Airports National Policy Statement

Adam Afriyie Excerpts

Thursday 7th June 2018 Westminster Hall

[Sir Roger Gale (North Thanet) (Con)]

Sir David, it is a particular pleasure to serve under your chairmanship this afternoon, on the eve of the 35th anniversary of our election to Parliament. It strikes me that we have been discussing this subject for most of those 35 years.

Sir David, you represent a constituency on one side of the Thames estuary and I represent a constituency on the other side. You and I are both fully aware of the discussions in the mists of time relating to Maplin Sands, and more recently those relating to Boris island. I think it is fair to say that we could probably agree, although I would not wish to drag you into the argument, that neither of those proposals was worth the back-end of the envelope that they were written on.

I am concerned about much of this matter. I pay huge tribute to the Chairman of the Select Committee, the hon. Member for Nottingham South (Lilian Greenwood), and indeed to her predecessor, the hon. Member for Liverpool, Riverside (Mrs Ellman). Together with their Committees, they have put an enormous amount of hard work into diligently scrutinising the proposals that we are considering this afternoon. I am extremely grateful to them for the work they have done, as I am sure all colleagues are.

This morning, colleagues who have opened their emails will have received a letter from Sir Howard Davies, the former chairman of the Airports Commission, and Sir John Armitt, a former commissioner at the Airports Commission and is now the Chair of the National Infrastructure Commission. In that letter, Sir Howard and Sir John say:

“The UK benefits from the third largest international aviation network in the world after the US and China; London has the largest origin and destination market of any city in the world; and Heathrow until 2013 served more international passengers than any other airport and even now is surpassed only by Dubai…the continuation of this success cannot be taken for granted, and the rise of Dubai is only one indicator of the risks that the UK faces. … As other hub airports in Europe and beyond continue to expand, the impression created is one of the UK being increasingly inward-facing and having limited ambition to expand its reach, even as it navigates the uncertainty caused by its impending departure from the European Union. Now should be the time to build on our strengths, not to diminish them, but preventing expansion at Heathrow would achieve only the latter.”

I am not remotely unsympathetic to the concerns expressed by colleagues representing seats in west and south London. My daughter has a home in Chiswick under the flightpath to Heathrow. I am a sufficiently infrequent overnight stayer not to have become acclimatised to the air traffic, so I understand what it means, and I also have considerable concern for the quality of the air that my six-year-old grandson, Soren, will breathe during the course of his young life.

That said, I support the proposals that the Government laid before the House on Tuesday, although two issues have to be addressed. Curiously, the Select Committee to some extent skated over them. The first issue is the timescale. Eight years seems wildly optimistic to me. I am not a betting man, but if I were, I would bet a gold sovereign that there will not be wheels on tarmac at any new runway at Heathrow inside 15 years. The other issue is freight, which was not mentioned to any degree in either the Secretary of State’s remarks on Tuesday or the Select Committee report. I will touch on both those points in the context of another airfield that is and should be available to us.

On Tuesday, the Secretary of State said that

“a new operational runway at Heathrow is still a number of years away.”

He says eight years; I have said 15. He continued:

“The Airports Commission recommended that there would also be a need for other airports to make more intensive use of their existing infrastructure”.

He went on to say that

“the Government support other airports making best use of their existing runways.”—[Official Report, 5 June 2018; Vol. 642, c. 171.]

Heathrow handles more freight than any other port in the country, but Heathrow is full. Even allowing for a growth in belly cargo, the capacity to handle more at Heathrow is non-existent. Gatwick is largely but not exclusively a holiday airport. It does not handle much belly cargo and has little freight capacity. Stansted has the capacity to some extent, but the turnaround time is eight hours, which is unacceptable for perishable goods. There is one airport in the south-east—Manston, in Kent—that is capable of turning around a freight aircraft in an hour and a half, has the capacity, has the runway and could bridge the gap. I want to direct attention to that this afternoon, very briefly.

