Air Passenger Duty

Debate between Jim Shannon and Mary Glindon

Tuesday 10th July 2018 Westminster Hall

[Jim Shannon]

My right hon. Friend clearly states the real issue, which is price. He is absolutely right. I was just saying that one of the other advantages is customs clearance, which probably suits many, but the thing that puts people there first is price. Customs clearance is an incentive but an extra which makes things a wee bit easier. My right hon. Friend is also right about Tourism Ireland needing to ask how better to connect passengers who come into Dublin airport so that they do not stay in Dublin but go north. To be fair, Tourism Ireland does things well when I go every year to the Milwaukee Irish Fest in Wisconsin, but we can and should be doing a lot more. My right hon. Friend is absolutely right about that. First and foremost, people are attracted by price. That can be applied to many facets of life, such as shopping trends or changing shopping practices.

According to a report published by Airports Council International, this year the UK was the only European nation to see a decline in its direct connectivity. That is worrying. If that is happening and a trend shows that, we need to do something positive and constructive about it right away. The reason for our focus on APD is that we believe in Northern Ireland’s ability to compete with the rest of the UK, and any area, to attract and secure global business. Belfast has clearly become the cyber-security capital of the UK and has the potential to do even more than it has so far. Why is that? Look at the reasons to learn how important it is for us to have the APD issue addressed, which would be of advantage to other parts of the UK as well.

In Belfast and other cities in Northern Ireland, global tech names such as Citi or Allstate work in the sector with silicon valley firms such as BDNA, and they are all recognisable. Not only does our highly skilled workforce attract global investment, but our indigenous tech firms such as Kainos, Novosco and First Derivatives grow in size and are becoming global leaders, all in a region of Northern Ireland. We must pay tribute to the Department of Enterprise, Trade and Investment and to the Ministers—when the Assembly was working—for their hard work, which is still delivering today, even though the Assembly is not functioning as it once was—the seeds were sown and the dividends are being paid.

Much of our attraction is the skills base, supported by international-standard research facilities, with education and big business working together. We have the education, the big business, the opportunities, the quality of graduates and all those things together—Northern Ireland again leading the way for the UK to follow. That is how things happen and benefits are achieved.

Northern Ireland is consistently the top-performing region of the UK in national exams at age 16 to 18. The fact is that we have the graduates, and that encourages the investment, which is perhaps why we have done so well. Digital firms want to invest because the skills base is there in Northern Ireland, and still available, because we continue to produce graduates to build above and beyond where we are. We have the highest percentage of qualified IT professionals in the UK and Ireland, with more than 77% holding a degree-level qualification.

I say with respect to the Minister and all other regions, Northern Ireland is leading the way. From a small base of 1.8 million people—although the latest stats tell us we are nearly at 1.9 million—we are up there with London and other parts of the United Kingdom. Post Brexit, therefore, we are in a position to do great good for the United Kingdom of Great Britain and Northern Ireland. This is an opportunity that we should be taking advantage of. Some 77% of post-A-level high school graduates in Northern Ireland go on to further and higher education, compared with the UK average of 71%. Again, Northern Ireland is leading the way.

All such things make it attractive to come to Northern Ireland. Furthermore, labour and property costs for a 200-person software development centre in Belfast are 36% less than in Dublin, 44% less than in London and 58% less than in New York. We can see the benefits of coming to Belfast and Northern Ireland. Improved connectivity, which is central to this debate, will only enhance our global potential. How can we build on our base and our level of delivery in Northern Ireland and across the whole of the United Kingdom? The motion seeks to highlight the importance of the ability to hop on a plane and get anywhere in the world quickly—the need for competitive APD, to allow us to show the world that we are only a short, cost-effective flight away.

Only aviation can connect the United Kingdom with existing and emerging markets vital to our post-Brexit future, producing and maintaining thousands of jobs, and indeed the thousands more jobs to come. At the moment we have a competitive disadvantage that we cannot afford: we pay more than double the aviation tax of our nearest European trading rival, Germany. The tax on trade hits UK businesses as they seek to expand international trade essential to our post-Brexit future. It acts as a brake on airlines’ developing new routes to the very markets that UK businesses need to reach.

