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Climate Change (Air Travel)

Volume 460: debated on Thursday 17 May 2007

5. What recent discussions he has had with the Chancellor of the Exchequer on the impact of VAT on air travel as part of the Government's climate change strategy. (137587)

13. What recent discussions he has had with the Chancellor of the Exchequer on the impact of VAT on air travel as part of the Government's climate change strategy. (137598)

The best way available in which to tackle the climate-change impact of aviation is to bring it within the EU emissions trading scheme. However, we continue to explore and discuss the use of other economic instruments, within Government, with stakeholders and with other countries.

Let me say first that I am very sad that the Secretary of State decided not to stand for the leadership of his party. [Interruption.] I think there are other members of the Labour party who think the same, but let me turn to more substantive issues. Does the Minister agree that emissions from aviation are the fastest growing source of greenhouse gas emissions, rising potentially from 5 per cent. today to a possible 25 per cent. by 2030? What changes does he think should be introduced to make aviation play its part in helping to tackle rising carbon dioxide emissions?

I agree that aviation is the fastest growing source of carbon dioxide emissions, but it is not just a question of carbon dioxide emissions. The Intergovernmental Panel on Climate Change estimates that the non-carbon dioxide impact of aviation is two to four times as great as the carbon dioxide impact. That is why the Government have been leading the way in bringing aviation into the EU emissions trading scheme, and why we strongly back the proposals that have emerged from the European Commission, which by 2020 could save 183 million tonnes of carbon dioxide per year.

I think that it will be the Labour movement that, in time, will be sad that the Secretary of State did not stand for the leadership of the Labour party.

In February this year the Government increased air passenger duty, but it has been described by one of the Government’s own members as

“a blunt instrument…not…designed for environmental ends.”

Can the Minister tell us when the Government will tackle the issue properly?

I accept that air passenger duty may not be the most effective policy instrument when it comes to influencing environmental behaviour, but it is one of the best we have. It is certainly far better than the Tory proposal to impose VAT on domestic flights. The simple fact is that the rise in APD announced in the last pre-Budget report will produce more carbon savings in a month than the Conservative proposals will in a year.

The growth in air travel has had a very good impact on the economy of such places as Greater Manchester, which has a rapidly expanding international airport, but has also had a massive impact on carbon emissions. The Minister briefly mentioned the UK’s efforts to have air transport included in the EU emissions trading scheme. Could he update the House as to where the Government are on this?

My hon. Friend is right about the importance of aviation to the UK economy and he gives a good example of the growth and success of Manchester airport. As a Government, we must have a sustainable policy on aviation. We should not be against aviation any more than we are against the cement industry, aggregates, construction, telecommunications or chemicals. Clearly it is important for aviation, like other sectors of the economy, to take responsibility for reducing its carbon emissions, which is why putting aviation in the EU emissions trading scheme is the best way forward. We have been responding to the European Commission’s proposals on aviation and we hope to see significant progress later this year, in accordance with the timetable laid out by the Commission.

Irrespective of whether the Government choose—I hope they will—to use other policy instruments in advance of the EU emissions trading scheme, which is still some years off, and given that the UK already submits information on emissions from international bunker fuels under the Kyoto provisions, should not emissions from both aviation and shipping be included in the Climate Change Bill from the beginning?

Domestic aviation is included in the UK’s greenhouse gas inventory. International aviation and shipping are not, because there is no international agreement on definitions. There is scope to amend the Climate Change Bill to allow the introduction of aviation and shipping, but we need international agreement on reducing carbon dioxide emissions from aviation and shipping. In the meantime, putting aviation into the EU ETS—the UK would support the inclusion of shipping—has to be the next best step. If we can achieve agreement through the International Civil Aviation Organisation to get global action on aviation, that would be much the best for everyone.

There is broad agreement that green taxes do help to change behaviour and I very much welcome the Government’s announcement of their intention that we enter the emissions trading scheme. However, there is also deep suspicion that green taxes are being used to raise the overall level of taxation, rather than simply to combat climate change or to change behaviour. Will the Minister confirm that if Britain does enter the emissions trading scheme, air passenger duty and many other green taxes affecting aviation will be reduced to offset those new taxes?

It is incredible that Opposition Members oppose the climate change levy, which will have more of an impact in a week in terms of reducing carbon emissions than the current Conservative proposal to put VAT on domestic aviation would do in a year, while also opposing the increase in air passenger duty, which will save 2.75 million tonnes of carbon dioxide a year by 2010-11—more in one month than putting VAT on domestic flights, as the original question suggests, will do in a year. This is a nonsense of a Conservative policy—

May I add my condolences to the Secretary of State on his decision not to stand in the Labour leadership race—although there is another hour to go before the period for nominations ends? His campaign to be Prime Minister might be dead, but his ideas on climate change live on in the form of his mini-manifesto, a detailed letter written to the Chancellor in which he calls for increasing passenger awareness of the impact of flights, raising air passenger duty and making flights subject to VAT, which the Minister has just condemned. If we all agree that aviation must play its role in combating climate change and if the Secretary of State believes that that is the way forward, when will we get the opportunity to debate those ideas in this House?

We shall have plenty of opportunities to discuss climate change in the future, particularly in relation to the Climate Change Bill. I welcome the hon. Gentleman to the Dispatch Box and congratulate him on his debut performance; it is just a shame that his task is to defend the Opposition’s shabby policy on aviation—