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Westminster Hall
Wednesday 4 July 2012
[Jim Dobbin in the Chair]
Aviation
Motion made, and Question proposed, That the sitting be now adjourned.—(Greg Hands.)
9.30 am
Mark Reckless (Rochester and Strood) (Con): It is a pleasure to serve under your chairmanship, Mr Dobbin, and to have the Minister respond to the debate.
My interest in airports first came about because, at a time when many boys want to be train drivers, my younger brother had an ambition to be an airport manager. Consequently, whenever we went on holiday, my indulgent parents would take us to the airport four or five hours before we needed to be there, and my brother would go around and catalogue the catering outlets and investigate the cleaning rosters. I was delighted, a few years later, when he decided that he actually wanted to be a doctor.
As an economist, I worked for a short period on airline alliances, but my most significant involvement with aviation came 10 years ago when, following a leak in the Financial Times a few months earlier, the then Labour Government published the “South East and East of England Regional Air Services Study”—SERAS—which proposed an airport twice the size of Heathrow at a location it described as Cliffe, in the constituency I now represent. Then as now, many felt that that was a stalking horse to make airport expansion elsewhere seem more attractive by comparison.
Our first response was to look at that airport study, which we noted excluded any consideration of Gatwick expansion, on the basis that there was a planning agreement, and it looked no further at that idea at all. I was sort of blooded on that issue when I first asked whether that decision was perhaps irrational and something that would be questioned by the courts. Initially, a judicial review was proposed, which ultimately led to the Labour Government being forced to consider the case for a second runway at Gatwick, even though they had previously decided against it.
The debate that took place showed that an estuary airport would be environmentally devastating, and that the economics simply did not add up. I and many others were delighted to campaign with the Royal Society for the Protection of Birds, the Friends of North Kent Marshes, and many others who made the case that having a huge airport in the middle of Europe’s leading wetland landscape, with its millions of birds, was probably not a good idea.
The assumption by some that no people live in that area and that there would be no opposition was put paid to by more than 20,000 people who live on the broader Hoo peninsula, and who would suffer egregiously from such an airport. In addition, large numbers of people live on both sides of the estuary, and any flights taking off in a westerly direction would create new flight paths over heavily populated areas of London.
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The idea that such an airport would somehow be a problem-free solution that people would not complain about is, to coin a phrase, for the birds.
Jackie Doyle-Price (Thurrock) (Con): To follow on from that, one point made by advocates of the estuary solution is that the area is crying out for new jobs. Does my hon. Friend agree that that ignores the economic growth that is already happening, particularly in south Essex, with the expansion of the port? That is the future of the estuary—ports, not airports.
Mark Reckless: My hon. Friend makes a good point, and I congratulate her on her work in campaigning for economic development in her area. The fundamental point is that although jobs might be created—I do not deny that there would be a lot of jobs; perhaps 200,000, as some estimates suggest—they would come 10, 15 or 20 years from now, and would be almost entirely taken by a vast migration of people who would be forced to uproot themselves, perhaps from around Heathrow, and move to a new area. In terms of Government engineering, I cannot see the case for that in a free society.
Tracey Crouch (Chatham and Aylesford) (Con): I congratulate my hon. Friend on securing this important debate. Has he seen the report issued by the South East local enterprise partnership, which states that if we allowed our existing airports to expand, we could increase the number of jobs by about 100,000? That would generate in excess of £4 billion per annum.
Mark Reckless: Yes, I have seen that report, and I have a copy with me. Indeed, I encouraged Medway council, and through it the local enterprise partnership, to commission that excellent study. My hon. Friend and neighbour is right, and I will draw significantly on the analysis in that paper during my speech.
As well as the environmental issues, there is a knock-down argument against the Thames estuary airport: it is vastly more expensive to build a new airport than to expand existing provision. Recently, some of those issues have been revisited with Boris’s pie-in-the-sky proposals, whether for Boris island, for a Foster monstrosity over the Isle of Grain, or even to look again at the Cliffe option that was so unambiguously rejected. Some newer issues have come to the fore. For instance, there is the London Array wind farm, and billions of pounds of investment have been put into a major liquefied natural gas terminal. There is the Richard Montgomery, a sunken vessel laden with high explosives, which this Government—unlike the previous one—tell us about, and provide reports on, to clarify the risk. Furthermore, issues of air traffic control have become even more significant than they were 10 years ago, partly because of the expansion of Schiphol airport over that period.
I note from the Parsons Brinckerhoff report mentioned by my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) that Richard Deakin, the chief executive of the National Air Traffic Services, said that the proposed site for the new airport was
“directly under the convergence of major arrival and departure flight paths for four of London's five airports.”
Pointing to the Thames estuary on a map, he said:
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“The very worst spot you could put an airport is just about here…We’re a little surprised that none of the architects thought it worthwhile to have a little chat with the air traffic controllers.”
Joseph Johnson (Orpington) (Con): I congratulate my hon. Friend on securing this debate, but I am a bit depressed by the combination of nimbyism and sticking-plaster solutions that he puts forward. Is he aware that the UK remains without any direct connection to 11 cities in mainland China that are expected to be among the 25 biggest cities in the world by 2025? Only a hub airport can deliver the sort of connectivity for which businesses in Orpington, and doubtless in my hon. Friend’s constituency, are crying out.
Mark Reckless: I encourage my hon. Friend to listen to the rest of my speech, and not merely to recycle briefings that I, too, have received. There are many arguments for a hub airport, and I do not deny that some are valid. Many, however, are recycled by industry players with strong vested interests that are not necessarily those of the country as a whole. However, I will address my hon. Friend’s point later in my remarks.
Finally, some estimates suggest that the cost of the proposal will be £40 billion, £50 billion or even £100 billion. The Parsons Brinckerhoff report, a substantive piece of work, argues that
“even the £70 billion being discussed is a conservative estimate.”
Boris tells us that that money will come from private investors. Yes, but they will want a return. Even if we are looking at a 5% interest rate over a 50-year period, a return on that sort of money will add at least £50 to the cost of every plane ticket from the airport. Why would airlines, passengers, the Government, indeed anyone, want to pay that sort of money when the cost of expanding existing airports—including some that Members present may be promoting—is so much smaller?
The coalition Government were right to reverse the policy that the previous Government decided on in 2003. To recap, the then Government’s recommendation was a second runway at Stansted by 2011-12, a third runway at Heathrow by 2015 to 2020 and, following our judicial review, a second runway at Gatwick from the mid-2020s. The strongest reason why we were right to overturn that is that the projections on which the Labour Government operated from 2003 were, as I and many others set out clearly at the time, wholly unrealistic. They were based on a low case of 400 million passenger movements for the UK by 2030, and a high case of 600 million.
Kwasi Kwarteng (Spelthorne) (Con): I am listening with great attention and fascination to my hon. Friend’s speech, but he has not addressed a very pertinent point raised by my hon. Friend the Member for Orpington (Joseph Johnson): at present we do not have access, or cannot fly directly, to those cities in China. I know that my hon. Friend the Member for Rochester and Strood (Mark Reckless) will come to that in his speech, but I am conscious that it is probably one of the most important questions that he could address, and I would very much like to hear his thoughts on it.
Mark Reckless: In deference to my hon. Friend, I shall bring forward my remarks on that point.
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The Minister of State, Department for Transport (Mrs Theresa Villiers): Before my hon. Friend does so, will he say if he welcomes the fact that Heathrow delivers more flights to China than any of its continental rivals, meaning that we have excellent connectivity to important emerging markets such as China?
Mark Reckless: Yes, I hugely welcome that. From listening to the debate that is dominated by a small number of players with the strongest vested interests and the most public relations consultants, one would get almost the reverse impression. When we talk about flights to China, it is important to remember that the reason why we have relatively few different city destinations—that is separate from the overall number of flights, which the Minister was right to raise and I think is more important—is that it is for the convenience of British Airways, the dominant player at Heathrow, to use Hong Kong as a hub airport for China, in exactly the way that it uses Heathrow as a hub here, through the Oneworld alliance and Cathay Pacific.
Joseph Johnson: First, on a point of fact, according to BAA, London has only 31 flights a week to two destinations in mainland China, whereas there are 56 to three such cities from Paris Charles de Gaulle airport, and 51 to four such cities from Frankfurt. Furthermore, my hon. Friend references Hong Kong and Shanghai. Surely he is aware of the additional cost that comes from having to route products, goods and services through Shanghai and Hong Kong, as opposed to sending them directly to where the market is, in mainland China. Our businesses are crying out for connectivity. That is an obstacle.
Mark Reckless: I made no mention of Shanghai. The reason why there are only 31—
Joseph Johnson: Hong Kong is a transhipment point.
Mark Reckless: I mentioned Hong Kong, and the reason why Hong Kong is used so much is that that is hugely to the economic benefit of BA, Cathay Pacific and the Oneworld alliance. They use Hong Kong for exactly the same reasons why my hon. Friend promotes Heathrow—these great hub economics, which are certainly to the benefit of the airline providing a service. There are arguments for hub airports, but the arguments that my hon. Friend makes for point-to-point services to more cities are very strong ones. As for why we do not have them, I refer to a written answer from the Minister in March 2012. I do not know whether my hon. Friend the Member for Orpington (Joseph Johnson) has seen it. It states:
“China—restricted to six points in the UK and six points in China since 2004”—
“with a current limit of 31 passenger services per week by the airlines of each side allowed”.—[Official Report, 14 March 2012; Vol. 542, c. 239W.]
If my hon. Friend would like to see more flights to more Chinese cities, the way to do it is to rip up that treaty, and for the UK to move to a unilateral open-skies position that allows any Chinese airline to fly to any city in the UK.
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Kwasi Kwarteng: I am trying to work through the maze of complicated arguments that my hon. Friend is presenting, but I have just a simple question. Does he believe that the United Kingdom as a whole needs more aviation capacity?
Tracey Crouch: There is an argument about competitiveness, and that argument is for today. Our colleagues are arguing that businesses in their constituencies require the opportunities now. Therefore we should be making the most of our existing airports, rather than waiting two decades for a new airport to be built to maximise opportunities.
Mark Reckless: I agree. There is huge scope for what my hon. Friend describes. It would hugely benefit not just the Medway towns and the south-east region, but the country as a whole.
I want to talk about one other area where the lobbyists have a certain position. I received a document yesterday from the Mayor of London, who tells me that he is delighted that I am having this debate. He says:
“France’s hub airport, Paris Charles de Gaulle (56 departures per week), has better connections to Brazil than Heathrow (27 departures per week).”
The reason is that we have a bilateral treaty with Brazil, with a current limit of 35 passenger services a week between the two countries. Again, that is vastly to the benefit of BA, which routes flights to Latin America, including Brazil in particular, through the joint hub that it now has in Madrid, through Iberia following the merger. We do not get pressure from BA to change that, because it hugely benefits its profits, but BA’s market capitalisation is in the low billions. The idea that our whole airline policy and the network of treaties negotiated by the previous Government should restrict those flights and prevent Brazilian or Chinese airlines from flying into our large cities is a huge mistake.
Paul Maynard (Blackpool North and Cleveleys) (Con): Even if we were to rip up every treaty that my hon. Friend has identified as a block, does he seriously believe that there is sufficient capacity at our hub airport? Will a hub airport alone sustain newly developing point-to-point routes? Does he seriously argue that Heathrow could suddenly accommodate more routes to developing countries?
Mark Reckless:
Yes, I do argue that. The limit on Heathrow’s routes to developing countries is largely because of the fact that those who have the slots find it most profitable to put on vast numbers of flights to New York and almost as large numbers to Hong Kong. It would benefit the country as a whole much more if there were a wider network of routes, rather than just what happens to benefit British Airways and maximise its profits. To get to what my hon. Friend suggests, the treaty we need to rip up is the treaty of Rome, because it is under European directives—[Interruption.] The reason why the slots are organised as they are is that they have been capitalised into property rights for the airlines that historically happen to have used them, and it is because of European legislation that that has been allowed to happen. If we want a more effective route network for
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our country as a whole, within the existing constraints of Heathrow—of course, others will argue that it needs to be bigger or we need a hub somewhere else and so on—European legislation prevents us from having that. Anyone who wants to set up a marginal route to an emerging market needs to buy out, at vast expense, one of the existing airlines, particularly BA, which has a near monopoly power. They have to give BA a huge amount of money to take the slots they need for those routes. The reason why they cannot do that is cost, yet we have treaties that restrict the amount of access that overseas airlines have into the UK. They could otherwise be flying into Gatwick, Stansted or Birmingham as city pairs, but the routes and slots are at Heathrow, and the regulation creates that monopoly power.
