Bus Services Bill [HL]
Debate between Viscount Younger of Leckie and Lord Berkeley(8 years, 4 months ago)
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The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
My Lords, I have to inform the Committee that if Amendment 112A is agreed to, I cannot call Amendment 113 by reason of pre-emption.
Lord Berkeley
My Lords, I am very grateful for the Minister’s explanation. This is another occasion when I am slightly concerned that the Minister has answered my amendment before I have spoken to it, but that is the way we have it here. In this case I do not complain; I shall read what he said very carefully and I suspect it will be fine. I do not propose to move my amendment.
Housing and Planning Bill
Debate between Viscount Younger of Leckie and Lord Berkeley
Lord Berkeley (Lab)
My Lords, I will speak to Amendment 84D, which has been put in this group. I have no problem with that. In my research for what I shall say, I also discovered quite a lot of involvement of the noble Lord, Lord Young, from a long time ago, which I shall come to in a few minutes.
The purpose of the amendment is to bring the tenants of the Duchy of Cornwall in line with other tenants of other landlords and their rights to buy. First, it repeals Section 33(2)(c) of the Leasehold Reform Act 1967. Secondly, it repeals Section 94(11)(c) of the Leasehold Reform, Housing and Urban Development Act 1993, concerning Crown land. I could read out the relevant clauses, but I expect noble Lords can understand what they are all about and if they want to read them, they can.
The amendment is also part of a Private Member’s Bill that I put in for the ballot last May. It did not come very high, so I thought it would be useful to raise the subject today, because it is relevant. The purpose is to examine the exemptions and immunities from certain Acts of Parliament which do not extend to the Duchy of Cornwall. Individuals who hold leases from the Duchy do not, unlike other persons who hold leases from private estates, have the right to enfranchisement. The purpose of the amendment is to give them the same rights as if they were leaseholders in England and Wales.
The first thing to discuss is whether the Duchy is a private estate or not. There has been an awful lot of debate about this. The Government, in many Written Answers over the years, have said that it is a private estate. On 9 June 2009, Bridget Prentice MP said:
“In general terms, the Duchies of Cornwall and Lancaster are private estates in that they belong to the heir apparent and the monarch respectively in their private capacities”.—[Official Report, Commons, 9/6/09; col. 528W.]
In a Written Answer to Andrew George MP, on the same date, Harriet Harman said:
“The Duchy of Cornwall is a private estate that funds the public, charitable and private activities of the Prince Of Wales, the Duchess of Cornwall, Prince William and Prince Harry”.—[Official Report, Commons, 9/6/09; col. 528W.]
There seems to be little debate about that. In a case brought by Michael Bruton on the Helford river, which I think is still being debated in a tribunal, having been to the European Court of Justice and back, the argument was that the Duchy of Cornwall did not have to do an environmental impact assessment on an SSSI over installing cages in which to grow oysters because it was a private estate. Michael Bruton argued that it was a public estate and the case has still not been resolved. While all this is going on, a large number of tenants are not able to buy their own houses, in contrast to those who are tenants of somebody else.
I will now give some examples from the island of St Mary’s in the Isles of Scilly, which I think apply elsewhere. They go back to the origins of the 1967 Leasehold Reform Act, which said that the Crown was exempt from this particular clause, but a voluntary undertaking was given to Parliament through a Written Answer by Mr Fred Willey, who was Secretary of State for Land and Resources, in 1967. My noble friend probably remembers that. The Answer does not mention the Duchy of Cornwall but refers to Crown leases. It stated that the Crown authorities will agree to enfranchisement,
“except that enfranchisement will be refused where the house is of special architectural or historic interest … or adjoins such houses and is important in safeguarding them and their surroundings”.—[Official Report, Commons, 31/6/1967; col. 42W.]
In 1992, during of the passage of what became the 1993 Act, a further Written Statement was made to Parliament, by Sir George Young, as the noble Lord then was, which was materially different from the 1967 Answer. He stated that, regardless of the exemption under the Act, the Crown authorities would agree, subject to specified conditions and exceptions, to the enfranchisement under the same qualifications and terms which applied by virtue of the 1967 Act and the 1993 Act to lessees held from other landlords. The relevant exception affecting the Isles of Scilly states that,
“where the property or area in which it is situated has a long, historic, or particular association with the Crown … the areas referred to in paragraph 3(iii) include the Off Islands within the Isles … the Garrison on St Mary’s and parts of central Dartmoor”.—[Official Report, Commons, 2/11/1992; col. 19WS.]
