Publications on the internet
Transport Committee - Minutes of EvidenceHC 78
Taken before the Transport Committee
on Monday 28 January 2013
Mrs Louise Ellman (Chair)
Examination of Witnesses
Witnesses: Huw Thomas, Partner, Foster & Partners, John Olsen, Independent Aviation Advisory Group, David Skelton, Deputy Director, Policy Exchange, and Ian Mulcahey, Managing Director, Gensler, gave evidence.
Q534 Chair: Good afternoon and welcome to the Transport Select Committee. Can we have your names and organisations, please?
John Olsen: I am John Olsen, Independent Aviation Advisory Group.
Huw Thomas: I am Huw Thomas from Foster & Partners.
David Skelton: I am David Skelton from Policy Exchange.
Ian Mulcahey: I am Ian Mulcahey from Gensler.
Q535 Chair: What evidence is there that there will be enough demand in the UK to support a four-runway hub airport?
John Olsen: This entirely depends on the total amount of aggregate demand and the total amount of supply. I am here to suggest that the supply side will radically change. Some people believe that demand will fill the supply, but, to answer the particularity of your question, I do not believe there is a requirement for a new four-runway airport anywhere in the United Kingdom. That depends, to a degree, on what happens to Heathrow and Gatwick. Our proposal contains short, medium and longer-term capacity planning for the entire United Kingdom-well, the south-east.
Q536 Chair: I am asking you at this stage about your views on the requirements for capacity and not about your specific proposal. What is your answer? It may be, "But it depends on what happens to the other airports."
John Olsen: I do not think the aggregate demand going forward-and it is very difficult to estimate this-will be sufficient to fill a new four-runway airport in addition to whatever capacity is available at the moment.
Q537 Chair: Do you agree with the forecasts coming from the DFT at the moment about aviation needs?
John Olsen: In some ways I do and in some ways I don’t. I do not believe that you can show that a four-runway airport per se is a good idea in itself.
Q538 Chair: I am asking you about capacity. Do you agree with the Department’s current opinions on capacity?
John Olsen: I think the Department is saying that additional capacity is needed and, therefore, it can be fulfilled in certain different ways.
Q539 Chair: But do you agree with its estimates of future capacity?
John Olsen: Not in detail, no.
Q540 Chair: What don’t you agree with?
John Olsen: I think the Government’s policy on, shall I call it, demand management-in other words, taxation-is such that those graphs or forecasts can be met in the future. It does depend what the view of Government is in so far as APD and other forms of direct levies or taxation.
Q541 Chair: The Department has issued figures on its views on future demand. Do you agree with those?
John Olsen: In a word, no.
Q542 Chair: Mr Thomas, what is your view on that?
Huw Thomas: The Department has revised down its figures, and we believe that it will be coming out with new figures imminently. They may well be revised down again in line with the lack of economic growth we have been seeing. However, if we look at the rest of the world, which is where our experience comes from, and we see the growth in aviation globally, then we think there is the demand there. We certainly believe that, in order to satisfy the demand for our trade capabilities going forward, there is definitely a need for a new or four-runway hub.
Q543 Chairman: Mr Skelton, what is your view?
David Skelton: Yes, Policy Exchange would agree that there is certainly enough demand to satisfy the demand for a four-runway hub, both in the UK, where people have been flying more over recent decades, and in emerging markets, where increased affluence means that people will want to fly more and will want direct long-haul flights to Europe. We think the UK should be in a position where it can satisfy this demand for long-haul flights to and from Europe so that companies in emerging markets would have the UK as a de facto option to base their European operations here. If they can fly straight to the UK on a long-haul flight, that takes away the inconvenience of having to change or get a train. If we are serious about prosperity and trade, we need to increase our aviation capacity to meet this increasing demand from emerging markets.
Q544 Chair: Mr Mulcahey, what is your view?
