National Policy Statement: Airports

Lord Goldsmith of Richmond Park Excerpts

Monday 25th June 2018 Commons Chamber

[Chris Grayling]

We commissioned an independent review that asked where we should site new capacity in the south-east of England. The Airports Commission came back with a very clear view. We have studied that view and talked to all those who are promoting individual schemes, and as a Government we believe that this is the right thing to do. We stood on this in our election manifesto last year. I believe it is the right thing to do for Britain.

[Zac Goldsmith (Richmond Park) (Con)]

The Secretary of State said earlier that not a single regional airport has opposed this scheme, but will he not acknowledge that Manchester, Edinburgh, Birmingham and the East Midlands have all expressed opposition to it, not because they do not believe that they will see growth, but because they believe that whatever growth they do see will be in spite of Heathrow expansion and that it will be less?

[Chris Grayling]

The key point is that they will see growth. The opportunities are there right across the United Kingdom. As I said a moment ago, the body that represents regional airports has been very robust indeed in its support. I genuinely believe that this project brings benefits right across the United Kingdom, including at least 100 additional flights a week for Scotland, and potential new routes for Northern Ireland, unlocking the benefits of tourism and advanced manufacturing. We believe that this will deliver, across the United Kingdom, the kinds of connections we need for the future.

Let me touch briefly on a couple of other issues that have been raised. First, I have been very clear that this airport NPS says that expansion can happen only if the delivery is compliant with our legal obligations on air quality. I am very confident that the measures and requirements set out in the NPS provide a very strong basis for meeting those obligations, including a substantial increase in public transport mode share, and it could also include an emissions-based access charge to Heathrow airport and the use of zero or low-emission vehicles. Heathrow is already consulting on the potential of a clean air zone.

Crucially, communities will be supported by a package of compensation worth up to £2.6 billion. That is absolutely vital. It is not possible to deliver a project such as this without some consequences for people who live in the area—I am well aware of that. Our job is to make it as easy as possible for those people in what is inevitably going to be a very difficult set of circumstances. There is, therefore, a world-leading package of compensation, ensuring that homeowners who lose their homes or who live closest to an expanded airport will be paid 125% of the full market value of their property. It includes a comprehensive noise insulation programme for homes and schools, and a community compensation fund of up to £50 million a year, which can help in places such as the Colne Valley. The Government will also consider how local authorities can benefit from a retention scheme for the additional business rates paid by an expanded Heathrow.

To mitigate the noise impacts of expansion, the proposed NPS makes it clear that the Government intend to implement a six-and-a-half-hour ban on scheduled night flights, which could mean that some communities will receive up to eight hours of noise relief at night. That is a really important part of the proposal. It may be uncomfortable and difficult for airlines, but it is the right thing for local communities.

It is important to note that those measures will not be optional; they will be legally binding. Let me explain how we will ensure that that happens. We are governed by the Planning Act 2008, a good piece of legislation passed by the Labour party. Following a period of statutory consultation by a promoter, any subsequent application for a development consent order will be allocated to the Planning Inspectorate. At the end of the examination process, the inspectorate will report to the Secretary of State and the mitigation measures needed to comply with the NPS will be imposed on a successful applicant as requirements in the development consent order. The Act grants the relevant planning authority significant powers to investigate a breach of the requirements and ultimately to apply for an injunction or prosecute for failure to remedy a breach. In the Crown court the fine is unlimited and, in determining the level of the fine, recent judicial trends have tended to look to the benefit gained from the offence.

I can also confirm that expansion can and will be privately financed, at no cost to the taxpayer. It has to be delivered in the interest of the consumer, which is why in 2016 I set out my ambition to keep airport charges as close as possible to current levels, and why I have commissioned the Civil Aviation Authority to work with the airport to keep landing charges close to current levels. So far, that process has identified cost savings of £2.5 billion.

