Air Passenger Duty

Siobhain McDonagh Excerpts

Wednesday 23rd October 2013 Commons Chamber

[Nicky Morgan]

ONS statistics show that lower-income households spend a lower proportion of their disposable income on APD than higher-income households. We are looking at what people actually spend.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

How would the Minister explain that to my Caribbean constituents, many of whom come from Jamaica or other Caribbean islands and have lived here for 40 or 50 years on low incomes? They now find themselves being excessively taxed in order to stay in contact with their family and friends in their home countries.

[Nicky Morgan]

I do not know whether the hon. Lady has just arrived in this debate, but we have already discussed Caribbean issues [Interruption.] Well, I think I have dealt with that issue. [Interruption.] I am sorry—I had not appreciated that the hon. Lady was present, but there were questions on this matter from the hon. Member for Hackney North and Stoke Newington and the right hon. Member for Tottenham, and I have addressed the issue of the Caribbean. ONS statistics show that lower-income households spend a lower proportion of their disposable income on APD than higher-income households. In relation to the Caribbean, APD must adhere to international rules on aviation tax, specifically the Chicago convention. The capital city convention on APD ensures that our APD complies with those rules.

The hon. Member for East Antrim spoke of the impact of APD on Northern Ireland in the context of recently announced changes to the rate of air travel tax in the Republic of Ireland. I thank him for saying that this is a listening Government and for his recognition of the moves we have made in that regard. We recognise the position of Northern Ireland as the only part of the UK that shares a land border with another EU member state with a different rate of aviation tax, which is why we have devolved to the Northern Ireland Assembly the power to set APD rates for direct long-haul flights. The Government and the Northern Ireland Executive recognise that decisions on further fiscal devolution of any taxes require careful consideration. We expect recommendations on further devolution to be put to the Government and Northern Ireland Executive by autumn 2014.

The debate highlights some of the most important issues facing Britain today, including repairing the public finances and bringing debt under control, thus ensuring the stability on which economic recovery depends. APD makes a vital contribution to the Government’s fiscal strategy—it would be irresponsible of us to abandon it—and forms part of the wider tax system that we are making into one of the most competitive in the world. I thank the hon. Gentleman for giving us the opportunity to debate those important issues, but I cannot agree with his proposal that the tax should be abolished.

--- Later in debate ---

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I shall address the issue on behalf of my Caribbean constituents, and report how angered and disappointed they are about the banding of Caribbean countries. Not only are my Caribbean constituents angry and disappointed, but so are their original home Governments at the way in which the banding impacts upon them and the development of their industries and tourism industries.

The Caribbean community in my constituency came to Mitcham and Morden in the 1960s, the 1970s and the 1980s. They did the jobs that nobody else wanted to do. They drove the buses, built the schools, dug the roads and worked in the hospitals, just as my own family who came from Ireland in the 1940s did. They never earned much but they worked hard. They looked after their families at home and in the Caribbean, and they contributed hugely to our community through youth facilities, churches and clubs for the elderly. They feel they have earned, and they have earned, their right to be here. They are proud of being British, they are proud of being Londoners, but they are also proud of the country that they came from.

Members of the Caribbean community work hard, and they save hard to go home every so often to see how their towns and cities are getting on and how their family and their friends are. Air passenger duty is a tax on their ability to do that. Whatever accounting company came up with whatever report, nobody can argue that for a Caribbean lady or gentleman in my constituency who lives on a pension and an occupational pension, APD does not disproportionately affect them in their efforts to stay close to their ageing families. It clearly does.

I am not arguing that APD should be scrapped; I am asking the Treasury to look at the banding. Nothing is set in stone; these are conversations that I and other Labour Members have had with Ministers of this Government and the previous Government. We are where we are because of the Chicago convention and the ticketing rules that exist for the airline industry. But it does not make sense to people in the Caribbean, or to me, that to go to Kingston, which is closer than Los Angeles, 25% more tax has to be paid. There is a way to look at the banding and to alter it, to recognise the contribution of those people, their families and communities, and to accept and respect the deep and long-standing connection that we have with those individual Caribbean countries and their Governments. They, like us, are going through hard times. They wish to develop their tourism industries in a price-sensitive market. Anything that we can do to help them out of respect for their communities’ work in our country and in our capital city would be gratefully received. It is not beyond the wit of the Government to do precisely that.