HC Deb 20 November 1979 vol 974 cc345-56

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]

10.16 pm
Mr. Fred Silvester (Manchester, Withington)

My hon. Friend the Under-Secretary of State has had a busy week. This seems to be aviation week. The previous debate, flying as fast as it did, kept up that tradition. However, I hope that my hon. Friend will find this a fairly relaxed moment. I hope that he will agree with much of what I have to say.

On Monday my hon. Friend said: Manchester airport has an extremely important role to play in the United Kingdom's airport policy."—[Official Report 19 November 1979; Vol. 974, c. 8.] I am glad that he recognises that. Tonight I want to stress that in two ways. First, I deal with Manchester airport's contribution to the growth of air traffic. It was decided last year that the airport would be the only category A international airport outside London. It is the third largest airport in the country outside Heathrow and Gatwick. Its importance is even greater if we ignore the question of domestic flights. I mean no disrespect to the other provincial airports when I say that that was an inevitable and right decision. It would have been foolish not to recognise the historic and geographic importance of the airport.

That decision was of great importance as it meant that we could plan the future of the airport on an established basis.

Currently the airport handles about 3 million passengers and 34,500 tonnes of freight. That is a small amount compared with the traffic handled by Heathrow and Gatwick, which together handle about 30 million passengers and 500,000 tonnes of freight. Nevertheless, it is a substantial amount. Furthermore, a number of proposals exist for carefully staged improvements in the facilities at the airport. The strengthening of the runway continues in a most remarkable way every night. The proposals include an extension of the runway, for which a planning inquiry is either under way or is about to happen. There are many other planned improvements. There is a new cargo complex. There are additional facilities for aircraft parking stands.

The general facilities for the consumer, the airport traveller, are improving. There has been an improvement in catering and hotel facilities, and not least in car park facilities. It is a comfortable airport from which to fly—something which cannot always be said about airports. It is important to recognise that the city and county responsible for the airport have put a lot of time and effort into planning its future development. All the development can be funded out of revenue, and the airport will continue to grow as a thriving business without needing injections of Government money.

The net effect of all this is to increase the capacity of the airport to 7½ million passengers by 1990 without the building of the second runway. That would be a major contribution to the air traffic growth of the United Kingdom. It is not necessary always to see the problem of that growth in terms of "What are we going to do about London?"

I do not pretend that problems do not exist in London or that Manchester will solve those problems. If I were a London Member, I should be only too glad if Manchester could do away with the need for a third London airport. I doubt whether it will. Fortunately, that is not my problem. The Minister will have to grasp that thorny problem. However, Manchester increases the options open to the Government, both in terms of the cost of the developments there and the speed at which they take place.

It is estimated that 65 per cent. of domestic passengers out of Manchester connect with another airline. That is perhaps 500,000 into London. Allowing for taking off on a second plane and coming back again, we could be up to about 2 million passenger movements a year avoided at Heathrow. I am aware that we cannot do the sums in that simplistic way, but those figures give some idea of the contribution that Manchester could make to easing the congestion around London.

However, I emphasise that the role of Manchester is not merely as an overflow for London. Its importance in its own right should be recognised. About 50 per cent. of the country's manufacturing industry is within a 75-mile radius of the airport. That is a statistic with which we have become familiar, but its implications are staggering.

The future economic health of the northern part of the country—Manchester affects not only the North-West, but the surrounding areas—is too often talked about in terms of grants, aid, saving a bit here and helping a bit there. We do not often have the opportunity to talk about something of major strategic importance such as Manchester airport.

A survey by the local chamber of commerce showed that the majority of experienced travellers request to go via Frankfurt or Amsterdam rather than suffer the hassle of Heathrow. That is an understandable view and is an indication of the opportunities and difficulties with which commerce is faced in that part of the world.

The Government can help. Manchester has a fine airport with great potential. It is economically important and it is prepared to seize opportunities in a proper commercial way, but it must not be hamstrung in its efforts by unreasonable restrictions. I refer particularly to licensing policy.

