Industry Reaction to Budget Inaction

The travel industry has reacted with anger and dismay after the Government failed to scrap plans for a rise in Air Passenger Duty. In his Budget announcement last week, the Chancellor Alistair Darling made no reference to the travel tax, which is due to increase in November and again in 2010. Airlines, agents, ABTA and other industry associations had urged the Chancellor to scrap the tax altogether, or at least cancel the second phase of increases. But despite their pleas, and evidence to show the negative impact on the tourism industry, the Government has refused to back down.

"The rise in APD to destinations such as the Caribbean, dependent on tourism, will be as much as 87%, equating to a tax bill of £600 for a family of fourt ravelling to the Caribbean in premium economy in 2010 compared with today's£160.

*Here's how the phased increases will impact travel costs:

For flights to Europe, APD will go up by 10% to £11 and to £12 in 2010. US travellers, the UK's key market for tourism, will see their taxes rise from £40 to £60 in 2010.

For long-haul visitors travelling over 6,000 miles (including Australia, NewZealand and Malaysia, three key inbound markets), taxes will rise from £40 to£85 in 2010.

Business visitors will also be severely affected with taxes for travellers ona ny flights above economy rising to anything up to £170 from 2010.