Ian Mulcahey: Our view is similar. We think there will be sufficient growth to justify a four-runway airport. If you look at other cites in the world, as Huw mentioned, if you are trying to position yourself as a global centre with a global hub airport, you are thinking of a six-runway airport, not just a four-runway airport.
Q545 Chair: You have all put forward proposals-some are specific proposals and some are more developed than others-on what you think should be done. I want to ask each of you if you have any breakdown in terms of construction, surface access and other infrastructure costs. Mr Thomas, can you give us any breakdown of the costs of the proposal you are putting forward?
Huw Thomas: We started off from the premise that the country needed access to a global hub and that, by positioning that access, it had to be reachable from the whole of the country. However, it should not be located so that the surface transport costs were prohibitive, which really led our decision as to the location we proposed. We focused the connectivity on the existing capacity in High Speed 1 and the capacity that would come from Crossrail in the future. That allows us to make a connection from where we propose a four-runway hub back to existing infrastructure, with a price tag that we have costed out at £4 billion. That is for the road and rail improvements.
For the airport itself, where we reclaim a substantial portion of land on the Isle of Grain to create the platform, again that has been fully costed, in conjunction with our cost advisers and engineers, Davis Langdon and Halcrow, at £20 billion. Within that figure there is a very substantial amount of contingency.
In arriving at that figure, we have globally benchmarked aviation costs. We have done an itemised analysis of the proposals on that specific site, including access and conversations with construction advisers and suppliers such as dredge fleet operators, in order to get a proper, fully-costed breakdown.
Q546 Chair: Mr Olsen, can you give me any breakdown of costs of the proposal you are putting forward?
John Olsen: Yes, I can, simply because our work has been based on a study made in 2001-02 called SERAS, which I think everybody here has read. SERAS was brought in at the request of the British Government to advise them on how to construct a White Paper for the future of aviation in the south-east of England. It contained very detailed analysis of the costs and, interestingly, of potential revenue and, therefore, profitability. We are the only people sitting here today who have actually embraced the idea that every costing of any facility like this must have not only an availability of finance but also be able to show a return on investment. If it does not, then, as far as we are concerned, the project is probably a dead duck from the beginning.
The serious breakdown was that the airport would cost £9 billion. This was back in 2001-02.
Q547 Chair: I want to know the breakdown of the costs for the proposal that you have put forward now.
John Olsen: That is what I am saying.
Q548 Chair: So this is the same thing; these are the same costs.
John Olsen: It is pretty much exactly what SERAS did, with some additions to that. They proposed £9 billion for the airport as a whole on the location of Cliffe, which we think is the only place you can build such an airport. Mott MacDonald added in £2 billion because they said that the structure was insufficiently costed and, therefore, needed some additional strengthening. That increases it from £9 billion to £11 billion. There are mitigational circumstances to get wildlife rehoused, which was another £1 billion. So we arrive at the number of £12 billion.
£12 billion is only the cost of constructing the airport. The big debate going on at the moment is what it will cost to connect that airport with people who work at the airport, people who travel through the airport and all other jobs that are necessary to make an airport function, together with where the true origin of passengers is. In our study it shows that we need very little help in terms of the additional infrastructure. We believe the whole package will cost between £12 million and £13 billion. In other words, it is a very small marginal amount of expenditure on connectivity, which has now become a word in your lexicon. In other words, how do you construct an infrastructure of land and sea-i.e. road and rail-connections into the airport? It is minimal because we believe you cannot do a project of this sort, when you have just asked me the question how much it is going to cost, with some loose ends like, "What happens to the parallel road and rail system? Who do we go to for that money?"
You cannot go to the same people that are financing the airport; ergo, it seems that you have to go to the British taxpayer for that money. We do not believe that is a good idea. We do not believe that money is necessary in the location that we have chosen. We can proceed on the basis that the estimates I have given you should work out. In other words, it is not, "Oh, sorry, we forgot about that rail track that needs to be built", and that is going to cost an indeterminate amount of money from the British taxpayer or another source of investment1.