Two or three years ago, GEC started building 19 power stations in Saudi Arabia. Enough traffic was generated to sustain, according to Saudi Arabian Airlines, two flights a week from Manchester to Riad. Saudi Arabian Airlines made an application to the Civil Aviation Authority, but it was opposed by British Airways and was turned down. It seemed that that was a great opportunity missed. We are still convinced that the service would not only have been viable but would probably have grown.

Air Malta wanted to increase from four planes to five its services to Malta on a joint route with British Airways. For a long time that development was thwarted because BA could not match the fifth plane. The system is now working, but there was a long delay.

There are scheduled international flights to 22 destinations out of Manchester involving a number of foreign airlines. This development must continue if the airport is to grow as we hope it will. West Africa, the Middle East and the American seaboard are obvious candidates for expansion.

I had some doubts about balancing the needs of British airlines with the freer skies policy I am talking about, but they were dispelled on Monday in the debate on the Civil Aviation Bill. Clause 10 of that Bill will impose duties on the CAA to look after the reasonable interests of the user and to look after the safety, efficiency and profitability of British Airways. The clause also stipulates the imposition of duties '"to secure the most effective use of airports within the United Kingdom. The authority will also have to ensure—and I paraphrase—that the new services do not upset the existing services of British airlines. They are not always the same thing, and, therefore, that balance will have to be stretched.

The CAA is being given new authority by the Secretary of State. It will have a greater discretion. It is right to say that it has been adopting a more flexible attitude in recent times. With that new discretion and with the new powers under the Act, that attitude must continue. It is of great importance to us.

I underline one point. Manchester international airport management is not against British Airways. It would like to see them running the services and I am not suggesting that British Airways should be cut out. The freer skies approach bites only when British Airways are not willing to run a service. In a sense, therefore, British Airways have a sort of permanent first refusal. It would, however, be bad for us, and for the whole of the North of England, if there was a regular veto on other services in order to protect the profitability of scheduled services out of London.

Yesterday the Secretary of State said: There is, inherent in a sound policy for awarding routes, a strong element of tension". —[Official Report, 19 November 1979; Vol. 974, c. 45.] I accept that. But the tension is not only between airlines and their colourful bosses. It is also between the necessity to reconcile the needs of the airlines with a wider range of commercial interests in the area which they serve.

Manchester airport has made the necessary preparation to serve those interests. I am glad that my hon. Friend has agreed to come to the airport. Councillor Walsh, the chairman, and Mr. Sweetapple, the director, and the staff will, I am sure, give him a very good welcome. He will see at first hand the plans that have been made and the work that has been done. I emphasise that in asking the Minister to support the liberal and effective policy for new routes out of Manchester.

We are not asking for charity, nor are we asking for special treatment. We want the airport to have the facility to grow as consumer demand warrants. We are totally convinced that the airport can meet the need and we have growing evidence that the need exists in the surrounding area. I emphasise again that those of us who look for a resurgence of economic well-being in the North of England firmly believe that Manchester airport must be a central part of that future structure.

10.29 pm
The Under-Secretary of State for Trade (Mr. Norman Tebbit)

I have listened with interest to my hon. Friend the Member for Manchester, Withington (Mr. Silvester). I have carefully noted his remarks about the future role of Manchester airport. I am grateful to him for raising the issue. Manchester airport is not being debated in an Adjournment debate for the first time. We debated a slightly different aspect of its affairs, as my hon. Friend knows, as recently as 27 July. But my hon. Friend has illustrated the importance of Manchester not only to its immediate area but as a great regional airport, especially at this time when the Government are considering the question of a possible third major airport in the South-East of England.

My hon. Friend knows of, and has, to some extent, drawn upon a most interesting paper recently produced by the Manchester International Airport Authority on its view of the long-term future of Manchester and the potential contribution of other major regional airports in helping to cope with the expected long-term increase of traffic in the London area. The Manchester airport authority kindly invited me to visit the airport to discuss this paper and to see for myself the facilities available. As my hon. Friend knows, I have written to accept the invitation and I hope to visit Manchester in the near future. I look forward to an exchange of views with the authority on the points raised in its paper.