This indicated that the 1967 test had been materially changed. There appears to have been no consultation about this and no debate in Parliament. Perhaps other noble Lords who were in the House of Commons at the time can correct me on this. It is not even very clear whether Members of Parliament voting on the Bill were aware that there had been a material variation to the Crown undertaking. It is not clear whether it was drawn to the attention of the noble Lord, Lord Young—maybe he will have views or maybe he cannot remember it. For the Crown to claim that it was entitled to refuse enfranchisement, the Crown no longer had to show that the property was of special architectural or historic merit. It now became clear that if it was in an area which had a long historic or particular association with the Crown, that was good enough.
There is an awful lot more in this story, which I will not bore the Committee with now except to say that the situation is rather confused. We can sit or stand here to debate this and say, “It doesn’t really matter because there are many other things going on to do with the Crown and the Duchy which need careful discussion”, but we have to remember that people who have bought a lease are affected by this: if the lease has come from one particular landlord, they cannot buy it, whereas if it has come from another landlord, they can. That is very unfair.
As I think I have demonstrated—there are many other documents that we can use to demonstrate it—the Duchy in this case is a private landlord, so the argument that its tenants should have an exemption from the right to buy seems to me very unfair. We know that leaseholds are a diminishing asset—that is the whole point of them—but just because somebody owns a house on the Isles of Scilly, in Cornwall or somewhere else of no particular architectural merit, why should they be exempt? The only safe way is to remove this exemption, which is why I tabled this amendment.
Viscount Younger of Leckie
That is a possibility, and I will bring that into the considerations that we will undertake prior to Report. I thank the noble Lord for his point. I hope that my noble friend will agree to withdraw his amendment and the noble Lord, Lord Berkeley, will not press his later.
Lord Berkeley
I am very grateful to the Minister for his answer, but in the exception mentioned—when properties are of special architectural or historic interest or adjoin such houses and it is important to safeguard them and their surroundings—the definition of whether a lease could be given up is very wide. Many of the buildings which I believe are the subject of this debate are in fact 1960s houses. They are probably very nice houses but they are not in the same category as the Garrison or the off islands or anything like that. It seems that there is no appeal in this process. The Duchy’s decision is final and that is that—you like it or lump it. Can nothing be done about it?
Viscount Younger of Leckie
I would not put it in quite that way. There are no plans to make changes, but the noble Lord will know that we are talking about properties that are considered to have a long historical association with the Crown. I will investigate further and if I can furnish the noble Lord with more information, I will certainly do so in the form of a letter.
Drones
Debate between Viscount Younger of Leckie and Lord Berkeley
Lord Berkeley (Lab)
My Lords, it was interesting that the Minister said that this is an exciting project. It certainly is an exciting project to keep under review while drones might get into the suction of an air engine when a plane lands at Heathrow. It is nice to know that it is under review, but what can the Government do about catching these drones, short of firing missiles at them?
Viscount Younger of Leckie
Indeed. This is an important issue because the technology is growing at such a pace. We are undertaking a review of how drones will be controlled from a safety perspective, while looking at the opportunities at the same time.
Railways: Trans-Pennine Rail Line
Debate between Viscount Younger of Leckie and Lord Berkeley
Viscount Younger of Leckie (Con)
My Lords, I congratulate the noble Lord, Lord Shutt, on securing this debate on the trans-Pennine rail line. I am very glad that he has pursued the debate, as I detected a slight hesitation in his speech as a result of the so-called “unpause” in September.
This has been a short but useful debate, with many very good contributions. I understand the depth of concern and why the debate was secured. A number of questions were raised—some quite technical from the noble Lord, Lord Rosser—so if I run out of time and am not able to answer them, I pledge to write to the noble Lord and copy in all other noble Lords who have taken part in this debate. I reassure the noble Lord, Lord Scriven, that this is not just warm words from the Government; there is some action. I hope that I will be able to prove that in the next 10 minutes or so.