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[Greg Hands (Chelsea and Fulham) (Con)]

I rise to oppose this national policy statement, which is why I resigned from the Government. I did not resign willingly; I greatly enjoyed my seven years in the Government. I spent four years in the Government Whips Office, keeping the show on the road during those difficult coalition years; I carried out the 2015 spending review—controversial in places—which is now bearing fruit as we see the deficit at a record low; and I was at the very foundation of the Department for International Trade to help the Secretary of State for International Trade to make the crucial preparations for having our own independent trade policy for the first time in 45 years. But I am also surprised to be resigning from the Government as I had always been led to believe that the decision on this issue would be a free vote.

I always knew, however, that I would vote against this proposal. At the 2017 general election I made two unequivocal pledges:

“Greg will be voting against the proposal when it comes before Parliament, expected later this year”,

and:

“Greg is against Heathrow’s 3rd runway and will vote against it, in Parliament.”

So for me, this is not just a debate about Heathrow, important though that is; it is also about being true to one’s word and to one’s election pledges.

Regrettably, this is a truncated debate, but I am joined by several right hon. and hon. Friends who have similar views about Heathrow, including my right hon. Friend the Member for Putney (Justine Greening) and my hon. Friends the Members for Richmond Park (Zac Goldsmith) and for Windsor (Adam Afriyie), and I know that they will make a lot of important points. I have three points to make, briefly. The first is about the impact on the environment in an urban London context; the second is about whether a large hub airport is in the nation’s interests, and the arguments about London’s connectivity; and the third is on night flights and the need to remove this wholly unnecessary stain on the liveability of our great capital city.

On London’s precious urban environment, Heathrow already exceeds legal pollution limits, before any single plane has landed at the third runway. Heathrow is seeking to have an extra 28 million passengers visit the airport each year, but somehow without a single extra car journey. Furthermore, Heathrow has not yet identified the future flight paths, so it is impossible to tell who and where will be affected by this big increase in flights. An awful lot of Londoners currently have no idea that they will be overflown by planes every 90 seconds.

[Zac Goldsmith]

I salute my right hon. Friend’s principles on this issue. Does he agree that the lack of information on where the new flight paths will go makes an absolute mockery of all the consultations that have been doing the rounds over the past couple of years?

[Greg Hands]

I wholly agree with my hon. Friend. It is perfectly possible to show where the flight paths are going to be or are likely to be. I conducted my own consultation, because both Heathrow and the Department for Transport initially refused to do a consultation in my Chelsea and Fulham constituency. I eventually had them come to the constituency, but even then they were unwilling to provide such basic information.

The pledge to build a freight hub is absolute madness when we already have excellent freight hubs that are well away from population centres, such as those at East Midlands airport and Stansted. Surely freight hubs should be created away from population centres, not in the middle of urban environments. The Secretary of State’s argument centres on this essential proposition: that the UK needs a hub airport—and by implication only one—to compete. I fundamentally disagree. A hub airport suits Heathrow and it suits the British Airways’ business models, but those are not the same as the national interest.

Most hub airports tend to be in medium-sized cities, and there is a reason for that. I fundamentally believe that London is best served by its five airports. It is about the difference between a city of 8 million to 10 million people and a city with a population of 1 million, 2 million or 3 million. New York has three large airports, as does Moscow, and Tokyo has two large hub airports. Most successful hub airports are in medium-sized cities. The Secretary of State gave the examples of Frankfurt and Amsterdam on Conservative Home this morning, but those are both cities with a population of fewer than 1 million. They cannot generate that level of traffic themselves, so they need to hub to create and boost their connectivity. It is not a choice for them; it is a choice for London.

Why should London prefer a set of orbital airports? The answer returns to the question of the size of London, with its 8 million, and growing, population. Travel times across London to one hub airport will very often exceed the two-hour median flight time. That is why, while Amsterdam and Frankfurt need a hub, London needs a set of orbital airports.

The related question is on connectivity, and it is not just about Heathrow but about London’s airports as a whole. Much has been made of Frankfurt and Amsterdam overtaking Heathrow in respect of connectivity, but that misses the point. What about the whole nation’s connectivity? And Heathrow is actually already pretty well connected. It may surprise people to know that 10 Chinese cities—Beijing, Shanghai, Changsha, Chongqing, Guangzhou, Hong Kong, Qingdao, Sanya, Wuhan and Xian—are currently connected directly to Heathrow each day. And to London as a whole, 28 US cities are connected to London airports, along with 13 Polish cities, seven in India and eight in Canada—more than either Frankfurt or Amsterdam. The growth of destinations served by London airports has been huge, and they have been point-to-point flights. The direction of modern aviation is towards point-to-point direct flights.

