Aviation Industry

Theresa Villiers Excerpts

Tuesday 15th November 2011 Westminster Hall

[Mr Donohoe]

I will come on to that as well; I have a speech that I would like to continue with. Last month, another runway was opened in Frankfurt, which will impact more and more on the position of the UK aviation industry.

The lack of hub capacity could cost the economy right now some £1.2 billion a year in lost trade. The CBI and other organisations, such as the Institute of Directors, say that that must be tackled if the UK is to maintain its global competitiveness, and I support them.

The coalition reversed the previous Government’s plans to build a third runway at Heathrow and, as I understand it, oppose the building of new runways at Stansted or Gatwick, which runs at 78% capacity. The coalition has said that it will produce a new aviation framework by 2013, but we need to bring that forward. It is clear that unless we do so, we will lose business.

As a reminder, the UK is the sixth biggest economy in the world. The world is becoming increasingly interconnected, and its centre of economic gravity is moving further east, but the UK does not have a cohesive aviation policy. The coalition has allowed us to fall far behind. Frankfurt opened its fourth runway just last month. France’s Charles de Gaulle already has four runways, and Schiphol, which is becoming more and more of a direct competition, now has six. We therefore have to think about where we are going in the future. Is it important for us to continue having a hub airport in the first place? One wonders whether that should be the way forward.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I hope I can reassure the hon. Gentleman. Will he welcome the fact that passenger numbers at Heathrow have reached record levels over recent months? I recognise the crucial importance of Heathrow airport, which is why the Government have arranged a programme to ensure that Heathrow is improved and works better, with reforms to security and other measures, which I will talk about in my speech.

[Mr Donohoe]

It would be wrong not to. Indeed, there is the possibility of further expanding the number of take-offs and landings by increasing the number of mixed-mode operations, which I understand are still being operated at Heathrow. That will allow it to expand further. The problem with that is all the environmental issues will start to create a real problem, because the noise in the air would become far greater than the noise today. Given the size of Heathrow, there is a clear argument, as the industry and all whom I know have been making for some considerable time, for further expansion through a third runway.

[Mrs Villiers]

I am afraid that in this instance I may have to disappoint the hon. Gentleman. The trial that is under way at Heathrow is not mixed mode, but a series of operational freedoms geared at improving resilience and tackling and mitigating delays. Those freedoms are substantially different from mixed mode because we are great supporters of runway alternation.

[Mr Donohoe]

I will always be corrected by the Minister in that respect. Under the previous Government, there was a trial period of mixed mode. I understood that the only way we could increase the number of passengers going through the airport was if we brought mixed mode into operation. I do not think I will be proven wrong in that respect.

--- Later in debate ---

[Mrs Villiers]

Just to reassure the hon. Gentleman, the Government have never said that we have ruled out any capacity expansion in the south-east over that period. What we have said is that the coalition will not give permission for new runways at Heathrow, Gatwick or Stansted. That is not the same as saying that there will be no expansion in the south-east ever, under any circumstances.

[Mr Donohoe]

I take that point on board, but the Minister is drawing a very fine line in that sense, because I would argue that unless there is an increase in the number of runways, the potential for increasing the service all that much is very limited. I think I would be proven correct by asking the views of those in the industry itself. That is the clear answer I get to the point she is making.

There is no doubt that capacity in the south-east is restricted. As I argued earlier, the south-east is where the need for more air transport services is greatest, yet there is less ability to extract more capacity from the existing infrastructure. Heathrow and Gatwick continue to operate at nearly 100% capacity, even with continuing reductions in domestic services.

Looking to the future, in a global and highly competitive industry such as aviation, any demand management measures implemented by the UK Government would have far-reaching consequences for the economy, jobs and our connectivity with the rest of the world.

--- Later in debate ---

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing the debate, and on Rosie’s arrival. I would also like to associate myself with the comments made about the late Alan Keen and his sad, recent death. He had a long and distinguished record on aviation matters.

I agree wholeheartedly with the importance that hon. Members have attributed to the aviation industry as a strong part of our economy and a vital gateway to the global marketplace for business. Many hon. Members made that point, including the hon. Members for Blackley and Broughton (Graham Stringer) and for Central Ayrshire. I also welcome the emphatic support for the aerospace industry provided by my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti). Supporting and providing the right economic climate for manufacturing to flourish is a hugely important part of the Government’s overall economic strategy. It is crucial that aviation in the UK is able to grow and prosper in the future, but I think we are agreed that a dash for major aviation growth regardless of cost is not the right approach. That is why we are developing a new aviation strategy to set out the way forward that will allow the British air transport industry to grow in the years and decades ahead, as well as addressing its environmental and quality of life impacts. No one underestimates the scale of the challenge, because reducing harmful emissions through greener technologies is more complex in aviation than in other transport sectors and will take longer to deliver.

In response to the points made on air passenger duty, we have listened with care to industry concerns, which is why we have made it clear that switching to a flight tax is not viable without wider international support for such a move. We have postponed this year’s inflation-based increase in APD, and proposals for further reform of the tax will be published soon.

In response to the hon. Members for Central Ayrshire and for Blackley and Broughton on the issue of the Thames estuary airport, as the Prime Minister has said, the Government have no plans to build a new airport in the estuary, or in Medway or elsewhere in Kent. The hon. Member for Central Ayrshire outlined some of the practical issues that would have to be surmounted before such a programme could go ahead, including, of course, the very significant airspace capacity issues. Nor do we have plans to redevelop Northolt as a third runway for Heathrow.

