AVIATION (AIRPORT STANDARD CHARGES) (Hansard, 25 June 1969)

§ Mr. John Rankin (Glasgow, Govan)
I beg to move, That the Civil Aviation (Navigation Services Charges) (Third Amendment) Regulations 1969 (S.I., 1969, No. 510), dated 1st April, 1969, a copy of which was laid before this House on 9th April, be withdrawn. The Statutory Instrument imposes an increase of 50 per cent.—[Interruption,]—in the navigation service charges on civil aircraft using—[Interruption.]

§ Mr. Speaker
Order. It is difficult for an hon. Member to address the House against a multitude of debates.

§ Mr. Rankin
It imposes an increase of 50 per cent. in the navigation service charges on civil aircraft using non-British Airports Authority airports where the Board of Trade provides air traffic control facilities. The increase is 50 per cent. over the previous charges, which means that a charge of 3s. per 1,000 1b. all-up weight becomes 4s. 6d., and puts the increase well outside the Government's prices and incomes policy. So it makes matters worse if an unwilling local authority has to impose and collect on behalf of a Government agency such increases.
There is another serious source of complaint. It has become the custom to give airlines a full summer season's notice of any increase in charges because they make up their scales of charges, particularly for package tours, on the basis of what they know airport charges will be in the current year. Most airlines have now completed their contracts with their operators. Prices are fixed and so is the cost of the holiday to the individual. In all probability it is now too late for the operators to publicise changes in the navigation charges. Consequently, there will be serious difficulties in increasing the prices of individual tours. This does not help to promote all-round good will.
It would have been better, in my view, if the increase had only been applied after the completion of the present summer season, when most contractual obligations would have been met. I think it can be said that all the local authorities 1642 feel that the application of the charge solely to municipal airports and not also to the British Airports Authority airports was a startling example of unfair discrimination. I believe that this selective imposition has been made on the ground that Heathrow's operations are self-supporting. I would not dispute this, but I do not believe that the operations of Gatwick and Prestwick can be described as self-supporting, and the B.A.A. accounts make this clear. Nor do I think that Stansted would be self-supporting. Yet these airports are exempt from the increase because the over all payments by the B.A.A. to the Board of Trade cover their costs.
I wonder, as a result of that, if one municipal airport happened to pay more than enough to cover its own operations, whether the other, non-State airports, would be relieved of their appropriate proportion of payments. Surely fairness would demand that if increases are essential they should apply to all airports in carrying them, whether they are State or municipally owned, although, I think, we would all agree that Heathrow should be exempted from such an arrangement.
The operation of the new charges raises a serious problem in Scotland particularly, and for Glasgow Airport especially. A few miles to the west of it lies Prestwick Airport, and equally near is Edinburgh. Both of these will be under the powerful patronage of the B.A.A. and fortified on their trading side by the Government's preferential 50 per cent. imposition. At the same time, Glasgow is not free to use at Abbotsinch aircraft of its own choice because of the restriction in the length of the main runway, which places an additional disability on the airport's potential, and this retardation coincided, ironically enough, with the suggestion of the Edwards Committee in its Report that the United Kingdom should have three international airports, one at London and the other two at Manchester and Glasgow, respectively. When I offer criticisms of the changes made by the Minister in acquiring some of his income, I may be forgiven for suggesting alternatives. Very properly, he is looking for savings in costs at airports. He might find it helpful to embark on an independent outside productivity survey into the operations 1643 of the air traffic control and telecommunications services throughout the United Kingdom.

§ Mr. Speaker
Order. We are debating an Order. The hon. Gentleman cannot amend it, and he cannot discuss the airports in general. The Order imposes certain charges on some airports and not others.

§ Mr. Rankin
I accept that, Mr. Speaker, although I thought that when I was suggesting a course that might reduce the Minister's income it would be in order to suggest means whereby he could recoup some of it. Such an inquiry could well result in sufficient savings to relieve the Board of a fair proportion of the financial burdens which seem to be compelling the Minister to take his present most unpopular step.
Originally, the increase in charges was to be spread over Manchester, Liverpool, Birmingham, Glamorgan and Glasgow, plus four Board of Trade airports. However, I believe that one of the Board of Trade airports has been sold, and I understand that Glamorgan will not be affected and that Aberdeen will pay very little. Therefore, it would appear that the heavy end of the stick will be felt by the four municipal airports, plus Belfast, and from them about £350,000 will be extracted. If that assessment is incorrect I am sure that my hon. Friend will give us the correct figures.
A five or 10 per cent. increase spread across all those airports would hit British airlines less hard, and would share the costs more equally between British airlines and foreign operators. As it is, the Board of Trade proposals hit the already hard-pressed British airlines most, because they are major users of the five airports I have mentioned. Therefore, I urge on my right hon. Friend now an early reconsideration of his proposals.

