The subsequent chancellor, Gordon Brown, introduced a double rate of APD for business-class and first-class passengers.
[3] One of the stated benefits of APD was to offset the environmental impact of air travel (see below) although the tax takes no account of the efficiency of the aircraft and flows into general revenue.
[2] Air Passenger Duty was controversially[11][12] doubled[13] from 1 February 2007, and the lower rate was extended to all the countries within the Single European Sky.
The distance used to calculate the new rate of APD is the distance between London and the capital city of the destination country as summarised below: The Treasury forecast that the 2007 rise would cut carbon dioxide emissions by about 0.3 million tonnes a year by 2010-2011, and all greenhouse gas emissions by the equivalent of 0.75 million tonnes of carbon dioxide a year,[14] although that has been disputed.
In 2013 a study by PwC, 'The Economic Impact of Air Passenger Duty', found that abolition of APD could provide an initial short-term boost to the level of UK GDP of around 0.45% in the first 12 months, averaging at just under 0.3% per annum between 2013 and 2015.
It stated that this increase would permanently raise UK economic output, to the point where the economy could be up to £16bn larger in the period 2013-15 than under the current system of APD.
Almost 60,000 jobs could be created between 2013 and 2020, and although the abolition of APD would result in £3-4bn in lost revenue to the Treasury, PwC's "cautious" analysis suggests that this would be offset by increased receipts from other taxes.
[19] The tourist minister of Kenya, Najib Balala, criticised APD for hurting tourism and economy in developing countries.
However due to exemption of APD for flights departing from airports in the Highlands and Islands, the UK and Scottish Governments agreed to delay the introduction of ADT, while sorting out the issues.
In 2019 the Scottish Government abandoned its plans to cut Air Departure Tax as the proposals were no longer considered compatible with Scotland’s climate change targets.