Hmmm, this sparked me to go and have a look at something:
The government, meanwhile, cushions airlines with the tax-free fuel and
zero Vat-rating that hand the industry a £9bn annual bonus.
As far as I’m aware, it’s international flights only that don’t pay duty on aviation fuel. So there’s no (or a smaller, at least, as Avgas does not pay the same rate as petrol for road use) subsidy for intra-UK flights:
If I want to go to Glasgow from London at midday tomorrow, I could on
Friday have booked a flight from Luton for £39. A train ticket from
Euston would have cost £100.20p.
But, if we are going to call that a subsidy then this is misleading:
Instead, the government last month published plans that will strangle
railways. Meagre annual subsidies of £4.5bn will be cut to £3.2bn by
2009 and the burden shifted from taxpayers to travellers through higher
fares.
For, as this seems to confirm, trains run on red diesel. 7 p a litre instead of 48 or 54 ( low sulphur or regular). The Virgin fleet alone uses 90m litres (or so it is said…the number does look low to me) so that’s a further £45 million or so a year subsidy to them from the Exchequer.
Or, of course, we can take the attitude that differential taxation rates are not a subsidy: in which case please shut up about Avgas.
But much the most interesting thing to me (and happy to be corrected if I’ve misunderstood this) is that at 25 p a litre or so for Avgas for domestic flights, as against 7 p for red diesel, trains are subsidised, not flights.
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