Aviation

Jim Fitzpatrick Excerpts

Wednesday 4th July 2012 Westminster Hall

[Mark Reckless]

It would certainly help. There are other ways in which the issue could be addressed; for instance, the air passenger duty regime. Many lobbyists are against the size of air passenger duty, but in operating conditions where there is an almost perfect monopoly at Heathrow and, at peak and to an extent shoulder periods, a monopoly at Gatwick, what happens through the increase in air passenger duty is that some of the monopolised value of those slots and the power of the grandfather rights are given instead to the public purse. It is not a situation of perfect competition in which costs are passed on. To the extent that costs rise, whether they are landing fees or APD, that will largely be absorbed into the price, giving greater public benefit, and possibly driving some of the marginal leisure stuff out of Heathrow and Gatwick.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

Would the hon. Gentleman mind running past me again how the treaty of Rome is an obstacle to more liberal air service agreements with other countries? When I was aviation Minister, we signed agreements with a variety of countries to allow more liberalised flight access to both countries, and the treaty of Rome was not an obstacle then. Given Gatwick’s recent expansion into five new routes, the treaty does not seem to be an obstacle. How will tearing up the treaty of Rome solve our aviation competitiveness questions?

[Mark Reckless]

There are two problems: first, the treaty of Rome gives property rights in-slot to airlines that have traditionally had them, which prevents new airlines from coming in with marginal routes to new emerging market countries, due to the cost of buying out the monopolist. Only more and more fights to New York or Hong Kong make such routes work. Secondly, the previous Government protected the monopolistic BA with restrictive agreements that prevent Brazilian airlines from flying here, saying that there should be no more than 35 passenger services a week and allowing only 31 a week to China. If we want more flights to emerging markets, we should just let Brazilian and Chinese airlines fly to any UK airport they want, without insisting on reciprocal rights for BA. That is what is holding the country back; the interests of Britain are not the interests of BA.

The final section of my speech is about our other airports. In 2010, we rightly said no to an estuary airport and to extra runways at Gatwick, Stansted and Heathrow. That was the right policy for this Parliament. I do not know the Liberal Democrat position on when or if there should be future runway capacity in the south-east, but it is right that the Conservatives at least look at the case for new runways as and when demand requires. A lot can be done with existing capacity. Gatwick is expanding strongly and setting up point-to-point routes in new emerging markets, which I welcome. That would be helped if Gatwick were allowed to invest in the A380 facilities by charging more and coming to its own arrangements with new airlines to build those facilities without existing suppliers having a veto. I would support greater deregulation of Gatwick in that regard.

I understand that the option now being promoted by the Mayor of London is Stansted. Since the previous White Paper and the Labour Government’s view, usage at Stansted has fallen off significantly and intercontinental flights there have stopped. The Mayor says that we should expand Crossrail to Stansted, and I am keen to discuss that. He may have ideas that I have not appreciated fully, and that are certainly a lot more constructive than his pie in the sky proposals for a Thames estuary airport.

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[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

It is a pleasure to see you in the Chair, Mr Dobbin. I congratulate the hon. Member for Rochester and Strood (Mark Reckless) on securing this important debate. We all keenly anticipate the publication of the Government’s consultation documents—a subject that I will come back to later. If they had already published them, we might not have needed this debate. None the less, this is a great opportunity for the Minister to update us on the documents.

As many Members have said, aviation is a success story, whether we are talking about the Scottish airports, Manchester, Birmingham, East Midlands, or the other regional airports. The focus of this debate, and the focus generally in recent years, has been on London and the south-east. The third runway debate has overshadowed the excellent work, which a number of colleagues have mentioned, being done at Gatwick, London City, Luton and Stansted, but the capacity of the south-east remains the big issue.

Our aviation industry is central to our economic prosperity and should be a key driver of growth, without which we have no prospect of emerging from the dangerous economic situation that we are in. The industry contributes at least £11 billion to UK GDP—more than 1% of the total—although briefings for this debate state that the figure is £23 billion. It also supports up to 200,000 jobs directly and 600,000 indirectly across the UK. However, just as the Government do not have a credible strategy for growth, they have not yet managed to set out a credible strategy for aviation, let alone the role that it could play in our economic situation. Aviation is a crucial sector on which our economy depends, and the reaction from business to the Government’s decision not to set out an aviation strategy until the latter part of this Parliament has ranged from incredulity to plain bemusement.

[Mrs Villiers]

Will the hon. Gentleman give way?

[Jim Fitzpatrick]

If the Minister will allow me to get to end of my remarks, I will be happy to give way to her. I hope that I will be able to give way, but I am constrained by time.

The chairman of the Airport Operators Association, Mr Ed Anderson, has said that, while the industry knows what the Government are against,

“we are not sure yet what it is in favour of”.

He went on to describe “better, not bigger” as an “election slogan”, saying:

“Better not bigger doesn’t constitute a strategy.”

