Debate on the Address

Debate between Keith Vaz and Lord Jackson of Peterborough

Wednesday 4th June 2014 Commons Chamber

[Keith Vaz]

The fact is that we are a very diverse nation. Whenever the Prime Minister, the Deputy Prime Minister and the Leader of the Opposition speak about Britain, they speak about the importance of our diversity. It is diversity that won us the Olympics. It is important in dealing with UKIP that we can see the changes that have occurred. The Prime Minister has just appointed the first Asian member of a Conservative Cabinet, but we need to go further in showing how we have changed. When we come to the appointment of the chairman or chairwoman of the BBC, we need to ensure that someone from the ethnic minority community is on the shortlist. That is important in dealing with those who try to undermine the basic nature of our society. When we appointed the Governor of the Bank of England, we still selected from an all-white shortlist. The hon. Lady has many Bangladeshis living in her constituency. We have so much to offer as a nation, and the people do not want abuse. They do not mind legitimate people coming here to work.

[Mr Stewart Jackson (Peterborough) (Con)]

Only the right hon. Gentleman could make a political issue of exotic fruits. Is he not in danger of conflating racism, which we all abhor, with a legitimate debate based on facts, which should have happened in 2004 when a moratorium should have been put on the free movement of labour? What we are really talking about is the pressure on public services, such as schools and health services.

[Keith Vaz]

There are those pressures for the hon. Gentleman because of east European migration. All parties now seem to be saying they want the maximum level of transitional controls on free movement. That means that the mistake that was made in 2007, whereby the transitional arrangements did not last the seven years, which was not the case with Romania and Bulgaria, will never be repeated. But that is a different form of migration. Those who came from south Asia and the Caribbean came to stay. If the hon. Gentleman looks at his constituency, he will find that a lot of the migration is easyJet migration. The communities will come from eastern Europe, they will work and they will go back. There are some who have stayed, but the vast majority have gone back to their countries. UKIP said that it would be the end of the world on 1 January—that thousands of Romanians and Bulgarians would come into this country. As the House knows, the Home Affairs Committee went to Luton airport and the plane was half empty, and 4,000 Romanians have left the country since 1 January, so the worst predictions were not realised.

When we look at east European migration, we should also consider migration from outside the EU. It is time the Government abandoned their target of bringing net migration below 100,000. I know that the Prime Minister and the Home Secretary have tried very hard to reach that target, but unfortunately it will not happen. The Prime Minister gave evidence before the Liaison Committee, and better to abandon the target and admit that it will not be met than continue to say that we still want to ensure that it will get below 100,000, because that will not happen.

General Matters

Debate between Keith Vaz and Lord Jackson of Peterborough

Tuesday 18th September 2012 Commons Chamber

[Mr Stewart Jackson (Peterborough) (Con)]

I am glad to have this opportunity to discuss a vexed issue of tax policy, namely air passenger duty, which has been described succinctly by the TaxPayers Alliance as an unwelcome burden on family holidays, a cost to business and redundant now that the European Union’s emissions trading system is being applied to aviation.

I declare an interest at the outset as the constituency Member of Parliament for Peterborough, which houses the international headquarters of Thomas Cook, so tourism and leisure issues are important to me. This is also a wider issue relating to business competitiveness, the impact on family budgets and household incomes, and the ongoing debate about sustainability, the environment and climate change.

The fair tax on flying campaign has been one of the most successful campaigns in recent parliamentary history. More than 130,000 individuals have written to their MPs in support of early-day motion 174, which calls on the Government to undertake a comprehensive study of the full economic effects of aviation tax in the United Kingdom, including its impact on employment.

APD was introduced in 1994 at an original rate of £5 per person for short-haul flights and £10 for flights elsewhere. In 2008, the then Government announced that the per-plane duty proposal that they had suggested the previous year would not go ahead and that, instead, APD rates and geographical bands would be restructured. Following the general election, the coalition Government have explored plans to switch to a per-plane duty, as outlined in both the coalition agreement and the 2010 emergency Budget. The overall APD tax take increased significantly from 1 April 2012, after the Government implemented an 8% APD increase.

