A high-powered British committee has recommended taxing low-cost foreign airlines that are taking traffic away from Britain and to foreign tourist destinations. The committee has proposed a VAT on aviation fuel in order to protect domestic tourism. Travelodge director of communications Greg Dawson has stated that in the period from 1995 to 2002 when no-frills flights gained momentum inbound tourism spend fell by 16% implying that Britons were being lured away from domestic tourist spots because of the attraction of cheaper air travel abroad.
During the same period, outbound tourism spends increased by 48%. Dawson considers not charging VAT as equivalent to subsidizing the budget airlines by the government, a move he says will lead to a tourist trade deficit of £25 billion by 2020.
It does appear that Dawson is coming down a tad too harshly on the budget operators who are opening up Britain for tourists from other countries. He claims that a 10% reduction in the number of overseas flights, presumably by the low-cost carriers, will create more than 31,000 jobs in the UK in the next 12 years and at the same time generate £1 billion for several British seaside resorts.