If the Government want to signal that Britain is truly open for business as Brexit approaches, what better way could there be than to cut this tax on trade by at least 50%, to bring us in line and give us an advantage? The high rate of APD is a brake on expanding links with the world, meaning that the United Kingdom of Great Britain and Northern Ireland loses out on connectivity opportunities, and it is one of the main reasons why Germany is better connected to South Korea, Japan, China and Brazil than the UK. It should be the other way around and we should be doing something to address that.

[Mary Glindon]

Does the hon. Gentleman agree that this is not only about Germany and further abroad? Under the Scotland Act 2016, Scotland is able to go ahead with its air departure tax proposal, which is a reduction of 50%, and that will affect the north-east, with a further bad effect on Northern Ireland in addition to the Dublin effect.

[Jim Shannon]

I thank the hon. Lady for her intervention and her wise words. The Minister has heard what she said, and I agree with her, as others do. We need to have a strategy and policy that move us forward together, so that we can all take advantage of what happens, rather than efforts that are divisive—perhaps the wrong word—or different ways of trying to achieve the same goal. I therefore wholeheartedly support the A Fair Tax on Flying campaign and its call for at least a 50% reduction in air passenger duty. I urge all Members to support the AFTOF campaign.

My mother often urged me not to be penny wise and pound foolish. Many people would say that that is the Ulster Scot in her, and in me—every pound is a prisoner, and we were told to look after it and to look after it well. There is nothing wrong with that: thriftiness is good—my children comment on that to me, but that is by the way, and I hope that they learn the lessons that my mother taught me, and that I have tried to teach them. The point is this: we need to focus on the immediate penny, but sometimes we forget the value of the pound. That was what my mum was telling me. We need to look at how we spend better to grow our economy.

From the Minister’s response to various comments, I know that he is sympathetic to our point of view. It has been outlined to me that up to £175,000 can be generated through trade from a high-growth market per average flight added. That is a massive amount of money per flight added, and gives us an idea of our potential to grow.

Exploration and Appraisal Drilling

Debate between Jim Shannon and Mary Glindon

Tuesday 24th February 2015 Commons Chamber

[Mrs Mary Glindon (North Tyneside) (Lab)]

I am really pleased that the Minister who will respond to this evening’s debate is my former colleague on the Environment, Food and Rural Affairs Committee, the Under-Secretary of State for Energy and Climate Change, the hon. Member for Hastings and Rye (Amber Rudd). I hope it will be a good debate.

This debate could not be more timely, as only today Oil & Gas UK published its 2015 activity survey, which has, quite rightly, attracted much news coverage throughout the day, not only because of the ongoing crisis with the price of oil, but because, as the chief executive of Oil & Gas UK, Malcolm Webb, has said:

“This offshore oil and gas industry is a major national asset.”

Although the report contains some bad news about the fortunes of the oil and gas industry, it also identifies the potential of the UK continental shelf, which, according to the recent Wood report, has produced 41 billion barrels of oil equivalent, and it is estimated that a further 12 billion to 24 billion could be produced.

The report highlights a number of important statistics, notably that 1.42 million barrels of oil equivalent per day were produced in 2014, which represents the best year-on-year performance in 15 years. However, production revenues fell to just over £24 billion for the year—the lowest since 1998—and there was a negative cash flow of £5.3 billion, which was the worst position since the 1970s.

It is expected that production could be about 1.43 million barrels of oil equivalent per day this year, and up to 15 new fields could come into production. By 2019, more than half of the UK continental shelf production is likely to come from fields that have started production since 2012.

The survey states that the long-term outlook for the UKCS is bleak, with drilling activity collapsing and prospects for significant new developments fading. Exploration activity was significantly worse than expected in 2014, with only 14 of the expected 25 wells drilled, which reflects the downward trend since 2009. An inability to access capital was cited as the main reason for low exploration activity, leading to the discovery of just 50 million barrels of oil equivalent with the potential to be commercially developed.

As few as between eight and 13 exploration wells are forecast to be drilled in 2015, as the lower oil price adds to existing barriers. Eighteen appraisal wells were drilled, which is more than were forecast, but that is a significant fall from the 29 wells drilled in 2013. No more than five appraisal wells are forecast for this year, a fall driven by poor exploration results over the past four years.

