Oral Answers to Questions

Priti Patel Excerpts

Tuesday 2nd September 2014 Commons Chamber

[Robert Flello (Stoke-on-Trent South) (Lab)]

3. What recent assessment he has made of the effect of his fiscal policies on the level of child poverty.

[The Exchequer Secretary to the Treasury (Priti Patel)]

The Government are protecting vulnerable groups while taking action to tackle the record deficit we inherited. Work remains the best route out of poverty and the Budget took action to support families and to make the tax and welfare system fairer, further increasing the income tax personal allowance to £10,500 in 2015-16, which will take 3.2 million people on low incomes out of tax altogether.

[Robert Flello]

I was amazed by the answer given by the Minister’s colleague to the previous question, so perhaps I will try her on the same point. Are she and her colleague in the least bit troubled by the fact that the IFS forecasts that child poverty will rise by 400,000 during this Parliament?

[Priti Patel]

The hon. Gentleman will know that the Government are committed to ending child poverty by 2020. Under this Government, as my right hon. Friend the Chancellor has already said, child poverty has fallen by more than 300,000 since 2010. The best route out of poverty is work and I am sure that the hon. Gentleman will support that route.

[Charlie Elphicke (Dover) (Con)]

I congratulate the Minister on her debut at the Dispatch Box. She has referred to child poverty falling under this Government. Will she confirm that it rose under the previous Labour Government in the previous Parliament?

[Priti Patel]

I thank my hon. Friend for his warm remarks. He is absolutely right. It is this Government who have gone out of their way to focus on a child poverty strategy, reducing the numbers, and that is something of which we are proud.

[Helen Goodman (Bishop Auckland) (Lab)]

16. The Government’s own figures show that the number of children in poverty in absolute terms after housing costs increased by half a million between 2010 and 2013. Why does the burden of fiscal adjustment fall on the most vulnerable?

[Priti Patel]

I think it is worth my reiterating that relative child poverty has fallen under this Government by 300,000 since 2010. It is quite clear what the IFS has said about the greatest and deepest recession we have had thus far and that work is the best route out of poverty. I have said it already and I will repeat it: work is the best route out of poverty. This Government are supporting hard-working families across the country and getting them out of poverty.

[Sarah Champion (Rotherham) (Lab)]

18. Unfortunately, the Minister’s comments bear no relationship to Rotherham, where almost a third of children are living in poverty. On a related topic, may I ask whether the Chancellor would listen to requests for additional funding for child protection in Rotherham and around the country?

[Priti Patel]

I thank the hon. Lady for her comments and we will look at all places and all situations. I reiterate that this Government are committed to helping all families that are having difficult times. Child poverty has come down and, of course, work is the best route to get families out of poverty. I am happy to discuss with her the specific issue of child poverty in her constituency

[Mr Simon Burns (Chelmsford) (Con)]

5. What assessment he has made of the effect of freezing fuel duty on the price of petrol.

[The Exchequer Secretary to the Treasury (Priti Patel)]

Autumn statement 2013 confirmed that fuel duty will be frozen for the remainder of this Parliament. As a result of this Government’s very clear actions, average pump prices are currently 16 pence per litre lower than they would have been if the Government had implemented the previous Government’s fuel duty escalator, and will be nearly 20 pence per litre lower by the end of this Parliament.

[Mr Burns]

May I congratulate my fellow Essex MP on her well-deserved promotion to the Treasury? Will she update the House on the use of the tax system to reduce the instability for motorists and outline the help that has been provided for them during what was the most horrendous recession caused by the Labour party?

[Priti Patel]

I thank my right hon. Friend for his warm and generous remarks. He knows that the Government are committed to supporting motorists. We are the Government who abolished the previous Government’s fuel duty escalator, cut fuel duty by 1 pence per litre and scrapped the four increases that had been planned over the Parliament. By the end of this Parliament, fuel duty will have been frozen for nearly four and a half years—the longest duty freeze in over 20 years—which I know that my right hon. Friend and, of course, the good people of Chelmsford will warmly welcome.

[Mr David Hanson (Delyn) (Lab)]

Could the Minister tell the House how much per litre VAT has added to the price of petrol?

[Priti Patel]

Simple answer: a lot less than it would have been under Labour.

[Stuart Andrew (Pudsey) (Con)]

6. What recent estimate he has made of the level of employment.

--- Later in debate ---

[The Exchequer Secretary to the Treasury (Priti Patel)]

We recognise that times have been tough for hard-working people. However, the Government have taken decisive action in getting more people into work than ever before—cutting taxes for hard-working families through increases in personal allowances, freezing council tax and fuel duty, cutting energy bills, and providing tax-free child care up to £2,000.

[Chi Onwurah]

In July the Chancellor came to Newcastle to announce that the economy was back on track. Office for National Statistics figures show that the real value of average wages in the north-east has fallen by £1,811 per year since this Government came into power. Is that what he means by “on track”—falling wages for working people and tax cuts for millionaires?

[Priti Patel]

The hon. Lady will know that our economy is recovering from the deepest debt-fuelled recession in living memory. The Institute for Fiscal Studies has made it clear that there have been very significant falls in real earnings as a direct but delayed response to the 2008 recession. In the light of this honest assessment, she will know that the only way to raise living standards in a sustainable way is to tackle the country’s economic problems head on.

[Sir Tony Baldry (Banbury) (Con)]

20. Does my hon. Friend agree that one of the best indications of the rate of growth is the increase in jobs, and that with over 1.8 million more jobs now in the economy than over the past four years, more women in work than ever before, and youth unemployment falling dramatically, that all indicates that our long-term economic plan is working and that as regards the economic policies of the Opposition, the wheel may be turning but the hamster is dead?

[Priti Patel]

My right hon. Friend is absolutely right. He has made the case very clearly that there are strong economic indicators out there that are testament to the Government’s long-term economic plan. Quite frankly, this country is going forwards, not backwards.

[Kate Green (Stretford and Urmston) (Lab)]

According to the most recent Office for National Statistics figures, child poverty in lone parent families where the parent is working full-time has risen from 17% to 22%. What are the Government doing to help those families to beat the rising cost of living?

[Priti Patel]

I re-emphasise the point that I made earlier: child poverty under this Government is down by 300,000. Inequality is being tackled very effectively by this Government through what we are doing to raise living standards and tackle the country’s economic problems head on.

[Mr Philip Hollobone (Kettering) (Con)]

Will my hon. Friend remind the House of the amount by which personal tax-free allowances have been increased since 2010 to help protect household budgets in an era of sluggish wage growth?

[Priti Patel]

As my hon. Friend will know, we have increased tax allowances by thousands of pounds to the new figure of £10,500, which will take an extra 3.2 million people out of tax.

