Finance Bill

The hon. Lady did not listen to me. I shall not give way again unless she listens. I clearly said that air passenger duty has an environmental impact. The consultation that I have confirmed today is about a point that business raised with me and has an environmental impact. For example, it has been put to me that the structure of air passenger duty makes it unsuitable for business-only flights, which may offer 100 business class seats on a plane designed to carry 300 passengers. Clearly, that has an environmental impact. However, as I explained, air passenger duty is not principally an environmental tax in the same way as the landfill tax, the aggregates levy or the climate change levy, which are designed with an environmental impact specifically in mind. The problems with amendment No. 13 are not so much technical as legal. International laws, within which we must work, prevent taxing emissions from aviation inasmuch as they are linked to fuel consumption. Courts have successfully struck down taxes on that basis. In a Swedish case involving the Braathens Sverige airline, the European Court of Justice held that a tax that resembled a tax on fuel, such as a tax that related to carbon dioxide emissions, was incompatible with legislation predating the energy products directive. The judgment of the European Court, of course, binds the United Kingdom. I have consistently said to Select Committees and to the House that our preferred policy for tackling the impact of aviation on climate change is the European Union emissions trading scheme. That is why we have worked so hard to press the case for, and achieve progress on, the inclusion of aviation in the scheme. I have also made it consistently clear over a number of years that APD is not the most environmentally effective tax for aviation. It is, however, established, available and compatible with international law. I should also add that, unlike some of the proposals suggested by others, it is a simple tax to operate and it imposes a small compliance burden on the industry and on air passengers. APD has a role to play in recognising the environmental costs of air travel, and in ensuring that air passengers understand and acknowledge the environmental costs of their actions. The rise in APD announced by the Chancellor will have an environmental impact. That is why, before the pre-Budget report, many of the green groups were arguing for an increase in the APD, as it is currently designed and structured. It is also why, after the Chancellor’s pre-Budget report statement, groups including Transport 2000 welcomed the move. I hope that, having been able to air some of the wider arguments in this short debate, the hon. Member for Twickenham will not seek to press his amendment to a vote. His proposal would delay the increase in air passenger duty, as my hon. Friend the Member for Wolverhampton, South-West pointed out, and that would be undesirable. I hope that the hon. Gentleman will not press his amendment, but if he does, I shall have to ask hon. Members to resist it.