HL Deb 05 June 1985 vol 464 cc760-70

3.59 p.m.

The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne)

My Lords, with your Lordships' permission I should like to repeat a Statement being made in another place by my right honourable friend the Secretary of State for Transport about the Government's policy for airports. The Statement is as follows:

"It is the responsibility of Government to ensure that sufficient capacity can be provided at United Kingdom airports, where it is required, and in due time. Our policy of encouraging competition in the air requires that there should be enough capacity, available (so far as is possible) to all airlines on equal terms. We cannot direct flights to airports they do not wish to use; airports must use the opportunities open to them to attract as many flights as they can through providing a cheap and efficient service, for the benefit of the passengers.

"To make airport managements more responsive to their customers, and to further assist the growth of our most important and successful airline industry, the Government have decided to introduce legislation first to make every major airport into a limited company; and, secondly, to convert the BAA into a holding company and to privatise it with its seven airport companies. I hope that local authorities will follow this lead and introduce private capital into their companies too; but we do not intend to force them to do so. A system of regulation will be proposed to control the monopoly aspect of airports (including charges), to regulate traffic distribution when necessary, and to safeguard essential national interests.

"Our air transport industry is the envy of the world and a great success story. It has a turnover of £4 billion, and earns £ ½ billion of foreign exchange. It is a growing industry, already employing 85,000 people. It is essential to the continuation of this success, and to the provision of more jobs, that there is sufficient airport capacity. Equally important, this must be done with minimum damage to the environment and to the lives of people living near airports.

"It is solving this dilemma—adequate capacity with minimum environmental damage—that first the inspector at the airports inquiries, and more latterly the Government, have had to grapple. I would like to pay tribute again to Mr. Graham Eyre QC for his thorough and comprehensive report. In announcing our decisions today, I want to stress that we have sought a solution which meets both objectives as far as is humanly possible.

"The success of our regional airports depends on them handling more traffic—which in turn depends on a growth in demand and on more airlines deciding to operate services from them. The signs are good: traffic grew by 12 per cent. last year, and is expected to increase by one-third more by 1990. The year 1985 has seen the introduction at regional airports of many new scheduled services to international destinations, and more are planned. The Government will do everything they can to increase flights to and from the regional airports, first and foremost by British airlines. As regards foreign airlines, we recently reached an agreement with the Government of Singapore which allows Singapore Airlines to operate to Manchester. We expect shortly to begin discussions with the US Government about the basis on which scheduled traffic rights to Manchester for US airlines may also be granted.

"We will continue to study, with representatives of regional airports, how to increase traffic still further. We will be ready to approve worthwhile investment in new facilities, and the improvement of road and rail links where they are justified. We will ensure that competition between all airports, both BAA and local authority, will be on fair and equal terms. We recognise the importance of maintaining access for domestic flights to Heathrow and Gatwick.

"Even after taking account of all these efforts to attract traffic to the regions and away from the South-east, the Government, after careful evaluation, have concluded that it is necessary to provide capacity in the South-east for between 72 and 79 million passengers per annum by 1995. This is consistent with the inspector's planning figure of 75 mppa. We intend to achieve that figure as follows:

"First: my right honourable friend the Secretary of State for the Environment recently announced approval of the STOLPORT in London's Docklands. This will provide 1 mppa.

"Second: the Government have decided to invite Luton Borough Council to come forward with proposals (which would be subject to the necessary planning procedures) to increase the capacity of Luton Airport from its present throughput of 2 mppa to 5 mppa.

"Third: Gatwick Airport is expected by that time to be capable on present plans of handling 21 to 23 mppa. We have no plans for a second runway at Gatwick.