--- Later in debate ---

[Mr Robin Walker (Worcester) (Con)]

17. What assessment he has made of the effect of freezing fuel duty on the price of petrol.

[The Exchequer Secretary to the Treasury (Priti Patel)]

I refer my hon. Friend to the response I gave earlier.

[Mr Walker]

I congratulate my hon. Friend on taking her well-earned place on the Front Bench. May I tell her that my constituents and, indeed, many businesses in Worcester have fed back how pleased they are that we have kept the fuel duty freeze in place and rejected calls from the Labour party to restore its fuel duty escalator? Will she remind the House what the cost would be to those people and businesses if we had gone along with the previous Government’s plans?

[Priti Patel]

I thank my hon. Friend for his warm welcome and kind remarks. This Government scrapped the previous Government’s fuel duty escalator, which would have increased fuel duty by 1p per litre above inflation from 2011 to 2014. Were it not for this Government’s very clear actions on fuel duty since 2011, current pump prices would be 16p per litre higher and would be nearly 20p per litre higher by the end of this Parliament. I know that my hon. Friend’s constituents and businesses in Worcester will support the clear action that this Government have taken.

[Guy Opperman (Hexham) (Con)]

T1. If he will make a statement on his departmental responsibilities.

Decommissioning Relief Deeds

Priti Patel Excerpts

Monday 21st July 2014 Written Statements

[The Exchequer Secretary to the Treasury (Priti Patel)]

At Budget 2013, the Government announced they would begin signing decommissioning relief deeds. These deeds represent a new contractual approach to provide oil and gas companies with certainty on the level of tax relief they will receive on future decommissioning costs.

Since October last year, the Government have entered into 61 decommissioning relief deeds (50 were signed in financial year 2013-14). Oil & Gas UK estimates that these deeds have so far unlocked at least £2.2 billion of capital, which can now be invested elsewhere.

The Government committed to report to Parliament every year on progress with the deeds. The report for financial year 2013-14 is provided below.

(a) The number of decommissioning relief agreements entered into—The Government entered into 50 decommissioning relief agreements in 2013-14.

(b) The total number of decommissioning relief agreements in force at the end of that year—Fifty decommissioning relief agreements were in force at the end of the year.

(c) The number of payments made under any decommissioning relief agreements during that year, and the amount of each payment—No payments were made under any decommissioning relief agreements in 2013-14.

(d) The total number of payments that have been made under any decommissioning relief agreements as at the end of that year, and the total amount of those payments—No payments had been made under any decommissioning relief agreement as at the end of the 2013-14 financial year.

(e) An estimate of the maximum amount liable to be paid under any decommissioning relief agreements—The Government have not made any changes to the tax regime that would generate a liability to be paid under any decommissioning relief agreements.

Childcare Payments Bill

Priti Patel Excerpts

Monday 14th July 2014 Commons Chamber

[Priti Patel (Witham) (Con)]

May I say what a pleasure it is to speak in support of this Bill, which I welcome for many reasons, but predominantly for the long overdue support it provides to hard-working parents up and down the country. It shows parents that the Government are on their side as they return to work, fulfil their career aspirations, provide better futures for their families and their children and encounter new opportunities. It is incumbent on the Government to play a positive role in that regard.

I am a parent; my son is five years old. Like so many Members from all parts of the House, I understand the challenges of child care and work-life balance. I also understand that the costs of child care are far too high—to be fair, that was true under the previous Government as well. It is about time that we all faced up to that. Rather than throwing political brickbats across the House, we must start putting across a positive message about supporting hard-working parents and facilitating affordable child care so that everyone benefits, including children. Rather than being partisan and party political, we should realise that this is about children and ensuring that their futures are secure and that parents have access to good-quality, affordable child care. Parents need to feel comfortable that they are putting their children in the right environment—one in which their children will flourish, feel safe and be stimulated.

[Mr Robert Buckland (South Swindon) (Con)]

My hon. Friend is making a powerful point about the need for flexibility. Does she agree that for parents with disabled children, the need to extend that provision through to late teens is very important? The provision to extend the scheme up to 17 is particularly relevant for those families.

[Priti Patel]

I welcome my hon. Friend’s intervention. He makes a powerful point. When we consider child care and child care payments, it is important to understand that this one size does not fit all—we all have different child care needs. All our children are different; every family is different. The Bill moves us away from the notion that everybody’s situation is similar. We must support families through all sorts of personal circumstances, some of which are challenging and very difficult. We know that both as constituency MPs and as parents.

One of the biggest challenges and choices that parents face is how to raise their children, so the Bill is not only timely but politically significant—we have not had such a measure before. We live in a society in which the pressures on parents are absolutely enormous, whether because of employment, changing jobs, the labour market, social mobility or the fact that we live in an international and global world. Many companies have different expectations of their employees, but employees are parents, too.

[Sarah Newton]

Does my hon. Friend agree that caring for older relatives is another huge pressure on families? It is so important that the benefits of this Bill will be available to those on carer’s allowance. So many people fall out of work because it is too difficult to work while managing caring responsibilities.

[Priti Patel]

My hon. Friend makes a powerful point, which relates to my earlier comments on everybody’s circumstances being different and the flexibilities outlined in the Bill. The ability to reach out to those with different circumstances and backgrounds is paramount. The Bill demonstrates a depth of understanding of the challenges facing families and households. When both parents work, they find it difficult to decide between the costs of child care, which can be in excess of £10,000 a year, and spending time raising children themselves.

We should remember that child care costs vary across the country and that no generic or standardised level or rate exists. Costs are naturally high in London, the south-east and the east. Many working households spend a lot of their income on child care, partly because people do not necessarily live in the conventional family set-ups in which grandparents might be around the corner and able to offer support. I must be perfectly honest that I rely on such a situation. I tell everybody that I am blessed and that I can do this job only because I have outstanding family support to look after my son.

Child care decisions are often made on cost grounds and the Bill goes a long way to reflect that. Over the past decade, the average hourly cost of child care has increased by more than 67%, which is almost two and half times higher than the CPI rate over the same period. The pay of parents in England will vary depending on what they do. In London, pay levels are slightly higher than elsewhere, but many parents pay hundreds of pounds a week to some child care providers, which means that their families are under pressure and more often than not—we have not discussed this—that pressure ends up on working mothers. They are the ones who sacrifice their careers or put them on hold because child care costs can be so high that they have to decide whether going out to work or staying at home to look after their children is more financially expedient. I have much sympathy with those mothers. Many of my constituents with successful professional careers that they want to continue inform me of the pressures and challenges that they face, including the high costs of child care and commuting costs. Essex is not that far from central London, but most of my constituents and others across the county work in London. They are on a treadmill day in, day out. They face pressures and costs and feel as if they have no choice. If people feel that they have to stay at home, it becomes harder for them to re-enter the work force, which is another reason the Bill is so important. It helps mothers in particular to meet their aspirations, which we should all welcome and support.