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[Justine Greening (Putney) (Con)]

It is a pleasure to follow the Chair of the Transport Committee, the hon. Member for Nottingham South (Lilian Greenwood), who made a very powerful speech.

I do not think that the proposal before the House will be seen as Parliament’s finest hour. It is very easy to dismiss the contributions of MPs perhaps who have communities overflown by Heathrow planes, but nearly 3 million Londoners will be affected if this expansion goes ahead. However, this is actually a vote that will affect all our communities in one way or another.

I think that the story of Heathrow is a story of broken promises, broken politics and broken economics. Those of us with communities around Heathrow know about Heathrow’s broken promises better than anyone else. There has been no action, despite promises, on night flights. The first flight over my community’s homes today was at 4.29 this morning. Under this proposal, we will actually end up with more early morning flights, not fewer. There has been no action on sticking even to existing rules on respite. I have been at public meetings at which the current Heathrow management has said that the previous promises made by previous managers should never have been made. Regional MPs who are banking on promises from Heathrow should bear that in mind when they sign up to this proposal today.

Of course, the ultimate broken promise was when the fifth terminal got planning permission. There was an express condition for local people of having no third runway, but look at where we are today. The bottom line is that any assurances in the development consent order are literally not worth the paper they are written on. Dare I say it, but with the greatest respect, Ministers will be long gone by the time those Members who are promised that their regional airports will get extra connections find out that those connections have not materialised. Such a “facts of life” explanation to them from a future Minister will be that their county council has to pay perhaps £10 million a year for their route to Heathrow. The problem, however, will be that no airline will want to provide it, because that is not a big enough subsidy, and doing so would be uneconomic. There have been broken promises in the past, and there are more to come for other MPs from Heathrow Airport Ltd.

What about broken politics? As we have heard, MPs are not being shown any kind of proper planning for a third runway. There will be 28 million extra passengers a year, but there is a promise from Heathrow that not a single extra car journey will happen. How is that going to be achieved? We do not have a plan for that. West London is illegally breaching air pollution limits, and there are similar problems in my own community. Expanding Heathrow makes that significantly worse. There is no plan at all.

No flight paths have been published today for communities to see. There is no plan on tackling carbon emissions. There is no plan on how to ring-fence domestic routes, as promised. Members might be interested to hear that the regional air connectivity fund set off with 11 new routes in 2016, but just two are still operating, and those are doing so at reduced frequency because they were not economic. There is no plan on how to have a freight hub in such a congested area. There is no assessment of how the resultant congestion charge that will become necessary will affect the west London economy.

Of most concern to people in this House is the fact that there has been no formal safety review—yet—even though the crash risk goes up by 60% in the most densely populated bit of the country, including my own community. When the Health and Safety Laboratory did its estimate of that crash risk, it asked DFT officials whether they wanted the population numbers impacted by the crash risk to be modelled, and they were told no, that was not necessary. Safety has been far from the top priority of the Department for Transport.

The process to create what little planning there is has been totally flawed. Consultations are never—I repeat, never—listened to. The Airports Commission got its numbers wrong. MPs have been given erroneous impressions of the impact on regional airports. The Government have had to reissue the draft NPS because its numbers were incorrect. Parliamentary questions have not been properly answered in the very short time MPs have had to ask them since the statement was first made. People simply get ignored in this process. They have to be either a big business or a big union before their voice counts, and that is totally unacceptable.

After all that, the DFT disagrees with its own analysis. It picks the project that it shows has a lower level of total benefits to passengers and the wider economy than Gatwick. It picks the project that is likely to need the biggest taxpayer subsidy. It picks the project that is the most risky by far. It picks the project that cannibalises the transport budget for the rest of the country. It picks the project that harms the growth of regional airports. That is why this is a story of broken economics. Even Heathrow knows that this is risky, which is why it has a poison-pill cost-recovery clause in the pre-legal contract, effectively outsourcing the economic risk to taxpayers.

