The cost of a bucket-and-spade holiday will rise as Labour hammered air travel in its first Budget for 14-years.

Hard-pressed families will see at least £2 slapped on the cost of every short-haul economy seat after Chancellor Rachel Reeves increased the air passenger duty [APD] flying tax.

Those using private jet users will be hit by a 50% hike.

Industry experts raised fears of far-reaching consequences for the aviation industry and wider economy with some labelling the punitive increase as a holiday tax.

The APD rises announced yesterday will add nearly £200 to the cost of economy tickets to New York or Dubai.

APD rates are based on the length of the flight and class of cabin.

For passengers travelling in cattle class, they are £7 for a domestic flight, £13 for a short-haul flight, and £88-£92 for a long-haul flight.

Those in premium cabins are charged £14 for a domestic flight, £26 for a short-haul flight, and £194-£202 for a long-haul flight.

Private jet passengers currently face an APD rate of £78 for domestic or short-haul flights, and £581-£607 for long-haul flights.

Tim Alderslade, Chief Executive of Airlines UK, said: “It’s the highest tax of its kind amongst all the major global economies and is already set to bring in around 79% more money for the Government over the next five years, a faster increase than any other tax.

“These rises aren’t sustainable. Some people say taxes are needed to price people out of flying for the environment. It’s a false argument.

“Ever increasing APD rates – making the UK one of the most expensive places to fly from in the world – is a strategic mistake for any country set on economic growth, least of all an island, and on providing for everyone the cherished opportunities to travel, trade and do business, in an ever more connected world.”

The Government claims the tax hike is an effort to clean up the skies, but experts say this misses the point.

Gediminas Ziemelis, majority shareholder and chair of aviation leasing and services giant Avia Solutions Group, said: “Each aircraft based in the UK directly supports around 400 jobs – four times the number of jobs created when overseas airlines operate routes to the UK.

“Furthermore, the nation’s airlines bring in around 20 million overseas visitors annually, who collectively spend £14billion, supporting over one million British jobs.

“Hiking APD risks undermining this vital economic contribution at a time when the aviation sector is still recovering.”

Meanwhile, the 4.5 mile extension of the controversial HS2 project into London Euston was approved.

It was paused for two years by former prime minister Rishi Sunak after an outcry over spiralling costs.

HS2 is currently nearly £20 billion over budget.

The High Speed Rail Group said: “Rail investment is far more than a short-term cost: it is a driver of national growth and regional connectivity. The approval to complete HS2’s critical link from Old Oak Common to Euston marks a pivotal step forward.

“We hope that an era of fragmented, short-term decision making has ended, in favour of a move towards a cohesive vision for the future of UK rail.

“However, we cannot stop here. To fully realise the socio-economic benefits of this project, it is critical that Phase 1 is properly connected north of Birmingham to Crewe and beyond.

“Taking a long-term, integrated approach to rail delivery going forward will enable HS2 and the broader network to fuel the UK’s economy and enhance productivity for generations to come. ​”For the first time in some years, this Budget sees that future one step nearer rather than further away.”