‘(1) The Secretary of State may by order require the CAA to impose on holders of operating licences or route licences an obligation to operate an air transport service serving a specified route as part of the licence conditions for operating another route.
(2) Before making an order under subsection (1) the Secretary of State must consult with—
(a) the CAA;
(b) holders of operating licences or route licences which may become subject to an obligation to operate an air transport service serving the specified route;
(c) providers of airport operation services connected with the specified route;
(d) providers of transport services other than air transport services serving the land equivalent of the specified route;
(e) any other person or body appearing to the Secretary of State to have an interest in the matter.
(3) An order under this section is subject to annulment in pursuance of a resolution of either House of Parliament.’.— (Mr Tom Harris.)
I beg to move, That the clause be read a Second time.
The new clause would give the Secretary of State the authority to require the CAA to impose on any airline an obligation to provide a service on any route. The CAA would draw up such a regulation, which could be imposed only after consultation with all interested bodies. I accept that, at first glance, the new clause might be interpreted as some sort of Stalinist attempt by the state to wrest control of the airline industry—that may or may not be a bad thing—but it is merely a probing amendment, intended to raise some important issues with regard to UK airports and their access to the UK’s hub airport at Heathrow.
The new clause gives me yet another opportunity to raise the issue of Heathrow’s third runway, the absence of which lies at the heart of many of the capacity problems faced by the UK, not only at Heathrow but throughout the country. A year ago, bmi—British Midland International—confirmed that it would withdraw its regular scheduled service between Glasgow and Heathrow. It blamed the decision on increases in passenger charges at Heathrow, but there is no doubt in my mind that the decision was made—as such decisions will be made in future—in the context of a hub airport that operates at 99% of capacity, and at which slots for regional services can be better and more profitably used by airlines for long-haul services. I raised that danger in debates on the future of Heathrow in the Chamber in 2009.
My hon. Friend mentions problems of capacity. Does he agree that the lack of capacity has led to incredible competition for slots, leading to several situations being resolved in the law courts, rather than through constructive negotiation?
My hon. Friend is absolutely right, and he has been very consistent in his support for the economic case for Heathrow.
I spoke flippantly about this being some kind of Stalinist plot; at this point it may be wise to mention that the hon. Member for Stockton South (James Wharton) has also called for Government action to preserve slots for regional services, and has called for a public service obligation to protect Heathrow flights to and from Durham Tees Valley airport. I will come on to that shortly.
My hon. Friend the Member for Luton South is absolutely right: without expansion of capacity at Heathrow, domestic services and therefore regional economies will suffer, and so it has proved. Colleagues in north-east England, many of whom have added their name to the new clause, have had a similar experience following bmi’s decision to withdraw services between Durham Tees Valley airport and Heathrow. There was no consultation. Surely any Government—particularly a Government who campaigned against Heathrow expansion on the basis of a commitment to developing and nurturing regional airports—have a duty to intervene to ensure that local economies are not put at risk by the short-sighted commercial decisions of airlines.
The new clause would ensure that there was a mandatory consultation period before any obligation could be put on airlines by the CAA under direction from the Secretary of State. That level of consultation has been sadly lacking whenever airlines such as bmi have unilaterally withdrawn services that are crucial to regional development and regional economies across the country. Those economies are being put at risk by a short-sighted approach to Heathrow expansion. That can be rebalanced, if not completely solved, by allowing the CAA to impose the obligations that I have mentioned on airlines. I look forward to the Minister’s response.
I understand that this is a probing new clause, and I shall be interested to hear the Minister’s response to the issues raised. Transport underpins the quality of our life and our economic prospects, particularly in the far-flung regions of this country. The Government have said many times that they wish to rebalance the economy from the south to the north. We have heard many times, throughout the passage of this Bill and others, about the problems of aviation capacity in the south-east. The key to that rebalancing is to ensure that regional transport infrastructure is up to the job. That includes the role of regional airports and their links to the south-east.
