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Mr. Prisk: The hon. Gentleman is making a reasoned and cogent argument. I certainly would not want this country's aviation industry to be disadvantaged unduly, but does he share my growing concern, which is held by others in my constituency, that the industry needs to accept in full principle that the polluter pays?

Graham Stringer: I do. I accept that principle, not just for aviation but for other parts of the economy. It is a profoundly good principle. Sometimes, working out precisely what it means is the difficulty and I will point out what I believe is a paradox in dealing with air pollution.

The aviation industry is a powerful contributor to the economy. It is also, because of its history, unusually structured, and it has some peculiarities, not least of which is the structure of the CAA. Forty or 50 years ago, aviation—the airports and the airlines—was almost wholly publicly owned around the globe. It was the Government's business. Still, if people want to organise a flight between this country and Singapore, they must have what is in effect an international treaty. That is odd in an industry that is leading globalisation and we should work towards removing that situation. We have seen the economic benefits of liberalising the skies over Europe. There has been a terrific growth in the economic impact of airlines since the skies over Europe were made free in 1992.

David Taylor: My hon. Friend talks about freedom. Does he accept that one of the characteristics to which he refers in saying that aviation has an odd structure is that it is a tax-free zone of the sort that Al Capone would envy and admire and that something needs to happen in relation to that? That certainly cannot be done in a single country or possibly even a single continent, but much more progress needs to be made before the polluter genuinely does pay and the industry, which contributes about 1 per cent. of our GDP, meets its environmental downside costs.

Graham Stringer: I do not accept that the industry is a tax-free zone—it is not—and it contributes almost £1 billion through the tax paid by aeroplanes using airports. I prefer to think of it as part of the travel industry and, unlike other parts of the travel industry, it operates and pays some taxes without a subsidy.

On my hon. Friend's other point, if the view is that extra taxes must be imposed to deal with some of the aviation industry's environmental problems, a global solution is the only way to do so, otherwise we would put our economy at a severe disadvantage.

The industry is strange because of the way that it has developed historically. If we looked at the CAA in principle, we would not put an economic regulator together with a body that is responsible for safety—that goes against most basic first principles—but as a member of the Select Committee on Transport, I have
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asked aeroplane pilots, airline and airport operators and ex-members of the CAA about that, and they say that it does not seem to cause any problem at present. It is useful to use that as an analogy in the context of the hon. and learned Member for Harborough (Mr. Garnier) finding it strange that airports can fine aeroplanes that fly off path. It is probably strange but, where that scheme exists, it probably works.

Mr. Brazier: The hon. Gentleman is making an interesting speech but surely he has missed the point: in many instances, the airport has no incentive to penalise those of its customers who fly off path. That is why there is a strong case for an independent body that has some responsibility in that area.

Graham Stringer: I hope that I have not missed the point. Having sat on the board of an airport company, I say that the hon. Gentleman is simply wrong. If someone wants to have a successful airport company and wants to expand, they need the support of the local community. Those people need to know that there is concern about their concerns. One of the ways of demonstrating that is to fine—not in an ad hoc or arbitrary manner—in a reasoned way so as to reduce unnecessary inconvenience to people who live nearby. My experience is that airports do that even where there is no financial benefit for them.

If the hon. Gentleman does not believe in such schemes he should go beyond my experience in Manchester to San Francisco. He might want to go to San Francisco anyway because it is a good place to visit. The airport there runs an extraordinarily good scheme, at its cost, that fines aircraft that go off course. It is supported by the community and has reduced the number of complaints. There is evidence in the UK and abroad that airports can pursue such schemes successfully without there being an intermediary between the airport and the community.

The aviation business has been privatised and liberalised, but the civil service has a residual memory of the time when British Airways was effectively part of the Government. It was nationalised, as was the British Airports Authority. That background sometimes distorts decisions on the aviation industry.

Those of us who are involved with the airports at Birmingham, Manchester and Glasgow, which are supported by many other airports, have believed for some time that there should be a completely open-skies policy in the regions. That would help in the south-east in that it would take aircraft out of that region—not many, but such a policy would help a little where the sky is congested. There would be economic benefits in the north of England. I believe that BA does not like that idea. In the short term, there would probably be slight damage to its bottom line, but that would be overcome in a year or two.

BA's interest, as a good British company, is not the same as the UK's interest, but sometimes aviation policy seems to be driven in that direction. I hope that, in future discussions perhaps rather than in her summing up, my hon. Friend the Minister will respond positively to the recent Civil Aviation Authority report on the granting
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of fifth freedoms to regional airports. That is not the open-skies policy that I would want ideally, but the CAA says that there are significant benefits for regional airports if fifth freedoms are granted, unless there is an extraordinarily good reason not to do so.

