The next item is the debate on the air passenger duty, the case for devolution, and I call on the Minister for Finance to move the motion—Rebecca Evans.

Motion NDM7107 Rebecca Evans, Darren Millar, Rhun ap Iorwerth

To propose that the National Assembly for Wales:

1. Notes the report of the Welsh Affairs Committee, Devolution of Air Passenger Duty to Wales.

2. Welcomes the unanimous recommendation by the Welsh Affairs Committee that Air Passenger Duty should be devolved to the National Assembly for Wales.

3. Notes the consistent cross party support that exists for the devolution of Air Passenger Duty across this Assembly, including the position set out in the Finance Committee’s submission to the Welsh Affairs Committee report.

4. Calls on the UK Government to respond to the report by:

a) setting out proposals to devolve Air Passenger Duty to the Welsh Assembly; and

b) fully devolve Air Passenger Duty by 2021.

Motion moved.

Diolch, Llywydd. I'm pleased to open this debate today. On 11 June, the Welsh Affairs Committee published the findings of its inquiry into the devolution of air passenger duty to Wales. We wholeheartedly welcome the unanimous recommendation of the Welsh Affairs Committee that APD should be fully devolved to Wales.

From the outset, the committee recognised that the Welsh Government has been calling on the UK Government to devolve APD and that the UK Government has made clear its reluctance to change existing arrangements. As a result, the inquiry naturally focused on considering the arguments for and against APD devolution. The Welsh Government's written evidence submitted to the committee highlighted the strength of support across this Chamber and across the business, tourism and aviation sectors in Wales for devolving APD, and this support is also reflected in today's joint motion.

The devolution of air passenger duty has been a long-running issue and a point of consternation for all of us. The recommendation to devolve APD to Wales featured in the Holtham commission's first report on funding arrangements for Wales, published 10 years ago this week. Devolution of APD also remains the only significant recommendation of the Silk commission yet to be fulfilled by the UK Government. A decade on from Holtham, decisions on how much income tax Welsh taxpayers pay are made here in Wales, with decisions on rates being made by the Welsh Government every year, which are then ratified by the National Assembly. The introduction of Welsh rates of income tax follows the introduction last year of the first new Welsh taxes in over 800 years—land transaction tax and landfill disposals tax. Together with local taxes collected by local authorities, which have been devolved since 1999—council tax and non-domestic rates—Welsh taxes are now raising some £5 billion each year for our public services. And yet APD, with current revenues generated in Wales of less than £10 million each year, is still a reserved tax and remains within the gift of the UK Government.

The intransigence of the UK Government's stance on devolving APD is further compounded by its previous decisions to devolve APD to both Scotland and Northern Ireland. There is no justification for Wales being treated less favourably and I welcome the committee's specific recognition of the current inequity in the devolution settlement. And this speaks to a wider issue: when asserting whether a power should be devolved, it's the merits of devolution itself that should be the concern of the UK Government and Parliament, not speculative judgments on any future policy decisions Welsh Ministers may or may not make. It's clear to me that devolving APD would be entirely consistent with the UK Government's approach to devolving taxes within existing areas of devolved competence, yet the UK Government's evidence to the inquiry highlighted its concerns that Bristol Airport would be significantly impacted if Welsh Government were to reduce or abolish APD, despite independent peer-reviewed evidence to the contrary. This is clearly not a sufficient or appropriate basis to limit the devolution of powers to Wales, which would be of benefit to our citizens.

In coming to its conclusion, I would like to thank the committee for remaining focused on the evidential and constitutional grounds for devolution of APD to Wales, rather than a premature assessment of potential future policy decisions. And to be clear, there has been no change in the Welsh Government's position.

Will the Minister take an intervention?

Of course.

Can the Minister confirm whether it is still Welsh Government policy, outlined by the previous First Minister, that if the power was devolved, you would cut APD to zero from Cardiff Airport?

I'm shortly coming on to the Welsh Government's position, and I intend also to address, at some point during the debate, the issues about the environmental concerns, which I know are very much at the uppermost of all of our thoughts at the moment. But as I say, there has been no change in the Welsh Government's position. In the event it is devolved to Wales, our intention is to use APD to secure optimal growth for the airport and for Wales, working with the other levers available to us.

