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Mike Kane (Wythenshawe and Sale East) (Lab)
It is a pleasure to serve under your chairmanship, Ms Dorries. This is my first Westminster Hall debate, so I expect any interventions to be gentle.
Our aviation sector is an important success story for the UK. We have the second largest aircraft manufacturing industry in the world, after the USA. Aviation benefits the UK economy through its direct contribution to gross domestic product and employment and by facilitating trade and investment, manufacturing, supply chains, skills, development and tourism. In 2011, the aviation sector’s turnover was some £53 billion, and it generated £18 billion of economic output. As a sector, aviation provides more than 1 million jobs and supports more than 2.5 million jobs in the tourism sector. Two out of three companies say that the UK’s international transport connections are crucial for their future investment decisions. A recent CBI report stated that adding just one additional daily flight to each of the eight largest high-growth markets in the world could increase UK trade by as much as £1 billion a year.
Aviation also brings many wider benefits to society and individuals, including travel for leisure and visiting family and friends. More than 220 million passengers go through UK airports every year. UK airports are contributors to the economic development of the UK regions in their own right, but their importance goes much further. As well as being major employers and wealth creators, our local airports enable local businesses to grow and develop by providing international connections to global markets and enabling the rapid delivery of goods to market.
Although the UK might be a small country in global terms, we are currently one of the most globalised countries in the world. With centres of growth shifting eastwards, our reliance on international trade to drive prosperity and generate employment is set to become even greater. As well as supporting international trade, international connectivity helps to underpin inward investment: it is hard to imagine the likes of Google locating in my region, the north-west, without access to direct air links. If we are serious about rebalancing the UK economy and closing the productivity gap between the north and the south, international connectivity is vital.
Airports are key catalysts for economic growth and jobs, and they make a significant contribution to the success of the regions in which they operate. My constituency is home to Manchester airport and benefits greatly from its close links with that airport. In 2014, Manchester airport is the third largest UK airport and is more than twice the size of any other airport outside London. It generates some £620 million of gross value added for the north-west region and is a major employer, with 17,000 people employed on site; of those, 2,000 work for the airport and the rest are employed by on-site businesses such as airlines and handling agents. A further 40,000 jobs in the region depend on the airport’s business. There are big plans ahead for Manchester airport.
Graham Jones (Hyndburn) (Lab)
I congratulate my hon. Friend on securing this important debate for the north-west, which is a manufacturing region. He is making a worthwhile point about Manchester airport’s impact on the region, but there is a bigger question: should it seek to expand? Should it become a hub airport? Would that serve the region by driving economic prosperity and thereby rebalancing the British economy? Should we ask that question, rather than just allow Manchester airport to exist as an airport with a balance sheet? That is how it seems to be operating at the moment.
Mike Kane
Yes, of course Manchester airport should serve the north-west economy as a whole. I remember the story that the airport was created in 1935 by one vote—the mayor’s casting vote secured the decision to build outbuildings and a strip of runway at Ringway. When I was a young councillor, my hon. Friend the Member for Blackley and Broughton (Graham Stringer) was my council leader, and he introduced plans for the second runway, which cost £172 million. We have to continue to grow.
Alok Sharma (Reading West) (Con)
This is a timely debate given the discussions on expanding airport capacity generally. On international connectivity, I understand the need for more point-to-point flights from Manchester airport, but for hub capacity surely we ought to be expanding our only hub-capacity airport, which is Heathrow. That would lead to more connectivity, more jobs and more investment in the north-west.
Mike Kane
Currently, flights from Manchester airport mainly go point to point. There is an argument for hub status, but I think that argument must be much further down the line than it is today.
Airport City Manchester will introduce a new concept to the UK, delivering up to 5 million square feet of new highly connected business space over the next 10 years. It has already attracted Chinese investment—the Beijing Construction Engineering Group has at least a 20% stake—and is set to attract even more connections at Manchester airport, facilitating further trade and growth. Airport City will take Manchester airport beyond its traditional use as a regional airport hub and transform it into an international business destination in its own right, providing a major regeneration opportunity for the surrounding area and helping to boost Manchester’s attractiveness as a major European business city.
Sir Malcolm Bruce (Gordon) (LD)
I congratulate the hon. Gentleman on securing this debate. I completely understand the case he makes for Manchester being the most important airport outside London, but will he acknowledge that air links are vital to areas such as mine in Aberdeen, where the shortest journey time to London by train is more than seven hours? British Airways’ withdrawal of our only link to London City airport is an indication of an airline that puts profit before service, given that the route is profitable, just not as profitable as other routes.
Mike Kane
Will the right hon. Gentleman bear with me for a few more minutes? I know many people want to talk about their regional airport, which is the focus of this debate. I will specifically mention airports that are represented by Members on both sides of the Chamber, which might be the appropriate opportunity for Members to get on the record. This is not my maiden speech, but I would like to push on with Manchester airport for a few more minutes.
Airport City provides an innovative and complementary offer to the region’s economy; with Media City and the city centre, it creates a modern business destination that will make full use of the existing infrastructure. The majority of workers and visitors will not drive to the airport; instead, they will walk, cycle, take the newly constructed tram, which will soon be in operation, or take a train or plane. It is estimated that the wider Airport City enterprise zone will create up to 16,000 new jobs over the next 10 to 15 years, including at University Hospital South Manchester’s medipark development. Airport City is likely to attract new long-haul airline routes to Manchester to support and serve the requirements of the global businesses based on site, which will in turn bring further growth, employment and destination options. Coupled with the extension of the Metrolink by 2015, Airport City will open up the south Manchester area and make it even more accessible for local people, creating employment opportunities and transforming the local community.
What else can regional airports bring? Manchester has established strong relationships with foreign airlines and brought significant investment to the region. Emirates and Etihad have their European call centres in the north-west. Etihad is one of the major sponsors of my football club, Manchester City, and is investing significantly in east Manchester, where the stadium is located. [Interruption.] I beg forgiveness from my hon. Friend the Member for Blackley and Broughton, who supports the team from the other side of the city. Manchester City’s new training complex will be completed in October 2014; it will include a £200 million football academy and a 7,000-seat stadium. Only last month, the leader of the city council, Sir Richard Leese, announced a new partnership with Abu Dhabi United Group, the club’s owners. The partnership with the city council will build more than 6,000 new homes in run-down parts of east Manchester as part of a £1 billion, 20-year deal—the single biggest residential investment that Manchester has seen for a generation.
There are many other examples of regional airports driving regional growth and jobs throughout the UK. From its modest beginnings as a world war two US air force base, Stansted has grown into the fourth busiest airport in the UK, serving 18.5 million passengers. It is currently the largest single-site employer in the east of England, employing more than 10,200 people in 190 on-airport companies and contributing more than £770 million to the local economy. East Midlands airport generates about £239 million for the regional economy and supports more than 8,500 jobs in the region. The east midlands is also a major base for manufacturers in the UK because of the proximity to the cargo connections provided by East Midlands airport. Most of the UK is within four hours’ trucking time of the airport. Aberdeen International airport provides 2,000 jobs on site and supports a further 4,000 Scottish jobs. Around 3.5 million passengers travelled from the airport in 2013 to more than 30 UK and world destinations. Leeds Bradford International was the fastest-growing UK airport in 2013, and it serves more than 70 destinations. It is Yorkshire’s international gateway and serves the largest metropolitan region outside London.
Stuart Andrew (Pudsey) (Con)
It is like a game of bingo, waiting for one’s local airport to come up. The hon. Gentleman is right that Leeds has been one of the fastest-growing airports, but does he agree that one of the big problems it faces is the surface access arrangements? It is served by mediocre roads in residential areas, and that has caused huge problems for my constituents. This is more for the Minister’s ear, I suppose, but does the hon. Gentleman agree that we should look into a rail link to the airport to make the investment there truly effective?
