Examination of Witnesses (Questions 300
- 319)
TUESDAY 24 FEBRUARY 2004
RT HON
ALISTAIR DARLING
MP, MR GRAHAM
PENDLEBURY AND
MR MICHAEL
MANN
Q300 Mr Challen: The December 2003
Departmental paper on air traffic forecasts predicted that by
2030 UK residents would make 103 million return trips abroad as
opposed to 75 million trips to the UK by foreign tourists. Does
this not rather give us a negative tourist balance? Does that
not demonstrate that it is not too good for the economy? If more
people are flying abroad for their holidays than coming here,
it is not doing us much good, is it?
Mr Darling: I think there is a
long tradition of people in this country who look out of the window
on a night like this and think, "I might like to go somewhere
for a sunny holiday." It is a fact that people travel and
go abroad. You could take the view to say, "Sorry you can't
go" or, "We are going to make it more difficult for
you to go," but I do not think that is an approach the Government
should take. A lot of people come and visit this country. A lot
of people in our country, especially as we become better off,
are going to visit other places. I do not think that travel is
necessarily a bad thing, provided you are alive to the consequences
of it and provided that we as a country and actually we as a world
take account of the fact that it does have environmental consequences
and that we seek to do everything we can to mitigate that. Almost
implicit in what you are saying—
Q301 Mr Challen: We are not doing
anything to mitigate it in aviation terms; that is the point.
Mr Darling: That is not true.
The White Paper sets out a number of things that we ought to be
doing.
Q302 Mr Challen: Ought to be doing.
Mr Darling: Yes and that we intend
to do. I do not accept the argument that somehow you should restrict
people in this country being able to travel abroad. I may have
misunderstood you but that seems to be implicit in the question
that you ask.
Q303 Mr Challen: It is a question
about trying to control or manage the growth in something. If
something has a demonstrable effect on the climate which has a
demonstrable effect on millions of people not in this country
but elsewhere who will suffer serious consequences who will never
be able to fly, is it not our responsibility to share some of
the load, to make some kind of sacrifice?
Mr Darling: You are rather confirming
what I thought, that what you should be saying to your constituents
or my constituents is, "Sorry, you should not be going abroad."
Q304 Mr Challen: We have been there
before.
Mr Darling: We seem to have got
there again.
Q305 Mr Challen: It is a return trip!
Mr Darling: I am beginning to
wonder whether it is. I think that what you need to look at is
emissions as a whole and you need to look at aviation emissions
alongside emissions from other areas as well and our over-arching
objective must be to reduce them. That is not to say you do not
do anything about aviation. I am not arguing that at all. What
I am saying though is you bear down on the aviation emissions
in different ways as you can. There are some things we can control
in this country, there are some things we need to do on a European-wide
basis, there are some things that can only be done through international
treaty, and that is the world in which we live.
Q306 Mr Challen: I accept that those
international responsibilities make it very difficult to negotiate,
particularly with certain countries that do not really want to
address this problem, but in this country we tax petrol very highly,
400% effectively, which is partly there to manage demand so why
can we not use these same economic measures to try and manage
demand in aviation?
Mr Darling: Because taxation of
aviation fuel is dealt with by international treaty and we are
bound by that.
Q307 Mr Challen: We do not seem to
be doing much to effect these things. I understand that the last
Aviation Treaty was 1947 or 1948. There is no urgency about it.
Mr Darling: It is a long time
ago and it does need to get agreement and it is not just one particular
country that you may have in mind that has difficulties over this.
There are a lot of countries from the very parts of the world
that you are concerned about which are also going to take some
persuading. It does not get away from the fact that aviation by
its very nature is pretty international. Never mind the treaty
aspect of it, the practical problems of going it alone are immense.
Suppose one country decides to put on a surcharge and it abrogated
the treaty to do that then it is quite easy for an aircraft to
nip across the border and fill up somewhere else.
Q308 Mr Challen: Are we arguing in
favour of fiscal or economic measures or instruments at these
international gatherings?
Mr Darling: Yes we do.
Q309 Mr Challen: What kind of response
have we had?
