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Passenger numbers are set to continue to grow, which will help to fuel further growth in the aviation industry. Department for Transport figures show UK terminal passenger numbers increasing to 520 million per annum by 2050, from roughly 210 million in 2010 according to the Civil Aviation Authority. That increase is modest in comparison with that which will be seen globally, not least as a result of the rise of the BRIC economies—those of Brazil, Russia, India and China—and other emerging markets. Airbus’s most recent global market forecast, published in September 2011 and covering 2011-30, foresees the need for more than 26,900 passenger airliners with seating capacities of at least 100, along with more than 900 new factory-built freighter aircraft. In the same time frame, the world’s passenger aircraft inventory will more than double from today’s 15,000 to 31,500 plus.
We should continue to push for further technological improvements and ensure maximum social and economic value for each tonne of CO2 emitted, but the future growth of the aviation industry presents a major opportunity for the UK economy, and it would be unwise to start playing productive sectors of the economy off against each other as we seek solutions to climate change. In a highly competitive global market, adverse regulations that limit a particular sector’s ability to grow domestically are more likely to increase the possibility of a competitor based elsewhere in the world gaining commercial advantage, than effectively to reduce greenhouse gas emissions. I encourage the Government to work through bodies such as the International Civil Aviation Organisation to promote solid and economically sound solutions.
That said, the overwhelming feeling I have picked up from the local aviation companies that I speak to regularly is that the Government are doing a lot of good work to ensure that the UK maintains its position as the world’s second largest aerospace industry, which is an incredible national achievement given the economic conditions and the global competition.
Mary Macleod: Does my hon. Friend agree that this debate should be largely about not how we expand airports such as Heathrow—I do not subscribe to the need to expand them—but about transport across the whole UK, and about looking for creative solutions? The Eurostar is a perfect example, because most of us who travel to Paris or Brussels take it.
Jack Lopresti: My hon. Friend makes a good point. She has worked very hard in campaigning against the expansion of Heathrow airport. I agree that there has to be a more regional dimension to our transport challenges.
I have been asked by the companies that I talk to regularly to pass on their thanks and compliments to the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), on his commitment to the aerospace growth partnership, which he co-chairs. The AGP is an industry and Government partnership aimed at addressing the future needs of the UK aerospace industry, and it will prepare a strategy that embraces technology, manufacturing and supply chain. Such initiatives give the sector confidence in economically uncertain
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times. By nurturing such relationships and demonstrating the UK Government’s commitment to the sector, we are ensuring that Britain is one of the best places in the world for aviation companies to do business.
The Government sent another strong signal to my local industry by confirming in the strategic defence and security review announcement last year a major order for 22 of the fantastic A400M aircraft, whose wings are manufactured at the Airbus site in Filton. Not only is it a fantastic bit of kit that will provide a much-needed enhanced lift capability for our armed forces, but it will provide us with many export orders. The SDSR also gave us the good news that 14 specially converted Airbus A330 strategic transport and tanker aircraft will replace the ageing TriStar fleets, which will benefit our armed forces and the local and national aviation industry.
The aviation industry holds one of the keys to the economic growth that the UK desperately needs, and the Government are working hard to support the sector and its highly skilled employees. It is the UK’s highly skilled aviation and aerospace work force who contribute so much to the industry’s success, and I ask the Government to continue to do all that they can to support the industry’s employees, especially in these tough economic times. I was very pleased to hear about the Government-backed talent retention solution from the Business Secretary’s skills and jobs retention group. The TRS is designed to help engineers facing redundancy link up with companies with vacancies for highly skilled engineering and aerospace staff, and it is backed by top companies such as BAE Systems, Airbus, Rolls-Royce and GKN.
The aviation industry is an engine of growth for the UK, and we must do all we can to ensure that it is nurtured and protected. From progress on biofuel and research and development programmes to sustainable aviation projects, the UK is a world leader in aviation. As the industry confronts the challenges of operating in an ever-growing and increasingly competitive global marketplace, we must do all we can to help aviation and aerospace companies make the most of the fantastic opportunities that present themselves.
3.7 pm
Graham Stringer (Blackley and Broughton) (Lab): The future of the aviation industry has been hobbled by Government policy, but that future is important, and I hope to explain why in the few minutes available. I congratulate my hon. Friend the Member for Central Ayrshire (Mr Donohoe) on securing this debate, which is vital not just to aviation but to the whole UK economy.
Historically, the United Kingdom’s aviation business has been the second largest market in the world, not just in the production of aeroplanes but in the flying of them. We are in danger of losing that position; we almost certainly will. The arguments for constraining runway and airport capacity in the south-east fall down when looked at in detail, as do the solutions, and I will try quickly to go through the reasons why.
Aviation is vital to the economy, not just because airports and aeroplanes—the production of them and the flying of people in them—produce jobs, but because reducing the connections that aviation gives us to the rest of the world is, in essence, like switching off the internet. If someone in the House stood up and said,
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“We’re going to stop the growth of the internet and communications with the rest of the world,” people would think that that Member had gone off his or her rocker. Effectively, however, that is what we are doing by constraining air capacity in the south-east.
There is only one hub airport in this country, and that is Heathrow. By constraining its runway capacity, we will not necessarily reduce any increase in the number of passengers using it, because operators can use larger aeroplanes on the same runways. However, we will certainly reduce its importance to the economy, because we will reduce the number of destinations it serves. Already, the number of short-haul destinations served by scheduled services from Heathrow is 46, while Amsterdam has 67, Frankfurt 74, Paris 78 and Madrid 63. Heathrow still has more long-haul destinations than those airports, but there is an ecology of short-haul and long-haul routes, and as the number of routes diminishes, so Heathrow’s importance also diminishes. Heathrow already has fewer connections to some of the growing cities in China. As I said in an intervention on my hon. Friend, it has fewer connections to Malaysia and to the BRIC—Brazil, Russia, India, China—economies than its competitor hubs in the rest of Europe, so it is already losing out, and it will lose out further.
It is often said that the regional airports can take the strain, and the hon. Member for Redditch (Karen Lumley), who is no longer in her place, said that people will go to Birmingham. However, all the evidence is that the airlines have no levers to help them to get extra capacity at regional airports, and they have not had any for 20 years. We are going through a recession and economically difficult times, and the loss of traffic at regional airports is about twice the rate at Heathrow. Indeed, the Government’s policies—this also applied to the previous Government—are having a perverse impact, because of the nature of the economies involved. Air passenger duty has a really negative effect on regional airports, and some airlines are choosing to use hubs outside a region because of it. The most recent example that I have come across—there are others—is AirAsia, which was more or less signed up to using Manchester airport, but which is now flying from Kuala Lumpur to Charles de Gaulle. The reason that it gave was simply air passenger duty.
What is true for regional airports, where air passenger duty has a differential impact, is also true for the whole United Kingdom economy—we can do the sums and see the transfers. It is not just that flights are not happening at regional airports, but that operators of flights—particularly tourist flights—from Japan, south-east Asia and the emerging economies are choosing to go to Charles de Gaulle, Frankfurt, Schiphol, Copenhagen and Madrid, rather than Heathrow, because of the extra cost of air passenger duty. As a result, air passenger duty is damaging not only regional airports, but Heathrow itself.
I was pleased by the decision to reduce air passenger duty at Belfast airport. However, if we want to use the capacity at our regional airports, there needs to be a differential between them and the south-east airports. Any differential must help our regional airports, rather than being less than helpful to them, as it is at present. The other way that regional airports could be helped is by building infrastructure. Very few airports in this
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country have direct links to high-speed trains or good public transport connections. Improving public transport to our regional airports at a cost to the public purse would therefore help in some way.
The biggest push that could be given to our major regional airports, such as Birmingham, Manchester and Glasgow—I do not think this really applies to other regional airports—would come from completely opening up the skies. The previous Government gave regional airports the ability to take flights, with their permission, with fifth freedoms, which meant that those flights could pick up passengers at those airports. That is an advantage, but it would be a much bigger advantage —I imagine this would appeal to a Conservative Government—if we completely opened up the skies around those airports, so that any aeroplane could fly in and out, pick up passengers and take them wherever they wanted. Historically, the only reason why that has not happened is the Government’s over-protectionist position towards British Airways and BAA.
Things can be done to help regional airports that go beyond what is being done at the moment, which is counter-productive. Incidentally, if air passenger duty is such a good idea, why do so few other countries in Europe have it? Only four other countries—Denmark, Norway, Malta and Holland—have it; some have tried it and got rid of it because it is so economically damaging. We have to test these things against what our competitors are doing to find out whether we should have them, and I do not think we should.
It is often said that there are environmental reasons for constraining traffic in the south-east. As my hon. Friend explained, however, when we look at the detail of what happens, it becomes clear that people do not stop flying because of constraints in the south-east system; they use other hubs, and the constraints imposed by air passenger duty reinforce that. Rather than taking a direct flight or using Heathrow, people from Manchester will fly to Schiphol, Copenhagen or wherever and fly onwards because it is cheaper. That saves them air passenger duty and it saves them going into the constrained south-east hub. As a result, there is at least twice the environmental damage, because aeroplanes produce most pollutants—carbon dioxide and other pollutants—when they take off. Someone going to, say, Tokyo may go via Copenhagen. There are not, therefore, good environmental reasons for such a view.
