Airport Expansion: Economic and Environmental Impact

Wednesday 25th October 2017 Westminster Hall

11:00

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

I beg to move,

That this House has considered the economic and environmental impacts of airport expansion.

It is a pleasure to serve under your chairmanship, Mr Gray. I thank the Minister for attending. I am bringing this issue to the House because of the impact that a third runway will have on significant parts of my constituency—those areas not already under the approach path to Heathrow—and because of wider regional and national concerns about the environmental, fiscal and economic cost of expanding Heathrow.

It is a year to the day since the Government’s announcement that the preferred option for an additional runway was Heathrow. Fortuitously, it is also the day after the release of the Government’s revised national policy statement. The Government decision to support expansion at Heathrow was based on reports produced by the Airports Commission, but since the publication of those reports in 2015, further analysis has significantly undermined their conclusions, particularly on the economic and environmental impacts and costs of Heathrow expansion versus those of Gatwick expansion. Yesterday’s releases undermine the conclusion further.

I will outline a few of the key points, the first of which is reduced net economic benefits. To begin with growth figures, I see that yesterday’s Government report revised assumed demand for flying upward, but I wonder if account was taken of UK economic growth: we have in the past year lurched from being one of the fastest- growing G7 economies to one of the slowest. Looking at the comparative figures in the Department for Transport calculations, the new estimates for net economic benefit arising from a third runway at Heathrow compared with Gatwick in yesterday’s figures changed the picture further. A year ago, the net economic benefit from a third runway at Heathrow was given as £61 billion over a 60-year period—a negligible net benefit. Yesterday the Government revised those figures upward: the figures given for a second runway at Gatwick are between £74.1 billion and £75.3 billion over 60 years; but this time the figures for the Heathrow option are lower than those, at £72.8 billion to £74.2 billion.

[Andy Slaughter (Hammersmith) (Lab)]

My hon. Friend is right to highlight yesterday’s figures, which completely blow the Government’s cover and show that there is no environmental or economic case for Heathrow that compares with the case for Gatwick. Does she agree that what is outrageous is that the figures have been suppressed while Heathrow’s cause was advanced? Now that we have the true figures, we should see that the Heathrow option is a totally inappropriate development for London.

[Ruth Cadbury]

Yes, my hon. Friend is right. The election delay and other excuses meant that figures that could have been in the public domain have only just come out.

Job creation figures are often used to justify Heathrow expansion, but those from the Airports Commission report have recently been revised downward. The total number of jobs that it is claimed will be created is down from 78,000 to 37,000. It is disappointing; the first draft of the national policy statement supported the higher figure and I have not had a chance to read the revisions to see whether that has changed. Analysis by Transport for London demonstrates that the 37,000 jobs are not genuinely new jobs, but merely displaced from other parts of the economy. That is not insignificant in terms of ensuring continued employment for thousands of people, but it is completely different from creating new economic activity. It is not clear that Heathrow’s promises to local communities about mitigation, to the regions about connectivity, and to the country about jobs remain the same, given the reduction in the figure for total economic benefit.

[John Grogan (Keighley) (Lab)]

Does my hon. Friend agree with my view, from a north of England and Yorkshire perspective, that rather than entrench Heathrow in its dominant position, it would be better for the balance of the UK economy to consider the potential of airports such as Birmingham, which will soon have a high-speed train connection, and Manchester? There is a lot of potential for spreading things around in the UK, rather than concentrating them at Heathrow.

[Ruth Cadbury]

My hon. Friend is right, and I shall come on to that point: expanding Heathrow appears to reduce demand and the ability for regional airport growth, rather than enhance it, as Heathrow airport keeps saying.

To return to comparisons between Heathrow and Gatwick, the Department for Transport states that,

“taken over the whole 60 year period, the Gatwick scheme could lead to greater monetised net public value”

when looking only at passenger benefits in terms of reduced fares, fewer delays and better services. Such conclusions do not shout to me that Heathrow is the better option for the country and passengers.

