Motion made, and Question proposed, That the sitting be now adjourned.—(Mr. Watts.)
I thank the Speaker for selecting this important subject for debate and it is a pleasure to see you in the Chair, Mr. Streeter. I also welcome the Minister to his new post.
I shall be discussing the importance of regional aviation policy in the context of its impact on regional economic development. No one can deny that we live in a world where economic relationships between countries and continents are more globalised than ever before. In such a world, connectivity is paramount. Communications are now instant; we think nothing of turning on the news to watch a live TV interview with somebody on the other side of the planet. Likewise, reaching the other side of the world in person is much easier than it has ever been thanks to air travel. It is estimated that more than half the UK’s population fly at least once a year, whether on holiday, to visit family and friends or on business.
Business-to-business connectivity is part of what makes the globalised economy go round. It is important to the UK as a major trading nation and equally important to our regional economies. Aviation is a crucial part of the UK’s goods distribution network, playing a particularly strong role, for example, in the movement of high-value freight. Some 30 per cent. of UK exports by value are transported by air. Heathrow is the world’s second biggest cargo handling airport. More than half the UK’s total air freight passes through it, which means that the remaining 50 per cent. leaves through other regional airports.
Aviation plays a vital role in connecting the UK’s regions to London and, through direct international links, to the global markets. The Airport Operators Association estimates that the airports that it represents handle more than 228 million passengers. According to a CBI submission to the Select Committee on Transport inquiry into the future of aviation, CBI members, particularly in Scotland and Northern Ireland, regard air links with London as very important for their businesses. In fact, 73 per cent. of respondents to a survey of City of London businesses said that air services were either critical or very important in providing direct contact with clients and service providers, and 64 per cent. said that they were either critical or very important to internal company business.
The aviation industry makes a major contribution to the UK economy. Oxford Economic Forecasting demonstrated in 2006 that the industry contributed £11.4 billion to UK gross domestic product in 2004. In addition, the aviation industry directly and indirectly supports 700,000 jobs.
I congratulate my hon. Friend on securing the debate. To give a consumer perspective from the north, Glasgow airport is targeting people living in the north of England who tend to travel to Manchester to catch a flight. Glasgow is closer for some, as well as cheaper, given that Scotland and England have different school holidays. I welcome the initiative of targeting those people to get them to travel from Glasgow, rather than from Manchester, London or anywhere else.
I thank my hon. Friend for that intervention. What is absolutely apparent from my research—I have an airport in my constituency as well—is the importance of regional connectivity not just to Heathrow, but to other airports in the country and globally.
Assuming that aviation continues to grow in line with Government forecasts and historical trends of the past decade, aviation’s contribution to GDP will rise to some £19.7 billion by 2010. It is the backdrop to a vibrant industry, but it is also an industry that is itself facing challenges in the UK regions, and those challenges are having an impact on the UK’s regional economies.
There are 22 regional airports outside the south-east, and they carry more than 500,000 passengers a year. The main aviation challenge facing the regions is the lack of connectivity between their airports and Heathrow. In 1995, Heathrow served 21 domestic destinations. Today, it serves only six: Belfast, Manchester, Glasgow, Newcastle, Edinburgh and Aberdeen. Leeds Bradford in Yorkshire and Durham Tees Valley airport in my constituency ran flights to Heathrow until this February, when BMI withdrew those services. Today, Schiphol airport in Amsterdam and Paris Charles de Gaulle serve more regional airports in the UK than does Heathrow—Schiphol serves 19 UK destinations and Paris CDG 14.
I find it bizarre that UK regional airports must rely on international hubs outside the UK to gain access to the wider world. A briefing from BAA bills Heathrow as the UK’s global gateway. I cannot see how that is true when fewer UK regional airports have access to Heathrow than to Holland and France.
On that point, does the hon. Gentleman agree that there is an environmental irony at play? The environmental movement says that we should not provide access to internal aviation within the UK, but that simply forces people to fly east before going west, which is obviously worse for their carbon footprint than if they made direct journeys from here.
What the hon. Member for Montgomeryshire (Lembit Öpik) says is undeniable, but what underpins planning for aviation is the aviation White Paper launched in December 2003 by the now Chancellor of the Exchequer, which discussed stringent environmental controls on regional airports, as the London airports, by and large, are designated, so the Secretary of State for Transport can do something about unacceptable environmental downsides such as night noise. Is that not the problem?
East Midlands airport is one such regional airport. We welcome its jobs, low-cost flights and other benefits, but we do not welcome the freight noise that affects communities around the periphery of the airport and under its flight path. However, there is no respite and no control from an effective local master plan.
I pay tribute to my hon. Friend’s optimism about what the industry might do, but the proposals and suggestions for improvements are still on the drawing board and the practical consequences are very much of the type suggested by my hon. Friend the Member for North-West Leicestershire (David Taylor). I suggest that my hon. Friend the hon. Member for Sedgefield (Phil Wilson) take more account of those concerns in relation to the policies that he is advocating.
I will take account of them, but the main point that I want to convey concerns the future growth of regional economies and the importance of regional airports to that. Because of the lack of capacity at Heathrow, aeroplanes are now stacking above London, which has an impact on the environment as well. There are a lot of issues that we need to take into consideration.
Moving on to the reasons for the anomaly, many UK airports are operating at the limit of their capacity. Heathrow is full up, operating at 99 per cent. of capacity, compared to other European hubs, which operate at about 70 per cent. Heathrow has only two runways, while Frankfurt and Paris CDG have four and Schiphol five. That has implications for Heathrow’s ability to continue functioning effectively as an international hub. Operating so close to the limits of capacity means that the airport’s resilience—for example, the ability to cope with unforeseen circumstances such as adverse weather conditions or significant flight delays—is limited.
Air traffic is predicted to continue growing, so it is essential that action is taken to ensure that the UK’s competitiveness is not undermined. The macro-economic benefits of capacity expansion at Heathrow were quantified by Oxford Economic Forecasting in its October 2006 report, which found that a third runway at Heathrow would generate wider economic benefits estimated at £7 billion in additional GDP per year. More recently, the Government’s consultation document estimated net benefit of about £5 billion a year. That is why the third runway at Heathrow is, in my view, essential. However, construction of the runway will take until 2018 or thereabouts to complete, so what do we do between now and then to help UK regional connectivity with Heathrow?
The economic factors must be balanced with the societal and environmental considerations. We must always listen carefully to local communities. Does the hon. Gentleman agree that, as a measure to tackle the shortage of capacity, an estuary airport would be a disaster on virtually every level? Despite that, it is being promoted heavily by many Conservative MPs from Essex and the Conservative Mayor of London?
I agree with the hon. Gentleman. We should consider existing flexibility in airport infrastructure, so that we can make what we have work.
I will use Durham Tees Valley airport in my constituency as an example. There are important links between the Tees valley and Heathrow. The economy of the Tees valley is based on the largest integrated process industrial complex in the UK. It contains industries specialising in petrochemicals, energy, renewable energy, biofuel and steel-making. It has the third largest port in the UK. There is also a world-class advanced engineering industry, which is based on the design, construction and maintenance of petrochemical plants, steel works, power stations and major infrastructure such as bridges. In addition, the region has the Wilton centre, which is Europe’s largest non-military private sector research centre. The petrochemical industry alone contributes £3.5 billion to the UK economy and 70,000 UK jobs depend on it.