Regional airports are not an alternative, for the reasons that I have given. The former Labour Secretary of State, Lord Adonis, said Boris island was bonkers, and within five minutes of looking at it, we can see that it will never happen—for environmental and planning reasons, and because of the sheer cost and financing involved. When there were fewer environmental issues, it took Munich 25 years to develop a new airport, which opened in 1992. Something as huge as Boris island will simply not happen as an alternative.
I should like to make a number of other points, but other hon. Members want to speak, so I will sit down. There is, however, no real alternative to expanding Heathrow; we certainly cannot use Heathrow and Gatwick as one airport. The Government’s policies are hugely damaging to the aviation industry and the UK economy.
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3.19 pm
Paul Maynard (Blackpool North and Cleveleys) (Con): I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing the debate. I shall try to be quick, because I know other hon. Members want to speak, so this will be high speed, if not on high rail, which will make a nice change.
I welcome the progress that the Government are making on aviation policy. They are taking steps in the right direction. It is not fast enough for me or many in the industry, but perhaps we need to learn patience. Good, evidence-based policy is not one of Jamie’s five-minute meals. It needs good-quality evidence, and if we do not form policy based on evidence, rather than on prejudice, it is plain stupid. I am not here to boost Blackpool airport, although it is a wonderful airport to fly into and see the wonders of the Fylde coast. I do not even want to waffle on about air passenger duty. I do not want to tempt the Minister down a route that she probably does not want to go down, given that she is not a Treasury Minister. I do not even want to bang on about a third runway at Heathrow, because I think that is a stable door that was shut long ago, unfortunately.
We must discuss a more fundamental question: what does UK plc need from our aviation industry? What do we actually need? Hidden, buried away like a nugget of gold within the scoping document, are two fundamental questions that the Government must consider. What are the benefits of maintaining a hub airport in the UK? And how important are transit and transfer passengers to the UK economy? Those things may seem self-evident. How could anyone dispute them? Yet a fortnight ago I met a commercial director for a regional airport, who said, “There is no such thing as a hub airport. There is no Government definition of one, so they don’t exist. So we don’t need a hub airport any more.” That struck me as the most illogical and ludicrous thing one could possibly argue, but none the less he tried. I would prefer to focus on not Boris island but Boryspil airport, which, for those who do not know, is the main airport for the city of Kiev, the capital of Ukraine. That is a classic example of an emerging market destination, which is economically crucial, and to which services from the UK are not sufficiently good. Yet all the aviation policy that we seem to be able to focus on is some future airport in the Thames estuary. We need to focus on the needs of the UK economy—of UK plc—here and now.
I welcome the work that I know the Minister is doing to make Heathrow and the other south-east airports function better, so that we get bang for our buck and extract the maximum from the capacity that we already have. I want London to be surrounded by a string of pearls in the form of excellent, functioning airports. One of them, however, cannot be a pearl but must be a diamond—the hub airport. To understand why, we must understand the definition of a hub airport, and why it matters to the economy. Transfer passengers do not exist merely for the benefit of Starbucks. The Frontier Economics foundation recently issued a report showing that there are at least 13 flights to emerging market destinations in which more than half the passengers are transfer passengers, who did not start their journeys at Heathrow. The more that we squeeze the short-haul flights that the hon. Member for Blackley and Broughton (Graham Stringer) referred to, the harder it will be to
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sustain flights to emerging market economies, because we will not have the transfer passengers, which is a grave concern.
I confess that a few months ago I wondered whether the UK really needed a hub airport. The Japanese Transport Minister once famously said that Incheon in South Korea was now Japan’s hub. I know that for many of my constituents Schiphol or Charles de Gaulle is essentially their hub airport. I began to think, “Can the UK survive without a hub airport? Can’t we just fly to Paris or Amsterdam?” However, the Frontier Economics report makes the fundamental case why we cannot do that. It is explicit about the amount of trade that we are losing as a consequence of having poorer connectivity with the emerging market economies. It is a question of not only the number of people flying through Heathrow, but where they are going. The hon. Member for Blackley and Broughton rightly made the point that Heathrow’s number of destinations is gradually dropping. In the past five years, it has decreased from, I think, 227 to 180. Over the same five years, the number of destinations reached from the main competitor hubs in Europe has increased.
There is clearly a case to be made that Heathrow is entering a period of consolidation. It may be getting more passengers, but they are going to fewer places, and, in the cycle, that is usually the beginning of the end of an airport’s hub status. That is what happened to New York about 20 years ago, when the destinations started to drop off and it lost its hub status. While I fully expect that in the coming 20 years Heathrow will remain England’s major international gateway, I have concerns whether it will retain its hub status. Hon. Members may ask whether that matters. New York no longer has a hub airport, but it remains a world city. I question whether we—UK plc—can afford to sacrifice the economic benefits that come from a vibrant, well-connected hub airport, which I think is fundamental.
Mary Macleod: Does my hon. Friend realise that London has 92 flights a week to China, whereas Paris has 73 and Frankfurt 69? We have good connectivity with China, one of the most important growing economies. Surely the issue is about working with businesses in China and elsewhere to find out their requirements. Has he had any correspondence with businesses there to find out whether they require additional flights to Heathrow and London?
Paul Maynard: I thank my hon. Friend for that useful intervention. Of course the main reason, historically, for our having far more flights to China is our historic tie to Hong Kong. The destinations that we serve are Beijing and Shanghai, and there are more than 3,000 seats a week going to Hong Kong. I think that Frankfurt serves five destinations and Paris four. We dominate on the Hong Kong routes, but we underperform in relation to all the other top 10 Chinese cities. Of course, economic growth in China is happening not in Hong Kong but in cities that most of us have probably never heard of—the likes of Chengdu and Dongguan, which no one is yet serving. Far more than focusing just on the number of people who are flying and the routes they are flying on, we must think about connectivity. Are we serving the places where the economic growth is?
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I make a plea to the Government. I welcome what they are doing to make the airports around London and the south-east more suited to improvements in the passenger experience, but I ask that we should not overlook the benefits that can be provided by an active, well-maintained and well-funded hub airport, which works well and connects to the places that UK plc needs to be connected to for growth. That needs to be a fundamental part of our aviation strategy.
3.27 pm
John McDonnell (Hayes and Harlington) (Lab): I shall be as quick as I can, because others want to speak. This will be the first debate in perhaps two decades when our colleague Alan Keen has not been with us, and I pay tribute to everything that Alan did over the years. On a happier note, I, too, welcome Rosie. Given the interest in aviation shown by my hon. Friend the Member for Central Ayrshire (Mr Donohue) she clearly arrived by stork.
I obviously have an interest in Heathrow, which is in my constituency, because of my constituents who work there, fly out of there and live around it. With reference to those who live around Heathrow, I want to tell BAA and colleagues who are present that the third runway is dead: that is it; it is over; it is finished. All major political parties have made it clear now that it will not be built. As to my hon. Friend’s novel idea about Northolt, this is almost becoming personal now—they are coming at me from all ways. Northolt was ruled out a long time ago because of its impracticality. It would cause just as many problems as expanding Heathrow. I understand the Government’s interest in making Heathrow more efficient, but experimentation around the Cranford agreement, moves towards mixed mode and, certainly, any attempt to increase the number of night flights would be resisted, because of noise and pollution. Nevertheless it is worth examining how we can make Heathrow much more efficient.
Despite everything that has been said by all the major parties, the blight in my constituency continues because of BAA’s continuing angst and lobbying for the third runway. It needs to be made even more explicit now to BAA that that is not going to happen. I say that—people may have seen the television programme last night—because BAA has bought up nearly two thirds of Sipson and refuses to sell the properties to families. It has made them available to families on short-term licences of up to two years and no more, although it now tells us that those licences are possibly renewable. It is destabilising the village. In addition, the threat of the third runway that BAA keeps mooting is still blighting the villages of Harmondsworth, Longford, Harlington and Cranford Cross.
One solution—I say this to the Government on a cross-party basis—is to agree to put in place a similar covenant to the one at Gatwick that will ensure for generations that there is no further threat of a third runway in the area and that is legally enforceable and binding.
We have discussed the role that High Speed 2 could play in alleviating the pressure on Heathrow. I support High Speed 2, but we need a consultation on the routes into Heathrow as soon as possible. Not consulting on the overall route has caused further blight, particularly within the London borough of Hillingdon.
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An issue has come up this week involving my constituents who work at Heathrow. The European Transport Workers Federation, the union representing aviation workers across Europe, held a demonstration on Monday about the deregulation of ground handling services such as baggage handling, ticketing and general passenger facilities. They are concerned that deregulation might not only put security operations at risk at airports across Europe, but affect staff health and safety.
On another staff issue, Heathrow is still a wonderful area of employment opportunity for all west London constituencies. It is still recruiting staff, yet the Government are consulting on closing the Heathrow jobcentre, a reduction of six staff members. Employers and unions alike have urged the Government to rethink, as it is one of the best recruitment facilities at the airport for ensuring that local people are attracted into employment and that the skills base in the area is developed.
Both staff at the airport and those flying out of Heathrow are affected by an issue that the British Airline Pilots Association raised with its members recently. The European Union is seeking to relax the flight time limitations on pilots. Britain has the gold standard, which ensures that we have the best safety standards in the world, but the European Union is seeking to undermine that gold standard and bring us into a system that reduces protections and weakens regulations. BALPA, the trade union for pilots, has made it explicitly clear that it is extremely anxious about the safety implications of the moves within Europe.