There is compelling evidence for the economic benefits of devolving APD. Enhancing connectivity between Wales and the rest of the UK, and the wider world, is a central strand of our economic action plan. Control over APD would enable us to make decisions in Wales for Wales, opening up new opportunities for trade and tourism, and enabling growth in the aviation sector and wider economy. It would give us the power to deliver one of the most important messages as we look ahead to the UK's exit from the EU: that Wales is open for business. But of course, any policy decisions on APD can only be made once we have the powers, and in the context of what is devolved and the circumstances at the time of devolution.

Any proposals for APD would be subject to full consultation with businesses and the people of Wales, and would be thoroughly assessed to ensure full compliance with the well-being of future generations Act and our statutory decarbonisation targets and associated carbon budgets required under the Environment (Wales) Act 2016. Therefore, we urge the UK Government to recognise the strong cross-party support that exists for the devolution of APD across this Assembly, and respond to the recommendations of the parliamentary committee in agreeing to fully devolve APD to Wales without further delay.

Can I thank the Minister for her comments? As you said, there is a fair amount of consensus across this Chamber for the devolution of this tax, and it's a discussion that has gone on for as long as I can remember being in this Chamber. You probably feel the same way. It clearly has risen up the agenda over recent months and years, with the devolution of the other pieces of the tax jigsaw in Wales, and there are now increasingly questions being asked with regard to if we can have income tax powers here and if we can have stamp duty and the other gamut of taxes, then why should there be a block placed on this one, if I can put it like that. 

The Welsh Conservatives are happy to co-submit this motion along with the Minister. Can I welcome the spirit with which you've brought the debate forward? This is, in essence, about keeping the spotlight on the devolution of the tax, first and foremost. Yes, of course, you only devolve taxes to either put them up, lower them, or keep them in the middle somewhere, but those are of course subsequent to actually having the power at all. So, if we haven't got the power yet, then those arguments are less relevant. I think the report of the Welsh Affairs Committee makes very interesting reading, and it's clear that the devolution of air passenger duty is overdue. I think it's refreshing and interesting to see a parliamentary committee from the other end of the M4, as we often describe it, well, first of all dealing with an issue like this, which is so relevant to our discussions in this Chamber, but also almost enthusiastically embracing the devolution of this tax, albeit with caveats as to some of the problems that could potentially arise from it.

As I said, air passenger duty would fit into the jigsaw of taxes that have been devolved—income tax, landfill disposal tax, stamp duty. This is a matter of parity, I believe. Scotland has this power, as we know, Northern Ireland has had the tax devolved to it, so it has become increasingly difficult to see why Wales shouldn't have similar devolution of tax here. There are, of course, arguments against it, and some of them are flimsy, others are worth looking at. They're well versed. We keep hearing of the threat to Bristol Airport; that comes up again and again when we have these discussions. I think that threat is probably overstated given that regional airports around the UK and Cardiff Airport in Wales do serve different populations, in the main. I know people travel fair distances to go on flights from airports, but I can't see why Bristol Airport would feel so threatened by this. And in any case, I don't believe that that should stand in the way of what is basically a political, philosophical—however you want to put it; constitutional—decision for this place, and the need for Wales to have this power.

Another argument that's been used against the devolution of APD is that the aviation industry is relatively undertaxed, and that airline fuel is not subject to tax, and tickets aren't subject to VAT in the same way. That may well be the case, but again, I can't see why that is an argument for or against the devolution of the tax. It should be for this assembly to decide what is relevant to Wales and the Welsh economy and air flights here, and this is where the power should lie.

My colleague Andrew R.T. Davies I think earlier mentioned the climate emergency, and that is something that needs to be considered. It did come up in the Finance Committee discussions. Clearly, there has been a lot of focus on air travel recently, as to its role, and it clearly does contribute massively to the carbon footprint, so I think individuals and governments do need to be aware of that. I would say, as I said before, though, that this isn't necessarily an argument against devolving it—it's for the decisions here to be taken. I would also say that I don't really see it as—. I don't think people are suddenly going to jump on planes that weren't going to jump on planes before. I think they're probably going to go to—. It might make a marginal difference. They're going to go to Cardiff Airport instead of elsewhere, whether that be across the border to Luton or Heathrow or wherever it might be. But first and foremost, that airport has to be successful for those decisions to be faced further down the line.

