Business leaders in the Midlands are urging the government to introduce cheaper departure taxes for Birmingham Airport.

Jerry Blackett, chief executive of Birmingham Chamber of Commerce Group (BCCG), has written to Transport Secretary Philip Hammond saying that Air Passenger Duty (APD) "will seriously frustrate the introduction of new air links between the Midlands and potential new markets across the world".

Britain currently charges passengers the highest rates of aviation tax in Europe. APD currently earns the Government around £3.8 billion each year. 

Many European countries have abandoned aviation taxes, due to the negative effects on their economies (examples are Belgium, Holland and Denmark, and now the Republic of Ireland). 

In the longer‐term, analysis shows that the UK economy will forego £750m of wealth and 18,000 jobs due to the recent rises in APD.

Research shows that a British family of four pays up to 25 times more in tax on a long-haul flight (£340) than its French counterpart (£14). Only five European countries currently levy versions of an aviation tax, all at significantly lower rates than in Britain. 

Mr Blackett adds: "APD is more likely to cause the failure of flights to regional airports, or discourage new ventures, because these flights are more marginal, particularly in the vulnerable start-up phase. 

"I wonder whether the highly successful Birmingham to Dubai service - celebrating its 10th year - would have survived a year under such a regime, as it took a long time to reach a 'critical mass'. That service now forms a key link between the Midlands and emerging economies in the Middle-East and beyond.

"I have no doubt that APD will hinder the development of new routes from Birmingham Airport and jeopardise the recovery of greater Birmingham.  As the rate of APD is increased, it will increasingly form a barrier to entry. 

"This is frustrating, as Birmingham Airport already has the infrastructure to cope with an additional nine million passengers a year, with consents to deliver 18 million. 

"Surely, with scarce runway capacity elsewhere, such a Strategic National Asset should be used to satisfy demand and at the same time rebalance the national economy? 

"We believe there is a strong case to reform APD with the implementation of a differential rate for regional airports, particularly where it can be used as an incentive to generate 'secondary markets' outside of the South-East, and encourage new passenger and commercial behaviours. Thus, there would be a double benefit - one to our region and one to the South-East.

"Growing our economy is a huge challenge, and my organisation and members will support the Government's plans rebalance the economy.

"Regional airports, such as Birmingham, are Strategic National Assets which are essential to the rebalancing of the UK economy. A reform of APD that gives greater consideration to the vital role that regional airports play, and which at the same time incentivises new travel behaviours, will accelerate regional economic activity, and reduce pressure on overcrowded airports in the South East of England."