Expanding Heathrow Is A Start, But Now We Must End The War On Aviation By Cutting Air Passenger Duty




With the government’s announcement that Heathrow will finally get a third runway, it is time to end the decades-old war against aviation by slashing Air Passenger Duty too

About this time every year, my Texan wife and I glance at the calendar and realise, with dread, that the time has come to book plane tickets to the States for Christmas. To be clear, the dread has nothing to do with visiting my in-laws, whom I love very much – no, what ties my stomach in knots every autumn is the nagging question of how much money the British government intends to extort from me for the privilege of flying away from this rainy island for a couple of weeks of Texas sunshine.

Every year, Air Passenger Duty – that invidious, regressive, anti-business tax – creeps ever upward. And while the government may deign to excuse certain people from this extortion (children under sixteen were made exempt this year, in a blaze of self-congratulatory glory), for the rest of us APD keeps on inching upward. At a time when falling oil prices should mean that air fares reach historic lows, in Britain at least the cost of air travel is kept artificially high thanks to this ill-conceived tax – by far the highest in the developed world.

And why? Primarily as a sloppy wet governmental kiss to environmentalists, who some time ago decided that nothing poses a greater threat to the Earth than a working class person enjoying a holiday in Florida, or taking a cheap excursion to one of the sunnier parts of Europe. Air Passenger Duty is nothing so much as the collective howl of outrage from well-heeled leftist environmentalists that poor people are forgetting their place (i.e. receiving benefits and being thankful for them) and daring to travel the world as wealthy people did before them.

Remember the leftist credo, everybody: Fashionable celebrities flying private jets to Davos to moralise about carbon emissions made by the rest of us = good. Nasty working class folk flying Ryanair for a fortnight in Lanzarote or a stag weekend in Riga = bad.

Now that the government has taken the painful and very belated decision to proceed with the expansion of London’s Heathrow Airport (something which should have happened a long time ago) there will be inevitable calls for punishing new environmental levies to offset the terrible “damage” that is supposedly wrought when the state takes its jackboot off the throat of the aviation industry. There will likely be calls to raise Air Passenger Duty even further to help pay for this crucial national investment, even though the exorbitant tax already places Britain at a huge comparative disadvantage.

The government must resist any and all calls to raise APD. In fact, there could be few clearer signs that this government is committed to championing UK aviation and supporting the economy through the uncertainty of Brexit than a bold, dramatic cut in Air Passenger Duty from the current level of £13 short haul / £ 73 long haul / £146 premium cabin rates back down to the single digits. When my wife and I connect in Houston or Dallas Fort Worth on our way from London to the Rio Grande Valley, we pay the state of Texas no more than a few dollars for the privilege of transiting through DFW or George Bush Intercontinental airport – and both of those hubs put London’s Heathrow and Gatwick to shame.

At a time when the government is considering cutting Corporation Tax as low as 10% as an incentive to firms to invest, grow and remain in the United Kingdom, we should not be discouraging business executives and holidaymakers (72% of whom come to the UK by air) from choosing Britain by mugging them before they even step off the jet bridge. Cutting Corporation Tax is great, but the government should not forget individuals, who currently labour under all manner of punitive stealth taxes and would greatly welcome the relief. Neither should the government forget the aviation industry, which is every bit as vital as shipping to an island nation, and which for too long has been stymied and suppressed by cowardly politicians who refused to take critical decisions in the national interest.

With the long-overdue decision to build a third runway at Heathrow Airport, the government has finally called an end to years of dithering and inaction and made a necessary decision in support of the economy. But the benefits of this decision could yet be killed in the crib unless Britain also signals its intention to stop being the high-tax, anti-aviation country which prioritises impractical, virtue-signalling environmentalism over necessary infrastructure investment and tax reform.

There is no earthly reason why you or I should have to pay £73 for the privilege of taking off from Heathrow Airport, whether it has two runways or three. And if Theresa May and Philip Hammond are serious about signalling that Britain is open for business then slashing this one small but immensely harmful tax would be a great place to start.





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The Furore Over David Cameron’s Tax Affairs Reveals Britain At Its Worst

David Cameron Tax Protest - Panama Papers

Responsibly lowering his tax liability through perfectly legal means is one of the few things that David Cameron has accomplished with any real competence. If only his stewardship of British sovereignty and democracy was half as accomplished, his premiership might not be such a letdown

No, I’m not going to write about David Cameron’s tax return, because despite the sound and fury emanating from the Paul Mason, “neo-liberalism” hating Left, it is a complete non-story.