So, Welsh Conservatives are more than happy to support this motion—indeed, co-submit this motion along with other parties here—and I hope that we can finally settle this once and for all and get this important level of taxation devolved to Wales.

I'm also very pleased to have been able to put forward this motion jointly with the Labour Government and the Conservative Party. Plaid Cymru has long championed the devolution of air passenger duty to Wales, and it is pleasing to see now, at last, that there is a consensus building here—certainly also the consensus that we saw reflected in the report by the House of Commons Welsh Affairs Select Committee. It is 10 years on since the Holtham report proposed this as a sensible measure. This would, as we've already heard, be the last major proposal to be enacted from the Silk commission, so the time is right, and it is baffling, in many ways, why blocks are still being put in the way of devolution. I think Stephen Crabb, when he was Secretary of State for Wales, said there were too many uncertainties and concerns about APD to get a decision through the then Prime Minister, David Cameron, and the Chancellor. Yes, uncertainties and concerns—not about Wales, it seems.

It has again been baffling to see the Secretary of State for Wales—in whose constituency Cardiff Airport is—seemingly batting for Bristol Airport, earning him the title of the Secretary of State for the west of England. And we have heard plenty of evidence to say that this wouldn’t be about disadvantaging Bristol—and there is no strong evidence to suggest that Bristol would be at a disadvantage—but that in fact it would be advantageous to Cardiff. And that is what we are interested in here. And not just Cardiff Airport, but Anglesey Airport—Maes Awyr Môn—in my constituency. We should be looking at this in the round.

There are obvious environmental concerns about the direction of travel for air travel in general. There have been plenty of reports suggesting that we will still see a huge increase in air travel globally—much of it driven by growth in Asia. But I was reading today a report saying that there will be changes in patterns of air travel that won’t necessarily be about driving up air passenger numbers, but would be about cleverer ways of people using air travel as a mode of transport, where the hub-and-spoke networks that we have been used to, and the growth of the major airports—the Heathrows of this world—will, if not give way entirely, see a shift towards more point-to-point travel with smaller, more efficient long-haul aircraft being able to make the journeys from city to specific city, and region to specific region, including, of course, Cardiff and Wales, and the advantages that can come from that.

So, I am pleased that we are jointly tabling this. We shouldn’t have to. In a situation where Scotland already has seen APD devolved, when Northern Ireland has APD devolved, it seems to me that the barriers are there to stop Wales in some way gaining that kind of advantage that could come from the devolution of something that is very much in the spirit, I think, of devolution and the direction of travel for devolution as a whole, and a proposal that has been made now in a number of highly respected reports, from Silk back to Holtham. So, let us today make that statement that we believe the time is not just right, but is overdue for us to take this step. It is in our interests as we look for ways of optimising the Welsh economy. It is not about trying to disadvantage others.

It's a pleasure to speak in this debate and I'm delighted to note the report of the Welsh Affairs Committee. I read it at the time it came out. I thought it was a good report. It’s relatively short; I wouldn’t describe it as a comprehensive report. My assessment was a bit different than the Minister’s in that I didn't read its focus as being especially on the constitutional side or looking at this in a sort of neutral ‘Should it be devolved?’ as opposed to a ‘What would the impact be if—?’ type of way. The substance of it, at least in terms of change of positioning at that Westminster level on a cross-party basis, seemed to relate to the evidence about Bristol Airport. And I think they concluded pretty firmly that even if we were to abolish or substantially reduce APD if devolved, the effect on Bristol Airport would be pretty small, and, frankly, not a sufficient basis for determining whether this tax should not be devolved here when it is devolved to Scotland and Northern Ireland.

In terms of points 2 and 3 and the references to the cross-party consensus, and pushing this forward with point 4, my group have discussed this and reflected on it. I was very grateful to the Minister, actually, yesterday, for answering my questions in a telephone call and setting out a bit more about the position of the Welsh Government, and for her frankness in that, which I appreciated. I think there has been a shift in emphasis from the impact of cutting or getting rid of the tax to one of varying it, but I understand the Minister’s perspective, as she’s expressed just now, that she would like Westminster to look at each tax and an argument for devolution on the merits of devolution, as opposed to the specific merits of a proposed policy, given it would be being devolved for us to decide here what that policy should be.