On the cost of surface access, increasing flights by about 47% will of course increase traffic and transport pressure on an airport whose roads and public transport are congested most of the time. That in itself is an economic cost to the local economy and a commercial cost to the airport and airlines. Improvements to public transport should shift a higher proportion of the new passengers on to rail, but many of the improvements, such as southern and western rail access, which are not even funded yet, are needed now for the smooth running of a major two-runway international airport and its hinterland. The imminent upgrade of the Piccadilly line and the creation of Crossrail were designed, according to Transport for London, to support an increased population in west London and beyond—not a third runway. I have seen no assessment of the additional pressure on the roads from freight and flight-servicing vehicles, which cannot, of course, transfer to rail. I have raised that point in the Chamber several times, and have not had an answer.

[Zac Goldsmith (Richmond Park) (Con)]

The hon. Lady is making an excellent speech, which hits exactly the right note. On the point about public infrastructure, TfL put the cost at about £18 billion. It may be less than that, but it is up to £18 billion. The Government have ruled out paying for any of it. Heathrow has promised to contribute up to £1 billion, and TfL could not pay even if it wanted to, because it is not within its budget. Does the hon. Lady share my hope that the Minister will address the issue of who will pay for the public infrastructure improvement?

[Ruth Cadbury]

The hon. Gentleman, who represents a constituency neighbouring mine, is right and has anticipated my point. The cost of improvements to surface access is disputed, with estimates ranging from just over £1 billion from Heathrow airport to £3.5 billion from the Department for Transport, and £18 billion from Transport for London. Of course, we have no commitment at all from the Government to fund anything that Heathrow airport is not prepared to pay for itself. As Heathrow airport has publicly agreed to commit only £1 billion, there is significant concern that the taxpayer would be left picking up the shortfall if the third runway were to go ahead. Any such contribution from the public sector would further reduce the available capital for investment in infrastructure projects outside London and the south-east, which fellow MPs from the north, Scotland and the south-west continually raise in Parliament.

[Colin Clark (Gordon) (Con)]

My constituency has seen the recent expansion of Aberdeen International airport. Does the hon. Lady agree that it is essential that far-flung regions should be connected to London? That is particularly true for Aberdeen, because the oil and gas industry is essentially linked to London.

[Ruth Cadbury]

The hon. Gentleman is right that commercial and leisure interests mean that passengers want to fly from Scotland to London, but there are five airports in London; why should Heathrow be the one that takes additional capacity? Also, many people in Scotland want to fly direct to their primary destination and would prefer not to transfer planes in the south of England.

On the restricted growth of regional airports, the Airports Commission pointed out that Heathrow expansion would negatively affect the opportunity for growth at nearly all regional airports in the UK. Heathrow claims that the third runway will service 14 domestic routes, yet the commission suggests that without a regional slot allocation preference or some sort of subsidy, new domestic routes may not be commercially viable. Indeed, it predicted that domestic airport connections to Heathrow would be reduced from the seven routes today to only four by 2050. The Government have yet to give any commitment on whether they are prepared to financially support these regional connections.

Increases in passenger numbers are regularly cited as the rationale for airport expansion, but interestingly the number of air traffic movements grew by only 0.6% between 2000 and 2014. Obviously, there are restrictions at Heathrow in that respect. Let us move on to climate change, because it is an important issue.

[Christine Jardine (Edinburgh West) (LD)]

As the hon. Lady moves on to climate change, does she agree that, with Brexit looming and its likely impact on air travel to and from the continent, there is a case for re-examining the possible impact on all our airports?

[Ruth Cadbury]

As time has moved on, that is essential. The Government must go back to square one and look at the whole issue of aviation demand and where supply is provided, rather than being at the behest of one very large commercial interest that needs to expand to please its shareholders and pay its outstanding debts.

If the Government are serious about meeting climate change targets, restrictions on growth at other airports will be essential if Heathrow is expanded. The Aviation Environment Foundation estimates that to remain compatible with the target of the Climate Change Act 2008 of limiting aviation emissions to 37.5 million tonnes of carbon dioxide in 2050, 36% fewer passengers would have to fly in and out of airports in the south-west, 11% fewer in Scotland, 14% fewer in the north-west and 55% fewer in the west midlands.

