AIRPORTS POLICY

HL Deb 14 February 1980 vol 405 cc320-36

3.21 p.m.

Lord TREFGARNE rose to move, That this House takes note of the Policy of Her Majesty's Government relating to airports. The noble Lord said: My Lords, in rising to open this debate on our airports policy, I want, first, to express my deep personal regret that the noble Lord, Lord Thomas, who died last weekend, will not be with us. I understand that he had, in fact, intended to speak today. I must say that the noble Lord was a lifelong friend of mine and, indeed, of my own late father.

On 17th December last the Government made known their views regarding the future handling of air transport demand at our airports. When I repeated in this House my right honourable friend's Statement on airports policy, I made clear that the Government would welcome an opportunity to hear your Lordships' views on their proposals. In the course of Questions on 17th January, my noble friend Lord Balfour of Inchrye, who unhappily is not able to be here today, said to me that these matters were of considerable interest to your Lordships, and were not a party political issue; and he suggested that we should debate them as soon as possible without the need to wait for them to be raised in another place.

My Lords, I have great sympathy for the views of my noble friend and I took note of what he said. I am sorry that he cannot be with us today but he has written to me with his comments, expressing his general support for the Government's policy. We may be departing somewhat from tradition, but I feel that in this case an early debate ahead of the other place is wholly justified. In deciding to hold the first full debate of this Administration on airports policy in your Lordships' House, the Government took particular account of the strong public interest in this matter and the valuable contribution this House has made by its dispassionate consideration of airports issues. The question of how to meet the growing demand for air transport has been one of the more intractable problems faced by successive Governments. All the more reason for approaching it candidly and with an open mind, as we have sought to do.

The previous Government's White Paper on Airports Policy followed an extensive review of national airports capacity and air traffic demand in the wake of the oil crisis of 1973. The slow-down in the growth of traffic provided a breathing space during which Heathrow and Gatwick in the South-East could be expected to cope with the demand. The White Paper proposed developments designed to meet the demand until about 1990, and ceilings on the expansion of Heathrow, Gatwick and Luton, but it did not deal with the problem of whether there should be new airport capacity to meet the longer term demand, and if so, where. There was a missing piece in the puzzle which was left for us to find when we took office. It had to be found quickly, bearing in mind the resumed rapid growth of traffic which took place in 1978 and 1979 and the long lead times required for airport development.

Our predecessors set up an Advisory Committee on Airports Policy and a Study Group on South-East Airports to look into the matter. On both these bodies were represented the principal organisations concerned with airport development and regional planning, all of which contributed their expert knowledge. I must emphasise in particular the co-operative approach of the local planning authorities. My noble friend Lord Nugent of Guildford sat on the Advisory Committee as the representative of the Standing Conference of Local Authorities in the South-East. He is, therefore, very familiar with the problems. He, too, had intended to speak today but I understand that he is indisposed.

These advisory bodies explored all the facts so as to enable the Government to reach their conclusions, but—and I must emphasise this—they made no specific recommendation. A crucial factor in assessing the need for airport capacity is the prediction of future traffic. The report of the Advisory Committee provides forecasts of the demand to the end of the century. Careful attention was given to the likely increase in oil prices; the economic growth in this country and in others with which we have substantial air traffic; and the relative competitiveness of our tourist industry, since tourism is an important component of air traffic. These forecasts suggest that in 1990 air traffic in the London area will be between 69 million and 81 million passengers a year; in other words, there could be, and indeed probably will be, a doubling of the current level of 38 million passengers. These figures represent only a modest annual growth of between 5 per cent. and 7½ per cent. comparable to what has happened in the last 10 years, but the rate of growth is expected to fall after 1990 to between 3 per cent. and 4 per cent. a year.

Despite the forecast that there will be more traffic at the regional airports than had previously been assumed, despite the inherent uncertainties in the forecasts, and even assuming that the overall demand will be at the lower end of the range, there is no doubt that the planned capacity of the existing airports will be exhausted by the late 1980s.

The first choice before us, therefore, was whether to meet the demand or deliberately omit to cater for it. If we decided not to provide extra capacity, most of the traffic would move to other countries, with consequent effects on our airlines, our tourist industries, and on employment and the economy in general. It would be unthinkable for a modern developed nation, so heavily dependent on its external communications, to take such a retrograde step. It would be unreasonable to penalise the travelling public and deliberately to stifle an important growth sector of our economy and one in which we enjoy a prominent position in the world.