I start by outlining the wider context of this debate. This Government have recognised that successive Governments have failed to invest adequately in transport both in the north of England and across the wider UK, and have now chosen to invest in transport for the long term. The transformation has already started. I am glad that some noble Lords recognised this in the debate, particularly the noble Lord, Lord Shipley. From March this year, electric trains were introduced on services in the north-west. Manchester Victoria station, once called the worst station in the UK, has been transformed. Train manufacturing has returned to the north-east, with Hitachi’s new £82 million factory in Newton Aycliffe, County Durham. This is creating more than 700 jobs and will support thousands in the UK supply chain.
Noble Lords will be aware that yesterday the Government announced an exciting new development, as was mentioned in the debate. The new northern and trans-Pennine rail franchises will see transformative improvements to passenger rail services in the north over the next decade. Rail journeys across the north will undergo the biggest transformation in decades, with an unprecedented package of improvements that goes far beyond the requirements we set out earlier this year. Together, these operators will oversee a very significant £1.2 billion boost to rail services with brand new, modern trains, more seats, more services and a host of improvements to deliver a modern, 21st-century passenger experience. This will include: the introduction of more than 500 brand new carriages; the removal of the outdated and unpopular Pacer trains from across the north; and space for 40,000 extra passengers at the busiest times.
I turn to the facts surrounding the pause of the trans-Pennine line and, indeed, the essence of this debate. I acknowledge the point made by the noble Lord, Lord Shutt of Greetland, about the doubt over the date of the 2022 upgrade of the trans-Pennine line. It is true that at a Transport Select Committee hearing in March 2015 the Secretary of State for Transport specifically acknowledged the slippage of the trans-Pennine electrification scheme from 2019 into the early 2020s. There is no doubt about that.
As noble Lords will be aware, on 25 June the Secretary of State announced that important parts of Network Rail’s programme for improving Britain’s railways were costing more and taking longer than planned to deliver. Sir Peter Hendy, who has a proven record of delivering on major transport challenges, was appointed as the new chair of Network Rail. The Secretary of State asked him to replan the whole of Network Rail’s improvement programme for England and Wales. Part of that announcement was that the scheme to electrify the trans-Pennine rail line connecting Manchester to Leeds and York via Huddersfield would be paused. Pausing the trans-Pennine electrification scheme did not mean that the Government’s commitment to delivering the project had faltered or stopped. I hope that I can reassure the noble Lord, Lord Rosser, to that extent.
In fact, the pause gave Sir Peter the opportunity to develop a better plan for this important route—what we are now calling the trans-Pennine route upgrade. On 30 September, work on the trans-Pennine scheme officially resumed. On 25 November, Sir Peter published his more robust plan for the Network Rail enhancement programme, to ensure that every part of Britain benefits from a growing economy. The noble Lord, Lord Berkeley, raised the importance of freight, which has not been mentioned much in this debate. This plan recognises the importance of the strategic freight network.
Let me be clear that the previous plan for the trans-Pennine line changed only the power supply of trains; it did not include the track work required to make journeys faster or for more frequent trains. The new plan for the full route upgrade will by 2022 make journeys faster, taking up to 15 minutes off today’s journey time between Manchester and York, right across to the east; permit more frequent fast trains—up to six fast trains an hour with limited stops between Manchester and Leeds; reduce crowding by allowing longer trains to run; and improve performance.
The original plan offered poor value for money. It included only electrification of the existing track, which brought limited benefits to passengers. The passenger benefits secured by the new upgrade proposal are expected to make the scheme medium to high value for money. During my briefing I asked in depth what was meant by “value for money”—about which many noble Lords will have more experience than me—but rather than go into that now I am more than happy to write to noble Lords with the information.
The next step in developing the new plan for the trans-Pennine route upgrade is the detailed design and planning of the works over the next two years. We are pushing on with works on the ground this coming January to improve the Calder Valley route from Manchester to Leeds via Rochdale and Bradford. These improvements will initially allow the Calder Valley to be used as a diversionary route for trans-Pennine services normally using the route via Huddersfield while it is closed for major work to enable the six tunnels along the route to accommodate the overhead electric wires. This includes the three-mile long Standedge tunnel, the fifth longest tunnel in the UK, with which I am sure noble Lords are familiar.
