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Mr. Bruce George (Walsall, South) : As a Rover owner who will not buy any more used cars from the hon. Member for Luton, North (Mr. Carlisle), may I ask whether the Minister appreciates that it is not xenophobic of Labour Members to want to see the retention of an indigenous motor vehicle capability? Is not it bizarre that, while the Secretary of State for Defence has encouraged defence manufacturers to diversify out of the defence industry, British Aerospace is going in the opposite direction? Is it the goal of Conservative Members to see unsuccessful British companies going under and the successful ones becoming subsidiaries of foreign operations?
Mr. Sainsbury : I have to disagree with the hon. Gentleman about what constitutes an indigenous industry. For me it is one that operates in Britain, creating jobs and wealth here. The ownership of the company seems not even secondary but far down the line of importance. I wonder whether the ownership of Hilton International, Jacuzzi or even Jack Daniels-- perhaps it is not well known that that is a British-owned brand name--makes a difference to the people who work for the companies that produce those commodities and the people who use them.
Mr. David Tredinnick (Bosworth) : My right hon. Friend's assurances that Rover will remain a separate enterprise are welcome, but does he not think that the escalating costs of German production and the fact that so many German companies are moving their production to Britain means that there is a distinct possibility that BMW will want to build BMWs at Rover plants in Britain?
Mr. Sainsbury : I cannot answer that. However, it is quite clear that BMW recognises the competitiveness of British component suppliers and thinks that there could be increased opportunities for them to supply parts for BMWs made in Germany. That is partly due to lower overheads and wage costs in the United Kingdom compared with those in Germany and is part of the benefit of our not having the social chapter.
Mr. Derek Fatchett (Leeds, Central) : Is it not clear that the guarantees and promises that the Minister gave in his statement have become less valuable as he has responded to questions? Will he tell us the force of the guarantees that have been given on investment in aerospace, research and development and job security? Judging from his words, is
Column 631it not a fact that those guarantees are simply not bankable? Is it not perverse that Conservative Members should claim a success for their strategy when the nature of that success means selling Britain's last wholly owned car firm to the Germans and to our competitors?
Mr. Sainsbury : I fear that the hon. Gentleman's remarks again betray a lack of understanding about the nature of modern manufacturing industry. Even more than that, they betray his total lack of understanding about what happens in a marketplace in which consumers and customers determine a company's success. It is they--if anyone--who guarantee job opportunities for the company and its suppliers.
Madam Speaker : I wish to make a short statement to the House about the use, and abuse, of the House's emblem, the crowned portcullis. My remarks are cast in general terms and affect all Members equally. Every Member receives a copy of the Members' handbook, which contains the following passage under the heading "Use of the House Emblem" :
"The designs and symbols of the House should not be used for purposes to which such authentication is inappropriate, or where there is a risk that their use might wrongly be regarded, or represented, as having the authority of the House. The principal emblem of the House is the Crowned Portcullis."
On 29 April 1981 the then Speaker made a statement to the House about a case of abuse of the emblem that had been referred to him as a contempt of the House. He said :
"I wish to make it clear to people outside the House, as well as to hon. Members, that the unauthorised use of the badge and name of the House of Commons is a serious matter."
While he did not take any further action in that case, he added : "Having given that public warning, I shall not be disposed to take as lenient a view of any future case brought to my notice."--[ Official Report , 29 April 1981 ; Vol. 3, c. 789.]
I judge that it is now appropriate to renew that warning. While it is one of the principal duties of the Speaker to uphold the dignity of the House, this is a responsibility undertaken equally by all of us when we have the honour of being elected to this place. Any intended use of the portcullis must be submitted for approval under the rules enforced, on my behalf, by the Serjeant at Arms and the Administration Committee, and no permission will be given if the use could possibly reflect adversely on the House, or be misunderstood. I hope that I have made abundantly clear the importance I attach to this matter.
Mr. Tony Benn (Chesterfield) : On a point of order, Madam Speaker. I refer to the ruling that you gave on 26 October in respect of the decision by the Home Secretary to decline to allow the president of Sinn Fein to come to Britain.
