Clause 17
Finance Bill
10:30 am
Greg Hands (Shadow Minister, Treasury; Hammersmith and Fulham, Conservative)
That would certainly be helpful, because it would start to focus minds on some of the difficulties caused by simply drawing up a list of existing countries and pretending that there are no political ramifications in doing so.
Many people are concerned that the Caribbean, which is most dependent on tourism, will be included in the part 3 territories. A family of four will pay £300 in APD from November 2010 for a return flight to the Caribbean, which is a lot of money for a family holiday. Caribbean Governments have reacted furiously to that proposal—I happen to know that because some of their high commissions are located in my constituency and around 10 per cent. of my constituents are of Caribbean origin. Under the bands, Florida would be in part 2, but the whole of the Caribbean would be in part 3. I have read in the Travel Trade Gazette that the Governments of those countries have drawn up lists of UK parliamentary constituencies where their voices can make a big difference. The Jamaican tourism Minister, Ed Bartlett, speaking at a reception here in the Palace of Westminster in April said:
“The Caribbean communities in the UK are beginning to understand this will hurt them.”
Moving away from some of the geographical problems to which the schedule will give rise, the Government’s change in policy has consequences, and there is a need to examine in some detail the case for their 180-degree U-turn since they first set out their intention to move to a per-plane tax in January 2008. When they originally launched their consultation in that month, the intention to move to a per-plane tax was absolutely clear. The Government would
“replace air passenger duty with a duty payable per plane rather than per passenger.”
In case of doubt, the consultation document was unambiguous:
“This reform will take place on 1 November 2009, and has the objective of sending a better environmental signal, and ensuring that aviation makes a greater contribution to covering its environmental costs”
while ensuring that a fair level of revenue continues to be raised from the sector in order
“to support public services.”
The document describes as a principle the need to provide incentives for the more efficient use of planes by taxing similarly sized aircraft the same, no matter how full the plane. There we have it: in January 2008 they set out a clear intention, with the reasons stated, to move to a per-plane tax rather than a per-passenger tax.
Last year’s Finance Act provided for certain powers to proceed in that direction, and Ministers again committed to a per-plane tax this time a year ago, with only the final scope and mechanism open to change, and yet six months later the change was absolutely total.