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Dying on a Jet Plane- £10.4 billion air travel subsidy 20.03.07

The aviation industry is the fastest growing producer of carbon emissions in the United Kingdom, due to enormous tax breaks it is also heavily subsidised according to the World Development Movement.

The anti-poverty pressure group, the World Development Movement published it findings on the aviation industry this morning (19th March 2007), it found that 54% of all air travel originating in the United Kingdom was done by the top 18% of the population, the poorest 18% account for a mere 5%. The average salary of passengers at UK airports is £48,000.

This report flies in the face of claims that the growth in air travel has been by less well of Brits benefiting from the loss cost carriers. Indeed according to the report the number of poorer people flying is actually reducing from over eight million flights for those that earn under £14,374 in 2000 to seven million in 2004. On the other hand those earning over £28,750 increased from 28.8 million to 36.5 million.

In the Report,, Dying on a Jet Plane the World Development Movement calculates that the lack of tax on aviation fuel and its VAT free status accounts for a “hidden” subsidy of approximately £10.4 billion, that is £173 per person, kids included, in the United Kingdom.

Air travel is the fastest growing sector of carbon emissions in the UK, in 2005 the carbon emissions from aviation accounted for 6.3% of the UK’s total. The carbon equivalent emissions, such as high altitude vapour, are a little more difficult to calculate, the Intergovernmental Panel on Climate Change (IPCC) have estimated that the overall impact of aviation on climate change is 2.7 times their carbon dioxide emissions. That would make the sector responsible for 17% of CO2e emissions, the World Development Movement estimate 10-15%, either way it is a substantial chunk of carbon.

The Government is predicting a doubling of air travel between 2002 and 2020, and a doubling of air freight between 2002 and 2010. The Department of Transport supports new runways at Edinburgh, Birmingham International, Heathrow and Stansted, in total expanded terminals and lengthened runways (To take bigger planes) at 24 of the UK’s airports.

So can tax be imposed on aviation fuel and what would be its impact?

Imposing tax on aviation fuel is not an easy process. The global aviation industry in the 1944 Chicago Convention prohibited aviation fuel tax for international flights, since then around 4,000 bilateral treaties have been signed wrapping this tax dodge in a huge bundle of laws that would be exceptionally difficult to unpick. This mess has lead politicians to find float more tangential routes, or to dodge the question all together.

For the Labour Government the right to and ease of air travel is a key to their feel good Britain, Brown has fought back against “Green air miles allowance” proposed by the Conservatives. He told GMTV "I am not going to penalise the holidaymaker and I am not going to penalise people who have got to travel for all sorts of reasons on domestic flights. I don’t think the Conservative proposals are properly costed or thought-out and I think people will be very angry about that." Basically the Government despite its Draft Climate Change Bill is proposing to do very little to fundamentally change air travel trends, it’s one proposal is to include the aviation industry into the European Trading Scheme thus effectively pushing the problem back onto industry and over to Brussels. The European Commission has estimated that including flights in the ETS will add between £1.20 and £6 to a return ticket. Chris Goodall in his new book “How to live a Low Carbon Life”, calculates that a fuel tax at a similar level to car fuel would add £200 to a return trip to New York, this would make the weekend shopping trip to Fifth Avenue a lot more expensive, similarly the low cost 1 pence trip to Carcassonne would be a thing of the past.

Transport 2000 in its pre-budget report on Transport suggests a number of key changes that could take place without unraveling the 1944 Chicago Conventions, firstly linking the Air Passenger Duty (APD) to an escalator, thus signally a radical increase in this tax, expanding the APD to both air freight and transit passengers, and last but not least changing the VAT status of aviation.

The World Development Movement Report points out the APD takes no account of the efficiency of the plane, it also points out that a full plane is effectively more heavily taxed than a half full one. It points out that taxing emission directly is the fairest and most effective system- this can be done on domestic flights and on European flights, if all European states agree, without coming against the Chicago Convention. For international flights it proposes a flight rather than passenger tax, based on distance traveled, occupancy rate and efficiency of the aircraft- effectively an emissions tax by another name that includes freight travel as well as passenger.

It would take £1.8 billion to insulate the cavity walls and lofts of the 3,7 million British home living in fuel poverty, raising the quality of life of a sixth of the British population and lessening the country’s CO2 emissions. £4.6 billion for ten years would link every unconnected home in the world to a sustainable electrical supply, 3.4 billion until 2015 would meet the Millennium Development Goal of halving the people in sub-Saharan Africa without safe access to water and sanitation.

Peter Shield

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World Development Movement

Transport 2000

Airport Watch

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