Finance (No. 2) Bill

Lord Dodds of Duncairn Excerpts

Wednesday 9th April 2014 Commons Chamber

[Jonathan Edwards]

That is an interesting point. I am sure that the people of Scotland are watching these developments intently, as they will be voting in a referendum on independence in September. The issue is, can they trust anything that the no campaign says in advance of that referendum? I am sure that that will become a growing theme as we approach the closing stages. I wish the hon. Gentleman and his colleagues well in the forthcoming months.

As I was saying, the Government have sought to water down the financial powers recommended by the commission by constraining them through a lockstep, essentially making it impossible to vary income tax in Wales. Meanwhile, the Labour party says that it will block any income tax powers via its Government in Cardiff unless the Barnett formula—the way in which Wales is funded—is reformed. That is despite having 13 years to do so while it was in government.

Labour also now supports the lockstep principle, despite the protestations of the First Minister. There is of course the added twist that the bands can only be moved upwards, which is why I have labelled Labour’s policy “lockstep plus”.

Needless to say, the agreement that was the Silk commission’s recommendations fell far short of what Plaid Cymru was advocating as a party, to which my hon. Friend the Member for Arfon (Hywel Williams) alluded earlier. We wanted a more comprehensive list of job-creating and economy-boosting powers including VAT, corporation tax, resource taxes and capital gains tax. However, in the interests of compromise, we settled on the final recommendations.

The Silk commission argued that should corporation tax be devolved to Northern Ireland, Wales should not be left behind. I follow with interest the unanimous support in Northern Ireland, among all parties, pressure groups and interest groups, for the devolution of corporation tax—[Interruption.] Exactly, that is a very interesting point: the Unionists in Northern Ireland want corporation tax and a whole range of job-creating powers for their devolved Government, yet we have unionists representing Welsh constituencies trying to block any move towards further powers for our country.

The Silk commission argued that should corporation tax be devolved to Northern Ireland, Wales should not be left behind. The fiscal powers recommended by Paul Silk and his team in the commission’s report are still desperately needed for the sake of the Welsh economy. The ability to vary some taxes and to borrow for investment would enable us in Wales better to deliver job-creating and economy-boosting measures and policies to help turn around the continuing bad performance of the economy.

It was also interesting to hear the Secretary of State sing the praises of the lockstep income tax provision of the Wales Bill in a TV interview. He said that it could be used to vary rates and would put Wales at a competitive advantage, but that the devolution of long-haul air passenger duty would put Bristol airport at a competitive disadvantage. That incoherence shows that the cherry-picking of the Silk recommendations falls apart unless they are introduced as a comprehensive and whole package.

Long-haul APD was devolved to Northern Ireland in last year’s Finance Bill, and the Silk commission has recommended the devolution of long-haul APD to Wales. It is clear therefore that today’s debate is the appropriate legislative vehicle to move this issue forward. Although I failed to do so last year, I live in hope that I might succeed today, but given that all the Labour MPs have disappeared home—AWOL again when the interests of Wales are under discussion—I am not holding my breath.

[Mr Nigel Dodds (Belfast North) (DUP)]

I have a lot of sympathy for what the hon. Gentleman is putting forward. He has mentioned Northern Ireland in relation to corporation tax and APD. Does he recognise though that one big argument in relation to Northern Ireland is the fact that we have a neighbour to our south, another EU member state, which competes directly with Northern Ireland? We also have a land border, and the corporation tax and APD rates down south are much less than they are in Northern Ireland, so there is a unique case in Northern Ireland—but I am not for one minute setting aside the merits of his case

[Jonathan Edwards]

As usual, the right hon. Gentleman makes a reasoned argument. Northern Ireland has a land border with the Republic, of course, but we would argue that we have a sea border. I normally find myself making the case for equality with Scotland in this place, but in this instance I am calling for equality with Northern Ireland. What is good enough for Northern Ireland is certainly good enough for Wales.

