Payday Loans: Advertisements
Lord Foulkes of Cumnock Excerpts(10 years, 8 months ago)
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Lord Newby
My Lords, I do not have any specific response to that, except to say that the ASA is able to investigate any complaints about the effect of ads on particularly vulnerable groups, which potentially would include gamblers. Certainly, if you watch paid-for sport television, you get a very large number of ads for online betting, which I find distasteful—but, as with many things in life, there is an interesting argument to be had about the line between what is distasteful and what should be banned.
Lord Foulkes of Cumnock (Lab)
My Lords, it is a pity that the Minister has resorted to statistics to try to explain this away. All it needs is one of these very cleverly devised adverts to put pressure on children or to influence children to put pressure on their parents, who can ill afford to take out these loans. Will the Minister answer the question put by my noble friend Lord Mitchell: when he brings forward his Bill, will the Government give sympathetic consideration to supporting it?
Lord Newby
My Lords, when the noble Lord, Lord Mitchell, brings forward his Bill, the Broadcast Committee of Advertising Practice will have expressed a view on these loans. The Government will take very considerable account of what it says in forming their view about the noble Lord’s Bill.
Economy: Growth
Lord Foulkes of Cumnock Excerpts(10 years, 10 months ago)
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Lord Newby
My Lords, the noble Lord may be right. An independent Scotland would have banking assets equivalent to 1,254% of Scottish GDP—more than Ireland, Iceland and Cyprus when they ran into banking difficulties.
Lord Foulkes of Cumnock (Lab)
My Lords, does the Minister recall that Alex Salmond used to be an economist with the RBS? Does that not say everything? Will the Minister confirm that economic growth in Scotland in the third quarter of 2013 was much the same as economic growth in the United Kingdom, which shows that devolution is working, that Scotland is getting the best of both worlds and that we are in fact, to coin a phrase, better together?
Lord Newby
My Lords, I agree. For example, it is very interesting, looking at what has been happening to unemployment not just over the past few months but over the past couple of decades, that in the 1990s unemployment in Scotland was slightly higher than it was here. In recent years, and particularly in the past few quarters, it has been slightly lower. It shows that Scotland, while moving broadly in line with the UK, can do better than the rest of the UK, as it has done in a number of respects. It is quite difficult to see how it could replicate that pattern if it were independent.
Pensions
Lord Foulkes of Cumnock Excerpts(11 years ago)
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Lord Foulkes of Cumnock
To ask Her Majesty’s Government what action they propose to take on the report by the Financial Services Consumer Panel concerning the selling of pensions annuities.
Lord Newby (LD)
My Lords, when people have saved up for retirement, the Government agree that they should get the best from their retirement savings. That is why we are already taking action to combat excessive pension charges. It is also why we set up the Open Market Option Review Group, which introduced measures to prompt consumers to shop around for an annuity and secure a better retirement income. The Financial Conduct Authority is also looking, through its thematic reviews, into the important issues that this report raised. The report is a useful contribution to ongoing work in this area.
Lord Foulkes of Cumnock (Lab)
My Lords, will the Minister join me in thanking the Daily Telegraph and Daily Mail for exposing this latest example of financial institutions cheating their customers? Will he ensure that the Financial Conduct Authority deals with them firmly, as it did yesterday with RBS and Lloyds? Could he also look at some way of ensuring that the people who are punished are those in the institutions responsible and not the bodies themselves, which pass on the costs to their long-suffering customers?
Lord Newby
My Lords, I am not sure that I ever thought I would say this, but I join the noble Lord in thanking those newspapers that have drawn yet another financial problem to more general interest and view. The Financial Conduct Authority has new powers and is already showing that it intends to use them very rigorously. It has powers in respect of individuals as well as institutions, and will use them.