I agree with my hon. Friend the Member for Reading East (Mr Wilson) that surface access to airports is a crucial part of making them successful. That is why Crossrail and Thameslink are going ahead—both will improve access. We continue to consider other options for western access to Heathrow, including work that could be co-ordinated with the proposed HS2 spur to Heathrow.

We have made it clear that a key plank of the Government’s approach to aviation is the cancellation of Labour’s misguided plans for a third runway at Heathrow. I find it ironic that the shadow Secretary of State, the hon. Member for Garston and Halewood (Maria Eagle), accuses us of having no policy, when the previous Government spent 13 years on an aviation White Paper that everyone agrees is no longer fit for purpose, and on pursuing a runway that is universally agreed to be absolutely the wrong approach for the UK economy. One of the coalition Government’s first acts was to cancel the third runway at Heathrow. I continue to believe that the price in terms of the environmental impact would have been far too high, given that noise already has a significant impact for thousands of people living with a plane overhead every 90 seconds. At the time, Labour described our position as

“politically opportunistic and economically illiterate”.

It seems that those on the shadow Front Bench have learned the error of their ways—but not all on their Back Benches.

We are clear that we need to protect and enhance the connectivity that is vital for our economy, which is why Heathrow’s success as one of the world’s busiest and most successful international airports is so vital. Our aviation strategy is designed to ensure that the UK maintains and improves the success of this leading international gateway. There is no evidence that Heathrow is about to lose its hub status. It remains an immensely successful airport, with more services to China than any of its European rivals, and a particularly strong connection with Hong Kong as China’s main hub airport. Our immediate priority is to make our airports work better within their existing capacity limits.

[Henry Smith]

I was delighted to welcome the Minister to Gatwick airport last month for the opening of new security gates. Will she congratulate Gatwick airport on the more than £1 billion of investment that it is making in enhancing capacity? Indeed, Sir John Major will open the renewed north terminal on Thursday.

[Mrs Villiers]

I am happy to offer my congratulations on that. Contrary to the allegation that the Government have created a policy vacuum, we have a range of initiatives designed to make our airports better—our priority is to make them better, rather than bigger. We are legislating for a much more passenger-focused system of regulation. We are improving air space management through the Future Airspace Strategy in the Single European Sky programme, which is already delivering real benefits in the UK and Ireland. We are changing the way aviation security is regulated to enable the industry to deliver the same high standards in security, but in a more passenger-focused and more hassle-free way.

Our south-east airport taskforce also included proposals to improve resilience and address delays. As a result, we are trialling the tactical use of greater operational freedoms at Heathrow. This is very sensitive, because those freedoms mean that occasionally there will be some incursions into the respite period, with occasional use of both runways for departures, or, occasionally, use of both runways for arrivals. However, I emphasise that that is not mixed mode and the Government remain committed to runway alternation and the benefits it brings. Very careful consideration will be given to the impact of the trial on local communities. I emphasise that the measures being trialled are to be used only to improve resilience, and prevent or recover from disruption, and not to increase capacity, which remains capped at current levels.

We have published our scoping document, setting out the issues to consider for the future of aviation. We know how crucial it is to have a successful regional airport sector, as hon. Members have highlighted today. We will look at ways to harness spare capacity to support economic growth and help to relieve crowding in the south-east. High-speed rail has strong potential to provide an alternative to thousands of domestic and short-haul flights. HS2 to Manchester and Leeds will deliver a three and a half hour journey time between London and Scottish destinations, providing a viable alternative to thousands of Scottish flights.

[Maria Eagle]

Will the Minister give way?

[Mrs Villiers]

I am sorry, but I really do not have the time. We accept that the international nature of aviation, as has been said, means solutions are often best delivered at a multilateral level. That is why we are working with the International Civil Aviation Organisation towards agreement on emissions and on noise issues. That is why we have worked very hard on the inclusion of aviation in the emissions trading scheme. We will publish our draft strategy in spring next year for public consultation, with a final strategy due in 2013. We want to see Britain, and British companies, spearheading the global debate on greener air travel and shaping a low-emission aviation sector of the future. We need to work with the industry to find new ways of decarbonising air travel, boosting investment in low-carbon technologies and fuels, and enabling the aviation sector to generate the headroom it needs to grow in a sustainable and successful way. Our world-beating aerospace sector will play a vital role in that. The challenge creates great opportunities for that world-beating sector.

We want to open a new chapter on the aviation debate. We are interested in working on a cross-party basis, as has been discussed today. Our goal is to move away from the polarised opinions that have dominated the discussion in the past. We want to develop a broader consensus for the change we need to deliver a flourishing air transport sector that can support economic growth, while addressing its local environmental impacts and playing its full part in combating climate change.

[Mr Roger Gale (in the Chair)]

Order. I owe an apology to the Minister and to the Opposition Front-Bench spokesperson. It does not happen all that often, but I am afraid that, so captivated was I by the quality of the Back-Bench debate, I misread the clock. I apologise to both Front Benchers.

I am also sorry that I was unable to call the hon. Member for Crawley (Henry Smith), but his constituents will have noticed from his intervention that he was assiduously present throughout the debate.

Finally, while I am on my feet, I express my pleasure at the birth of the granddaughter of the hon. Member for Central Ayrshire (Mr Donohoe).