Air Passenger Duty

Siobhain McDonagh Excerpts

Wednesday 23rd October 2013 Commons Chamber

[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.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

How would the Minister explain that to my Caribbean constituents, many of whom come from Jamaica or other Caribbean islands and have lived here for 40 or 50 years on low incomes? They now find themselves being excessively taxed in order to stay in contact with their family and friends in their home countries.

[Nicky Morgan]

I do not know whether the hon. Lady has just arrived in this debate, but we have already discussed Caribbean issues [Interruption.] Well, I think I have dealt with that issue. [Interruption.] I am sorry—I had not appreciated that the hon. Lady was present, but there were questions on this matter from the hon. Member for Hackney North and Stoke Newington and the right hon. Member for Tottenham, and I have addressed the issue of the Caribbean. ONS statistics show that lower-income households spend a lower proportion of their disposable income on APD than higher-income households. In relation to the Caribbean, APD must adhere to international rules on aviation tax, specifically the Chicago convention. The capital city convention on APD ensures that our APD complies with those rules.

The hon. Member for East Antrim spoke of the impact of APD on Northern Ireland in the context of recently announced changes to the rate of air travel tax in the Republic of Ireland. I thank him for saying that this is a listening Government and for his recognition of the moves we have made in that regard. We recognise the position of Northern Ireland as the only part of the UK that shares a land border with another EU member state with a different rate of aviation tax, which is why we have devolved to the Northern Ireland Assembly the power to set APD rates for direct long-haul flights. The Government and the Northern Ireland Executive recognise that decisions on further fiscal devolution of any taxes require careful consideration. We expect recommendations on further devolution to be put to the Government and Northern Ireland Executive by autumn 2014.

The debate highlights some of the most important issues facing Britain today, including repairing the public finances and bringing debt under control, thus ensuring the stability on which economic recovery depends. APD makes a vital contribution to the Government’s fiscal strategy—it would be irresponsible of us to abandon it—and forms part of the wider tax system that we are making into one of the most competitive in the world. I thank the hon. Gentleman for giving us the opportunity to debate those important issues, but I cannot agree with his proposal that the tax should be abolished.

--- Later in debate ---

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I shall address the issue on behalf of my Caribbean constituents, and report how angered and disappointed they are about the banding of Caribbean countries. Not only are my Caribbean constituents angry and disappointed, but so are their original home Governments at the way in which the banding impacts upon them and the development of their industries and tourism industries.

The Caribbean community in my constituency came to Mitcham and Morden in the 1960s, the 1970s and the 1980s. They did the jobs that nobody else wanted to do. They drove the buses, built the schools, dug the roads and worked in the hospitals, just as my own family who came from Ireland in the 1940s did. They never earned much but they worked hard. They looked after their families at home and in the Caribbean, and they contributed hugely to our community through youth facilities, churches and clubs for the elderly. They feel they have earned, and they have earned, their right to be here. They are proud of being British, they are proud of being Londoners, but they are also proud of the country that they came from.

Members of the Caribbean community work hard, and they save hard to go home every so often to see how their towns and cities are getting on and how their family and their friends are. Air passenger duty is a tax on their ability to do that. Whatever accounting company came up with whatever report, nobody can argue that for a Caribbean lady or gentleman in my constituency who lives on a pension and an occupational pension, APD does not disproportionately affect them in their efforts to stay close to their ageing families. It clearly does.

I am not arguing that APD should be scrapped; I am asking the Treasury to look at the banding. Nothing is set in stone; these are conversations that I and other Labour Members have had with Ministers of this Government and the previous Government. We are where we are because of the Chicago convention and the ticketing rules that exist for the airline industry. But it does not make sense to people in the Caribbean, or to me, that to go to Kingston, which is closer than Los Angeles, 25% more tax has to be paid. There is a way to look at the banding and to alter it, to recognise the contribution of those people, their families and communities, and to accept and respect the deep and long-standing connection that we have with those individual Caribbean countries and their Governments. They, like us, are going through hard times. They wish to develop their tourism industries in a price-sensitive market. Anything that we can do to help them out of respect for their communities’ work in our country and in our capital city would be gratefully received. It is not beyond the wit of the Government to do precisely that.

