Examination of Witnesses (Questions 260-279)
Tuesday 1 July 2003
RT HON
ALISTAIR DARLING,
MR ROY
GRIFFINS AND
MR GRAHAM
PENDLEBURY
Q260 Chairman: I was getting my retaliation
in first!
Mr Darling: I thought that. Sadly
my radio alarm was set for two minutes into your interview. As
I was listening I thought this sounds very familiar and then I
realised with horror this was the day I was coming to see you.
There clearly are arguments to be had. For example if you take
low cost air travel, in 1998 seven million people went by low
cost airlines, today's figure is 35 million, that is a very large
number. There are all sorts of considerations we need to take
into account. The central point is not just as a country but throughout
the world we have to take a view on what we do to make sure that
the environmental cost of air travel is met. That is easier said
than done when you are dealing with a global industry than if
you are dealing with a purely domestic one.
Q261 Mr Barker: Surely sustainability
means more than just an economic cost? You cannot just measure
sustainability—it is a financial cost—can you?
Mr Darling: As you will know there
are a whole host of ways in which you might want to look at it.
Q262 Mr Barker: I am trying to quantify
this statement you have just made that all transport must be stainable?
Mr Darling: What I mean by that
is that when we plan for the future, when we take account of the
fact that as a country we become more prosperous, we want to travel
more, we have more reasons to travel we should try and do that
in a way that is sustainable.
Q263 Mr Barker: What does sustainable
mean to you?
Mr Darling: What I mean by it
is that you have to balance the fact that if you move round at
all there is clearly some environmental impact with the fact that
you should do your best to try wherever you can to mitigate the
effect of that. You cannot just carry on blindly as if somehow
the damage to the environment does not matter. I know there are
many people who have had a stab at giving a precise definition
of sustainability but what I mean by it is that what we have to
do is to so arrange our policies that what we do is something
that is capable of lasting without doing untold damage to the
environment in which we live. It is always going to be a matter
of balance and a matter of judgment as to where you strike that
balance, especially so in the case of air travel.
Q264 Mr Thomas: Can I just ask you,
Secretary of State, about the SPASM model which I understand lies
behind some of the assumptions in the consultation. This internal
model that you have in the Department of Transport I understand
was re-run using new co-ordinators, as it were, by the CPRE and
Friends of the Earth amongst others. Some of the factors they
put into that were factors that are not at the moment being consulted
on, like VAT on aviation tax similar to that on car tax and the
abolition of duty free. When that model was re-run by your civil
servants using the new parameters set by these organisations it
came out with the need for no new runway anywhere in the United
Kingdom by 2020 and a much significantly reduced amount of air
travel because precisely, as you said a little earlier to this
Committee, you now had air travel actually meeting the real cost
of its pollution. Why was that not part of the consultation?
Mr Darling: The whole point of
a consultation is to get people's views on what they think ought
to happen. Some people say we should put VAT on fuel, this is
where you get the figure of £8 or £9 million referred
to on the radio this morning. If we follow that advice it is to
put something like a nine-fold increase on air passenger duty.
This is quite an interesting, philosophic question as to whether
your policy ought to be to price people off airlines. Let us be
in no doubt what that means, that means each and everyone of us
sitting round this table saying to our constituents, "some
of you are not going to be able to fly". That is what pricing
off actually means.
Q265 Mr Thomas: Or not so often perhaps?
Mr Darling: Take the person who
is going to Italy this summer from your constituency, what you
are saying is, you can only do that if we are putting £100
on each ticket, or whatever it is.
Q266 Mr Thomas: It would cost them
five times more to travel from my constituency to Gatwick or Heathrow
than it would to travel to Italy, there is something warped and
perverse in the system, is there not?
Mr Darling: That is a separate
point.
Q267 Mr Thomas: It is all transport.
Mr Darling: Of course it is all
transport, I will come back to those points. In relation to air
travel if your primary objective is to reduce the emissions, to
reduce the environmental damage there are different ways in which
you can do that in relation to trading schemes and other constraints,
and so on. Of course that can be done at a European level, to
some extent it is frankly something that would have to be done
on a global level. You could take the other approach, I would
not characterise all of the Friends of the Earth saying that,
some people say you just price one section of the population off
and say, sorry you cannot go. I think there are difficulties in
that. I think there are real political difficulties in saying
that and you also have difficulties in the sense of saying, "sorry
only rich people can fly". That is a view that you are entitled
to take if that is the one that you hold. As far as my general
philosophy in relation to transport is concerned, domestic and
international, as the world becomes more prosperous people will
want to travel more. Clearly we want to encourage people to travel
in a way that is as least environmentally damaging as possible.