A typical family of four pays an average of more than £115 in APD each year. A family of four flying in economy class to Florida from the UK would pay £262 in APD, whereas in France the equivalent tax is £38. Compared with seven years ago, APD rates have risen 160% on short-haul flights and up to 360% on long-haul flights, with inflation over that period being about 18%.

The tax has a significant and deleterious effect on the economy. The British Chambers of Commerce found that APD could cost the economy a staggering £10 billion in lost growth and up to 250,000 fewer jobs over the next 20 years. Many European countries, including Belgium, Holland and Denmark, have abandoned their aviation taxes because of the negative effects on their economies. In the longer term, analysis undertaken by Oxera in 2009 shows that the UK economy will forgo £750 million in wealth and 18,000 jobs because of the rises in APD since November 2010, with about half of the extra revenue raised offset by tax revenue losses in the wider economy.

Although it has to be conceded that the research on APD is piecemeal, it does point to significant damage to the economy in the long run. The Government’s figures project 7,000 fewer flights in 2011-12 as a result of the APD increase in 2010. A 2011 report by York Aviation estimated that APD would result in Scotland losing 1.2 million passengers, 148,000 tourists and £77 million in revenue by 2014.

Aviation is vital to the UK economy. It contributes £53.3 billion or 3.8% of GDP. It supports 963,000 UK jobs—352,000 directly in the sector and 344,000 indirectly through the supply chain. A massive amount of economic activity is dependent on the success of tourism, leisure and aviation.

[Keith Vaz]

There is a burden on the traveller not only through the additional tax, but through the increase in the cost of visas.

[Mr Jackson]

The right hon. Gentleman makes an important point about the impact on people who take long-haul flights, such as to India or the Caribbean.

APD is having a significant impact on people who want to come to the UK from growth economies, such as China. Such people would spend money and drive growth. In 2011, the Tourism Alliance produced a report entitled “Air Passenger Duty: the Impact on Visitors from China”, which found that the UK’s share of the Chinese market had more than halved from 0.5% in 2001 to 0.2% in 2010. If the UK had retained its share of the outbound market from China, it would have gained more than £1 billion in additional tourism revenue from China over the last decade.

Britain has the highest air taxation of all European Union and G20 countries. It is so high that the Treasury will collect more than twice as much in passenger taxes this year as all other European countries combined. Only five other countries in Europe have a similar tax. In August 2010, the German Government approved an air travel levy. It was introduced on 1 January 2011 and ranges from the equivalent of about £7 per passenger for short trips to £39 for long-haul trips. That is well below the UK’s APD, which starts at £13 for short-haul trips. In 2009, the Netherlands followed Belgium in abandoning its equivalent of APD because, although it raised the equivalent of £266 million in one year, the Dutch calculated that the loss to the wider economy was more than £950 million. Germany has set its rate at about half the UK’s level.

Given that one of the Government’s economic ambitions is for Britain to have the most competitive tax system in the G20, it is extraordinary that the World Economic Forum’s recent tourism competitiveness report ranked the UK 134th out of 138 countries for air ticket taxes and airport charges. That was before the 8% rise in the last Budget.

This tax is having a direct effect on constituents across the country—ordinary working people on modest salaries who want to go on holiday. That is the important point that Treasury Ministers need to think about when preparing next year’s Budget.

The British Chambers of Commerce has found that UK airports believe that rises in APD have contributed to a number of key routes being lost at local airports. Peel Airports, which operates Liverpool John Lennon airport, Robin Hood airport Doncaster Sheffield, and Durham Tees Valley airport, provided an analysis of its lost routes in a joint submission to the Treasury by the Northern Way, a coalition of regional development agencies in the north of England. Following the doubling of APD in 2007 and the subsequent rises, Liverpool John Lennon lost six domestic services, five European services and two long-haul services to north America, and Robin Hood airport Doncaster Sheffield lost one domestic service, six European services and three long-haul services.

