§ Mr. Mark Todd (South Derbyshire)Much of South Derbyshire is impacted by the activities of East Midlands airport. In positive terms, the airport provides jobs to local people both directly and through a variety of on-site and adjacent associated businesses. It also offers a fairly limited range of travel destinations. The negative aspects, however, are substantial. Aircraft noise affects the lives of my constituents along the flight paths to the west and south-west of the airport in communities such as Melbourne, Ticknall, Weston-on-Trent, Swarkestone, Milton, Barrow upon Trent and Findern. Although most people judge that acceptable in daytime, the increasing strength of the airport and its chosen core market of dedicated freight traffic have greatly increased night flying. No formal restrictions are in place through planning consent conditions or national regulation. That is unacceptable in its impact on local residents and its distorting effect on the freight marketplace. This debate gives me the opportunity to expand on both aspects.
Just-in-time logistics have driven faster delivery demands, met by specialist freight integrators. Globalisation of sourcing and trade liberalisation have prompted longer supply chains, particularly for high-value products. Airfreight thus carries a disproportionate 20 per cent. of our exports by value. Airfreight has expanded rapidly in the past few years, doubling between 1969 and 1989 and doubling again between 1989 and 1999. Growth is expected to accelerate, with forecasts of 8 per cent. growth per annum during the next 10 years. At present, 70 to 80 per cent. of freight is carried in the bellies of passenger aircraft. Provided that capacity is available, it is anticipated that dedicated and express freighter services will grow in importance. Considerably more than half the cargo flights from East Midlands take place at night. To ensure next-day delivery, night flights are necessary. That also helps to spread the stress on the surface network that is a critical part of the distribution of airfreight goods.
The Select Committee on Transport, when advising the Government on aviation after its consultation, stated
if the UK were to reject night flights altogether—one can recall the court case at Heathrow, which suggested that that might happen—it would be rejecting a key means of support for modern industry … There are significant risks to the UK economy and its relative standing in Europe in the air freight market if no solution can be found.However, one should not exaggerate. Constraints on market channels to meet demand will prompt innovation. During the 30-year period covered by the Government's airport consultation, many adventitious innovations will impact on products, demand and market channels. It is worth noting that the recent huge growth in airfreight would not have been predicted in a similar Government study 30 years ago. A leading freight integrator has confirmed that to me. It is accepted in the Government's consultation on the future development of air transport that the modelling of airfreight demand is primitive.238WH East Midlands is comfortably the largest freighter airport in the United Kingdom. It is claimed that expanding operations there will bring 26,800 extra jobs to the region over 30 years. A balanced approach to the development of the airport and its disadvantages, as well as advantages, is therefore necessary.
In the Government's projections, East Midlands airport's freight volume is expected to grow between tenfold and fifteenfold by 2030. Very little of that volume is expected to be carried in the bellies of passenger aircraft.
There are DHL, TNT and UPS bases at East Midlands, along with nearly 30 freight-forwarding and airfreight service providers. The largest users of those services are the fashion industry, professional services, engineering, telecommunications and aerospace, which are all core sectors of the midlands economy. The economic value of a typical airfreight air traffic movement is three to five times more than an equivalent passenger flight. However, airport slots are not allocated on economic value and returns from passenger sales increase the value of passenger traffic to airports, which, of course, allocate the slots.
Thus, predicted growth in passenger traffic will squeeze out freight at the margins. That is a certainty with the costs of passenger air travel expected to fall by 1 to 2 per cent. per year in real terms over the 30-year period, prompting more rapid passenger volume growth. Restricting airport growth will accelerate that trend if there is no market intervention. Capacity for freight traffic is already limited by night-flight restrictions at many airports, and I have emphasised that night flights are critical in providing express airfreight services.
