Brown’s airline taxes under fire
Gordon Brown has come under fire from MPs for raising airline taxes before the House of Commons has a chance to approve them.
A doubling of air passenger duty was a key plank of the chancellor’s pre-Budget report last autumn, and was hailed as proof of his commitment to environmental issues.
But today the Treasury committee questions why the tax hike – which will add £10 to short-haul flights and £40 to long-haul flights – will be introduced on February 1st.
This is at least a month before MPs have a chance to debate and approve the move when they discuss the Budget, which is normally announced in March.
The MPs accept that when tax rises may distort the market or change people’s activities, then they should be introduced immediately, but says there is no evidence that raising air passenger duty will have such an effect.
Treasury officials told the committee that the timing was “perfectly standard procedure”, but today’s report notes they have failed to provide any relevant precedents.
“As a general rule, we consider that, where increases in rates of duties or taxes are proposed in the pre-Budget report, those increases should not come into force until after the House of Commons has had an opportunity to come to a formal decision on the proposed increase following the Budget,” the report says.
Shadow chancellor George Osborne seized on the findings, saying such criticisms from a Labour-dominated select committee were a “huge blow” for Mr Brown.
Putting up air passenger duty early was the centrepiece of the chancellor’s pre-budget report but the way it is being implemented is a lesson in incompetence,” he said.
“After ten years of Gordon Brown’s tax rises you’d think that he would have perfected his stealth tax routine by now.”
The Treasury said it would not comment until it had sent its official response to today’s report to the select committee.
Today’s report reflects industry concerns about the duty increase – although it is intended as a tax on passengers, not airlines, some firms warn they will have to pay for the tax on tickets booked before the pre-Budget report in December, for flights after February 1st.