One of the other by-products of the policy you are advocating
is if you say to people, "you and your family cannot fly
to Spain", what will happen in some cases is people will
climb into their cars and try and drive across. I am not sure
I want to encourage that sort of thing. As you know road travel
has its risks and it is also environmentally damaging. The point
you make is, yes, there are people who were consulted, who have
come in to us and said what we should do is shove up taxes. I
indicated earlier this year that I thought the policy that was
predicated on saying to a large section of the population, "sorry,
you are not allowed to fly, that is the province of a few rich
people", does not seem to me to be a terribly great place
to start.
Q268 Mr Thomas: Accepting that as
a philosophical point there are also hard practical points and
practical alternatives as well in terms of the expansion of runways
in the south east of England and access to that particular mode
of transport. When 35% of my constituents cannot afford a car
there is obviously a pricing mechanism going on here that says
they choose not to run a car because of price and yet we allow
air travel not to bear those similar costs. I simply want to ask
you, what, in fact, is your philosophical approach to this? Is
it whether it needs to be done at European level or whether it
needs to be done at an international level? Is it to try and work
for that greater cost to be borne throughout the whole range of
aviation or is it simply to allow for the expansion of on-going
low costs that we have seen?
Mr Darling: I think there are
two parts to this, firstly in relation to our policy it is clearly
set out in the consultation documents which we published last
year, which I referred to, that the Government's belief is that
the "polluter pays" principle is right. The nature of
how you do that and the rate at which you can do it depends to
a large extent on the international remit, because that is the
way that aviation is constructed. Even if you pursue that line
the question still arises, this is what we are consulting on,
do we need any more airport capacity in the South East and indeed
in other parts of the country? As you know in Wales, for example,
there are many people who want traditional airport capacity for
many reasons. If you look at what has happened in relation to
the cost of flying it is not just taxation, the reason the low
cost airlines are so much cheaper is because to a large extent
they have stripped out the selling costs. If you add some of that
back in it might not have the effect that you want to achieve.
Q269 Mrs Clark: Can I just take you
back to the whole environmental issue, you have just said that
you are concerned about the possibility of people not flying to
Spain but going on the road and using their cars. Is it not true
that the aviation industry is turning into a total pariah, in
much the same way that the nuclear industry has a bad environmental
reputation, and in fact chasing up to producing about one third
of CO2 emissions. What do you say to all of that?
Mr Darling: With respect, the
language you are using is somewhat extravagant. I think you are
right that the airline industry throughout the world is a major
contributor to harmful emissions, which is why—the point
I made to Simon Thomas in relation to that—that is something
that is going to have to be dealt with globally, it is something
that the Government believes does need to be tackled. My point
in relation to travelling to Spain, and I just cited that as an
example, is if people want to travel and visit places clearly
there is a balance to be struck in relation to the cost of air
travel and the corresponding cost that would arise if you shifted
more people on to the roads travelling across continental Europe.
That is one of the considerations the Government would have to
put in place.
Q270 Mr Challen: I would just like
to go back to the question of what I should tell my constituents,
particularly in relation to the SPASM report, and the revised
way it was done with Friends of the Earth and the rest of them.
I do not think if I went to my constituents and said, "would
you mind paying the average increase in inflation on your air
fares?", they would object to that. I think they would find
that a reasonable proposition, rather than the assumption that
we seem to be making that air fares are going to fall by 2% every
year. Should we not be doing something to correct the assumption
that the public have that if you fly from Liverpool to Dublin
for £7 one way that is creating false assumptions for the
public and that this is a sustainable way of getting from one
place to another?
Mr Darling: Firstly, what was
being put to me by Simon Thomas from the Friends of the Earth
submission or even the Royal Commission is it was not an inflation-only
increase they were talking about. The Friends of the Earth submission,
or at least people who are arguing that point, suggested the equivalent
of a nine-fold increase in air passenger duty and the Royal Commission
suggested £70 on a return ticket. It is not just inflation
you are talking about, in relation to sustainability if you look
at these tickets, yes, you can get some for single figure returns,
but I think anyone who tried to book these would see that is not
universal. I made the point in the House fairly recently in terms
of long-term sustainability and economic sustainability that airports
would not be able to last indefinitely by letting low cost airlines
come in paying virtually no landing charges. Although these agreements
are commercially confidential it is well known the low cost airlines
can drive a pretty hard bargain with some airports that are anxious
to get them. If at some point you need to renew your runway or
re-build a terminal building you have to get income from some
point. All of these are things that we need to consider in terms
of whether something is economically sustainable or environmentally
sustainable. That was the whole point of the consultation and
the whole point of considering the conclusions that you no doubt
will come to when you consider your report.