[Jim Shannon (Strangford) (DUP)]

The hon. Lady is outlining the case for help for the industry. We all know that the good news this year has been the lower price at the pumps, meaning that we all—my constituents—benefit, including from the fact that that has driven down the price of oil for home heating. There have been real benefits from the reduction in the oil price. I know the hon. Lady accepts and acknowledges that prices have come down, and therefore that inflation has fallen and people have more money in their pockets. Is she suggesting to the Government that we are looking for tax incentives for the oil companies so that they can proceed?

[Mrs Glindon]

That is exactly what I hope for from the Government, and I will come on to that.

Six more development wells were drilled than in the previous year. In relation to reserves, the survey states that there are potentially 10 billion barrels of oil equivalent, with 6.3 billion in sanctioned projects or under development and 3.7 billion yet to get boardroom go-ahead. However, companies say that fewer than 2 billion barrels of oil equivalent are likely to be developed, and that figure could fall further because of current global capital rationing. Under the right conditions, the industry would need to invest £94 billion to recover those reserves.

The fact is that our reserves and untapped resources could provide a successful industry for years to come, but the industry faces exceptional challenges and an uncertain future. There must be a concerted effort on tax, regulation and cost to make the basin more attractive to investors and to ensure that significant sums of much needed capital come to the UK.

The best year-on-year performance was largely due to new investment in new start-ups enabled by tax allowances. Tax concessions are generally the most effective and meaningful incentives. There needs to be a permanent reduction in the headline rate of tax for the industry, a simplification of the tax allowance structure and stimulus for exploration.

I hope that the Minister will confirm that the Chancellor, in his forthcoming Budget, will significantly reduce the headline rate of tax for the industry, which is currently between 60% and 80%. The Oil and Gas Authority must be rapidly resourced with the right capability and capacity to implement swiftly the recommendations of the Wood report. Enhanced capability and the authority of a better resourced regulator would greatly improve the stewardship of our oil and gas resources on the UK continental shelf, and cut through many of the existing blockages to maximising its economic recovery.

The Treasury is going through a public consultation regarding a proposed investment allowance for North sea gas and oil developments. The allowance should be modified to include provisions to support exploration and appraisal drilling along similar lines to the Norwegian approach. A decade ago Norway was faced with a slowdown in exploration and investment, but it has solved the problem by giving a massive rebate to those exploring in Norwegian waters. It is only through exploration that we find new discoveries.

It would be helpful if receipt of the investment allowance was subject to an undertaking by operating oil companies that full and fair opportunity on a level playing field will be given to the UK supply chain to tender for related contracts. The North sea can indirectly be a significant stimulant to jobs, especially in the manufacturing sector and deprived areas of the UK such as the north-east. Over the past five years the majority of North sea fabrication contracts have been placed overseas. The Government can do a lot more to support the British fabrication industry without breaching EU or World Trade Organisation regulations. Our domestic fabrication industry has the skills, expertise and track record to fulfil most of the contracts that have, sadly, been placed elsewhere.

Oil and Gas UK has recently highlighted that development costs for new offshore facilities over the past four years have risen to unsustainable levels. Budgets have been exceeded and projects have suffered major delays. In most cases the projects under review were constructed outside the UK. Recent contracts awarded by Maersk to overseas fabricators for the forthcoming development of the Culzean field—I apologise for my pronunciation—have been widely reported. However, very few UK jobs will be created by the development of this field, even though Maersk will benefit from significant UK tax concessions. At best, UK fabricators will be second-tier contractors. UK fabricators, including OGN in my constituency, are facing a bleak future, along with the rest of the industry, with a limited number of contracts on the horizon. Unless those fabricators win a reasonable proportion of the projects, there will be significant job losses, likely yard closures, and the extinction of domestic manufacturing skills that will never be restored.

