I apologise in advance to you, Mr Deputy Speaker, and to the general public, for the repetitive nature of the comments I am about to make. I genuinely believe that the more people say these things, and the more often we say them, the more the Government will listen.
APD was introduced under the guise of an environmental tax, but all hon. Members know that it simply is not an environmental tax. No money from it goes back into the aviation industry or into the environment—nothing is ring-fenced. However, it is discriminatory against people who live north of the Watford Gap, because they have to pay twice, which is grossly unfair. From that point of view, will the Minister consider the possibility of ensuring that people do not pay APD twice, even if he does not abolish or freeze it, to ensure that it does not discriminate against people?
The APD has a significant cost impact on passengers, and therefore on the UK’s competitiveness and on the profitability of the UK aviation industry. The UK has the highest air passenger tax in the world. Taking air tax, air ticket taxes and airport charges together, the World Economic Forum ranks the UK 134th out of 138 countries. Only six European countries tax passengers
for international air travel, and UK rates are twice the level of the next most expensive tax, which is levied in Germany.
A number of colleagues have identified examples of APD. A Chinese family of four flying to the UK must pay £648 APD to fly premium economy. They would pay only £134 to fly to France, and £141 to fly to Germany. A British family of four holidaying in Florida must pay £260 APD to fly economy. A German family of four would pay £141, and a French family would pay just £133.
We should also look at comparators from other European countries. Aviation duty considered by the Belgian Government was never implemented because of concerns about the impact on industry. In the Netherlands it has already been abolished. In Germany, it has led to a significant reaction from airlines, including the withdrawal of low-fare airline capacity. Denmark briefly introduced a ticket tax, but it has since been withdrawn, and of course we know what is happening in Ireland. In Malta, a duty was removed following a legal challenge from the European Commission, with the tax being described as “discriminatory”.
Several hon. Members have asked for an impact assessment, but that has been being carried out for the past 18 years. Currently, the aviation industry contributes £49.6 billion, or 3.6% to UK GDP, supports 921,000 UK jobs, and pays more than £7.9 billion in tax. Glasgow airport in my constituency provides 5,000 jobs both directly and indirectly.
As has already been said, the APD will cost Scotland more than 2 million passengers per annum. Up to 5% of long-haul demand may be lost. There will be a loss of competitiveness, which is important to the economy, and it will have an impact on the tourism industry, with more than 148,000 trips and £77 million in visitor expenditure lost over the next three years. By 2016, APD will cost the Scottish economy up to £210 million in lost tourism spend per annum. Those figures are from York Aviation.
The aviation industry is under severe pressure. Hon. Members may recall the recent terrorist attacks in Glasgow. BAA, the airport authority, has had to make extensive investment in security to make Glasgow airport more secure, and the airlines have also had to contribute. There are significant pressures on airports such as Glasgow to compete, and both management and the workers whose jobs are on the line are extremely concerned about the competitive nature of aviation. We have already heard about the competition from railways. Like the right hon. Member for Belfast North (Mr Dodds), I am approached by people in airport lounges who tell me that they have done an assessment of travelling from Glasgow to London and it takes almost the same time to fly—given the time it takes to get to the airport, go through security, get on the plane, get to London, get the Paddington Express—as it does on the train. The danger is that we could lose the aviation industry as it stands.
There are other arguments against the APD. Some 200,000 people have written to their MPs calling for an impact assessment, and that is crucially important. Some 90,000 overseas travellers have written to the Treasury asking for similar measures. APD does not do what it was supposed to do. It is not an environmental tax—it goes straight to the Treasury. The three largest
airports in Scotland are putting pressure on Members of Parliament to ask the UK Government to look at the tax and do something to help the people in the aviation industry to retain their jobs.