Examination of Witnesses (Questions 353-359)
MS HELEN
WATSON, MR
GRAHAM FRENCH,
DR JONATHAN
BAILEY AND
MR GEOFF
MUIRHEAD CBE
27 FEBRUARY 2008
Chairman: Good afternoon, gentlemen and
madam. I do apologise for keeping you waiting. I am afraid we
had some business to carry out. Can I ask the Members having an
interest to declare?
Graham Stringer: A member of UNITE.
Mr Martlew: A member of UNITE and GMB.
Chairman: ASLEF.
Mr Leech: I am not sure whether I need
to declare an interest as a member of Manchester City Council,
who of course part own Manchester Airport.
Q353 Chairman: We all have our crosses
to bear! I do not think you do, but frankly we will record it.
I think it is called "belt and braces". I am very grateful
to you for coming this afternoon. Perhaps you would kick off by
identifying yourselves, starting on my left.
Dr Bailey: Jonathan Bailey, External
Affairs Director for Manchester Airports Group.
Mr Muirhead: Geoff Muirhead, Chief
Executive, Manchester Airports Group.
Mr French: Graham French, Air
Transport Analysis Manager, Civil Aviation Authority.
Ms Watson: Helen Watson, Head
of Economic Policy and International Aviation in the Economic
Regulation Group, Civil Aviation Authority.
Q354 Chairman: Does anybody have
any very brief remarks they want to make? No? That is very helpful.
Can I ask you in general, do you think the Government's approach
to air freight is appropriate to support a healthy UK air freight
industry?
Mr Muirhead: I think if you look
at the Aviation White Paper it was generally supportive of the
air freight industry, so within that context I believe the Government
has a policy which supports the proper development of the air
freight business.
Q355 Chairman: Is it commensurate
with the importance of the industry to the UK economy?
Mr Muirhead: Perhaps not so. There
are many issues coming forward which make air freight challenged
in its ability to grow, not least of which is taxation which is
being applied to the aviation industry generally and the proposal
to put it onto air freight specifically is the subject of a recent
consultation document which the Government has put out. Air freight
is a very competitive marketplace and I think the implications
of taxation need to be well considered before they are applied,
and it is interesting that it is applied in a disproportionate
way. It seems to be applied to aviation and not to other transport
sectors.
Q356 Chairman: So you are saying
the Government does not fully understand the issues which are
faced by the industry and perhaps does not entirely consider its
perspective?
Mr Muirhead: I am not necessarily
saying it does not fully understand, but the consultation document
has some elements to it which give cause for concern.
Q357 Chairman: Would you like to
comment on that?
Ms Watson: I do not think I have
anything to add.
Mr French: No.
Q358 Chairman: Do you think the Government
allows air freight to compete fairly with other modes of freight
transport in a free market?
Mr Muirhead: Going back to what
I said previously in respect of the disproportionate approach
in terms of taxation, aviation in general is a global business
and we require international agreements in respect of a level
playing field. We are having a unilateral approach in this country
to taxation on aviation, which is putting the industry at a disadvantage,
there is no doubt about that.
Q359 Chairman: Which particular bits
of taxation, Mr Muirhead? Do you want to be specific?
Mr Muirhead: APD in particular,
Air Passenger Duty, which currently collects £2 billion from
the aviation industry out of the UK and is not applied to our
competitors across Europe, and the recent consultation is indicating
the Government's desire, or shall I say the Treasury's desire,
to increase that to £2.5 billion in 2009.
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