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7.43 pm
Mr. Geoffrey Clifton-Brown (Cotswold): The House knows that I am used to being adaptable. Within days of my appointment to the Opposition Front-Bench team, I was shuffled from my responsibilities for matters involving the Department for Environment, Food and Rural Affairs to those relating to the DLTR. However, you, Madam Deputy Speaker, have advised me that I should not speak from the Front Bench in this debate because it might create a precedent even in these exceptional circumstances. I am therefore delighted to take part from the Back Benches in the debate initiated by the hon. Member for Hayes and Harlington (John McDonnell).
The debate is timely, and the hon. Gentleman covered the issues in a measured and constructive tone. The last thing that anyone would want to do is exacerbate the situation by causing further alarm. Unless we can instil confidence in the general public that they should continue to travel by air, the terrorists will, in a sense, have won. We therefore need to move forward in a constructive fashion.
The hon. Gentleman described many of the lay-offs that have taken place and I do not want to add to the list. However, they are a sign of the pressure that has been put on the airline industry—I use the term in its widest sense—since 11 September. However, the problems do not all result from then; a certain amount of restructuring was due to happen in any case.
It is not all bad news. For example, this evening's Evening Standard reports that Ryanair has just announced increased profits. They have risen by 30 per cent. to 102 million euros in the six months ending in September compared with analysts' expectations of 89 million euros. In addition, revenues were up by 29 per cent. The newspaper quotes Ryanair's chief executive, Mr. O'Leary. Describing his rivals, he said:
- "'Many have used the events of 11 September as an excuse to cover their continuing losses but they were loss making well before then and will continue to be so.'
He praised European Transport Commissioner Loyola de Palacio for 'doing a fine job' preventing 'basket cases' from receiving more State aid."
Ryanair is talking about purchasing more second-hand planes. The Evening Standard reports:
- "It is also talking to owners of 600 second-hand 737s as well as planemaker Boeing about buying 50 more aircraft."
I strongly echo the words of my hon. Friend the Member for Uxbridge (Mr. Randall). I hope that there will be an announcement on terminal 5 very shortly and that,
when it comes, it will not follow the precedents that the Government have set recently. I hope that a full statement will be made to the House before the press is informed, so that we may play a full part in scrutinising the announcement first. Will the Minister take that point on board? I know that there has been controversy about terminal 5, but the industry will gain confidence if it knows where it is going.The infrastructure of London's airports has been mentioned. The number of job losses at Heathrow is likely to be substantial, but the Government could consider a number of options. Last week in Westminster Hall, I made the point that we need to consider the infrastructure used for travelling between London's airports. There is still a poor service between the two major airports of Heathrow and Gatwick, but surely we could consider providing fast rail systems or improving the M25 so that bus travel is quicker and more predictable.
In Westminster Hall, attention was drawn to the Thameslink rail link between Luton and King's Cross. I travelled on it recently and it is still a relatively poor service. It stops at every little station when we want a high-speed rail link between King's Cross and Luton. In fact, as on the link between Paddington and Heathrow, one should be able to check in one's baggage at King's Cross. Even in the current security situation, the ability to check in baggage could be used at more of the terminals that link central London with major London airports, and in respect of links between airports. That would make travel easier for people changing from domestic to international flights.
The hon. Member for Hayes and Harlington mentioned the NATS privatisation programme. The debate on that will have to be reopened in light of today's uncertain circumstances. We need to be clear about the direction that our airspace control is taking. If the second planned airspace terminal at Prestwick is not going ahead—the Minister is shaking his head—he needs to explain where the investment for Prestwick and West Drayton is coming from and where he expects it to go. As I said, if the £1 billion investment from the consortiums is not forthcoming, where will the money come from to fund those two improvements? We need to know that fairly shortly.
The hon. Gentleman also mentioned the Government's role as insurer of last resort. They could provide stability for the industry. The first offer to be insurer of last resort was only a day or two away from running out when the Government announced that they would pay the premiums for another 30 days. We need to know the Government's plans. They should not leave it until the day when the arrangement runs out. Let us try to provide certainty.
