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Mr. Andy Slaughter (Ealing, Acton and Shepherd's Bush) (Lab): My hon. Friend is making a good point, which has reached the nub of the issue. The Opposition have overstated their case by attacking the whole concept, but I hope that my hon. Friend agrees that the Government need to reconsider the anomalies in the system, which penalise some countries, such as those in the Caribbean—we have heard about others—in a logically ridiculous and unfair way.
Ms Abbott: I entirely agree. The system that the Government propose does not bear examination. I repeat that the sums may be relatively small for those travelling club class to a top resort on the north coast of Jamaica, but they are large sums for my constituents, who perhaps save for a year or two out of tiny incomes. I cannot for the life of me understand why the Government would want to penalise minority communities in our big cities from the Caribbean and Asia in that way, because people will find the sums involved onerous and hard to afford.
Sarah Teather: The hon. Lady is giving a very good speech and I absolutely agree with the points that she is making. The briefing that the Caribbean Council has sent to all MPs says that a family of four travelling economy to the Caribbean—not club class, as she suggested—will pay £300 extra in 2010. That is a substantial amount of money.
Ms Abbott: We have to look at the incomes that people are earning. We are largely talking about people who are in low-paid public sector jobs or other low-paid sectors of the economy, and for them £300 is a lot of money. Having to find £300 extra to see their aunties or grandparents at Christmas or attend a wedding or funeral will cause real pain for families in my constituency, as well as people in Birmingham, Manchester and other places.
The other thing to say is that sometimes an arbitrary distinction is made between tourism and travel by friends and relatives. Jamaica could not sustain itself without the money spent by relatives who go home regularly and, for example, give money for school fees or invest. The economic consequences for the Caribbean are therefore serious.
As the House has heard, the system also seems to be wholly arbitrary; it really is a case of a Treasury civil servant with a compass. It means that people will pay more air passenger duty going to the Caribbean than they will going to Hawaii. It scarcely makes sense to have the whole of north America in the same zone, when America stretches from the Pacific to the Atlantic.
Mr. Bone: The hon. Lady is making a powerful speech. Is not one of the unintended consequences of the measure that people will fly to Miami and then change planes to fly down to the Caribbean? That will mean taking two flights and causing much more pollution, so I am not sure that the Government have thought the measure through.
Ms Abbott:
Absolutely. As someone who flies to Jamaica most years, I can tell Ministers that travel agents will recommend, particularly to families visiting
relatives, that the cheapest way would be to take a cheap flight to Miami and then take another flight onwards. That will not help with emissions; in fact, it will make things worse. That is another indication that Ministers need to look at the proposal again.
The proposal has already caused much unhappiness in Caribbean countries—we have heard about the Prime Minister of Jamaica and other regional leaders who are concerned—and among the Caribbean community here. I have received many letters from people who have been made aware of the issue and are concerned. They cannot believe that a British Government are seeking to penalise people from the Caribbean in that way. However, I would like to put on record my thanks to the Chancellor of the Exchequer, who met a small group of us earlier this week to discuss the issue. I am glad that the Government are at least listening.
In conclusion, the Caribbean has historic ties with this country and important community links. To go forward with the air passenger duty in its current form would send an unfortunate signal to those in the Caribbean community about the respect and concern that the Government have for them. It is not too late to revisit the proposal. All of us in this House understand the environmental reasons behind it, but I hope that enough has been said in this debate to make the Government understand that the four-zone system is widely seen as unfair and not seriously based on environmental considerations, and that it will have disproportionate effects on key supporters and Commonwealth countries, including India and Pakistan, as well as those in the Caribbean. For the sake of my constituents, the Caribbean community in this country and Caribbean leaders, who have gone to enormous trouble to make their case, I urge Ministers to reconsider the proposal.
Mr. Jeremy Browne: Thank you for giving me an opportunity to speak to amendment 1 and all the issues that are thrown up as a consequence, Madam Deputy Speaker. I congratulate the hon. Member for Hammersmith and Fulham (Mr. Hands) on the intelligent way in which he set out the arguments. I also congratulate the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) on making in such a compelling fashion the case that I, too, wish to make.