A sensible way to start to improve the environment and air quality around an airport is giving the airport the ability to encourage airlines by financial means to move to less polluting aircraft. That is the way forward. Obviously, the airlines are worried about such measures and about noise. They are concerned that any decisions taken by airports do not over-penalise or conflict with airspace requirements. Overall, it seems that such an approach is sensible. There is a real problem around airports, and particularly Heathrow.

Primarily, the problem is not caused by aircraft at Heathrow but by cars. I cannot think of any other situation where there is a threat to a major industry because another body or series of bodies is polluting the air. If we return to the principle that the polluter pays, aviation pollutants do not constitute a threat that, by 2010, Heathrow will not meet European standards. The pollution comes from cars. If hon. Members can think of another example of one industry affecting the expansion and development of another industry, I cannot. We need to separate the issues and there needs to be a solution.

The noise problem is getting better. I accept that it is a complicated issue. There is not a simple linear relationship with decibels. We are talking about the quality and time of day of the noise and whether the area is rural or urban—in other words, the background noise. As there is more intense criticism of airports, on average, aircraft make a quarter of the noise that they made 20 years ago.

Justine Greening (Putney) (Con): Twice as many flights land at Heathrow compared with 20 years ago. Does that not suggest that total noise is increasing rather than decreasing, purely because more planes want to land there—something which is planned to increase further?

Graham Stringer: The hon. Lady makes a good point, which I think is about 10 or 15 per cent. right. Like most people to whom I have talked who live around airports, I would prefer four quiet aircraft that can barely be heard and, in some instances, not heard at all, to one very noisy aircraft that wakes people up.

I was once at a public meeting where people were complaining about aircraft. They especially complained about a particular jumbo jet, as it turned out, that was noisy. I and others were able to point out that, while we had been in the meeting, about 25 aircraft had gone over the building and that they had heard only one. They had not heard the other 24. Obviously, quantity as well as quality matters but there has been a huge improvement in 777 aircraft, to give one example, over the old DC-9s. In my opinion, that outweighs the increased number of flights.

There is a quarter of the noise, but there are still complaints. The number of complaints must be considered in detail. At Nottingham East Midlands airport, over a period, there were 615 complaints about noise, 72 per cent. of which had been made by one
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individual. As far as I know, they were not made by an hon. Member. Sometimes, statistics obscure the fact that real people are finding that there is less of a problem with the airport and its noise than has been recorded.

The Secretary of State will have the power to allow public airport companies, such as Manchester airport, to trade. Those powers are not currently in the hands of the local authorities that own them. I support that good idea. The regulatory impact assessment says that the Secretary of State considered handing over power completely to the public airport companies so that they would have the same freedom as a privately owned airport company, but that that would make it more difficult to take local authority views into account. I found that a strange decision for airport companies that are owned by local authorities.

I urge the Secretary of State—I will also urge Ministers if I serve on the Standing Committee—to go the whole hog and make those public airport companies as free to trade as their private sector competitors. The issue is not whether the Secretary of State can intervene. BAA and other private operators would be annoyed and disturbed if there were a public subsidy, but the accounts are transparent, there is no public subsidy and the companies should be allowed to compete on a level playing field.

My hon. Friend the Minister said that he was weighing up all the facts as they relate to ATOL. To understand the complexities of the system, it is worth reading one sentence from the Select Committee's report. Once hon. Members hear it, I would be surprised if they defend the current system. It states:

We are saying that that system should continue to be funded, but it is not sensible or rational and does not justify that approach.

The hon. Member for Rutland and Melton (Mr. Duncan) said there should be a clear choice between a completely free system of buyer beware and extending the system. I agree. The difficulty is that the European package travel directive, which was introduced into British law by the package travel regulations, says that there must be protection for a number of travellers. The regulations make it clear that in this country—although I do not think that the original directive says this—that has to be provided by package tour operators. It is sensible to extend the scheme to all travellers for £1 a journey. The insurance system is even more complicated than the ATOL system.

One argument is that extending the scheme would mean extra regulation. The CAA report makes it clear that the change to a levy on all passengers is deregulatory, takes £1 million-worth of burden off the industry and creates a level playing field. The arguments in favour of that are so strong that I find it difficult to understand why the Government resist it.
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I tried to intervene on the Minister because I wanted to ask about the extra consultation. He implied that the Government are not going to amend the Bill to allow the scheme to be extended, but who else is there to consult? The CAA has carried out a thorough consultation and the Government have gone to the industry. As far as I am aware, they found that BA and one of the low-cost carriers—possibly Aer Lingus—do not like it. I can understand why, because it is an extra cost to their passengers and there are problems of carriers going broke, but the nature of a collective insurance policy is that everyone pays. With all those facts in place, I do not understand why we cannot have the argument now and make a decision. We do not need another consultation. The facts and the arguments are clear. It is not justifiable to continue a scheme that was appropriate when 98 per cent. of leisure passengers travelled through inclusive tours now that that figure is down to just over 60 per cent. I hope that the Government listen to those arguments.

6.55 pm

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