Noble Lords will no doubt be aware of the northern powerhouse. Our aim is to rebalance the decades-old north/south divide. Much has been said about this in the House over the past few months. Transforming transport connectivity across the north is integral to this ambition. The noble Lords, Lord Shutt, Lord Scriven and Lord Berkeley, raised the importance of connectivity. Connectivity, as I think I mentioned earlier, is at the heart of the northern powerhouse: joining the major cities of the north to bring together an economic powerhouse to rival London and rebalance the economy. There will be massive investment in rail capacity, delivering 500 new trains of all types—diesel, bi-mode and electric—space, as was mentioned earlier, for 40,000 more passengers, greater frequency and more services. The new franchise is just the start of that. This will start to deliver services to the north and needs to be allowed to be built upon by our plans for the northern powerhouse rail, previously called HS3.
We are working closely with Transport for the North, Network Rail and HS2 Ltd to develop our rail plans for the 2020s and beyond. Noble Lords might not be surprised to learn that we now like to call this the northern powerhouse rail network—there is probably an acronym for that. We have also commissioned HS2 Ltd to look at options for improvements to rail travel to Scotland, which we will consider next year.
I would like to address some of the questions raised. The noble Lord, Lord Shipley, acknowledged that we have the elements of a plan for transport in the north but need to do much more work. He is absolutely right. In the Autumn Statement, the Government announced £10 million a year for the life of this Parliament to fund the new Transport for the North organisation. It is tasked with producing a comprehensive northern transport strategy.
The noble Lord, Lord Shutt, talked about what was recently said about HS3 and asked what the Government’s position is. The Government have, jointly with Transport for the North, set out their vision for the transformation of the east-west rail connections across the Pennines. As I mentioned earlier, we now call this the northern powerhouse rail network. With Transport for the North, we have commissioned Network Rail to examine how we can deliver a 30-minute journey time between Manchester, Leeds and Sheffield, with links onward to Hull, Newcastle, Liverpool and, importantly, Manchester Airport. We will publish the findings of this work early next year.
The noble Lords, Lord Shutt and Lord Scriven, mentioned the electrification of the Calder Valley line and the south trans-Pennine route. The electrification of the Calder Valley line has been identified as a potential scheme by the electrification task force for the control period starting in 2019. Network Rail is currently considering the recommendations and will publish its electrification strategy in the next year for funding consideration by the Government after 2019.
The noble Lord, Lord Shutt, raised the issue of the design of the Leeds HS2 station. The Government have asked Sir David Higgins to look at the options for Leeds and its links to Leeds city station, and to find a scheme that will stand the test of time.
The noble Lord, Lord Shipley, asked what the Y aspect of HS2 would look like. The Government and Transport for the North are working very closely with Network Rail and HS2 Ltd to address these very questions.
The noble Lord, Lord Rosser, asked whether, had the National Infrastructure Commission existed before the election, the poor planning of the project—as he put it—would have been avoided. However, he will know only too well that his ex-colleague, the noble Lord, Lord Adonis, has been asked to chair the National Infrastructure Commission, with a clear remit to advise on the priorities for transport and, indeed, other infrastructure investment.
I hope that I have made it clear during the debate that this Government are both ambitious and practical about improving transport in the north of England. This is supported by yesterday’s announcement of a comprehensive plan for the railways in the north. I hope I have got it across that we have taken decisive action to ensure the trans-Pennine line electrification goes ahead with a better plan than before. Rail passengers will have a better service that will do far more to support the northern powerhouse economy.
In summary, and to conclude, we already have electrified the oldest inter-city railway between Liverpool and Manchester earlier this year; we have a clear view towards a better scheme, the trans-Pennine route upgrade, to be completed by 2022; we have announced the new trans-Pennine and northern rail franchises, with a transformational programme up to the mid-2020s; and we have taken steps, through establishing Transport for the North, for the north itself to set out a clear view of its transport priorities to complement the opening of HS2 to Manchester and Leeds in the early years of the 2030s. As has been acknowledged, this is just the start and there is much work to be done. Our journey has started, and I thank noble Lords for supporting the project so far.
Lord Berkeley
I welcome much of what the noble Viscount said. Five or six fast trains an hour across the Pennines sounds really good for passengers, but you will not have any stopping trains in that pattern unless you have more tracks. Perhaps the noble Viscount could write to us about the extra tracks that will be necessary to accommodate stopping trains and freight.
Carbon Emissions
Debate between Viscount Younger of Leckie and Lord Berkeley
Viscount Younger of Leckie
In taking a holistic view my noble friend makes a good point. Under the UK’s Climate Change Act we are committed to cutting overall emissions by 80% by 2050. This extends the argument beyond housing. Carbon budgets provide the framework to put us on a cost-effective pathway to meeting our legally binding 2050 target.