There are two main arguments that I wish briefly to explore. The first is about the desirability, in the view of my party, of having a system of aviation taxation based on each plane that travels, rather than on each customer who travels. It is worth momentarily setting the context for that policy preference. Aviation in the United Kingdom is an increasingly large contributor to the overall output of carbon dioxide. Six per cent. of the UK’s total carbon dioxide emissions now results from aviation, and that figure is rising rapidly—far faster than, for example, the contributions made by other forms of transport or by buildings to overall CO2 emissions. There is therefore an important issue to address. How can we try to ensure that the projection of rapidly increasing CO2 emissions is limited, rather than rising inexorably in the years and decades ahead? Most people accept that CO2 emissions resulting from aviation are likely to grow as a proportion of CO2 emissions overall. The key is to try to ensure that they grow more slowly and make up a lower percentage of overall emissions than they would otherwise.
For that reason, our desire as a party is to try to find a system that allows people to fly—we realise that in many circumstances, although not all, people need to fly for work or leisure—but that ensures it is done as efficiently as possible. I thought that the analogy drawn by the hon. Member for Wellingborough (Mr. Bone) was a good one—perhaps it is sometimes easy to think of such matters in quite straightforward terms. A car with four people in it is obviously a much more efficient way of transporting four people from A to B than four cars each with one person in. It is for that reason—a reason that is, I admit, partly to do with congestion, but partly to do with helping the environment—that some councils have explored the possibility of reserving lanes for cars with two or more passengers, because we need to be more efficient and intelligent in using CO2-emitting fuels.
On the same principle, it would clearly be desirable to have planes filled to capacity, or at least to give airlines the incentive to fill them to capacity where possible. The issue is therefore about incentivising those companies, partly to make their planes fuller but partly not to continue with this strange system whereby planes are flown around empty in order to get them to different destinations—that may sometimes be necessary, but it is reasonable to try to incentivise airlines to do it as little as possible—and partly also to introduce more fuel-efficient planes. I recognise that the Government’s policy will create those incentives. However, having a per plane duty rather than a per passenger duty will create even greater incentives than the Government’s system.
The hon. Gentleman also made the point that we should try to ensure that we do not create perverse incentives for customers to avoid the system that the Government are putting in place by taking a short-haul flight and then a long-haul flight, or vice versa. One always needs to consider when looking at such systems whether people will find ways around them that may be economically advantageous to them, but which will undermine the basic environmental policy that the Government are seeking to promote. That is the background to the issue.
2.30 pm
The second part of my speech relates to the issue that has been so eloquently discussed by the hon. Members for Hackney, North and Stoke Newington and for Hammersmith and Fulham—namely, the division of the world into four bands for the purpose of assessing levels of air passenger duty. The hon. Member for Hackney, North and Stoke Newington said that the system was arbitrary, but it is not entirely so. There is a method to it. The lines that have been drawn are straight lines, not jagged or wobbly ones. What is strange about the system is that its consequences do not appear to have been fully thought through.
There are a number of anomalies in the system, and the hon. Member for Hammersmith and Fulham has been particularly imaginative in thinking of potential pitfalls in the system being proposed by the Government. The overwhelmingly obvious anomaly is the one that has been raised by my hon. Friend the Member for Brent, East (Sarah Teather), the hon. Member for Hackney,
North and Stoke Newington and others—namely, the fact that the Caribbean is in a different band from the United States.
In an era in which anyone with a computer can put in the names of two cities and find out precisely, to the nearest metre, the distance between them, it seems strange that we need to base the system on capital cities. It would be perfectly feasible to base it on the actual distance of each flight. We could have a tax system that charged a number of pence per mile, for example. Or, if that were too complicated to administer, we could have a banding system in which the bands applied to each individual flight, rather than to the country that was being visited and to the location of the capital city in that country. The situation becomes particularly anomalous when the country in question is very large, because the capital city might be located in an area that is unfavourable to travellers—or, indeed, in one that is more favourable than the rest of the country.
I wonder why the capital city has been chosen as a measure. We were talking about the United States of America earlier. Los Angeles, which is eight time zones away from London, is a much bigger city than Washington DC, so why is Washington DC regarded as the most suitable point for judging the tax level of journeys from the United Kingdom to the United States? New York would be just as good an example, or Chicago. There are any number of cities in the United States that are bigger than Washington DC, which is not a tourist destination for many people. Far more British people go to Florida, for example, which is further from here than Washington is. It is slightly strange that the Government have chosen to use capital cities as a measure, and it is reasonable to ask them to look again at whether this is the best system to use.
