Air Passenger Duty

Debate between Gavin Shuker and Henry Smith

Thursday 20th October 2011 Commons Chamber

[Gavin Shuker (Luton South) (Lab/Co-op)]

I congratulate the hon. Gentleman on securing this debate not once, but twice, not least because it gives me the opportunity to welcome the Economic Secretary to the Treasury to her new role—a well-deserved promotion. Does the hon. Gentleman agree that part of the problem with this issue, with which I am very sympathetic, is the fact that there is a gap between the Treasury and the Department for Transport in that the Treasury leads but the Department for Transport is required to produce plans for airports and aviation?

[Henry Smith]

I am grateful for that intervention. The holy grail of government is joined-up government, with all Departments and the Treasury working together. My right hon. Friend the Minister for the Cabinet Office and Paymaster General is doing a great job in trying to achieve that.

The World Economic Forum’s international tourism competitiveness report ranked the UK 134th out of 138 nations for air taxes, and we are beaten only in the amount we charge by the west African countries of Senegal, Ivory Coast, Mali and Chad. The chief executive of British Airways said:

“Aviation in the UK is the most undervalued and overtaxed industry in Britain. We want to play our full part in assisting Britain’s economic recovery, but we are held back by levels of tax on flying which are higher than anywhere else in the world”.

and added that the increases would cost BA an extra £100 million and put more pressure on ticket prices. At the recent launch of a new Air Asia X route from Kuala Lumpar to London Gatwick, its chief executive stated that it is commercially more difficult to operate from the UK than from France. He pointed out that 10% to 12% of its passengers flying from Paris to Kuala Lumpar are British nationals. That gives a sense of the shift that passengers are already starting to make.