Oral Answers to Questions

Debate between Baroness Morgan of Cotes and Angus Brendan MacNeil

Tuesday 5th November 2013 Commons Chamber

[Nicky Morgan]

I thank the hon. Gentleman for his question. As I said, we will always look at any evidence that people want to send us. We want to encourage new links between the UK and China, and the Mayor of London made some interesting points. The point is that we have to change prices a lot in order to change passenger behaviour, and we would need to look at that further.

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

Is the Minister aware of the success of Barcelona airport in gaining more than 20 international routes in the past year because of a 100% APD reduction? Does she think that such a reduction would help Scotland to regain the millions of passengers it has lost owing to this Government’s APD costs?

[Nicky Morgan]

The hon. Gentleman will be aware that there is no APD charge from airports in his constituency. As he knows from our recent debate, APD makes an important contribution to the deficit reduction plans; we will always keep it under review, but it is a very important part of this Government’s attempts to rebalance the economy.

Air Passenger Duty

Debate between Baroness Morgan of Cotes and Angus Brendan MacNeil

Wednesday 23rd October 2013 Commons Chamber

[Nicky Morgan]

First, I am not sure that all hon. Members do understand the fiscal challenges facing the Government, but I will assume that the hon. Lady does, very much so. I listened carefully to what she said about the Caribbean. I know that Ministers, including my predecessor, have engaged with representatives. I could be wrong, although I do not think the hon. Lady will be surprised if I said that I know more about air passenger duty today than I did this time last week, but I think that zoning for the Caribbean was introduced by the previous Government. All Ministers keep all taxes under review. However, I heard what she said, and we will listen to the representations that are made.

[Mr MacNeil]

I, too, welcome the hon. Lady to her new position. What are these fiscal challenges that the Westminster Government face? The hon. Member for East Antrim (Sammy Wilson), as Finance Minister in Northern Ireland, has to balance his books. The UK has not paid its way since 2001; in fact, in the past year it has borrowed £120 billion. There is a good argument that says that changing the management of APD will increase GDP and tax revenues. With that body of evidence behind it, is it not worth listening to the wise words on APD rather than ploughing on regardless?

[Nicky Morgan]

I thank the hon. Gentleman for his comments. I think that the fiscal challenges are very apparent. We still have a large debt and a deficit run up under the previous Government which this Government have said we need to tackle. Later in my speech I will talk about the PricewaterhouseCoopers report, the impact on GDP, and the assumptions that are made.

--- Later in debate ---

[Nicky Morgan]

I thank the right hon. Gentleman for his remarks. As a Conservative, I believe in the lowest tax possible, but I also believe in running the economy as responsibly as possible, meaning that what we get in, we spend out. That was put out of kilter by the legacy of the previous Government. We have been very clear about the reason for APD and the role it plays. We cannot choose to ignore £3 billion when we have to deal with the deficit and legacy left to us by the previous Government, of which the right hon. Gentleman was at times a member.

[Mr MacNeil]

On balancing the books and spending what we raise, if that were the case the UK would raise income tax by 8p to 10p in the pound, such is the size of the UK deficit in a country that has not paid its own way since 2001.

[Nicky Morgan]

This Government are making progress in making sure that we do pay our way. We also believe that people should keep as much as possible of the income they earn. I will come on to talk about household income and the impact APD has on it, but for now I want to address UK competitiveness.

When comparing different countries’ tax regimes, it is important to view the system as a whole. Comparisons between individual elements can be misleading, especially if companies’ decisions about where to invest are driven by the impact of the system as a whole, not its individual parts. As my right hon. Friend the Chancellor has made clear many times, the Government are committed to ensuring that the UK has the most competitive tax system of all advanced economies. We want to have a tax regime that supports the attractiveness of all parts of the UK as places to invest in and that ensures that the whole of the UK is open for business.