Air Passenger Duty

Graham Stringer Excerpts

Thursday 1st November 2012 Commons Chamber

[Graham Stringer (Blackley and Broughton) (Lab)]

I do not know whether I should thank you for that, Mr Deputy Speaker, but I do thank you for allowing me to catch your eye.

I congratulate the hon. Member for Witham (Priti Patel), who secured the debate and moved the motion. The debate is important; we can see that from the agreement on both sides of the House and from the number of e-mails, letters and postcards that we have all received. For the first time as a Member of Parliament, I have had more correspondence about a serious economic issue than about the welfare of animals—an extraordinary feat.

I have agreed with almost every word of every speech that has been made this afternoon. By and large I am not an angry person and do not lose my temper, but there should be anger about what is happening to aviation in this country, and air passenger duty is part of the problem. Aviation is absolutely vital to this country’s future; it represents about 4% of the economy when we add up the jobs and its overall impact.

However, aviation is much more important than that. Sadly, we have seen the cotton and other industries go and they have been replaced in the best places by newer, more modern industries. That cannot happen with aviation. This country’s economic welfare depends on its ability to get cargo and people in and out on aeroplanes. We are in a competitive situation to get those aeroplanes to land in this country. In many senses, we are losing that race. I know that the number of passengers expected in Manchester airport’s business plan 10 years ago is down. My guess is that that is true of most of the major airports in this country. They are under a double attack. One attack is on capacity in the south-east. Heathrow is our most important asset in this regard and the sooner the Government make a decision about it the better; I do not believe that any more information can be made available on the third runway at Heathrow. All the information is there and the Government need to stop dithering, make a decision and put some certainty into the issue. The lack of capacity at that hub means, of course, that passengers use other hubs in Europe; they are more profitable and invest in more runways while Heathrow gets less competitive.

Air passenger duty has the same impact. I do not want to repeat figures that have been given out previously, but it is worth going through the figures that show the damage being done. The £2.5 billion raised from air passenger duty is about twice as much as that raised in the whole of the rest of the European Union. A single person flying in the European Union pays about €16 in duty from here; they would pay €3 from Ireland, €4 from Italy, €7.5 from Germany, €5.2 from France and €8 from Austria. Our rates are more than double those of other European countries. We can see the impact of that, not only within Europe but outside it.

It is estimated that Stena Line Ferries is taking 20,000 extra passengers into this country who have flown from India alone. That is a loss to our airports and aviation business. Those are people who have bothered to fly on a plane and then get on a boat. Lots of people would not bother to do that. The trade from China has halved; that is not surprising when we consider how much duty a Chinese family must pay to come to the UK—£648, compared with zero in air passenger duty if they flew into the Netherlands or a number of other European countries.

The hon. Member for Crawley (Henry Smith) is not in his place, but he must have hacked into my e-mails, because he made the same points about green taxes that I was going to make. I will not just reproduce what he said. Part of the camouflage for air passenger duty is that it is somehow an environmental tax. It is not—it takes no account of what sort of aeroplane is involved or of the levels of carbon dioxide or other gases coming out of it. It is simply a tax—and an unnecessary one, given that we have introduced the European Union emissions trading scheme. It is doing serious economic damage, and so this very moderate motion asks for an economic impact study. The World Travel and Tourism Council has carried out a study that shows that in 2012 it expects that damage to equate to over £1 billion more than the amount raised. That is an appalling figure, although it may have got its figures wrong. Perhaps we can rely on the Treasury to get the figures right when it undertakes a study.

I do not believe that our economy now, or in future, can afford to maintain this tax. I am happy to support this very moderate motion, but I hope that Members in all parts of the House will be increasingly critical of Government policies that damage one of our most important industries.