That much is outlined well enough here, here, here and here.

This blog is more than happy to discuss tax reform – preferably of the fundamental and flattening kind – but not through the lens of our national envy and hatred of wealth and success. Because this tawdry intermission in our political conversation serves only to highlight all of the flawed parts of our national psyche – particularly the disdain bordering on hatred many people feel toward wealth and success – while fading out everything that makes us great.

Of course there are privileged people in this country with wealth and resources that the poorest among us can only dream about. But every moment we waste casting envious eyes at those with more than us, bemoaning our own lot in life and viewing ourselves as part of a vast Collective of the Oppressed and Hard Done By is a moment we are not accepting the agency and responsibility we have for our own lives and decisions.

Should we be outraged that the legal, private tax affairs of an elected politician somehow set a bad example? Okay – but only if we are really willing to go down a path that ultimately will lead to witch-hunts of anybody who fails to “voluntarily” donate 90% of their income to Our Blessed NHS (genuflect).

Bear in mind, many of those shouting the loudest themselves are guilty of the same (or worse) behaviour, cynically (and hypocritically) attempting to use this story to advance their political agenda. And in terms of Cameron’s mishandling of the media story, are we really going to focus on this one particular instance and not the many other clangers? I could write a blog post every day for a year about why David Cameron is a lousy conservative and a disappointing prime minister, and still not get around to talking about his family’s mundane tax affairs.

So if you want to read a furious polemic about the Evil Tories and their inherited wealth, look elsewhere – Owen Jones and Paul Mason will take good care of you. Likewise if you want to read a simpering, fawning defence of the prime minister.

Our country faces an existential choice in the coming EU referendum while the liberal, enlightenment values which we supposedly hold dear are under attack everywhere from GCHQ to social media to the university campus.

And so long as that remains the case, this blog will focus on the things that matter, not the shiny distractions which only serve to reveal our petty biases and jealousies.


Panama Papers - Mossack Fonseca - Tax Avoidance Evasion

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Margaret Thatcher Conference on Liberty – Second Impressions

Margaret Thatcher Conference on Liberty 2014 4


The Margaret Thatcher Conference on Liberty 2014 continues at London’s Guildhall.

Semi-Partisan Sam is live-tweeting the event here, and previewed the conference here.

The event continues to surpass expectations, with bold policy suggestions on tax and on the defence of national sovereignty in an age of supra-national organisations chipping away at democracy.

It should be noted that the agenda items that play into hands of the discredited neo-conservatives and national security extremists are yet to come, so the conference could yet take a turn for the worse. Former CIA chief General David Petraeus and the National Review’s Jonah Goldberg, for example, are yet to weigh in on the discussion panels.

Key highlights from the late morning and early afternoon sessions include:

STOP THE PRESSES – An important proposal on tax. The Centre for Policy Studies rolled out #ThePolicy, which involves eliminating capital gains and corporation taxes completely for small businesses, unleashing them to create jobs. The loss of tax revenue would be balanced by reductions in the welfare bill and increases in PAYE and National Insurance Contributions from the newly employed.

A lively debate over whether corporations or big government pose the bigger threat to liberty. The result came down emphatically on the side of big government (79% to 21%), perhaps rather surprising considering the increasing synergy between the two.

Art Laffer telling it like it is, with his five keys to success for any national economy: A low rate, broad-based flat tax; spending restraint; sound money; free trade and sane (not excessive) regulation.

A call to embrace the rise of developing economies: Art Laffer says “You need China. Without China there is no Wal-Mart and there can be no middle class”.

Big or small business is irrelevant – what matters is efficiency and competency, and may the best size win, according to Laffer.

The Battle of the Professors: Luigi Zingales and Deirdre McCloskey slug it out in a panel discussion, arguing whether the economic situation of the average (median or mean) person has improved faster or slower in recent years.

An attack on the bailouts, with The Economist’s John Micklethwait declaring that “too many people were bailed out for too much, and it perpetuated this sense of unfairness”.

The conference now continues, with General David Petraeus rebutting some of the theories of American decline in the panel discussion “After America, What?”


Stay tuned to @SamHooper on Twitter for live-tweets from the conference, and to this blog for discussion and analysis of the conference after the fact.

Anti-Independence Bribes For Scotland Could Wreck The Union

RBS banknote


Hearteningly for those who believe in the United Kingdom and do not want to see the fragmentation and balkanisation of our country, the latest opinion polls still show a large (if slightly falling) majority in favour of voting No in the upcoming referendum on Scottish independence. But this has not put the No camp at ease, as evidenced by new reports of more hurried ‘concessions’ being offered to sweeten the deal for those Scots still vacillating over how to vote.