In Sedgefield, NETPark boasts cutting-edge technology in high-value goods production that is showing the way in new industries such as printable electronics and nanotechnologies. The Saudi Basic Industries Corporation—SABIC—is constructing the world’s largest low-density polyethylene plant at Wilton, with an investment of £200 million. The Biofuels Corporation operates the world’s largest biodiesel plant at Seal Sands and Ensus is constructing the world’s largest bioethanol plant there. A pipeline is expected, which will deliver £4 billion through renewable energy plants, biofuel plants and advanced engineering. The integrated chemical complex, which was formerly owned by ICI, is now owned by 26 multinational companies such as SABIC, Dow, Huntsman, Avecia, Johnson Matthey and GrowHow.
We must consider the jobs provided and exports produced by world-class multinational companies such as AMEC, Whessoe, Aker Kvaerner, Cleveland Bridge and K Home Engineering. The north-east is the only English region that exports more than it imports, yet the local airport does not have access to Heathrow—the UK’s global gateway.
Does the hon. Gentleman intend to speak about aviation in the context of other modes of transport? Lord Adonis is a great advocate of high-speed rail. The region that the hon. Gentleman represents is exceptionally well placed to benefit from the development of high-speed rail within a short time scale.
I welcome any ideas on high-speed rail, but the current proposals will not be connected to the north-east. I think I am right that if all the trains we have were filled with passengers who would otherwise have taken flights, Heathrow would still run at 90 per cent. capacity. High-speed rail might be part of the solution, but it is not the whole solution.
Yesterday, we had a debate on Heathrow and we are covering much of the same ground. Intermodal links are crucial. It is no accident that Flybe, one of the most successful and profitable airlines in the current difficult market, has an absolute rule that it will not fly to airports where the rail links take more than three hours. I urge the hon. Gentleman to read the report of yesterday’s debate. We must stay on the regional factors today and look at the problems with the Oxford case.
The hon. Gentleman should ask himself why the number of flights to Heathrow has increased while the number of destinations has dropped. The airlines are maximising the use of a handful of extremely profitable routes.
I will come to that last point and consider the hon. Gentleman’s remarks.
Critics will say that Durham Tees Valley airport has access to Schiphol airport in Holland. That is true and welcome, but the problem with Schiphol is that it does not connect with Australia, and its connectivity has reduced by 45 per cent. to the middle east, 27 per cent. to Asia and 31 per cent. to north America. It is not a Heathrow substitute, but complements it. I understand that there is pressure on Schiphol to limit its capacity in the long term, which could reduce connectivity to the region even more.
Does the hon. Gentleman agree that any attempt to limit air travel by making it less convenient to make intercontinental journeys from the UK is utterly naive? Price is a consideration, but the desire to make the journey is much more significant. People will find ways to make journeys by making changes outside the UK, even if it is less environmentally friendly and more time-consuming.
The hon. Gentleman is right.
Paragraph 4.47 of the consultation document, “Reforming the framework for the economic regulation of UK airports” states:
“The crowding out of regional services from capacity constrained Heathrow is unlikely to have an adverse impact on regions providing regional connectivity is maintained via alternative airports.”
If the experience of Schiphol is anything to go by, I do not believe that that statement is accurate. It is not in the interests of this country to encourage our nationals to use another country’s airport as a hub. What does that say about our faith in Heathrow and our commitment to the regions?
I believe that there is a way through the problem. The Government are listening. The draft regulatory framework has been put out to consultation. On 24 March, I had a meeting with the Minister’s predecessor, along with the Minister for the North East and my hon. Friend the Member for Stockton, North (Frank Cook) and my right hon. Friend the Member for North-West Durham (Hilary Armstrong). We were told that the Department has deemed it necessary to look at the wider economic impact on the regions, rather than focus narrowly on the regional airports. I look forward to hearing from the Minister when we will hear the results of the consultation.
Unlike the Opposition, the Government have not written off Durham Tees Valley airport, and thereby the Tees valley. One Opposition spokesman said that the north-east could not sustain two airports. We know that their commitment to the regions is minimal because they oppose the development of the third runway at Heathrow.
One of the key factors in BMI’s decision to terminate its flights to Heathrow from Durham Tees Valley was the charging policy at Heathrow. At most hub airports around the world, domestic and short-haul services co-exist with long-haul networks, and landing charges are based on the take-off weight of the plane, with smaller aircraft having lower landing charges than larger ones. At Heathrow, landing charges are the same, regardless of the size of the aircraft. I have christened that policy “the poll tax with wings”. Heathrow airport is operating at capacity. Airlines make more money from long-haul than short-haul flights and are therefore keen to use scarce slots for long-haul flights. The market strength of Heathrow therefore works against regional connectivity.
Central to BAA’s financial performance is its ability to maximise ancillary revenues from areas such as retailing and catering. That involves maximising passenger throughput at the airport. It is therefore in the interests of BAA to encourage larger aircraft to operate from the airport at the expense of smaller ones, because there are limited opportunities to grow the number of aircraft movements.
The charging structure at Heathrow before the recent increase reflected those incentives. For example, a 49-seater Embraer RJ145 from Durham Tees Valley cost each passenger £12.76 in landing charges, compared with £8.68 for an Airbus A330. The recent changes have made the differential much worse. The increase in charges has a substantially greater impact on operating margins for short-haul services. Combined with the substantial incentives for airlines at Heathrow to switch slots to long-haul services, that has resulted in the loss of flights between Heathrow and Durham Tees Valley. As a consequence, BMI made a commercial decision to withdraw its flights from Durham Tees Valley and is using those slots to fly larger planes from Kiev, Tel Aviv and Riyadh.
In response to these pressures, BMI puts pressure on regional airports to reduce their landing charges, and because those flights are important, the landing charges are reduced. There is no longer any scope for further reductions, and consequently, increases in landing charges at Heathrow make regional airports less profitable. The Department seems to be arguing against regulation in this area, which we should consider, because Heathrow’s capacity is constrained and because the prime concern is to ensure as many connections as possible between Heathrow and the rest of the world.
That brings me back to my earlier point. How can Heathrow be the UK’s global gateway if the vast majority of our regional airports do not have access to it? Lack of regulation, and people’s inability to think outside the box, have put us in a perverse situation in which British regional airports are forced to link up with international hubs in Holland and France, while Heathrow, the UK’s global gateway, is used to maximise profits for its Spanish owners. Meanwhile, multinational companies on Teesside and elsewhere try to reach out to global markets. There may have been some thinking up to where we are now, but I am afraid it has not been joined-up.
If there were a third runway at Heathrow, which my colleagues do not support—[Interruption.] It would, for the reasons the hon. Gentleman has given, be used for further intercontinental flights with maximum profit for the owners of the airport—[Interruption.] The right hon. Member for North-West Durham (Hilary Armstrong) continually talks from a sedentary position. If she wants to make a speech, she should do so. Would not the third runway simply be used to carry on existing practices, rather than to provide the regional slots the hon. Gentleman wants?
Let me continue with my speech and I shall propose how we could prevent that from happening.
Heathrow is a major national economic asset, but it is not available to half the country. The Government’s objectives include improving the economic performance of all English regions and reducing the gap in economic growth rates between regions. How can those aims be achieved if we disadvantage peripheral regions that have world-class industrial sectors, and if we fail to regulate airports to safeguard links to regional airports?
Whole areas of the UK, including Teesside, Yorkshire, the south-west and Wales, cannot access Heathrow and are directly disadvantaged as a result of their inability to gain access to world markets through that major national asset. The draft regulatory framework, which has just been out to consultation, suggests that the answer is a public service obligation, or PSO, but goes on to say, at paragraph 4.48, that
“no applications to impose PSOs on London routes have since been received indicating that regional connectivity is perhaps not such a significant issue, although concerns about regional connectivity are raised with DfT from time to time”.
