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Last Updated: Tuesday, 23 January 2007, 15:40 GMT
UK airlines attack 'green taxes'
EasyJet Boeing 737
EasyJet insists it is serious about tackling emissions
Chancellor Gordon Brown's air passenger tax has been attacked by three of the UK's leading airlines as the wrong way to fight climate change.

British Airways, EasyJet and Virgin Atlantic, appearing jointly before MPs for the first time, insisted they were serious about cutting emissions.

But Mr Brown's air passenger duty did not create an incentive to invest in cleaner technology, they said.

All three backed carbon trading as the best way to reduce emissions.

In his November pre-Budget report, Mr Brown increased air passenger duty (APD) from 5 to 10 on short haul flights. Long haul passengers will pay up to 80 extra.

But Barry Humphreys, Virgin Atlantic's director of external affairs and route development, said the chancellor's scheme was "a poor environmental tax".

"It does not achieve any environmental objectives. There must be better ways of achieving those objectives," he told the Commons Treasury Committee.

Global scheme

He said the European Emissions Trading Scheme, which airlines are due to join in 2012, was a more effective system.

I get the feeling you have been dragged to the table - there are no initiatives from yourselves
John McFall, Treasury committee chairman

He said Virgin Atlantic, which has said it will donate future profits to developing green technology, was trying to persuade US airlines to join a global carbon trading scheme, although the final decision would be taken at government level.

They "would be far happier" with the tax "if the money collected by the chancellor was used for environmental purposes", said Mr Humphreys.

Andrew Kershaw, British Airways' environmental affairs manager, called on air passenger duty to be replaced by a carbon trading scheme.

"We believe it would be more suitable to have something more in line with emissions trading rather than based on taxation, which we don't believe is environmentally effective.

"Equally, we believe that once emissions trading was in place as a more effective mechanism, there would be no purpose in having an APD or other environmental tax."

Andrew Barker, EasyJet's planning director, also criticised the chancellor's tax.

"The problem with any tax is that it takes money away from us to invest in the new technology that reduces emissions."

He added: "If we pay tax, it has to be something that forces good behaviour on airlines and forces the end result of fewer emissions."

'Idiot economist'

Roger Wiltshire, of the British Air Transport Association (BATA), dismissed reports that allowing aviation into the European emissions trading scheme would create windfall profits for airlines from the allocation of carbon quotas.

"Quite frankly we laughed when we heard that comment. The only way an airline in an overall capped scheme could make a profit would be to close up shop," he said.

The airline could sell all of its carbon quotas, but then it would have to cease trading, he explained.

The three airlines moved to distance themselves from comments by Ryanair chief executive Michael O'Leary, who described Sir Nicholas Stern, whose report on climate economics prompted the committee's inquiry, as an "idiot economist".

Mr Wiltshire, whose trade body represents several UK airlines including British Airways and Virgin Atlantic, said: "We welcome the Stern review. We think it's a measured report."

Working together

Mr O'Leary had declined an invitation to appear before the committee, chairman John McFall told the airlines.

Mr McFall agreed it was encouraging that Ryanair's low-cost rival EasyJet had agreed to appear before MPs, along with two other commercial rivals.

But he said the airlines were not doing nearly enough to work together to fight climate change.

"I get the feeling you have been dragged to the table. There are no initiatives from yourselves," he said.

He asked the three firms to write to the committee in six months time with a joint initiative to cut emissions.


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