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Public misled over economic benefits of aviation

2nd December, 2011

The economic benefits of aviation are routinely overstated by the aviation industry, and occasionally by Government and official bodies. The latest example has come in the draft of the Gatwick Airport master plan, which claims that “The aviation sector directly accounts for £53 billion (3.8%) of UK GDP.”

How has such a figure been derived, when the Government’s latest estimate is only £9 billion? The Gatwick Area Conservation Committee (GACC) response to the master plan points out that:

“1. It refers to turnover instead of economic output (gross value added). In the Department for Transport Scoping Document (March 2011) it was stated that: “The air transport sector’s turnover in 2009 was around £26 billion and the sector directly generated around £9 billion of economic output.” The £9 billion figure is the correct one to use when referring to the GDP (Gross Domestic Product).

2. It includes the supply chain, so that for example the output of Scottish distilleries making whisky for sale in airport shops is included in the output of the aviation industry. It also includes the spending of employees, so that for example when the worker in the distillery spends his money buying haggis in a Scottish supermarket, the haggis also is included. Such bogus figures are never used in the official national statistics.”

The inflated figure, reports GACC, has been repeated in the leaflets widely distributed around the airport, and in the exhibitions held in various local towns.

Referring to the Government’s estimate of economic benefit, GACC states “Even the figure of £9 billion is too high. As we have pointed out in our response to the DfT Scoping Document, it does not include depreciation”.

In addition, any consideration of the overall contribution of the aviation industry it is important to remember that the sector benefits from tax free fuel and VAT-free aircraft. The Government estimates that the value of these exemptions – if compared with rates paid by motorists – is around £10 billion (see, for example, DfT 2008, Summary of responses to the Government’s consultation on the aviation emissions cost assessment).