Select Committee on Treasury Minutes of Evidence

Examination of Witnesses (Questions 100 - 107)



  Q100  Chairman: I understand, but the motorist will tell you that he or she pays tax every day at the petrol station. You do not pay anything.

  Mr Barker: If we pay tax it has to be something that forces good behaviour on airlines and achieves the end result of fewer emissions. That must be the case.

  Q101  Chairman: Therefore, you do not know what the right tax is but you should be paying some tax up until 2012?

  Mr Wiltshire: I think the right tax is one that creates an incentive for the industry on the one hand to improve its technology and on the other an incentive to the consumer to take action himself.

  Q102  Mr Mudie: Would not a more effective tax be one that hit you rather than the passengers and therefore gave you the incentive to do something? The passenger's incentive is not to travel, but if the tax is on you as an industry you will be in a negotiating position in which you can say you will do something to save tax. But you are really out of this; it is the passenger who is involved in it?

  Mr Kershaw: From our point of view the difficulty is that a tax is not effective in meeting environmental objectives. If what we want to do is reduce climate change impact we need to find effective mechanisms to do that.

  Q103  Mr Mudie: One of the suggested ways of doing that, if we accepted it, would mean that you would spend money, not the passengers. But at the moment it is the passengers who are being hit.

  Mr Barker: But any kind of tax impacts the money we have to spend ourselves.

  Q104  Mr Mudie: You made £97 million last year.

  Mr Barker: It impacts us straight away.

  Q105  Mr Mudie: There are bigger players here and there must be a lot of money in this industry.

  Mr Barker: The tax already is one and a half times our profit and the amount of money we spent on new aircraft last year, 70% of which was to reduce emissions. Therefore, that money just goes away from us; it affects us directly.

  Q106  Chairman: You are happy to pay tax—or do you not want any tax at all?

  Mr Barker: We are responsible entities and we are happy to pay tax, yes.

  Q107  Chairman: I get the feeling that you are advocating zero tax.

  Mr Barker: We are talking about environmental matters.

  Chairman: We need to read the evidence to get some idea of what the airline industry is about. I think that you are effective in your message elsewhere; you get people on planes to go here and there, but your message in terms of environmental taxation is pretty dense. I get the feeling that you have been hauled to the table. You have shown no initiative yourselves and anything that you have to do will be very complex. If you could write to us in six months to say what initiatives you were taking that would help us. Thank you for your evidence this morning.

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