Air Passenger Duty

Part of Opposition Day — [8th Allotted Day] — Northern Ireland – in the House of Commons at 4:57 pm on 23rd October 2013.

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Photo of Nicky Morgan Nicky Morgan The Economic Secretary to the Treasury 4:57 pm, 23rd October 2013

Madam Deputy Speaker, it is a real pleasure to speak in this debate, particularly given that you are in the Chair. It does not seem that long ago that we were meeting on the Terrace and you were giving me advice on how to become a Member of Parliament—and now look at where we both are.

It is a pleasure to respond to Sammy Wilson. I thank him for raising the issues, which relate to the two greatest challenges facing the Government and Britain today—rebuilding the British economy and restoring the public finances. The House well knows the state of both challenges when the Government came into office. The economy was still reeling from the impact of the recent banking crisis and Britain had the largest fiscal deficit in our peacetime history.

The hon. Gentleman started talking about zealousness, particularly in respect of green taxes. I thought he was going to talk about zealousness in tackling the fiscal deficit, although I am not sure that I heard that from him. The Government have had to face up to those challenges and take tough choices. My right hon. Friend the Chancellor committed to tackling our budget deficit and getting our national debt under control. Fixing the public finances is vital to maintain confidence in Britain and the stability that is an essential condition of growth, as the hon. Gentleman mentioned, and recovery.

In recent months, the statistics on gross domestic product, employment, business investment and consumer confidence have all shown that our efforts are beginning to bear fruit. The process of recovery is, of course, far from complete, but, building on the stable foundations that the Government put in place, the economy is now healing. I am sure that the whole House welcomes the signs of recovery so far and looks forward to seeing them continue.

In particular, I am sure that the hon. Gentleman will join me in welcoming the recent good economic news from Northern Ireland. This year, Northern Ireland’s exports have risen by 4% in the second quarter of the year and in September they rose at the fastest rate in nearly six years. September also saw the third consecutive month of grown in Northern Ireland’s GDP, with activity rising in the manufacturing, retail and services sectors. It also saw the third consecutive month of rising private sector employment, while total jobs have grown by more than 5,000 over the course of the year. That has kept unemployment in Northern Ireland well below the UK average and the fourth lowest of the 12 UK regions. Just as Northern Ireland makes a key contribution to the UK economy overall, growth and recovery in Northern Ireland are making a key contribution to the UK’s wider recovery.

Supporting strong transport links is a key part of building our economic recovery. The Government are therefore bringing forward record investment in transport infrastructure, which the hon. Gentleman mentioned, to ensure the connectivity of all parts of the United Kingdom, including Northern Ireland. That is why in this year’s spending review we announced a £20 million fund to improve air connectivity between London and the rest of the United Kingdom. Where the case is made for a public service obligation, the Government will use this fund to support regional air links. Northern Ireland will be able to bid for that support. This would build on existing support for the Northern Irish economy—for example, the additional £94 million of capital spending power for the Northern Ireland Executive announced in this year’s Budget and the action plan set out in the Northern Ireland economic pact published this June.

Ensuring sound public finances is indispensable to economic recovery. With forecast revenues of £2.9 billion in 2013-14, air passenger duty, or APD, makes an essential contribution to the Government’s strategy for tackling the current budget deficit and getting debt under control.