Regional Airports

Tuesday 2nd February 2016 Westminster Hall

09:30

[Valerie Vaz (in the Chair)]

Quite a number of hon. Members are present and wish to speak. I am sure that at some stage I will have to impose a limit of approximately four to five minutes.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I beg to move,

That this House has considered regional airports and UK airports capacity.

It is a pleasure to serve under your chairmanship, Ms Vaz. I am delighted to have secured this debate, which could not be more timely in a year when I hope that the Government will face up to some of the most significant decisions in the aviation sector for decades. That could not be more important for regional airports, such as Newcastle international airport in my constituency and countless others around the UK, which are the backbone of regional economies and, therefore, the economy as a whole. The interest in and concern about the issue is demonstrated by the number of hon. Members present.

Newcastle international airport celebrated its 80th anniversary last year. As the Minister knows because he came to visit, it is the largest airport in the north-east and the 10th largest in the UK. It also happens to be the single largest employer in my constituency and is proud of its public-private partnership model, with ownership between the seven local authorities and AMP Capital. Indeed, it served a record 4.56 million passengers in 2014 and supported 3,200 jobs directly on site and 12,200 indirectly. It contributes over £581 million in gross value added to the north-east economy, including £181 million in tourism impact and 1,750 tourism jobs.

Newcastle airport exports well over £300 million of goods every year. The vast majority are carried by Emirates on its long-haul service to Dubai and last year saw the first ever trans-Atlantic service from Newcastle by United Airlines to Newark, which is set to return this summer. Newcastle international airport makes an invaluable contribution to the north-east’s proud claim to be the only consistently net exporting region in the UK, just as other regional airports make an invaluable contribution to their local economies.

This is when we come to the purpose of today’s debate. The Government are facing critical decisions that will determine the future of the UK’s aviation sector, which in turn will have a major impact on regional economies. Those decisions are not new and include where to build the new runway to provide the capacity we need for the future and how properly to support regional airports during a time of considerable upheaval with devolution.

Time and again, the Prime Minister has kicked the can down the road rather than face up to the challenges. It is not just Heathrow or Gatwick that loses out from this chronic indecision. The future growth and sustainability of the UK’s regional airports and, by extension, the growth of our regional economies, are equally put at risk.

[Mr John Spellar (Warley) (Lab)]

Does my hon. Friend, like me, find it utterly extraordinary that, given the huge advantage to many regional airports around the country, the fact that business is overwhelmingly supportive of an early decision on airport capacity and the fact that the private sector trade unions—GMB and Unite—are also campaigning vigorously on behalf of their members to increase airport capacity, the Prime Minister, dithering Dave, is still holding back on bringing a decision to Parliament?

[Catherine McKinnell]

I thank my right hon Friend, who makes my argument for me. Hon. Members will remember the Chancellor’s claim in 2011 of a march of the makers, which he has since forgotten, and his more recent talk of a northern powerhouse. How does he expect the makers to march or the north to become a powerhouse if they cannot export or do business with the rest of the world? That is what is at risk thanks to the Government’s dither and delay.

[Ian Mearns (Gateshead) (Lab)]

It is fantastic that my hon. Friend has this debate this morning. The problem with provincial airport capacity using Heathrow as a hub is that we unfortunately rely on flights in and out of Heathrow and those are the very flights that will be squeezed due to the lack of capacity at Heathrow. When they are in competition with increased demand from overseas flights, those provincial flights, which are important for the regional economies, will lose out.

[Catherine McKinnell]

My hon. Friend excellently makes my argument for me. I want to talk about the most important decision on the desk of the Secretary of State for Transport at the moment: airport capacity and expansion. Having pledged to cancel the Labour Government’s plans for a third runway at Heathrow, the coalition Government set up the independent Airports Commission in 2012, chaired by Sir Howard Davies, to assess and to report on long-term aviation capacity options by summer 2015. The commission did exactly what it was asked. Having considered a plethora of options, it decided in its interim report in 2013 to narrow these down to just three, all of which were in the south-east. In July 2015, it produced a thorough and comprehensive report assessing each of these in turn.

[Sammy Wilson (East Antrim) (DUP)]

Does the hon. Lady agree that it is important not only that airport capacity is increased in the south-east so that regional airports can feed into it but that slots are guaranteed for flights from regional airports? Otherwise, as capacity diminishes because airlines use more and more flights across the world, regional airports will be squeezed again.

[Catherine McKinnell]

Indeed. The commission looked at that issue and its decision was unequivocal: a third runway at Heathrow presents the clearest case and the greatest strategic and economic benefits to the UK. That view was shared unanimously by its members. For the benefit of hon. Members, it is worth revisiting what some of those benefits are.

The commission estimates that by 2050, GDP would be boosted by £129 billion; 78,000 new jobs would be created; productivity would be boosted by £69 billion; and 12 new long-haul routes would be available to UK passengers with 16 million extra long-haul seats. Those benefits far outweigh those that would be provided by an expanded Gatwick. Perhaps most important, the commission said that an expanded Heathrow would

“provide a stimulus to economic growth throughout the UK.”

It estimates that £70 billion to £80 billion of economic benefits would spread across the regions of the UK by 2050.

I recognise the many concerns, both local and national, about an expanded Heathrow, particularly local air quality, noise and other community impacts, not to mention whether an expanded Heathrow is even possible in line with our climate change commitments. The Airports Commission also recognised those challenges and set out a package of measures to meet them. Let us remember that the commission did not simply give an unlimited green light to expanding Heathrow. It recommended that any new runway must be accompanied by a ban on night flights, which is possible only with expansion anyway; a legally binding noise envelope so that noise levels do not exceed current limits; a new aviation noise levy on airport users to fund a mitigation package for local residents; a £1 billion commitment from Heathrow for community compensation; a legal commitment that expansion will happen only if it does not delay local surrounding areas complying with EU limits on air quality; and compensation for homes lost at full market value plus 25% available immediately. That would provide the framework within which to approach the challenges posed by an enlarged Heathrow.

Why is airport expansion in the south-east so important to other regions such as the north-east? The trend in recent years has been towards a hub-and-spoke model of aviation, whereby airlines have routed all operations through a hub airport and joined with other airlines, creating alliances, to provide customers with hundreds of destinations, all accessible through a single hub. We can look all over the world and see that the hub-and-spoke model is key, from the likes of Schiphol, Charles de Gaulle and Frankfurt in Europe to the rise of the increasingly dominant middle eastern hubs in Dubai, Qatar and Abu Dhabi, not to mention the well-established far eastern hubs such as Singapore and Hong Kong. Of course, Heathrow stands alongside those, accounting for 70% of the UK’s scheduled long-haul flights and serving 75 unique destinations.

That is not to say that long-haul routes are neither valuable nor viable from regional airports. As I mentioned, the daily Emirates service from Newcastle to Dubai has been transformational, facilitating millions of pounds in exports from the north-east to the middle east, but it has been so successful because it is operating to another hub airport, from which those goods and passengers can travel on, throughout the middle east, to Australasia and beyond. I hope that we will see more of those links developing in the future. Regional airports play a significant role in providing their own direct connections worldwide, in conjunction with connections through a hub such as Heathrow.

[Ian Mearns]

My hon. Friend is making an excellent point about the fact that the delay in relation to Heathrow could cost the UK economy significant amounts of money. If I am flying from Newcastle, I do not mind which hub I use, as long as I can get where I want to go, so if Heathrow is not developed and the capacity is not there for inbound flights from Newcastle in order for me to change to an international flight, I will happily use Schiphol, Brussels, Paris or even Dublin if I am going to the United States of America. Therefore, it is vital for all the UK’s provincial airports that that capacity is provided as soon as possible.

[Catherine McKinnell]

My hon. Friend makes a very important point, but we must always look at this in both directions. It is not about where we would be happy to go via if we want to go somewhere, but where people are happy to come via if they want to come and do business where we are. That is increasingly important.

[Ms Margaret Ritchie (South Down) (SDLP)]

My hon. Friend is making compelling points about the need to develop airline and airport capacity. Does she agree that to do that, there needs to be a review of air passenger duty? I am thinking of us in the Northern Ireland context having to compete with the Republic of Ireland, where there is zero air passenger duty.