Kwasi Kwarteng: Is my hon. Friend seriously suggesting that the key to our aviation problems is ripping up the treaty of Rome?
Mark Reckless: It would certainly help. There are other ways in which the issue could be addressed; for instance, the air passenger duty regime. Many lobbyists are against the size of air passenger duty, but in operating conditions where there is an almost perfect monopoly at Heathrow and, at peak and to an extent shoulder periods, a monopoly at Gatwick, what happens through the increase in air passenger duty is that some of the monopolised value of those slots and the power of the grandfather rights are given instead to the public purse. It is not a situation of perfect competition in which costs are passed on. To the extent that costs rise, whether they are landing fees or APD, that will largely be absorbed into the price, giving greater public benefit, and possibly driving some of the marginal leisure stuff out of Heathrow and Gatwick.
Jim Fitzpatrick (Poplar and Limehouse) (Lab): Would the hon. Gentleman mind running past me again how the treaty of Rome is an obstacle to more liberal air service agreements with other countries? When I was aviation Minister, we signed agreements with a variety of countries to allow more liberalised flight access to both countries, and the treaty of Rome was not an obstacle then. Given Gatwick’s recent expansion into five new routes, the treaty does not seem to be an obstacle. How will tearing up the treaty of Rome solve our aviation competitiveness questions?
Mark Reckless: There are two problems: first, the treaty of Rome gives property rights in-slot to airlines that have traditionally had them, which prevents new airlines from coming in with marginal routes to new emerging market countries, due to the cost of buying out the monopolist. Only more and more fights to New York or Hong Kong make such routes work. Secondly, the previous Government protected the monopolistic BA with restrictive agreements that prevent Brazilian airlines from flying here, saying that there should be no more than 35 passenger services a week and allowing only 31 a week to China. If we want more flights to emerging markets, we should just let Brazilian and Chinese airlines fly to any UK airport they want, without insisting on reciprocal rights for BA. That is what is holding the country back; the interests of Britain are not the interests of BA.
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The final section of my speech is about our other airports. In 2010, we rightly said no to an estuary airport and to extra runways at Gatwick, Stansted and Heathrow. That was the right policy for this Parliament. I do not know the Liberal Democrat position on when or if there should be future runway capacity in the south-east, but it is right that the Conservatives at least look at the case for new runways as and when demand requires. A lot can be done with existing capacity. Gatwick is expanding strongly and setting up point-to-point routes in new emerging markets, which I welcome. That would be helped if Gatwick were allowed to invest in the A380 facilities by charging more and coming to its own arrangements with new airlines to build those facilities without existing suppliers having a veto. I would support greater deregulation of Gatwick in that regard.
I understand that the option now being promoted by the Mayor of London is Stansted. Since the previous White Paper and the Labour Government’s view, usage at Stansted has fallen off significantly and intercontinental flights there have stopped. The Mayor says that we should expand Crossrail to Stansted, and I am keen to discuss that. He may have ideas that I have not appreciated fully, and that are certainly a lot more constructive than his pie in the sky proposals for a Thames estuary airport.
Dr Julian Huppert (Cambridge) (LD): I congratulate the hon. Gentleman on securing the debate. When I spoke to those at Stansted recently, they made it clear that, given that the airport was at only 50% capacity, they want no more discussion of a second runway—that just messes up their relationship with the local community. Stansted wants a better rail service. I hope that he will support that.
Mark Reckless: That is certainly the position in the short-term. I am keen to see better surface travel into Gatwick. The deterioration in the train service there is most unfortunate. Investment is strongly in the national interest.
The British Chambers of Commerce initially proposed a “Heathwick” arrangement. There are some issues with the economics of it, but the existing system is the reason why it could be attractive. If we allowed Gatwick to invest £5 billion in a super-fast railway to Heathrow—by the way, BA, it would take 15 minutes airside, rather than an hour to connect them—it would be regulated capital and would lead to higher slot prices at Gatwick, which is a good thing anyway. Our problem with aviation in this country has been that we have held down the cost of landing fees at Heathrow and Gatwick, which means that they are operating at near capacity with all the problems mentioned. If we allowed landing fees to rise and entirely deregulated Gatwick and Heathrow, there would be a big transfer of economic value from the airlines to BAA.
Another way to do it would be differential APD, particularly on short-haul flights at Heathrow. Because we could get the cost back from higher landing charges at Gatwick, Heathwick, although not ideal, might make sense within the existing system; it would press out some of the leisure point-to-point flights from Gatwick and allow intercontinental flights to come there.
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From Heathrow’s promoters, we hear that it is a great hub, that we need just one hub and that Paris Charles de Gaulle has more destinations than us, but those destinations are in French west Africa—Mali, Bangoui and Ouagadougou. I do not think that there is any suggestion that that should happen from Heathrow. Most demand is leisure, not business. Heathrow still flies more people and planes than other airports, even those with four or six runways.
We do not necessarily need a hub that is ideal for those who happen to operate that hub. There is a suggestion that a dual-hub is not ideal. That is true, but it is an awful lot better than no expansion and forcing more and more people to use European airports. According to the constrained Department for Transport forecast, which I find questionable in a number of ways, if we do not allow expansion in the south-east, 25 million rather than 4 million people will fly from Belfast by 2050 and 12 million people rather than 700,000 will fly from Exeter by 2030.
I question the plausibility of those forecasts, but if we deregulate air travel and allow a second runway at Gatwick in due course, after the agreement runs out in 2019—I agree with the hon. Member for Cambridge (Dr Huppert) that it should not be immediately—it will make it more attractive for the airline to expand in the airport. At some point, the Liberal Democrats may think that we will need at least one runway in the south-east. The strongest demand from the vested interests is for that to be at Heathrow, but there is a strong argument for the country as a whole for it to be at Gatwick. It would benefit from being there because we would then have competing hubs, with potentially another airline alliance based at Gatwick. It would drive down prices, serve more destinations and operate for the benefit of UK consumers as a whole, rather than just those who happen to have the strongest vested interests and shout loudest in current consultations.
Nigel Mills (Amber Valley) (Con): I congratulate my hon. Friend on securing the debate. If I may intrude on the London and south-east grief with a question about the midlands, what are his views on encouraging passengers from the midlands and further north not to go to Gatwick or Heathrow for their leisure flights, but to use the airport they are driving past? Does he support the idea of a congestion charge around London to make regional airports more competitive?
Mark Reckless: Higher APD on short-haul flights from Gatwick and particularly Heathrow could allow airports beyond the south-east to compete for marginal business that might make more sense at those airports, particularly the leisure flights of people based in the midlands and the north who are flying point to point. Similarly, if we deregulated our international air agreements, there would be a better chance that intercontinental networks would base themselves at Birmingham airport, for example, which now has a longer runway.
Julian Sturdy (York Outer) (Con):
My hon. Friend makes a powerful case. An argument is that regional airports across the country will take up some of the slack. My airport, Leeds Bradford, has invested heavily—£11 million—in expansion and has new links to Heathrow. Is it not the case that despite the important role that
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regional airports play across the country, they will not lessen the need for expansion in the south-east and London? Ultimately, people want to fly into the capital city of a country and we cannot get away from that fact.
Mark Reckless: Yes, I think that is right. My argument is that it is entirely conceivable to have two hubs. Heathrow currently has many more passengers and planes using it than most of the other supposed competing hubs. The problem is that the slot prices are very high and profits are being maximised by those who, under EU law, own the property rights in those slots. If instead we allow a second hub, and Gatwick is the more attractive and conceivable hub to develop, and both operate in that way, competing airlines would drive down prices and give many more links to emerging markets, rather than very thick routes to New York and Hong Kong. That is my view, but perhaps the Mayor of London has considered matters that I have not. Stansted, and potentially regional airports—Southend and, I am delighted to see, Luton are developing in this way—could take many more point-to-point leisure flights, rather than them flying from Gatwick, or even Heathrow. Why does Heathrow have so many flights to Orlando? Why does it have flights to Malaga or Larnaca?
There is a very strong case for Gatwick. Many regional airports can help with the load. The debate that we have been having about aviation has been horribly distorted by what I am afraid are preposterous efforts by the Mayor of London to put the Thames estuary airport on the agenda, 10 years after it was categorically ruled out, and by the issue of Heathrow. Very strong vested interests want expansion at Heathrow. There are some economic arguments for the country as a whole for expansion there. However, there are costs, in terms of those living under the flight path, and in terms of our political promises; and the value of politicians sticking to what they promise is strong.
As to what the Transport Secretary says, and the argument that “It is all very well talking about a third runway at Heathrow, and mixed mode, but what is the next step?” it is incumbent on those who want expansion at Heathrow to say what happens in 30, 50 or more years. The reason the Secretary of State does not get the answers is that those with a vested interest at Heathrow—BAA and British Airways—do not want unlimited expansion there. It would undermine their monopoly position. The idea of going for mixed mode is attractive to BA—not necessarily to BAA, because it does not get the higher regulated capital. A third runway allowing marginal expansion of perhaps another 20 million passengers is attractive, because it maintains the value of the slots but allows them to develop. My hon. Friend the Member for Spelthorne (Kwasi Kwarteng) may want to discuss the fact that if we want Heathrow to be a mega-hub, perhaps remaining the biggest in the world and taking on Dubai as well as competitors in Europe—there are strong arguments against that, particularly from the point of view of people who live in the area, and the environment—it could mean taking over RAF Northolt and putting in several runways linked into Heathrow, as a long-term single giant hub solution.
Despite arguments that two hubs are not ideal, that is a far better solution than complete constraint on any expansion, or only looking after the interests of Heathrow. If we were to see the Oneworld alliance at Gatwick—
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short-term expansion is being done very well at the moment, and there could be longer-term expansion, but only once the 2019 agreement runs out—it would be a much more sensible way forward. There is a basket of other options, all of which make more sense than harking back to the preposterous estuary airport proposal, or looking at UK aviation solely through the issue of a third runway at Heathrow.
Jim Dobbin (in the Chair): Order. I have had seven notifications from hon. Members who want to speak. I intend to call the shadow Minister at 20 minutes to 11, so we have less than 40 minutes for those seven speeches.
10.2 am
Graham Stringer (Blackley and Broughton) (Lab): It is a pleasure to serve under your chairmanship, Mr Dobbin, for what I think is the first time.
I congratulate the hon. Member for Rochester and Strood (Mark Reckless) on obtaining this important debate on the different issues relating to competition in the aviation industry. I agree with many of the points he made, and it is worth exploring further the points with which I disagree. He is serious about trying to find a solution to the country’s aviation policies, and that is worth discussing. Judging by the expressions of everyone taking part in the debate, there is agreement that Boris island is a complete non-starter. It is a decoy duck, Potemkin village, a red herring, or, as the previous Labour Secretary of State said, bonkers; it will not happen. But it is part of the illusions around aviation policy—which are the basis not of what the hon. Gentleman has been saying but of the Government’s policy—that somehow we do not know what has been happening in aviation, and there is more information to be found out. That simply is not true.
Going back to the Roskill commission in 1969 and a series of other White Papers and investigations, more is known about aviation policy in the south-east of England than about possibly any other area. If we want to be competitive, there must be more airport capacity in the south-east. Otherwise, the decline and damage that lack of aviation is causing to the economy will continue. I do not agree with the hon. Gentleman that it is right to suspend any discussion for the length of the Parliament. It might be right for the coalition agreement, but it is not right for the economy.
Mark Reckless: Will the hon. Gentleman give way?
Graham Stringer: I will in a moment, but I want to go through some of the points that the hon. Gentleman made.
I do not think the “Heathwick” proposal works in detail. When I give way to the hon. Gentleman I want him to tell me about any city in the world—Toronto, Washington, Glasgow—that has tried having two airports. There are examples all round the world of countries saying “We will have an intercontinental airport here and a domestic one there,” and finding that neither of those airports has worked. Off the top of my head, I cannot think of a city with two competing hubs. The nature of hubs, and what makes them valuable—both for countries and airlines—is that
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airlines from all over the world go into them, with great interconnectivity. The idea of competing hubs is a contradiction in terms, and there is no real evidence that having two adjoining airports works.