Nonetheless, I do think that it is easier to assess the merits of a policy where there is a firm intention as to what direction it should be. My understanding still is that the Welsh Government would be looking to reduce if not abolish it and the potential benefit to Cardiff Airport would be something that we should properly consider in that. And of course Welsh Government owns Cardiff Airport, so if it were to become a more popular airport and a better business proposition, some of the benefit of that would go to the taxpayer, either from increased dividends or lower net cash going into it going forward, or indeed from selling a minority stake if the Government were ever to do that. So that's something that weighs with us. 

I was less convinced by the arguments Nick Ramsay put forward about this being a matter of parity with Scotland and therefore we should do it. Scotland has significantly greater powers in many areas than we do here. I wouldn't argue for parity on one of those, and I wasn't aware that he did either, at least not across the board. Scotland has the power to vary the rates and not just the rates but the thresholds of income tax. People in Scotland are paying significantly more tax towards the upper middle and higher end of the income distribution because the threshold has not been raised as it has in England and indeed Wales for the 40p rate. Yes, I'll take an intervention.

I'm grateful for the chance to clarify that. You've shifted the argument now onto income tax and that's quite a different tax to APD. I think when it comes to a tax such as APD, there are clearly advantages for it to be devolved to Wales. I think in the case of that tax, there is an argument for parity, but I wasn't saying that there should be parity for everything across the board, otherwise we would be massively changing the—

I'm glad for the clarification. I'm sure his constituents would appreciate it as well. Certainly the better offer than if Boris Johnson were to come in and raise the threshold to £80,000 and that were not to happen for them, they might wish to hold their Member to account for that. But I think he makes an important distinction around taxes. We are sceptical about the devolution of ever more taxes to Wales—

What's Boris Johnson got to do with this?

He's proposed to raise the threshold of income tax that I raised—

We're not talking about income tax. We're talking about air passenger duty.

I'm glad you've clarified you're not talking about that, because it wouldn't have been popular with your constituents if you had been. But the fact is—[Interruption.] That's enough, Nick, thank you. [Interruption.] Nick, can we move on? Thank you. 

This tax is a small tax. It's only £10 million. It was, as stated, recommended by the Silk commission. Notwithstanding our scepticism to continued devolution of more and more taxes and that only ever going in one direction, towards the objective supported by Plaid Cymru to my left, with that £13 billion fiscal gap we were told about earlier, I just don't think it's a good idea to have ever more fiscal autonomy and then independence. However, this area was in the Silk commission. We don't want to fight something that there was such a consensus on so long ago. I think it would have benefits to Cardiff Airport if this tax were to be reduced. I still see that as the likely path of direction.

I think it's very difficult to do within the carbon budget context, because if we reduce APD here and that leads to more people flying from here who were otherwise going to Bristol, if that's scored against us but we don't then consider the reduction in Bristol, then we might not make what would be the right decision on a carbon dioxide basis for the UK as a whole. But in the round, I think the case has been made for this tax to be devolved. The Welsh Affairs Committee supports it cross-party and I think we should support it cross-party in this Assembly as well. 

I'll say first of all that I do support the devolution of air passenger duty, but I am wary about what the Welsh Government will do with it. Labour like nothing more than to spend other people's money and they think they know better how to spend other people's money than people do themselves. Recently, we heard that, across the border, Welsh Labour's fellow travellers and ideological soulmates in the Westminster Labour Party plan to tax the gifts parents give their children via a brand new lifetime gifts tax. It's yet another example of the Labour Party that works on the principle that if it can be taxed it must be taxed, never mind what the consequences are.

Of course, devolving air passenger duty to Wales will be an opportunity for Wales to reduce the tax to benefit families using Welsh airports, but there's no reason to suspect that, given the chance, Welsh Labour won't follow their Westminster heroes' lead and increase it once they have control of it, or create brand new taxes if they have the powers to do so. I'm not hearing any guarantee from the Welsh Government that if the tax is devolved they won't try to use it as a cash cow. Perhaps in this debate they will be willing to give that guarantee to families and businesses who would use Welsh airports. I doubt it, though.