I would like to suggest an alternative system. I understand that paying more tax to travel further is a reasonable proposition. I do not doubt that there are people on low incomes who wish to travel to distant parts of the world, but most of us accept the need to reflect the environmental damage done by long-haul flights. It is the anomalies in the system that people are uncomfortable with.
I do not know whether the Minister, in the short time that she has been in her job, has had the opportunity to consult her officials and other Ministers and to consider an alternative system. If she is attached to the idea of four bands, we could keep them, but each individual flight could be assessed within those bands. There is only a limited number of destinations that one can fly to directly from the United Kingdom, and it would take very little time to assess any new routes that came into effect. In that way, the Government could retain the simplicity of a banding system—they could introduce more than four bands if they wished to do so—but each individual flight could be assessed within one of the bands.
Such a system would avoid two places that were close together being banded separately. It would also avoid the even more anomalous situation—the example of the Caribbean and the United States has been mentioned—in which places that are much further from the United Kingdom are placed in a lower band than places that are more proximate to us. I hope that the Minister will consider that proposal, for reasons of fairness as well as for environmental reasons.
Mr. Bone: On the environmental issue, there is a further perverse effect. Most environmental damage is done on take-off and landing, so short-haul flights are, by their nature, much more environmentally damaging. They are often used as an alternative to going by rail. If we are concerned about the environment, perhaps we should be concentrating more on short-haul flights than on long-haul flights, to which there is no such alternative. Furthermore, the aircraft used on long-haul flights tend to be the most efficient.
Mr. Browne: I am grateful to the hon. Gentleman for that intervention. Short-haul flights definitely do more damage per mile travelled than long-haul flights, and it is important to look at the alternatives, particularly within the United Kingdom. I accept that the islands of Scotland and perhaps places such as Aberdeen are a considerable distance from London, but it is important to ask whether people should be routinely flying from London to Manchester, for example, when it seems much more sensible to make that journey by rail most of the time.
The hon. Gentleman’s intervention also raises the question whether people might feel incentivised to take a short-haul flight from the United Kingdom before taking a long-haul flight to a destination further away, in order to avoid paying these duties. That means that we will need to consider the tax regimes in nearby European countries. We must also be alert to the risk of creating a system that unfairly penalises some destinations. The example that illustrates the greatest unfairness involves the Caribbean, which is only four or five times zones from here yet is treated for the purpose of this rule as though it were much further away.
Mr. Angus MacNeil (Na h-Eileanan an Iar) (SNP): The hon. Gentleman is correct in his assertions about short-haul flights. Does he agree that this legislation could present greater opportunities for Schiphol and Shannon?
Mr. Browne: That is a hazard, but I do not want to go so far as to say that any taxes on aviation will threaten our airline industry if other countries’ taxes are lower. The logic of that position would be that we should have no aviation taxes at all, and I do not agree with that proposition. However, we need to have a system in place that incentivises airlines to be more environmentally efficient, and that reflects the polluting effect of flying long haul without building in anomalies that unfairly penalise some categories of passenger and some countries whose economies rely on trade and tourism.
Mr. Slaughter: I am confused, which sometimes happens when I listen to Lib Dem policy. Is the hon. Gentleman agreeing with my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) that the anomalies in the Government’s proposal need to be corrected, or with the hon. Member for Brent, East (Sarah Teather) and the official Opposition, who believe that the whole system needs to be done away with and replaced by a new one, which might be more expensive for people travelling to the Caribbean?
Mr. Browne:
I think I was making myself perfectly clear, but the hon. Gentleman might have chosen not to listen carefully to what I was saying. I have made two points. One was that I disagree with the Government’s
view that we should tax per passenger; I think that we should be taxing per plane. I hope that that concept is straightforward and easy to understand. I disagree with the hon. Member for Hackney, North and Stoke Newington that the system is arbitrary.
