THE Chancellor has announced plans to cut tax on flights across the UK in a bid to strengthen the Union.

Rishi Sunak unveiled the move in his Budget which he is presenting in the House of Commons.

"We used to have a return leg exemption for domestic flights but we were required to remove it in 2001," he said.

"But today I can announce that the flights between airports in England, Scotland, Wales and Northern Ireland will from April 2023 be subject to new lower rate of air passenger duty. 

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"This will help cut the cost of living with nine million passengers seeing their duty cut by half. We will bring people together across the United Kingdom.

"And because they tend to have a different proportion of domestic passengers it is a boost to regional airports like Aberdeen, Belfast and Southampton."

The cut to air passenger duty is controversial with the announcement coming just ahead of COP26 with the UK under pressure to cut carbon emissions.

Sunak’s Budget is an embarrassment for the COP26 hosts just a week before the international climate summit, the Scottish Greens have said.

Commenting, Scottish Greens finance spokesperson, Ross Greer MSP, said: “This is a budget written for the Tories' corporate donors, not for the millions of people across the UK who desperately need help after a decade of Westminster austerity and a disastrous Brexit process.

"It certainly wasn't written with the planet's future in mind either. To cut aviation taxes just days before hosting COP26 has confirmed the UK Government's reputation as an international embarrassment."

He added: "Unsurprisingly, there is nowhere near enough on the environment. The investment in green tech does not go far enough, and the plans to spend £21 billion on roads while cutting air passenger duty for domestic flights, as well as freezing fuel duty, take a wrecking ball to the UK's climate obligations when we are only days away from COP. The Tories are a clear and present danger to our planet."

The Chancellor earlier told MPs in his speech that the Budget begins the work to prepare for a new economy post Covid, as he delivered his speech this afternoon.

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Sunak is under pressure to help people with the cost of living amid rising prices and a £20 per week cut to Universal Credit.

Among the announcements so far he has said a planned fuel duty rise would be cancelled.

He told MPs: “With fuel prices at the highest level in eight years, I’m not prepared to add to the squeeze on families and small businesses.

“So I can confirm today the planned rise in fuel duty will be cancelled. That’s a saving over the next five years of nearly £8bn.”

The Chancellor added public sector workers will also see “fair and affordable pay rises” across the whole Spending Review period.

He also confirmed an increase in the minimum wage next year to £9.50 an hour.

Responding to the fuel duty freeze, RAC fuel spokesman Simon Williams said: “We welcome the Chancellor’s confirmation that duty will continue to remain frozen at 57.95p a litre until next year. With pump prices at record highs, now would have been the worst possible time to change tack and hike up costs still further at the forecourt.”

Labour leader Sir Keir Starmer will not be responding to the Budget, as the leader of the opposition is normally expected to do, as he is isolating after testing positive for Covid. Shadow chancellor Rachel Reeves will set out Labour's response instead.

According to Downing Street, Sunak told the Cabinet on Wednesday morning that his Budget "will deliver a stronger economy for the British people" with the "levelling-up" agenda – spreading prosperity around the country – a "golden thread" running through it.

The Chancellor is under pressure to reveal more about the economic outlook, with government debt soaring to record peace time levels in the wake of the pandemic.

And he will deliver a three-year spending review alongside his Budget.

The Treasury has asked departments to find "at least 5% of savings and efficiencies from their day-to-day budgets" – so it is clear not every area will get the same treatment.

Policies already unveiled from the chancellor's Budget include:

  • £6.9bn for English city regions to spend on train, tram, bus and cycle projects - including the £4.2bn promised in 2019 alongside funding for buses announced by the PM in 2020.
  • £5.9bn for NHS England to tackle the backlog of people waiting for tests and scans.
  • A rise in the National Living Wage from £8.91 per hour to £9.50, to come into effect from 1 April.
  • £2.6bn to be spent on creating 30,000 new school places for children with special educational needs and disabilities.
  • £1.6bn over three years to roll out new T-levels for 16 to 19-year-olds and £550m for adult skills in England.
  • The SNP and the Scottish Greens have been approached for comment on the plan to cut air tax on domestic flights.