Transport secretary promised EasyJet not to levy green taxes

The transport secretary, Grant Shapps, promised EasyJet that green taxes would not be levied on airlines six months before the company was given a £600m coronavirus crisis loan with no environmental conditions attached, newly released documents show.

Direct lobbying against environmental taxes by Britain’s biggest airline are revealed in Freedom of Information Act responses obtained by Unearthed, Greenpeace’s investigations unit.

Evidence of the lobbying came as airlines across Europe were set to receive more than €26bn (£22.7bn) in taxpayers’ money for coronavirus bailouts with no binding environmental conditions attached, according to data compiled by Transport & Environment, Carbon Market Watch and Greenpeace.

The meeting with Johan Lundgren, the boss of EasyJet, took place shortly after Shapps’s appointment as transport secretary last year. During the meeting, Shapps reassured the CEO he wanted the Department for Transport to be pro-aviation.

In a separate meeting a month earlier with the chief executive of Heathrow, John Holland-Kaye, Shapps also stated that he wanted to reorient the transport department to be “more proactive in promoting aviation”.

The easyJet boss used his meeting to criticise the Netherlands’ plans to levy green taxes on airlines, while Shapps “agreed this was not a way forward”.

Environmental taxes on aviation to cut greenhouse gas emissions could involve a tax on departing passengers, a fuel tax, or making airlines pay for their emissions, all measures discussed in EU institutions.

Income subsidies

Direct cash grants for self-employed people, worth 80% of average profits, up to £2,500 a month. There are similar wage subsidies for employees.

Loan guarantees for business

Government to back £330bn of loans to support businesses through a Bank of England scheme for big firms. There are loans of up to £5m with no interest for six months for smaller companies.

Business rates

Taxes levied on commercial premises will be abolished this year for all retailers, leisure outlets and hospitality sector firms.

Cash grants

Britain’s smallest 700,000 businesses eligible for cash grants of £10,000. Small retailers, leisure and hospitality firms can get bigger grants of £25,000.

Benefits

Government to increase value of universal credit and tax credits by £1,000 a year, as well as widening eligibility for these benefits.

Sick pay

Statutory sick pay to be made available from day one, rather than day four, of absence from work, although ministers have been criticised for not increasing the level of sick pay above £94.25 a week. Small firms can claim for state refunds on sick pay bills.

Other

Local authorities to get a £500m hardship fund to provide people with council tax payment relief.

Mortgage and rental holidays available for up to three months.

But Lundgren said his company would instead be setting up its own sustainability targets, which would involve “gold standard” carbon offsetting, and that EasyJet was involved in the research and development of electric flights. Shapps said the government was committed to investing in electric flights.

Minutes of the meetings with Lundgren reveal little talk bout any imperative to reduce greenhouse gas emissions from aviation, or aviation’s contribution to the government’s new, legally binding target to reduce emissions to net zero by 2050.

Emissions from aviation reached record levels last year, and in the past five years have risen by 26%; the sector is responsible for 12 percent of CO2 emissions from all transport sources.

This month, with EasyJet flights hit by the coronavirus pandemic, Lundgren asked for and was given a £600m government bailout. The failure to attach any environmental conditions to the loan was a missed opportunity, campaigners say.

Fiona Nicholls, climate campaigner at Greenpeace, said: “Carbon offsetting will not clean up aviation’s carbon emissions, just create the illusion it does. EasyJet is peddling snake oil and it’s shocking that the secretary of state seems so willing to buy it.

“A green levy on frequent flyers offers the UK a fair more effective way of tackling the sector’s huge impact on our planet. Rather than dismissing the case out of hand, Grant Shapps needs to look again and take this moment to promote a measure that will genuinely have an impact on the climate emergency.”

The loan to EasyJet was part of state financial support worth €26bn, either sought, or received, by airlines since the pandemic spread across Europe. None of the bailouts had environmental conditions attached.

A spokesperson for EasyJet said: “We recognise we have a responsibility to minimise the impact of our flights and so are focused on both operating efficiently now, and on the development of electric aircraft in the future. Since the technological solution is not yet available, in the interim we offset the carbon emissions from the fuel used for all of our flights on behalf of all of our customers.

The Committee on Climate Change says cutting greenhouse gas emissions to zero by 2050 is necessary, affordable and desirable. Here are some of the actions needed to make that happen:

• Petrol and diesel cars banned from sale ideally by 2030 and 2035 at the latest.

• Quadrupling clean electricity production from wind, solar and perhaps nuclear, plus batteries to store it and connections to Europe to share the load.

• Connection of new homes to the gas grid ending in 2025, with boilers using clean hydrogen or replaced by electric powered heat pumps. Plus, all homes and appliances being highly efficient. 

• Beef, lamb and dairy consumption falling by 20%, though this is far lower than other studies recommend and a bigger shift to plant-based diets would make meeting the zero target easier.

• A fifth of all farmland – 15% of the UK – being converted to tree planting and growing biofuel crops and restoration of peat bogs. This is vital to take CO2 out of the air to balance unavoidable emissions from cattle and planes.

• 1.5bn new trees will be needed, meaning more than 150 football pitches a day of new forests from now to 2050.

• Flying would not be banned, but the number of flights will depend on how much airlines can cut emissions with electric planes or biofuels.

“We have always said that taxing passengers is not the right approach, as this provides no incentives for airlines to improve the carbon efficiency of their flying, it simply acts as a revenue raiser for governments. The way for aviation to address climate change is to invest in new technology; a tax will simply reduce the funds available to airlines for investment, while only having a very marginal effect on emissions.”

A separate meeting on 20 August last year with Holland-Kaye came as Heathrow’s expansion was under increasing scrutiny following the net-zero emissions target adopted by the British government that summer.

Shapps told the Heathrow CEO that the national policy statement containing airport expansion plans was still government policy, “subject to future confirmation that it remained value for money”.

In the past Shapps has been a vociferous supporter of Heathrow expansion, and he admitted to Holland-Kaye that he felt a “personal conflict of interest” discussing the matter, given his previous statements.

Since their meeting, Heathrow’s expansion has been thrown into doubt after the appeal court ruled in February that the government’s airline national policy statement was illegal, because ministers had not adequately taken into account the government’s commitments to tackle the climate crisis when drawing it up. Heathrow Airport is appealing against the judgment in the supreme court.

A Department for Transport spokesperson said: “Aviation contributes around £14bn to the economy and creates half a million jobs. It is only right that we champion this sector, while continuing our work to make UK aviation the cleanest and greenest in the world.”

“The sector must play its part in reaching the UK’s net zero by 2050 target. That’s why we are working with industry to develop new technologies, fuels to cut emissions and are taking a leading role driving international action for the sector.”

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