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Aviation Servives
DEPARTMENT FOR TRANSPORT
[Relevant documents: Sixth Report from the Transport Committee, Session 2002–03, on Aviation, HC (2002–03) 454—I, and the Government's response thereto, Cm 6047; and The Department for Transport Annual Report 2003, CM 5907.]
Motion made, and Question proposed,
- That further resources, not exceeding £1,377,992,000, be authorised for use during the year ending on 31st March 2004, and that a further sum, not exceeding £41,854,000, be granted to Her Majesty out of the Consolidated Fund for the year ending on 31st March 2004 for expenditure by the Department for Transport.—[Mr. Heppell.]
1.30 pm
Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab): When a country neglects one of its most important weapons for economic development—transport—it gets into considerable difficulty. For well over 20 years, this country has ignored the fact that its aviation industry is vital to our development. It is not only a multinational industry, but one that brings in large numbers of people, their money and their interests. It also provides for the British an essential means of developing their industries and their relationships with other countries of the world.
The estimate that we are debating today is one of the most important, and the Government are to be congratulated on having produced a White Paper after so many years of drift and indecision on the part of successive Governments. It is therefore disappointing that their response to the Select Committee's report on aviation was mildly grudging. There are many aspects of aviation policy that need to be debated in considerable depth, but this afternoon I would like to concentrate almost entirely on the gap that the Select Committee has identified in the thinking of Her Majesty's Government.
Let me make it clear that I sympathise with a Government who are seeking to undo 20 years of neglect across the transport system. They are continually being asked to come up with new ideas and new investment on a large scale for the whole industry across the United Kingdom. The reality, however, is that aviation now needs some pretty clear decisions and, above all, some very clear leadership at Government level, not least because we have reached the point at which what we do now—or, even worse, what we do not do—will dominate our economy for the next 10 to 20 years.
I turn first to the development of airports. Whether we like it or not, people are going to continue to move around, and they are going to continue to use aeroplanes to do so. The development of the airports in the south-east of the United Kingdom is directly relevant to our economy. Without an efficient means of moving industrialists, those working in industries and those contributing to our tourist industry, we are going to suffer economically.
The Government seem still not to have faced up to a number of awkward political decisions. We have to decide which of the airports in the south-east are going to be developed, and who is going to develop them. We also have to decide—when I say "we", I mean all of us—who is going to pay for that development. We have to accept that, if we run away from those decisions, a state of happy neglect will not deal with the chaos that will ensue, and the whole of the United Kingdom's economy will pay a very high price.
I want to address one or two simple points. The first is the ownership of the major airports in the south-east. My Committee has considered, in a number of reports, the complex situation that now exists in relation to the remains of what were state-controlled agencies. The Government are in an odd situation, because BAA—formerly the British Airports Authority—which controls the major airports in the south-east is a private company with a need to respond to the interests of its shareholders. Its decisions will be taken on the basis of its relationship with its shareholders, yet it is required to advise the Government on how we should develop our airports and which developments we should push to the top of the queue.
That represents a basic conflict of interest, as my Committee has highlighted, not least because if BAA is not prepared, for its own internal economic reasons, to make clear how it is going to fund the development of airports in the south-east, it will almost inevitably be taking decisions, by default, that will affect the United Kingdom at every level. If, on the other hand, it bases its decisions on where it wants to see development purely on its own economic interests and on the charges that it can level on the airline industry, it will almost inevitably not be capable of handling the advice that it gives to the Government impartially or independently. That is inevitable; it is built into the system.
My Committee suggested that we should consider the existing ownership of BAA and whether the need to produce results for its shareholders had influenced its decisions on where future development should take place. We also suggested that we should consider whether the taxpayer is best served by allowing BAA monopoly control of all the major airport machinery in the south-east. Whether we like it or not, those of us who are concerned about the future of regional airports know that if anything goes wrong with the slots at the major south-eastern airports, the first people to suffer will be those who are flying from the regions of Britain. BAA has a responsibility to maximise the profits that it receives from its airports in the south-east, but it also makes decisions about slot control, about how particular runways should be developed and about whether that would restrict access for regional air traffic. Inevitably, its interests will not be the same as those of the people outside the south-east.
Mr. David Wilshire (Spelthorne) (Con): Before the hon. Lady moves on from the reasons why BAA might or might not want to take particular decisions, does she accept that there is another consideration that BAA must take into account—namely, the interests of the people who work for it? More than 25 per cent. of my constituents who are in jobs depend on Heathrow.