Those are the issues that I wished to raise in this debate. On the expansion of Heathrow, there comes a time when my hon. Friends must recognise that they are no longer in the majority but in a small minority. Continuing to harp on about the need for a third runway not only destabilises the population around Heathrow, but prevents our getting on with developing a proper aviation policy that is integrated with transport overall.
3.33 pm
Mr Rob Wilson (Reading East) (Con): I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing this debate and on the birth of his new family member, Rosie.
I want specifically to discuss my strong support for much-needed improved ground access to Heathrow. In my view, there is a specific and strong case for improving railway connectivity to London Heathrow via a western extension of services. The case is not based solely on improved accessibility for passengers, because it is also driven by a strong national economic imperative.
This is a debate about the future of the industry. Often, when talking about the future, we try to be optimistic. Optimism is definitely required when discussing aviation, due to the financial challenges facing the nation. Given the financial crisis and the need for economic growth to stimulate recovery, we must be mindful of the contribution made by the industry. Simply put, we all acknowledge that a strong aviation industry is good for the British economy.
In that light, I am keen to secure the multiple benefits of improved rail access to Heathrow airport for my constituency of Reading East. However, it is worth noting that the benefits of access reach far wider than individual constituencies. I have been working closely
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with key figures in government and the railway and aviation industries to make extended western access to Heathrow a reality. As we debate the future of this important industry, I am pleased to report that the project is making progress, which is important.
Estimates from the Treasury put the aviation industry’s contribution to the UK economy at £18 billion, which cannot be ignored in the current economic climate. The aviation sector employs 250,000 people directly and an estimated 200,000 more in the supply chain. Again, that contribution should not be taken lightly. Heathrow airport has 65.7 million terminal passengers each year, and Department for Transport forecasts estimate that that figure will have risen to 85 million by 2030.
Looking to the future, as air travel grows, so will the industry’s contribution to the wider economy. We cannot afford to ignore it or fail to make the right investment to exploit it. After all, there are plenty of other airports across Europe willing to challenge Heathrow’s position. We must defend Heathrow’s pre-eminence on the European and worldwide stage. There is, of course, a balance to be struck between aviation expansion and its negative impacts, such as the environmental considerations that hon. Members have discussed.
Mary Macleod: Does my hon. Friend agree that we must also take account of local residents? What we really want is to make Heathrow better, not bigger, and to ensure that the noise impact on local residents is minimised.
Mr Wilson: Of course. I think that the hon. Member for Hayes and Harlington (John McDonnell) would totally agree. The Government have said that expansion should not come at any price. As we know, they have cancelled the planned third runway at Heathrow. There is, by and large, cross-party consensus on the issue. However, that is not to say that we cannot make improvements to the system that we already have, as my hon. Friend has said, and Heathrow is a prime example. Improved western railway access to Heathrow would help to maximise the benefits that the airport provides.
For my constituency, that means strengthening Reading’s standing as the commercial centre of the Thames valley. Direct railway access to Heathrow would entrench and extend Reading’s position as a place to do business. Leading technology companies such as Microsoft and Oracle have established headquarters in Reading East, along with many other companies too numerous to name with a global outlook and an international reach.
The lack of direct rail access has rightly been described by the president of the Reading chamber of commerce as bringing “huge frustrations”. Big businesses based in Reading pay an estimated £10 million a year in taxi fares to send executives and business people to and from Heathrow, which is not particularly business-friendly. Money is not the only cost to businesses resulting from inadequate connectivity to the airport. The absence of a link also costs them precious time that could be spent with clients and customers. Lengthy journeys on the M4 to Heathrow, with their inherent risk of traffic jams and other delays, are not acceptable for international businesses.
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The easier transport to an airport is, the more people and businesses will use it, in which case the economic benefit will then flow into the wider economy. I have been working with key figures at BAA, Network Rail and First Great Western and officials from the Department for Transport. All have come together to breathe new life into the project. As a result, £119,000 in funds was recently allocated to Network Rail, and design consultants have been appointed. A feasibility study is under way and is due to be completed in December. I look forward to the report’s publication.
As I have outlined, the exciting benefits for Reading East are clear, but the project also has the potential to open up direct rail access to parts of the country that are poorly served. For the first time, Heathrow would become directly accessible to Wales, Herefordshire, Devon, Dorset, Cornwall and many other areas by means other than car or coach. I have no doubt that hon. Members representing constituencies in those areas would also benefit, and that they look forward to the report’s publication. Additionally, I hope that they will attend a parliamentary reception that I am hosting on Thursday 24 November to give the project further traction. I am delighted that my right hon. Friend the Transport Secretary will speak at the event.
I am passionate and serious when I say that this project is part of the future of the aviation industry. The implications of this important expansion in accessibility are vast, as millions of people would find themselves with a new route to Europe’s busiest airport. As the world shrinks and our outlook becomes ever more global, why should some parts of Britain be disjointed in their access to our premier airport?
I am optimistic about the future, despite the gloomy economic outlook. Aviation will play an important role in delivering growth for the UK economy. We cannot afford to endanger that future prosperity by not constantly seeking improvements to the industry—in this case, through better connectivity to Heathrow airport.
3.40 pm
Jim Sheridan (Paisley and Renfrewshire North) (Lab): I will be brief, Mr Gale, because I am conscious of the time. Siren voices in Scotland are already arguing that air passenger duty should be devolved to the Scottish Parliament. I do not share that view, because it would create more problems than it would solve, so I hope that the Minister and her colleagues will resist any temptation to do that.
On Scottish airports, increased competition for slots at Heathrow is already causing a problem, as my hon. Friend the Member for Central Ayrshire (Mr Donohoe) suggested by highlighting BMI’s withdrawal of its flights from Glasgow to Heathrow. The net result is that we have only one airline that flies from Glasgow to London Heathrow, namely British Airways, which has a monopoly where the prices are already soaring. That has given us many problems.
Finally—I am grateful for this opportunity to speak, Mr Gale—Scotland is located on the periphery of Europe and, as such, travelling by air is not a luxury, but an essential element of business and family life. I sincerely hope that the Minister takes that into account.
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3.41 pm
Maria Eagle (Garston and Halewood) (Lab): I congratulate my hon. Friend the Member for Central Ayrshire (Mr Donohoe), first, on securing this debate on the future of aviation, which has clearly been in demand from other Members—we have had an excellent debate—and, secondly, on the birth of his granddaughter, Rosie, who will think that she is the centre of the universe by the time she is old enough to read Hansard. I also welcome you, Mr Gale; it is a pleasure to serve under your chairmanship.
Our aviation industry is central to our economic prosperity and should be a key driver of the growth without which we have no prospect of emerging from the dangerous economic situation in which we find ourselves. The industry contributes more than £11 billion to the UK’s gross domestic product—more than 1% of the total—and supports up to 200,000 jobs directly and 600,000 indirectly across the UK.
I regret, however, that just as the Government do not have a credible strategy for growth, neither have they yet managed to set out a credible strategy for aviation, let alone set out the role that aviation could play in improving our economic situation. For a crucial sector on which our economy depends, the reaction from business to the Government’s decision not to set out an aviation strategy until the latter part of this Parliament has ranged from incredulity to plain bemusement.
I would much rather that we were not in opposition—it is a deeply frustrating place to be, as the Minister may recall—but the one thing that it provides is the time and space to develop ideas for the future, as well as some detailed plans. However, after 13 years in opposition, it is clear to the industry and to the wider business world that this Government came to office without such plans.
We have had lots of consultations, relentless industry engagement, scoping documents and taskforces. That is all very laudable, yet none of it makes up for the lack of a policy, let alone a strategy. With the economy on the brink, holding out the prospect of a policy late in the latter part of a five-year Parliament is, frankly, not good enough. It represents a total failure to prepare for government, and Members do not have to take my word for that. The chairman of the Airport Operators Association, Ed Anderson, has said that, while the industry knows what the Government are against,
“we are not sure yet what it is in favour of”,
and he went on to describe “better not bigger” as an “election slogan”, saying:
“Better not bigger doesn’t constitute a strategy.”
The Government also face international criticism. The chief executive of the International Air Transport Association, Giovanni Bisignani, has been quoted as saying that the Government seem
“intent on destroying its competitiveness with a policy agenda focused on increasing costs and limiting capacity growth.”
Sir David Rowlands, a former permanent secretary at the Department for Transport, has described the Government’s policy as “mildly extraordinary”, which is damning criticism from somebody from the higher reaches of the mandarinate.
Baroness Valentine, speaking for London First, said in another place earlier this year that
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“government seems content for aviation policy to drift.”—[Official Report, House of Lords, 24 March 2011; Vol. 726, c. 872.]
She has also said, most damningly, that
“the Government’s aviation strategy is damaging our economy and enhancing that of our EU rivals.”
We have heard that criticism echoed by some Members who have contributed to today’s debate.
Henry Smith (Crawley) (Con): Will the hon. Lady give way?
I am sure that the Minister saw the letter in The Times earlier this year signed by 74 senior business leaders. Setting a long-term strategic direction for aviation in London, the wider south-east and across the country is a vital part of delivering the growth and jobs that the country needs, and the letter concluded:
“All options must be considered, short term and long term, to address growing demand.”
We agree with them, which is why earlier this month, in a speech to the Airport Operators Association, I made an offer to the Government, which I am happy to repeat today. We are willing to take the politics out of aviation, put aside party differences and work together on a joint aviation policy for the good of the nation. As I have said, this is a clear, unambiguous offer, with no catch.