My Lords, the Advisory Committee was quite clear on this point. It said: We consider that the deleterious effects of airport development should be mitigated as far as possible, but overall we take the view that the arguments for continuing to meet the demand for air transport are more compelling and should continue to be Government policy".

We have accepted this advice and decided that we should continue to so provide. But given the inherent uncertainty of the forecasts, and in particular the longer term predictions dependent on world events which are themselves so unpredictable, we have come to the conclusion that the solution we need is one which meets the demand as it develops and avoids massive commitments which may prove to be unnecessary. Starting from these premises, I shall now outline the Government's thinking and our proposals for meeting the demand.

First, I should like to say a few words about the role of regional airports. It is often represented that there is considerable spare capacity at airports outside the South-East and that if we could only ensure that it is fully utilised, there would be no need to provide additional capacity in the London area for some time. I do not think anyone would disagree with the objective of spreading out the burden and thus reducing the pressure on our London area airports. However, the question is not whether it is desirable but to what extent it can be achieved.

One of the most significant points to emerge from the Advisory Committee's forecasts is a new method of assessing regional airport traffic which leads to a lower share of international traffic for London. The new method is clearly more realistic than that used in the White Paper on Airports Policy which simply assumed a constant proportion. The percentage of United Kingdom traffic from particular geographical areas has been calculated using origin and destination survey information, and combined with forecasts of international interlining. The crucial point of course is that even if the demand exists at the various regional airports, there is a volume of traffic below which particular routes would not be viable and would, therefore, be commercially unattractive to airlines. Naturally, short-haul routes using a higher frequency of small aircraft are more likely to be successful than long-haul services with larger aircraft. But even then the picture is inevitably distorted by the wider range of convenient services and concessionary fares available at the London airports, which tend to attract passengers who would really prefer to use their local airport if it were possible to do so.

The latest survey of passenger origins and destinations at the London airports carried out in 1978 confirmed the previous results that about 78 per cent. of the passengers, excluding those transferring between international flights, had origins or destinations in the South-East. Clearly this leaves a significant potential traffic for regional airports to attract, but it does point to two important conclusions: first, traffic must be concentrated at the major regional centres, otherwise it will not be profitable for airlines to operate these routes and there will be no easing of the burden on the London airports. And secondly, the numbers are such that even the maximum utilisation of regional airports will not remove the need for additional airports capacity in the South-East. We have no reason to doubt the Advisory Committee's conclusion that it would only delay the evil day by a year or so.

Having said this, I want to stress that the Government will adopt policies designed to encourage the fullest possible use of regional airports by loosening the market structure to create opportunities for innovation, by promoting the establishment of new air services between provincial centres in Europe and negotiating new rights in the context of bilateral air service agreements; and by encouraging the development of tourism in the regions and with it the extension of direct scheduled and charter services from an increasing range of points abroad to regional airports. It will be for the airports concerned, the airlines and the tour operators to exploit these new opportunities and tap the demand which we believe to be there.

May I now turn to the London airport problem. There are in fact both short-term and long-term problems. In the short-term we have to deal with the intolerable congestion which is developing at Heathrow, our premier airport and busiest international travel centre in the world. My right honourable friend announced on 17th December that permission had been granted to the British Airports Authority to construct a fourth terminal on the South side of the airport, capable of handling 8 million passengers a year subject to certain conditions designed to mitigate the environmental effect of the development in the light of the particular circumstances at Heathrow. The new terminal is expected to be in operation by 1984 or 1985 and will provide sufficient capacity to cope with the growth of Heathrow's traffic for some years. However, in the meantime the BAA will use their best endeavours to encourage more traffic to move to Gatwick.

I know that the noble Baroness, Lady Burton, will be particularly interested in the provision of adequate public transport links to the new terminal for the convenience of passengers. Special mention was made of this in the decision letter. I can tell her that careful attention has been paid to this matter and that a report will be submitted shortly to my right honourable friend the Minister for Transport on the various options, which include the extension of the Piccadilly line to Terminal 4. My right honourable friend will then discuss the recommendation with those concerned: the GLC, London Transport and the BAA. The Government have this problem very much in mind, and I can assure the noble Baroness that I have drawn the attention of my honourable and right honourable friends to the useful points she recently made on this subject in the course of Questions.

