7th July, 2020
The Chancellor is expected to deliver a ‘summer statement’ tomorrow, including key measures to help deliver an economic recovery from the Coronavirus lockdown. With some in the aviation industry, and some MPs, having called for a suspension of Air Passenger Duty in a bid to stimulate air passenger demand, we sent a briefing to the Treasury arguing that aviation tax should be retained and in fact increased for the following reasons:
- The Government should not be implementing measures designed to stimulate aviation demand in the absence of meaningful policies to tackle the sector’s environmental impacts, including noise and climate change. While the industry has set itself a target of net zero emissions there is currently no policy mechanism for holding it to account to deliver this.
- Many airlines have benefited from government loans and made extensive use of the staff furlough scheme during the pandemic. In recovering, they should make a fair contribution towards rebuilding public finances, and on the spending necessary to support a green recovery.
- Travel abroad should not be incentivised at a time when the UK’s domestic tourism and hospitality sectors need to rebuild.
- Aviation is already very lightly taxed – too lightly, NGOs have argued.
- Flying is a discretionary activity undertaken largely by those in the top half of the income spectrum. The 15% of the UK population who fly frequently are responsible for 70% of all flights, with the 1% most frequent flyers accounting for close to a fifth of all flights by English residents. To put the sector on a trajectory compatible with net zero, there is a strong case for increasing taxation rather than providing high income passengers with tax breaks.
Click here to read the briefing in full.