Economy: Women’s Incomes
Lord Foulkes of Cumnock Excerpts(11 years ago)
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Lord Newby
My Lords, we would like to see—as no doubt the noble Baroness would—a higher proportion of women from those communities being economically active. We are seeing that a much higher proportion of young women in those communities are economically active than their parents were. However, one of the positive things about the rise in the number of women in employment, which I mentioned earlier, is that there is now a higher proportion of women in the labour market than ever before. That is very much to the benefit of women overall.
Lord Foulkes of Cumnock (Lab)
My Lords, does the Minister realise that proposals regarding economic policy are to be included in the paper to be produced by the Scottish Government tomorrow? Since the Minister’s noble friend was unable to answer my supplementary question, could he take some advice from the Advocate-General and answer it? A Government can call something a White Paper only if they have the power to implement what is included—and, if the Scottish people were, unfortunately, to vote yes, the Scottish Government’s proposals could be implemented only with the full agreement of the rest of the United Kingdom.
Lord Newby
My Lords, perhaps I could refer the noble Lord to the speech made by my noble and learned friend at Aberdeen University last Friday, which very adequately answers his question.
Taxation: Tax Law Enforcement
Lord Foulkes of Cumnock Excerpts(11 years, 1 month ago)
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Lord Foulkes of Cumnock (Lab)
My Lords, I am not going to continue this attack on Sir John Major because it is disgraceful. With respect, the Minister has been giving us the same answer about extra staff for almost the past three years, yet we have illustration after illustration of evasion. First it was Starbucks, then it was Amazon, then it was Philip Green and Irvine Laidlaw; one after the other has been avoiding tax. Has the Minister not yet come to the conclusion that what is needed is legislation to close the tax loopholes?
Lord Newby
My Lords, leaving aside the fact that, sadly, I have not been a Minister for three years, the question of closing tax loopholes and dealing with companies that are international by their nature is an international problem. The level of activity now being undertaken via the OECD is on a scale that we have not seen for a generation. Some 15 work streams are currently under way, looking at different aspects of this problem, with a two-year deadline to resolve them. If it were possible to legislate in one country and deal with all these issues, not only we but the US, Germany, France and other countries that find themselves in the same boat would have done it. You cannot operate against multinationals on a domestic basis alone; it must be done internationally. That is what we are doing, and we are putting huge effort and impetus into that work.
Taxation: Evasion and Avoidance
Lord Foulkes of Cumnock Excerpts(11 years, 6 months ago)
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Lord Foulkes of Cumnock
To move that this House takes note of the economic and social consequences of tax evasion and avoidance.
Lord Foulkes of Cumnock
My Lords, I am particularly pleased to have obtained this debate on this subject, which is not just tax evasion and tax avoidance but the social and economic consequences of that tax evasion and avoidance. I must say I am disappointed that no Conservative Members have sought to participate in the debate; it might have added an interesting angle—some spice—to it, although I understand that some of the things that they might try to defend are not easy to defend. Tax is a question of a real moral imperative as well as having profound practical consequences. Those who dodge their legitimate tax obligation commit a severe moral breach, but they also deprive our schools and hospitals of much needed investment and create problems for responsible businesses that pay their full share of taxation.
Tax evasion and avoidance is not new. Plato—I see that the Convenor of the Cross-Benches is looking astonished that I am quoting Plato—said that when there is income tax, the just man will pay more and the unjust less on the same amount of income. How true that is. However, what is new about the current crisis in tax is the scale of the issue and how far out of control we have let it go. The amount that we lose in the United Kingdom in uncollected taxes is a third of the deficit. It dwarfs the personal tax allowance, and it is more than twice the size of the bill for housing benefit—and how often do we hear about all those? That is nearly £40 billion. It is a cash sum the size of the budgets of some government departments, which are being asked to make cuts that are causing tremendous problems. We have heard of them recently in debates on legal aid and defence, and of all the difficulties that are being created for our departments. It is money that could be used to cut the deficit, to build 2,500 new schools or to employ more than 1 million new nurses, teachers and policemen. On its own, tax evasion is costing the average household £530 every year.
