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Oral evidence Taken before the Environmental Audit Committee on Tuesday 1 July 2003 Members present: Mr John Horam, in the Chair ____________ Memorandum submitted by The Department for Transport Examination of Witnesses Witnesses: RT HON ALISTAIR DARLING, a Member of the House, Secretary of State for Transport, MR ROY GRIFFINS, Director, Aviation Directorate and MR GRAHAM PENDLEBURY, Divisional Manager, Aviation Environmental Division, Department of Transport, examined. Q252 Chairman: Thank you for finally agreeing to see us, Secretary of State. Welcome to the Committee. As you know, we are looking at the environmental impacts of aviation issues which have not been covered before in a select committee. Mr Darling: Mrs Dunwoody might dispute that. Q253 Chairman: I had a chat with Ian and he agreed it had not been thoroughly covered. Is there anything you want to say? Mr Darling: Perhaps I should introduce my colleagues. Roy Griffins is Head of the Aviation Department in my Department and Graham Pendlebury is Head of the Aviation and Environmental Division, Department of Transport. I wonder if I can submit one observation to you in a way of almost getting my retaliation in first. You will be aware that the consultation period in relation to the papers we published last July ended yesterday, as did the consultation period for the aviation environment document jointly produced by the Department of Transport and Treasury. I have said on many occasions, both to the Transport Select Committee and in the House that my intention is to publish a White Paper on aviation which amongst other things will cover future airport capacity as well as many of the issues you want to touch upon. That will be published at the end of this year. It follows from what I say that clearly I have not yet evaluated and am not due to evaluate what was said in the consultation process, and I intend to do that justice. I can say in all honesty I have not come to a conclusion on a whole range of things. I just say in anticipation of your questions that the answer to many of them will be, "I do not yet, you will have to wait and see". I thought if I said that now when I actually say it on many occasions in the next hour or so you will understand why I am saying it. Q254 Chairman: Thank you for being so explicit. Some ministers implicitly do not say very much. Mr Darling: You never know your luck on that one either. Chairman: We did want to start off on the Royal Commission on the environmental pollution report, which you have made some comments about. Mrs Clark. Q255 Mrs Clark: I think it is fair to say you were not very keen on that report, quoting from your interview in the Times you say, "I thought it was a rather thin report and they had not done as much work as they might have". This was done in six months rather than the normal two years plus. Mr Darling: Yes. Q256 Mrs Clark: You then say, "This report is not the truth of many years research, in fact it is a gallop round the course". What do think in retrospect about those comments that you made? Could they be counterproductive, perhaps reinforcing the perception that the DfT is not interested in sustainability? Do you think these think those comments in that article no ill-judged? Mr Darling: No. I do think generally whilst advice from the Royal Commission and anybody is extremely useful people should then not be afraid of entering into a debate about them. I have met the Royal Commission, not all of it, key members of it and they made the point they had originally planned on the basis that the consultation would finish much earlier. You will recall when I announced the consultation last July it was my my hope it would be concluded by the end of the year and we would be publishing the White Paper about this sort of time. The High Court subsequently found that we were wrong to exclude Gatwick from consideration so we had to republish the papers with Gatwick, which gave them a lot longer. The reason the Royal Commission Report was a lot thinner than it might otherwise be is because they were under the impression that we wanted to get the thing out. It is common ground between us that they normally spend up to two or three years looking at these things. Q257 Mrs Clark: It is a waste of time, is it? Mr Darling: No, certainly not. Q258 Mrs Clark: It is thin and sketchy and just a gallop round the course. Mr Darling: I do not think it is fair for you to say that it was a waste of time. The Royal Commission members give a lot of their time to produce these things and the report is useful. It was done fairly quickly or comparatively quickly. I said that at the time and that is something that they subsequently acknowledged to me. In relation to its content there were useful findings in it, in particular they comment on the emmissions that are found in the atmosphere, not down here, which are not so widely known about. It a useful contribution. I think the last point that you made about the perception of the DfT, we made the point in the consultation document and I made the point in my statement in the House last July that of course all transport has to be sustainable. In fact in just about every speech I give I make that point. I think it is quite wrong for people to say somehow we are not bothered about the environment. I am bothered about the environment and throughout my political career outside this House and inside there are many examples where I can point to my concern that whatever we do is sustainable. The characterisation of the Department as being somehow oblivious to the environment is simply not true. You might want to have a look at my announcement before Christmas in relation to multi-modal studies, where I can point to a whole number of things where frankly that allegation does not stand up. Q259 Gregory Barker: Minister, just on that point that all travel has to be sustainable, what is sustainable about the massive growth in the airline industry that you are projecting over the next 30 years? What is sustainable about the massive increase in carbon emissions? What is sustainable about the fact that they are not taxed? Are you not really just coming out with another soundbite attaching