Airports (Amendment) Bill [HL]

Earl of Caithness Excerpts

Friday 9th November 2012 Lords Chamber

[The Earl of Caithness]

My Lords, I declare my interests again. First, I live in a more remote area than the noble Lord, Lord Empey. Secondly, I was formerly Minister of Aviation.

I regret and welcome this Bill. I regret it, because I think that it is wrong for this House to debate exactly the same Bill as it debated in March, a mere seven months ago, when it did not receive the support of either Front Bench. It would have been preferable if the noble Lord, Lord Empey, had put down a Starred Question or a Question for Short Debate rather than a Bill. I welcome it, because it gives us another opportunity to discuss what we discussed in March and the House will be pleased to know that I am not going to repeat what I said then.

The noble Lord, Lord Empey, said that the raison d’être for this Bill is for the Government to have power to intervene. They have power to intervene now. They have the Public Service Obligations. My noble friend Lord Attlee spelt it out clearly in March this year. It is clear that the Government can operate, but they have to operate within the European law. The noble Lord, Lord Empey, then changed the emphasis and said that it was not really a regional hub that he wanted, but that he wanted to go to Heathrow. He wants to keep that link. If my noble friend Lord Attlee and the Government say that Northern Ireland can have a link to Heathrow, is my noble friend Lord Attlee going to reinstate the Inverness-Heathrow link, and the other 11 domestic links that have been lost to Heathrow over the last 22 years? That would be a huge interference in the market place. You cannot isolate Heathrow. You cannot isolate one airport. You have got to talk about a region. There is Heathrow. There is Gatwick. There is Stansted. There is Luton. All those airports have international flights.

That very conveniently takes me on to the hub. In Clause 1(2) the noble Lord, Lord Empey, wants to get access to hub airports. He and I are both lucky. He flies out of Belfast, and I fly out of Inverness. We can both fly to Amsterdam, and we can get just as good connections in Amsterdam, as the noble Lord, Lord Soley, said in March, as we can from the London airports. Indeed, in some instances it is cheaper to go to Amsterdam, so we cannot argue that we do not have access to hub airports.

Going further into the Bill, in subsection (3) the noble Lord wants to ensure “adequate services”. That is purely subjective, not the precise wording that one should be using in legislation. In the summer months, we have three services to Inverness from Gatwick; in the winter months, we have two. I do not call that an adequate service. If my noble friend Lord Attlee has to make the decision about what is an adequate service, is it three services—one in the morning, one at lunchtime and one in the evening—or one in the morning and one in the evening, as now? If I take the morning flight, I cannot come to your Lordships’ House. If I take the evening flight, I do not get home until after midnight. I do not think that is an adequate service, but if you were to ask Flybe to retain the lunchtime flight, it would put that company in jeopardy because there are not enough people taking that flight.

The real issue behind this Bill is the number of passengers who are flying. The noble Lord, Lord Empey, touched on this. Since 2007, there has been a 20% decline in UK domestic travel, not just to London airports. Does my noble friend have any comments on that when international passengers are down by 2% over the same period? Has there been an impact assessment on the effects of airport passenger duty? It has risen 160% from £5 per passenger per flight to £13 per passenger per flight. What impact has that had on tourism and on the regions? Is that a contributory factor to the decline in domestic air travel? Does my noble friend anticipate that domestic air travel will continue to decline? Does he think that airports and providers regulated by the CAA are making the right sort of return and that the CAA is therefore regulating them properly? London Gatwick, which is price-regulated, saw a 17% rise in profits in 2001-12. Is that acceptable to my noble friend? BAA saw a 15% rise in quarterly profits in the first quarter of 2012. NATS, which is a monopoly and CAA price-regulated, saw pre-tax profits rise by 119% in 2011-12. Those are costs that the airlines have to meet, and if the airlines had to meet lower costs, the price of tickets would go down, which might encourage more people to fly.

Does my noble friend Lord Attlee agree with the statement by the new owners of Gatwick that they have structured their increased charges to discriminate against smaller aircraft? Airport charges per passenger have risen from £9.72 in 2007 to £20.13 in 2012. That is a fairly crude estimate because it is a highly complicated mechanism, but there is an over 100% increase in passenger charges. Is it right that it should be on the passenger, or would my noble friend agree that it should be on the weight and size of the aircraft, which therefore does not discriminate against smaller aircraft?

These are the sort of issues that would resolve the problem that the noble Lord, Lord Empey, raised. If we are going to keep open the domestic links to London—it does not have to be to London but if that is what the noble Lord wants—we need to get more people flying and to do that we need to be able to reduce the cost. Can my noble friend therefore comment on the questions I have raised?