Mark Reckless: I am delighted to have some discussion of the issue in the current Parliament, and I look forward to hearing from the Minister what decisions may be made about how that discussion should happen. I just do not think we should build any new runways during this Parliament.
I disagree about dual hubs. Perhaps the idea has been tried in, say, Tokyo and one or two other places and has not been ideal, but we are not making a comparison with the ideal; we are making a comparison with the constrained capacity possibility that 14 million people might try to fly from Exeter. Expanding Gatwick, rather than restricting it, will not result in the perfect economic hub airport, but hubs give declining returns, to scale, to the extent that they get bigger and bigger. If we allow flights to new emerging markets and competing hubs operating in the competitive interest of the country, rather than one hub operating in the interest of the monopolist based there, that would be a significantly better airline policy than the one we have.
Graham Stringer: All I would say is that the proposition has not worked. We are in decline and we need extra runways in the south-east. Only one new runway has been built in this country since the second world war. Heathrow was, I think, originally planned to have 12 runways, albeit in a different configuration. The hon. Gentleman can look at the history books if he wants to.
The hon. Gentleman’s argument relies on two issues: first, that our connections to China, as the Minister of State said, mean that we are not really suffering; and secondly, that slots are too cheap at Heathrow, and if we freed up that market we would help the economy as a whole. Let me give some evidence.
The Frontier Economics report, “Connecting for Growth”, which was produced in 2011, showed that trade is 20 times higher where there are direct flights to cities in China. It estimates that the UK is missing out as trade goes to France, Germany and Holland, and quantifies the cost to the UK economy of a lack of connections as £1.2 billion a year. Taking that present value over 10 years, that amounts to £14 billion. Paris and Frankfurt boast 1,000 more annual flights to the three largest Chinese cities, Beijing, Chongqing and Guangzhou, than we get from this country. The Minister of State is right to say that we send a large number of flights to Hong Kong, and that there is hubbing in the Oneworld alliance at Hong Kong. The City of London is doing quite a lot of damage at the moment, but if we consider some of the effects, and the latest financial centres index, the Hong Kong index has gone up by 21 and London has gone down by three. There is a correlation, if not a direct one, between the hubbing that is going on there and the damage that is being done to the UK economy. ForbesMagazine has shifted the UK down from sixth best country in the world in which to do business to 10th best. One contributing factor is our connections with other countries.
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Zac Goldsmith (Richmond Park) (Con): Does the hon. Gentleman agree that some of the problems that he has just described result not from lack of capacity but from poor prioritisation? Hundreds of flights every day to and from Heathrow involve places that do not in any way contribute to Heathrow’s hub status. We have short-haul flights, flights to Malaga and 15 flights a day to Cyprus. Such point-to-point flights could happen at any other airport. We have masses of spare capacity, but it is not all at Heathrow. If that is the problem, surely the priority is to make better use of existing capacity and to get rid of some of those pointless flights that could easily happen elsewhere.
Graham Stringer: I always find that a particularly difficult argument to be put by Conservatives, who suddenly want to plan routes and move away from a completely deregulated market in Europe—apart from where it is constrained by slots. Having argued ideologically for that position, all of a sudden they want to tell aeroplanes that they can only go from Manchester and Leeds and not from London. I do not believe that that is the Conservative party’s position at all. Even if we put up the price of slots, which has been kept artificially low by how slots are regulated, we would not necessarily get the flights going to the right parts of the world that will benefit this economy. We would get even more flights going to New York and the west coast of the United States because those are the most profitable routes from this country in the short term. The two cheap slots would not solve the problem because the central issue is lack of capacity.
I have a few more facts from the London chambers of commerce that represent the views of 350 business leaders from the BRIC countries: 92% made the general point about the importance of direct flights; 67% said that they were more likely to do business in a place if there were direct flights to it; and 62% said that they would only invest in an area if there were direct flights between the city in the country in which they were operating and the city in which they were likely to invest. Such flights to Brazil, Russia and China are limited.
I wanted to talk about the damage that air passenger duty is doing to regional airports, but I do not think that there is time because of the number of Members who wish to contribute to this debate. None the less, such duty is doing damage and the Government really need to change their policy. Twenty-two of our competitor countries in the EU have no air passenger duty whatever, so imposing a duty is a ridiculous anti-competitive position for this country to take.
I want to talk a little about how we use capacity in the regional airports. It is not possible to, as the hon. Members for Rochester and Strood and for Richmond Park (Zac Goldsmith) suggested, somehow move flights about, but there is no reason whatever why we could not have a completely open skies policy in the regional airports. There is 15 times more capacity in our regional airports than would be provided by one extra runway at Heathrow. It would be against the law to direct flights within Europe to that runway; that simply could not happen. At the moment, airlines are reluctant to make use of the partial open skies policy in relation to major regional airports with fifth freedom rights, but the Government must agree that, and sometimes there are
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difficulties. Airlines, which have a real interest in getting into Heathrow, are suspicious that if they use the facility of partially open skies in the regional airports they will be kept out in any future negotiations to get into Heathrow. Having a completely open skies policy in the regions, however, might shift out one or two intercontinental routes. It will not change the whole structure of aviation, but it will help.
Finally, the central point of the Government’s policy, especially the Liberal Democrat part, seems to be that constraining capacity in the south-east will help the environment and not damage the economy. I hope that I have shown that that constraint in the south-east is already damaging our economic competitiveness, and the answer to that is to build extra runways and not a new airport. It is worth saying, and it has been said before, that our policy is damaging not only our economy, as we are, in effect, helping other hubs in France, Germany, Denmark, Spain and Holland to do better, but our environment. When planes take off from the United Kingdom, taking passengers to airports such as Schiphol to pick up intercontinental flights, they are putting more nitrous oxide, sulphur oxides and carbon dioxide into the atmosphere than would otherwise be the case. Although the whole aviation debate needs to be opened up, the solutions have been known for a long time, and the Government have had their head in the sand for their whole time in office.
Jim Dobbin (in the Chair): Order. Six Members still wish to speak in this interesting and important debate, so they will have roughly four minutes each before those on the Front Bench respond
10.17 am
Paul Maynard (Blackpool North and Cleveleys) (Con): It is a pleasure to serve under your chairmanship, Mr Dobbin. In four minutes, I will speedily go through some of the points that I want to raise. First, may I mention the passengers? We did not hear my hon. Friend the Member for Rochester and Strood (Mark Reckless) say much about them. It is almost as if they are a pain in the neck for wanting to travel. I happen to regard leisure travel as a good thing—rather liberating, in fact. May I also say—I did not hear my hon. Friend say this—well done to the Government? The Minister might be shocked by that remark, given my track record on aviation.
The South East Airports Taskforce has effectively sweated our assets in the south-east, increasing throughput at all major airports. Like the hon. Member for Blackley and Broughton (Graham Stringer), I speak as a northern MP. Most of my constituents and businesses stopped using Heathrow as a hub long ago, which is one reason why Heathrow is already in decline. For the north of England, the hub is Amsterdam or Paris, which is a major national problem.
I congratulate the Government on their recognition, earlier this year, that we need a hub airport in the UK, and that we need only one hub airport. If I had more than four minutes, I could give a lecture on the economics of hub dynamics. There is no such thing as a twin hub; it is a contradiction in terms. I could tear out my hair in frustration every time I see that idea printed, or hear it being discussed. If we tried to make Heathrow and
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Gatwick a joint hub airport, all we would do is guarantee their obsolescence within a decade and the downgrading of the UK. It would be an absolute national disaster.
We have heard a lot about China. Some people say mainland China, while others say China, which allows us to accommodate Hong Kong into our calculations. Let me talk specifically about Wuhan, which has been of interest to the Department for Business, Innovation and Skills. Air France has just launched a service to Wuhan to facilitate PSA Peugeot Citroën’s joint venture with Dongfeng Motor Corporation. Despite labouring under the heavy burden of the treaty of Rome, France has somehow managed to put its economic interests ahead of the interests of Brussels. How it managed it I would love to know, because we could then replicate it here. Clearly, it has put economic interests ahead of narrow, petty interests.
I am fascinated to note that COMAC—the Commercial Aircraft Corporation of China, a new Chinese aircraft manufacturer—is basing itself in Europe not in London but in Paris. I wonder why that is. Could it be because France has better links to China? Could it be because France is where China is getting inward investment from? Surely not.
If I had had more time this morning, I would also have mentioned air passenger duty. I realise that it is a controversial issue, but I make this plea: will the Department for Transport try to encourage the Treasury to conduct an independent economic assessment, bringing in all relevant factors, of the overall cost of APD to the UK economy? If I had more time, I would go on to talk about Chinese tourism. I know that it has been the subject of what might be called civil war in higher echelons in the Government, but it crystallises the problem that we face in this country. The problem is not that we have APD per se; it is the scale of our APD, compared to that charged by our competitors, that is a real problem.
We have heard lots of discussion about south-east airport capacity and about where airports should or should not be sited. We have also heard mention of New York, which has found what I would describe as a “string of pearls” solution—a number of sizeable airports, all of which act as international gateways, but none of which actually act as hubs. There is a perfectly logical and coherent argument to be put forward to say that that is what the UK might need. I would disagree with that argument, but it would be a rational argument to make.
Interestingly, in the Mayor of London’s submission, ahead of this debate, I could find no mention of Boris island. Can the Minister confirm that that option has been officially removed from the table? I looked very carefully; perhaps it was my eyesight, but I just could not see it.
10.21 am
Jim Shannon (Strangford) (DUP): Thank you, Mr Dobbin, for calling me to speak.
I congratulate the hon. Member for Rochester and Strood (Mark Reckless) on securing this debate and bringing the issue to the House today. In four minutes, I quickly want to give the Northern Ireland angle. In particular, I want to mention a subject that is often talked about, and perhaps hated: air passenger duty. It is an issue that must be considered.
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Recent press coverage of APD shows that the Government raise very little money from internal flights from Northern Ireland, and airlines actually take advantage of the tax and retain it when flights are not taken up, as they charge a fee and most people do not ask for the refund. That was not the intention with regard to the tax, and that is the first thing that must change if we are to boost competitiveness.
I spoke to the hon. Gentleman yesterday about this debate and I said very clearly that I wanted to put forward the Northern Ireland angle. With the Government committed to regional rebalancing in the UK, and an economy that is heavily reliant on the south-east, where better to start than with a change to APD? I understand that APD does not apply to flights to Scottish islands. If the Government are serious about rebalancing the UK economy, surely Northern Ireland should have the same treatment in relation to APD as the Scottish islands. Making that change would send a strong signal that the Government are serious about regional rebalancing.
As a frequent flier from Northern Ireland to the mainland UK, I am well aware of flight prices and the critical importance of having a good flight system and links. Having spoken to various airport managers, I know there are some central themes that continually emerge. I want to touch on those themes quickly.
The first is future national economic growth. The UK needs improved links to key emerging markets. I was surprised to learn that UK businesses trade 20 times as much with countries to which there are daily flights than with those countries with which we have a less frequent service, or no direct service at all. It is very clear that the more direct flights to countries we have, the more our economy will grow, the more employment will grow, and the more we all benefit. We must boost growth by increasing inward investment and exports. Improving international connectivity is critical if those things are to happen. That is one reason why competitiveness is an essential component of growth. We should have regular contact with the BRIC countries—Brazil, Russia, India and China—and we should open up more links with them, because that will boost our economy.
London is open for business, and so is Gatwick airport, in particular. However, although in the summer months Gatwick is at full peak capacity, at other parts of the year it is not. Sometimes it is operating only at 78% capacity. The hon. Member for Rochester and Strood spoke about that. There is potential for a further 11 million passengers to use Gatwick every year, which would represent a 25% increase on current levels. Gatwick has secured new direct routes to China, Hong Kong, South Korea, Vietnam and Nigeria. In each of these countries, there are opportunities for economic benefit, and the routes can only strengthen and enhance the possibilities.
