Wales Bill

Debate between Lord Rowe-Beddoe and Lord Bourne of Aberystwyth

Committee: 3rd sitting (Hansard - continued): House of Lords
Tuesday 15th November 2016 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, I think the last time I made that journey was with the noble Lord, Lord German, who was driving, but we will gloss over that.

As noble Lords will be aware, those airports are close together, although I accept that it is not always an easy journey, because of the build-up of traffic. However, the nature of the England-Wales border has led to a number of English regional airports raising serious and legitimate concerns about lower APD rates in Wales. As my noble friend Lord Hunt suggested, the rates could go up as well as down; we need to realise that they would not necessarily go down, at least not all the while.

The Government must ensure that devolution does not lead to undue market distortion. Currently we are bound by the state aid rules of the European Union, in any event, which was something that the Silk commission considered long and hard in looking at this issue. I do not have the Silk report in front of me, but I seem to remember that we recommended the devolution of tax on long-haul routes, not overall. It is true that we looked at the analogy of Northern Ireland—which is different because people there have the option of going to Dublin which, being in a different member state, could vary the rates anyway—and we were persuaded just in relation to long haul. I think I am right in saying that no long-haul flights currently take place from Cardiff; I appreciate that that that could make a difference. I am looking at the noble Lord, Lord Rowe-Beddoe.

[Lord Rowe-Beddoe]

There are long-distance flights and they are being negotiated all the time. They go on as charter flights right through the year, so there are long-distance flights. While I am on my feet, may I say that your commission recommended that long haul be devolved? I apologise to the noble Lord, but that was your position.

[Lord Bourne of Aberystwyth]

I am grateful for the clarification on the existing charter flights. I am aware of our recommendation for long haul, although the scope of the amendment is probably broader.

As I said, the position in Scotland is very different because the airports are a long way from the next international airports, so the competition and fairness argument cannot apply. The United Kingdom Government have to look at these things in the context of fairness, and it would genuinely not be fair to an airport in England, which is unable to vary the rates, to compete with an airport that could. Noble Lords must surely see that point.

The point made by my noble friend Lord Hunt, speaking with a north Walian voice, was that this tax, if we were to adopt it, would not help the people of north Wales, for whom the nearest international airport would be Manchester or Liverpool; or, indeed, the people of mid-Wales, for whom it would be Birmingham —I am not sure that this is a plea for Birmingham, but I thought I would get in before it.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, that is an unfair suggestion. I am certainly not playing north Wales against south Wales—I am informing noble Lords of what happened when we were out on the road. There is only one international airport in Wales. If we are talking about APD in relation to long-haul flights, that means only Cardiff in relation to Wales, as things stand; that is undoubtedly the case. I am the first person to stand up for Wales, as I hope that the noble Lord will accept, but we cannot do that in isolation from what is happening in the rest of the country. If the measure being talked about is unfair, I am afraid that it will not see the light of day in the context of looking at what is fair for the United Kingdom. Yes, we must stick up for Wales, but it has to be done in the context of fairness.

I shall progress the argument a little to see if there are other things that we can be doing. As I have said, we do not want to look at the position of market distortions, but we want to help Cardiff Airport if we can. We looked at a review of this to see whether it would be possible to devolve APD to Wales while supporting English regional airports against the impacts of reduced APD. However, there are no obvious options that could mitigate against the impacts on regional airports elsewhere, if devolving the tax to the Assembly meant that Bristol could face 25% fewer passengers. That is significant. I shall ensure that I circulate full details of our review into these options to noble Lords so they can see it.

I hope that noble Lords will accept that this is not a desire not to do what is best for Wales, but a desire to do what is best for Wales while recognising that we cannot fail to be fair to the rest of the country. If that happens in this case to be England, I make no apologies for that. Bristol Airport does not have the ability to vary APD, and we cannot do that in the context of the Bill.

I have listened carefully to the debate, and I shall circulate the details of the review, when we had a look to see if there was anything that we could do. There was a long debate in the Silk commission, and it was not along party-political lines; it was generally divided on the issue of what we could do for Wales, partly because of fairness and partly because of the issue that still exists about state aid and the fear of action in relation to that—valid action. On that basis, I ask the noble Lord to withdraw his amendment. As I say, I shall circulate details of the review that we had to see whether there was anything that we could realistically do to help Wales—and, in this context, that means Cardiff Airport.

[Lord Rowe-Beddoe]

I thank the Minister for his response and thank all noble Lords and noble Baronesses who have participated in this short debate. I thank the noble Baroness, Lady Randerson, who mentioned 102 kilometres. It is an important number because under current EU regulations 100 kilometres has associations with state aid, which the Minister brought up. In Cardiff we have been fighting allegations about state aid—successfully, I am happy to say. I am also very pleased that the elephant in the room was mentioned, not by me but by everybody else. Yes, of course it is Bristol—and this is a pure political gesture. We know it and feel it in ourselves. If we look at the constituency make-up around the city of Bristol and in the south-west, we will understand why. However, I am sorry that the noble Lord, Lord Hunt, disagrees with me for the first time—or I disagree with him.

I will come back on just two points. Cardiff is our international airport, whether it is situated in Ceredigion or in south Wales. We cannot have them all over Wales. We can put up little airports and support ones like Valley and Broughton so we can use them, but Cardiff is our international airport. The status of long-haul flights is under heavy negotiation at the moment and regular routes will be announced soon.

I say to my noble friend Lord Hunt that there is a little group called the Regional and Business Airports Group which represents 32 regional airports in the United Kingdom. In September 2015, it wrote a discussion paper, in which it advocated on behalf of the regional airports in the United Kingdom the devolution of this,

“market distorting tax which impacts far more heavily on smaller airports than larger ones”.

That is quite an interesting document—it was addressed to the energy and transport tax team—and perhaps the Minister could take a look at it.

I thank all noble Lords. It is late at night and I will withdraw the amendment, but I will have to come back at some stage.

Draft Wales Bill: Silk Commission

Debate between Lord Rowe-Beddoe and Lord Bourne of Aberystwyth

Monday 30th November 2015 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, I understand my noble friend’s views on this matter but I repeat that issues relating to election to the National Assembly for Wales are to be devolved in totality. It is a significant move to Wales, just as it is to Scotland, and it is for Wales to determine that issue.

[Lord Rowe-Beddoe (CB)]

My Lords, will the Minister clarify a point that he made in an earlier answer—namely, what is the state aid problem with the devolution of air passenger duty to Cardiff and not to Scotland?