Select Committee on Environmental Audit Minutes of Evidence


Examination of Witnesses (Questions 280-299)

Tuesday 1 July 2003

RT HON ALISTAIR DARLING, MR ROY GRIFFINS AND MR GRAHAM PENDLEBURY

  Q280  Mr Challen: Are we in a situation where we could try and nip this problem in the bud and do something about it?

  Mr Darling: The whole point of the White Paper is to set out what the Government's policy is. Despite the temptation you are putting in front of me you are not going to get an answer, which I cannot give you at the moment, because it would not do justice to the various people that spent a lot of time, a lot of effort and probably a lot of money making their representations known to us.

  Chairman: We will to break for the division.

The Committee suspended from 1.10 pm to 1.18 pm for a division in the House

  Chairman: Welcome back, can we start again.

  Q281  Mr Ainsworth: Secretary of State, as you may know my constituency is particularly affected by Gatwick, can I begin with a small plea, a lot of my constituents have only woken up to the fact that the consultation exercise closed yesterday and I am still receiving a lot of letters, will you take them for a few more days?

  Mr Darling: That is no problem, the sooner the better.

  Q282  Mr Ainsworth: I appreciate that. I appreciate you cannot go on forever. Thank you for that. You said several times this morning that one of the points of consultation is to establish whether we need new capacity. Is there a chance that the answer to that will be no?

  Mr Darling: There could be a possibility people could say, no we have plenty of space. I did say last year, and I said this quite deliberately, I did not think nothing was an option.

  Q283  Mr Ainsworth: You are not actually consulting on whether or not to have any extra capacity?

  Mr Darling: It is a perfectly stateable case for people to say, "well, okay, some of the airports are congested do not do anything". I do not know if anybody has said that in consultation but I imagine they would say it. The point I made last summer, and I repeat today, is even if you take conservative growth levels and if you look at airports like Heathrow today—Heathrow is full really all the time, as anybody who uses it will know—the question is, do you need additional capacity? Are there other things you can do? If you need additional capacity where should you put it? If you are having a genuine consultation then it is open to people to argue for doing nothing, although, as I said, looking at what I said last summer there are some difficulties in that approach, ranging from building four runways at a particular airport. Of course there are a range of options.

  Q284  Mr Ainsworth: Doing nothing is not one of them. You are quite clear about that.

  Mr Darling: I said last summer given the pressures that I could see just saying, okay this is not a problem we have to deal with it seems to me to be an unrealistic option. Put it this way, I do not want to be responsible for creating a situation that we now have with road and rail where successive governments, for one reason or another, either put off decisions or did not put enough money into the system. We now have to spend an inordinate amount of money to catch up on the railways, for example as you have seen in the last couple of days. In relation to airport capacity I believe no matter how difficult these decisions are we have a duty to plan ahead. Exactly how much we need to cater for or how much we should cater for that is the whole point of having the consultation. Those are the issues I shall be considering over the next few months.

  Q285  Mr Ainsworth: Take roads; the policy there is to move towards decoupling growth in the economy as a whole. Is that correct?

  Mr Darling: What has happened in the last three years, or so, is the growth in car ownership is slowing down in relation to the growth in the economy and the two are quite closely related. I suppose there comes a point with cars where there is a limit to the amount of cars any one household can have.

  Q286  Mr Ainsworth: Yes, but surely there is a limit to the number of holidays that people can take? 75% of air travel is leisure based, it has grown phenomenally in recent years. When you look at growth projection are you assuming that people are going to take more and more time off work to travel?

  Mr Darling: To some extent they will. Again I come back to the central point, the whole point in publishing a whole range of figures was to get people's views as to what they thought was realistic and what they thought was not. You will know from people you know that the traditional model in this country where most people took one holiday a year is changing, people go away for weekend breaks and part of the low cost airlines success is taken by people at off-peak times from airports that it was not possible to fly from. Obviously one of the things we have to take a judgment on is, is the growth that we project realistic or not? Are people going to carry on flying more and more? I said last year when I made the statement, in the last year or so half the population flew at least once. Is that going to increase in the future? The whole point of the consultation is to look at that. Once we have answered that question we then say, okay given the set of figures that then result what capacity do you need? Do you need more in the South East? Do you need more in other parts of the country? Do you need a combination of them? What is the answer?

  Q287  Mr Ainsworth: Do you think it is reasonable to use fiscal measures to try and manage demand and to achieve environmental outcomes?

  Mr Darling: As you know, in relation to the consultation we are looking at a variety of ways, of which fiscal is just one, they are set out in the document. As I say, that is one of the things we are looking at.