The hon. Member for Cambridge (Dr Huppert) spoke about the need to improve rail surface access links to airports, and that is important, too. Millions of air passengers go on to use other transport infrastructure, such as rail lines. It is imperative that those lines are up to the standard that is expected of a thriving central business hub. That will encourage new flight-lines, which in turn will encourage competitiveness in the market. As soon as bmibaby pulled out of Belfast City airport
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last month, all the other airlines there upped their prices, and the reason was clear—they had less to compete with. Their flights were being almost filled at higher prices, which in the long term will affect businesses. A flight from Belfast can cost approximately £400 to £500. One can get a flight to the USA for £450. There has to be something wrong there, with regard to competitiveness.
The UK aviation industry provides about 352,000 jobs and more than £8.6 billion in tax each year, as well as contributing more than £50 billion to Britain’s gross domestic product. It is a major player in the economy of Great Britain, and when it comes to improving Britain’s international competitiveness, it is very important.
In conclusion, in a history class many moons ago, I was taught that the secret of the success of Great Britain was her mastery of the seas; that probably shows my age. That was not simply about having a good fishing fleet, or the Royal Navy; it was about having connections and building up trade all over the world. That must be an ingredient in our continuing success, and the key to true competitiveness.
10.26 am
Dr Julian Huppert (Cambridge) (LD): I congratulate the hon. Member for Rochester and Strood (Mark Reckless) on securing the debate.
We are world leaders in the aviation industry. London is the best connected city in the world, with seven runways operating at six airports, and Birmingham, Manchester and Edinburgh all pose formidable regional challenges to the dominance of the south-east. Gatwick is opening new routes to China, Vietnam and South Korea. British Airways has global alliances for massive hub operations. Airlines are competing to make use of the capacity we have, particularly since the BAA monopoly was broken.
However, there are constraints. By 2050, the UK must cut its carbon emissions by 80%. That is an important and challenging task, and if we allowed unconstrained expansion of aviation, as has been suggested by some Members, I believe that it would be all but impossible to achieve it. Given the environmental constraints, what kind of growth can we manage to have?
In 2009, the independent Committee on Climate Change said that if we are to meet our 2050 target, the aviation industry must not emit more than around 37.5 million tonnes of carbon dioxide a year by 2050. Allowing for increased plane loads, new technology and fuel improvements, that allows for a 60% increase on current passenger numbers to around 368 million passengers per annum. That is the carbon budget that we can have.
What is the capacity constraint? We have enough spare capacity in this country already. We can get to the limit imposed by our environmental obligations without any new runways anywhere: not at Heathrow, not at Gatwick, and not at Stansted. That is why the Liberal Democrats oppose the expansion of the airports in the south-east. We have spare capacity, and if we were to build more capacity and make use of all of it we would do irreparable damage to our global environment.
It is very hard to forecast demand, as the old “predict and provide” approach of the previous Government tried to do. Even in the US, the Federal Aviation
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Administration says that it is not possible to make reliable forecasts beyond 2030, so I simply do not understand how any Government think they can forecast demand to 2050. That is particularly true given that, with the possible exception of the Secretary of State for Business, Innovation and Skills, people are very bad at forecasting recessions and other economic changes.
We also have local environmental problems that make a huge difference to our nation’s well-being. One in four of all those in Europe who are affected by aviation noise live under the Heathrow flight path. I find it astonishing that so little has been done about that, and that the previous Labour Government were so keen to keep blindly increasing Heathrow. Now Labour are completely and utterly unclear as to what their policy on Heathrow expansion is; if the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), the shadow Minister, wants to try to say what it is, I would be delighted to hear from him. No?
Aviation planning has categorically failed to take account of the north-south divide, and how we can ensure that we provide decent air quality and access to decent public transport. About half of all emissions from aviation are actually caused by the ground access to the airport rather than by the planes themselves. Rail access, which is being called for by so many airports now, is critical in reducing those emissions.
This is a very abbreviated speech so I cannot go through all the detail. What is the way forward? I have been very clear about Heathrow, Gatwick and Stansted; I say a big “no,” and I am delighted that that is what the coalition agreement says. I have also been very clear about what we need to do to control UK aviation policy. We need to get the greatest hubbing potential that we can and achieve the greatest economic benefit possible, given all the constraints.
We should support growth, such as we are seeing at Gatwick; a fifth of Gatwick’s capacity is still free. Gatwick is doing well and it wants a new rail service. Stansted is half-full; its big call is for a new rail service, not a new runway. Birmingham is looking to expand and Manchester already has two runways. We need to provide the rail links to make those airports work.
We also need to reform air passenger duty. It is poorly designed, has a number of anomalies and favours short flights for which there are overground alternatives. We should be moving towards a per-plane duty. We should introduce new noise limits in population centres to incentivise quieter planes, and tough requirements for low-emission surface access, to reduce the overall impact. We also need to support the European Union’s emissions trading scheme, to promote the “polluter pays” principle.
What about the hub? Although the Government have done well to rule out proposals for a third runway and other expansion, we should also put an end to talk of mixed-mode operations at Heathrow. They cause damage to the air and through the noise they create; they are a non-starter and provide very little benefit. Heathrow is badly located, and mixed-mode operations would give all the pain with little of the gain. We need to move point-to-point flights elsewhere, as has been discussed, reform the EU allocation rules and perhaps consider a departure tax. Heathrow is not the place for a hub airport, but as Members have said, Boris island is
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certainly not right either, for a whole range of reasons; it is expensive, there is a higher risk of bird strike and it does not serve the north.
Our consideration of where to have a new hub needs to be subject to some serious constraints: a strategy for removing excess capacity above the climate change cap outside the airport; no net increase in the number of UK runways, so that we would have to close some to make up for new openings; greater recognition of the need to serve both north and south; and significantly lower noise impacts than at Heathrow. We could have something that is better both economically and environmentally, and I hope that the Government will consider the matter very carefully.
10.31 am
Mr Robert Syms (Poole) (Con): The UK aviation industry has been a remarkable success story, post war. It is the second largest in the world. It has been so successful that most of us take it for granted and assume it will always be there. Sometimes we are a little disparaging of British Airways as a national carrier, but it is a competitive world out there, and in Schiphol, Charles de Gaulle and Frankfurt there are people who want to compete with us and take jobs away. The aviation industry creates lots of well-paid jobs for lots of people, so we must think clearly about where we are going with it.
It is perfectly sensible to say “We will not expand Heathrow” or “We will not expand Gatwick” or “We will not expand Stansted”, but it is not sensible to say that we will not expand any of them. At some point, we have to increase airway capacity in the south-east of England. Some of the BALPA pilots who came to lobby us last week pointed out that one of the most environmentally dangerous things is to have 15 aircraft sitting on a runway running their engines while waiting for a take-off slot. Sometimes, an additional runway might not necessarily be a bad thing environmentally. We can do a lot to have smart working at Heathrow, and I agree with my hon. Friend the Member for Richmond Park (Zac Goldsmith) that considering slot allocation would be a sensible way to begin.
It would be sensible to have a link between Heathrow and Gatwick. Given their proximity, a fast rail route would provide consumers with more diversity and variety of choice. However, the principal area that ought to be expanded is Stansted. I use the airport myself, and sometimes it looks as though it is half-shut. It has a lot of capacity but its biggest weakness is the rail link with central London. Passengers amble through the Essex countryside wondering whether they will ever get to the airport. On one occasion I was late for a flight, and I burnt up a lot of nervous energy on the way. If we could get a fast rail connection from Stansted to the rest of the rail network and the tube system and halve the journey time from 60 minutes to 30 or 35, many more people would use the airport. Stansted is as far from London as de Gaulle is from Paris and Schiphol is from Amsterdam, and potentially there is capacity for more people to start using it.
The other advantage of Stansted is that significant numbers of people do not live around it. One only has to stand in the constituency of my hon. Friend the Member for Richmond Park and watch the number of
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aircraft coming in to realise that putting a lot of money into expanding Heathrow is not the environmentally sensible thing to do. One has to pay regard to the many millions of people who live below the flight path.
We can be smarter. We can invest in rail links and, at some point, we will have to increase capacity by putting in more runways, with the logical place being the underutilised Stansted. Although Heathrow will always remain the hub, we can be a bit smarter with the airports around London and make them a bit more efficient, thereby promoting our national interest.
10.34 am
Nigel Mills (Amber Valley) (Con): It is a pleasure to serve under your chairmanship, Mr Dobbin. I congratulate my hon. Friend the Member for Rochester and Strood (Mark Reckless) on securing the debate. We have, I think, focused a little too much on the impact in the south-east and have not looked at the full national interest, although my hon. Friend tried to do so. I want to talk about the impact of aviation policy on the midlands.
One thing that pushes flight numbers in the south-east up to near capacity is passengers from the midlands needlessly driving down to use its airports—Gatwick in particular—to go on holiday, when there are perfectly sensible flights, probably to the same places, from midlands airports, which, in many cases, people drive straight past. Trying to find ways not of forcing but of encouraging such passengers to use the midlands airports rather than the London ones has to be a way of solving the problem. I agree with the hon. Member for Blackley and Broughton (Graham Stringer) that it is strange for a Conservative to want to regulate and to force people to do something, so I suggest that we do exactly the opposite. The problem is that once we start regulating an industry and a market, we end up with a problem and decide that the solution is to regulate a bit more or a bit differently, or to bolt something on, to try to force a change in the behaviour that the regulation created in the first place. I suspect that the answer in this case is to deregulate much more of the industry.
I am not at all convinced of the logic of forcing BAA to sell Gatwick, and now Stansted, only to end up still economically regulating both airports. Surely we only regulate a dominant player in the market, and it is hard to see how in one market there can be three. I would free everything up and let Gatwick and Stansted compete with Heathrow, to see what they could do. That would get us a much better short-term fix than any of the other options.
In the midlands, what can we do to encourage people to use the regional airports? An interesting report was produced by Birmingham airport, and we have all seen the adverts on the tube about not putting all our eggs in Heathrow’s basket. If we are talking about fast rail links between airports and London, we have a plan for that; it is called high-speed rail to Birmingham, and it will reduce the journey time from Birmingham airport to London to just over 40 minutes, which is not far off the aspiration that my hon. Friend the Member for Poole (Mr Syms) mentioned for Stansted. I have driven to Stansted airport a few times, and it is an awful place to
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get to—a terrible location. I cannot see any real attraction in it. No offence to the hon. Member for Cambridge (Dr Huppert), but it is not a solution for a national airport for the UK. Such a solution would be a complete disaster. If we want fast rail links into London, let us have high-speed rail, and then Birmingham airport can become London Birmingham airport, or some other such preposterous name.
More seriously, if we are trying to balance the economy away from the south-east, and out to the midlands and the north, aviation can play a role in encouraging airports in those areas to get more flights, including flights to the new emerging markets. The midlands is the centre of the UK’s manufacturing industry, so it would be good to have links between those local businesses and the major areas they serve. My constituency, for example, has about 550 employees at Rolls-Royce, who fly all over the world. If we are a Government looking at regional benefit rates and regional pay, why can we not consider regional air passenger duty? We have done it for Northern Ireland, so why not do it elsewhere and try to give the areas concerned a chance to build up their competitive airports, increase capacity, attract new routes, and generally grow the market outside London?
I do not pretend that the majority of people will not want to fly to London, and that that is not where the economic powerhouse will be, but we ought to consider the scope and capability that exists outside London as well, rather than just forcing people into the capital’s airports, which happen to be relatively cheap to fly to because they already have full capacity, in which they are protected, and because regulation keeps the prices down.
Finally, if we want our national hub to be truly national, we must ensure that regional airports to which the rail journey is too long have access to the hub. Otherwise, airlines will discontinue their routes to Belfast and Scotland, for example, because they can make more profit from routes to New York, and the hub will become purely a London and south-east one. That is not an attractive way of growing the economy all around the country.
Jim Dobbin (in the Chair): We have hit the deadline of 20 minutes to 11. I call the shadow Minister.
10.39 am
Jim Fitzpatrick (Poplar and Limehouse) (Lab): It is a pleasure to see you in the Chair, Mr Dobbin. I congratulate the hon. Member for Rochester and Strood (Mark Reckless) on securing this important debate. We all keenly anticipate the publication of the Government’s consultation documents—a subject that I will come back to later. If they had already published them, we might not have needed this debate. None the less, this is a great opportunity for the Minister to update us on the documents.
