Ryanair – not much grasp of economics

Posted on

Accountancy Age has reported that Micahel O'Leary of Ryanair has been attacking Gordon brown again :

O'Leary has not let up with his attack on chancellor Gordon Brown's air passenger duty, telling the Parliamentary Monitor that it is a 'tax grab' and has nothing to do with the environment.

He has apparently said:

'Taxing cheap air travel is Brown's contribution to the environment. That is £1bn in taxes, and not one cent of it will be spent on the environment,' he added.

Well of course, O'Leary is right. Not one penny of this will go to the environment. It has no way it can partake in exchange through the medium of cash, so the Treasury has to act as surrogate manager of the funds. And tax is in this sense a form of rationing.

There may be better forms of rationing, but rationing does make sense. Which is more than can be said for O'Leary's logic.