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Budget Resolutions and Economic Situation

And paid for them, as my hon. Friend says. I welcome the statement that the controversy"““has refocused attention on more fundamental shortcomings in the design of APD. In particular as a per-passenger tax it is not directly linked to the carbon content of the flight. As a result it provides no incentives for airlines to use more fuel-efficient aircraft or to increase seat-occupancy rates. It also excludes the fast-growing air freight sector.””" I welcome, too, what the document says about the Financial Secretary to the Treasury. It points out that he admits that APD"““is a blunt instrument as far as the environment goes… It is not even the best tax instrument actually to deal with the effects of aviation… In narrow terms it’s not specifically a tax that is designed for environmental ends.””" It also quotes the Government’s 2003 aviation White Paper as saying"““Because of its blunt nature, APD is not the ideal measure for tackling the environmental impacts of aviation.””" It continues:"““Together with the fact that the tax increase announced in the PBR was not offset by reductions in tax elsewhere, these deficiencies help to undermine public support for APD as an environmental tax and feed suspicions””—" I would put it more strongly than that—"““that it is simply designed to raise revenues for the Treasury.””" I commend my hon. Friend the shadow Chancellor for that consultation document and his incisive analysis of the defects of APD. When I last heard him speak, I was left in some uncertainty as to whether we would be voting against resolution 13, but I hope that in the light of what he says in the document and our concern about retrospective legislation, he will join me and others in the No Lobby when we vote on it. Let me refer to the way in which the Budget has covered up the work of Sir Michael Lyons. His commission was set up in July 2004 to consider the whole issue of how we pay for local government. After almost three years, he reported in a way that many of my elderly constituents would find encouraging. He said that 1.8 million people, mainly poor pensioners, are unable to get the full benefit of the council tax rebate and that as a result there is an enormous extra burden on those poorer members of our communities. He suggests that we should bring in new measures to help those people who are paying £1.8 billion a year more than they should be because of the inefficiency of the council tax rebate system. Sir Michael came forward with the radical idea—I hope that it will be taken up by my hon. Friend the shadow Chancellor—of raising the upper capital threshold for entitlement to council tax rebate to £50,000.