I should, perhaps, pay my own tribute to Manchester International Airport Authority. I know from the times, not very long ago, when I operated into and out of Manchester that it has developed a first-class airport, serving much of the North of England. But, equally important, the authority has successfully sold its facilities to the airlines and the travelling public in general.

Despite the long-term growth in air transport, there are uncertainties about the return on investment in airport facilities. I should like to express my admiration to those in Manchester who had the courage and foresight to develop what is already one of the best airports in Europe. For many years, Manchester has handled more passengers than any other airport outside the London area. Traffic has grown from 2.3 million in 1974 to 3.4 million in 1978. That is an annual growth rate of 8.8 per cent., higher than in the London area. Its supremacy is even more marked when one considers only international passengers. Last year nearly 2½ million international passengers used Manchester compared to about 900,000 at Birmingham, the next largest airport in that sense.

However, as my hon. Friend knows—he has made the point himself—we must bear in mind that Heathrow handled nearly 23 million international passengers, some 10 times as many as Manchester. Recently the growth of traffic at Manchester has been well above the national average. I believe that part of that success has been due to the policy of giving the highest priority to the airport. Our objective is to shift the burden away from the London area and to encourage the development of services directly to the regions, wherever possible. One way of achieving this is to concentrate traffic at a number of selected regional airports so that the additional traffic at these airports will increase the number of routes that would be viable and thus accelerate the growth of traffic in the region as a whole.

I have often had to say to those who try to beguile me with the attractions of other regional airports that it is essential to develop first what one would regard as the second great gateway that is Manchester before going on to develop other gateways to a comparable size in England. I emphasise "in England" not least because the right hon. Member for Lanarkshire, North (Mr. Smith) has been kind enough to come to listen to the debate.

Our predecessors attempted to formalise this policy in their 1978 White Paper on airports policy which classified airports into four categories. The Government are not bound in any way by our predecessors' White Paper. However, I should like to make it clear that we agree with the principle of categorisation as a means of concentrating regional traffic at a number of growth points. The Government do not intend to apply this policy rigidly, but I believe that in general it offers the best prospect for developing services in the regions.

Manchester is the only gateway international airport in England outside London, and it therefore has the highest priority of all regional airports in matters of licensing and development of services.

It is sometimes suggested that traffic could be further stimulated at regional airports such as Manchester if only the Government were to adopt a more liberal air traffic licensing policy. Let us look at the facts. I think that my hon. Friend understands the problem extremely well.

The range of international services operating from Manchester is greater than at any other airport outside of London. Scheduled services currently operate to 19 destinations in Europe and three in North America. Apart from Prestwick, no other regional airport serves transatlantic destinations.

The Government have negotiated rights from Manchester to a further five European countries, but these routes have not been taken up by the airlines. In addition, there are a large number of other points in countries to which there are services which could also be served from Manchester. Altogether there are over 70 routes which could be operated from Manchester for which rights are available.

So there is no shortage of opportunities for airlines to develop new services from Manchester. The Civil Aviation Authority recognises the important role of Manchester in the allocation of licences, and the new powers which I hope will shortly be available under the Civil Aviation Bill will allow it to operate with greater discretion in deciding on the viability of services.

I should emphasise to my hon. Friend that the provisions concerning the duty of the CAA to consider the existing pattern of route services when considering new applications are designed not to discriminate against Manchester but to introduce an element of stability into its consideration of routes in a period when the guidelines and the guidance have been changed. We wanted to make it plain that we were not encouraging the CAA suddenly to indulge in a wholesale transfer of routes for no particular reason, other than that it thought that it might be a good idea at the time.

Only one application for an international licence from Manchester has been refused by the CAA, and in that case the airline offered no evidence to support the application. However, several of the licences which have been issued are not being operated. I want to make it clear that it is open to other airlines to apply for any licence, whether or not it is being operated.

I must assume that the real reason why licences are not being taken up or are not being operated is that the airlines do not yet consider that there is a sufficient demand to make them economically viable. We are encouraging freer competition in this respect, but the decision on whether to operate the services must remain one for the commercial judgment of the airlines.

