Equitable Life

Gavin Robinson Excerpts

Thursday 31st January 2019 Commons Chamber

[Bob Blackman]

That is clearly a matter for court action—for the Crown Prosecution Service and others—but it is a further scandal that no one has suffered anything other than the people who saved the money in the first place.

May I set out for the House’s benefit the categories of individuals who suffered the unfortunate loss? First, there are the pre-’92 trapped annuitants. Bizarrely—I have never understood this—the Government drew a line at 1 September 1992 for the people who would receive compensation. Those who invested before 1 September 1992 were excluded from the compensation scheme, yet they are the most elderly and often the most vulnerable individuals who are owed money. Someone who took out a pension policy on 31 August 1992 got not a penny, but those who took a policy out on 1 September 1992 could end up with full compensation. That seems completely arbitrary. Many of these people are particularly vulnerable. Some 9,200 of those individuals are still alive and it is clear that they should receive full compensation.

The cost of providing full compensation for those victims will be less than £100 million. The key point is that within the compensation scheme, there is a contingency, and that does not need to be used now because the forecasts are that the payment for those who were receiving 100% benefit will be 11% down, so the additional funds and the contingency are not required. The Government could therefore take the decision to pay in full those most elderly victims who need assistance.

Post-’92, there are of course two categories: those who received 100% compensation; and those who have received 22.4% compensation. Why 22.4%? That is an arbitrary figure. I believe that every victim of this scandal should receive the full amount of money.

In the various statements that were made to the different Select Committees and to this House, the Government accepted that the total bill would be £4.3 billion. That figure was later corrected to £4.1 billion. However, the Government have allocated only £1.5 billion. They clearly have a debt of honour, and I have three basic asks for them today. First, given the position of the pre-1992 trapped annuitants and the figures that I have set out, will the Government now take action to compensate fully those elderly individuals who are extremely frail? The money will almost certainly go straight back into the Treasury and the economy in a way that we would all welcome.

Secondly, will the Government face up to the fact that although the scheme is closed to new entrants, they are going to be paying out to the victims of the scandal for some considerable time? Will they therefore top up that money, possibly over a phased period, as has been suggested? Perhaps that period could be five years. Most of those victims will be coming up to retirement soon, and they need certainty that they are going to get some money. The key point here is that this would not immediately cost the Treasury the £2.6 billion that would be required, because this could be phased over a longer period to top up the pension schemes of those in operation.

My third ask, which is equally crucial, relates to the fact that the Government now know exactly who is involved, because the scheme is closed to new entrants. They know the names, the addresses, the national insurance numbers and the total amount that those people are owed, and that data needs to be retained. I ask the Minister to give a guarantee that data will be retained and not destroyed, so that when the Treasury eventually owns up to this and accepts that it has to pay full compensation, we do not have to go back to square one to get all the data back.

[Gavin Robinson (Belfast East) (DUP)]

rose—

[Bob Blackman]

I will give way just one more time, because I know that the Deputy Speaker is looking at me and expecting me to finish.

[Gavin Robinson]

I am grateful to the hon. Gentleman for giving way. I think it is important to reinforce his three asks. I met an 87-year-old constituent on Friday afternoon who was distraught and in tears over how he had been left as a result of the Equitable Life scandal, but he was given hope when he got a note from the action group to say that today’s debate was happening. Given the hon. Gentleman’s three key asks, and given the political willingness right across the House and around the country to resolve this issue, does he agree that the Government must ensure that this will not be another false dawn for those who look to us most?

[Bob Blackman]

I thank the hon. Gentleman for his timely intervention.

I would like to sum up by thanking the Equitable Members Action Group and the policyholders who have suffered for so long. I also want to make it clear to the House that things have changed. When we were elected, it was basically only Conservative Members, and some colleagues from the opposite side, who were supporting justice for Equitable Life policyholders. The all-party parliamentary group now has more than 100 members, from the Labour side in particular, who now recognise that this is a debt of honour, so this is not just confined to these Benches. The reality is that if the Government fail to honour the debt, further action will clearly have to follow and we will force the Treasury to take action.

Taxation of Low-income Families

Gavin Robinson Excerpts

Wednesday 16th January 2019 Westminster Hall

[Steve Double (St Austell and Newquay) (Con)]

It is a pleasure to serve under your chairmanship, Sir David. I start by congratulating my hon. Friends the Members for Stafford (Jeremy Lefroy) and for Congleton (Fiona Bruce) on securing this debate and on the way they have introduced the subject. I very much welcome the report by the Strengthening Families Manifesto group that was published today and which we are here to debate.