Heathrow knows that there is a massive risk of the project going belly up. When that happens, it will be in a strong position to turn round and ask taxpayers to pay. When it turns out that the problem of air pollution is insurmountable, we will be asked to pay for the runway that it cannot use.

[Zac Goldsmith]

My right hon. Friend is making an excellent, forensic speech. It has been said in the debate that without cross-party support we cannot hope to deliver an infrastructure project of this magnitude. Three of the four main parties in the House are not in favour of the scheme. Does she not think that that adds to the undeliverability of the project?

[Justine Greening]

Absolutely. This requires cross-party support, which is simply not there. Heathrow’s problem is that it is a hub airport in the wrong place, which means that it is expensive. Passenger charges are 40% more expensive than at rival European airports. That is why Leeds Bradford routes have been cut. It is not because there is not space—it already has space—but because those routes are simply uneconomic.

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[Zac Goldsmith (Richmond Park) (Con)]

We have heard about some of the human and environmental consequences of the decision that we may be about to make, but it is worth repeating them.

Heathrow is already the noisiest airport in the world, and a third runway will obviously make that problem worse. The Heathrow area has been in breach of air pollution laws for more than a decade. Expansion will mean 250,000 more flights, 25 million more road passenger journeys, and therefore, plainly, more pollution. A third runway will mean the destruction of old and entrenched communities such as those described by the right hon. Member for Hayes and Harlington (John McDonnell)—I pay tribute to Armelle and her campaign against the third runway, which goes back many years. Thousands of homes will be destroyed to make way for the new runway. Families will be displaced and simply told to start again. Official forecasts tell us that Heathrow expansion is not reconcilable with the Climate Change Act 2008. Those are just some of the consequences of the way in which we are potentially likely to vote tonight.

Members would only sign off those costs if they believed that the economic upside justified it, but so much of what we have heard about the economic benefits is propaganda. It is not even very sophisticated propaganda. Heathrow bosses must be laughing out loud when they tell us that expansion can deliver 250,000 more flights without any extra car journeys, or that a third runway will mean that fewer people will be affected by noise.

Let me briefly say something about the economic case. In its 2014 report, on which the Government’s decision was based, the Airports Commission estimated that Heathrow expansion would deliver £147 billion worth of total economic benefit. The Government lapped it up, but then, in last year’s draft NPS, they quietly revised the figure down to between £72 billion and £74.2 billion—less than half the original estimate. Today’s NPS uses the same figure, but admits that it is a gross figure which does not include the actual economic and financial costs of the proposal.

[Adam Afriyie (Windsor) (Con)]

Does my hon. Friend agree that if the runway were ever built—in fact, it would be half a runway—it would be the most expensive place on earth on which to land, and that that would knock out the economics of improving our trade and connectivity?

[Zac Goldsmith]

As would be expected, my hon. Friend has made an impeccable point.

The net present value, a metric which does include all the costs and benefits, reduces the figure to between £2.9 billion and minus £2.5 billion over a 60-year period. So the upside has gone from £147 billion to minus £2.5 billion, yet the Government’s position has not budged.

It gets worse. A report from the New Economics Foundation shows that three quarters of any new capacity from a third runway will be taken up by international-to-international transfer passengers who never leave the airport. The Department for Transport’s own guidance says that they add nothing whatsoever to the economy, and should not be counted. If they are excluded—as the Government have recommended to themselves—the NPV is reduced by a further £5.5 billion, which produces a minus figure. DfT analysis also shows that an overrun in Heathrow’s costs of just 1% could be enough to negate the overall benefits of the scheme.

None of that, by the way, takes into account the point made by the right hon. Member for Twickenham (Sir Vince Cable) about Transport for London’s estimated £15 billion price tag for a link between the Heathrow expansion and surface level. It also does not take into account the legal and planning complexities that are unique to Heathrow. A gigantic legal challenge, backed by local authorities, City Hall and numerous organisations, is waiting around the corner from tonight’s vote.