Q549 Chair: So who would be paying for that?
John Olsen: An outside investor of non-British origin will be persuaded, if we follow all the other plans that we have at this particular location.
Q550 Chair: Do you have someone in mind?
John Olsen: Yes, we do indeed.
Q551 Chair: You have discussed this with a potential investor.
John Olsen: Yes.
Q552 Chair: And you think it is feasible to do it.
John Olsen: I have discussed it with a potential investor in an area where potential investment will be forthcoming.
Q553 Chair: Mr Skelton, do you have any breakdown of costs?
David Skelton: We do. We considered that Heathrow was the best possible option; first, because it had the largest hinterland, but, secondly, because most of the infrastructure-in terms of transport and terminals and other facilities-was already in place. Heathrow will have Crossrail. It already has the Heathrow Express and the Piccadilly line. Our proposal would reuse four of the five existing terminals. We would only need to build four runways plus one additional terminal. We would need to fill in a reservoir plus build piers to the runways. This would be considerably cheaper than alternative options because transport and terminal infrastructure is already in place.
We spoke to two experts in the field, who put the cost at between £8 billion and £12 billion, but we do accept that a much larger engineering study would be necessary to give a definitive number. We think that this would be considerably cheaper than alternatives as the infrastructure is already there.
Q554 Chair: Do you think that, in general terms, it is going to be better value to have expansion in an existing airport rather than building a completely new one?
David Skelton: Absolutely. It would be much better value because the infrastructure is already there. There will be no need to build new roads or railways. Crossrail will be there come 2016, so the infrastructure already there means we can get going much more quickly and also means there is less room for potential slippage.
Q555 Chair: Mr Mulcahey, can you give us any breakdown of the costing?
Ian Mulcahey: We have no detailed breakdown of costs. We are currently working on a variety of scenarios to optimise the location. It is well known that we favour an estuary option for our scheme. We have provisional estimates of a cost-and I have put a serious health warning on these-of £25 billion to £30 billion. The health warning is due to the sheer scale of the variables, which are to do with the fixed links and where they land and connect to. With more work, as we choose the most appropriate location in the estuary, we can finesse those costs as may be.
In our opinion, the advantages of the estuary mean that we can build an entirely fresh, new and efficient airport without the complications of operation that you suffer in any of the existing airport sites. We believe we can create a much more efficient and cost-effective solution because of that.
Q556 Chair: But at this stage you do not have any detailed costings.
Ian Mulcahey: We have no detailed breakdown of costs at this stage, no.
Q557 Iain Stewart: Mr Skelton mentioned Heathrow’s hinterland. With an estuary airport, I can see there is an issue for getting people out from central London to the airport. At present, Heathrow will attract a lot of passengers who live in the Thames valley and the home counties to the north of London. An estuary airport will be on the other side of London. Do you not have any breakdown of the costs it will take to construct the infrastructure that will get those passengers to an estuary airport?
John Olsen: I would say in our case, no.
Q558 Iain Stewart: How are you going to get there?
John Olsen: In the greater scheme of things, we have the great possibility of building a lower Thames crossing, heralded by Essex and Kent as a vital piece of infrastructure for the United Kingdom. In other words, that is supposedly funded by Essex and Kent. It has been on the books for a very long time and it would provide, like many of our suggestions, not only direct connections for passengers and staff working at the airport but it would also enhance the transportation facilities of the local people-the local communities.
There is a whole pattern of existing frameworks. You can go directly from St Pancras to Gravesend in 35 minutes today. That is a piece of infrastructure that is already there. It already takes care of the north of England to St Pancras and the north London areas. That is all connecting to the estuary airport.
You are bringing up the case of somebody who is living west of Heathrow and how they get to an airport if it is not going to be Heathrow. Crossrail, which is also currently funded by the Government, is expected to be completed in two to three years’ time. That will carry that catchment zone into that area. We need not worry too much about it being inaccessible, which I think is your point. You are saying that an estuary airport is inaccessible to the labour supply and markets.
