National Policy Statement: Airports

Vince Cable Excerpts

Monday 25th June 2018 Commons Chamber

[Sir Vince Cable (Twickenham) (LD)]

I start by expressing my respect for the right hon. Member for Chelsea and Fulham (Greg Hands) for having resigned from the Government over this issue. I, like him and quite a few other Members, am concerned partly about our own residents and partly about the wider national interest. We are being criticised in some quarters for being nimbys, but in this case our backyard is very large indeed. At present, 1 million people are affected by the 51 Leq—equivalent continuous sound level—noise contour, which is a good definition of serious impact, and that number will increase substantially.

The aspect of noise that I want to focus on, however, has already been alluded to by the right hon. Member for Wokingham (John Redwood) and others, and this is the deliberate creation of what our residents now call “noise sewers”: the deliberate concentration of flights along particular routes. The problem is aggravated by the absence of regulations governing the angle of take-off, which is judged by airlines specifically according to fuel savings. Tens of thousands of residents under take-off paths as well as landing paths are subject to extreme and prolonged forms of noise pollution. The question now is: how will the expansion of Heathrow affect that?

The number of flights is to increase by more than 50%, and the NPS says it would like to keep the proportion of people additionally affected to around 10%, so almost by definition those who will experience the greatest hardship and environmental damage will be those under the existing flight paths. I invite the Minister in reply to give some reassurance to those who have to deal with this noise sewage problem and say how that can be alleviated within the overall policy. We do not know the future flight paths or whether the Government will regulate to deal with some of the effects, but perhaps they could give us some assurances.

On the wider national picture, I strongly agree with the analysis of the right hon. Member for Hayes and Harlington (John McDonnell). I do not necessarily agree with his approach to public finances, but on the financing of the airport he is absolutely right. Heathrow Ltd is an exceedingly dodgy company by any reckoning: last year, its profits were just over £500 million, but it remitted in dividends over £700 million; it extracts rent in the form of monopoly rent from its existing holdings, particularly its monopoly control of carparks; it has very little interest in development; and its balance sheet position is terrible—it has run down its shareholder funds from £5 billion to about £700 million and it has doubled its debt. It has no interest in development and no competence in managing the kind of risky project now envisaged. The only way the Government can cope is by underwriting the company. We know in practice, however, that the regulator, because of the regulatory asset base system of regulation at the airport, will increase landing charges to enable the investment to remain profitable. The worry expressed by people such as Willie Walsh, the chief executive of British Airways, is that passengers—or a combination of the taxpayer and passengers—will pay for the overrun.

The other aspect of cost that the right hon. Gentleman rightly referred to is the complete lack of a definition of who pays for the infrastructure costs outside the perimeter fence. We have a wide range of estimates, from £5 billion, in the Davies report, to £15 billion from Transport for London. The Government say they do not recognise the lesser figure, but what figure do they recognise? The developers have said they will come up with only £1 billion, so where will the remaining billions come from? I know that “the odd billion between friends” might be a good way of looking at this, from the Government’s point of view, but we need some precision and some protection for the public finances. Billions of pounds of public investment are ultimately likely to be involved, and given how the Treasury operates, with the rationing of capital, this will come at the expense of infrastructure projects in other parts of the country.

In my remaining minute, I want to say a bit about that regional impact. The assumption in the Government’s statement is that the regions will benefit, but they patently will not. There will be a rationing of capital and of landing rights because of carbon dioxide limits. Every one of the seven leading regional airports—Edinburgh, Manchester, Birmingham, East Midlands, Bristol, and others—have made it absolutely clear that they oppose Heathrow expansion because it inhibits their own potential for developing point-to-point routes to other parts of the world. In terms of the aggregate picture, we have already been told that the net present value is close to zero, and actually heavily negative if we take out international transfer passengers, and on the specific issues, such as the availability of flights outside Europe for business passengers, only 2% of all flights fall in this category. For national and local reasons, therefore, I oppose the motion.