Budget: Rishi Sunak makes flights cheaper despite warnings to cut UK’s air-travel demand

Government will also freeze fuel duty to make it cheaper to drive

Jon Stone,Andrew Woodcock
Wednesday 27 October 2021 21:50
Budget 2021: Sunak announces cut to Air Passenger Duty for some domestic flights

Rishi Sunak has been accused of undermining the UK’s response to the climate emergency, after his Budget included measures to make it cheaper to take internal flights and drive cars that emit greenhouse gases.

The moves – branded “astonishing” and “retrograde” by Friends of the Earth – were unveiled just days ahead of the crucial Cop26 global warming summit in Glasgow, at which Boris Johnson will plead with the international community to cut carbon emissions.

And they came just a day after the government’s own Climate Change Committee (CCC) told the prime minister that his administration’s net zero strategy had “nothing to say” on aviation and must take further action to discourage people from flying.

Environmentalists said that a Budget statement that spent longer on the reform of alcohol duty than the government’s net zero targets would effectively “extend the age of fossil fuels” in the UK.

In a Budget that he said would lay the foundations for an “economy fit for a new age of optimism”, the chancellor said he wanted to make internal air travel cheaper in order to “cut the cost of living”.

From April 2023, air passenger duty (APD) on flights between airports in England, Scotland, Wales and Northern Ireland will be reduced from £13 to £6.50 per leg, offset by increased rates for long-haul routes.

Mr Sunak claimed the policy – costing the Treasury £275m between now and 2026-27 – would “help cut the cost of living, with 9 million passengers seeing their duty cut by half”.

“It will bring people together across the United Kingdom, and – because they tend to have a greater proportion of domestic passengers – it is a boost to regional airports like Aberdeen, Inverness and Southampton, which are major regional employers,” he said.

But the policy effectively pushes passengers to switch from rail to flying, by cutting the price of internal flights at a time when rail fares are set to see their biggest rise in a decade.

It is the polar opposite of what is being done in some other European countries, which have increasingly moved to restrict domestic air travel where rail alternatives are available.

The Office for Budget Responsibility forecast it would result in around 410,000 more passenger journeys a year (a 3.5 per cent rise).

And the new £91 “ultra-long-haul band” of APD will affect just 5 per cent of passengers, as it applies only to flights over 5,500 miles.

The chancellor also confirmed he would extend state support to English airports for a further six months to “help them get through the winter”.

And he continued the practice of all Conservative chancellors since 2010 by freezing fuel duty, a policy that has made it increasingly cheaper to travel by car than to use more environmentally sustainable alternatives.

The twelfth successive year of frozen taxes on petrol and diesel will cost the Treasury £1.6bn annually and a total of £7.9bn by 2026-27.

According to the OBR, motorists have benefitted to the tune of £65bn from the freeze since 2010, compared to a rise in line with inflation, making it one of the government’s most generous tax cuts. Mr Sunak said it had saved the average car driver £1,600 over the period.

This year’s freeze alone was predicted by the OBR to increase purchases of fossil fuels by 450 million litres over the next five years.

In a statement earlier this week, the CCC – a statutory body that advises the government on its climate change targets – said options for reining in the growth in aviation should be “explored further with a view to early action”.

The CCC said: “The government does not include an explicit ambition on ... reductions in the growth of aviation, and policies for managing travel demand have not been developed to match the funding that has been committed.”

Friends of the Earth’s head of policy Mike Childs responded with horror to the Budget package.

“Cutting APD on domestic flights is an astonishing move that completely flies in the face of the climate emergency,” he said. “The chancellor should be making it cheaper for people to travel around the country by train, not carbon-guzzling planes.

“APD for all flights should have been increased, or even better, replaced with a frequent flyers levy, aimed at curbing multiple flights taken by a minority of people each year.

“As the prime minister prepares to host next week’s crucial climate summit, this retrograde step is another illustration that the government’s carbon reduction plans don’t add up.”

Rebecca Newsom, head of politics at Greenpeace UK, said Mr Sunak was “actively making things worse by making it cheaper to fly between UK cities”, while James Thornton, chief executive of environmental law charity ClientEarth, said the announcement on fuel and domestic flight duties “goes against everything we know about climate change” and warned that the UK had “missed a crucial chance to lead by example”.

Luke Murphy, head of the environmental justice commission at the Institute for Public Policy Research think tank, said Mr Sunak had “used the Budget to extend the age of fossil fuels”.

“Cutting air passenger duty was the most significant new policy mentioned in the Budget speech today, which will have an impact on greenhouse gas emissions – and it will increase them. Rishi Sunak talked for longer about beer duty than our duty to future generations to address the climate and nature crises,” he said.

“The truth is, this climate-void, fossil-fuel-heavy Budget failed to deliver the necessary £30bn of investment needed each year to meet our climate and nature targets.”

And Sam Alvis, head of green renewal at Green Alliance, said the chancellor’s approach to climate was “increasingly difficult to understand”.

“Just days away from a vital climate conference championed by the prime minister, Rishi Sunak barely mentions net zero and encourages people to fly around the UK rather than take the train. The measure on air passenger duty will even cost the Treasury money rather than boost its revenue,” he said.

Ed Miliband, Labour’s shadow energy and climate secretary, said: “Another Budget from the chancellor which failed on both the cost of living crisis and the climate crisis.

“No green recovery, no plan to save families £400 on bills, no plan for green steel. Working people will pay the price of Tory climate delay.”

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