Select Committee on Environmental Audit Minutes of Evidence


Examination of Witnesses (Questions 300-319)

Tuesday 1 July 2003

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

  Q300  Mr Barker: Secretary of State, I have listened to your comments and your responses to the answers and have become increasingly concerned, do you think it is responsible or sensible for the Secretary of State during a consultation process to try and characterise or polarise the argument here between driving people off the airways—which is what I have written down as how you tried to characterise what Mrs Doughty was saying—and allowing people to take holidays, when in actual fact what we are dealing with is how do we get to grips with the escalating growth in air travel? Nobody here is talking about de facto reducing the number of people who currently take holidays, we are talking about how do you control future expansion. The comments that you have made seem extremely simplistic and designed to distort the argument.

  Mr Darling: I think in relation to any arguments that are put ministers and, indeed MPs, should not be afraid to test those arguments and say what is the logical conclusion of it.

  Q301  Mr Barker: Do you accept what you said about driving people off the airways? You use a political soundbite which is totally inaccurate, it may be politically effective but it is not sensible debate that we should be having in a select committee.

  Mr Darling: If your argument is that you want to use the price mechanism to get people off the airways—

  Mr Thomas: Or limiting them getting on.

  Q302  Mr Barker: You are doing it again, we are not talking about "off" we are talk about limiting expansion.

  Mr Darling: Simon Thomas has just said sotto voce he wants to stop them getting on in the first place. If your policy is—and people are entitled to hold this view—that you want to stop people flying, then be explicit about it.

  Q303  Mr Barker: But do you accept there is a fundamental difference between stopping people flying at current levels and holding back future demand, there is a fundamental difference?

  Mr Darling: Holding back demand is another way of stopping people flying,

  Q304  Mr Barker: Holding back future demand.

  Mr Darling: It is still the same thing. At some stage you are saying, "Sorry, we are full up."

  Q305  Mr Barker: So you do not recognise any difference?

  Mr Darling: All I am saying to you is if your argument is you should use a price mechanism to control demand (the same thing applies to all transport) you are saying you do not want some people to use it. I am not saying it is a disrespectful argument, I am just pointing out the logical conclusion of it. I repeat yet again the reason we consulted was because the Government does believe that we must make sure that we meet the environmental impact of air travel. We have not reached a concluded view on how you do it. All I am saying to you is that once you decide how you are going to do it or once you mount an argument, you need to be alive to the consequences of what you mean.

  Q306  Mr Lucas: Is it not the case in connection with railway policy that you are using price as a mechanism to move people off the railways?

  Mr Darling: No, there are now more people travelling on the railways than at any time since 1947 and about a 20% increase in the number of people travelling even since 1997.

  Q307  Chairman: The same is true of the airlines.

  Mr Darling: Absolutely. Let me finish the point, then by all means come back. The reason the fares went up is, as I said the other day, there has to be a balance struck between what the taxpayer pays and what the farepayer pays, and the problem we have on the railways, as has been graphically illustrated in the last 24 hours, is that the amount of work we have to do is immense and we have got to get the money from somewhere. It is not a policy designed to get people off the railways.

  Q308  Mr Lucas: I may have misunderstood Richard Bowker at the Strategic Rail Authority who when talking about managing demand in the use of the railways was making precisely the point, that certain services were over capacity and travelling needed to reduced. This is the point that we are making in connection with the airways.

  Mr Darling: Can I just deal with that point. What he was saying there—and there is an analogy here with low-cost airlines—concerned managing your demand at different times of the day. You may remember before we announced the changes to the fares regime we announced that we wanted to replace Saver tickets in the next three years. Part of the problem with Saver tickets is because they come in after 9 o'clock, you could very often find that a train coming through a station at five to nine was empty and at five past nine it was standing room only. The point that was being made was if you can have a range of prices you can spread the load in a more sensible way. That is what low-cost airlines do. As you know, they use the pricing mechanism to make sure they are carrying 70 or 80% and frequently get 100%. It is not our policy or the SRA's policy or anybody else's policy to drive people off the railways. I am rather pleased with the fact that we are carting more people around than we were at any time since 1947.