Q271 Mr Challen: The issue of the
re-done SPASM report is that you could introduce these extra charges
or taxes or VAT over a period of time incrementally, you would
not just turnaround and say all of a sudden we are going to change
you, the passenger, with a £70 charge. Why can it not be
done incrementally so that we are seeing this gradual expectation
growing amongst the travelling public that things are always going
to get cheaper and therefore they are going to travel more?
Mr Darling: As people become better
off in real terms they will want to travel more. That point needs
to be kept in the front of our minds.
Q272 Mr Challen: That is a different
issue. Personal income is one thing—
Mr Darling: It is a related issue.
If people have more money at their disposal they travel more.
Self-evidently that has happened in the last 30 or 40 years. In
relation to the modelling you do you can have all sorts of assumptions,
as you know, and they will come up with a different range of results.
The whole point of us consulting was to look at all these things,
hear what people have to say and at the end of the year we will
set out our conclusions.
Q273 Mr Challen: I certainly would
not go round to my constituents and suggest to them they should
have some limit on their income.
Mr Darling: I bet you would not.
Q274 Mr Challen: That might not be—
Mr Darling: A very short-term
investment I should think!
Q275 Mr Challen: We are talking about
two entirely different things. I accept that if somebody's personal
income goes up they might wish to travel more but if air travel
is not to be contained in a sensible way which reflects the sustainable
needs of the environment, and so on, we do need to have a more
positive approach to it. Your own consultation is based on a forecast
growth of about 4% every year until 2030, is that really sustainable?
Mr Darling: The whole point of
the consultation was to put figures out to the public domain and
to get people coming back saying whether they thought we were
right or wrong. I know there has been a large number of responses
on that point and when we have them all we can then look and see
what assumptions they have made, what we have made and come to
a conclusion. That is the whole point of consultation.
Q276 Mr Challen: The Aviation Environment
Federation suggested this growth in passengers would mean a new
Heathrow every three years by 2030, is that sustainable?
Mr Darling: I would be surprised
if such a proposition was sustainable, never mind the assumptions
behind it.
Q277 Chairman: It is your proposition.
Mr Darling: We are not planning
to build a new Heathrow every three years.
Q278 Chairman: You are projecting
growth of 4% a year.
Mr Darling: We are putting these
figures out in the public domain to consult upon. Had you been
questioning me now and the consultation had been our actual conclusions
you would have been on stronger ground. We are consulting. The
whole point of consulting is to say to people: What do think?
Do we have our assumptions right or do we have them wrong? Then
we are going to have to sit down, apply our judgment to it, publish
our conclusions in the White Paper at the end of this year and
people will then, no doubt, say, "yes, you are doing the
right thing" or "no, you are doing the wrong thing".
Q279 Mr Challen: In the course of
the consultation one is able to look at the premise of that consultation
to see what sort of indicators, messages or signals the Government
might be issuing. In the South East Airport Consultation it says,
"the objectives for airports is to maximise the economic
and social benefits while trying to minimise the environmental
impacts down". "Trying to minimise environmental impacts
down" does sound rather weaker than simply saying we are
going to maximise the economic social benefits. Is that a signal
to people as to what the White Paper is going to contain?
Mr Darling: Not really, no. I
understand that you and others sitting in this room and watching
will be anxious to get whatever signal they want. As I said right
at the start, you will get the conclusions when I told you you
will get them, at the end of this year, and you are not going
to get them before then. In relation to that point the point we
are making there is that as a country, as members of this House
we are going to have to reach a judgment as to the economic importance
of air travel. When I made my statement last year I made the point
about the employment generated from air travel, Heathrow employs
something like 60,000 or 70,000 people in greater west London.
Look at the economic importance to the whole country in terms
of air freight, in terms of passengers, you have to look at that
and alongside it say, "what damage does it do?", or
"how do you mitigate the damage that it does to the economy?"
You as Members of Parliament as opposed to members of this select
committee have to form a rounded view on what these things are.
All we are saying in the select committee is the aircraft industry
is of significant importance to this country but we have to do
things in a way that do our best to mitigate environmental damage.
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