Civil Aviation Bill

Debate between Lord Stephen and Lord Soley

Wednesday 7th November 2012 Lords Chamber

[Lord Stephen]

This amendment is about the very important economic and social impact of air services. It is a very live and current issue. By way of background, I should explain that Nestrans, the North East of Scotland Transport Partnership, and Hitrans, the Highlands and Islands Transport Partnership, met at the end of September with the CAA to discuss these issues. They have been lobbying on this issue along with Northern Ireland. Part of the reason for their lobbying is that air links are absolutely vital to business and economic growth in these regions. It is worth mentioning that a rail journey from here to Inverness takes around eight hours and from Aberdeen to London it is more than seven hours. There are others better qualified than me to explain the journey time from Northern Ireland.

In the discussion at the end of September, these bodies requested that the CAA’s remit be extended from just reviewing consumer interest and the concept of “all passengers”, which gets mentioned a lot by the CAA—all passengers carrying equal value—to one of a more balanced approach that recognises a broader range of issues, including economic impact, social cohesion, and the EU policy of reducing peripherality. Separately—and this is not part of the amendment—they are also anxious to explore what the Department for Transport could do in terms of the use of PSOs and PSO protection for vital regional routes to the London hub, to prevent them being substituted by even more profitable long-haul services. This already happens extensively across Europe, but it is not something that the Department for Transport has gone with, despite its powers. When I was Transport Minister in Scotland, I was well aware of the extensive network of PSOs inside Scotland, but there are none from Scotland to London—and, indeed, introducing such a PSO would no doubt not be without controversy outside Scotland, in other parts of the UK.

That is the background. It is topical and live because, on the same day, the CAA released a letter to the chief executive of the Chamber of Commerce in Aberdeen & Grampian, Bob Collier. It says:

“In March 2011, Flybe complained to the CAA that Gatwick’s charging structure”—

this is not to do with slots; it is to do with the charging structure—

“unreasonably discriminated against operators of small aircraft at the airport in favour of larger aircraft on long-haul routes. We have now issued our provisional decision following our investigation. We have provisionally concluded that Gatwick airport’s objective of increasing the efficient use of its single runway justified the changes to its charging structure. We recognise that some passengers are likely to be harmed by Gatwick’s changes but our provisional conclusion was that any such adverse effects would be balanced by benefits to other passengers. We do not have legal powers to ensure that an airport’s charging structure supports wider goals such as regional policy, which was the main concern of your letter”.

As a consequence of that decision, just a few weeks ago Flybe withdrew the Aberdeen to London Gatwick route. That is on top of the loss of the Inverness to Heathrow route in 2008. These are real pressures with real consequences. The impact on regional economic growth is very important for us as a nation. For example, the oil and gas industry—the energy industry—that is centred on Aberdeen employs 40,000 people in Aberdeen and the north-east of Scotland directly, another 80,000 across Scotland and an estimated 400,000 across the UK, all focused on that energy industry that has its centre, heart and headquarters in Aberdeen. There is, therefore, a real multiplier effect if we can get regional growth happening. The oil and gas business has been one of the very few drivers of economic growth over the past couple of years. I am disappointed that more sectors have not delivered the same success and growth.

The CAA and its “all passengers” remit is the focus of this amendment. It seems to me, although I will be happy to be corrected by the Minister, that no distinction is made between a planeload of tourists going to Spain and a planeload with the same or a slightly smaller number of business people going overseas to win business. There is a reasonable argument that there could and should be such a distinction. An environmental remit is rightly being introduced in the Bill, so why should there not also be an economic and social dimension framed and shaped to reflect government policy? I believe that that remit could be included in the Bill. Let us give the CAA the legal powers to do more to support the UK economy. If that is what Ministers wish and if this amendment also stimulates discussion on the use of PSOs and a more proactive regional policy, perhaps in support of the approach suggested in the recently published report of the noble Lord, Lord Heseltine, then in my view so much the better because we have a problem right here, right now and action is needed on this issue now. I beg to move.

[Lord Soley]

I am very sympathetic to the comments of the noble Lord, Lord Stephen. Indeed, I have said on many occasions that the problem we have with the lack of expansion in the south-east is mainly the impact on the regions of the United Kingdom. The three cities most at risk from lack of expansion in the south-east are Belfast, Aberdeen and Inverness. They are the most squeezed. I am sure the Minister will say that this is not the place for an amendment of this nature. He is already nodding. I am not surprised as I think that that is a fair analysis of the structure of the Bill. However, the noble Lord, Lord Stephen, has given us an important opportunity, which we should not duck, to recognise that the regions of the United Kingdom need access to the global market and do not have sufficient access at the moment. I have named three of the cities, but I could go on to mention Bristol, Exeter or Cardiff in the west. A number of them are hit by this problem. He and probably a lot of the country will be relieved that I do not intend to wax lyrical about the need to expand Heathrow or an alternative but, believe me, we need that report from Howard Davies very rapidly. We are in serious trouble.