Business View: Brown knocks airlines off their 'green' course

Chancellor's tax on travel is an act of sabotage on political colleagues
Click to follow
The Independent Online

So Calamity Brown strikes again. Not content with ruining the pension system in the UK through swingeing taxes, he is now doing his best to sabotage the efforts of his Cabinet colleagues at Defra to talk airlines into helping in the fight against climate change.

David Miliband, a Blairite, had high hopes for his scheme to persuade the UK's airlines to address the growing problem of their carbon emissions. But thanks to the Chancellor's latest tax raid on air travel, his ambitions lie in tatters.

As part of the pre-Budget report, announced on Wednesday, Mr Brown doubled air passenger duty to £10 on short-haul economy trips; to £20 for business class; to £40 for long-haul economy; and to £80 for higher-class tickets.

When it comes to fighting climate change, it was classic Brown behaviour: raise taxes enough to bring in the odd billion quid, but without doing enough to make any real difference to environmentally damaging consumer behaviour.

The only thing he managed to achieve was a big fat raspberry from the airlines, which, unsurprisingly, are no longer interested in Defra's plans. In fact one airline is rumoured to have sent the department's mandarins a letter of grievance that finished with a very short sentence ending in "off".

Airlines should accept that they have to do more to alleviate the damage done by air travel. And my guess would be that most passengers wouldn't mind paying a little extra to offset their carbon emissions. British Airways already has a carbon calculator on its website to enable its customers to do just that, but the option is too well hidden.

Anyway, both airlines and the consumer do not trust Mr Brown to use a flat-rate air passenger duty to fight climate change. It's a bit like giving a footballer's wife a credit card and asking her to shop responsibly.

Business should be given the opportunity to address climate change issues on a voluntary basis before Government, on this occasion in the shape of Mr Brown, imposes clumsy taxes to solve the problem.

Meanwhile, over at Defra, we can only imagine what is going through the minds of civil servants who had spent months working on a plan to coax the airlines into taking responsibility for their carbon emissions.

It makes a mockery of the idea of joined-up government, and flings an economy-class ready meal into the Chancellor's eye.

Russia's whip hand

On Wednesday, Shell will learn whether it will have to fork out hundreds of millions or even billions of dollars to the Russian government, for alleged breaches of the country's environmental regulations.

Of course, the report by the Ministry of Resources is little more than a convenient brickbat with which to batter Shell. Russia is, after all, hardly known for its environmental credentials.

The reality is that the Russian government is desperate to grab more revenues from its giant gas fields and is now less dependent on Western companies to provide the necessary investment than at the time when these deals were signed.

The spat between the Kremlin and Shell over the Sakhalin 2 project is just the latest episode illustrating how risky it is for Western energy companies to invest in Russia. But oil giants such as Shell, faced with falling reserves, have no choice but to deal with the former Soviet giant. Western Europe, including the UK, is becoming increasingly reliant on Russian gas to feed its power stations and light its homes.

In energy terms, the global superpower is not the United States, but Russia.