Heathrow Airport

Baroness Sugg Excerpts

Thursday 7th June 2018 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, with the leave of the House I will repeat in the form of a Statement the Answer given by my honourable friend the Parliamentary Under-Secretary of State for Transport to an Urgent Question in the other place. The Statement is as follows:

“First, let me thank the right honourable Member for raising this issue. As the Secretary of State set out in his Oral Statement on Tuesday, we recognise the strong feelings on this matter from some Members, and their constituents, across the House. I am aware of the various representations that have been made in the Chamber that the Government would be liable for Heathrow’s costs should they decide to withdraw support from the scheme.

These representations appear to stem from a clause in a non-legally binding agreement between Heathrow and the DfT that has been taken out of context. This non-issue was addressed by the Secretary of State for Transport on Tuesday, and by the Prime Minister yesterday. So let me repeat in the clearest possible fashion: there is no liability here. The Government have not entered into any agreement that gives Heathrow the right to recover its losses in the event of the scheme not proceeding, and nor would they accept any liability for any of the costs that HAL has incurred or will incur in the future.

For the avoidance of any doubt, please allow me to quote directly from the document in question. It says that,

‘this Statement of Principles does not give either HAL or the Secretary of State any right to a claim for damages, losses, liabilities, costs and/or expenses or other relief howsoever arising if, for whatever reason, HAL’s Scheme does not proceed’.

We are absolutely clear of our responsibilities to Parliament when a liability, or indeed a contingent liability, is incurred.

Yesterday, the Government laid before Parliament a Written Ministerial Statement and departmental minute that set out a contingent liability for statutory blight, which will start if the proposed airports NPS is designated. The liability is contingent because the Government have rightly protected the taxpayer by entering into a binding agreement with Heathrow Airport Ltd, whereby the airport assumes the financial liability for successful blight claims if the scheme proceeds. With regard to wider scheme costs, the answer is simple. We have not notified Parliament of any liability because there is no liability”.

--- Later in debate ---

[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.

[Lord Trefgarne (Con)]

My Lords, may I raise a matter which I touched upon briefly yesterday? Can my noble friend confirm that, when and if this new runway comes into service, there will unfortunately have to be the end of fixed-wing aviation, at least, at RAF Northolt? Has that been taken into account?

[Baroness Sugg]

My Lords, we are not aware of that impact at Northolt at this stage. It is an airspace issue and there is a big project on airspace modernisation, which we are taking forward over the next couple of years. That will need to be carefully considered, but I am fully aware of the historical importance of Northolt and, as I said, we are not aware of that impact at this stage.

[Lord Trefgarne]

My Lords, with your Lordships’ permission, this is a very technical matter. If my noble friend were able to write to me, I would be grateful.

[Baroness Sugg]

As I said, we are in the early stages of the airspace modernisation, but I will certainly write to my noble friend to explain in what detail I can.

[Baroness McIntosh of Pickering (Con)]

Will my noble friend put my mind at rest? I should perhaps say in passing that I was Conservative transport spokesman in the European Parliament for nine years. There is concern across the north of England that a number of direct international flights, which have built up very successfully from regional airports such as Leeds Bradford Airport, Doncaster Sheffield Airport, and perhaps East Midlands Airport as well, will lose those direct connections as part of the deal that has been negotiated with the expansion of Heathrow Airport. That would be a very regrettable step, and I hope that my noble friend will take this opportunity to put my mind at rest. Will we continue to enjoy a raft of choices for international flights, directly from regional airports across the north of England, to make sure that we are not adding to congestion at London Heathrow?

[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.

[Lord Tunnicliffe]

My Lords, if the Minister will forgive me for extending my question, she ran through a number of schemes which she said were committed. Who is committed to paying for these claims and under what sort of process are they committed?

[Baroness Sugg]

The schemes which I mentioned—those that are already in progress on HS2, Crossrail and the Piccadilly extension line—are already committed and agreed on. The other two to which I referred for southern rail and western rail are still in development.

[Lord Tunnicliffe]

But who is paying for the committed schemes?

[Baroness Sugg]

Those schemes have already been currently funded, and I will have to write to the noble Lord with exact details.

[Baroness McIntosh of Pickering]

My Lords, in the event that I perhaps did not express my question as well as I might, it is particularly the point-to-point regional flights between airports such as Leeds Bradford through Amsterdam, and onward to international connections, that I have in mind. Can my noble friend give me a categorical assurance that these will not be poached by Heathrow?

[Baroness Sugg]

I am afraid that I cannot predict exactly what is to happen with future flights. All I can do is to reiterate our support for regional airports. Another announcement we made yesterday was on making best use of existing capacity, which will allow regional airports to grow as long as they get permission from the local authority area. As I said, regional airports are supportive of Heathrow expansion and, even with that expansion, we expect them to continue to grow.

[Lord West of Spithead (Lab)]

My Lords, notwith- standing all the complexities and costs, this thing has been studied to death. Does the Minister not agree that it is about time that we jolly well got on and did it, because it is so important for UK aviation and UK industry?

[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?

[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.