§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Nicholas Baker.]
11.31 pm§ Sir Fergus Montgomery (Altrincham and Sale)I am grateful for the opportunity to raise the future of Manchester airport. I am sorry to keep my hon. Friend the Under-Secretary of State for the Environment so late, but I am sure that he realises that it is no fault of mine that other hon. Members wished to talk until 11.30 pm.
In the past decade, Manchester airport has grown from handling 4 million passengers a year to 11 million. It is the fastest growing airport in Europe. It is important to me because it is the largest employer for my constituency. It is just outside my constituency, but it happens to employ more of my constituents than any other employer.
I pay tribute to the Government because, since they took office in 1979, Manchester airport has changed from what was basically a regional airport to become the 17th largest international airport in the world. There have been significant advances in recent years, including Cathay Pacific flying to Hong Kong, Singapore Airlines to Singapore, Qantas to Australia, South African Airlines to Johannesburg, the emirates airlines to Dubai, and British Airways and Pakistan International to Islamabad. Canada is served by both Canadian International and Air Canada.
The crunch has come largely in the efforts to get sufficient licences for United States airlines which want to serve Manchester. About five years ago, American Airlines was offered a temporary operations permit to Chicago, and I pay tribute to American Airlines for the work that it has done on the route. Things were not quite so easy as they could have been in the beginning, but the airline persevered. The route has now become the most successful and profitable of the airline's international network. That has helped to prove what many of us have always believed—that with the airport's catchment area of about 20 million people, there is always demand.
I pay tribute to my right hon. Friend the Member for Hertsmere (Mr. Parkinson) for his work while Secretary of State for Transport. It is largely due to his persistence and it is thanks to him that an agreement was reached with the United States Government to grant a further two licences that were available to any non-London airport. There were eight applications for the licences, all the applicants choosing to serve Manchester to Atlanta in preference to any other regional airport. That says a great deal for Manchester airport. This year, those two licences were awarded to Delta Air Lines which, in the last week of June, began a service from Manchester, and to American Airlines which only last week began a service to New York, alongside that of British Airways. That shows American Airlines' faith in Manchester.
I should like to draw to my hon. Friend's attention the fact that there are 28 scheduled services between Manchester and the United States, compared with 393 from London. That illustrates the imbalance between north and south. I hope that the interest that has been evinced in introducing new services by a number of United States airlines will be given favourable consideration by the Government. After all, my right hon. and learned Friend the Secretary of State for Transport, who is my hon. Friend's boss, expressed support for the economic benefits that flow from the expansion of regional airports. 1061 It is good to have a Secretary of State for Transport who does not come from the great London area but from Scotland, and is therefore well aware of the problems in those parts of the United Kingdom that are further from London.
The benefits, which have been quantified, show that each new daily United States air service creates 1,400 new jobs and improves the regional economy by £14 million. That brings me to one of my main points. There are rumours that Stansted airport will soon be opened up to United States airlines. If that is true, it will not be of any assistance to the regional airports, nor will it help to relieve aviation congestion in the south-east. I hope that my hon. Friend the Minister will be able to quash that rumour.
I pay tribute to the part that the Government have played in improving the regulatory process in Europe, which has allowed more opportunity for the airlines and has helped to meet demand from north-west travellers. Only a few years ago, the Manchester-Paris route had only three or four flights a day, but it now has 10. Virtually every major European city is now served from Manchester. The other important point is that Manchester has developed airline services from other British cities, so that passengers from other British cities can get to Manchester and link into its long-haul network.
All that has had an effect. Manchester has now overtaken Gatwick as the largest summer holiday airport. Last year, Manchester airport was awarded the "silver globe" award, Heathrow being second and Gatwick third. The success of Manchester Airport is also due to the provision of facilities for passengers. The construction of terminal 2, which will double the airport's capacity to 25 million passengers, is on schedule and on budget. I thank the Government for their support for the development, which they view as a project of national importance and, in that regard, have authorised the appropriate borrowing powers.
Another vital question relates to the airport's rail link. I used to think that Manchester was not very good at providing a means of getting those who land at Manchester airport into the centre of Manchester. A slight hiccup some time ago caused some anxiety, but I understand that British Rail has now allocated the money to finalise the link. Such a link is long overdue and will be an enormous asset for travellers to Manchester airport. Again I make a comparison with Stansted. The link from Stansted into central London cost £80 million and carries some 50,000 passengers a year. The Manchester rail link, even according to British Rail's conservative estimate, will carry a million people a year.