Mike Kane
I would have thought that the Tour de France would have improved the roads in that region in the past few weeks. In 1882, a famous Mancunian, Daniel Adamson, envisaged a city region stretching from the Mersey estuary to the Humber estuary. We have to start thinking like one economic region across the country, and that includes the rail links the Chancellor began to talk about just a few weeks ago in Manchester.
Jason McCartney (Colne Valley) (Con)
I congratulate the hon. Gentleman on securing such a timely debate. As a member of the Transport Committee, when we discuss Heathrow expansion I am always banging the drum for our regional airports. I particularly enjoyed how accessible Manchester airport was when I flew with Pakistan International Airlines direct to Islamabad to visit Kashmir and Pakistan. My family and I also use Leeds Bradford airport. We must continue, across the House, to bang the drum for regional airports and stop being obsessed with Heathrow expansion. We need better connectivity for our regional airports, and we must use them better.
Mike Kane
I cannot agree more with the hon. Gentleman. As I said to the Minister in the main Chamber the other day, over the years Governments of all parties have sometimes been caught in the glare of Heathrow’s headlights when making policy, but really the issue is combining regional airports and growing power in our regions, partly through competition but mainly through co-operation.
Newcastle International airport plays a vital economic role in the north-east, to which it contributes £650 million. Since 2006, the value of exports flown through the airport has risen from under £20 million to more than £250 million. Birmingham airport—
Karen Lumley
I thank the hon. Gentleman for securing this debate. I did not think he was going to get to Birmingham. Does he agree that if we are serious about rebalancing the country’s economy, we need airports such as Birmingham’s? Does he welcome the news that there are to be direct flights to China, which will enable business men in the west midlands to access emerging economies?
Mike Kane
I cannot agree more with the hon. Lady. The figures I have are that Birmingham airport’s catchment economy exported £55 billion of goods in 2011. We have to begin to exploit the emerging south-east Asian markets, and there is a need for regional airports, not just the hubs in the south-east of England.
There are smaller airports, such as Blackpool, which has been operating since 1909. A £2 million refurbishment of the passenger terminal there was completed in 2006, giving the airport the capacity to handle more than 2 million passengers a year.
Mark Menzies (Fylde) (Con)
The hon. Gentleman has made a great contribution in such a short time in the House, and he has clearly read the mood of the Chamber. If I may say so, Ms Dorries, your mother lives in the catchment area of Blackpool International airport, so what I say will be close to your heart as well. Although it is a Treasury matter, I would like to put on the table the suggestion that we consider variations in regional air passenger duty, which would act as an economic stimulus to enable airports to expand and offer new flights. I would also like to appeal directly to the Minister: my constituency has a rail link to Blackpool International airport, but a passing loop could increase the service from once to twice an hour. That would make a great contribution to the success of the airport.
Mike Kane
But we have to start thinking as a region. The best site might have been in Blackpool, but Manchester won the bid because of not only its corporate social responsibility but the direct flights to a nearby international airport. By increasing rail links across our regions and agglomerations, and across the north as a whole, we can in future act more effectively as a single economy.
London Luton airport has recently received final planning consent for a £100 million development to increase annual passenger capacity from 12 million to 18 million by 2031.
Gavin Shuker (Luton South) (Lab/Co-op)
I congratulate my hon. Friend on securing this debate, as well as on working out in his short time in the House how to get such a high attendance at a Westminster Hall debate. Does he agree that one effect of this period in which there has been a relative vacuum in aviation policy has been that regional airports have been able to step in to fill the gap? For example, without significant ground works—there will be no additional runway or lengthening—London Luton airport is expanding from 12 million to 18 million passengers. That is a great way to respond to the capacity gap in the south-east.
Mike Kane
I could not agree more with my hon. Friend. That expansion alone is forecast to add £283 million and more than 5,000 jobs to the regional economy around Luton. We need to grow Luton airport.
Connectivity in the UK is good, but to keep up with our European competitors we need to do more.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
The hon. Gentleman makes a good point about connectivity across the UK. Perhaps the regional air connectivity fund should be used for airports in the north of Scotland. Some might say that such airports are on the periphery of the UK, but they are certainly not on the periphery of the globe. Money from the fund could be used to link Stornoway to the Faroe Islands, or perhaps for through-flights coming from Iceland or wherever, in order to improve the economies of areas that are currently seen as peripheral but are actually very central in the context of global routes.
Mike Kane
Yes. Let us hope that Stornoway does not enter into competition with the beautiful island of Barra, where the landing strip is on the sea shore.
Since 2008, the UK’s connectivity has declined by 4.9%, whereas Germany’s has increased by 4.3% and France’s by 3.4%. My own airport, Manchester, has a positive story to tell about connectivity. After I have told that story, I will discuss other regional airports.
Mr Graham Brady (Altrincham and Sale West) (Con)
Does the hon. Gentleman, who is my constituency neighbour, agree that all these airports that bring benefits to and improve the international connectivity of the British economy would benefit enormously if we did not persist in having what I think is the second highest rate of duty on air transport? It is a tax on trade and a tax on family holidays—should we not be lowering it?
Mike Kane
That is a good point. If the hon. Gentleman will forgive me, I will come to the connectivity fund and expand on the points about airport passenger duty in a few minutes.
Manchester is the international gateway to the north. It has 60 airlines serving more than 200 destinations, which is more than Heathrow. I repeat for Hansard: that is more than Heathrow. Last year, Manchester added more new routes than any other UK airport, serving the 24 million people who live within two hours’ drive. It is the only airport outside the south-east with a strong long-haul portfolio. As well as serving destinations such as Singapore, Pakistan and the US direct, it also offers strong onward connectivity via the middle east: three times daily to Dubai, twice daily to Abu Dhabi and 10 times a week to Doha. More recent connections include Hong Kong, Jeddah and Toronto, and the new Charlotte service has increased transatlantic services at the airport to more than 60 a week. Most of the world can be reached from Manchester either non-stop or with one stop.
However, 5 million passengers a year from Manchester’s catchment area leak to the London airports to catch flights. The challenge for the future is ensuring that passengers have the option to fly from their local airport, taking the pressure off the congested south-eastern airports. However, I hope to welcome High Speed 2 to the airport station at some stage in the near future. It will reduce journey times from Manchester airport to Euston from two hours and 24 minutes to 59 minutes.
As I said earlier, Stansted is the UK’s fourth busiest airport, serving more European destinations than any other airport in the world. Both Ryanair and easyJet have committed to growing their Stansted portfolios; Ryanair’s will grow from nearly 500 flights a week to more than 700 in winter 2014. Edinburgh is Scotland’s capital airport, with over 40 airlines serving more than 100 destinations. More than 9 million passengers a year pass through the airport.
For smaller point-to-point airports, although direct flights are preferable, indirect flights offer an important alternative where they do not exist, either via UK hubbing or through hubs in continental Europe or the middle east. At East Midlands airport, the priority for the future is to access more European hubs in order to widen connectivity; it currently serves Amsterdam, Brussels and Paris. In the longer term, the airport is keen to have direct routes to emerging economies that are key to the region, such as India. Direct access to markets supports business and trade between the region and those markets. It is not just about how connected the UK is to the outside world today; it is about its connectivity in the future and how it compares with other EU and global airports, such as those in the gulf.