The Government deserve credit for recognising the pressures, in addition to soaring child care costs, that families and mothers face and the impact of those pressures on families. As with so many other issues, the Labour party ignored that when it was in government. We have heard lots of rhetoric today, but the reality is that it is difficult, a challenge and a balance. It is easy for the Opposition to talk about the Government today, but we have to remember that the economic policies of the past—uncontrolled public spending—hampered the economy instead of helping families. When families needed help, they were hurt. We know about the negative impact that the downturn and its economic legacy has had on households, so now is the right time to focus on support for hard-working families. The Bill is about support for child care costs, but we want to put an end to the shameful past and what parents had to deal with, and to look forward.

As we heard from the Financial Secretary to the Treasury, the Government have gone a long way to bring in positive and proactive measures to help hard-working households: cutting income tax bills, abolishing Labour’s jobs tax; reducing fuel duty; and supporting private business. That applies particularly to my constituency, where SMEs employ 85% of my constituents. We need the private sector and SMEs to be successful to continue to create more jobs. A million new jobs have been created since 2010. The measures are positive and bring a new dynamic to the employment market. At the same time, low earners have been given support with child care costs, including free child care places for some 40% of two-year-olds. Those are the proactive measures that make a difference to middle and low-income families.

As a Conservative, I instinctively believe that the Government should not only support families, but also help parents to make choices about working arrangements, which is why the Bill is so positive and proactive. Families want to be empowered by Governments to make the right choices for themselves. The Bill helps families to make such choices by alleviating some of the financial pressures caused by child care costs. This package of support will help women who want to continue to work to do so. We are already seeing record numbers of women in work and the Bill will help those who have established a career—or those who are just starting out after having taken time off to bring up their children—to continue to develop and to advance in their profession.

The £2,000 a year of support for families is a substantial amount for the Chancellor to find and should be put in the right context. It has been made possible only because of the controls that have been placed on spending and the reductions in the deficit, which the Labour party has opposed. This Government is on the side of hard-working families. The Bill will benefit not only my constituents but working families across the country through sensible and practical measures. I welcome it as a positive way of supporting families and working women.

Finance (No.2) Bill

Priti Patel Excerpts

Tuesday 8th April 2014 Commons Chamber

[Kelvin Hopkins]

I am not an expert on tax codes, but taxation is too complex and could be made much simpler, although I think tax should remain progressive. The idea of a flat tax, which the UK Independence party is talking about, is complete nonsense. I fundamentally oppose UKIP not because of its views on the European Union, on which I might have some sympathy, but because of its views on everything else. UKIP is extremely right wing. It wants to get rid of rights at work, privatise the health service and introduce a flat tax. Frankly, UKIP is barking and I will oppose it at every turn.

My hon. Friend the Member for Birmingham, Ladywood talked about a review of the impact of tax changes, which is absolutely right and I support her.

[Priti Patel (Witham) (Con)]

I have thoroughly enjoyed the debate so far. I am astonished by the ground that we have covered, because we are solely here to address corporation tax, which has not been explored anywhere near enough in the light of the Labour party’s amendment.

As my hon. Friend the Member for Enfield North (Nick de Bois) said, the amendment would create uncertainty and put jobs and future investment at risk—there is no doubt about that. The Labour party wants to reverse the Government’s low business tax approach by putting up corporation tax, which would send out all the wrong messages to the business community. It is farcical that Labour Members are dressing up their so-called policy as a way to help small businesses with business rates. They are cynically trying to pitch big business against small business. The Government have clearly shown that we can help all businesses, both large and small, by cutting corporation tax and, importantly, easing the burden of business rates, which the Minister and the Chancellor of the Exchequer have done.

[Angie Bray (Ealing Central and Acton) (Con)]

Does my hon. Friend agree that it is often not an either/or situation? Small businesses often depend on larger businesses for work.

[Priti Patel]

My hon. Friend is absolutely right. She gets to the heart of the debate and shows why Labour has no credibility. Labour Members cannot claim to want to help small businesses when, as the Minister pointed out, at the last general election, when they were in government, they proposed to increase the small profits rate of corporation tax from 21% to 22%. We have also heard about the Labour party’s so-called interest in small business, but in government it presided over the closure of 6,000 small post offices. There is fuel duty and energy costs for small businesses, too. On many issues, Labour lacks credibility. We should put things into context and beyond doubt.

[Mr Love]

Will the hon. Lady give way?

[Priti Patel]

No. We heard from the hon. Gentleman earlier.

The last Labour Government ignored the benefit of expanding trade. Exports came up in the discussion. This Government have gone out of their way to expand overseas trade. The Chancellor is in Brazil this week at the beginning of export week. We are doing everything right to sell Britain overseas, and to encourage overseas companies to come here and benefit from the low rate of corporation tax, which Labour wants to destroy.

Putting up corporation tax does nothing to help small business, contrary to what Labour says in its shallow and feeble amendment. That only goes to demonstrate that the Opposition have no plan to expand our economy or create more jobs, growth and prosperity—creating those things is exactly the right approach that the Government are taking.

Amendment 2, which I obviously do not support, is completely irrelevant to the wider national debate currently, which is about sustaining growth in our economy, and expanding our economy with jobs, growth, prosperity, inward investment and exports. On that point, I heard a terrible diatribe earlier—an hon. Member said we are not exporting enough. In my county of Essex, the Essex chamber of commerce has helped more than 1,000 local firms, including many small and medium-sized businesses, in processing export documents and giving practical assistance. The value of those exports is well over £300 million. That is the message we want to send out to business of all sizes in the UK. I have no intention of supporting the amendment and support what the Government are doing.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

It is an honour to follow the hon. Member for Witham (Priti Patel). I concur that it is great news that the Chancellor is drumming up business for Britain in Brazil, but I wonder what first attracted him to the Copacabana beach.

I know debates in the House can sound like statistical conventions, but we have only to look at the statistics to realise that the debate is important. Some 99.9% of all private sector business in the UK is in SMEs, which also account for 59% of private sector employment and 48% of private sector turnover. As my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) said, SMEs account for 47% of all private sector employment. Labour Members will know that growing private sector trade unions such as the Union of Shop, Distributive and Allied Workers and Community the union are picking up on that growth.