§ Mr. Tim Fortescue (Liverpool, Garston)
The way in which the Order has been handled by the Board of Trade is a classic example of pretending to comply with the trappings of democracy but making up the Department's mind first and going through the motions of consulting other people later.
On 25th November a letter was written in the Board of Trade to the airport 1644 authorities in the cities concerned, of which Liverpool was one, but it was not received in Liverpool until 3rd December. It asked the airport director to give his comments on the proposed increase of charges at that airport by 10th December. This did not leave much time for him to consult his appropriate committee—this is a municipal airport—and get his reply in, but he complied with that requirement and by 10th December his answer was with the Board of Trade. Nothing was heard from the Board of Trade, and on 19th March the directors of the five airports concerned—all municipal airports—asked the Board of Trade what had happened to the proposal. They were told that their objections were still being considered.
They heard nothing more until on 9th April the Order was laid in the House of Commons. So far as they know, no note has been taken of their protests. They were not consulted again and were not told and still have not been told what the Board of Trade thought of their views. Now, nearly two months after the coming into operation of the Order on 1st May, we have an opportunity to debate it when there is obviously no hope of getting it reversed. The Board of Trade may have complied with the rules, but in fact the democratic process has been scoffed at throughout.
The Order has three major defects. First, it is unfair; secondly, it is untimely; thirdly, it is uneconomic. It is unfair because, as the hon. Member for Glasgow, Govan (Mr. Rankin) has pointed out, it does not apply to all airports. All the British Airports Authority airports, which number four, are exempt from it. This, I understand, is because the profit made at Heathrow is more than enough to recompense the costs of the deficits at Prestwick, Gatwick and Stansted, and so those three airports are not being required to pay these increases in charges.
I should like to examine the implications of this decision. Let us say that tomorrow the British Airports Authority took over the airport at Manchester, which is not beyond the realms of possibility, if not tomorrow, in due course. The deficit at Manchester would also be more than covered by the profit made at Heathrow. Would the airport navigation charges at Manchester then be reduced? 1645 The whole concept of the huge profit at Heathrow, made because it is the major international airport in the country, covering the deficit of other airports under the Authority is entirely unsound and absurd when one considers the further implications.
The other unfair feature, as the hon. Gentleman pointed out, is that not all airlines are affected by these increases. Foreign airlines, which by and large fly to Authority airports, do not have to pay, whereas British airlines, which are practically the exclusive users of the airports where the increases will apply, will be penalised. This is direct discrimination by the Board of Trade against British airlines, many of which are small and in no condition to stand any increases in charges.
The Order is untimely because all the agreements between airlines and airports for the summer season, when chartering of aircraft is very heavy, have been made and yet suddenly, on 1st May the airports found that they were to be charged more for the facilities which they received from the Board of Trade. Thus the profit margin which they thought they would make from airlines using them during the heavy traffic season will be greatly affected by these charges.
The Order is uneconomic because, as the Minister must know, municipal airports are going through a very bad time. The airport at Liverpool, which he knows even better than I do, is losing approximately £600,000 a year for the ratepayers of Liverpool. This is a problem which is baffling the authorities in Liverpool. They do not know whether to close the airport or to expand it and thus try to get more traffic, or what else to do with this valuable piece of real estate. The blow to them is considerable. They have been harshly affected by it and they feel aggrieved.
In the Edwards Report on British Air Transport in the Seventies references are made to these charges. The summary of the chapter on airports, page 231, says: Although the policy of trying to make the airports and air traffic control services self-supporting is right and should be continued, the U.K. must take account of policies and practices in other countries. It is well known that throughout Europe airport navigation charges are subsidised to a great extent by the Governments 1646 concerned. If we were to stop those subsidies for British airports it will put some of our airports at a disadvantage in comparison with continental airports. The figures are most interesting. They were taken from a series of Parliamentary Answers from the Board of Trade recently.
The deficit on air navigation charges in this country in 1968–9 will be just over £2 million. When these increases are made, for the year 1969–70 the deficit will be £1,800,000 and in 1970 it will be up to £2 million again. This is a fleabite. This Order will make practically no difference at all to the financial position and it is not the way to solve this problem of air charges. It seems that the approach of the Board of Trade has been to nibble at the problem, which should be tackled far more extensively.

§ Mr. Speaker
Order. I would remind the House that this debate finishes at half-past Eleven; the Front Benches are intervening at Eleven o'clock. Brief speeches will help.

§ Mr. Richard Buchanan (Glasgow, Springburn)
I am glad to follow the hon. Member for Liverpool, Garston (Mr. Fortescue), because he has epitomised the whole of the debate in his three points, and I support him entirely. We are not saying that the British Airports Authority with its air navigational control services should not pay. We think that it should be in the position of many other Government-sponsored organisations; it should be made to wash its face. What we object to is that the Government are discriminating against municipal enterprise in particular.
I speak particularly for Glasgow. There the Board of Trade said we should take over control of the airport at Abbotsinch vis-à-vis Renfrew. Renfrew was a small out-of-date aerodrome which had served the community very well. Glasgow took the bit between its teeth and municipal enterprise was rewarded by a first-class airport being established near Glasgow with excellent fast services to and from the centre of the city.
Glasgow is now being penalised because of its enterprise. It would not mind paying the extra charges if it was being allowed to develop its airport and 1647 ancillary services but restrictions are being placed upon its development. A recent application to extend the runway was refused, and the Board of Trade is refusing certain charter flights permission to land there so that its ability to meet the extra charges is restricted. This enterprising airport is likely to be forced into the red because of this.
Many hon. Members pass through Heathrow several times a week. It is possibly the busiest airport in the world, and by discriminating in favour of such airports to the detriment of airports like Glasgow Municipal Airport, Birmingham Municipal Airport and Manchester Municipal Airport, we are adding to the troubles piling up year after year at Heathrow. It is impossible to expect Heathrow to cope with all the traffic. Another airport is probably necessary, but before it is built there will be an increase in traffic. It is in the interests of operators whose flights arriving to do so where landing charges are most economic as at Heathrow. This Order is untimely and unfair, discriminating in the worst possible way against municipal enterprise at its best.

