Air and Fuel Duty – Time for a Change

APDsays Aodhan O’Donnell, Interim Chief Executive, The Consumer Council

The recent Budget revealed measures that will bring changes for Northern Ireland consumers across a range of issues including the price of a pint, pensions, savings limits and tax allowances.

However, two changes that were needed were not delivered: the removal of air passenger duty (APD) on flights to and from Northern Ireland and a reduction in fuel duty.

The Chancellor announced that the two highest levels of APD that affect long haul flights are to be removed, but this will have no impact in Northern Ireland as our Executive had already secured the removal of APD on direct (long haul) flights to and from Northern Ireland.

However, there is currently only one route (to New York) that this applies to, whereas over 98 per cent of our journeys are to short haul destinations, such as the UK and Europe, which still incur APD.   It adds £13 on every flight from a UK airport.  Return flights from Northern Ireland to other UK airports are therefore twice hit, adding £26.  That is £104 in tax for a family of four travelling to London and back, whereas the same family would pay £0 in tax travelling to New York and back!

Meanwhile the Chancellor also announced that the scheduled fuel duty increase for September 2014 has been cancelled which is welcome news.  Fuel duty is the largest part of the price we pay at the pumps, accounting for about 60 per cent of the total cost.  Latest figures from the AA show that prices are at their lowest levels for three years.

However, they are still approximately 40 per cent higher than they were five years ago.  Consumer Council figures show that for the week commencing 17 March 2014 the average petrol price was 129.3 pence per litre (ppl) and diesel 135.6ppl, compared to 90.87ppl (petrol) and 98.23ppl (diesel) the same week in 2009.

Recent Consumer Council research on how consumers are coping with the cost of living found that the price of petrol and diesel is consumers’ third top concern.  The high cost of fuel is an issue that has been recognised by our elected representatives who last week presented a petition to Downing Street calling for a 3p cut in fuel duty.  Unfortunately this was not reflected in the Budget.

Removing APD and reducing fuel duty would make a real difference to consumers in Northern Ireland.  Take for example Ryanair’s announcement on Friday that it would deliver increased services for airports in the Republic of Ireland and new routes to important economic links such as Germany and France.

This has been directly attributed to the Irish Government’s decision to scrap its equivalent of APD, (Air Travel Tax).  It stands to reason that if Westminster took the same action it could bring similar, positive developments for consumers here.   This must be given serious consideration.

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