Access to global connectivity is not simply an issue of access to Heathrow. Passengers value the choice, competition and service offered by alternative carriers connecting through alternative hubs, such as in the middle east. Manchester airport does not have the luxury of a UK hub operator and relies on overseas carriers to provide long-haul connectivity. Without those carriers, Manchester would just be a spoke into Heathrow. Ultimately, it is the airlines that determine which routes are flown, and therefore overall connectivity, depending on long-term route profitability. However, political and regulatory factors can play a major role in influencing the attractiveness of starting and sustaining routes.
The UK still enjoys a strong position in transatlantic aviation and flights to traditional partners such as India, but is linked to relatively fewer locations in Brazil, Russia and mainland China. Both Germany and France have much better connectivity to China in particular. In a 2012 survey by CBI and KPMG, almost half of respondents expressed dissatisfaction with the UK’s air links to emerging markets. Of companies that deemed flights to China to be crucial, only 46% were satisfied with their current availability.
Regional airport connectivity is not just about the number of destinations served; it is also about the frequency of services, the economic value that they drive, the accessibility of destinations right across the UK, whether flights take place at convenient times, and their capacity. The Government have demonstrated their support for the growth of connectivity from regional airports by announcing the regional air connectivity fund. This will provide public support for new intra-EU routes from airports with fewer than 3 million passengers per year, or 3 million to 5 million in exceptional circumstances. The hon. Member for Na h-Eileanan an Iar (Mr MacNeil) commented on the fund a few moments ago.
Funding will be available for five years and will come to an end in March 2019. Airlines will have to prove that they can make money from the route without public assistance after two years. However, in reality, competition rules will make it difficult for many routes to qualify. Those that do will be at the smallest airports and will be short-haul routes only, not the game-changing routes we need such as Manchester to Beijing.
It is important to acknowledge the steps the Government took in this year’s Budget, when the Chancellor cut air passenger duty on long-haul routes to destinations including China, India, Brazil and many other emerging markets. However, the Government could go further by offering a temporary air passenger duty exemption for new long-haul routes, as recommended by the Select Committee on Transport and mentioned by the hon. Member for Altrincham and Sale West (Mr Brady). It would help to make best use of existing capacity and encourage more routes to emerging economies.
A temporary APD holiday would have the advantage of being a proven commercial strategy and one that airports use: that is, a lead-in discount. It would cost the Treasury nothing, as the Treasury receives no income from routes that do not yet exist. Forgoing revenue on new routes until they were established would cost nothing and could result in an income stream later on.
Mr MacNeil
The hon. Gentleman is speaking eminent sense. I am sure that he is aware of the success in Iberia and Catalonia with routes from Barcelona. The Government in Madrid did not take the APD, and 21 new routes were started in one year due to the APD holiday, as he suggested. The Government here would do well to learn from the lessons in continental Europe.
Mike Kane
I am grateful for that contribution. We must continue to consider APD. We live in a competitive world and we want a competitive market, but we also want a level playing field with competing airports across Europe, such as those in Spain, particularly Barcelona. A temporary APD holiday would be in line with the Government objectives of making best use of existing capacity and promoting links to emerging economies and economic growth near regional airports.
Mr Nigel Dodds (Belfast North) (DUP)
I commend the hon. Gentleman on securing this important debate. He may be aware that in Northern Ireland, international flights are exempt from APD, because it is now a devolved matter for the Northern Ireland Executive. I heartily endorse what he and the Transport Committee have suggested. Although we have devolved power, as a result of intense competition from Dublin international airport just down the road, which has zero APD, it is nevertheless a major cost to the Northern Ireland block grant, meaning that the money cannot be spent in other important areas such as health, education and so on. I agree totally with what he says about the need for action at a UK level.
Mike Kane
I look forward to flying from Manchester to Belfast on Friday morning to represent Wythenshawe in Falcarragh over the weekend. However, we could not secure a route from Manchester to Londonderry airport. We need further connectivity between UK airports.
Clearly, strict rules would be needed to prevent airlines from churning from one airport to another to create new routes. The route would need to introduce net additional capacity from the UK. The Treasury could also review the impact of APD on the economy and on connectivity, as there is anecdotal evidence to suggest that high rates have damaged connectivity. To give just one recent example, AirAsia ceased operations in the UK, citing APD levels as the primary cause.
There is also a case for greater liberalisation of access to UK airports, particularly regional airports. Given that the UK long-haul carriers have consolidated their services at Heathrow, airports elsewhere must rely predominantly on overseas carriers to provide direct scheduled links to long-haul destinations. The Government have gone some way towards further liberalising foreign access; the last aviation framework document said that access would be granted, even without reciprocity, on a case-by-case basis. However, where there are concerns about issues such as state aid, access may still be refused and UK airlines have the right to object. But if UK airlines are not interested in serving points directly from airports such as Manchester, the Government should be prepared to open the market to airlines that are.
Aviation is vital to Britain’s competitiveness and future economic success. It is undoubtedly a key driver of our regional economies and a catalyst for the UK’s economic growth and jobs. Through mechanisms such as APD and the regional airport connectivity fund, the Government should continue to look at how they can maximise support for our regional airports, which would increase connectivity, remove pressure from congested airports in the south-east, and help to create additional capacity for jobs and growth throughout the UK. Supporting regional airports is a win-win situation not only for our regional economies but for the UK as a whole.
Graham Stringer (Blackley and Broughton) (Lab)
I congratulate my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) on a real tour de force; I do not think there is any airport in the UK of any significance that he missed out in his speech. The importance of aviation to Manchester, other regional airports and the whole of the UK came out extremely clearly in his remarks. He said that in round terms aviation is worth £50 billion to the UK economy, but in fact we could not have a modern economy without aviation. While the people who measure these things put the figure at around £50 billion, if we took aviation out of the system we would not be left with the economy minus £50 billion; we would be left with a very small and primitive economy indeed.
However, as my hon. Friend hinted, there is a paradox at the centre of aviation policy in this country: if we add up all the capacity on all the runways at London and regional airports, we find that we have more than 21 times the capacity that we need for aeroplanes to land in and take off from this country, but on the other hand Heathrow is congested because aviation depends on a hub system internationally. Heathrow is our major, indeed our only, hub airport, and it is congested. Many airlines would like to get in there but cannot. Airlines have cut off routes to the rest of the UK because that hub airport is full, yet we do not have the routes that regional airports, including those in Birmingham, Manchester, Newcastle and the east midlands, would like.
Mr MacNeil
The hon. Gentleman asserted that airports rely on a hub system, but that is an arguable point. I gently say to him that the hub system did not come about accidentally. For about 50 years, the UK had bilateral air agreements specifying that only London airports could be used. If there is a hub system, perhaps the most logical hub would be Schiphol airport, with its five runways. However, as we know, the reality is that a huge number of political choices contributed to the hub system, and similarly a huge number of political choices have been made that are not helping our regional airports. Specifically, they are not helping on APD, as the hon. Member for Wythenshawe and Sale East (Mike Kane) said.
Graham Stringer
There were a lot of points in that intervention, but I do not think that the key point about hub airports is that until recently most flights needed—some still do—bilateral agreements to get into Heathrow. The real point about hub airports is that we need that efficiency of transfer traffic in order to thicken routes that would not be viable at other airports. I will come on to APD shortly.
We have this paradox; we have loads of runway capacity, but insufficient runway capacity at Heathrow. That means that our aviation industry, which is vital, is not as good as it could be. My hon. Friend the Member for Wythenshawe and Sale East mentioned businesses such as Google moving to the north-west and having headquarters there. However, KPMG has moved its European HQ to Frankfurt because of the lack of runway capacity at Heathrow.
There are two solutions. One is blindingly obvious but has got caught up in party politics. I hope that the three political parties can keep a united front and support whatever comes out of the Davies report. However, my view is simply that we should build a third and probably a fourth runway at Heathrow, because this country is falling behind in its international competitiveness.