Manston airport was operational until 2013. In November 2013, it was obtained for £1 by Mrs Ann Gloag, one of the shareholders in Stagecoach. She rang me on 30 November and told me in terms, “I am going to invest millions of pounds in Manston, and I will give it two years to turn things around.” Within three months, she was closing it. It is absolutely obvious that she and her successors—actually, the airport was acquired on a 100% mortgage, so effectively she still controls it—always had the intention to try to smother Manston in housing. As an aside, Manston airport is smack on top of the Thanet aquifer. If housing was put on it, the aquifer would dry up and Thanet would run out of water. That is one of the many minor details that the proposed developers have sought to overlook. That, however, is not the point of my case this afternoon.

The point of my case this afternoon is that we have a gap that we have to bridge. Today, we are losing business—not tomorrow, next week, next month or next year, but today—to Frankfurt, Schiphol, Charles de Gaulle and Dubai, as Sir Howard said in his letter.

[Adam Afriyie (Windsor) (Con)]

I am impressed by my hon. Friend’s passion for Manston, despite some of the challenges. He talks about competitiveness and how we are losing business to other European countries and further afield, including Dubai, but does he accept that if landing charges per passenger go up to £31, £32 or possibly even £40 from their already very high level of £22 to £23, the third runway at Heathrow will drive even more business away from this country?

[Sir Roger Gale]

For the sake of argument, I will accept the point my hon. Friend is making, but it is safe to say that my argument is that I am concerned about UK Ltd and post-Brexit freight. As a country, we will have to develop markets in the middle east, Asia, the far east, Africa and South America if we are going to survive in a post-Brexit modern economy. We will have to have air freight capacity to handle high-value goods coming in and going out. There is nowhere within striking distance of London for those goods to go.

I freely concede that regional airports can and will play some part in helping to solve the problem, but the problem is massive, and if we do not solve it now and we lose Manston airport as a potential freight hub, we will live to regret it. Once it is gone, it can never be retrieved. It is a national asset, not a local asset, and it has to be regarded as such. I hope and expect that when a development consent order goes in for Manston airport, the Planning Inspectorate will have cognisance of the Secretary of State’s remarks on Tuesday that we must use the available runway capacity. We have to hang on to Manston. If we can do that and use the capacity of our regional airports, we can stem the flow of business to other countries and bridge the gap, but that gap will be a large one.

I support the proposal for Heathrow. I think it is necessary, although I suspect that in fairly short order we may find that we need another runway at Gatwick as well as Heathrow, not instead of. In the interim, we have to make the best use of what we have, and what we have right on our doorstep and available is Manston airport.

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[Justine Greening (Putney) (Con)]

It is a pleasure to serve under your chairmanship, Sir David. I start by paying tribute to the work of the Transport Committee. Having had an interest in this area for many years, I can honestly say that it has delved into the detail behind the proposal more thoroughly than I have seen in the past, and I very much welcome that.

I recognise that what has been said is that there are some conditions that it is yet to be proven can be met in order for the third runway to go ahead. I think that is very much like saying, “Two plus two could potentially equal eight; we haven’t worked out how that will ever be possible, but let’s suspend reality for long enough to be able not to have to take a decision that confronts facts.”

We have a long-standing issue in my constituency of Putney, Roehampton and Southfields, similar to those in the constituencies of many hon. Members who will contribute to this debate today, of noise in particular, and night-time noise especially. The proposed loss of respite—it is already for only half the day and will go down to just a third—will really damage my local community’s quality of life. This is not some minor thing to be disposed of. My constituents, like many other Londoners, are those who head in on the tube every day to keep this city going; to be in those roles that make this a capital city that generates taxation receipts that help the rest of the country, as well as Londoners, with the public services we all rely on.

