Infrastructure (Financial Assistance) Bill

Grahame Morris Excerpts

Monday 17th September 2012 Commons Chamber

[Grahame M. Morris (Easington) (Lab)]

I was hoping to open with some generous comments about the contributions from Government Members, and although I have agreed with some of them, I have found others that dealt with the Opposition’s view a little unpalatable. Make no mistake: our commitment is to jobs and growth, and to a credible plan to stimulate investment in infrastructure.

As my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) has already said, a number of sectors in our region could benefit considerably from investment in housing and construction. I did not quite understand the point the former Prisons Minister, the hon. Member for Reigate (Mr Blunt), was making in saying that housing should not be considered as infrastructure. It is absolutely vital. As many as 25,000 new jobs in the north-east could be created through low-carbon investment and a proposal from the North East of England Process Industry Cluster. We should also consider superfast broadband, communications and transport. Although we are not a direct beneficiary of High Speed 2, there is a plan to locate the train-builder, Hitachi, within County Durham, which could generate many thousands of new jobs.

In the time available I want to talk about the important and often neglected role of regional airports as part of our regional economic infrastructure. In the north-east, that is the Newcastle and Durham Tees Valley airports, which I want to thank, along with the Airport Operators Association, for their assistance in providing information. As Members will appreciate, airport infrastructure projects are generally entirely private sector funded. More than £100 million has been invested in new facilities and infrastructure at Newcastle airport since 2000. A terminal, a runway, instrument landing systems, an air traffic control tower, a fuel farm—all have been improved or replaced during the intervening period. More than £3.2 million has been spent on the terminal in the past year. Plans further to improve the airport include additional investment in the terminal, aircraft parking stands, freight offices and access.

However, this is not simply a question, as the Minister implied, of overcoming ownership and planning constraints. Other Government policies influence the ability to take forward infrastructure projects, one of which is investment in complementary infrastructure in other modes. Here, I am thinking of the importance of improving the A1 western bypass, which is seen as an obstacle to further growth at the airport. That would be of considerable benefit in terms of gross value added and improving journey times. I hope the Bill is an indication that the coalition now recognises the importance of aviation policy to the UK economy. We need to ensure that the UK can compete in both established and emerging markets. That requires investment in airport infrastructure, and not only to enhance connectivity right across the country; the UK needs vibrant, point-to-point airports and sufficient world-class hub capacity.

I do not propose to get involved in an argument about whether the right thing to do is to expand Heathrow; but it is absolutely clear that that is a decision for Government to make. It is up to the Government to decide where hub capacity, if it is to be increased, should be. As with all infrastructure improvements, there is a long lead-in time and people need certainty in order to invest in new facilities. The hon. Member for Halesowen and Rowley Regis (James Morris) suggested that an alternative would be to expand Birmingham airport, but I do not necessarily agree that that would be the best decision. However, the Government should consider the matter, as our regional airports are suffering as a result of this uncertainty.

These airports have considerable potential as engines of sustainable economic growth. As I mentioned, Newcastle airport supports 7,800 jobs, with more than 3,000 of those on site. The benefits go not only to Newcastle, but to the whole north-east region. The benefits to the regional economy are put at some £646 million. The airport contributes £57 million gross value added for tourism, it handles 4.7 million passengers a year and generates £48.8 million a year in air passenger duty from passengers flying from Newcastle. Aviation is a huge benefit to the UK economy, contributing about £50 billion, of which the Chancellor takes about £8 billion, as I understand it.

I wish to remind the Minister that the recent global crisis and the associated recession has caused the biggest fall in activity at UK airports since the 1950s. In the north-east region, the number of passengers at Newcastle airport has reduced from 5.5 million in 2007 to 4.7 million in 2012. Even more dramatically, the number for Durham Tees Valley airport has decreased from 1 million in 2005 to 200,000 in 2012.

As this is a Treasury Bill, it is reasonable to ask the Minister about the role of the Chancellor and the Treasury in the context of our regional airport infrastructure. Is this another case of perpetuating a north-south divide? I understand that passenger numbers at Heathrow, and indeed for much of the south-east, have recovered to their levels before the financial crisis. To use a northern expression, this seems to be a no-brainer. Why do the Government not see investment in airport infrastructure as a key driver of growth and jobs?

There have been notable critics of the approach being taken, and not necessarily from the Labour party. Mr Olivios Janovec, director general of the pan-European airport operators association, says that the UK has the worst aviation and aviation tax policies in Europe. Perhaps that is because of a lack of continuity; we seem to have had more Transport Secretaries and aviation Ministers than Chris Hoy has had gold medals, and I do not think that that has helped.

The Government are not doing enough to make regional airports flourish. There is considerable potential, and a major boost could be provided to jobs and growth in the north-east. That is important because the number of unemployed claimants in Easington in August 2012 was 3,307, or 9.9% of the economically active population. The number of claimants was up by 441 compared with the figure for the previous year and it was 14 higher than the figure for July 2012.

It is important that the Government examine what is happening on air passenger duty, as this country has the highest rates in Europe and possibly the world. It is a regressive tax that takes no account of people’s ability to pay. I also urge the Government to move ahead and recognise the important role of Government in stimulating demand.