Budget Resolutions and Economic Situation

Debate between Chloe Smith and Gavin Shuker

Friday 23rd March 2012 Commons Chamber

[Miss Smith]

Mr Deputy Speaker, it may take more time than I have to list all the counties of the UK, although I would be happy to try if you were to be charitable with me. I think the point about the Budget is that it lays out what the Government are doing across the country, and it lays out what the reality is. I will explain the reality, and that is that 226,000 new jobs were created in the private sector last year. That makes over 600,000 since we came into government. The Office for Budget Responsibility forecasts that from the start of 2011 to 2017, a total of 1.7 million jobs will be created in the market sector. That is private sector growth built on a foundation of economic stability.

I will explain how we have gone even further to encourage greater growth—unless the hon. Member for Luton South (Gavin Shuker) would like to do that job for me.

[Gavin Shuker]

I am delighted to raise a very important point, and I hope a non-combative one. What is the Government’s position on the child poverty targets, enshrined in law, by 2020?

--- Later in debate ---

[Miss Smith]

This Government take child poverty extremely seriously, and this Government of course— [Interruption.] I beg your pardon. Is the hon. Gentleman still chuntering? Would he like to clarify his question?

[Gavin Shuker]

I will help the Minister. There is a legal framework in place, under laws passed by the previous Government, to hit child poverty targets by 2020. Will she give Her Majesty’s Government’s position on that target?

[Miss Smith]

I certainly join the hon. Gentleman in seeking to combat and take out child poverty, but it is this Government who will do that on the basis of our work through the Budget to put private sector growth at the heart of the recovery. The Government will consider all the matters that feed into poverty and not simply transfer income from one side of a line to another.

Let me outline the other key things that we are doing in the Budget. We are overhauling the planning rules, cutting corporation tax, restoring our international competitiveness and creating an invitation for investment in the UK’s economic future. As the House knows, the Government have already set out plans for some £250 billion of infrastructure investment in the next decade and beyond. That is critical to renewing our infrastructure network, which enables Britain to compete with emerging giants in the global market.

The Chancellor provided further details on those ambitions. They include taking forward a feasibility study into ownership and financing models for the road network; supporting Network Rail to invest a further £130 million in the northern hub rail scheme, and providing up to £150 million to projects in core cities, as well as Growing Places funding to empower communities and businesses to lead development in their areas.

Various hon. Members asked questions. I single out those of the hon. Member for Liverpool, Riverside (Mrs Ellman), the Chairman of the Select Committee on Transport, to whom my right hon. Friends will be happy to write to answer her specific questions. I thank other colleagues for their contributions. They will appreciate that I am now rather short of time owing to the pressing matters that Opposition Members raised.

As we invest in our physical infrastructure, it is also important that we invest in our digital infrastructure. That covers matters such as mobile coverage and broadband. It also means pushing such investment into cities; some cities will come forward for the super-connected cities initiative.

We want to help build on our long and very rich history of scientific and technological leadership. It is essential to sustain that and capitalise on our strength. It is also essential that we make the UK manufacturing supply chain more competitive. That sort of investment provides a springboard for entrepreneurs and manufacturers to lead a private sector recovery across all sectors and all parts of the country.

Just as we encourage businesses to expand at home, we must also focus on helping British businesses to expand overseas in ways in which my right hon. Friend the Chancellor set out last week. We can go further on exports—we aim to double our nation’s exports to £1 trillion by the end of the decade. We will not sit idly by while China, India and Brazil forge ahead.

Of course, if we want our businesses to take those risks to invest and hire new workers, we must ensure that they have access to finance. That is why the Budget contains the national loan guarantee scheme, on top of our deficit reduction strategy, which has earned market credibility and low interest rates. We are ensuring that the full benefits of those low interest rates are passed on to businesses throughout the UK.

It is this Government who are taking the decisive action needed to make Britain the best place to start, grow and finance a business; who are putting ingenuity, innovation and the enterprise of people in businesses at the heart of our recovery, and who are restoring our competitiveness and putting the UK at the heart of the global market. We are unashamedly backing business in the Budget by creating the most competitive tax system in the world, removing the bureaucratic burdens on businesses and investing in infrastructure.

My hon. Friends have already mentioned GlaxoSmithKline. I could add Nissan, Jaguar Land Rover and Tesco, which have announced that they are creating thousands of new jobs in the UK.

The Government are building a sustainable and prosperous economy in a recovery that builds on our strengths across all regions of the country and all the creativity and productivity of our private sector. We are also putting money in the pockets of low-paid workers. As the Chancellor said in his Budget speech, the Opposition borrowed us into trouble, we will earn our way out.