Our environmental challenges are much more than noise. Air pollution has become a serious issue in London in recent years. Putney High Street is one of the worst offenders for air pollution. In the 21st century, my community is concerned about the air that we breathe; we have no choice about that when we come out of our doors. Many communities living more immediately around Heathrow and in the M4 vicinity find themselves in a similarly impossible situation, and they rely on government at local level, City Hall level and national level to fix that.

I could make a very long speech but I am going to try to keep it short, in order to demonstrate how utterly bankrupt this proposal is in practice. I yet wait for people to present me with facts that prove that somehow this is a good idea. Even the updated appraisal analysis released by the Department for Transport earlier this week shows that in the long run Gatwick is a better, higher net public value proposal than Heathrow, and it is lower risk. It takes some kind of perverse logic to pick the lower value, higher risk project that is double the cost. I do not understand the logic. When I was a Minister, I always tried to rely on an evidence base, but I simply have never found the evidence to back up Heathrow expansion. Spurious, high-level, strategic points are always made, which fall apart when we get into the detail.

We keep hearing about extra capacity. That fundamentally misses the point that there are diseconomies of scale in building a third runway. Heathrow is already the most expensive airport in the world. For an airport where a third runway would basically double its capacity, the problem of average runway cost gets worse. That is precisely why we are seeing many of our regional links and emerging market links under pressure. Heathrow airport used to have a direct link to Dar es Salaam in Tanzania—it does not any more. We used to have a direct link to Lusaka—we do not any more. That is because those slots are always worth more to companies that want to fly to New York. The same holds for our regional airports, which have seen their slots under pressure. My point is that that would get worse when the next runway to be built is even more expensive and puts pressure all over again on the routes where it is worst.

[Adam Afriyie]

My right hon. Friend is making a powerful case. She keeps referred to a “third runway,” but it strikes me that actually what Heathrow will be building is half a runway, because it will not operate at night—unless of course the Government breach their original commitment to have no night flights. Not only will it be expensive, but it will be only half a runway, and those costs will be passed on to the passengers and the airlines, who will not want to fly there.

[Justine Greening]

My understanding, when I looked at the detail previously, was that the runway, because it is inevitably being shoehorned into a small site—even the Government response rules out a fourth runway—cannot actually take the biggest category planes. If that became the mode of transport of the future, they would not be able to use that third runway.

I have real concerns about this project. Heathrow’s plan for a third runway has been knocking around for 20-plus years, which tells us everything we need to know about it. It is a 20th century strategy that has never been reassessed, even though, as the hon. Member for Brentford and Isleworth (Ruth Cadbury) pointed out, we are now in the 21st century. The Dreamliner point-to-point will be the aviation transport model of the future, combined with, dare I say it, the entry of low-cost carriers into that market, which will want to fly out of low-cost airports, not the most expensive airport in the world—airports that are close to people at a regional level, to provide connectivity on their doorstep, not an airport that is hundreds of miles from where people live, for example where I grew up just outside Sheffield in south Yorkshire. Why should people in those communities have to travel all the way to London to take advantage of the connections that in the 21st century our country ought to be able to have from other airports?

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[Adam Afriyie (Windsor) (Con)]

I am delighted to serve under your chairmanship, Sir David. Thank you for your generosity in allowing me to speak even though I arrived a couple of minutes later than I should have done at the beginning.

I feel impassioned about this issue, however, in defence not only of my constituents—whom of course I shall defend to the death—but of our national interest. The third runway is not in our national interest, and I shall make a few points about why.

I thank the Chair of the Transport Committee, the hon. Member for Nottingham South (Lilian Greenwood), for a fantastic report—I mean that, from the bottom of my heart. It has the statistics we require, the firm and clear analysis of the Government’s position and the national policy statement, and the supporting data necessary to make an informed judgment. I therefore thank the Chair and the Committee overall.