There is no doubt that families are right at the heart of social justice. It is clearly understood that helping families to stay together and thrive together is not only good for them as families, which is obviously very important and at the heart of the issue, but good for our society as a whole and for our economy. I think it is understood that the ability of Government to help families to stay together may be limited, but the least that we should expect is that the Government do not place barriers in the way of helping and encouraging families to stay together. That is the issue that we are debating today.

We should, through our tax and benefits system, provide every possible opportunity for families to improve their finances through hard work—through taking a job, increasing their income, increasing their hours or taking a pay rise. Sadly, the situation that we have at the moment negates that and actually acts as a disincentive to couples taking on extra work or extra hours, because of the effective marginal tax rate by which they are then penalised. That issue was well presented by the previous speakers, so I will not go into the detail of it—it is a well-established problem—but it is clearly there for all to see.

The introduction of universal credit was very welcome and a huge step in the right direction.

[Gavin Robinson (Belfast East) (DUP)]

I was going to intervene earlier, but I was enjoying the flow of the hon. Gentleman’s speech, so I decided to rest in my place. He makes an incredibly important point, and I commend the hon. Member for Stafford (Jeremy Lefroy) and all his colleagues for their sterling work. I do not think that anyone has said that the disincentive that we have heard about this morning is an intentional outcome of the over-simplification of our tax system, but if it is not intentional, we should resolve to solve it. Does the hon. Gentleman agree?

[Steve Double]

I very much welcome that intervention: the hon. Gentleman makes a powerful point. I do not believe for a minute that the Government set out with the intention of ending up in this position, in which families face effective marginal tax rates of 75% or 80%. No one intended that to be the case, but the hon. Gentleman is right to say that that is the situation and that, if that was not the intention, surely it is time to look at it and see what steps we can take to reverse and undo it.

As I said, the introduction of universal credit was a huge step in the right direction and very welcome. It is not perfect; it is not without its challenges, but I very much welcome the Government’s approach to the roll-out of universal credit—to take their time, learn, and adjust and amend as necessary. Fundamentally, universal credit is the right change to make to our benefits system, and I very much welcome the way the Government are rolling it out.

One purpose of universal credit was to ensure that work paid and to reduce the disincentive for people to take on extra work and lose benefits. I saw that myself, before coming to this place, as an employer. I am thinking of the number of times that I approached my staff to offer extra hours of work and they just said to me, “There’s no point, Steve, because I will lose tax credits. There is no point in me working longer and harder to be no better off—all I will be doing is giving the extra money to the taxman.” Universal credit has been a big positive step, a step in the right direction, to remove that disincentive, and that is hugely welcome, but we need to recognise that there is still a disincentive in the system. It has been highlighted and now is the time to address it.

I also hugely welcome the Government’s policy of increasing the personal allowance. That has taken many of the lowest-paid people in our country out of the tax system—out of paying tax—altogether. That has also been the right thing to do and is very welcome, but as we are saying, it does not undo the situation that we now have. Under the current arrangements, there are those who are paying marginal tax rates of 75% if they are homeowners, and 80% if they are renting, and on universal credit. We cannot expect people to be incentivised to take extra work if they will get to keep only 20p or 25p in the pound for the extra work that they take on.

I therefore very much welcome the report that has been published today. I urge the Government to consider it carefully and look at what can be done to review the current situation. I very much welcome the suggestion from my hon. Friend the Member for Stafford that we need to set as a target bringing the UK in line with the OECD average. It seems crazy for the United Kingdom, which is renowned around the world for the effectiveness and competitiveness of its tax system, to be so out of step with the average for the other developed countries. We should set a target that, in an achievable but relatively short space of time, we will seek to reverse the situation and bring ourselves back in step with the OECD average.

We need to change the mindset that the only way to tackle the problem is through the taper rate for universal credit. That will get us so far, and I am sure that any amendments that can be made in that respect would be welcome, but really we need to bring our tax and benefits systems into line with each other.

Homelessness among Refugees

Gavin Robinson Excerpts

Tuesday 17th July 2018 Westminster Hall

[Kate Green]

It is obviously not the same for every single country or every individual asylum case. It is important that we recognise that our obligation to give refuge is shaped by international treaties and conventions that we are long signed up to, and which look on a case-by-case basis at the danger that an individual faces in their country of origin. We need to be clear that we have a robust decision-making process that properly assesses that danger, and be confident in presenting to the country that our process works well. Sadly, at the moment, delays and poor decisions mean that often it does not.

