Anger at new blow to airport survival (From The Northern Echo)

Anger at new blow to airport survival

7:42am Thursday 16th July 2009 in

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BUSINESS leaders hit out at the Government last night in the growing row over costly green taxes which they claim will close regional airports.

Just weeks after Gordon Brown said regional flights were vital to the North-East’s economy, Transport Secretary Lord Adonis suggested a high-speed rail link might be a better alternative to flying.

Peel Airports believes the high cost of regional flights to London led to BMI’s decision to scrap services from Durham Tees Valley to Heathrow earlier this year.

But in a blunt message to the airport operator, Lord Adonis said: “You’re doomed if you don’t pay your fair share.”

And he poured scorn on Peel’s claims that rising air passenger duty was damaging regional airports and had killed Durham Tees Valley’s air link to London.

Instead, he told MPs that the level of duty “broadly meets the environmental costs” of flying, which is widely recognised as a growing cause of global warming.

He said: “To be quite frank, I don’t think aviation has a credible future unless it is able to make a bigger contribution to meeting its environmental costs.”

Giving evidence to the influential Commons Transport Select Committee, Lord Adonis predicted that his plans for a North-South high-speed rail link would reduce the need for flights to the capital.

He told MPs: “High-speed rail is a much better option than aviation for developing the short-distance market.”

The comments prompted anger and concern last night among regional business leaders and politicians.

Sedgefield MP Phil Wilson, who has campaigned for the restoration of Durham Tees Valley’s links with Heathrow, said he would be meeting Transport Minister Sadiq Khan to discuss the situation.

He has also called for a meeting with Lord Adonis.

Mr Wilson said: “I am all in favour of an integrated transport policy, but that takes time to put in place.

“No one would deny there is a case for a high-speed rail link, but that will take years to build. In the meantime, I am concerned about what is happening in the here and now.”

James Ramsbotham, chief executive of the North-East Chamber of Commerce, said: “Lord Adonis said everyone has to pay their way – that is actually an erroneous way of wrapping this situation up.

“It wasn’t long ago that we were being told how important our airports are to the North-East economy.

“If the money was going to be spent on research to reduce emissions that would be different, but this is not the case.”

The Peel Airports Group, told the Transport Select Committee two weeks ago, that bmi’s decision to quit flying from Durham Tees Valley to Heathrow was a direct consequence of a doubling of passenger duty.

The group said that duty was to rise by up to 113 per cent in November – adding about £40 on a long-haul flight.

It warned that the tax burden would rise again when the air industry was included in the EU’s emissions trading scheme, from 2012, to tackle global warming It calculated the combined tax burden from passenger duty and the emissions trading scheme at £3.6bn by 2012 – far higher than the “environmental cost” of flying, which it put at £2bn.

In written evidence, Lord Adonis said the changes this autumn – introducing four duty bands, in place of two – would mean “passengers flying further, and therefore contributing more to aviation emissions, will pay more”.

But, under questioning, he conceded that the money raised goes into the general Treasury funds, rather than being ring-fenced for fighting climate change.

Mr Ramsbotham added: “What is happening is really damaging for our regional airports.

“For example, the Dutch have stopped this green tax so people could take a short hop to Schiphol and then continue their journey without paying the tax.

“This is a way to make sure we don’t use our own airports.

The airports are hugely important to our region.”

Lord Adonis’ enthusiasm for a 225mph rail line through the North-East will also fuel Peel’s suspicions that the Department for Transport is anti-aviation.

The committee’s inquiry, called The Future of Aviation, comes ahead of a key Government study taking in the economic impact of losing an air link to London, now due in the autumn.

No one from the Peel Airports Group was available for comment last night.