LAPFF urges Treasury to review position on APD amid 'contradictory signalling'

The Local Authority Pension Fund Forum (LAPFF) has urged the Treasury to review its current position on air tickets being VAT free and aviation fuel incurring no duty, arguing that this is in "direct opposition" of broader climate goals.

In its response to the Treasury’s ongoing consultation on reforms to Air Passenger Duty (APD), LAPFF argued that a price signal of reducing domestic APD would encourage more flights.

It warned, however, that this would be in “stark and direct opposition” to the government’s climate change target of reducing emissions by 78 per cent by 2035 over 1990 levels.

The group emphasised that the with aviation expected to grow to be the biggest source of UK emissions by 2050, it is a significant contributor to the material financial risks of climate change with the potential for loss of shareholder value.

Considering this, it also urged the government to take the opportunity to support the development of UK leadership in electric flight in its consultation later this year, which is expected to outline how the aviation sector will deliver its contribution to net zero.

LAPFF chair, Cllr Doug McMurdo, commented: “We have seen just how quickly government and companies can respond in the face of the coronavirus pandemic. Addressing air transport emissions is critical to tackling climate change.

“By proposing a reduction in air passenger duty, which is likely to increase domestic flights, the Treasury is showing a ‘tin ear’ to the UK government setting out best practice in the run up to COP26 in Glasgow.”

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