[Catherine McKinnell]

I thank my hon. Friend for that intervention. I will come on to that issue shortly.

To go back to the airport expansion issue, Newcastle currently has a six or seven times daily service in and out of Heathrow. It is used by 500,000 passengers a year, including many of my constituents, as well as residents and businesses from across the north-east, 50% of whom use the domestic service into Heathrow to connect to hundreds of destinations worldwide—an opportunity that no other UK airport provides for my constituents, or passengers from any other region, for that matter. As the Transport Secretary himself told the British Air Transport Association last week, we must keep

“beating the drum for the regions in this debate.”

He also said:

“One of the most persuasive arguments for new capacity is the links it will provide to the north, the south west, Wales, Scotland and Northern Ireland. Opponents have tried to suggest that a new runway would somehow undermine our domestic network. In fact the reverse is true.”

I could not agree more. However, these vital connections between the regions and Heathrow, which, let us be clear, is where domestic links are most valuable, are at risk. As the Airports Commission found, a crowded Heathrow has led to a decline in the number of domestic services, from 18 in 1990 to just seven at present, but it estimates that that could bounce back to 16, and an additional 1 million passengers a year, if a third runway is built. By contrast, the commission says that if we maintain the status quo at Heathrow, domestic passengers using the airport could fall by a staggering 2.5 million.

In that case, I hope that the Minister will acknowledge the vital links between regions such as mine and Heathrow and the economic benefits that they provide for regional economies. I hope that he can reassure hon. Members today that the impact on regional economies is playing a key role in the weighing up of the decision. Most importantly, I hope that the Minister will set out clearly when we can expect a decision once and for all, and provide a guarantee that we will see no more dither and delay from this Prime Minister.

The other major concern for regional airports in the UK at the moment is the devolution of APD to Scotland and Wales. As a result of the Smith Commission proposals, APD is being devolved to Scotland through the Scotland Bill, and the Government are now considering the case for doing the same in Wales, as part of the St David’s Day agreement signed last year. We know already that the Scottish National party programme for government includes a pledge to cut APD in Scotland from 2018, initially by 50% if the SNP wins power this year, with a view to replacing APD with a “more competitive regime” in the long term. Of course, it was welcome that the leader of the Scottish Labour party, Kezia Dugdale, pledged while visiting Newcastle that a Labour Scottish Government would not cut APD north of the border, acknowledging the risk of such a move to north-east airports and businesses. The implications for airports such as Newcastle and others, including Bristol, Manchester and Birmingham, should not be underestimated. We have long made that clear; we have done so since the Smith Commission’s proposals were published.

[Julian Knight (Solihull) (Con)]

The hon. Lady’s mention of Birmingham airport prompts me to intervene. What does she think about the idea of an APD holiday for new flights? For instance, the American Airlines flight that she mentioned from her constituency to Newark is a summer flight at the moment, but potentially, with an APD holiday, could become an all-year-round flight instead.

[Catherine McKinnell]

A number of options are being mooted and discussed as part of the solution. What I want to see from the Government is some certainty about what they will actually do to ensure that regional airports are not disadvantaged by some of these changes. All options need to be considered and taken seriously. Indeed, analysis by Her Majesty’s Revenue and Customs of the impact of devolving APD to Scotland found that Newcastle would be the most acutely affected, at least immediately, with an initial 10% reduction in passenger numbers. That is the Government’s own analysis. In particular, HMRC’s review forecast that the savings to medium and long-haul passengers from reduced APD in Scotland would outweigh the cost of travelling further.

[Sammy Wilson]

Does the hon. Lady accept that we do not even have to rely on modelling done by HMRC? We have only to look at the example of Northern Ireland. Passengers are being sucked out of Northern Ireland to an airport 100 miles down the road, where there is no APD at all. The same would happen if we had an uneven playing field in the rest of the United Kingdom.

[Catherine McKinnell]

The hon. Gentleman makes a very important point. It is a very clear illustration of the impact that such a move can have.

[Ian Mearns]

I am grateful to my hon. Friend for giving way again; she is making a very powerful speech. The situation is similar for those of us in the north-east, with our regional airport at Newcastle. It is 104 miles from Newcastle airport to Edinburgh. If the Scottish Government were to reduce APD by half or possibly do away with it altogether—there would be a real economic disbenefit for Newcastle airport. However, we are already suffering a major disbenefit because people travelling from provincial airports into a hub such as Heathrow get charged APD twice. There is a charge at Heathrow for being inbound and there is a charge from Newcastle for being outbound, so people are charged twice for flying between a provincial airport and a hub such as Heathrow.

[Catherine McKinnell]

My hon. Friend makes a very important point, and I can see that the Minister is interested. He should give some consideration to the impact that that practice has on domestic passengers and regional economies.

[Ian Paisley (North Antrim) (DUP)]

The hon. Lady is making an excellent point. Does she agree that this should not be about persuading Scotland not to reduce this taxation? In fact, I am delighted that Scotland has indicated that it will reduce it. This should be about all of us persuading the Chancellor to remove this pernicious, dirty, nasty little tax on passengers and on business.

[Catherine McKinnell]

Interestingly, the Prime Minister seemed to recognise the issue during the general election campaign. He told regional newspapers:

“We are not going to accept a situation where there’s unfair tax competition...We will do what’s necessary to make sure that England’s regional airports can succeed.”

However, there has been near total silence on this issue ever since and there is a considerable amount of understandable concern that that was simply a lot of hot air.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

I echo the comment made by the hon. Member for North Antrim (Ian Paisley). It is not a matter of trying to stop regional airports in Scotland from developing. APD was designed to dampen some of the demand here, and it holds back all regional airports. The land border with southern Ireland has been mentioned. If someone from Germany, such as the German side of my family, wants to visit the wilderness, they have a massively different choice between Ireland and Scotland because Ireland does not have APD and it has 9% VAT on tourism. We are ranked 139th out of 140 countries for tourism competitiveness.

[Catherine McKinnell]

It is almost a year and a half since the Smith commission’s proposals were published and accepted by the Government, yet we are still no closer to understanding how the Government intend to protect regional airports that are set to be adversely affected by the changes. In last summer’s Budget, the Treasury belatedly published a discussion paper on options for supporting regional airports through the changes. The document outlined three options: devolving APD in England; varying APD rates in England; and providing aid to regional airports in England. Unsurprisingly, those proposals begged more questions than they answered.

For instance, which bodies in England would APD be devolved to—local authorities, combined authorities or local enterprise partnerships? If APD was left as it is, and the Government provided financial support instead, how would they ensure that adequate aid reached airports acutely affected by lower APD rates across the border in Scotland or Wales? There are stringent EU guidelines on state aid support, particularly in the aviation sector, and we have previously heard the Government promise compensation to sectors impacted by one policy or another, but they have often under-delivered. How will this be any different? Will airports such as Newcastle be left to plug the gap?

Those and many more questions remain regarding the Government’s proposals, yet, six months on from the publication of the paper, there is near total silence from Ministers. I hope that the Minister will break that silence and provide us with some much-needed detail. When will the Government publish a response to the discussion paper that they published last summer? Are all three options still on the table or have some been ruled out? Most importantly, will the Minister tell airports such as Newcastle, Bristol and others how they will be supported by the Government when APD rates are devolved to Scotland and, potentially, to Wales? At the very least, will he tell us when airports can expect to hear about the plans?

The Airport Operators Association has made clear its very strong preference for any future reduction in APD in Scotland to be

“matched, immediately, by a cut everywhere”

so that no part of the UK is “disadvantaged in any way.” It is clear that the continued uncertainty on the issue is very damaging, and it is already having an impact on regional airports when it comes to airlines planning future routes and commitments. It is not good enough to wait and see what happens in Scotland. Action and certainty are required for England’s regional airports now.