§ Mr. Hugh Jenkins (Putney)
Would my hon. Friend accept that many of us who are closely associated with Heathrow Airport, particularly those of us with constituencies under the glide path, strongly accept any proposition which would result in dispersal of a number of the aircraft landing at Heathrow, and would strongly resent any attempt by the Government to prevent dispersal which would be beneficial not only to the airport but also to those who live near it?

§ Mr. Buchanan
I am most grateful to my hon. Friend for his intervention, and I support him wholeheartedly. Although not within the province of these Regulations, or the argument of Glasgow versus Prestwick or Edinburgh, it is the case that the dispersal of aircraft in the future would be to the ultimate benefit of the people who reside around airports.

§ Mr. Anthony Stodart (Edinburgh, West)
I promise that I shall be extremely brief. I want to take a slightly different line from those of hon. Gentlemen who come from a city neighbouring my own, and although it has not been 1648 unknown in the past for Edinburgh and Glasgow to have different views on subjects, I do wholeheartedly agree with the point which they have made.
However, I want to make a slightly different point, and it is this. If charges are to be put up in this way, then I believe that the airlines involved are entitled to good service at the airports concerned. The Minister, I think, will have guessed that I am going to refer to the services which are available at Turnhouse.
The story of Turnhouse, as he knows, is a very long and a very dismal one. It goes back over a number of years. The diversions which take place owing to lack of runway and the lack of radar, although small as a percentage of flights, are maddening to those involved and. I believe, do quite a lot of harm to the business people who want to come to the expanding north-east of Scotland. It is one of the very few airports in the United Kingdom without radar. The runway is a notorious feature. The number of surveys made is staggering; and an alignment for a new runway was agreed over seven years ago. It is incredible, but I read within the last few weeks that the Minister told Edinburgh Corporation that the question now under discussion is whether or not the present runway is to be extended or whether a new one is to be built.

§ Mr. Speaker
Order. We are not discussing Edinburgh Airport or any other in general. We are discussing navigation service charges which, under these Regulations, will be increased by 50 per cent.

§ Mr. Stodart
With great respect, and always subject to your Ruling, Mr. Speaker, it is a valid point to make that if the charges are to be increased and British European Airways and others using Turnhouse Airport have these most inadequate services of any at any airport one should protest at the services not being improved. Having made that point, and having had your indulgence, I think, I do say to the Minister that it is really high time that the Board of Trade came to grips with this matter and made a decision one way or another.

§ Mr. Edwin Brooks (Bebington)
Like the hon. Member for Liverpool, Garston (Mr. Fortescue), I speak as a Merseyside Member of the House who is aware of 1649 the anxiety and even anger which is felt in that area about not only the character of the decision which has been taken by the Government, but the way in which, apparently, it was conveyed to the authorities concerned. I feel that there is a case to be answered by my hon. Friend. Certainly those of us who have been in contact with Liverpool Airport Authorities do feel, as a result of the story they told us, that there has been a breakdown of communication which needs explanation.
I find myself very much in agreement with many of the conclusions at which the hon. Member for Garston arrived, but I reach these conclusions for somewhat different reasons, and indeed I do not altogether share the hon. Gentleman's criticisms of the Government's action in its essential nature.
It should be remembered that as long ago as 1961, in the White Paper on Civil Aerodromes and Air Navigational Services, it was stated that the Government's policy entailed a levy on charges for air control, telecommunications, meteorological and other services provided at Exchequer expense for aircraft using civil aerodromes in the United Kingdom or whilst en route. It was stated quite clearly that the charges should progressively be increased until such time as the cost would be borne entirely by the industry. We have been told that a deficit has been incurred, apparently, at certain airports, and it is this deficit which, as I understand it, the Government are now attempting to reduce.

§ Mr. John Tilney (Liverpool, Wavertree)
Would the hon. Gentleman also agree that since that time there has been a prices and incomes policy, and that what is proposed is an increase of 50 per cent.?

§ Mr. Brooks
I shall come to that, because I think that the hon. Gentleman is illustrating with a particular example the special and contrived framework within which we are trying to tion of the airlines and the airports apply commercial criteria to the opera-concerned.
I speak with some reservations, because, as a member of the Public Accounts Committee, I was a signatory to a Report which appeared some years 1650 ago in which the Committee came out quite unequivocally in favour of an end as quickly as possible to this deficit, and we made the point, which I am sure the House would endorse, that it is wrong for the Exchequer to be seen as a permanent Father Christmas handing out money galore to anyone who happens to come along.
We also added one vital proviso. In a number of answers given by the witnesses before us, the point was made that there might well be a strong case for a subsidy to be paid in certain specified circumstances. When the P.A.C. proposed that an attempt should be made to reduce the deficit, it was also made quite clear that there might be a case for redressing some, or perhaps all, of the consequent damage that might be caused to certain interests, by means of a subsidy for certain well-defined purposes.

§ Mr. Speaker
Order. That may be so, but not on these Regulations.

§ Mr. Brooks
With respect, Mr. Speaker, the Government are for once endorsing the views put to them by a Select Committee. This is not an altogether usual experience for those who spend long hours serving on these Committees, and I think it is only right, at least briefly, and subject to your Ruling, to indicate to the House that when we made this recommendation—

§ Mr. Speaker
Order. The hon. Member can express his gratitude to the Government for following a Committee recommendation, which he says is unusual, but no subsidies are being discussed. We are increasing certain charges by 50 per cent.