As many Members have said, aviation is a success story, whether we are talking about the Scottish airports, Manchester, Birmingham, East Midlands, or the other regional airports. The focus of this debate, and the focus generally in recent years, has been on London and the south-east. The third runway debate has overshadowed the excellent work, which a number of colleagues have
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mentioned, being done at Gatwick, London City, Luton and Stansted, but the capacity of the south-east remains the big issue.
Our aviation industry is central to our economic prosperity and should be a key driver of growth, without which we have no prospect of emerging from the dangerous economic situation that we are in. The industry contributes at least £11 billion to UK GDP—more than 1% of the total—although briefings for this debate state that the figure is £23 billion. It also supports up to 200,000 jobs directly and 600,000 indirectly across the UK. However, just as the Government do not have a credible strategy for growth, they have not yet managed to set out a credible strategy for aviation, let alone the role that it could play in our economic situation. Aviation is a crucial sector on which our economy depends, and 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.
Mrs Villiers: Will the hon. Gentleman give way?
Jim Fitzpatrick: If the Minister will allow me to get to end of my remarks, I will be happy to give way to her. I hope that I will be able to give way, but I am constrained by time.
The chairman of the Airport Operators Association, Mr 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”.
He went on to describe “better, not bigger” as an “election slogan”, saying:
“Better not bigger doesn’t constitute a strategy.”
Sir David Rowlands, a former permanent secretary at the Department for Transport, has described the Government’s policy as “mildly extraordinary”. Baroness Valentine, who speaks for London First, said earlier this year that the
“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.”
Seventy-four business leaders wrote to The Times, saying that 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 the country needs. They concluded that all options must be considered—short term and long term—to address growing demand. Only last week, John Longworth, the director general of the British Chambers of Commerce, said:
“The Government must stop tiptoeing around on aviation because of short-term political considerations. Unless politicians grasp the nettle and make some tough decisions, both our export and inward investment potential will suffer.”
I hope that the Minister will indicate when we will be able to see the consultation documents.
Mrs Villiers: Will the hon. Gentleman give way?
Jim Fitzpatrick: I assure the Minister that if I finish what I have to say by 10.47 or 10.48 am, I will give way to her, but I want to get my points on the record.
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The hon. Member for Orpington (Joseph Johnson), who is no longer present, gave a couple of quotes from the Mayor of London’s briefing. To save time, I will not repeat what he said, but he did not cite two points—although others have mentioned this—relating to the loss of visitors to the UK. The Mayor’s briefing states:
“While France and Germany each managed to attract between 500,000 and 700,000 visitors from China in 2010, the UK had only 127,000. In total, France earns £1.3bn per year from Chinese tourist spending on visits in the country, compared to the UK’s Chinese tourist spending receipts of £115m.”
“France’s hub airport, Paris Charles de Gaulle (56 departures per week), has better connections to Brazil than Heathrow (27 departures per week). In 2009, inward investment from Brazil totalled $800m in France, and only $1.7m in the UK.”
The Mayor has a strong argument on those figures.
The Government seem to accept that there is a capacity issue. In the Budget statement, the Chancellor referred to south-east capacity, as did the Prime Minister in response to a question from the hon. Member for Richmond Park (Zac Goldsmith) during Prime Minister’s questions. As I have said, we are waiting for the Government’s consultation document to indicate their likely direction of travel. Constraints on aviation, whether from a lack of capacity or lack of investment, will not stop flights happening—or increasing. As Members have said, those constraints will simply displace flights from the UK to Schiphol, Charles de Gaulle or elsewhere.
The hon. Member for Rochester and Strood effectively articulated the arguments against the proposed estuary airport. He made some interesting points about EU competition law, and I will consider them carefully.
My hon. Friend the Member for Blackley and Broughton (Graham Stringer) spoke with great authority on the issue, as he always does. He mentioned in passing other factors that affect aviation, such as air passenger duty, which was also mentioned by other colleagues. Nobody developed the argument, but APD is a huge factor in whether people decide to go to the UK or elsewhere in Europe. Given that it brings in between £2 billion and £3 billion for the Treasury, it will not surrender APD, but that is a factor and it needs to be looked at.
Another big issue that affects our economic performance is visas and the obstacles we place in the way of people who want to come to the UK, particularly from China. Moreover, as we discussed at length during deliberations in the Civil Aviation Bill Committee, the performance of the UK Border Agency—I accept that it is not the Minister’s responsibility—is harming the way that potential tourists and business visitors perceive the UK, because of what they read and hear in the media.
Lack of time meant that we did not have the opportunity to hear a lecture by the hon. Member for Blackpool North and Cleveleys (Paul Maynard) on hub dynamics. I would be interested to read it, so perhaps he could send me a copy. He made the point about the decline in our aviation industry and the rise of Schiphol and Charles de Gaulle.
The hon. Member for Strangford (Jim Shannon) reinforced the points about connectivity and regional access, and the hon. Member for Cambridge (Dr Huppert) raised the issue of emissions. That issue has to be addressed, and we were addressing it when we were in government. The industry was confident that it could meet the levels set, but it meant using the emissions
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trading scheme, with the expectation that emissions would rise and that the industry would have to offset them elsewhere within the industry.
Dr Huppert: Will the hon. Gentleman give way?
Jim Fitzpatrick: I assure the hon. Gentleman that I have nearly finished—I have three minutes left—and will give way to him when I have done so.
As I was saying, the industry was confident that it could meet the levels set, but the bottom line is that Lib Dem policy on aviation is the obstacle to the Government having any policy at all, certainly before 2015.
The hon. Member for Poole (Mr Syms) mentioned the need for more capacity and made the case for Stansted, and the hon. Member for Amber Valley (Nigel Mills) asked how we can give more support to regional airports and proposed deregulation.
The aviation industry and Britain’s wider business community came together last week to call for a cross-party consensus on aviation that lasts beyond the term of one Parliament. For several months, the shadow Secretary of State, my hon. Friend the Member for Garston and Halewood (Maria Eagle), has repeatedly offered to take the politics out of aviation, put party differences aside and work together on a joint aviation strategy for the good of the nation. It is a clear, unambiguous offer, with no catch. Aviation matters to the country, the economy and businesses and families throughout the country. It is an industry that needs stability in the long term and a long-term plan that straddles Parliaments and Governments. We must not repeat the party political wrangling that turned the proposed third runway at Heathrow into a political football, and we must agree to stick to the agreed strategy, whatever the outcome at the next election.
Mrs Villiers: These issues are very important, so why have the Opposition not suggested any ideas for dealing with the long-term capacity challenges in the south-east? They have suggested nothing at all.
Jim Fitzpatrick: The Minister knows that we had a game plan in place, but we lost the election. Then, as a gesture, to try to achieve national consensus on this important issue, we said that we would drop support for the third runway so that we could have cross-party talks. We have not even had the courtesy of a reply from the Secretary of State for Transport about engaging in talks. Until the Government introduce their consultation—it is they, not the Opposition, who are responsible for creating aviation policy—it is a bit rich of the Minister to ask me about policy.
Dr Huppert: The hon. Gentleman said that the Labour party dropped its support for the third runway as a gesture. Will he be clear on what his party’s policy is now? Is it against a third runway, or is it merely in favour of having a blank page that can be filled with anything in future?
Jim Fitzpatrick:
The hon. Gentleman tempts me to respond but, given that I fully explained our policy during a five-minute discussion only two days ago, I
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think that he knows what it is, and that he is just playing games to try to throw me off. He knows that we are in the throes of devising our aviation policy, and I assure him that it is likely to be formulated way before the coalition reveals its policy, which we do not think will be published until 2014, or even 2015.
Finally, I have the following questions for the Minister. What is it that the Government will publish? How long have we been waiting for the documents? What exactly will they consult on in the documents and—the most important question of all—when will we see them?
10.50 am
The Minister of State, Department for Transport (Mrs Theresa Villiers): I congratulate my hon. Friend the Member for Rochester and Strood (Mark Reckless) on securing the debate, which has been excellent; there have been many very useful contributions. There is no doubt that the UK has a highly successful aviation sector, and I pay tribute to the energy and enterprise that we see from that industry, in the face of challenges as tough as the global slow-down and, of course, rising world oil prices. Developments over the past 20 years, such as the introduction of low-cost, no-frills airlines, have provided real passenger benefits and unprecedented choice and opportunity to fly.
In the year of the Olympics and the diamond jubilee, we are reminded once again of aviation’s critical role as the route to bringing in tourism. However, the very success of our aviation industry presents us with a key challenge: how do we accommodate growth and seize the benefits generated by aviation while meeting our environmental commitments and addressing the quality-of-life impact of aircraft noise?
It is very clear that London is one of the best-connected cities in the world, with its five busy and successful airports—six, if newly expanded Southend is included. Together, those five airports provide direct links to around 360 international destinations, including virtually all the world’s great commercial centres. That compares with just 309 such links from Paris, and 250 from Frankfurt. Heathrow provides more flights to New York than Paris and Frankfurt put together, and has more flights to the crucial BRIC—Brazil, Russia, India and China—economies than other European hubs, including more services to China.
Airlines are launching new routes to key emerging-market destinations. BA has recently announced a new service to Seoul. China Southern Airlines now flies from Heathrow to Guangzhou. Gatwick has a new Air China service to Beijing, and the aviation industry continues to invest and innovate. Birmingham airport will shortly begin constructing a runway extension better to enable it to serve long-haul destinations. The operators of Heathrow and Gatwick are investing £5 billion and £1 billion respectively over the next few years in better infrastructure. Of course, it is important to press for the further liberalisation of aviation, in terms of opening up the opportunity for UK airlines to provide flights to more destinations—something called for by my hon. Friend the Member for Rochester and Strood.
Mark Reckless: Why does it need to be UK airlines? Surely the benefit for the UK is to have airlines—Brazilian or Chinese as much as UK ones?
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Mrs Villiers: Naturally, trade agreements on aviation between different countries provide mutual benefits. Liberalisation and expanding the range of airlines that can serve routes between the UK and other countries can provide real benefits economically and for passengers. We seek mutuality in these agreements, but we are also prepared to consider a more open approach for regional airports along the lines proposed by the hon. Member for Blackley and Broughton (Graham Stringer).
It is true that Heathrow is pretty much full, and Gatwick, too, is starting to fill up. However, it is simply not true to claim that London’s connectivity is falling off a cliff-edge. We are taking action right now to make our airports better, as well as preparing for the longer-term challenges of capacity in the south-east. We are reforming the way aviation security is delivered to make it more passenger-friendly and cost-efficient. We are trialling a set of operational freedoms at Heathrow, which we hope will make the airport more resilient and reliable. However, we will carefully have to assess their environmental impact. We are finally making progress on the single European sky, which has the potential to cut fuel-burn, improve punctuality, address noise and increase capacity.
Zac Goldsmith: Will the Minister give way?
Mrs Villiers: I am sorry, but I do not have time. If I have time at the end, I will give way.
We have an extensive programme of surface access improvements under way. Hon. Friends were right to raise that as being important for our aviation competitiveness. Manchester is getting a new Metrolink extension and will benefit from Northern Hub improvements. Gatwick station is getting a major upgrade; Thameslink will benefit Gatwick and Luton; Luton is getting improved access from the M1; and tunnelling has started on Crossrail. That project will ultimately see Heathrow connected to the City and Canary Wharf by train directly for the first time.
In the longer term, High Speed 2 will provide greatly improved surface access to Heathrow and Birmingham. As my hon. Friend the Member for Amber Valley (Nigel Mills) mentioned, that is a real game-changer, bringing Birmingham within easy travelling distance of many more people across the country. Of course, our HS2 plans will also provide an attractive rail alternative to thousands of short-haul flights coming into our south-east airports. That will potentially free up even more space for the long-haul destinations that hon. Members have rightly identified as crucial to our economic success.
However, good government is about not only tackling the problems of today, but preparing for the future. That is why the Chancellor announced in last year’s autumn statement that we would explore the options for maintaining the UK’s aviation hub status, with the exception of a third runway at Heathrow. The coalition is clear that it does not support a third runway at Heathrow. The airport is unique in Europe, in terms of the magnitude of its noise impact on densely populated areas. Thousands live daily with a plane overhead every 90 seconds, and have more planes that wake them up at 4.30 in the morning. The quality-of-life impact of a third runway and up to 220,000 more flights over London every year would be massive, and there is no technological solution in sight to ensure that planes become quiet
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enough quickly enough to make that burden in any way tolerable. We do not support mixed mode, which would see the end of the much-valued respite period that means so much to those who live with Heathrow noise daily.