For those who gain refugee status, there is an issue of becoming homeless once they are recognised as refugees. The Refugee Council interviewed 54 refugees for a study in 2017, and found that none had secured accommodation by the time they left asylum accommodation, and that more than half had slept rough, or in a hostel or homeless shelter, after being granted status. The decision to grant status—a moment that should represent relief from fear and the chance finally to rebuild a shattered life—can instead become the start of a new nightmare.

The problem lies fundamentally in the incredibly short move-on period, which allows refugees a mere 28 days to leave Home Office accommodation after they have been granted refugee status, and to move from NASS to mainstream benefits. In that time, they must obtain their national insurance number, open a bank account, receive their biometric residence permit, navigate a complex benefits system, and find somewhere to live and, if they are able to work, a job, while settling into their new life. For many—mentally traumatised, struggling with poor English and disconnected from mainstream services—it is simply too much to cope with.

[Gavin Robinson (Belfast East) (DUP)]

The hon. Lady is making entirely the right points. In 2015-16, Northern Ireland had more than 100 refugees who we believed were in destitution. Is she aware that Belfast City Council commissioned the Law Centre of Northern Ireland to produce a refugee transitional guide? The Select Committee on Work and Pensions recognised that guide as describing best practice, and asked the Department to distribute it right across the United Kingdom so that when people find themselves navigating that system and process they get the best advice and help possible.

[Kate Green]

I am aware of the work of the Northern Ireland Law Centre, which was one of a number of organisations that helpfully briefed me for the debate. As the hon. Gentleman says, that guide is an extremely useful resource.

Although voluntary groups are providing such resources, the system is fundamentally making things harder for refugees. Their first universal credit payment will not be made for more than a month. Although advance payments are available, they cannot be paid until someone has a national insurance number and a bank account, and their availability appears not to be well signposted by either the Home Office or Jobcentre Plus. Meanwhile, local housing allocation rules may not give priority to new refugees, particularly those who move into a new area to be with other members of their community. Those factors are placing refugees at grave risk of homelessness and destitution.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Stretford and Urmston (Kate Green) on setting the scene for us very clearly. There have been some significant and helpful contributions on an issue that we all feel strongly about. I have been very clear about the need for a manageable number of vetted refugees. It is not enough to tell people that they are free to live in the UK without also giving them the tools to begin their new life, find work and integrate into the community that they have been moved to. For every refugee whom we agree to take, there must be funding and the will in the community to integrate those people. If those things are not there, we are failing them, and we need to do something about that. I am clear that we have a duty to help, which does not mean simply moving them from a refugee camp in Europe to one in the UK. We must move them into communities, and we cannot do that when we oversubscribe.

I recently spoke to the inspector who had the task of settling refugees in my area. He said they integrated into communities best when they were in small family units that the neighbourhood wanted to help. An example of that is happening in my town, Newtownards. Four Syrian families were relocated together. It was important that they were together; they were clustered in one area, and had houses together where they had contact with each other. My colleague and hon. Friend the Member for East Londonderry (Mr Campbell) referred to the importance of faith groups, and they are important in my constituency. It was faith groups who came together to help the refugees when they arrived in Newtownards. It was the Minister and people of Strean Presbyterian church, and the Link group in Newtownards, which brings together a number of churches. Whenever—I say this gently—Government Departments were not as quick off the mark as they perhaps should have been, Link helped, physically, with getting furniture and giving clothes and food, and with being someone to talk to.

I met the Syrian families. I thought it was important to do so, first to welcome them to the area, and secondly to show them that politically they had support at the highest level. There was no bother about relocation in Newtownards. There never would be; but there is a language barrier and it is important to deal with that early on. Other hon. Members have referred to it and I know how important it is. Being able to speak the language is necessary to get a job and do the shopping, and so that children can go to school. The children are going to school, and we have many good people working together to make those things happen.

My hon. Friend the Member for Belfast East (Gavin Robinson) has a Red Cross group in his constituency. It does excellent work. I met someone from the group at Westminster last week, and have met others locally. They do tremendous work on integrating people and helping them to settle across the area.

