The American Embassy in London has sent a 6 page letter to the Treasury complaining about a proposed tax per flight that the UK government believes will help to incentivise airlines to fill their planes with passengers, rather than fly half full.
The letter states: “The Treasury’s proposal, although cast as an environmental measure, appears in reality to constitute nothing more than a device for generating additional revenue from the airline community.”
“There is no linkage between the funds collected from airlines and the mitigation of any environmental impact of airline emissions or any other environmental problem…Moreover, the Treasury’s proposal does not demonstrate that the new duty would influence airlines to adjust their fleets or their booking practices to achieve higher load factors…Nor are any data provided to justify the levy based on an assessment of damage from aircraft emissions.”
The Americans also warn the Treasury that the “proposed duty raises serious legal concerns”. It details a number of international treaties and agreements which would allegedly be breached by the new tax raising the spectre of international legal action. The Americans have also sent the memo to other European governments.
Under the plans unveiled by Alistair Darling, the Chancellor, last year, the way in which flights are taxed will be changed from autumn 2009. Instead of each passenger paying a fixed levy per flight, the Treasury will instead tax each plane. Airlines will then pass on the tax to passengers. The amount paid per plane will depend on how far it is travelling with the world divided into three taxation zones and European flights charged less that American and other long-haul destinations.
It’s unclear whether this tax will work and how it will impact on fares to passengers. But one thing is clear, the US should not interfere with UK policy.