Air Transport (Northern Ireland)

Laurence Robertson Excerpts

Thursday 27th June 2013 Westminster Hall

[Mr Laurence Robertson (Tewkesbury) (Con)]

It is a pleasure to serve under your chairmanship once again, Mr Amess. I thank the Liaison Committee for nominating this important debate, and the Minister of State, Department for Transport, my right hon. Friend the Member for Chelmsford (Mr Burns), for attending. I know that he had a busy night last night, not necessarily helped by some who are in the Chamber today. I welcome him.

This debate comes on the back of the first report of 2012-13 by the Select Committee on Northern Ireland Affairs, which we published last November. I am grateful to all Committee members for the work that they carried out on this detailed inquiry, and to our officials, who are a bit thin on the ground today, although I am sure—at least, I hope—that quality will make up for the lack of quantity.

I am grateful to the many witnesses whom we interviewed during the course of our inquiry into the air transport strategy for Northern Ireland. We talked to representatives of the airports, the CBI, the airline companies, travel companies, the Consumer Council for Northern Ireland, unions, the UK Border Agency, Ministers, the Federation of Small Businesses and others.

Since the Committee was re-formed after the last general election, we have concentrated on trying our best to move towards a rebalancing of the Northern Ireland economy. We know that Northern Ireland has become somewhat over-dependent on the public sector, and we are well aware of the reasons why. There is a large deficit in the amount of Government spending in Northern Ireland relative to the amount of tax raised there. The same is true in Scotland and Wales, of course, but it is more pronounced in Northern Ireland. Wages are also lower in Northern Ireland, and there is great concern about people who perhaps do not feel that they have had the full benefits of the peace process. We as a Committee have considered security issues from time to time, of course, and we will do so again, but we are doing our best to encourage and work with the Government and make proposals about how we might rebalance the economy in Northern Ireland. It is obviously worth doing for its own sake, so that people in the Province can enjoy greater prosperity, but we also see it as a way to cement the relative peace achieved over the past 15 years or so.

Our first inquiry after the last general election was on the level of corporation tax. We recommended that the issue be devolved to the Northern Ireland Assembly so that it could set a rate that would be more competitive with the current tax rate in the Republic of Ireland. Corporation tax in the UK is 23%, but only 12.5% in the Republic. Although the Committee was certainly not unanimous on that proposal, we felt that it would help the economy in Northern Ireland move towards where we want it to be. We are debating aviation policy, not corporation tax, but I will talk about tax a little later.

I must stress the importance of air travel to Northern Ireland. It is an island off an island—a beautiful place, but nevertheless slightly remote. The only way that people there can travel reasonably quickly and efficiently either to the mainland or to the continent is by air. The sea crossing is lovely, but it is quite slow. [Interruption.] I do not know whether the Minister is thinking of extending High Speed 2 to Northern Ireland, but I am sure that it would be welcome if he did. However, as at the moment there are no plans to do so, we must stress how important air travel is to people in Northern Ireland for social, family and business reasons.

[Kate Hoey (Vauxhall) (Lab)]

Some Committee members suggested that it might be helpful for Ministers, particularly Ministers for Transport, to make the journey to Belfast from London or Southampton via the only real way other than flying, and to tell us all how long it takes, how much it costs and how it could possibly help improve business connectivity for that to be the only way by which a person can travel. It might be helpful for the Minister to make that trip so that he can experience it for himself. I had to make it once. It takes a very long time.

[Mr Robertson]

I thank the hon. Lady for her helpful intervention. I am sure that the Minister travels to Northern Ireland regularly, but it sounds like an invitation for him to do so in a different way.

When the Minister gets there, he will see that the rail links in Northern Ireland are not what we might want either, particularly between City of Derry airport and Belfast. I will come to that issue in a minute. It is a long and sometimes difficult journey. Northern Ireland Members sometimes have to leave Parliament early in the day—not in the morning, of course, but not too late in the afternoon—if they want to get back that evening, which may explain why they are sometimes unable to take part in debates such as this.

