Preparing Young People for Work

Debate between Sammy Wilson and Baroness Morgan of Cotes

Wednesday 10th December 2014 Commons Chamber

[Nicky Morgan]

The hon. Gentleman is absolutely right. We want to ensure that the widest possible options and inspiration are available to all our young people, and we intend that various large public sector organisations will have a role on the advisory board—for example, the NHS, which employs 5 million people, and the armed forces, which are a huge source of career opportunities for our young people.

[Sammy Wilson (East Antrim) (DUP)]

Given the skills shortage highlighted this year, there is clearly a need for an organisation to enhance careers education in schools. What does the Secretary of State mean when she says that in the longer term she envisages this company sustaining itself? Does that mean a charge to the schools, to the employers or to both?

[Nicky Morgan]

I thank the hon. Gentleman for welcoming the creation of this company. I intend that in the longer term employers will see the value of the company and therefore will invest in it.

Oral Answers to Questions

Debate between Sammy Wilson and Baroness Morgan of Cotes

Tuesday 11th March 2014 Commons Chamber

[Nicky Morgan]

The point made by the hon. Gentleman, which his constituents will appreciate, is that freezing fuel duty has enabled people to spend more money on themselves and their families in other ways. He needs to understand that fuel duty cuts and freezes since Budget 2011 have had to be fully funded through tax rises or spending cuts elsewhere. Any further action needs to be considered in the context of the wider public finances.

[Sammy Wilson (East Antrim) (DUP)]

Tomorrow, the FairFuelUK campaign will be handing in a petition calling for a reduction in fuel duty. Given that the National Institute of Economic and Social Research has indicated that a 3p reduction would increase jobs by 70,000 and GDP by 0.2%, does the Minister agree that such a measure should be given priority in the forthcoming Budget in order to help the economy on its way and to promote growth?

[Nicky Morgan]

That is a matter for the Chancellor. The hon. Gentleman will appreciate that the Government regularly receive a range of representations on fuel duty. We hear what he and many other campaigners, not only on fuel duty but on many other issues, have been asking for.

Air Passenger Duty

Debate between Sammy Wilson and Baroness Morgan of Cotes

Wednesday 23rd October 2013 Commons Chamber

[Nicky Morgan]

I am always happy to meet hon. Members to discuss these matters. That sounds like an interesting idea. It might help me to learn more about these issues, as I am doing in this debate.

In order to make our tax system more competitive, we plan to reduce the rate of corporation tax to 20% from April 2015. At that point, the UK will have the joint lowest corporation tax rate in the G20 and by far the lowest rate in the G7. Increased rate relief on research and development, combined with the patent box, will make the UK one of the most attractive places to innovate. As a result, the latest KPMG annual survey of tax competitiveness rated the UK as the No. 1 most competitive tax regime internationally.

As well as supporting UK competitiveness, within the constraints of the need to repair the public finances, the Government are also supporting households to meet the cost of living. By April 2014 the Government will have increased the personal allowance to £10,000, which will take 2.7 million people out of income tax altogether. In Northern Ireland, since 2010 the rising personal allowance has already taken 75,000 people out of tax. In recognition of the impact of persistently high pump prices, the fuel duty increase that was planned for 1 September this year was cancelled, and the Chancellor has also announced his intention to cancel the September 2014 duty increase.

On aviation taxes, the House will recognise that the UK is one of only four EU countries that does not charge VAT on domestic flights. That stands in contrast to rates of VAT on those flights of 19% in Germany and 20% in the Netherlands. There is also no duty charged on the fuel used in international, and virtually all domestic, flights. Finally, as I have already said, despite the fiscal challenges, the Government have ensured that APD rates have been frozen in real terms since 2010, rising by just £1 for the vast majority of passengers since then. The Government therefore reject the suggestion that we have pushed taxes on aviation too high.

Let me turn to the report on APD published earlier this year by PricewaterhouseCoopers and to which today’s motion refers. The report claims that abolishing APD would give such a boost to the wider economy that it would make other tax receipts increase by enough to offset the loss of APD revenue—the £3 billion I referred to a moment ago. The report’s conclusions, however, are based on economic models that rely on a series of significant assumptions. In particular, the report makes a series of assumptions about the behavioural impact of scrapping APD—how much business air travel would increase by—and the resulting increase in overall UK productivity.

The Government have reviewed the report, its modelling and the underlying assumptions carefully. We do not agree with the assumptions needed to justify the claim that abolishing APD would be revenue neutral overall, and, in our view, abolishing APD would have a significantly smaller impact on UK economic activity than PWC has estimated. There would therefore be a smaller increase in other taxes than PWC predicted, with overall tax revenues falling as a result. We also note that under some of the less optimistic assumptions that PWC considered in its report, its models predicted a net loss of revenue in the longer term. As I have said, any revenue loss would either need to be made good by increased revenues from other sources, or would need to be compensated for by further reductions in public spending.

The Government dispute the claim by PWC that APD is a regressive tax—I am sorry that the right hon. Member for Tottenham (Mr Lammy) is no longer in his place, as this goes to the heart of what he was talking about. PWC compared APD rates with average weekly household expenditure of different income groups, but its analysis took no account of the fact that not all households pay APD at all. A better measure of fairness would be to compare what households spend on APD, relative to their incomes. Using that measure, statistics from the Office for National Statistics show that lower-income households spend a lower proportion of their disposable income on APD than higher income households.

[Sammy Wilson]

I am amazed at the way the Minister is trying to deal with this issue. Surely we only measure the impact of a tax on someone who consumes a service. The PWC report looked at various income groups and found that the tax fell far more heavily on those with lowest income levels—that is 45% of travellers— compared with those with the highest levels. We are already comparing travellers. Indeed, the tax represented 28% of their average weekly income. If that is not regressive, I do not know what is.

[Nicky Morgan]

ONS statistics show that lower-income households spend a lower proportion of their disposable income on APD than higher-income households. We are looking at what people actually spend.