Heathrow Airport

Baroness Kramer Excerpts

Thursday 7th June 2018 Lords Chamber

[Baroness Sugg]

My Lords, the statement of principles was a snapshot in time. It was published publicly in October 2016 and is not legally binding. As I said, the document will expire if the scheme proceeds and the NPS is designated. The Government will of course define their relationship with Heathrow in a new agreement if the scheme proceeds. On surface access, Heathrow Airport Ltd has pledged to meet the costs of any surface access proposals that are essential to deliver airport expansion. Many of the schemes which the noble Lord mentioned—HS2, Crossrail and the extension to the Piccadilly line—are already committed. For any other scheme currently under consideration, such as western and southern rail access, there will be an appropriate contribution from the developer.

[Baroness Kramer (LD)]

My Lords, when the PPP companies Metronet and Tube Lines collapsed, the Government found themselves having to step up with millions to make up the damage to London Transport because it was essential. It will be exactly the same with Heathrow if there is any failure in the successful completion of this project, and the Government should be honest about that. From doing years of infrastructure funding, I can say that there is no way that any responsible shareholder or lender would put money into a project with so many potential liabilities—for transport, environment, community impact and damage to other airports—without some form of implied government backstop. Will the Government please come clean and provide their estimate of the liabilities that the taxpayer will be exposed to before the vote in the Commons?

[Baroness Sugg]

My Lords, there is of course a risk that in certain circumstances Heathrow Airport Ltd could pause or cease the development of the scheme. However, the regulator will hold Heathrow to account on the delivery of the scheme through its regulatory licence. I say again that the Government are clear that airport expansion should be financed solely by the private sector and that Heathrow Airport Ltd has no claim to damages or liabilities.

--- Later in debate ---

[Baroness Sugg]

My Lords, I am happy to confirm to my noble friend that we absolutely continue to support regional airports. With an expanded Heathrow, we will still see regional airports growing and benefiting from long-haul flights, such as the recent introduction of the flight from Manchester to China, which has been so successful.

[Baroness Kramer]

My Lords, can I suggest that the Minister may have missed the point? In order to pay back its financing and its shareholders, Heathrow will need to fill those runways as rapidly as possible. The obvious way to do that—I am sure this is deeply embedded in Heathrow’s plans—is to suck in traffic from other airports across the UK, not just in London and the south-east but elsewhere. Will she confirm that that is indeed part of the business plan and give assurances otherwise to the various regional airports, because it will require government action to make sure that that does not happen?

[Baroness Sugg]

My Lords, there is a huge amount of pent-up demand at Heathrow and I imagine that those flights will be some of the first coming in when the new runway is built, which Heathrow expects to be in around 2026. I have spent much time in many regional airports and they have all been welcoming of the expansion of Heathrow, particularly on the domestic connectivity point where we expect to see up to 15% of slots reserved for domestic flights.

--- Later in debate ---

[Baroness Sugg]

I could not agree more with the noble Lord. We are in desperate need of expanded capacity in this country if we are to continue to succeed as a nation. I would very much like it if we could proceed.

[Baroness Kramer]

My Lords, could I just push the Minister on the funding of surface transport?

[Noble Lords]

No!

[Baroness Kramer]

There are still two minutes to go— unless someone else would like to ask a question. As the Minister will know, the Heathrow Southern Railway scheme requires the diversion of trains, typically going to Windsor, to the airport. The plans actually consume capacity that has been designed to meet not only the needs of the current Heathrow Airport but the growing demands of the local community. While the local community is going to be displaced, who is going to provide that replacement transport? There are both capacity issues and huge cost issues associated with that, but the airport could very easily claim that they are not directly related to bringing passengers to the airport.

[Baroness Sugg]

My Lords, Heathrow Airport Ltd has pledged to meet the costs of any surface access proposals that are essential to deliver airport expansion. Any work that will benefit the wider transport system, not just the airport, may require some taxpayer contribution, but proposals will need to represent value for money. As those proposals develop, those agreements will be made.