What must be surprising for anyone who thinks Labour stand for the low paid is that they even want to be responsible for a regressive tax like air passenger duty in the first place. The tax forces a low-paid family who has taken a year or more to save for a holiday to pay the exact same amount of tax as a wealthier family who can go on holiday at the drop of a hat. It completely and deliberately ignores income or ability to pay. So, how has a party that says it's on the side of struggling families come to want responsibility for a regressive tax on the much-deserved holidays of those who work the longest hours in Wales? Well, because this Labour Government supports other regressive taxes when it suits them and their political ideology, of course. Just look at VAT.

Although it's not devolved yet, this Labour Government try to fool us that they're doing all they can to beat period poverty, while saying that we should keep our EU membership, which stops us removing VAT from sanitary towels and tampons because the EU classes them as luxury items. Now, it's one thing to say that you're prepared to tax the low paid the exact same money for a holiday abroad as you charge the super rich, but surely it's immoral to say that you'll continue to charge a single mum for vital sanitary towels or tampons. The same thing goes for the so-called 'fat tax'.

Let's be realistic: Labour are unlikely to want air passenger duty devolved so that they can lower it or abolish it. They want it devolved so they can raise it and use it as they think fit. Even the simple understanding of economics that Labour has should tell them that raising it too much will see people opt for flights that take off and land at nearby English airports, such as Bristol instead of Cardiff. 

Will the Member give way?

No. Let's crack on, Mark. Sorry. 

By wanting to control this regressive tax, but in complete contradiction wanting to also stay in an EU that imposes taxes over which the Welsh Government have no control and can only tug at the sleeves of their so-called friends in the EU to try to influence decisions, shows that even when it comes to low-income families, the message from this Labour Government is loud and clear: that they know better than the people how their hard-earned money should be spent. 

Bringing me on to my final point: on this Government's watch, parts of the Welsh NHS have become a basket case, literacy and numeracy is hardly stellar according to the Programme for International Student Assessment, and the economy has stagnated. So it's surprising that Welsh Government, at this particular time, sees fit to spend its time and attention fretting about claiming further powers from Westminster. Indeed, if Labour spent as much time trying to resolve Wales's problems as they spend wondering about what new powers they should have, what new ways they can come up with to take money off people to fund their pet projects, and doing their best to thwart Brexit, Wales would be in a much better state. Thank you. 

I'm glad to contribute to this debate today, because the devolution of air passenger duty is something that I've championed long and hard for many years, and I can't find a coherent argument to say why air passenger duty should not be devolved to this institution. In fact, I was on point in the negotiations on Silk for the Conservative group here, and when all the leaders were sitting around the negotiating table talking about income tax and talking about other measures, obviously this was one of the taxes that we did talk about. 

I do sympathise with the point that was introduced—I think Rhun introduced it—about Stephen Crabb's comments some four years ago now, because there was a discussion about it going to Scotland as well at that time, and the northern airports as well, and how they might be affected, and it seemed to overcome that argument for it to be transferred to Scotland. It's not our problem what's going on in Bristol. Bristol are a commercial operation, and they seem to have a very successful model, to be fair to them, with 8 million passengers going through. If someone's trying to cite Bristol as an argument why we shouldn't transfer the duty, which I think has been the case, I just don't see that that should be a reasonable argument in this debate, to be honest with you. This is about— [Interruption.] Yes.

Just very quickly—and thanks for giving way—do you have any idea what's driving the Member for Cardiff Airport to be citing problems for Bristol as a reason not to devolve the tax to Wales?

I'm sure that you have better access to the Member for Cardiff Airport than maybe I do these days. [Laughter.] So I'll leave you to pose that question, and maybe you'll listen to the answer. 

But, generally, this is a tool that can come into the hands of this Assembly and, by extension, to the Welsh Government, that can drive opportunity. I personally would like to see what the First Minister said, it becoming a reality and being abolished. I make no bones about that, because that's what the First Minister said: if it did come to the Welsh Government, they certainly would look to get rid of it. It would have a cost on long-haul flights of about £1 million, and I appreciate the figure that's been talked about is £10 million in total. It is worth reflecting on the Silk commission's recommendation that it was related to long-haul flights and not short-haul flights. And that was the Silk commission's recommendation. So there is a difference there, hence I would suggest the modest tax income loss that the Welsh Government might face if it did do away with it for long-haul flights, if that power came to it, but I would say that that would be multiplied several times over by the increased volume of passengers coming into Cardiff, especially international passengers, and the spend that they would have within the Welsh economy.