Looking to the future, several European Community issues could affect the airport. First, the possible abolition of the duty-free facilities causes a great deal of anxiety. If abolition were approved, it would mean a loss of jobs. I know that the Government have not reached a final decision and that they are sympathetic to the proposals made by Manchester airport for up to five years of transitional arrangements, thus saving jobs and avoiding a significant increase in scheduled and charter air tariffs.
Secondly, there is the worry that air tickets and holiday accommodation, which are currently exempt from value added tax, could have VAT added by the European Community. That would inevitably mean an increase in 1062 cost both for air fares and for holiday accommodation, thus threatening jobs and the stability of the vital travel industry.
My hon. Friend the Minister may be interested to know that I recently received through the post a copy of a letter from a man called B. A. Didsbury, the district secretary of the Transport and General Workers Union. The letter was sent to an Opposition Member. I have no idea where the copy came from—it came in a plain envelope and had a Manchester postmark. At first I thought that it had been wrongly sent to me, but because I have a curious nature, I suppose, I read it and I am glad that I did so. Perhaps one of the leakers who has been so helpful to the Labour party has decided that the balance should be redressed and that someone should leak something to the Conservative party.
Whoever sent the letter to me has my thanks, as it makes interesting reading. I will gladly let my hon. Friend the Minister have a copy of the whole letter to pass on to my right hon. and learned Friend the Secretary of State for Transport who, I believe, should see it. I will quote just one extract:
Increasingly, elected members are refusing to be involved with local authority grievance and disciplinary procedures, and have almost totally withdrawn from negotiations.Likewise at Manchester Airport where councillors, who are directors, repeatedly have refused to meet with shop stewards. Fortunately, for as long as the Airport remains in local ownership, then the underlying company policies can be influenced by political, rather than strictly economic considerations.To this end, and following stupendous efforts by Paul McDermott and other branch officials, airport workers are forming themselves into a political pressure group. This, we intend, will have a significant impact on local Labour Parties. The Airport and the job security of its workers will become a major political consideration in the selection and promotion of local Labour Party candidates.I do not know what my my hon. Friend the Minister thinks about Mr. Didsbury, but he scares me—to him, economic factors are unimportant, but political commitment is the thing.
§ Mr. Peter Thurnham (Bolton, North-East)Is my hon. Friend aware that it has been estimated, I believe, by Councillor Howarth, who is a former chairman of the airport, that excess manning costs at Manchester airport amount to £2 million per year? Does he agree that that should be dealt with, because Manchester airport has a great future as an airport which serves more United Kingdom airports than any other airport in this country?
§ Sir Fergus MontgomeryI agree with my hon. Friend. Councillor Howarth was once a Labour Member of Parliament. He is a moderate member of the Labour party and not part of the far left fringe. The type of policy suggested by Mr. Didsbury is similar to what we saw behind the iron curtain in eastern Europe, and we all know where such policies led the people of eastern Europe.
My right hon. and learned Friend the Secretary of State for Transport should be made aware of such happenings because if such a policy is allowed it will not bode well for the future of Manchester airport. It could put at risk all the great achievements of the airport in the past decade.
I hope that my hon. Friend the Minister can give me some hope that the benefits that have accrued to Manchester airport in the past 10 years will continue and that a watchful eye will be kept on people using that airport for political ends rather than for the good of the community.
§ The Minister for Roads and Traffic (Mr. Christopher Chope)First I congratulate my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery) on his constructive speech. I also congratulate him on having secured this debate at a much more civilised hour than was possible for yesterday's Adjournment debate.
The final part of my hon. Friend's speech was the sting in the tail and gave a revealing insight into the secret socialist agenda and the brazen abuse of power that that so often involves. I shall be pleased to see the letter to which my hon. Friend referred and to pass it on to my right hon. and learned Friend the Secretary of State.
One thing is absolutely certain. Manchester airport, a fine airport, should be developed not for the benefit of socialist trade unionists, but for the benefit of customers. As a result of its success, it should be able to ensure that there are good employment prospects for its workers. The letter referred to by my hon. Friend was most disturbing, and I am glad that he brought it to the attention of the House.