These are the real and significant costs of tax evasion and tax avoidance. In responding to them, as well as in talking about the moral principles at stake, I will of course address some of the solutions to the problems, but first we must say that not paying your full and legitimate share of tax is immoral. By making use of our roads or our highly trained workforce, or by breathing our clean air, or even by casting a vote, you are bound by the obligations of society—and one of those key obligations, agreed through our democratic process, is to pay your legitimate share of taxation.
Lord Campbell-Savours
If my noble friend will allow me to intervene, I wonder whether he might be able to tempt the noble Lord, Lord Forsyth, out of his corner on the question of a flat tax in his whole argument.
Lord Foulkes of Cumnock
I have never been able to tempt the noble Lord, Lord Forsyth, on anything up till now, but I am sure that if he feels constrained, he will come in.
Lord Forsyth of Drumlean
I agree with everything that the noble Lord said in respect of tax evasion, but he has linked that to avoidance as if they were the same thing. Does he think that political parties that receive money from donors should return such donations to those who say that they constructed them in such a way as to avoid paying as much tax?
Lord Foulkes of Cumnock
My remarks are addressed as much to them as they are to other people.
When you fail to pay your fair share of tax, you break that obligation. This results in unfairness. Can we be proud of a country where 500,000 people are forced to rely on food banks while the average rate of income tax paid by the top earners is only 10% of their vast income, or where the high street shops that we are so proud of are closing at 10 times the rate at which they did in 2011, yet Amazon gets away with paying a paltry £2.4 million on sales of £4 billion? Such contrasts make a mockery of our democracy and are shameful. I do not, therefore, apologise for speaking on this issue in moral terms. It is a moral issue. When Roger Carr of the CBI says to us politicians, “Don’t make tax a moral issue”, he sounds like a man who does not want to have an argument that he knows he has already lost.
However, we need to have that argument. The argument against having a moral debate is that morality has no role to play in the solution of the problem. Of course, the solution has to be practical, but I would argue that it will involve making companies and individuals pay more tax—their fair share of tax—rather than persuading them. Yet the will to get to grips with the complex, practical problems and the energy to make people pay tax will come because of moral outrage, so we must continue to highlight the moral issue. It might not provide the solution, but it is how the solution can be achieved. It will provide the momentum or force to get that solution.
I realise that speaking in these terms may get some disapproving looks from powerful chief executives. They dismiss the campaigns of politicians and think tanks such as Progress, which is now running an excellent campaign on this, and respected NGOs such as ActionAid, which has produced some reports—I have one of them here—about the effect on developing countries of tax avoidance. I know that some of my colleagues will touch on that as well. They dismiss these as being anti-business. On the contrary, a fair tax system is about being pro-business but responsible business. In the UK, our bricks and mortar retailers are being driven out of business by online operators, based offshore, that can get away with not paying tax. Reputable companies such as John Lewis are struggling to compete with global firms that can spirit their profits out of the country. The status quo of allowing large-scale tax avoidance and evasion is favouring the large multinationals, which can pour resources into avoidance. That is hurting the growth of small and innovative British business, and it needs to be challenged.
I was glad to get a letter from the noble Lord, Lord Phillips, who unfortunately cannot be here today, in support of what I am arguing. He has given me permission to quote him. He says that,
“the already highly destructive effects of gross disparity in earnings”—
are “dire in the extreme”. He does not have very good writing, by the way. He also says:
“Restoration of some sense of civic duty is also essential”.
I have given the essence of what he says.
So what are the solutions? There is no single solution to the problem. Some of the options require international co-operation, and I welcome, as I did in the European Union Select Committee on Tuesday, the decision that was made at the recent Council of Ministers. However, we cannot allow the fact that some of the decisions have to be made internationally to serve as an excuse for us not taking action here in the United Kingdom, if for no other reason than to set an example. When we speak on this, it would give us greater authority on the international stage.