I suppose that means that debates such as this will be forgotten after they finish, but I want the Minister to know that I will not forget this issue after this debate ends at 11 o’clock.
The same paragraph states that
“we do not believe additional policy interventions, either through the regulatory framework or otherwise, are necessary.”
How many more regional airports must lose their access to the UK’s global gateway before we realise that additional policy intervention is required? The document then discusses
“comments received from the CAA who expressed the view that the maintenance of routes between regional airports and any particular airport should not be an obligation of the regulator. The CAA further noted the Government’s capacity to impose PSOs on specific routes where necessary.”
There should be an obligation on the CAA to regulate to save regional access to Heathrow.
The hon. Gentleman is being very generous in giving way. I seek to elicit further views from him on PSOs. Does he agree that the problem, or the reason why there are not applications for PSOs, is to do with the Government’s attitude to granting them? They say that a PSO will be granted only if there is a risk to the commercial use of a slot, and that as long as a service is operating in a slot, they will not see a commercial risk. So, they will grant a PSO only after the operator has withdrawn, by which time nobody is seeking a PSO.
There is a lot of truth in what the hon. Gentleman says, but I shall come to the faults of the PSO system and how they can be remedied.
PSOs are part of the answer, but not the complete answer. I understand that Durham Tees Valley airport is looking at the economics of having a PSO, but there are three parts to the equation. First, the PSO process is bureaucratic; secondly, if successful, it secures only the slots; thirdly, the landing charge system at Heathrow discriminates against regional flights. Those three issues militate strongly against PSOs. If a subsidy is needed to pay for the landing charges, the cost is borne not by the Department for Transport, but by local authorities or regional agencies such as regional development agencies, whose primary purpose is not to subsidise landing charges at Heathrow. That is why no region has successfully pursued a PSO at Heathrow.
There are one or two PSOs in the highlands and islands of Scotland, and in Wales, I think, but there are more than 250 in Europe. To ensure access to Heathrow from peripheral regions and to help their economic development, the Government should regulate to retain regional flights to Heathrow. In addition to the six airports, a minimum of three return flights a day should be allowed from Durham Tees Valley, Leeds Bradford, Plymouth, Newquay, Cardiff and Exeter. That would require 15 slots a day, and would retain regional connectivity to the peripheral regions. That is less than 1 per cent. of Heathrow’s capacity, which has about 480,000 slots.
The Government also need to discuss with BAA and the airlines a commercial tariff that will enable those flights to take place based on the take-off weight of the aircraft. They should also amend the regulatory framework in the interests of the whole UK to improve regional accessibility into Heathrow. The regions expect the Government to ensure that Heathrow can be used by the whole of the UK.
I shall put to the Minister four other recommendations, which are also supported by the Northern Way and the Tees Valley joint strategy unit. First, the regulator’s duties should be expanded to give the Civil Aviation Authority a general duty to promote access to air services throughout the UK from London Heathrow in support of the Government’s commitment to regional growth.
Secondly, using the duty, and recognising that the economic benefits of domestic services contribute to meeting the Government’s wider policy agenda, which is not currently reflected in the airline’s financial benefits at price-regulated airports, regulation should be used to promote a differential in airport charges for domestic services, compared with international services, under overall average yield per cap.
Thirdly, the Secretary of State should use his ability to give direction to the regulator. That is an important tool for shaping the regulatory regime to support, as far as possible, the Government’s wider policy goals, including those related to regional economic development. To avoid the risk of excessive interference from the Government, I suggest that any draft directions should be published and should be subject to consultation through open process.
Fourthly, I encourage the Government to consider the case for PSO air services on the same basis as other EU member states, taking into account both the social and financial benefits of air services. The potential for air services from Heathrow to regional airports should be further investigated for slot protection through being designated as public service operations. Will the Minister get his civil servants to look again at the draft regulatory framework, and ask them, under his political guidance, to encourage some thinking outside the box? This issue is about more than aviation, airports and airlines; it is about the future economic growth of our regions, selling our goods worldwide and remaining a global player.
It will be the best part of nine or 10 years before the first aeroplane taxis down the third runway. That is a long time, but the issue of providing a decent service from Heathrow to the regions needs to be sorted out now; UK plc deserves that. All I ask for is some joined-up thinking.
Order. Front-Bench speeches will start at 10.30 am. Five colleagues seek to catch my eye, and we have only half an hour left, so if they keep their speeches brief, that will be appreciated. Four people have given notification that they wish to speak, so they will have priority.
It is a pleasure to serve under your chairmanship for the first time, Mr. Streeter. I also welcome my right hon. Friend the Minister to his new post.
I congratulate my hon. Friend the Member for Sedgefield (Phil Wilson) on securing the debate on an issue of broad interest. As he made clear in his opening remarks, the issue has influence locally, regionally, nationally and internationally. The South West Regional Committee, of which I am Chairman, will carry out an inquiry into transport across the region, which will undoubtedly encompass the role of regional airports.
I have a regional airport in my constituency, and I am therefore aware of the concerns expressed by local residents about the use of the airport and the environmental consequences of air travel. I am also aware of the wide support that the airport received, both from constituents and local businesses. I shall endeavour to express a wide range of views from Plymouth without in any way pre-empting the future investigation of the regional Select Committee, which will hopefully happen in about a month’s time.
I shall begin by talking about the issues that directly affect Plymouth before looking at the wider south-west. From Plymouth’s perspective, air services are generally viewed as fundamentally important to the social and economic strength of our city. That view was clearly expressed by my hon. Friend the Member for Sedgefield in relation to his area. The airport is a key element of the city’s growth agenda, and its continued existence and future growth has been factored into assumptions made about our local economy. It provides—as do all regional airports—vital connections into London.
Air Southwest is the sole airline operating from Plymouth, and it has slots at Gatwick and, most recently, at London City airport, as well as a range of connections to other major cities. However, it no longer has access to Heathrow. There are concerns across the sector that the trend of regional operators losing access to Heathrow could have a detrimental impact on regional economies, some of which are very fragile at the moment. Such concerns are not new. Indeed, as long ago as 1998, the then Environment, Transport and Regional Affairs Committee concluded that because runway capacity in the south-east was in short supply, pressure would be put on regional airports.
I do not want to revisit the arguments for and against the third runway at Heathrow, but the evidence suggests that, without additional capacity in London, economic growth in the regions could be damaged. Offering Amsterdam Schiphol or Charles de Gaulle as an alternative does not work, because of the enhanced range of destinations offered by Heathrow and across London. Serious consideration needs to be given—again, my hon. Friend made this point—to the need to protect regional links into Heathrow as part of any future plans for a third runway and in relation to general capacity issues. As suggested, there could also be a role for the regulator.
To preclude—indeed, to discourage—regional airlines from having access to Heathrow by making the slots extortionately expensive will not help the UK economy, and it certainly will not help the south-west. Despite the environmental concerns, air travel in the south-west is predicted to continue to grow. In a region where the strategic road and rail networks have historically been underfunded and have inadequacies, air travel, whether it involves Bristol, Exeter, Plymouth or Newquay, is essential.
Is it not the case that, economically and environmentally, a far better alternative to having more slots at Heathrow for regional airports is high-speed, affordable and convenient trains, particularly for cities and regions that are within, for example, 500 km of Heathrow? That would encompass the vast bulk of the population of England. Is that not the way forward, rather than having more slots at Heathrow?
