Aviation

Debate between Mark Reckless and Graham Stringer

Wednesday 4th July 2012 Westminster Hall

[Graham Stringer (Blackley and Broughton) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Dobbin, for what I think is the first time.

I congratulate the hon. Member for Rochester and Strood (Mark Reckless) on obtaining this important debate on the different issues relating to competition in the aviation industry. I agree with many of the points he made, and it is worth exploring further the points with which I disagree. He is serious about trying to find a solution to the country’s aviation policies, and that is worth discussing. Judging by the expressions of everyone taking part in the debate, there is agreement that Boris island is a complete non-starter. It is a decoy duck, Potemkin village, a red herring, or, as the previous Labour Secretary of State said, bonkers; it will not happen. But it is part of the illusions around aviation policy—which are the basis not of what the hon. Gentleman has been saying but of the Government’s policy—that somehow we do not know what has been happening in aviation, and there is more information to be found out. That simply is not true.

Going back to the Roskill commission in 1969 and a series of other White Papers and investigations, more is known about aviation policy in the south-east of England than about possibly any other area. If we want to be competitive, there must be more airport capacity in the south-east. Otherwise, the decline and damage that lack of aviation is causing to the economy will continue. I do not agree with the hon. Gentleman that it is right to suspend any discussion for the length of the Parliament. It might be right for the coalition agreement, but it is not right for the economy.

[Mark Reckless]

Will the hon. Gentleman give way?

[Graham Stringer]

I will in a moment, but I want to go through some of the points that the hon. Gentleman made.

I do not think the “Heathwick” proposal works in detail. When I give way to the hon. Gentleman I want him to tell me about any city in the world—Toronto, Washington, Glasgow—that has tried having two airports. There are examples all round the world of countries saying “We will have an intercontinental airport here and a domestic one there,” and finding that neither of those airports has worked. Off the top of my head, I cannot think of a city with two competing hubs. The nature of hubs, and what makes them valuable—both for countries and airlines—is that airlines from all over the world go into them, with great interconnectivity. The idea of competing hubs is a contradiction in terms, and there is no real evidence that having two adjoining airports works.

[Mark Reckless]

I am delighted to have some discussion of the issue in the current Parliament, and I look forward to hearing from the Minister what decisions may be made about how that discussion should happen. I just do not think we should build any new runways during this Parliament.

I disagree about dual hubs. Perhaps the idea has been tried in, say, Tokyo and one or two other places and has not been ideal, but we are not making a comparison with the ideal; we are making a comparison with the constrained capacity possibility that 14 million people might try to fly from Exeter. Expanding Gatwick, rather than restricting it, will not result in the perfect economic hub airport, but hubs give declining returns, to scale, to the extent that they get bigger and bigger. If we allow flights to new emerging markets and competing hubs operating in the competitive interest of the country, rather than one hub operating in the interest of the monopolist based there, that would be a significantly better airline policy than the one we have.

[Graham Stringer]

All I would say is that the proposition has not worked. We are in decline and we need extra runways in the south-east. Only one new runway has been built in this country since the second world war. Heathrow was, I think, originally planned to have 12 runways, albeit in a different configuration. The hon. Gentleman can look at the history books if he wants to.

The hon. Gentleman’s argument relies on two issues: first, that our connections to China, as the Minister of State said, mean that we are not really suffering; and secondly, that slots are too cheap at Heathrow, and if we freed up that market we would help the economy as a whole. Let me give some evidence.

The Frontier Economics report, “Connecting for Growth”, which was produced in 2011, showed that trade is 20 times higher where there are direct flights to cities in China. It estimates that the UK is missing out as trade goes to France, Germany and Holland, and quantifies the cost to the UK economy of a lack of connections as £1.2 billion a year. Taking that present value over 10 years, that amounts to £14 billion. Paris and Frankfurt boast 1,000 more annual flights to the three largest Chinese cities, Beijing, Chongqing and Guangzhou, than we get from this country. The Minister of State is right to say that we send a large number of flights to Hong Kong, and that there is hubbing in the Oneworld alliance at Hong Kong. The City of London is doing quite a lot of damage at the moment, but if we consider some of the effects, and the latest financial centres index, the Hong Kong index has gone up by 21 and London has gone down by three. There is a correlation, if not a direct one, between the hubbing that is going on there and the damage that is being done to the UK economy. Forbes Magazine has shifted the UK down from sixth best country in the world in which to do business to 10th best. One contributing factor is our connections with other countries.

Civil Aviation Bill

Debate between Mark Reckless and Graham Stringer

Wednesday 25th April 2012 Commons Chamber

[Graham Stringer]

The hon. Lady is right in what she says, but all three mayoral candidates are wrong on this matter.

It is completely legitimate for any constituency MP, including the Secretary of State, to oppose what they think their constituents do not want. However, it is also incumbent on any Government to consider the national interest, not just the interest of people representing west London. Exactly the same argument is used about High Speed 2, and the analogy is a good one. I chair the all-party group on high speed rail, but if somebody was driving High Speed 2 through my constituency, I would oppose it, because I would like to carry on being an MP and representing my constituents. That is a reasonable thing for an MP to do, but I also know that HS2 is good for the economy. Similarly, I know that constraining runway capacity in the south-east is extremely bad for the economy. It will do no good for the environment; it will just strangle the British economy.