We have heard a number of times about the importance of regional airports and the role that they can play in dealing with capacity issues in the south-east, if they are allowed to, and we have heard how well run, efficient, effective and profitable regional airports can be. In an earlier sitting, the Minister talked about the efficiency of Manchester and Newcastle airports in particular. However, as many in my region know only too well, the efficiency, effectiveness and profitability of a good regional airport, particularly the smaller radial airports, can be thrown into jeopardy overnight by one big player pulling out and using its Heathrow slots elsewhere. The new clause would allow the Secretary of State by order to require the Civil Aviation Authority to impose on an airline an obligation to operate an air transport service serving a specified route before allowing them to operate another route. That would be a general obligation; it is not about one particular airport or one particular region, and it could not be tied to one specific airport or airline.
I wish to pose a question. This goes back to a point that the hon. Lady made about the environmental consequences of flying. When I was a member of the European Parliament—I have harked back to that time on several occasions—British Midland Airways used to keep a slot open by flying a completely empty plane between East Midlands airport and Heathrow. That was not particularly good for the environment, and it certainly did not help the people of the east midlands. I am slightly worried that the new clause would have an unforeseen consequence. I understand why it was tabled, but I am not convinced that it has been thought through.
That is a valid point, but my understanding is that when slots have been pulled, particularly from airports in my region, it is not because the planes are flying half-empty or the route is unprofitable; it is because more profit can be made elsewhere.
On the point made by the hon. Member for Daventry, an additional issue strikes me. Many low-cost airlines will move to wherever the landing fees are cheapest. They can move planes parked overnight at stands, which is different from the core business of flying around. Under the new clause, there would presumably be a compelling case for entering into new negotiations with an existing provider of airport services, instead of just upping and leaving overnight.
Absolutely. The new clause would ensure that airlines that pulled out of airports at short notice, and so risked the future of small regional airports, risked losing their right to use Heathrow slots elsewhere. As my hon. Friend the Member for Glasgow South said, had the amendment been in place when bmi pulled out of its slots for flights between Heathrow and Durham Tees Valley airport, the CAA could have insisted that bmi was still under an obligation to fly that route. It might then not have pulled out, or certainly not without consultation.
When a big player pulls out of a small regional airport and uses its slots at Heathrow for other profitable routes, there is a devastating impact not only on small regional airports, but on the whole region, particularly socially deprived regions. It also reduces the efficiency of an airport such as Heathrow as an internal hub.
I have been told that only two regional airports now have slots into Heathrow: Newcastle and Manchester. Until we get High Speed 2, that will not be good for the regions. People who live in the regions have told me that they must fly to Charles de Gaulle, Madrid or Schiphol to fly on elsewhere. The arrangement works both ways, and it has an impact on Heathrow, as well as regional airports.
I am following what the hon. Lady says, but I am struggling to see how she can square her argument with any concern for the environment. Surely the environmental consequences of requiring airlines to continue to fly domestic flights that are unprofitable, and therefore presumably not full, are damaging. Replacing short domestic flights with long-haul larger planes that carry more people and are more efficient would much better environmentally than the sort of action she is considering.
So if it is not profitable, we should scrap it? Is it more environmentally friendly for people to fly from Glasgow or Durham Tees Valley to Madrid instead of London? I understand that airlines need to be profitable, and that they are operating in a challenging market, but they do not operate in isolation, and they have a duty to the regions, as well as to the hub. The new clause would go some way to regulating the situation and ensuring that those obligations are met.
I am grateful to you, Mrs Riordan, for calling me to speak as we come to the end of the day, and the end of the Bill. New clause 3 is an interesting probing amendment with much merit. We have heard from my hon. Friends the Members for Glasgow South, and for North West Durham, about the effect of lack of capacity in the UK, and some of the unexpected consequences. Heathrow slots will always be full, certainly while it has only two runways and operates at 99% capacity, and falls over at the first burst of snow as a result, and while we lack an aviation strategy to expand capacity in the south-east properly. However, in many regional airports—Luton airport, which I would argue is London’s premier airport, is in my constituency—
Changes in aviation over the past 15 or 20 years have meant that, instead of wanting to fly directly from point to point, low-cost carriers and airlines are willing to be flexible about where they fly to; they will perhaps fly to airports with fewer facilities, and have expanded to fly into more regional airports. Some airlines are flying to airports that are 50 km or 100 km away from the place advertised as being where the passenger is finally dropped off. That has meant competition for slots, and much more competition between regional airports in attracting business.