§ Mr. Brooks
If we are increasing these charges, we are presumably arguing my implication that there is no case for a subsidy, but it is my view that there is a case for a subsidy.

§ Mr. Speaker
Order. There may be a very good case for a subsidy, but not in this debate.

§ Mr. F. V. Corfield (Gloucestershire, South)
On a point of order, Mr. Speaker. In so far as charges do not cover their costs, there is a subsidy, and there is, therefore, an element of subsidy in this Order.

§ Mr. Speaker
That is true, too.

§ Mr. Brooks
There is the further point that the Government are making no effort to reduce the deficit on the en route services, which is greater than the one we are attempting to reduce by this Order.
I should like to put the point this way. Many of us accept that there is a case for trying to end an open-ended subsidy, but we feel that in a situation such as this, where there is an apparent discrimination against certain airports, there is also a strong case for considering specific discrimination in favour of those airports, on the basis of certain arguments about long-term regional policy. It is only fair to comment briefly from the answer given to me in the course of our interrogations, where Sir Richard Powell said: I would guess that losses would continue on the other services outside the Highlands and Islands as well, but this is a question which will have to be decided, whether it is right to allow the subsidy to take this form of undercharging for these services or whether it would be right to charge the full cost or something more nearly approaching the full cost and make up the difference in some other way. It was in the light of that comment and further comments of a similar kind that the Committee came to its considered recommendation, which I understand the Government are now endorsing, that it would be wrong in principle that any airline … should, for more than the limited period required to build up traffic at newly established aerodromes, receive a hidden subsidy from the British taxpayer in the shape of navigation services provided free or below cost. We went on to say that It would be better to charge the airlines the full cost and leave them to meet the resulting increase in their expenditure from profits. If this were to make it impossible for British airlines to provide, without loss, services which are considered socially necessary it would be open to the Government to consider a direct subsidy, adjusted to the merits of each case. My case is that the Government have made no effort in laying these Regulations to justify the absence of a discriminating subsidy of the sort the Public Accounts Committee considered should be taken note of and perhaps implemented.
I do not wish to add to the arguments made for particular municipal airports, which have already been developed at length. I simply indicate that P.A.C. were not necessarily justifying tonight's 1652 procedure and certainly not arguing that Regulations should be laid before the House without considering the case for an element of subsidy for socially necessary purposes.

§ Mr. John Wells (Maidstone)
With respect to all hon. Members who have spoken, one might think that this was a Scottish and North of England debate.

§ Mr. Rankin
What is wrong with that?

§ Mr. Wells
Nothing is wrong with that.

§ Mr. Rankin
Why are you complaining?

§ Mr. Wells
Wait and hear. These charges will affect all airports in all parts of the island. Therefore, it is a national problem and not a regional and Scottish problem. If the hon. Member had bided his time in peace he would have heard what I was going to say.
There are fewer light aircraft flying in this island today than in the year 1938–39. This is the most deplorable truth. If these charges are to be increased under the Regulations the problems for the light aircraft operator, and, therefore, for the light aircraft industry, are likely to increase.
I realise that there must be an economic price, but that this country has a unique opportunity to foster its light aircraft industry, and a unique situation where we have certain light aircraft firms producing a good product to compete with any of their American or Continental counterparts. These Regulations place their enterprise and effort in grave jeopardy. The hon. Member for Glasgow, Govan (Mr. Rankin) seems to think there is nothing wrong with making this a parochial matter for Scotland and the North of England.

§ Mr. Rankin
rose—

§ Mr. Wells
Do not waste time.

§ Mr. Rankin
On a point of order, Mr. Speaker. Is it in order to make an allegation which is without foundation in any respect?

§ Mr. Speaker
The hon. Gentleman has been long enough in the House to be a little less sensitive.

§ Mr. Wells
I am grateful for your protection, Mr. Speaker. The point is 1653 that within 40 miles of Greater London there are a number of minor and municipal airports. My hon. Friend the Member for Liverpool, Garston (Mr. Fortescue) mentioned a great municipal airport, but there are minor municipal airports which are of great importance to this industry, and I believe the Regulations we are now considering will do them irreparable damage, and I hope that the Board of Trade will think again.

§ Mr. Kenneth Marks (Manchester, Gorton)
Like the hon. Member for Liverpool, Garston (Mr. Fortescue) I am concerned about the very short notice given to airport directors to put forward their opinions and those of their committees. The week, or a little over, which was allotted was a very short time. I hope that Government Departments reply in as short a time to epistles which they receive from local government.
I think it was particularly difficult for local airports to receive this notice and for it to be applicable at a time when holiday traffic, which is so much a part of their business, was starting its peak. We have heard a suggestion that the Select Committee should consider socially necessary lines, and I should imagine that holidays now are regarded as socially necessary.
The fact is that as a result of these Regulations traffic for Heathrow and other national airports is likely to grow, and that of other airports is likely to decrease. Heathrow is over-used, but Manchester's airport at Ringway is under-used. There has been considerable capital development of late, with extended runways and extended services, all of which are satisfactory, I understand, but the airport itself is under-used. I suggest that there is a case for discrimination in favour of some of these airports.
I hope that the Minister, in his reply, will explain the short notice given to the local authorities concerned and all the other airports. I hope he will give some explanation of this incentive to increase traffic at Heathrow airport, and I end with one special point—

§ Mr. James A. Dunn (Liverpool, Kirkdale)
I should like just to put the record straight. On Wednesday, 7th May, the Minister of State received a 1654 deputation from all the airports concerned that are affected by this Order. This does not detract one iota from some of the other inadequacies, but I think that should be on record.