First, we need an HMRC with more bite. Tax avoidance is itself an industry. The big four accountancy firms make £2 billion a year, In order to challenge that kind of vested interest, HMRC needs to be given significantly more muscle. The £154 million so-called “blitz” that the Chancellor recently announced simply does not match up, especially—and I hope that the Minister will deal with this—against a backdrop of overall cuts to HMRC that will diminish it to its lowest staffing level ever by 2015. For every £1 invested in HMRC, £9 is returned to the Exchequer. That is a real investment. For every 10 cases of tax evasion brought by the Crown Prosecution Service, nine end in a conviction. So we have some of the tools, but we need more and we need to make them tougher.
We also need an HMRC that is more transparent. While HMRC is of necessity a big part of the solution, it is also currently part of the problem. With no proper ministerial oversight, it has become a closed community that cuts deals with big business. Noble Lords will have heard the stories of Vodafone having £8 billion in tax waived, which appear to go largely unchallenged. We need to be able to put a spotlight on HMRC. We need it to disclose the deals that are being done with big business. Every year HMRC writes off £5 billion that it knows that it will not collect. We need to be able to hold it accountable for that and for it to become substantially more transparent.
The chair of the Public Accounts Committee in the Commons, Margaret Hodge—who is doing a terrific job, by the way—has called for the publication of the tax affairs of the FTSE 100, which may be a provocative idea but certainly has great merit.
We need the Government to negotiate a series of new multilateral automatic information exchanges. While the recent agreement signed between our overseas territories and the EU G5 is welcome, it is just a small first step. We need agreements that go further and draw in a greater number of participants. Developing countries in particular, as I have said, need to be brought within the fold. Rampant tax-dodging means that many of them are unable to capture the benefits of the foreign investment occurring within their boundaries. They would be less reliant on aid and therefore less dependent on us developed countries if they received the tax revenues that are due to them from the multinational companies operating within their boundaries.
We also need a public register of beneficial ownership. If we do not act on beneficial ownership and tax, we have not got to the nub of the problem. David Cameron, the Prime Minister, was right to call on our overseas territories to develop a register, but this is an issue on which the UK should lead from the front. At present, we have no formal obligation for companies to register their beneficial owner, so front companies are set up, and it is difficult to know who is the ultimate beneficial owner. We need to pull back the curtain and see who is really benefiting from tax scams. We must change that and set the kind of example that will enable us to speak with authority on this issue at the G8 and then at the G20. I am sure my colleagues around the House who are participating will make other useful suggestions.
Finally, I shall try to anticipate one of the Minister’s defensive responses. He might try the familiar attack on Labour’s 13 years of government, using one of the four or five clichéd images circulated in the memos we have see from government: “Asleep at the wheel”, and so on. I am happy to have a conversation with the noble Lord, Lord Newby, and any other Minister at any other time, but that is not the subject for today. Today we are challenging the present Government, who have been in power for three years, about what they are doing. Therefore I ask the Minister, first, whether he will agree with me, and more importantly with the Public Accounts Committee, that cuts of as much as £2 billion to HMRC have hindered our ability to collect tax, and will the Government think again about those cuts in the coming spending review. Secondly, will he commit the Government to a public register of beneficial ownership? Thirdly, will he encourage the Prime Minister to lead a multilateral automatic information exchange that is much broader and much more ambitious than any that has gone before and that includes, above all, the developing countries? I hope that his answer to each of those questions is positive. Unless he does so, he will not have answered the challenge that I put at the start, and he will have failed the people who are losing because of the tax dodging. I hope that today we can have a positive response from a Minister who I know deep in his heart is sympathetic to the cause that I have been putting. I beg to move.
Lord Foulkes of Cumnock
My Lords, I have found this a really encouraging debate, with such well informed contributions. It was also notable for one of the most helpful and sympathetic responses by a Minister that I have heard for a very long time. I really am most grateful to him, and I will return to that in a moment.