My hon. Friend the Member for North West Durham rightly gave the example of Durham Tees Valley airport. In 2004, bmibaby signed an agreement with Durham Tees Valley airport, requiring it to base two aircraft at the airport, and operate them from that airport, for a period of 10 years. That is not unusual in the industry; what is unusual is that in late 2006, the airline withdrew both aircraft from the airport to redeploy them to other UK airports. Presumably, that decision was driven by a couple of factors, including the ability to grow that route. I think we would all accept that. The hon. Member for Cambridge pointed out some of the implications of what happens when airlines are unable to fill their routes.
I might speculate and say that the move could have been due to the issue of where those planes could be stored overnight. The low-cost business requires airframes to be moved around perhaps four or five different cities. That is very much a logistical exercise. Small changes in routes may have a big impact on where aircraft are sited. In this case, in late 2006, bmibaby withdrew both aircraft to redeploy them to other UK airports. It subsequently cancelled all services without warning, and without agreeing with the airport any terms for departure.
I am sure that everyone here has concerns about that business practice. I am a proponent of aviation and its role in the UK economy. I fundamentally believe in aviation’s power for good, and I think that we sometimes do ourselves a disservice when we talk down an industry that employs so many. On the environmental point, I have to say that the industry has a very clear road map and plan for reducing carbon emissions and being part of the UK’s export-led recovery.
When new routes are opened up, from place to place and point to point, growth follows. I can give the anecdotal example of an airport in the north-west that opened up a route to the west coast of the United States. Subsequently, over a period of two or three years, growth expanded massively, with local businesses exporting to that part of the United States. Businesses and hubs grow around airports. I say that simply because I fundamentally believe that airlines are a force for good. However, we should call on that relationship, and say that responsible business and responsible capitalism are not—how best to put this for Hansard?
Perhaps I can help the hon. Gentleman out. I thank him for giving way. I agree with him most of the time. His airport services a huge number of people from my constituency, and I am afraid that I have to say to my hon. Friend the Member for Crawley that it is probably Daventry’s favourite London airport. Let us consider the example of Silverjet, which had a route to New York. It was a busy route, but not profitable enough for that airline to keep going. My problem with the new clause is that it would tie the arms of new and fledgling businesses operating out of our regional airports. East Midlands airport is the airport that I know best and have used the most. I would hate us to constrain new entries into the market by giving them the worry that they might have to service a route that is unprofitable.
The hon. Gentleman raises the example of Silverjet in my constituency. Of course, Silverjet was a business that fell over, which was sad because it offered an extremely good service. What happened was pretty marginal. The timing and the fall-off of the UK economy at that point meant that it was not able to secure a proper business jet service to the States. The new clause would not constrain businesses that were put into bankruptcy or were in financial difficulty in that sense; it would only require consultation before services were withdrawn.
For example, with regard to the UK’s railways, two successive companies running the east coast line have fallen over at different points, despite the stringent requirements that we place on train operating company franchising—sometimes to the detriment of smaller companies, which cannot get in. There is a question to be asked about that process, but I will not digress.
The behaviour of a train operating company in one region, if it chooses to pull out, should have a knock-on effect on other routes being advertised or awarded. Again, this probing new clause is intended to make the point that the behaviour of an airline before it is granted a new route or new slot should be taken into account. In that way, we hope that a more responsible approach from a number of airlines could be sought.
It was clear, in the case of the east coast line, that the business practice in question was not only unhelpful but disingenuous. Subsequently, it was sorted out in the courts over a number of years that bmibaby did not behave in the way that it should have done in upholding the agreement that it rightly made. However, should that have a knock-on effect on the other routes that it hopes to reach a settlement on and is hoping to fly?
In that context, the new clause makes good sense. It raises important issues and calls for thriving aviation in the UK, which we acknowledge, and it offers something in return as well. Much of this good Bill would resettle the UK’s aviation regulation for the next 20 or 30 years, say. Looking back at the last 20 or 30 years, we see the big shift that has happened with low-cost carriers and people wanting to be more mobile in respect of where planes and stands are sited. The new clause goes a long way towards correcting the situation, so that we can have a successful, thriving aviation sector in the next 20 or 30 years as well.
