Air Passenger Duty

Debate between Drew Hendry and Gregory Campbell

Tuesday 10th July 2018 Westminster Hall

[Drew Hendry]

Other right hon. and hon. Members will have to make up their minds whether the hon. Gentleman is unusual, but I leave that with them.

As the hon. Member for Belfast East pointed out, the tax does not work as an environmental incentive. It is simply an economic disincentive. The money goes into the general tax pool every year and does not go to tackle the environmental issues other than in the way that any other tax might. There is no direct funnelling of that money into environmental initiatives—otherwise there would be significant differences. As he said, all studies show that a reduction in APD would produce a net benefit to the economy.

The hon. Member for Strangford (Jim Shannon) said that PwC stated that if APD is scrapped, the Treasury will gain. He made the telling point that a Treasury report found that the UK is ranked 135 out of 136 countries in terms the cost to the traveller. That is damning of the cost of air travel through APD. He further pointed out that Ireland scrapped APD in 2014—an independent country making a decision for itself—and tourism shot up by 47%.

The hon. Member for Belfast East introduced a side issue, which I also thoroughly agree on, of cutting VAT rates for tourism. Combined with tackling APD, that would be of huge benefit to areas throughout the nations of the UK where tourism and visitor numbers are extremely important to the local economy. We support that strongly and we would commit to it if the power was with us. On the hon. Gentleman’s closing remarks, I cannot send a Valentine to the Tories because it certainly would not be sincere, but the comment about it being a humorous way to highlight a serious problem is valid.

[Mr Gregory Campbell]

Smaller airports suffer disproportionately from APD, such as airports in Scotland and my own airport in Londonderry, where we are trying to get route development money. Does the hon. Gentleman agree that that double disadvantage—the difficulty of attracting new routes and APD—needs to be countered and that action should be taken to help?

[Drew Hendry]

I will come on to some specific issues in Scotland, because the picture is different, particularly in the highlands and islands, but the hon. Gentleman’s point is very well made for the rest of the Scotland, where there are direct APD effects.

The hon. Member for Strangford pointed out that it is the highest tax of its kind in the EU. It is worth repeating that the cost in Germany is half. The scandalous figure is that, for long haul, it is the highest tax in the world, which affects tourism. The revelation that the hon. Gentleman sneaks off to use Dublin airport will probably reverberate around his local community.

APD is a competitive disadvantage. ABTA calls it a “tax grab”. The hon. Member for Strangford pointed out that Northern Ireland is losing out on connectivity opportunities. Again, it has that in common with other parts of the nations of the UK. His feeling was that the UK Government should just get on and reduce or scrap APD. We are always grateful for some motherly advice in Parliament—there is nothing more true than penny wise and pound foolish. The UK Government could benefit from a net increase in income from other taxes. The hon. Gentleman pointed out the impact of 61,000 jobs—that is a significant benefit that raises the question of why APD has been allowed to continue to so long. Why has it not been addressed?

Air passenger duty is one of the most expensive taxes of its kind in the world, as we have heard. It hampers Scotland’s ability to secure new direct international routes and maintain existing ones. It is simply a regressive tax. Combined with the other unfair tax on our tourism sector—VAT—we face among the highest taxations in the world. An independent report found that reducing air departure tax, as it is called in Scotland, by 50% will boost Scotland’s air connectivity and economic competitiveness.

Encouraging the establishment of new routes, which would enhance business connectivity and inbound tourism, would help to generate sustainable growth. That is why the Scottish Government remain committed to a 50% reduction in ADT by the end of the Scottish Parliament in 2021. We want to get on and deliver it.

We want to abolish ADT entirely when resources allow, but that cannot be delivered until the UK Government and the Scottish Government can ensure that exemptions afforded to the highlands and islands remain. The Scottish Government understand the importance of the exemption. Therefore, the introduction of ADT in Scotland will be deferred until the issue of the highlands and islands exemption is resolved. As a highlands MP, I know only too well that air connectivity is critical for the highlands and islands, and I welcome the Scottish Government’s determination to deliver the best possible outcome for the area. I could not possibly countenance the withdrawal of support for the highlands and islands which, for the reasons I pointed out, would lead to substantial difficulties for people who rely on air transport as part of the public transport mix.