[Gavin Robinson]

I am glad that my hon. Friend has mentioned the role played by the Red Cross across Northern Ireland. It is still a profound regret to me that not one of the Syrian refugees who relocated to Northern Ireland has been housed in East Belfast. There is a barrier to the provision of houses to those individuals, who desperately need them. There is a welcoming community that wants to host them if they come to my constituency. Does he agree that the situation needs to change?

[Jim Shannon]

I am almost flabbergasted by that news, Sir Henry. Given that we have been able to relocate four families close together in Newtownards, with the support of the local churches in making it happen, I am really disappointed by that. It is a big issue to be addressed, and that should be happening now. I am sure when my hon. Friend phones those concerned to remind them about it, their ears are burning.

I thank the many sterling workers who think long and hard about, and put hours into, making the transition into British life easier for those who come, and the community where they are placed. The hon. Member for Stretford and Urmston mentioned Law Centre NI, and I shall quote a briefing it produced. It is important to set out the changes that it wants, and how they would make integration a wee bit easier. I promised that I would raise the matter on its behalf, and bring it to the attention of the Minister, whose response I look forward to. Refugees are given 28 days to leave Home Office accommodation and find housing, benefits and employment. If it had not been for the people of Newtownards—the churches, committee groups and Link group—coming together for local individuals, we would not have had the smooth integration that was needed, when it was needed. If people are far from home in a community that they are not familiar with—a different culture and tradition—they will all of a sudden feel very much on their own. What has helped those people has been their faith and their integration into church life in Newtownards town.

In the 28-day period, people are expected to apply for social housing, but single adults are rarely found to be in priority need and there is a shortage of social housing, as my hon. Friend the Member for Belfast East said. If they want to find private rented accommodation, they have in reality less than 28 days to arrange it. There can be delay in relation to their notification of status. We can see how problems multiply. The law centre said:

“The move-on period for people granted status should be extended from 28 days to at least 56 days to reduce risks of homelessness amongst refugees and bring Home Office policy in line with changes recently introduced under the Homelessness Reduction Act and that the impact of procedural adjustments within the move on period introduced in recent months are unclear so a full evaluation of the Post Grant Appointment Service and the pilot that preceded it should be published urgently.”

Law Centre NI is clear about what is needed:

“Learning from this should shape the support that refugees receive around housing and benefits across various government departments.”

Its experience, and the importance of that, are clear.

People who have been financially supported by the Home Office on £37.70 per week during their asylum claim, and who have not been permitted to work, will have been unable to save the funds needed to access private rented housing in advance. Having been placed in no-choice accommodation during the asylum process, they will also often have limited networks to rely on after they move in. There are significant obstacles to getting access to essential support such as benefits and universal credit, such as proof of address and incorrect advice from the jobcentre. Law Centre NI points out that integration loans should be adjusted and monitored to reflect the private rental market more accurately. It refers to the

“public body with a duty to refer”

refugees to local housing authorities under new regulations under the Homelessness Reduction Act 2017.

There are those who say that we can help, and clearly we must. We must help and put our money where our mouth is, like the man with the starfish. We all know that story, about the man picking up stranded starfish and putting them back, who when told “You can’t help them all,” says “I can help this one.” That is what we are doing—“Helping this one.” It must be done in a manner that provides security, hope and a future. If that means that we limit the numbers that we have, to ensure the care that we give people is appropriate and worthy of the British name, that must be the case. Homelessness in the UK is not what we want to offer; we want to offer hope, community, education, healthcare, friendship and freedom to live and work. We must seriously consider the requests of Law Centre NI on behalf of the Refugee Council, the No Accommodation Network, Crisis and Asylum matters.

Air Passenger Duty

Gavin Robinson Excerpts

Tuesday 10th July 2018 Westminster Hall

[Gavin Robinson (Belfast East) (DUP)]

I beg to move,

That this House has considered air passenger duty throughout the UK.

Good morning, Sir David. It is a pleasure to serve under your chairmanship.

Air passenger duty is a protracted issue that Parliament has had many opportunities to consider since its introduction more than 20 years ago. The fundamental premise of my party’s position on air passenger duty and the thrust of the debates throughout recent decades is the economic barrier and detriment that air passenger duty—it as an arbitrary charge on short-haul and long-haul flights—causes for our economy more generally, for our tourism industry and for connectivity within and outwith the United Kingdom. This is a timely opportunity for the House to consider the impacts of air passenger duty once again.

[John Howell (Henley) (Con)]

It would not be a debate if I did not intervene. Air passenger duty was introduced as an environmental tax to try to discourage people from using planes. Does the hon. Gentleman think it has worked at all in that function?