Noise mitigation is dear to my heart because of the cost of insulation to make life bearable for people such as my constituents living under the approach paths, now and in the future. The low-flying, quieter aircraft that Ministers often talk about are much more disturbing on the ground than higher-flying, noisier aircraft. When under the approach path to Heathrow, the only quiet aircraft is a glider, and we have not yet invented the passenger glider. Up to 1 million people will be significantly affected by aviation noise around Heathrow—300,000 more than are affected now. The noise mitigation package offered by Heathrow is not available for the majority of people affected and is lamentably insufficient compared with international comparators.

Aviation is absent from the clean growth plan. If a third runway is constructed, by 2050 emissions from aviation will constitute about 25% of total UK emissions. That will require significant reductions and restrictions in other sectors of the economy, including the complete decarbonisation of the rest of the transport sector. I do not see the Department for Transport moving very fast to do that. The Committee on Climate Change said that allowing aviation emissions to overshoot their target, as would be inevitable with a new runway, would imply other sectors making cuts beyond what is feasible.

Finally, regarding the weak clean air plan, the Government’s releases yesterday confirmed what many of us had been saying for some time: expanding Heathrow cannot be done without further breaching air quality limits. The Government’s clean air plan has been rightly criticised for seeking to shift responsibility for air quality on to local authorities. The Government should be taking responsibility for this. To meet the air pollution limits would require a significant move away from diesel vehicles on roads surrounding the airport and no increase in airport-related traffic. That is not feasible. A third runway will inevitably increase delays at junctions and slow average speeds on local road networks—things that are already problems—and thus increase emissions at the expense of the health of my constituents and many hundreds of thousands of other people. It will also have an impact on the local economy.

I urge the Government to follow the Mayor of London’s lead in prioritising air quality, and remind the Minister that the Government’s policy of supporting expansion at Heathrow totally undermines the effort to make London a more sustainable city. Yesterday’s figures clearly illustrate that Gatwick expansion would not hit the air quality limits.

In conclusion, I ask the Minister to respond to a number of key questions. What assessment has he made of the impact of Brexit on future aviation demand? What level of subsidy are the Government prepared to give to support flights from regional airports into Heathrow? What is the total contribution required from the public purse to support Heathrow expansion?

11:14

[The Minister for Transport Legislation and Maritime (Mr John Hayes)]

It is a great pleasure to serve under your chairmanship, Mr Gray. The hon. Member for Brentford and Isleworth (Ruth Cadbury) has been assiduous in her defence of her constituents’ interests. She and my hon. Friend the Member for Richmond Park (Zac Goldsmith) are beyond question in both the diligence they have exercised and the passion they have shown. Nothing worth while is ever achieved without passion, and no one is more passionate in defending their constituents’ interests than she and he. On that basis, I congratulate the hon. Lady on securing the debate. I note that my hon. Friend has already briefly contributed and is here to listen to what I have to say.

Let me be clear: the Government have expressed a preference for airport expansion, on which we are consulting. That is where we are with this. Final decisions will be made as a part of that process, but they have not yet been made. I will certainly consider all the matters raised by the hon. Lady, which she kindly informed me about previously. She set out with great courtesy, as she has many times before, the areas she hoped to cover. I will do my best to try to address them; time is short, but we will try to cover as much ground as we can none the less. This is a timely debate, because it was only yesterday that the Government launched our consultation on the revised national policy statement and published our response to our earlier consultation on airspace reform.

If I may, I will deal at the outset with the matter raised by my hon. Friend the Member for Gordon (Colin Clark). It is right that we see this subject in the context of what we expect of our regional airports. He is right to say that any consideration about airport expansion needs to be on a strategic basis; it would be quite wrong to see the expansion in the south-east in isolation. He can be assured that the Government think strategically about these things. Part of our ongoing consideration, and the discussion we are having on the back of the consultation, will take full account of the point made by him and others about the need for the relationship between the regions and the south to be secure.

I mention those publications because they are intrinsic to the debate. I am sure that the hon. Member for Brentford and Isleworth has already taken the opportunity to look at the statement from the Secretary of State for Transport, although she may not have had a chance to work through the full suite of documents, as they are extremely detailed. However, it is inevitable that my response today will repeat much of what was set out in the statement yesterday; she would hardly expect me to do anything else.

