Air Passenger Duty and Developing Economies

Lord Tunnicliffe Excerpts

Wednesday 18th May 2011 Lords Chamber

[Lord Tunnicliffe]

My Lords, I also congratulate the noble Baroness, Lady Benjamin, on bringing forward this debate. I celebrate the unanimity in the House tonight. Every contributor has spoken against the discriminatory nature of this tax and I share that view. I do not resile from APD. It was a tax that we carried throughout our period in government and it is a perfectly reasonable way of raising revenue. The airline industry is lowly taxed—it is zero-rated—and, because of an historical agreement in the 1940s, its international fuel is untaxed. Although APD is a perfectly proper tax, the present banding, on which I have to hang my head in shame and say that my Government were responsible, is discriminatory.

I first went to the Caribbean 45 years ago as an airline pilot. Thirty years ago, I was general manager for the Caribbean for British Airways, and I have taken an interest ever since, visiting it regularly.

The United Kingdom’s history in relation to the Caribbean is pretty shameful. We are quite smug in this House about how we got rid of slavery but we forget that we invented it in 1564. Enormous fortunes were made out of the slave trade, principally from the Caribbean and the Americas, and it was not until 1838 that West Indian slaves were emancipated. During that period and subsequently, huge fortunes were made in this country from the sugar industry and its associated products. Throughout most of our history, this traffic has been one way. Even in recent times, as has been pointed out, the Caribbean has made an enormous contribution. Members of the Armed Forces came from the Caribbean to fight in the Second World War, and in the 1950s and 1960s its people contributed to our society by providing labour for the specialist industries, transport and sport and so on. That contribution has been invaluable. Those people triumphed through the hostility that they met, and they and their descendants now form a rich part of our life.

Since then, we have continued to let the Caribbean down. We did not help it to preserve its sugar industry or help its banana industry to survive. We have been very dismissive of its needs. We have recently given up our World Service output there and we are going to remove the Royal Navy presence.

It is time to listen to the Caribbean. It is time to think again about this unreasonably discriminatory tax and change it, and I hope that the Government will listen to what we are saying. These things happen because big organisations make little changes, and you cannot have more of a beast of an organisation than Her Majesty’s Treasury. It makes little changes that have a disproportionate effect on little people, and the Caribbean islanders are little people. My favourite island, Antigua, is the size of a typical English constituency and eight out of 10 people there are involved in the tourist industry. A discriminatory tax in those circumstances is wrong and I hope that the Government will listen to what they have heard tonight. I do not ask the Minister to deviate from his Treasury brief. That would produce instant dismissal and the House would be poorer for his absence from the Front Bench. However, I hope that the passion expressed in the debate about the discriminatory nature of this tax will be firmly communicated to his colleagues in the Treasury. I hope that they will take account of this passion and that we will see an end to this discriminatory tax.