A further concern I want to raise briefly this morning is the effect of regulatory charges—including, for example, the cost of a 24-hour police presence and all the security borne by airports—on regional airports such as Newcastle International. I understand that very large airports, with airlines queuing up to use their runways, are easily able to pass on those costs on to airline operators. However, it is much less easy for regional airports to do so, and the impact of the shift in costs is therefore having a disproportionately adverse effect on them. Regional airports are understandably extremely concerned about proposals that they should bear the costs of Border Force operating on their sites. Given that the agency is responsible for national security, I would have thought that responsibility lay squarely with the Government.

The decision on airport capacity and expansion has been kicked into the long grass far too many times, even after a £20 million independent commission made the decision on the Government’s behalf, as it was asked to do. The Government must make a decision in the national interest, but it should be a decision that respects our international commitments and the concerns of local communities. The Airports Commission has set out a plan that can achieve those twin aims, but the Government do not seem to accept it.

It is time to end the dither, delay and prevarication that has prevailed for far too long under this Prime Minister and Chancellor because it is not just London and the south-east but Newcastle, the north-east and many other regions will lose out most. Heathrow is, after all, not a London airport; it is the national hub. Airports across the country are looking for answers and long-term certainty from the Government, whether it is on airport capacity or the tax regime for aviation in the UK. I really hope that the Minister will be able to provide that certainty for them today.

[Valerie Vaz (in the Chair)]

The wind-ups will begin at 10.30 am, so it would be helpful if Members would stick to a four-minute time limit. We will see how it goes from there.

09:55

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate. I was not sure that I would be called so soon, but I appreciate the opportunity. I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on focusing everyone’s attention on the issue. Clearly, I will be speaking from a Northern Ireland perspective.

The issues of regional airports, including capacity and air passenger duty, are particularly pertinent to Northern Ireland as we share a land border with the Republic of Ireland. My hon. Friends the Members for East Antrim (Sammy Wilson) and for North Antrim (Ian Paisley) have said that on a couple of occasions so it is clear that these issues concern us all. Another indication of that concern is the number of Members of Parliament from Northern Ireland who are here.

Just a few miles down the road, Dublin airport does not have APD imposed on its flights. Not only does the existence of APD put strain on Northern Irish airports as it does with other regional airports throughout the UK, but we are punished twice by having to compete with foreign airports able to operate at a significant advantage. APD was designed to be a revenue raiser but, in the case of regional airports—especially in Northern Ireland—APD has instead become an obstacle to growth. Perhaps the Minister could comment on the suggestion that revenue could be raised by reducing APD and by making us an equal competitor with the Republic of Ireland.

Just last week, news came out showing that passenger numbers have soared at Northern Ireland’s two main airports: George Best Belfast City airport and Belfast International airport. More than 7 million passengers passed through Ulster’s airports last year—a rise of 9% at Belfast International and a rise of 5.4% at Belfast City. However, despite the success at Belfast City and Belfast International, there was a huge slump at Londonderry airport with numbers down by almost a fifth.

[Ian Paisley]

My hon. Friend will appreciate that the figures from 2006 to 2016 show that passenger numbers have not yet recovered for Belfast City and Belfast International airports because numbers are being sucked to Dublin.

[Jim Shannon]

I will certainly speak about that. The figures show an increase, but a much greater increase could be achieved. Perhaps we might dwell on that. A spokesman for Belfast International airport said:

“If we can make advances such as this with the drag of APD impeding progress, think what we could achieve for the Northern Ireland economy if we didn’t have this regressive tax”.

That is a great point, which my hon. Friend the Member for North Antrim also makes. We could do better and much better.

Some 240 million passengers a year join or leave aircraft at the reporting airport. That figure is important because the increase in traffic is yet to be evenly spread out. Other airports outside of London—in Wales, Scotland and, particularly, Northern Ireland—should get the advantage of that. I want to see the connectivity and I know the Minister will comment on that. Those airports are making a case for at least some reduction in APD, with Wales and Scotland already on course to deliver. This debate is important to me as the MP for Strangford because I see Belfast City airport as the airport for my constituents, and they see it that way as well. We want the advantages, across my constituency and across the whole of Northern Ireland, of better prices and better connectivity with other parts of the United Kingdom.

As well as regional disadvantages, APD is at risk of creating a socioeconomic divide, where those with the ability to pay can enjoy the benefits of air travel when and where they want, while those without it are left using other, less appropriate means of transport. APD raises some £3 billion a year in tax revenue, year on year, for the United Kingdom but, despite its introduction, demand has risen rather than fallen. Although APD is a form of revenue, raising it has failed in its aim of reducing demand and carbon demand. If something is broken—and in this case, it is—we should fix it. It is clear that APD does not work for regional airports across the whole United Kingdom of Great Britain and Northern Ireland, and Northern Ireland wants something different.

The benefits of abolishing air passenger duty will be seen across the entire United Kingdom. According to PricewaterhouseCoopers, abolishing the duty would see the UK economy grow by a staggering 0.5%, which would give the UK Treasury some £570 million in tax receipts in the first year after abolition due to the increased demand for air travel. That is a win-win.

In Northern Ireland we know all too well how much air passenger duty influences the decisions of airlines about doing business. We compete directly with the Republic of Ireland in this sector, and we need only look at what happened when air passenger duty was abolished in the Irish Republic. The figures are interesting: Dublin airport increased its passenger numbers from north of the border—my constituents—which is proof that APD is an obstacle to business, growth, prosperity and security for our people. We must do everything we can to ensure the future success of Northern Ireland.

My party is on record as supporting a third runway at Heathrow—we said it in previous debates, and we are saying it in Westminster Hall today. Let us get the third runway in place for Heathrow. Let us get connectivity across all the United Kingdom, and let us get it for Northern Ireland—for Belfast City, for Aldergrove and for Londonderry. Let us move forward and give everyone in the United Kingdom of Great Britain and Northern Ireland the opportunity to have the advantage of no APD.

10:00

[Kelvin Hopkins (Luton North) (Lab)]

It is a pleasure to speak in this debate. I congratulate my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this debate and on her excellent speech.

I am here to talk about rail connectivity to regional airports. The Minister will remember that a little while ago I spoke in a debate about eastern regional airports, specifically about Luton. Since then, together with my hon. Friend the Member for Luton South (Mr Shuker), I have had a meeting with the owners of London Luton airport and was impressed with their plans for expansion. Airport passenger numbers are increasing rapidly at Luton—they are now at 12.5 million and are on an upward trend—but we want more trains to stop at Luton Airport Parkway station. There are plans to build a fixed link between the railway line and the airport to ensure that passengers can get to their flights more easily.

Birmingham airport can make a bigger contribution to airport capacity. Indeed, it can serve the south-east and London with the right rail connectivity. I recently met representatives of the Airport Operators Association, who said that Birmingham is operating at only 30% capacity. An old friend of mine, Paul Kehoe, who used to be a director of London Luton airport, is now a director of Birmingham airport, and I hope to put this to him, too. Birmingham airport could and should provide much more capacity for not only for the midlands and the north but for London and the south-east, but it needs better rail connections.

[Karen Lumley (Redditch) (Con)]

Birmingham airport is in my region. Does the hon. Gentleman agree that, when HS2 is finally on stream, Birmingham airport will be able to take people from north London? Birmingham also has the capacity for a second runway.

[Kelvin Hopkins]

I thank the hon. Lady for her intervention, but my scheme is rather different from HS2. It is a lot cheaper, more convenient and can be done much more quickly. I am suggesting, as I suggested in a debate some time last year, that we link Birmingham Snow Hill to London. It currently operates to Marylebone, and trains could go to Paddington, too, but electrifying and upgrading the line could provide a rapid, 125 mph service from the centre of Birmingham to the centre of London without changing trains because it could be linked to Crossrail at the southern end. A little track work and electrification would cost no more than £1 billion, according to my railway engineer friends who advise me on such things. A link to the southern end of Crossrail would mean that trains could go both to Heathrow direct and to the City of London, so people could go from the centre of Birmingham to the centre of London. The existing west coast main line, which serves Birmingham airport, links through to Leamington Spa on the Birmingham Snow Hill line, so one could get a direct electrified train non-stop from Birmingham airport to the City of London using Crossrail.

