LONG-HAUL PASSENGERS PAY DOUBLE AS PLAN TO PENALISE HALF-EMPTY AIRCRAFT IS AXED
25 November 2008The Recession Budget
Sam Coates, Chief Political Correspondent
Long-haul passengers will have to pay more in taxes.
From November 2010 they will face charges of Pounds 80 in economy class and Pounds 170 in first and business class on journeys of more than 6,000 miles. Under the current system the tax on flights beyond Europe is Pounds 40 in economy and Pounds 80 in business and first class.
Plans to reform aviation taxes so that they penalise airlines for flying half empty aircraft have been dropped, angering environmentalist groups.
The Chancellor told the Commons that despite cross-party support, the Government had been unable to produce workable proposals to charge tax per aircraft as opposed to per passenger. It was accused of bowing to pressure from airports.
Alistair Darling will retain air passenger duty and tax flyers based on miles travelled. "As much as I am in favour of a bipartisan approach, it seems in this case not to have reached the right conclusion," he said. The move "could harm the aviation industry when it is facing huge problems".
Mr Darling will expand the existing scheme into a four-band system, so that those who have a larger environmental impact will meet the cost.
Last night the aviation industry expressed delight, saying that the move would minimise the impact on regional routes and ensure that airports were not responsible for the "costly and bureaucratic collection of the tax directly". It also means that transfer passengers remain outside the tax.
Ed Anderson, the chairman of the Airport Operators Association, said: "While we believe that the Government has done the right thing in not introducing aviation duty, we remain concerned that the industry is taxed more than its fair share at this critical time.
"It is heartening to see that government has listened to our warnings. We will continue to fight for levels of tax that keep our industry internationally competitive."
Expressing disappointment at the proposals, John Sauven, of Greenpeace, said: "Plans to tax flights instead of people would have encouraged the industry to fill their planes instead of flying half-empty airliners around the world. Once again the aviation industry has been given a free pass at a time when its contribution to climate change is rising."
Mr Darling reminded MPs that aviation would be included in the European Union emissions trading scheme from 2012, under the Climate Change Bill.
From November next year air passenger duty will be structured around four distance bands, at intervals of 2,000 miles from London.
Ian Godden, of the Society of British Aerospace Companies, said that the move would not necessarily encourage airlines to use the most environmentally friendly aircraft. He added: "The Chancellor appears to have replaced one bad idea with another."
(c) Times Newspapers Ltd, 2008
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