Aviation matters to our country—every Member who has spoken in this debate has said so—and to businesses and families throughout the country. It is an industry that needs stability for the long term, and a long-term plan that straddles Parliaments and Governments and that is capable of surviving after fruition.
In addition to the Government’s more immediate work that they must conclude—that is fine—I believe that the best way forward is the establishment of a cross-party commission to set out our long-term aviation strategy for a generation or more. We should not have rows from one Parliament to the next about an element of the strategy, but set out a long-term plan. We must not repeat the party political wrangling that turned the proposed third runway at Heathrow into a political football. We must also agree that we will then stick to that agreed strategy, whatever the outcome of the next election.
Any terms of reference for such a cross-party examination of capacity will inevitably start with an understanding that the answer for the south-east will not be to fall back on the proposed third runway at Heathrow. We have accepted that the local environmental impact means that that is off the agenda. The cross-party body must have the freedom to look at all options for growth, including in the south-east, while prioritising making the best use of existing runways and airports. A bigger prize is available for us all if we put political battles to one side and develop a long-term strategy for aviation to which everybody can sign up. It is time to move on and find an alternative way forward.
I should like the Minister to clarify the Government’s position on two further issues: first, the link between high-speed rail and aviation; and secondly, emissions from aviation. We have offered Ministers our clear, cross-party support for the high-speed rail line that we proposed when in government. I have been clear that we will work with the rest of the House to deliver the
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legislation needed to take forward that vital project. We fully accept that there is simply no other credible way to tackle the growing capacity issues on our existing main rail lines. We have, however, argued that there is a clear case for connecting the new high-speed rail line directly to Heathrow from the start. The Opposition and the Government agree that the line should connect to Heathrow; the only debate is over whether that happens from the start, or via a costly, multi-billion pound spur, tacked on at a later date.
As we have argued, taking the line via our major hub airport opens up the prospect of private sector funding, potentially saving the taxpayer billions. It would lead to a new route that made better use of existing transport corridors and better protected the area of outstanding natural beauty that the current proposal crosses. It would also open up the opportunity to connect to the Great Western main line, thus bringing the benefits of the high-speed line to the south-west and Wales and increasing connectivity for the south-west to Heathrow.
Creating a major new transport hub to the west of London at Heathrow—rather than several miles away at a site with other, inadequate transport connections—that mirrors the hub in the east at Stratford represents the joined-up thinking that is too often lacking in our transport infrastructure planning. I hope that the Minister will confirm that the Government are looking at that alternative proposal.
Our proposal is one that the Minister herself supported when she was the shadow Secretary of State for Transport, and I suspect that she still sees its merit. I hope that she will indicate a willingness to look again at it. She has our support as she seeks to do better at persuading her new Secretary of State of the merits of the case than was possible with the previous Secretary of State.
On carbon emissions, I hope the Minister agrees that we will simply not achieve the goal set out in the Climate Change Act 2008 to reduce emissions by at least 80% by 2050, compared with 1990 levels, unless aviation does more. That is why we believe that future aviation growth must go hand in hand with a greater cut in aviation emissions than we agreed when we were in government.
The Government have failed even to re-affirm their commitment to the existing emissions target for aviation that we set in government. I hope that the Minister will take the opportunity to do that today and that she will support our call for the Energy and Climate Change Committee to set out what it would mean for aviation to go further and ask it to update accordingly the carbon budgets that have been set.
I hope that the Minister will agree with us that, in principle, international aviation should be included as well, once the Committee produces its advice on accounting methodology. As the Minister will know, the industry’s sustainable aviation road map makes it clear that, by 2050, it is possible to get absolute emissions down to levels seen at the turn of the century, even as passenger numbers are projected to grow by a factor of three, so we all agree that it is possible to do more. Therefore, this should be seen not as a threat but as an opportunity. Fuel efficiency improvements in aircraft engines and air frames, improvements in air operations, both in more fuel-efficient practices and air traffic management, and
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the use of alternative fuels produced sustainably—all those things can make a contribution. The UK should be at the forefront of developing the new technologies that enable the aviation industry to thrive, while reducing emissions.
I again thank my hon. Friend for securing the debate. I hope that the Minister will feel able to respond positively and make up for the Government’s failure to date to provide an aviation strategy, which this country so badly needs.
3.51 pm
The Minister of State, Department for Transport (Mrs Theresa Villiers): I congratulate the hon. Member for Central Ayrshire (Mr Donohoe) on securing the debate, and on Rosie’s arrival. I would also like to associate myself with the comments made about the late Alan Keen and his sad, recent death. He had a long and distinguished record on aviation matters.
I agree wholeheartedly with the importance that hon. Members have attributed to the aviation industry as a strong part of our economy and a vital gateway to the global marketplace for business. Many hon. Members made that point, including the hon. Members for Blackley and Broughton (Graham Stringer) and for Central Ayrshire. I also welcome the emphatic support for the aerospace industry provided by my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti). Supporting and providing the right economic climate for manufacturing to flourish is a hugely important part of the Government’s overall economic strategy. It is crucial that aviation in the UK is able to grow and prosper in the future, but I think we are agreed that a dash for major aviation growth regardless of cost is not the right approach. That is why we are developing a new aviation strategy to set out the way forward that will allow the British air transport industry to grow in the years and decades ahead, as well as addressing its environmental and quality of life impacts. No one underestimates the scale of the challenge, because reducing harmful emissions through greener technologies is more complex in aviation than in other transport sectors and will take longer to deliver.
In response to the points made on air passenger duty, we have listened with care to industry concerns, which is why we have made it clear that switching to a flight tax is not viable without wider international support for such a move. We have postponed this year’s inflation-based increase in APD, and proposals for further reform of the tax will be published soon.
In response to the hon. Members for Central Ayrshire and for Blackley and Broughton on the issue of the Thames estuary airport, as the Prime Minister has said, the Government have no plans to build a new airport in the estuary, or in Medway or elsewhere in Kent. The hon. Member for Central Ayrshire outlined some of the practical issues that would have to be surmounted before such a programme could go ahead, including, of course, the very significant airspace capacity issues. Nor do we have plans to redevelop Northolt as a third runway for Heathrow.
I agree with my hon. Friend the Member for Reading East (Mr Wilson) that surface access to airports is a crucial part of making them successful. That is why
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Crossrail and Thameslink are going ahead—both will improve access. We continue to consider other options for western access to Heathrow, including work that could be co-ordinated with the proposed HS2 spur to Heathrow.
We have made it clear that a key plank of the Government’s approach to aviation is the cancellation of Labour’s misguided plans for a third runway at Heathrow. I find it ironic that the shadow Secretary of State, the hon. Member for Garston and Halewood (Maria Eagle), accuses us of having no policy, when the previous Government spent 13 years on an aviation White Paper that everyone agrees is no longer fit for purpose, and on pursuing a runway that is universally agreed to be absolutely the wrong approach for the UK economy. One of the coalition Government’s first acts was to cancel the third runway at Heathrow. I continue to believe that the price in terms of the environmental impact would have been far too high, given that noise already has a significant impact for thousands of people living with a plane overhead every 90 seconds. At the time, Labour described our position as
“politically opportunistic and economically illiterate”.
It seems that those on the shadow Front Bench have learned the error of their ways—but not all on their Back Benches.
We are clear that we need to protect and enhance the connectivity that is vital for our economy, which is why Heathrow’s success as one of the world’s busiest and most successful international airports is so vital. Our aviation strategy is designed to ensure that the UK maintains and improves the success of this leading international gateway. There is no evidence that Heathrow is about to lose its hub status. It remains an immensely successful airport, with more services to China than any of its European rivals, and a particularly strong connection with Hong Kong as China’s main hub airport. Our immediate priority is to make our airports work better within their existing capacity limits.
Henry Smith: I was delighted to welcome the Minister to Gatwick airport last month for the opening of new security gates. Will she congratulate Gatwick airport on the more than £1 billion of investment that it is making in enhancing capacity? Indeed, Sir John Major will open the renewed north terminal on Thursday.
Mrs Villiers: I am happy to offer my congratulations on that. Contrary to the allegation that the Government have created a policy vacuum, we have a range of initiatives designed to make our airports better—our priority is to make them better, rather than bigger. We are legislating for a much more passenger-focused system of regulation. We are improving air space management through the Future Airspace Strategy in the Single European Sky programme, which is already delivering real benefits in the UK and Ireland. We are changing the way aviation security is regulated to enable the industry to deliver the same high standards in security, but in a more passenger-focused and more hassle-free way.
Our south-east airport taskforce also included proposals to improve resilience and address delays. As a result, we are trialling the tactical use of greater operational freedoms at Heathrow. This is very sensitive, because those freedoms mean that occasionally there will be some incursions into the respite period, with occasional use of both
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runways for departures, or, occasionally, use of both runways for arrivals. However, I emphasise that that is not mixed mode and the Government remain committed to runway alternation and the benefits it brings. Very careful consideration will be given to the impact of the trial on local communities. I emphasise that the measures being trialled are to be used only to improve resilience, and prevent or recover from disruption, and not to increase capacity, which remains capped at current levels.
We have published our scoping document, setting out the issues to consider for the future of aviation. We know how crucial it is to have a successful regional airport sector, as hon. Members have highlighted today. We will look at ways to harness spare capacity to support economic growth and help to relieve crowding in the south-east. High-speed rail has strong potential to provide an alternative to thousands of domestic and short-haul flights. HS2 to Manchester and Leeds will deliver a three and a half hour journey time between London and Scottish destinations, providing a viable alternative to thousands of Scottish flights.