There are many reasons for the third runway not being in the national interest, but I shall mention three or four key ones. First, commissioning a scheme that creates the most expensive airport in the world at which planes can land is not in our national interest—it does not lead to greater competition, but to more business being driven elsewhere across Europe and the world. The idea that landing fees will rise, and that that is somehow a great benefit to our country, is completely misplaced. It is a naive thought and does not come from a business perspective.

[David Hanson in the Chair]

The second issue is the viability of Heathrow to finance the scheme in the first place. I would not say that Heathrow Airport Ltd is in difficulty today—I would not wish to cast aspersions on it or its pretty decent profits—but if we look at its financials, the gearing ratio in particular, it is already sitting at about 87%. That is quite worrying. We were deeply disturbed when Thames Water was at, I think, 81%—we got very concerned about it. NATS was restricted by the CAA to just 65% gearing, but in the expansion scheme the Government are suggesting that somehow Heathrow should go all the way to about 91% gearing. That is a bizarre amount of pressure from the Government to create an unstable and financially unviable company or scheme.

That leads me to another point. We all sit here thinking, “Of course Heathrow really wants to develop this runway”—I am sure that is what the Department for Transport has thought all the way through and what lots of Members present think: that it really wants to develop the third runway. However, let me cast a note of doubt on that. Think of the obstacles, the huge legal challenges and the continuing political uncertainty. Heathrow will have to conduct the biggest waste clearance project in the history of Britain, other than after the second world war. That could cost £1 billion. It has to remove the energy-from-waste plant—or buy it, shut it down or do something with it—so that is another £1 billion. When Heathrow goes to its shareholders and investors and says, “We’d quite like about £20 billion to create half a runway, where you can only fly during the day but not at night, and we haven’t got clarity on how the slots will work or be allocated,” it is incredibly unlikely that those shareholders will stump up the money. Capital makes a choice about where it is deployed.

Is Heathrow Airport Ltd serious about building a third runway? I really question whether it is. If it gets the Secretary of State and the Government—a Conservative Government—to support a third runway, it shuts out the competition from other runways around the United Kingdom. Gatwick will not be able to develop its runway and everybody else will be left with uncertainty. There will be no further runway developments if Heathrow is given the go-ahead. If it is given the go-ahead, it may find reasons why it is not possible to raise the finance, do a waste clearance or meet the air quality legislation. Heathrow will be chuckling, because, if it does not build the runway and no one else can built a runway, it basically will have shut down expansion for the next 10 to 15 years. Guess what? Its landing fees will begin to rise, because there will be a capacity issue.

[Justine Greening]

It is even better than that. If Heathrow happens to end up incurring any costs, it has a ready-made legal case to claim them back from the Government. All the risks have been mitigated for this private sector company.

[Adam Afriyie]

My right hon. Friend is spot on, as ever. She made that point very clearly in the urgent question today and in the point of order yesterday. I support all her comments in both cases. What on earth is a Conservative Government doing underwriting a private business that is wholly owned by overseas shareholders anyway, on the basis that somehow that is in our national interest, when in fact it is completely against our comparative advantage in the airline sector?

Hon. Members from Scotland, Ireland or the regions may think, “This is a marvellous scheme, because we will have lots more routes open to us. Heathrow has been up to have a chat with us and a cup of coffee and brought us lovely chocolate biscuits and promised all sorts of goodies”—[Interruption.] Not chocolate biscuits; okay. Just look at the promises that Heathrow made before. I will not go through them now, but not one of those promises was ever met, even when it came down to the number of people who would be employed at the airport or the number of apprentices. Quite frankly, if I were Scottish or Northern Irish, I would not trust Heathrow as far as I could throw it. We have nothing in writing and nothing that is legally binding—we have less than was ever given for the fourth terminal or all sorts of other things—so I would be very cautious. Of course, hon. Members may be happy to march through the Lobby to support a Conservative Government—I can understand that.

