HGV Road User Levy Bill (Ways and Means)

Kwasi Kwarteng Excerpts

Tuesday 23rd October 2012 Commons Chamber

[Kwasi Kwarteng (Spelthorne) (Con)]

I am happy to make my contribution to this somewhat technical though important debate. It is gratifying when matters contained in the manifesto or the coalition agreement have been acted on and we, as the governing party as part of a coalition, have delivered on our commitments. This is an instance in which we can be proud of ourselves for having delivered. It is bizarre, as the shadow Minister said, that we have been talking about this for more than 20 years. It seems a rather long time to be discussing something as technical and clear cut as this.

I fully support the levy. It will level the playing field. My constituency is dependent on good transport infrastructure. Spelthorne is very connected to Heathrow, but it also has links with the M3 and the M4 and it is within the M25. This legislation is exactly the kind of thing that haulage businesses in my constituency and neighbouring constituencies want to see. It sends a signal; they see a Government who are very keen on promoting business and enterprise and who are willing to defend the interests of British business against competition, which is laudable. For too long, British firms have been paying road tolls abroad while foreign operators were largely exempt from such taxation in the United Kingdom. It boils down to a simple proposition: is it right that foreign operators do not contribute to the maintenance of the roads they use? Contribution to the upkeep of the roads is not even a competition point; it is simply a matter of equity.

With regard to hypothecation, I am keen that the money that goes into the capital fund stays within the Transport budget, particularly the roads budget. I was lucky enough to go on a Transport Committee trip to Switzerland, where we saw the rail infrastructure and how it was financed. Rail infrastructure in that country is determined by hypothecated funds raised from taxation. That seems a good principle for the funding of infrastructure, and gets rid of any need to borrow money. The Swiss have a balanced budget at every stage of their infrastructure development. I am not making a party political point, but given our recent experience we could learn considerably from that funding model, so I am pleased that we have set aside a fund. I urge the Minister to be scrupulous about using the money for roads.

Everyone knows that haulage services are important to the smooth functioning of the economy. The transportation of goods is exactly what we as an advanced economy should be fostering. I am pleased that members of the Road Haulage Association are keen on the legislation and that we have managed to satisfy their concerns.

Generally, the measure is a step in the right direction. I hope the Minister will clarify some of the points and queries raised by Members on both sides of the House; it is rare that we come together to agree on something that will be helpful and useful to all our constituents and to the wider interests of our country.

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[Huw Irranca-Davies]

The hon. Lady makes a good point. It is not a case of us being winners. I think the hon. Member for Spelthorne slightly misspoke earlier when he talked about putting protection in place. As the hon. Lady says, it is not to do with protection for us, but with creating a level playing field. I am sure the hon. Gentleman did not intend to suggest that we want fortress mechanisms; it is about getting a level playing field.

[Kwasi Kwarteng]

As an attentive observer of and participant in our debates, the hon. Gentleman will appreciate that in my speech I suggested that foreign operators should contribute to their use of the roads. That is the best argument in favour of the legislation.

Aviation

Kwasi Kwarteng Excerpts

Wednesday 4th July 2012 Westminster Hall

[Mark Reckless]

I encourage my hon. Friend to listen to the rest of my speech, and not merely to recycle briefings that I, too, have received. There are many arguments for a hub airport, and I do not deny that some are valid. Many, however, are recycled by industry players with strong vested interests that are not necessarily those of the country as a whole. However, I will address my hon. Friend’s point later in my remarks.

Finally, some estimates suggest that the cost of the proposal will be £40 billion, £50 billion or even £100 billion. The Parsons Brinckerhoff report, a substantive piece of work, argues that

“even the £70 billion being discussed is a conservative estimate.”

Boris tells us that that money will come from private investors. Yes, but they will want a return. Even if we are looking at a 5% interest rate over a 50-year period, a return on that sort of money will add at least £50 to the cost of every plane ticket from the airport. Why would airlines, passengers, the Government, indeed anyone, want to pay that sort of money when the cost of expanding existing airports—including some that Members present may be promoting—is so much smaller?

