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'Aviation tax to rise' says Chancellor - read this, not George's lips

There was a sting in the tail of the emergency budget as far as outbound travel is concerned, from something barely in it.

Chancellor George Osborne mentioned the promised move from Air Passenger Duty (APD) to a tax on aircraft - albeit briefly - saying the government would "explore changes in aviation tax and consult on these".

What he did not say was that a sharp rise in APD rates this November will go ahead as planned - potentially pricing the Caribbean and further-flung destinations beyond the range of many families and blighting demand for premium-economy seats. TUI Travel has considered ripping these off its Thomson Airways fleet at some point as a consequence.

We know the rise in APD will go ahead because otherwise Osborne would have announced a withdrawal of the increase and alternative way to raise the revenue.

His statement told us something else - that the government lacks firm proposals for the replacement duty despite a per-plane tax having been explored at length under the last administration, which proposed a similar change before ditching it and pouring the pain on APD.

The problem is that any tax linked to emissions will also relate, inevitably, to the fuel used on a flight - and a tax on aviation fuel on all but domestic flights would break international law. The last government gave up trying to find a way round this.

The Chancellor's speech told us one more thing without mentioning it - that UK airlines and passengers face paying the new tax (or APD) alongside the yet-to-be-determined cost of carbon emissions trading.

Airlines are due to join the European emissions trading scheme (ETS) in 2012. The cost will be added to fares. The earliest a replacement tax for APD will be introduced - given the need to develop proposals and consult all parties, as Osborne promised - must therefore be November 2011, or just before the introduction of emissions trading.

That sounds to me like we face both, though you did not hear it from the Chancellor.

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