Mr Darling: It is fair to say
that it is mixed. European countries as a whole tend to be more
sympathetic and other countries not. If it is helpful to you,
Graham has fairly recently returned from such a gathering and
he will happily tell you what the mood of the meeting was.
Mr Pendlebury: I can do that briefly.
I was actually the chairman of the meeting that you are referring
to in Montreal with 180-odd delegates there and Mr Mann was present
there as well. We had very long discussions on the subject of
economic instruments and charging mechanisms and the problem that
we faced is that Western European members of this body are the
only countries who actually speak out in favour of economic instruments
and market-based options, other than voluntary measures which
find some favour with the US. So we do plough a pretty lonely
furrow and certainly the developing countries as well as the United
States and Russian Federation are deeply hostile to any demand
management or economic instruments.
Q310 Mr Challen: In the absence of
these other options at the present time, and we are still waiting
for the Emissions Trading Scheme in the European Union, has the
Government or Department considered increasing air passenger duty
as an interim measure?
Mr Darling: Obviously any matters
relating to taxation would be for the Chancellor to consider alongside
the rest of his fiscal arithmetic, if you like. All I want to
say about APD is remember it was never introduced as an environmental
measure. It was introduced because the then Chancellor was a bit
short and was looking for somewhere to get some money. It was
subsequently badged as an environmental measure but I do not think
it is. It is a pretty blunt instrument. One of the things I was
looking at was the figures of aircraft using Heathrow recently
in connection with the fact we needed to tackle the Heathrow problem.
The average age of Heathrow aircraft is a lot younger than the
rest of the fleet and the newer the planes the cleaner their engines
tend to be. If you want something targeted on driving down aviation
emissions, a landing charge that was perhaps more geared at getting
at the dirtier engines might be a better way of reducing environmental
damage than the blunt instrument of APD. The answer to your question
in relation to APD and any other tax, obviously that is something
the Chancellor will consider Budget to Budget.
Q311 Mr Challen: Can I ask about
the 27 supporting papers that were published in support of the
White Paper. What was the basis of the collation of these items?
It does seem rather accidental. It is just a collection of things,
many of which do not seem related to each other and leave out
other things that would have supported the White Paper, for example
an in-depth piece of research on the impacts of economic instruments
on the price of fuel. It might also have addressed the question
of public opinion, not only of people who want to fly and who
perhaps do not at the moment but also the public opinion of people
who live in the vicinity of airports already and those who might
face considerable expansion. Have you ignored public opinion?
Where is the supporting evidence there?
Mr Darling: Far from it. First
of all, to answer the first part of your question, what we have
done is we have published everything we have got on the principle
if you make it available to people there it is and they can draw
their own conclusions. As you might imagine, this is a process
that started before I became Secretary of State and had been going
for some time and different bits of work are done at different
times and it is best just to make these things available. In relation
to what do the public think, we received thousands of representations
from individual members of the public as well as the organisations
you would expect in relation to airports. For example, there was
almost universal opposition to Cliffe Airport. There was complete
opposition to a new airport in the Rugby area. Indeed, just about
every airport in the country was the subject of letters for and
against. Indeed, all these representations, unless people asked
for them to be confidential (which is a standard practice in all
government consultations) are available so that people can see
what they thought.
Q312 Chairman: But, Secretary of
State, did you have all these documents available when you took
your decision before publishing the White Paper. I notice that
the one on aviation and global warming, for example, is dated
January this year. The White Paper came out in December.
Mr Darling: That is the date on
which we published it and that is why it has got January 2004.[6]
Q313 Chairman: Why did you not publish
them on the same day as the White Paper?
Mr Darling: I think it was a matter
of logistics. There was an awful lot of stuff, as you yourself
have observed, and it was put out in January as the legitimate
thing to do. I do not think there is anything wrong in that in
that this is not an emergency piece of legislation that I published
on the 16th and the deed was done. This is something that I hope
will stand for some considerable time. Indeed, as you might imagine,
there are many, many people now gearing themselves up to challenge
what we are doing and the information we have got is fully available
to do it. There are many happy lawyers around at the moment.
Chairman: I am aware of that.
Q314 Mr Savidge: Before going on
to the main topic, what I want to ask you about is emissions trading.