§ Mr. Marks
That was my last point, that the hon. Member for Garston forgot in his calendar that on 7th May the Minister met representatives from all airports.

§ Mr. Patrick Wolrige-Gordon (Aberdeenshire, East)
Whatever anyone may say about the particular points in these Regulations, one thing that many people in the country believe is that our airports are not right. There is something wrong with them. This debate today has directed a lot of attention to this point and there has been criticism of the Board of Trade in this respect. It has been quite interesting to me to hear criticism and concern expressed from all parts of the country and from almost every airport affected.
The hon. Member for Glasgow, Spring-burn (Mr. Buchanan) made the point in his speech that the Regulations discriminated against municipal airports, but it is also true that the Board of Trade, in its wisdom, has also discriminated against itself because a number of the airports discriminated against in the Regulations by the increases in the charges are run by the Board of Trade itself.

§ Mr. Buchanan
I pointed out that any deficit incurred by an airport under the control of the Board of Trade is paid for by the Government, while any deficit incurred by a municipal airport is paid for by the ratepayers, in addition to the other charges which must be met.

§ Mr. Wolrige-Gordon
I thank the hon. Gentleman for reiterating the importance of that point.
Hon. Members who are concerned, as I am, with airports run by the Board of Trade are anxious about an Instrument of this kind because of the additional difficulties that it will raise. I am particularly concerned with Aberdeen, since hon. Members who represent constituencies in the northern part of the country are keen to have good and efficient air services. We believe that it is more important to have efficient air services from the remoter areas than from 1655 southern parts which are within easy reach of, say, London, by train.
The figures relating to the financing of an airport like Aberdeen are not easy to obtain, because they are grouped with the statistics applying to airports in, for example, Belfast, Bournemouth and Edinburgh. However, the air charges alone for Aberdeen last year were £120,000 while the revenue gained from the navigation service charge amounted to only £15,000—this in addition to the loss on the current account of the airport. It means that the burden falling on people wishing to develop air services from the north of Scotland—which are vitally necessary for the development of the local economy—will be made greater by this Instrument. It is time for the Board of Trade to reduce this burden and make it possible for the airports about which I have spoken to be developed.

§ Mr. R. F. H. Dobson (Bristol, North-East)
I differ from most hon. Members who have spoken in that I approve of the Regulations and do not wish them to be withdrawn.
The Board of Trade has had to take a difficult decision. Such decisions often face Government Departments. In this case the Department has realised that two factors are involved. The first is that some of the deficit which exists as a result of these services must be recouped. It cannot be recouped—leaving aside the subsidy question—except in the way suggested. Broadly speaking, if those who use and need the services cannot pay for them, who can?
The second—and I am surprised that hon. Gentlemen opposite have not referred to this—is that the Instrument is discriminatory, although it discriminates for social reasons. For example, the Highlands and Islands services, which at present make a loss of £309,000, are excluded from its provisions. The hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon) might have mentioned that the airport in which he is passionately interested will not come within the terms of the Regulations.
I support the Instrument because we must recoup losses of this kind and because we must improve the navigation services in and out of airports. It is generally accepted that, in some respects, 1656 they need improving. Adequate charges should be made to ensure that landing and take-off is safer for the travelling public. Until we get to the stage of recouping the charges, as the Regulations suggest, in order to improve local airport navigation services, we shall never make operators believe that this is something that should be done—

§ Mr. Buchanan
That is precisely the point we are making. We are asking the Board of Trade to be fair about it, and not just to put up some charges and keep others down.

§ Mr. Dobson
My hon. Friend is making a case only in favour of a particular airport which is close to that in which he is interested.

§ Mr. Buchanan
No, no.

§ Mr. Dobson
With respect, I cannot see that there will be diversions from Abbotsinch into Heathrow. There will possibly be diversions from Abbotsinch into Prestwick, with which my hon. Friend is concerned. My hon. Friend has a right to express his concern. I am seeking to discuss the whole of the development of our air navigation services in and out of our airports. These Regulations may go some way to improving them, because they make the charges more realistic.

§ Mr. Reginald Eyre (Birmingham, Hall Green)
The arguments advanced by the hon. Gentleman may be sound, but would he not agree that the introduction of these charges was untimely, because airline operators from big cities like Birmingham had already fixed their charges for the present very busy season?

§ Mr. Dobson
I would accept that argument if the charges were being swingeingly increased, but let us take it in terms of total aircraft. A BAC111 on charter will go up from £13 to £19 for landing and take-off—total aircraft. That is not a great increase for the number of aircraft involved.
I see that I am over-running my time, Mr. Speaker, but I hope that I have succeeded in making some points in support of the Regulations.