I also thank all those who have contributed. My dear friend, the noble Lord, Lord Browne of Ladyton, echoed the description of the tax avoidance “industry”, which it has become, and underlined that very effectively. I say to the noble Baroness, Lady Kramer, that I accept her scolding, gentle as it was. I was only saying, “Hands up” to our lack of action. But now it is the present and the future that we have to concentrate on. I will return to the noble Baroness, Lady Kramer, in a moment because she made a contribution, which was echoed, that was perhaps the most important new thing to come out of this debate.
Perhaps I might also say how pleased I am to see the noble Lord, Lord Haskel, back, not just in good health but, as we heard, in his robust, powerful and informed debating style. We really are very pleased to see him and we know that on this issue he is one of our noted experts. He talked about Luxembourg, and others talked about Liechtenstein and the Cayman Islands. It is interesting that over the past few years Ireland has been developing itself and organising its affairs to become a tax haven. That is something that has crept up on us. Perhaps we ought to be discussing this with the Irish, since they are so close to us.
When the noble Lord, Lord Watson, intervened, I realised that, along with my noble friend Lord Browne and myself, we have got three football fanatics from Scotland. He pointed out the fankle, if I may use the Scots word, that the chairman of Bayern Munich had got himself in. Sometimes the owners of football clubs, as I have found recently—not in my own personal case but in the case of my club—get themselves into these kinds of difficulties. He also picked up the suggestion made by the noble Baroness, Lady Kramer, which I will come back to.
Perhaps the most welcome of all interventions was from the noble Lord, Lord Brooke. His interventions are always welcome and sometimes the funniest things I ever hear in this Chamber, which is a relief sometimes through the long tedium of some of the debates that we have. I hope that his anonymous rich insomniac is now sleeping well, having paid the money that was due. If there are any more rich insomniacs who think they have not paid enough tax, I am sure that the Revenue would welcome their contributions.
I also thank the noble Lord, Lord Davies, for his very kind remarks, and his very perceptive points. He made the important point that if these taxes are paid properly, ordinary people become better off and the companies benefit because they have more consumers, purchasers and people involved. He summarised the points I was making about identification and enforcement very well, and echoed the call for the lead to be taken at the G8 meeting, which I am glad to say is going to be held in Northern Ireland.
The noble Lord, Lord Newby, answered my questions. It is good to come and have questions that are posed specifically being given an answer. I hope that other Ministers will learn from the excellent example of the noble Lord, Lord Newby. To echo the debate by saying that the moral compass of some companies is clearly lacking is a strong point for a Minister to make.
The one new point that I want to finish on, for which I give credit to the noble Baroness, Lady Kramer, was this idea of consumer power, of having some kind of boycott so that we can show our dissatisfaction with and distaste for the great tax avoiders. The noble Lord, Lord Watson, mentioned this as well and went through some of them: Google, which he is no longer using; he will go anywhere but Starbucks for coffee; and Amazon. There are competitors. I am glad to see that the right reverend Prelate the Bishop of Derby is nodding. That gives me great comfort. I remember the great apartheid debates we had and how the boycotts really had an effect in South Africa. The noble Lord, Lord Brooke, made a plea to NGOs to keep us briefed. Perhaps a collective of NGOs could get together and produce a list of companies that they feel are the most outrageous and that we ought to avoid. That was very encouraging. We will call it the “Kramer coefficient” or the “Kramer list” and give credit to the noble Baroness.
It has been a very good debate. Once again, I thank everyone who contributed, particularly the Minister for his helpful responses.
Welfare Benefits Up-rating Bill
Lord Foulkes of Cumnock Excerpts(11 years, 9 months ago)
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Lord Forsyth of Drumlean
The noble Lord, Lord Foulkes, normally cheers when I get up to speak, but not on this occasion, perhaps because we have found something to disagree on.
I must congratulate my noble friend Lord Kirkwood on this very ingenious amendment. I suspect that he started from a position opposed to the Government’s proposals, knowing his long and distinguished record in supporting people on low incomes. I am sure that he would have preferred that the status quo had a rival—
Northern Ireland: Corporation Tax
Lord Foulkes of Cumnock Excerpts(11 years, 9 months ago)
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Lord Newby
My Lords, that is something that we will confirm once we have a final decision in Northern Ireland.