I welcome the debate and the comments of the hon. Member for Glasgow South, who introduced it, and other Committee members who have contributed. I had no intention of accusing the hon. Gentleman of a Stalinist plot in tabling this probing new clause. I reassure him that I am aware of the concerns that my hon. Friend the Member for Stockton South (James Wharton) has expressed on related matters; he has conveyed those directly to me and to colleagues at the Department for Transport.
The Government take seriously the matters raised by discussion of the amendment. It is useful to be told that it is just a probing amendment, but it raises important issues. We recognise the vital contribution that regional airports make to local economies and that high-quality regional connectivity is important for our economy. In future, we hope that high-speed rail will provide a viable and lower-carbon alternative to thousands of flights, but we recognise that, particularly for remoter areas of the UK, regional air services will continue to provide a vital lifeline and a means of connectivity.
The hon. Member for Scunthorpe will be aware that the Government’s current plans for HS2 take it to Leeds and Manchester, but the benefits of the line will be felt much more widely, as trains run off the new line on to the existing network, reducing journey times to destinations such as Newcastle, Edinburgh and Glasgow. He may also be aware that the coalition agreement states clearly that our aspiration is a truly national network. In due course, obviously, a national network would embrace destinations in Scotland.
I have to share my concerns with hon. Members about how the new clause might work in practice. EU regulations govern the allocation, transfer and exchange of slots at Heathrow. EU slot regulations follow the world slot guidelines determined by the International Air Transport Association, reflecting commercial aviation’s global business. The rules on slots are contained in council regulation EEC 95/93. They are aimed at providing airlines with fair and equal access to airports across the EU through independent and transparent slot allocation procedures. Member states are required to ensure that independent airport slot co-ordinators are appointed to manage slot allocation at airports where capacity problems occur.
I am afraid that EU law does not allow either the Government or the CAA to have any role in slot allocation, apart from the limited exception provided by the public service obligation procedure, to which I will come in a moment. EC regulation 1008/2008 allows a member state to impose public service obligations—PSOs—to protect air services to airports serving a peripheral or development region, or on thin routes to any airport on its territory, where such a route is considered vital for the economic and social development of the region.
It would be open to regional bodies—local enterprise partnerships and the devolved Administrations, for example—to apply to the Secretary of State for Transport to impose a PSO on an air route, if they felt that a case could be made that satisfied the requirements of EU regulation. If approved, that would permit slots to be ring-fenced at a relevant London airport.
However, I am afraid that one of the principles of PSOs is that they can be imposed only when it is necessary to ensure adequate services between two cities or regions, rather than purely for the purposes of linking individual airports. Importantly, that means that when judging whether a region has adequate services to London, it is necessary to take into account the level and nature of services to all five of London’s main airports, as well as surface transport connections. There is, I am afraid, no other mechanism for the Government to intervene in the allocation of slots at Heathrow or other London airports.
Surprisingly enough, I was just coming to a similar point. Under the rules currently laid down by European law, the potential for the ring-fencing of slots at Heathrow to protect regional services is covered by the rules on PSOs only. I am afraid, therefore, that the new clause is contrary to EU law because it would override the strict criteria and process by which European Governments are permitted to intervene in route operations. As my hon. Friend said, if the Opposition were serious about the new clause, the repeal or amendment of the European Communities Act would be required.
I will disappoint the Minister by not giving a commitment on that particular point. She mentioned the five London airports. Will she say a couple of words about the definition of those five and how flexible it is? Could the number be increased? For example, there has been expansion at Southend recently.
I was meant to go to Luton but unfortunately I fell off my bicycle and broke my collar bone, so I had to cancel. However, I will be back.
I loved my visit to Cambridge international and my many visits to Gatwick and Heathrow and a whole range of airports that do great things in supporting our economy and enabling people to travel abroad on their holidays.
Having identified the EU block, I can share with the Committee that these matters are under discussion at a European level. The European Commission’s better airports package, the proposal to amend the EU slot regulations, provides an opportunity for the UK to highlight general issues with the European Commission and explore the inclusion of measures to help secure the ongoing provision of air services between UK regions and congested London airports. The Committee’s discussions today will provide a useful input into that process. I believe that the European Scrutiny Committee is due to debate the better airports package next week.
