Transcripts
"No more runways for Britain"
by John Stewart
Aviation growth can easily be halted by cutting tax breaks
This year will be an important one for aviation. In December the Government is set to publish an Aviation White Paper setting out its policies for the next 30 years. In preparation for the White Paper, it is currently consulting on the Regional Air Studies, which outline options for airport expansion across the UK.
Massive airport expansion
The Regional Air Studies are based on government forecasts that passenger numbers will double by 2020 and treble by 2030. Such a huge increase would require the equivalent of almost five new Heathrows by 2030. The prospect of such expansion has aroused considerable opposition, ranging from local protest groups around airports to the great and the good of the green movement. In a recent report the Royal Commission on Environmental Pollution pointed out that aviation was the fastest growing contributor to climate change and called for tough government action to limit growth.
Too many sweeteners
But perhaps the most stinging argument thrown at the Government by its many critics centres on the privileged economic position enjoyed by the aviation industry. The industry in the UK receives tax concessions of at least £7.5 billion a year. This arises largely because there is no tax on aviation fuel and no VAT on airline tickets or the purchase of aircraft. It is these tax concessions which enable the industry to offer so many low fares. In other words, the current and projected growth in air travel is being artificially stimulated by tax concessions. Economists have shown that, if these tax concessions were removed, the current airports could cope with passenger numbers, even in 30 years time.
Two questions arise from this: wouldn't more expensive tickets stop poor people flying; and wouldn't the wider economy suffer? To take the first question: the projected trebling in passengers numbers by 2030 will be made up almost entirely of the top 10% of income earners taking more weekend breaks abroad. Social classes A and B already take up 75% of the seats on budget flights. People in social classes D and E fly very little, if at all, because, while flights may be cheap, the overall cost of a foreign holiday is beyond their budget.
That is not projected to change significantly over the next 30 years. People in social class C, who have been able to fly more often as a result of cheap fares, may need to cut down on the number of foreign holidays. This may not be a major hardship, but it is important to the Government as many of these people are the key 'swing' voters courted by all parties.
Clearly the aviation industry has contributed to the economic prosperity of the UK. But there is little evidence that Great Britain plc would go into decline if government managed demand rather than went gung-ho for growth. The airline sector only accounts for 0.8% of UK Gross Domestic Output, with airports contributing a further 0.13%. Only 24% of trips are for business purposes. The projected growth in air travel is being driven by a leisure market that has been artificially created by tax concessions, not by the solid needs of the business community.
A noisy future
Limiting this growth would have important benefits. A removal of the tax concessions would give the Chancellor of the Exchequer a considerable amount of money each year to spend on other things, including measures that could bring direct benefit to the poorest in society. If growth could be limited to 1% a year, pollution created by aircraft would remain at current levels as the industry expects aeroplanes to become cleaner by about 1% each year over the coming decades. There is, though, no prospect of quieter planes coming on-stream in the foreseeable future. The future for people under flight paths remains grim, even if growth was to be severely limited.
In conclusion, then, what are the prospects of limiting growth? Eliminating the tax concessions - in conjunction with our European partners - is now on the agenda. High-speed rail as an alternative to short-haul flights is being discussed. But it remains very doubtful if this Government will produce a White Paper that goes against the wishes of the aviation industry and the desires of the key swing voters who enjoy flying abroad on cheap flights
John Stewart heads the UK Noise Association. jdm.stewart@virgin.net
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