Air Passenger Duty

Ian Paisley Excerpts

Wednesday 23rd October 2013 Commons Chamber

[Nicky Morgan]

I assure the hon. Gentleman that I am keeping a very fresh pair of eyes on all areas of my Treasury brief. I look forward to meeting him and the hon. Member for Hackney North and Stoke Newington (Ms Abbott) to discuss the issue further. We will certainly keep it under review.

As I have said, we must continue to work hard to reduce the deficit, so if we were to abolish APD, an alternative source for the revenue would need to be found. We never seem to hear any suggestions, but if we hear any today my hon. Friend the Exchequer Secretary will respond to them in his winding-up speech.

Some have argued that, in the case of APD, no such off-setting measures would be necessary and that abolishing the tax would pay for itself by increasing economic activity overall and thus receipts from other taxes. The motion cites the report by PricewaterhouseCoopers arguing exactly that. I will turn to the report shortly, but first let me address the general question of the impact of the tax system on the UK economy and the UK’s international competitiveness.

[Ian Paisley (North Antrim) (DUP)]

I welcome the Minister to her place and congratulate her on her new post.

May I suggest that one way in which the Government could make money out of this and increase productivity would be to incentivise the 50,000 Australians who visit Northern Ireland every year to fly through Heathrow and use that as their hub, instead of flying to Dublin before travelling up to Northern Ireland and then leaving via Dublin and spending their money there?

[Nicky Morgan]

I welcome the hon. Gentleman’s suggestion and I will certainly think about it. My earlier remarks hinted at the existence of the Airports Commission, which will look at all the UK’s airports, the role they play for travellers and how we deal with those who come here by whichever means.

--- Later in debate ---

[Ian Paisley (North Antrim) (DUP)]

It is a huge honour to follow the lumberjack from Strangford.

My hon. Friend the Member for East Antrim (Sammy Wilson) led the charge in putting this important case. He presented a compelling argument to the House. Indeed, he got us so far out in front of the Government that I do not think we will need to have a vote tonight. I congratulate him on the way he presented his case.

I cannot believe that this Government—a Government with whom I have a lot of sympathy in many areas—want to tax people more than any other Government in the world when it comes to air travel. That is astounding. It is sad to see my friends on the Government Benches trying to defend the indefensible. This is a pernicious, nasty little tax that affects transport, ordinary people and jobs, prevents UK businesses from exporting and expanding, and harms growth by stopping inbound tourism.

The tax affects ordinary citizens in the United Kingdom. If mum and dad in Northern Ireland want to take little Billy and Sarah to their nation’s capital, they will go on the internet and look at the cheap flights that they could take from Aldergrove airport or George Best Belfast City airport with easyJet, Aer Lingus, British Airways or any of the other airlines that operate out of Northern Ireland. If they book in advance, they will get tickets for the whole family for less than £100. Unfortunately, they would then have to write a cheque for £104 to the Chancellor of the Exchequer for the privilege of flying from one part of the United Kingdom to their nation’s capital. That is wrong. It is ridiculous. As the hon. Member for Mid Norfolk (George Freeman) argued, it is grossly unfair to the citizens of the United Kingdom. The Government have an opportunity to stop it and they should stop it.

Our competitors recognise that the tax is wrong. As my hon. Friend the Member for Upper Bann (David Simpson) said in an early intervention, in 2009 the Netherlands followed Belgium in abolishing its equivalent of APD because although it raised the equivalent of £266 million in a year, the loss to the wider economy as a result of taxes from which the country did not benefit was almost £1 billion per year. The German Government have said that they will freeze their equivalent tax and the Minister of Transport has stated publicly that they want to abolish it. I believe that they will do so before the next German election.

I draw Members’ attention to the words of the chairman of the Northern Ireland Tourist Board, Howard Hastings, and a speech that he made in London on Monday evening. He is not known for being outspoken or as abrasive as my hon. Friend the Member for East Antrim, but he said:

“It is daft at any level that there is a lower level of APD between Dublin and GB when compared to Belfast and GB”.

He also said it was daft—doubly daft—to create a system in which thousands of visitors who come to Northern Ireland each year are

“financially incentivised to come through Dublin, rather than through Heathrow—”

or Gatwick, and our nation’s capital. He went on:

“Our two airports are fighting to attract new routes, particularly from Continental Europe. Air passenger duty is a major stumbling block. Recently published evidence shows that the cross channel air capacity for Winter 2013 is 2.4% up on a year ago. But drill down a layer, and we see that the increase in capacity to the Republic is up 13,000 seats…or 10%”

per year.

If ever there was a compelling argument to remove something that is doubly daft from our tax system it is the argument that airport passenger duty must be scrapped, and it must be scrapped sooner rather than later.