The background is that we have three airports in Northern Ireland: Belfast International, sometimes known as Aldergrove; Belfast City, nowadays named George Best Belfast City airport after the great footballer; and, of course, City of Derry airport. Belfast International airport has about 4 million passengers a year, Belfast City airport 2.4 million and City of Derry 400,000. When we compare that with Dublin, which has 90 million passengers a year, we see a big difference between the two, but Belfast International airport is busy and fulfils a completely different role from Belfast City airport. Both are important. City of Derry airport could probably be used more, especially this year, when Londonderry is the city of culture.

In terms of connectivity, it is extremely important that we retain capacity in the south-east of England, because many people fly from Belfast to London and then on to other cities in the world. There is some concern about the speed with which we are moving in that direction. The Committee expressed frustration about how long it is taking for the Government to decide whether we are to have, for example, a further runway at Heathrow, Boris island or something else. It is of some concern to the Committee that the Government seem to have ruled out a third runway at Heathrow before commissioning the Davies report.

[The Minister of State, Department for Transport (Mr Simon Burns)]

If it is helpful to my hon. Friend, the Government’s policy, in the manifestos of both the Conservative party and the Liberal Democrats, is that there will be no third runway at Heathrow during the lifetime of this Parliament. For the way forward beyond 2015, we have set up the Davies review, an independent commission, to consider what we should do to move forward on capacity in the south-east of England.

[Mr Robertson]

That is extremely helpful, given that we have less than two years to go in this Parliament before the third runway is a possibility. I cannot speak for the Committee on that—we did not express a view whether there should be a third runway at Heathrow—but we did say that we are concerned about how long it is taking. The Government’s response to our report said, reasonably, that they do not want to rush matters; they want to consider the issue in depth and detail, and to get it right. I fully understand that, but we feel that we are losing out to Dublin, Paris and Schiphol due to the delay.

It is important to Northern Ireland that we secure the routes from Belfast to London airports. A while ago, British Airways—or the International Airlines Group, to be more correct—took over BMI, and there was some concern about whether the route would be discontinued. We interviewed Willie Walsh of International Airlines Group, who was helpful to the Committee and stressed the importance of that route to British Airways. We are concerned that the long-haul routes appear to be more profitable for some airline companies. He said that BA was not in a position, necessarily, to buy an awful lot more planes that could fly long-haul, so the route from Belfast was valuable to it. That is a slightly negative way of getting to the position that we wanted to get to, and we must stress the particular importance to the people in Northern Ireland, and to its economy, of the routes from Belfast to London.

Recently, we had a bit of a scare when Flybe announced that it was ending flights from Belfast City airport to Gatwick, although it ended a number of flights to Gatwick, not just from Belfast. The good news is that EasyJet has taken over and assures us that that route is important for it. All these things are worrying and are a problem for people in Northern Ireland, because air transportation is so important to them.

Linked to the issues I have mentioned are the slots, particularly at Heathrow, which is under such enormous pressure. We want to move the situation on as quickly as we can. We discussed the possibility of ring-fencing certain slots, particularly at Heathrow, but as the Government correctly responded, it is difficult to do that under EU law and tends to distort competition and the free market. As an avowed free-marketeer, I have some difficulty with that. The slots are probably best secured by creating extra capacity in the south-east, and we are in a vicious circle in that respect.

I now return to tax: air passenger duty. A while ago it became obvious to the Committee that Continental Airlines, now operating under United Airlines—the only company flying from Belfast directly to Newark in the United States—was seriously considering ending its only flight, because of the high level of long-haul air passenger duty. We have since had discussions with that airline in the United States. It was a close-run thing. It was seriously considering ending that flight, because it did not feel that it could pass on the air passenger duty to the customers, owing to the proximity of Dublin. Four people travelling from Belfast to Newark would pay £260 in tax, whereas from Dublin I think the charge is €3 each, and there was talk of abolishing that. Because of the possibility of a short journey elsewhere, Belfast was in danger of losing out.