The Guardian reports:

David Cameron has backed plans for Scotland to set its own income tax rates, including the freedom for the first time to cut taxes below the level of the rest of the UK. He said the proposals, published by Scottish Tory leader Ruth Davidson on Monday, would offer Scottish voters “real powers with real consequences” if they voted no in September’s independence referendum.

The new powers, potentially including control of housing benefit and Scotland’s share of VAT receipts, were described by Davidson as a radical and “thoroughly Conservative vision” for greater devolution.

It is certainly true that additional devolution of powers could fall within the remit of a “thoroughly conservative vision”, as the Scottish Tory leader says – but only if the entirety of the Strathclyde report is implemented, not just the eye-catching parts about tax. Ruth Davidson has taken an excellent piece of constitutional work and boiled it down into a single policy that would actually be harmful if implemented.

The ill-conceived focus on tax is just another reactive move, likely to serve only two purposes, both negative:

1. Offering additional concessions suggests fear and panic on the part of the “Better Together” campaign. When issues of momentum and public perception are known to be so important, it reeks of political amateurism to carelessly give the impression that the pro-Union campaign is somehow on the back foot and in need of new eye-catching reasons for Scots to remain part of the United Kingdom.

2. Offering additional areas for devolved power in a reactive way because of opinion polling is just about the worst way of charting a path toward constitutional reform imaginable. And this latest bribe raises all sorts of questions that our political leaders (many of whom are out of their depth on constitutional matters anyway) are unable and unwilling to answer at the moment. Why, for example, will Scotland be given this new power over income tax, but not Wales, Northern Ireland or England?

The danger is that by touting ill-conceived bonus incentives such as these to remain within the Union without the context of broader constitutional change for the UK (which Lord Strathclyde gave in his report but is going largely unreported), the “Better Together” advocates are simply punting on the issue and creating more problems that the UK must wrestle with in future.

Offering greater income tax and VAT altering abilities may have the short term effect of pleasing a few wavering Scottish voters, but it will also sow the seeds of discontent in the other home nations which are not equally favoured with these powers. How is it wise to fight the flames of Scottish separatism today in a way that can only fuel the fires of Welsh and English nationalism tomorrow?

As with any discussion about devolution of powers, there are also important considerations around the West Lothian question that remain unanswered.

From what little we currently know of the proposal, the Scottish Parliament would be given full power over income tax rate setting (over and above the +/- 3% deviation currently allowed), as well as some control over VAT. But while there is a partial link between taxes raised in Scotland and the amount of money available for Scottish public services, in reality most of the UK’s finances are ultimately fungible, with a big central pot satisfying demands from all corners of the United Kingdom.

If the Scottish Parliament assumes these new powers of taxation but Scottish MPs at Westminster are not prevented from voting on matters of taxation involving England, Wales and Northern Ireland, it would create an extraordinarily strong perverse incentive for Scottish MSPs to vote to lower income tax and VAT as much as possible within Scotland while Scottish MPs vote to keep taxes higher in the rest of the UK, knowing that the rest of the country must continue to subsidise Scottish defence, infrastructure and other critical areas.

But more than questions of hurt pride, inequality or the creation of an incentive to effectively steal from the rest of the Union, this represents yet another cack-handed attempt by politicians to solve a short-term problem at the expense of the longer-term stability of the United Kingdom. More devolved powers over taxes and other areas are a great idea, but all of the home nations deserve these power equally; they should not be granted to Scotland alone.

Giving out important constitutional waivers whenever one part of the union becomes restive is a terrible way to govern, and yet this is increasingly becoming the norm, with the incomplete rollout of Strathclyde’s excellent report being preceded by Gordon Brown’s one-sided suggestion of the same thing – more devolution on taxes and not much else.

This blog has strongly and consistently advocated for a full constitutional convention to be held to debate and agree precisely how we want to move forward as a United Kingdom of four home nations, which powers we want to reserve for “we the people” and which we lend to government at the local, county, devolved country and national level – with equality of powers among the home nations a central tenet.

The current settlement – with broad powers given to the Scottish Parliament, lesser powers to the Welsh Assembly and the fractious Northern Ireland Assembly never more than five angry words away from suspension and the reimposition of direct rule from Westminster – is rapidly becoming more complicated than any of us, least of all our politicians, can wrap our heads around.