That is the hub issue, but what do we do about the second issue, which is the capacity we have in the regions? How do we attract extra airlines to our major regional airports? There are three things that we can do, but Governments have not been good at doing any of them. First, I can see no reason at all why there should not be a completely open skies policy in every regional airport outside London. Why should any airline in the world that wants to fly into the UK, take passengers and go wherever it wants not be able to do so? If it could, that would create jobs and benefit any airport that it operated from.
The Government have gone part way there by granting fifth freedoms to airlines coming here, but there is also the right for UK and other airlines to object to those freedoms, so that measure has not brought about the benefit that it could have had. Having completely open skies with rights for everybody and no right of objection for other airlines, whether British or not, would benefit our regional airports, particularly the bigger ones such as Glasgow, Manchester and Birmingham, but also some of the smaller ones. That is the one thing that we could do that would help the regional airports.
Secondly, as was mentioned both by my hon. Friend the Member for Wythenshawe and Sale East and in interventions, there should be a change in APD. Let me say clearly that APD is a bad tax. The PricewaterhouseCoopers report last year—I think it was published just before Christmas—showed that if APD was abolished, the UK economy would probably grow by 0.5%. I understand why Treasury Ministers, and Transport Ministers for that matter, say, “We don’t want to lose the revenue we’ve got”, even though other countries such as Holland and Ireland have scrapped APD and their economy has benefited as a result. Even if we cannot prove what would happen by creating theoretical models for this country, we can see what is happening elsewhere, follow the example of other countries and scrap APD; that would be the ideal way to approach the issue.
However, if scrapping APD is too much of a step for naturally cautious Treasury Ministers, we should adopt a step-by-step approach and measure what is going on. We could abolish APD for children, which would be very popular as APD is a tax on holidays as well as on business. Equally, we could abolish APD in the winter, when airlines find it difficult to make a profit; go to any UK airport in November and there will be people rattling about in it. Also, there could be a holiday—not with buckets and spades, but on taxation—for new routes, so the Treasury would not lose any money. In addition, APD could be reduced just in the regions. There are lots of different ways of approaching the problem of how to get rid of a bad tax, which would be beneficial for the regional airports. The Transport Committee looked at APD and recommended that the Government consider it in greater detail. On top of that, the Government should look at practical experience elsewhere, and adopt a step-by-step approach in this country.
The third point, already referred to by my hon. Friend and in interventions, is the importance of surface access. If we compare our airports with continental airports, many airports in north America and airports in the far east, we find that our train links are poor. Our biggest international airport—indeed, the biggest international airport in the world—is Heathrow, but apart from the Paddington link it does not have a mainline rail route going into it. In what country would one of the world’s great airports not have a mainline route going to it, so that people could not get to it by train from many other parts of the country? That is simply poor.
The Transport Committee is holding an inquiry into rail. We recently quizzed Network Rail and the Office of Rail Regulation about how they assess railway lines going to and from airports. I have been on the Committee on and off for a long time, but I found the answer pretty extraordinary: they do not assess them any differently from routes to anywhere else. We should, as the Davies commission recommended, change that approach so that we give priority to our airports. That would take traffic off the roads, help to support the airports and help to attract traffic into them.
The Committee looked at the example of Stansted, which could be part of the solution to some of the congestion in the south-east system. The rail line to Stansted is poor, and the sooner we get a decent fast rail link, the better. We can argue about whether the journey time should be 30 minutes, as Stansted thinks, or whether it can be reduced only to 40 or 45 minutes, but it should certainly be reduced; that would benefit everybody.
In Manchester, we have made our own arrangements in a sense. We have paid for the southern link to the rail system at Manchester airport, as well as for part of the northern link. With other Greater Manchester MPs, across all parties, I had to fight the Labour Government to get the tram link. All airports really should have decent surface links—preferably rail or, in some cases, rail and light rail.
I will finish on that point. Aviation is vital to our economy. It is not as good as it should be. We need to make sure we use the assets we have, invest to make them work better and certainly sort out the south-east system, which will help our regional economies as well.
Nadine Dorries (in the Chair)
Order. May I just say that the air conditioning is battling with the sweltering heat outside? If anybody would like to remove their jackets, that is absolutely fine. I call Mr Jim Shannon.
Jim Shannon (Strangford) (DUP)
Thank you, Ms Dorries. It is a pleasure to speak in the debate. I congratulate the hon. Member for Wythenshawe and Sale East (Mike Kane) on bringing this issue to Westminster Hall for consideration. He made a passing comment about Northern Ireland’s airports, and I will, very parochially, mention all three. I want to put down a marker for the importance of not only regional airports but, on behalf of myself and my right hon. Friend the Member for Belfast North (Mr Dodds), those in Northern Ireland.
Today’s debate is important for regional airports. It is also important for me, as the Member of Parliament for Strangford and the Democratic Unionist party spokesman on transport. It is therefore a pleasure to make a contribution. I also wish to put on record how important the debate is for Belfast City airport, Belfast International airport and City of Derry airport.
As the quest continues for another runway for Heathrow—nowhere has been confirmed as yet—we cannot allow connectivity with airports in Northern Ireland and on the mainland to drag. I am concerned about that question mark over where a Heathrow runway will go. The hon. Member for Blackley and Broughton (Graham Stringer) mentioned the importance of a third and a fourth runway. I subscribe to that view, because their importance is clear.
Northern Ireland cannot expect to have a hub airport. We cannot expect to have international contact all over the world, but we do expect to have more direct connectivity internally in the United Kingdom of Great Britain and Northern Ireland and, ultimately, internationally. The World cup has just finished, and I am reminded of a football saying we have in Northern Ireland: “We are not Brazil. We are Northern Ireland.” While that is meant for football, it is clearly relevant to the airport world. [Interruption.] It is good they got to the semi-finals. However, we recognise what we have in Northern Ireland, and we recognise that contact with the regional hubs—with Heathrow and other places in the United Kingdom—is what makes the difference.
Mr MacNeil
On the reference to Brazil, I happily remember that Northern Ireland did just as well as Brazil in the 1982 World cup, when, as I am sure the hon. Gentleman clearly remembers, Gerry Armstrong scored a fantastic goal against Spain. However, the substance of my question relates to excellent idea from the hon. Member for Blackley and Broughton (Graham Stringer) about open skies. The hon. Member for Strangford (Jim Shannon) will know that, although there have been negotiations with Russia over routes—137 in and 130 out—none are coming into Scotland, and I am sure it is the same for Northern Ireland. The fact that bureaucrats have spent this long negotiating to achieve zero for Scotland and Northern Ireland may lend credence to the idea that we should further investigate what the hon. Member for Blackley and Broughton said.
Jim Shannon
I thank the hon. Gentleman for his contribution. Yes, I can remember the 1982 World cup. I was in the stadium when Billy Armstrong scored—
Jim Shannon
Sorry—Billy Hamilton passed to Gerry Armstrong. I remember that very well. However, on the issue the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) raises, we have similar opinions, and we want to see an impact for all the regional airports.
Let me give some background information about Belfast. The city has sizeable port, airport and logistics infrastructure, which supports more than 26,000 jobs and generates more than £60 million gross value added for the local economy. In May 2013, almost 140,000 passengers flew between Northern Ireland and the rest of the world, representing 2.5% of the total for the UK regions. It is worth noting that that does not include Northern Irish passengers who transferred to the Republic of Ireland by road or rail to start their journey. Clearly, the interest in air travel is greater than ever, and the figures for people flying globally from Northern Ireland’s airports in just one month are substantial.
