Rachel Reeves yesterday launched a multi-billion pound raid on holidaymakers with inflation-busting hikes in flying taxes.
The Chancellor announced an increase of 15 per cent in Air Passenger Duty (APD) on economy seats to European hotspots such as Spain, Greece, Portugal and Italy.
The duty – a stealth levy known as the ‘holiday tax’ – will increase by £2 to £15 for these flights.
For long-haul economy passengers to destinations like the Caribbean, South Africa and the Far East, the levy will be hiked by £12 to £106.
Business class seats will be raised by similar rates in percentage terms while private jets will be slapped with a whopping APD hike of 50 per cent.
Private jet passengers currently face an APD rate of £78 for domestic or short-haul flights, and £581 to £607 for long-haul flights.
The changes will take effect from April 2026 and rake in an extra £2.5billion for the Treasury by 2030.
The duty – a stealth levy known as the ‘holiday tax’ – will increase by £2 to £15 for these flights (stock)
For long-haul economy passengers to destinations like the Caribbean, South Africa and the Far East, the levy will be hiked by £12 to £106 (stock)
The Tories’ transport spokesman Helen Whately said: ‘You name it, Labour will tax it.
‘This might not sound like a big increase, but it’ll whack Air Passenger Duty up by nearly 15 per cent on many flights.
‘That’ll not only hit holiday-makers; if you fly regularly for work it’s yet another tax on working people and a blow for businesses in today’s Budget.’
Former British Airways boss, Willie Walsh, said: ‘The government’s plans to increase air passenger duty revenues by almost 50 per cent over the next five years is bad news for the British economy in desperate need of links to world markets.
‘This increase in APD is out of sync with the government’s industrial strategy.
‘After the recent investment summit, the government said it was looking to attract “growth in every part of the UK” and now it is doing the opposite.’
Rachel Reeves today launched a multi-billion pound raid on holidaymakers with inflation-busting hikes in flying taxes
Earlier this month the Mail revealed how Ms Reeves was weighing up inflation-busting hikes to the levy as part of a ‘polluter pays’ plan to raise revenue for Labour’s spending plans
The Budget tax hike rivals 1993’s eyewatering revenue-raiser in the wake of Black Wednesday – and might be even bigger if measured at current prices rather than as a proportion of GDP
Earlier this month the Mail revealed how Ms Reeves was weighing up inflation-busting hikes to the levy as part of a ‘polluter pays’ plan to raise revenue for Labour’s spending plans.
Ms Reeves told the Commons: ‘Air passenger duty has not kept up with inflation in recent years so we are introducing an adjustment…But I am taking a different approach when it comes to private jets, increasing the rate of air passenger duty by a further 50%.’
A Treasury document stated that the increases will ‘help correct for below-inflation uprating in recent years’.
Karen Dee, chief executive of trade body AirportsUK, said the move was ‘disappointing’, adding: ‘If the Government is serious about realising its aim for the UK to become the fastest growing economy in the G7, then it must recognise and champion the role that airports play in growth and international connectivity, and minimise the cost and regulatory burdens imposed.’
Tim Alderslade, chief executive of Airlines UK, which represents UK-registered carriers, said APD ‘already makes the UK less competitive’ and further increases will ‘impact growth, directly hitting the pockets of ordinary travellers and making it harder for UK airlines to put on new routes’.