§ Mr. F. V. Corfield (Gloucestershire, South)
It is not usual that I follow such a strong Tory speech as we have had 1657 from the hon. Member for Bristol, North-East (Mr. Dobson), but I am delighted to do so now, although I do not entirely agree with him. We are indebted to the hon. Gentleman the Member for Glasgow, Govan (Mr. Rankin) for this debate. It seems to me that the House has, on the whole, shown some sympathy for the general principle that services provided should be paid for, and that where there is a deficit some efforts should be made to reduce it. I certainly do not quarrel with that view, but what I hope we shall be told is why the Board of Trade has chosen this particular method.
If one looks at the air traffic control services provided at airports, as opposed to en route, as, so to speak, an overall account, the obvious way in which to bring up the revenue to match the expenditure is by an across the board increase in charges. If, on the other hand, we are to go about it airport by airport, and say, "Heathrow pays its way", there can be no possible reason to say we shall similarly treat Stansted, Gatwick and Prestwick, which most certainly do not pay their way.
Again, as I pointed out earlier when I wanted to be sure that I should be in order to talk of subsidies, in so far as these charges do not cover the cost, there is a subsidy, and one would have thought that in adjusting subsidies, which is what the Regulations do, one would either see where the need was greatest—and it certainly is not greatest at Heathrow—or ask where was the air service need, as opposed to the financial need, where, for some particular reason, we wish in the national interest to encourage air services in parts of the country where they cannot otherwise be operated economically.
From time to time during Questions I have suggested that it is time to see to what extent our regional development policies are being inhibited by a lack of modern communications, and particularly by lack of air services, and I got the impression that my point of view was sympathetically received by the Minister. But the main airports that will suffer from a reduction of subsidy are precisely those which one would have thought required a little help to get the transport that is necessary to keep going the regional development expansion, about which the Government blow their own trumpet a little too enthusiastically but in whose success both sides are interested. 1658 It is curious that, in adjusting subsidy, the Government should do it in completely the reverse order to the normal concept of the use of a subsidy.
When just after devaluation the Board of Trade, in consultation with the British Airports Authority, decided that landing fees should be increased at Heathrow, and we challenged that, we were told that this was not because the costs had risen but because we should charge what the market would bear so as to earn the maximum foreign exchange. There is no doubt an argument in that direction, but it is not to be applied here. If that argument is not to be applied, the charges are raised at Heathrow; they are not raised at Manchester and everywhere else except Heathrow and the few municipal and privately owned airports which provide their own service. They are the people who are not affected, plus the hangers-on to Heathrow because they happen to be owned by the same national authority, namely, B.A.A.
I hope that the Minister of State will be able to explain why the Government have adopted in these Regulations almost every principle that would be thrown out if any other form of subsidy or method of earning foreign exchange were being considered. I agree with my hon. Friend the Member for Liverpool, Garston (Mr. Fortescue) that the Board of Trade appears to have handled its consultations with airport directors in a remarkably cavalier manner.
Although I agree with the hon. Member for Bristol, North-East that the sums are not normally large, I believe that this is not the best time of year to announce increased costs, when people have committed themselves to fixed-charge holidays or fixed-charge charters or fares, as the case may be. I hope that we shall be given an explanation of what appears to be an extraordinary Statutory Instrument which, in the absence of explanation, can be described as slightly barmy.