The coalition Government were right to reverse the policy that the previous Government decided on in 2003. To recap, the then Government’s recommendation was a second runway at Stansted by 2011-12, a third runway at Heathrow by 2015 to 2020 and, following our judicial review, a second runway at Gatwick from the mid-2020s. The strongest reason why we were right to overturn that is that the projections on which the Labour Government operated from 2003 were, as I and many others set out clearly at the time, wholly unrealistic. They were based on a low case of 400 million passenger movements for the UK by 2030, and a high case of 600 million.

[Kwasi Kwarteng (Spelthorne) (Con)]

I am listening with great attention and fascination to my hon. Friend’s speech, but he has not addressed a very pertinent point raised by my hon. Friend the Member for Orpington (Joseph Johnson): at present we do not have access, or cannot fly directly, to those cities in China. I know that my hon. Friend the Member for Rochester and Strood (Mark Reckless) will come to that in his speech, but I am conscious that it is probably one of the most important questions that he could address, and I would very much like to hear his thoughts on it.

[Mark Reckless]

In deference to my hon. Friend, I shall bring forward my remarks on that point.

--- Later in debate ---

[Kwasi Kwarteng]

I am trying to work through the maze of complicated arguments that my hon. Friend is presenting, but I have just a simple question. Does he believe that the United Kingdom as a whole needs more aviation capacity?

[Mark Reckless]

Yes.

--- Later in debate ---

[Mark Reckless]

Yes, I do argue that. The limit on Heathrow’s routes to developing countries is largely because of the fact that those who have the slots find it most profitable to put on vast numbers of flights to New York and almost as large numbers to Hong Kong. It would benefit the country as a whole much more if there were a wider network of routes, rather than just what happens to benefit British Airways and maximise its profits. To get to what my hon. Friend suggests, the treaty we need to rip up is the treaty of Rome, because it is under European directives—[Interruption.] The reason why the slots are organised as they are is that they have been capitalised into property rights for the airlines that historically happen to have used them, and it is because of European legislation that that has been allowed to happen. If we want a more effective route network for our country as a whole, within the existing constraints of Heathrow—of course, others will argue that it needs to be bigger or we need a hub somewhere else and so on—European legislation prevents us from having that. Anyone who wants to set up a marginal route to an emerging market needs to buy out, at vast expense, one of the existing airlines, particularly BA, which has a near monopoly power. They have to give BA a huge amount of money to take the slots they need for those routes. The reason why they cannot do that is cost, yet we have treaties that restrict the amount of access that overseas airlines have into the UK. They could otherwise be flying into Gatwick, Stansted or Birmingham as city pairs, but the routes and slots are at Heathrow, and the regulation creates that monopoly power.

[Kwasi Kwarteng]

Is my hon. Friend seriously suggesting that the key to our aviation problems is ripping up the treaty of Rome?

[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.

Civil Aviation Bill

Kwasi Kwarteng Excerpts

Wednesday 25th April 2012 Commons Chamber

[Kwasi Kwarteng (Spelthorne) (Con)]

I am sure the hon. Gentleman appreciates that aviation is vital not only to this country, but to the community he represents, and certainly to the community I represent. I therefore want to understand the drift of his comments. Is he saying that BAA should cease to operate and that Heathrow should shut down? What exactly is he proposing?

[John McDonnell]

I wish I hadn’t bothered now! We must not go back to that level of debate. The hon. Gentleman is one of the most intelligent new Members of the House, and I have even started to read his books. We must not get dragged down into such trite debates. We will meet separately and work together to develop a strategy to enhance the economic benefits of Heathrow for both our communities, as I did with his predecessor. The debate is not about whether to close Heathrow; it is about how to strike the right balance between enhancing the employment benefits and protecting the environment, and that is all that these amendments do. They simply say to the Secretary of State and the CAA, “You need to take into account the environmental implications and the effects on local communities.”

What has happened in Sipson has not been taken into account. BAA is still buying properties and letting them out on a short-term basis. The community is therefore continuously blighted. There is no compensation for the local businesses—the butcher, the hairdresser, the local post office and pub. Their loyal clientele is now gone, and some of those businesses are closing down while the others can no longer earn a living.

We have met BAA and I have met Colin Marshall. I pushed the boat out and took him for a coffee in central Hayes. I sought to see whether at least some support could be devised for those local businesses to tide them over while they build up the loyal base again as best they can. The answer was no. Only two weeks ago, the board rejected that request. What is happening now? It is offering a small element to try to tart up the front of the shops—that is all.