I am extremely pleased to have the opportunity to put on record the Government's appreciation of the contribution made by Manchester airport to air travel in this country and internationally. The recent topping out of Manchester's second terminal by my right hon. and learned Friend was another milestone in that airport's history. The airport has been so successful in recent years that milestones come thick and fast.
It is only two years since the new domestic complex, capable of handling up to 2.5 million passengers a year, was opened. Now the airport is well on the way to completing capacity to handle an additional 6 million international passengers a year. Apart from the London airports, no other United Kingdom airport has total current capacity for 6 million passengers, let alone an expansion programme of that size. Ten years ago, Manchester handled about 4.5 million passengers; now it handles more than 10 million—my hon. Friend quoted 11 million—and the prospects for the future are looking good.
We welcome the development of the first phase of the second terminal at Manchester airport and the substantial increase in capacity that it will bring. It is a testimony to the importance of regional airports and the development of air services to and from them. It is a tribute to the vision, skills and hard work of those responsible for Manchester airport and it is a tribute to British efforts to open up new possibilities for services to and from regional airports.
We want to see regional airports handling all the traffic that they can attract, not only for the benefits that this brings for those living in the region, but for the contribution that it can make to relieving pressure on the London airports. As the third largest airport in the United Kingdom, Manchester airport plays a vital role in our regional airports policy. In the past decade, the Government have approved supplementary credit and borrowing allocations for Manchester airport amounting to some £132 million, almost 43 per cent. of the total allocations for local authority airports over this period. Manchester already enjoyes scheduled services or chartered flights to more than 140 destinations. The new terminal, when it is ready in two years' time, will increase the airport's ability to provide a still wider range and greater frequency of services.
1064 During the past half dozen years, the United Kingdom has put the issue of opening up new routes on to the political agenda, and major changes have been delivered. That is most striking within the European Community, where services can now be operated to any point, save the Azores and the Greek Islands. That is the result of the initiative taken during our last presidency in 1986.
The opening up of routes is only one part of liberalisation. The whole paraphernalia of out-moded bilateral air services restrictions needs to be opened up if free and fair competition is to follow. Negotiations of a third and final stage of EC liberalisation is about to begin, culminating in the next United Kingdom presidency al the end of 1992. However, much progress has already been made. As an illustration, there are now more than 40 air services from Manchester to other EC airports. There are some 200 services from British regional airports to points in other European countries.
We concentrated on Europe first, as the extent to which old restrictions were holding back development of regional services seemed greatest there, but we have not been idle elsewhere. Manchester has a good range of transatlantic services at present. British Airways flies to New York and Orlando. American Airlines has had a service to Chicago for some time and recently introduced a service to New York. As my hon. Friend said, Delta Airlines introduced a service to Atlanta at the end of June.
Those services result, in part, from an agreement which we reached with the United States in 1990. I was grateful for the tribute that my hon. Friend the Member for Altrincham and Sale paid to our right hon. Friend the Member for Hertsmere (Mr. Parkinson), who played an important part in that agreement. Under its terms, three new routes were created to United Kingdom regional airports for United States carriers. One of those opportunities was immediately used to provide cover for the service provided by American Airlines to Chicago, which had been operating informally for some time. The other two new opportunities could be used for services to any regional airport. The United States chose to use those opportunities for additional services to Manchester, resulting in the recent inauguration of the Delta Airlines service to Atlanta and a service by American Airlines to John F. Kennedy Airport in New York.
The fact that Manchester was chosen is indeed a tribute to the attractiveness of Manchester as a destination for transatlantic services, but it also reflects a lot of hard work by the airport authorities and others to ensure that the airlines were aware of the facilities and traffic opportunities available.
The 1990 agreement also resulted in new rights from regional airports for United Kingdom carriers and, at present, there are three route opportunities available which could be used by United Kingdom carriers to provide services from Manchester to United States destinations. Whether they do so is a commercial matter for the airlines, but if they so decide, they will find no Government or bureaucratic obstacles in their way.
We know that there is probably unsatisfied demand for route opportunities. More United States carriers wanted to fly than could be covered by the two route opportunities on offer, but further services by United States carriers will depend on new rights being negotiated under the Bermuda 2 air services agreement and, as a first step, the United States authorities will have to come forward with proposals.
