Reverse cut to domestic Air Passenger Duty and use £130m to cap national bus fares instead, say campaigners

Campaigners are calling on the Government to reverse a tax cut on domestic flights and use the money to fund a six-month extension of the national £2 bus fare cap instead.

Changes to Air Passenger Duty (APD) rates, which come into force today (1 April), are set to cost the Government around £130 million in lost revenue over the next four years. Campaign for Better Transport is calling on the Government to reverse the cut in domestic APD – which is predicted to result in an additional 410,000 domestic air passenger journeys a year, some brand new journeys others as a result of people switching from trains or cars - and use the money to fund an extension of the England-wide £2 single bus fare cap until the end of the year.

Norman Baker, from Campaign for Better Transport, said: “We are facing a global climate challenge and how we choose to travel will have a huge impact on whether we meet that challenge. Cutting tax on domestic flights sends the wrong signals about how the Government wants people to travel and will result in more carbon-polluting flights. The £2 bus fare has been a huge success, both in helping people with the cost-of-living crisis and in getting more people using public transport. Extending it until the end of the year will continue to help people struggling to meet rising transport costs, provide a huge boost to the bus industry and help reduce carbon emissions by helping more people leave their cars at home.”

There were 398,411 domestic flights within the UK last year and 2.8 billion bus journeys in England. The temporary £2 bus fare cap, which was introduced in January and has already been extended once, has proved popular with passengers, with some fares cut by three quarters. Up until the introduction of the fare cap, buses fares had risen by 89 per cent in the last decade whilst services had been cut by a quarter.

ENDS

Notes to Editors

1. According to The Office for Budget Responsibility, the introduction of the new domestic rate of Air Passenger Duty (APD) on 1 April will cost £275m over the next four years and result in around 410,000 more passenger journeys a year (a 3.5% rise), with that increase split evenly between genuinely additional flights taken and those displacing journeys that would otherwise have been taken by car. Reinstating Band C for the longest long-haul flights will raise £145 million over the next four years and could potentially result in around 23,000 fewer passenger journeys a year to destinations more than 5,500 miles away (a fall of less than 1%). Combined, this will result in a £130 million tax shortfall.

1. On 1 April reforms to APD come into effect. A new band for domestic flights, priced at half the previous rate, is being introduced, plus an extra long-haul band.

*There are three rates of duty for each destination band depending on the class of travel: reduced rate for travel in the lowest class of travel available on the plane; standard rate for travel in any other class of travel; and a higher rate for travel in planes of 20 tonnes or more equipped to carry fewer than 19 passengers.

3. The current £2 single bus fare cap applies to most bus operators in England. It was launched on 1 January and was originally meant to run for three months. After campaigning by Campaign for Better Transport and others, it was extended until the end of June 2023. The Government has so far committed a total of £135 million to fund the national initiative for six months.
4. Transport for Greater Manchester introduced a £2 fare cap in September 2022. In the first three months of operation, bus patronage went up by 10%.
5. From 1 November 2009 until 1 April 2015 four APD bands existed based on geographical distance from London to the capital of the destination country. Following changes to APD in the 2015 Budget, the destination bands were reduced to two by merging the former bands C and D into band B.
6. Campaign for Better Transport research revealed 1 in 4 bus services have been cut since 2012.
7. According the RAC Foundation, bus fares rose by 89.44% from 2012 to December 2022.
8. Annual bus journeys are quoted from the Department for Transport’s annual bus statistics. Annual domestic flights are quoted from Table 5: Air Transport Movement Comparisons.