Highlands and islands airports have been exempt from air passenger duty since 2000 because of the area’s low population density and peripherality. The current APD exemption helps support the viability of commercial air services in the highlands and islands. Without it, we would face reduced flights and the withdrawal of important services to the region. Alternative surface journeys by road, rail or sea are long, particularly for those coming from the islands, whose journeys often include overnight stays or overnight ferry travel.

Recognising the social and economic importance of flights to the region, the Scottish Government have worked to reduce the cost of air travel, but residents of the highlands and islands still pay more than people who live in other regions of the UK. The Scottish Government have worked closely with Transport Scotland, VisitScotland, Highlands and Islands Enterprise and, crucially, Highlands and Islands Airports Ltd to develop the network at Inverness airport and improve international air connectivity to the region. That has brought new routes, including a British Airways route to Heathrow and a KLM service to Amsterdam, and improved the frequency of existing routes. Similar work has led to the expansion of the air network serving smaller regional airports in the highlands and islands.

The introduction of those new flights has enabled our business and tourism sectors to flourish, but more could be done. We are all too well aware that those connections remain some of the most fragile across these isles. Since being elected in 2015—I served in the last Parliament as Transport spokesperson for the Scottish National party, and I am now its Business, Energy and Industrial Strategy spokesperson—I have consistently made the point that they are crucial to Scotland and to the highlands and islands. That is why the case for the exemption remains, and why the UK Government must provide assurances about route protections and public service obligations in respect of the third runway at Heathrow.

The Minister knows that the Scottish Government cannot implement ADT unless a solution is found to the problem with the exemption. Will the UK Government look at why APD was handed over in a state that put that exemption at risk? The Scottish Government were effectively given responsibility for APD without the power to implement it. What assessment have the UK Government made of the state of APD? What is the Department doing to resolve the issue with the highlands and islands exemption while supporting the Scottish economy? The Minister will be aware that the Scottish Government have convened a new highlands and islands working group, which includes organisations with expert knowledge of the highlands and islands economy. Its first meeting was on 15 June. What support have the UK Government offered that working group?

The Scottish Government want to continue to work with the UK Government to find a solution. While the UK Government continue to set APD rates, they should take the impact on the Scottish economy seriously. As we heard, that impact is also felt by the economies of Northern Ireland and of the other nations of the UK. Since APD was transferred in the state it was, will the Minister review it for the rest of the nations of the UK?

Trade, Exports, Innovation and Productivity

Debate between Drew Hendry and Gregory Campbell

Wednesday 13th January 2016 Commons Chamber

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

I am delighted to follow the hon. Member for Spelthorne (Kwasi Kwarteng), particularly because he said this debate was about a bygone age. In talking about innovation, I intend to bring things a wee bit further up to date by talking about the situation not only today, tomorrow or in four years’ time, but in 10 or 20 years’ time. In doing so, I hope that a ray of light will fall upon the Government Benches and that the scales will fall and tip in favour of innovation.

The Government have underplayed innovation. It is about imagination, vision and determination—words often applied to leaders and leadership. We all agree that innovation is a good thing. I have heard many times people describe the digital economy as one of the key tenets of innovation. Members have talked about the opportunities throughout the nations of the UK for small and medium-sized enterprises to help us grow and develop the economy and about the contribution they already make across rural and urban areas. New technology is available to assist businesses here and now, including the opportunities offered by superfast computing. That involves wiring together many high-speed computers to perform in just minutes actions that would normally take days or even weeks, and companies can get hold of that technology. An example of its use would be rendering an animation for industry. That kind of technology is available now but its availability is limited because companies need to be able to connect to it.

The new levels of hand-held technology available to business and industry today can transform not only business and the economy but public services, allowing us to invest more in providing better services for people. When I was a boy, I used to watch a television programme on the BBC called “Tomorrow’s World”. It was about the things that were going to happen tomorrow, but things are moving faster now. The developments that we are talking about are already here. An example is driverless car technology, which could transform the way in which we use our roads. It could transform aspects of industry and of rural connectivity. Suddenly we have an opportunity to connect people in a different way, but that innovation is not being discussed enough by this Government or by Members of this House in general. These things are available to us here and now.