Maria Eagle: Will the Minister give way?
Mrs Villiers: I am sorry, but I really do not have the time. We accept that the international nature of aviation, as has been said, means solutions are often best delivered at a multilateral level. That is why we are working with the International Civil Aviation Organisation towards agreement on emissions and on noise issues. That is why we have worked very hard on the inclusion of aviation in the emissions trading scheme. We will publish our draft strategy in spring next year for public consultation, with a final strategy due in 2013. We want to see Britain, and British companies, spearheading the global debate on greener air travel and shaping a low-emission aviation sector of the future. We need to work with the industry to find new ways of decarbonising air travel, boosting investment in low-carbon technologies and fuels, and enabling the aviation sector to generate the headroom it needs to grow in a sustainable and successful way. Our world-beating aerospace sector will play a vital role in that. The challenge creates great opportunities for that world-beating sector.
We want to open a new chapter on the aviation debate. We are interested in working on a cross-party basis, as has been discussed today. Our goal is to move away from the polarised opinions that have dominated the discussion in the past. We want to develop a broader consensus for the change we need to deliver a flourishing air transport sector that can support economic growth, while addressing its local environmental impacts and playing its full part in combating climate change.
Mr Roger Gale (in the Chair): Order. I owe an apology to the Minister and to the Opposition Front-Bench spokesperson. It does not happen all that often, but I am afraid that, so captivated was I by the quality of the Back-Bench debate, I misread the clock. I apologise to both Front Benchers.
I am also sorry that I was unable to call the hon. Member for Crawley (Henry Smith), but his constituents will have noticed from his intervention that he was assiduously present throughout the debate.
Finally, while I am on my feet, I express my pleasure at the birth of the granddaughter of the hon. Member for Central Ayrshire (Mr Donohoe).
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Bank Account Fraud
4.1 pm
Stephen Timms (East Ham) (Lab): I am grateful to Mr Speaker for selecting this debate, and I am delighted to see the Exchequer Secretary to the Treasury in his place, upholding as always the high standards set by previous occupants of his office.
The debate arises from troubling recent constituency cases, in which constituents who have been the victims of fraud have found themselves seriously disadvantaged by actions taken by the banking industry in response. They have suffered what seems to be arbitrary and draconian punishment without even an explanation, still less any opportunity to challenge what had been done to them. No one can object to the banking industry taking every step it can to protect itself and its customers from fraud. It is absolutely right that it should do so, but those measures need to be taken in a way that treats customers fairly, and such a requirement has not been met in the cases to which I shall refer. I hope the Minister will agree that we need a better way of protecting against fraud, which does not cause its victims such hardship.
I will put to the Minister a series of points, to which he is likely to be sympathetic and to which I will be grateful for his response. First, if customers are to be denied the opportunity to have a bank account, they should be told and not, as in my constituency cases, be left to find out for themselves, submit numerous applications to different banks and be rebuffed each time for reasons that have not been made known to them. They should be told for how long they are likely to be unable to open an account. They should be given accurate information about what alternative courses of action might be available to them. If the only account they will be able to open is with a credit union, they should be told so. My constituents have been provided with no such information and been left completely in the dark.
Secondly, there should surely be at least some allegation of wrongdoing before someone is deprived of a bank account. In the case of my constituents, as I am about to explain, no such allegation was made, but the inter-bank machinery of the financial services industry organisation, the Credit industry fraud avoidance system, was triggered anyway. Thirdly, someone who is to be denied the opportunity to have a bank account should be provided with a reason. Such people should have someone in their own bank, in CIFAS or somewhere with whom they can discuss the matter—someone who understands what is going on. Fourthly, they should be given the opportunity to challenge the refusal of an account. Being unable to hold a bank account is too serious a handicap for there to be no practical way at all to challenge what is being done.
I will set out the experiences of my constituents, which have given rise to my concerns. I first became concerned when my constituent Miss Josephine Dolor came to see me in July. She had a Halifax bank account, with a bank card, which she had last used in early November last year; she was 17 at the time. When she next tried to find the card, she could not do so. At that point, as she accepts, she made a mistake. Thinking that the card would turn up, she did not report its loss and took no action for some weeks. She recognised that the
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card had really been lost only when she could not find it after Christmas. She then reported its loss at the East Ham branch of Halifax on 29 December last year, some six weeks after it first went missing.
By that time, all Miss Dolor’s education maintenance allowance payments, amounting to about £100, had been withdrawn from the account. In addition, in late November, £1,000 was transferred into her account from somewhere else, and another £600 was transferred in on 9 December. By 18 December, those funds had all been withdrawn. The transfers in have since been confirmed as fraudulent and remain the subject of a fraud investigation by the bank. On 7 February, Miss Dolor was interviewed by a Halifax officer, and she explained what had happened and that she had no knowledge of how anyone else could possibly have known the personal identification number for her card—although they clearly did—and the officer said that she believed Miss Dolor’s explanation.
At that point, it would be difficult to criticise Halifax. Miss Dolor had had the opportunity to explain what had happened, and her version of events had been accepted. However, at that point things started to go badly wrong. In response to an inquiry about the closure of the account from Miss Dolor’s mother, she received a letter from Halifax customer relations dated 29 March. The letter was rather unclear. It included an apology to Miss Dolor, a reimbursement of the £100 that had been taken out of her account and a £50 payment
“for any distress our process has caused”.
It appeared that, as the Halifax officer had stated, the bank accepted that Miss Dolor was innocent of any wrongdoing. But the letter also said:
“No explanation has been provided as to how a third party may have access to your PIN. Regrettably we are not going to offer you any more accounts as a result of the fraud. This is a business decision.”
That blunt termination of the account was only the start of Miss Dolor’s problems. She subsequently found out the hard way that it was impossible for her to open an account with any other bank, because Halifax has registered her with CIFAS. Lloyds Banking Group, the parent of Halifax, tells me that that is a requirement of its membership of CIFAS. CIFAS, though, says that it is not a requirement and that it is up to the bank how the case is registered. Lloyds certainly did not warn Miss Dolor of the consequences of the “misuse of facility” registration that it had made of her. In my view, Lloyds should certainly have explained that to her. I understand why Lloyds registered my constituent: because the withdrawal from the account was carried out using her card—that is not in dispute—and her PIN. Miss Dolor told me that she has no idea how anyone could have known her PIN. It is not written down anywhere, she has not told anyone what it is, not even her mother, and she is not aware of anyone ever watching her use it, although of course fraudsters have some clever techniques for obtaining such information. There is certainly no dispute that someone had the PIN. On one occasion, a fraudulent withdrawal was apparently made in a branch using a signature that did not to me look very much like Miss Dolor’s.
CIFAS told me yesterday, however:
“If Halifax had considered that Miss Dolor was a victim of fraud they would have filed her case as such. If she had been filed
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as a victim, Miss Dolor’s ability to hold bank accounts, or indeed open new ones, would have remained unhindered...Halifax chose to register this case as a ‘misuse of facility’ which identified Ms Dolor as being a fraudster”.
At the same time as apologising to Ms Dolor and issuing her with compensation, Halifax was registering her with CIFAS as a fraudster, and that registration was subsequently supported by the Financial Ombudsman Service. As a member of CIFAS, Halifax is required to register the details of all proven fraud cases, but I understand that that is not a legal obligation, simply a condition of CIFAS membership. Being the subject of a misuse-of-facility registration with CIFAS has had disastrous consequences for Miss Dolor. Her account with Halifax was summarily closed, and she has since been unable to open an account with any other bank or the Post Office.
One of the most disturbing aspects of the matter for me is that no one explained to Miss Dolor that that was going to happen. Halifax gave the impression that it accepted that she was the victim, and it gave her compensation. It did not inform her that she would no longer be able to have a bank account. She had to find out the hard way. The other banks told her not that that was because of her registration with CIFAS, but simply that she did not meet their criteria for opening an account. There was a real danger in the summer that, because Miss Dolor had no account into which to pay her student loan cheque, she was going to have to give up her university place. In the end, she was able to open an account with a local credit union. She cannot access that account from her university home, so it is awkward for her, but it meant that it was at least possible for her to commence her course in September.
One letter from Halifax suggested that she should open a basic account somewhere. She has tried but has been rejected twice, because that is not possible given her registration. Surely her bank should understand the consequences of its action against her, and inform her of those consequences. That did not happen, and when I pressed Lloyds, its response was:
“Our letter of 29 March 2011 went into detail about CIFAS.”
That was simply untrue. The letter of 29 March should have explained that the misuse-of-facility registration with CIFAS would make it impossible for Ms Dolor to obtain a bank account anywhere. What it actually said was that
“extra checks will be made for you when you are applying for financial products...your credit file has not been updated to hold negative information”.
It reads as though Lloyds was doing her a favour. In fact, Lloyds almost prevented her from starting her university course. Surely customers are entitled to expect their bank to be straight with them.
When a person applies to open a bank account, each bank runs that person’s details through the CIFAS database. If they are found to have a misuse-of-facility registration on CIFAS, it seems that they are told that
“further checks have shown you do not meet the bank’s criteria for an account”,
and that is the end of the story. There is no appeal and no further recourse. Miss Dolor inquired at just about every High street bank, and at the Post Office. She has never had the opportunity to discuss the position with anyone. She has simply received the same automated
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response every time. My constituent, who is an enthusiastic, intelligent, young woman who aspires to a career in law, has been placed in limbo. As far as one can tell, she has not even been accused of any wrongdoing, let alone found guilty of anything. She is the victim of a fraud, yet she is still, one year after her card was stolen, unable to open a bank account anywhere.
