John Lennon Airport-backed tax cut calls are self serving, Government committee says

CALLS for a cut in air taxes – backed by the owner of John Lennon Airport (JLA) – are “self-interested lobbying” and must be rejected, the Chancellor is urged today.

The Conservative-led energy and climate change committee has written to George Osborne ahead of next week’s Autumn Statement, arguing that airlines must not be “let off the hook on emissions”.

The letter follows a joint plea, by four of the biggest airlines in the UK, to scrap air passenger duty (APD), because it is “incredibly damaging” to the economy.

The chief executives of British Airways, Virgin Atlantic, Ryanair and easyJet said the levy – paid by all passengers on flights departing from the UK, raising £2.2bn a year – deters tourists and discourages businesses from investing in Britain.

Last year, Peel Airports Group, the owner of JLA, protested that APD – on top of the air industry’s inclusion in the EU’s emissions trading scheme (ETS) – threatened regional airports with a “double whammy”. Peel put the combined tax burden at £3.6bn by next year – far higher than the “environmental cost” of flying, which it put at £2bn.

But Tim Yeo, the Tory chairman of the energy committee, writing to the Chancellor, said 85% of EU aviation allowances would be issued for free – which meant it “cannot be considered a replacement”.

The letter backed a shake-up, under which APD would be raised for countries, or operators, that flouted ETS rules, while those in compliance would be “rewarded” with a cut.

But, Mr Yeo wrote: “Emissions in the aviation sector could undermine all of our efforts to combat climate change. The Government must not bow to this self-interested lobbying, but look for ways to make the tax more effective at reducing emissions by penalising the most polluting operators.”

The Treasury plans to raise an extra £900m from APD by 2013, making a rise likely in next week’s crucial financial statement.

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