Lord Berkeley (Lab)
Another manifesto commitment that will effectively increase the amount of carbon is the Government’s commitment to phase out onshore windmills. We can debate why that should be but the proposed planning system will effectively phase them out. Is the Minister aware that it will also reduce the number of jobs in the industry? Is he aware that a company called Mabey in Chepstow announced its closure last week, with the loss of 125 jobs, as a direct result of the fact that no more masts will be manufactured for windmills?
Viscount Younger of Leckie
I do not know about the examples that the noble Lord mentioned, but in relation to windmills, or wind farms, decarbonisation must work for the local communities where infrastructure is built. We remain focused on getting the best deals for bill payers, to make these schemes work better.
Airports Act 1986 (Amendment) Bill [HL]
Debate between Viscount Younger of Leckie and Lord Berkeley
Viscount Younger of Leckie (Con)
My Lords, I offer my congratulations to the noble Lord, Lord Empey, on securing a Second Reading for his Airports Act 1986 (Amendment) Bill. The Bill’s aims are admirable. In essence, it proposes powers for the Secretary of State for Transport to direct airport operators, in the interest of national air infrastructure, to ensure adequate services between the UK’s hub airport, Heathrow, and regional airports.
By way of background, it is important to emphasise that the UK has excellent aviation connectivity. The five airports serving London offer at least weekly direct services to over 360 destinations worldwide, more than Paris, Frankfurt or Amsterdam. We have the third largest aviation network in the world after only the USA and China. Although Dubai International Airport has overtaken Heathrow to become the world’s top airport for international travel, it is still behind Heathrow in overall passenger numbers: some 70.5 million passengers travelled through Dubai’s terminal last year, compared with over 73 million at Heathrow. As has been mentioned today, the UK is also well connected by air domestically, with at least 54 weekly air services between UK cities in 2014, and 13 cities with services to a least one London airport. This includes seven cities with services to Heathrow.
The previous Government’s aviation policy framework sets out the importance of aviation to the UK economy and the Government’s proposals on how aviation can deliver for the UK economy while meeting its environmental obligations, both global and local. It stated that airports are in some ways cities in themselves, creating local jobs and fuelling opportunities for economic rebalancing in their wider region or area. New or more frequent international connections attract business activity, boosting the economy of the region and providing new opportunities and better access to new markets for existing businesses.
The aviation policy framework also recognises that airports in Northern Ireland, Scotland, Wales and the English regions make a vital contribution to local economies, and that air connectivity across the UK—and to the UK’s hub airport, Heathrow—is very important. As the noble Lord, Lord Davies, said, this is particularly so for Northern Ireland, given its geographical circumstances, which means that air connectivity for Northern Ireland is an essential means of ensuring its continued links to the remainder of the UK, and is of course crucial for its developing economy. I therefore acknowledge the noble Lord’s concern that the Government have limited powers—for example, in the public service obligation, to which I shall refer later—to intervene to ensure that regional air connectivity is maintained in an air services market that operates almost entirely on commercial lines. As the noble Lord, Lord Berkeley, succinctly put it, they are largely in private hands.
Ultimately this Government believe that air passengers are best served by a commercial airline market that is able to operate in a competitive environment. This allows airlines to determine the routes that they operate, and from which airports, based on their assessment of routes’ viability. In this context, it remains possible that airlines currently operating domestic air services between Heathrow and the UK’s regional airports could in future decide to reduce or withdraw them and use the relevant Heathrow slots for alternative services.
Noble Lords will know that the International Airlines Group, IAG, owner of British Airways, is in negotiations to acquire Irish airline Aer Lingus. Both British Airways and Aer Lingus operate services on the Belfast-London route, and the negotiations have raised some concerns that the merger may see a rationalisation of services. However, under the proposed acquisition deal, IAG has agreed with the Irish Government to include a number of connectivity commitments on services between Irish airports and Heathrow, as well as between Belfast and Heathrow.
The noble Lord, Lord Empey, has suggested that some form of intervention is necessary to protect such services from commercial market pressures that could see them discontinued not just to and from Northern Ireland but from airports in Scotland and the English regions. However, there is healthy demand for services from airports in Northern Ireland, Scotland and the English regions to London. For Northern Ireland, in 2014 there were nearly 1 million passenger journeys between the two Belfast airports and the five main London airports, of which nearly 350,000 were between Belfast and Heathrow. British Airways and Aer Lingus together operated an average of 59 flights per week between Belfast and Heathrow.