1065 We would certainly consider such proposals with a clear view in mind of the advantages of additional services to the airport and the region. We want to see regional airports develop further. Our past actions underline that commitment, but creation of new rights for the United States must bring about appropriate new opportunities for our carriers. It would be wrong to allow advantages to the United States which could distort the balance of opportunities in the market to an extent that would be unfair to our airline industry.
I think that a better approach than piecemeal trading of rights is to look at the transatlantic market to the United States as a whole. We need to consider with the United States whether the present arrangements provide for fair, effective and healthy competition by the airlines of both sides, or whether changes are necessary. We need to consider whether sufficient opportunities are available for services or whether they can be expanded. We also need to consider whether unnecessary restrictions and regulations can be removed.
We have therefore been engaged in liberalisation talks with the United States for some time. Good progress is being made, but there are difficult issues to be tackled. Consequently, it is not possible to say when conclusions will be reached. Neither side has ruled anything out of the discussion. We are looking at fundamental issues, such as cabotage rights and inward investment in United States carriers. We shall also consider such key marketing issues as use—or abuse—of frequent flier programmes, use of computer reservation systems and opportunities for commercial arrangements between airlines. We shall look at the route structure and the availability of route opportunities generally, as well as to regional airports, including Manchester.
What we want from liberalisation is fair competition, which should bring benefits for all concerned—not just for airlines and airports, but for their customers and the economy as a whole. We do not want—and are concerned to guard against—scope for abuse of market dominance, leading to the extinction of competition.
We have also been successfully pursuing liberalisation elsewhere in the world—with, for example, Canada, Singapore and New Zealand. We are in the midst of talks with Thailand. A standard element of liberalisation is to remove restriction of routes from regional airports, so that services can be from any point in one country to any point in the other.
There is a myth that we agree to new routes to or from regional airports only when that suits British airlines, and I should like to dispel it. As I said, we see liberalisation as good for all concerned: airlines, certainly, but airports and customers at large as well. If we had a request for a route to a regional airport that was not possible under present arrangements, we would also look carefully at that region's interests in considering what to do, but we would probably suggest a wider opening up of opportunities through liberalisation.
1066 We are concerned to see that international services to and from regional airports continue to develop strongly. The Government intend to play their part, in opening up scope for fair competition, by making sure that the necessary opportunities are there, but a characteristic of liberalisation is that it opens up opportunities before airlines are ready for them. There could be services to Manchester from Japan, New Zealand and Malaysia, for example, to add to those introduced in the last year or so from Hong Kong and Pakistan.
Perhaps the airlines have not wanted to take up these opportunities, but there is a challenge here for Manchester and other regional airports: to go out and try to interest the airlines concerned, British and foreign, in starting new services. Officials in the Department of Transport are, of course, ready to help—in advising on what is already available and in opening up new opportunities that look desirable.
My hon. Friend referred to a rumour about Stansted. It is a matter for the United States authorities whether they come forward with proposals for additional route rights to Stansted and/or new rights involving regional airports. The Government's negotiations will have to take account of what is proposed, but we do not envisage acting outside that negotiating framework.
My hon. Friend also referred to the fraught issue of duty-frees. So far, the European Commission has not brought out any specific proposals to end intra-Community duty-free shopping, but that termination would indeed be a side effect of the current technical proposals for VAT and excise control systems after 1992. The matter has not yet been discussed in Brussels, but the Government recognise that the duty-free trade is important to the United Kingdom industry and economy, and we are very aware of the concerns of all involved.
My hon. Friend also referred to the Manchester airport rail link. I understand that British Rail fully intends that the rail link will be operational by planned completion date of May 1993. Work is well under way and, although contracts for some of the infrastructure and rolling stock are still to be placed, the management of BR's regional railways see the link as a high priority. That link will greatly improve access to the airport and generally boost the economy of the north-west because, for the first time, passengers will be able to travel by train direct not only from central Manchester but from as far afield as Blackpool, Leeds and Hull. There has been fine co-operation between the passenger transport authority, BR and Manchester airport company.
It is not just Members of Parliament or Ministers from the regions who can understand the importance of Manchester airport. I have often used it and found its facilities very useful. There is no doubt that it has a valuable role to play in future, provided that that role is not undermined by the sort of trade union irresponsibility to which my hon. Friend referred.
Question put and agreed to.
Adjourned accordingly at three minutes to Twelve o'clock.