  Q309  Mr Lucas: For you the policy on the railways in this respect is entirely distinct from the policy on the airways? You do not see any parallel between what this Committee is advancing to you and what is being carried out on the airways?

  Mr Darling: I think I lost you there. As I understood it, you asked me whether or not it is our policy or the SRA's policy to price people off the railways and I was saying I did not think that was an accurate representation of our—

  Q310  Mr Lucas: Is it about managing demand in both industries?

  Mr Darling: The railways are in the business of carrying more people. It is an explicit aim set out in the 10 Year Plan. It makes sense to spread the load if you can because there are times when the trains are empty, there are times when they are absolutely packed to the gunnels, and if you can spread demand that must be a very good thing, but you are still carrying them. That is our railway policy. The whole thrust of what we have been saying this afternoon in relation to air travel has been something slightly different which is do you leave the thing unchecked, do you do anything to try and check growth, to what extent do you meet demand, to what extent do you leave things as they are? These are all matters that are part of the consultation.

  Q311  Sue Doughty: There are other things you could do though. You were talking about the need for Europe-wide taxation and you touched on an emissions tax. There are other things. At the moment you are assuming we have lots of little planes taking off one after the other which need lots of runways to do this on. That is not the only way. You could look at them and say how do we manage the excess demand and what we are really looking at is the number of take-offs and the landings. In other words, there is more than one way of dealing with this. For example, one could have more efficient planes that took larger people—

  Mr Darling: Larger people? That is a step too far I think!

  Q312  Sue Doughty: A larger number of people and larger people too, who also have trouble on flights! Certainly there is another way of looking at it. At the moment we keep talking about driving people off. Could we actually reduce the pollution by using more efficient planes, and that is where an emissions tax could really help, and this might be an approach?

  Mr Darling: The point you make about emissions is an important one because, as you know, some aircraft types are cleaner than others. That is the whole point of looking at the emissions regime and the emissions trading systems—there is a voluntary one in this country and Kyoto is looking at that—are another way of dealing with it. You are right about improving technology. You are also right, I suspect, there may well be general economic pressures brought to bear where airlines might want to fly fewer but larger aircraft because it is more efficient and it is more effective to do it. You are right, there is a whole range of things one can look at. You are also right in saying that we need to look at these things not just on a global level but Europe itself, although again we would need to make sure that where it was appropriate to get agreements we got everybody in Europe into it, not just some, for perfectly obvious reasons.

  Q313  Mr Francois: Secretary of State, the DoT's consultation certainly talks up the potential economic benefits of air travel but in comparison it actually says very, very little about the disbenefits of future expansion. Do you not think that is a flaw in the consultation document?

  Mr Darling: No, because it was open to anyone who wanted to put in a contrary view to do so. I have no doubt they have. Indeed, I know some of them have because I read about it in the newspapers.

  Q314  Mr Francois: Even if you are kicking it off as a consultation you are also looking to provoke comment and the best way to do that is for the Government to come out with a balanced analysis. Paragraph 3.33, for instance, highlights the positive economic benefits of tourism but it entirely fails to mention the amount that UK residents spend when going abroad, and in actual fact in balance of payments terms there is a negative balance. For instance, you talked about 35 million people taking cheap flights this year but the bulk of those people are going abroad and that far outweighs the number of people who are coming into the UK to spend money in tourism. If you are talking about money coming in as a result of tourism should you not be a bit more honest and talk about people going out?

  Mr Darling: I am not a protectionist and I believe in freedom of movement of people and goods. I think people should be allowed to travel. Maybe you are entitled to take a different view if you want but it seems an extraordinary view to say that you are not going to let people go abroad if they want to.

  Q315  Mr Francois: Forgive me, Secretary of State, I never said that I was going to stop people going abroad and I never said that I was a protectionist. Forgive me, you have been doing that all afternoon in front of this Committee. Some people come here and pay lip service to environmental things because they are in front of an environmental committee. Can I say, having heard your evidence, we cannot even accuse you of that, you have not bothered to pay lip service to anything environmental at all so far. Do not mis-represent what we are saying. Forgive me, I am going to repeat my question.

  Mr Darling: Do not be ridiculous.

