Clause 9 - Operators of areas

Part of Civil Aviation Bill – in a Public Bill Committee at 9:30 am on 1st March 2012.

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Photo of Jim Fitzpatrick Jim Fitzpatrick Shadow Minister (Transport) 9:30 am, 1st March 2012

Thank you, Mrs Riordan, and welcome back. As you said, when we finished on Tuesday we had begun a discussion on clause 9, and you helpfully allowed the debate to cover clauses 10 to 12. My hon. Friend the Member for Blackley and Broughton, who opened the debate, described them as “sneaky clauses”. I am not sure how sneaky they are, but his comments and those of my hon. Friend the Member for Bolton West certainly raised some interesting and significant points. I will not quote extensively from their speeches, because we were all there and I do not want to provoke the hon. Member for Amber Valley, who might be tempted to comment if I did.

My hon. Friend the Member for Blackley and Broughton raised some important and fundamental questions. He asked where the proposals came from and why they are in the Bill. He asked about the potential of secondary legislation for such an important initiative and about the efficient operation of airports, particularly in Manchester, in respect of the clauses. He also asked about costs, flexibility and the duplication of bureaucracy.

I will cover those points in a moment, but I also want to add two of my own: investor confidence and the gold-plating of legislation, of which we hear quite a lot from the Government side of the House, and sometimes rightly so. None the less, the regulations are being brought in by the Government—apologies to the hon. Member for Cambridge; I meant “by the coalition”—and they therefore warrant further examination.

As my hon. Friend the Member for Blackley and Broughton said, it is unclear where the regulations have come from. No one in the evidence sessions came  forward demanding that they be introduced because of the urgent need for the break-up of British airports or for terminal operations to be broken down into different ownerships. Why are the regulations being brought forward? Where is the demand coming from? Notwithstanding that there has been no domestic request, it was mentioned in the evidence sessions and by my hon. Friend on Tuesday that the one international example is JFK in New York, which is regarded as quite inefficient and expensive and does not set a standard that we would want our airports to follow.

On secondary legislation, we are discussing a potentially significant change in how airports are operated and run in the UK. In future, it may well be that the proposals would be appropriate were the market to change and were there to be an appetite for them within the aviation industry. However, for the Department at this point to produce regulations that say that, if that happens at some point in the future the proposals could be introduced by secondary legislation, seems somewhat superficial. It would be interesting to hear the Minister’s comments, because one would expect a full consultation and the Government and the Civil Aviation Authority to have to go through hoops to determine that it was appropriate. Secondary legislation does not appear to be an appropriate vehicle.

On efficiency, my hon. Friend the Member for Bolton West, in particular, raised the question of capacity at the different terminals at Manchester and the ability for incoming aircraft to be switched between terminals, which could be more difficult if those terminals were operated by different companies. There would certainly need to be an element of capacity headroom at each terminal, if that were the case.

There is an interesting and lengthy article on Heathrow in today’s Financial Times. I recommend it to colleagues who have not seen it, as it gives a good international comparison between the operation of Heathrow and other airports. It demonstrates that, with Heathrow operating at 97% capacity, the ability to accommodate any hiccup in operation—whether fog, snow or whatever—has a massive knock-on effect on the efficient operation of the airport. There is a comparison with our European competitors and the additional runway capacity, mentioned by my hon. Friend the Member for Blackley and Broughton on Tuesday, that has been built in the past few decades. It makes particular reference to Doha, Abu Dhabi and Dubai.

Dubai, with its efficient six-runway operation in direct competition to northern Europe, is saying to India, China or Australia, “Fly here to go to the States. There is no need to go to northern Europe. If you want to come to northern Europe, why would you want to come to Heathrow, with its potential delays?” My hon. Friend the Member for Bolton West articulated the capacity issues at Manchester and the ability to move between terminals because there is a single airport owner. If we break down the terminals, the potential for the flexibility seen at Manchester is brought into sharp focus.

My hon. Friend the Member for Blackley and Broughton raised the question of costs and the significant implications for investment for airports with regard to the transfer of ownership. My hon. Friend the Member for Bolton West raised questions of the duplication of bureaucracy. I cannot say that I was entirely comfortable with her description of some professional workers as “bean  counters”; perhaps that was not the most complimentary way to describe some significant and highly regarded professionals. However, I take her point about the kind of operation that we want at our airports. Do we want an efficient operation, with maximum capacity and usefulness, or do we want in the short term to create a climate in which people can work out the transfer of ownership into different companies? In that instance, she made a valid point about the bureaucracy required to take the matter further.

I have two further brief points to make: one on investor confidence and the other on the gold-plating of regulations. I cannot remember whether the invitation to a number of us to attend the topping-out ceremony at terminal 2 at Heathrow was for yesterday or next Wednesday. It is certainly happening about now. My hon. Friend the Member for Blackley and Broughton referred to the cost of terminal 5 at Heathrow, which took 20 years to get through the planning inquiry and into operation. Terminal 3 in Beijing, China, took four and a half years. There was significant investment; my hon. Friend the Member for Blackley and Broughton struggled to remember how many billions. I defer to the quote from his contribution, but we are talking about billions.

I am not a business man; colleagues know that. However, suppose a business person or company was looking to make that significant investment of billions of pounds, and someone said, “We are just about to pass regulations to say that at some point in future not only will we be able to strip you of that asset and the return on your investment, but we can do it through secondary legislation, and your ability to influence the outcome of the decision by the regulator or Government will be extremely limited.”

As I said earlier, that might not mean that the regulations would not be appropriate at some point in future, but to implement them through secondary legislation, at a time when we are struggling with capacity and looking at how to get investment into the aviation sector, looks like a disincentive to international companies when it comes to investing in terminals at our airports.

My hon. Friend the Member for Blackley and Broughton, whom the Minister correctly commended for his experience of the sector—my hon. Friend was chairman of Manchester Airports Group—clearly has a better grasp of these issues than I do.