Another constituent, Mr Ravi Borra, contacted me last month on finding himself in a similar situation. He is an MBA student at Coventry university’s London campus. To support himself he has worked full time as a waiter at St Pancras station during his vacation. For that he received just over £1,000 for a month’s work, and he was paid by cheque. After paying that cheque into his bank account in good faith, he was contacted by his bank—again, it is Lloyds—which informed him that the cheque had been flagged as being fraudulent, his account had been suspended, and he had been registered on CIFAS. Like Miss Dolor, he cannot open an account elsewhere, and when he attempted to do so, he was told repeatedly that his application did not pass the qualifying tests. He filed a complaint with Lloyds in September, and was contacted by the fraud department a few days later and was told that, although it could not reopen his old account, it could set up a new account for him. Mr Borra was happy with that compromise. He received his PIN number and debit card for his new account, but the very next day he received a letter from Lloyds saying that
“recent risk assessment on your accounts has highlighted concerns and as a result we have taken the decision to close all the accounts you currently hold with us in two months time...in the meantime, I have placed a block on all your accounts which stop all transactions”.
Mr Borra finds himself in a complete nightmare. He did a month’s work for which he has received no payment. He cannot open a bank account. No one will tell him what is going on. He cannot even apply to extend his student visa and it seems that he may be unable to finish his studies.
Late yesterday, CIFAS told me that Mr Borra’s registration with it was cancelled by Lloyds last month, but no one has told Mr Borra that, and the new block on his new account was imposed after the deletion. He has told me today that he still cannot open an account anywhere, for reasons that are at the moment unknown. Lloyds says that it is simply complying with its obligation as a CIFAS member, but CIFAS says that when someone is registered with it, it cannot delete that data. The prerogative for doing so lies with its members—the banks—and the registration remains on the database for a minimum of one year. One year without a bank account seriously disrupts a person’s life. There seems to be nothing my constituents, who have not been accused of anything, can do to open a bank account and resume their lives.
The Minister will recognise that being without a bank account is a serious disadvantage and may mean not being able to start a university course or take up a job. People should not lightly or accidentally be deprived of the chance to have an account, but that is what seems to have happened in these cases. As far as I can tell, no one decided that my constituents should be denied the chance of having a bank account. Rather, actions by their bank triggered a response from the machinery that has been put in place, with the effect that they cannot
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have a bank account for at least a year. Surely that is too serious a sanction to allow it to happen by accident. Being denied a bank account is appalling for anyone, and contrary to Government policy. As we move towards the introduction of universal credit, this Government, like the previous one, are encouraging people to have bank accounts, but in arbitrarily closing accounts the banks are undermining Government policy as well as causing hardship to their customers.
I hope the Minister agrees that people such as those I referred to should not be treated in that way. Perhaps he can offer some hope that those who find themselves in that nightmarish situation may be offered a means of finding a way out.
4.17 pm
The Exchequer Secretary to the Treasury (Mr David Gauke): It is a pleasure to serve under your chairmanship, Mr Gale. I congratulate the right hon. Member for East Ham (Stephen Timms) on securing the debate.
I sympathise with the right hon. Gentleman’s constituents, whose experiences he described so vividly. He knows that it is difficult for the Government to comment on specific cases, but it is clearly unacceptable that individuals who have been victims of fraud—that seems to be the case that he set out—should be systematically denied access to a bank account. As far as I am aware, there is no legal or regulatory reason for this to happen.
As the right hon. Gentleman said, the consequences in this day and age of someone being denied a bank account are considerable, and I entirely agree with him that that should not lightly or accidentally be denied. It is worth making the wider point that the Government want to ensure that we improve levels of financial inclusion, as indeed did the Government in which he served with such distinction. We believe that banks should serve the economy, and we are committed to improving access to banking and the transparency of financial products for consumers.
Having access to appropriate banking services is an important element of modern life, and it can help to alleviate some of the problems faced by low-income families. A bank account enables individuals to make and receive payments through a variety of channels, have a more secure place to keep money and reduce the cost of household bills. The number of individuals without bank accounts has fallen in recent years, but the Government remain keen to see the situation improve further, and in particular to identify groups who may have specific difficulties in accessing a bank account.
While the situations described by the right hon. Gentleman are clearly invidious, it is not clear how many individuals are affected by this sort of difficulty. This is the first time that I have personally been made aware of this issue. As far as the Treasury is aware, it is not widespread. The right hon. Gentleman may have identified a growing problem that we need to look at. His industry and dedication as a constituency MP have highlighted not one but two cases that happen to have occurred among his constituents.
The issue falls within the remit of the Financial Secretary to the Treasury. He is not available to attend the debate, but he will be asking officials to investigate
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how this matter may have arisen and how many consumers may be affected. We will write to the right hon. Gentleman to explain the findings, and I am grateful to him for highlighting this particular issue. Clearly, we need to understand whether the problem is widespread.
The right hon. Gentleman set out four points, and I shall try to respond as best I can. I will take his first and third points together. He asked whether individuals should be informed if they are going to be denied a bank account and, if so, whether they should be provided with a reason. Those are eminently sensible and reasonable points. Consumers have the right to ask for a reason if they are denied a bank account, as set out in the Money Advice Service’s guide to bank accounts, which is available on its website. Consumers may also complain to the specific firm if they are unhappy with the outcome, and they can take their complaint to the Financial Ombudsman Service.
The decision to offer a bank account is ultimately a commercial decision. Current account providers are not obliged to provide a specific reason for not offering an account. However, it is worth highlighting the Financial Services Authority’s principle that financial institutions are required to treat their customers fairly, which is relevant in these circumstances.
The right hon. Gentleman questioned whether consumers should be denied a bank account where there has been no allegation of wrongdoing. Again, decisions as to whether to offer a bank account are a commercial matter for the financial institution concerned, and the Government do not intervene in such decisions. However, there is no legal or regulatory reason for victims of fraud to be denied a bank account. The circumstances that he set out appear to be of some concern.
The fourth question asked by the right hon. Gentleman was whether consumers should be given the opportunity to challenge the refusal of an account. If consumers are unhappy with the decision taken, they may complain to the specific firm concerned, and if they are unhappy with the outcome, they can take their complaint to the Financial Ombudsman Service. I reiterate the point that if a financial institution, or more specifically a bank, has been in breach of the FSA principle of treating customers fairly, the individual customer can raise that with the bank and with the Financial Ombudsman Service. If the explanation that is given to a customer is wrong—for example, if there is misleading information about how CIFAS works and its impacts—without wanting to be drawn too much into specific cases, it seems there is a case that the customer is not being treated fairly.
Stephen Timms: Part of the difficulty arose when the banks to which an application was made simply said to Miss Dolor, “You do not meet the criteria for an account.” I do not know whether that meets the terms of providing an explanation, but it clearly did not shed any light on the matter for her. If she had been told that she had been registered in such and such a way with CIFAS, she would have understood what was happening. The whole process was opaque. Does the Minister agree that some effort should be made to provide some illuminating information rather than a kind of stonewall response? It might meet the letter of the requirement, but in practice it does not help the customer at all.
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Mr Gauke: I have considerable sympathy with the point that the right hon. Gentleman makes. Again, I do not want to be drawn into an individual case, but clearly it is not terribly helpful when the response may be technically accurate, but does not get to the heart of the matter. As he has set out, the individual customer, a member of the public, will be concerned if they find themselves in that most difficult of situations where they are being denied a bank account, but without any real understanding as to why. As in the cases that he has highlighted, an individual may go from bank to bank without being given any real indication as to why they are in that difficult position. In such circumstances, I sympathise with him and his constituents.
The Government want to ensure that everyone can access the financial services that they need to play a full part in society. I am grateful to the right hon. Gentleman for raising this issue in today’s debate. I assure him that we will consider the matter and investigate whether it is widespread. I want to assure him that it will be taken into account as part of the Government’s ongoing work to improve financial inclusion and access to bank accounts. He has rightly set out some of the difficulties that exist for individuals if they are not able to access a bank account. If the attempt to tackle fraud is working in such a way that the innocent are being punished, we need to address that by working with the FSA and the high street banks.
I reiterate my thanks to the right hon. Gentleman for raising the matter. My colleague, the Financial Secretary, will reply to him with further details after we have had an opportunity further to investigate the extent of the problem. If there is anything that we can do to address this matter, we are certainly keen to do so.
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Planning Guidance (Northumberland)
4.28 pm
Sir Alan Beith (Berwick-upon-Tweed) (LD): Thank you, Mr Gale, for chairing this debate. I am glad that the Minister is taking part. He and I have worked together on other issues over quite a long period. I am glad to have the opportunity to discuss the potential impact of the draft planning guidelines in Northumberland. My hon. Friend the Member for Hexham (Guy Opperman) would like to have taken part, but he is still taking part in the constituency boundary inquiry in Newcastle, at which I spoke yesterday.
I want to address three main questions in this short debate. First, does the guidance enable planning authorities to combine the protection of the countryside with the encouragement of those forms of development that local people need if they are to have affordable homes and jobs? Secondly, how does the guidance affect the strategic housing land assessment that councils have been required to carry out? Thirdly, how will it be applied to wind farms and wind turbines?