The graph on page 31 of the report is quite telling about noise. We are talking about 323,000 people who will be hearing 51 dB of noise. They will not have heard that noise before, and yet they do not know who they are. Heathrow came to a meeting in my constituency in Ascot. It was roundly trashed all through the meeting, yet most of the people in the room were there because they were a bit annoyed about the existing noise, and they were not even under the flight path. They did not realise that potentially they will be under the flight path. How on earth can the decision be made when the people affected do not know that they will be affected? It is the wrong way round.

The promises are not worth anything, particularly when it comes to the slots, and I would be very cautious about believing them. If the Government give Heathrow permission to build the runway—I really do not understand their enthusiasm for committing to a single, private sector company that virtually holds a monopoly anyway; it is bizarre behaviour in terms of market economics—what will they do if Heathrow does not then build the runway? Is there a penalty clause for Heathrow? Will we charge it several billion pounds for pretending to want to do something that it then does not complete?

I notice that the recommendation for the Lakeside Energy from Waste plant, which is in my constituency, was the only one that the Government did not accept, giving just a single sentence—“Well, we don’t believe it’s a nationally significant venture.” Will the Minister publish the data on which that decision was based? The Lakeside Energy from Waste plant processes 40% of the hazardous waste in this country and is of enormous strategic importance, so I am surprised that no data was available for the public to see the basis on which the decision was made.

At what point will the Government back away from supporting a third runway at Heathrow? If it becomes clear that the required noise levels cannot be reached, will the Government back away and change their mind? If it becomes clear that the existing air quality legislation cannot be complied with, will they back away? If so, how will they change that decision? If it turns out that the Lakeside Energy from Waste plant will be shut down, causing a regional and possibly national issue, at what point will the Government change their mind?

I am cognisant that if the Government change their mind, possibly beyond the next 17 or 18 days, that may open up an enormous liability for the taxpayer, if Heathrow has been incurring costs from the moment that the national policy statement was published. Will the Minister explain how the Government allowed that clause, which applies only to the Heathrow proposal, not the Gatwick or other proposals, and which contains the very strange proposal to underwrite the cost incurred, whether or not the scheme goes ahead?

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[Alan Brown]

I agree with the call for independence, and it was great to hear the right hon. Member for Putney (Justine Greening) giving advice on what an independent Scotland would look like. However, even if Scotland becomes independent, we can still have the same connectivity, as that is separate from being independent. We want to be an independent country with connectivity all over the world. However, the truth of the matter is that, with regard to the expansion of Scottish airports, many of the chief executives of Scottish airports I have spoken to want Heathrow expansion. Truth be told, they would accept Gatwick expansion, but they all say that they need that extra connectivity into the main London airport. That is the reality; it is not a factor of independence. In an ideal world we would have a major international hub in Scotland, but we do not have the critical mass.

People either support Heathrow expansion, support it with a “but”, or outright oppose it. Those who oppose it are more likely to be here on a Thursday afternoon to make their contributions heard. It has been a really good debate. Every Member, no matter their viewpoint, has complimented the excellent work done by the Transport Committee. It has published an excellent report, and I must pay tribute to the Committee’s Chair for the thorough way in which she presented it.

I am pleased that a briefing was provided for MPs. Unfortunately, I was unable to attend, but the briefing notes were excellent, giving a concise summary of some of the issues that still need to be teased out. It will be good to hear the Minister’s response. Like others, I pay tribute to the work the Clerks have done. Although I have not been involved, I know how the Clerks work, and it is great to see the report and information presented concisely.

The Committee Chair highlighted fairly that this issue is not just about connectivity; it is also about the individual people who will be affected. I am conscious that I am a Scottish MP who will be asked to vote on a decision that affects people who are not my constituents. I accept that and understand that some local people affected might be a wee bit angry about that, but unfortunately the reality of a major infrastructure project is that some people will be affected. We must look at the pros and cons, and these people should be adequately compensated and looked after. That is the flipside of a dynamic—other MPs are now advising me as a SNP and Scottish MP on what view I should take—so it works both ways.

