Aviation

Jim Dobbin Excerpts

Wednesday 4th July 2012 Westminster Hall

[Several hon. Members]

rose—

[Jim Dobbin (in the Chair)]

Order. I have had seven notifications from hon. Members who want to speak. I intend to call the shadow Minister at 20 minutes to 11, so we have less than 40 minutes for those seven speeches.

--- Later in debate ---

[Graham Stringer]

I always find that a particularly difficult argument to be put by Conservatives, who suddenly want to plan routes and move away from a completely deregulated market in Europe—apart from where it is constrained by slots. Having argued ideologically for that position, all of a sudden they want to tell aeroplanes that they can only go from Manchester and Leeds and not from London. I do not believe that that is the Conservative party’s position at all. Even if we put up the price of slots, which has been kept artificially low by how slots are regulated, we would not necessarily get the flights going to the right parts of the world that will benefit this economy. We would get even more flights going to New York and the west coast of the United States because those are the most profitable routes from this country in the short term. The two cheap slots would not solve the problem because the central issue is lack of capacity.

I have a few more facts from the London chambers of commerce that represent the views of 350 business leaders from the BRIC countries: 92% made the general point about the importance of direct flights; 67% said that they were more likely to do business in a place if there were direct flights to it; and 62% said that they would only invest in an area if there were direct flights between the city in the country in which they were operating and the city in which they were likely to invest. Such flights to Brazil, Russia and China are limited.

I wanted to talk about the damage that air passenger duty is doing to regional airports, but I do not think that there is time because of the number of Members who wish to contribute to this debate. None the less, such duty is doing damage and the Government really need to change their policy. Twenty-two of our competitor countries in the EU have no air passenger duty whatever, so imposing a duty is a ridiculous anti-competitive position for this country to take.

I want to talk a little about how we use capacity in the regional airports. It is not possible to, as the hon. Members for Rochester and Strood and for Richmond Park (Zac Goldsmith) suggested, somehow move flights about, but there is no reason whatever why we could not have a completely open skies policy in the regional airports. There is 15 times more capacity in our regional airports than would be provided by one extra runway at Heathrow. It would be against the law to direct flights within Europe to that runway; that simply could not happen. At the moment, airlines are reluctant to make use of the partial open skies policy in relation to major regional airports with fifth freedom rights, but the Government must agree that, and sometimes there are difficulties. Airlines, which have a real interest in getting into Heathrow, are suspicious that if they use the facility of partially open skies in the regional airports they will be kept out in any future negotiations to get into Heathrow. Having a completely open skies policy in the regions, however, might shift out one or two intercontinental routes. It will not change the whole structure of aviation, but it will help.

Finally, the central point of the Government’s policy, especially the Liberal Democrat part, seems to be that constraining capacity in the south-east will help the environment and not damage the economy. I hope that I have shown that that constraint in the south-east is already damaging our economic competitiveness, and the answer to that is to build extra runways and not a new airport. It is worth saying, and it has been said before, that our policy is damaging not only our economy, as we are, in effect, helping other hubs in France, Germany, Denmark, Spain and Holland to do better, but our environment. When planes take off from the United Kingdom, taking passengers to airports such as Schiphol to pick up intercontinental flights, they are putting more nitrous oxide, sulphur oxides and carbon dioxide into the atmosphere than would otherwise be the case. Although the whole aviation debate needs to be opened up, the solutions have been known for a long time, and the Government have had their head in the sand for their whole time in office.

[Jim Dobbin (in the Chair)]

Order. Six Members still wish to speak in this interesting and important debate, so they will have roughly four minutes each before those on the Front Bench respond

--- Later in debate ---

[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to serve under your chairmanship, Mr Dobbin. I congratulate my hon. Friend the Member for Rochester and Strood (Mark Reckless) on securing the debate. We have, I think, focused a little too much on the impact in the south-east and have not looked at the full national interest, although my hon. Friend tried to do so. I want to talk about the impact of aviation policy on the midlands.

One thing that pushes flight numbers in the south-east up to near capacity is passengers from the midlands needlessly driving down to use its airports—Gatwick in particular—to go on holiday, when there are perfectly sensible flights, probably to the same places, from midlands airports, which, in many cases, people drive straight past. Trying to find ways not of forcing but of encouraging such passengers to use the midlands airports rather than the London ones has to be a way of solving the problem. I agree with the hon. Member for Blackley and Broughton (Graham Stringer) that it is strange for a Conservative to want to regulate and to force people to do something, so I suggest that we do exactly the opposite. The problem is that once we start regulating an industry and a market, we end up with a problem and decide that the solution is to regulate a bit more or a bit differently, or to bolt something on, to try to force a change in the behaviour that the regulation created in the first place. I suspect that the answer in this case is to deregulate much more of the industry.

I am not at all convinced of the logic of forcing BAA to sell Gatwick, and now Stansted, only to end up still economically regulating both airports. Surely we only regulate a dominant player in the market, and it is hard to see how in one market there can be three. I would free everything up and let Gatwick and Stansted compete with Heathrow, to see what they could do. That would get us a much better short-term fix than any of the other options.

In the midlands, what can we do to encourage people to use the regional airports? An interesting report was produced by Birmingham airport, and we have all seen the adverts on the tube about not putting all our eggs in Heathrow’s basket. If we are talking about fast rail links between airports and London, we have a plan for that; it is called high-speed rail to Birmingham, and it will reduce the journey time from Birmingham airport to London to just over 40 minutes, which is not far off the aspiration that my hon. Friend the Member for Poole (Mr Syms) mentioned for Stansted. I have driven to Stansted airport a few times, and it is an awful place to get to—a terrible location. I cannot see any real attraction in it. No offence to the hon. Member for Cambridge (Dr Huppert), but it is not a solution for a national airport for the UK. Such a solution would be a complete disaster. If we want fast rail links into London, let us have high-speed rail, and then Birmingham airport can become London Birmingham airport, or some other such preposterous name.

More seriously, if we are trying to balance the economy away from the south-east, and out to the midlands and the north, aviation can play a role in encouraging airports in those areas to get more flights, including flights to the new emerging markets. The midlands is the centre of the UK’s manufacturing industry, so it would be good to have links between those local businesses and the major areas they serve. My constituency, for example, has about 550 employees at Rolls-Royce, who fly all over the world. If we are a Government looking at regional benefit rates and regional pay, why can we not consider regional air passenger duty? We have done it for Northern Ireland, so why not do it elsewhere and try to give the areas concerned a chance to build up their competitive airports, increase capacity, attract new routes, and generally grow the market outside London?

I do not pretend that the majority of people will not want to fly to London, and that that is not where the economic powerhouse will be, but we ought to consider the scope and capability that exists outside London as well, rather than just forcing people into the capital’s airports, which happen to be relatively cheap to fly to because they already have full capacity, in which they are protected, and because regulation keeps the prices down.

Finally, if we want our national hub to be truly national, we must ensure that regional airports to which the rail journey is too long have access to the hub. Otherwise, airlines will discontinue their routes to Belfast and Scotland, for example, because they can make more profit from routes to New York, and the hub will become purely a London and south-east one. That is not an attractive way of growing the economy all around the country.

[Jim Dobbin (in the Chair)]

We have hit the deadline of 20 minutes to 11. I call the shadow Minister.