I was intrigued by my hon. Friend’s story about starting out in a corner shop. I want to tell a story about a firm in my constituency. In 1985, a young woman—a housewife called Kamal Basran—was bringing up a young family and preparing food for them in her kitchen. She was fed up that she could not buy quality Indian cuisine from any of the major supermarkets. She took out a £5,000 bank loan and started supplying food to local restaurants and businesses. In the past nearly 30 years, she has grown that business and hopes to post a £50 million profit this year. It has grown year on year despite the recession. She now has 220 employees. As a new MP, I had the great honour of visiting that business in my constituency just a couple of weeks ago. The package I got as I left was superb. I do not declare an interest—I distributed the goods to parliamentary staff and constituents afterwards.

That success story is an example of why SMEs matter so much. In polling up to the last general election, people said that their work prospects were the most important things to them after health and crime—work prospects were always No. 3 or No. 4 on the list. That is why the debate is important.

Newspaper Supply Chain

Priti Patel Excerpts

Wednesday 19th March 2014 Westminster Hall

[Priti Patel (Witham) (Con)]

It is an honour to serve under your chairmanship, Mr Dobbin. I am grateful to Mr Speaker for granting this debate. I commend the Minister because this is her second debate in a row.

The issue of the newspaper supply chain and independent newsagents is covered by two Government Departments, so it is important that independent newsagents know which Minister and Department they can go to. I am delighted that my hon. Friend the Minister is responding this afternoon. I would be grateful if, in her response, she told us whether there are plans for one Minister to take the lead on this issue and oversee the policies that affect independent retailers.

Independent newspapers have been an integral part of many communities for decades. I am the daughter of former shopkeepers, and I spent more than 35 years living above a shop. My parents would go downstairs at the crack of dawn to open the shop, mark up newspapers and deal with the many challenges of the newspaper supply chain, so I have first-hand experience of the benefits to local communities of independent newsagents and the challenges of the newspaper supply chain.

Today is Budget day, so we should remember that our economy benefits from having prosperous, dynamic, independent newsagents; it is an important sector. Whether it is a friendly face at the counter who knows exactly what each customer comes in to buy, or a paper boy earning money for the first time and getting work experience—I have plenty of experience of delivering newspapers—independent newsagents offer high-quality, personalised services. As much as we welcome choice in where we shop, we all recognise that large supermarkets and online platforms do not do that.

Conservative Ministers deserve credit for taking action to support the sector. In particular, they have cut the small profits rate of corporation tax, increased the cap on business rates—that is an important step—cut fuel duty by more than Labour planned, reduced the burden on employers of national insurance contributions, and cut red tape, which has made a significant difference. The announcements in today’s Budget, apart from the usual increase in tobacco duty, with which we would not argue, also give independent newsagents a helping hand.

However, it is clear that over a number of years independent newsagents have faced difficult challenges that have forced many out of business. New tobacco controls have harmed responsible independent retailers. They have also driven many customers into the arms of illicit traders and smugglers, but that is a subject for another debate. The expansion of supermarkets brought more challenges. Changes to the newspaper and magazine market, including the expansion of existing newspapers’ online media platforms, new entrants to the market and the growth of free newspapers, have led to a decline in newspaper sales. The terms and conditions imposed on independent retailers by wholesalers are a part of the challenge they face.

I want to concentrate on the relationship between newspaper and magazine wholesalers and independent newspapers. The underlying trends and changes in how consumers digest newspapers and the news is highly relevant, because it has led to change in the marketplace.

Since the turn of the millennium, independent newsagents have suffered a fall in sales caused by the emergence of free newspapers—we all pick them up—that target the commuter market. The Metro and the Evening Standard, which are available in railway and underground stations, are two prominent examples. However, newsagents have also felt the impact of technological changes; more and more content is available online. All the main newspapers now invest heavily in their online platforms, which are updated minute by minute, particularly on Budget day. The growth in the use of smartphones and tablets has enabled news groups to provide news in a much more user-friendly way. Consumers are able to seek out and read news stories on other platforms, such as blogs. As a result, hard copy sales are falling. In the past two years alone—between March 2012 and February 2014—sales declined by 16% from 18.3 million to 15.4 million.

Despite the challenges that those changes pose to the traditional ways of selling newspapers, there are still some positive features for independent newsagents. Many people still go to their newsagent on the way to work and value the service they receive, and national news groups still see a role for print editions, which is important for independent newsagents. Few of us would find fault in news groups’ entrepreneurial and commercial decisions to use new technologies—we have all got to embrace new technology—or the cost-effective ways in which consumers digest news.

However, an issue that needs to be addressed, which places independent newsagents at a disadvantage and hampers their ability to compete and respond, is the wholesalers’ control of the newspaper supply chain and their vice-like grip on independent newsagents. The Minister is aware of the campaign that the National Federation of Retail Newsagents, the Association of Convenience Stores and many others in the sector ran to raise awareness about the lack of competition in the wholesale market. The are only two main wholesalers that operate in Great Britain: Smiths News and Menzies Distribution. They operate in what can be described only as a near monopoly, or near duopoly. National publishers of newspapers and magazines sign exclusive distribution rights deals with those wholesalers. Prices are set and there is no scope for independent newsagents to get involved in the negotiations, so their voices are not heard. A third wholesaler, Dawson Holdings, ended its magazine and newspaper distribution activities in 2009 after losing out on contracts with publishers.

Smaller independent wholesalers that traditionally operate at a local or regional level have been squeezed out as publishers have concentrated their contracts with Smiths and Menzies. As a result, if a newsagent wishes to trade in newspapers, they are effectively at the mercy of the wholesaler when it comes to terms and conditions, the quality of service—which many newsagents would question—and charges.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for raising this issue. Like her, I have been contacted by constituents and small newsagents who are penalised by Menzies and other wholesalers, and have had their contract conditions changed without negotiation or consultation. Will the Minister respond to that issue? If an independent newsagent has a contract, how can they be charged extra money without consultation? There is no thought for the independent newsagent, who makes little money as it is.

--- Later in debate ---

[Priti Patel]

I completely agree. That is the reality of what we are dealing with. It is not a new problem; it has been going on for decades. There is a lack of negotiation, and newsagents are just a second thought. Any newsagent will be able to wax lyrical about the poor service they receive. From my experience in my parents’ shop, I have seen the supermarket down the road getting its newspapers first. When the newspapers are taken off the lorry, the independent newsagent is bypassed completely. That is simply not acceptable, but the wholesalers operate a virtual monopoly.

It is astounding that despite the monopoly conditions to which independent retailers are subjected, the Office of Fair Trading decided in 2009 and 2012 against referring the matter to the Competition Commission for further investigation. There is a strong case for opening up the sector and looking at the way those organisations are governed. That outcome is grossly unfair to the tens of thousands of independent newsagents who, as I know, are up at 4 am—before dawn—to serve the public. They work long hours to deliver a service for their customers, but they are forced to accept declining margins, higher charges and appalling service.