Ordered, That the debate be now adjourned.— (Mr Dunne.)

Debate to be resumed on Monday 26 March.

Air Passenger Duty

Debate between Chloe Smith and Gavin Shuker

Thursday 20th October 2011 Commons Chamber

[Miss Smith]

I can certainly give the hon. Gentleman an assurance that I shall carry on meeting representatives from the Caribbean and, indeed, from Australia and New Zealand very shortly, to discuss those concerns. I am afraid, however, for reasons I shall come on to, that it is rather difficult at this precise moment to give him further assurances, because the Government are due to respond to the consultation. I shall shortly deal with the detail of that, and with his points about per-plane duty.

The good news is that the consultation enabled Ministers to go into all those issues in more detail. The hon. Gentleman will know that in the Budget, the Chancellor announced that, for the first time, as my hon. Friend the Member for Crawley described, APD would be extended to passengers flying aboard business jets, which is another important feature that we have made clear. That addresses a clear unfairness in the system, and the consultation invited views on how that should be addressed.

I cannot promise the hon. Member for Hammersmith (Mr Slaughter) or anyone else that we will meet everyone’s wishes, but we will try to deliver an APD system that is fairer, simpler and more efficient, and the Chancellor will set out those details in due course. On the hon. Gentleman’s point about per-plane duty, to make the position clear, the UK’s international obligations in that area include air service agreements with more than 150 countries, including the 1944 Chicago convention. We will not introduce per-plane duty at present because of concerns about legality and feasibility. We will, however, work with international partners to continue building consensus.

[Gavin Shuker]

Will the Minister give way?

[Miss Smith]

Briefly, as I must conclude.

[Gavin Shuker]

I want to make just a small observation. Before the election, the Conservatives campaigned on moving to a per-plane duty. Given the complexity that the Minister mentioned, can she shed some light on why they said that they would do so?

[Miss Smith]

The glory of coming into government is that one realises that all sorts of things are worse than one imagined, and that is a case in point. As I have said, the legality and feasibility of that approach have been clarified quite extensively.

I will touch briefly on the question of the devolution of APD. As hon. Members will know, the Chancellor announced that from 1 November 2011 the rate of APD for direct, long-haul passengers departing from Northern Ireland will be cut to the short-haul rate, which I hope we all agree is good for constituents in Belfast East and elsewhere in Northern Ireland. That measure was in response to the unique challenge facing Northern Ireland and is designed to ensure that local airports remain competitive. However, in order to provide a permanent solution to the issue, the Government have launched a process for the devolution of APD to the Northern Ireland Assembly. We are working in close consultation with the Executive to take that forward. I would also like to offer my thanks, and those of my predecessor, to members of the Northern Ireland Affairs Committee for the diligent and helpful input they provided on the issue.

Let me also say a few words about APD and the regions, which hon. Members may be interested in. We received around 500 responses to the APD consultation, many of which related specifically to the question of regional APD rates. It is certainly fair to say that there is no consensus on the matter. Some regional airports have asked us to consider lower APD rates for the regions, but several airlines and hon. Members have asked us to consider the opposite. I note the views of my hon. Friend the Member for Crawley in this regard. On that question, and on the broader reform of APD, the Government aim to publish a full response to the consultation later this autumn. We will of course take into account the views expressed in this debate.

There is one other issue that has been raised which I must address quickly: the environmental impact of aviation. We must recognise the scale of the challenge that confronts us. Since 1990, CO₂ emissions from UK aviation have more than doubled. In 2010 they accounted for around 6% of total UK CO₂ emissions. As other sectors decarbonise over the coming decades, aviation emissions are likely to make up an increasingly large proportion of total UK emissions. The Government’s approach to this problem is a pragmatic one. The international nature of aviation requires an international response, which is why we support the inclusion of aviation in the EU emissions trading system from 2012. At the same time, the Department for Transport, in true joined-up fashion, is considering the best way to tackle local environmental impacts as part of its aviation policy review.

I know that some have called for the abolition of APD once aviation enters the ETS, but I must point out, as others have done, that APD is fundamentally a revenue-raising duty and currently raises around £2.5 billion a year. The forecast revenues that will result from aviation joining the ETS are only around £0.1 billion a year, reflecting the fact that under the relevant EU directive most of the allowances for the system will be given to airlines for free. In looking forward, however, the Government will assess the revenue requirements from aviation taxes, including those from the ETS, in the round.

In conclusion, I hope that we can continue to have constructive debates in a way that helps deliver a tax system for air transport that is fair and sustainable for the long term and puts us on a positive footing in the world. I thank my hon. Friend the Member for Crawley again for bringing this matter to the attention of the House.

Question put and agreed to.