That is the sort of blight that has occurred as a result of the activities of BAA—well not BAA, but Ferrovial, the Spanish company founded by a fascist under Franco that has now exploited my community to maximise its profits and ship them abroad to prop up the construction corporation, which is now having financial trouble. So I welcome the opportunity that these amendments would provide to place that duty on the CAA and the Secretary of State to ensure that the impact on local communities is taken into account. If these duties were in place now, BAA would have to introduce a compensation scheme for those local businesses in Sipson; it would have to stop blighting the overall area; it would have to introduce a scheme to compensate my constituents for the noise pollution they are experiencing; and it would have to drive down its operations that are producing such air pollution in my area.

I finish by saying that some of my local schools around Heathrow have a box into which children put their pumps when they go into class in the morning. They do so because they suffer from such a range of respiratory conditions, particularly asthma. In Hillingdon, we now specifically train our teachers on how to deal with asthma attacks in class; this is as a result of the air pollution, particularly that from the airport itself. The amendments are some of the most significant in terms of attempting to affect the environmental impact of aviation in this country that we have seen for many a year, and they should be treated seriously. New clause 6 should be treated seriously, because the noise affects not only people’s enjoyment, but their health, as has been shown in recent research. I am pleased that new clause 6 is being put to the test in the House tonight. Even if the Government cannot accept the other amendments, I would welcome it if they would think again, as we go into this consultation on aviation overall, to see how we can build in better environmental protections for the local communities against the expansion and operations of aviation overall.

Civil Aviation Bill

Kwasi Kwarteng Excerpts

Monday 30th January 2012 Commons Chamber

[Kwasi Kwarteng (Spelthorne) (Con)]

I had prepared some introductory remarks, but in view of the kind comments of the hon. Member for Glasgow South (Mr Harris), I should perhaps clarify my view on the third runway. In the course of my brief parliamentary career, I have never explicitly come out in favour of the third runway, but those who know me know that I am very partial to it, even though I am not necessarily saying it is the only solution to the aviation capacity problem the country faces. It is, however, vital for the economic future of our country that we solve this problem, especially given the stagnant growth here and in the eurozone. Too often in our post-war history we have adopted short-term policies that have impeded our long-term growth. I hope that our future aviation policies will not impede our future growth, however. The question of aviation capacity in the south-east is very important. We have debated it in the House before, and I have written about it.

I turn now to the Bill itself, which is a slightly different subject. The Bill is to be welcomed for a number of reasons. Most notably, our current civil aviation rules were framed almost three decades ago in the 1980s, and the Bill makes laudable attempts to modernise the regulation of this important industry. The broad thrust of the Bill is to place the customer at the centre of any considerations, and that should be supported. Its measures will establish as the Civil Aviation Authority’s primary focus the promotion of the interests of the passenger, and the entire industry accepts that that should be the case.

There is, however, a wider question, which was raised by the Select Committee, of which I am privileged to be a member. We found in our pre-legislative scrutiny report that the CAA should have as a secondary duty the need to take account of the reasonable interests of the airlines. Some might say that the airlines are very good at looking after themselves as they are quite well financed and have good lobbyists. When addressing aviation issues, however, we must consider all the participants, including airports and airlines as well as passengers. It is a commonly held belief that in the field of competitive air transport the needs of the airlines are closely aligned with those of the passengers, and I agree. As their interests are generally aligned rather than in conflict, we must consider including this secondary duty in the Bill. As this is to a considerable extent a co-operative industry, with airlines, airports and passengers all part of the mix, I strongly support the Bill’s providing for symmetrical rights of appeal, allowing airlines as well as airports to appeal to the Competition Commission.

The Bill’s provisions granting publication duties to the CAA in respect of all airports is also welcome. These days, transparency is essential; customers rightly want it, and airlines should welcome it too. The CAA must promote better information on customer service and environmental effects. No one disputes that the airline industry stands on the front line in the war against carbon emissions, but we must recognise the achievements of the industry in our country: the airline industry in Britain is at the forefront of addressing climate change and environmental protection. In that regard, it is better than any airline industry in any other country. Before we burden our industry with yet more regulation, we must pause to acknowledge its achievements in this field. Naturally, the information about airlines should be comparable and fair, but the move to transparency is certainly a step in the right direction.