Just over a year ago, the Labour Welsh Government acquired the national airport of Wales, located just outside Cardiff near Barry in the Vale of Glamorgan. The ability to attract long-haul flights to the airport would significantly improve its competitiveness. It has more than 1.5 million people within its catchment area, and long-haul flights could attract people from even further afield given that that is the only airport in Wales or the west of England with a runway large enough to accommodate transatlantic aircraft. The development of the airport could act as a spur to growth in the south Wales economy, bringing in greater foreign direct investment through better business links, which would in turn bring jobs and growth. Quite frankly, I am amazed that the Labour party has not proposed its own amendment to the Finance Bill and that only goes to show that the First Minister has absolutely no influence over his bosses down here in London or, at least, over Labour MPs based in Wales.

In response to the UK Government’s proposals for the Wales Bill last November, the Labour First Minister said that he was “disappointed” that air passenger duty on long-haul flights would not be devolved. I am not surprised, given that his Government had brought the airport under public ownership only a year earlier. In a lecture at the London School of Economics, the First Minister said:

“Air passenger duty is another tax that should, in my view be devolved. While London struggles with where to build additional airport capacity, we in Wales face a very different problem. Our national airport in Cardiff has not enjoyed the growth in passenger numbers and destinations that we need to help drive economic growth. Devolution of air passenger duty would give us a useful tool to incentivise the growth of Cardiff airport and other smaller facilities, such as Anglesey in north Wales. APD has already been devolved to Northern Ireland for long-haul flights; at a minimum, I believe Wales should have parity.”

The First Minister makes my case for me, but where are his MPs? Where are they? It is just a shame that he could not get his MPs to the Committee to vote when he has the opportunity to do what he keeps preaching to the people of Wales in the Western Mail and on the BBC.

MPs representing Welsh constituencies who fail to vote in favour of devolving air passenger duty do not only ignore the economic needs of Wales, the First Minister of Wales and the overwhelming majority of Welsh public opinion.

Charter for Budget Responsibility

Lord Dodds of Duncairn Excerpts

Wednesday 26th March 2014 Commons Chamber

[Mr Osborne]

I will make a bit of progress and then take some interventions.

Today, we take another important step towards the goal. We seek the support of Parliament not just for the principle of this welfare cap—important as that is—but its practical application: the list of benefits in it and the cash limit we set out today. I have noticed, in the past 24 hours, a change in the language being used by those on the Labour Front Bench. A day or two ago it was, “We are going to vote for the Government’s welfare cap.” Clearly, Labour MPs did not like that, so this morning the shadow Work and Pensions Secretary, said that Labour will sign up to something called a welfare cap, but that

“We would do it in different ways”.

What different ways? Does that mean different benefits would be included? [Interruption.] Will the shadow Chief Secretary, the hon. Member for Nottingham East (Chris Leslie), explain Labour’s welfare cap? Does that mean different levels of benefits? Does it mean a different level of spending? Every time the Opposition are faced with a difficult decision and asked to prove their fiscal credibility, they buckle because they are weak. We know what has happened. They have read the polls and seen the focus groups. They are being told not to vote against the welfare cap, but everyone knows what their instincts are. Everyone knows what gets them a cheer at the Labour conference: more spending on welfare paid for by more borrowing. Indeed, their only welfare policy is a £500,000 increase in housing benefit. The shadow Work and Pensions Secretary gave it away last week, in a private left-wing meeting. She said this, in private:

“it will be much better if we can say that all of the changes the Government have introduced we can reverse and all benefits can be universal.”

At least those Labour MPs voting against the welfare cap today are being true to what they believe in. No one thinks that of the shadow Chancellor and the Labour leadership today.

Time is short, so let me set out briefly how the cap will operate, first by enforcing public expenditure control where there was none previously. Welfare spending was called annual managed expenditure by the previous Government—no doubt a term dreamt up by the shadow Chancellor when he was running things so badly—but it was expenditure that was neither managed nor set annually. Now it will be. The Budget document sets out the 26 different benefits that will sit under the cap. They include almost all transfer payments from tax credits, housing benefit and employment and support allowance to statutory maternity pay, carer’s allowance and disability living allowance.

