6th December 2006
Chancellor has still not grasped scale of problem
The Chancellor’s doubling of air passenger duty announced in today’s Pre Budget Report will do practically nothing to stem the rapid growth in cheap flights and the environmental damage which they cause according to campaign group Stop Stansted Expansion (SSE).
“This is little more than a token gesture,” said SSE Campaign Director Carol Barbone. “Until such time as we have sensible taxation of air travel and sensible pricing of air fares, the unsustainable boom in cheap flights will continue unabated.”
“Despite all the warnings about the urgent need to tackle climate change and Tony Blair telling us that it is the greatest challenge facing the world today, when it comes to action, this Government still does not appear to have the courage to take the type of decisive action necessary to address the problem,” she continued.
Aviation is the fastest growing source of greenhouse gas emissions and yet the aviation industry continues to receive total exemption from fuel duty and VAT. If airlines had to pay the same fuel duty and VAT as the motorist, the revenues raised would amount to £9bn a year. However, even with today’s increase, the total revenues from air passenger duty will still be only £1.9bn a year.
The Stern Report commissioned for the Chancellor and published on 31 October highlighted the cost of not taking decisive action now to curtail carbon emissions. Based on analysis from the Stern Report, the climate change impact of UK aviation is currently between £6bn and £12bn a year.
1. The Chancellor announced that the doubling APD will be effective from 1 February 2007. Revenues from air passenger duty in the last fiscal year (2005/06) were £909m. Doubling APD will increase revenues to about £1bn in the current fiscal (2006/07) and to £1.9bn in 2007/08.
2. The current rates of air passenger duty are:
- £5 on economy and charter flights to Europe and on UK domestic flights
- £10 on first class and business class flights to Europe
- £20 on economy and charter flights outside Europe
- £40 on first class and business class flights outside Europe
Over 75% of passengers pay at the £5 rate
3. The Chancellor estimates that the APD increases announced today will deliver carbon savings of around 0.3m tonnes of carbon per annum by 2010-11 through reduced demand. When the effect of non-carbon dioxide emissions is taken into account this has a climate change impact equivalent to saving around 0.75m tonnes of carbon per year by 2010-11. This ‘saving’ is less than the additional amount of carbon that is being generated each year through the rapid growth in UK aviation.
4. Official reference sources for all of the figures quoted in this release are available on request.