We did a quick report and put an awful lot of pressure on the Government to do something about this. To be fair to the Treasury, the Department for Transport and the Northern Ireland Office—I do not know exactly who took the decision; I suspect it was the Treasury—

[Mr Burns]

Treasury.

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

Stereo.

[Mr Robertson]

The Treasury is all-powerful. The level of air passenger duty was reduced to that for short-haul flights, and the Government have since devolved decisions on air passenger duty to the Assembly, so it can decide how it wants to play it. That reduction saved that route. I pay tribute in particular to the Select Committee members from Northern Ireland, who put pressure on me as Chairman, allowing me to put pressure on the Government. We saved that route, but it was a close-run thing that demonstrates how important—how big an issue—air passenger duty is.

Okay, we saved that route and that is important, given the relationship with America, but 98.5%—the vast majority—of Northern Ireland passengers take short-haul flights. Many witnesses cited air passenger duty as a major problem and a major cost, particularly for people who travel an awful lot.

I have made mild criticism of the Government so far. They inherited a massive deficit from the previous Government and, as we saw yesterday, it is difficult to cut taxes at this moment. We fully understand that. However, I stress to the Minister—although we are glad that the Transport Minister is present, and we know that three Ministers cannot be here, we could have done with a Treasury and a Northern Ireland Minister here, too—that air passenger duty is important. I hope that he takes that message back to the Treasury, to see what can be done to lower this burden on the people of Northern Ireland.

The Committee also considered visas and tourism, which is important to Northern Ireland and, indeed, to the Republic of Ireland. Of course, the Republic of Ireland, the United Kingdom, the Channel Islands and the Isle of Man are not in Schengen, but in what is known as the common travel area. Although that is helpful, people coming from other countries to Ireland—it is a bit more complicated than this—may need a further visa to get into the United Kingdom, and vice versa.

Again, the Government agreed with our recommendation and are already acting to have discussions with the Government of the Republic of Ireland, to see if this situation can be made simpler. Obviously, there has to be a uniform security policy surrounding the common travel area, if we go down that route, but we encourage the Government in that regard. Of course, the island of Ireland is promoted as one destination in respect of tourism. There is nothing wrong with that, even for Unionists like me. It is sensible. However, we feel that there can be more simplicity with regard to travelling to both the UK and Ireland.

I thank the Committee for all its hard work in compiling this report. I hope that I have stressed the importance of rebalancing the economy in Northern Ireland and of the role that air transport plays in that.

--- Later in debate ---

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

It is a pleasure to see you in the Chair, Mr Amess, and it is a delight to follow the hon. Member for Belfast East (Naomi Long). She made reference to most of the report’s key points, which I will also refer to when I comment on the report, and she raised several other issues that I hope to cover. I thank the Chairman of the Northern Ireland Affairs Committee, the hon. Member for Tewkesbury (Mr Robertson), for the report and for his explanation of it: it is clearly a work of some significance. It is a good to see the Minister in his place to respond to the debate, and I hope not to be too long in my contribution, because responding to the points that have been made is clearly a matter for the Government.

I want to make two non-financial declarations, Mr Amess. First, I have family in Belfast, not too far from the constituency of the hon. Member for Belfast East, in Holywood. Secondly, I say to my hon. Friend the Member for Vauxhall (Kate Hoey) that I sailed from Southampton to Belfast last year to help celebrate the opening of the Titanic Belfast museum, which is a must for anyone interested in British history, British shipping or British tourism. Going to see it was a great opportunity that my wife and I took.

My hon. Friend, along with the hon. Member for Belfast East and the hon. Member for Tewkesbury, made some powerful points on air passenger duty, and I will come back to those in due course. My hon. Friend the Member for Vauxhall also commented on links to north America and particularly, potential new links to Canada, which the hon. Member for Belfast East also referred to. I am sure that the Minister will come back to those links in due course.