  Q316  Mr Francois: I am not being ridiculous, you are the one who keeps misrepresenting the things members of this Committee from all parties are putting to you. Why did your analysis play up very heavily the amount of money that tourists spend in the UK while not making any mention at all of the amount that people going on holiday take out? That is a perfectly legitimate question.

  Mr Darling: It is patently obvious that if somebody goes abroad they will spend money abroad and most people who are consulted are perfectly well aware of that. We could have produced a White Paper without a consultation. Lot of governments have done that. You just say, "There is the White Paper, there is the Government's policy, take it or leave it." Quite deliberately, over a long period, and I think it was your Government that started this so it is not a party political point, they decided to look at different parts of the country and to look at what the needs might be. We got all that stuff together and it made sense to say, "Here are some preliminary findings, here are some preliminary projections, go and look at it, see what you think, and then come back." It is a prolonged consultation, if you like, because the period has gone on for a year but the stuff has been around for some considerable time. Inevitably in a consultation document you will raise some things and not others, it might be seen that you are giving an emphasis to it one way or another, but it is open at this stage and has been for a year now for people to come back and say, "You are wrong." As for your point about lip service, what would have been grossly insulting and intolerable is for any Minister to come before a Committee and pay lip service to anything. What you are entitled to get from me is what our thinking is. I am sorry that one of the problems I have at the moment is because the Government will not have reached a concluded view until the end of the year that I cannot be as definitive as I will be come December or whenever it is we publish it.

  Q317  Mr Francois: I will press you a little further, my point being that your document to kick off the consultation exercise was slewed. Admittedly, people can make whatever responses they want to but you have played up very much one side of it and very much played down the economic disbenefits. That is the point I am really trying to address and if I may say so, sir, you have not done much today to try and redress it, even taking on board your point that you still have to assess the responses of consultation. Hang on, there is the cost of all of this. You are talking about building new airports, and you have already told us that the low-cost airlines drive an extremely hard bargain with the airfield operators, and I think that is a fair comment, so there is not going to be a tremendous amount of profit coming from them for the airport operators. If all this new capacity is coming who on earth is going to pay for it without government subsidy?

  Mr Darling: There will not be any government subsidy. The airports in this country are almost exclusively owned by private sector operators and I have made it clear on countless occasions that any new capacity is going to be paid for by the private sector, with the exception of the Highlands and Islands' airports, which are different from that and subsidised and operated by the Scottish Executive and Manchester which is operated commercially and is owned by the local authority. We are not going to subsidise them. Therefore when I am being asked by people what we are going provide, I make the point that that could not be true because someone would have to make the commercial decision. You are right, there has been a huge growth in low-cost airlines. Stansted, for example, which as you know for many years after it was built was somewhat empty when you went round the thing it was noticeably so, is now growing rapidly because of low-cost airlines . However, the other airports like Gatwick, Heathrow and Manchester, for example, are heavily dependent on scheduled services and Manchester, as you know, recently in the last three or four years built a second runway and that was a commercial decision on their part. These decisions will be taken absolutely commercially. To come back to the point that you started raising and on which you took exception to my reply, I would have thought it was obvious if people go abroad they will spend money abroad. I think it is quite legitimate for us to say suppose on one view you made it difficult to fly into this country because of capacity constraints, then the inevitable consequence is that people might choose to go somewhere else and spend their money somewhere else. Yes, it is true that if British people go abroad to spend their holidays which they do increasingly, they spend their money abroad. I do not think we could possibly be held to be concealing that point. It is a statement of the blindingly obvious I would have thought.

  Q318  Mr Francois: All I would say, Secretary of State, and I am sure you have more experience of these matters than I, is that when you come before a select committee, it might be a good idea in the future not to accuse anyone who asks you a question of wanting to be a tax raiser or protectionist. I just offer that to you for the future.

  Mr Darling: On that, yes I have been in front of a few select committees and I have been a Member of this House for 16 years and I am not afraid of a robust debate, and neither should you be.

  Q319  Mr Francois: I think I have proved today that I am not, sir!

  Mr Darling: There is an opposition debate tomorrow so we can resume the fight.


 
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