Can I tease out a little further the main discussion we have been
having. All of us fully appreciated what you said at the start
that obviously there is a strong and proper desire for people
to travel for leisure and for business. Nobody is suggesting that
that be banned or anything. The concern we are expressing that
has to be balanced with that is if we do not find economic instruments
or some form of instrument that controls the growth of flights,
there is at least the possibility of catastrophic climate change
destroying both the holiday resorts and the economy. The happy
punter you referred to who looks out on the cold weather might
find that the weather becomes considerably worse here and at the
destination he would like to go to.
Mr Darling: I do not dispute the
general terms of what you are saying. I was asked right at the
start whether global warming was an important consideration and
the answer is a very important consideration. That is why, as
I said before, we attach considerable importance for example to
getting a European Union Emissions Trading Scheme (including aviation)
off the ground. I think it is very, very important. So too is
taking account of aircraft emissions and landing charges. These
are very, very important matters. On the point Colin Challen was
raising on taxation of fuel, that is important too. However, we
live in an international world and we do not always agree with
the views that governments are taking but that is the world in
which we live and we have just got to get on with it. You are
absolutely right that in aviation and other areas as well if we
do not do anything then the consequences will be very bad for
us, so it is very, very important, but it all comes back, as I
said at the start, to striking that right balance between providing
sufficient capacity to enable people to move around and at the
same time dealing with the environmental consequences.
Q315 Mr Savidge: You stress that
the UK sees the EU Emissions Trading Scheme as being a key part
of policy and getting that in place by 2008. Will that therefore
be a key objective of the UK Presidency of the EU in 2005?
Mr Darling: Yes, it will.
Q316 Mr Savidge: Do you think we
have prospects of getting it by that time?
Mr Darling: Yes, it will be one
of our priorities. As to the prospects, we are already talking
to other Member States and, as Graham Pendlebury has just said,
if you look at the international scene I think there is more awareness
and more commitment to doing something in Europe than there is
in other parts of the world. That is not to say the argument is
done and dusted and it is just a question of putting the thing
in place, but it is very important. There cannot be anybody who
is not concerned about the consequences of global warming and,
you are absolutely right, if we do not do something there will
come one day when the sunny destinations will not be there.
Q317 Mr Savidge: In discussions with
the governments of other Member States of the EU, have you found
that they are uniformly in favour of an Emissions Trading System
or have there been other instruments that they would prefer?
Mr Darling: I think there is a
variety of approaches. The distinction I would make is not between
an Emissions Trading Scheme and people saying, "No, no, we
would rather have some other form of taxation," although
there are some, I think it is varying degrees of signing up to
doing something, and a lot depends on the individual airlines
in these countries. On the point made earlier it is not just the
United States—and it is very easy to characterise the United
States as being the bad boys in all this—there are lots
of developing countries. I have met, as you might imagine, counterparts
in different parts of the world and from areas of the world which
have had experience of environmental damage from various causes
who are going to be quite difficult to convince, I think.
Q318 Mr Savidge: There was talk at
one stage of an emissions charge as an interim measure. Has that
been abandoned now or is that still on the table?
Mr Darling: I think the Committee
looked at this. You canvassed this with John Healey when he came
to speak to you a few weeks ago. No, it has not been abandoned.
There are some difficulties, as John said, in relation to whether
or not it would be characterised as a fuel tax and whether or
not the thing could work. As I was saying to Colin Challen, I
think the things that bear down on the causes of pollution, like
dirty engines, are things I am in favour of. I have looked at
an emissions charge and I can see how people have sought to characterise
it because inevitably it is based on distance because that is
what you consume fuel doing. You are saying that it might be a
tax. The one thing that I am very clear about in this area, whether
it is an attempt to build an extra inch of runway or doing anything
to aircraft, there is no shortage of people who will go and take
you to court. It is the way the world is now.
Q319 Chairman: On the emissions charge
question, is there any talk still going on in European circles
about an emissions charge? We heard last year when we looked at
this whole area that there had been some consideration at an EU
level.
Mr Darling: It is certainly something
that has been discussed. Again I will ask either Michael or Graham
to comment on this. I think it would be wrong to give the impression—
6 Please see footnote 1. Back
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