Airline competition is also provided by services that operate from Belfast airports to the other London airports; Belfast City Airport has services to Gatwick and London City airports, in addition to Heathrow. Belfast International Airport hosts services to Gatwick, Luton and Stansted airports. We see this demand as continuing, given that Northern Ireland is a competitive destination in its own right. Noble Lords may be surprised to hear that outside London Northern Ireland is the leading UK region for attracting inward investment. This success has been seen across a range of knowledge-intensive sectors. Belfast in particular is the world’s top destination city for financial services technology investments. This continued success has led to over 800 international companies locating in Northern Ireland, employing in excess of 75,000 people. The level of demand that this generates justifies the daily services that both Belfast airports maintain to London and to other European airport hubs and their connecting networks. Belfast International Airport has existing services to Amsterdam Schiphol and Paris Charles de Gaulle, and just last month Belfast City Airport commenced a service to Schiphol.
On the long-haul front, Belfast International Airport has a daily direct flight to Newark, New Jersey, operated by United/Continental airlines. It recently celebrated its 10th year of operation, flying nearly 83,000 passengers. Later this month, Virgin Atlantic will begin operating a seasonal weekly flight to Orlando International Airport. Scotland is also well connected, with 62,000 flights in 2014 between Scottish airports and the five main London airports, carrying nearly 7 million passengers. Of these, around 25,000 flights—that is, 41%—were to and from Heathrow, carrying 3.1 million passengers.
In the broader UK context, the following airports in the English regions currently have air services to Heathrow. For 2014, the last full year of statistics that are available, Manchester had 8,500 flights, Newcastle 4,000, and Leeds-Bradford 1,900. In addition, Newcastle Airport had 500 flights to and from London Stansted and 1,200 to and from Gatwick. Again, the operators of these services have not indicated any intention to withdraw from them.
In the context of these healthy traffic levels on commercially viable and attractive routes, we do not consider that air connectivity between London and these airports is under threat. For the airlines, these domestic air services are important in feeding passengers through to their long-haul services from Heathrow. It is of course open to other airlines to introduce services to compete with incumbent airlines on these routes if they conclude that doing so would provide a commercial return.
Lord Berkeley
The Minister has explained that there are lots of services around the country, which is wonderful, but this Bill is actually about slots at hubs, whether at Heathrow or elsewhere. Is there a precedent anywhere else in Europe for slots being reserved in hub airports for regional services? I suspect there is not because there is no shortage of slots in most other airports. Could the Minister address the issue of slots? If it is peculiar to the UK, which I suspect it is, surely the European Commission should look at this with special favour.
Viscount Younger of Leckie
I do not have any statistics about slots around the European Union, but the noble Lord will be aware that the allocation of slots at EU airports is governed by the European Union and associated UK slot regulations. It is true that Heathrow has more of an issue because, as various noble Lords mentioned, it is at 99% capacity and other airports around Europe are at not such great capacity. Under the regulations, the process of slot allocation at Heathrow, Gatwick and other slot-co-ordinated airports in the UK is undertaken, as the noble Lord will know, by an slot co-ordinator entirely independent of the Government, the CAA or other interested parties. I will write to the noble Lord with details about other airports around the UK.
As I said, it is open to other airlines to introduce services to compete with incumbent airlines on these routes if they conclude that doing so would provide a commercial return. However, introducing provisions for the Government to direct the UK’s internal aviation market to ensure domestic services to a hub airport could set up distortive effects on airline competition and would be contrary to general EU and wider competition principles. Such intervention therefore carries a high risk of a legal challenge to the UK Government being raised with the European Commission by airport operators and airlines as well by the Commission itself. The consequences of a successful challenge would be substantial fines.
Government intervention to direct particular services from a regional airport to a hub airport would require the ring-fencing of specific take-off and landing slots at the hub. As the noble Lord, Lord Empey, understands, the UK’s major airports, including Heathrow and Gatwick, have constrained capacity, which I have just alluded to. They are therefore subject to EU slot regulations transposed into UK law. These regulations govern the allocation, transfer and exchange of slots at congested airports in the UK. Within these regulations there is some limited scope to allow for the ring-fencing of slots at a congested airport to serve a particular route, provided that this meets the criteria for a public service obligation. However, to do this there would need to be an unused slot at the congested airport. In Heathrow’s case, given that 99% of slots are currently used, as I said, it is unlikely that the regulations would enable slots to be ring-fenced.