§ The Minister of State, Board of Trade (Mr. William Rodgers)
The House will not dispute that the main consideration in civil aviation must be the safety of aircraft, their passengers, crews and the people on the ground. My hon. Friend the Member for Bristol, North-East (Mr. Dobson) mentioned this in passing.
1659 The navigation services provided by the National Air Traffic Control Service are recognised to be as good as any in the world and must remain that way. But these services are costly, and as long ago as 1937 the Maybury Committee envisaged that eventually civil aviation should be economically self-supporting. This objective was repeated as regards ground services in the White Paper on Civil Aerodromes and Air Navigational Services, Cmnd. 1457, in 1961 and has not been changed by successive Governments.
It was not, however, until 1964 that Statutory Instrument No. 1071 introduced for the first time a separate charge for aerodrome navigation services, where these are provided by the National Air Traffic Control Service. I emphasise "aerodrome navigation services", because it is only this element of the air traffic control service that we are considering this evening. We are not considering the even more costly en route services which take over when the aircraft is clear of the aerodrome on departure or on arrival. These services are at present provided free and no charge is in contemplation before 1971, and then probably on an agreed international basis.
The charge introduced in 1964 was intended to be the first stage representing only a proportion of the cost of providing those services and, apart from the post-devaluation increase of 12½ per cent. for international movements already mentioned, there has been no further addition until the one now under review—that is, there has been a pause for nearly five years.
I refer now to the views of the Estimates Committee and the Public Accounts Committee, as did my hon. Friend the Member for Bebington (Mr. Brooks). I defer to his view, as he was a member of the Public Accounts Committee, but I must refer to what both had to say. The Estimates Committee in its Third Report. 1966–67, and the Public Accounts Committee in its Fifth Report, 1966–67, both emphasised the need for increased charges in order to reduce this indiscriminate indirect subsidy to the air transport industry. I stress the word "indiscriminate", and I shall return to that later.
1660 In November, 1966, the Estimates Committee said: Your Committee consider that it is wrong in principle that the taxpayer should be called upon to subsidise the users of the airlines of the world by being required to make up the considerable difference between the actual cost of navigation services and the amount recovered by way of the Air Navigation Service Charge. … the time has come to make some increase in the charges. In July, 1967, the Public Accounts Committee said: Your Committee endorse the policy of increasing charges progressively until the full cost of all air navigation services is borne entirely by the civil aviation industry, and they consider that the progress towards this end has been disappointing. We have taken note of these views, and of what was, in effect, a reprimand from the Public Accounts Committee. We regard this as an additional reason for going ahead now to transfer more of the burden of these loss-making services from the taxpayer to the user. It is not a bad principle to look around for every possible opportunity of transferring burdens from the taxpayer if, prima facie, there seems to be a good reason for so doing.
The net reduction in Government expenditure of up to £500,000 in a full year will, I am sure, be worth while. Certainly, I should expect a saving of £½ million to commend itself to hon. Members opposite, even if my hon. Friends, with, happily, a different philosophy, might not accept it so readily. It is £500,000 that is at stake here: I do not take the view of the hon. Member for Liverpool, Garston (Mr. Fortescue) that it is a matter which should be approached with indifference as a fleabite in terms of public expenditure as a whole.
For the last financial year for which figures have been published, that is, 196768, the collective deficits for the provision of navigation services provided at the aerodromes concerned were £1,321,000 at the six municipal airports at Manchester, Birmingham, Liverpool, Glasgow, Glamorgan and Bournemouth, and just over £500,000 at the Board of Trade's aerodromes at Belfast, Edinburgh and Aberdeen.
The proposed 50 per cent. increase will reduce the deficit by some 25 per cent., so we still have a long way to go to achieve full recovery.
My hon. Friends may for a moment have been deceived into believing that this 1661 subsidy is being extinguished. There is an argument in favour of extinguishing it, for the reasons which I have given. However, I remind them that in a full year, even after this increase, there will be, in effect, a subsidy of £1½ millions to the nine airports which we are discussing.
Now, a word about consultation. It has been suggested that it was inadequate, and the hon. Member for Garston had some harsh things to say. At least in some matters of detail, the hon. Gentleman had his facts wrong. He said, for example, that Liverpool submitted its views by 10th December. I have a letter dated 11 th December, a 15-line letter simply expressing—as one might have expected—displeasure at the intention as it was understood.
I strongly deny that democratic process has been scoffed at. I tell hon. Members plainly that between 25th November and the laying of the Regulations no joint representations were made by the airports concerned. With respect to them, I think they woke up a little late in the day and only then began to lobby their Members of Parliament. As my hon. Friend the Member for Liverpool, Kirk-dale (Mr. Dunn) rightly said, as soon as it was put to me that there was something to discuss I was very happy to meet a deputation. I thought that we had a useful discussion, even if I did not convince everyone.
A letter went to the appropriate representatives of airlines and airports on 25th November. It was a full letter, and it mentioned the very substantial deficit on air navigation charges and said unequivocally that we proposed that, with effect from 1st May, the rate should be increased by 50 per cent. The letter added that before the necessary Regulations were made the Board of Trade would be happy … by way of consultation to consider any observation which your company"— or committee— may wish to put forward. Comments were asked for by 10th December, though we considered all the comments whenever they came in. It was a clear indication that we wanted to hear views and intended to consider them. That was the nature of the consultation proposed. We considered all the letters which we received. They did not raise 1662 any points which had not previously been in our minds. At no time did airports collectively say, "We want to discuss this with you and dispute the matter". If they had done so I or my officials, as appropriate, would have been prepared to see them.
Perhaps we have all learnt something from this experience. Perhaps next time representations will be firmer and earlier, and in a collective form. Perhaps next time I shall go out of my way not to wait to be lobbied but positively to invite my hon. Friends at an early date, even before they realise what we are up to.
We followed the proper process. We have always been prepared to listen to the arguments put forward: between 25th November and the laying of the Regulations there were five months, which is a very full period for consultations to take place, had there been a strong wish for them.

§ Mr. Fortescue
Will the Minister accept that on 19th March, when the airport directors had heard nothing from the Board of Trade in reply to their protests, they were told by telephone that these protests were still under consideration, and that the Statutory Instrument was laid on 1st April and that when he saw the airport directors on 9th May it had already been in force for over a week?