Sir David Rowlands, a former permanent secretary at the Department for Transport, has described the Government’s policy as “mildly extraordinary”. Baroness Valentine, who speaks for London First, said earlier this year that the

“government seems content for aviation policy to drift.”—[Official Report, House of Lords, 24 March 2011; Vol. 726, c. 872.]

She has also said, most damningly, that

“the Government’s aviation strategy is damaging our economy and enhancing that of our EU rivals.”

Seventy-four business leaders wrote to The Times, saying that setting a long-term strategic direction for aviation in London, the wider south-east and across the country is a vital part of delivering the growth and jobs the country needs. They concluded that all options must be considered—short term and long term—to address growing demand. Only last week, John Longworth, the director general of the British Chambers of Commerce, said:

“The Government must stop tiptoeing around on aviation because of short-term political considerations. Unless politicians grasp the nettle and make some tough decisions, both our export and inward investment potential will suffer.”

I hope that the Minister will indicate when we will be able to see the consultation documents.

[Mrs Villiers]

Will the hon. Gentleman give way?

[Jim Fitzpatrick]

I assure the Minister that if I finish what I have to say by 10.47 or 10.48 am, I will give way to her, but I want to get my points on the record.

The hon. Member for Orpington (Joseph Johnson), who is no longer present, gave a couple of quotes from the Mayor of London’s briefing. To save time, I will not repeat what he said, but he did not cite two points—although others have mentioned this—relating to the loss of visitors to the UK. The Mayor’s briefing states:

“While France and Germany each managed to attract between 500,000 and 700,000 visitors from China in 2010, the UK had only 127,000. In total, France earns £1.3bn per year from Chinese tourist spending on visits in the country, compared to the UK’s Chinese tourist spending receipts of £115m.”

It also notes:

“France’s hub airport, Paris Charles de Gaulle (56 departures per week), has better connections to Brazil than Heathrow (27 departures per week). In 2009, inward investment from Brazil totalled $800m in France, and only $1.7m in the UK.”

The Mayor has a strong argument on those figures.

The Government seem to accept that there is a capacity issue. In the Budget statement, the Chancellor referred to south-east capacity, as did the Prime Minister in response to a question from the hon. Member for Richmond Park (Zac Goldsmith) during Prime Minister’s questions. As I have said, we are waiting for the Government’s consultation document to indicate their likely direction of travel. Constraints on aviation, whether from a lack of capacity or lack of investment, will not stop flights happening—or increasing. As Members have said, those constraints will simply displace flights from the UK to Schiphol, Charles de Gaulle or elsewhere.

The hon. Member for Rochester and Strood effectively articulated the arguments against the proposed estuary airport. He made some interesting points about EU competition law, and I will consider them carefully.

My hon. Friend the Member for Blackley and Broughton (Graham Stringer) spoke with great authority on the issue, as he always does. He mentioned in passing other factors that affect aviation, such as air passenger duty, which was also mentioned by other colleagues. Nobody developed the argument, but APD is a huge factor in whether people decide to go to the UK or elsewhere in Europe. Given that it brings in between £2 billion and £3 billion for the Treasury, it will not surrender APD, but that is a factor and it needs to be looked at.

Another big issue that affects our economic performance is visas and the obstacles we place in the way of people who want to come to the UK, particularly from China. Moreover, as we discussed at length during deliberations in the Civil Aviation Bill Committee, the performance of the UK Border Agency—I accept that it is not the Minister’s responsibility—is harming the way that potential tourists and business visitors perceive the UK, because of what they read and hear in the media.

Lack of time meant that we did not have the opportunity to hear a lecture by the hon. Member for Blackpool North and Cleveleys (Paul Maynard) on hub dynamics. I would be interested to read it, so perhaps he could send me a copy. He made the point about the decline in our aviation industry and the rise of Schiphol and Charles de Gaulle.

The hon. Member for Strangford (Jim Shannon) reinforced the points about connectivity and regional access, and the hon. Member for Cambridge (Dr Huppert) raised the issue of emissions. That issue has to be addressed, and we were addressing it when we were in government. The industry was confident that it could meet the levels set, but it meant using the emissions trading scheme, with the expectation that emissions would rise and that the industry would have to offset them elsewhere within the industry.

[Dr Huppert]

Will the hon. Gentleman give way?

[Jim Fitzpatrick]

I assure the hon. Gentleman that I have nearly finished—I have three minutes left—and will give way to him when I have done so.

As I was saying, the industry was confident that it could meet the levels set, but the bottom line is that Lib Dem policy on aviation is the obstacle to the Government having any policy at all, certainly before 2015.

The hon. Member for Poole (Mr Syms) mentioned the need for more capacity and made the case for Stansted, and the hon. Member for Amber Valley (Nigel Mills) asked how we can give more support to regional airports and proposed deregulation.

