Air duty rise on premium flight fares

Air passengers who fly first and business class will pay more to keep fares down for millions of economy travellers.

The Chancellor said the move – which also applies to private jets – will protect budget fliers from rising air duties.

However, details in the Budget documents reveal that those who fly premium economy – when they get extra legroom – will also face higher air fares.

Announcing the move, Mr Hammond called it a ‘Lewis Hamilton’ tax – a reference to the Formula One star who was exposed in the Paradise Papers for avoiding VAT on his £16.5million private jet.

Air passengers who fly first and business class will pay more to keep fares down for millions of economy travellers. (File photo)

Announcing the move, Mr Hammond called it a ‘Lewis Hamilton’ tax – a reference to the Formula One star (above) who was exposed in the Paradise Papers for avoiding VAT on his £16.5million private jet

He said; ‘From April 2019, I will again freeze short-haul Air Passenger Duty (APD) rates and I will also freeze long-haul economy rates.

‘Paid for by an increase on premium class tickets, and on private jets. Sorry Lewis.’

APD for long-haul flights for economy premium, business and first class passengers will rise by £16, while the tax for those travelling by private jet will go up by £47.

The duty – charged on flights from the UK – is currently levied at £75 for an economy long-haul ticket, and £150 for a long-haul ticket in business class.

Air Passenger Duty for long-haul flights for economy premium, business and first class passengers will rise by £16, while the tax for those travelling by private jet will go up by £47. (Above, Lewis Hamilton ‘on’ his plane)

Cider bingers will pay more

Alcohol duty was frozen by the Chancellor – but the price of strong cider will increase to tackle binge drinking.

Fees on wine, spirits, beer and lower-strength ciders will stay the same after Mr Hammond was lobbied not to raise prices. He said: ‘This will mean a bottle of whisky will be £1.15 less in 2018 than if we had continued with Labour’s plans. A pint of beer will also be 12p less, so Merry Christmas Mr Deputy Speaker.’

But he added that he would increase duties on ‘white ciders’ from 2019 to target ‘excessive consumption by the most vulnerable people’. It will apply to still cider and perry which is 6.9-7.5 per cent alcohol by volume.

Alcohol duty was raised in March’s Budget. Yesterday’s announcement will disappoint some MPs who had called for it to be cut, not just frozen.

The Treasury said around 95 per cent of passengers who pay APD use economy, but refused to give a more detailed breakdown.

Based on the 109 million passengers who paid APD in 2015/16, more than 5.5 million fly business class, first class or economy premium every year.

Last night critics hit out at the rise in duty for premium economy passengers.

Former Tory party chairman Grant Shapps, one of a group of MPs calling for APD reform, said: ‘I don’t think anyone could argue with the wealthiest passengers … paying more.

‘But the Budget smallprint suggests that the cost will be also be transferred to passengers who simply purchased a couple of inches of extra leg room in premium economy.’

James Daley, of consumer group Fairer Finance, said: ‘It’s a shame economy premium passengers are being put in the same category as those who fly first class.’

British Airways owner IAG said the plan contradicted Mr Hammond’s pledge for low taxes. The UK has the highest APD in Europe – raising £3.2billion in 2016/17.

Rail discounts for commuters aged under 30

Millennials will be handed discount railcards in a move that could wipe hundreds of pounds off their train fares every year.

The Chancellor vowed to roll out the 26-30 railcards in what was seen as a clear bid to win over younger voters.

It will come as a welcome boost to those who are no longer eligible for the 16-25 young person’s railcard.

Mr Hammond told MPs: ‘I can announce a new railcard for those aged 26 to 30, giving 4.5 million more young people a third off their rail fares.’

Railcards currently cost £30 a year but save travellers a third of the cost of their journeys and represent a saving to the typical rail user of £150 a year.

The Treasury estimates that an additional 4.5million young people will become eligible for discounted fares under the scheme.

It is understood it will still not be possible to get a discount on season tickets – the costs of which often run into many thousands of pounds a year.

The Conservatives have been under pressure to target the under-30s after Labour’s better than expected performance in June’s general election was attributed to the youth vote.

Smokers of rolling tobacco will be hit with an extra 1 per cent duty this year

Rolling tobacco hits £20 a pouch

Smokers of rolling tobacco will be hit with an extra 1 per cent duty this year.

Tax on cigarettes will rise at inflation plus 2 per cent – or around 5 per cent overall. But rolling tobacco will face an additional 1 per cent levy. The hikes came into force from 6pm last night.

It means a 50g pouch of hand-rolling tobacco will cost more than £20. A pack of premium cigarettes will cost smokers £10.80 – an increase of 28p.

Simon Clark, of smokers’ group Forest, said: ‘This is the second increase this year. Tobacco duty is already punitively high. A further hike discriminates against smokers who are less well off. Once again the poor are sacrificed on the altar of public health.’

Deborah Arnott of Action on Smoking and Health said the move will help tackle the ‘tobacco epidemic’. But she added that the Government should do more ‘by ensuring [smokers] are offered evidence-based treatment to help them quit’.

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