the word "sustainability", as so many ministers do, to the policy of the day without any thought to really what that means? Mr Darling: No. Firstly, in the consultation document we consult on a range of options in relation to airport growth, that is the whole point of consulting. If we have got it wrong it is important we should know that. As I say the consultation has only just finished and consultations being what they are most people seem to reply on 30th June, so we did not have a chance to look at those things. Secondly, you are right air travel has grown very dramatically over the last 30 years. Our job is two things, one is, what do we think is likely to happen over the next 20 to 30 years? Then, of course, you are right in saying indeed the consultation documents look at all sorts of scenarios and say, well if you do this, or you do that or try and constraint demand what difference does it make? The whole point of this consultation exercise is to try and get - perhaps it is too much to hope in relation to a concensus - an informed view as to what patterns of air travel are likely to look like. In relation to sustainability the point I was making there is right up there in the front of the consultation document and in the joint one that the Treasury published, where we said that air travel or the air industry ought to meet the costs of the pollution that it causes. That is what I mean about something that is sustainabe. I dare say we will come on to this, there is a wider argument, which I heard your Chairman at 6.40 this morning setting out in relation to what you do about it. Q260 Chairman: CI 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 sound 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. These 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 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 Gregory 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 Gregory 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 Gregory 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 them no 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 rate 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 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 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 per cent 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 pay conditions 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 pay" principle is right. The nature of how you do that and the rate of 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 on 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 car. 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 extravagent. 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 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 two per cent 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 confidental 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 four per cent 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 four per cent 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 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. 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 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: Taking the road, 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 per cent of air travel is leisure based, it is a growing phenomen 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 it 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 consultation 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 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 effect 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 they are currently talking about postponing any improvements to the East Coast Mainline between London and Edinburgh and indeed left Edinburgh to Aberdeen completely off here 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 environmently 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 Picadilly 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 costs 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 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 the 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 exlicit 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 riveria 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 emmissions. 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 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 David 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 David Wright: He does, yes. Mr Darling: It is called an 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 David 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. Q300 Gregory 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 talk 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 Gregory 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 --- Q302 Gregory 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 Gregory 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 Gregory 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 Gregory 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 Ian 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 per cent 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 Ian 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 per cent and frequently get 100 per cent. 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 Ian 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 Ian 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: 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. Q320 Mr Thomas: What are your views now on congestion charging? Mr Darling: In relation to congestion charging, as you know, there are only two schemes in this country, and only one significant one. It has worked far better than we thought. We made it possible to do so because of the legislation that we introduced. Whether it works in a particular town or city depends on the circumstances. I have made the point before that in London 85 per cent of people coming into the city centre come in by car. Nowhere else in Britain approaches that. Manchester is 60 per cent and most are down at 40 per cent. It is up to local authorities and if they want to work up schemes, which I have to approve unlike London, the Department has made it clear it