We need a better solution. Last year, we kicked off the process of deciding what that will be, with the publication of our scoping document on aviation. The 600 or so responses we received are being used to prepare our draft aviation policy framework consultation, which will be published shortly. We plan to adopt the final framework in March next year, as set out in our business plan. It will set out the overarching economic and environmental framework within which we want to see aviation grow. We also intend to issue an open call for evidence on maintaining the UK’s international aviation connectivity. We will fully consider all representations to that consultation. The shadow Minister, the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), wants us to go faster, but had no ideas whatever to share in today’s debate.
Jim Fitzpatrick: When will we see the documents, Minister?
Mrs Villiers: The consultation will be published shortly.
Jim Fitzpatrick: Does “shortly” mean before the summer recess?
Mrs Villiers: The consultation will be published shortly. The decision is a crucial one that requires objective, thorough and evidence-based analysis of our connectivity needs and how best to meet them in a sustainable way. We do not want to make the mistake that the previous Government made of coming up with the wrong solution and seeking to reverse-engineer the evidence. Put simply, that landed them in court and ensured that they failed to deliver any new capacity. We need to get this right. We need to base our decisions on the evidence, and on a process that allows the communities affected by any of the options fully to take part and ensure that their voice is heard.
Zac Goldsmith: Can my right hon. Friend tell us what work her Department has done on considering the viability of maintaining two hubs rather than one? We have today heard a lot of statements from Members, but no evidence at all, that we must have a single hub. Has her Department looked at that question, and are there any data she can share with us?
Mrs Villiers: Certainly the debate that will be triggered by our call for evidence will look at a range of options, including how a hub can interact with highly successful point-to-point airports, and will consider connections between our airports to see if they can provide a way to improve and enhance our connectivity. Those are the sorts of ideas we have already been looking at, because they were proposed in response to our scoping document, and they will provide an important basis for future debate over the next few months on how we maintain London’s and the UK’s top-class connectivity.
John McDonnell (Hayes and Harlington) (Lab): Will the Minister give way?
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Mrs Villiers: I am afraid that I am about to run out of time, so unfortunately not.
My hon. Friend the Member for Rochester and Strood raised a number of issues about the potential for a new airport—issues relating to cost, airspace management and impact on the local environment. It is, of course, vital to consider the sorts of questions he raises about costs and local environmental impact whatever options are put forward as a result of our call for evidence. Those are important questions to ask, and important criteria against which to judge any of the potential ways to address the future connectivity needs of the south-east airports. On air passenger duty, as hon. Members will be aware, taxation is a matter for the Chancellor.
To conclude, we are taking forward a range of measures right now to improve our airports and ensure that they are top-class international gateways to the rest of the world, and we are carrying out the process needed to determine our future connectivity needs. We believe our approach represents a responsible, structured and proper process that takes us towards delivering a sustainable solution that will maintain the UK’s connectivity and competitiveness in the future.
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Voluntary Sector
11 am
Stephen McPartland (Stevenage) (Con): It is a pleasure to serve under your chairmanship, Mr Dobbin. I thank the Minister for coming, and I am pleased that some hon. Members are here today to celebrate the voluntary sector in small towns and cities. I know that my hon. Friend the Member for Carlisle (John Stevenson) is keen to speak, and that my hon. Friend the Member for Lincoln (Karl McCartney) is keen to intervene. I am happy for both to do so.
Everyone here today recognises the important contribution in our areas that the voluntary sector makes to many families and to our local economies. The voluntary sector receives and spends tens of billions of pounds every year and employs hundreds of thousands of people who are all trying to make a difference to the life of other people.
Before I raise two points with the Minister, I would like to celebrate the work of the 163 charities and more than 100 community groups in my constituency. Yes, that is right—in my constituency, with 69,000 people on the electoral roll, we have about 300 charities and local community groups all trying to make a difference. A classic example took place just this weekend, when Stevenage hosted the largest armed forces day celebration in Hertfordshire. The Stevenage indoor market traders, under the chairmanship of Peter Mason and its outstanding committee, welcomed the market stall that Mark Williams, a Gulf war veteran, runs for the national Gulf Veterans and families association. It not only raises funds, but tries to support servicemen and servicewomen who fought in the Gulf.
There were more than 20 charity stalls on the day, and thousands of people attended. I was honoured to be given the opportunity to speak at the opening of the day, and was humbled to meet a Dunkirk veteran who was collecting money in a bucket for the Royal British Legion. As a nurse, she had looked after wounded soldiers on the beaches at Dunkirk. I was very proud of what she had done, and it was an honour to meet her. There were many other stories from veterans and war widows. I was proud that our community came together to show our support for our armed forces.
Turning to more established local charities in my constituency, I am proud to be a patron of Turn the Tide, a local charity that tries to help disadvantaged young people. We are trying to teach children, in groups of two, how to build a small sailing dinghy. Once they have built the dinghy, we then teach them how to sail it on Fairlands Valley Park sailing lake. We hope this will develop into a lifelong hobby for the children, and we are also looking into the possibility of giving them access to some qualifications. The charity is run by a good group of people. A number of people have come through the scheme so far in the past year or so, and it is proving to be a huge success.
I am also a trustee of The Living Room in Stevenage, which is a charity founded and led by the inspirational Janis Feely, who now has an MBE for her services. The Living Room is a charity that helps people put their lives back together and makes a massive contribution to the local community. It simply tries to break the cycle of addiction and uses abstinence-based group therapy to
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help addicts recover, whether from drugs, alcohol, food or other addictions. The programme at The Living Room in Stevenage works. It has a high success rate because of a very unique selling point—all the counsellors have been addicts in the past. They have all reached rock bottom and they all know what it is like to be there. They know when the people they are counselling are pushing a little bit further than they should, and when they are not going fast enough. It is a unique charity and I am delighted to have been involved with it for a number of years.
Karl McCartney (Lincoln) (Con): I congratulate my hon. Friend on securing the debate. It is also a pleasure to serve under your chairmanship, Mr Dobbin.
My hon. Friend mentioned being a trustee of various charities in his constituency. He also mentioned how many charities there were in his constituency. There are 270 charities and voluntary sector organisations in Lincoln. With the help of two companies, Lindum Group and Wright Vigar, we have a number of receptions coming up to thank the trustees of those charities. With 270 charities and voluntary organisations, the number of trustees in my constituency numbers in the thousands. I am sure that my hon. Friend would like to welcome that.
Stephen McPartland: The importance of trustees to charities is massive. The Minister will be aware that one of the biggest challenges for charities is to attract good-quality trustees. It is like being a school governor—they are overwhelmed with paperwork and given a huge amount of responsibility. Like most people involved in charities, all they want to do is help people. I am delighted to hear that my hon. Friend is welcoming all the trustees in his constituency. It has given me a very good idea, and I will no doubt be doing something similar later this year.
Returning to the work of The Living Room, the charity is very good at putting people’s lives back together. It has helped mothers recover to the point where they have been able to get their children back out of care. It has helped to rebuild marriages, and it has helped many clients, as we call them, to go back to the world of work and put their lives back together. It is a fantastic organisation, and I am very proud to be associated with it.
Another charity that was started in Stevenage is unique, and I love it. It is run in partnership with Hertfordshire police and has expanded across the county, and I understand that a number of other police forces are interested in it. It is called Dog Watch. Everybody has heard of neighbourhood watch, but we have a system called Dog Watch. Dog walkers are often the ones who identify fly-tippers. It is usually a dog walker who is unfortunate enough to discover a dead body, because their dog finds it. More than 400 people have signed up with Hertfordshire police through the Dog Watch charity, and they are effectively the eyes and ears on the ground in Stevenage. There are many community events, and the whole community gets involved. Dog Watch helps rescued dogs and looks after a number of animals. Most importantly, people are out there with the police on a day-to-day basis. If something happens and the police are keen to find out what is going on, they have access to a resource of people who have probably walked past the very spot three times that
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week and may have seen a particular vehicle or something else. Dog Watch is led by a lady called Sarah Sheldrick, and she is also an inspiration.
Young people are very important in charities. Only last week, I visited Thomas Alleyne school in Stevenage, where the pupils presented me with a petition that I hope to give to the Secretary of State for International Development. They want all children throughout the world to have access to primary school education. You know, Mr Dobbin, that I am very interested in global poverty and what is going on around the world, especially in relation to access to education. The pupils of Thomas Alleyne school have gone a step further and raised enough money to send three African children to school for the next year. The pupils are making a personal demonstration to those children in Africa that they will try to help them get educated. That is very important, because it shows that in my constituency of Stevenage people are becoming involved with community spirit right from the start.
A slightly larger charity based in Stevenage is POhWER, which provides highly skilled advocates to support vulnerable people who find it difficult to challenge the NHS and other services when things go wrong, and to help people get the public services they need. I work very closely with POhWER and am a huge fan of the support it gives to people. It understands the challenges, as most of the board of trustees have used advocacy services themselves in the past. The Minister with responsibility for care services has written to POhWER to thank it for the work it does, particularly with those who have mental health issues. POhWER is also a success, because it is one of the few charities that has managed to win some Government contracts to provide advocacy services. That brings me to my first question to the Minister. Why is it so difficult for charities and community groups to win contracts from the public sector?
The Minister is keen for local councils, local NHS, police and various public sector bodies to work more closely with local charities and community groups, and many do, but that never seems to translate into a contract in my area. The tendering processes of local public bodies are bewildering. Most charities just want to get on with helping local people and cannot navigate the complex bureaucracy that is put in their way.
I met a couple of people last week who are keen to launch a self-empowerment service in Stevenage, but they are coming up against huge barriers and do not think that they can deal with the tendering process. They believe—I have heard this complaint from many small local charities—that many of the contracts are too large and say that, when they can get involved in a contract, they effectively have to subcontract to a larger charity or a private sector organisation, and feel that they do not get what was promised. I am also starting to hear complaints that charities are being used as a form of bid candy; that is, they are being used by large providers to win a contract, but see little benefit locally. That issue has arisen time and again in my constituency, especially in the past 18 months, as ever more contracts of this kind have gone out.
We need to level the playing field and have services delivered more locally, but how does the Minister intend to do that? The Government’s localism agenda works; it is the right thing to do. We have to push power away
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from central Government towards local people and communities. However, many local councils seem to be acting as a barrier between the Government and local communities. Councils pay lip service to the Government, but do little to help local community groups and small charities tender for contracts. It is almost as if they want to keep as much work as possible in-house. In my constituency, Stevenage borough council keeps everything in-house and does not outsource anything, so it is difficult for small groups and charities to be involved in any way.
Will the Minister consider introducing to councils more standardised bidding and monitoring forms that pass the plain English test? We are giving councils guidance and working hard—the Minister is desperate for them to engage with local community groups—but in my experience in the past two years, there is a barrier between the Government and local communities, which means that community groups cannot navigate bureaucracy and red tape. Those groups want to help people, just as small businesses want to get on and sell their product and not deal with health and safety and myriad other regulations. Many small charities and community groups are subject to the same regulations as businesses and are not geared up to work with them.
It would be remiss of me not to mention the issue of irrecoverable VAT, which costs local charities and community groups up to £500 million a year. This is a long-standing issue, but it is important that we try to tackle it.
Many people in my constituency come to me about Criminal Records Bureau forms. One man has had 15 CRB forms for the different groups that he is involved in. We put the Protection of Freedoms Act 2012 into place and we are getting rid of unnecessary bureaucracy to do with CRB forms, and I know that the idea is that, if there has been no change in people’s circumstances, they will be able to log on to the internet, check the system and move forward. However, it is two years on and that measure does not seem to have been implemented yet, and nobody knows when it will be implemented. People are agitated, saying, “Do I need to get my new CRB forms, because I’m going to be helping out?” The CRB forms are a huge barrier to people being involved in community groups.