Some of those benefits, such as statutory maternity pay, have relatively stable and predictable costs, while others, such as housing benefit, have consistently grown much faster than forecast; but each one involves many hundreds of millions, often billions, of pounds of spending, and deserves the same careful management and scrutiny as items in the defence budget or the education budget. Some of those benefits, such as disability living allowance, help some of the most vulnerable citizens, but that is not an excuse for failure to manage their budgets. After all, our national health service also cares for the most vulnerable, but that does not prevent us from giving it an annual budget.

[Mr Nigel Dodds (Belfast North) (DUP)]

Will the Chancellor spell out the implications for devolved regions such as Northern Ireland, where welfare spending is devolved? What is the implication for the block grant if there is a rise in welfare expenditure through no fault of the Northern Ireland Executive?

[Mr Osborne]

Many benefits apply universally throughout the United Kingdom, but some areas of welfare spending are devolved. I know that there are specific arrangements with Northern Ireland, and we have been having discussions with the Northern Ireland Executive. I am well aware that the right hon. Gentleman represents only one party in the power-sharing arrangement, but we are keen to see the Executive make progress on welfare reforms and help to control the bills, and, as he knows, we are discussing that with him and his colleagues. However, I shall be happy to sit down and work out with him how some of the principles of the welfare cap here can be used to control welfare spending in Northern Ireland.

Budget Resolutions and Economic Situation

Lord Dodds of Duncairn Excerpts

Wednesday 19th March 2014 Commons Chamber

[Sammy Wilson]

I would accept that point if I had not heard Government Members saying for the past three years that businesses are now more confident because there is a firm hand at the helm. We have not seen that come through in the figures to date. That is my first concern. I want growth to be sustained. I want the Chancellor to succeed. It does not matter to me electorally whether he succeeds or fails, but it matters to my constituents.

My second point is about the distribution of growth. Most of the growth has been in the south-east of England. Regions such as Northern Ireland, where there has been growth of 0.3%, have not benefited.

[Mr Nigel Dodds (Belfast North) (DUP)]

My hon. Friend has picked up on a point that I was going to raise, which is the unevenness of growth across the UK. Northern Ireland has a relatively low level of growth, which is having an impact on jobs and investment. Given his expertise in, and experience of, Northern Ireland’s finances, I would be grateful if he indicated what more the Government could do to help regions such as Northern Ireland.

[Sammy Wilson]

I listened intently to the Chancellor, and I was pleased when he made the point that he wanted to ensure that growth occurred in all the regions of the United Kingdom. However, I was disappointed to listen to the rest of the speech, because I wanted to know what policies would be introduced to effect that more even distribution of growth. I welcome the setting up of the enterprise zone in Coleraine, but one has to bear in mind that that will just balance out the 350 jobs that have been lost in that town, where severe unemployment had already been caused by the closure of some companies. It is intended to balance out the impact that the central Government’s decisions have had on my constituents in Northern Ireland.

Currency in Scotland after 2014

Lord Dodds of Duncairn Excerpts

Wednesday 12th February 2014 Westminster Hall

[Mr Iain McKenzie (Inverclyde) (Lab)]

It is a pleasure to serve under your chairmanship today, Mrs Riordan. I congratulate my hon. Friend the Member for Edinburgh South (Ian Murray) on securing this important debate. The choice of which currency to use is perhaps the single most important economic decision a country can take. That is why Scotland is asking, as we close in on the independence referendum in September, why the yes campaign does not seem to know what currency it wants. We hear that the SNP wants and favours a currency union with the rest of the UK, keeping the pound. However, the other members of the yes campaign want either the euro or a new currency altogether. This leaves us in Scotland very confused and worried. What currency does the yes campaign want for Scotland?