Of course, Birmingham airport could effectively become a satellite, or even a hub, to share the load with Heathrow, because a one-hour service direct from airport centre to airport centre using the Birmingham Snow Hill line would make a real difference to airport capacity and could help to fill the spare capacity at Birmingham. As the hon. Member for Redditch (Karen Lumley) said, Birmingham airport could be expanded further. I am suggesting something that could be done relatively quickly and cheaply and that would service the people of Birmingham and the people of the City of London while increasing the usage of Birmingham airport by passengers coming from the south-east and London. I hope the Minister recognises that as a real possibility.

[Julian Knight]

I am the Member of Parliament for a constituency that neighbours Birmingham airport, and devolution and the idea of devo-APD have been discussed. Does the hon. Gentleman agree that potentially devolving APD to airports such as Birmingham, and to authorities such as the West Midlands combined authority, could be a real benefit and bonus to regional airports?

[Kelvin Hopkins]

The hon. Gentleman has made his point, and I will not comment because I am concerned about passenger capacity and have not given any thought to his point.

An electrified, non-stop service from Birmingham airport to the City of London without changing trains would make a real difference to the attractiveness of Birmingham to travellers from London and the south-east, and it could provide a direct, one-hour, 125 mph electrified train from airport to airport. Birmingham and Heathrow could effectively serve as a hub, or as hub satellites to each other. Luton airport is doing very well and is going to expand massively over time, but my proposal could be done very quickly. We could see a tremendous benefit to the regions, and particularly to Birmingham airport.

10:05

[Sir Alan Haselhurst (Saffron Walden) (Con)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this debate and on her speech, in which she made many important points. I was a little worried that her speech was becoming slightly political. She sounded somewhat like a cheerleader for Heathrow, so I hope she checked her script with the hon. Member for Hayes and Harlington (John McDonnell). I am also surprised that the debate has very much turned to APD—the debate could have been entitled that to give guidance to other colleagues who might have wanted to contribute on that subject. There is a serious problem with what the Scottish Government might do but, by and large, APD has not acted as too much of a brake on the increase in passenger traffic, which is at the heart of the problem of how we provide airport capacity.

Airport capacity is much easier to decide in opposition than in government. Looking back at what has happened over the past decades, the party in government is always the one that is in trouble trying to determine airport capacity, whereas the parties in opposition are freer to comment. The problem with airports, and our country as a whole has never been good with big projects—we agonise over them, and over the consequences in the immediate area where their impact is most felt—is that we struggle because people say, “Of course we want air travel, but we don’t need an airport just near us, thank you very much, because of the disadvantages that come with it for the rest of the year.” It is essential that an island country such as ours has good airport connectivity. Politics does not help, because one party comes in and has to look at airport connectivity more realistically, and then that party goes out. No one is sure whether a policy conceived in one Parliament will be continued in another.

[Catherine McKinnell]

I appreciate the right hon. Gentleman’s point about politics, but does he agree that the point of the independent airports commission, which the Government spent £20 million constructing, was to come up with a viable plan for the whole UK? The commission has made that recommendation, so is it not incumbent on the Government to say whether they support that decision?

[Sir Alan Haselhurst]

One might think that, but the reality is that it depends on what the commission says. The majority recommendation of the 1968 Roskill commission was rejected by the then Government, and the minority recommendation, which was accepted by the Government of 1970, was rejected by the incoming Government in 1974. Such recommendations do not have a very good record.

I will say a little more about the Davies commission before I conclude. We are beset by the division between the capital city and the rest of the United Kingdom, and I find that the term “regional airports” somehow implies second division—it is like talking about the premiership and the championship in football—and that regional airports are somehow different or less good. I am a northerner, and at one stage I represented a Greater Manchester seat. I was very pro the development of Manchester airport, but we have never yet exploited the regional airports to their full. At the moment, there is an urgent need to do so, because they have usable capacity.

Of course I do not want to decry London’s importance to our country, but I think that we do not extol the virtues of the rest of the country. I find the concept of the northern powerhouse exciting. I acknowledge that Government after Government over the past 50 or 60 years have tried to decrease the emphasis and pressure on London and the south-east, but we have never succeeded. There is a still a net drift to the south-east, and it is unhealthy for our country.

A point that has not yet been covered in this debate is the difference between hub and point-to-point. Where the Davies commission falls short is that it recommends a hub airport in London, but then says, “Oh, but we can’t have a fourth runway.” Even a third runway puts us way behind the competition in the rest of Europe. If we are really to have a hub airport, it must have the necessary capacity. Figures suggest that Heathrow’s domestic connectivity with three runways will decline, not improve, because the more profitable long-haul routes will steadily displace domestic services.

We must make more use of the spare capacity in the rest of the country, recognising that there are aircraft types being developed now that encourage the growth of point-to-point services from many of the airports in our country. I hoped that this debate would concentrate on that more than it has so far.

[Valerie Vaz (in the Chair)]

If Members reduce their interventions, everyone will be able to get in.

10:11

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

It is a pleasure to serve under you, Ms Vaz. I pay tribute to the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) for securing this debate. Obviously, we are all here to pitch for our local airports, and as usual I am pitching for Prestwick, the UK’s clear-weather airport with a long runway. We have a train station in the airport; what we do not have is a single flight to London. We are obstructed from applying for a public service obligation or the connectivity fund by the 60-minute rule—we are within 60 minutes of Glasgow.

This debate opened with a discussion of Heathrow versus Gatwick. The posters that used to be outside the tube entrance referred to a fantastic surge for the whole of Britain. To us in the very northern powerhouse, Heathrow is almost on the south coast. Therefore, unless whatever airport is chosen has protected routes for domestic airlines, there will be no benefit to the rest of the country.

I would also pick up the mention of point-to-point by the right hon. Member for Saffron Walden (Sir Alan Haselhurst). Part of the reason for the obstructed capacity in the hubs of Heathrow and Gatwick is that lots of us who live in a totally different place are made to fly through those airports. We do not want to be here; we do not want to go through Heathrow or Gatwick. We want to go point-to-point, but the number of those flights has diminished.

[Sir Alan Haselhurst]

I thank the hon. Lady for allowing me to intervene on that point, which I was unable to develop as fully as I would have liked within the time limit. The development of the Airbus A350 aircraft and the Boeing 787 opens up the possibility that an aeroplane that can fly distance with 250 passengers rather than 400 could be economically viable. That is an exciting possibility.

[Dr Whitford]

I thank the right hon. Gentleman for that intervention.

We tend to talk about the business flyer coming into London, and there are certainly plenty of business flyers in my region who would welcome a flight from Prestwick into London, but we also need to start thinking the other way around, as a previous speaker said, about tourism coming in. I would like us to think about the smaller regional airports, which are often in areas of great attractiveness and beauty that are tourism hotspots. For someone sitting in the middle of Europe deciding whether to go for their holidays to southern Ireland, Northern Ireland or Scotland, it is a no-brainer. With 9% VAT and no air passenger duty in the Republic of Ireland, the difference in the cost of a fortnight’s holiday is vast. Unless people are coming to visit family, they will always go to southern Ireland instead of any of us. It is not just Northern Ireland that loses; it is other picturesque areas such as the lakes, Scotland and the mountains in Wales.

It is important that we have some kind of strategy for developing the smaller regional airports. APD is one of the biggest barriers; that is what all the smaller regional airports feed back. Instead of just saying, “It’s not fair if Scotland gets to change it,” we must campaign to cut or remove APD across the country. The PricewaterhouseCoopers report suggested that the growth in GDP would compensate. I know that there would be a time lag, but it would bring jobs into areas where there are often no other jobs.

Although we suffer from the 60-minute rule for being close to Glasgow, being on the south-west coast of Scotland, we can sell ourselves as a golf area—we have the Open this year—and a coastal area. Sailing is one of our biggest tourist industries. People can fly straight into the area that they want to visit. I am sure that there are other small airports in the UK that would like to offer the same.

While we discuss Heathrow versus Gatwick and business coming into and out of London, it is important that the Government have a strategy to support the development of tourism and the smaller regional airports. Another block to that is our 20% VAT rate on hospitality and tourism, versus 9% in southern Ireland. The areas that are strongest in tourism often do not have other industries; that applies right across the UK. There are Members from all parties who live in more rural areas where tourism is being held back by VAT and APD. They are taxes to raise funds, but they are stultifying the local economy. I call for a tourism strategy for the United Kingdom, and it should include smaller and larger regional airports.