Although I understand the concerns behind the new clause, I am unable to support it for the reasons given. I recognise that caution is needed in relation to the concerns expressed by several Government Members, including my hon. Friend the Member for Cambridge. Nevertheless, I assure the Committee that the Government are committed to supporting regional airports and regional connectivity.
Our plans for a new high-speed rail network, connecting London, Birmingham, Manchester and Leeds, provide a major improvement to regional connectivity, which will be felt far wider than the destinations directly served by the first phase of the project, as I said in reply to the hon. Member for Scunthorpe. For example, our HS2 proposals for the north of England deliver a journey time from Glasgow and Edinburgh to London of approximately three and a half hours. We regard our plans for HS2 as the first stages of a genuinely national network, which will provide further benefits for regional economies and regional connectivity.
Unlike the hon. Member for Glasgow South, I do not believe that a third runway at Heathrow is the solution to our country’s transport problems. Apparently, the Leader of the Opposition also opposes a third runway, but it seems that that message has not percolated through to the hon. Gentleman’s party. We will soon consult on our new aviation policy framework, which will include a focus on regional airports. Alongside that, we will issue a call for evidence on maintaining the status of the UK as an international hub for aviation with excellent connectivity.
I welcome the contributions made by hon. Members about this important matter.
I am grateful for the Minister’s comments. I admit that it would have come as something of a surprise if she had stood up and said that she would accept the new clause. Perhaps it was my fault for announcing that it was a probing amendment; in future, I should try to keep the Government Whip on his toes instead of on his BlackBerry.
It is incredibly tempting to press the new clause to a vote to give Government Members an opportunity to vote in favour of EU legislation, but I will not be as pugnacious and hard-hearted as my hon. Friend the Member for Poplar and Limehouse, who, given half a chance, would have pressed anything to a vote.
I have listened to the Minister’s comments and am grateful for what she said about the debate that is taking place at a European level. I hope she will recognise, however, that this is such an important matter that the UK Government must take a lead. I support high-speed rail, but it is not enough constantly to refer to HS2 as a solution for the problems faced by regional airports; those problems extend far beyond the need for connectivity by surface transport.
At some point, the Government must find genuine solutions. The two governing parties will have to come up with a little more meat in relation to what I said about Heathrow’s expansion. I understand the Lib Dem position—its Members want a modal shift from air to horse-drawn carriage, which is fair enough, but the Conservative party used to be known as the pro-business party. Until it becomes that again, I am afraid that the industry will not accept whatever strategy or short-term solutions it comes up with.
I am grateful to the Minister because she has obviously given the matter genuine thought. It has been a good debate. I beg to ask leave to withdraw the motion.
On a point of order, Mrs Riordan. If I may delay the Committee for a few more minutes, I should like to thank you and Sir Roger, in his absence, for managing proceedings in such an exemplary fashion. A Public Bill Committee is a fairly new experience for some hon. Members, and I am sure that your gracious and helpful chairmanship has eased their introduction into what can sometimes feel like a rather arcane and technical aspect of parliamentary work. Arcane and technical though it can be, it is hugely important, so I thank all members of the Committee, on both sides, for their thorough scrutiny of an important Bill.
I will pick out just a few. My hon. Friend the Member for Amber Valley demonstrated a formidable technical grasp of the Bill, as well as a determination to address the issues. My hon. Friend the Member for Daventry highlighted the concerns of his constituents who depend on the continued success of East Midlands airport and DHL. I hope I have provided some reassurance on that. My hon. Friend the Member for Milton Keynes South had a close eye on the consumer interest.
The hon. Member for North West Durham made many thoughtful and incisive contributions, enlivened by anecdotes to illustrate how important the issues dealt with by the Bill are. The hon. Member for Bolton West brought to bear the considerable expertise on transport matters that she demonstrates so regularly in the Select Committee on Transport. Of course, the hon. Member for Blackley and Broughton was rigorous in challenging the Bill’s provisions and asserting the need to avoid over-regulation.