The people of Scotland want a straight answer about the currency from those who support separation, with a guarantee of which currency we would use if a yes vote should transpire in September. But today all we have on currency from the nationalists is a wish list at best, wrapped up and qualified with ifs, buts and maybes. We now know that keeping the pound in a currency union would require the agreement of the rest of the UK; but what if agreement could not be reached on that? What is plan B? Even if a separate Scotland wanted to continue to use the pound, and agreement was reached with the rest of the UK, it would mean that there was no control over our interest rates and how much Scotland could tax and spend. I do not believe that even the nationalists would accept that as independence.

[Mr Nigel Dodds (Belfast North) (DsUP)]

Is not the bottom line the fact that there is a fundamental contradiction at the heart of the yes campaign—that on one hand the SNP and the yes campaign want national sovereignty to be transferred to Edinburgh, but on the other hand they want to give it away almost immediately in a currency union?

[Mr McKenzie]

The right hon. Gentleman makes the point clearly and we have been highlighting that throughout the debate on Scotland’s future.

If Scotland carried on using the pound regardless, we would have no control over our economy and we could lose our central bank, which acts as the lender of last resort. The nationalists are now suggesting that Scotland should default if they do not get their way on a currency union; the Deputy First Minister has said that Scotland might not take its share of national debt if it is not agreed. That is wildly irresponsible and would jeopardise an independent Scotland’s creditworthiness. The people of Scotland have every right to worry about the future of the money in their pocket, when they hear bullying threats, such as the threat of reneging on our share of the debt. What tone would that bring to other negotiations about separation? It is hardly the way to make friends and impress people.

Tourism (VAT)

Lord Dodds of Duncairn Excerpts

Tuesday 11th February 2014 Westminster Hall

[Ms Ritchie]

I thank the hon. Gentleman for his helpful intervention, and I completely agree with him. In our nearest neighbour, the Republic of Ireland, VAT on tourism products is now 9%. Even in the difficult economic climate that the Republic has experienced—it has just come out of the bail-out situation—the VAT rate reduction has underpinned businesses in the tourism sector and encouraged new ones to emerge.

[Mr Nigel Dodds (Belfast North) (DUP)]

I, too, commend the hon. Lady and her colleagues on securing this important debate. To be parochial for a moment, in Northern Ireland the problem is our land frontier with the Irish Republic where, as she has just mentioned, there is a lower rate of VAT. Is that not a particular issue for the Province, given people’s propensity simply to go south to enjoy better VAT rates?

[Ms Ritchie]

I thank the right hon. Gentleman for his very helpful intervention. I absolutely agree with him. My constituency borders County Louth in the Republic of Ireland. Many people come to the island of Ireland via Dublin airport, where there will be a zero rate of air passenger duty from April this year. The lower VAT rate on tourism products encourages many of them to use their purchasing power on accommodation and restaurants in the Republic of Ireland, rather than travelling north, where they would have an opportunity to invest in our local economy.

As a labour-intensive industry, the tourism sector is a leading employer. In particular, it offers younger people entry-level jobs at the start of their careers, and more than 44% of people employed in the sector are less than 30 years old. We face a youth unemployment crisis, with more than one in four young people out of work, and the Government’s lack of support for the tourism sector is clearly impairing job creation. A cut in the rate of VAT would create demand, which would spur job creation and go some way towards reducing youth unemployment. In Ireland, the VAT cut for tourism has produced an extra 10,000 jobs in just over a year. A prominent report on the subject published by Deloitte produced evidence that a similar tourist VAT cut in the UK would create some 80,000 jobs.

Fairness and Inequality

Lord Dodds of Duncairn Excerpts

Tuesday 11th February 2014 Commons Chamber

[Jonathan Edwards]

I am grateful to my colleague for making a very valid point on my behalf.

