Regional Airports

Ian Paisley Excerpts

Tuesday 2nd February 2016 Westminster Hall

[Catherine McKinnell]

My hon. Friend makes a very important point, and I can see that the Minister is interested. He should give some consideration to the impact that that practice has on domestic passengers and regional economies.

[Ian Paisley (North Antrim) (DUP)]

The hon. Lady is making an excellent point. Does she agree that this should not be about persuading Scotland not to reduce this taxation? In fact, I am delighted that Scotland has indicated that it will reduce it. This should be about all of us persuading the Chancellor to remove this pernicious, dirty, nasty little tax on passengers and on business.

[Catherine McKinnell]

Interestingly, the Prime Minister seemed to recognise the issue during the general election campaign. He told regional newspapers:

“We are not going to accept a situation where there’s unfair tax competition...We will do what’s necessary to make sure that England’s regional airports can succeed.”

However, there has been near total silence on this issue ever since and there is a considerable amount of understandable concern that that was simply a lot of hot air.

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[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate. I was not sure that I would be called so soon, but I appreciate the opportunity. I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on focusing everyone’s attention on the issue. Clearly, I will be speaking from a Northern Ireland perspective.

The issues of regional airports, including capacity and air passenger duty, are particularly pertinent to Northern Ireland as we share a land border with the Republic of Ireland. My hon. Friends the Members for East Antrim (Sammy Wilson) and for North Antrim (Ian Paisley) have said that on a couple of occasions so it is clear that these issues concern us all. Another indication of that concern is the number of Members of Parliament from Northern Ireland who are here.

Just a few miles down the road, Dublin airport does not have APD imposed on its flights. Not only does the existence of APD put strain on Northern Irish airports as it does with other regional airports throughout the UK, but we are punished twice by having to compete with foreign airports able to operate at a significant advantage. APD was designed to be a revenue raiser but, in the case of regional airports—especially in Northern Ireland—APD has instead become an obstacle to growth. Perhaps the Minister could comment on the suggestion that revenue could be raised by reducing APD and by making us an equal competitor with the Republic of Ireland.

Just last week, news came out showing that passenger numbers have soared at Northern Ireland’s two main airports: George Best Belfast City airport and Belfast International airport. More than 7 million passengers passed through Ulster’s airports last year—a rise of 9% at Belfast International and a rise of 5.4% at Belfast City. However, despite the success at Belfast City and Belfast International, there was a huge slump at Londonderry airport with numbers down by almost a fifth.

[Ian Paisley]

My hon. Friend will appreciate that the figures from 2006 to 2016 show that passenger numbers have not yet recovered for Belfast City and Belfast International airports because numbers are being sucked to Dublin.

[Jim Shannon]

I will certainly speak about that. The figures show an increase, but a much greater increase could be achieved. Perhaps we might dwell on that. A spokesman for Belfast International airport said:

“If we can make advances such as this with the drag of APD impeding progress, think what we could achieve for the Northern Ireland economy if we didn’t have this regressive tax”.

That is a great point, which my hon. Friend the Member for North Antrim also makes. We could do better and much better.

Some 240 million passengers a year join or leave aircraft at the reporting airport. That figure is important because the increase in traffic is yet to be evenly spread out. Other airports outside of London—in Wales, Scotland and, particularly, Northern Ireland—should get the advantage of that. I want to see the connectivity and I know the Minister will comment on that. Those airports are making a case for at least some reduction in APD, with Wales and Scotland already on course to deliver. This debate is important to me as the MP for Strangford because I see Belfast City airport as the airport for my constituents, and they see it that way as well. We want the advantages, across my constituency and across the whole of Northern Ireland, of better prices and better connectivity with other parts of the United Kingdom.

As well as regional disadvantages, APD is at risk of creating a socioeconomic divide, where those with the ability to pay can enjoy the benefits of air travel when and where they want, while those without it are left using other, less appropriate means of transport. APD raises some £3 billion a year in tax revenue, year on year, for the United Kingdom but, despite its introduction, demand has risen rather than fallen. Although APD is a form of revenue, raising it has failed in its aim of reducing demand and carbon demand. If something is broken—and in this case, it is—we should fix it. It is clear that APD does not work for regional airports across the whole United Kingdom of Great Britain and Northern Ireland, and Northern Ireland wants something different.