In my capacity as chair of the all-party small shops group, I am frequently contacted about this issue. I receive regular communications from newsagents across the country about the problems they encounter as a result of the lack of competition in the wholesale market. If a newsagent is dissatisfied with the products they sell and the terms and conditions they receive, they are hemmed in, because there are not many places for them to go. When it comes to general products, an independent newsagent can go to many cash and carries—of course they can, because there is competition in the marketplace—but they are limited as to where they can go for newspapers and magazines. There is simply no other avenue, which is why so many newsagents feel aggrieved. The market is stacked, rigged against them, and the Minister must review that.

The consequences of a lack of competition in the wholesale market and the dominance of the relationship between the publishers and wholesalers over independent retailers are profound. Notably, the margins that newsagents receive on newspapers are declining, and fast. Just as the cover prices of newspapers are set by the publishers, so too are the margins that retailers receive. When prices increase, the share that the retailer receives does not always follow. Some newspapers, such as The Telegraph and the Express, have accompanied their recent price increases with a pro rata rise in the amount received by the retailer, so that the margin remains the same. Many others, however, have not done so. The Mirror, for example, did not pass on a pro rata rate when prices increased from 70p to 80p in January, with the percentage received by retailers being slashed from 22% to 21%. In Scotland, the equivalent margin fell from 23% to 21%. Since January, it has been reported that one particular publisher has cut the margins received by retailers for 65 out of 138 titles.

It is understandable that publishers and wholesalers are looking for savings and efficiencies; I understand that the marketplace is changing. However, the arbitrary nature of decisions to cut retailers’ margins seems harsh—it is a blunt instrument—and the effect on profitability is pretty stark for independent retailers. I hope that the Minister will look into that aspect of the relationship between wholesalers and publishers.

On top of the fact that margins are being eroded, newsagents face higher costs from what are known as carriage charges, imposed by wholesalers. Originally introduced after the first world war to protect the universal availability of newspapers and their distribution to remote areas, carriage charges have soared over the past 20 to 25 years. I know that because my dad always used to complain about them. Despite the falling volume of newspapers and magazines being sold and distributed, carriage charges are rising and now represent the primary source of profit for wholesalers.

It says something about the effect of carriage charges in recent years when an increase of 2% announced by Smiths last summer was welcomed by some newsagents. That puts the figures into context. The fact that the steep rise in carriage charges has coincided with the signing of exclusive distribution deals between publishers and wholesalers, and with the collapse of competition among wholesalers, adds to the injustice that independent retailers feel—it is the icing on the cake—with a duopoly in place and the OFT failing to take action.

[John McDonnell (Hayes and Harlington) (Lab)]

I think the hon. Lady’s dad was right. We debated this issue in this Chamber 10 years ago, when there were more wholesale distributors. We are now down to two, but they have cut their nose off to spite their face; they have forced the costs on to retailers, and now corner shops are going out of business and circulation is declining. Short-term profit-making is significantly undermining the entire industry in the long term.

[Priti Patel]

I completely agree with the hon. Gentleman. The shops that we are talking about are the lifeblood of many communities. I have seen, over 35 years, a massive change; there is no doubt that we have seen many big changes. Increases in carriage charges are relevant not only to Great Britain but to Northern Ireland. Newsagents there have faced huge increases in the past 12 months alone. I would be interested to hear from the Minister about where there is scope to review the changes to carriage charges.

[Jim Shannon]

On that subject, the costs in Northern Ireland are exorbitant—I believe they are greater than here on the UK mainland. Independent newsagents have informed me and other elected representatives that it is getting to the point where they will have to decide whether to carry newspapers at all, because the margins are so tight. At the end of the day, it does not add up. Let us be honest: small shops are selling perhaps 100 newspapers, or 200 at the very most—there is no profit in that.

[Priti Patel]

The hon. Gentleman makes a really interesting point. I make it my business to visit many independent shops, particularly newsagents, and I always ask about the number of newspapers they are selling. The figures are staggering, because they are declining at such a rate. I remember, when I was a child, the bundles of our Sunday newspapers being enormous—we were dealing with hundreds and hundreds of newspapers on a weekend alone. That landscape really has changed completely.

Along with all the additional costs, independent retailers are frustrated by the appalling service that they receive from wholesalers. Of course, that has a knock-on effect on their business and the quality of service that they can offer to their customers. When their newspapers are delivered late, people stop going to those shops. I hear many reports from newsagents about late paper deliveries. Other newsagents find that the wholesaler has given them the wrong order or the wrong number of newspapers, or that the supplier has gone to the supermarket down the road, and not to their shop.

Although there is a process by which a newsagent can complain, it does not change a thing. It just adds to the stress and frustration of running a business. Newsagents feel increasingly powerless to get redress for their situation. With the latest promotion by one supermarket chain—it gives away free newspapers to customers spending more than £5—the squeeze is being felt even more. Will the Minister update us on what action the Government are taking to investigate possible abuses in the supply chain and to ensure that independent retailers are not unfairly disadvantaged?

In conclusion, independent newsagents, some of which are dependent for 75% of their business on newspaper sales, deserve to be treated with fairness—the debate is all about fairness in the supply chain. Unless changes are made to boost competition and give them a fair deal, including involvement in negotiations and decision making, more and more newsagents will struggle to compete. We will see more withdraw from the marketplace because they will not be able to survive, and our communities will be much poorer as a result. One newsagent put it clearly:

“the big point that needs to be made is that falling sales, shrinking margins and disproportionately high carriage charges will before long drive many smaller news retailers out of the market, to the detriment of consumers—notably the elderly who may not be tech-savvy and digitally aware of the alternatives to print editions.”

I hope that the Minister will give due consideration to the points I have made, and will help us to see what can be done to support the future of independent newsagents. These are small and micro-businesses, and the Government are doing great things for similarly sized companies. The issue should be reviewed by the Competition and Markets Authority, and the Government should work with newsagents to assess the reforms that are long overdue. I look forward to hearing what the Minister has to say.

[Jim Dobbin (in the Chair)]

I call the Minister to speak in her second debate this afternoon.

Oral Answers to Questions

Priti Patel Excerpts

Tuesday 10th December 2013 Commons Chamber

[Danny Alexander]

I do not recognise those figures. Back in the spending round in June, I set a cap on the costs of HS2 at £42.6 billion. We intend that it will be delivered substantially under that budget. The question for Labour Members is whether they support this project or not. Frankly, given the enormous benefits it will provide for cities across the north, Labour Members should support the scheme, not constantly undermine it.