The Committee Chair also importantly outlined the risks of inaction—decisions not taken and no further expansion of a hub airport—in terms of the potential loss of business to other European airports. She and others highlighted the risk of the project not being delivered in Heathrow’s timescale by 2026. A pertinent point is that it could be built by 2026 and operating at full capacity by 2028—it seems counter-intuitive that it could be at full capacity just two years after its projected opening. That suggests that it is not a forward-thinking business plan. It would be good to hear comments on that.

The Chair and other Members highlighted surface access issues, particularly road traffic, the required air quality updates and the fact that there are openings for legal challenges. Again, the Minister’s response must cover that in detail. The Chair concluded by saying that the Committee’s support is conditional. It clearly has yet to meet to discuss further the Government’s response, but it is a fair comment that the report must surely have helped other Members decide how they will vote when the time comes to make this big decision. I again pay tribute to the Committee for the work it has done.

I congratulate the hon. Member for North Thanet (Sir Roger Gale) on his 35 years in Parliament. He highlighted the success of and threats from competing airports. He touched on the personal aspect of understanding how Heathrow can affect constituents but still laid out his support for the plan. I commend him for shoehorning in a connection to Manston airport and for suggesting that it could be used as a stopgap for freight transport.

We then heard from the hon. Member for Brentford and Isleworth (Ruth Cadbury), who has been campaigning against Heathrow expansion for a long time. I respect her view. She correctly highlighted flightpath concerns, and I agree that there should be more transparency on flightpaths so that people fully understand the implications. She also highlighted issues about other traffic movements.

The right hon. Member for Putney has been dogged on this issue. I commend her for securing an urgent question today. She highlighted what she sees as the financial considerations and risk to the Government in having to underwrite the project. We need further clarity. I am well aware that the Government say that there is no financial risk involved because it will be fully by the private sector, but we need absolute clarity on that. She touched on massive concerns for Scotland relating to infrastructure and growth. I welcome her conversion to Scottish independence. I appreciate what she said about Transport for London’s commitments to surface expansion potentially drawing away further investment, but the reality is that Transport for London has a different borrowing model, so that will not directly affect infrastructure spend in Scotland. That is a bit of a red herring, to be honest.

The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard), having analysed this and being a member of the Transport Committee, was another “Yes, but.” He highlighted the real importance of western rail access not just for Heathrow, but for wider western connectivity. It seems that that project should have gone ahead sooner rather than later.

The hon. Member for Windsor (Adam Afriyie) came at this from the national interest approach. He made the argument that it is not in the national interests, and as a Tory he argued about the financial implications. Interestingly—this is almost a conspiracy theory—he believes that Heathrow is not going to develop and that this is just a mechanism to control competition. Depending on what happens with the vote and how we go forward, we will see whether those chickens come home to roost, but I suggest that Heathrow seems to have spent a lot of money and effort so far, and to do so for a scheme it does not intend to progress with would be quite surprising.

[Adam Afriyie]

In terms of the financial interest and the money that has been spent so far, I would say that it would be a pretty wise investment to spend several tens of millions if it looked as though Heathrow could increase its landing fees, increase its take and stop the competition growing for a period of 10, 20 or 30 years. That is a wise investment on its part.

[Alan Brown]

I take the hon. Gentleman’s point that there is a financial benefit to spending the money if it eliminates the competition, but clearly if Heathrow stymies routes and development going forward, it opens up some of the other opportunities that at the moment we are saying do not exist. I am not sure it would be in its long-term interests to be able to do that.

The hon. Member for Hammersmith (Andy Slaughter) said that this debate has cheered him up. I presume that is because quite a few people spoke in opposition—I am not sure that I will cheer him up as I continue. He highlighted concerns about flightpath and cost. As a flippant aside, I must commend him for the coherent speech he has made from the scribbles he makes on his paper. I do not know how he manages to do that, and I commend him for it.