The aviation industry and Britain’s wider business community came together last week to call for a cross-party consensus on aviation that lasts beyond the term of one Parliament. For several months, the shadow Secretary of State, my hon. Friend the Member for Garston and Halewood (Maria Eagle), has repeatedly offered to take the politics out of aviation, put party differences aside and work together on a joint aviation strategy for the good of the nation. It is a clear, unambiguous offer, with no catch. Aviation matters to the country, the economy and businesses and families throughout the country. It is an industry that needs stability in the long term and a long-term plan that straddles Parliaments and Governments. We must not repeat the party political wrangling that turned the proposed third runway at Heathrow into a political football, and we must agree to stick to the agreed strategy, whatever the outcome at the next election.

[Mrs Villiers]

These issues are very important, so why have the Opposition not suggested any ideas for dealing with the long-term capacity challenges in the south-east? They have suggested nothing at all.

[Jim Fitzpatrick]

The Minister knows that we had a game plan in place, but we lost the election. Then, as a gesture, to try to achieve national consensus on this important issue, we said that we would drop support for the third runway so that we could have cross-party talks. We have not even had the courtesy of a reply from the Secretary of State for Transport about engaging in talks. Until the Government introduce their consultation—it is they, not the Opposition, who are responsible for creating aviation policy—it is a bit rich of the Minister to ask me about policy.

[Dr Huppert]

The hon. Gentleman said that the Labour party dropped its support for the third runway as a gesture. Will he be clear on what his party’s policy is now? Is it against a third runway, or is it merely in favour of having a blank page that can be filled with anything in future?

[Jim Fitzpatrick]

The hon. Gentleman tempts me to respond but, given that I fully explained our policy during a five-minute discussion only two days ago, I think that he knows what it is, and that he is just playing games to try to throw me off. He knows that we are in the throes of devising our aviation policy, and I assure him that it is likely to be formulated way before the coalition reveals its policy, which we do not think will be published until 2014, or even 2015.

Finally, I have the following questions for the Minister. What is it that the Government will publish? How long have we been waiting for the documents? What exactly will they consult on in the documents and—the most important question of all—when will we see them?

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[Mrs Villiers]

I am sorry, but I do not have time. If I have time at the end, I will give way.

We have an extensive programme of surface access improvements under way. Hon. Friends were right to raise that as being important for our aviation competitiveness. Manchester is getting a new Metrolink extension and will benefit from Northern Hub improvements. Gatwick station is getting a major upgrade; Thameslink will benefit Gatwick and Luton; Luton is getting improved access from the M1; and tunnelling has started on Crossrail. That project will ultimately see Heathrow connected to the City and Canary Wharf by train directly for the first time.

In the longer term, High Speed 2 will provide greatly improved surface access to Heathrow and Birmingham. As my hon. Friend the Member for Amber Valley (Nigel Mills) mentioned, that is a real game-changer, bringing Birmingham within easy travelling distance of many more people across the country. Of course, our HS2 plans will also provide an attractive rail alternative to thousands of short-haul flights coming into our south-east airports. That will potentially free up even more space for the long-haul destinations that hon. Members have rightly identified as crucial to our economic success.

However, good government is about not only tackling the problems of today, but preparing for the future. That is why the Chancellor announced in last year’s autumn statement that we would explore the options for maintaining the UK’s aviation hub status, with the exception of a third runway at Heathrow. The coalition is clear that it does not support a third runway at Heathrow. The airport is unique in Europe, in terms of the magnitude of its noise impact on densely populated areas. Thousands live daily with a plane overhead every 90 seconds, and have more planes that wake them up at 4.30 in the morning. The quality-of-life impact of a third runway and up to 220,000 more flights over London every year would be massive, and there is no technological solution in sight to ensure that planes become quiet enough quickly enough to make that burden in any way tolerable. We do not support mixed mode, which would see the end of the much-valued respite period that means so much to those who live with Heathrow noise daily.

We need a better solution. Last year, we kicked off the process of deciding what that will be, with the publication of our scoping document on aviation. The 600 or so responses we received are being used to prepare our draft aviation policy framework consultation, which will be published shortly. We plan to adopt the final framework in March next year, as set out in our business plan. It will set out the overarching economic and environmental framework within which we want to see aviation grow. We also intend to issue an open call for evidence on maintaining the UK’s international aviation connectivity. We will fully consider all representations to that consultation. The shadow Minister, the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), wants us to go faster, but had no ideas whatever to share in today’s debate.

[Jim Fitzpatrick]

When will we see the documents, Minister?

[Mrs Villiers]

The consultation will be published shortly.

[Jim Fitzpatrick]

Does “shortly” mean before the summer recess?

[Mrs Villiers]

The consultation will be published shortly. The decision is a crucial one that requires objective, thorough and evidence-based analysis of our connectivity needs and how best to meet them in a sustainable way. We do not want to make the mistake that the previous Government made of coming up with the wrong solution and seeking to reverse-engineer the evidence. Put simply, that landed them in court and ensured that they failed to deliver any new capacity. We need to get this right. We need to base our decisions on the evidence, and on a process that allows the communities affected by any of the options fully to take part and ensure that their voice is heard.