Airlines pay no tax on aircraft fuel, virtually no VAT, and benefit from Duty Free sales on international flights. These tax breaks amount to an indirect subsidy of £9.2 billion a year [1] – and it's the taxpayer who picks up the bill, whether they fly or not.
The Action Day is set to coincide with this year's Budget. Friends of the Earth have been calling on Gordon Brown to take action to make airlines pay for the impact they are having on the climate. Aviation is the fastest growing source of carbon dioxide, one of the principal gases that cause climate change. New figures earlier this week showed that carbon dioxide levels in the atmosphere rose last year at one of the fastest rates ever recorded [2]. UK aviation emissions have grown by more than 70 per cent over the last decade and Faye Page, from Birmingham FoE added, "With the forecast growth in the aviation industry it will be impossible for the Government to meet its target of a 60 per cent reduction in carbon emissions by 2050."
There are other significant environmental and social problems that will arise from the expansion of Birmingham Airport. Nitrogen dioxide, which is emitted from aircraft engines, is said to increase suffering in people with lung conditions and will also impact on the natural ecosystem. Similarly, the ecosystem will be severely damaged by the construction process of an extra runway and terminal. Noise is also a major factor to consider. When the Government recently tried to lift a cap on night flights, the House of Lords fortunately rejected their plan. Aircraft noise is not only an irritation but a serious health issue to those living close to airports.
Birmingham councillors are keen to support the extension of the airport's Main Runway for the perceived boost it will bring to the economy, yet it could actually aid investment out of the region. The airport enables tourists from abroad to visit the Midlands, but UK tourists spend much more abroad than foreign tourists spend in the UK. This 'tourism deficit' is currently £17 billion per year [3] and is growing, fuelled by the growth in cheap flights.
Contact: Faye Page, Birmingham Friends of the Earth
Tel: 0121 632 6909
Editors Notes
[1] Average calculated thus:- £9.2billion effective subsidy divided by no. of UK tax payers; 29million
Calculation of the effective subsidy
No tax on fuel: the Treasury stated in 2002 that if airlines paid duty on aviation fuel at the same rate as that paid on petrol this would raise £5.7 billion a year.
Very little VAT: airlines pay no VAT on purchase or servicing of aircraft, fuel, baggage handling, meals etc. Nor is there any VAT on airline tickets. Charging VAT on all flights leaving UK airports would raise around £4 billion a year.
Duty free on international flights costs the Government around £0.4 billion a year.
Air Passenger Duty: this brings in £0.9 billion a year
So –
No tax on fuel £5.7 billion
Virtually no VAT £4.0 billion
Duty free £0.4 billion
Deduct Air Passenger Duty £0.9 billion
Total £9.2 billion
[2] Metro, Wednesday 15th March, "CO2 levels hit 30m year high".