[Valerie Vaz (in the Chair)]

In order to accommodate all Members, I must reduce the time limit to three minutes. Bear in mind that for every intervention, a minute is added to the speaker’s time.

10:17

[Julian Knight (Solihull) (Con)]

It is a great pleasure to serve under your chairmanship, Ms Vaz. I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this important debate. As we are time-limited, I will not get into the Gatwick-Heathrow issue, which has been well put in this debate, except to say that I believe we need capacity at both airports over time, and we need to future-proof our airport capacity across the UK.

The regional airports are vastly underused. My own airport—Birmingham airport, on the edge of my constituency—is at only 27% capacity. Stansted operates at 60% and is considered a busy and successful regional airport, and Manchester airport operates at only 40% capacity and is also often held up as a model for regional airports. The unused capacity is a bit shameful, really. As the hon. Member for Luton North (Kelvin Hopkins), who is no longer here, said in his speech, Birmingham airport is only about an hour from central London. In fact, Birmingham is more convenient to many parts of the south-east than the self-styled London Luton airport. With the advent of High Speed 2, the journey time could be cut to 40 or 45 minutes, putting it within easy reach of the main conurbation of London and its surrounding areas.

We must use our regional airports much more, and I have a few ideas for how we could go about it. In my previous Westminster Hall debate, I was a proponent of air passenger duty holidays for new flights. I mentioned the flight from Newcastle, in the constituency of the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), to Newark. There are also many flights from Birmingham airport that operate only in summer. I think that we could go further and create an APD holiday for those areas, which fly to economically important destinations. It is a great shame that in 2010 this country traded more with Ireland than with Brazil, Russia, India and China. One reason is that we do not have regional connectivity with those emerging—well, in many cases emerged—economies. So I would consider the idea of APD holidays for new flights in economically important markets.

However, there is also the devolution of APD. The hon. Member for Newcastle upon Tyne North said that she would effectively like to stop the devolution of APD to Scotland; that is the Scottish Labour party policy. I would say, frankly, “Good on the Scottish and good on the Welsh for doing what they are doing”, but I want to see such change in other areas as well. We have to be careful, because if we act in terms of favouring one region over another within England, that process will be open to legal challenges. Regarding all the combined authority deals, we should consider devolution of APD.

10:19

[Mike Kane (Wythenshawe and Sale East) (Lab)]

I congratulate my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this debate.

In the short time available to me, I will just refer quickly to the right hon. Member for Saffron Walden (Sir Alan Haselhurst), who made a premier league analogy. Well, if someone already has Manchester airport, they already feel like they are in the premier league, and it is great that we will invest £1 billion in new infrastructure, including new terminals, to welcome Pep Guardiola to the city as the new Manchester City manager.

With 23 million passengers a year, which will rise to 43 million a year by 2025, Manchester airport is a serious world international airport. It has the capacity, with the two runways, to go to 55 million passengers a year. A total of 100,000 tonnes of goods are exported out of Manchester airport and it generates 21,000 jobs. There was a jobs fair just last week, with 4,000 new jobs coming on stream; 7,000 people applied, so it was massively oversubscribed.

It was great to welcome President Xi Jinping and the Prime Minister to Manchester airport just a few weeks ago to announce the development of Airport City, an £800 million investment in new, high-tech sectors both south and north of the city. The joke around Manchester was that it was awful to see the Prime Minister kowtowing to the leadership of a one-party state, but there you go—welcome to Manchester.

However, the point that I will address today is rail connectivity, the importance of which was pointed out by the hon. Member for Solihull (Julian Knight), who also talked about current capacity. There was a Mancunian entrepreneur and industrialist called Daniel Adamson. In 1860, he saw the north developing a continuous economic region—a powerhouse, as he described it—from the banks of the Mersey estuary to the banks of the Humber, to create a single economic market. In 1886, he then decided to build the Manchester Ship canal. He got halfway there, but there is now an opportunity—in the years ahead of us—to create that single market.

Current rail access to Manchester airport means that the population within a two-hour catchment of it using public transport stands at around 8 million. Currently, the only city that can be reached in that time period is Manchester. However, with the right rail improvements things would improve. Transport for the North, which was funded by the Chancellor in the last autumn statement, is considering three options at the moment. We estimate that if we put in the right transport links from east to west we would create a catchment area for the airport of 18 million people, bringing in Liverpool city region, Sheffield, Liverpool itself and Leeds, with all of them being within around 30 minutes of Manchester and Manchester airport. It would widen the airport’s catchment area massively.

High Speed 2 will bring journey times to Manchester down from the current time of 2 hours 24 minutes to 59 minutes. We can connect our airports and our cities more effectively if we have the right vision, guts and gravitas.

10:23

[Ian Paisley (North Antrim) (DUP)]

It is an honour to serve under your chairmanship, Ms Vaz.

This has been a very agreeable debate. I do not think I have ever attended a debate in which I have agreed with absolutely everything that has been said by every Member—with the exception of the hon. Member for Gateshead (Ian Mearns), who does not care if he flies from Dublin. I think that Northern Ireland Members can say, with unity for once, that in future we want him to fly from everywhere but Dublin. We will encourage him to do so and get him a timetable to make sure that that happens.

I watched the Minister of State’s reaction to the debate and I noticed that he agreed with a number of points. That is probably because he hails from and represents Scarborough, so he knows the needs of people who come from the north. Of course, whenever he comes to Northern Ireland he does not have to fly north; he just flies west to visit Northern Ireland. So I think he gets this issue, which is important. Members recognise that there is a very distinctive north-south divide here and we must address it very quickly.

A lot of this debate has focused on airport passenger duty, and I agree that it is important. I described it earlier as a pernicious, dirty and nasty little tax, and it is a tax on competitiveness, so it has to go. Frankly, however, it is not up to Scotland or Northern Ireland to do their own side deals on this issue. Addressing APD is an issue that the Chancellor must grasp and deal with centrally. He must recognise that if he does not grasp the issue, unfairness will be created across vast parts of the United Kingdom, which will probably disadvantage the north of England more than anywhere else; other parts of the UK will also be disadvantaged.

What has been absent is a proper aviation strategy that pulls together the tourism need, the business need, the capacity need and all those types of issues. When the Minister looks at this proposal, I am sure that he will bring to the debate a recognition that we need a proper aviation strategy that addresses the needs of other airports in Northern Ireland.

There has been an awful lot of discussion—not just in Parliament but outside it—about sorting out the Gatwick versus Heathrow debate. Yes, that debate needs to be sorted out, and expeditiously, but we also need to address the capacity at London City Airport very quickly.

[Ian Mearns]

I agree that we need an aviation strategy, but we also need a much more integrated transport strategy. As my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) pointed out about the expansion of Manchester airport, the problem for the north-east of England is that it takes more than two hours by rail to get to Manchester. The connectivity is simply shocking, and I honestly assure the hon. Gentleman that if I was going to Dublin, I would not start from here.

[Ian Paisley]

The hon. Gentleman is absolutely right about the importance of ensuring that such a strategy also includes other transport. For example, my colleague the hon. Member for Belfast East (Gavin Robinson) has a railway that goes almost to the airport. I have a motorway that gets almost to the airport at South Antrim. We need that entire process joined up, so that passengers, commuters, businesspeople and tourists coming in and out of the airport have an easier time of it getting to and from the airport.

In that strategy, we should also ensure that Gatwick, Heathrow and the other centralised airports have slots for the regional airplanes to reach them. That is important, as it will address the issue of ensuring that the C series, whenever it comes on stream, will be available for the other airports, as well as the Airbus equivalent.

Finally, I will point out that when Holland had APD its airports were devastated by competition from its neighbours in Germany. The Dutch scrapped APD and we need to learn the lesson of history.

10:27

[Karin Smyth (Bristol South) (Lab)]

It is a pleasure, Ms Vaz, to be involved in this debate; I have learned a lot.