The important thing about this subject generally is that the Government are not frightened or nervous about taking big, strategic decisions about infrastructure. Members might think that untypical of Governments in democratic polities; over the last several decades, such Governments have often been reluctant to take big decisions, partly for fear of binding the hands of successors and partly because no one wants to be held responsible for a decision that goes wrong. Governments need to take big, strategic decisions on infrastructure and this Government are determined to do so, notwithstanding the tendency I described—perhaps the inevitable consequence of living in a democracy where we are all, quite properly, answerable to the people whom we serve.

The issue is not about taking the decision but about the process. The hon. Member for Brentford and Isleworth is right to draw attention to some of the specifics of that, which I will now deal with. We announced last October that the Heathrow north-west runway is our preferred option to deliver extra capacity in the south-east. I have no intention of being excessively partisan, but the hon. Lady knows that her own party’s manifesto made clear the official Opposition’s preference for airport expansion in the south-east. That manifesto set down four serious and unsurprising conditions, many of which she covered in her brief remarks and, indeed, in her many questions to the Government. We have received a number of responses to the major consultation that we launched originally. The draft airports NPS allowed us to solicit views and opinions, and we have received about 70,000 responses in total. In parallel, Heathrow Airport Holdings Ltd has been working with airlines to bring down the cost of the scheme.

We are now consulting on the revised draft NPS for a further eight weeks. That is in line with our statutory requirements and is the right thing to do. We expect the Liaison Committee to announce shortly which Select Committee will take forward parliamentary scrutiny. The draft NPS has been revised in the light of the consultation responses already received, to reflect changes to wider Government policy and updated evidence, such as the Government’s air quality plan and the latest aviation passenger demand forecasts.

To respond to what the hon. Member for Brentford and Isleworth said about Gatwick, I should say that it is really important to realise that some of the advantages are hard to monetarise; they are not entirely financial. I shall try to elaborate on that in a moment. Although of course money matters, it is not all that matters. There will be strategic reasons why we will come to the decision we come to when we have consulted. Further consultation is not unusual. The Planning Act 2008 requires us to consult again.

Let us be clear about the areas that the hon. Lady addressed. The first is the broad economic case—the net economic benefits and demand. The revised passenger demand forecasts, which the Government published yesterday, show that the need for additional capacity in the south-east is even greater than previously thought. They show that all five of London’s main airports will be completely full by the mid-2030s, so doing nothing is not an option.

Our revised analysis shows that the new north-west runway at Heathrow would deliver benefits of up to £74 billion to passengers and the wider economy over a 60-year period. As I have said, the monetarised benefits are part of the strategic approach, and if one looks at the monetarised effects of both the expansion at Heathrow and the possible expansion at Gatwick, one sees that they are fairly evenly balanced over the longer term. Heathrow offers the greatest economic benefits for at least the first 40 to 50 years. The figures, which the hon. Lady will be familiar with, show an evening out of those monetarised benefits in the longer term. She will know that well.

[Andy Slaughter]

The Minister seems to be rewriting history. At the time the commission produced its report, we were told that the economic benefits of Heathrow were much greater than those of Gatwick. The facts have changed. Surely the Government should be looking at the revised facts and not just saying, “We’ve made a decision. We’re going to go on with it whatever happens.”

[Mr Hayes]

The hon. Gentleman is perhaps not quite in the same league as the hon. Lady or my hon. Friend the Member for Richmond Park, but he is certainly right up there in terms of his interest in this subject. [Interruption.] I do not mean to be unkind to him, but I do not want in any sense to underestimate the contribution made by those two colleagues. The hon. Gentleman will understand the point that I made earlier: not all the strategic benefits, the long-term benefits, can be monetarised—a few moments ago, I said that the two were broadly the same. But let us talk about some of the additional strategic benefits, which are pertinent to the hon. Lady’s initial remarks.

The ability to secure the United Kingdom’s future as an aviation hub is an important part of expansion, as is our ability to compete with other European and middle eastern airports. In 2040, there would be 113,000 additional flights across the UK airport network, equating to 16 million additional long-haul seats. That would help UK businesses to connect to markets across the globe.