As regards Gatwick, your Lordships will know that a Public Inquiry is currently taking place into the proposal by the BAA to build a second terminal with a capacity of 9 million passengers a year. This would enable them to make full use of the runway's capacity of about 160,000 air transport movements a year, which they estimate in the early 1990s will allow them to handle up to 25 million passengers per year. This of course is dependent on the rate of introduction of larger aircraft into Gatwick's traffic. If approved, the new terminal could be in operation by about 1986 and cope with the growth of Gatwick's traffic well into the early 1990s.

As your Lordships will appreciate, I cannot comment on the merits of the case. The Inquiry will examine all the evidence and the wider implications of the proposal in order to give them their due weight in relation to airport capacity requirements. The Government will reach their conclusions in the light of the Inspector's report. But again, for the benefit of various noble Lords who have raised the matter in the past, I can say that, regardless of the outcome of the Inquiry, steps have already been taken to improve the Victoria to Gatwick rail service. Gatwick station is being entirely rebuilt at a cost of £6 million; there will be a new concourse above the station platforms with a walkway into the airport terminal, and escalators will link the concourse and the platform. British Rail hope that two of these escalators will be brought into operation later this year and they expect the entire reconstruction of the station to be completed by 1982. British Rail have also introduced special rolling stock for the regular train service to the airport with additional luggage space and destination markings for ease of recognition by air passengers.

At Victoria the concourse has been enlarged to reduce congestion and the number of trolleys has been increased. A special ticket office is provided in peak holiday periods solely for Gatwick passengers. Thus the service is already much improved and further substantial improvements are under consideration to cope with the growth of airport traffic, in particular the provision of dedicated platforms for a separate rail service and purpose built facilities at the station for airline passengers. I am prepared to give more details when I wind up later if noble Lords wish me to do so.

However, if the forecasts are to be believed, even these developments cannot provide sufficient capacity to meet the demand at the end of this decade, let alone for the longer term. The Government therefore considered the following options. First there was the possibility of developing Heathrow and Gatwick beyond the level currently envisaged, by building a fifth terminal at Heathrow and a second runway at Gatwick with further terminals there as required. This possibility was not fully explored in the report of the Advisory Committee but it was tempting, in particular since it would have avoided the environmental damage that a new airport would undoubtedly cause. We have carefully considered this option but have come to the conclusion that a fifth terminal at Heathrow would strain the ground facilities, and would impose a significant extra noise burden on an area which already suffers heavily—1½ million people are currently affected by significant levels of aircraft noise around Heathrow. Moreover, it would take perhaps 11 to 13 years to build, bearing in mind the need to relocate the Perry Oaks sewage works and drain the land before construction, and its use would be constrained by runway capacity (bearing in mind, in particular, the limit of 275,000 air transport movements which will apply when the fourth terminal is in operation) and it would not provide a long term solution.

As regards the second runway at Gatwick, I respect the views of my noble friend Lord Boyd-Carpenter, which the Government have carefully taken into account. But I must point out that the earlier plans for a second runway were concerned rather with an auxiliary to the existing one—shorter and closer than would be required for independent parallel operations. We have looked at the possibility of a second independent runway with a minimum separation of 2.4 kilometres used by the Study Group which would allow, with appropriate terminal facilities, a total throughput at Gatwick of up to 50 million passengers per annum. Such a runway would have to be located either to the South where it would involve substantial destruction of the built-up area in Crawley, or to the North where it would require cutting some 110 feet into a hill and destroying the village of Charlwood and other smaller settlements. Even if such wholesale disturbance of the environment were to be regarded as an acceptable price to pay, it is doubtful whether air traffic control problems would enable the capacity of the airport to be fully utilised, bearing in mind the proximity of Heathrow and interference with defence activities.

My Lords, I will dwell on that point no longer. The Government concluded that the idea of a fifth terminal at Heathrow and a second runway at Gatwick would not meet the requirements and should not be pursued. This effectively limits the future expansion of these airports.