I hear what my hon. Friend is saying, but he clearly does not know the south-west very well. Frankly, the idea of our getting a high-speed rail link all the way down to Cornwall is simply not a runner in the medium term. We may get it as far as Exeter or Bristol, but that does not work for Plymouth or Cornwall. We desperately need those regional air links. Cornwall is, of course, an objective 1 area and is one of the poorest regions in the country. Without regional air links, I am afraid that businesses will not come to the far south-west. I understand the environmental arguments, but this is a very difficult issue for our region.
As I have said, road and rail are alternatives, but those in the business community who want to conduct business in London do not have five hours to spare to travel there either by car or train. It takes me five hours door-to-door to get to London. A high-speed rail link would be fabulous, but in the short and medium term that is not going to happen. I want businesses to feel that they can commute to Plymouth or London for business in a day, without having to rush or be utterly exhausted.
Proposals for a runway extension at Plymouth would allow slightly larger planes to use the airport. That has some very strong support across the city and already much of the land required has been safeguarded. However, I suspect that that proposal is, again, unlikely to go ahead, because the costs run into tens of millions and the pressure on the major funders is likely to make it impossible. Genuine concerns would be raised both by organisations representing residents who live close to the airport—such as the Derriford and Birdcage residents association—and, of course, environmental groups. However, for the reasons that we have heard, regional flying could be less harmful to the environment than mainstream aviation. I am advised that the Dash 8 aircraft currently flying in and out of Plymouth has fuel consumption equivalent to 70 miles per gallon per passenger. Many of those who use that aircraft would otherwise use a car.
Why do we need a vibrant regional airport? Plymouth is one of the drivers of the sub-regional economy and, as I have said, it borders on an objective 1 area. We have unemployment well above the regional level—the most recent figures put it at 5.8 per cent. That is set against the city’s growth agenda, which still has a target of increasing our population by 30,000 in the next 10 to 20 years, as well as increasing employment. To support that growth, there is a determination to encourage inward investment. We have established a city development company which is supported by the regional development agency, and the city council has good links to other local business organisations.
The regional development agency’s strategy in the area is for there to be a developing role for most of the region’s airports, namely Newquay, Plymouth, Bournemouth, Exeter, Staverton airport in Gloucestershire —a much smaller airport—and Bristol. The priority is to address the issue of peripherality, which is why regional airports are so important. The regional development agency also understands the importance of protecting routes into Heathrow and Gatwick by the use of public service orders. Plymouth city council has actively been pursuing the option of trying to get a public service order for Plymouth linking into Heathrow, but, so far, it has failed. My hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) and I have written to Ministers, and I know that the hon. Member for South-West Devon (Mr. Streeter), who is in the Chair today, has also tried to raise the issue through parliamentary questions and other means. We would very much like to have our route protected in that way.
The hon. Gentleman should do his homework. Mr. Jamieson was my predecessor, so it would have been a bit difficult for me to write to him.
I know that a number of hon. Members want to speak, so I shall conclude. If the Government are serious about supporting regional economies, they have to support the infrastructure and links into our regional airports and the regional airports themselves. I look forward to hearing wider evidence on the role of our region’s airports during the Select Committee inquiry and I, obviously, also look forward to hearing the Minister’s response today.
May I start by declaring an interest? I have been involved on a financial basis with air taxi work. I also declare a deeper interest in relation to the need to have a realistic attitude towards aviation as a whole. There are powerful economic, cultural and political reasons for connecting the world with itself. The most sensible way of doing that is through aviation. Last week, Oxford Economics launched a report called “Aviation: the Real World Wide Web”, which contains some powerful arguments that are often ignored in debates about aviation. Those arguments show that aviation has reduced many problems that we would face if we thought of ourselves in terms of being an individual country, rather than a global village. However, perhaps that is a debate for another time.
We must be realistic about aviation. There is no question—in fact, it is obvious—but that we cannot control demand for aviation simply by limiting the opportunity to fly internationally from the UK. All the evidence shows that flying is aspirational and motivating for almost the entire British population. Fifty years ago, only a small proportion of the population could afford to fly, and that privilege has been opened up to a much wider proportion of people. Indeed, as an island country, if we want to travel, we have to cross water. The Eurostar obviously connects us to France and further afield, but it is not practical to make every journey by train—even if we had high-speed links, which I very much support. Unless we adopt some sort of Talibanesque limitation on people’s right to travel, we have to accept the fundamental reality that aviation will continue to expand.
On high-speed links, if Heathrow were connected directly to the channel tunnel, through which Air France will be running trains from 2012, does that not offer the opportunity to shift many of those using short-haul flights from Heathrow on to the high-speed link?
I agree with the hon. Gentleman and, hopefully, with my hon. Friend the Member for Lewes (Norman Baker), who will summarise the official Liberal Democrat position on these matters. Only a fool would pretend that high-speed rail links are inferior to aviation in terms of economic and practical benefits. The hon. Gentleman is absolutely right. In an ideal world—when the Liberal Democrats take power in 2010—we will support the creation of a high-speed rail link which will, in large part, obviate the need for regional aviation in the UK. It is not a sensible way to transport people on what is a relatively small island.
I made one of the earliest predictions that the likely outcome of the 2010 election would be a hung Parliament, possibly with the hon. Gentleman as a compromise leader of the Administration. However, in a serious vein, I have heard him speak movingly and effectively about the polluter paying and level runways for aviation. Is not taxation needed to ensure that aviation compensates wider society for the environmental downsides that it causes? No one is talking about banning people from flying, but the actual costs should be reflected in the ticket price.
I agree. People who have looked at websites when booking flights know the relatively small additional cost of paying for the environmental damage of flying. The environmental offset for a flight is not very expensive. Of course, there are issues with offset, but, once again, that is for another time. Let me adamantly confirm that when I appoint the hon. Gentleman Minister for Transport—
Paragliding, actually. I will expect the hon. Gentleman to ensure that the damage caused by every passenger air mile is paid for.
Let me move to regional airport policy. The A380 and the Boeing 747 have been superbly successful aircraft. Indeed, the A380 is the 21st-century jumbo jet for hub-to-hub operations. I recently had the privilege of flying on the A380 with Singapore Airlines, which has an unsurpassed quality of service in economy class and, I imagine, in business class and what it calls suite class on long-haul flights.
However, the real opportunity for regional airport policy is point to point. Aircraft in the design phase at present—the A350 and the Boeing Dreamliner—will provide an opportunity for regions to be connected to other regions around the world. There are obvious economic benefits to that, but there are also environmental benefits. If a journey does not involve a change—in other words, if it can be made in one flight instead of two, especially on efficient aircraft such as the A350 or the Dreamliner—it will have a smaller environmental footprint.
It seems clear that if we are to have a serious regional policy and relieve the congestion around London, point-to-point flights are the natural way to go. Once again, let me emphasise the importance of environmental considerations. I am not suggesting point to point between destinations that can be connected by high-speed rail, but it is the obvious answer for intercontinental journeys. As the Oxford Economics report implies, we can get economic, cultural and political benefits without having to make short flights but by ensuring that point to point on an international basis is possible.
I steer clear of the third runway debate, because there is only so much wrath I want to incur for my party’s Front-Bench spokesmen, but I observe that there are three certainties when it comes to British aviation policy: first, the demand for aviation will continue to rise; secondly, we should commit ourselves to high-speed rail links to obviate the need for short regional flights; and, thirdly, point to point offers an enormous opportunity to connect regions and gain economic benefits. No Government should take away people’s right to fly, but every Government should commit themselves to the right to save the environment at the same time.