[Priti Patel (Witham) (Con)]

I welcome the Chancellor’s decision to establish the great eastern main line taskforce, so can my right hon. Friend give an assurance that in this era of record capital spending on infrastructure he will look favourably on investing in measures that the taskforce proposes?

[Danny Alexander]

I certainly will. I know that my hon. Friend has campaigned assiduously for this, as has my hon. Friend the Member for Norwich South (Simon Wright) and many other Members in that part of the country, and the ambition that the taskforce has set out is a good one. It is very much in keeping with the direction of travel in our national infrastructure plan, so I look forward with interest to the proposals from the taskforce and to taking them forward in due course.

Oral Answers to Questions

Priti Patel Excerpts

Tuesday 25th June 2013 Commons Chamber

[Mr George Osborne]

Figures from the Office for National Statistics show that the deficit fell from 7.8% to 7.7%, so it came down.

[Priti Patel (Witham) (Con)]

T7. In the light of the Chancellor’s assiduous commitment to deficit reduction, what assessment has my right hon. Friend made of the Opposition’s spending plans, which appear to consist of more borrowing, more debt and a return to Labour’s failed policy of boom and bust?

[Mr Osborne]

rose—

Oral Answers to Questions

Priti Patel Excerpts

Tuesday 29th January 2013 Commons Chamber

[Priti Patel (Witham) (Con)]

15. What plans he has to simplify the tax system.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The Government are committed to simplifying the tax system. Since 2010, we have set up the Office of Tax Simplification and have acted on a range of its recommendations. The Government are improving tax administration for small businesses and, from April 2013, will introduce a new cash basis for calculating tax, benefiting up to 3 million small self-employed businesses.

[Priti Patel]

Does my hon. Friend agree that the most effective way to simplify the tax system and to maximise tax yield is to reduce the burden of taxes through lower taxes?

[Mr Gauke]

It would be right to say that the Government have taken 2.2 million people out of income tax—that is certainly a simplification for them. We have reduced the small profits rate of corporation tax and reduced the main rate of corporation tax. We have taken steps, wherever possible, to reduce taxes.

Fuel Duty

Priti Patel Excerpts

Monday 12th November 2012 Commons Chamber

[Priti Patel (Witham) (Con)]

Like all right hon. and hon. Members on the Government Benches, I welcome this debate and the opportunity that it presents to highlight the gross hypocrisy of Labour Members over fuel duty and the cost of living. Despite their contributions to the debate and the words in their motion, Labour’s record in government shows how shallow is their so-called concern about this issue. Today’s debate ranks as nothing more than a sanctimonious attempt by Labour Members to exploit the anxiety of the public for nothing more than superficial reasons of political opportunism. It is exactly these kinds of antics that erode public trust and confidence in politics.

Labour Members have come to the House today to argue for freezes in fuel duty, but at the time of their last Budget in March 2010 they came here to pledge the continuation of above-inflation increases in fuel duty for the duration of this Parliament. They may be afflicted by the collective amnesia that we have seen today regarding their record in office, but my constituents remember the misery inflicted on them as Labour presided over huge increases in the cost of fuel and the cost of living. In particular, they remember what happened in 2000, when the price of petrol at the pump surpassed 80p per litre. They have not forgotten the appalling way in which the Labour Government handled the matter back then and their failure to get to grips with the crisis and the impact that the fuel price increases were having on businesses and families. Despite various promises at the time, no action followed. Fuel prices consistently increased under the Labour Government. If Labour Members were genuinely concerned about the impact of the level of fuel duty on families and businesses throughout the country, they would not have increased fuel duty 12 times when they were in power.

By contrast, this Government have recognised the burden that fuel costs add to household budgets and businesses. As my hon. Friend the Minister highlighted, they should be congratulated on freezing Labour’s planned fuel duty increases and abolishing the fuel duty escalator, even managing to cut fuel duty by 1p. It is now 10p a litre lower than it would have been under a Labour Government, saving families £159 this year alone. The overall tax burden under this Government is lower than it would have been under Labour, as is the deficit. This country has been saved from the indignity of taking a begging bowl to the International Monetary Fund by dealing with the financial mess that the previous Government left for this Government. As a staunch believer in the power of low-tax economies, I would like the Government to go further in cutting this duty and lowering the overall tax burden, but of course Ministers are limited in what they can do because of the huge levels of borrowing for public spending that have existed.

One astonishing thing about fuel duty is that it raises far more money than is spent on our roads. The mismatch between the amount raised from motorists and the amount spent on improving our road network has caused huge concern to my constituents. Under Labour, revenue received from fuel duty rose considerably. In 1996-97, total receipts from excise duty on oils were £17.2 billion. However, when the Labour party left office, they were around £27 billion, and that is without taking vehicle excise duty into consideration. Despite that extra money from motorists—over 50% more in cash terms—Labour failed to invest in the road network, especially in Essex. My constituents have not forgotten that. Vital road schemes, such as the project to dual the A120, were completely axed. Labour pillaged the pockets of motorists in my constituency and gave them nothing in return. Instead of investing in infrastructure in Essex, Labour blew the money on unsustainable levels of public spending and the rising cost of debt interest payments. Many other schemes, including the Dartford road crossing, also demonstrate that point.

In conclusion, I want the cost of motoring to fall and investment in our road infrastructure in Essex to increase. That will never be achieved by anything suggested by the Labour party, including the shallow statements that we have heard today, hence my opposition to the motion.

Air Passenger Duty

Priti Patel Excerpts

Thursday 1st November 2012 Commons Chamber

[Priti Patel (Witham) (Con)]

I beg to move,

That this House believes that the UK’s air passenger duty acts as a barrier to economic growth and deters both inward investment and inbound tourism; notes the financial impact on families of the rising costs of air passenger duty; further notes the impact on British businesses wishing to export and take advantage of business opportunities overseas; notes that the current air passenger duty regime is the highest air passenger tax in the world, which makes the UK less competitive than countries with lower aviation taxes; further notes that over 200,000 members of the public are calling for a review of the economic impact of air passenger duty; calls on HM Treasury to commission a comprehensive study into the full economic impact of air passenger duty in the UK, including the effects on jobs and growth, reporting in advance of the 2013 Budget; and calls on the Government to use the evidence from the study to inform future policy-making.

I am grateful to members of the Backbench Business Committee for granting this timely debate in advance of the autumn statement next month, and I pay tribute to the outstanding efforts made by the fair tax on flying campaign in securing the support of more than 200,000 members of the public who have lobbied right hon. and hon. Members on the matter. The campaign has given families and businesses across the country a strong voice to express their opposition to air passenger duty.