I think that the transfering of security regulation from the Department for Transport to the CAA is a good thing. Obviously, details will have to be refined and clarified and in many cases things will have to evolve, such as how the structure will work, but it is quite right that a Government who have made decentralisation one of their guiding principles should delegate responsibility in this regard. There is a view that such a move is simply a way of reducing Government costs, but in my view it is quite right so to empower the CAA, although more details will have to be supplied.

Clearly, this is only Second Reading, so I am happy to support the Bill at this stage, but there are wider issues of concern. The CAA is the only major economic regulator for which the National Audit Office has no real remit, as has been mentioned, so there should be an explicit duty for the CAA to act in an efficient manner. That, indeed, was what the Transport Committee found.

More broadly, we must be very careful as regulation in civil aviation throws up the important issue of regulatory costs. If Britain’s aviation industry is to thrive, it is clear that we should not impose too many or too onerous burdens on our businesses that operate in the field. Not only are financial burdens onerous, but a more complex regulatory environment can pose its own problems. The CAA already charges airports a small levy for every arriving passenger, from which source of finance it seeks to undertake its functions. Those charges are set to increase by a third in April 2012 and it is apparent that the provisions in the Bill might add to it costs for airports. Given the increase in air passenger duty, we are in danger of burdening the industry with ever more costs, impeding its ability to drive the economic growth we all keenly anticipate.

This is Second Reading, however, and I am quite happy to support the Government at this stage. I only hope that more details can be thrashed out and considered in Committee and on Report.

Rail Fares

Kwasi Kwarteng Excerpts

Wednesday 11th January 2012 Commons Chamber

[Justine Greening]

The Opposition are out of touch. The speech largely failed to talk about how we can tackle the underlying problem in the rail industry, which is the cost. The hon. Member for Garston and Halewood touched on that point and I will come to it later. The industry was passed over to this Government with a high cost. I want to tackle that cost, but the previous Government did nothing to tackle it in 13 years. One of the most important things that the Government and I have to do is to get to grips with the high cost of the railway industry. That must be part and parcel of the Government’s overall approach to getting a grip on our public finances.

At the heart of the Government’s clear determination to do that is giving ourselves the best possible chance of keeping interest rates as low as possible for as long as possible to help families and businesses with loans and mortgages. It is not just the taxpayer who is paying through the nose for debt. We must keep interest rates as low as possible for people across this country who rely on that for their household finances to make sense. Let us be clear: if we had taken the advice of the Opposition to spend more and borrow more, which is what they have been talking about in this debate, we would be talking not about the cost of rail and bus fares, but about an International Monetary Fund bail-out to keep our country afloat, and we would be living in a country facing bond yields and interest rates like those of European countries such as Greece. That is the situation that the Opposition want to swap for.

[Kwasi Kwarteng (Spelthorne) (Con)]

Does my right hon. Friend have any idea why the perennial problem of rail costs was not tackled in 13 years under Labour and why she and her Department have had to deal with it?

[Justine Greening]

My personal view is that there were two key reasons—a lack of ability to tackle the problem, because Labour simply did not understand how to do so, and a lack of willingness. Tackling the problems means that we need to have some difficult discussions about the work force, and as we saw in the vote that has just taken place in the House, the Labour party shows no willingness ever to stand up to its party pay leaders, the unions.

High-speed Rail

Kwasi Kwarteng Excerpts

Tuesday 10th January 2012 Commons Chamber

[Justine Greening]

I will be writing today to all the people affected directly by HS2, and that will include making sure that people in areas that will have tunnels underneath them will receive all the details they need to understand how this process will work.

[Kwasi Kwarteng (Spelthorne) (Con)]

Will my right hon. Friend say a few words about the massive capacity that is going to be added to freight lines, so that we can encourage greater use of the railway in transporting freight around the country?

[Justine Greening]

One of the things we have seen in recent years is freight switching from road to rail. HS2 will have the advantage of freeing up the capacity on the conventional railway network, which will see that renaissance continue. We hope that it will have even more force behind it than it has had already.

Cost of Motor Insurance

Kwasi Kwarteng Excerpts

Tuesday 8th November 2011 Commons Chamber

[Karl MᶜCartney (Lincoln) (Con)]

It is a pleasure to follow the hon. Member for Liverpool, Riverside (Mrs Ellman), who made many points with which I agree. I congratulate her and hon. Members across the House on securing this debate and putting forward this motion. May I declare an interest as both a justice of the peace and one of 32 million drivers who pays insurance for the family car? Like many, I am dismayed that the previous Labour Government did nothing to dissuade the estimated 1.5 million uninsured drivers still on our roads or to halt the rise in fraudulent claims and insurance scamming which plague drivers and our courts.