"Fourth: the capacity at Heathrow in 1995, when all four terminals will be in full operation, is expected to be 38 to 42 mppa. It is very possible that this will be adequate to handle as big a throughput of passengers as runway capacity will allow. The Government have decided to accept the inspector's recommendation that air transport movements at Heathrow should not be artificially constrained, and to ask the House to accept the abandonment of the proposed limit of 275,000 air transport movements a year. Even with this, and with all foreseeable technological improvements to the full use of runways, it seems likely that runway capacity, not terminal capacity, will be the limiting factor at Heathrow for some years ahead. Nevertheless, it seems prudent to ask the BAA to pursue with the Thames Water Authority the possibility of moving the Perry Oaks sludge works elsewhere. Only if and when this has been done, and in the light of traffic forecasts at that time, would it seem sensible to see whether extra terminal capacity should be provided and if so how much. My right honourable friend the Secretary of State for the Environment, on whose behalf the Minister for Housing and Construction has acted throughout, has turned down Uttlesford DC's application for planning permission for Terminal 5, and no terminal can be built at Perry Oaks in the future without planning permission. We are setting up a study of improved surface access to Heathrow.

"Fifth: Stansted. It will now be abundantly clear, Mr. Speaker, that the only way we can provide sufficient capacity to sustain the growth of our successful aviation industry is by terminal development at Stansted, thus bringing into more effective use the spare runway capacity which is available there. My right honourable friend the Secretary of State for the Environment and I have therefore decided to accept the inspector's recommendation to the extent of granting the BAA outline planning permission for development at Stansted. The application was for 15 mppa. The inspector recommended initial permission for this 15 mppa, rising later to 25 mppa at Stansted. Although we have granted permission for the 15 mppa recommended by the inspector, we have decided to impose conditions requiring that the development be phased and limiting the first phase of development to 7 to 8 mppa. The initial development will thus amount to less than one-third of what the inspector recommended ultimately. Apart from the planning decision I propose to seek powers to limit air transport movements at airports. Subject to Parliament giving me the necessary powers, I intend to impose an initial limit on air transport movements at Stansted equivalent to 7 to 8 mppa. Any further increases in traffic at Stansted would be subject to control by Parliament, by means of an affirmative resolution. As a result, further growth of traffic at Stansted would only take place when it was seen to be necessary, with Parliament having the decisive role. This should provide reassurance to people in the area. We have rejected the possibility of the construction of a second runway at Stansted.

"In the past we as a nation have shirked the decisions needed for the growth of air traffic and the jobs that go with it. We are in danger of stifling one of our most enterprising industries and losing out to our continental rivals. Schiphol, Paris and Frankfurt are building capacity well ahead of growth. They no doubt hope that we will shirk the decisions once again. The Government are determined not to.

"The decision letters on the planning application and the White Paper, all of which are now available in the Vote Office, set out the arguments for these decisions at length and with clarity. When they have read them, I hope that honourable and right honourable Members will feel that our responsibilities to all the many important and often divergent interests concerned have been adequately discharged".

My Lords, that concludes the Statement.

Lord Carmichael of Kelvingrove

My Lords, perhaps I may first of all thank the Minister for repeating the Statement made in the other place and also for arranging that a copy of the White Paper was sent to this side of the House. Unfortunately it has just newly arrived, and obviously it will take some studying. I am sure that the noble Lord is aware that it is a very important Statement and that it will not have total and universal approval on all sides of the House, far less throughout the country. It has a far-reaching effect in terms of regional policy. I notice, for instance, that there is no mention of the Scottish position although regional policy is mentioned briefly.

I believe that in his usual way the Secretary of State has decided that when in doubt—and there is a great deal of doubt even about the Statement—the answer is to privatise and to set the airports free. But it appears from the Statement that at the same time he is taking steps for himself and the CAA to have more control over allocating traffic. That part of the Statement appeared to me at least to be rather muddled. Perhaps the Minister can expand a little on what the powers will actually be.

The Statement also says that the capacity at Stansted will be increased only to a throughput of between 7 and 8 million passengers per annum in the initial stages and that a further increase would require parliamentary approval. How can people take even the phasing seriously when in the Statement the Minister has gone back on his previous view that he would stick to 275 mppa at Heathrow? That was what I gathered from the original debate on the inspector's report—that 275 mppa would certainly be held to.

