- The Washington Times - Sunday, March 11, 2007

LONDON — Harsh new taxes on air travel, designed to rise with repeated trips, will be introduced by the opposition Conservative Party today as part of a plan to reduce emissions blamed for global warming.

The proposals, to be disclosed by the party’s legislative leader on finance issues, George Osborne, include the imposition of a value-added tax or fuel duty that would affect business travelers, vacationers and the tourist industry.

The Conservatives will suggest allowing individuals one low-tax short-haul flight each year; subsequent journeys would be taxed at a higher rate, according to a leaked document entitled “Greener Skies.”

The Tories’ green taxes form one of the most ambitious programs ever put forward by a mainstream political party. The plan sparked an immediate tax war with Labor over the weekend, while the travel industry branded them a “tax on fun.”

In a further departure from Tory tradition, the party will underline its green credentials by welcoming former Vice President Al Gore to a meeting of the shadow Cabinet on Thursday.

Mr. Osborne’s document will list a series of draconian, though uncosted, green-tax proposals, the proceeds of which will be plowed into tax cuts “for the family,” said a Conservative source.

Among the proposals, which the Tories say are only options, are:

• Charging a fuel duty or VAT on domestic flights. Revenues raised “will be offset by equivalent reductions in other forms of taxation,” the document says.

• Replacing the $19 to $155 Air Passenger Duty with a per-flight tax levied on airlines, which would penalize the dirtiest engines the hardest.

• A personal “green air-miles allowance,” which would punish those who flew more often with a higher tax rate.

The document states: “For example, everyone could be entitled to one short-haul return flight per year at the standard rate of tax, but additional flights would be charged at a higher rate.”

The leaked paper claims: “We need to find a policy approach whose side effect is not to make air travel the preserve of the better off.”

It also reveals fears that public support for new environmental taxes on aviation would be undermined if it was interpreted simply as a means of increasing total tax revenues. There is a danger that increases in the cost of flights may put air travel out of the reach of those on low incomes.

Mr. Osborne told the Sunday Telegraph: “This demonstrates that we are prepared to take the tough, long-term decisions necessary to tackle climate change and back up green rhetoric with action.”

The policy announcement occurs only a week before Gordon Brown, the chancellor of the exchequer, or treasury secretary, introduces his annual budget, which is expected to include green-tax measures. This week, the government will offer a long-awaited climate change bill, which will set out the economic case for taking action on global warming.

A Tory source said the idea was to punish dirtier aircraft and frequent fliers, not “once-a-year package holidays.”

However, the plans were denounced on Saturday as a “tax on hardworking families” and a “tax on fun.”

A spokesman for the British Air Transport Association, which includes British Airways, BMI and Virgin, said: “These proposals would threaten to decimate the airline industry, the hundreds of thousands of jobs it supports. They would put at risk [Britain’s] position as the global transport hub and our links with the rest of the world.

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