§ Mr. Rodgers
Yes. Those are facts. I have not disputed them. But I do not think that they affect the course of the events and the opportunities that there were for fuller discussion if there was any strong wish for them.
It has been argued, especially by the aerodrome managers and this evening by my hon. Friend the Member for Glasgow, Govan (Mr. Rankin), that the short period between the announcement of the decision to impose the increase and the effective date did not allow sufficient time for airlines to pass on the increases to their customers. If we had time I should like to enter into a long discussion on the economics of airline operation and the criteria by which fares are determined. Hon. Members cannot really believe that the majority of the airlines are so ill-equipped and unresponsive to possible changes in costs that when the warning was issued in November they were not in a position to take account 1663 of it if they wished in the interim. Increases in domestic fares do not occur at frequent intervals, and the airlines consider all their costs and revenues before approaching the A.T.L.B. to ask for an adjustment. If we consider the figures involved, it is possible to see why the airlines cannot really have believed that this would involve any increase in fares. The extra charges falling on them could have been met simply by a growth of traffic and higher load factors. This alone in favourable circumstances could have been sufficient to offset the cost.
The assumption made in our discussion is that airlines would wish to increase fares for this reason alone, but the average increase is 3s. 6d. per return journey if only one of the nine airports is concerned—which is the usual case—or 7s. if two are concerned. It is not a cost change, when so much else is changing, which would of itself make an application for a fares increase worthwhile. British European Airways has said that it does not propose to seek an increase.
There is the separate question of charter inclusive tours. The tours operator usually publishes his brochure in December for the following summer season. He has, of course, a good idea of what the forward rates are likely to be in the aircraft charter market in respect of destinations, dates and times of departure and the likely cost of the relevant hotels. On this basis, he offers a price for various package tours in his brochure. It is probably not until late January or early February that he firms up his arrangements with his carrier. The carriers were, of course, as I have said, under warning since November—a period of over three months—that our charges might be increased and any prudent operator would have made allowances for this or provided a pass-on clause in his contract.
There have been objections that some of the organisers have been compelled to charge too much for some of their package holidays because of provision I. That has been said in this House. In this case, and to the extent that they bear these increased charges, the costs are brought more into line with what they are obliged to charge: to that extent 1664 operators should be grateful to us for making their position a great deal easier.
Perhaps the strongest and, on the face of it, the most reasonable complaint tonight has been against the decision not to increase air navigation charges at airports controlled by the B.A.A. It has been argued by my hon. Friend the Member for Glasgow, Springburn (Mr. Buchanan) that this is discrimination against municipal airports If it is—and it is not—it would be discrimination only against certain of them, because many of them provide their own charges and are not affected by the Regulations.
As the House knows, there is a substantial surplus at Heathrow which results in a surplus on the Authority's accounts as a whole. But cross-subsidisation in aviation is becoming unfashionable and I do not see why we should introduce the principle now between B.A.A. airports and the others. But I take the point that the complaint is against our failure to increase charges at the other three B.A.A. airports—Gatwick, Stansted and Prestwick—because it is felt that they are no longer in line competitively.
I must confess that I think that some improbable suggestions have been made. I do not see aircraft which now land at Manchester landing at Heathrow instead. If they feel the charges to be too high at Manchester, they will surely go to Liverpool. The charges there are going up as well, however. In any case by going to Liverpool they would be helping an airport in difficulties while Manchester is prosperous and generally has very good prospects ahead of it. If that sort of diversion takes place, I do not think that there can be complaint.

§ Mr. Marks
There is considerable diversion of traffic between Ringway and Heathrow, perhaps because the weather is frequently bad at Heathrow when good at Manchester. There is thus an interchange between the two already going on.

§ Mr. Rodgers
Aircraft now diverted to Manchester because of bad weather will still go there. We must look at this in perspective. I lay a bet that there will not be the fall in traffic at these airports which the authorities fear may take place as a result of this increase.
1665 I agree that Abbotsinch is in a special case and I was not surprised by the powerful advocacy on its behalf by my hon. Friend the Member for Govan. As he knows, because he does not like it, there is an agreement between Abbotsinch and the B.A.A., endorsed by the Board of Trade, which determines where the traffic will go. Whether he likes it or not, and on this occasion I think that he will like it, I can give him an undertaking that this agreement stands and there will be no possibility of diversions on this occasion.
May I refer particularly to the position at Manchester and Glasgow? Let us assume that there is no objection in principle to the idea of a subsidy. The two most prosperous municipal airports are Manchester and Glasgow. I wish to pay tribute to the admirable way in which they are run. I am not surprised also of Manchester, because my hon. Friend the Member for Birkenhead (Mr. Dell) was vice-chairman of the airports committee when the airport was getting on its feet.
In the year ended 31st March, 1968, Manchester earned a surplus of £370,000. This represents a contribution to the rates of 3¼d. At the same time, there was a net trading loss on air navigation services of £321,000. This means that out of the contribution to the rates of 3¼d., the taxpayer was paying 2¾d. Taxpayers were subsidising the ratepayers of Manchester through air navigation services.
Glasgow earned a small surplus in the year ended 31st March, 1968. There was neither a contribution to the rates, nor a rate burden. The net trading loss for air navigation services was £294,000. This was equivalent to a rate of 2¼d. We have contributed nearly £3 million towards initial development in Glasgow.
I compare this with the position at Liverpool which is in a development area when Manchester is not, which lost £567,000 in the year ended 31st March, 1968, representing 5¼d. on the rates. In this case the net trading loss for air navigation services was only £189,000, or the equivalent of a rate of 1¾d.
The case for subsidy is greatest at Liverpool where the loss is greatest and the subsidy smallest. The case for the subsidy is weakest in Manchester and the subsidy is largest. Thus it was a topsy-turvy situation which nobody wishes to 1666 perpetuate. I could give other examples: Carlisle, Newcastle and Tees-side are all airports in development areas, but the position with them is that they do not receive a subsidy from the taxpayers. They provide their own services and, if the airport loses, the cost falls on the rates.
I see no reason in principle why the prosperous airports should have help and those which are least prosperous should thereby be disadvantaged. That is precisely the position which hon. Members who are praying against the Regulations would maintain. They wish to preserve the status quo.
However, I agree with my hon. Friend the Member for Bebington that the question of subsidy must be considered when we consider the Edwards Report. Important questions of principle are involved, but now is not the time to change things ad hoc.
I respect my hon. Friend's reasons for moving the Prayer. We have had a useful debate and I wish that we had longer to discuss the anxieties of hon. Members, but I ask the House to reject the Prayer. I do so because first, the increase in charges for navigation services is wholly consistent with the policy of successive Governments; secondly, the policy has been endorsed by Select Committees; thirdly, an increase represents a useful saving in public expenditure; fourthly, the present system of indiscriminate subsidy is haphazard and indefensible; fifthly, the increases are unlikely to have any substantial effect on airline charges; sixthly, the aviation industry is no longer an infant industry, but should stand increasingly on its own feet; seventhly, any broader decision about the future of regional air services and airports should await decisions by this House on the wider issues raised by the Edwards Report.