I was talking about the inequality that exists in the United Kingdom. Why is this so, how is it so, and why has it been allowed to happen under successive Labour and Tory Governments? I am sure that many Members will be able to cite numerous facts and figures that amply demonstrate the inequality and lack of fairness that exist in the UK; indeed, we have already heard several interventions to that effect.

[Mr Nigel Dodds (Belfast North) (DUP)]

I may not agree with everything that the hon. Gentleman says today, but I can tell him that in September 2013 the average Northern Ireland household was surviving on discretionary income of £60 a week, while average discretionary income in the United Kingdom was £157 a week. There is clearly a big discrepancy throughout the UK. Does the hon. Gentleman agree that one of the reasons why devolution is so important is that it can lead to local solutions, and can enable local help to benefit the citizens of the devolved countries?

[Jonathan Edwards]

In that regard, the Democratic Unionist party and Plaid Cymru share a common vision, in that we need to empower our respective Governments to deal with the economic and social challenges that our people face.

I want to set out how and why this inequality has been allowed to take a grip and, indeed, been actively pursued by the powers that be. I will also set out how that can be reversed, and how places such as Wales can become more prosperous and egalitarian societies. We have seen the over-concentration of power, status and influence in a narrow and unrepresentative financial elite over the past three decades. That has allowed greed, avarice and hubris to take hold among the elite’s own ranks, while poverty, destitution and exclusion have risen among much of the rest of society.

The uneven economic development of the UK and the concentration of so much wealth and power around London and the south-east distort much of the UK’s public life. They influence and shape many of the political, media and business perceptions about what is good for the entire UK, and lead to geographical polarisation and a super-concentration by Westminster politicians on certain sectors of the population whose opinion is seen as worth courting and listening to.

--- Later in debate ---

[Jonathan Edwards]

I am grateful for that intervention, and I congratulate my hon. Friend on all the work he has done on this issue. He has twice presented Bills to pursue that common-sense proposal, and when it comes before the House again I intend to be here to support him—I hope that the hon. Member for Wealden will be, too.

[Mr Dodds]

May I endorse the point made by the hon. Member for Wealden, because Northern Ireland is dependent to a high degree on home heating oil—off-grid energy supply—with some 70% of our households using it. Our household bills are, on average, way beyond the highest bills in the rest of the UK. It is important that the issue is highlighted and something is done to address the situation of those who are off grid.

[Jonathan Edwards]

The right hon. Gentleman makes a very valid point. He will be aware of the lack of competition in the market, where there are perhaps five or six suppliers with more or less mirrored pricing policies. The Government should examine that, and let us hope they remedy the situation affecting those individuals who are off the gas grid.

Wales is a country rich in natural resources, and it is a net exporter of electricity. No one in an energy-rich country such as mine should have to live in fuel poverty, yet 30% of the people in my country do. The energy sector was privatised by the Tories and the current market was set up by Labour in 2002, allowing the previous regional monopolies to merge into the big six. It is symbolic of the profiteering, privatisation and corporate greed that has undermined poorer areas and poorer people under Labour and Tory misrule.

Wales is a colonial economy, where our natural capital is extracted for no or little economic and social benefit to our people. No wonder the Westminster elite oppose empowering the Welsh Government by giving them control over our natural assets. Last week, the shadow Environment Secretary made an incredible intervention in the Scottish independence debate when she said that if Scotland votes yes, the remnants of the UK might stop importing Scottish electricity if Labour were in power and look to other markets for supply. That one intervention summarises the Westminster elite and how they view Wales and Scotland. No wonder that on social media these sort of “Project Fear” scare stories have earned the hashtag “know your place”. I would wager that my friends in the yes campaign in Scotland are delighted at such ill-judged interventions.

Oral Answers to Questions

Lord Dodds of Duncairn Excerpts

Tuesday 5th November 2013 Commons Chamber

[Mr Osborne]

Of course the OBR provides an assessment of the impact of Government policies on the economy, and I will consider my hon. Friend’s specific suggestion that we look into the impact of climate change policies on energy prices. We are currently examining the charges and levies that the last Government, among others, added to energy bills, and seeing what we can do to roll them back in order to provide relief for customers.