People will inevitably say that this tax is about maintaining some kind of traction on air travel and aviation in order to reduce the dangers of climate change. However, attempts to justify the tax on environmental grounds have been unpersuasive, and particularly with the application of the EU emissions trading scheme to the aviation sector, I believe that the aviation tax should eventually be phased out.

In his 2011 book “Let them Eat Carbon”, the chief executive of the TaxPayers Alliance, Matthew Sinclair, noted research by the Intergovernmental Panel on Climate Change that suggests that by 2050 aviation will still be responsible for only 5% of the human contribution to climate change. That figure, although significant, is still pretty marginal. With aviation expected to continue to make up such a small share of global emissions, stopping people flying is not critical to limiting climate change, and we know that aeroplanes are now quieter, cleaner and more efficient than ever. APD is excessive, unfair and inefficient as a means of reducing greenhouse gas emissions, and it is duplicated in a number of other policy interventions. I therefore believe that it should eventually be abolished.

In their working paper “The impact of the UK aviation tax on carbon dioxide emissions and visitor numbers”, Mayor and Tol found that the 2007 increase in UK aviation tax had had

“the perverse effect of increasing carbon dioxide emissions, albeit only slightly,”

while reducing the number of travellers to Britain.

A 2008 cost assessment by the Department for Transport found that the aviation tax was excessive following the doubling of air passenger duty rates in February 2007. The Government have since—surprise, surprise—stopped carrying out such studies, but results show that even with a high estimate for the social cost of carbon, it is hard to justify the current APD rates on the basis of aviation’s contribution to climate change.

In the run-up to the autumn statement and next year’s Budget in March, the Government have an excellent opportunity to reconsider this tax, which I believe is regressive, inefficient and, above all, damaging to what we all care about—British jobs and British growth. Even more important, we as hon. Members must defend the interests of our constituents. They are not wealthy and do not own Learjets and jet across the world at the drop of a hat, but are decent working people who wish to have a holiday with their family. At the moment, we are clobbering them, but next year we have a real opportunity to right that wrong and bring in a fair tax regime that will compare with other such regimes across the world. We should do the right thing, and I believe that over the next few years, this tax should come to an end.

Although no Treasury Ministers are sitting on the Front Bench, I hope that they will listen to people power—some 130,000 people have written to hon. Members about this issue, and it is time for a change.

Student Visas

Debate between Keith Vaz and Lord Jackson of Peterborough

Thursday 16th June 2011 Westminster Hall

[Mr Jackson]

The former Prime Minister was an alumnus of Edinburgh university. However, none of us is in any doubt that we live in an age of globalisation and that we must be competitive. The Government’s template and watchword is that we will be open for business and geared to growth across a number of areas, including manufacturing, services, finance and higher education. We all understand that that approach is based, in the higher education sector, on the reputation, kudos and prestige of the institutions involved, and none of us has any argument with that. I truly and sincerely believe that the Government and my hon. Friend the Minister would not hastily introduce proposals that damaged that reputation.

The onus is on those taking the Government to task to demonstrate that the proposals will damage the reputation of the higher education sector and that they are not—as I believe, and as the Chairman of the Home Affairs Committee would surely concede, given the views expressed to his Committee—about dealing with bogus institutions, bogus students and overstayers. I will talk later about the financial impact, which I mentioned in my intervention on the hon. Member for Sheffield Central.

The wider issue is that if we do nothing about net migration, we will have a population of 70 million in 20 years and one of perhaps 80 million in 50 years. Under the Labour Government, net migration quadrupled to 237,000 per annum between 1997 and 2007. With the exception of Malta, England is now the most overcrowded country in Europe, along with the Netherlands. Under the former Government, 5.2 million people came into this country as foreign migrants, while 2 million left.

As I said, senior parliamentarians have noted that significant mistakes have been made. I draw hon. Members’ attention to the projections made about European Union migration before the free movement directive came into force in 2004. Officials at the then Home Office told us that about 13,000 to 15,000 EU migrants would seek temporary work under the worker registration scheme, but they were out by a factor of 25, if not more.