Let us imagine one side benefit of looking at these issues properly. There is an opportunity for driverless technology to be used across the nations of the UK. An individual road traffic fatality costs £1 million or more— leaving aside the tragic loss of human life—but we could avoid that kind of thing by deploying new technology. We might then start to see the benefits of embracing such technology.

Members might also have heard about the internet of things. It is a real thing. We are now connecting appliances, apparatus and machinery over great distances to enable them to operate automatically. Also, 3D printers are now able to do mind-boggling things that would not have been considered possible just a few years ago. We have the opportunity to revolutionise our cities through the proper embracing of smart city technology. We have a golden opportunity vastly to reduce emissions to help our position on carbon use.

New technologies can spur growth and create great benefits for the economy. They can revolutionise and democratise things for us, including teaching and learning, allowing greater access to the subjects that are currently available only to the few. They can grow high-quality jobs and provide opportunities for people who are still locked out. These include opportunities for our young people, for young girls and for women to get into industries that they have traditionally been unable to get into—such as science, engineering, technology and IT. As my hon. Friend the Member for Dundee East (Stewart Hosie) said earlier, these new technologies can provide opportunities for inclusive growth. In 2013, the digital economy was worth £11 billion in Scotland alone. That is a substantial business.

Entrepreneurs are already leveraging digital technologies to create successful businesses and significant economic impacts, but that number could be increased. This is especially true given that small businesses grow two or three times faster and create new jobs when they embrace new digital technologies. The hon. Member for Bedford (Richard Fuller), who is not in his place just now, talked about encouraging growth in small businesses. We can encourage such growth in rural areas and places that are difficult to get to by helping them to embrace digital technologies. With the aid of technology, small businesses can also go global from day one, reaching overseas markets and talented potential employees.

Those opportunities are there to be embraced, but let us consider some of the barriers that are being created by the UK Government. We heard again from my hon. Friend the Member for Dundee East about the head of the small business operation at KPMG saying that we are talking no longer about grants for innovation, but about loans. That is a barrier to success, although I will not repeat the many arguments that have been well made in this House on that already.

Barriers also arise from the technology that is available to people across the nations of the UK at the moment. I welcome a commitment to universal broadband, as that is a good thing and it should be embraced fully. What is being proposed by the UK Government at the moment, however, is at best—I am being very kind here—a bare minimum for the future. A speed of 10 megabits per second is technology from a bygone age now and it is not good enough for communities in the future, as we see particularly when we look in detail at the plans. A lot of the bridging is going to be done by satellite technology, which is good where there is nothing else, but it is affected by the weather; it has a high latency potential, it suffers from poor uploads; and, in general, people can get up to—that is the key term—only 6 megabits per second with it. That is what is being proposed for rural areas. The costs of satellite broadband also present a considerable barrier, as people are looking at £30 to £100 a month for these contracts in order to take advantage of it.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The hon. Gentleman is discussing businesses in rural areas. Does he agree that many small and medium-sized enterprises throughout the UK that have relocated from town and city centres to rural areas on a cost basis now find themselves disadvantaged, precisely on the broadband access grounds he talks about? That needs to be addressed by the Government.

[Drew Hendry]

I am very grateful for the hon. Gentleman’s intervention, as he hits on a key point. There is a vibrant, intelligent, work-ready employee base in rural areas, and people there are ready to take advantage of opportunities presented by employers. He rightly describes, however, what people may suddenly find when they move to a rural area, and I have some personal experience of this. When I was working in Windsor, lots of things were available to me by way of technology, but when I then moved to the highlands, I suddenly thought, “Ah, I might have made a mistake here.” I am glad to say that I did not make a mistake and we worked through it, although at some expense. Broadband access is a real barrier to people being able to set up businesses in rural areas. If the UK Government want to take a view for the future, they have to consider people across all parts of the regions of the nations of the UK and make sure that people in rural areas have the same opportunities to engage in business as those in urban areas.