Again, the Select Committee highlights that point. It states that there is a need to
identify the extent to which night operations can expand at existing airports without compromising noise protection standards. This is likely to affect the location and nature of future development of the air freight industry.if capacity at UK airports is constrained—the Government's consultation suggests that it may be—prices will rise and, if decisions are left solely to airports, slots will be allocated to those flights that attract the highest value to an airport. More marginal activity will be displaced first to less favoured airports and then entirely. It is clear that freighter traffic will be impacted by constraints, forcing up prices for freighter use and prompting greater selectivity in the use of that transport mode, which is welcome in terms of sustainability. The airfreight of relatively low-value items is not justifiable in terms of the environmental impact of the transport mode. That squeeze process is also likely to focus express freighter traffic at airports with minimal night noise regulation.One of the thrusts of the Government's consultation on the future development of air transport is that East Midlands airport will further strengthen its already dominant position in the freighter market. That is not in the interests of airfreight users, as I will explain, and the Government should not encourage it. The current market share of East Midlands already poses competitiveness concerns. Further steps towards the monopoly supply of freighter slots would be unacceptable.
239WH Freight integrators told the Select Committee that they would like to use an airport closer to the south-east since that is where most freight comes from and is destined for. A Federal Express spokesman told the Committee,
Three of us operate out of Stansted and we have got a major investment there … simply because over the years we have been forced to move out of Heathrow and Gatwick",which bears out a point that I have already made.We have a major concern for the South East because if that happens at Stansted as well we will not be able to offer businesses in the South East generally, particularly in Central London, meaningful services that we do now because we will be going too far away to another airport.Furthermore, in terms of surface logistics East Midlands is a poor choice on which to base the whole strategy for airfreight. Surface communications to East Midlands airport are poor. There is a proposal to open the Donington loop to passenger traffic permitting a rail station at Castle Donington. There is also the long-delayed proposal for a station adjacent to the M1, but neither of those proposals would provide freight access to the airport through rail. The lack of provision ensures that all freight traffic to and from the airport travels by road or is moved on by air through the hub.Road links are also poor. The airport lies close to one of the most congested sections of the M1. Although the A50 offers reasonable routes to part of the west midlands, links to the east are poor and rely on the M1. Accepting that further airport growth at East Midlands is achievable within the current built environment, it is essential that surface links are improved. The airport owners should meet the cost as a condition of meeting a set benchmark point of traffic growth.
National strategy needs at least one other airport that could absorb freighter growth and would be attractive to operators in logistics terms. I hesitate to commend an airport option that might well have impacts of which I am unaware, but an airport much closer than East Midlands to the south-east and well located for east-to-west and north-to-south movements would be appropriate. That airport would have to be permitted on the basis of freight use to prevent the squeeze by passenger services. It would also be wise to consider intervening in how airports allocate slots between freight and passenger services to protect freight access to some areas.
A large part of freighter activity necessarily takes place at night and has used the oldest, noisiest aircraft. The attractiveness of East Midlands to that sector is explained in large part by the consistent failure of any level of government to impose night noise controls similar to those at equivalent airports. The Government consultation notes the local night noise issue but hints that, since the area around the airport is relatively sparsely populated, it should be of no great concern.
The implication of the highest forecasts of freight traffic from East Midlands would suggest a flight every three to five minutes from the airport. That density is unacceptable. Even modern aircraft produce significant noise while climbing at low altitudes. It is essential that a reasonable night noise regime encompassing both flight quantities and noise volume is agreed between the airport and local representatives—if that is facilitated by the White Paper—or failing that, is set by 240WH Government. The current voluntary framework endorsed by Ministers is inadequate to deal with anything like the growth forecast.
I have already pressed the Minister to define at what point the current regime should be reviewed. The local planning process on airport growth will not fill the gap in regulation. There is already significant capacity for growth without major runway or building development, let alone a second runway. The lack of effective controls skews the freight market in favour of East Midlands and this is not in the interests of the local residential community or, as I have argued, the wider economy.