You, Madam Speaker, then properly said that it was a matter for the Government and that it was not your responsibility. However, for the president of Sinn Fein, armed with a British passport in which the Foreign Secretary asks all foreign Governments to let him go without let or hindrance and to afford all possible assistance to him, to go to an unofficial body in the United States, but not to be allowed to come here raises the question again. I ask you, Madam Speaker, to consider, not today, but at some stage, whether you could find a way of protecting Members of Parliament so that a British citizen who is not convicted or even charged with any offence can come to this country, as he can travel to America, Dublin, or to any other country in the world.
In view of the importance of the peace process that has begun being completed, I invite you, Madam Speaker, to consider carefully whether this would be the moment to indicate to the Executive that the two Secretaries of State should resolve their differences ; one asks every foreign nation to assist Mr. Adams, while the other excludes him from the Palace of Westminster, where he should be allowed to answer questions put by hon. Members of the House.
Madam Speaker : I have given this matter a considerable amount of thought. I recall very well that the right hon. Gentleman raised this matter with me last October. Nothing has changed since then so far as my responsibilities are concerned. I shall simply repeat what I said on that occasion : this is a matter for the Home Secretary, who is not responsible to me for what he does in his official capacity. It is not my intention to comment on any action that he may care to take.
Mr. Ron Davies (Caerphilly): On a point of order, Madam Speaker. Have you received any request from the Secretary of State for Wales to seek an opportunity to clarify in the House contradictory statements that he made outside the House? You, Madam Speaker, will be aware that last year the Secretary of State for Wales was required to appoint a new chair to the Welsh Development Agency, the previous occupant having left in disgrace, and the WDA was enmeshed in a web of fraud, corruption and mismanagement. In the summer, Mr. David Rowe-Beddoe was appointed.
Following months of speculation concerning Mr. Rowe-Beddoe's previous political activities, the Secretary of State for Wales, in an interview broadcast by the BBC in November, said :
"I have no idea what his political affiliations are."
I wish to put this point directly to you, Madam Speaker. It is now clear that the Secretary of State for Wales had received a copy of a curriculum vitae, which featured prominently a political position that Mr. Rowe-Beddoe was holding as chairperson of the Monte Carlo branch of Conservatives Abroad. That post was responsible for gathering-- [Interruption.]
Column 634The hon. Gentleman is now getting into an argument and putting forward a point of view. Although I am always interested in points of view outside the Chamber, I can listen only to points of order that are for me. Will the hon. Gentleman come to his point of order?
Mr. Davies : Two contradictory statements have been made : first, the Secretary of State for Wales maintained that he was unware of the political affiliations and, secondly, on Friday of last week, the press department of the Welsh Office put out a notice saying that he had received a copy of the curriculum vitae and was aware of the political affiliations of Mr. Rowe-Beddoe. It is quite clear that no right hon. or hon. Member could mislead the House, but it seems to me that that is a clear case of the public in Wales having been misled. I wonder whether you, Madam Speaker, could give guidance, first, on whether you will take it on yourself to ensure that the same strict standards of honesty which you maintain in the House will be maintained outside the House--
Madam Speaker : Order. I believe that the hon. Gentleman is now reflecting on the Secretary of State. He must not do that. If he wishes to do that, there are ways and means of doing it by means of a substantive motion. He must not reflect on the Secretary of State. I am sure that he will withdraw that reflection.
Mr. Davies : Of course I understand quite clearly that no right hon. or hon. Member can cast any aspersions on the integrity of any other Member of the House. I am concerned because contradictory statements have been made outside the House. I should be grateful if you could confirm, Madam Speaker, that if you receive any request from the Secretary of State for Wales to come to the Dispatch Box, you will facilitate that so that he can take the earliest opportunity to clarify those clear contradictions in his public position.
