Matthew Lesh, Head of Research at the Adam Smith Institute, warns that the government should not be picking winners in industry when it comes to bailouts or tax cuts.

“The collapse of Flybe would be a tragic event for its staff and travellers. But the Government is right to remember that no business is too big to fail. It must avoid the temptation to bailout a failing, carbon-intensive business. If customers are unwilling to pay the true cost of a business it should not continue to exist — we must be willing to allow the economy to adapt to new circumstances and demands. We should not ask taxpayers to subsidise the travel of politicians and businessmen.

“A broad lowering of air passenger duty would be a better approach than a direct cash injection into a single business. But even this appears to be inconsistent with broader government goals to reduce carbon emissions. Short haul flights, particularly where the same journey could be taken by train, are a disproportionate contributor to carbon emissions and the government will be hard-pressed to explain why this will be encouraged in future budgets at the expense of future generations. “

For further comment, or to arrange an interview, please contact the Adam Smith Institute press team on mobile 07904099599, landline 02072224995, or email matt@adamsmith.org.