[Mr Nigel Dodds (Belfast North) (DUP)]

I welcome the action taken by the Government to freeze fuel duties, but UK taxes on petrol and other fuels remain among the highest in any country in the European Union. What will the Chancellor do to remedy that much unwanted achievement?

[Mr Osborne]

I looked at the plans that this Government inherited, and then cut petrol duty in March 2011. We have frozen the duty ever since, and I intend to continue the freeze for the rest of the current Parliament, provided that we can find the savings to pay for it. That is the crucial point: if we do not sort out the economy, if we are not fixing the public finances, if we do not have an economic plan, we cannot have a living standards plan.

Air Passenger Duty

Lord Dodds of Duncairn Excerpts

Wednesday 23rd October 2013 Commons Chamber

[Dr McCrea]

I thank the hon. Gentleman for that helpful intervention.

I thank the hon. Member for Brigg and Goole (Andrew Percy) for acknowledging the problems faced by regional airports—many hon. Members acknowledged that point in the debate. The hon. Member for Paisley and Renfrewshire North (Jim Sheridan) is right that statistics are worth repetition because they might get through to the Government, who must then answer to them.

The hon. Member for South Down (Ms Ritchie) drew attention to the impact of the Irish Government on Northern Ireland. She was exactly right. It has been said that the UK Government cannot do what the Irish Government have done because of the deficit. However, I draw the House’s attention to the fact that the Irish Government have a greater deficit problem than the UK Government. The Irish Government nevertheless believe that removing APD was of greater value economically. The Minister should bear that in mind when he expounds why we should not abolish APD—he should not say that it is because we are dealing with the deficit. As I have told him, the Irish Government have a greater problem, yet they have announced the measure in their budget.

I am happy that the hon. Member for Mid Norfolk (George Freeman) spared us the details of his trip to Amsterdam. Nevertheless, I hope he has learned something from the debate and will change his mind on any decision he makes later.

I share the experience of my hon. Friend the Member for Strangford (Jim Shannon): a lot of ordinary people come to my constituency office because they have no Sinn Fein representation in the House and we must represent them. That is a disgraceful situation, but it is a fact, and we must accept the reality. The hon. Member for North Antrim (Ian Paisley) gave the House an interesting report of the statement by Mr Hastings. That, too, is worthy of our consideration.

It is clear from the debate that the civil aviation sector is one of the main pillars of economic growth in the UK, driving job creation and growth both at home and overseas, as well as providing air transport for goods and passengers. More than a third of world trade is delivered by air, and about half of international tourism is facilitated by air links. However, as hon. Members commented, UK passengers are taxed more for air travel than passengers anywhere in the world, with APD rates expected to rise again in line with inflation from 1 April 2014.

In March 2013, the UK was ranked by the World Economic Forum as the world’s least-competitive country in terms of taxes and charges levied on air passengers. The TaxPayers Alliance has described APD as

“an unwelcome burden on family holidays, a cost to business and redundant with the EU Emissions Trading System now being applied to aviation”,

and has called for APD to be phased out entirely.

Our vision for a strong and prosperous Britain can be achieved only with healthy and vibrant transport and economic development sectors. Air connectivity is the key to efficient trading and, as the UK economy continues to transform in the face of domestic and global change, it is essential that the aviation industry is given the certainty and incentive necessary to allow it to plan and invest for the long term. Time and again we are presented with the argument that APD has deterred airlines from opening new routes, especially in Northern Ireland, where robust air links are fundamental to underpinning our regional economy, and has compromised the ability of local businesses to attract new foreign direct investment.

The situation is similar in Scotland. Amanda McMillan, managing director of Glasgow airport, has stated:

“Due to the size of the market in Scotland, we will always find it difficult to attain and sustain new routes and this situation is compounded even further by APD which simply serves to artificially depress demand and dissuade airlines from basing aircraft here…Unless APD is reformed, people travelling to and from Scotland…will continue to face some of the highest levels of taxation in Europe which is clearly a disincentive to travel.”