It is not realistic for us to control demand for aviation—that is beyond the political capacity of any party—but we must be realistic about reasonable flight distances, and we should also be realistic about speaking with one voice in the collective interests of Britain. Within that, there is an interest in having a proper and positive strategy on international aviation.
It is a pleasure to speak under your chairmanship, Mr. Streeter, for the first time in 26 years. I congratulate my hon. Friend the Member for Sedgefield (Phil Wilson) on two counts: first, securing the debate, and, secondly, the magnificent way he presented a well-researched demonstration of folly on the part of the Government.
I have no airport in my patch. In 1983, my hon. Friend’s predecessor, Tony Blair, said to me, “Will you take care of my airport? I know nothing about them.” So, from then until 5 May 2005, I looked after that airport. After that, of course, my hon. Friend took over the responsibility, and I am pleased to say that he has done an excellent job.
Teesside airport—or Durham Tees Valley, as it is now called—is the airport in which I have taken a particular interest. It was the airport where I did my flying lessons, and I have nursed it like a baby for 20-odd years. It is particularly with regard to Teesside that I want to speak, but the statements that I shall make are relevant to every regional airport in the country.
Rather than regurgitating stuff that has already been discussed, I want to talk about increased charges for air passenger duty. The irony is that Holland has disregarded it—it has done a U-turn—and Greece has done away with it altogether. That has created a climate in which economy airlines such as Ryanair are basing their aircraft elsewhere in Europe. In fact, Ryanair has moved to Italy; we do not have it in this country any more. That is a common move.
Europe is taking over our markets, and the Government have to realise that. It is as plain as the nose on your face that we will pay heavily for their deafness. The issue was first raised with them in the middle of last year, but no action was taken. The first realistic meeting that we managed to secure, in March this year, was as a result of the persistence of my hon. Friend the Member for Sedgefield. Several of us were there, including my right hon. Friend the Member for Darlington (Mr. Milburn) and those my hon. Friend identified earlier. We were promised that we might have some better news this month, so, like him, I anxiously await word from the Minister about what he is doing.
For those who are interested in the third runway, I voted for the damned thing. I would be happy to see it built and am sure that it would be of benefit, but can we wait that long? When we consider what we welcomed as the northern gateway—it was supposed to help to bridge the gap between north and south—we must ask whether we can wait a further 10 years. The third runway is planned for 2019—that is, if it is built by 2019. I used to train planning engineers, and I know how they can get it wrong.
Some say no taxation without representation, and it is clearly far less exciting to say no taxation without regional airport connectivity, but does my hon. Friend agree that it is entirely unfair for his constituents and mine, and those of everyone else in this room, to pay for the third runway at Heathrow without being able to fly to it from their own regional airport?
Hear, hear. So be it. It is self-evident, is it not? I do not need to comment on that, because it is sound logic.
The suggestion being put about in some quarters—certainly from interests such as BAA and even by the former Transport Secretary, my right hon. Friend the Member for Ashfield (Mr. Hoon)—that the cure to all our ills is the third runway at Heathrow is fanciful.
The reality is that the death of regional services to Heathrow—only a handful are left, as my hon. Friend the Member for Sedgefield said—is a here-and-now issue. If we are to improve the economic welfare of the north of England and the other regions in the country, we cannot wait. The fundamental reason why regional services have vanished from Heathrow is that the cost structure operated by BAA, which is endorsed by the Civil Aviation Authority and the Competition Commission, means that they are uneconomic.
The Government have indicated that they might be persuaded to consider ring-fencing slots for some regional services through the public service obligations orders, but which airline will be prepared to use those as long as the unfair and punitive charging system remains in place? We have to change the charging system.
The real solution is for the Government to say to the CAA, the Competition Commission, and even BAA, that a key element in deciding the costing structure at Heathrow has to be securing the viability of regional services, given their critical importance to the nation’s economy, and especially given the ambitions to bridge the north-south economic divide. Ministers have claimed that they have no powers to intervene over the Heathrow charging regime, but I do not accept that. I have been in the House for 26 years and I know what Governments can and cannot do. There is not a lot that they cannot do—I have seen it and been part of it—so it is nonsense to say that they cannot intervene.
It is no use waiting until some new golden age in which the third runway will solve our ills, because it will not happen. Unless the Government act now, by the time a third runway does happen—if it happens—Schiphol airport in Amsterdam will be even more firmly entrenched as a gateway to the world for much of the UK public. Incidentally, Schiphol is not the only threat. In Germany, Frankfurt airport has planning approval to begin building a fourth runway, and a third passenger terminal, along with accompanying infrastructure, will open in 2011. The longer we sit here doing nothing, the more we endanger our future.
I have nursed Durham Tees Valley airport for well over 20 years—for 25 years, anyway—and I could go on talking for the rest of the day, but I understand that at least another two hon. Members want to get into the debate. I hope that they can manage it in the eight minutes remaining.
I will try to keep my remarks as brief as possible, Mr. Streeter. I congratulate my hon. Friend the Member for Sedgefield (Phil Wilson) on securing the debate. He concentrated on the economic development benefits, as he sees them, of regional airport development. That is important, but I want to bring into the debate some other, wider dimensions and, of course, as right hon. and hon. Members will have gathered from my earlier comments, I want to say something about the environmental dimension, which is also important when considering policy on regional airports and airports more generally.
The fact is—we all know this—that the growth of air travel is a potential major contribution to the growth of UK greenhouse gas emissions. We have stop that growth, or reduce it, if we are to meet the UK’s wider climate change objectives. That does not mean that we will stop people flying or that we should seek to do so. All of us, including me, fly from time to time. The question is, what is the right balance between environmental considerations and the other economic and societal considerations that have been mentioned today? On regional airport policy and airport policy generally, it is about getting the balance right when we take forward the policies for the future.
Some points have to be made and fed into the debate on regional airport policy. Where possible, domestic journeys in particular should be taken by less environmentally damaging forms of travel. Policy should be designed to encourage that, which means high-speed rail. I hear the comments made by my hon. Friend, who represents the north-east, about high-speed rail. I would like high-speed rail to happen much more quickly in many other parts of the UK than is envisaged in the Government plans. However, I welcome—
Does my hon. Friend accept that there is little prospect of high-speed rail in areas such as the north-east, or even Scotland, in the medium term?
Does my hon. Friend also accept that one of the main economic factors, which links to the environment, is the fact that we are a global nation and we need to develop relationships with companies from the other side of the world? We in the north-east have good relationships with such companies, as my hon. Friend the Member for Sedgefield (Phil Wilson) said. However, without regional links those companies will say, “We can’t make that link. There’s no point in our going to the north-east, because we can’t get there easily enough.”
The environmental arguments in respect of Schiphol are worse, because the Dutch are not being as strong on the environment with airlines as our Government are.
I would like high-speed rail to happen much more quickly than some people envisage, but I also take the point about the need to improve connectivity now. A factor in respect of high-speed rail is creating links to major airports and other airports in the UK, including Heathrow and Manchester. But things could be done to improve connectivity through the existing rail network. I make some of my journeys to Edinburgh by air because the last train from London to Edinburgh is at 6 pm, which is not convenient for many business passengers, let alone leisure passengers. Things could be done in that regard, too.