The west of England economy is growing—it is worth about £26 billion annually— and we are a net contributor to the Treasury. Aviation has long been a part of that success story. The British and Colonial Aeroplane Company opened in Filton in 1910, which was the beginning of 100 years of continuous development, design and manufacture, with all the job opportunities and wealth that that development has created. Of course, Filton was later famously home to Concorde and it is currently home to Airbus, GKN Aerospace and Rolls-Royce, among other leading players in the global aerospace industry.

Airport capacity is central to that local growth. Our first airport opened in Whitchurch in 1930, which is now located in my constituency of Bristol South. After the war, a new site was finally opened at the current airport site, outside the city boundaries in Lulsgate. By 1988, 100,000 passengers were being served and in 2000 a new terminal and other infrastructure improvement led to more than 2 million passengers being served.

Last year, Bristol Airport handled nearly 7 million passengers, making it the ninth busiest airport in the UK and a major regional resource for Bristol, the west of England, the south-west and indeed south Wales. It has generated more than 11,000 jobs, many of which are located in my constituency of Bristol South.

Bristol airport’s performance is good; despite being the ninth largest airport in the UK, it has been the most punctual airport in the UK two years running and it is the 10th most punctual airport in the world, which we are very proud of. In 2011, planning permission was given for it to handle 10 million passengers. There is an ambition not only to bring more business travel but to open up tourism to the west of England and the whole of the south-west, which includes the fantastic city of Bristol, neighbouring Bath, which is a unique world heritage site, and traditional seaside and rural areas across the whole of the south-west, including Devon and Cornwall, and Wales.

However, as many Members have already said, two things are crucial to the continued success of Bristol airport and its contribution to the wider economy. First, a decision about Heathrow is needed as soon as possible. Secondly, the devolution of airport passenger duty to Wales, which would effectively result in a redistribution of traffic away from Bristol and into south Wales, has been raised by many hon. Members. Even limited devolution of the duty for long-haul flights would have a detrimental impact. Bristol airport wants to continue to invest in facilities and create jobs, but APD would remove the level playing field on which we currently operate. I am keen to see a western powerhouse built on our tremendous industrial past and our current and future business and leisure offer, and the continued success of Bristol airport is key to that. The Government should better acknowledge and support our regional airports, and provide them with greater certainty about the rules under which they now operate.

[Valerie Vaz (in the Chair)]

The Minister has kindly indicated that he will reduce his speaking time, and if the other Front-Bench spokespersons reduce theirs, to about six minutes, we can get the final three Members in.

10:30

[Tom Elliott (Fermanagh and South Tyrone) (UUP)]

I appreciate being called, Ms Vaz, and I welcome the opportunity provided by the hon. Member for Newcastle upon Tyne North (Catherine McKinnell).

We have moved from regional airports right through to the Heathrow-Gatwick debate, local tourism and many other aspects of the matter, including the north-south issues raised by the hon. Member for North Antrim (Ian Paisley). I am not sure whether he is talking about the north and south of England or of Ireland—he can clarify that—but the fact is that we in Northern Ireland do not have the same opportunities as many in other parts of Great Britain do.

I listened to the debate about rail links. I would love a rail link from Fermanagh and South Tyrone right into any airport in Northern Ireland, but I do not have one. What we want to concentrate on are the links between our airports in Northern Ireland and those in the rest of GB, particularly Heathrow—it is the national hub, irrespective of what others might believe about their own airports. I am pleased to hear how well Manchester is doing, and that proves that there are opportunities there that we do not have in Northern Ireland. We are also fighting with the airport duty to which others, in particular the hon. Member for Strangford (Jim Shannon), have referred. What we really need is to develop those links, instead of reducing them. From what I have seen over the past few years, the links from regional airports through to the main hubs are reducing and we need to increase them.

I do not know where the UK Government are putting any finances in, and that takes us back to the debate about whether there should be a new runway at Heathrow or at Gatwick. Who can afford it? I guess that both airports’ business plans say that they can afford it, but can they? If they can, let them bid, and let it be decided on economic terms as opposed to on the best terms for the individual airport.

We must ensure that regional airports, such as Belfast International airport, Belfast City airport and the airport in Londonderry in Northern Ireland, are on a level, fair playing field with others. I listened to the hon. Member for Solihull (Julian Knight) talk about airport passenger duty; if it will be taken off in Northern Ireland it should be taken off everywhere. We are happy to participate in the debate and take on those very issues, but we need that level playing field in terms both of regional infrastructure—train services or other public transport—and of the availability of bigger hubs such as Manchester.

10:33

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

I appreciate your efforts, Ms Vaz, to ensure that we are all called in the debate.

I am extremely lucky to have Glasgow airport in my constituency. I have spoken in the past about not only its importance to the local Renfrewshire economy but its economic impact on Scotland and across the UK. It contributes about £200 million to the national economy and supports 7,300 jobs in Renfrewshire. The airport’s success in 2015 led to its being named both UK and Scottish airport of the year. It was a record year, with 8.7 million passengers from all over the world coming to Scotland through its arrivals hall.

The debate provides us with the opportunity to talk about the success of, and the opportunities for, our regional airports, but in doing so we must debate the issue that the Government have clumsily kicked into the long grass until after the London mayoral election—airport capacity in the south-east. The decision to expand Heathrow or Gatwick should not, and cannot, be considered in a vacuum. Regional airport connectivity has to be at the forefront of any plans for airport expansion. The delay until after the mayoral election is causing extreme uncertainty in the sector, which serves no one. All our regional airports have long-term plans and their ability to plan is severely hindered by the constant and lengthy delays.

As we look forward to the airport expansion decision, a startling statistic that jumps out is that the number of services from Scottish airports to Heathrow has declined by more than a quarter over the past 10 years, and to Gatwick the number has fallen by almost 20%. When the expansion eventually occurs, therefore, we must ensure not only that the number of direct flights from Scotland to Heathrow or Gatwick is protected but that we consider ways of reversing the decline of the past 10 years.

The expansion will have ramifications for the rest of the UK, particularly for the regional airports. I have an unlikely ally in the hon. Member for Uxbridge and South Ruislip (Boris Johnson), who has argued that the expansion will have a significant impact on Scotland and that we should not be disfranchised. I therefore ask the Minister to assure us today that the motion, Bill, statutory instrument or whatever legislative vehicle is used is worded so as to ensure that it cannot be certified. Scottish, Welsh and Northern Irish MPs must be able to debate, and vote on, the issue at every parliamentary stage.

We have heard that regional airports are achieving significant success, but their importance to the national economy is often not fully appreciated. I see at first hand the impact that Glasgow airport has on the local Renfrewshire economy, but the delayed decision on the expansion is causing unnecessary concern, and I urge the UK Government to get on with it, and make a decision based on what is best for all parts of the UK.

10:35

[Gavin Robinson (Belfast East) (DUP)]

I greatly appreciate the opportunity to contribute to the debate, and I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), who summed up entirely appropriately the issues that frustrate and constrain regional aviation in this United Kingdom.

I am proud to have, in east Belfast, George Best Belfast City airport. Its provenance goes back to the second world war, the Sunderland flying boat was launched there in 1952, and the precursor to the Harrier jump jet was trialled in Belfast. On that site, with Bombardier, we are currently developing the C Series, which is an important tool for regional and small airports throughout the United Kingdom that need light, less noisy, as well as efficient and effective aircraft that can get in and out quickly. I am glad that London City airport is considering the C Series. When I was Lord Mayor of Belfast a number of years ago, the city airport was our unique selling point. A passenger can walk out of the arrivals lounge and be in the city centre in five minutes. No other regional airport has such connectivity to its city centre.

[Jim Shannon]

In my constituency it is 10 minutes.

[Gavin Robinson]

The Ards aerodrome has its place, and the kites that are flown there are of great significance.