Some weeks ago, I attended a Northern Ireland chamber of commerce and industry reception. Everyone there was committed to ensuring that we better utilise air travel and interested in how we do that. Small businesses emphatically believe that connectivity will encourage inward investment and facilitate export growth in Northern Ireland. The Federation of Small Businesses recently carried out a poll of its members, and 96% agreed or strongly agreed that air connectivity can and will encourage inward investment and export growth. Clearly, there is a willingness among businesses to support connectivity. A further 93% of the FSB’s members described George Best Belfast City airport as having a positive impact on the local economy. Good air links are therefore vital for the Northern Ireland economy, and the hon. Member for Wythenshawe and Sale East made the same point about regional economies generally.
The most pressing issue for small businesses is having more destinations and routes available to them. That can be critical for businesses looking for new markets to export to, or looking to secure investment or business from other parts of the UK. For a country such as Northern Ireland, which exports most of what it produces, it is important to have contacts with the outside world—on the UK mainland and beyond.
Northern Ireland has the largest percentage of small businesses in the UK relative to its size. Recently, Brian Ambrose, the chief executive of Belfast City airport, revealed the airport’s desire to have more routes to European destinations. With that in mind, the airport has set about improving infrastructure and encouraging exports from the airport. However, it is subject to a so-called “seats for sale” restriction, which puts a bit of a limit on things. The airport reports that if it could develop as much as it wished, the extra passengers would contribute another £13.2 million gross value added and there would be a further 270 jobs. Clearly, we could do a lot more if we had the connectivity and the opportunity.
Some 86% of the FSB’s members were supportive of the airport’s move. The critical factor for Belfast City airport is the impact of aircraft noise on local residents. That is a big issue that has to be addressed. If it can, the potential for the airport is great, and the airport will develop further.
The 2003 White Paper on air transport recommended that the planning agreement for Belfast City airport be reviewed. It said the scope to develop capacity at Belfast International airport within existing boundaries was significant and should be supported. It also said that the development of City of Derry airport should be carried out in conjunction with the Government of the Republic of Ireland. This is not about British Airways and Aer Lingus; it is about how we can best work together to develop connectivity.
The Northern Ireland Affairs Committee concluded in 2012 that it was critical to ensure that Northern Ireland continued to have access to Heathrow, as the UK’s hub airport, and I believe that is true. Like me, the Northern Ireland chamber of commerce and industry sees Heathrow as critical to our regional airport development—that applies to Belfast City, Belfast International and City of Derry airports. The Northern Ireland Executive have stressed the importance of the route, and Northern Ireland’s unique access position within the United Kingdom should be reflected in emerging aviation policy. We must maintain Northern Ireland’s links with the USA through Belfast International airport, and consider extending Northern Ireland’s direct links with long-haul destinations, as has been suggested. Devolution of air passenger duty is a key part of that. Tourism Ireland has recommended potential routes, making the case for carriers. Northern Ireland’s direct connectivity with mainland Europe continues to increase, and new destinations are in the process of being confirmed.
Belfast City airport’s almost 3 million passengers amount to nearly 10,000 a day, and the core catchment area is 75% of Northern Ireland. The annual passenger figure for Belfast International has been more than 4 million; 65% of passengers were on domestic flights and 35% on international flights. City of Derry airport has also contributed greatly to the numbers travelling, mostly to holiday destinations. It is vital to maintain those links, which will help to promote business links, enterprise development and inbound tourism.
The Heathrow hub—and Gatwick, to a lesser extent—can only improve with greater connectivity, more flights and the road and rail infrastructure already referred to taking passengers quickly and on time to their international flights or UK mainland destinations. The three Northern Ireland airports, George Best Belfast City airport, Belfast International airport, and City of Derry airport, all want and intend to be part of that. With the help and support of the Westminster Government, that can and must happen.
Sir Roger Gale (North Thanet) (Con)
I had not intended to take part in the debate, but having listened to the catalogue of airports outlined by the hon. Member for Wythenshawe and Sale East (Mike Kane), whom I congratulate on securing the debate, I felt I should highlight an omission. Sadly, Manston in Kent was not included, and it would be a shame if the debate were to pass without reference to it.
Manston airport has a proud history as a wartime airfield. It was operating and was marginally viable. It was acquired by Ann Gloag of Stagecoach on 30 November last year. Mrs Gloag told me on that date that she intended to invest heavily and give the airport two years. On Budget day this year, less than four months after her acquisition, she announced that it would close. That was in my view an act of vandalism. Manston shut in May, despite the fact that RiverOak had put on the table an offer of the asking price of £7 million. Since that time, the airfield has been asset-stripped. The fire engines, radar, instrument landing systems and even furniture have been sold. Manston is a vital national asset. My hon. Friend the aviation Minister knows that. It has a long runway; it is three runways wide; it can take anything, as a major diversion field; and it has potential as a search and rescue base. Above all else it has tremendous potential capacity as a European freight hub. It is something that we cannot afford to lose.
The Secretary of State for Transport and the aviation Minister are both aware of our concern and are being supportive—I say “our” because my hon. Friend the Member for South Thanet (Laura Sandys) and I have been working together since the threatened closure to try to reverse the situation. We met Sir Howard Davies a couple of weeks ago. He rightly said that he did not consider Manston had any capacity as a hub airport; but he also made it plain that he thought the south-east would need all the capacity that was on offer, and then some. In that context, again, we cannot afford to lose Manston.
Thanet’s controlling Labour group proposed a compulsory purchase order last week. That proposition was seconded by the leader of the Conservative opposition and it has the full support of my hon. Friend the Member for South Thanet and me. I hope it will, if necessary, have the support of the Government. We expect the CPO decision will be taken by Thanet’s cabinet on Thursday. I hope that that will happen, and then there will no doubt be an inquiry. We think, with Thanet and, I believe, the nation, that the airfield has the potential to serve the nation as a freight hub, and we want it to be reopened for that purpose. The Select Committee on Transport has, I understand, agreed to undertake an inquiry into the whole business of regional airports, and I hope that as part of that process evidence will be taken from Manston, and also, perhaps, from Mrs Gloag, who I am sure will be delighted to appear before the Select Committee and explain her actions.
I believe that Manston will open again and take its place again in the list to which the hon. Member for Wythenshawe and Sale East referred. I shall look forward to a reaffirmation of the Minister’s support when he replies.
Nadine Dorries (in the Chair)
The winding-up speeches will take 20 minutes. If Mr Shuker and Mr Bruce could divide the remaining 15 minutes between them, that would be great.
Gavin Shuker (Luton South) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Ms Dorries. I shall of course be mindful of the fact that others want to speak.
My hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) did a fantastic job of setting out the situation, and I want to develop one or two pertinent points in more detail. We are grateful, as you will know, Ms Dorries, in Luton South and the wider region, that the green light has been given for the expansion of passenger numbers at Luton airport. When regional airports are mentioned, it is easy to envisage Birmingham and Manchester. However, although Luton is one of six airports that serve London directly, it has carved out its own place in our aviation economy, with a lot of point-to-point and many low-cost airlines that have driven growth in recent years; but it has a bright future, as well, because without significant ground works or additional heavy moving, such as the extension and repositioning of runways and the installation of additional runway capacity, it has the ability to increase passenger numbers significantly from the existing location. I thank the aviation Minister and Ministers at the Department for Communities and Local Government for their responsible approach to expansion at Luton. My constituents are overwhelmingly positive about having an airport on their patch.
We hope that in the coming years passenger numbers will go from 6 million to 18 million, without additional significant ground works—just by changing the management of passengers, take-offs and departures. Of course, the result is further prosperity when other operators come in and cast their vote of confidence in the airport. In the past year Atlasjet, easyJet, Monarch, Thompson and Wizz Air have expanded routes and put on new routes out of Luton. London Luton airport now serves 107 destinations, which, considering its location, is phenomenal and a boost to the local economy.