[Gavin Robinson]

I am delighted to have an intervention so early and to have it from the hon. Gentleman. The answer is no—it has not worked to protect our environment at all. The Treasury call for evidence published as a result of the confidence and supply agreement states clearly:

“APD is a tax based on the number of chargeable passengers aboard an aircraft taking off from a UK airport, and is the only tax applied on air travel as the government does not apply VAT to airline tickets or levy a tax on fuel.”

Somebody who is interested in the environmental impacts of air travel would suspect that a tax might be attributed to fuel, given that the fuel causes the damage. When the Labour Government considered APD back in 2006, they felt they needed to strengthen the opportunity to protect the environment through air passenger duty. Department for Transport modelling indicated that, even if they were to proceed along the current path, there would not be a stabilisation of emissions until 2040. Does it work as an environmental protection? No, it does not. Does it work as an economic detriment to our country, our economy and our tourism industry? Yes, it does.

I pay tribute to those who have campaigned on this issue for much longer than I have. Northern Ireland has been enriched by the enthusiasm and passion of the campaign from Hospitality Ulster, the Northern Ireland Hotels Federation and the Northern Ireland airports. I have the privilege of representing George Best Belfast City airport in my constituency. We have Belfast International airport, some recreational spaces in Newtownards aerodrome and St Angelo, and the City of Derry airport in Londonderry. Airlines UK, a campaigning body that represents airlines across the United Kingdom, has provided much information. The House of Commons Library and the Tourism Alliance have also been very useful in providing information for this debate.

As I have mentioned, the confidence and supply agreement struck between my party and the Government last year specifically provided for a review of air passenger duty and of VAT on tourism and the hospitality sector. The issue crosses the entirety of our United Kingdom. Other Members here today will want to raise issues that are particular to Scotland and to the northern parts of England. Although this debate covers the whole United Kingdom, I will focus most of my remarks on the impacts of APD and VAT in Northern Ireland.

[Mary Glindon (North Tyneside) (Lab)]

I congratulate the hon. Gentleman on securing the debate. As he has said, the issue affects other parts of the United Kingdom. A Fair Tax on Flying estimates that, since the measure was introduced, the residents of North Tyneside have paid more than £38 million in APD. Is that fair or commensurate with the economic problems that we face in the north-east when we need to increase our trade and let people go on hard-earned holidays?

[Gavin Robinson]

The hon. Lady is entirely right. She indicates how APD acts as an economic barrier and a detriment. It curtails growth and success and stands in the way of business from the north of England to the south of England to other parts of the United Kingdom. It stands in the way of leisure pursuits and increases the costs on hard-working taxpayers and their money, whether it is for business or pleasure. She is entirely right. It is a barrier.

[David Simpson (Upper Bann) (DUP)]

My hon. Friend knows that the UK has the highest flight taxes anywhere in the world. We surely need to look at that. Hopefully we are going to be in a post-Brexit situation, so we need to make sure we can attract businesses and more people into the country. Cutting the tax is one way we can do it.

[Gavin Robinson]

The Minister does not need to be encouraged on the merits of leaving the European Union or indeed on the benefits, flexibility and freedoms that it will give us as a country to chart our own course and to set preferential tax rates that are beneficial and encourage growth, which I think must be a key factor for the Treasury.

I have mentioned the confidence and supply agreement and the call for evidence that was published. I understand that there has been extensive engagement, particularly from Northern Ireland industry, the airlines and all of those affected by this arbitrary tax. The consultation closed on 5 June and we look forward not only to the thoughtful engagement of the Treasury, but to its purposeful response. The issues that it took evidence on are the same issues that have applied to this debate for years. When the Treasury says that it wants to explore the economic impact of APD, it is exploring the same reports that were presented to it in 2011, 2013 and 2015—exactly the same reports carried out using exactly the same modelling—which indicate that scrapping air passenger duty would be a net gain to the UK Treasury. I do not say that superficially, but whenever we stand before a Treasury Minister or try to argue with the Treasury and say, “We want to have this cut for a boost,” they look at you and say, “This will cost us money. If we take from this pot, how will we supplement it in another way?” The call for evidence will show, as every economic forecast has shown, that there is a net economic benefit to the reduction of air passenger duty.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate my hon. Friend on securing this debate. Does he agree that the major competitor to all of Northern Ireland’s airports—International, City and Londonderry—is Dublin? Dublin Airport has now attracted tens of millions of passengers. It is one of the fastest growing airports in western Europe and the Irish Republic does not have APD. We need a very competitive industry. Cancelling APD would give our airports a magnificent advantage over Dublin.

