Economic Update

Lord Lancaster of Kimbolton Excerpts

Tuesday 12th January 2021 Lords Chamber

[Lord Agnew of Oulton (Con) [V]]

My Lords, there is a balancing act here. We all absolutely accept the grave state of the government finances following this crisis, and we will be doing everything we can to bring the books back into balance; however, if that is done too quickly, it will cause greater suffering to those who are most vulnerable, and therefore we have to try to strike a balance. The optimum way out of this will be by economic growth, which is where we are putting a great deal of emphasis.

[Lord Lancaster of Kimbolton (Con)]

My Lords, the £1.4 billion government-backed loan that easyJet announced yesterday demonstrates the perilous state of the aviation sector. Given that a higher tax rate does not always result in increased revenues, is it time to review the air passenger duty, partly to help stimulate demand but also partly, potentially, to increase revenues for the Exchequer?

[Lord Agnew of Oulton (Con) [V]]

My Lords, the Government are acutely aware of the challenging circumstances aviation is facing. The sector is able to draw on the unprecedented package of measures announced by the Chancellor, including schemes to raise capital, flexibilities with tax bills and the furlough scheme. The Government have committed to consult on aviation tax reform and will provide an update on the timing of this in due course.