will help them to do that. Just at the moment we are not being overwhelmed with requests to put them in place. Q321 Mr Thomas: The principle of congestion charging is one that you accept? Mr Darling: I am not sure whether you are aware of it, but you may have seen in the newspaper about three or four weeks ago I made the point that if we look at the pressures we face over the next 20 to 30 years we cannot simply seek to build our way out of the problems we face. We need a judicious mix of new construction where it is needed, investment in public transport, but I have said that we do need to look at options such as road pricing. Q322 Mr Thomas: You cannot see the read across to aviation from that? Mr Darling: Of course --- Q323 Mr Thomas: Without accusing anyone of wanting to stop people going on holidays! Mr Darling: The point that I was making is that if your policy is to price people off the aeroplanes it has a consequence. Q324 Mr Thomas: You are happy to support a policy which prices people out of the city centre and encourages them to take an alternative view both about the way they travel and the way they can go about their business? Mr Darling: You are right on that. If you take congestion charging, the object of that is to encourage people coming into the city centre to use public transport, not to not come in at all. Q325 Mr Thomas: Or not come in at all or to do their business in a different way? Mr Darling: I think you will find that the Mayor of London is very keen that people should come to the city centre because, at the risk of raising another problem with tourism, a lot of people come and spend a hell of a lot of money in the city centre. Q326 Chairman: Some people will be deterred, ie priced out of their journeys, because you are saying, "We are pricing you out." Mr Darling: Except that on the evidence so far --- Q327 Chairman: In principle some people will be deterred. Mr Darling: The explicit aim was to reduce congestion in the city centre, not to keep people out of it. There are some people who do not come through but there is evidence to suggest that for north-south and east-west travel people are varying their transport. Q328 Chairman: Are you saying that nobody is going to be deterred by the congestion charge? Mr Darling: Nobody can say nobody is but that was not the object of the exercise. Q329 Mr Thomas: The object of the exercise with aviation is not to deter people flying, it is to make them pay the cost of the environmental impact. Mr Darling: Let me finish the point in relation to road pricing. Again the advantage of road pricing is that certainly you do not want to deter people from travelling because you want them to look at alternatives, like trains for example, but road pricing would also allow you, for example, to try and spread the load on roads throughout the day, because at the moment the congestion is very peaked around morning and, to a lesser extent, the evening rush hour. It comes back to my central argument; both in those policies in relation to our railway policy, which I discussed with Ian Lucas, and in relation to road pricing, the objective is not to stop people travelling. When you are talking about domestic air travel I made the point when you have got a good rail alternative, then yes, that is something you ought to encourage, but in terms of international air travel, at the risk of being again accused of taking an extreme example but I think it is one worth making, if you take trans-Atlantic travel, you either go across the Atlantic in an aeroplane or you do not go, assuming that you cannot afford the QEII. The whole thrust of the Government's transport policy is to enable people to move around as efficiently and as quickly as possible whilst at the same time taking account of the environmental impact. Q330 Gregory Barker: But this is not across the Atlantic, it is in the low-cost airlines and they are in short haul primarily, not across the Atlantic so, Secretary of State, your example is irrelevant. It is short haul growth, is it not, that is the principle? Mr Darling: Trans-Atlantic travel, as you know, took a huge dip for obvious reasons two years ago; it is now recovering. Q331 Gregory Barker: To previous levels. Mr Darling: Yes, in some cases, depending on the routes, it has recovered to that. Obviously we are looking 20 to 30 years ahead, not three or four years ahead, and that is something we are consulting on. Simon Thomas's point was we were being inconsistent as between certain aspects of domestic policy and air travel. The point I am making is in domestic travel our objective is not to stop people travelling but to try and --- Q332 Mr Thomas: You had the objective in your 10 Year Plan to reduce the number of road journeys. Mr Darling: No, we did not, we wanted to tackle congestion. Q333 Mr Thomas: Mr Prescott said he would have failed if he did not reduce the number of road journeys., Mr Darling: Go and look at the10 Year Plan and you will see what the position is. I have studiously not said that anything that people want to put forward is a no-hope policy or anything like that. What I am doing is saying all these arguments have their difficulties. As the Government we will reach our view at the end of the year and you will be able to see what the position is then. It is inevitably a difficulty when you are asking me things at a stage when we have not yet come to a concluded view. I understand full well why you are asking me from different perspectives these questions but I am afraid I have to answer as I can. Q334 Mr Thomas: One of the other things you have said today is you have to be alive to the consequences in response to several questions here. Are you alive to the consequences of your predict and build way of approaching aviation at the moment? Mr Darling: Our policy is not predict and provide. Q335 Mr Thomas: It is not? Mr Darling: No, as I have said. Q336 Chairman: That is a very good moment to finish the session on - not predict and provide. I think it was a very robust session. Thank you very much for enjoying the exchanges, as I think you probably did. Mr Darling: I thoroughly enjoyed it! Q337 Chairman: And I wish you well on your air journey to the north of England! Mr Darling: Thank you. |