Three airlines fly from Edinburgh to Manchester—there are 10 flights a day. One reason for that is that that route is about half the distance of Edinburgh to London. The train can sometimes take about four hours to get there. Things could be done to improve existing regional connectivity, including to airports, which might meet some of the concerns mentioned by my hon. Friend the Member for Sedgefield.
I accept some of the points made about connectivity, but my point is that we need to get away from journeys within the UK that could be made by other forms of transport, thereby freeing up space for that type of air travel, perhaps leading to connectivity for the north-east, which is not provided for at present. I have some reservations about the arguments advanced on reserving slots in the way my hon. Friend suggested, but I am happy to consider that. However, we cannot lose sight of the wider environmental considerations.
With regard to economic trends, and some of the trends in air travel, there is a case for reviewing airport policy and taking on board the points on connectivity made by my right hon. Friend the Member for North-West Durham (Hilary Armstrong), but the case for reviewing the decision on a third runway is stronger than ever. I hope that the Government, in considering how airport policy is advanced, take account of the wider environmental considerations, along with the important economic considerations raised by my hon. Friend the Member for Sedgefield.
I thank Catherine Coulthard for the support that she has given me in preparing for the debate.
It has been well stated that the north of England needs some strategic intervention in respect of its airports for it to be able to be competitive not just within the UK, but internationally. There are two principal reasons for that. First, strategic Government interventions now in northern airports will reduce the need for other, probably more difficult and expensive, state interventions in other parts of the northern economy in future. To reduce and ultimately stop the dependency of parts of the north of England on long-term Government intervention and support, it is imperative that the Government invest wisely to ensure that the north can compete in its own right, regionally within the UK and internationally. There is real intrinsic value in spending now; it means spending much less later.
Secondly, the south-east cannot keep growing indefinitely in population, the impact of its growth on the environment and much else. This is not good for the country or for our economy, and not good for the people of the south-east. It is, ultimately, bad news for our democracy as well. This Government have a proud record of redistributing wealth on a social and individual basis. That redistribution must accelerate regionally. The economy of the north of England does not require a long-term hand-out; it requires a short, sharp hand-up.
At a time when we are witnessing the end of unregulated energy markets and we can see for ourselves the effect of light regulation on the banking system, it is clear that the policy conclusions in both those sectors need to be taken over into the aviation sector. We need strategic interventions in the regional airports in this country, right now.
I would like to meet the Minister with a delegation to discuss the importance of Carlisle airport to the Cumbrian economy, and I hope that can happen very soon. I support those who are calling for ring-fenced landing slots at Heathrow.
I congratulate the hon. Member for Sedgefield (Phil Wilson) on securing the debate. I do not agree with everything he said, as I will explain, but I listened to him with more sympathy that I would have done to his predecessor—[Interruption.] I wish that the former Chief Whip, the right hon. Member for North-West Durham (Hilary Armstrong), would stand up and make a speech instead of continually intervening from a sedentary position. She does that all the time, and she is still doing it.
The hon. Member for Sedgefield set out two objectives. First, he recognises the need to secure help for regional economies, and I support that objective. Secondly, he expressed sympathy for direct flights, or point-to-point flights, as my hon. Friend the Member for Montgomeryshire (Lembit Öpik) described them. I also support that objective. Clearly, if one must travel from A to B and can do so without changing flights on the way, carbon emissions are reduced.
I support those two objectives, but I do not agree with the prescription set out by the hon. Member for Sedgefield. I have listened to hon. Members here and on the Floor of the House who seem to live in a parallel world where climate change does not exist. It does exist—
I am delighted that the hon. Gentleman is prepared to give way to me. I certainly do not want to do anything other than improve climate change, carbon footprinting and so on in this country and worldwide. Does he accept that BMI’s policy, for example, of cancelling flights from Teesside means that the environmental damage is greater because people use other airports? What faith does he have in manufacturing potential? Despite what has been said, a firm in my constituency is close to an American company that is delivering significant changes to aeroplanes that will reduce their effect on the environment. We should support and invest in such companies to produce better environmental opportunities for air travel.
I agree that we should support such companies, but I have talked to the aviation industry and others in the transport sector, and my assessment is that we are some way from dealing with carbon emissions from aviation, although solutions for road transport are rather nearer. We are probably 30, 40 or 50 years away from a sensible solution that will make a real difference to alternative fuel technology for aviation.
The hon. Member for Sedgefield has a correct beef to pursue in BAA’s and British Airways’ attitude. Perhaps BA should be called “London Airways” because of its policy of marginalising regional airports. I know that colleagues in Manchester feel strongly about the reduction in the number of direct flights from Manchester to New York because they must now go via Heathrow with consequent extra carbon emissions. We can agree on such points.
I am conscious that there has been a big drop in the number of people using Durham Tees Valley airport. CAA figures show that 19,601 passengers used it in February 2009, which is a 52 per cent. fall from the previous year, and such falls must be examined. There is no indication that a third runway at Heathrow would solve the problem. The approach of the hon. Member for Sedgefield should be regulatory, because with a third runway BAA and BA will simply provide more flights to New York, Bangalore and Singapore.
I understand that.
I want to return to the problem of carbon emissions and the point that the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) made. If projected carbon emissions from aviation, even according to Government figures, stabilised where they are now and remained the same in 2050, a cut not of 80 per cent. but of 89 per cent. would be required from this country to compensate for what would effectively be a free ride for aviation. The current projection is that aviation emissions will increase by 38 per cent. by 2040.
The problem is largely out of control, so it is reasonable to consider the alternatives, including high-speed rail. I do not agree with the reference made by the hon. Member for Sedgefield to the north-east being peripheral, nor do I believe that Exeter is peripheral.
I will not, because I have done so twice.
For me, Scottish islands such as Shetland are peripheral. Exeter is not. I challenge the hon. Member for Plymouth, Devonport (Alison Seabeck) to travel door to door from this place to the middle of Exeter by rail or air—
I will not, because I have only four minutes left.
It takes two hours 40 minutes to travel to Darlington—even now, with an unimproved rail line from King’s Cross. That compares favourably with the overall journey time by air, taking account of delays at the airport.
In response to the point about high-speed rail, I understand that, thanks to Lord Adonis and the Government, High Speed 2 is being considered not only for London to the west midlands, but for scoping corridors way beyond that, including to the north-east. I look forward to the report on High Speed 2. My vision for high-speed rail is that it should benefit the north-east, Scotland and Wales. It should not be one line. That is achievable and has been done elsewhere in Europe, so there is no reason why it should not be done in this country.
It is worth making the point that regional airports have sought to expand in recent years, and many of the connections have been for holiday purposes. There is nothing wrong with that, but we must not assume that extra slots will necessarily be taken up by journeys to London for business purposes. They will also be taken up for holiday purposes to holiday destinations.
On the alternatives to short-haul flights to Heathrow and comparing them with the alternative of high-speed rail, when businesses were polled in 2008, almost 10 times as many UK businesses supported the suggestion of a high-speed rail link from London to the north as supported the expansion of Heathrow with extra slots to the north-east.
The Airport Operators Association has said:
“Using CAA statistics, even if all of Heathrow’s domestic passengers switched to rail, Heathrow would operate at around 90 per cent. of capacity and still be full before 2020 when a third runway could be operational. Rail is not an alternative to airport expansion, but it is part of a coherent intermodal transport policy.”
I do not accept that. There is an alternative to a large range of domestic destinations and new European destinations. There should be direct train journeys to Amsterdam and Berlin, for example. There is no reason why we should not be able to make such journeys by rail. Yesterday, I met Deutsche Bahn to talk about that. Plans are progressing well, and when EU open access occurs in 2010, we will see more of those journeys.