  Q288  Mr Ainsworth: I am thinking of the landfill tax, which is a tax that was introduced at a modest level and it has not been found to be achieving the environmental objective that people wanted and the Government promised to increase it very substantially, well ahead of inflation. Why are you not prepared to adopt this approach when looking at aviation, particularly in the light of the damage it does to the environment?

  Mr Darling: We are consulting. There is a whole range of things that are being put to us and we will need to consider them. Until I publish the White Paper at the end of this year I am not going to set out what we propose to do. By definition we have not decided what we are going to do. For the sake of completeness there is a point on VAT, we had a manifesto commitment not to put VAT on public transport and we will stick to that.

  Q289  Mr Ainsworth: You said something curious earlier, that the demand for air travel would continue to grow as more people are becoming better off. Is the fact that they are becoming better off not a good reason for putting prices up rather than forcing them down?

  Mr Darling: I note your enthusiasm for putting up taxes.

  Q290  Mr Ainsworth: If everybody is better off they can afford to pay more. This whole discussion has to be seen in the context of the very serious damage aviation is doing and will continue to do to the environment, particularly if unchecked.

  Mr Darling: What I said in reply to an earlier question is there is a range of options available to us. The overriding objective must be to try and reduce the harmful emissions that are caused as a result of air travel. There are a number of ways you can do that, by the control of emissions in trading schemes, and so on. I say, yet again, the Government has not reached a conclusion as to what the best way forward is, we will have done so by the time we publish the White Paper, then you will be able to see what the Government's considered view is.

  Q291  Mr Ainsworth: Is the truth of the matter that underlying the consultation is the assumption that aviation growth is a good thing and the environment comes second and are you still working on a predict and provide basis?

  Mr Darling: No, it is certainly not predict and provide. Even after we published the White Paper the decision as to whether or not there is any new airport capacity actually built will be one taken by the private companies that own Britain's airports—apart from Manchester, which is a public company. For the most part the airports are owned by private companies and they are not going to build runways on spec, the planning process is extremely expensive, so the idea that somehow we are going to say, well let us have a whole number of runways just in case is nonsense. There is no predict and provide at all.

  Mr Ainsworth: Thank you.

  Q292  Mr Savidge: At the risk of sounding parochial can I ask you a couple of questions that perhaps impinge on your responsibility as Secretary of State for Scotland and our shared constituency concerns as Eastern Scotland MPs. I notice that yesterday Mr Dan Hodges, the Director of the Freedom to Fly lobby group claimed that the effect of not building another runway at Heathrow would be to hit domestic services, and he mentioned services such as the main connections between London and Scotland, do you believe that is a valid point or not?

  Mr Darling: I make a general point that campaigners on both sides will make claims which are designed to back up whatever proposition they happen to be advancing. Our job is to look at these and ask ourselves what effect it will have. I think self-evidently if you have capacity constraints at any airport two things can happen, one is charges can go up because if you have a scarce resource you can charge more for it and also airlines using it will obviously try and get their more profitable flights into it. If you can make more money on one destination than another and you only have one slot then you put your more profitable airplane in there. If we did have a situation where there was severe demand restraint at Heathrow or the London airports then something has to give. Whether or not it would affect destinations like Edinburgh or Aberdeen we do not know. However, this is one reason why we are consulting, we need to look at what would actually happen if we decided to do nothing or, you know, go for some further expansion. It must be the case that if we have scarce resource and demand keeps rising there has to be a consequence of that, what precisely that consequence is depends on a number of factors.

  Q293  Mr Savidge: Obviously the main environmentally friendly alternative to flying on such routes would be the train, how far does it concern you that the Strategic Rail Authority are currently talking about postponing any improvements to the East Coast Mainline between London and Edinburgh and indeed left Edinburgh to Aberdeen completely off the map the last time they printed a map of the East Coast Mainline? Would it be that might be the alternative in relation to something like Eurostar, which has in fact diverted a lot of passengers on the London to Brussels or London to Paris routes? Would that not be an alternative that possibly should be environmentally encouraged?

  Mr Darling: Absolutely. We are spending £9 billion on upgrading the West Coast Mainline and that will mean that from the end of next year the fastest train between London and Manchester will be two hours. If you can get from Manchester Piccadilly to London Euston in two hours it makes no sense, other than for the most obsessive flyer, to go out to Manchester Airport, fly down on the shuttle to Heathrow and come back in. That is a very good alternative. By 2006-07 you will have an hour off the Glasgow run. If you can get from Glasgow to London in four and a quarter hours and you take into account travel time that is a very good alternative. In relation to the East Coast at the moment the reliability is gradually improving. Many people who use the GNER East Coast Mainline in preference to air travel do so because they can do more work and also that company is quite imaginative in offering quite good deals, rather like the low cost airlines, to fill up the train. That is something that we want to encourage. On your Edinburgh to Aberdeen point, you can rest assured that as I lived in Aberdeen for four very happy years in the 70s I will make sure that the track is most certainly not left off any map in the future.