The figure of 1 mppa at the London Docks seems to be put in almost for balance. From my reading of the inspector's report and the later material on STOLPORT it appears that most of the traffic would come from Heathrow or Gatwick. It would not be new traffic. Even if it relieved them of any traffic, it would produce a lower load factor on Heathrow and Gatwick. One of the problems—and the Minister actually said this in the Statement—is not terminal capacity but runway capacity. I do not see that he can claim a 1 mppa reduction because of STOLPORT.

I think that the Minister has chosen the fastest way possible to expand, against all the advice from many sources—but perhaps not from the inspector's report—including originally the Thames Water Authority about the impossibility of moving the Perry Oaks sewage works. I wonder why he has suddenly decided that this is something that should be done.

Although I agree that there are problems in the South-East, I think that the outlook for regional airports, and particularly Manchester and Birmingham, is bleak after this Statement. I hope that the Minister accepts that before legislation is brought forward there should be an important debate on the White Paper when we have had a chance to read it.

4.14 p.m.

Baroness Burton of Coventry

My Lords, in thanking the Minister for repeating the Statement, may I say that I hope to remember that this is a Statement and not a debate, which doubtless we shall have at a later date? I am looking at one phrase with which we all entirely agree—that: Our air transport industry is the envy of the world and a great success story". I believe that every one of us here today, whatever our feelings about details, would support that and hope that we keep the industry in the forefront of world affairs.

I note that the Government say that their policy is that there should be enough capacity available so far as possible to all airlines on equal terms and that flights cannot be directed to airports that airlines do not wish to use. We accept that entirely. We hope very much that the Government will see that there is enough airport capacity available for all who need it.

I come now to the legislation, the BAA, and so on. Obviously we shall have to wait to see what arises. At this stage I would say only that I welcome the proposal to control the monopoly aspect of charges. I think that the Minister will agree that airport charges have been a bone of contention for all airlines. We should all very much welcome their control.

We on these Benches were glad to note the development of STOLPORT which the Government have decided for the London Docklands. Everyone with whom I have spoken, I think, and certainly I myself, very much welcome what is said about Luton. Although Luton has had all the necessary facilities, it has seen a fall in traffic, as I mentioned in our debate, simply because of a subsidised Stansted which took traffic from Luton. Luton will now be able to go ahead, as it says in the Statement, to 5 million passengers per annum which it can well do.

We who believe in the second runway at Gatwick think that the Government have made fundamentally a wrong decision. Of course we shall continue to press for the second runway. I think that we seem to be making some headway. Whether we are making an impression I do not know, but we are certainly making headway. We on these Benches, and I hope others, believe that the refusal to lay down a second runway at Gatwick makes absolute nonsense of Government declarations about sufficient airport capacity. But I shall leave that for a debate and not weary the House with it now.

However, may I ask the Minister a question about charter airlines which arises from the decision not to lay down a second runway at Gatwick? I have strong sympathy with the charter airline industry, as have my friends and the Civil Aviation Authority. We suggest that the industry has a legitimate case for demanding security of tenure at Gatwick. Can the Minister help me? It has been suggested that charter services should be moved from Gatwick to Stansted. I ask the Minister a straight question: is that true? We suggest that such a move would be damaging both to the consumer and to the airline industry. Furthermore, I would point out that the charter airlines were largely responsible for building up Gatwick to the major international airport which it now is.

I think that we would all accept that we must await developments at Heathrow, and I hope that the Government will be able to give us more details in the ensuing debate. That brings me to Stansted. Any major development at Stansted, particularly a subsidised Stansted, would militate against development in the regions. Is the Minister aware that that feeling is strongly held?

Let me ask him two specific questions. In the Government's Statement the first phase of development is limited to 7 to 8 million passengers per annum. Can we take it from the Statement that that does not necessarily imply moving up to 15 mppa? If it implies moving to the higher figure, what would be the cost? In the recent debate in the House I asked the Minister whether he could give us the estimated cost for development at Stansted as recommended by the inspector—namely, to one runway and a capacity of 15 mppa, and he did not give me a reply. Perhaps he could do so today.