The Government have made it clear that volunteers should not have to pay for CRB forms. However, most councils are, in my experience, charging an administration fee to process the forms, so the reality is that most volunteers are being charged for a CRB form, and that cost is borne by the individual or the charity. There is a sense of a barrier between what we want to achieve and what local communities want and what is happening. We need to leap across the barrier and deliver this free service to volunteers.
I would have loved to mention every one of the 300 charities and community groups in Stevenage, but no doubt we can do that in an hour-and-a-half debate in future.
11.14 am
John Stevenson (Carlisle) (Con):
It is a delight to serve under your chairmanship, Mr Dobbin. I congratulate my hon. Friend the Member for Stevenage
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(Stephen McPartland) on securing the debate, which is relevant to small towns and to cities, such as my constituency of Carlisle. I should like to make a small contribution to the debate.
The Government and politicians talk a lot about the role and importance of the public and private sectors, and the relationship between the two. That is natural, to a large extent, because the private sector is the wealth-producing part of our economy and creates the vast majority of our employment. It is dynamic, innovative and varied and vital to the success of our economy, nationally and locally. The public sector is similarly important. It provides our schools, hospitals, much of our infrastructure, the police and welfare and is important both nationally and locally. There is often political debate about the size of each sector and what each should do and how they should do it.
Sometimes, we neglect the third sector—the voluntary and charitable sector—which is equally important in small towns and in cities, as it makes a valuable contribution to communities in many ways. It plays a huge role, sometimes doing things that neither the private nor public sectors can or will do. It is important in terms of its contribution to society and to local communities, and in respect of how it helps people to get involved.
In 2009-10, 40% of adult volunteers formally volunteered once a year and 25% at least once a month. In my view, much of the voluntary sector flies below the radar: that is true of my constituency. Throughout the country, about 80% of voluntary organisations are not registered and there are an estimated 600,000 informal groups, many of which have annual incomes of less than £10,000; yet they play a vital, important role in our communities, especially in small towns and cities.
The voluntary sector is diverse. In my constituency, for example, Friends of the Settle-Carlisle Line is a heritage trust that plays an important role in publicising the importance of that railway. A recently created charity called Cumbria Gateway helps people with drug issues move back into mainstream society. Cumbria Council for Voluntary Service helps voluntary groups generally with administration and encourages more people to get involved in the third sector.
It is important that we recognise the benefits of a thriving third sector, but it should be an independent sector that is not dependent on the state and it should not be over-regulated. What will the Government do to ensure that the sector continues to thrive, develop and expand? I want to be able to reassure organisations in my constituency that the Government support them. I should like the Minister to confirm that there are no proposals for additional regulation in the sector.
Although I appreciate that funding has been reduced, can smaller organisations in particular be provided with help to gain access to the funding that is out there? Often, small organisations struggle to find out where to get access to such finance, and even to find out where it is advertised and in which organisations or parts of government they have to seek it.
Stephen McPartland: Does my hon. Friend agree that small charities often find it difficult to apply for funding because they do not have the resources?
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John Stevenson: Yes. Indeed, sometimes they do not even know where to go to seek such support. I also support my hon. Friend’s comment about the third sector having access to public sector contracts. It is important that small organisations have that opportunity, too, and that it is not just national charities that have priority in that regard.
The voluntary sector has an important role to play in our society—in changing the way we do things—and I seek reassurance that the Government will give as much support as they can to it.
11.18 am
The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd): It is a pleasure to serve under your chairmanship, Mr Dobbin. I congratulate my hon. Friend the Member for Stevenage (Stephen McPartland) on securing the debate and for the sincere way in which he expressed his admiration and respect for the 300-odd local charities in Stevenage. He clearly does more than talk the talk: he walks the walk by being a patron and trustee of at least two of those organisations, which is admirable.
My hon. Friend and other colleagues are reflecting the importance of the sector to the country in a year when we are presenting to the world the best of Britain, and I have absolutely no doubt that the voluntary sector is part of that. The ecosystem of charities, supported by millions of people who give time and money to improve other people’s lives and the conditions in their neighbourhood, underpins our sense of well-being; it is massively important.
My hon. Friend the Member for Carlisle (John Stevenson) spoke well about organisations in his area. I vividly remember visiting the Living Well Trust on the Raffles estate when I first became a Member of Parliament. What was really brought home to me was that on a troubled estate the thing that made a difference—the people who made a difference—were Barrie, Kath and the team there. They did much more than anything a council could do to support residents from the estate. The Living Well Trust was the battery at the heart of the estate, and that forged a strong impression in my mind.
Times are challenging for such organisations: less money is around, there are more demands and there is a huge amount of change. We are sensitive to that. In the short time I have, I shall reassure colleagues that the Government are extremely committed to protecting the sector as best we can through a difficult short term, while putting in place measures that will underpin its resilience and effectiveness in the future. I will address specifically how we can make it easier for charities to access money and to help us deliver better public services.
First, we are trying to make it easier to run a charity. We all know that it is one of the most difficult things to do; it has always been difficult, but it is particularly hard now. The Government can do things to help, such as looking hard at the amount of bureaucracy and regulation imposed—my hon. Friend the Member for Carlisle made that point—and we are undergoing probably the biggest and most comprehensive review of the regulation and legislation that affects the sector. Our instinct is to deregulate and to remove bureaucracy, so that there are fewer forms to fill and fewer daft questions to answer, freeing time and money that can be better spent.
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My hon. Friend the Member for Stevenage mentioned CRB checks, which have been a huge source of frustration. We are certainly not going as fast as many people would like, but the reform is radical; millions fewer people will need to have CRB checks, and those who do will find it much easier to carry the check around the system. The reform, which my colleagues at the Home Office are working hard on, is complicated, but the new system will be in place at the beginning of next year. It will be a new era for CRB checks, with an injection of common sense in a system that had grown out of all proportion. That is only one example of the kind of things that we are doing to make life a bit easier.
Mention was made of how small charities can find access to what money is around. Information is important, so we have continued to fund a website called Funding Central, which I recommend to colleagues. It is probably the most comprehensive source of grants and pots of money available.
My hon. Friend the Member for Lincoln (Karl McCartney) talked, importantly, about the value of trustees, which we are keen to encourage. The environment is challenging for charities, and most of them recognise that they lack certain things, such as business skills in particular, which will become increasingly relevant if they are competing for more tenders and public work. There are business skills in every constituency, but they happen to be engaged in different things. The impression I get in my constituency is that if we can make better connections between local businesses and local people with business skills and the charities that are on their doorstep, the effect can be transformational; it can raise the capacity and capability of small local charities. We will be doing a lot to make those connections work much better. Furthermore, some of those business people will be inspired to become trustees and become part of the governance of local charities.
Making it easier to run a charity, therefore, and helping the sector to modernise its skills is important. Behind most front-line charities, of course, sits a local council for voluntary service, or another support organisation, and we have invested £30 million in the CVS network to encourage the councils to think about how they can improve their offer to front-line charities. That is a serious investment when there is not a great deal of money around. Making it easier to run a charity is the first important strategic strand.
Secondly, how do we get more money into the sector? How do we get more resource in terms of more volunteers and people giving their time? I recommend to colleagues the White Paper on giving and the update we published last week for dissemination to local charities, because in those documents we communicate clearly our absolute commitment to broaden the base of people in this country who give.
I shall throw a spotlight on a couple of initiatives where we are putting up taxpayers’ money as a match to stimulate giving to local charities. Localgiving.com is a new platform set up by one of the participants in “The Secret Millionaire” to inspire more support for local charities. In September, we will be matching, pound for pound, local donations given through that site. It will be our third match. The previous one sold out in 24 hours, which tells us that if people are given information about the local charities on their doorstep, they are interested in doing more to support them. I encourage colleagues
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to get their local charities to register and get engaged with Localgiving.com, for the pound-for-pound match in September.
We have also put up £50 million to match donations from local philanthropists—people who have been relatively fortunate and want to put something back into their communities. We will match every £1 they give with an additional 50p towards the building of local endowments that will be a source of sustainable, long-term grants for local organisations. We are determined on such interventions for the long term, so getting more resources into the sector is hugely important to us.
Thirdly—a relatively new area—how do we make it easier for charities to participate in and help us to deliver better public services? Part of the problem is that the public services in the past have been closed and opportunities have not been available. The Government are opening up opportunities, but it is a big cultural change and will not happen overnight. Big question marks are raised about the capability and competence of commissioners throughout the country—many are new and many are being asked to do things in different ways—and of local charities, which need to step up and persuade commissioners that they have the resilience and ability to deliver.
We are working hard to make that a reality. We are sending strong signals to commissioners. We supported the private Member’s Bill promoted by my hon. Friend the Member for Warwick and Leamington (Chris White), which places a requirement on commissioners to consider social value in their commissioning processes. The “Best Value Statutory Guidance” issued by the Secretary of State for Communities and Local Government to local authorities also makes it clear that we want them to consider social value. The Localism Act 2011 contains a right to challenge, so that local groups can question existing provision in a public and transparent way. We are setting up a commissioning academy, because commissioners need support, and the first cohort is
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going through this summer. That is about encouraging more intelligent commissioning, in particular at local level.
We are supporting local charities that want to do more in that space. A £10 million investment and contract readiness fund has been set up as a source of grants available to charities and social enterprises that want to do more public service delivery but recognise that they need a little more help and support to increase their capability and readiness. The principle is clear, however: we want the people buying on our behalf to have much more choice in who they buy from.
In some of the most stubborn and difficult social areas, charities and social enterprises frequently make the extra bit of difference in keeping people out of jail or off drugs, as has been said, but such organisations are often small. One of the challenges mentioned is a real one; commissioners naturally want to buy at scale, with all the potential efficiencies that can be pursued, but they find it difficult to reconcile that with including small, local charities that could make that additional bit of difference in the supply chain.
We are feeling our way, but there is definite progress. This morning, I had a meeting with the National Council for Voluntary Organisations and Serco, which have come together with a new framework to guide prime contractors—big private organisations or big charities—in their engagement with small charities in their supply chain. In an environment where we are paying people for outcomes, it is in the interests of bigger organisations to engage with the small local charities that, in our experience, can make just that additional bit of difference.
Finally, if my hon. Friend the Member for Stevenage wants to bring any of the 300 magnificent charities in his constituency to meet the Minister, he is extremely welcome to do so, because I regularly have such meetings. I would like them to feel the appreciation of the Government for the incredible work that they do.
11.29 am
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West Bank (Area C)
2.30 pm
Mr Frank Doran (Aberdeen North) (Lab): I am grateful for the opportunity to speak on the important issue of Area C in Palestine. Following the Oslo agreement in 1995, the occupied Palestinian territories were divided into three areas: Area A, about 18% of the west bank, contains most of the main Palestinian settlements and is under full Palestinian civil and security control; Area B, roughly 22% of the west bank, is under Palestinian civil control and Israeli security control; and Area C, on which I want to concentrate, makes up the other 60% of the west bank and is under complete Israeli civil and security control.
The Oslo agreement as concerned with the west bank was intended to be interim and to last for only five years. The lands should have been handed over gradually to Palestinian control, but that has never happened.
Dame Joan Ruddock (Lewisham, Deptford) (Lab): I apologise to my hon. Friend for the fact that I cannot stay for the whole debate. Does he agree that Area C would, and does, make up the backbone of any future Palestinian state? The failure of the Oslo process to follow its proper track therefore jeopardises the whole future of the two-state solution. Will he ask for the Minister’s views on that?
Mr Doran: I thank the right hon. Lady for her intervention—I always thank the right hon. Lady, and I always give way to her. The Minister has heard her question, and I am sure that he will respond. Of course, I agree that the solution, if there is one, to the problems of Area C is crucial to the whole settlement of a particularly difficult issue.
Israel, as an occupying state, has clear and unambiguous responsibilities to the Palestinian people in Area C, including for the safety and welfare of civilians living in the occupied territory. It has no sovereignty over Area C or any other part of the west bank. I want to concentrate on Area C and the way in which the Israeli authorities have met their obligations under international law.
In May this year, I had the opportunity to visit Palestine for the first time, on a trip with some colleagues organised by the Britain-Palestine all-party parliamentary group and CAABU, the Council for the Advancement of Arab-British Understanding. One of the first things I noticed travelling through the west bank, as a newcomer, is the enormous amount of new development. The hills are full of new housing complexes, but in Area C those developments do not belong to the indigenous population—they have all been developed by the occupying force, Israel, and are therefore illegal. The scale is staggering.