Public service obligations are also governed by EU regulation and provide some scope to protect regional air services that may become economically unviable. They can be used to protect air services to airports serving a peripheral or development region or on low traffic routes considered vital for a region’s economic and social development. The aviation policy framework made clear that the Government would be inclined to support applications by devolved and regional bodies to establish PSOs that comply with the specific EU law to protect vital air connections between other UK airports and London and help economic and social development in peripheral regions.
The previous Government announced in the 2013 spending round that £20 million would be made available over two years until 2016 to maintain regional air access to London, where there was the probability that an existing air service would be lost, by establishing a PSO on the route. The 2014 Budget increased and extended this support, which means that government can step in where necessary to maintain existing regional air links to London. As the noble Lord, Lord Empey, has mentioned, the Government have already stepped in to secure the Dundee to London Stansted route—not to Heathrow, as a noble Lord mentioned—and more recently the Newquay-London air route, which the noble Lord, Lord Berkeley, mentioned, after its operator announced last year that it would no longer operate the route, and no other airline came forward to take it on commercially.
Cornwall Council provided evidence that the route met the EU PSO requirements and undertook a tendering process to find an airline to operate the route. Subsequently, in October 2014, the previous Government announced a four-year PSO funding deal for three weekday rotations and two weekend rotations between Newquay Airport and London Gatwick airport, providing certainty for the far south-west region. It is worth giving some background, because the Newquay-Gatwick service carried nearly 44,000 passengers in the first five months of operation, exceeding the projected take-up level by almost 10%. Therefore, it would be open to the devolved Governments in Northern Ireland, Scotland and Wales, and local authorities and other organisations in England, to apply to the Secretary of State for Transport to establish a PSO on a particular air route, should they feel that a business and legal case can be made that satisfies the PSO regulation.
There is no other mechanism for the Government to intervene in the allocation of slots at capacity-constrained UK airports. Noble Lords will therefore appreciate that under European and UK law, the potential for ring-fencing slots at Heathrow to protect regional services could be dealt with only by reference to the PSO rules alone. Again, that was raised by the noble Lord, Lord Berkeley.
One of the principal effects of the Airports Act 1986 (Amendment) Bill is therefore contrary to EU and UK slot regulations, because it would override the strict criteria and process by which European Governments can intervene in route operations. Again, the possibility exists that intervention to ring-fence slots at a hub airport in contravention of an EU obligation could lead to a successful legal challenge.
More generally, I remind noble Lords that a key part of the Government’s approach to aviation is to maintain the UK’s status as a leading global aviation hub as fundamental to our long-term international competitiveness and economic growth. We are also mindful of the need to take full account of the social, environmental and other impacts of any expansions in airport capacity. We therefore look forward to the publication shortly of the final report from the independent Airports Commission. Just to reassure the noble Lord, Lord Davies, it will indeed be published shortly. Once the Airports Commission has published its final report and set out its recommendations, it will be for government to consider the full body of work. We will look carefully at all the evidence and analysis before deciding on an appropriate timetable for a decision on increasing airport capacity.
The noble Lord, Lord Empey, raised the matter of the EU airports package, quoting that it was essential for regional airports to have connectivity to hub airports. The Government are aware of the European Commission’s proposed Better Airports package from 2011 and its slot provisions. Progress stalled in 2012 because of a lack of agreement over other matters. To give the noble Lord some reassurance, should an EU presidency decide to revive the package, the EU would be involved in the negotiations.
In summary, while I understand the noble Lord’s commendable motivations in proposing his Airports Act 1986 (Amendment) Bill, I must conclude, on the basis that its proposals could set up distortive effects on aviation competition and would run counter to EU and UK regulations on allocations of slots at congested airports, that the Government must express their reservations and will not be able to support the Bill into legislation. I know that the noble Lord considers this to be a highly important issue and, as the noble Lord, Lord Davies, said, that he has already undertaken a great deal of hard work at the European level to press for changes that will allow greater member-state intervention in maintaining regional air connectivity. I therefore respect his intentions to pursue the issue further with the European authorities.