Madam Speaker : As the hon. Gentleman and all hon. Members understand, Cabinet Ministers and all hon. Members from all parts of the House are responsible themselves for the comments or statements that they make. As Speaker of the House, I cannot be responsible for the comments or statements made by any right hon. or hon. Member. In direct response to the hon. Gentleman's question, I have not been informed by the Secretary of State that he is seeking to make a statement on that matter. If he wishes to do so, he will certainly be facilitated.
In answer to Question 5, the Minister referred to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) exceedingly inappropriately, but nevertheless he did, as being a man of "shifty nature". That was allowed. Are we to take it that we can apply any adjective, such as "lying", providing we put the noun "nature" after it and get away with it? That would be an excellent parliamentary device.
Madam Speaker : When the hon. Gentleman reflects on the matter and looks at Hansard tomorrow, he will probably find that that description was a reflection on the policies of the hon. Member for Garscadden and not on him personally. I am very concerned about such matters and that is how I interpreted what was said.
Mr. Andrew Faulds (Warley, East) : On a point of order, Madam Speaker. May I revert to the matter of the portcullis? Is it not somewhat unfortunate that some years ago the relevant Committee took the decision that the shop downstairs, and I think other outlets as well, were allowed to use the portcullis in their commercial transactions for various bits and pieces of various sorts of commodities? Should that policy not be reconsidered? In view of your animadversions against the improper use of the portcullis, should not the hon. Member who has given rise to the raising of the issue
misappropriates the portcullis be subject to some sort of penalty?
Madam Speaker : I made it clear when I made my statement that I was issuing a general reminder to the House. I am not referring to individual cases, which, I will tell the hon. Member for Warley, East (Mr. Faulds), I deal with, having received advice from the Administration Committee. I have already dealt with the case to which the hon. Gentleman referred.
As regards the kiosk and the sale of goods from it, such sales are conducted on behalf of the House, with the entire approval of the House.
Mr. Bruce Grocott (The Wrekin) : On a point of order, Madam Speaker. My point of order arises out of the statement made earlier today. It affects the authority of the House and it seems to reflect a growing trend. When a
Column 636major issue of national importance is before the House, such as the sell-off of the Rover Group, the House is addressed not by a member of the Cabinet, but by a Minister of State. The same thing happened last week in the debate on housing, which is another matter of major national importance. I do not intend any disrespect to the hon. Members concerned, but a debate is downgraded if the Cabinet does not send someone of Cabinet authority to address the House. When matters of national importance are raised, surely someone of Cabinet rank should address the House.
Madam Speaker : The hon. Gentleman is aware that the level of the Minister who appears at the Dispatch Box is not a matter for me. I am sure, however, that his remarks will have been noted by those sitting on the Treasury Bench.
Mr. Llwyd : On a different point of order, Madam Speaker. Earlier this year, the Secretary of State for Wales made a plain statement that he was unaware of the political affiliations of Mr. David Rowe-Beddoe, the incoming chairman of the Welsh Development Agency. It is clear from the evidence available that he well knew at the time what the political affiliations were. Has--
Madam Speaker : Order. That is the same point of order. Having dealt with it, I refused a point of order from a Member on the Government side. The hon. Gentleman is taking advantage of my tolerance and generosity on this matter. I have dealt with it and it must be left there.
Sir Peter Emery (Honiton) : On a point of order, Madam Speaker. The hon. Member for The Wrekin (Mr. Grocott) made a point of order, with which you dealt, but it must be pointed out that the Minister replying today made it clear that the Secretary of State was out of the country--he is in the far east--which is why he was not making the statement today--
Madam Speaker : Order. The House is inclined to get into a bit of a tangle on such matters. The Secretary of State was on the Front Bench at the time, which was why the hon. Gentleman for The Wrekin made that point of order. He wondered why another Minister in the Department should make the statement.
Mr. Ray Powell (Ogmore) : On a point of order, Madam Speaker. Last weekend's press, particularly the Welsh press, contained a statement by the Public Accounts Committee regarding the funding of the Welsh Development Agency and all that has gone on in the investigation that has been conducted there. Can you advise me on how to ask the appropriate Ministers about the publication of the Public Accounts Committee report? What channel should I use to ask my questions?
