit the British economy.
In a letter to George Osborne, over 30 MPs said they were concerned about the impact of the planned increases on 'ordinary families'.
The letter said: 'The Governments intention is to introduce a double-inflation Air Passenger Duty rise in April 2012 even after the aviation sector enters the Emissions Trading Scheme (ETS) in January 2012, adding extra cost to each flight.
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'The effect of these two tax increases on the travelling public will be a significant increase in the cost of flying abroad next year, at a time when many ordinary families are already coming under severe financial pressure.'
It said that other EU countries were scrapping their versions of APD to offset the ETS scheme, which will mean that if airlines go over their 'carbon ration', they will have to pay - which could be passed onto the consumer.
The UK has the highest rate of flight tax in the world with air passengers paying 8.5 times the average European APD.
The Telegraph also published a letter signed by the heads of the British Air Transport Association, the Airport Operators Association, UK Inbound and the Association of British Travel Agents.
Tourism chiefs have said a rise coulddamage tourism, keeping foreign tourists at bay - at odds with Prime Minister David Cameron's recent Great Britain campaign.
'The vast majority of organisations involved in the inbound tourism industry would much rather see the Government address the significant financial barriers tourists face whencoming to the UK.
'In two months time the Chancellor is expected to announce substantial air passenger duty rises. This will further deter inbound tourism, the value of which has already dropped by more than six per cent in the last year.'
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