Government sources have confirmed the Treasury has dropped plans to replace Air Passenger Duty (APD) with a per-plane tax related to carbon-dioxide emissions from flights.
A Downing Street source confirmed at the weekend: “We tried and tried [to find a way of implementing the policy] and it just wasn’t workable.”
The government has previously refused to comment on speculation that it has dropped proposals to scrap APD because the Treasury has failed to find a way around international aviation regulations that make a tax on aviation fuel illegal.
Leading travel companies recently banded together to campaign against further rises in APD and to demand a Fair Tax on Flying.
Previous attempts to build an alliance against increasing rates of APD had been weakened by the failure to agree a common line – with Tui Travel, Thomas Cook, Abta and easyJet supporting a move to a per-plane tax and British Airways and Virgin Atlantic leading opposition to such a move.
EasyJet greeted confirmation of the government’s retreat by saying: “If this were true we would be very disappointed. A per-plane tax is both a fairer and a greener tax.”
The government coalition deal between the Conservatives and Liberal Democrats includes an agreement to change aviation duty and Prime Minister David Cameron has previously described APD as “perverse” because it does not include cargo or private jets and applies at the same rate per passenger whether aircraft are full or empty and more or less polluting.
Aviation minister Theresa Villiers recently confirmed that Chancellor George Osborne would make a statement about APD in his Budget statement on March 23. There are fears this may mean a further increase in rates this November.