Flight taxes hiked to bail out banks: It's nothing to do with environment, says Darling

Flight taxes are being raised to help bail out the banks, Alistair Darling admitted yesterday.

In an extraordinary intervention, the Chancellor said the higher air passenger duty being introduced tomorrow was needed to plug gaps in the national finances.

He made no attempt to justify the move - which will add £340 to the ticket for a family of four flying long haul - on environmental grounds, the official reason for the tax.

Airlines warned yesterday that the tax would cost thousands of jobs and do nothing to combat global warming.

Addressing journalists in Newcastle, home of the failed bank Northern Rock, Mr Darling said: 'I am quite blunt about it, we need to raise money to pay for some of the things we have done.

'If unemployment goes up there is a cost obviously to the family, there is cost in increased benefits, Northern Rock has cost a lot of money.

What we are doing is putting a pound on to your average ticket, which about three quarters of people travel on.

'And you consider the cost of an air ticket, I don't think a pound is that unreasonable.

'In the North East, we have spent billions on a bank for very good reasons.

'We could have stood back and said "There you are, tough luck". We didn't because that was the wrong approach.'

Michelle Di Leo, director of the aviation lobbying group Flying Matters, said Mr Darling had 'let the cat out of the bag on this flying stealth tax'.

She added: 'Just when the economy needs all the help it can get, he is imposing a tax which undermines job creation in the tourism sector, prices ordinary families out of flying and all for absolutely no environmental benefit.

Not on board: British Airways has condemned the raised taxes

'When people realise how much this stealth tax will cost them and how much damage it is doing to the economy, any politician who commits to scrapping it will get an electoral boost.'

The cost of air tickets will rise from tomorrow when the first of two increases in air passenger duty takes effect.

The hike, which will particularly hit long-haul passengers travelling in business and first class cabins, was condemned yesterday by British Airways

BA said the effect of the two increases would mean the cost of a flight for a family of four to Australia for travel after November 1 next year would rise by at least £340.

A poll for World Travel Market, a London-based exhibition event, showed 52 per cent of 1,030 people surveyed - all of whom holidayed this summer - said they would reduce their overseas holidays due to tomorrow's hike. And 13 per cent said they would stop overseas holidays altogether.

Tomorrow's increase will see duty for short-haul economy flights to Europe rise from £10 to £11.

On longer journeys the levy rises by as much as £30.

In November next year the duty increases will see economy-class passengers on the shortest flights paying £12.

But for premium-class passengers on the longest flights - more than 6,000 miles - the levy will soar from the November 2009 figure of £110 to as high as £170.

Silla Maizey, BA's customer services director, said: 'These huge tax hikes are very bad news for holidaymakers - and completely unjustified.

'The Government says the tax is environmental, but its own figures show that aviation already meets its environmental costs without any increase in passenger duty.'