Interestingly, as we go forward, if it was to be devolved in its entirety on short haul as well—there is much talk about electric engines and the development of electric engines on short-haul flights in particular—that would be at the discretion of the Government, whoever controls that power at that time, whether you would want to incentivise that technology for short-haul flights. I think that's an interesting debate and discussion to have, because it is fair to point out that there's an environmental consequence for people who fly—I accept that—but as someone who believes that flying is an economic good and it links people to communities the length and breadth of the globe, I'd like to see flying become as cheap as possible, not as expensive as possible. I do see it as a tool of empowerment.

But I do regret bitterly that we have not enacted the Silk commission's recommendation and, indeed, the recommendation of the Holtham commission from 10 years ago, and I reiterate it and it is worth reiterating: there is not a coherent argument to stop air passenger duty being devolved to the National Assembly. I can argue with the Welsh Labour Government—as I do week in, week out—about some of the policy decisions they've taken, but it's called democracy, and people cast their vote accordingly and they either endorse the politicians to take those decisions or they don't as such. So, to actually say that we don't trust the policy decisions that are going to be taken isn't a good enough and sound enough reason to stop this tax being devolved.

So, it is a pleasing sight I hope—I haven't seen the buttons pressed here tonight—but hopefully by the end of the night we will have a thumping big vote to endorse this motion tonight that's before us. And I do hope that with the change of leadership that will come in the Conservative Party and the new Prime Minister that this particular unfinished piece of business will gain new impetus, and it will not be long before that economic lever is transferred here to Wales, and then we can have the real discussion on the policy. But as I said, I clearly want to put my flag to the mast of what the previous First Minister argued very comprehensively that it should be used to lower air passenger duty, so that people get better options and opportunities of flights out of Cardiff Airport.

But again, I would seek clarification, because I hear what the finance Minister has said about, on the one hand you've got the environmental argument, on the other hand you've got the economic argument, and you say that these tests have to be put to the future generations commissioner, the legislation and all the rest of it—the future generations Act. You can do that now so that the case and the argument and the policy can be understood and gain wider support outside of this Chamber. And, as I said, from my understanding, certainly the previous First Minister was very clear that he wanted to get rid of air passenger duty, especially on long-haul flights. I would be grateful if you could, in your summing up, commit to that particular policy that was the policy of the Welsh Government under the previous First Minister, and I'd like to understand whether it's a continuation of that policy for this current Government.

It is indeed gratifying to note the recommendations in the Welsh Affairs Select Committee report, because there is no doubt that if air passenger duty were to be devolved, and the Welsh Government were to use this opportunity to reduce or better still abolish APD, it would unlock the true potential of Cardiff Airport by considerably enhancing the Welsh Government's ability to attract new airlines, and thus potentially facilitating a large increase in passenger numbers using the airport.

APD was devolved to Northern Ireland for direct long-haul flights through the UK Finance Act 2012, whilst the Scotland Act 2016 made provision for the full devolution of APD to Scotland. Since then, the Welsh Government has argued that there is no justification for being treated differently to Scotland and Northern Ireland, and we on this bench fully endorse that stance. 

The problem for Wales has been the UK's stance with regard to protecting the status of Bristol airport. This argument no longer stands, as Bristol's operations have hugely expanded over recent years, dwarfing those of Cardiff. We only have to look over the Severn to the M49 corridor to see the wider impact expanded airport usage can have on the economy. A completely new interchange is being constructed to make access to a large business park, which is expected to provide thousands of local jobs. As set out in the Welsh economic action plan, enhancing the connectivity of Wales with the rest of the UK and internationally is key to the development of Wales' economy. 

As long ago as 2014, as referred to by Andrew R.T. Davies, the Silk report also recommended that APD should be devolved for direct long-haul flights initially. But although Andrew R.T. Davies said that they didn't say about standard flights, they did actually say that

'devolving all rates of APD to Wales should be part of the UK Government’s future work on aviation taxation'.

Now, given that the Silk report was five years ago, I think it has now come time for full devolution to take place. We in Brexit fully endorse the recommendations in the report and call upon the UK Government to devolve these powers as soon as practicable. But I have to say that we support this APD on the basis that the Welsh Government will use it to actually take away or reduce it considerably, because that is what this will do to the Welsh economy, and that's the whole idea of this being devolved to the Welsh Government.