Quite a lot of my constituents have involved themselves through e-mail in the debate about the planning proposals, and some have clearly been concerned by fears that they will unleash a torrent of development in the countryside or strip away the protections that the countryside enjoys. Ministers have made it clear that the guidance does not reduce or dismantle the protection given to national parks, areas of outstanding natural beauty or the green belt—my constituency contains the first two of those. Instead, it embodies a principle that has always been part of the planning system: a person has the freedom to make use of his or her land unless there is good reason for the community to deny that right, such as the protection of landscapes, the conservation of historic buildings and areas, or the promotion of sustainability. I sometimes wonder, however, whether man-made landmarks that we know and love—Stonehenge, Blackpool tower, Kielder water, Lindisfarne castle, for example—would have received planning permission from some authorities.
The Government are right to get rid of much of the top-down structure and guidance that has grown up over the years. Regional spatial strategies have ludicrously restricted the number of houses that can be built in Northumberland’s rural villages, and regional strategy has created a presumption in favour of wind farms in many of the most attractive parts of my constituency. The objective of having a much shorter guidance manual is correct, but the Government must develop clearer wording around the concept of a
“presumption in favour of sustainable development.”
If they do not, Ministers and planning authorities will waste a lot of time and money in the law courts over the next few years, and the planning process will be subject to even more delays. People may feel that the dice are being loaded against them—I will return to that point.
When an organisation with such a distinguished record as the National Trust rings the alarm bell, Governments need to take notice. The trust is a major land and property owner in my constituency; it owns most of the village of Cambo, and much of Low Newton-by-the-Sea, as well as historic buildings that are great tourist attractions. The trust’s initial comments and those of the Campaign
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to Protect Rural England might have given the impression that people who live in and care about the countryside are against all development, but that has never been so. Indeed, the National Trust sometimes applies for planning permission for developments that it considers necessary to make the country houses it owns sustainable. Country people know that the countryside cannot be run as a museum. If they are to provide local services, local people need homes at prices that they can afford. Shops, pubs, churches and local transport need a resident population to sustain them; they cannot survive on weekend-cottage owners alone. Jobs are needed to stop rural depopulation.
During my time as a Member of Parliament—which, admittedly, is getting quite long; 38 years last week—I have seen a huge reduction in the number of houses inhabited full time by people who work locally. House prices, inflated by scarcity and the demand for second homes, are far beyond the reach of local people in rural Northumberland. I therefore welcome the wording in the guidance that, in rural areas, local councils should plan to meet the need for affordable housing and that some market housing should be allowed if it will provide more affordable housing for local people. Although I welcome the debate about protecting the countryside, I do not want it to lead to the Government adopting wording that would make it even more difficult to secure the housing and small business development that are essential to a sustainable countryside. Equally, I would not want anything to add to the feeling shared by some of my constituents that, even under the current system, the balance of power is in favour of large developers.
James Wharton (Stockton South) (Con): I congratulate the right hon. Gentleman on securing this important debate; it refers specifically to a part of the world that is not too far from my own. He pointed out that many communities feel that they do not have enough control over developments. Does he agree that that is the case all too often? Many communities in my constituency are opposed to local developments—whether housing developments, wind turbines or any other sort of development—and feel that they have no power or voice under the old system.
Sir Alan Beith: Indeed, and I welcome the various ways in which the Government are trying to empower local people—for example, through local neighbourhood planning. Alnwick in my constituency is one pilot area for such a development. I genuinely welcome the Government’s attempt to bring more of the planning decision process to local people. Of course, some things in the planning guidance might work the other way, and I will address some of those issues.
As I have said, some people in my constituency feel that the dice are loaded against them in favour of big developers. In my area, there is the added issue of large, landed estates that are in a relatively powerful position and can consider their actions for the long term. They have many levers in their power, which people feel can sometimes make it difficult effectively to oppose developments that they do not like, or even to secure the appropriate balance of social housing in a development.
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The Minister will know that I have experienced difficulty in getting a satisfactory answer to constituents’ concerns about the strategic housing land availability assessment and how it will relate to the presumption in favour of sustainable development—what a jargon-filled world we live in, between the SHLAA and the presumption, but that is what we must examine. If the SHLAA is just a developer’s wish list and does not change the designation of land or the way that planning considerations are applied, it will not be a problem.
Experience of a recent case in Berwick, however, has created the fear that the SHLAA listing, which the planning authority agreed to without first consulting English Heritage, could override important archaeological and landscape considerations in future planning decisions. An extremely sensitive site close to the Royal Border bridge and castle was included in the draft SHLAA, although the heritage and landscape factors were not listed in the assessment. That has left local people feeling that, should the area ever be the subject of a planning application, the dice would already be loaded because relevant factors had been set aside by the site’s original inclusion in the land assessment.
There is also concern that, in many places, local development plans do not exist, have not been finally agreed to, or have not been updated. That could lead to a disregard of relevant planning considerations for sites included in the SHLAA list, or to the presumption in favour of sustainable development overruling conservation, landscape or other considerations. What assurance can the Minister give to localities that do not have an approved up-to-date local plan?
Finally, I will consider wind turbines and wind farms. Large parts of my constituency, which is characterised by beautiful countryside and stunning views, have been designated as suitable for onshore wind generation. Some parts, such as the national park, although not the adjoining areas, have been excluded. The result is an avalanche of applications for the rest of the area, some of which encircle communities such as Wingates, a hilltop village near Rothbury. In the borders region, 250 turbines have been erected and 600 are in the planning process. Northumberland has granted permission for three wind farms, and a further 10 have been approved by inspectors on appeal. The planning authority needs to be confident that it is free to make sensible, careful and robust decisions about which sites to approve and which to reject. Opinions are, of course, divided over individual wind farm sites and about the general policy of wind-farm development.
James Wharton: The right hon. Gentleman refers to the need for local councils to have a genuine framework of accountability through which they can influence applications for wind farms. In Northumberland, the Conservatives have called on the county council a number of times to look at the introduction of a policy that will make it clearer, for both applicants and residents who are concerned about potential developments on their doorsteps, what the framework in that area should be and what is, or is not, permissible. Does he believe that to be a possible way forward, and would he support such a position?
Sir Alan Beith:
I will go on develop the case in my own way, and the hon. Gentleman will see how I think that we should handle it. His intervention is relevant to
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my point because, although there are many divided opinions, they do not divide along party political lines. He mentioned the Conservative party, and in Northumberland there are applications to place a turbine on a site belonging to the Conservative leader of Northumberland county council and for a wind farm to be put on land owned by the hon. Member for Stroud (Neil Carmichael). Enthusiasm for renewable energy and wind farms, and concern about them, stretches across the parties.
In such a highly-charged debate, we must know what the new planning guidance will mean. It could be argued that a wind farm or wind turbine is, by definition, a sustainable development because it produces sustainable energy without carbon or non-renewable resources. If that is combined with the existing designation of some larger areas as suitable for wind farms, does the presumption in favour automatically come into play? We need to clear that up, because if it were so, the planning process would break down. The planning authority would be left powerless to make sensible decisions about the suitability of a site, its cumulative impact in the light of other approvals, landscape issues, wildlife protection or proximity to residential developments. The planning authority would fear losing every appeal against refusal, at considerable cost. Therein lies one of the problems with the suggestion made by the hon. Member for Stockton South (James Wharton). If the planning authority devises a framework that is more restrictive than the regional framework to which it is already subject and then loses its cases on appeal, we are no further forward.
Let me consider, as I have referred to it, the proximity to residential properties. The planning guidance is a missed opportunity to write in a national presumption against close proximity to residential properties for large or multiple turbines. The Government have not looked favourably on the relevant private Member’s Bill promoted by the hon. Member for South Northamptonshire (Andrea Leadsom). They should reconsider the issue to give people some reassurance, not about small turbines designed to provide electricity for a house or farm, but about large installations built very close to residential property.
The Minister must make it clear that what I have described in respect of the presumption in favour of sustainable development will not have the effect that I have suggested—that that is not the Government’s intention. Even within areas designated as suitable for wind farms, there should be no non-rebuttable presumption. Planning authorities will be seen as a waste of space if they do not have the freedom to control the rush to find and develop wind-farm sites in which so many developers are competing. My constituents will rightly be angry if the planning authority is unable to take into account historic views of Holy island, Bamburgh and the Cheviots, or any of the other factors that I have mentioned, including wildlife protection and closeness to residential property.
There are a great many applications in my constituency, and that has introduced a new and rather worrying element, to which I want to direct the Minister’s attention. One developer, which has applications in relation to the Elsdon area and the area north of Belford—two separate applications relating to different parts of my constituency—somehow managed to give
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residents in Elsdon the impression that, although there would be some funds for community benefit if the scheme went ahead, there would be a lot more if they did not oppose it and there was no need for an appeal or an inquiry. It would not be acceptable for the planning process to be distorted by people being pressured to forego their right to express their point of view. Needless to say, it did not have that effect. When the people affected thought that that was what they were being told, they reacted in a pretty hostile way. It certainly did not bring them round in favour of the proposal. However, that would be a very unwelcome development in planning matters.
Some people do not like community benefit at all. I accept that if a scheme—whatever the development—goes ahead and has potentially detrimental effects on an area, or if it would be more acceptable if other things were done at the same time, developers should be encouraged to provide those benefits to the community. However, their scale should never be conditional on whether the planning process has been allowed to go ahead in the normal way or has been curtailed by people feeling that somehow they would lose out if they pursued their objection.
