This week's Budget revealed that the new government has plans to reform the aviation tax system, in such a way that the Treasury plans to raise £3.8 billion through industry in 2014-2015, compared to £1.9 billion last year. Essentially, this will be achieved by switching from a per-passenger to a per-plane duty, an adjustment that will encourage fuller planes.
Although any major reforms are subject to public consultation, it is likely that such an adjustment to taxation would add hundreds of pounds to the cost of flights for an average family holiday. The prospect of rises in flight costs has alarmed those who fly regularly, and the aviation industry said that families were facing a 'hidden tax bombshell'.
Simon Evans, chief executive of the Air Transport Users Council, said "We accept a polluter must pay, and the reality is in straitened times we all have to pay our fair share... but a 33% increase in what air passengers contribute to the Treasury does seem over the odds."
Some airlines, especially BA, also voiced concerns about the planned reform. A BA spokesman said, "We continue to believe such a tax would significantly damage Britain’s economic competitiveness without bringing any practical environmental benefit."
Environmental groups have been more welcoming to the proposed scheme as it means that planes will fly with fewer empty seats. However, many agree that the amount of tax needs to be increased to really divert people away from air travel.
Friends of the Earth transport campaigner Richard Dyer said, "Switching to a per-plane tax will help to ensure that planes fly full, but the Government must also increase the amount of tax raised in order to help address the national budget deficit. Aviation is lightly taxed compared to other industries because it pays no fuel tax or VAT – so is effectively being paid to pollute at the expense of the public purse."
"Bolder action is needed to ensure aviation takes responsibility for its role in tackling climate change. The Government must scrap all plans to expand British airports – and instead focus on providing fast, reliable and affordable rail services."
The Independent, Friends of the Earth