My second point relates to the bands of 2,000 miles. Everyone can agree that the capital cities are within those bands, but I believe that that is a bad way to run the system. I was suggesting that the distance covered by each individual flight should be measured. For example, we could measure the distance between London and Kingston in Jamaica, and the distance between London and Miami. I suspect that they would both fall within the same band, under a new banding system. That would be far less anomalous than the present system, in which a flight from London to Miami is judged according to the distance between London and Washington DC. That seems to be a very strange system.
Ms Abbott: The hon. Gentleman may think it is an anomalous system, but a Jamaican nurse who has saved for two years to fly home and finds that she has to pay substantially more in air passenger duty than someone who is flying all the way to Los Angeles would think the system looked pretty arbitrary.
Mr. Browne: I do not want the hon. Lady to misrepresent my position, because I am an ally of hers and it would be a great shame if she thought there was political advantage in pretending otherwise. Both she and I are trying to persuade the Government that it is unreasonable to have a system that charges people more in tax to fly a shorter distance. That is what we are saying, while the Government propose that people should pay more in tax to fly to the Caribbean than they should to fly to San Diego or Los Angeles. I think that that is a bad system and I have made that completely clear. My understanding is that the hon. Lady agrees that it would be better if we based the system on measuring the distance of each flight and taxed either per flight or had a banding system that took each individual flight into account rather than the distance from London to the country’s capital city. I venture to suggest that unless the system is extremely complicated, the tax levels for Florida would be the same as for the Caribbean islands, which the hon. Lady would agree to be a fairer system.
I conclude with this parting shot—I very much hope that the hon. Member for Hammersmith and Fulham presses the matter to a Division. The case is clear cut and there is a genuine grievance, which has been articulated by the hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter). I anticipate that he will vote with me, my hon. Friends and Conservative Members to try to make the Government think again. The case has also been articulated by the hon. Member for Hackney, North and Stoke Newington, who I also anticipate will join us in the Aye Lobby to ensure that the Government are made to understand that this is a great grievance for many people. We need to come up with a system that takes account of the environmental consequences of aviation but does not at the same time create unfair anomalies that penalise our constituents.
Mr. Neil Gerrard (Walthamstow) (Lab): I shall be brief as I do not want to repeat what has already been said.
Like many hon. Members, I met the Prime Minister of Jamaica when he came here to raise the issue of air passenger duty, so I heard the case that he, his Tourism Minister and the Caribbean Council have made about the effects of the proposed system on the Caribbean. My hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) has gone through the case in detail, so I shall not repeat it all.
The key issues for the Caribbean are quite simple. The first is the importance of tourism. As my hon. Friend said, the collapse of the traditional economy in the Caribbean—the Jamaican Prime Minister specifically mentioned the collapse in the bauxite market—has made the islands much more reliant on tourism than ever before. Anything that discourages people from flying to the Caribbean, as opposed to destinations nearby such as Florida, will have an impact on the area.
Secondly, people living in the UK, including British citizens, whose families are still living in the Caribbean and who need to visit them—I have been approached by many people in my constituency about this—are also affected. Tourists have a choice about where they go and are able to weigh up the cost of fares, but the people visiting their families have no such choice; they either visit them or they do not. The only choice they might have is to go via a different route. That could mean, as was mentioned earlier, people taking a short-haul flight to, say, Paris and then flying from there across the Atlantic because it is cheaper, which would not particularly help our airline industry or do anything to deal with pollution. We should be aware that people who need to visit their families may not be at all well off. An increase in passenger duty from £160 to £300 in a couple of years is not an insignificant amount of money for a family of four wanting to make those journeys.
Let me say a few words about the alternatives. I am not necessarily convinced that the amendment provides the answer; it simply proposes to move to duty per plane. We should be looking at a system more closely connected to distances of flights. I am told that such an approach would cause all sorts of administrative problems, but, frankly, I do not believe it. As was said earlier, we can look up in 10 seconds on Google the distance between any two cities in the world, and all the airlines provide the air miles when we fly—presumably based on the actual distances of the flight.
Sarah Teather: I absolutely agree, and I tabled an early-day motion that incorporated those factors. The hon. Gentleman is right—it is not as if airports get up and move from one week to the next; they are fixed points, so it should not be beyond the wit of the Government to work out how far apart they are.
Mr. Gerrard: Almost inevitably, the information is there already.
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