We want to protect the very special beauty of our countryside from the threat of inappropriate or badly sited developments, whether wind farms or other kinds of development. We need the power to make local decisions. We want to maintain a living countryside that welcomes the homes and jobs that are needed if the countryside is to be sustainable. The result of the debate about planning policy needs to be a system in which local people play a crucial part not only in helping to shape their area, but in keeping it as one of living communities whose beauty and grandeur are protected for future generations.
4.44 pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill): It is a pleasure to speak under your chairmanship, Mr Gale. I congratulate my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) on securing the debate, which I know is important both to his constituents and more generally. I am delighted to be doing business with him again in a Committee Room of sorts. Our roles today are slightly different from our previous incarnations in the Select Committee on Justice.
I shall try to deal with the important points raised by my right hon. Friend. He has made powerful points in the context of his constituency and its surrounding county. In a wider context, there has been a positive and constructive debate on matters of planning policy in relation to the Localism Bill and in other debates in both Houses. I welcome the opportunity to debate those matters further.
I am pleased that my right hon. Friend recognises, fairly, that there is a pressing need for reform of national planning policy. The system has grown unworkably complex, with more than 1,000 pages of national planning policy and at least a further 6,000 pages of guidance. The complexity of that system slows down decision making and frustrates the sustainable growth that the country needs, such as new homes for young families struggling to put together a deposit and new jobs to
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breathe fresh life into local economies. He correctly recognises that that applies in rural areas as much as in towns and cities.
A streamlined framework focusing on key priorities will be more accessible and transparent. In the future, anyone who wants to understand the principles informing how decisions are made will be able to do so. That is important, as polling evidence suggests that many people feel cut off from the planning system because it is too complex. They do not feel able to find their way through it. They feel that they are unable to understand or to influence. If the system is not intelligible to the intelligent and well-informed citizen, it is not delivering on one of its key purposes.
It is important to get this right, because planning is a very important tool. It is how we create communities that work and, as my right hon. Friend said, places that we are proud of, and it is how we lay the foundations for business. Also, and very importantly, it exists not only to protect, but to enhance our green spaces, parks and countryside for our enjoyment today and for generations to come.
Let me make some remarks on the specific issues that my right hon. Friend helpfully raised. I am sure that you, Mr Gale, and other hon. Members will understand that I am constrained in what I can say today, given that we are engaged in considering the large number of responses—some 14,000, as I recall it—that we have received to the consultation. Of course, we need to give all the responses careful attention and avoid any impression of pre-empting the outcome of the consultation.
We have heard concerns expressed about the effect of the proposed presumption in favour of sustainable development on local areas, whether that is my right hon. Friend’s rural Northumberland or urban areas. Some of those concerns—I exempt my right hon. Friend’s observations from this entirely—have been very wide of the mark. Joseph Harper, QC, editor of the “Encyclopedia of Planning Law and Practice”, has said that much of the criticism is ill informed. However, that does not mean that there are not genuine concerns, which I hope that the Government will be able to allay.
We want to ensure that planning is a positive process that reflects the needs of each area and to emphasise the central and critical role of the local plan in decision making. We want local authorities to be responsible for deciding what housing and other development they need and where it should go without the sort of top-down, unpopular targets that were imposed on them under the previous Government’s regional strategies. We want that development to be plan-led. Indeed, the proposed new system does not undermine the concept of the plan and enhances its importance.
What the presumption says, in layman’s terms, is quite simple: locally prepared plans should set out what is needed in each area, development in line with those plans should be approved without delay, and in the absence of an up-to-date plan, the policies in the draft national planning policy framework, including its requirement for development to be sustainable, should guide decisions.
My right hon. Friend raised a concern about irrebuttable presumptions. I assure him that that is not the case. Like any legal presumption, the presumption is rebuttable
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by evidence, which is a basic legal tenet. In this context, the best evidence to rebut a presumption will be the existence of an up-to-date local plan that deals with the issues raised by the development in question.
Sir Alan Beith: I want the Minister to take into account the situation in Northumberland, where the county planning department took over from six district councils, some of which contained significant areas that were not the subject of a developed or agreed local plan. In these times of straitened resources, getting the structure of local plans fully completed and agreed in every place will take some time. We may need some kind of transition period before the principle can operate in quite the way that he has suggested. Will we not have a situation where some factors are not properly examined, because there is no local plan governing the situation?
Robert Neill: I take my right hon. Friend’s point. I am sure that he will have noticed that the Minister with responsibility for decentralisation, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), recognised that point in the debate that we had in the House recently. I cannot pre-empt our response to the consultation, but I reassure my right hon. Friend the Member for Berwick-upon-Tweed that his point is particularly well heard by the Government. The Minister with responsibility for decentralisation has indicated that we will look to provide suitable transitional arrangements for local authorities in such circumstances, including the local authority of my right hon. Friend the Member for Berwick-upon-Tweed.
Against the background of the importance of a local plan, the onus is put on democratically produced local plans to identify and provide for the needs of each area. Plans must be based on evidence and be deliverable, or they will not have the confidence of the community or of investors, who might need to be brought into the area.
On housing, plans must, as is the case now, reflect the local housing based on a strategic housing market assessment and the availability of suitable land, which is set out in strategic housing land availability assessments. SHLAA, as they are often referred to, do not allocate land for development, but inform decisions on land allocations to be taken through a local plan. They form part of the evidence base. Policy restrictions such as landscape designations and the potential impacts of development on the landscape are identified through the assessment. Sites are chosen for development in the local plan and are subject to full consultation with statutory consultees and the public through the local plan process. None of that is undermined in the new system.
Sir Alan Beith: That is a key point on which I want to press the Minister. If the assessment has been carried out in a way that fails to address some issues, such as landscape, is there any proper mechanism by which it can be reintroduced when a planning decision has to be taken?
Robert Neill:
Ultimately, each planning application has to be addressed on its merits and the relevant material considerations and policy. The plan is one of the principal material considerations in a case, but the
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existence of, for example, designations that are consistent with national policy or other impacts can always be taken into account. There is a classic dictum by Lord Clyde in the House of Lords on such matters, which states that the weight to be placed on any material consideration is a matter for the decision maker. Again, that has not changed. Obviously, the weight that each material consideration carries will vary from case to case, but that is the whole point of the system. I assure my right hon. Friend that such issues are not shut out by the process.
The natural environment is an important part of the process. We pay great attention to the safeguarding of the natural and historic environment. Under local plans, communities can shape development in an area to reflect what is important locally, which includes special landscapes or the character of villages. Again, the best protection, making allowances for the transitional arrangements that I have referred to, is to get a plan in place, which can reflect precisely the points raised by my right hon. Friend.
Although we recognise that we need jobs and homes for young people and opportunities for businesses to expand, that will not be at the expense of our natural and historic environment. The draft framework sets out the Government’s thinking on how the planning system should safeguard the environment while providing for sustainable growth. The national planning policy framework maintains designations for the green belt, areas of outstanding natural beauty, national parks, sites of special scientific interest and other designations that protect the character of our country’s landscape, stop unsustainable urban sprawl and preserve wildlife. We are going further on that, because we will introduce a new local green space designation through the NPPF. It will enable communities to identify green areas of particular importance to them for special protection. That might be a key green in a village or a market town, as well as in a major city.
If we are going to protect the environment, it is important that we use land effectively. That is why the draft framework clearly states that
“plans should allocate land with the least environmental or amenity value.”
That means using derelict land when considering where to develop. We want developers to reuse derelict land, if that is the most appropriate course of action.
We also want to respect the historic environment. It is a non-renewable resource, and its conservation is integral to sustainable development. I reassure my right hon.
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Friend that we are committed to ensuring that the framework will maintain the existing protection, as set out in planning policy statement 5 for the historic environment, and we are looking carefully at the specific wording in the NPPF.
My right hon. Friend mentioned wind farms. Residents will have greater choice than ever in that regard through their local and neighbourhood plans—neighbourhood plans are a key part of the system, too. The plans will enable them to decide the look and feel of the places that they live in and love, while making sure that genuine larger-than-local objectives are met, such as protecting the natural environment, supporting sustainable local growth and combating climate change. I appreciate that proposals for wind farms can be controversial, but onshore wind, along with other renewables, has an important contribution to make to our energy mix and to reduce the pressure on consumer bills. However, that is not and should not be any excuse for building wind farms in the wrong place. The draft framework does not give a green light to all development proposals.
Whatever the class of development, decisions will continue to be plan-led. Plans will continue to set out what would be unacceptable, and they will be underpinned by the environmental safeguards in national planning policy. I believe that our new planning policies will ensure that communities and their environment are protected from unacceptable developments.
The consultation is closed, and I have indicated the steps that we are taking to consider it. As well as the written consultation, we held 11 regional workshops, including in the north-east. We have had wide engagement with organisations across the spectrum, including those referred to by my right hon. Friend, and I am glad to say that there has been good progress. We are finding unlikely bedfellows—property developers and environmental groups—sitting down and talking together to find common ground on how we go forward.
I hope that I have given my right hon. Friend and his constituents a renewed assurance on the transitional arrangements and the importance of historic and other environmental protections, and reassured them that the new planning policy framework is an opportunity, not a threat. I look forward to working with him again to see how we can take the framework forward as it is translated into a final document.