I have already mentioned the support for domestic connectivity to the nations and regions of the UK. The importance of freight has often been understated in the debate. Freight is an important part of what Heathrow already handles; I think that it handles more freight by value than all other UK airports combined. We are also talking about up to 114,000 additional jobs in the local area by 2030 and—a subject dear to my heart—very many, perhaps 5,000, additional apprenticeships. I was able to visit very recently the team at Heathrow airport who deal with skills and apprenticeships and saw the effect that they can have on the prospects of, the opportunities for, so many people.

I shall deal quickly with other areas that the hon. Lady would want me to deal with. The Airports Commission estimated the potential costs of the surface access provision for the north-west runway at Heathrow at about £5 billion, but recognised that final details and therefore costs would be determined as part of the statutory planning process. Let me be clear: there will be no planning permission unless a very high bar has been met in environmental terms. It is simply a matter of fact that planning permission cannot be granted unless that high bar is crossed, and I certainly, as Minister of State, would not want it otherwise.

It is right that additional investment will be needed in the infrastructure around the airport. However, I am not sure that I would agree with the Mayor. The Mayor has had a fairly torrid time over the last week. He was criticised in the Chamber last week, and I think I had a go at him yesterday, although, as I said, I do not want to be too partisan about these things. I am not sure that the analysis done by Transport for London takes full account of the infrastructure that we are already committed to improving. None the less, it is right that we have a proper and open debate about the surface access issue, and we will do so.

I have said a little about the growth of regional airports and the Government’s support for that. The Government fully recognise the importance of air services to the nations and regions of the UK, and the draft airports national policy statement published yesterday makes it clear that the expansion of Heathrow will be an opportunity to increase frequency on existing domestic routes and to develop new domestic connections.

On the cost of noise mitigation, I have made it clear that there will be no planning permission unless that is dealt with satisfactorily. Any expansion at Heathrow will be accompanied by a world-class compensation and mitigation package, to mitigate the impact on local communities. That is the least that the hon. Lady and my hon. Friend should expect. While I am Minister of State, they can be guaranteed that that will happen; I know that that is the Secretary of State’s view, too.

[Ruth Cadbury]

Will the Minister guarantee that “world-class” means equivalent—equivalent noise standards and equivalent insulation schemes to those at comparable international world airports that have cities next to them?

[Mr Hayes]

The hon. Lady will know that we have suggested a package of more than £700 million for noise insulation of homes and £40 million for schools, to be funded by the scheme promoter, but given the point that she has just made, I am more than happy to go back and look at best international practice. It is perfectly proper that the Government should be guided by that best practice. I will take away her point and, if she agrees, I will write to her particularly about that issue and copy in my hon. Friend the Member for Richmond Park.

On the absence of aviation emissions from “The Clean Growth Strategy”, I should say that if one looks at the revised draft, one will see that it does take account of what we published in respect of emissions—our clean air plan. I was involved in drawing that up with Ministers from the Department for Environment, Food and Rural Affairs, and we do need to take account of it. We need to ensure, as the hon. Lady suggested—I entirely agree with her—that that process is consistent and coherent and that we have an holistic approach to air quality. It would be wrong of us to pursue a policy in respect of airport expansion that did not chime with what we hope to achieve more generally.

The hon. Lady also mentioned EU withdrawal. I, of course, look forward to our escape from the European Union; I prefer to talk about it as an escape than as a withdrawal. It has been an awful business over most of my adult lifetime, and hopefully that business is coming to an end. However, it is right that as we regain our independence and freedom, we do so in a way that does not in any sense lead to a detrimental effect for the hon. Lady’s constituents or mine. It is important that we plan that process carefully. She will appreciate that the planning of it is well beyond my pay grade, and on that basis it would be quite improper and extremely unwise of me to say too much more about it. None the less, I take her point and, again, we will look very closely at the implications of our escape from the European Union for this area of policy.

I have covered most of the subjects, albeit briefly. The nature of these debates is that they are always brief, but I will end, if I may, with Yeats, because we have not quoted Yeats enough in this debate:

“Happiness is neither virtue nor pleasure nor this thing nor that but simply growth. We are happy when we are growing.”

So it is with airports, so it is with the House and so it is with the hard work of Members of Parliament such as the hon. Lady.

Motion lapsed (Standing Order No. 10(6)).

11:30

Sitting suspended.