Surely it is not selfish of BAA to say that it is vital to protect the jobs not only of our employees but of all those who use Heathrow.
Mrs. Dunwoody: I accept that totally, but the reality is that there is no problem with protecting jobs at Heathrow. Many of us would say that it is a viable and developing economic asset to the country, and that it ought to be protected simply because of the amount of business that it generates, alone and unaided.
Mr. Brian H. Donohoe (Cunninghame, South) (Lab): Does my hon. Friend also recall the evidence that the Committee took from the hon. Member for Inverness, East, Nairn and Lochaber (Mr. Stewart)? He made it plain that, unless there was a continuation of the route served by jet from Inverness to either Gatwick or Heathrow, many of the businesses in the highlands would be badly affected and would relocate as a consequence of not having that direct route.
Mrs. Dunwoody: Indeed. We were told time and again that in taking a business decision about where a new factory should be built or where a new business should be expanded, transport—almost inevitably—was one of the first priorities of any of the managements concerned. We took evidence that showed that in some instances, the ability of foreign managements to get to a regional destination not just by changing planes—even though that might be a convenient system—but by flying direct, would influence their decision about where their developments should go. We were constantly told of Japanese managements who, when faced with the alternatives of a site that could be reached easily and a site that could be reached only after experiencing certain difficulties, inevitably chose the site that had mainline connections and offered easy ways of flying in and out of the region. So it is terribly important that we understand the absolutely direct link between access to airports in the south-east for those in the regions, and the decisions that are taken about where developments will be located in future.
I do not want to take too long as I know that many Members want to speak, but I want to consider the hazards that will arise if the Government appear to be influenced by some of the decisions being taken by the European institutions. At the request of the European Commission's transport commission, a study was undertaken of the feasibility and impact of adopting market mechanisms to allocate slots at congestion category 1 airports. Even though most people are not interested in the minutiae of airport administration, they understand that there is no use in having the best and most comfortable plane in the world if it cannot actually be landed at the airport of one's choice at the time when one wants to arrive.
So the allocation of slots at airports, particularly in the south-east, is not only a very fraught matter but an absolutely vital one for airline passengers. The European Union—for reasons that are fairly acceptable in theory, but which will cause enormous difficulty in practice—seems to be moving towards a system through which the only way of deciding whether airline
passengers can land at a congested airport will be the price that the airline in question is prepared to pay for the slot, or pairs of slots, on offer.There are those in this House who believe very strongly that capitalism red in tooth and claw is the only way to plan our transport system. Having looked at the results of some years of that total lack of overall guidance, I beg leave to differ very strongly. But more than that, in a congested island the decisions that are taken about airline slots become even more vital. My Committee has produced a detailed report on the effect on the regions, but we should think about the report produced by National Economic Research Associates, in conjunction with Leiden university and Consultair Associates. That report appears to conclude that, although planned investments may ease the situation, there will be more and more congestion in the next five years, and that the only way to deal with it is to open up the slots to market forces. That is not only very dangerous; it will have an immediate knock-on effect on all regional passengers who want to get to the south-east.
It is extraordinary that I should have to ask Parliament not to accept a policy that will make it virtually impossible for people who live outside the south-east to travel easily and efficiently to their capital city, yet that is what we are talking about. We are not talking simply about ways of expanding the profits of a private company called BAA, but about the right of people who do not live in the privileged south-east to access the city in which most decisions—whether we like it or not—are still taken. Be they decisions in government, law or commerce, such decisions are almost inevitably determined by what goes on in the capital city of the United Kingdom.
We seem to be saying that it is not necessary to plan to ensure a sensible allocation of resources for regional airports; instead, we can just leave it to the market. But the market has already demonstrated that the control of slots at Heathrow, for example, is an absolutely stunning money-maker. We are talking about not £1 million or £2 million, but £5 million and even £10 million. We are talking gold bars. To those who seriously think that we can say to regional airports, "Don't worry about it. Your local authorities will have the right, if they so choose, to subsidise transport that will get you to even the most congested south-east airports", I can only say that that is the most unlikely scenario that I have heard, even in this Chamber.
The reality is that the Government are being advised on airport development by a private company that is committed to making an enormous profit. As far as I can see, such decisions will be governed not by the political, economic and demographic interests of the UK regions, but by a series of political decisions that are all about making money and applying the simple measurement of money to a vital asset.
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