Frequent Flyer Levy

Meeting: 
MQT on 2016-07-20
Session date: 
July 20, 2016
Reference: 
2016/2411
Question By: 
Caroline Russell
Organisation: 
City Hall Greens
Asked Of: 
The Mayor
Category: 

Question

Proposals for a frequent flyer levy could remove the need for airport expansion at Heathrow and Gatwick. Would you consider carrying out a study into this proposal which replaces Air Passenger Duty with a variable levy based on the number of flights taken?

Answer

Answer for Frequent Flyer Levy

Answer for Frequent Flyer Levy

Answered By: 
The Mayor

Sadiq Khan (Mayor of London):  Thank you for your question, Assembly Member Russell.  Taxation of air travel remains the responsibility of the Government.  It is for them to determine the appropriate regime that reflects the environmental impact of aviation while ensuring that it can play its vital role in supporting the UK economy.

 

I am aware of the proposals raised last year for a frequent flyer levy.  The Government would need to be aware of the risk of perverse consequences if it restricted key business travel and the ability of London to trade internationally, just as the UK needs to be developing new trade links with the wider world.  I suspect that there are also practical challenges.  For example, it is not clear how a database of all UK flyers would be operated or how it might include non-UK residents.

 

As I made clear last week, I support new aviation capacity for London and my view is that Gatwick is the cheapest, greenest and most viable option presented by the Airports Commission.  I believe that the new Government should not delay the decision any further.  The lack of a clear commitment to proceed with additional airport capacity is holding back London’s economy.

 

Caroline Russell AM:  Thank you, Mr Mayor.  We need to separate the issue of airport capacity from the fairness of aviation taxation.  Just 15% of the population are taking 70% of the flights.  These people, who are very frequent flyers, are dominated by some of the wealthiest sections of our population.  They are characterised by earning over £115,000, they tend to have homes abroad and they tend to live in the City, in Westminster, in Kensington & Chelsea and in Surrey.

 

Tony Arbour AM (Chairman):  That is a bit evil, is it not?

 

Caroline Russell AM:  The frequent flyer levy is about making aviation taxation much fairer because our airfares are currently artificially low and aviation is exempt from fuel duty and is zero-rated for value-added tax (VAT), like children’s clothing or disability aids.  This effective subsidy of the aviation sector is about £11.4 billion, which is over £400 per household.  However, the people who are taking the majority, 70%, of the flights are this very small proportion, 15%, of the population who are flying more than three times a year.  What this frequent flyer levy would do is enable people going on holiday once a year to pay no tax on their flights, but all on subsequent flights per year they would pay an increasing amount of tax.  What this would do is it would just make sure that the subsidy on aviation ‑‑

 

Tony Arbour AM (Chairman):  Is there a question in this, Assembly Member Russell?

 

Caroline Russell AM:  Yes, there is a question.  Sorry.  Will you undertake a study of the frequent flyer levy in order to investigate the potential for a fairer way of taxing air travel?

 

Sadiq Khan (Mayor of London):  No.

 

Caroline Russell AM:  OK.  Will your advisors meet with the people who are proposing the idea of a frequent flyer levy?

 

Sadiq Khan (Mayor of London):  No.  Look, if the Assembly Member or those who are advising her want to make representations to the Treasury and the Chancellor, they are welcome to do so.  TfL is doing lots of things.  Aviation is not one of them, nor is taxation on aviation.

 

By the way, when I said that I will be a Mayor for all Londoners, it includes the people of Westminster and Kensington & Chelsea as well.

 

Tony Devenish AM:  Thank you.

 

Caroline Russell AM:  Mr Mayor, the point is that this is about you being able to represent Londoners to the Government.  If you understand the benefits of a frequent flyer levy, you will be better able to represent Londoners to the Government.  In particular, you said earlier in your response to Assembly Member Kurten ‑‑

 

Tony Arbour AM (Chairman):  You are still not asking a question.

 

Caroline Russell AM:  I am asking a question.  You said that there were no problems with Gatwick, but there are 50,000 people who are suffering an increase ‑‑

 

Tony Arbour AM (Chairman):  What is the question?

 

Caroline Russell AM:  ‑‑ in pollution and three times as many people will be suffering noise at Gatwick.  The option of a frequent flyer levy would enable you to reduce demand for these mainly leisure flights.  Does that not seem like a good idea for you to investigate?

 

Sadiq Khan (Mayor of London):  No.

 

Caroline Russell AM:  That is a no?  That is a huge shame.