Lewis Smith, Environment Reporter
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Aircraft rather than passengers will incur an environmental levy to encourage the aviation industry to reduce carbon emissions.
Air passenger duty will be replaced from November 2009 with a scheme that charges flights instead of individuals. The Chancellor’s measure is designed to increase pressure on airlines to reduce the number of empty seats and thus improve the ratio between emissions and passengers. It will also tax freight aircraft and private jets for the first time.
Aviation firms expect the duty to be levied according to aircraft type so that the dirtier planes pay the most.
The duty is also likely to be linked directly to the distance flown so that the further an aircraft flies the more it will pay.
The Chancellor’s decision was welcomed by many within the air industry who felt that the air passenger duty did little to force change. At present all flights within the European Union incur the same £10 charge for economy passengers and £20 for business class. For flights outside the EU a flat £40 is levied on economy passengers and £80 on business class, irrespective of distance travelled.
Taxing individual passengers raises £2.4 billion a year but moving to a system of taxing flights could raise £520 million more. About 40 per cent of flights are not covered by passenger tax, including freighters and private jets and passengers who transfer through British airports. Aviation analysts suggested that these flights were likely to be the Government’s target rather than holidaymakers.
Conservatives accused the Chancellor of stealing one of their policies, having promised such a measure this month.
Chris Huhne, the Liberal Democrat environment spokesman, said that the move was a step in the right direction but criticised other environmental announcements such as the “failure of the Defra budget” to match economic growth.
The switch from duty on passengers to aircraft was welcomed by environmental and transport groups with some exceptions, including Ryanair. Pete Lockley, head of transport at WWF-UK, said that it was good news for the environment, especially as it meant the freight sector would be included in the squeeze on greenhouse gases. He added: “It gives airlines an incentive to fill planes and make better use of the flights they run.”
John Sauven, of Greenpeace, was concerned about the Government’s continued support of air travel but was encouraged by the new duty. “A tax that penalises airlines for flying half-empty planes makes a lot of sense,” he said. Toby Nicol, of easyJet, said that the budget airline was delighted at the prospect of carriers flying old and high-emission planes being penalised. “A 25-year-old Alitalia MD82 would pay a hell of a lot more than a two-year-old A319,” he said.
The Campaign for Better Transport (formerly Transport 2000) said: “The aviation industry pays no fuel tax or VAT so it is right they contribute something to the economy, and we have argued that taxing flights rather than passengers is a better way of doing this.”
Ryanair said: “This is just another tax on ordinary passengers from government ministers swanning around on private aircraft. This Labour Government lied when it proposed to spend the £1 billion raised from doubling APD on the environment. Not a penny has been spent on the environment and they are back stealing more from ordinary passengers going on holidays.”
The Chancellor also reiterated that carbon trading remained a central part of efforts to limit climate change and emphasised the Government’s desire for aviation to come within the European carbon trading scheme.
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