Aviation

Paul Maynard Excerpts

Wednesday 4th July 2012 Westminster Hall

[Mark Reckless]

I agree. There is huge scope for what my hon. Friend describes. It would hugely benefit not just the Medway towns and the south-east region, but the country as a whole.

I want to talk about one other area where the lobbyists have a certain position. I received a document yesterday from the Mayor of London, who tells me that he is delighted that I am having this debate. He says:

“France’s hub airport, Paris Charles de Gaulle (56 departures per week), has better connections to Brazil than Heathrow (27 departures per week).”

The reason is that we have a bilateral treaty with Brazil, with a current limit of 35 passenger services a week between the two countries. Again, that is vastly to the benefit of BA, which routes flights to Latin America, including Brazil in particular, through the joint hub that it now has in Madrid, through Iberia following the merger. We do not get pressure from BA to change that, because it hugely benefits its profits, but BA’s market capitalisation is in the low billions. The idea that our whole airline policy and the network of treaties negotiated by the previous Government should restrict those flights and prevent Brazilian or Chinese airlines from flying into our large cities is a huge mistake.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

Even if we were to rip up every treaty that my hon. Friend has identified as a block, does he seriously believe that there is sufficient capacity at our hub airport? Will a hub airport alone sustain newly developing point-to-point routes? Does he seriously argue that Heathrow could suddenly accommodate more routes to developing countries?

[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.

--- Later in debate ---

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

It is a pleasure to serve under your chairmanship, Mr Dobbin. In four minutes, I will speedily go through some of the points that I want to raise. First, may I mention the passengers? We did not hear my hon. Friend the Member for Rochester and Strood (Mark Reckless) say much about them. It is almost as if they are a pain in the neck for wanting to travel. I happen to regard leisure travel as a good thing—rather liberating, in fact. May I also say—I did not hear my hon. Friend say this—well done to the Government? The Minister might be shocked by that remark, given my track record on aviation.

The South East Airports Taskforce has effectively sweated our assets in the south-east, increasing throughput at all major airports. Like the hon. Member for Blackley and Broughton (Graham Stringer), I speak as a northern MP. Most of my constituents and businesses stopped using Heathrow as a hub long ago, which is one reason why Heathrow is already in decline. For the north of England, the hub is Amsterdam or Paris, which is a major national problem.

I congratulate the Government on their recognition, earlier this year, that we need a hub airport in the UK, and that we need only one hub airport. If I had more than four minutes, I could give a lecture on the economics of hub dynamics. There is no such thing as a twin hub; it is a contradiction in terms. I could tear out my hair in frustration every time I see that idea printed, or hear it being discussed. If we tried to make Heathrow and Gatwick a joint hub airport, all we would do is guarantee their obsolescence within a decade and the downgrading of the UK. It would be an absolute national disaster.

We have heard a lot about China. Some people say mainland China, while others say China, which allows us to accommodate Hong Kong into our calculations. Let me talk specifically about Wuhan, which has been of interest to the Department for Business, Innovation and Skills. Air France has just launched a service to Wuhan to facilitate PSA Peugeot Citroën’s joint venture with Dongfeng Motor Corporation. Despite labouring under the heavy burden of the treaty of Rome, France has somehow managed to put its economic interests ahead of the interests of Brussels. How it managed it I would love to know, because we could then replicate it here. Clearly, it has put economic interests ahead of narrow, petty interests.

I am fascinated to note that COMAC—the Commercial Aircraft Corporation of China, a new Chinese aircraft manufacturer—is basing itself in Europe not in London but in Paris. I wonder why that is. Could it be because France has better links to China? Could it be because France is where China is getting inward investment from? Surely not.

If I had had more time this morning, I would also have mentioned air passenger duty. I realise that it is a controversial issue, but I make this plea: will the Department for Transport try to encourage the Treasury to conduct an independent economic assessment, bringing in all relevant factors, of the overall cost of APD to the UK economy? If I had more time, I would go on to talk about Chinese tourism. I know that it has been the subject of what might be called civil war in higher echelons in the Government, but it crystallises the problem that we face in this country. The problem is not that we have APD per se; it is the scale of our APD, compared to that charged by our competitors, that is a real problem.

We have heard lots of discussion about south-east airport capacity and about where airports should or should not be sited. We have also heard mention of New York, which has found what I would describe as a “string of pearls” solution—a number of sizeable airports, all of which act as international gateways, but none of which actually act as hubs. There is a perfectly logical and coherent argument to be put forward to say that that is what the UK might need. I would disagree with that argument, but it would be a rational argument to make.

Interestingly, in the Mayor of London’s submission, ahead of this debate, I could find no mention of Boris island. Can the Minister confirm that that option has been officially removed from the table? I looked very carefully; perhaps it was my eyesight, but I just could not see it.