It is vital that we maintain pressure on oil companies to place work in the UK. That pressure can be maintained by ensuring that the work of the Department of Energy and Climate Change industry development team is fully transferred and incorporated in the Oil and Gas Authority. For my part, I will press to have the work of the cross-party industry promotion group carried forward into the next Government. That group, of which I am a member, has proved to be very successful. It will be meeting three major operators this week to discuss their projects and what opportunities those will bring to the UK supply chain. I look forward to reassurance from the Minister that she is listening to the oil and gas industry, and that action taken by the Government will mean that jobs are protected and our major national asset is there for many years to come.

Electric Vehicles (Vulnerable Road Users)

Debate between Jim Shannon and Mary Glindon

Wednesday 30th October 2013 Westminster Hall

[Mrs Glindon]

I thank my right hon. Friend for that intervention. It is understated, or perhaps more widely taken for granted, that those people are also vulnerable—in fact, who among us are not? We must remember that being able to hear a vehicle also allows road users to judge the direction and speed of nearby traffic, which are crucial factors in deciding when it is safe to cross the road. For all pedestrians, 80% of our perception to danger is from our hearing.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Lady on bringing this matter to the Chamber for our consideration. I suspect that every one of us in the House have had the opportunity to do a walk with the Guide Dogs association, where we put on a blindfold and do a 2-mile walk through a very busy town. If ever an illustration was needed of how dangerous it is for a blind person, and how vulnerable they are, that is one way in which the message is brought home very quickly. Does she feel that when it comes to electric cars, there is an onus on the Government—perhaps the Minister will address this point today—to have some sort of method of warning people, whatever that may be? I am not an expert, but blind people and vulnerable people need to be protected on roads and on footpaths.

Housing Benefit (Under-25s)

Debate between Jim Shannon and Mary Glindon

Wednesday 21st November 2012 Westminster Hall

[Mrs Glindon]

Yes, I agree with my hon. Friend, and I will refer to those statistics. Unless we have been through the same situation as those young people, none of us can imagine it, and I wonder how it will affect their future.

Of those aged under 25 who claim housing benefit, 17% are in work, but, as the Prince’s Trust has pointed out, they need that benefit to close the gap between their earnings and accommodation costs. Many young people earn only low rates of pay, and the national minimum wage for 16 to 17-year-olds is only £3.68 an hour; it is £4.98 an hour for those aged 18 to 20. Young people on apprenticeships earn only £2.60 an hour. The Low Pay Commission has found that young people are disproportionately likely to be paid the minimum wage for their age: 13% of young people aged between 18 and 20 are on the minimum wage of £4.98 an hour. Most young people who claim housing benefit are not in work, but young people all want to work. In a recent survey by the Prince’s Trust, young people who had previously been unemployed were asked how many jobs they had applied for, and the most common response was that they had made more than 100 applications.

The Government say that they want young people to take up their apprentice schemes, but apprenticeship wages are low, at £2.60 an hour. If the Government take housing benefit from those young people—particularly the most vulnerable, whom we want to get into apprenticeships—it will be yet another barrier to their future in work. The Prince’s Trust has also pointed out that young people who want to strike out on their own in business, and take up the trust’s enterprise programme, are often lone parents who claim housing benefit. They need housing benefit to supplement their incomes until their business is profitable enough to allow them enough salary to cover accommodation costs. Why should those young people be denied opportunity because they cannot afford a roof over their head, while the very rich get huge tax breaks from the Government?

The Government have said that some young people will be exempted from the cuts, but how will those exemptions be worked out, and who will be eligible? I hope that the Minister will tell us.

[Jim Shannon (Strangford) (DUP)]

The issue will be one of the biggest in my constituency, and I perceive great difficulties, come next year. Is the hon. Lady aware that there have been discussions with the Government and the Northern Ireland Assembly about changes that may help the system to work? Perhaps the changes proposed for Northern Ireland could be brought across to the rest of the United Kingdom. We are not getting everything we want for Northern Ireland, but I understand that we are getting some helpful concessions. Would the hon. Lady want to suggest that the Government might discuss that with her, and that they might enable the changes to be made UK-wide?

[Mrs Glindon]

I thank the hon. Gentleman for that intervention, and hope that the Minister will have listened to what he said.