In an evidence session to the Northern Ireland Assembly Finance and Personnel Committee on 18 September, the director of the City of Derry airport, Damien Tierney, described APD as one of the “big factors” influencing airline decision making. Low-cost carriers such as easyJet and Ryanair, which account for most of the Province’s air travel, are particularly influenced by APD.

[Mr Nigel Dodds (Belfast North) (DUP)]

Does my hon. Friend agree that APD has long since ceased to be an environmental tax, if it ever was, and is now simply a means of revenue generation for the Government?

[Dr McCrea]

I thank my right hon. Friend for his intervention. Throughout the debate, Government Members have acknowledged that APD is a way to deal with the deficit, so my right hon. Friend is spot on in identifying that this is another form of taxation on the people of the United Kingdom.

Belfast International airport has noted in similar terms that APD has been held up as a barrier to airlines that might otherwise have shown interest in operating services in Northern Ireland, thereby limiting market opportunity and creating competitive disadvantage for operators. A 2011 report by PricewaterhouseCoopers, entitled “Helping Economic Take Off”, looked at Northern Ireland’s geographical location, which makes us unique in both a UK and EU context. We are the most westerly part of the European Union and the only region of the UK separated by water, yet we share a land frontier with another member state. We have to travel and we have to trade, and air connectivity is the essential springboard from which future economic growth will be launched. The report, however, found that the continued imposition of APD would serve as a significant deterrent to further investment by existing or new carriers in existing or new air routes.

Much has already been said in today’s debate about the Netherlands experience. The Dutch Government introduced an aviation tax in 2008 for passengers departing from Dutch airports. The Dutch air passenger duty proved controversial from the outset and decreasing passenger numbers, combined with the global economic crisis, led the Dutch Government to subsequently abolish it on 1 January 2010. Belgian plans for a ticket tax were not implemented for similar reasons and a Danish tax was withdrawn due to adverse economic impact. In January 2013, the German Government announced that they would freeze their air passenger tax, while the German Transport Minister has publicly stated that he would like the tax to be abolished completely. Will our Government not listen to what is happening across the rest of Europe? Surely those decisions are being made in the light of economic circumstances.

The decision announced in last week’s budget by the Irish Government—that air travel tax is to be removed from 1 April 2014—has once again thrown APD into sharp focus, particularly its potential impact on the aviation sector in Northern Ireland. Concern has already been expressed by the Consumer Council of Northern Ireland that demand for air services in Northern Ireland could face decline, as people head south of the border to avoid tariffs. As Belfast International airport, in my constituency, has commented:

“Any tax or regulation prevailing in Northern Ireland which makes our gateway less attractive than those across the border is entirely retrograde with regard to economic development”.

As recognised by the Northern Ireland Affairs Committee in its two previous reports, Northern Ireland suffers greatly from its shared land mass with the Irish Republic, where the abolition of air travel tax, along with low corporation tax, start-up incentives and marketing funds, will now make it even harder for Northern Ireland to compete for cheaper fares and new route development. Belfast International airport, which lies on the shores of Lough Neagh in my constituency, is the main international port of entry for the province and has proved itself to be an essential component of the local economy and regional growth, as well as being a strategic asset nationally.

In conclusion, I realise that time has run out and I want the Minister to have the opportunity to respond to the debate. I thank every right hon. and hon. Member for participating. I trust that the Government have listened to what has been said and will take away the motion and the thoughts of the House, rather than seek to divide it.

amendment of the law

Lord Dodds of Duncairn Excerpts

Monday 25th March 2013 Commons Chamber

[Naomi Long (Belfast East) (Alliance)]

All of us who sat in the Chamber throughout last week’s Budget statement will be acutely aware of the context in which this debate is taking place. Global economic conditions remain extremely challenging and the impact on the UK economy has led to the downgrading of many of last year’s Budget predictions.