[Gavin Robinson]

My hon. Friend is right. I will come on to those Northern Ireland-specific issues, but first I will touch on the 2013 PricewaterhouseCoopers report. PwC uses—this will mean something to the Minister, and probably a lot to the officials sitting behind him, although it does not mean much to a layman like me—a computable general equilibrium model: exactly the same model that the Treasury uses when considering economic impacts. PwC updated its report in 2015, but the 2013 report was clear: scrap air passenger duty, and the Treasury will gain—not lose and claw back, but gain.

As a country we have gone from getting £343 million per year from air passenger duty in 1999, to £3.9 billion last year, with £4 billion estimated by 2021. When PwC updated its model in 2015, it said that there would be a direct boost to this country’s GDP of 0.5% in the first year, not a loss. How many times do we see newspaper headlines with every political decision that is having a detrimental impact on our GDP? Yet here is a simple and clear way that the Treasury could make a positive and progressive move that would lead to an increase in GDP in the very first year.

PwC said in 2015 that if we had done it that year, by 2020 we would have had 1.7% economic growth. That would have meant 61,000 additional jobs in this country, stimulation of our tourism and hospitality sectors, growth in business, 61,000 more families benefiting from a good income, 61,000 more families not otherwise relying on the state, and more revenue raised in tax than would be lost in abolition. If we can push one message, whether through the consultation, the call for evidence or the plethora of modelling and economic data that has been provided to the Treasury, it must be this: more tax revenue will be raised with the abolition of APD than its retention—an extra £570 million per year, had the decision been taken in 2015. That is not the £4 billion we are hoping to get, but £2 billion on top of that by 2020. That is a 50% increase, and were I a Treasury Minister I would jump at the chance.

Northern Ireland is, of course, close to our hearts. We have to look at the competitive disadvantage in Northern Ireland compared with our near neighbours in the Republic. Travelling from Belfast to Dublin airport is no different from travelling from Manchester to Birmingham. It is only 100 miles, so when someone is considering where to fly from and how much it will cost, the economic attractiveness of flying from Dublin is incredibly strong.

I do not put those figures forward to suggest that the UK tourism industry is in a bad place; it is not—we rank fifth out of 136 nations in travel competitiveness overall. However, on ticket price competitiveness, the Treasury report says we are 135th out of 136 countries. When someone is faced with the attractive economic proposition of travelling 100 miles down the road to Dublin, that is a barrier to growth in Northern Ireland, to additional connectivity, and to greater opportunity for leisure travel. It is frustrating and constraining the economic stimulus that we in Northern Ireland desperately need, and that our businesses crave.

In Northern Ireland we have had an 11% increase in travel, with 17% more air passengers going through our airports over the last five years. That sounds good, as the UK average is 22%, but what are Dublin’s figures? In 2014, the Republic of Ireland scrapped air passenger duty. From 2014 to 2018, the number of air passengers going through Dublin’s airports rose by 47%. That is an additional 9 million travellers, 1.2 million of whom come from Northern Ireland. That starkly illustrates what we are attempting to highlight. On average, 25% of the cost of a one-way short-haul ticket in this country is air passenger duty. It is not small beer; it is a considerable consideration for anyone seeking to travel.

The Northern Ireland Affairs Committee, which I served on during the time of the inquiry, has considered both the reduction and the abolition of air passenger duty, as well as a reduction in VAT. The debate does not focus on VAT but on air passenger duty. However, in our view the two are intertwined, and the Northern Ireland Affairs Committee agreed. The Republic of Ireland cut its VAT rate for tourism and hospitality, bringing it down to 9%. That means, again, that that industry has a competitive advantage. If somebody goes to visit the island of Ireland they will see our hospitality figures, hotel rates and so on with a significant uplift.

When the Republic of Ireland cut its hospitality and tourism VAT, there was a significant benefit to the economy again. For every percentage point dropped—and the rate went down to 9%—there was an increase of 1.7% in employment. That directly led to 4,800 new jobs in the Irish Republic, because it had the courage to cut the VAT associated with hospitality and tourism. The Northern Ireland Hotels Federation and Hospitality Ulster are clear that the economic benefit and growth created in the Northern Ireland economy through that simple reduction could result in 1,100 jobs.