[Keith Vaz]

I have no objection to the hon. Gentleman’s widening the debate, because he touches on the context of the Government’s actions. However, on his last point, we cannot do anything about EU migration. Does he not agree that we should be careful about restricting genuine people from taking genuine, legal routes to come here to study, because we cannot stop people coming from the EU? Does he not also agree that it is essential that we know the figures—how many people come in and how many go out—when we debate immigration? To this day, we do not have accurate figures.

[Mr Jackson]

The Chairman of the Select Committee makes his point in his normal charming and intelligent way. My wider point, which he anticipates, is that the former Government made no effort to anticipate EU and non-EU immigration. Indeed, it has recently come to light that they suppressed research commissioned by the Department for Communities and Local Government, which looked at some, although not all, of the negative consequences of large-scale migration.

All I am asking in considering the specific and narrow point about tier 4 student visas is that we genuinely look at the cost-benefit analysis for the wider community. Yes, we can argue about nuances and value judgments made by individual higher education institutions, but at the same time we must concede that within the wider policy framework, these decisions, which are essentially about large-scale migration, have wider ramifications. That is consistent with the Government’s view that we must move away from the inexorable conveyor belt towards a population that will be significantly greater within 25 years than the population of Germany or France, for example.

The policy has been flexible and there has been appropriate consultation. It is aimed principally at bogus students and overstayers. I would like to see the evidence that HE institutions will be adversely affected, because the level of graduate unemployment across all disciplines in the UK stands at something like 20%, which is pertinent when considering public policy on the recruitment of international students who might stay to work after the conclusion of their studies. That is fair. If we look at the fees regime and at how financial arrangements for universities will progress over the next few years and measure that against demand, we see that because of our reputation and because we have the kudos of being a principal centre of superb higher education in the world, the demand for people across the world will remain high, whether for chemical engineering, languages, dentistry or humanities.

--- Later in debate ---

[Mr Jackson]

The evidence given by Migrationwatch UK for example—[Interruption.] Migrationwatch UK has put forward an evidence-based, robust and demonstrable case. It may not be to the taste of many Opposition Members, who are reminded on too many occasions of their abysmal failings in the management of immigration on behalf of the citizens of this country. Nevertheless the case is not usually challenged in terms of its robustness, and I am sure that the Chair of the Home Affairs Committee would concur.

[Keith Vaz]

It may come as a surprise to the hon. Gentleman that when Sir Andrew Green gave evidence to the Select Committee, he did not regard students as migrants. His main concern was those who came illegally and bogus colleges, not genuine students coming to the country to support University Centre Peterborough.

[Mr Jackson]

The right hon. Gentleman has reiterated the points I am making. I will not repeat verbatim what Sir Andrew said in his evidence to the Committee in February—I think—but he said that he was mostly concerned about pre-degree education, language schools and “bogus” colleges and that he did not see the increase in student numbers per se as a “problem” for immigration. I do not dissent from that view; he and are at one. I resist the premise on which the hon. Member for Nottingham South (Lilian Greenwood) proceeds, but I must be very careful because my brother is a professor at Nottingham university, so I am aware that it is a superb institution—he would expect me to say that, but nevertheless it is true.

The issue is not about reducing the number of students per se, but about closing loopholes and ensuring that we retain our integrity and reputation. If we look at pre-degree level courses, we must in fairness also look at the evidence over past years and draw a link between the number of students who have come into the country, over the past 15 years for example, and long-term economic migration and settlement. It would be foolish and short-sighted not to accept that many students have been economic migrants. We are looking perhaps at a reduction in student numbers of only about 10% from the 2009 figure of 270,000. No one has yet given detailed projections of how many of them would be in each sector.

On the face of it, yes, institutions will lose £105 million due to students not coming, but we must make the link and look at the opportunity cost—the displacement of indigenous people, who are British citizens, who are not in work and are on benefits as a result of jobs being taken by people who began as students but entered the work force. It is foolish to disregard that.

Even the Scottish Trades Union Congress and others have conceded that if we do not get a grip on that displacement and the corollary—the cost imposed on taxpayers—it will drive down wages and conditions, particularly for those in low-wage and low-skilled jobs in my constituency and others. That cannot be good for community cohesion and the economic well-being of the country.