Perhaps I may now turn briefly to the facilities available at Manchester airport; it is appropriate that I should mention them. There is the work on refurbishing the runway to enable the heavier wide-bodied jets to use the airport. When the work is completed next year, Manchester will be able to handle an increasing range of long-haul routes, and no doubt this will prove an additional attraction to airlines. Key sector loan sanction was provided by the Government to enable this work to be carried out.

The airport authority has also applied for planning permission to extend the runway, and that is to be the subject of a public inquiry, so I think it best that I make no comments on its merits.

The authority has also sent me details of further proposed developments to increase the airport's capacity. Our policy is to support developments which are needed to cope with additional demand—subject, of course, to the usual planning procedures. But at a time of financial stringency I would not encourage any local authority airport operator to bring forward proposals for expansion which could not be justified on the basis of a reasonable forecast of increased traffic.

My hon. Friend was very realistic, as he always is, about the way in which airports such as Manchester could help to relieve the current pressure on London's airports. As he knows, the situation here is indeed serious, with Heathrow in all probability operating at its maximum capacity very shortly—perhaps entirely by 1982. That is why we were driven to transfer traffic to Gatwick. Of course, Manchester and other regional airports have a considerable role to play in alleviating the pressure on London airports.

Mr. Andrew F. Bennett (Stockport, North)

On the point of transfers from Gatwick to Heathrow, is the Minister aware that for most people who live north of Watford it is just as easy to get to Manchester international airport as it is to get to Gatwick? Is it not therefore logical to look at transfers to Manchester rather than to Gatwick?

Mr. Tebbit

I think that the hon. Gentleman has half a point but not a whole point, because a large part of the catchment area of Gatwick traffic will be on that side of London. Where there are services out of Manchester, and for someone who lives, as the hon. Gentleman says, north of Watford, it may well be easier to go to Manchester rather than Gatwick. I hope that that will be a factor that will induce airlines to see whether they can bring forward viable services.

One of the issues on which the advisory committee on airports policy will shortly report to the Government is the extent to which that role can influence the need for a third London airport. We shall consider the role that regional airports can play in the solution of our airport capacity problems in the South-East. However, whatever we decide, I am sure that there is a great future for Manchester in building up its services to attract passengers from its natural catchment area, which may come down as far as Watford.

The Government's policy is to encourage the natural growth of traffic in the regions and thus alleviate the pressure on London's airports. I understand that the advisory committee on airports policy re-examined the assumptions previously made about the growth of air traffic in the region, so that its report will reflect more accurately the potential growth outside the South-East.

In conclusion, I believe that by its actions my Department has fully reflected its support for the development of Manchester airport. We have negotiated over 70 routes from Manchester to points in Europe, in addition to 17 in North America. So far the airlines have decided to operate on about 22 of those routes. Where there is dissatisfaction with an existing licence, either because it is not being used or because of the quality of the service, I assure the House that a competing airline may apply for that licence to be transferred to it.

The Civil Aviation Bill is intended to take this policy further by ensuring that licences are not refused solely because the Civil Aviation Authority has doubts about the viability of a route. That is a matter for judgment by the airlines. It will be for them to use their commercial judgment to decide whether to apply for licences in the knowledge that other operators will take advantage of the competitive situation to develop new routes. I believe that increasing competition will provide a healthy stimulus to the development of air services in the regions.

We have not stood in the way of improvements to facilities at Manchester. We have ensured that the authority has been able to obtain the finance for the refurbishing of the runway. As I have said, that will make it possible for the heavier jets to use the airport. The airport now has a capacity for 7½ million passengers a year, which should be sufficient to handle the expected growth in traffic for several years to come.

The future growth of Manchester airport will considerably alleviate the pressure on airports elsewhere. But I would be misleading the House if I were to suggest that this welcome contribution is likely materially to affect the issue of whether additional airport capacity in the South-East will be needed and, if so, when. I am sure that Manchester, not least because of the great industrial area that surrounds it, will play an increasingly prominent part as the major English regional gateway airport. I wish it every success in doing so.

Question put and agreed to.

Adjourned accordingly at sixteen minutes to Eleven o'clock.