  Q294  Sue Doughty: I would like to return to the whole business about pricing and subsidy. We have been talking to you about this £9 billion subsidy through lack of taxation on the aircraft industry. I am still having difficulty in understanding why aviation, one of the most polluting forms of transport, is being treated differently to other forms of transport? Why should it not be taxed to earn revenue? You are making this claim that we would not want to see it, I really want to hear from you why it should not be taxed?

  Mr Darling: I said to you that we are considering a whole range of options and I've said on many occasions now that you will not get the Government's concluded views for some time yet. I think "subsidy" is the wrong way of describing it, subsidy is misleading. Airlines have been taxed in accordance with international agreements now for the last 50 years. I have made the point in the consultation document and here today that we think the polluter should pay. In relation to air travel I think it is important if we are going to change the regime it has to be done on an international basis. If we did that unilateralary what we would be doing is putting our airlines—and it would be our ones because we would not be able to catch airlines that fly into our country to go elsewhere—at a huge disadvantage. That does not seem to me to be a terribly good policy to advocate. Obviously in relation to controlling emissions and reducing them that is something that we want to pursue, we have been quite explicit about it. In Kyoto at the end it was quite explicit that people should be doing that. For historical reasons the taxation of airlines has been dealt with internationally and that is why we are in the position that we are in.

  Q295  Sue Doughty: It is very worrying that we can subsidise buses and trains and you can get an elderly person to the shops but we are running scared of what is going to happen to the holiday-maker. My suggestion is that while it is nice to get a cheap holiday on the Riviera it is rather more important to allow people to get round this country in a reasonable way, we do have fairly high travel costs.

  Mr Darling: We do subsidise. We do write cheques to the railways and the buses, you are right about that, the system in relation to airlines is different. These are all issues. I said to you the Government's objective is to cut down on harmful emissions. I have doubts about a policy that is explicitly constructed round the idea that you drive people off airplanes and you say, "you cannot travel". You can take a judgment about that. Maybe in Guildford that is a jolly popular policy, "MP says that you cannot travel".

  Q296  Sue Doughty: This is a real distortion of what this Committee is trying to do. We are talking about people putting up with miserable travel situations, misery on the road, rail and bus travel. I think it is a sense of proportion and where the priorities lay. Nobody said commuters are entitled to a much better deal than they are getting, my constituents would like to see a much better deal on commuting, yet you are trivialising our view about air travel. Of course we take this seriously. What we are suggesting is that we ought to look at the price. This is what worries me, every time you come back you suggest that this Committee does not want people to take holidays, of course we do, but we want to take a common sense view of the whole thing.

  Mr Darling: I agree we need to take a common sense view of these things. All I am saying to you is that we are not having an abstract discussion here. If, and I am not saying you are advocating this, it was your policy that we should put £70 on every fare or £100 do not let us pretend it does not have some sort of impact. If it does not have an impact there is no point in doing it. I do not think you can say it would not disadvantage our constituents. I just said to you that I think a policy that is predicated about driving a significant number of people off the airways has certain difficulties. I do think, and I've said this time and time again this afternoon, that we do need to make sure that we look at options that might be available to us to ensure that we control the harmful emissions that no doubt air travel is responsible for.

  Q297  Mr Wright: Secretary of State, how do you respond to this interesting idea that was floated recently by one of the chief executives of the budget airlines that potentially airports could be paying him to fly his planes into airports and people could be flying for free? Of course it is all about football and shopping more than about controlling transport. What is your reaction to that? That seems ridiculous in terms of the impact of aviation. Clearly it is not happening at the moment but in his comments there was a trend—

  Mr Darling: He says lots of things like that.

  Q298  Mr Wright: He does, yes.

  Mr Darling: It is called a negotiating ploy. I made the point earlier that airports will need income to invest. A point was made to me graphically by one airport, I will not say which it is, where they were offering to do up a part of airport and I think it was this particular airline which said, "if you do that we will clear off because we are not paying the cost of it". That will give you an example of how air travel has to be sustainable, and whether it is sustainable on footfall alone I do not know.

  Q299  Mr Wright: It does not sound like the polluter is the payer.

  Mr Darling: I do not think he was addressing himself to the question of pollution, I suspect he was addressing himself to how to get the best deal for his airline. In relation to pollution and at the risk of repeating myself the whole point of consultation and the whole point of the economic instruments is to get people's views so that we can formulate a view later this year.


 
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