As to jobs, aviation has a unique role in the UK economy. It is easier to create jobs in a service industry at the low end, but aviation can widen the skills mix towards middle and higher incomes; and it can create jobs for both genders and for people of various ethnic backgrounds. It is a diverse field, and that is important for young people growing up in my constituency, who know that there will be expansion and a positive future for the airport. Actually, it is not just about entry-level jobs at that airport. Although many people do not realise it, we are No. 1 for business jet travel. The chances are that people travelling on a Learjet land at Luton, which is hugely important because of the servicing and other skills that are created.
I should like briefly to mention surface connectivity, which many hon. Members picked up on. Luton Airport Parkway station, which serves London Luton airport, is just 22 minutes, at present, from St Pancras. Out of the six airports that I mentioned, people would struggle to make a case for an airport that is closer in terms of connectivity by rail from central London, but although we think of the Heathrow Express and the Gatwick Express we never talk about a London Luton express. In that sense, I was glad that in the recent franchising round, Govia Thameslink Railway Ltd, which will take over from the FirstGroup, committed, in conjunction with the Department for Transport, to introducing a minimum of two services an hour, 24 hours a day, serving Luton Airport Parkway. I hope that in time we can build on that, as passenger numbers increase, because that is a vital north-south route. Perhaps the Minister will reflect on that in his comments.
Additionally, we know that we need upgrades in the wayfinding systems at the terminal building, Luton Airport Parkway, and at St Pancras International. Most of all, my constituents are united—and I am with them—in saying that we need to remove a separate, confusing charge for the shuttle bus up to the terminal building. These may seem small issues, but if people think they are buying a ticket to London Luton airport and find themselves being marched to a cashpoint to get the small change they need to get to the airport, their frustration will affect the rest of the experience and it will be hard to turn around perceptions at that point.
Luton has the ability to contribute to capacity in the south-east, at a time of relative calm before what we fully expect to happen in 2015 happens, when the Davies commission reports. Let us turn on that capacity in the next 12 to 18 months, while expanding UK business.
On jobs, it is important to get the skills mix right. It would be easy to expand an airport such as Luton by getting rid of many of the diverse businesses that provide high-skilled jobs and just focusing on driving low-cost carriers. However, we have chosen not to do that in Luton and that is a welcome move. On surface connectivity, we are starting to see point-to-point not just as taking off at one airport and landing at another, but as being about the entire journey, from home to the destination. Those are key components in determining whether people are getting a good travel experience. Regional airports have something to contribute on all those points, and I hope the Minister will reflect on that in his comments.
Sir Malcolm Bruce (Gordon) (LD)
I congratulate the hon. Member for Wythenshawe and Sale East (Mike Kane) on securing the debate, which has demonstrated a real interest in the subject. I also appreciate that he identified so many regional airports in some detail.
I had not intended to make a full speech, but local circumstances at the moment are of great concern to me. I put on the record that Aberdeen airport is a vital link for our oil and gas industry. It is a busy, expanding airport that offers flights to 50 destinations, more than half of which are international direct links, and access to a number of hubs—not only London, but Frankfurt, Copenhagen and Paris. All these links have been developed by an airport management who are keen to attract new business, have recently extended the runway and are currently upgrading the terminal buildings.
In passing, I have to say that it is a matter of great regret to me that about 25 years ago the terminal building was relocated from one side of the airport to the other. I protested at the time because I was campaigning to reopen the railway station next to the old terminal building, but was told that there was no future for railway links to airports and that there was more land on the other side. That is a matter of huge regret, because our airport gets totally road gridlocked at busy times of the day. That valuable link, which has been reopened—I got the station reopened—carries 750,000 passengers a year, in spite of being on the wrong side of the airport. That is what happens when there is no forethought in planning.
My concern, which I raised at Prime Minister’s questions last week and on which, I am glad to say, I got support from the Prime Minister, is that British Airways, having launched with a great flourish two years ago a direct link between Aberdeen and London City airport, is axing this service, without so much as a press notice, let alone any consultation with the local community. I only found out about it because I was alerted by a constituent who was trying to book a flight after the clocks go back and the winter timetable comes in, at the end of October, and found that the service was no longer available. That was the first time that anybody in the local community had been made aware of it. I have been in touch with the chamber of commerce, Oil & Gas UK, the Institute of Directors, local parliamentary colleagues and the entire business community, all of whom are completely stunned by the news and had no knowledge of it. Given the benefit that British Airways gets from the business travel that connects out of Aberdeen, it is at the very least pretty poor public relations and discourteous.
Questions have been raised about whether the route was actually loss-making. I am seeking, along with colleagues from all parties, a meeting with BA to try to get some explanation, a consultation and the possibility of reconsideration. I have to say that I am having some difficulty getting any response out of BA. It made a comment to the local paper to the effect that the decision was commercial and it was not prepared to discuss any details, but I take that as an indication not that the route was making a loss, but that there are other, more profitable routes to which BA prefers to transfer the planes. Unless BA proves otherwise, that is where I rest my case.
I have nothing against the business communities of Dublin, Glasgow or Edinburgh, all of which need to be properly served and which have important, good airports, but I question whether Aberdeen should lose its three flights a day so that Edinburgh can have 11 flights to London City alone, Glasgow eight and Dublin five. That is a demonstration of an airline that is simply looking at its own bottom line and not at its shared responsibility for business development—because, of course, this affects the economy.
I have had streams of contacts, including e-mails, from people saying, “This is such a wonderful service. It gives us a straight connection, quickly and efficiently, to continental destinations and to a flight directly to New York.” Much more to the point, is a much easier route into the City. I think that I am right in saying that pretty well every parliamentarian from the north of Scotland has used this service—we tend to travel together, so I hope that we do not precipitate any by-elections—and we have found it quick and efficient.
Let me just make a quick point about Heathrow, although I will not enter the “whether or not” debate: Heathrow is currently operating too close to capacity, with the consequence that massive delays arise from small disruptions. If anything happens at Heathrow, people can be delayed for three or four hours because of a 10-minute glitch somewhere in the system. For those of us who do not have to fly to Heathrow, the alternative of flying to City airport is a real advantage, which we crave and appreciate.
I am glad to have had the opportunity to put that on the record. I hope that British Airways reads this debate and acknowledges that it should at least engage with its customers in the business community, both to publicise its decision—and consult in advance to give people some opportunity to use it or lose it—and to indicate whether it is prepared, in the light of the representations being made, to reconsider. BA was anxious to tell us what a wonderful service it was, and last time I spoke to BA, it told us that it was pleased with the response, yet without even an announcement it suddenly terminated the service because it wanted to use the planes elsewhere. I contend that an airline as big as British Airways needs to behave much better towards its business clients and I hope that it reconsiders its decision.
Mr Gordon Marsden (Blackpool South) (Lab)
It is a great pleasure to serve under your chairmanship, Ms Dorries, and take part in this debate. I congratulate my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) on securing it and on making such a forceful case, not just for Manchester airport but for regional airports throughout the country. Indeed, he laid out his case with such aplomb that I thought that a Government so handy about and keen on appointing tsars might make him airport tsar in the near future.