The people we represent, who listened to the statement outside this place, were realistic about the Budget, but they also hoped for measures that would encourage inward investment and growth; give businesses confidence and access to finance to create new jobs and help grow their export markets; ease the pressure on family budgets and small businesses alike; tackle inequality in society; and stimulate desperately needed growth.

Although talk of an aspiration nation is great rhetoric and a worthy aim, it is the job of Government not only to ensure that people are encouraged to have aspirations, but, if there is to be real improvement, to create the context in which they have the opportunities and support to fulfil them.

In the brief time available I want to focus on a few aspects of the Budget, welcoming some of the positive measures and highlighting a number of areas where more could be done.

I commend the Government for upholding their commitment to spending 0.7% of gross national income on international development. Given the current economic climate, it is understandable, though regrettable, that, despite the fact that this allocation represents a small fraction of overall Government expenditure, it comes under continuing pressure. However, by standing by the commitment, the UK is showing leadership in the international community. Aid well spent is a powerful tool to tackle severe global poverty, to assist some of the poorest nations in becoming more self-sustaining and to support global justice, human rights and security. Moreover, although it is spent abroad, it also contributes to protecting our own national interest.

In that vein, I also welcome the fact that at the same time as the Treasury is seeking to tackle tax avoidance in the UK—which we all welcome—it has also committed to prioritising dealing with international tax avoidance by UK companies, which is depriving many nations from the transition from aid to trade. I hope that it will be robust in its actions.

I also welcome the increase in the personal tax allowance, which will lift many of those in the lowest paid employment out of tax altogether. If it were part of a package of measures to tackle poverty more comprehensively, it would be even more welcome. However, as I noted last year, as an anti-poverty measure it is neither the most effective nor the most targeted approach. Although the poorest working families will benefit, raising the personal allowance will also benefit many others.

In the time remaining, I want to comment briefly on measures that will impact on Northern Ireland in particular. I welcome the reduction in corporation tax, which is a particularly sensitive issue given our land border with the Republic of Ireland, where corporation tax is significantly lower at 12.5%. Although it would not be a silver bullet, the devolution of corporation tax has been identified by industry, the Northern Ireland Affairs Committee and the Northern Ireland Executive as an important tool in stimulating the economy and attracting inward investment. The UK-wide reduction, though modest, is a step in the right direction and will also lower the potential cost to the Northern Ireland Assembly should this tax power be devolved, as many of us wish. It is disappointing that that devolution was not announced in the Budget. I trust that the Prime Minister will have more positive news for the First and Deputy First Ministers when he meets them to discuss the matter tomorrow.

[Mr Nigel Dodds (Belfast North) (DUP)]

The hon. Lady can be assured that virtually all the Northern Ireland Assembly parties support what she has just said. Does she agree that it is important that their meeting with the Prime Minister tomorrow has the endorsement of all major business groups, major community groups and people who are concerned about jobs and employment in Northern Ireland?

Cyprus

Lord Dodds of Duncairn Excerpts

Monday 18th March 2013 Commons Chamber

[Greg Clark]

Clearly, it is a matter of regret, and lessons should be learned from the situation that Cyprus finds itself in. One of the clear lessons is that it should not have been allowed to descend into this state of indebtedness, and the banks should not have been allowed to get into their present position of vulnerability. It is in our interests, as well as in the interests of other members of the eurozone, that we have a much more soundly based banking system right across Europe.

[Mr Nigel Dodds (Belfast North) (DUP)]

I welcome the action that has been taken to protect the deposits of members of our armed forces in Cyprus, but to follow on from what has just been said, is not the lesson of this whole episode to spell out very clearly to anyone who advocates in future any greater European integration or any joining of the euro, “Hands off our money”?

[Greg Clark]

I am sure that our constituents in this country will be relieved and reassured that we are not part of these arrangements and not exposed to the consequences of the failure that is sought to be averted in Cyprus.