I had hoped for a maximum limit of 5 million; but if we have a suggested limitation in the first phase of between 7 million and 8 million, can he tell the House what the cost of that development will be? That is important. Secondly, can he tell us whether Stansted will continue to be subsidised? Of course, Stansted does not pay for itself. It exists by cross-subsidy from Gatwick and Heathrow. It takes away money that the regions feel could be better used in their particular area. In the last two or three years it has greatly damaged Luton. Stansted is not self-sufficient and it will not yield a return.

I think we should all like more definite plans for the regions. Whatever the Minister has said, there is a very strong feeling in the regions that they have been neglected, that there are not definite plans for their development. While I was very glad to note what had been agreed about Singapore Airlines flying into Manchester, I think I am correct in saying that that will not happen until well on into next year. Will the Minister bear in mind what we feel about that?

I have tried not to be too lengthy. I hope the Minister will give us the replies for which I have asked. One thing I should like to say before I sit down is this. Not only we on these Benches but I think all parties in both Houses of Parliament are very glad that that proposed limitation of air traffic movements has gone. If it had reached this House in the Civil Aviation Bill as was originally proposed, I should have upset my Leader by proposing that we threw it out. It was a most shocking Bill and if ever there was an attempt to pre-empt matters in favour of Stansted that was it. However, thanks to the Standing Committee in another place, it has now died. I am very glad it has died. I hope the Minister will take note of the points that I have made and give us an answer.

Lord Trefgarne

My Lords, I am very grateful to both the noble Lord and the noble Baroness for their reception of this Statement.

In answer to the noble Lord, Lord Carmichael, whose supplementaries were not quite as far-ranging as those of the noble Baroness, perhaps I may just clarify one point. The limit that we have decided to abandon so far as Heathrow is concerned was not a limit on passengers, as I think the noble Lord sought to imply, but a limit on the number of air transport movements. It was originally proposed that the ceiling should be 275,000 air transport movements per annum and it is that that we have now abandoned.

The noble Lord said he thought that this Statement would not receive a universal welcome. I think it is beyond the wit of even the noble Lord to devise a Statement on a matter such as this which would achieve universal acceptance across the land and across both sides of your Lordships' House. However, we have had a good stab at it.

The noble Lord also referred to the modest capacity that will be provided by the STOLPORT, which was approved recently. Those movements which will take place at that new and exciting venture are movements which might otherwise have used Heathrow or Gatwick. They will be confined to aircraft of a specific genre so that they can use the very limited runway length that is available there. They will be relieving some of the stresses and strains on the other two airports, but I agree that that will only be to a marginal extent.

The noble Baroness, Lady Burton, asked me a large number of questions. The noble Baroness may prefer that I write to her on some of them, although I think that I can provide an answer to most of them if your Lordships will bear with me for half an hour or so. However, that may be trespassing unduly upon your Lordships' patience.

Baroness Burton of Coventry

My Lords, perhaps for the benefit of the House and to save the noble Lord trouble, he will give the answers now and not write.

4.24 p.m.

Lord Trefgarne

My Lords, I will give as many as I can. The purpose of the announcement that we have made today, incorporating the decisions which it does, is of course to ensure that we provide sufficient airport capacity into the 1990s for the demand as we believe it will arise at that time. The noble Baroness commented upon the regulatory machinery that we have referred to in the Statement. That will require legislation and will be brought forward as soon as an opportunity can be found. It will be very necessary that that legislation provides for some control of the monopoly aspects of airports because certainly there are some airports in the land which enjoy something of a monopoly in the position which they occupy.

The noble Baroness accepted, and I think welcomed, the thoughts that we had for Luton Airport. That will of course be a matter for the owner of Luton Airport, which is not the British Airports Authority: it is the Luton Borough Council. We have invited the council to bring forward the kind of proposals that would meet the increased capacity that we have suggested. That no doubt will be happening in due course.

