By Alexander Lee
The UK government’s decision to cut taxes on domestic flights has been regarded by environmentalists as a ‘shockingly bad’ budget decision. The government plans to halve domestic air passenger duty to £6.50 per flight starting August next year. Air Passenger Duty (“APD”) is the tax levied per passenger for flights within the UK. As a result, approximately 9 million passengers will pay less for flights within England, Scotland, Wales, and Northern Ireland. Rishi Sunak, the Chancellor of Exchequer, has said that this will correct the imbalance of people having to pay more percentage tax for domestic than international flights and boost regional airports whose businesses have been negatively affected during the pandemic. [1]
Nevertheless, Paul Tuohy, Chief Executive of Campaign for Better Transport claims that this doesn’t solve the issue of how the nation will fund its 2050 net-zero carbon emissions target. Cutting APD would potentially derail efforts to commit to net-zero efforts, steering those residing in the UK to opt for flights (which are faster and cheaper), instead of more environmentally-friendly methods of travel. Such cuts would increase the number of flights per year by 1,000 on estimate as per Andy Bagnall, Director-General of Rail Delivery Group. [2] Additionally, this would also encourage investors to expand their portfolios into aviation, bearing in mind the ESG requirements of their clients.
However, APD has also been raised on trips exceeding 5,000 miles, leading officials to believe that this will balance the incentive to switch to aviation for shorter flights such that the overall effect of the changes will be carbon neutral. However, any long-term commitments to environmental sustainability mean that the UK government has to recognize that the pandemic has changed the aviation landscape permanently and that the new unavoidable reality is that the aviation industry has to be permanently downsized.
References:
[1] Camilla Hodgson, Philip Georgiadis, ‘Green campaigners hit out at Sunak’s tax cut on domestic flights’ (Financial Times, October 2021), https://www.ft.com/content/998ebb23-8dfb-49fb-91b7-821001d8e081, accessed 6 Jan 2022
[2] Earth.org, ‘Reaching Sustainable Aviation Fuel Goals in the Airline Industry’ (Earth.org, October 2021), https://earth.org/reaching-sustainable-aviation-fuel-goals-in-the-airline-industry/, accessed 6 January 2022
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