We are constrained by a regressive and restrictive tax—air passenger duty—which has been fairly reflected on today. The devolution of the duty is the wrong course of action, but I am slightly concerned by the suggestion that we need further strategies and opportunities for the Government to consider what happens next. We need decisions. We have had the devolution of air passenger duty on long-haul flights in Northern Ireland. It sustains our only transatlantic flight from Belfast International airport, but it is not enough. I ask the Minister to reflect on that. In the Northern Ireland Affairs Committee we are currently considering air passenger duty and the variation of VAT on tourism and hospitality, and I hope that our report, when published, will form part of the Department for Transport’s current thinking.

[Tom Elliott]

Does the hon. Gentleman accept that Lord Empey’s Bill, the Airports Act 1986 (Amendment) Bill, currently in the House of Lords, will help to create rightful decisions that Heathrow must take regarding flights coming from regional airports?

[Gavin Robinson]

The hon. Gentleman makes an important point. The Government’s 2003 White Paper suggested that we needed to build up the regions to reduce congestion in London, but the truth is that by expanding what we have in the south-east of England we are constraining the regions. We need to give the regions a fruitful opportunity to expand, and to compete on a level playing field.

[Ms Ritchie]

Does the hon. Gentleman agree that Northern Ireland depends greatly on exports—particularly farm exports—and that we need a strong, sound regional airport with connectivity links to access global markets?

[Gavin Robinson]

The hon. Lady is entirely correct. We have as much transport among all our planes in Northern Ireland as we do in the capital, and regional aviation links are crucial for exports.

When something is going wrong or when someone is suffering an injustice or is unwell, we often say, “You would not wish it on your friends, never mind your enemies.” I am quite pleased that there is a threat for the north of England. I am quite pleased that there could be a disparity between APD in Scotland and APD in the north of England, because that would focus minds and attention on the issue. I do not wish to see that disparity, but I do wish to see greater recognition in the United Kingdom of the issues that for many years have been constraining us with the foreign border in Northern Ireland. If the danger that we have faced over decades is now facing those in the north-east of England and across the United Kingdom, that can only be a good thing, because there will be recognition of the dangers, damage and constraints of this pernicious tax on aviation. I hope we find a solution.

[Valerie Vaz (in the Chair)]

If the two Front-Bench spokespersons on the Opposition side take five minutes each, the Minister can have between seven and eight minutes, and I can then allow Catherine McKinnell to respond.

10:40

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure, as always, to serve under your chairmanship, Ms Vaz. I will try to jet through my comments, as there are quite a lot. I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this debate, because it is important. She talked about the importance of UK airport capacity, and I think there was general agreement on that point. Members were also in general agreement on the impact on tourism, jobs and exports across the piece. On the critical decisions on airport strategy by the Government, the hon. Lady rightly used the expression, “kicked the can”. Lots of other phrases could be used. She also said that growth and sustainability lose out from inaction. All those things are correct. I call for an end to the dither and delay, and I will speak about that in a moment.

There is lots to agree on, but one thing to disagree on—the hon. Lady will have picked this up around the room—is the subject of APD. The hon. Member for Strangford (Jim Shannon) correctly called it a regressive tax. We also heard that it creates a social and economic divide, which it does. The average family of four in Scotland pays more than £100 more because of APD. That is not right. It seems odd to me that the Labour party position is that APD is wrong and we should get rid of it, but not in Scotland, because it is not right to do it there. But I say that it is right to do it there. And by the way—I must say this, because the issue was brought up—when Kezia Dugdale talks about APD, she has already spent the APD money 10 times over on housing, health and education, despite the fact that getting rid of APD creates no new money. I would not go to her for advice on taxation.

Getting back to the main points that we can agree on, there needs to be action, and soon.

[Mike Kane]

Will the hon. Gentleman give way?

[Drew Hendry]

I will not, because I am going to make progress; I have very little time to get my points in. My hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands) talked about Glasgow airport and the 7,000 jobs and more than £200 million a year it adds to the economy. He also called on the Minister to confirm that the matter will not be dealt with under EVEL rules, as was suggested by a Scotland Office Minister some time ago. We have heard about the impact of airport expansion on the different nations of the UK, so I hope the Minister will come back with an answer on that.

The right hon. Member for Saffron Walden (Sir Alan Haselhurst) correctly said that the UK has never been good with big projects. That is especially the case with the fudge over airport expansion. He also said that it was essential for island nations to have good links, and he is absolutely correct about that. I think I also heard him use the phrase, “You’ve got to decide”, and the Government have got to decide. The main thing is to get on with it. Whether it is Gatwick, Heathrow, no new runways or something else, the point is that the industry is in a condition of stasis across the piece.

My hon. Friend the Member for Central Ayrshire (Dr Whitford) talked about Prestwick. She is a big champion for the airport. She pointed out the clear weather that we get there, and in other debates she has mentioned it as a location for a possible space port. She talked correctly about the 60-minute rule. One of the things that the Davies commission pointed out was that for regional airports to work properly and share in any expansion, there must be a point-to-point public service obligation decision taken by the Government. They must put regional airports at the heart of any decision and ensure that when we talk about links, it is not just links to London, but to specific hub airports. That is important, because some 90% of international visitors to Scotland come through air travel, and more than a third of them come through the Heathrow hub. Over the past 10 years, while destinations and routes from Scotland have doubled, flights to London have fallen by more than a third. We are not getting the protection that we require for those routes. Speaking of regional expansion, I am delighted to note that the First Minister of Scotland has announced a £20 million expansion of Aberdeen airport that will create a 50% gain in size. That is a real vote of confidence for the north-east.

I will try to bring my comments to a conclusion, but there is so much more that I could have said. There is a need for the Government to make a decision on airport expansion and ensure that regional airports are at the absolute heart of those decisions.

10:45

[Daniel Zeichner (Cambridge) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I must congratulate my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this important debate. She raised an important series of issues, ably abetted by our mutual friend, my hon. Friend the Member for Gateshead (Ian Mearns). Both of them explained the tremendous positive impacts that Newcastle International brings to the north-east, both as a key employer in the area and through its wider partnerships.

We also heard strong contributions from my hon. Friends the Members for Luton North (Kelvin Hopkins) and for Wythenshawe and Sale East (Mike Kane) on the need for rail connectivity and from my hon. Friend the Member for Bristol South (Karin Smyth) on the worries that areas in the south-west have on the threats from air passenger duty and the general uncertainty. The right hon. Member for Saffron Walden (Sir Alan Haselhurst) made a characteristically expansive contribution, giving us the historical perspective.

We heard recently from Sustainable Aviation, which produced a report last week that underlines the massive contribution from the UK aviation sector as a whole. It represents more than £50 billion in GDP. There are around 1 million jobs related to aviation and the industry contributes £8 billion in tax revenue. As Members across the Chamber and the report have said, we cannot rest on those laurels.

Starting with the vexed issue of airport capacity, in July 2015 the Prime Minister promised a response before Christmas, which never happened. Many of us understand the impact of the coming mayoral elections. The Government say that they are considering the questions raised by the Environmental Audit Committee. Those are important questions, but I wonder why the Government were not asking themselves those questions in the six months after the commission’s report came out. We also have a new twist to the saga, as we heard the Transport Secretary suggest on LBC that a decision will not even come this summer. Will the Minister confirm whether the Government will make a decision in 2016, or whether we will be waiting even longer?

It is absolutely clear that there are a whole range of issues here. This morning, we are talking about the effect on the regions. It cannot only be about the south- east, because connectivity to other parts of the UK is vital in rebalancing growth. Any decision on expansion must ensure that flight links are improved across the country and that UK airports are connected to hubs. I must press the Minister on that matter, because at the end of last year, The Times quoted the chief executive of Heathrow, John Holland-Kaye, expressing concerns that a cap on night-time flying would “constrain” links to the rest of UK. Can the Minister assure the House that any eventual expansion will not leave us with a choice between exacerbating noise disruptions and restricting flight slots to UK airports?

Ongoing delay must not mean inaction. For example, Sir Howard Davies recommended an independent noise ombudsman back in 2013. That is universally agreed by pro-expansion groups, as well as by green and local community groups. With Labour’s backing, the Government could introduce that measure now, so why do we not get on with it? Even then, whatever decision is made on Heathrow or Gatwick, it will take eight, nine or 10 years to implement. Aviation will not stand still in that time. We will need new routes to connect with existing and emerging markets. We have heard about the new aircraft that offer possibilities for expanded point-to-point travel, and encouraging that would complement the UK’s existing hub mode. It would enable airports with existing capacity to build new routes to emerging economies and to directly support investment and growth across all regions. There are things that the Government could and should be doing to promote our international gateways.

