Air Passenger Duty

Lord Haselhurst Excerpts

Wednesday 23rd October 2013 Commons Chamber

[Sammy Wilson]

The right hon. Gentleman makes an important point. Although this tax is regarded by some as a tax on the rich and therefore a progressive tax, it is not: it is a flat-rate tax and therefore it is a regressive tax. Many of those who are hit are travelling on holidays or to see their families, and they save up for that even though many of them are on low incomes. Indeed, 45% of those who are hit by it would be regarded as being on medium or below-medium incomes, yet they pay the same tax as those earning more than £80,000. Leaving aside the impact on growth, on exports and on industry, the regressive nature of the tax makes it an unfair tax, and that is another reason this issue needs to be looked at.

[Sir Alan Haselhurst (Saffron Walden) (Con)]

Bearing in mind the huge revenue APD currently yields for the Government and the fact that passenger demand is rising, it would be quite a good idea to concentrate on some of the anomalies in the structure of the tax at present. That might be the weakest point of the shell around the argument—the perverse way it impacts in Northern Ireland, as the hon. Gentleman has persuasively been saying, in the Caribbean and, indeed, in other parts of the Commonwealth.

[Sammy Wilson]

The right hon. Gentleman is right. One of the reasons why we in Northern Ireland sought devolution of the long-haul tax is that we could not have afforded to have all our passenger duty devolved, with the impact that that would have had on the block grant. Nevertheless, chipping away at APD as the right hon. Gentleman describes is important.

I will come later to the revenue that the Government currently make from APD, as I am sure that is the point that the Minister will make. It is one thing to rant about the unfairness and inequity of air passenger duty, but where will the Government get the money from otherwise?