Heathrow

Justine Greening Excerpts

Thursday 7th June 2018 Commons Chamber

[Justine Greening (Putney) (Con)]

(Urgent Question): To ask the Secretary of State for Transport if he will make a statement on the potential taxpayer liabilities that the Government have entered into in their statement of principles agreement with Heathrow Airport Ltd.

[The Parliamentary Under-Secretary of State for Transport (Jesse Norman)]

Let me thank my right hon. Friend the Member for Putney (Justine Greening) for raising this issue. She has been absolutely indefatigable on it, and I salute her.

As the Secretary of State set out in his oral statement on Tuesday, we recognise the very strong feelings on this matter of some Members across the House and their constituents. I am aware of the various representations that have been made in the Chamber that Government would be liable for Heathrow’s costs should they decide to withdraw support from the scheme. These representations appears to stem from a clause in a non-legally binding agreement between Heathrow and the Department for Transport that has, I am afraid, been taken out of context.

The question was addressed by the Secretary of State for Transport on Tuesday and by the Prime Minister yesterday. Let me repeat in the clearest possible fashion that 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 Heathrow Airport Ltd has incurred or will incur in the future.

For the avoidance of any doubt, I will quote directly from the document in question, which 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 that we would have a responsibility to Parliament when a liability or, indeed, a contingent liability were incurred.

Yesterday, the Government laid before Parliament a written ministerial statement and departmental minute that set out what was a contingent liability for statutory blight, which will start if the proposed airports national policy statement 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 none.

[Justine Greening]

I am very grateful to the Minister, for whom I have a lot of respect, for coming to the House today. He mentioned one part of the statement of principles, but he will also know that the immediate clause after that says “notwithstanding…2.1.5”—that is, the paragraph he just read out. In other words, it says that in spite of that, Heathrow Airport Ltd

“reserves its rights (including but not limited to its rights to pursue any and all legal and equitable remedies (including cost recovery) available to it”,

and I set out that yesterday. It has clearly been written by a lawyer. If it does not matter legally, why did Heathrow Airport Ltd include it in the statement of principles? It paves the way for Heathrow to recover costs from the taxpayer when things go wrong. As the Secretary of State himself said on Tuesday, there are circumstances in which the runway could be built but then not used.

My questions are as follows. Why was this term agreed to in the first place? Heathrow is a private company, and should therefore accept the risks. Why was it agreed to exclusively for Heathrow Airport Ltd? Were the Secretary of State and the Department for Transport clearcut with Parliament about the existence of the clause, and if not, why not? Why was it never flagged up in the national policy statement documents that have been seen by the public? What assessment have Ministers made of the existing outstanding liability under the clause, given that it has already been triggered, and will the Minister confirm that my own assessment is correct?

Was the Cabinet Sub-Committee that made the decision to proceed with Heathrow Airport Ltd’s proposal made aware of the clause? For transparency purposes, will the Minister publish the papers that the Sub-Committee did look at, so that we can establish the level of detail that was available to it when it reached its conclusion? Why should the Minister have any faith in the prospect that if the Heathrow expansion goes wrong—as I suspect it will—and the company pursues the Government and taxpayers for potentially billions of pounds in costs, it will then honour any public service obligation in relation to routes to regional airports, and why does he think that the Scottish Government should have any confidence that it will ever stick to the memorandum of understanding?

[Jesse Norman]

My right hon. Friend has asked a vast number of questions. If I do not cover all the points that she raised, I shall be happy to write to her. She mentioned the Cabinet Sub-Committee; I am not a member of the Sub-Committee and have not seen the papers that were presented to it, so I cannot comment on that.

My right hon. Friend asked whether any liabilities had been created, and directed my attention to a specific clause. It is of course a very narrow legal point, but I entirely accept that it is important to focus on it. The Government’s position is that no liabilities have been created, and therefore none need to be disclosed; and no contingent liabilities have been created. The statement of principles is a standard document on which the Government took advice both from distinguished leading counsel and from a top-tier firm of solicitors. It simply allows Heathrow Airport Ltd to reserve rights that it would normally have under commercial law, while making clear that the Department has no liabilities in respect of the issues already described.

We, as a Department, are clear about the fact that the statement of principles is not legally binding. It does not create any legitimate expectation. It does not fetter the discretion of the Secretary of State. It does not give Heathrow Airport Ltd the right to claim

“damages, losses, liabilities, costs and/or expenses or other relief”.

Heathrow does, of course, retain some rights of its own, and that is entirely proper.

There might be circumstances in the future under some future Government, possibly of a different political persuasion, that did create a contingent liability, and the Government would then be under an obligation to present that to Parliament in the normal way. Heathrow Airport Ltd might, in the exercise of its legal rights, have the ability to sue them in some respect, but that is not touched on by this question.

The statement of principles with which we are dealing is not, in fact, the only document of its kind. There were two other such documents. In October 2016, the Government entered into an agreement on a statement of principles with Heathrow Airport Ltd, as we have discussed, but versions of the same document were also agreed with the promoters of the other shortlisted schemes, Gatwick Airport Ltd and Heathrow Hub Ltd. Those, of course, fell away when the Government recommended the Heathrow north-west runway as the preferred scheme. This is not a one-off deal or any kind of special arrangement with Heathrow itself.