The second option we considered was the development of one of the inland greenfield sites examined by the Study Group. However, there seemed little point in pursuing this option since none of the four inland sites which had been assessed had overall demonstrable advantages over the site of the existing airport at Stansted. The only realistic choice therefore was between Stansted and developing a new airport at Maplin. For the benefit of my noble friend Lord Cork and Orrery who, I note, has tabled a Motion on this matter, I will say that the Government specifically requested advice on the possibility of building a new airport on Severnside. This was carefully considered by the Advisory Committee and is discussed in Chapter 5 of their report. Their conclusion, which the Government accept, is that a new airport at Severnside is not a feasible solution to the problem of airports capacity in the South-East.

I turn to the proposition of a new airport at Maplin or Foulness. As your Lordships will recall, it was a Conservative Government which decided in the early 1970s to site the proposed third London airport at Maplin. In those days the plan was for a massive four-runway airport, but the expected traffic has not materialised, the future is uncertain and the requirements have changed significantly. We had to look at the question in the light of today's circumstances. Your Lordships will be aware that there is a body of opinion which is still in favour of Maplin, or perhaps more accurately against any inland site. It is represented that on regional planning grounds there are arguments for Maplin because it would create less disruption to existing strategy plans and would provide employment in an area where jobs are needed. Great weight is placed on the fact that the noise nuisance in the immediate vicinity of the airport would be least at Maplin.

But account must also be taken of the serious disturbance that would be created by moving the Ministry of Defence firing ranges at Shoeburyness to a new site—if indeed one could be found (and I need not dwell on the difficulties this raised in the earlier Maplin project)—and the 40 miles of new motorway and the rail link which would need to be built across Essex before the airport could operate. Moreover, Maplin is remote from the market and is the least attractive site to the airlines, which would not bode well for its success; it would take much longer to bring into operation—even if the 17 years estimated by the Study Group could be compressed, which is by no means certain—and it would be a much more expensive project than the expansion of Stansted.

All these considerations are greatly reinforced by the uncertainties about future air traffic. Maplin requires massive investment in moving defence installations, reclaiming land, building an entirely new airport, motorway and railway access before the first passenger could be handled. Would it really be sensible to embark on such a commitment, with all it entails in terms of public expenditure and environmental damage, without any certainty that these facilities would ever be used to the full?

Against this is the possibility of making use of the existing facilities at Stansted, which have considerable operational and economic advantages, are easier to develop, and could start to carry additional traffic much earlier. The Government do not believe that a case has yet been made for building a major new international airport for London. The provision of a new terminal building at Stansted capable of handling 15 million passengers a year is in our view the best way of providing additional capacity before the end of the decade. This can be carried out by 1987–88 by the purchase of about 1,500 acres of additional land and some improvements to the road and rail access facilities.

However, as I said on 17th December, the Government believe that the time is long overdue for a settlement of the airports' question for a much longer period ahead, so that demand can be met if it develops into the next century. The best solution must be one that avoids premature expenditure and leaves future Governments with the maximum degree of flexibility as regards timing. On the evidence before them, the Government believe that these objectives can be achieved at Stansted.

The Government have therefore invited the British Airports Authority to bring forward proposals for the construction of a new terminal building and associated facilities at Stansted, with a capacity of 15 million passengers a year. I understand that the authority will be seeking planning permission sometime this summer and that compulsory purchase orders for the 1,500 acres required for the development will be submitted at about the same tune. The authority has also been invited to define in an illustrative plan and apply for the safeguarding from incompatible development of an additional area of about 2.500 acres sufficient to provide for a possible second runway and further terminal buildings should these be needed in the 1990s or beyond.

These proposals will be examined under appropriate planning procedures which are currently under consideration, but which will include a wide-ranging Public Inquiry. This is likely to start in the first half of next year. The Inspector will be able to take into account any evidence and views which he considers relevant to whether the development should be permitted and this will provide a full opportunity for the wider social and environmental implications of the proposals to be explored or assessed in the light of possible longer-term requirements. I can assure your Lordships that the Government will reach their decision only after the most careful study of the Inspector's findings.

To conclude, I have set out some of the considerations which have led the Government to their conclusions. I have explained why we have decided not to build a major new international airport and not to revive the Maplin project even in a revised form. In our view, the most sensible approach is to encourage the fullest use of our regional airports' potential and to provide additional capacity at the existing airports in the South-East to meet the demand as it develops. I am well aware that, even after 20 years, any expansion at Stansted remains a controversial issue; I believe I have demonstrated that our proposals are modest and reasonable and I hope they will receive your Lordships' support. I beg to move.

