Scotland Bill

Drew Hendry Excerpts

Monday 29th June 2015 Commons Chamber

I will conclude by talking about the economic impact on England. I have given the figures for the savings that passengers could make, and airlines can of course take advantage of those savings by choosing to split them between passengers and their own profit lines. If, however, for the sake of argument, one Ryanair flight and one easyJet flight were moved from Manchester airport to Glasgow, £2.9 million of revenue would be lost to the United Kingdom Treasury and 450 jobs would be lost in Manchester. That is not insignificant when one is trying to build an economy, and I do not blame Edinburgh or Glasgow for trying to build their economy in the way that Newcastle and Manchester are doing. Those figures represent nearly 250,000 passengers, and the economic impact in relation to long-haul flights is much more significant.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The hon. Gentleman is making a point about cross-border competition. Does he agree that there is another point about the longer-term sustainability of airports outwith that area, such as Inverness and Dundee? They need additional support and would benefit from the reinvestment in Scotland of the revenue generated by additional passenger traffic.

[Graham Stringer]

I agree with that perfectly sensible point.

The Government may have a number of possible solutions, and I hope that the Financial Secretary will be able to respond in some way. Manchester airport has made the case strongly to the Government that there should be an air passenger duty holiday on new long-haul routes, and that would be helpful. The Government could devolve decision making to other parts of the United Kingdom as well as to Scotland, although it would be difficult to find a mechanism for doing so. The Government could also agree to compete with Scotland, because if there is no competition, there will be an unfair loss of jobs through lowering the rate of air passenger duty.

Such solutions seem sensible to me, given the experience in the rest of Europe and, indeed, in the rest of the world. The tax was brought in not for environmental reasons, as is sometimes said, but entirely to deal with the hole in the budget after the 1992 general election. It is an inefficient tax: consultants have estimated that it costs the economy more than it brings into the Treasury in cash. Even if the Financial Secretary cannot give an absolutely definitive answer today, I hope he will assure us that he is willing to look at some of the sensible responses to this new competition in tax regimes.