[Mark Reckless (Rochester and Strood) (Con)]

The hon. Gentleman implies that there may be a tension between a constituency interest and the national interest, but the Government’s policy and the Conservative party’s policy of being against a third runway at Heathrow precedes the previous Secretary of State. It has really been this Minister, when in opposition and in her current role, who has taken on the vested interests and put forward a policy that protects the environment, as well as the national interest. I do not believe that there is any relevant constituency interest here.

[Graham Stringer]

I have great respect for the hon. Gentleman, and I agree with him on a number of policies, but he is in error in his understanding of the history of the development of the Conservative party’s policy. To be fair to the Lib Dems, they have always opposed the third runway at Heathrow. The Conservative party was in favour of it until Boris Johnson thought he had a chance of winning the previous mayoral election—that changed its national policy. The Labour party was in favour of a third runway. When the Conservatives became the Government, the shadow Secretary of State said that she would change the Labour party’s policy—I do not agree with this, but I can see why she did it—so that there could be a discussion about how to deal with the problem facing us.

That problem—this is the final point I wanted to make—is that Heathrow is losing destinations and business, and not just because of the capacity on runways. We face at least a double whammy: air passenger duty is having an effect, too. The situation is directing passengers to airports in Europe that have added extra runways, such as Madrid, to where British Airways has moved much of its operations, and Charles de Gaulle. The hon. Member for Daventry (Chris Heaton-Harris) was talking about integrators. The two main centres for freight in the aviation industry are Brussels and Charles de Gaulle; we have already lost out on those issues. Passengers are going to Madrid, Charles de Gaulle, Schiphol and Frankfurt, and, increasingly, to Copenhagen, at the expense of London. That is damaging not only the London economy, but the UK regions, because of the decreasing number of routes from the regional economies into Heathrow, in particular, and into the whole of the south-east system.

--- Later in debate ---

[Graham Stringer]

Since the second world war, as the Minister will know, Heathrow has been the largest international airport in the world. Soon it will no longer be that. It is still bigger than Frankfurt as regards its international destinations, but—I do not have the figures in front of me—the number of destinations served by Heathrow has gone from something like 220 to 180. Increasingly, the passenger numbers are going up because larger aeroplanes are going to fewer and fewer destinations.

I wanted to make both that small point about why the word “effective” is not in the first two clauses and the larger point that I would like not only the words to be in the Bill but there to be an effective aviation policy, which the Government do not have. On this issue, although not necessarily on others, the Government’s policies are anti-business and anti-growth. They are damaging the UK economy and they need to change them. Changing the wording of the Bill would help.

[Mark Reckless]

It is a pleasure to follow the hon. Member for Blackley and Broughton (Graham Stringer). First, let me respond to what he said about Heathrow and China. We all see the adverts in Westminster tube station, but there is a fundamental inconsistency in the line being pushed by BAA and the Mayor of London, among others, that Heathrow is essential as a hub but that we do not have enough point-to-point flights to different places in China. The model used by BA and its oneworld alliance relies not just on Heathrow as a hub but on Hong Kong, too. It is deciding that it is more effective to use Hong Kong as a hub, for all the reasons given by the hon. Gentleman and others, and to fly to all those Chinese cities with greater frequency and service out of Hong Kong. I do not accept the argument that a lack of point-to-point flights from Heathrow to cities in China makes the case that Heathrow needs a third runway to be a hub airport. The very economies of the hub and of the Heathrow and Hong Kong dual hub model for service for China lead to the system that we have.

[Graham Stringer]

The hon. Gentleman is making a very sensible point about where hubs develop in the world. Hubs developing in the middle east are doing a similar job in serving parts of China and there are also hubs in south-east Asia. A better measure of the failure of Government policy is the number of airlines that want to get into Heathrow from all parts of the world but cannot do so. A number of those airlines, some from China and some from other developing countries with large growth rates, have applied but cannot get their aeroplanes into Heathrow. Does he not agree that that is a better measure?

[Mark Reckless]

The reason there is unsatisfied demand for Heathrow and people who would like to fly from there but cannot is that landing slots at Heathrow are still cheaper than those at other airports and certainly cheaper than they could be. BA uses most of those landing slots, has capitalised the value and does not sell many of them on, partly to ensure that there is only limited competition so it can maximise its profits. I will return to that point, but I have quite a lot of sympathy with the hon. Gentleman’s arguments that the regulator should look to ensure that licence holders—airports—are effective as well as economic and efficient.

I also have considerable sympathy with the shadow Minister’s new clauses on National Audit Office oversight. However, I understand that those are only intended to be probing. I hope that that will also be the case with his amendments, because ultimately I trust the Minister on this issue. I do so for the ultimate reason that, in so many areas of public policy one can pretty much know what the policy will be by looking at where the money is—where the vested interests lie—and at what the civil servants are pressing. Too often Ministers merely oversee that policy solution. In this area I believe that it is the personal, political intervention of the Minister, both as shadow Secretary of State in opposition and now as Minister responsible for aviation policy, that led to, and kept, the Conservative policy against a third runway at Heathrow.