This is what is so utterly perplexing. Why would we choose the most polluting, most disruptive, most expensive and least deliverable option, when the alternative is at least as economically beneficial, and vastly simpler to deliver? It is not because Heathrow will deliver more connectivity. According to every metric and every analysis, Gatwick and Heathrow deliver the same. Even the discredited Airports Commission’s own analysis predicts that whichever airport expands, the UK as a whole will achieve almost identical connectivity.

That brings me to the NPS. I am having to skip whole chunks of what I was going to say. The NPS is a horror story. The Secretary of State told the House that Heathrow expansion would “enable” growth at Birmingham, Newquay, Aberdeen, and other regional airports. That is nonsense. The Government’s own analysis shows that Heathrow expansion hinders growth at regional airports. It does not “enable” it. The Transport Committee found that if expansion goes ahead, there will be 74,000 fewer direct international flights per year to and from airports in the non-London regions in 2030, and that the figure will double by 2050.

In the last few seconds available to me, let me ask the Secretary of State to take this opportunity to put the record straight, because he has misled the House. We are being asked to approve a monstrous scheme, and I urge—beg, even—Members to look at the details before they cast their votes.

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[Ruth Cadbury (Brentford and Isleworth) (Lab)]

The case for runway 3 is as bad as ever for my constituents, and now weak overall, as the economic case has not been made—and that is based on the Department for Transport’s latest figures. The proposal keeps coming back—16 years, I think, it has been—and I have been campaigning against it all that time. It keeps coming back not because of an unwillingness to make a decision, but because successive generations have realised that the arguments for expansion do not stack up. The generously funded Heathrow lobby keeps bringing the proposal back and will continue to do so until it gets the answer it wants. Meanwhile, we have not moved on to seriously address alternative solutions as part of a nationwide UK aviation strategy.

On noise and air quality, which are the issues affecting my constituents most of all, more than 300,000 people in our region of west London and the Thames valley will experience significantly worse noise than they do now. Most of them are not aware that they will be under the final approach path to the third runway. Those under the present approach paths to the existing two runways currently get eight hours respite; that will be cut to six hours and perhaps less. On night flights, the Secretary of State has suggested that the cap will be relaxed, despite promises. Runway 3 will bring 50% more passengers. Heathrow says that there will be no new traffic, but there is nothing in the NPS to justify that claim.

[Zac Goldsmith]

The hon. Lady has campaigned valiantly on this issue and deserves more than three minutes in which to make her case.

[Ruth Cadbury]

I thank my neighbouring colleague.

There is nothing in the NPS to justify how Heathrow can get away with saying that there will be no new traffic despite 50% more passengers, a doubling of cargo, and additional flight servicing and staffing. It is absolutely impossible. As everybody acknowledges, all the proposed rail infrastructure is needed now to meet current traffic pressures. Our roads system has ground to a halt, and our air quality has already been in breach of EU limits for many years. The Government will continue to lose legal challenges as a result.

There is nothing in the NPS on the air pollution generated by aircraft, and there is nothing on climate change obligations that will satisfy the Committee on Climate Change, as we will no doubt hear on Thursday. All the additional passengers arising from expansion will be outward leisure passengers and transfer passengers. The increase will bring nothing to the economy and will take the tourist pound away from the UK’s beautiful tourist destinations. Heathrow expansion means more intense use of existing routes such as New York. It will restrict growth at non-south-east airports by 24%—those are not my figures but the Department’s—reduce domestic routes to Heathrow from the current eight to four or five, and mean 160,000 fewer international links from regional airports, thus making our regions less connected to the rest of the world than they are now, according to page 27 of the Transport Committee’s report.

The hub airport model has been superseded by a preference for direct point-to-point flights among passengers and businesses who would rather not change, and also by the new ultra long-haul planes. Unused capacity outside London could, without Heathrow expansion, mean a growth of 62% in flights and 96% in passengers. Without Government intervention, domestic slots from regional airports to Heathrow cannot be guaranteed. The Government appear to have written a blank cheque to Heathrow by signing an agreement with a clause reaffirming the company’s right to sue the Government if Ministers back out of the scheme—a clause not included in the agreement on the Heathrow hub or that with Gatwick. It is increasingly evident that the Government are supporting the most expensive, most complex and highest risk scheme. Heathrow should be better not bigger.