Chancellor doubles airline taxDrivers and flyers hit in Pre-Budget Report

06 December 2006

 

A plane in the sky

Air passengers and drivers are set to be hit in the pocket after Chancellor Gordon Brown today ended the freeze on fuel duty and doubled the tax for air travellers.

In his tenth Pre-Budget Report Mr Brown promised that the extra funds raised would be used to fund the government's priorities such as public transport.

He told the Commons that fuel duty will go up by 1.25p a litre from midnight, ending the three-year freeze.

And from the start of February air passenger duty (APD) will double - rising from £5 to £10 for economy-seat passengers on domestic and European routes, with the APD rising from £20 to £40 for economy-seat travellers on long-haul flights.

Air passenger duty

Passengers travelling in airlines' various business class and first class cabins already pay twice as much in APD as those sitting in economy class.

These premium-class travellers will, from February, have to pay £40 for short-haul flights and £80 for long-haul flights.

Paul Charles, Director of Communications at Virgin Atlantic, said: ‘History has shown that since the APD was introduced, the number of passengers flying has increased sharply. Virgin Atlantic believes that higher taxes are not the answer to tackling global warming, as travellers will always want to fly to see friends and relatives or meet business contacts.

‘Increasing APD does not incentivise the aviation industry to find solutions for the cleaner engines of the future. Instead, there needs to be a greater focus on cutting emissions at source, through a combination of measures such as towing aircraft towards runways instead of taxiing on engines, greater efficiencies within European air traffic control systems, and the creation of a European emissions trading scheme.’

Environmental measures

Mr Brown also announced an environmental package of measures, which included an exemption from stamp duty for new zero-carbon emission homes.