I rise to speak to new clauses 4, 5, 8 and 9. I also refer Members to my speech on new clauses 2 and 3 and income tax during our first day in Committee last week.
New clause 5 would devolve air passenger duty to Wales. In 2012, the Silk commission recommended the devolution of a block of financial powers, including air passenger duty, to the National Assembly. That was a carefully crafted package of measures. Those minor taxes were clearly listed as pressing, and the commission recommended that they be devolved in the next possible legislative vehicle, which happened to be the 2013 Finance Bill. For whatever reason, however, APD was missing from that Bill and a Plaid Cymru amendment that would have included it was defeated.
On the publication of its recommendations, the commission had cross-party and governmental support. However, four years on, I am disappointed that the Government have turned their back on the commission and its recommendations. They are instead simply cherry-picking the amendments that will be the least disruptive to the current devolution arrangement for Wales. In that period, we have had a Northern Ireland Act and two Scotland Acts through which APD was devolved to those countries and, needless to say, Labour and Tory MPs based in Wales supported those Acts. Wales is, once again, getting the short end of the stick when it comes to devolved taxation.
I am disappointed that the hon. Member for Cardiff Central (Jo Stevens) is not in the Chamber. Although she is apparently oblivious to her party’s inability to support the devolution of APD twice in the previous Parliament, she has rightly stated:
“Air passenger duty has already been devolved to the Northern Ireland Assembly and…to the Scottish Parliament, but despite this, the Budget did not propose that it be devolved to the Welsh Assembly.”—[Official Report, 25 May 2016; Vol. 611, c. 521.]
She asked for it to be devolved, and that is an unimpeachable argument—I agree with every word she said.
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Members of this House argued for devolving air passenger duty to Scotland to encourage investment and the expansion of airline networks and coverage. Furthermore, the reservation of APD was cited in a report by the Northern Ireland Affairs Committee as a “stumbling block” to economic growth. Why are those arguments not good enough for Wales? Why is parity with the other devolved Parliaments not even on the table? The Bill’s failure to include APD in the list of devolved taxes simply proves once again that Westminster views Wales as a second-class nation.
Devolving APD is the best way to develop Cardiff airport and to boost the Welsh economy. Cardiff airport is the fastest growing airport in the UK. It is the only airport in Wales or the west of England that is capable of accommodating transatlantic aircraft. It serves a catchment area of 6 million people and contributes £104 million to the Welsh economy. Devolving APD to Wales would greatly strengthen the airport’s competitiveness, as well as significantly improving its contribution to the Welsh economy. Given that the airport is now owned by the Welsh Government, it seems bizarre that the UK Government are intent on restricting the ability of a Welsh public asset to maximise its potential. Cardiff airport has projected that by devolving APD and then abolishing it, the airport would experience a 27% increase in jobs and a 28% increase in gross value added overall. I am not arguing for complete abolition, but Debra Barber, the managing director and chief operating officer at Cardiff airport, has said:
“APD is a punitive tax that only serves to hinder Cardiff Airport’s ability to continue on this journey of growth and we agree that it should be abolished at the earliest opportunity. We believe that neighbouring airports should work together and complement one another, growing and strengthening side by side for the greater good of a thriving aviation industry across the UK.”