On improving road and rail access, we had the opportunity to change the way in which we plan connections while improving air quality and CO₂ around our airports. Improving surface access is the Airport Operators Association’s No. 1 priority in 2016. So will the Government recognise that too, and endorse Labour’s call for the National Infrastructure Commission to prioritise a review into rail and road access into all airports? In the meantime, let us commit Manchester airport to joining Birmingham International and the HS2 line, and commit to include upgrades to links to Stansted in the next rail investment period.

We have heard the arguments today about air passenger duty. The Government must absolutely get on with it. When can we expect the promised review of the future of air passenger duty in terms of its purpose and how options for reform can improve the competitiveness of different airports in a devolved environment? Will the Minister also outline what, if any, advice the DFT and the Treasury have received from the European Commission over the compliance of the options in the discussion paper?

There is a degree of consensus that we must not let aviation policy stand still while the Government delay on expansion. It is clear that our regional airports need full backing to reach their full potential as international gateways. I look forward to the Minister’s response and his clarifications on when he expects to report on the commission, on the noise ombudsman, on surface access and on APD.

10:50

[The Minister of State, Department for Transport (Mr Robert Goodwill)]

It is a great pleasure to serve under your chairmanship, Ms Vaz. First, I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this important debate on regional airports and UK airports’ capacity. She has set out a strong case that regional airports are essential, not only for maintaining the UK’s air connectivity, but for jobs and economic regeneration across the country. I understand her frustration that the Government are having to take time to make important decisions, but it is vital that the process is robust, and that all environmental and economic factors are fully considered. 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 nation, which is vital to the UK economy. This is a timely debate, given the Government’s announcement last December on airport expansion in the south-east.

The Airports Commission set out a convincing case for new runway capacity in the south-east by 2030, which the Government have accepted. The Government also accepted the commission’s final shortlist of three schemes. It is important to get the decision right, so that it will benefit generations to come. That is why we will further consider the environmental impacts and continue to develop the best possible package of measures to mitigate the impacts on local people and the environment. We expect the package of further work to be concluded by summer 2016. Importantly, the timetable set out by the Airports Commission for delivering additional capacity in the south-east by 2030 will not alter.

It is important to remember that the UK continues to have excellent aviation connectivity, both on a point-to-point basis and through the London hub. After all, we have the third largest aviation network in the world after the United States and China. The Civil Aviation Authority’s statistics show that the UK’s regional airports handled around 39% of the UK’s air passenger total in 2014: around 92 million passengers. Services from UK regional airports operated to more than 100 domestic and international destinations, providing convenience and travel opportunities, and helping to reduce the need for air passengers and freight to travel long distances to reach larger airports.

It is heartening to see that many of the airports that were impacted by the economic downturn a few years ago are now, like the economy, seeing real growth again. Manchester airport, as mentioned by the hon. Member for Wythenshawe and Sale East (Mike Kane), is now the UK’s third largest, handling more than 20 million passengers a year. It has the only regular A380 service from a UK airport outside London and its routes are expanding further—Cathay Pacific is operating direct flights to Hong Kong and, starting this June, Hainan Airlines will operate four flights a week to Beijing. Those are the first direct scheduled flights between mainland China and a UK airport outside of London, worth at least £250 million in economic benefits to the UK. Indeed, my big new shiny railway will be coming to Manchester as well as Birmingham airports.

My hon. Friend the Member for Solihull (Julian Knight) mentioned Birmingham airport, which completed its runway extension in 2014, enabling larger aircraft to fly to more long-haul destinations. That has allowed greater capacity to destinations such as Dubai, Delhi and Amritsar, and some successful charter operations to Beijing. The airport celebrated its most successful year in 2015, handling more than 10 million passengers for the first time. That is not all. Ongoing investment programmes are also under way at other airports such as Edinburgh; Belfast City, which saw 2.7 million passengers last year, an increase of 5.4%; and Belfast International airport, which saw 4.4 million passengers, an increase of 8.9%.

I welcome last month’s announcement that Ryanair is to begin operating a new base at Belfast International from March with flights to Gatwick, and five other routes will follow. In December, I was very happy to announce successful routes under the regional air connectivity fund that allow routes between Carlisle and Belfast City and Londonderry and Dublin.

Like me, the hon. Member for Newcastle upon Tyne North was able to see at first hand the newly completed redevelopment at Newcastle International airport’s departure lounge when I had the honour to open it formally shortly before Christmas. It is worth mentioning two more bits of good news for the airport: United Airlines has announced it will repeat its non-stop Newcastle to New York Newark service next summer; and Newcastle has been named the UK’s top large airport in a nationwide poll of Which? magazine readers for the third year running.

Within the UK, airlines operate in a competitive commercial environment, and we consider that they are best placed to determine which routes they operate, and from which airports. We know that the commercial aviation market brings many benefits to air passengers. However, the Government also recognise that, because aviation plays an important role in connecting regions, there may be occasions when aid is necessary to protect certain existing air services that may be discontinued or to develop other services to airports where local economic conditions prove unattractive to airlines.

We are conscious of the possible risk of distortion to competition that could be created by Government intervention in the commercial airline market. That is why we have been careful in balancing the commercial imperative with the need to provide support for existing services and for new air routes from some of our smaller airports. Last November, the Chancellor announced that 11 new air routes from smaller UK airports would be supported with around £7 million of start-up aid over the next three financial years. Those routes, one of which will be operated by Links Air between Newcastle and Norwich, will begin operating this spring and will provide domestic links between England, Scotland and Northern Ireland, as well as international connectivity to France, Germany, the Netherlands and Ireland.

The Government have been asked why we cannot acquire or reserve slots at busy UK airports such as Heathrow for domestic services from regional airports, such as those in Northern Ireland. The allocation of slots at EU airports is governed by regulations agreed at European Union level and by associated UK slot regulations. Under the regulations, the process of slot allocation at Heathrow, Gatwick, Manchester and other slot co-ordinated airports in the UK is undertaken by an independent slot co-ordinator independently of the Government, the Civil Aviation Authority or other interested parties. The UK Government therefore play no part in the slot allocation process at Heathrow or other co-ordinated airports, and under EU regulations we are legally prevented from intervening in that process.

Unfortunately, time is pressing. I wanted to say a few words about air passenger duty, but no doubt there will be an opportunity in future. Indeed, it is a matter for the Chancellor, so I will come to a conclusion and allow the hon. Member for Newcastle upon Tyne North a chance to get the final word.

The Government believe that maintaining the UK’s status as a leading global aviation hub is fundamental to our long-term international competitiveness. We are clear about the economic and connectivity benefits that our regional airports bring to regions, communities and businesses. We have established the right foundations to move forward, gain consensus and secure the benefits that aviation brings for the whole nation.

[Valerie Vaz (in the Chair)]

I thank Front Benchers for their timely speeches.

10:58

[Catherine McKinnell]

Thank you for your excellent chairing of this debate and for ensuring that everybody managed to have their say, Ms Vaz.

There are many opinions on this issue and very localised concerns, but there is one overriding message that we can all agree on that applies to airport capacity and air passenger duty. We need decisive action to ensure that our regional airports not only survive the changes ahead, but thrive on them. “Wait and see” is not an option. It is damaging our regional economies and the national economy. We await the Government’s decisions on two key issues.

I was disappointed that the Minister did not have time to deal with air passenger duty. Although it is the responsibility of the Chancellor, I hope that the Minister’s Department will exert all the pressure necessary to get a swift decision, because the issues have a major impact on our future regional connectivity in this country. We need an end to the dither and delay on the vital issue of regional aviation. I urge the Minister to do everything he can to ensure that his Department, the Secretary of State and the Chancellor come back with responses on all the issues raised in the debate without further delay.

Question put and agreed to.

Resolved,

That this House has considered regional airports and UK airports capacity.