Madam Speaker : As the hon. Gentleman may be aware, I never give advice on procedure across the Floor of the House. The hon. Gentleman is a long-standing Member of the House who is rather shrewd and well aware of how to get things done. I shall, however, point his nose in the direction of business questions on Thursday as a way to begin.
in the Chair. ]
"but subject to (6) below.".
No. 3 in page 22, line 43, after "aircraft", add--
"(6) This duty shall not be charged until the Government has presented a report to Parliament on its effects on the economies of the United Kingdom islands, on the travelling public and on the air transport industry and tourism.".
Mr. Smith : It gives me pleasure to move this amendment, which calls on the Government to submit to the House a report on the full implications of air passenger duty before the tax is introduced. It gives us an opportunity to debate the general principle of the tax in relation to our objections and those of many others outside the House.
Not only was this yet another tax which Conservative Members omitted to tell the electorate anything about in their election addresses, but it was brought forward with no prior consultation with those most affected, the travelling public, the island communities of the United Kingdom, on whom it has a particularly serious affect, the airline industry or the tourism industry.
Our call for a report to Parliament is all the more justified because the Government have no mandate whatever for this tax, any more than they have one for the other new impositions and tax increases which they are inflicting on the public. As we all now know, and as the country knows, the Conservatives fought the last election on a false prospectus, as the people are only too aware. Bitter experience has taught them that they can never trust the Conservatives on tax again.
It should worry Conservative Members that, according to a poll reported in yesterday's The Sunday Mirror, 69 per cent. answered with a resounding no when asked whether they would ever trust the Conservatives on tax again. Three quarters of the poll sample said that tax would be very or fairly important in determining how they voted next time.
The Opposition are most concerned about the air passenger tax because it will add to travellers' costs. It also risks destroying jobs in the airline and tourism industries, and it will add to industry's bureaucratic costs. It is discriminatory as between air and other modes of travel. It impacts unfairly on the people and economies of the
Column 638smaller islands of the United Kingdom ; and its imposition is the thin end of a wedge which threatens to drive the air tax sky high. Even at the levels at which the duty is proposed now, there will be an unwelcome impact on passengers and holidaymakers and those on whose jobs depend on providing for them. As Keith Betton of the Association of British Travel Agents said, as reported in The Times of 1 December,
"the tax would mean higher air fares, lower passenger volumes and a reduction in air services, none of which will be to the consumers' advantage' ".
The same article pointed out that the tax on flying will push up fares on some routes in Britain by about 15 per cent., and it is feared that it will lead to the closure of several small airlines. On top of all that, we should note the cost to the airline industry, now conscripted as a tax collector, which will face the administrative burden of collecting the duty.
Airlines such as British Airways have warned that the duty could prove costly and complicated to administer. Aircraft operators with no business or fixed establishment premises in the United Kingdom will be obliged to appoint fiscal representatives to ensure compliance with the tax regulations, and that may discourage some marginal overseas airlines from flying out of the United Kingdom. There are a number of other problems with the administration of the tax, such as the unfair asymmetry between the respective obligations of Customs and Excise and air operators, in respect of late payments and refunds of duty. It cannot be right that Customs should have to pay interest only if delay is due to its own errors, whereas the taxpayer has to pay interest for any reason, even if an error by the Customs causes a delay.
We shall be pressing these matters further in Standing Committee, but there are a number of other points on the administration of the duty which I should raise now. As I said earlier, the industry has had an inadequate time to respond to these proposals. I have with me a copy of a letter sent to the Paymaster General, dated 27 January 1994, from Sir Colin Marshall, the chairman of British Airways. He points out that he was asked to submit comments on 30 November and to supply them by 31 January. It is clear from the tone of his letter that he was a little taken aback by the fact that the deadline for reply that he was given sees the Government debating this clause on the Floor of the House. That shows just how inadequate the time has been for the industry to respond.
