If he will introduce fiscal measures to require the aviation sector to meet its environmental costs.

In the 2007 pre-Budget report, the Government announced their intention to replace air passenger duty with a duty payable per aeroplane. The reform will take effect on 1 November 2009 and will send better environmental signals, ensuring that aviation makes a greater contribution to covering its environmental costs as well as raising a fair level of revenue to support public services.

I welcome the Government's adoption of that Lib Dem policy, but will the Minister express her concern at the fact that it is usually much cheaper to fly to Manchester than to take the train, although flying produces far more carbon emissions per passenger? Is it not time that the Government sought to remedy that market distortion and somehow ensure, by means of Treasury levers, that the cost of travelling equates far more closely to carbon emissions than to the abstract formula that currently applies?

We have invested a substantial amount—over £10 billion—in our railways, with more to come in Government programmes. As we proceed towards decarbonising our economy over the medium to long term, the issues raised by the hon. Gentleman will have to be taken into account. That is why the Climate Change Bill is so important: it will make carbon budgets possible for the first time, thus enabling us to make decisions on all those issues.

According to its own calculations, aviation contributes about £13 billion to the United Kingdom's economy—less than 1 per cent. of GDP—yet its tax-free status produces for the industry about £10 billion, which is £50,000 for each of the 200,000 employees in the sector. On grounds of fairness, economics and environmental impact, is it not about time we addressed that long-standing issue?

Taxing aviation involves international issues, which are dealt with in the Chicago convention. The Government are trying to ensure that the convention is renegotiated; that is not an easy task. They are also pursuing—with some success, and hoping for a final decision soon—the inclusion of aviation in the European Union emissions trading system, which would begin to address the points that my hon. Friend has rightly made.

rose—

Hon. Members:

Hear, hear!

There are few things more worrying than being cheered by Tories.

Does the Minister accept that, given the distances covered, a full plane is a very carbon-efficient way of transporting people around the highlands and islands? Does she also accept that the present system of per capita air passenger duty recognises the socio-economic importance of aviation to the remote communities in the highlands and islands, and will she ensure that it continues to be recognised when she constructs her new system?

Now that the hon. Gentleman has more time on his hands, I hope he will be able to respond to the public consultation on the design features of the tax. The consultation opened on 31 January, and will close on 24 April.

As my hon. Friend said, this is an international cause—and rightly so—fought on European ground. There will be little effect on our pollution if we tax aviation fuel in this country when planes are buying their fuel in France and then flying over here. Will my hon. Friend put more emphasis on the fact that we need to work internationally to solve the problem?

My hon. Friend is absolutely right. That is why we are trying to gather an international consensus to amend the Chicago convention, which is now anachronistic. It is also why we are working very hard with our partners in Europe—with, I hope, some success—to ensure that aviation is included in the EU emissions trading system. That would mean that the problem of aeroplanes diverting to airports in Europe where the tax is not payable would not arise.

I welcome the Minister's last response. Will she look in particular at air freight? That is a very competitive market, and there will be no environmental benefit at all if planes simply divert to near-European airports and there is then transhipment to the UK.

The hon. Gentleman is right. I have met representatives of the freight industry, who are engaging positively in our consultation, and we will take into account the issues to do with, and the effects of, the move to the plane tax, which his party supports, in its design.