My hon. Friend the Member for Vauxhall asked for the Opposition’s view on APD. I know that the Minister would say the same thing as I would; it is a Treasury matter. However, I have had meetings with shadow Treasury Ministers, and the official Opposition policy is that we have given a commitment to undertake a review of APD, because there is an understanding—I am sure with the Government as well, because of the comments that they have been making—of the impact that APD is having on tourism, industry and connectivity. The hon. Member for Belfast East made significant comments on the Oxford Economics report, the PricewaterhouseCoopers report and what APD is doing, as well as whether it should be rebalanced and whether that could provide a greater incentive for the UK economy to grow. I have no doubt that colleagues in the shadow Treasury team are keen to look at those issues.

The hon. Lady made some points reinforcing the report’s recommendations, and I will try to refer to what she said briefly in my review of the recommendations. One thing that I will say is that from my time as aviation Minister, between 2007 and 2009, I know that the vast majority of airports take the issue of noise very seriously. We tried to reinforce the provisions, and the coalition has tried to reinforce the protection for communities around airports. My understanding is that the expansion of the airports in Paris, which we envy, because they have a greater capacity than we have, was partly dealt with by the appointment of a noise regulator for aviation in Paris, which provided the independence that the hon. Lady is asking for. This is about reassuring the public that somebody—whether the Government, an economic regulator, the Civil Aviation Authority, or whoever—is looking at the noise footprint and can ensure that it is within the contours; that all the arrangements, whether compensation, double-glazing or air-conditioning, that are in place for most airports are monitored appropriately; and that the matter is being dealt with efficiently.

On the report, the key question relates to recommendation 1 on connectivity. The Government, as I am sure the Minister will tell us, have set up the Davies commission, which is looking at capacity and connectivity. He knows that we think that it was a great idea and that we suggested it 12 months before they did it, but the fact that they got round to it is to their credit. We fully support it, and Labour’s position is that we will wait to see the outcome of the commission and its recommendations.

The only potential recommendation that we have firmly set ourselves against is if the commission comes out in favour of an estuary airport. I cannot imagine that it will, but that is one recommendation that we will not take forward. However, we will look at anything else that Davies comes out with, as the Conservative party has also said. I think that the Liberal Democrats are in a different place altogether on aviation. I am not clear exactly how they view aviation, given how important it is as an economic tool, which everyone who has spoken in the debate so far has recognised.

[Mr Laurence Robertson]

If an additional airport is not in Labour’s plans at all, the hon. Gentleman must be sympathetic to the idea of a third runway at Heathrow.

[Jim Fitzpatrick]

For the avoidance of doubt, we have said that we will look at whatever the Davies commission proposes, with the exception of a potential recommendation to build an estuary airport. We said that if that is a recommendation, we are sorry, but we are not persuaded at all by the evidence that that is the way to move aviation forward as an economic tool for UK plc. However, we will look at point-to-point, additional runways at Gatwick or Stansted, or a new hub airport—whatever the Davies commission comes up with, we will look at, but an estuary airport, from our point of view, is off the table.

Anecdotally, a range of events have been organised by a variety of different organisations, industry bodies, think-tanks and so on. The best story that I have heard from many such meetings was a question-and-answer session that included, on the top table, the chief executive of Schiphol airport. When he was asked what he thinks the answer to the UK’s aviation policy should be, his response was, “It’s not for me to say, but the recommendation I would give is that you should take your time and think about it long and hard.” The longer we take to make a decision, the more Schiphol is growing, day by day, week by week, and month by month.

As the hon. Member for Belfast East and my hon. Friend the Member for Vauxhall said, Schiphol advertises itself these days as the UK hub airport. It serves more than 20 British cities, while Heathrow only serves seven. Therefore, the connectivity from our regions is dwindling, and as slots from Heathrow become more precious and more airlines want to get in, that squeezes the ability for our regions and for Northern Ireland, Scotland and elsewhere to get in. Capacity is a big issue, and the connectivity points made in recommendation 1 are therefore significant.