I understand that we have two tax rates for VAT in this country—20% and 5%. We are constrained to those two at the moment, and even if we were not, we might not choose to have three, four or five because of the increase in burden. However, the Northern Ireland Affairs Committee was quite clear that the disparity makes a distinct difference when Tourism Ireland, which is charged with promoting tourism on the island of Ireland under the Good Friday agreement, is promoting Northern Ireland, as opposed to the Republic of Ireland.

I hope that the Minister will not only outline a timetable for considering the Treasury’s call for evidence, but show an earnest desire to take, once thoughtful consideration has been given to the mounting evidence that has been compiled over years, reasonable, beneficial, appropriate steps to stimulate the aviation sector across the United Kingdom, tourism and economic growth in Northern Ireland. I hope that we look at not only the specific calls of the Northern Ireland Affairs Committee on the abolition of APD and the reduction of tourism VAT, but other models as well.

One such model could be a route development fund. We could charge no APD for a three-year window. That would be a good way to test whether or not it is an economic barrier or detriment. There would be no loss to the Treasury on any new route, because it would just not charge for such a route. A route development fund would encourage growth and stimulate the sector to get business destinations, which we crave in Northern Ireland, such as Frankfurt in Germany, France or even transatlantic flights to the United States. We could give a route development fund three years to see whether it makes sense, and whether air passenger duty has been a significant barrier. Allow a route to develop without the threat of air passenger duty, allow it to stabilise and grow, and we believe that fruit would be borne through that sensible policy.

[Nigel Dodds (Belfast North) (DUP)]

I am grateful to my hon. Friend for securing this important debate. It is a timely opportunity to remind everyone of the important work that is under way in relation to the consultation on APD and VAT in Northern Ireland, which he referred to. He talked about the general issues, but there are two crucial issues that will result in a change for Northern Ireland: first, we are in competition with Dublin airport; and, secondly, Northern Ireland is cut off from the rest of the United Kingdom by the Irish sea, and therefore we are much more dependent on air links. When the Treasury looks at APD, it must conclude that, to make Northern Ireland competitive and to sustain our economy, it must take action to deal with those two issues.

[Gavin Robinson]

My right hon. Friend is absolutely right about the competition and the constraints put upon us as a region. I could not have put it better. We are set aside by the Irish sea, and we rely on air connectivity. We do not have the choice to search around for off-peak train travel, or to easily jump on a boat, only to find that the bus is not at Stranraer waiting for us. When we look at stimulating our economic growth, we have to recognise that we are at a distinct disadvantage because of the Irish border and the tax duty regime in the Republic of Ireland.

I know that other hon. Members will mention the other devolved regions, which have committed to remove air passenger duty. Whenever a devolved Administration gets into such a discussion with the Treasury, it will ask for the cost to be covered by the block grant. It has had such conversations with Northern Ireland and with the Scottish Government. If there is further devolution, it may have such conversations with the north of England.

The whole thrust of that approach is predicated on loss and on the Treasury not having something it otherwise would have had. If it is successful, Scotland, Northern Ireland or the north-east of England are not allowed to reap the rewards; they go back to the Treasury. We need confidence and optimism in this process. Evidence from across the United Kingdom shows that there are benefits. The Government must recognise our unique challenges and those of other parts of the United Kingdom.

I look forward to hearing what the Minister has to say. I have a Valentine’s poem for him. It was written by Pubs of Ulster—the predecessor to Hospitality Ulster—to one George Osborne in February 2015. I hope it adds a bit of levity to a debate that can be turgid when we get down into the figures. I think pragmatists can see what the answer is.

“Labour is red

Tories are blue

Here’s something important

That you need to do

Our VAT rate is crippling

Our ability to grow

It’s putting off tourists

To other countries they go

Please cut the VAT rate

And help us create

A competitive market

For our beds and our plates

As you know my dear Chancellor

You’re close to our hearts

But elections are looming

And you may depart

So as your last action

Before the big day

Please cut the VAT rate

And you may get to stay!”

That is a little bit of fun, but it lays out the Northern Ireland tourism and hospitality industry’s calls about VAT.

Air passenger duty is clearly a barrier to growth. I trust that the Minister will thoughtfully consider all the calls for evidence. We look forward to hearing a suitable response today and in the weeks to come. I hope that, come the autumn statement, we will be in a position to make some sensible and serious proposals.