Like many colleagues, I am aware that it can often be the issues that never make the front pages, or those that receive little, if any, attention, that can irritate people the most and can undermine and shake their belief in the rule of law and a responsible society. Normally, this occurs when people have done the right thing yet their fellow citizens who have purposely done the wrong thing somehow get away with it and the law-abiding are left to pay the penalty. The menace of uninsured drivers is one such issue. If that and the so-called insurance scammers were effectively tackled, the costs of motor insurance would be significantly reduced for the law-abiding drivers of our country.

In September, I conducted an online survey regarding uninsured drivers, the fines and punishments currently handed down, and what respondents felt should be the punishment, given the rising costs of premiums that most law-abiding drivers have had to pay in recent years. There is a widely held view that there is a need for far harsher penalties for uninsured drivers and other people who, aided and abetted by the claims industry, lie about the extent of injuries caused to them and, in some cases, wilfully manufacture the circumstances in which accidents occur. There are also about 1,200 claims per day for whiplash, each case averaging a payout of £3,500, and hire car charges for replacement cars are also eye-wateringly high. That is not sustainable, or, I believe, a true representation of accidents on our roads.

My interest results not only from what my constituents or friends and family tell me, but from what I have seen with my own eyes and experienced personally. As a magistrate, I have found that our hands have for some time been tied by rules and by the ring-fencing of the level of fines and type of sentences we can impose on the same old faces that come before us, often three or four times in a few years. These people include those who drive without insurance, and often without tax and MOTs for their vehicles too. It is also a proven fact that many of those convicted of vehicle crime are involved in other law-breaking activities.

Moreover, my family and I have been the victim of three car insurance scams, and the police forces in both Kent and St Albans have shown no interest in following them up, despite judges and courts finding in favour of us and our insurance company. But they should, because how many fully insured drivers have the time and bullishness to see through such action, and challenge the system and the fraudsters? The system relies on this lack of willingness.

[Kwasi Kwarteng (Spelthorne) (Con)]

How extensive does my hon. Friend think the problem of fraud is in relation to rising premiums?

[Karl MᶜCartney]

It is very extensive, and I shall discuss it later in my speech. It is something we have to deal with.

The system relies on a lack of willingness to contest such fraudulent claims. After the judge’s decision in our most recent case, it was revealed in court that these scammers had tried it on—successfully—six times in the past five years from the same registered address of the vehicle. Unpunished, they are probably trying it on again as I speak. Not only do uninsured drivers increase the insurance premiums of law-abiding insured drivers, but we taxpayers are being fleeced a second time, as our courts are seeing similar claims cases taking up large amounts of court time, whereas 10 to 12 years ago that was not so. Typically, the courts, those working in them and the legal system suspect that the true number of fraudulent claims is at least 10 times that which reaches our courts.

To gauge whether my views were in tune with others—I feel that there is an appalling lack of appropriate punishments for uninsured drivers and accident scammers—I conducted an online survey, as I said. It was predominantly of local people in Lincoln and asked their views about uninsured drivers, given that the average fine for driving uninsured in the county of Lincolnshire was £213 in 2010, a reduction from £233 in 2008. I was not surprised to find that the vast majority felt the fine level was too low. It is especially galling for insured drivers to note that while their average insurance premiums have risen by up to 40% in recent years, the fines for uninsured drivers have decreased in the same period. We can see why this situation has occurred. The average comprehensive premium for the Lincoln postcode was just over £603 at the end of September 2011, which shows that someone has to be caught 2.8 times or more in a year for it to be more expensive than to drive with insurance.

However, as we have heard, insurance is about risk and age, and those key factors also matter. For example, the estimated cost for comprehensive insurance for a male in Lincoln aged between 17 and 20 is £2,733. It is £1,338 for a 21 to 25-year-old and £765 for a 25 to 30-year-old. That means that anyone from those age groups caught driving uninsured has respectively to be fined 12.8, 6.5 and 3.6 times per year before the fine exceeds the insurance cost.