Twenty-four hours ago, Mr. Streeter, I sat in your Chair and heard a fine speech by the hon. Member have for Canterbury (Mr. Brazier) in which he comprehensively demolished the research underpinning what Oxford Economic Forecasting has said, which shaped the predicted usage of aviation, both freight and passenger. Is it not about time that we had a thoroughly independent and effective analysis that is more balanced than the Oxford document, which is substantially discredited?
Yes, it is. The aviation industry has made a practice in the past 10 years of skewing figures to try to influence Government policy in an improper direction. We need an independent look at the issue, and I hope that with a new Minister in charge and Lord Adonis as Secretary of State, we will get it.
I have not been able to make all the points that I wanted to—I have been keen to give way to hon. Members—but let me say to the hon. Member for Sedgefield that I very much sympathise with his wish to support his regional economy. That is right. I also sympathise over the lack of direct flights, the pulling of flights and the loss of slots to London. However, the prescription that he produced for more flying, while dismissing the environmental case and ignoring high-speed rail, is not the right solution.
It is a great pleasure to serve under your chairmanship, Mr. Streeter. I congratulate the hon. Member for Sedgefield (Phil Wilson) on securing this debate on regional aviation policy. He is a strong supporter of his local airport, Durham Tees Valley, which is also my sister’s local airport; she lives near it. Like many regional airports, Durham Tees is struggling in the current economic conditions. Figures obtained by the Airport Operators Association suggest that airport employment will fall by one quarter this year and the average profits at UK airports by one fifth. My party profoundly believes in the importance of our regional airports and the contribution that they make to regional economies.
I have not seen the detail of that statement, but the position at the moment is that we have a number of busy airports in northern England. Having used Newcastle and Leeds myself and my sister being a regular user of Durham Tees Valley, I am conscious of the role that they all play.
Regional airports have grown in popularity in the past few years. The hon. Member for Sedgefield cited various figures. The most striking one is that the percentage of passenger traffic going to regional airports grew from 39 to 48 per cent. between 2001 and just before the recession. We support the expansion of regional airports where community support exists. We can see a case for proportionate and sensible expansion of regional airports, with decisions made on a case-by-case basis, taking account of local and national environmental factors as usual. Regional airports have the potential to reduce transit flights by increasing point-to-point movements—as the hon. Member for Montgomeryshire (Lembit Öpik) pointed out—as well as reducing road congestion in the south-east, where there is still an unhealthy concentration of flying.
The hon. Member for Sedgefield stressed the importance of links to Heathrow and I will return to that point, but I think that he was wrong to underplay the importance of direct flights as more and more regional airports get longer runways. My party believes that regional airport policy should allow maximum utilisation of existing infrastructure and thus take some of the pressure off the south-east. Some spare capacity already exists, but in other areas, including the south-east, there are problems. A number of airports are stuck in very long planning processes and there may be good reasons why some of those projects should not go ahead.
Turning to specific issues, I would be interested if the Minister commented on the need for temporary surge capacity in the south-east to deal with the Olympic games. Over a couple of weeks, there will be 900 extra movements. Clearly, smaller airports should pick that up. What thought has he given to that?
My local regional airport, of which I am extremely proud, is Kent International at Manston. Its current infrastructure includes one of the longest runways in the country. It is suitable for code E aircraft such as Boeing 747-400s and is also capable of hosting code F aircraft such as the A380. Sadly, it is massively underused. However, the forthcoming enhancement of the rail service between London and Ramsgate means that travel times will drop from two hours to barely 80 minutes, with the trains passing the bottom of the runway. The medium-term aim is to cater for 500,000 tonnes of freight and 6 million passengers a year, which will potentially provide 7,500 jobs. Even partial success would make the airport a substantial driver of economic growth in east Kent, which is one of the poorer areas of the country.
Southend is another example of a regional airport that can expand. Its runway is operating at a tiny percentage of capacity, but the planned extension and new railway line will take pressure off other south-eastern airports.
I listened with interest to the comments by the hon. Member for Plymouth, Devonport (Alison Seabeck) on Plymouth. My parents live in the west country, so I am rather sensitive to those points, but I put it to her that the Conservative plans for a rail hub at Heathrow that links Heathrow directly into the rail system would transform the ability of constituents such as hers to travel.
I understand the point that the hon. Gentleman is making and it is an interesting proposal. None the less, the time taken on the rail link to go all the way down to Plymouth and Cornwall is still much longer than if we had the air link into Heathrow. Tourism is important. It is important that we get Americans coming to Heathrow who then come to Plymouth to visit it and the far south-west. Playing down tourism is a mistake.
The point is that people would be able to get off an aeroplane and go directly to a rail terminal, which would avoid the huge transfer times.
Today, regional airports are struggling, as a number of hon. Members have said. Air passenger duty is growing substantially, and regional airports have been hit by the economic downturn. A point that the hon. Member for Sedgefield made strongly is that a serious distortion in APD is hitting our regional airports. It is hitting the viability of their routes to Heathrow, which is a key reason why we have lost some of those routes, and it bears down particularly heavily on point-to-point flights, as opposed to people getting a short connection to a continental airport and then doing an APD-free flight from there. There are other anomalies, but one is that charges are based on the distance from London to the capital city of the destination country, not the destination itself. Therefore, frequent flyers to the western United States or eastern Russia pay much less; they get a relatively free ride compared with other people flying comparable distances.
The structure for APD is in a mess. We propose moving to a flights tax to end the absurdity whereby full carbon-efficient aircraft subsidise empty carbon-inefficient aircraft. I do not have time to go into more detail, but my shadow Treasury colleagues are examining the issue closely.
The administered incentive pricing proposal is causing regional airports huge worry. Ofcom proposes to introduce such pricing for the use of aeronautical spectrum, which is a good idea, in principle as it would encourage people to use less. The problem, as the Cave review pointed out, is that some people, including airports, have no choice. The Government themselves have said:
“In many cases, international agreements limit the scope to improve spectrum efficiency”.
Ofcom is ignoring the Cave review. Will the Minister give guidance to Ofcom and tell it to look at what the Cave review and the Government said about the issue? Ofcom’s original consultation document was only placed on its website, not sent to stakeholders. Will the Minister tell us who responded and who provided evidence to Helios and Plum in their work on the impact assessment for Ofcom’s AIP proposals? He may need to write to me on that. Ofcom proposes a two-stage approach to spectrum pricing. When is the second consultation, on pricing of radar and aeronautical radio navigation aids, expected? Have the Government done any detailed research on the cost implications for regional airports? To give one example, the losses at Inverness would be increased by one sixth—that would be picked up directly by the Scottish taxpayer.
Can the hon. Gentleman guarantee, given the indication from the shadow Chancellor of the Exchequer, the hon. Member for Tatton (Mr. Osborne), that there will be a 10 per cent. cut in funding for public sector projects after the next election, that the Conservative proposals for high-speed rail will go ahead?
The Conservative proposals for high-speed rail have been personally endorsed by the leader. They are a long-term project, although the first stage, which connects into the link to the channel tunnel, is the one that will deliver most of the alternatives to flying by bringing journeys by rail to Brussels, Paris, Amsterdam and many other destinations within three hours. The Conservative party is closely committed to that project. The hon. Gentleman and I have the same view on Heathrow and similar views on high-speed rail, but I do not share his downbeat view of the savings that can be generated by some of the exciting developments in aeronautical technology or the carbon savings that will come from biofuels.