I also pay tribute to colleagues on both sides of the House who have supported the call for this debate, including my hon. Friend the Member for Crawley (Henry Smith) and the hon. Member for Blackley and Broughton (Graham Stringer), whose early-day motion influenced the wording of the motion. In addition, as part of its recent inquiry into the matter, the all-party aviation group, chaired by the hon. Member for Central Ayrshire (Mr Donohoe), has produced compelling evidence in support of an economic review into air passenger duty.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

Of late, I have received more representations on this issue than on any other. It is important that the hon. Lady has been able to raise this issue, and she can count on considerable support.

[Priti Patel]

I thank the right hon. Gentleman for his remarks. All hon. Members feel very strongly about the representations we have received. The purpose of the debate is to give the issue of APD a thorough airing and to make those representations to my hon. Friend the Minister.

The motion calls on the Treasury to respond to the concerns of 200,000 members of the public and business representatives about the air passenger duty system. It specifically calls on the Treasury to conduct a comprehensive study of the system’s full economic impact and urges the Government to use the evidence gathered from the study to inform future policy making on aviation taxes.

The evidence that I have seen, the views of families and businesses in my constituency, and views from the aviation sector, suggest it is time that the Government considered aviation taxes.

[Philip Davies (Shipley) (Con)]

I commend my hon. Friend for introducing the debate. Is it not a question of making the UK competitive around the world? In the previous debate, the Minister said that if we cut taxes on one thing, it will mean either more spending cuts or increases in taxes elsewhere, but should not the message be, “Let’s cut air passenger duty and cut spending”? After last night’s vote, perhaps the Government could start with the EU.

[Priti Patel]

APD has a detrimental impact on our competitiveness, which is why we are calling for the economic impact. I will come to competitiveness later.

I hope my hon. Friend the Minister will be open-minded to the concept of looking at the financials and to doing an economic impact assessment, because families and businesses feel that APD is a punitive tax. Research demonstrates that the costs to the wider economy are far greater than tax receipts for the Treasury. The World Travel and Tourism Council estimates that the cost to the economy in 2012 will be £4.2 billion, and as many as 91,000 jobs.

[Sir Malcolm Bruce (Gordon) (LD)]

I commend the hon. Lady for introducing this extremely important debate. I represent Aberdeen airport. We are doubly disadvantaged, first because we are much more dependent on air travel—it takes seven and half hours to get from Aberdeen to London by train—and secondly, we must pay tax twice if we inter-line in London. That gives us an incentive to use continental rather than UK airports.

[Priti Patel]

The right hon. Gentleman touches on both the cost of APD and our competitiveness. A 2011 York Aviation report estimated that Scotland would lose 1.2 million passengers, 148,000 tourists and around £77 million in the period up to 2014.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

Is the hon. Lady aware that the Scottish airports consortium has published a report today that says that Prestwick airport, which is in the constituency of my hon. Friend the Member for Central Ayrshire (Mr Donohoe), and which is very important to the whole Ayrshire economy, is the worst affected in Scotland in percentage terms? It will lose 14% of the traffic it currently hosts.

[Priti Patel]

The hon. Lady demonstrates the scale of the challenge, and why we need a review.

I am sure right hon. and hon. Members are aware that Britain has been ranked 134th out of 138 by the World Economic Forum on air taxes and airport charges. We clearly have a major problem. I am unapologetic in my belief in lowering taxes, which is the most effective way in which to promote sustainable growth in the economy. The figures demonstrate how damaging and counter-productive air passenger duty is becoming to the Government’s growth agenda.

I recognise that the current APD system was introduced by the previous Government and note that it raises £2.9 billion for the Treasury, which is a significant sum of money. I do not doubt that it is an essential contributor to removing and reducing the Government’s deficit, but when taxes cause more harm than good, they need to be reviewed and reformed.

[Mark Garnier (Wyre Forest) (Con)]

I congratulate my hon. Friend on introducing the debate. Does she agree that APD can act as a barrier to expansion for some regional airports? Were it not for the high level of APD, they could attract other carriers, thereby rebalancing our economy.

[Priti Patel]

I completely agree with my hon. Friend. That is part of the challenge of our wider aviation policy and strategy.

Already in this Parliament, the Government have rightly recognised a number of counter-productive and damaging taxes, and scrapped a number of them, including the cider tax, the jobs tax and the broadband phone tax, and the planned increase to the small profits rate was replaced with a cut. On that basis, I urge the Minister to consider the economic impact of APD.

[Iain Stewart (Milton Keynes South) (Con)]

I am grateful to my hon. Friend, who is being generous in giving way. APD will be considered by the Select Committee on Transport when we begin our aviation inquiry. APD has an economic impact, but it is critical to the debate on the UK’s aviation capacity. Perhaps she will refer to that later in her speech.

[Priti Patel]

The Davies commission has a role. When considering the future of APD, we must remember where we stand internationally in terms of competitiveness. Britain is in a global race, and competing in a global environment that is tougher and more competitive than ever before. Foreign businesses, which can bring much needed investment to our economy, can relocate to other countries. Our competitors in Europe and throughout the world are all too ready to recognise that. Prior to being elected to the House, I saw how our competitors were on standby to welcome new investment, particularly from emerging markets.

[Fiona Mactaggart (Slough) (Lab)]

Businesses in Slough tell me that they have invested in the town I represent because of its proximity to Heathrow. Some international companies are thinking of disinvesting because of the insecurity of Heathrow’s future. That is a classic example of the importance of airports to inward investment in the UK, and particularly the importance of what used to be the premier airport in Europe.

[Priti Patel]

The hon. Lady makes a valid point. I have no doubt that right hon. and hon. Members recognise the global trends and the direction of travel when they see the rise of super-hubs and big business destinations, such as Singapore, Dubai and Mumbai. There is certainty around their aviation and economic strategies, and we are competing against many big international centres. We must remain competitive to survive. Tax rates that are higher than those in other economic centres put businesses off when they are making investment choices and decisions. Attracting foreign direct investment is an essential component of the Government’s plan for growth, and current APD rates are a barrier to foreign investors who are looking to expand into the UK.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The hon. Lady is making a great speech. Does she agree that APD, as a gateway tax, sends a signal and puts down a marker, and leaves a bad taste in the mouth for many who are thinking of coming to the UK? Their first taste of the UK, and the first piece of information they have about it, is the very high-tax regime to get into the country.

[Priti Patel]

The hon. Gentleman makes a valid point on how counter-productive taxes such as APD are when it comes to inward investment and the attraction of Britain as a place to do business.

