Legal questions over doubling of air tax
Gordon Brown’s hike in air passenger duty comes into effect today, amid claims that it is not legal because it has not been approved by parliament.
The chancellor announced in December’s pre-Budget report that the tax should double, taking the toll on short-haul flights to £10, and £40 on long-haul flights.
Anyone who booked their flights before the announcement to travel today or from now on will have to make up the difference at the airport, although BA has offered to cover the difference for its passengers who find themselves in this position.
The move was hailed as proof of the chancellor’s green credentials, as it is intended as a disincentive to fly. Aviation currently accounts for six per cent of all carbon emissions.
However, the aviation industry condemned the tax and so did environmental campaigners, who argued it would do little to change people’s behaviour. Opposition parties have also warned it must be off set by a reduction in taxes elsewhere.
In addition, MPs on the Treasury select committee last week raised concerns that the air passenger duty hike would come into effect before it could be approved by parliament.
The Treasury responded that this was standard procedure, but the committee noted that officials failed provide any evidence to support this argument. Earlier this week, the Conservatives published legal advice that backed the committee’s position.
“In the absence of any Commons resolution or any other legislative step to change the rate of air passenger duty, there would seem to be no lawful basis at present for the demanding of the additional monies,” the independent advice said.
Shadow chancellor George Osborne warned the increase in air passenger duty “fails on both counts”, both because it may be illegal and because it simply adds to the tax burden.
“Gordon Brown fails to understand that to get support for new green taxes they should be off-set by cuts in other taxes. Gordon Brown’s own track record on raising taxes should also indicate that all changes in taxation should be competently introduced,” he said.
However, the Treasury has insisted there were legal precedents to the way the tax was being introduced, such as the decision to raise levies on North Sea oil, which came into force a month after it was announced but before parliament approved it.
A spokesman also stressed that the tax was not a levy on passengers but on airlines and travel companies, and it was a “commercial matter” if they chose to pass the costs on. It would also not be collected until after MPs had given their approval, he said.
But Menzies Campbell, the leader of the Liberal Democrats, said today’s increase was “no more than another ‘stealth’ tax by the Blair-Brown government”.
He claimed the government had admitted to the Commons environmental audit committee that the rise may have no impact on carbon emissions, saying this demonstrated the “shallowness of the government’s green thinking”.
To read more responses to the air passenger duty hike read our issue of the day