The benefits of abolishing air passenger duty will be seen across the entire United Kingdom. According to PricewaterhouseCoopers, abolishing the duty would see the UK economy grow by a staggering 0.5%, which would give the UK Treasury some £570 million in tax receipts in the first year after abolition due to the increased demand for air travel. That is a win-win.

In Northern Ireland we know all too well how much air passenger duty influences the decisions of airlines about doing business. We compete directly with the Republic of Ireland in this sector, and we need only look at what happened when air passenger duty was abolished in the Irish Republic. The figures are interesting: Dublin airport increased its passenger numbers from north of the border—my constituents—which is proof that APD is an obstacle to business, growth, prosperity and security for our people. We must do everything we can to ensure the future success of Northern Ireland.

My party is on record as supporting a third runway at Heathrow—we said it in previous debates, and we are saying it in Westminster Hall today. Let us get the third runway in place for Heathrow. Let us get connectivity across all the United Kingdom, and let us get it for Northern Ireland—for Belfast City, for Aldergrove and for Londonderry. Let us move forward and give everyone in the United Kingdom of Great Britain and Northern Ireland the opportunity to have the advantage of no APD.

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[Ian Paisley (North Antrim) (DUP)]

It is an honour to serve under your chairmanship, Ms Vaz.

This has been a very agreeable debate. I do not think I have ever attended a debate in which I have agreed with absolutely everything that has been said by every Member—with the exception of the hon. Member for Gateshead (Ian Mearns), who does not care if he flies from Dublin. I think that Northern Ireland Members can say, with unity for once, that in future we want him to fly from everywhere but Dublin. We will encourage him to do so and get him a timetable to make sure that that happens.

I watched the Minister of State’s reaction to the debate and I noticed that he agreed with a number of points. That is probably because he hails from and represents Scarborough, so he knows the needs of people who come from the north. Of course, whenever he comes to Northern Ireland he does not have to fly north; he just flies west to visit Northern Ireland. So I think he gets this issue, which is important. Members recognise that there is a very distinctive north-south divide here and we must address it very quickly.

A lot of this debate has focused on airport passenger duty, and I agree that it is important. I described it earlier as a pernicious, dirty and nasty little tax, and it is a tax on competitiveness, so it has to go. Frankly, however, it is not up to Scotland or Northern Ireland to do their own side deals on this issue. Addressing APD is an issue that the Chancellor must grasp and deal with centrally. He must recognise that if he does not grasp the issue, unfairness will be created across vast parts of the United Kingdom, which will probably disadvantage the north of England more than anywhere else; other parts of the UK will also be disadvantaged.

What has been absent is a proper aviation strategy that pulls together the tourism need, the business need, the capacity need and all those types of issues. When the Minister looks at this proposal, I am sure that he will bring to the debate a recognition that we need a proper aviation strategy that addresses the needs of other airports in Northern Ireland.

There has been an awful lot of discussion—not just in Parliament but outside it—about sorting out the Gatwick versus Heathrow debate. Yes, that debate needs to be sorted out, and expeditiously, but we also need to address the capacity at London City Airport very quickly.

[Ian Mearns]

I agree that we need an aviation strategy, but we also need a much more integrated transport strategy. As my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) pointed out about the expansion of Manchester airport, the problem for the north-east of England is that it takes more than two hours by rail to get to Manchester. The connectivity is simply shocking, and I honestly assure the hon. Gentleman that if I was going to Dublin, I would not start from here.

[Ian Paisley]

The hon. Gentleman is absolutely right about the importance of ensuring that such a strategy also includes other transport. For example, my colleague the hon. Member for Belfast East (Gavin Robinson) has a railway that goes almost to the airport. I have a motorway that gets almost to the airport at South Antrim. We need that entire process joined up, so that passengers, commuters, businesspeople and tourists coming in and out of the airport have an easier time of it getting to and from the airport.

In that strategy, we should also ensure that Gatwick, Heathrow and the other centralised airports have slots for the regional airplanes to reach them. That is important, as it will address the issue of ensuring that the C series, whenever it comes on stream, will be available for the other airports, as well as the Airbus equivalent.

Finally, I will point out that when Holland had APD its airports were devastated by competition from its neighbours in Germany. The Dutch scrapped APD and we need to learn the lesson of history.