Chancellor claims APD changes will reduce emissions

The chancellor has defended the Air Passenger Duty (APD) changes he announced in Wednesday’s Budget, saying emissions on domestic flights are a “tiny proportion” of the overall amount.

Opposition MPs and environmental campaigners attacked Rishi Sunak’s decision to halve the APD rate on domestic flights, saying it will increase rather than reduce emissions amid the climate crisis.

They also criticised the move in light of the UK preparing to host the UN Climate Change Conference (Cop26) in Glasgow from Sunday (October 31).

Sunak also came under fire from travel industry leaders for the increase in APD on ‘ultra’ long-haul flights of more than 5,500 miles, from April 2023.

The BBC reported that the Office for Budget Responsibility forecast the APD changes could lead to more than 400,000 extra passenger journeys a year, a 3.5% increase, “a figure rejected by the chancellor”.

Speaking to the BBC, Sunak said: “Aviation in general only accounts for about 8% of our overall emissions and of that 8% a fraction, just 4% or 5%, comes from domestic aviation, so it is a tiny part of our emissions.

“So, yes, we are doing this to support domestic aviation and regional airports who will benefit from this but we are also introducing a brand new band for ultra-long-haul travel so those who fly the furthest will pay the highest rates of APD; that’s consistent with our environmental objectives.

“Yesterday the independent watchdog said that our plans, in the round, will reduce carbon emissions and move us further along the path to net zero.”

Sunak added that the government was investing in research and development to create sustainable aviation fuels.

Manchester Airports Group chief executive Charlie Cornish welcomed the 50% cut on APD for domestic routes but said: “The UK has for some time had some of the highest rates of aviation tax in the world and, in the aftermath of these reforms, those travelling on short-haul flights will still pay at least £13 and those on long-haul flights will still have to pay at least £84.

“These taxes are not only passed directly passed onto passengers, making air travel less affordable for all, they have also placed us at a competitive disadvantage when seeking to secure new connections to key global destinations.

“The introduction of the ultra-long haul APD tax band does not assist the industry in terms of aviation decarbonisation and the revenue generated by the levy delivers no environmental benefit.”

Jonathan Wall, managing director of Xeinadin-owned accountancy firm Elman Wall, said: “APD is nothing more than a consumption tax that the government can conveniently justify through climate change commitments despite it being around long before the sustainability and responsibility arguments were elevated into a global debate.

“The decision to halve APD domestically, when there are more carbon-efficient alternative means of travel it could incentivise through tax breaks, doesn’t make sense and highlights the government’s green washing tactic.

“Similarly, if the government were being sincere about its commitment to climate change, it wouldn’t wait until 2023 to introduce the changes.

“There’s also no evidence that rises in APD assist the industry in meeting its climate targets when greater focus and support for research and development into sustainable aviation fuels would be a much more effective use of fiscal levers.

“Ultimately, this is just another aggravation to the industry at a time when it least needs it.”

Nigel Vere Nicoll, president of the African Travel and Tourism Association (ATTA), said the announcement on ultra-long haul APD only affected one African destination – South Africa, but criticised the introduction.

“APD was supposed to be an environmental tax, yet it has never been ring fenced for that purpose,” he said, suggesting the chancellor may “use these funds to balance his own books with not a pound going to environmental research”.

Vere Nicoll added: “The travel industry is committed to any initiative that will help sustain the environment, but APD is not the way forward”

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