I thank the Opposition Front Benchers for raising a wide range of interesting and important points, giving the Committee the opportunity to consider all the key issues in the Bill. We had well informed and detailed debates, particularly on the environment, information powers, aviation security and extension of the ATOL scheme. The extent of their support for so much of the Bill is much appreciated and reflects the fact that the Bill can be said to have more than one parent. Both the previous and present Governments can claim some credit for the positive response the Bill has received from a wide range of stakeholders, although I must correct one point. I had been happy to share the credit for a move to an outcomes-focused, risk-based approach to security with the previous Government, but it seems that I was incorrect and the credit for the change can therefore be claimed solely by the present Government.
I am pleased to note that the Committee has covered all 112 clauses in and 14 schedules to the Bill with informed and thorough debate, which has provided rigorous scrutiny. I am sorry that I have had to appear with my arm in a sling. Sometimes low-carbon transport choices come at a price. However, I can warmly recommend a combination of paracetamol, codeine and diet Red Bull as a way to survive a Public Bill Committee when recovering from an injury.
We have done the Bill justice, and the fact that we have done so in a timely and efficient fashion to enable us to finish early is a credit to the Chairmen, to the usual channels and to all members of the Committee. My Whip, my hon. Friend the Member for North Herefordshire, has done a sterling job. The usual channels have worked well together in aiding the management of the work that we have undertaken, ensuring that we have had ample time in each sitting for detailed and serious consideration and scrutiny of the Bill.
I thank the Committee staff for their excellent work and the Hansard reporters. I commend the Bill to the Committee and look forward to our further deliberations on Report.
Further to that point of order, Mrs Riordan. I am happy to second that vote of thanks. I thank the Minister and her colleagues and officials. There are one or two exceptions. Obviously, there is disappointment that the hon. Member for Finchley and Golders Green decided that he would not vote for amendment 18 before he even listened to the arguments. There is disappointment that the hon. Member for Amber Valley did not support his own amendment 29; we gave him the chance. There is disappointment with the hon. Member for Cambridge for not supporting our amendment, but we do have hopes for him, if his hon. Friend the Member for Norwich South will speak to him, at Report stage. We know he is engaging with colleagues on the other side of the Chamber regarding the environmental duty, so we will be keen to see how that develops before we get to the Floor of the House.
We express our sincere appreciation to Dr Thatcher and her team for their first-class advice and assistance in the preparation of our amendments. We thank the Hansard reporters and the messengers for their efficient and accurate communications and reporting.
I thank my hon. Friends for their interest, support, wisdom and insight, and for their contributions to the debates. There was excellent stewardship by my hon. Friend the Member for Scunthorpe, ably assisted by my hon. Friend the Member for North West Durham. It has been a pleasure to share responsibilities on the Front Bench with my hon. Friend the Member for Barrow and Furness. Even though there were two of us, we could not move the Minister on virtually anything, but we still have hopes for Report. The professionalism of the Government Whip, in association with the usual channels, ensured that we not only kept on track but finished ahead of time. I must confess that I did not enjoy sharing in the emotional rollercoaster that is being a West Ham United fan with the hon. Member for Elmet and Rothwell.
Finally, Mrs Riordan, I thank you and Sir Roger for keeping us in order. We had a conversation after our first sitting, and when I asked you how it was going, I discovered that it was the first sitting of a Public Bill Committee that you had chaired. That did not come across in any way. Your confidence and assuredness gave the impression that you were every bit as experienced as Sir Roger; you were far gentler, but just as efficient. We are very grateful for that.
In conclusion, serving on this Committee has been a positive first experience for many for us. It was the first time for me in opposition leading on a Bill; it was the first time for my hon. Friend the Member for Barrow and Furness on any Bill; and the first time for my hon. Friend the Member for Feltham and Heston, who only made her maiden speech a few weeks ago. It was the first experience of a Bill for a number of other hon. Friends, too. The Minister said that the Bill has two single parents—no, that it has two parents. That makes it a better child—according to the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith). Notwithstanding that it is a good Bill, we still live in the expectation that it will be even better after Report. If the Government want to accept any of the amendments we put forward and claim them for themselves, we will pleased to support them when the Bill comes back to the Chamber.