It is suggested that international environmental controls will save the day. Chapter 4 applies to all new aircraft manufactured after 2006—the first new noise standard agreed since 1977. Chapter 3 reduced noise only modestly and there is no agreed date for phasing out chapter 3 aircraft. With replacement rates of 20 to 30 years and given that freight aircraft are generally older than passenger aircraft, one could expect only gradual implementation on freight routes. Since most new aircraft now meet chapter 4 standards and it took 25 years to move from chapter 3 to 4 it would not be reasonable to expect much further progress from international regulation in the next 20 years. We should focus on the potential for accelerated European implementation of chapter 4.
The UK needs a thriving airfreight sector. It should bear appropriate environmental burdens and be forced to adopt modern technologies. The Government have an important role in driving development and the adoption of more demanding international aircraft noise standards. It is neither economically nor logistically sound to focus freighter traffic growth at East Midlands. The current light noise regulation of the airport distorts location choice for integrators and that trend will accelerate as other airports fill with passengers.
Although night flying is an essential part of freighter activity, the scale of growth projected at East Midlands would have unacceptable noise impacts on our communities even with the most modern aircraft. Some growth at East Midlands is inevitable. There should be clear and close benchmarks at which the need for formal regulation is reviewed. The Government should intervene in slot allocation to protect freight use of other airports and should identify a suitable south-eastern location for core freight activity so that we have a logistically coherent strategy, not one driven solely by where night slots are available.
Most of my constituents appreciate the needs of a growing airport; they seek a more balanced approach. Their interests and that of the wider economy largely coincide. I hope that the Minister will reflect further on how to proceed in providing for the freight sector and responding to local concerns.
Mr. Deputy SpeakerThe hon. Member for North-West Leicestershire (David Taylor) has obtained permission from the initiator of the debate, the Minister and the Chair to take part.
§ David Taylor (North-West Leicestershire)I am grateful to my hon. Friend the Member for South Derbyshire (Mr. Todd) and to the Minister for allowing 241WH me to make a brief contribution to this short debate, as East Midlands airport is located in my constituency, although it is close to the Derbyshire border.
When the aviation White Paper is published in a few weeks' time, will the Minister reassure us that, when spelling out the future of airfreight in the midlands, the document will properly reflect the existing social and environmental impact of aviation on local airport communities in the three counties affected by East Midlands airport?
The contribution of air transport, in particular aircraft arrivals and departures, to greenhouse gases, air pollution and noise was recently calculated in a Treasury report to cost more than £1.4 billion per year, of which many millions are inflicted on my area.
As my hon. Friend said, the difficulty with East Midlands airport is that it is unique in the United Kingdom. It operates a very high volume of freight aircraft and a rapidly increasing number of passenger aircraft with few, if any, conditions imposed on it by local authority planners to protect nearby villages. The Government have so far declined to designate it under the Civil Aviation Act 1982 to restrict the impact of noise at night.
Although East Midlands airport has attempted to ameliorate the adverse effects of its operations by using noise-preferred routes, noise penalty schemes and sound insulation grants, that is not making a sufficient difference to the thousands of people whose human rights are infringed and whose sleep is seriously disturbed by freight aircraft at night.
Although economists shy away from putting a figure on such environmental blight in their cost-benefit calculations, will the Minister ensure that the White Paper takes a balanced view and prohibits any extra regional airport capacity without a common protective environmental framework being implemented?
Britain's airports must be removed from their fiscal cocoon and required to deal much more effectively with the adverse consequences of their night freight operations. "Things can only get noisier" will never be a sustainable aviation strategy.
§ The Parliamentary Under-Secretary of State for Transport (Mr. Tony McNulty)I congratulate my hon. Friend the Member for South Derbyshire (Mr. Todd) on securing the debate. The issue is important and it is made more so by the imminent publication of the aviation White Paper. I also thank my hon. Friend the Member for North-West Leicestershire (David Taylor) for his contribution. I had a useful discussion with both of them en route to East Midlands airport recently. Happily for them, they went off to do whatever they were doing for the rest of the day, while I stayed at the airport until about 11.15 pm seeing the pleasure that is DHL and its operations, as well as being entertained over dinner.