Gibraltar and Spain

Debate between Drew Hendry and Gregory Campbell

Wednesday 14th October 2015 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate the hon. Member for Filton and Bradley Stoke (Jack Lopresti) on this very important and timely debate on the future of Gibraltar.

I had the honour of attending the national day celebrations in Gibraltar very recently, on 10 September—a day when Gibraltar is awash with red and white and when people express their right to self-determination. It is a small nation of 29,000 people, but as we have heard from other hon. Members, their number is swelled on a daily basis by a huge intake of the Spanish people who work there.

I had the pleasure of speaking both with natives of Gibraltar and with Spanish people that day, and they are a friendly mix; they get on well. I would therefore like to underline the point made earlier. This is not a point of difference; the tensions do not exist between the Spanish people and the people of Gibraltar. The tensions exist because of the actions of the Spanish Government and, of course, the reaction or lack of reaction from the UK Government. It is important that we bear that in mind.

The people of Gibraltar live in a small nation bordered by a larger nation, a larger neighbour, but it still manages to be efficient, thriving, friendly and, as we have heard, an economic magnet—a very successful small nation. Despite the problems and constraints caused by its larger neighbour, it is able to contribute and work perfectly efficiently and well under its own steam. The people of Gibraltar have the right to continue to express their need for, and their absolute right to, self-determination. People who live there must be absolutely safe and able to conduct their business. The incursions into Gibraltar’s territorial waters, the problems that it has had to put up with and the manufactured situations that have been set up to put it under what can only be described as intimidation are not acceptable, and no small nation should find themselves in such a position.

We heard from the hon. Member for Bromley and Chislehurst (Robert Neill) about the attempt to undermine the economic position of Gibraltar, and that is not acceptable either. Gibraltar is a nation that can survive perfectly well on its own and that performs perfectly well on its own. It has had to put up with incursions into territorial waters and manufactured border delays where people have had to wait for hours and hours to cross the border. Gibraltar has experienced incursions, in violation of its aviation rights. In August there was an incident, as we have heard, involving the discharging of firearms in territorial waters, which put at risk not only people from Gibraltar but citizens of other nations who were present, including UK citizens. That is not acceptable behaviour, and nobody should have to put up with it.

The people of Gibraltar have made and continue to make Gibraltar. Gibraltar is a nation with a right—I have said this many times, but I am not afraid to repeat it—to self-determination and to control its own affairs, as a nation does. Its constitutional future should be determined by the people who live there, not by their neighbour. The Spanish Government say that Gibraltar has no right to self-determination.

[Mr Gregory Campbell]

The hon. Gentleman is rightly outlining the right of the people of Gibraltar to self-determination. Does he agree that they, like others, have expressed that right at the ballot box, and that should be respected and adhered to?

[Drew Hendry]

We are the people who defend democracy, and the ballot box is always the way to secure the constitutional position of any nation. I would certainly agree with that. The right to make constitutional decisions at the ballot box is absolutely paramount. The Spanish Government have form on the matter; they have ignored the will of Catalonia as well as this issue in Gibraltar.

When I spoke to people in Gibraltar who had been subject to incidents such as those I have described—I am sure we will hear about them later—I found that they have real concerns and fears, not only about those incursions, but about what will happen in future. They are deeply concerned about the question of EU membership. The Prime Minister must confirm what he will do to uphold Gibraltar’s right to self-determination and stand by it regardless of the outcome of the EU referendum. It is also important for the UK Government to say clearly what actions they will take to support Gibraltarians’ ability to live their daily lives safely. When Their Majesties of Spain visit in 2016, that would be an opportunity to assure support for Gibraltar and its self-determination into the future.

Finally, the Prime Minister has told us that he wants to undertake treaty negotiations ahead of the EU referendum. Regardless of the outcome of the referendum, during those negotiations the Prime Minister needs to take into account the views and concerns of the people of Gibraltar on the single market and the free movement of goods and services, and to make sure that those rights are upheld for Gibraltar in future. The people of Gibraltar have stated their will, and they are extremely motivated and concerned. They have democratically expressed their desire for self-determination, and it is the duty of this House and UK Ministers to support them in progressing that aim.