§ 8. Mr. Gerald Howarth (Aldershot)How much tax was raised on AVGAS aviation fuel in (a) 1990, (b) 1997 and (c) 1999. [141840]
§ The Financial Secretary to the Treasury (Mr. Stephen Timms)The amount of excise duty was £4.8 million in 1990, £7.5 million in 1997 and £11 million in 1999.
§ Mr. HowarthI am most grateful to the Minister for that reply. He will be aware—as will many of his right hon. and hon. Friends—that Britain is one of the world's leading aerospace countries, with a long history in aviation. Is he also aware that our flying training organisations are finding life extremely difficult at present? That is not simply because of the increased cost of crude oil, but because of the additional burdens imposed on them by new flight crew licensing requirements—and the need to invest about £4,000 per aeroplane in order to provide suppression of commercial radio stations by the extension of the FM band. Such is the burden on flying training organisations in this country that, for example, British Aerospace has moved its flying training from Perth in Scotland to Spain, where it saves 50 per cent. of its costs.
I suggest to the Financial Secretary that he might do something to help that important component of one of Britain's leading industries by cutting the rate of fuel duty—[Interruption.] It is a fairly modest amount of money. He might also try to help in other ways, because the industry is struggling greatly at present.
§ Mr. TimmsI agree with the hon. Gentleman that the UK aerospace industry is thriving; it is doing extremely well and is a shining example of success in the current British economy. On aviation gasoline duty, it is the case that, since 1982, the rate has been set at half the duty on leaded petrol—previously, it had been set at the full rate. In 1982, the Government of the day reduced it to half rate; that was a compromise between the view that there should be no duty, as, by international agreement, no duty is levied on jet fuel, and the view that aviation should bear the same duty burden as other forms of transport. The compromise reached at that time was right. I continue to support it.
My right hon. Friend the Chancellor cancelled the escalator on fuel duty, introduced by the Conservatives in 1993. He announced a freeze on fuel duty for the coming year. The package of measures that he announced on fuel duty has been widely welcomed.
§ Mr. Geraint Davies (Croydon, Central)Does my hon. Friend agree that there is an argument for a review of 800 aviation tax—especially given both the differential with the tax on cars and the environmental impact? Does he agree that if such a review were to take place, in an internationally harmonised framework, there is an argument that some of that money should be hypothecated to areas near airports, where environmental damage and noise are greater—in particular, in Croydon?
§ Mr. TimmsI think that there is a case for taxing aircraft fuel using international criteria, but at present that is excluded by international agreement. However, we have supported action through the International Civil Aviation Organisation to remove that exemption. We have also supported a request for a European Union study of the implications of taxing aviation fuel in the EU.