I take it that the Paymaster General has the letter and the submission with him today. He should tell the House and the wider public whether the Government intend to respond sympathetically to British Airways' sensible and pertinent points. The airline points out that the duty should be accounted for by the airline that collects it. It points that, as proposed, the collection of duty from passengers will be done by the airline selling the ticket, but payment of the duty will be done by the airline carrying the passengers on the dutiable sector. There are no administrative systems for airlines to identify at uplift which passengers are eligible to pay the duty. It would clearly be very expensive for British Airways or other airlines to put such systems in place. These are the sort of matters which could and should have been gone into thoroughly if full consultation with the airline industry and all affected had taken place.
British Airways' second point concerns the timing of the collection of the duty. It says that the duty should be
Column 639payable after it has been received by the airline responsible for paying it. That is not an unreasonable request, because, in many cases, the Bill requires airlines to pay the duty before they have received it. That is because of the delay in collecting the tax from agents or other airlines. Such a system would give rise to onerous cash flow difficulties.
British Airways suggests that duty on domestic journeys should be charged at £2.50 per direction rather than £5 per round trip. It states :
"if the duty is simply accounted for by the uplifting carrier, there are no systems to identify which leg of such a journey the passenger is really on".
That would involve airlines in much additional administration. They would have to check the wording on millions of tickets, and that would be costly. BA suggests a constructive way around that. British Airways says that all passengers whose journey commences and terminates outside the United Kingdom should be exempt from the duty. That is because of the importance to British Airways and other airlines of passengers who stop over in London or in other United Kingdom cities during an international journey. BA says that one third of its passengers through Heathrow are transfer passengers and that charging duty on them would render BA uncompetitive. It says that it is competing for business with foreign countries by offering stopovers in the same way as some other airlines, such as KLM which stops at Amsterdam. Having to add the duty to the fares of passengers coming through the United Kingdom would damage BA's competitiveness. British Airways suggests that all passengers for whom no fare has been charged should be exempt from the duty and says that a number of passengers fall into that category. The obvious ones are the members of staff travelling for duty purposes. For example, crew members have to be in position to operate a service somewhere else. But BA says that there are other free flights for charitable or compassionate reasons. It states that it would seem inappropriate to impose the duty on passengers such as the seriously sick children that the airline carries each year on its "Dreamflight" charters to Florida. Those issues will have a great resonance with the wider public. The legislation is indicative of the Government's hurry. It has been rushed without full consultation with the industry, and the full implications of its administration and the unfair and damaging effect of many of the provisions have not been thought through.
British Airways says that the effective date of the duty should be delayed until at least 1 November 1994 and preferably until 1 January 1995. The Association of British Travel Agents says that tour operators selling short -haul holidays generally have summer brochures running to the end of the season on 31 October. It says that imposition of the duty from 1 October will leave those operators having to pay the duty for a month without having collected it from the passengers. Moving the effective date back a month would remove that problem.
As I have said, another area of widespread concern in the industry is the discriminatory impact of the tax as between air travel and other forms of transport. I hasten to emphasise that we suggest that it would be better not to impose it on air travel, and not that it should be extended
Column 640to other forms of travel. Plainly, the travel industry must be worried about such an extension. In The Independent of 1 December, Sir Colin Marshall said :
"The new air passenger duty proposed discriminates against this nation's most successful transport sector and penalises airlines while rail, coach and ferry companies will escape, as will the Channel tunnel. It will mean, in effect, higher fares for virtually everyone at a time when UK airlines have been working hard to keep ticket prices down."
Sir Michael Bishop, the chairman of British Midland, Britain's second biggest scheduled airline, said :
"Air travellers in and from Britain do not deserve to be singled out in this way. Why should they be forced to pay more and why should road, rail and sea travellers be exempt? This will make air travel less competitive against other forms of transport and we greet the decision with great anger."
I await with interest the Government's response to those angry complaints by the industry's leaders about unfairness.
