Air Passenger Duty

Andrew Percy Excerpts

Wednesday 23rd October 2013 Commons Chamber

[Andrew Percy (Brigg and Goole) (Con)]

I am afraid the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) made two incorrect observations at the start of his speech: that he would speak for much less time than the time limit, which was then eight minutes; and, secondly, that he was looking forward to hearing the gripping contribution following his speech. He had obviously not seen the speaking list. I cannot promise that my contribution will be either interesting or gripping, but it will at least be less than eight minutes now.

I congratulate the Economic Secretary to the Treasury, who is not currently in her place, on her contribution. She is new to the role. I was, of course, waiting by my phone at reshuffle time hoping to be offered that post, but it was not to be. She did an excellent job at the Dispatch Box today. I also congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on taking up her new position on the Opposition Front-Bench team, but I will just say that it would be nice if those on the Labour Benches showed a little contrition about how we got into the economic situation we are in when talking about the cost of living, and perhaps took some ownership of the problems they bequeathed to the country in 2010. We are delighted to be dealing with them and we are delighted to go on doing so, but we would sometimes like those who are guilty of having created them in the first place to accept some of the blame.

My view on APD has changed considerably since the fair tax on flying campaign of a few years ago. As there was a lot of terrible economic news at that time, not least to do with our massive deficit, it seemed to me and many other Members that to be asking, effectively, to make holidays less expensive was not the most appropriate thing to do.

My views have changed slightly over time, however. APD can easily be dismissed as a tax that can be avoided, and for some that is true, but for many businesses and individuals—particularly, as we have heard, in certain parts of the country, including Northern Ireland—it is a tax that cannot be avoided.

Since joining the Northern Ireland Affairs Committee, I have been growing concerned about the impact APD is having on our regional airports, especially after a meeting with representatives of Continental Airlines, who explained in great detail and depth the impact that it has had on the company. Heathrow will always be successful, but airports such as mine—Humberside airport—and Leeds Bradford, East Midlands and Doncaster airports have struggled, and continue to struggle, to find new routes as it is a lot cheaper to fly from Schiphol or Dublin.

When I was looking to book a holiday recently, I found it would have been cheaper for me to fly from Leeds or Manchester to Dublin and then connect on to the ongoing flight. That is counter-intuitive and, it would seem, a little perverse. Although I am no economist, it is clear to me that that is not good for our economy. It is time that we looked at the issue.

I accept that there is a take of £3 billion from air passenger duty. I have not had a chance to look through the methodology of the PricewaterhouseCoopers report or to analyse that in any great depth, but there is a solution to the problem of how to find £3 billion: it is called leaving the European Union. That might net us a bit more than £3 billion—[Hon. Members: “Hear, hear.”] I knew I would get a cheer from hon. Members on the Democratic Unionist Benches, who have a sound view on the subject. I do understand that any reduction in APD would have an impact on the Treasury. That is why it is time for a proper review to establish the extent of that impact.

The hon. Member for Ribble Valley (Mr Evans) reminded me that, when people made arguments about beer duty in the past, the response from the Treasury was always “This will cost us money. How will we make up the difference?” That has been turned on its head now, as we seem to have accepted that a cut in beer duty can bring in more money.

I remember air passenger duty being presented as a green tax. I know there has been some discussion about whether it is a green tax, a light green tax or a pale green tax. It certainly was presented as a green tax and many people have argued that it is such a tax, so I hope that it will be in the mix in any review, in line with the Prime Minister’s statements today about wanting to review green taxes and being honest about green taxes. It strikes me that we will not have a particularly honest debate with the public about APD or about energy bills unless we are prepared to open up the whole debate about green taxes and their impact not just on energy bills, but on our whole economy.

I represent an area with many carbon-intensive industries. We are still waiting to hear what is going to happen with the assistance for them. Green taxes are having a massive impact on them and an increasing number of people feel that the country is being hamstrung by those taxes. If we can throw APD into that discussion, all the better. People who use regional airports are most affected and in my area incomes are much lower than in other parts of the country, so APD has a disproportionate impact on the poorest parts of the country.

There is much that I agree with in the motion. I will not vote against it, but I have yet to decide whether I will support it. I call on the Minister to pay heed to the sensible comments that have been made by many Members in all parts of the House, particularly the hon. Member for East Antrim (Sammy Wilson), whom I congratulate on his speech. It is time for a proper assessment of the impact of APD on our economy and on our citizens, and I hope the Minister will respond in those terms.