Better Transport

The Government should:

• Tax aviation fairly. Airplane fuel is not taxed at all; there is no VAT on air travel or even new aircraft when they are bought. And airport landing fees are much lower than they should be because they are cross-subsidised by retail sales from airport shops
• Replace air passeger duty. It should proceed with the promised introduction of a replacement of air passenger duty with a duty per plane, encompassing both freight operations and transfer passengers for the first time, with effect from November 2009. This would have the advantage of catching freight aircraft and transfer passengers. Any proposals for increased tax on air travel should be matched by tax cuts elsewhere and a clear indication given as to where the money raised will be spent
• Withdraw support for airport expansion plans and seek EU agreement for slot auctions at congested airports. In addition to extra flights that would be catered for by airport expansion, more traffic would be generated by travellers. The proposed third runway at Heathrow is predicted to cause 10 million extra car journeys a year
• Encourage alternatives. Rail travel could be a viable substitute for domestic and near-land Europe short-haul flights (as our chair, John Stewart, recently showed in a report for the union RMT). Around 45% of air journeys in Europe are currently 500 kilometres or less in length; ideal for rail. Using teleconferencing is also a good alternative to flying. People need alternatives to aviation, and can’t just be priced out of the air 
• Tax fuel for internal flights and remove tax exemptions on VAT and duty free

We wrote to the Chancellor, Alistair Darling, in January 2008 and again in July 2008 offering more detail about how taxation could be used to tackle climate change, and responded to the consultation on the proposed expansion of Heathrow Airport in February 2008 by showing how the Government could increase rail use and eliminate the need for aviation expansion.