The debate gives us an important opportunity to hear about the great benefits provided by local airports and the significant challenges that they face. That has been reflected in hon. Members’ contributions. My hon. Friend the Member for Blackley and Broughton (Graham Stringer) proposed a radical open skies initiative as a potential game changer; the hon. Member for Strangford (Jim Shannon) clearly outlined the positive signs for Northern Ireland; and the hon. Member for North Thanet (Sir Roger Gale) rightly spoke about the situation at Manston. I congratulate my hon. Friend the Members for Luton South (Gavin Shuker) and his colleague on the part they have played in getting the expansion at Luton. He rightly drew attention to the skills and the business opportunities there. The right hon. Member for Gordon (Sir Malcolm Bruce) reminded us, with the sad tale of British Airways’ withdrawal from Aberdeen, of the broader responsibilities that airlines have to their local communities. I cannot forget my parliamentary neighbour, the hon. Member for Fylde (Mark Menzies), who rightly praised Blackpool airport, pointing out its value not only to his constituents, but to mine. Blackpool airport has a distinguished past, with aviation activity since 1909 and mass Air Force training in world war two. Today it offers a wide range of medium-range destinations, not least via Jet2.com.
The debate is such that we have to touch on what more can be done for the communities that regional airports serve and how Governments have a role in helping the airports to expand. Putting regional airports at the heart of our transport policy as economic generators and job creators in the communities in which they operate reaffirms their role as vital links to national infrastructure, crucial to spreading economic growth more evenly across the regions. UK regional airports served 220 million passengers in 2013, and Manchester welcomed more than 20 million of them. Although overall UK airport use fell during the recession, Manchester increased its share to 9.1%, and other major airports outside the south-east such as Edinburgh, Bristol and Leeds have also increased their share. Experiences vary across different regional airports, so a robust understanding of them and an overarching narrative regarding their needs and opportunities are essential at the heart of Government.
There is no doubting the great economic value that airports create for their communities. They bring trade and tourism into areas and provide jobs, apprenticeships and skills programmes for local people. In meetings with airport operators, I have often stressed how essential it is that they scale up that community engagement and promote what they already do, which can be substantial. I am therefore delighted that the Airport Operators Association publicised that work in its recent report, “Airports in the Community”. My hon. Friend the Member for Wythenshawe and Sale East referred to some of that work. Poignantly, in view of what the right hon. Member for Gordon said, Aberdeen airport, apart from the 2,000 jobs on-site, helps to recruit 1,700 overseas students who attend the Aberdeen business school. Newcastle airport employs 3,200 people directly, but supports a further 8,000 jobs in the north-east. The story of airports’ great value is consistent across the country. In the north-west, John Lennon airport has 2,000 people working on-site; Manchester has shown great corporate social responsibility work with its airport academy and its young people’s skills academy, which targets young people in Wythenshawe in my hon. Friend’s constituency. A whole raft of good activity is going on in airports.
Several airports are putting education at the heart of their community outreach. Birmingham has its own flight school, available for pupils across the midlands, and Leeds Bradford offers students across west Yorkshire aviation masterclasses. Those are programmes of real substance. East Midlands airport has won a “business in the community” award and airports of all sizes and resources can make a valuable and prized contribution to their local area. Biggin Hill, central to the heroic fights of the battle of Britain in the second world war, but now a strong local airport, is in the second year of its Nick Davidson memorial flying scholarship. He was a British Airways pilot who pledged to fund a scholarship to train a new young pilot every year. London Gatwick, Heathrow and Stansted, while not regional airports, run their own excellent community schemes, too. Heathrow has put 3,500 jobseekers through basic skills training; Gatwick has a scheme to support young entrepreneurs; and Stansted raises substantial sums of money for the local air ambulance trust. The success of those schemes shows the value of expanding them more broadly across all regional airports.
That is one side of the relationship between airports and communities. The other is what can be done by Government and local stakeholders at all levels to support regional airports, to keep their operations viable and to help them to expand into new and prosperous routes where possible. In that, the Government cannot always claim to be keeping up their end of the deal.
In last year’s spending review, the Government announced money for funding public service obligations for new air routes. That funding was increased to £20 million a year and rebadged as the regional air connectivity fund in this year’s Budget. Announcing the scheme in March, the Chancellor named three airports he believed might benefit: Liverpool, Leeds and Inverness. Two out of those three—Liverpool and Leeds—may not qualify for any support under the current rules. European state aid guidance makes clear that the fund should be directed at smaller regional airports with fewer than 3 million passengers. There is support for regional airports with between 3 million and 5 million passengers, but only in exceptional circumstances. Does the Minister yet have an answer as to how to define those exceptional circumstances? If so, can he tell us? It is a year since the funding was first announced, but airports such as Newcastle, Belfast, Liverpool and Aberdeen are in the dark as to whether they can they apply for funding. Can he reassure them that investing scant time and money in making an application to the fund will be anything more than a trip down a blind alley?
The European Commission also wants to prevent airlines from simply switching from one airport to a local competitor, but those rules could end up being highly restrictive. Great city regions, such as Manchester and Liverpool, need to have their own functional economies and access to trade routes. What progress are the Minister and his officials making with the Commission on the regulations to make it easier for all of our regions to get the support they need?
Today’s written ministerial statement on the Davies review lets slip the prospect of slightly more procrastination, with a consultation on guidance for the fund to be announced soon, but not the guidance itself. While we are on the subject of procrastination, what about the rest of the statement, which delays the creation of the Davies’ noise ombudsman until after the election and fails to answer the questions raised by businesses and more generally? The Opposition have been emphatic that dealing with issues of noise and emissions is central to building consensus between regional airports and the communities they serve. Those communities who feel pressure and are concerned about the future might well feel aggrieved if they cannot even start work on those issues now. We need robust evidence to take the debate forward.
The Davies commission pointed out that Government investment would represent only 5% of the typical cost of a new start-up route. Do Ministers foresee that the investment will be a game-changer for regional airports? What support will be available for those airports that will not qualify, because they have more than 5 million passengers, such as Manchester, Edinburgh, Birmingham and Glasgow?
All these airports share the need for quality investment in surface access. Consumers think about the whole journey from point A to point B and how easily accessible their local airport really is. Investment in the local roads network is essential, but so is the prioritisation of public transport routes and reducing carbon emissions. We have seen great improvements at airports such as Manchester—the city’s excellent Metrolink will be going to the airport from next year, which is ahead of schedule—and there has also been investment in Gatwick, where renovations to the train station are under way, but smaller airports must not be neglected. One way of ensuring that is for airports to have real influence on local enterprise partnership boards and to benefit from the increased devolution of funding and decision making. The Department for Transport is already a significant contributor to the single local growth fund, which will be top-sliced under Government proposals, so it is essential that the interests of transport connectivity in general and airport connectivity in particular are reflected in the way funding is distributed. How is the Minister monitoring how airports and their communities are benefiting from the bidding stage of the single local growth fund?
The principles and approaches I outline are echoed in the proposals that we in the Labour party have put out to benefit the regions—not just those produced by the shadow Business Secretary, my hon. Friend the Member for Streatham (Mr Umunna), and those in the Armitt infrastructure report, but now those in the Adonis document, which looks at devolution and local decision making. We fully recognise local airports’ role as economic drivers, and their potential to prosper with truly devolved local structures and funding. The history of Manchester airport—it stood out against the depredations of Thatcherism in the mid-1980s to construct a model that involved local councils, and it has been able to build on that with the combined authority arrangements—demonstrates that potential. As regional airports look at the increasingly popular point-to-point flights, the national network is increasingly relevant for them.
Mr Marsden
I’m afraid not, because of lack of time.
There is need for short-term action as well, which includes saying something about expanding the capacity in the south-east. I am sure that the Minister is aware of the letter signed by the 50 business leaders in The Sunday Times this weekend. Given that the ministerial statement says nothing to answer the question of regional airports at all, will he make a definitive statement in the near future? My hon. Friends have talked about air passenger duty, and regional airports feel aggrieved because they feel that long haul has been given benefits, while they have been given none.
