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Rates of Air Passenger Duty

Part of Clause 9 – in the House of Commons at 8:45 pm on 11th March 1997.

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Photo of Rt Hon David Trimble Rt Hon David Trimble Leader of the Ulster Unionist Party 8:45 pm, 11th March 1997

This has been an interesting debate, and what I have heard reinforces my view that amendment No. 7 is right. I am surprised by the Government's approach on this matter. They acknowledge that there is a problem, especially regarding the regions.

The Minister says that the solution to the problem of the regions is subsidy; but subsidy will not solve the problem, because the problem is the cost caused to travellers, and the subsidy will not go to travellers. The subsidy may be relevant only in the context of uneconomic flights, where there is an argument for subsidy. We have heard, however, that the British Airways flights to Glasgow and Edinburgh are among that airline's most profitable. The most profitable route for British Midland is from London to Belfast. It is not the most profitable route for British Airways, but there are reasons for that. The subsidy will not arise on the profitable routes, but there will be a cost for the regions. Subsidy is not the answer to the problem. The Minister acknowledges that there is a problem, but, as I have said, the answer does not lie in subsidy.

9.15 pm

The Minister should think again because of the cost that he is imposing on the regions, on businesses travelling to the regions and on individuals who travel to them. I am reinforced in my belief that amendment No. 7 is the right one because of the problems that would arise with the implementation of amendment No. 22.

The Liverpool and Manchester position is superficially attractive, but in reality is not. With a localised exemption, there will always be problems in drawing a boundary. The fact that a boundary runs over land or over sea is irrelevant. The problem with the Scottish National party's amendment, No. 22, is its reference to "Objective 1". Objective 1 is under review. As the hon. Member for Western Isles (Mr. Macdonald) said, it is not likely that objective 1 status will apply to any part of the United Kingdom within a short time. If we are to be positive, we must accept the proposal that has been put before the House in amendment No. 7.

It is right that we should take that course against the background of the costs being imposed. As my hon. Friend the Member for Belfast, South (Rev. Martin Smyth) said, a regressive tax is bearing especially heavily on those who opt for budget fares, and that can be said particularly of children.

The hon. Member for Edinburgh, Central (Mr. Darling) produced some remarkable arguments. He said that the revenue gained would benefit our constituencies. The revenue might benefit the hon. Gentleman's constituency, but it will certainly not benefit Northern Ireland constituencies, because in the current Government spending round—the hon. Gentleman may not appreciate this—expenditure in Northern Ireland as a whole is being reduced in real terms. The additional revenue will not come to any constituency in Northern Ireland.

The hon. Member for Edinburgh, Central sees a problem in raising £415 million. I am amazed. A year or two ago, we defeated the Government when they proposed increasing value added tax on domestic fuel. I did not hear Labour spokesmen expressing worries about lost revenue. The Government seemed to have no problem in filling a much greater gap than would ensue if the amendment were passed. It is remarkable, as the Minister has said, that Labour is now adopting Conservative policies in broad terms. It may quibble about details, but broadly it is adopting those policies.

Labour has been offered an opportunity this evening to defeat the Government, and what does it do? The answer is that it retreats. One wonders why Labour Members bother to continue sitting on the Opposition Benches.