MPs protest zero-tax flights

A parliamentary committee has called for tougher aviation taxes to curb the fast growth of flight emissions, on the eve of a Budget that is likely to focus on greening cars and leave aviation in its current fiscally-privileged state.

Gordon Brown should scrap the zero-VAT rate that the entire UK aviation industry benefits from and bring in tougher, more effective taxes on flights, the Labour-dominated Environmental Audit Committee said in a report on Tuesday.

“We cannot understand why the entire aviation industry is zero-rated for VAT,” the MPs said, urging the Treasury to reveal the cost of letting aviation companies reclaim the VAT they pay.

Although aviation only produces around 5% of UK’s carbon emissions, it is by far the fastest growing CO2 source.

In Wednesday’s Budget report the Chancellor is expected to reject calls for greener taxes on aviation coming from environmental groups and the Tories as well as fellow Labour MPs.

While the EAC welcomed the doubling of air passenger duty announced in December’s pre-budget report it said this does not “nearly go far enough.” In real terms it represents a tax cut rather than rise, as it restores the tax rates of five years ago. More importantly, it “will do nothing to stabilise aviation emissions, merely slow their growth slightly,” the Committee said.

Levying air passenger duty per flight rather than per person might encourage airlines to fill more seats as well as finally imposing taxes on air freight, which has so far remained entirely untouched by the air passenger duty system, they said.

Finally, MPs marvelled at the “anomaly” by which airport vehicles are allowed to use diesel taxed at 7.69 pence per litre, as opposed to the road fuel rate of 48.35ppl: “It seems utterly perverse to offer them such a large tax reduction, considering the large impacts of airports, not just on global warming, but on local air quality.”

Aviation has been targeted by politicians and campaigners alike as both the fastest-growing of carbon emission sources and the most protected by the tax system.

In 2004 aviation accounted for 5% of total carbon emissions in 2004 – dwarfed by road transport which is the UK’s most significant CO2 source within the transport sector at 21%, according to a previous EAC report.

But expanding at half the current growth rate, Britain’s aviation industry will account for 50% of all carbon emissions by 2050 if we are to stabilise atmospheric CO2 at 550ppmv, according to a recent Tyndall Centre study.

The aviation sector’s climate impact is far from limited to CO2, which itself only accounts for around 60% of the global warming effect. Because of the sensitive region of the atmosphere that aircraft pollute, the effect of other greenhouse gases emitted by aircraft engines is particularly strong, but not included in most statistics.

The full report from the Environmental Audit Committee can be found here.

Goska Romanowicz

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