HOLIDAYMAKERS were hit with a double whammy today when Chancellor George Osborne ruled out scrapping planned air tax rises.

Travellers will now face, from April 1, a big increase in the air passenger duty (APD) airport departure tax.

Not only will this year’s rise be in line with inflation but will also take into account the APD increase deferred from April 2011.

It will mean a near-10% hike in APD, adding around £250 to the cost for a family of four flying to Florida and about £360 more to the cost for a four-person family jetting off to Australia.

Following Prime Minister David Cameron’s comments earlier this week, Mr Osborne also announced a U-turn on the Government’s aviation policy.

The coalition Government had ruled out expanding south-east England airports when it came to power in 2010.

But today Mr Osborne said that the country had to "confront the lack of capacity in the south east of England".

He went on: "We cannot cut ourselves off from the fastest growing cities in the world."

London Mayor Boris Johnson favours a new Thames Estuary airport. The Government, in the form of a statement last January and in Mr Cameron’s infrastructure speech this week, has said that such an estuary scheme would be among those considered.

Mr Osborne said today that Transport Secretary Justine Greening would be setting out Government thinking on aviation "later this summer" - a timescale that suggests that any proposals will come long after the result is known of the May London Mayoral election in which Mr Johnson is seeking a further term.

Mr Osborne also announced rail improvement plans for the north of England, including increasing capacity on the Hope Valley line between Manchester and Sheffield.

The Chancellor also said the Government would work with Mr Johnson, and others, on rail improvement proposals including longer commuter trains and increased capacity at stations.