HL Deb 18 January 1990 vol 514 cc739-41

3.23 p.m.

Lord Stanley of Alderley asked Her Majesty's Government:

What steps they will take to further their policy of encouraging economic growth in the regions, and North Wales in particular, by ensuring that air fares from Manchester are in line with those of Heathrow.

Viscount Davidson

My Lords, the Government's policy is to remove restrictions in aviation arrangements between governments so that airlines are free to compete on fares and other aspects of their services, subject only to proper safeguards against anti-competitive behaviour. We have had considerable success in liberalisation, both bilaterally and within the EC. The increase in competition which results is the best way of bringing down fares, including those from Manchester.

Lord Stanley of Alderley

My Lords, I thank my noble friend for that Answer. How does he equate declared government policy of decentralisation when the fares from Manchester to Europe are, on average, 52 per cent. higher than those from Heathrow? Does my noble friend really want me to travel all the way to Heathrow, thus polluting the M.6 and M.1 and further overcrowding Heathrow?

Viscount Davidson

My Lords, I am not sure that I can advise my noble friend on the latter part of his question. However, fares from Manchester or from any other airport must reflect the costs of providing the service concerned. Therefore, fares from Manchester to European destinations tend to be higher than fares from London because of Manchester's greater distance and the lower level of demand, which reduces operators' opportunities for economies of scale. But on long-haul routes such as those to the USA the differences are less pronounced and fares tend to be the same whether from Manchester or London.

Lord Cledwyn of Penrhos

My Lords, I agree entirely with the case put forward by the noble Lord, Lord Stanley of Alderley. However, is it not also the case that communications between London, the Channel Tunnel and North Wales must be improved dramatically and quickly if that large and important region is to benefit from the single market in 1992? Will he therefore convey to his right honourable friend the need, for example, to electrify the line from Euston to Holyhead and ask him that it be done as a matter of urgency?

Viscount Davidson

My Lords, of course I shall convey to my right honourable friend anything that the noble Lord the Leader of the Opposition says. However, as I am sure he knows, the Government are making a massive investment in the road infrastructure of North Wales. The most notable element is the improvement to dual-carriageway standard of the A.55 across North Wales, costing some £550 million. It will reduce the journey time from Bangor to Chester from over three hours to about one hour. That is probably quicker than would be the result of electrification of the railways.

Lord Boyd-Carpenter

My Lords, will my noble friend remain firm in a view which he expressed a moment ago, that regulation of air fares is not government policy and that they should be deregulated and set by the airlines in accordance with their commercial judgment?

Viscount Davidson

My Lords, I must agree with my noble friend. The agreement in principle at the Transport Council on 5th December provides a framework for the next stage of liberalisation and sets goals for the future.

Lord Carmichael of Kelvingrove

My Lords, the Minister will be aware that more than 60 per cent. of air traffic is centred at Heathrow and he said that Manchester Airport is used less than Heathrow. However, how does he explain the fact that when Singapore Airlines, which had two flights per week into Manchester, asked for seven the Government restricted it to only three per week? Surely that would have been a way of increasing the income of Manchester Airport and perhaps ultimately reducing landing charges. That does not seem to be a way of encouraging competition or regional development.

Viscount Davidson

My Lords, I cannot comment on the particular case raised by the noble Lord but I shall write to him. The Government encourage the maximum use of regional airports to meet local demand and to relieve the pressure on the London airports. Over the past decade the Government have approved borrowing totalling over £240 million for the development of local authority airports. That together with airports' internally generated resources has facilitated over £300 million of investment.

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