On recommendation 2, we note the Government response. Naturally, I consulted my colleagues in the shadow Northern Ireland team and, if I may, I shall quote the points that they made to me. They said:

“The main political issue is Air Passenger Duty.”

They are aware of the

“keen debate on this around regional airports in the UK, particularly re Scotland.”

They say that their line to date, cleared with the shadow Treasury team, is that

“there are special circumstances in Northern Ireland. It is the only part of the UK that has a land border with another EU member state, which has lower rates of APD. Belfast City airport and Belfast International airport both compete with Dublin…on attracting airlines, routes and passengers. Conversely, it relies on…air transport for a link to the rest of the UK.

The government has removed”—

congratulations to the Government—

“APD on the long-haul New York flight from Belfast International airport, which we supported.”

That move is obviously well supported also in the Select Committee and by colleagues from Northern Ireland.

My colleagues in the shadow Northern Ireland team go on to say:

“We are sympathetic to the argument for reducing APD on all routes from Northern Ireland but would need to examine it fully, including the impact lowering the rate would have on the block grant. There are other options including looking at ‘protected routes’ that already exist in the UK for the air link to the Scottish islands, for example. Belfast-London Heathrow would be the obvious one for this.”

I cannot imagine that the Minister will say very much different.

On recommendations 3, 4 and 5, the Government response says that they concern devolved matters, and clearly that is the case. With regard to recommendations 6 and 7, I think that I covered the relevant points in my comments on APD. Recommendations 8 and 9 concern a key issue, and obviously the Government say so in their response. That matter is very much part of this debate.

On recommendations 10 and 11, we are told:

“The Government notes the comments on these areas”,

which I think is a very erudite thing to do.

As I said at the beginning of my speech, this is an important report. I am pleased to be here to contribute to the debate. I thank hon. Members for their comments and the Chairman and his Committee for producing the report. Like them, I look forward to the Minister’s response.

--- Later in debate ---

[Mr Laurence Robertson]

Could I ask for clarification on something? We were told by the City of Derry airport that UK guidelines are that

“railway access to airport terminals can only be justified when passenger numbers reach 10 million per annum.”

Does the Minister know—perhaps he can write to me if he needs to find out—whether that is a devolved or a reserved matter?

[Mr Burns]

I hope that I can give some reassurance to my hon. Friend. That is a devolved matter, but what I will do, in the spirit of co-operation and friendliness, is write to him with the precise details to explain why it is and what the best way forward is for him and his Committee.

--- Later in debate ---

[Mr Burns]

I hear what the hon. Gentleman says, but I fundamentally disagree with him. The issues are extremely complex and difficult, and they have stumped successive previous Governments—we have been going around the houses for 30 or 40 years without a final conclusion. A timetable of just short of three years, to consider the recommendations for the short term and, hopefully, to find a proper and lasting solution for the long term, is the right time scale. With that, there can be no accusations that it is a botched job, or that it has been rushed because of an artificial deadline, and we will be able to get the right and relevant recommendation, which will secure our moving forward to keep our hub status and everything that flows from that. We will, hopefully, then be able to get cross-party consensus.

I think that all the political parties have behaved responsibly—sometimes uncharacteristically so, where British politics is concerned—in reaching consensus on high-speed rail, and when the Davies commission has reported, ideally we will be able to reach consensus on its recommendations. We will have to wait and see, but I think that the time scale is respectable and responsible, and provides the time for the work to be done without rushing it.

[Mr Laurence Robertson]

I hear what the Minister says, but the problem is that when the report comes out it will not be the end of the story. Everything then has to be negotiated, and then something has to be agreed, and built. So let us say that in 2015 a third runway at Heathrow is recommended. When does the Minister estimate it would be operational?

[Mr Burns]

I am not going to fall into the trap of signing up to, “Let’s say it’s the third runway at Heathrow airport”. The Davies commission is totally independent and I, as a Minister in the Department for Transport, will not in any shape or form be tempted into that, even as an example, because it could be misconstrued—as I said earlier, walls have ears—and I certainly do not want to compromise the commission’s independence.