Air Passenger Duty

Siobhain McDonagh Excerpts

Thursday 1st November 2012 Commons Chamber

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I have a large Caribbean community in Mitcham and Morden, many of whom moved to Britain 20, 30 or 40 years ago. For them, air travel is not a leisure choice, but something they save up for over many years, often from low incomes, scraping together every spare penny to visit their friends and families. For most of us in the Chamber, the people we treasure live close by—my mum lives round the corner. We are not charged £81 in tax to see our friends and families, but to my constituents that is what air passenger duty really is: a tax on friends and family. Let us not forget that those constituents are also a lot less well off than we are. Many are pensioners; others are in low-wage jobs, having come to this country to do the kind of work that the rest of us did not want to do.

Earlier this autumn, I hosted a party here in Parliament to celebrate 50 years of Jamaican independence. Mitcham and Morden has a large Jamaican community, and I wanted to celebrate the role that people from that country and the rest of the West Indies play there. Most had never been invited here before, and I am pleased to say that hundreds of people came along. It struck me that this was a community that had had it hard, yet despite often encountering prejudice and discrimination, they had never stopped. They had worked hard to put food on their children’s plates, yet they also found time to help the community, whether through the church or by setting up local youth groups.

Most of all, it struck me that those people were not only proud to be British but determined never to forget where they had come from. They were proud of their culture, proud of the country that they were born in and proud of the country that they now live in. And they have every right to be proud, because they have improved this country, and Mitcham and Morden in particular. However, I am not proud of the effect that this tax has on them and their families.

I appreciate that when air passenger duty was introduced by the Major Government, it was done with the best of intentions. There are problems with emissions, and the aviation industry has an obligation to reduce them, just as every industry does, but I do not think that imposing a duty on every passenger is the best way to encourage airlines to make their planes produce fewer emissions. It is too crude, and regulating emissions achieves better results, as we are now discovering thanks to the efforts of the European Union—not a body that is often praised. At the time, however, APD seemed a modest way of tackling the problem and, right up until 2007, economy class passengers paid only £5 for flights to Europe, and £20 for flights beyond. Sadly, since then, under this Prime Minister and the previous one, air passenger duty seems to have become more about raising revenues than reducing emissions. In the past two years, APD on flights to the Caribbean has risen nearly two thirds, to £81.

What makes the tax so unfair is that it disproportionately targets poorer, ethnic minority communities. Because of the anomaly that says the capital of Jamaica is more than 4,000 miles from London, while the capital of the USA is not, passengers flying to Kingston have to pay more than people going to airports in the States that are further away. In 2010, that anomaly cost passengers to the Caribbean £5 more than passengers to the US. Now the difference has more than trebled, to £16.

What my constituents want to know is: how can it be fair that those travelling to Kingston should have to pay 25% more duty than much better-off passengers flying to Los Angeles, which is about 20% further away? If anyone were to look at this from an equalities point of view, they would be appalled. The impact falls disproportionately on the lower paid and on the black community. Like many Members, I have been petitioned by hundreds of people about this unfair tax, and the unfair anomaly that I have just mentioned is a major concern.

It was disappointing that the Government’s consultation did not respond to those legitimate concerns. It is already difficult and expensive to fly to Jamaica. I had a quick look on Expedia before coming here, and in the week starting 17 November there are only three days on which it is possible to get a direct flight to Kingston, although there are direct flights to Los Angeles every day. As a result, the cheapest return to Kingston costs more than £900, while a return to LA is just £564. Clearly, that is not all because of air passenger duty. It is because there is not enough capacity at London’s airports, which is why I support an extra runway at Heathrow, to bring in extra jobs and cut travel costs for my constituents.

However, those differences show that the cost of travel for our low-income, ethnic minority constituents is already disproportionately high. Air passenger duty is a regressive tax that only makes that situation worse. If it is about cutting carbon, it should be based on real emissions, and it should not favour wealthy passengers travelling to developed countries such as Canada and the US over people travelling to developing countries in the Caribbean. This Government have failed to take advantage of the opportunity offered by their consultation to introduce a fair alternative, or to tackle emissions meaningfully. That is a source of considerable disappointment.