To conclude, the Conservative party believes that regional airports are a huge asset. We must find ways to make life easier for them.
It is a pleasure to see you in the Chair, Mr. Streeter. I know that you have a genuine interest in this area of policy.
One’s nervousness is compounded by the fact that the Prime Minister’s Parliamentary Private Secretary has walked into the Chamber. I hope that she is here for the next debate, rather than to take notes on this one.
I congratulate my hon. Friend the Member for Sedgefield (Phil Wilson) on his excellent and thought-provoking speech. He is a champion of the north-east, not just because he led a delegation with my right hon. Friend the Member for North-West Durham (Hilary Armstrong) and others to meet the previous Aviation Minister, or because of the issues he has raised at Prime Minister’s questions, but because of the way he has challenged and cajoled previous and current Ministers and officials regarding some of the challenges that his region faces. That will benefit not just his region and his constituents, but the wider community.
We have had interventions and speeches from across the UK. We have heard from North-West Durham; Montgomeryshire; Paisley and Renfrewshire, North; Edinburgh, North and Leith; North-West Leicestershire; Castle Point—I always enjoy it when the hon. Member for Castle Point (Bob Spink) has a dig at the Mayor of London—Orkney and Shetland; Lewes; Canterbury; Copeland; and Stockton, North. I will try to deal with the points that have been raised, but if I do not, I will, of course, write to my right hon. and hon. Friends, as well as to the hon. Member for Canterbury (Mr. Brazier), who speaks for Her Majesty’s official Opposition.
The hon. Gentleman was understandably nervous when asked to confirm his leader’s view that there should be only one airport in north-east England, and he was nervous when asked another important question. I know that this is a hard assumption for my hon. Friends to make, but let us assume for a second that the Leader of the Opposition is being truthful when he says that, should the Conservative party form a Government—God forbid—the only ring-fenced areas of expenditure would be the NHS, development and schools. That raises the question of where the cuts will be made, so when I am being sanctimoniously lectured about high-speed rail, I know that the words I am hearing are not worth the breath taken to say them.
My hon. Friend made an interesting speech. I have great respect for the hon. Member for Lewes (Norman Baker), but I do not envy my hon. Friend her five-hour journey with him to Plymouth. However, she raises a serious point, because this is not an either/or. We need to recognise that only one party—well, there is probably another one—is committed to investment in infrastructure, which is what we are talking about.
The hon. Member for Montgomeryshire (Lembit Öpik) made an important speech. I enjoyed his comments about the Talibanesque ban on people’s right to travel—even more than I enjoyed his comments about the Liberal Democrats taking power in 2010. However, he made important points about the different options that exist, about the fact that we live in a global village and about the many challenges that we face.
My hon. Friend the Member for Sedgefield also raised important points, and I will come to them. First, however, let me say that the Government fully recognise the importance of the UK’s regional airports as contributors to the UK aviation sector and in creating greater choice for passengers.
My hon. Friend referred to the White Paper and he is familiar with it. For other colleagues, it is worth pointing out that we accept that the failure to allow for increased airport capacity could have serious economic consequences at regional and national level. Airports, including those in the regions and the devolved Administrations, are an important focus for the development of local and regional economies. We accept that they attract businesses, generate employment, open up markets and provide important impetus to regeneration.
Let me give some examples of the growth in regional airports. Manchester international airport has increased the handling capacity of its transport interchange with the opening of a new £15 million rail platform in December 2008. Last October, Glasgow international airport’s Skyhub terminal extension opened, greatly improving facilities for passengers. Earlier this year, Birmingham international airport gained planning approval to extend its runway. Improvements have been under way at other regional airports, including Glasgow Prestwick, Aberdeen and Bournemouth.
However, we cannot escape the fact that private sector airlines and airports are seeking to stay profitable in the downturn, which is having a major effect on their business. UK airlines operate in a competitive international market, as several colleagues have said. We cannot escape the fact that some UK airlines have announced plans for job losses. They want to fly more profitable routes.
We also have to state the obvious. My hon. Friend the Member for Stockton, North (Frank Cook) thinks that the Government have huge power, but we simply do not have the power to tell airlines what routes to fly. Although we can and do try to influence their decisions, airlines and airports will make commercial judgments.
We are clear that the fall in passenger numbers in 2008, which several hon. Members have mentioned, reflects the current cyclical economic position, not a change in the fundamental drivers behind the longer-term growth in UK air passenger demand, which we continue to expect to remain strong as economic growth recovers.
Hon. Members, including my hon. Friend the Member for Sedgefield, have approached the Government about opportunities for state assistance to maintain air services between regional and hub airports. My hon. Friend the Member for Plymouth, Devonport (Alison Seabeck) referred to her council approaching the Department. In our guidance, we have set out how we assess such applications, and we will look at any submissions.
We will carefully consider any application from regional bodies for a public service obligation to support a regional air service, although, as I said, it is not possible to guarantee in advance that one will be approved. Any proposal would have to meet EU eligibility criteria and be subject to a full economic assessment. My hon. Friend the Member for Sedgefield has called for a review of that policy. I cannot give him a commitment on that today, but I can confirm that we will explore what assistance can be given to regional airports.
In his excellent speech, my hon. Friend referred to the economic regulation of airports. As one of the regional stakeholders who expressed concerns in response to the Government’s recent consultation on proposals to reform the economic regulation of airports, he will be pleased to know that we will publish our response later this year. We will look at all the options and respond to his points, as well as to those of his region, which has also responded and has been quite vociferous in its views.
My hon. Friend the Member for Stockton, North raised the important issue of air passenger duty, and he is not the first to do so. Other colleagues have cited the changes to APD that the Chancellor announced in November 2008 as a possible reason for withdrawing services at regional airports. From this November, APD will expand from two to four bands to send a stronger environmental signal that passengers flying further will pay higher rates to reflect the greater levels of emissions from their flights. I know that the hon. Member for Lewes has a keen interest in the issue. We estimate that that reform will save 0.6 million tonnes of CO2 by 2011-12, compared with now.
Several colleagues have spoken, and I want to deal briefly with some of their points. I have no doubt that my hon. Friend the Member for Sedgefield will continue to lobby, harangue, harass and cajole me and my colleagues in the politest and most courteous of ways.
I am happy to meet my hon. Friend the Member for Copeland (Mr. Reed) to discuss his concerns about Carlisle airport. In his two minutes, he managed to make some important points. As I said, the hon. Member for Montgomeryshire made a very thoughtful speech. I have huge respect for the hon. Member for Lewes, but I am not sure that I agree with his analysis of road versus air, because both are an option. However, he is right about High Speed 2, because our vision is not simply of a route from London to the west midlands. The hon. Gentleman has read what my right hon. Friend the former Secretary of State for Transport has said, and he will know that we want the whole country to be served by high-speed rail. He was, however, a bit unfair when he suggested that my hon. Friend the Member for Sedgefield, or anybody else, had said that climate change did not exist.
My hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) made an important speech about the balance that needs to be struck. He will be aware of the summit taking place in Copenhagen later this year. For the avoidance of doubt, let me say that we have the toughest environmental conditions anywhere in the world in place for runway 3.
In the nine minutes that I have had, I have tried to deal with most of the points that have been made. I will write to those colleagues whose points I have not been able to deal with. Once again, I congratulate my hon. Friend the Member for Sedgefield on his excellent Adjournment debate. He has raised several serious issues, which the Department and the country need to take on board.