Treasury oppose £1 levy on flights
26.06.05
A plan to add a £1 levy on flights from the UK has caused a row within the Government. The levy, which would replace the ATOL bond to cover travellers if an airline goes bust, is opposed by Gordon Brown and the Treasury. However, Alistair Darling and the Department for Transport is in favour of the supplement.
The levy was proposed by the Civil Aviation Authority, the industry's regulator, and has attracted the backing of much of the travel industry and the House of Commons Transport Committee. Tour operators believe the present system is haphazard, and they calculate that the ATOL system costs them £100m a year. The abolition of the ATOL system could also mean reduced prices for package holidays.
The Department for Transport back the plan, on the basis that the current ATOL regulations are unsatisfactory as they only cover a proportion of passengers, those who book their flights through a tour operator who is ATOL bonded. Passengers who book using their credit card also have some cover, but those using a debit card and / or booking directly with the airlines are not covered. Travel insurance typically provides no cover either.
Trading Standards also support the levy, saying that the current law has failed to keep up with changes in the way people arrange holidays. Virgin Atlantic are understood to have sent a letter to ministers in support of the policy too.
However, the Treasury oppose the plan. They are of the opinion that passengers themselves should ensure they are covered and are backed by British Airways and Ryanair.
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