As my hon. Friend the Member for South Derbyshire said, freight is important to this country and business is increasingly international. We depend on our export services and on high-value goods, and as a freight- 242WH specific airport, East Midlands is unique. It ranks third in the country for net volume of freight handled, but those airports that are respectively first and second deal with belly cargo in passenger planes only rather than dedicated freight.
We depend on export services and high-value goods. In the 21st century, many of those exports depend on aviation and that trend is increasing. Set against that, our major airports are full or filling up rapidly, as my hon. Friend mentioned. In the south-east, which handles more than half our passenger traffic, Heathrow's two runways are full for most of the day, and so is the single runway at Gatwick. Those issues will be addressed in the forthcoming aviation White Paper. As the Secretary of State said when he announced the air transport consultation, doing nothing is not an option. It would be positively the wrong thing to do.
Although I do not want to dwell on the White Paper, it provides the necessary backdrop to our debate about the future of East Midlands airport. The key consultation questions on which we sought views were: how much, if any, additional airport capacity is needed; where could or should any new capacity be located; and, given what my hon. Friend the Member for North-West Leicestershire asked, what measures will be needed to control and mitigate the environmental impact of airport growth.
As and when the White Paper comes to fruition, we would very much like to develop a package for each and every airport covered by it in respect of their existing functions and role in the local economy, whether or not there will be expansion of capacity. In that context, especially if there is to be expansion, yes, it does mean a key package for surface logistics—the way in which my hon. Friend the Member for South Derbyshire referred to surface access—for noise abatement and mitigation, for environmental impact mitigation and for all the other elements to which both my hon. Friends referred.
The White Paper will most emphatically not be about one here, one there and half of one there. It is supposed to be about developing a framework for aviation in this country for the next 30 years and, in that context, must be done responsibly, above and beyond simply the allocation of capacity.
Yes, airport development is a matter of national interest and there are wide-ranging implications for people and the environment, as my hon. Friends said. It is right that the Government should look ahead and make plans to ensure that we can develop a sustainable airports policy and, equally, along with that and within the context of the Treasury's view, the economic instruments for aviation.
We must follow that approach everywhere. Clearly, London and the south-east is a key area, but we have examined in detail a wide range of options for the midlands as well as elsewhere in the country. All the options that we concentrated on have strengths and weaknesses. There is no perfect answer and, as I have told my hon. Friends on several occasions, we have made no decisions yet—the White Paper is in genesis, to say the least. We must consider the 400,000 responses that we have received.
The consultation highlighted a very important issue that we are now considering; namely, the future of the UK airfreight sector. That industry is worth a total of 243WH about £5 billion to the UK economy. It accounts for some 50,000 jobs directly and as many again in indirect employment. It is vital for the success of British businesses in an increasingly competitive international marketplace and, as my hon. Friends have mentioned, it is growing. Airfreight traffic at UK airports has doubled in the past 12 years and we have forecasts of a sixfold increase by 2030.
The fastest growing area within the sector is express freight, which is expected to comprise more than half the UK freight market by 2030. As my hon. Friend the Member for South Derbyshire said, some of the main players have a significant presence at the East Midlands airport. I am sure that many companies in the region find it invaluable to have on their doorstep the means to dispatch consignments for delivery almost anywhere in the world within 24 hours.
DHL and UPS have suggested to me—I exclude TNT simply because I have not met representatives of that company—that they need slots closer to London precisely for the express market. The fact that the express end of the freight sector is expanding does not necessarily mean that all the expansion has to be at East Midlands. A strong case has been put by UPS and DHL for at least an early and night flight into and out of Stansted, where they are based—whether they stay there is neither here nor there—to deal with the express market. The entire sixfold increase will not go to the East Midlands airport.
