Regional Airports

Debate between Valerie Vaz and Catherine McKinnell

Tuesday 2nd February 2016 Westminster Hall

[Valerie Vaz (in the Chair)]

Quite a number of hon. Members are present and wish to speak. I am sure that at some stage I will have to impose a limit of approximately four to five minutes.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I beg to move,

That this House has considered regional airports and UK airports capacity.

It is a pleasure to serve under your chairmanship, Ms Vaz. I am delighted to have secured this debate, which could not be more timely in a year when I hope that the Government will face up to some of the most significant decisions in the aviation sector for decades. That could not be more important for regional airports, such as Newcastle international airport in my constituency and countless others around the UK, which are the backbone of regional economies and, therefore, the economy as a whole. The interest in and concern about the issue is demonstrated by the number of hon. Members present.

Newcastle international airport celebrated its 80th anniversary last year. As the Minister knows because he came to visit, it is the largest airport in the north-east and the 10th largest in the UK. It also happens to be the single largest employer in my constituency and is proud of its public-private partnership model, with ownership between the seven local authorities and AMP Capital. Indeed, it served a record 4.56 million passengers in 2014 and supported 3,200 jobs directly on site and 12,200 indirectly. It contributes over £581 million in gross value added to the north-east economy, including £181 million in tourism impact and 1,750 tourism jobs.

Newcastle airport exports well over £300 million of goods every year. The vast majority are carried by Emirates on its long-haul service to Dubai and last year saw the first ever trans-Atlantic service from Newcastle by United Airlines to Newark, which is set to return this summer. Newcastle international airport makes an invaluable contribution to the north-east’s proud claim to be the only consistently net exporting region in the UK, just as other regional airports make an invaluable contribution to their local economies.

This is when we come to the purpose of today’s debate. The Government are facing critical decisions that will determine the future of the UK’s aviation sector, which in turn will have a major impact on regional economies. Those decisions are not new and include where to build the new runway to provide the capacity we need for the future and how properly to support regional airports during a time of considerable upheaval with devolution.

Time and again, the Prime Minister has kicked the can down the road rather than face up to the challenges. It is not just Heathrow or Gatwick that loses out from this chronic indecision. The future growth and sustainability of the UK’s regional airports and, by extension, the growth of our regional economies, are equally put at risk.

--- Later in debate ---

[Catherine McKinnell]

It is almost a year and a half since the Smith commission’s proposals were published and accepted by the Government, yet we are still no closer to understanding how the Government intend to protect regional airports that are set to be adversely affected by the changes. In last summer’s Budget, the Treasury belatedly published a discussion paper on options for supporting regional airports through the changes. The document outlined three options: devolving APD in England; varying APD rates in England; and providing aid to regional airports in England. Unsurprisingly, those proposals begged more questions than they answered.

For instance, which bodies in England would APD be devolved to—local authorities, combined authorities or local enterprise partnerships? If APD was left as it is, and the Government provided financial support instead, how would they ensure that adequate aid reached airports acutely affected by lower APD rates across the border in Scotland or Wales? There are stringent EU guidelines on state aid support, particularly in the aviation sector, and we have previously heard the Government promise compensation to sectors impacted by one policy or another, but they have often under-delivered. How will this be any different? Will airports such as Newcastle be left to plug the gap?

Those and many more questions remain regarding the Government’s proposals, yet, six months on from the publication of the paper, there is near total silence from Ministers. I hope that the Minister will break that silence and provide us with some much-needed detail. When will the Government publish a response to the discussion paper that they published last summer? Are all three options still on the table or have some been ruled out? Most importantly, will the Minister tell airports such as Newcastle, Bristol and others how they will be supported by the Government when APD rates are devolved to Scotland and, potentially, to Wales? At the very least, will he tell us when airports can expect to hear about the plans?

The Airport Operators Association has made clear its very strong preference for any future reduction in APD in Scotland to be

“matched, immediately, by a cut everywhere”

so that no part of the UK is “disadvantaged in any way.” It is clear that the continued uncertainty on the issue is very damaging, and it is already having an impact on regional airports when it comes to airlines planning future routes and commitments. It is not good enough to wait and see what happens in Scotland. Action and certainty are required for England’s regional airports now.

A further concern I want to raise briefly this morning is the effect of regulatory charges—including, for example, the cost of a 24-hour police presence and all the security borne by airports—on regional airports such as Newcastle International. I understand that very large airports, with airlines queuing up to use their runways, are easily able to pass on those costs on to airline operators. However, it is much less easy for regional airports to do so, and the impact of the shift in costs is therefore having a disproportionately adverse effect on them. Regional airports are understandably extremely concerned about proposals that they should bear the costs of Border Force operating on their sites. Given that the agency is responsible for national security, I would have thought that responsibility lay squarely with the Government.

The decision on airport capacity and expansion has been kicked into the long grass far too many times, even after a £20 million independent commission made the decision on the Government’s behalf, as it was asked to do. The Government must make a decision in the national interest, but it should be a decision that respects our international commitments and the concerns of local communities. The Airports Commission has set out a plan that can achieve those twin aims, but the Government do not seem to accept it.

It is time to end the dither, delay and prevarication that has prevailed for far too long under this Prime Minister and Chancellor because it is not just London and the south-east but Newcastle, the north-east and many other regions will lose out most. Heathrow is, after all, not a London airport; it is the national hub. Airports across the country are looking for answers and long-term certainty from the Government, whether it is on airport capacity or the tax regime for aviation in the UK. I really hope that the Minister will be able to provide that certainty for them today.

[Valerie Vaz (in the Chair)]

The wind-ups will begin at 10.30 am, so it would be helpful if Members would stick to a four-minute time limit. We will see how it goes from there.