Lord Foulkes of Cumnock
My Lords, does the Minister agree that any decision in relation to Northern Ireland does not constitute a precedent for any other part of the United Kingdom because Northern Ireland is the only part of the United Kingdom that has a land border with another European Union country?
Lord Newby
My Lords, that is the reason why this has become such a big issue in Northern Ireland. The same considerations do not apply elsewhere in the United Kingdom, although I remind the House that the differential between the rate of corporation tax in Northern Ireland and the rate in the Republic of Ireland is now significantly less than it was when this Government came into office.
Business
Lord Foulkes of Cumnock Excerpts(11 years, 10 months ago)
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Lord Foulkes of Cumnock
My Lords, before we move to the main business of the day, perhaps I may point out that there seems to have been a mistake in the timing of the Urgent Question debate. My understanding was that there would be 10 minutes after the contributions from the Front Benches on both sides. On this occasion that was not the case, and a number of Back-Benchers who wanted to get in were not able to do so. Will the Leader of the House confirm that after the Question repeated by the Front Bench and the reply from our Front Bench, we should then have 10 minutes for Back-Bench questions?
Lord Newby
My Lords, I am afraid that the noble Lord is mistaken. The rule is that the Minister repeats the Question and the clock then starts. The 10 minutes will include all questions, including those from the opposition Front Bench.
Air Passenger Duty
Lord Foulkes of Cumnock Excerpts(11 years, 10 months ago)
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Lord Foulkes of Cumnock
My Lords, along with other noble Lords, including the admirable noble Lord, Lord Palmer, I have had representations on the general issue, calling APD a tax on exports, on business, on inbound tourism and on families, and pointing out that it is the highest air passenger tax in the world. However, I want to concentrate on, and say just a few words about, a particular anomaly and to suggest a solution to the Minister.
First, I declare a non-pecuniary interest as president of the Caribbean Council, which is not as exotic as the banana plantation of the noble Lord, Lord Palmer. The Caribbean Council meets regularly with Caribbean high commissioners, and we recently met many of the Tourism Ministers from the Caribbean when they were in London. The unfairness of the APD in general, and the Caribbean anomaly in particular, is top of the agenda of all those meetings. The four bands, A to D, which have been described by the noble Lord, Lord Palmer, are measured by the distance to the capital of the country concerned, so because California is nearer to Washington, the capital of the US, it is cheaper in APD terms than the Caribbean, which is in the dearer band C. Travel to the Caribbean is disproportionately costly, yet the Caribbean is the most tourist-dependent region in the world; in Antigua and Barbuda, for example, 74% of their GNP comes from tourism. The high APD has resulted in British tourists choosing not to visit the Caribbean. Between 2008 and 2011, there was more than a 10% decrease in UK-Caribbean air traffic, in spite of a general increase of 1% in air traffic generally.
One of the groups most affected is the Caribbean diaspora. Agencies have suggested, for example, that the visiting friends and relatives, or VFR, market has been particularly hard hit. That is worrying. The Government have in fact admitted that the banding is arbitrary. The Chancellor—I am sure the noble Lord, Lord Howell, will use all the influence he can in relation to this—said in his 2011 Budget that he was,
“consulting today on how to improve the existing and rather arbitrary bands that appear to believe that the Caribbean is further away than California”.—[Official Report, Commons, 23/3/11; col. 963.]
However, by November 2011, the willingness to tackle the anomaly had petered out.