The noble Baroness asked, too, about the question of charters and whether they would be moved from, say, Gatwick to Stansted. We have asked the Civil Aviation Authority to have a careful look at the distribution of traffic around the London airport complex and we shall look forward to hearing their views on that matter in due course. However, I hear what the noble Baroness says about the importance of Gatwick to the charter airline companies. I am certain that the CAA will bear that point very much in mind.

The proposal as far as Stansted is concerned is that it should initially be allowed to develop up to about 7 or 8 million passengers per annum. Any increase above that will be subject to Parliamentary approval—and I understand it is proposed that that should be the approval of both Houses of Parliament. Thus, when the time comes, if it does, to authorise that increase, your Lordships and Parliament will have a clear voice as to the way forward.

The noble Baroness asked me, too, about the costs, particularly the costs at Stansted. I am advised that the initial phase is likely to cost very much less than the estimate of £400 million at mid-1981 prices which the BAA gave to the inquiries. We shall certainly expect the BAA to show that the investment, whatever it may turn out to be, will earn an acceptable rate of return. The £400 million was of course for a significantly greater expansion at Stansted than is now anticipated, so clearly the figure at which we are now looking will be very much less than the figure originally proposed.

As for the question of the regions, which was a thought in the mind of both the noble Baroness and the noble Lord, Lord Carmichael, I am afraid it is the case that one cannot move demand in great chunks around the countryside. The fact of the matter is that the 75 per cent. or so of the passenger demand arising in this country arises in the South-East of the country. It really is not possible to dragoon the population up to the North-East or to the North-West, or to wherever the regional airports may be. However, there is clearly a significant and growing demand in the regions. We are determined that that demand should be met. That is why we have taken the steps that we have, particularly with regard to Manchester but also with regard to the other aerodromes in the regions. Since 1979 we have authorised something like £200 million-worth of expenditure at the regional airports. I believe that they are now ready to cope with the demand as it arises. It is now a matter for the passengers and for the airlines to show that that demand is there.

Lord Boyd-Carpenter

My Lords, is my noble friend aware that the fact that these decisions have now at long last been made and announced will cause great relief in all who are interested in the development of our civil aviation, who have been very much concerned about the delay in dealing with this admittedly difficult matter?

Is he also aware that many people will congratulate the Government most warmly on abolishing the preposterous 275,000 movements limit at Heathrow? May I ask him whether that abolition is to take effect at once in view of the fact that we are now at the stage of the early summer traffic rise which happens every year?

With respect to Stansted, may I ask my noble friend also whether the first phase of development will be undertaken in a way which does not in any way prejudice or prevent a move to the second stage? In other words, can he assure me that the appalling mistake made years ago at Gatwick will not be repeated? In the Stansted context, may I also ask him whether the difficulties in respect of air traffic control, that used to stand in the way of a Stansted and Luton development such as he has announced have now been resolved so that there will be no difficulties air traffic control-wise in the interaction of flights in and out of those two fairly adjacent airports?

Finally, can my noble friend say whether the Statement which he has repeated, which is of course the Statement of the Government, carries, or does not carry, the general support of their expert advisers, the Civil Aviation Authority?

Lord Trefgarne

My Lords, I am grateful to my noble friend for his welcome for the Statement. So far as removing the limit of 275,000 movements at Heathrow is concerned, that limit has not yet in fact been imposed. It was to be imposed had the legislation passed through the other place at the time that Terminal 4 was opened. The legislation did not pass the other place, and indeed Terminal 4 has not yet been opened. So the limit has not yet been imposed. Thus the question of lifting it does not arise. It will not now be imposed at all.

My noble friend asked to be assured that there would be no inhibitions—I think he was anxious to ensure that the initial phase should not in any way prejudice the second phase—on the development at Stansted. I can assure him that this is our intention. I am not aware of any difficulties over the question of air traffic control constraints either at Luton or Stansted, although I am aware that there were some difficulties of that kind in the past. If I am wrong about that, I can perhaps write to my noble friend. I can assure him that the Civil Aviation Authority has of course been closely consulted in all this.

