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Economy Can Benefit From Green Taxes On Flights

Wed, 18 Oct 2006

A new report released by Oxford University states that imposing green taxes on flights would benefit the economy in the UK as it would encourage people to take holidays in Britain rather than spending their money travelling abroad.

It was found that the British economy was boosted by net increase of £555 million in tourism spending. The results were even more surprising given that the demand for air travel had dropped after the September 11 terrorist attacks.

The impact of the terrorist attacks have greatly increased people’s fear of flying, but the reduction in overseas visitors coming to Britain was more than outweighed by the rise in domestic tourism . This meant Britain didn’t suffer from the situation but actually gained, as domestic spending rose by £1.678 billion while spending by overseas tourists fell by £1.123 billion.

Authors at the Environmental Change Institute of Oxford University, said, "Emissions of carbon dioxide from the British aviation industry had more than doubled since 1990 and would double again by 2030 under the Government’s plans to build several new runways."

The report continued, "The UK will be unable to meet its targets for reducing climate change impacts without action to curb the demand for air travel ."

The latest figures show that Britain generates more flights than any other European country, and a fifth of all international air passengers are on flights that arrive or leave from airports within the UK . It also shows that last year, British residents spent a staggering £17 billion more on leisure trips abroad than overseas tourists spent here.

There was a recommendation for an immediate increase in air passenger duty, which is currently at £5 for short-haul flights and £20 for long-haul flights .

"Raising air passenger duty is legally straightforward and does not require international agreement, unlike other measures such as aviation fuel taxation. Another policy that deserves serious consideration is the addition of VAT to domestic air tickets", said the report.

It was quoted in the report that the Government’s preferred solution, including aviation in the European emissions trading scheme, would not happen for several years at least.
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