2 December 2010
Richard Fuller (Conservative, Bedford): Asked the Chancellor of the Exchequer (1) if he will change the basis for calculating Air Passenger Duty banding from London to capital city of destination to London to destination;
(2) if he will change the Air Passenger Duty banding for destinations in the Caribbean to be the same as that for destinations on the east coast of the United States.
Justine Greening (Conservative, Economic Secretary to the Treasury): The June 2010 Budget stated that the Government will explore changes to the aviation tax system, including switching from a per-passenger to a per-plane duty. Major changes will be subject to consultation.
Henry Smith (Conservative, Crawley): Asked the Chancellor of the Exchequer (1) what assumptions in respect of the rates of Air Passenger Duty were used in calculations to obtain the forecasts for Air Passenger Duty receipts contained in table C11 in the Budget 2010 report,
(2) what estimates of air passenger numbers were used in calculations to obtain the forecasts for air passenger duty receipts contained in table C11 in the Budget 2010 report,
(3) what methodology was used to calculate the forecasts for Air Passenger Duty receipts contained in table C11 in the Budget 2010 report.
Justine Greening (Conservative, Economic Secretary to the Treasury): The Air Passenger Duty forecast uses announced duty rates where available and beyond that the assumption is that duty rates will be increased in line with the retail prices index at each Budget. This is set out on page 51 of the June 2010 Budget policy costings document:
– http://www.hm-treasury.gov.uk/junebudget_costings.htm
Passenger numbers by band are forecast using econometric models of the demand for air travel, based on the relationship of passenger numbers with macro economic variables including GDP and disposable income. The latest Office for Budget Responsibility forecast of these variables is used to produce the forecast. Outturn passenger numbers by band, as well as outturn receipts data are published by HMRC:
– https://www.uktradeinfo.co.uk/index.cfm?task=bullair
The receipts forecast is the product of projected passenger numbers multiplied by assumed duty rates. Some small adjustments are made to reflect unusual factors, such as the volcanic ash cloud and industrial action, as well as the latest receipts outturn.
Sourced from Dehavilland: www1.Dehavilland.co.uk