Air Passenger Duty and Developing Economies

Lord Palmer Excerpts

Wednesday 18th May 2011 Lords Chamber

[Lord Palmer]

My Lords, I, too, thank the noble Baroness, Lady Benjamin, for securing this slot to air again this grotesquely unfair tax. I must declare an interest as someone who opens their home and gardens to the visiting public and who is dependent on a vibrant incoming tourist industry. I also declare an interest as a residual beneficiary of a landlocked estate on the picturesque island of St Lucia. I care passionately about those who live and work on the estate.

I feel sorry for the noble Lord, Lord De Mauley, who will have to fasten his seatbelt as he endures an hour of strong turbulence. All of us will be singing from the same hymn sheet.

I do not believe in retrospective taxation, but my left-wing tendencies gather momentum every time I learn that private jets are exempt from APD. That is a scandal, and both Administrations should hang their heads in utter shame.

It is a complete myth that this is an environmental tax. Not only are private jets exempt, but so, also, are all cargo shipments. Holland and Belgium, for example, recently had the sense to abandon their equivalent, realising the damage that APD has done to their economies. Meanwhile, in the past six years, APD in this country has risen by a staggering 325 per cent—I repeat, 325 per cent. London is now a far more expensive destination than all our rival European cities, especially for those coming from China, India, Australasia and Russia. Ireland has announced that its levy will be cut from €10 to just €3. When we compare that with the levy of £85 for someone travelling in economy class to Ireland from the United Kingdom, it makes a complete mockery of that tax. Not unnaturally, more and more travellers living in the regions are choosing to fly long-haul via Amsterdam, Paris or Frankfurt rather than Heathrow to avoid that tax.

We all despise taxes in every shape and in every form, but APD is a wholly unfair tax. Her Majesty's Government must take all those points on board and action should be taken as soon as possible, especially before next year's Olympics. We must not forget the horrible effect that this tax has on the Caribbean countries.