--- Later in debate ---

[Anneliese Dodds]

I was pleased to hear the Minister say from a sedentary position that they are working on that. I hope the UK Government will do so with rather more application than they did on support for the steel sector, of which I had an inside view as a Member of the European Parliament: they made no attempt to secure clearance for the kind of support we saw applied in countries such as Romania, which had been okayed by the European Commission; they asked the Competition Commissioner for exemption only from environmental measures. There was not much application around steel, so I hope we will see a different approach to these matters.

Another concern is the impact of APD on Britons who have family living outside the British Isles. The previous four-banding system meant that such individuals could end up paying more APD than those travelling to the US, for example. None the less, the division in the calculation between short and long-haul travel continues to be criticised by some who feel that that disadvantages Brits with families in, for example, the Caribbean, India, Pakistan or Bangladesh, who need to fly long haul to visit them. One could argue that other, lower carbon alternatives are available to flying for short-haul journeys, which do not apply for travelling long distances. An indication of the Government’s thinking on that would be helpful.

Our final concern is about APD’s impact, or otherwise, on environmental outcomes. In response to a question posed by the hon. Member for Henley, the hon. Member for Belfast East maintained that APD does not have a positive environmental impact. However, we must look at it in the context of enormous public concern around climate change and the increasing significance of emissions from aviation. At APD’s introduction in 1994 and, following that, the Labour Government’s focus on it, there was an attempt to ensure that its design would have a green impact. For example, during the 2007 Budget process it was stated that APD

“plays a valuable role in ensuring that passengers understand and acknowledge the environmental costs of their actions. The resultant behaviour change can deliver significant climate change benefits”.

Those believed benefits were then detailed.

[Gavin Robinson]

I hope that the hon. Lady does not misconstrue what I said as a suggestion that we are not interested in climate change. The Library briefing is helpful, talking about the Labour Government in 2006 and a Department for Transport recalibration of emissions, which were to increase and not decrease until 2030. I do not think consumers realise that the contribution is made for environmental benefit or that it is having any tangible impact. The growth of aviation technology will have a much bigger impact on environmental benefits than an APD charge.

[Anneliese Dodds]

I am grateful to the hon. Gentleman for those comments. I acknowledge that there is not necessarily the awareness to ensure that it does have such an impact. Some of the matters he just raised have led to calls for a redesign of the duty, which some believe could lead to a greater environmental impact. One suggestion, which was examined in 1998, was whether it would be better to levy the duty on planes rather than passengers to reduce under-occupancy and lessen emissions. However, the then Government suggested that a restructuring of APD would be more appropriate and the four bands were introduced. Of course, since then we have gone down to two bands.

It is interesting to note that the highly interventionist right hon. Member for Wokingham (John Redwood)—he is not often described as that—argued that, on reducing under-occupancy through such a measure,

“there is a green case to be made there.”—[Official Report, 23 April 2007; Vol. 459, c. 729.]

However, the practicalities of doing so are highly complex, which may be why that did not develop at that time. In particular, it is difficult to exempt transit and transfer passengers from the calculation, which led Alistair Darling away from initial moves in that direction.

The taxation of aircraft fuel has been mentioned as an alternative, but that is prevented by the network of bilateral air service agreements under the principles of the Chicago convention. It would be helpful to hear whether the Minister has been involved in attempts afoot internationally to alter that agreement to provide more flexibility.

--- Later in debate ---

[Gavin Robinson]

This has been a productive debate. We may not be many in number, but we were ably assisted by the hon. Members for Henley (John Howell) and for North Tyneside (Mary Glindon), and by the Front-Bench contributors. I have enjoyed listening—the speeches were thoughtful and full of detail, which is how a debate should be.

I am grateful to the Minister for his commitment to engage in the interim and to present a response to the call for evidence in October. He is right that we have the power for a route development fund, but that misses the point that, if the Treasury were to permit the introduction of previously non-serviced routes where no APD is applied, not only would there be freedom to grow those routes, but it would be demonstrated to the Treasury that there is a benefit in not having APD associated with them. It is slightly different: if the Executive used their powers, APD would be charged for those routes.

We are one of a few European Union countries with APD. We have heard in the debate about the benefits for Ireland and the Netherlands from scrapping it. There has been exponential growth in their economies as a direct result. We are the only European Union country, out of 28 member states, where connectivity has declined. We need to think about the reasons for that and work productively to see what we can do to encourage growth in business, aviation and the country.

Question put and agreed to.

Resolved,

That this House has considered air passenger duty throughout the UK.