Britain’s tourists are the most heavily taxed in the world, and the bill is now steep enough to send them elsewhere.
That is the warning from Sean Doyle, chief executive of British Airways, who says the government’s air passenger duty (APD) regime is pricing visitors out of the country and will leave a flagship growth target in tatters.
Speaking on the sidelines of a conference in Rio de Janeiro, Doyle argued that the UK will fall well short of its goal of welcoming 50 million international visitors a year by 2030, with would-be travellers heading instead to Japan, France and Spain. With tourism worth roughly 5 per cent of gross domestic product, he framed the duty as a self-inflicted brake on an industry Britain can ill afford to neglect.
“Our passengers are the most taxed in the world,” Doyle said. “For a family of five coming into the country and travelling, it’s a huge penalty that they have to pay compared to what you pay in Europe.”
A tax that keeps climbing
The numbers behind his complaint are striking. While receipts from road fuel duty and vehicle excise duty have fallen by 40 per cent and 25 per cent respectively in real terms since 2000, according to economists at Fortia Insight, APD receipts have doubled once adjusted for inflation. In an era when most motoring taxes have quietly eroded, the levy on flying has gone the other way.
The standard duty now ranges from £16 on a domestic departure to £253 for flights leaving the UK for destinations more than 5,500 miles away, a band that captures foreign visitors’ return legs. The full schedule of APD rates published by HM Revenue & Customs confirms just how far the long-haul charge has crept upward.
Crucially, the money is not ring-fenced for aviation or for cutting the sector’s carbon footprint; it flows straight into the Exchequer. The Office for Budget Responsibility expects the duty to have raised around £4.6 billion in the past fiscal year, equivalent to roughly £160 for every household in the country.
For Doyle, the politics look immovable. Complaints from the aviation sector, he suggested, continue to fall on deaf ears in Whitehall. The duty “ain’t going to change, from what we can hear”, he said.
The lesson from tokyo
What the government should be examining, Doyle argued, is the raw count of visitors arriving on these shores, and what rivals are doing to lift it. He pointed to Japan, which welcomed a record 42.7 million tourists last year. “It wasn’t a [major] tourist destination ten years ago,” he said. “It’s aiming for 50 million.”
Britain, by contrast, looks stuck. “We’re stuck at about 36-37 million and we have a target of 50 million,” Doyle said. “Yet unless we address the affordability issue we’re not going to get there. If you look at France and Spain, they’ve absolutely shot [further] past us … APD is a big part of that.”
His intervention lands amid mounting unease about the cost of visiting Britain. Retail leaders have already warned the Chancellor that the country is at a massive global disadvantage over tourist taxes, while analysis from Oxford Economics has cautioned that a separate holiday tax could cost 33,000 jobs and dent tourism spending. The wider picture is hardly reassuring: the government has been accused of “sabotaging” tourism as international visitor spending slid by £2 billion, feeding a sense that policy and ambition are pulling in opposite directions.
A warmer word for Rolls-Royce
Doyle was notably more upbeat on one front. British Airways had previously taken aim at Rolls-Royce over delays and reliability problems on the Trent 1000 engines that power its Boeing 787 Dreamliner fleet, a long-running headache for the carrier. That relationship now appears to be healing.
“We’re seeing improvements in the performance of our Trent engines,” Doyle said of the Derby-based engineering group. “I’m hopeful that we’re well through the worst of the Rolls-Royce issues.”
It is a rare note of optimism in an otherwise pointed message to ministers: that Britain’s appetite for taxing its visitors is quietly costing it the very growth it claims to want.
