Finance Bill

I disagree. I thought that we had a consensus that long-distance flights were more environmentally damaging than short-distance flights. Let us move on, because I wish to come to suggestions made to amend our APD system in order to avoid the anomalies. Ticketing systems are based on national territories. As such, it is straightforward to base the tax on countries, and we think that the capital city is the most coherent and principled proxy. Where it is administratively simple to divide a territory at an appropriate point, as in the case of the Russian Federation, the Government have done so. Of course it is possible to determine the exact distances of flights, and I take the point that my hon. Friend the Member for Walthamstow made about the administration of that. Such an approach would be slightly more complex because of the ticketing systems that airlines use, and any consequent increases in cost could be passed on to passengers. My hon. Friend was right when he mentioned the Chicago convention and the fact that the distance link might be so closely tied to fuel consumption as to raise questions about legality. He asked that we should focus our attentions on that, and I assure him that the Government continue actively to support international action at the International Civil Aviation Organisation. It administers that convention, which, as someone rightly said, was signed in 1944 and created the framework. The convention has been revised frequently, but we think that it is now in need of modernisation, and that is particularly true in relation to the environment. The UK and other like-minded states believe that the current practice of exempting aviation from fuel taxation is anomalous and we have succeeded in increasing our focus on the environment, but it has not yet been possible to reach consensus in the ICAO on specific economic instruments. I assure all hon. Members that we are committed to engaging actively, together with our European partners, to press for greater action on the environmental impacts of aviation. There will be instances in any banding system where a capital falls either just within or just outside a band, or a territory covers a large area. Calls for exceptions to be made for a specific country or group of countries can generally not be met without breaking international law principles of uniform treatment. Making changes in the banding system to change the impact on one group of countries in particular could reduce the revenue from APD, thus requiring the money to be found elsewhere. It could also undermine the environmental signals from the tax and, in addition to legal considerations, it could raise distortion issues with comparable destinations.