Cutting air passenger duty to help Flybe could wreck UK carbon plan

Frequent flyer levy and cheaper trains would help with environmental pledges – but neither is planned

Travel from Exeter to Manchester next Wednesday, and a round trip with the airline Flybe returning the next day would cost you £68, of which air passenger duty amounts to £26. A train ticket for the same journey would cost £141.

This kind of price disparity between domestic flights and rail journeys has been the norm for years, the result of under-investment in railways and rail fares allowed to rise at rates much higher than inflation, while regional airports and airlines receive publicly funded incentives and tax breaks on fuel. It comes despite the government’s much-vaunted green policies, and its repeated goal to reach net zero emissions by 2050.

Given these price differences, and the woeful state of many of the UK’s railways, it is easy to see why the UK’s aviation sector is set to become the country’s biggest source of greenhouse gas emissions by 2050, if left unchecked. That would blow apart the country’s carbon budgets and the net zero commitment.

The Committee on Climate Change, writing to the government last year, warned: “Plausible options for how aviation could become zero carbon, even by mid-century, are lacking. Given a population that is anticipated to grow and rising incomes, some growth in [aviation] demand is expected. However, this cannot be unfettered.”

If the government presses ahead with plans to cut air passenger duty from domestic flights, as it is proposing in attempts to ensure the survival of Flybe, that would also send the wrong signal to the markets, argues Sam Fankhauser, director of the Grantham Research Institute on Climate Change at the London School of Economics. “Air passenger duty is applied as a green tax, based broadly on the principle that the polluter pays. Cutting or removing [it] would essentially reduce or eliminate the carbon price for flying.”

As price comparisons show, air passenger duty at its current rate is at nowhere near the price that would be needed to tip the economic balance away from air travel. Indeed, according to the veteran flying campaigner Leo Murray, director of innovation at the climate charity Possible, that was never the intention.

“It was designed not to have an impact on demand for air travel,” he said. “They [governments] do not want it to reduce demand. Air travel has been regarded as if it is a really precious economic sector.”

Yet the entire sector contributes only about £20bn to £30bn to the national economy, according to estimates, and leisure trips taken abroad by UK residents far outnumber those by tourists coming to the UK. Murray points to a deficit of about £23bn when the amount overseas tourists spend in the UK is subtracted from the amount British holidaymakers spend abroad.

That means, he says, there is economic space for far higher air passenger duty in the leisure sector. Long-haul business flyers could also pay far more without being discouraged from flying, as air passenger duty barely makes a difference to them. “We are bleeding money out of the country, and you could repatriate some of that by encouraging people to stay in the UK,” he says.

One of the fairest ways to curb emissions from flying would be a frequent flyer levy. The majority of flights are taken by a small minority of people – in a given year, most people in the UK do not fly at all, and most of those who do are taking one or perhaps two return flights on holiday. One-fifth of overseas flights are taken by just 1% of the population. The airline industry is kept afloat by well-off people spending more on their leisure, taking advantage of low prices to jet off frequently on short trips.

A frequent flyer levy would allow people a small number of flights a year without charge or at a small charge, while each subsequent flight would attract a much higher toll. Critics say it could penalise people in the outer edges of the UK, such as the north of Scotland or Northern Ireland. But there could be ways to manage those impacts while ensuring that the environmental cost of cheap flights is accounted for.

Encouraging rail travel could also play a big role in reducing emissions from domestic aviation. Germany has just slashed the price of rail travel, to encourage people to use the lower-carbon form of transport. Even more radically, France is considering restrictions or even a ban on some domestic flights.

Both those countries have well developed high-speed rail networks, however, which have benefited from public investment over decades. The UK has only one short stretch of high-speed rail, in the south-east, and plans for HS2 are still mired in controversy.

This November, the UK will host the crunch UN climate conference, COP26, in Glasgow, and the government’s green policies will be scrutinised on the international stage. As ministers consider cutting air passenger duty on domestic flights while regions compete for what is likely to be limited investment in the national rail networks, a coherent green transport policy looks further away than ever.

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