Moved, That this House takes note of the policy of Her Majesty's Government relating to airports.—(Lord Trefarne.)

3.46 p.m.

Lord PONSONBY of SHULBREDE

My Lords, I wish at the outset to thank the noble Lord, Lord Trefgarne, for giving the House the opportunity of debating at this early date the question of airports policy and for so comprehensively introducing the debate. As he rightly says, this is a question on which there are many strongly held individual points of view, and I have no doubt that the Government will be under considerable pressure from different sources to change their decision on this matter, but I hope in this case that the flexible approach outlined by the noble Lord will be one which the Government will stick to.

As he rightly says, this is a matter of great public concern, a matter which will cause hardship to some and a matter which, if not properly solved, could work to our national detriment. It is not, as he said, a party political issue. Indeed, I see that his right honourable friend the Secretary of State in the Commons on 17th December commented that he appeared to have more friends on the Opposition side than on the Government side; whether that is the case in this House, I do not know.

The first question to which one must address oneself is the all-important question of need. As the noble Lord said, forecasts have a habit of being notoriously inaccurate. Indeed, I felt that he himself was not fully convinced of the forecasts which have been made and whether we should believe in them. One can remember, for example, forecasts being made after the war about the birth rate which proved to be a considerable over- estimate of what in fact happened; and I noted the other day that the population of the United Kingdom was reduced last year for the first time for very many years. Likewise, forecasts for car ownership proved to be greatly underestimated in the years to which they referred.

Regarding the forecasts we are looking at today on the question of air traffic, there are some provisos given in the appendix to the report of the Advisory Committee, where the comment is made: They do not reflect changes in the competitiveness of the United Kingdom as compared with other world tourist markets or the possibility of accommodation or tourist site congestion in London". This is a matter of which we have become very much aware in the tourist field. We have seen a decrease during the past year in the number of tourists coming to London from the North American Continent, and this is of general concern in the tourist industry.

Therefore, almost before the ink is dry on the forecasts, one sees that they may not in fact prove to be right. But when one is talking about forecasting and the forecasts which the tourist industry has made, one sees that the general forecast still stands at the proposed 5 per cent. growth level in the 1980s, levelling down to about 2 per cent. by the end of the century. One should remember that in absolute terms an increase of this kind of level is still a very considerable increase in numbers, because these are percentage increases based on very much higher figures than in the past. In fact one is talking about an increase of 2 million to 3 million tourists a year. Against this one should recollect that during the last year only about 15 per cent. of United Kingdom residents took a journey by air at all, and therefore there is obviously great leeway to be made up in terms of possible additional flights to be made by United Kingdom citizens, and indeed by citizens from all parts of the world.

The other factor is concerned with exactly how people are arriving in this country; what is the size of the planes they are arriving in. Certainly as new planes have been introduced the load factors on individual planes have increased, and this one believes will continue. Ten years ago total aircraft movements were about 263,000, while last year they were 292,000—not a very substantial increase. But if one turns to figures for the number of passengers per aircraft on the intercontinental services one finds an increase from 68 to 167—almost three-fold. One wonders what will be the effect on the average number of passengers coming into our airports following further re-equipping by the airlines with larger aircraft. This is a factor which must be taken into account. The cost of air travel, the increasing cost of fuel, the cost of staying in London (to which I have already referred) are all factors which could make the proposed forecasts wrong when we come to the years in respect of which they are projected.

One should say that for some years now the concern of the British Airports Authority has been for the handling of passengers, not for the amount of runway space available. This is very clearly demonstrated by those figures for aircraft movements and passenger movements. I am left in no doubt that there is a need, but I am in some grave doubt as to how great the need will turn out to be. I am also convinced that, as these figures show, the need will be in and around London, where it must be met. The need for additional airport capacity in London will not be met by trying to tackle the problem from much further afield, because if that approach were adopted, passengers and airlines would switch to airports which are not really very much further from London but are sited on the continent.