To help the Minister—noble Lords know that I am always keen to help the Government when I can—the Caribbean Council proposal is to reband the Caribbean from band C into band B by designating Bermuda as the capital of the Caribbean, for APD purposes only. There is no reason why that cannot be done; it can be done technically and it has been suggested to the Government. The cost to the Government would be just over £18 million out of a total projected revenue of £3 billion. The benefit to the Caribbean and the resulting benefit to the United Kingdom Government would be enormous. In conclusion, I ask the Minister whether he will say in his reply or give us a pledge—I am not expecting an answer today—that he will take this away, look at it sympathetically, discuss it with the Chancellor, remind him of his pledge in the Budget in 2011 and come back to the House with, I hope, a positive response.
Lord Newby
Okay, one noble Lord has called for abolition. I am sorry if I exaggerated the opposition but it certainly felt as though a number of noble Lords were calling for the abolition of the tax.
On the Caribbean, there have been strong arguments presented tonight and over the years about the effect of APD there. I am aware of the strength of the arguments because in a former existence I made them myself. In response to these arguments, changes to the structure of APD were considered as part of the 2011 consultation. For a number of reasons, it proved much more difficult to do it than appeared at first sight. One of the main challenges is that if you adopt the pure principle of a distance-based tax, it would be seen— bizarrely, in my view—as a proxy to taxing fuel. That would be illegal under the Chicago Convention on international aviation, so the Government looked at a rather simpler restructuring. However, they found that the only way they could have done it that would have dealt with the disparity of treatment between the US and the Caribbean would have required an increase in the duty for about 90 per cent of passengers, including those flying to Europe and the USA. The Government felt that, in the current economic climate, it would not be fair to ask the majority to pay more to help fund a cut for the minority.
Lord Foulkes of Cumnock
I think the Minister has been listening carefully to the debate. He will recall that I gave him a suggestion; my understanding is that it was not considered in the review. It came up very recently from a meeting between the Caribbean Council and Ministers from the Caribbean. I asked the Minister for a very simple pledge to take this new suggestion back now and discuss it with the Chancellor: Bermuda should be designated the capital of the Caribbean for this purpose only. Surely that is the least he can do for the people of the Caribbean, on behalf of whom my noble friend Lord Morris spoke so eloquently.
Lord Newby
The noble Lord, Lord Morris, anticipated me two minutes ago and the noble Lord, Lord Foulkes, has anticipated me just now. I was about to say that I had not heard the Caribbean Council’s suggestion of designating Bermuda the capital of the Caribbean. My experience of the Caribbean does not fill me with hope that, when push comes to shove, there would be much agreement to designate anywhere as its capital. I am not sure whether you can designate somewhere as a capital for one purpose but not a capital for every other purpose. However, it is a new suggestion; I will certainly take it back and we will see whether it deals with the problem. My initial thought, not having heard the suggestion before, is that it is probably not quite as simple as that.
The Government recognise the mutual benefit of tourism and trade between the United Kingdom and the Caribbean. We welcome the work of the UK-Caribbean Forum to establish a new and improved strategic partnership to promote prosperity, growth and development within both regions. No doubt this topic can be discussed in that forum.
The noble Lord, Lord Howell, and other noble Lords referred to the devolution of air passenger duty to Northern Ireland. The Finance Act 2012 devolved to the Northern Ireland Assembly the power to set rates on direct long-haul flights leaving from Northern Ireland. The rate on short-haul flights will remain the same as that for the rest of the United Kingdom. In devolving direct long-haul rates to Northern Ireland, the Government responded to the wishes of the Northern Ireland Executive. We also recognised that Northern Ireland is in a unique position within the United Kingdom in that it shares a land border with another EU member state that has a lower rate of aviation tax. Further devolution of air passenger duty to Scotland or Wales is a subject that requires careful continued evaluation before we can be confident of its effects across the UK as a whole.
I return to my initial comment that I thank the noble Lord, Lord Palmer, for securing the debate. The Government want to ensure that aviation and tourism continue to grow to promote economic growth and support jobs across the country more generally. However, we also believe that aviation must bear its fair share of the fiscal burden so that we remain on course to address the record deficit. Air passenger duty makes an essential contribution to the public finances and to this Government’s plans to create a stable platform for growth.