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House of Commons

Tuesday 21 March 2006

The House met at half-past Two o'clock


The unavoidable absence of Mr. Speaker having been announced, the Chairman of Ways and Means took the Chair as Deputy Speaker, pursuant to the Standing Order.


Hbos Group Reorganisation Bill

Order for Third Reading read. To be read the Third time on Tuesday 28 March.

Oral Answers to Questions


The Secretary of State was asked—

Local Transport Monopolies

1. Mr. Andrew Turner (Isle of Wight) (Con): What discussions he has had with the Office of Fair Trading on local transport monopolies. [59776]

The Secretary of State for Transport (Mr. Alistair Darling): My officials meet regularly with the Office of Fair Trading. It is for the competition authorities to consider whether a local monopoly is abusing its position and having a detrimental effect on consumers.

Mr. Turner: Wightlink, which enjoys what the OFT calls a dominant position in the cross-Solent ferry market, has just been sold for £230 million, which can only be recouped from its customers. Fares have increased significantly, potentially damaging the local economy and causing hardship particularly to those who have to travel because of a need for health care. Does the Secretary of State agree that instead of launching investigations only after the ill effects become apparent, the OFT should keep local transport monopolies under review and ensure a fair deal for local communities?

Mr. Darling: I am grateful to the hon. Gentleman for having raised his concern directly with my Department. I appreciate the problem that he sets out. I think that the competition authorities last looked at the position on the Isle of Wight in 1995, although there was a further review in 2000. The test is not whether there is a monopoly but whether those involved are abusing the position. As I understand it, there are three operators on the Isle of Wight, two of which are bigger than the other
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one. If the hon. Gentleman, or anyone else on the Isle of Wight, has a particular problem, he might want to raise it with the OFT.

On the hon. Gentleman's general point, I am not sure that I would want the Competition Commission to keep a constant watch over everything that might constitute a monopoly. I imagine that its resources would have to be significantly increased were that to happen. The best thing to do in relation to this particular case, if the hon. Gentleman is so minded, is to raise it with the authorities.

Ian Lucas (Wrexham) (Lab): Does my right hon. Friend agree that open access arrangements on our railways can have a very positive effect? Does he particularly welcome the competition that will be created by the proposed link between Wrexham and London, which will compete with the Virgin railway service that currently operates?

Mr. Darling: Competition can be beneficial. However, it is also important to ensure that there is sufficient capacity on the railway lines to allow for additional services to run, whether between Wrexham and London or anywhere else. The other relevant factor that must be considered is the effect that it has on the overall finances of the railways.

Air Travel

2. Mr. Stephen Crabb (Preseli Pembrokeshire) (Con): What his policy is on the extent to which demand for air travel should be met by increased spending on infrastructure. [59777]

The Secretary of State for Transport (Mr. Alistair Darling): Investment in airport infrastructure is essential in order to deliver the objectives of the White Paper that I published in 2003 and to ensure the international competitiveness of the UK. Perhaps I should draw the House's attention to a statement that I made this morning on the Government's response to the Civil Aviation Authority's price control review consultation, which emphasises the importance of investment in order to deliver the objectives of the Government's White Paper. I also draw the House's attention to the recent statement by the CAA, which stressed the importance of airport operators maintaining a sufficient credit rating to be able to fund future investment.

Mr. Crabb: Given that the White Paper forecasts that demand for airport capacity in the south-east region will reach £300 million passengers by 2030—more than double today's level—and that existing airport capacity serving this market is already, in effect, fully utilised, how confident is the Secretary of State that current plans for the provision of additional runway capacity in the south-east will match this demand in a timely and appropriate manner? What does he think will be the consequences for the UK if we fail to do so?

Mr. Darling: I am in no doubt that if we do not implement the proposals set out in the White Paper of three years ago, that will have adverse consequences for the United Kingdom. I am concerned that the hon. Gentleman's Front Benchers seem to be having doubts about the position that I set out in 2003, which strikes a
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reasonable balance between the need to meet some of the increased demand that will come in the south-east and elsewhere and the need to meet our environmental obligations.

As the hon. Gentleman suggests, the problem that we now face is that Heathrow is full for most of the day, Gatwick is fairly well used, and growth at Stansted has been dramatic over the past few years. If we get ourselves into a position whereby we do not take decisions, which is essentially what happened in this country for nearly 20 years, or do not accept that some capacity is needed to meet all the demand that might arise, the position of the UK generally will be very bad. That is why I believe that what I set out in the White Paper in 2003 was right then and remains right now.

Mr. Brian H. Donohoe (Central Ayrshire) (Lab): On the specific problem of airports, does my right hon. Friend agree that, given the BAA's virtual stranglehold in the south-east and throughout the country, it is now time to do something? In addition, given the speculation about that company, does he believe that it is time to consider breaking it up to allow development elsewhere, by airports such as Prestwick in my constituency, so that they can fight on a level playing field rather than suffer strangulation by the BAA?

Mr. Darling: I am not sure whether I agree with my hon. Friend. First, it is up to the competition authorities to decide whether an abuse of the monopoly position has occurred and, if so, to make recommendations. It is not open to the Government to expropriate property from a private company—that is not the right approach.

The BAA is currently committed to substantial investment in not only the London airports but airports in Scotland, as my hon. Friend knows. However, the competition position is for the Competition Commission to determine, as set out in the Enterprise Act 2002. It is important that investment is maintained in airports, whether by BAA or anyone else. No Government can be indifferent to that.

Mr. Julian Brazier (Canterbury) (Con): The Government have committed themselves to an extra runway at Stansted, despite its failure to attract long-haul operators. Who will pay for upgrading the railway line, which, as the Secretary of State knows, is getting slower through the extra stops? Who will pay for the water that is needed at a time of unprecedented water shortages in the area? Above all, who is responsible for joined-up government, covering every issue from skills shortages to housing shortages, which will arise as a consequence?

Mr. Darling: I am intrigued by the hon. Gentleman's proposition that an airport is not an airport unless is caters for long-haul flights. Stansted has many short-haul flights, and many low-cost airlines fly into it. Millions of people every year fly from Stansted to different parts of Europe. It is a viable airport. The test is not whether it has long-haul flights.

As I have said on several occasions, the White Paper strikes the right balance on the need to increase capacity, especially in the south-east. If we do not do that, the implications for this country are serious, not only in loss of business to other parts of the world but in relation to the country's economic health.
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If an application to build a second runway is granted, the developer will be required to meet some of the additional costs for surface access. The Government have much responsibility for the general railway network and the line from Cambridge to Liverpool Street. That presents a problem for the hon. Gentleman. He cannot say that he favours more investment while signing up to a policy that means cuts in investment.

Mr. John MacDougall (Glenrothes) (Lab): Will my right hon. Friend continue to press the case for improved links between Fife and airports such as Edinburgh? Will he do what he can to encourage BAA to improve the links and make the necessary investment for better public access?

Mr. Darling: Yes, I will. The Scottish Executive propose a railway line from Fife as well as Edinburgh and Glasgow through Edinburgh airport, and BAA is fully involved in that. If that happened, it would provide fast links from all over Scotland to Edinburgh airport, which is one of the airports that the White Paper identifies as experiencing significant growth in the next 30 years.

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