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Archived press release

Regions lose out as aviation industry rakes in �9 billion public subsidy

22 September 2003

The UK Regions are potentially missing out on billions of pounds each year because of the huge tax breaks and public subsides given to the aviation industry Friends of the Earth revealed today. The environmental campaigners today called on the Government to make the industry pay its own way, and spend the extra money on improving public transport and other essential public services throughout the UK instead.

The UK aviation industry benefits from £9.2 billion [1] in subsidies through a variety of tax breaks. These include no tax on aviation fuel, exemptions from VAT on flight tickets and buying new planes, and profits from selling duty free goods. Friends of the Earth has calculated how much more could be spent in each UK region and local authority if this money was put to better public use [2].

Friends of the Earth's aviation campaigner, Richard Dyer said:

"Taxpayers are losing millions of pounds to the aviation industry each year. This economic madness must be stopped. The Government must put an end to these tax breaks and incentives and force this polluting and destructive industry to pay its own way. When council cuts are biting, and key public services are being squeezed, these billions would be far better spent on improving public transport and other essential services throughout the country. "

UK - REGIONAL BREAKDOWN

ENGLAND - By Region

Friends of the Earth has also highlighted some of the projects which this money could finance in the UK Regions:

• £9.2billion would pay for about 180,000 additional teachers, nurses or policemen

• £9.2billion represents a tax refund of £557p.a to every person on the average wage (£25,000p.a)

• £940million would pay for the planned extensions to the West Midland Metro

• £2billion would pay for the Thameslink 2000 rail upgrade

• £1.5billion would pay for an upgrade to Manchester's rail network

• £650million would pay for all the public transport improvements recommended in the Tyneside multi-modal study, including the re-opening of 2 lines to passenger trains

Notes

[1] The £9.2 billion subsidy is currently calculated as follows:

Fuel tax @ 45.8p per litre (the same rate as applied to car fuel) would raise:- £5.7 billion

VAT applied to all aspects of aviation would raise:- £4.0 billion

Abolishing Duty Free would raise:- £0.4 billion

Deducting Air passenger Duty (currently £5 or £10 per ticket) -£0.9 billion

Current Net Subsidy =£9.2 billion

[2] Friends of the Earth calculated how this £9.2billion subsidy could be allocated to the regions, counties and districts in the UK by using a simple pro rata basis based on population size. The figures do not therefore take into account the concentration of flights in the South East, they merely provide an illustration of what the subsidy means on a local level.

The figures for all the local councils in the UK are listed at the following web link:-
www.foe.co.uk/resource/evidence/uk_aviation_subsidies.pdf (PDF†)

†To view PDF files you will need to download Adobe Acrobat Reader. Visually impaired users can get extra help with these documents from access.adobe.com.

For further information please contact the Friends of the Earth media team on 020 7566 1649.

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