According to the Israeli human rights organisation B’Tselem, there are 124 formally recognised settlements in the west bank, not including East Jerusalem, and about 100 informal settlements—outposts—that are illegal under Israeli law. As a result of the restricted road network—restricted for Palestinians, at least—the settlements dominate more than 40% of the west bank. There are 310,000 settlers now living in Area C, where
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the rate of population growth is much higher than in any other part of the country, with an increase of 4.75% per year.
The Israeli Government not only condone illegal development but encourage it, providing incentives, subsidies and funding for housing, education and infrastructure, including special roads and water connections. According to a Peace Now report from 2006, 40% of the land—or 3,400 buildings—on which settlements have been built in Area C is privately owned by Palestinians.
Andrew Percy (Brigg and Goole) (Con): Is the hon. Gentleman aware that, at most, about 5% of the west bank consists of settlements, and most of them are in settlement blocks? Does he not accept that the vast majority of the settlements are along the peace line and that, to get to peace, land swaps will be required? Most of those settlements are more than likely to come into Israel anyway.
Mr Doran: That does not alter the facts on the ground. Owing to the road networks, the various infrastructure around the settlements and the inability of Palestinians to go into that territory without a permit from the Israeli authorities, 40% of the land is effectively taken up by the settlements.
Mrs Helen Grant (Maidstone and The Weald) (Con): I congratulate the hon. Gentleman on securing this important debate. I, too, have recently returned from a visit to the region. Someone remarked that because of the Israeli settlements the whole of Area C looks similar to a Swiss cheese, which is a very good description. That lack of a contiguous, sustainable two-state solution in the area is making peace very difficult to achieve.
Mr Doran: I agree with the hon. Lady. There are less light words than Swiss cheese for what is happening; it is very serious and damaging to any potential solution. She is absolutely right.
Mr Philip Hollobone (Kettering) (Con): I refer the Chamber to my declaration in the Register of Members’ Financial Interests.
I take the issue of settlements seriously, but listening closely to the hon. Gentleman, I simply cannot understand his repeated reference to settlements taking up 40% of the west bank. I have the United Nations “Humanitarian Atlas”, and there is simply no way that the Israeli settlements amount to anywhere near 40% of the west bank. May I ask him to ensure that he is quoting a correct figure?
Mr Doran: I stand by the figure. I am not suggesting that 40% is built on; that is not the issue. I am talking about the area of land that is restricted with regard to Palestinians. It includes the road network. The Swiss cheese effect was mentioned by the hon. Member for Maidstone and The Weald (Mrs Grant). There are large areas to which the Palestinian community is denied access. That calculation is made, as I said, in a 2006 report by an Israeli human rights organisation. I want to make progress now, because the hon. Member for Kettering (Mr Hollobone) will have his opportunity to speak later.
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On my visit to the west bank, I saw numerous examples of how the Israeli civil Administration restrict any kind of development by Palestinians. Around 70% of Area C, or 44% of the west bank, is effectively off limits to Palestinian construction—the hon. Member for Kettering made me nervous of getting into such statistics, but I have to stick by them—and is designated for exclusive use by Israeli settlements and the Israeli military, or is taken up by nature reserves or the barrier buffer zone. In the remaining 30% of Area C, a range of restrictions makes it virtually impossible for Palestinians to be granted permission for development.
The most frequent obstacle to Palestinian development is the requirement on the applicant to prove that he or she owns or has the right to use the land, but most land in the west bank is not registered, so the owners must go through a complex system involving tax and inheritance documents. The second ground for the rejection of most Palestinian permit applications is the requirement that the proposed building must be in conformity with an approved planning scheme that is detailed enough to enable building permits to be used. Palestinian villages, however, lack sufficiently detailed plans. The outdated plans that do exist are interpreted restrictively by the Israeli civil authority. In practice, only about 1% of Area C is available for the construction of new properties, and most of that is already built up.
Grahame M. Morris (Easington) (Lab): I congratulate my hon. Friend on securing this important debate. Does he share my concern that among the buildings demolished are structures funded by the European Union, such as schools? I visited the occupied territories in the west bank a year ago, as part of a delegation, and saw a school that had been built with funding from an Italian charity, but that had been subject to a demolition notice.
Mr Doran: We were obviously on the same visit, because I will mention that particular project later. Under the restrictive laws and regulations, many Palestinian structures, including homes, schools, water systems and farming infrastructure, are treated as illegal and are therefore subject to demolition orders.
In 2011, nearly 1,100 Palestinians, half of them children, were displaced through 222 house demolitions—an 80% increase on the number of people displaced in 2010—and 4,200 people were affected by the destruction of structures necessary to their livelihoods, such as water storage and agricultural facilities. In total, 622 Palestinian structures were destroyed, including mosques and classrooms. At the end of 2011, there were more than 3,000 outstanding demolition orders. Those figures included 18 schools.
So far this year, 371 Palestinian structures have been demolished on the west bank, 124 of which were homes, and 600 people have been displaced so far this year. That is a significant and troubling increase in the weekly average, from 21 people a week displaced in 2011, to 24 a week this year. Of the structures demolished since the start of 2000—this relates to the point made by my hon. Friend the Member for Easington (Grahame M. Morris)—60 were EU-funded structures, and 110 are at risk of demolition. Will the Minister tell us the total cost of those demolished EU projects, and whether he
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has made any representations to the Israeli Government on this matter? It would also be helpful if he would identify any projects funded by the Department for International Development that have suffered the same fate.
In addition to the demolition of Palestinian structures, there is the issue of the natural resources of the occupied territories, which have for decades been diverted for the use of Israel and Israeli citizens. International law, of course, requires the natural resources of the occupied territories to be used for the benefit of the local population, except when they are required for an urgent military purpose. The most crucial natural resource on the west bank is water, and 80% of the water extracted from the west bank mountain aquifer goes to Israel, with only 20% going to the Palestinians.
Settlers consume between six and 10 times more per head than their Palestinian counterparts. Many settlers have swimming pools and are able to irrigate their farmland. By contrast, 190,000 Palestinians live in 134 villages without running water. Palestinian consumption in the occupied territories is about 70 litres per day, well below the 100 litres recommended by the World Health Organisation. In some rural communities, people survive on 20 litres per day, and many Palestinians are forced to buy water of dubious quality from mobile water tanks at high prices. Wells and systems built without permits are frequently destroyed by the Israeli army.
Demolition orders are in place, and actual demolition has occurred, all over Area C. On a recent trip, we visited two Bedouin communities. The first was Kahn al-Ahmar. The residents are a Bedouin community who are refugees from the Negev. The area in which they live could not be described as remote. They live cheek by jowl with a main highway, and there is a substantial settlement on the other side of the road. However, the actions of the ICA have led to the community being isolated in practical terms.
The residents recognised that one of the costs of that isolation was the impact on their children’s schooling, and they decided to build a school. They obtained funding support from an Italian non-governmental organisation, and were given help with design and materials. They managed to build a school, and the main material was used tyres—it is a fascinating building—covered in mud or some form of mortar, but it is well insulated and cool, and it suits the children very well in their environment. The children are being supplied with an education in good surroundings. However, the Bedouins there did not have permission to build the school, and since its construction it has been under constant threat of demolition.
The families living there have been targeted on two fronts. First, the ICA wants to demolish the school, and there is no permit. That is the law. That will deprive the children of their education. The second threat, which has been made to all the Bedouin groups in the area, is to move them to another site. The proposed site is next to a rubbish dump that services the settlement up the hill. Everything that will involve, and the risk to health for all those who are moved to the site, is anathema to the community involved. We spoke to a community leader, Abu Khamis, who said:
“They are saying they are moving us to a rubbish dump, if we move out of this community it should be to return to the home of our tribe in the Negev.”
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“Whether the rubbish dump or the French Riviera we don’t want to go”.
That Bedouin community lives where it does because there was a river and natural wells, but they were diverted to serve the local settlements on the other side of the road, and the land used for grazing the Bedouins’ sheep has been severely restricted. We were told about the harassment by nearby settlers. Abu Khamis told us that his wife had been beaten by settlers while on the hillside with their sheep. On the day we visited, a group of settlers had entered the community, and had taken photographs of the children and structures to intimidate the residents.
As well as settler intimidation, and the constant threats to demolish the school and of possible removal to the rubbish dump site, there is further institutional harassment. For example, the access route to the village from the main road that the villagers used to use was sealed off by the authorities, and the only access to the village by vehicle now is along an extremely rough river bed track. The authorities have built a sewage air vent 5 metres from the classroom, and that obviously affects the air that the children breathe in the school. My hon. Friend the Member for Easington visited the same site and he will recall how difficult the drive to the village was, but those people have to put up with that every day, and it is much worse for them because they are cheek by jowl with a major road.
Despite all that, Abu Khamis and his community are adamant that they will not be intimidated or moved from their home. Their most earnest wish is to return to their tribal home in the Negev, but that is not possible now. It is difficult to interpret the behaviour and actions of the Israeli authorities as anything other than intimidation of the worst kind. They hope that the constant threat from the authorities, and their mean and insidious actions, such as cutting off access, will grind the community down.
The community at Kahn al-Ahmar has in some respects become a symbol of the way in which the Israeli authority treats the Palestinian communities. There has been considerable media interest in the school project, and it is a tribute to Abu Khamis and his community that they have continued to resist all efforts to intimidate them from their home, but how long can that go on?
On the same day, we visited the Kurshan community, who also live nearby in the Khan al-Ahmar area. An international non-governmental organisation has funded a new home for each of the eight families in the community, but within a week of completion 24-hour eviction notices were served. On the day we visited, the community had been told that an appeal against the orders had been refused, and that their homes would be demolished the next afternoon. We were told that just an hour before came an ICA representative had visited and told the families that they would be relocated to the rubbish dump area—presumably the same rubbish dump area where the other sect of the tribe was to be moved to.
A member of the community, Abu Faris, said that he had told the ICA representative
“that’s a rubbish dump and I am a human being. In any country a human being should not live near a rubbish dump and I have a right to be a human being just like you have”.
He told us that they intended to carry on finishing the inside of the new building. I understand that the following day an injunction was obtained for the Kurshan community,
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and the court asked the ICA not to carry out the demolition. The case is winding its way through the court processes, but in the meantime the Kurshan Bedouin community remains in its new homes, but under constant threat of displacement.
Mr Ben Bradshaw (Exeter) (Lab): On the illegal demolition of infrastructure that has been built with British, UK, EU or international money, is it not time to move beyond the ritual criticism and condemnation that we always make of the Israeli authorities, and sue them for damages? They are recklessly wasting and destroying our taxpayers’ money, and our taxpayers deserve that money back from the Israeli Government.
Mr Doran: My right hon. Friend makes an excellent point, and I hope that the Minister has taken note of it. It raises another issue, because my understanding of how international law operates is that the Israeli authorities have responsibilities to the Palestinian communities that are being met by our country, the EU, and non-governmental organisations around the world, saving Israel that expense. There is a serious issue that needs to be considered.
Mr Robin Walker (Worcester) (Con): The hon. Gentleman is generous in giving way again. He makes the point that the Israeli authorities have responsibilities; does he also agree that it is in their interest to have a better-educated and better-off Palestinian population that is able to feed itself? That is in the interests of a two-state solution and long-term peace.
Mr Doran: This is the politics of the mad house. We have a very suppressed Palestinian population, and one day the kettle will explode. There is no question about that; it is just a question of when.
I started by mentioning the responsibilities of the Israeli authorities as the occupying force in Area C. It is clear that the Israeli Government are ignoring their responsibilities under international law, and I have raised a few points about that in this short debate. There is a virtual free-for-all, with new housing developments for settlers actively encouraged and supported financially by the Israeli Government. That development has taken place regardless of the rights of the true owners of the land. Resources, particularly water, have been channelled to the illegal settlers, but restricted or denied to the Palestinians, who have been denied all the rights given to illegal settlers.
As the hon. Member for Maidstone and The Weald said, we have a Swiss cheese approach. It is almost like the creation of bantustans; the communities will be separated out and surrounded by Israeli settlements, or roads that Palestinians cannot access. That appears to be a deliberate strategy by Israeli authorities to isolate Palestinian communities in Area C.