Rt. Hon. Geoff Hoon, UK Secretary of State for Transport, speaking at AOA conference
Thu 20 Nov 2008 – The UK’s new Secretary of State for Transport, Geoff Hoon, said in a speech delivered to the Airport Operators Association (AOA) Annual Conference in London earlier this week that the debate around the future of aviation has become extremely polarized. He said there were three main myths which needed to be tackled concerning the environment, airport capacity and high-speed rail links. AOA’s Executive Chairman Ed Anderson told delegates the impending switch by the Government to an aircraft-based duty was “the wrong tax at the wrong time”.
Hoon said the aviation industry was complex and fast-moving, and although the current economic situation was challenging, the aviation sector was well-placed to weather the storm and remain successful. Aviation has enjoyed remarkable growth in recent decades, he went on, with the number of passengers passing through UK airports growing rapidly from 32 million in 1970 to 241 million in 2007 – a more than six-fold increase.
He believed the growth had helped underpin the business competitiveness of the United Kingdom and the lower fares and increased numbers of flights had “democratized global travel so that it is no longer the exclusive preserve of the rich ... providing opportunities to travel for ordinary hard-working families that would be the envy of many previous generations”.
“Personally, I believe that this is a huge positive both for the economy and for the quality of life of people living in this country. However, it also creates challenges that we must deal with as a responsible government and as a society that cares about our legacy for future generations.
“Modern aviation means that the world is getting smaller. We have to adapt to its changing nature. That includes mitigating the negative aspects of that change as we enjoy the benefits of globalization.
“I am concerned, though, that the debate around the future of aviation has become extremely polarized. We need to concentrate on the facts.”
He spelt out three main “myths” he saw as at the heart of the debate:
· Firstly, that it is impossible to reconcile supporting aviation expansion with supporting the environment;
· Secondly, that there is an easy way to make airports better for passengers without considering additional capacity; and
· Thirdly, that it is possible to largely abolish short-haul flying and transfer its passengers to high-speed rail links.
On the first “myth”, Hoon said it was “a complete fallacy” to argue there was a simple choice between supporting aviation and protecting the environment. “More fundamentally, I simply do not accept that we have to make a choice between a strong economy or being green. As [Nicholas, now Lord] Stern made clear, it is not about extremes. It’s actually possible – with the right, responsible policies – to do both.
“That is why, for example, this government has been so strongly in favour of including aviation in the EU Emissions Trading Scheme. And I hope that next year we can make further progress towards our ultimate goal of a global deal.
“Emissions trading allows us to say, clearly and unequivocally, that expanding aviation does not lead to increased CO2 emissions. Any expansion would have to live within the tight caps proposed by the EU and any growth in aviation emissions will be fully offset by a reduction in emissions elsewhere.
“That is a huge achievement, which sets the industry firmly on the path to long-term sustainability. We don’t make enough of it. Let’s all go out and make that fundamental point clear. More planes does not mean more CO2 overall.
“The battle against climate change requires action in all areas of course. That’s why we are collaborating with other stakeholders on Greener Skies initiatives such as Functional Airspace Blocks and the ACARE programme to reduce noise and emission levels across the industry. The aviation industry needs to concentrate its spending on research and development and greener technology.”
Hoon claimed it was “nonsense” that capacity no longer had to be addressed because traffic forecasts had dipped. He said the Government’s 2003 White Paper offered a “measured and balanced” approach to future growth, “while at the same time dealing with the impact of aviation on our environment, including its effect on climate change”.
“It is that type of long-term thinking that this industry needs and that has been so sadly lacking in the past. Well let me tell you that this Government’s policy for aviation will continue to take a long-term view.”
Hoon is due to announce very shortly the Government’s decision on the highly controversial Heathrow expansion proposals and his comments could be taken as a signal that they will get the go-ahead, despite fierce objections. However, he went on to say that Government support for the development would depend on being able to meet stringent local environmental conditions.
He said that although high-speed rail had an important role to play on certain routes and in certain markets, it could only ever make a modest impact on aviation traffic. “So rather than pretending we’re faced with a false choice between aviation and high-speed rail, let us face the fact that they are complementary. We need to work on taking both forward.”
He concluded by saying that the recent attention given to the aviation industry and the contentious nature of the debates highlighted the need for the sector to step up its engagement with passengers, businesses and the communities in which it operated.
The Airport Operators Association’s Executive Chairman, Ed Anderson, told delegates that the UK Government’s proposed switch from Air Passenger Duty to a per-flight Aviation Duty would add around £100 ($148) to the price of a long-haul air ticket. The AOA is concerned that the change to Aviation Duty in November 2009, expected to be announced in a Pre-Budget Report next week, will lead directly to a 5% drop in passenger demand in the first year, and that further stepped increases in the tax planned for the following years will further damage the industry and penalize the passenger.
“Aviation Duty is the wrong tax at the wrong time,” said Anderson. “It will harm air freight; it will jeopardize regional air links; and it will damage the UK’s competiveness within Europe. The environmental argument which the Treasury makes for the tax is extremely weak and at a time of economic turmoil the cost is unjustifiable.”
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