Many young people live with their parents, because that is the only way they can manage work; they simply cannot live in a home of their own. The consequences for young people who cannot live with their parents are serious. Crisis has found that, as my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) said, one third of those accepted as homeless by their councils were under 25, and 10,000 had lost their home because their parents could not or would not house them. What will happen to those young people if housing benefit is cut?

[Mrs Glindon]

That is a concern of several agencies and organisations that are in the same boat. I hope that the Minister will say something about it.

Half the young people who receive housing benefit have children. Moreover, 28,000 young people receiving housing benefit are sick or disabled. How would the Minister expect those people to cope without any housing benefit at all? While places such as St Mungo’s provide accommodation to more than 17,000 people every night and help thousands more who are sleeping rough or are at risk of homelessness, we can only wonder what it would be like if those who rely on housing benefit were to lose it and no longer have that safety net. How would those figures be magnified?

I am pleased to say that in my constituency, there is a scheme called Maritime Court, which is run by Places for People as an individual support project. It is a customer-led service that offers support and guidance. Everyone using the scheme is encouraged to discuss their needs, and appropriate information is provided to assist them to make informed decisions. They get advice and support on issues such as life skills, benefits, budgeting, employment and education, with the ultimate aim of developing life skills to enable independent living within the community. The service offers a low to medium level of housing-related support. It has 24-hour staffing all year round. Young people get support for up to two years, living in accommodation there until such time that they are able to move into accommodation in the community. As has been mentioned, such projects are concerned about proposals for the future.

[Jim Shannon]

The issue of affordable housing is one that Barnardo’s, Save the Children and many other organisations are raising. Does the hon. Lady feel that the Government need to address the issues of affordable housing and of housing that is suitable within the housing benefit range?

[Mrs Glindon]

The hon. Gentleman has raised a particularly important point—one that we come back to time and again. When we see the low wages for apprentices and many young people, how else can they afford a home, with or without housing benefit?

I want to give a couple of examples to show how young people’s lives need to and can be turned around, and why housing benefit is crucial; obviously, I will use supplemented names. The following case study is from Maritime Court. A young woman, Sue, went into the project when she was 17, with a number of support needs. She had been re-homed and resided in one of Depaul UK’s lodgings within a family home environment, because she had been asked to leave her parents’ house. She had some skills but no experience of living on her own or managing a tenancy. She had led a chaotic lifestyle, as a lot of young people do, which was compounded because her mother had moved around, having had a lot of debt and rent arrears. Her parents had separated, and she had an awkward relationship with her mother. She was often left to fend for herself and her young sister from an early age. She received no family support when she was at home with her mother, so she was a young person on her own. She had also suffered domestic abuse from family members and friends, so she was a vulnerable young person. The support that she needed was with money management, how to develop relationships and tackling offending behaviour. She also had mental health and communication problems, to say but a few.

During Sue’s time with the scheme, the massive support she received enabled her to overcome many of her problems, and she became a mature person, who was able to deal with difficult situations. She has moved on through Maritime Court and has been able to work with North Tyneside council and get into independent living. The case study explains how the staff worked through issues with her and provided support. She has now moved on—she is starting a placement and is looking forward to training for a new career. That would not have happened had it not been for Maritime Court and for housing benefit.

Another referral that was made to Maritime Court was from North Tyneside council’s men’s direct access unit. Lee, as I will call him, had mild learning difficulties and cerebral palsy. He engaged well with staff from day one, but he seemed to rely on staff for company. He would often go out and have a good drink, but he was never aggressive. Staff realised that he was a very vulnerable person because the only way he could have friends was by allowing people into his flat in Maritime Court. He lived on the ground floor, so the staff moved him upstairs, which helped to solve some of his problems.

Lee was on a lot of benefit because of his disabilities, but he would often come back with no money once he had got paid, because people were taking advantage of him. The people at Maritime Court took over the management of his money and helped him with his benefit. He started to turn his life around. Eventually, staff found him a place in South Shields, which is across the river, in an area near where his girlfriend lives. With all the support he had, he was able to set up in Dock street in South Shields, and he is still doing extremely well there.

I could go on, but I cannot give more examples in the time allotted. What I want to put to the Minister is that, should the proposals go ahead, as I and others have said, thousands of young people who are now able to enjoy a roof over their head will be made homeless.