In the broadest sense, we must have political consensus on how to move forward on airport capacity. We want to reach that consensus soon in the next Parliament, but it has to be in far more expansive and wide-ranging ways than the Government’s pale version of Michael Heseltine’s vision. The Labour party is determined to ensure that the bright future for regional airports, as highlighted in this debate secured by my hon. Friend the Member for Wythenshawe and Sale East, comes to pass.
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
I am particularly pleased to be present today, given that it is the day of the reshuffle.
I congratulate the hon. Member for Wythenshawe and Sale East (Mike Kane) on securing the debate on the domestic and international connectivity provided by the UK’s regional airports. The debate has been good natured and, by and large, we have all been on the same page. I am a big supporter of the UK’s local international airports, as they could be more accurately called. The hon. Gentleman talked eloquently about how important regional airports are not only for maintaining the UK’s air connectivity, but for jobs and economic regeneration throughout the country. I hope he will be encouraged to know that we have all those interests at heart.
I welcome the opportunity to respond for the Government to this important and timely debate. It is timely because the UK’s status as an international aviation player is at the forefront of the political debate and in the media. Although there may be differences in our approaches, I welcome the broad agreement that exists across the political spectrum on the importance of maintaining the UK’s position as a leading global aviation hub, which the Government believe to be of vital importance to the UK economy. It is important to remember that the UK continues to have excellent aviation connectivity, both point to point and through the London hub. We have the third largest aviation network in the world after the USA and China.
Domestic aviation connectivity within the UK, however, is also important to our national cohesion, and will remain so. In that regard, the Government have always made it clear that regional airports make a vital contribution to the growth of regional and local economies and as a way to provide convenience and travel choice for air passengers, as recognised in the Government’s aviation policy framework, published in March last year. The Civil Aviation Authority’s statistics for last year show that the UK’s regional airports handled 90 million passengers, or around 39% of the UK total, and services from regional airports operated to more than 100 domestic and international destinations.
I am aware that airports were impacted by the economic downturn, but now, just like our economy, many of our airports are seeing real growth again, thanks to our long-term economic plan. For example, Leeds Bradford and Belfast City airports each saw passenger growth of more than 10% between 2012 and 2013. We want to see that growth continue.
We warmly welcome the ambition of the UK’s regional airports, which are responding to local and regional demands by investing in their infrastructure to enable services to more destinations and better facilities and choice for their passengers. For example, Manchester airport is now the UK’s third largest, handling more than 20 million passengers per year, and its routes are expanding further, with Cathay Pacific starting direct flights to Hong Kong from the end of this year. The airport is also working hard to establish air links with mainland China. It has the only regular A380 service from an airport outside London—the daily service by Emirates to Dubai—and its £650 million city enterprise zone promises to create between 7,000 and 13,000 jobs.
Birmingham airport completed its runway extension this year, enabling larger aircraft to fly to more long-haul destinations. On 22 July, the airport reaches a significant milestone with a new air service to Beijing, the first from a UK airport outside London. I do not need to add that both Manchester and Birmingham airports will be served by High Speed 2.
Leeds Bradford airport recently completed an £11 million passenger terminal development to increase airside space by 65%. Glasgow airport has been busy over the past few years making handling preparations for additional passenger traffic during this summer’s Commonwealth games in the city, as well as for the first world war commemoration ceremony, which follows soon after. That is not all: ongoing investment programmes are also under way at other airports, such as Newcastle, Edinburgh, Belfast City and Belfast International, delivering additional improvements to airport capacity, airport facilities and the passenger experience.
I share the disappointment of my right hon. Friend the Member for Gordon (Sir Malcolm Bruce) at the discontinuation of services from Aberdeen to London City airport. The decision was a commercial one for BA, but Aberdeen also has 11 flights per day to Heathrow. I will, however, write to BA expressing disappointment that my right hon. Friend and his colleagues are having difficulty arranging a meeting.
The hon. Member for Strangford (Jim Shannon) made some points about Northern Ireland connectivity. I agree that Northern Ireland has particular circumstances that make air connectivity vital. Northern Ireland is well connected by air, with more than 18,000 flights per year between it and the rest of the UK. The two Belfast airports have connections to major London airports, including to Heathrow from Belfast City.
The hon. Member for Blackley and Broughton (Graham Stringer) made a number of points about bilateral agreements. With Europe, of course, we have an open skies policy, so there is no need for a bilateral agreement. When the UK negotiates bilateral agreements, we make it clear that there are other airports outside Heathrow and London. The aviation policy framework encouraged fifth freedoms from regional airports, and Emirates flies to a number of UK airports, including Manchester, Newcastle and Birmingham, with direct flights to the middle east and numerous onward connections.
Surface access to the airports is vital. The Airports Commission has highlighted many important investments in airport surface access that are already being put forward by the Government. The commission chair, Sir Howard Davies, wrote to the Chancellor of the Exchequer on 26 November about its recommendations on surface access to airports. The Treasury’s national infrastructure plan published on 4 December began the process of implementing the recommendations and referred specifically to the Airports Commission’s proposals for new work.
Key new elements of the programme are, for example, the enhancement of Gatwick Airport station with part funding of £50 million; further work to develop a strategy for enhancing Gatwick’s road and rail access, with the report due in the spring or summer of 2015; and work on developing proposals to improve the rail link between London and Stansted, the report on which we again expect in the spring or summer of 2015. It is also important to look at other issues, such as smart ticketing facilities at railway stations.
A couple of weeks ago, my hon. Friend the Member for Fylde (Mark Menzies) and the hon. Member for Blackpool South (Mr Marsden), who spoke today on behalf of the Opposition, came to see the Secretary of State to lobby for a passing loop on the line from Blackpool South to Kirkham and Preston. The Secretary of State is looking at that issue.
I welcome the potential improvements at Luton Airport Parkway station. I am aware of the problem of flights arriving late and people having no way of travelling from the airport. Surface access is also a particular problem at Leeds Bradford, an airport I have used on many occasions. Indeed, I was there on 1 May, when I experienced some ear-bending from the management about the possibility of improving access through, for example, a railway line reasonably close to the airport.
The tale of Manston airport is, I am afraid, rather an unhappy one so far, although I am heartened by the fact that the local authority is looking into what it can do. I spoke to the leader of the council last week, and she had received an 8,000-name petition. The Department is more than happy to help with any Civil Aviation Authority licensing issues.
The hon. Member for Na h-Eileanan an Iar (Mr MacNeil) raised the issue of public service obligations and start-up aid. We recognise that air connectivity is not a luxury for communities in the highlands of Scotland, but essential. In this year’s Budget, the Chancellor announced funding to allow start-up aid for new routes from regional airports handling fewer than 5 million passengers per year. In June, we announced support for maintaining air links between Dundee and London for the next two years, and a public service obligation was agreed with Dundee city council. The Department for Transport is working with the Treasury to develop guidance that will clarify how the Government ordinarily expect to interpret the European Union state aid guidelines on start-up aid for new air routes, and explain how the funding process will operate throughout the UK.
The Government have established the right foundations to move forward, gain consensus and secure the benefits that aviation brings to the whole nation. We are clear about the economic and connectivity benefits that our regional airports bring to regions, communities and businesses. In that context, I welcome last week’s announcement by the Transport Committee that it will conduct a short inquiry to examine policy and to make recommendations to the Government on the role of airports that handle fewer than 5 million passengers per year. The Committee’s objective in undertaking the inquiry is to ensure that that policy area is properly scrutinised and that the role of smaller airports in improving connectivity is recognised within Government.