In introducing the debate the noble Lord reiterated the remarks of the Secretary of State regarding the expansion of capacity at regional airports; and he underlined the need for this. I am sure that noble Lords would all agree with this to the extent that expansion is possible, but one quickly recognises that there are strong economic reasons why in fact a more comprehensive regional airport service is not being developed at the present time. The concern of the major European airlines is to fill their long haul planes; to see that they have sufficient feeder services coming into the hub of their activities so that they can make a financial success of their long haul routes; and the process of "sucking" passengers into the centre of their individual nets is being followed by the major European airlines.

It is obviously uneconomic to run services from many regional airports to many European cities. We know that the Department of Trade has negotiated for services to be run over some 1,500 routes between regional airports and points in Europe, but less than 100 of these routes are in fact being operated at present. The constraint arises not because airways are unable to operate the services, but because they find it uneconomic to do so. I am sure that many noble Lords wait with expectation the result of the application by Laker Airways to operate some 666 new routes in Europe. Putting aside the question of whether or not the application will be successful, what will be more interesting will be how many routes are operated—how many routes actually get off the ground. On the other hand, one can see a very great role for regional airports in developing charter services. I should have thought that in course of time there will be considerable development in this way.

The general strategy of the Government is to meet the demand for airport space as and when it arises, and their concern that they should not be frustrated in this is of great importance. One must be flexible; one must be able to ensure that the demand can be met as and when it arises. We must always remember that there is no reason why anyone should be compelled to come to the United Kingdom for a holiday. Whether or not people come is their own choice. There are many other attractive destinations in Europe for, say, Americans to visit—if indeed Americans wish to come to Europe at all. This is a point which must not escape us because, as has been said, the economic success or otherwise of this country depends very much on the level of our invisibles and the fact that we are able to continue to attract people to this country.

I particularly feel the campaign which has been waged over the years by my noble friend Lady Burton to see that people are properly looked after when they arrive at the airports—that they receive a welcome, and that they do not have to endure delays or undue inconvenience—is one which is terribly important, because on the sort of welcome they receive will depend very much whether or not somebody will decide to come here a second time. Indeed, I may say in parenthesis that it was gratifying to know that last year, for the first time, the majority of visitors to Britain were people who were coming here on a second occasion. This was the first time that this statistic emerged—51 per cent. of our visitors were repeat visitors. Therefore, we have the incremental approach of the Government: in 1984–85, the fourth terminal opening at Heathrow; hopefully, in 1985–86 the second terminal opening at Gatwick; and then one sees the proposal for Stansted following on that. I think that this incremental approach is by and large a very wise approach. It would be wrong, in my view, to build a white elephant which might not in fact be needed in the outcome if the forecasts are shown to be wrong.

Having said that, in many ways I would prefer that there were alternative solutions. I would think that in many ways a fifth terminal at Heathrow would have a great deal to commend itself. But, as the noble Lord has rightly said, the time taken could well stretch very far away. The Perry Oaks sludge disposal works have to be re-sited, and not only do there have to be inquiries about the application itself but there will no doubt have to be inquiries in relation to any alternative site for the sewage works themselves; and this could add immeasurably to the time-scale there. Then, of course, there is the problem whether in fact the existing runway pattern at Heathrow could cope with the additional passengers. Another solution, which again I would prefer, would be the solution of the second runway at Gatwick to increase capacity there, but the noble Lord has said—and, indeed, this is a matter which I have looked into myself—that the present configuration of the situation makes it very difficult for a second runway to be built there without a gross loss of amenity, with many hundreds of people being re-housed. Therefore one comes down and back to Stansted, an existing airport. There you have a situation where in eight years or so you could have increased capacity and where you are not going to spend overmuch (although a great deal) on developing the new facilities required.

I think that that, in a sense, is the order in which one sees the viability of the different solutions which have been put forward. Like the noble Lord, I think that any proposal for developing a green field site, or indeed for developing Severnside or Maplin, would be proposals which would be vastly expensive; and, indeed, one might find at the end of the day that one did not need airports of this particular size. Therefore, I think the Government's broad strategy is correct, but that they must keep flexible for a number of years ahead to see whether these additional requirements to capacity are in fact required. The forecasts could be proved wrong, and we could have a change in the way people travel or a change in our attractiveness as a tourist centre. I therefore hope that the Government will still be keeping their options open.