However, as my hon. Friends said, such capability comes at a price. Night flights are essential to operation of the international next-day delivery market, and that means night noise. East Midlands airport is in a fairly rural area. It would be very easy to regard noise impact there as a lesser issue than at, say, Heathrow or Birmingham, but be assured that we recognise that it is a very real issue every night for the people in communities such as Kegworth, Melbourne or Diseworth. As my hon. Friends said, the airport company clearly takes the noise issue seriously. It has made good progress in implementing the enhanced noise control scheme agreed last year.
However, if East Midlands is to expand to accommodate growth in the freight market, further measures will be required. That is why we will want to consider the airport's proposals for mitigation of aircraft noise problems before we reach any decisions. Its proposals include property purchase and noise insulation. Indeed, I would go further. As I said earlier, given the capacity to expand that already exists at East Midlands, apart from any greater capacity, we shall consider how that expansion, should it come—it is not necessarily an issue for the White Paper—can be done in a sustainable and mitigated fashion. It is not simply about no management at all of that particular capacity.
§ Mr. ToddMay I press the Minister slightly? He and I have exchanged letters about setting precise benchmarks at which one could reasonably review the current regulatory environment at East Midlands airport, foreseeing growth in the future. Will he reflect a little further on that? I have just received his latest letter.
§ Mr. McNultyI shall certainly reflect on the matter a little further, but I am unable to do that with my 244WH futurologist hat on, in the sense of the expansion that there may or may not be to the existing airport or any expansion that we permit or otherwise in the White Paper. I assure my hon. Friend and my hon. Friend the Member for North-West Leicestershire that, whatever the future road map—if that is an appropriate phrase—for East Midlands airport, there does need to be a notion of a development or growth brief in terms of expanding the existing facilities or any subsequent expansion of capacity.
As with all the decisions that will be taken on our new runways and our existing airports we must, as both my hon. Friends have suggested, strike a balance between maximising the economic and social benefits of more capacity and minimising environmental impacts such as noise, air quality and, as my hon. Friend the Member for North-West Leicestershire said, greenhouse gas emissions. The consultation exercise is helping to inform us where that balance should lie and answers on the Government's thoughts will be forthcoming by the end of the year in the White Paper. I reassure my hon. Friends that we are on schedule to publish the White Paper by the end of the year. I know that in terms of the stretch and import of the White Paper, their constituents in the east midlands as well as people throughout the country seek, if nothing else, some clarity about what that future will be, with or without extensive capacity.
I reiterate that, regardless of what happens at East Midlands airport, we will keep under review the essential package that is in place to control noise, which was mentioned my hon. Friend the Member for South Derbyshire. It involves phasing out noisier freight aircraft, especially DHL; a marked reduction in flight tracking noise level infringements; a noise charging regime; operational procedures to promote quiet operations; instigation of a noise insulation grant scheme; and extensive stakeholder and community outreach to build consensus about noise amelioration proposals. Those elements are constantly kept under review and that will continue. Whatever the future for East Midlands airport, I will continue to reflect on what amelioration package is needed given the expansion or capacity increases that there may be.
§ Mr. ToddMay I press the Minister on one other point? I mentioned ensuring the availability of slots in other parts of the country where it is necessary to provide express freight Locations. As he said, it would be foolish to base the entire growth in the east midlands. That would not work logistically. How can we ensure that other slots are kept available for freight?
§ Mr. McNultyCertainly in the express freight market, which is where the real significant growth is, market forces are doing that as we speak. I suspect that my hon. Friend cannot continue to push beyond that this side of the White Paper. I would resist that up until then. The notion of the White Paper being about more than simply the allocation of any airport capacity that we determine is real. It is about regional access to the London and south-east hubs, and a consequential, managed development of the freight sector. In that context, I am sure that the sort of issues that my hon. Friend raised will be considered. However, there is nothing that I can say today to my hon. Friend that will move the matter on further.
245WH I congratulate my hon. Friends on their contributions. My hon. Friend the Member for North-West Leicestershire is twitching, but I will not give way to him as we are running out of time. This is a serious issue, and I am sure that we will address it again after the White Paper has been published.