I'd like to contribute only briefly to this debate. Like others, I warmly welcome the motion that the Government and opposition parties have placed before us this afternoon, and I'm very happy to endorse and support that. I think we should also welcome the work of the Welsh Affairs Select Committee. Now, I accept I have somewhat of an interest in this matter, but it is one of the instruments of the House of Commons and of the Westminster system that has been consistently supportive of the work of this place and which has recognised how we need and can develop institutional scrutiny and democracy across the United Kingdom.

Now, I believe that we should be devolving this particular tax because I believe that we should ensure that we have a coherence of structural devolution. I'm not one of these people who believes that we should devolve any particular matter unless there's something we especially want to do with it that is different to that which is done in England. I've never been one of those devolutionists who simply want to define what we are here in Wales as being different to the other side of Offa's Dyke.

I believe that we should have coherence in the settlement. I believe that, at present, the settlement is a broken settlement. You only have to listen to any debate on transport to look at that. You have the issues that I have with the railway from Ebbw Vale to Cardiff, which are matters that are ignored by the Department for Transport in England, and the Government here do not have sufficient powers to progress matters as we would choose to do. There is a structural issue there with the settlement, and I believe there's a structural issue here with the settlement as well. I believe that, if the Welsh Government—and the Welsh Government is the only authority that has the ability to properly manage transport policy in Wales, so if it is to do that in a coherent fashion then it must have the powers available to it to deliver that policy, whatever that policy happens to be. And air passenger duty is a part of that. It's part of a suite of different powers that should be available to the Government to enable it to deliver a holistic policy.

So, I believe that we should support the work of the select committee in this matter, and I believe we should support the long-standing view of the Welsh Government that this is devolved as part of a wider fiscal framework, which will establish a very different financial relationship between the different institutions of the United Kingdom. We've already seen this argument made coherently by both Silk and by Holtham. Both have been very, very clear that, if we are seeking to devolve issues of taxation then we should do it, not on a piecemeal basis but in order to deliver a stable settlement where both Governments in England and here in Wales are able to deliver their policy in a holistic manner. We've already seen this failure with the judicial system, where criminal justice again represents a part of a broken settlement.

I hope that, in resolving these matters, we may reach a point whereby we have a stable and coherent settlement before either I retire or my constituents decide it is time for me to retire. I hope that, in taking this matter forward, the United Kingdom Government will take a more rounded view on these matters. I'm not sure if I share the optimism of Andrew R.T. Davies and Nick Ramsay that a new Prime Minister later this year will lead to such a happy outcome, but what I hope we'll be able to do—and the former First Minister has spoken clearly about this, our new First Minister has spoken very convincingly about this as well—is to arrive at a point where the settlement works and the settlement no longer becomes the point of debate but how we operate the settlement and the policy options that we have become the area of debate, and that is how any democracy should properly operate. So, I don't wish to enter into a debate, and I hope we don't cloud the debate this afternoon with questions about how the Government would operate this taxation. That is a matter for manifestos, election and political debate in this place. What this place has a responsibility to do—and we failed with the last Wales Bill or Wales Act process because of the lethargy in Whitehall in delivering a devolved settlement that enables us to take these matters forward. I hope now that through this report and other reports we'll be able to ensure that we do have a devolved settlement that enables both Governments to deliver their policy.

The Minister for Finance to reply to the debate. 

Diolch. I'm very grateful to all Members who have made some very interesting and useful contributions during the debate today. It is really my hope that the UK Government will stop seeing APD devolution as something to be resisted, but instead work with us to generate opportunities not only for the economy of Wales but also for the south-west of England and the UK as a whole, because there is no evidence to suggest that the devolution of APD would disadvantage Bristol Airport in any way and the Welsh Affairs Committee was quite clear on that.

Whilst the benefits to Wales are clear, devolution of APD to Wales could ultimately help reduce airport congestion in the south-west of England, making more efficient use of the existing runway and airport capacity across the UK. Expanding airport capacity is clearly crucial for the UK's longer term prosperity.

