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Air Passenger Duty

Oral Answers to Questions — Treasury – in the House of Commons at 10:30 am on 25th January 2007.

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Photo of Shailesh Vara Shailesh Vara Shadow Deputy Leader of the House of Commons 10:30 am, 25th January 2007

Whether he plans to offset the increase in air passenger duty in February with a reduction in revenue elsewhere in the tax system.

Photo of John Healey John Healey The Financial Secretary to the Treasury

The changes to air passenger duty will secure resources in the coming spending round for our priorities on the environment and on transport.

Photo of Shailesh Vara Shailesh Vara Shadow Deputy Leader of the House of Commons

I am grateful to the Financial Secretary for those comments. Given that this morning's Treasury Select Committee report shows that there is legal uncertainty regarding the duty, will he confirm that proper legal advice was sought and obtained? In the interests of open and transparent government, will he publish that advice?

Photo of John Healey John Healey The Financial Secretary to the Treasury

The announcement was made on 6 December, the duty point is take-off and the charge increase will come into effect on 1 February. It is perfectly normal to announce such tax changes in advance, and the way in which we have done that is perfectly legal. From 1 February, the change will have the full force of the law.

Photo of Paul Goodman Paul Goodman Shadow Minister (Childcare), Treasury

The Treasury Committee said definitively today:

"the liability to pay Air Passenger Duty at the new higher rates will effectively be incurred before the House of Commons has authorised the increase".

The Chancellor is evidently too busy working out whether he supports England or Scotland in the World cup to bother with the conventions of the House. Will the Minister guarantee unequivocally that the APD increase on 1 February will be lawful?

Photo of John Healey John Healey The Financial Secretary to the Treasury

The way in which we have announced and are implementing the rise is totally in line with the conventions of the House. It is precisely what we did when we announced in the 2005 pre-Budget report an increase in the rate of the supplementary charge on North sea oil, which was introduced with effect for accounting periods from 1 January 2006. The Budget resolutions were laid alongside the Budget that followed and that was legislated for in the Finance Bill. We are following precisely the same precedent and procedure with the proposals for the increase in air passenger duty.