At the time of Gordon Brown’s unrequested intervention in January, this blog warned:

When the unionist side is already making such a convincing case and steadily holding a majority of public opinion, why come out proposing “major constitutional changes” as a deal-sweetener? Not only does it reek of panic and desperation, it is a cast-iron certainty that the constitutional changes being proposed will be of a narrow, specific and non-universal nature, designed to bribe voters but carrying with them the unintended consequence of making the architecture of the UK’s political governance even more complex and inequitable than it is today.

Unfortunately, it seems that what was just a doodle in the margins of Gordon Brown’s notebook in January is now well on the way to becoming part of the UK government’s official pitch to Scottish voters, and blueprint for the constitutional future of the entire UK.

Scottish tartan enjoys timeless fashion appeal not just because of the rich culture and history associated with it, but also because of the intricacy and precision, the warps and wefts intersecting and being spaced apart just so in order to produce a unique pattern in the larger tapestry.

It is sadly ironic that the panicked and misguided efforts of short-sighted politicians north and south of the border risk turning the UK – if it survives 2014 at all – into a far messier, less pleasant patchwork than we are today.

Bold Proposals On Tax, Ignored By Cameron



As more people come out in support of scrapping the 40% tax band – or doing something, anything that might alleviate the pinch on middle income earners – David Cameron remains resolutely set against the idea.

This time, it was the turn of one of Cameron’s own No. 10 Policy Board members, Nadhim Zahawi, to advocate for 800,000 people caught up in the fiscal drag which has seen them start paying the 40% rate on their marginal income in the last three years.

The Telegraph reports:

Mr Zahawi on Wednesday praised plans by Renewal, a Tory pressure group, to abolish the 40p rate entirely and deliver a tax cut worth £2,000-a-year for 2 million middle class workers. 

Under the proposals, the move would be funded by lowering threshold for the 45p rate from £150,000 to £62,000. 

In a speech at Policy Exchange, a think-tank with links to the Conservative Party, Mr Zahawi said: “It is a welcome development that Conservatives have started to seriously debate where next for income tax. 

“Labour have the 50p, the Lib Dems have the mansion tax, we need our own iconic tax policy. I think Dave Skelton’s [from Renewal’s] contribution, and his suggestion that we abolish the 40p rate and pay for it by lowering the 45p rate was a great way of starting the conversation.”

Renewal’s plan is not perfect – £62,000 seems far too low to impose what is a very high top marginal rate of 45%, for instance. Nor is the idea of making an ‘iconic’ tax proposal just to have a handy catchphrase with which to compete with Labour and the Liberal Democrats redolent of good policymaking or government.

But this is a problem that affects people up and down the income scale, and the idea of giving some relief to those slightly higher up the scale deserved more than the immediate dismissal that it received from David Cameron. As the Telegraph continues:

Mr Cameron on Wednesday defended the government’s focus on increasing the tax free threshold. 

Asked if Tory back-benchers were right to call for the 40p threshold to be raised, Mr Cameron said: “I’m a tax cutting conservative. I want to see us relieve people’s tax burden. We’ve chosen to do that through raising the personal allowance which helps everyone earning under £100,000.”

David Cameron, the tax cutting conservative. It sounds good, but it is hardly an accurate claim.

When Cameron says that “we’ve chosen” to raise the personal allowance, he neglects to admit that this was a Liberal Democrat, not a Conservative policy. Had the LibDems not manoeuvred their way into coalition government, the Conservatives would likely never have entertained the idea of a personal allowance up to or exceeding £10,000. Now that he is also rejecting the idea of doing anything at all about the 40% tax band – either scrapping it or increasing the level at which it applies – he is committed to doing nothing significant for middle income earners either.

This leaves only those who earn enough to qualify for Gordon Brown’s new top rate of income tax, which George Osborne reduced from 50% to 45%. And that is the situation currently faced by the Conservative Party – the only concrete actions of this ‘tax cutting conservative’ party have been to cut the taxes for the very highest earners. This track record is every bit as bad as the optics make it seem.

Ed Miliband and the Labour Party like to talk about the “cost of living crisis”, and they are right to do so. Aside from the fact that there is obvious electoral mileage to be gained, someone needs to talk about the fact that despite the better economic news of late, wages remain stagnant while inflation continues to eat away at purchasing power. Economic growth means absolutely nothing to people if it is not reflected in their own personal circumstances.

At some point soon, people might start realising that another UK economic recovery built on booming property prices alone is unsustainable and undesirable. And when this happens, the focus will turn to consumer spending, and why it isn’t more buoyant.

Perhaps then the foolishness of treating ever more British wage earners as higher rate taxpayers will become more readily apparent.