The hon. Gentleman said that we should extend the period from 30 days to 180. As I have no technical expertise, I do not know whether that is right, but it seems to me that a longer period would be of great benefit to the industry. Unless there is another terrorist outbreak, I do not think that that would be too expensive. If there is another terrorist outbreak, they will spend a lot more on unemployment benefit and so on. It would surely pay to keep some stability in the industry, and that is one way of doing it.
The hon. Gentleman mentioned negotiating with the European Union on what specific help can be provided when the single regeneration bid ends, because that is
causing uncertainty. Conversations with the relevant directorates general in the EU on what could be done to the state aid rules in such exceptional circumstances would pay dividends. There is a significant threat of job lay-offs, and a number of jobs have already gone. The Government could talk to the EU about that.While the Government are finding out what can be provided for the airline industry, they should consider targeted help for security measures. We know that they are receiving more than £1 billion in airport passenger levy. The Government have increased the rate and are now bringing in that substantial sum. Although that is going into the general Treasury coffers, it would be wrong in such exceptional circumstances for the cost of increased security measures to fall on an individual airline. Carefully targeted measures would be helpful. Again, I do not think that that would be too expensive.
I welcome the hon. Gentleman's eminently sensible initiative to bring everyone together in a taskforce, especially members of the TGWU. I was not aware that it was going to lobby the House on Thursday, and the debate is timely. Many of its members must be apprehensive. It is incumbent on all hon. Members to see what can be done to ensure that as many jobs are preserved as possible and to bring all Government agencies together to decide what can be done to help people who are going to lose their jobs. I was especially impressed with the hon. Gentleman's idea about the Learning and Skills Council. That is a positive initiative to retrain people who lose their jobs, perhaps to re-enter the industry with new qualifications and skills when it revives and expands.
I do not want to detain the House. The Minister can do a great deal to reassure the industry. That would be tremendously helpful. We all need to chart a way through the crisis so that we shorten the recession as much as possible. Every measure will help, including talking to the European and American authorities. We know from tonight's Evening Standard that British Airways is about to drop out of the FTSE 100, which is a serious development. Its profits and share price have plunged. No one wants that. We all want it to recover quickly. One reason why it has taken such a dive is that of all European airlines, it is one of the most dependent on the transatlantic trade. Anything that the Government can do, including concluding a bilateral agreement, would be beneficial.
7.57 pm
The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Mr. David Jamieson): I congratulate my hon. Friend the Member for Hayes and Harlington (John McDonnell) on securing the debate and providing the House with an opportunity to discuss this important subject. I thank him for making so many vital points, and for the calm and measured way in which he raised them on behalf of his constituents.
I want to respond in full to many of my hon. Friend's concerns, but I shall deal first with the comments made by the hon. Member for Uxbridge (Mr. Randall). I am glad that consumer confidence is still high in Uxbridge. I am sure that the good people there are delighted to have a Labour Government who have enabled that to be the case. The hon. Gentleman raised a number of important issues, which I shall address.
The hon. Member for Cotswold (Mr. Clifton-Brown) is temporarily on the Back Benches. I look forward to seeing him on the Front Bench again. He said that he had been assigned to the DLTR; I think he meant the DTLR—the Department for Transport, Local Government and the Regions. That is my Department, and I hope that he is shadow spokesman for it. The hon. Gentleman made the important point, which needs to be made, that some airlines are doing well. Tonight we are discussing some of the industry's problems, however.
The hon. Gentleman will not have to wait long for an announcement on terminal 5, but I cannot tell him what it will contain. He also mentioned National Air Traffic Services, as did my hon. Friend the Member for Reading, West (Mr. Salter), who has a long history of raising that subject. We have not received a request for financial assistance from NATS. We have agreed only a pause in the building programme at the Scottish centre, which we had to do following the events of 11 September. We are firmly committed to the two-centre strategy.
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