Martin Craigs, chief executive of the Pacific Asia Travel Association, has stated:

“The UK is an island trading nation, air services are the vital lifeblood of modern global commerce. The UK Air Passenger Duty is now the world’s highest by a wide margin. It is certainly turning away tourism and trade from the world’s fastest growing economic region”,

which, of course, is Asia-Pacific.

APD also acts as a deterrent to British businesses that are looking to exploit lucrative business opportunities elsewhere in the world, and particularly in emerging markets. Businesses in my constituency, including small and medium-sized enterprises, provide more than 80% of local jobs. They are hit hard by APD. They want to export more, but APD is a barrier.

[Dr Phillip Lee (Bracknell) (Con)]

Many of the businesses in my constituency are based there because of the proximity of Heathrow airport, like the businesses in the constituency of the hon. Member for Slough (Fiona Mactaggart). Many of my constituents who work at Heathrow are concerned about the level of APD. It seems perverse that, at a time when our trade is becoming more non-EU, we are discouraging or making it more difficult to trade with those parts of the world that continue to grow.

[Priti Patel]

I thank my hon. Friend for his intervention. As I said earlier, this tax is seen as counter-productive when it comes to inward investors, and we have to tackle that. One business man has written to me saying that the tax is having a major impact on both new business opportunities and maintaining current business. A reduction in it would bolster the aviation industry in the United Kingdom. Another has commented:

“I am a frequent business traveller trying my damndest to provide export business for this country and it grieves me to be paying such a punitive tax to travel on behalf of the country.”

A review of the economic impact of APD would show the true extent of the cost to businesses. In fact, the Government previously looked at the impact of APD on the Northern Irish economy and reduced APD to band A—currently, the standard rate is £26 and the reduced rate is £13—to ensure that Belfast could compete with Dublin’s air travel tax, which is just €3. Just as APD needed to be reformed to help Belfast compete with Dublin, APD should be reduced to help London’s airports compete not just with Amsterdam, Paris, Frankfurt and Madrid, but with many of the Asia-Pacific and other international hubs.

[Naomi Long (Belfast East) (Alliance)]

The hon. Lady is making a compelling case. The Irish Republic has announced that despite the fact that its APD equivalent is only €3, it intends to scrap it, because it believes it is an impediment to growth in the economy.

--- Later in debate ---

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We have a lot of Members who wish to speak and they should recognise that if they have already intervened, they will go down the list—and not be upset about that.

[Priti Patel]

I take on board the hon. Lady’s point.

As well as compromising trade, the cost of APD is felt by the aviation and tourism sector across the country. Last year, more than 30 million visitors came to Britain and spent £18 billion in our economy. We all want to see that number increase, and I want to see more foreign tourists flying to our international airports and travelling to see attractions elsewhere in the country—including the county of Essex, where the tourist sector supports 54,000 jobs and adds £3 billion to our local economy.

[Heather Wheeler (South Derbyshire) (Con)]

I congratulate my hon. Friend on securing this debate. She talks about Essex with passion, which is fantastic. In South Derbyshire we are equidistant from East Midlands airport and Birmingham airport and we have a huge amount of tourism, as well as many jobs based in the airport industry. I hope that Ministers listen to my hon. Friend and think again about a tax that is holding back growth.

[Priti Patel]

I thank my hon. Friend for her comments.

We would all like to see travellers from Brazil, Russia, India, China and a range of emerging markets choose to spend their dollars, rupees and other currencies here, but the current rates of APD are deterring inbound tourism, especially from developing countries with a growing middle class. Why would a family of four from China wishing to take a holiday in Europe come to Britain where APD would add a further £324 to their travel costs when they could hop on a flight to France and pay aviation taxes totalling £36 or to Germany where they would also pay less? The Government’s tourism strategy clearly warns that we are pricing ourselves out of the mass or middle market and will swiftly relegate Britain from being the sixth most popular destination in the world to the margins of the industry. The aviation sector supports more than 900,000 jobs and contributes more than £50 billion to GDP. I urge the Government to consider how APD can be reformed to support tourism as well as business.

In 1994, modest levels of £5 for short-haul travel in the EU and £10 for destinations beyond the EU were introduced. APD is now having a negative impact on our economy. When the then Chancellor of the Exchequer, the Minister without Portfolio, my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), announced the introduction of APD in November 1993, he said it was a small duty on all air passengers from United Kingdom airports. The predicted revenue was £330 million a year. It now raises 10 times more than that, and a family of four travelling economy class to Florida this winter will pay £260 in APD.

[Mr David Hamilton (Midlothian) (Lab)]

That figure would be a lot higher if the family were going via one of the regional airports and could not get the same carrier, because they would pay two lots of APD. It is now proving very difficult for many families to have a decent holiday abroad.

[Priti Patel]

The hon. Gentleman makes his point clearly. APD is having a wider multiplier effect.

If that same family of four were travelling to Australia, they would have to fork out £368. Those figures are not small and are having a severe effect on households with modest incomes throughout the country, including pensioners who wish to visit relatives living abroad. We have all had correspondence from our constituents, and one of mine wrote to me on this point to say that she supports this campaign because both of her children and her grandchildren live overseas and flying is the only way to visit them.

Another has written:

“Having friends and family in the Caribbean we have to pay even more of this excessive tax than flying to the west coast of the USA although the distance flown is less.”

This tax is clearly having a negative impact on families. It is deterring foreign direct investment, it is holding back our businesses, and it is making our country less competitive. For those reasons, I hope that colleagues will support the motion and I urge the Minister to take on board the remarks that I have just made.

[Several hon. Members]

rose—

--- Later in debate ---

[Priti Patel]

I thank all right hon. and hon. Members for their contributions to this powerful debate in which we have heard about the impact of this tax on hard-pressed families and businesses, and about its counter-productive nature. I thank my hon. Friend the Minister for his remarks. I hope that he and the Treasury will keep a very open mind about the call in the motion for an economic assessment and a full review and will not rule it out, because, as we have heard, this tax is having a counter-productive impact on the economy. All Members present will continue to press him and the Treasury to secure a review in future.

Question put and agreed to.

Resolved,

That this House believes that the UK’s air passenger duty acts as a barrier to economic growth and deters both inward investment and inbound tourism; notes the financial impact on families of the rising costs of air passenger duty; further notes the impact on British businesses wishing to export and take advantage of business opportunities overseas; notes that the current air passenger duty regime is the highest air passenger tax in the world, which makes the UK less competitive than countries with lower aviation taxes; further notes that over 200,000 members of the public are calling for a review of the economic impact of air passenger duty; calls on HM Treasury to commission a comprehensive study into the full economic impact of air passenger duty in the UK, including the effects on jobs and growth, reporting in advance of the 2013 Budget; and calls on the Government to use the evidence from the study to inform future policy-making.