Nevertheless, I get my hon. Friend’s point about how long any major infrastructure improvement project in this country, however much support it has in the political arena, takes to go from the idea, and the acceptance of the idea, to laying down the first bricks and opening the first door for the service, or whatever it is. That is another issue and, speaking from a purely personal point of view, I think it has to be considered, but I do think that the right way forward is for an expert organisation that is divorced from party politics to consider the issue and come up with a solution. I hope that one can then get swift consensus among the political parties—or the major ones—so that we can move forward.

From the past 24 hours, my hon. Friend will appreciate that notwithstanding the fact that most issues in the House of Commons have some opposition, having broad consensus that one is doing the right thing makes some of the parliamentary processes easier, and avoids one political party being against another in a kind of guerrilla warfare, trying to slow down and thwart what might be in the national interest. That is why the decision made by my right hon. Friend the Secretary of State for Transport to set up the Davies commission was the right one, and I look forward to the commission’s recommendations in the summer of 2015, so that we can seek to build political consensus and move forward. That is crucial, not only for Britain’s interests but for Northern Ireland’s as well.

This has been an important and interesting debate, and I welcome the fact that we have been able to discuss the valuable contributions made. As I said at the beginning, a number of the issues are devolved to Northern Ireland, and the Committee might well want to pursue them further with the Northern Ireland Executive.

[Mr Laurence Robertson]

Thank you, Mr Amess. This has, indeed, been an interesting debate, and we have covered all the relevant issues that are very important to Northern Ireland. I thank everyone who has spoken, and I thank the Minister for his comprehensive response.

I talked about competing with the Republic of Ireland or with Dublin. I should put on the record that as well as chairing the Select Committee, I co-chair the British-Irish Parliamentary Assembly, so I meant competition in a very friendly way. The Irish Government support reducing corporation tax to 12.5% in Northern Ireland, so I speak about such competition on the basis of co-operation.

It would be helpful if the Minister came back to me on my specific point about railway access to airport terminals, and we can take it from there.

I entirely agree with the points made, particularly by the hon. Member for Vauxhall (Kate Hoey), about EU interference on air passenger duty and landing slots. We should make our own decisions in this country, and perhaps we will be doing so by the end of 2017.

The Minister spoke about the reasons for APD, of which there are two: one is to raise tax and the other relates to green issues. On those green issues, if we over-tax our airlines, we will not reduce the number of flights or save the world; people will just fly from somewhere else. That is the point we have been trying to get across.

On the time scale, I have some sympathy with the Government, because airport capacity in the south-east should have been sorted out long ago by the previous Labour Government, but we need to speed up the process. I am concerned about how long it will take for the review, for action to be taken and then for building work to be completed. Northern Ireland might lose an awful lot of jobs while that is going on, and I am very concerned about that.

Let us say that the recommendation is made next year and that it is for a third runway. From a political point of view, if the Lib Dems do not like that, they can go into the election saying that they will not pursue that option, and we can go into it saying that we will. I do not see what is wrong with that. We will get to the point, before the next election, at which we disagree on several issues with the Lib Dems—and with the Labour party—and we will all go into the election putting forward our own views.

I would be nervous about going into the election and saying to the electorate, “I’m sorry, we have no policy.” This is a political point—you may rule me out of order in a minute, Mr Amess—but I would have a problem about going into the election and saying to my constituents, “I’m sorry, I don’t have a clue what we should do in the south-east.” I will not be doing that; I will be putting forward a very definite view. I want to impress on the Minister the importance of that point.

The debate has been very valuable: we have made our points to the Minister. I have known him for many years, and I know that he will go away, take those points on board and do his absolute utmost to help the people of Northern Ireland. It has been a privilege to lead this debate. As I have said, the very important thing to do in Northern Ireland is to rebalance the economy, and one way to help do so is by securing the aviation that enables people to travel not just to the mainland, but to the continent and to the growing markets that are emerging throughout the world.

Question put and agreed to.