Air Passenger Duty

Lord Brady of Altrincham Excerpts

Thursday 1st November 2012 Commons Chamber

[Mr Graham Brady (Altrincham and Sale West) (Con)]

It is a pleasure to follow the right hon. Member for Wythenshawe and Sale East (Paul Goggins), with whom I share an interest in the importance of Manchester as a key driver of growth, jobs and prosperity in the north-west of England, particularly in the part of Manchester that we both represent. I am pleased to follow the good and cogent case he made about the importance of the airport and of freeing it up to attract more investment into the UK.

I also congratulate my hon. Friend the Member for Witham (Priti Patel) and others on securing this important debate. The case is unanswerable. We always want this country to be a world leader, except when it comes to the levels of taxation we impose on businesses and investment, and on our people when they have the modest aspiration of taking a foreign holiday. That is the position we find ourselves in. I am delighted to see the Economic Secretary in his relatively new position. He is a sensible man and a good Minister, and I hope that he will give this debate a good hearing.

I know that the Government believe in our key point, because they have set about reducing levels of corporation tax with the express intention of making us more competitive in the world and ensuring that businesses see the UK as a place to locate, rather than going to other places. The argument here is exactly the same. We do not want to be at the top of the international league table for aviation tax; we want to be towards the bottom, as that will help to bring in international business and investment.

[Neil Carmichael (Stroud) (Con)]

I am listening carefully to this important debate and I have heard a lot from my constituents about it. I recognise the revenue-raising function, but should we not underline the importance of international competition in transport and capacity, and think more in terms of an holistic approach to this policy area?

[Mr Brady]

That is absolutely right. It is also important to note, as the hon. Member for Belfast East (Naomi Long) did, that the Government have recognised the strength of this argument, not just in general terms about levels of taxation applied to business but specifically in relation to APD. They understand that in the case of Northern Ireland competing against the Republic there was an unanswerable case for a reduction in APD. It is apparent to us all that precisely the same argument applies to the UK and particularly to the regional airports—which many Members have mentioned—that compete with airports in continental Europe.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

The hon. Gentleman seems to be talking as though every tax has a similar effect. It is quite clear that this tax is damaging industry, damaging our enterprise and damaging investment, particularly in the regions, although we have even heard from Essex, which is close to London. Would it not be better for the Government not just to rely on broad taxation, such as the 5p reduction for people earning over £100,000, which has no real targeted effect on industry and enterprise, but perhaps to take the revenue from that broad source and offer relief from this damaging tax?

[Mr Brady]

I do not always agree with the hon. Gentleman, but I am pleased to agree with him about that. This tax precisely targets investment and international trade, which are exactly the things that the United Kingdom needs to focus on if we are to grow our way out of the problems we face.

[Mr MacNeil]

The hon. Gentleman said that Northern Ireland is competing with the Republic of Ireland, but surely we are all competing with the Republic of Ireland and with each other. We had better make sure we have that mindset; otherwise we will be left very much in the slow lane.

[Mr Brady]

That is absolutely right. Unlike the hon. Gentleman, I hope we will not be competing internationally with Scotland in the near future, but if we are, I hope we have lower aviation duty. The regional effects—on Scotland and Northern Ireland, but also on airports in the north of England—are clear. There is a plain and unanswerable case.

Like my hon. Friend the Member for Witham (Priti Patel) and the right hon. Member for Wythenshawe and Sale East (Paul Goggins), I want to touch briefly on the impact on families. Air travel should not again become a luxury that only the rich can afford. It is not a luxury in the modern world. Air travel, whether for business or leisure, is an essential part of modern life. It has opened up the world, opened people’s minds and enhanced the quality of life for us all.

I have said that I am confident that my hon. Friend, being such a good Minister, will respond warmly to the case we are all making. The final reason for that is that the proposers of the motion have been so modest in their aspirations. The motion highlights some of the damage that we think is being done by this tax, but we do not call for it to be cut or axed altogether. We are asking only for the Treasury to look carefully at its effect before next spring’s Budget. All we want is a proper detailed review and economic assessment of whether this tax does more economic harm than good. I think that all who have spoken so far believe it does.