Turning to some of the specific contributions, there was, naturally, concern about the climate emergency, and to address the climate emergency we have accepted the UK Committee on Climate Change's recommendation for a 95 per cent reduction in Wales and intend to legislate to that effect. This represents Wales's fair contribution to the UK's commitment under the Paris agreement and demonstrates our commitment to tackling the climate emergency. In March, the Welsh Government published 'Prosperity for All: A Low Carbon Wales', and that contains detailed, sector-by-sector emissions profiles, and 100 policies and proposals to achieve a low-carbon Wales. And this will get us to our 2020 emissions target and set the foundation for greater efforts that we are starting to generate. It's important, I think, to recognise and to put the issue in context because the latest figures, from 2016-17, estimate the total emissions from national and international aviation in Wales is 0.22 per cent of overall emissions for Wales. It's also important to recognise that research that's been carried out independently shows that there would be carbon savings in terms of emissions because of the road traffic to Bristol Airport.

I recognise that there's lots of interest and enthusiasm in terms of how Welsh Government might seek to use these powers in future, but during this debate and during the discussions that we're having on this, and during the evidence that I was pleased to give to the Welsh Affairs Committee, I was really quite clear not to spell out exactly what we'd intend to do with that, because there's an important point of principle here, which I think Alun Davies encapsulated perfectly, and that is that it's not for the UK Government to decide whether or not to devolve powers to Wales by taking a view on how those powers might be used in time. It should undertake the decision as to whether or not to devolve the powers on that merit alone, which is why I haven't gone into much detail on that in the debate today. However, of course, it would be subject to full consultation with interested individuals, with business, with the tourism sector, and, of course, colleagues would want to have their say.

In terms of cost, there would be no cost to the UK Government. The Welsh Government's funding would be correspondingly reduced to a block grant adjustment to account for the loss of UK revenues. This is likely to be initially equivalent to the amount of APD revenue generated in Wales, and the latest estimates by HMRC for 2017-18 show APD revenues in Wales to be around £9 million. So, there's absolutely no prospect of it being the kind of cash cow that Michelle suggested that it might be. Actually, our interest here really is about unlocking the potential of the airport.

There'll be no administrative costs for passengers either. As with the current system of APD, which is run by HMRC, airlines are obligated to make the tax returns. And in terms of the cost to operators, in their oral evidence to the Welsh Affairs Committee, airline operators confirmed that in the event that additional administrative costs did arise from devolution, they didn't expect the burden to be significant or lasting, and it certainly would not serve as a barrier to them using Cardiff Airport.

I've really welcomed the strong party support and consensus that we've had during this debate, so perhaps I'll prevail upon colleagues for some further cross-party support on a related issue, and that's, in terms of planning for a post-Brexit Britain, we need to create opportunities to continue and develop our economy. Andrew R.T. Davies specifically spoke about the importance of connectivity and the role that air travel can play there. With 80 per cent of Wales's trade being with UK domestic markets, improving the transport connectivity around the whole of the UK is vitally important to the success of our future, and that's why those public service obligation routes are so important.

As part of our planning for life post Brexit, we did develop and send robust evidence-based applications to the UK Government to submit to the European Commission for a new network of domestic public service obligation air services, but the UK Government, unfortunately, is blocking these applications, without the provision of any real rationale other than it's currently developing a new aviation strategy 2050, and that's likely to take two or three years to be passed into UK law.

Now, the UK Government's role in terms of public service obligations is simply as a conduit to pass our applications on to Europe; it has no other function in the process. So, Westminster's position of obstructing the development of these new routes, and therefore, more widely, the aviation sector's development in Wales, is extremely frustrating, particularly when considered alongside its decision, for example, not to fund the eGates in Cardiff while, at the same time, funding them in competing regional airports in England, and, of course, persistently refusing to devolve air passenger duty to Wales when it's already done so for Northern Ireland and Scotland. So, I'd welcome cross-party support for the public service obligation air routes that we have asked the UK Government to take forward on our behalf.

But to close, Llywydd, I'm very grateful, again, to colleagues for their contributions and to put on record my thanks, again, to the Welsh Affairs Committee for a very useful and good piece of work. Thank you.

The proposal is to agree the motion. Does any Member object? The motion is therefore agreed in accordance with Standing Order 12.36.

Motion agreed in accordance with Standing Order 12.36.

This means that there are no votes to be taken today, and that brings today’s proceedings to a close.

The meeting ended at 17:13.