One of the most serious aspects of the unfairness of the tax is its impact on travel to and from the smaller islands of the United Kingdom. If the Government's argument is that the duty is some sort of luxury tax, it is particularly flawed in relation to travel to and from the Scottish islands, Northern Ireland and a number of other islands around the British Isles. In such cases, both for business and family travel, there is often no realistic convenient alternative to air travel. It has been estimated that the impact on prices on those routes will be particularly serious.
The article in The Times from which I quoted earlier put the possible increase as high as 15 per cent. Surely the Government must see that that would be serious for the communities affected and their economies. In a letter to the Paymaster General, dated 15 December, John Parr, the director general of the Air Transport Users Coucil, said :
"the Council would urge you most strongly to exempt passengers flying to and from Northern Ireland, the Scottish Islands, the Isle of Man and the Channel Islands from liability to the tax. On none of these routes is there any acceptable alternative to air transport for business purposes, so that the local economies are heavily dependent on the provision of adequate air services. Any significant reduction in the latter as a result of the tax would inevitably put frequency--a prime requirement of business flyers--at risk and might even cause some services to be withdrawn altogether. The economic consequences would clearly be extremely serious for the areas concerned." In a letter of response dated 13 January, the Paymaster General stated :
"While I note your argument about exempting all passenger flights to Northern Ireland, the Scottish Islands, the Channel Islands and the Isle of Man from the duty, it would be difficult to justify relieving flights in one or more particular areas but not elsewhere. The result of such concessions would undermine the principle of the duty and reduce the revenue to be raised from it which would have to be made good from elsewhere."
There is no understanding of or even reference to the important point about the economic effect on the livelihood of the islanders, their tourism, economic development and family links and visits. It is abundantly clear that, as elsewhere in the Budget, the Government's desperation to pay the bills resulting from their incompetence counts for everything and the real needs of the economy count for nothing.
To rub salt in the wounds, in his Budget speech the Chancellor tried to have us believe that the exemption for journeys undertaken on aircraft of less than 10 tonnes take-off weight or with fewer than 20 passengers was somehow intended to help the islanders. When my hon. Friend the Member for Western Isles (Mr. Macdonald) said
Column 641that 90 per cent. of air journeys in his constituency would still be caught by the tax, did the Government have a rethink? Of course not ; they just forged on, doubtless feeling that a Government already tainted with so many broken promises need not worry about such details. After all, the Chief Secretary has told the nation that the little promises do not matter. The Opposition believe that it is imperative that flights to the other islands of the United Kingdom be exempted from this duty. We have tabled amendments to that effect and shall return to this crucial matter during later proceedings on the Bill, when the Government will rightly be put under very strong pressure to think again about this duty's very severe impact on the communities to which I have just referred.
The Government will undoubtedly argue that, notwithstanding its probable damaging effects and its unpopularity, the air passenger duty is being introduced at a modest level. No doubt they will ask what all the fuss is about. In answer, we need only refer to the danger--indeed, on Second Reading my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) referred to it as the likelihood--that, once the tax is in place, the initial levels will be the thin end of the wedge. What the industry and the travelling public fear is that a Chancellor pressed simultaneously by the fiscal deficit and the need for pre-election bribes on marginal income tax rates will not be able to resist putting the air passenger duty up as part of the process of year-on-year tax increases to which the Conservatives, in breach of all their election pledges, are now committed.
I invite the right hon. Gentleman to give the Committee an assurance that the air passenger duty will not be raised before the next general election. As it is, this tax promises to be just a part of the Conservatives' sky- high taxation. That is why Opposition Members will vote for the amendment and against the clause.
The Paymaster General (Sir John Cope) : I should like at this stage to make some brief preliminary remarks, although I hope to be called at a later stage so that I may reply in more detail to points raised during the debate, including some of those made by the hon. Member for Oxford, East (Mr. Smith).
The amendment draws attention to the potential effects of the new duty. These and all the other factors were considered when we were deciding to introduce the duty and were concerning ourselves with structure, rates and exemptions. As all hon. Members know, the purpose of the tax is to raise revenue--a matter that has been discussed at length in this Chamber.