Lord Dean of Beswick

My Lords, the noble Lord the Minister will not be surprised if some of us do not accept one of the main thrusts of the Statement, not, I think, raised so far by any noble Lord, that an industry which in the terms of the Statement is doing so well should be privatised at this stage. It is obviously for no other reason than to suit a particular, narrowminded political philosophy. It is also obvious that the Government, or the Minister involved in another place, have had no regard at all to points made in a recent debate in this Chamber by some of us who come from the hinterlands in the North. The points that we made have been almost totally ignored. To include the bare announcement that development at Stansted will eventually involve 15 million passengers a year will be seen once again in the North as a death blow in favour of the South. The maximum development that could have been attained in the North will be killed by that statement alone.

Will the Minister accept that the Statement will not be seen in the North, as I remarked in the Chamber some time ago, simply as a declaration on airport policy? It will be seen once again as selling out the people in the North to assuage the view of people in the affluent South. The unemployment figure in the Stansted Airport catchment area is 4.5 per cent. In parts of the North and certainly in the catchment area of Manchester Airport the figure is well above—I emphasise "well" above—the national average. That is the context in which this decision will be seen in the North of England, where other noble Lords and myself come from.

I should like to ask the Minister one specific question. The Statement said that the Government had no intention whatever in the forthcoming legislation to privatise the municipally owned airports. Can he give an undertaking that at no time during the passage of any such legislation the Government will accept from any quarter amendments to carry out that particular exercise? I give the undertaking, for my part, that those of us from the North, who are bitterly disappointed with the exercise that is to be carried out, will do our best to ensure that the North, through the legislative process, gets a fair crack of the whip even if this means at times that we have to be less accommo-dating to the Government than is normally the case.

Lord Trefgarne

My Lords, I am sorry that the noble Lord takes the Statement that way. I believe that we have been accommodating to the regions. Over the past five or six years we have provided as I said earlier—or authorised at least—some £200 million for expansion and redevelopment at those airports. We have adopted a most liberal licensing regime for new air services operating from those airports. The noble Lord may be aware of the recent regional air services directive that has emerged from the European Community in which we took a leading part. Indeed, if we had had our way it would have been much more liberal even than it is. We have now authorised the operation of Singapore Airlines from Manchester. That is a major step forward. It was implied that we had taken some time to reach that decision. In fact the Singapore Government lodged the application with us only in March this year, and it was authorised a few weeks ago. Only a month or two was taken by us in our consideration of that matter.

I believe it is not justified to suggest that we have been neglecting the regions. In the end, the prosperity of the regional airports will depend upon the local people, the passengers and the airlines. The Government do not have it in their power to wave a magic wand over the regional airports and to create some great new enterprise where none exists.

Lord Leatherland

My Lords, I wonder whet her the Minister can answer a simple, non-political question. How many new houses will it he necessary to provide in the Stansted area to cater for the staff?

Lord Trefgarne

My Lords, I do not have the number of houses before me, but we anticipate that in due course Stansted will be offering employment opportunities for some 10,000 people.

Lord Mountevans

My Lords, I should like to give a slightly more generous welcome than has perhaps been most recently given to the Statement, which is, I think, one that will tive a great deal of encouragement to those of us involved in aviation, in transport and/or in the tourism industry. I agree wholeheartedly with the Government's plans as stated today to meet demand as and when it arises both in the South-east and in the regions. I wish really to ask only one question. Can the Minister amplify on the remark in the Statement that the Government will look sympathetically at cases submitted to them for access to airports by rail and road? As the Minister knows, Stansted, without decent rail access, will not be a particularly attractive proposal to the many airlines which will be encouraged to use it.

Lord Trefgarne

My Lords, there are two aspects to the point raised by the noble Lord. We have decided to commission a study into surface access generally to Heathrow. In regard to Stansted, we are also asking British Rail to look at the possibility of providing a rail link to Stansted Airport. At present, as the noble Lord may know, the railway proceeds as far as Bishop's Stortford. I suppose that the most obvious solution would be a spur from Bishop's Stortford to the airport. That would of course be a matter for British Rail. We have asked British Rail to look into the matter and to bring forward proposals, with some idea of the cost.