Q559 Iain Stewart: It is the time it will take. I live and my constituency is in Milton Keynes. I can get to Heathrow in a relatively short period of time. It is going to take a lot longer for me to get to somewhere in north Kent.
John Olsen: Indeed. The other part of our plan is to maintain what the Government require, which is a competitive airline and airport structure in the United Kingdom. Previously, as you know, it was not competitive at all; it was all part of BAA’s monopoly. In this case, we have seen the detachment of Gatwick airport from Heathrow. It is managed by GIP. There is new and effective management wanting to become an airport which will have a hub status. "Hub" simply means that you can connect with various services into the centre and then disperse it through the network available provided by the airlines and that airport. It can be big or it can be small; it does not make that much difference.
If we finish what we want to do in terms of the totality of capacity available in the London and south-east area, people in your constituency will have access to Gatwick airport by Crossrail and from St Pancras direct non-stop on a high-speed train to Gravesend, which is the gateway to what we want to do in the Thames estuary. There are all sorts of arguments that I have seen with people saying, "How do I get from north-west London into any new airport in the Thames estuary?" There will be connections there-without a doubt.
Q560 Iain Stewart: But you have not put a cost on them.
John Olsen: I do not think it is necessary. If, indeed, as is the case, High Speed 1 goes there anyway because it is already built, then the connection through Crossrail will, we hope, go directly to a new estuarial airport, especially if it is built where we are suggesting, which is Cliffe at the western edge of the Hoo Peninsula. There are five London stations connected to Gravesend, believe it or not, with a possible additional two that can also be connected. The vast majority of the Greater London area will easily be connected to the estuary airport location we have suggested. There does not need to be anything more than small pieces of the jigsaw puzzle put together to complete those connections.
For example, from Waterloo, which already has connections into Ebbsfleet, it can be revitalised and redone so that it extends to Gravesend. That is one example. Liverpool Street can be put on line. London Bridge is the biggest terminal station in the UK. Clapham Junction is the biggest railway station in Britain and actually in Europe. That can be connected directly to an estuary airport on existing lines, believe it or not. It does take some tinkering and at some stage there will be re-electrification and so on, but these are not big infrastructural expenditures. That is the basis of our proposal. There will not necessarily be any large infrastructural investments covered by the taxpayer because, in our part of the world, investors are not going to invest in a railway line or a road.
Q561 Iain Stewart: Are there any counter views to that?
Huw Thomas: What we learned from the Olympics was just how much capacity there is in High Speed 1. It is a very good point that High Speed 1 gives you very rapid access from St Pancras to Ebbsfleet. In our costings, we provide a four-track connection, grade separated, to Ebbsfleet. Crossrail have protected powers to Gravesend and effectively to Ebbsfleet so we connect in to that system. For your constituents coming down from Milton Keynes, if they are to go to Heathrow, they have to get on the tube either to go to Paddington or get on to the Piccadilly line. I would argue that the Piccadilly line would be slower than taking them on a stop to get on to Crossrail and out to the estuary airport.
I agree that the existing overground network exists, as it originally did in terms of the connection to Ebbsfleet, and that the capacity from Waterloo and Cannon Street would be very easy to revitalise. We also believe that capacity could be created from Liverpool Street. There is very good capacity in the network to the east. We do not know it is there because none of us ever use it. The Olympics taught us that there is very good capacity out there.
Q562 Chair: Mr Skelton, did you want to comment?
David Skelton: It is important to note that the hinterland at Heathrow already exists. 25% of business travellers arrive at Heathrow within 30 minutes of starting their journey. It is 3% for Gatwick, 2% for Stansted and 12% for Luton. The transport infrastructure is already there. You will have Crossrail and you have the Heathrow Express. You will have an improved Piccadilly line over the next decade.
In terms of cost of reaching the airport for business travellers, quite a few business travellers can reach Heathrow relatively easily by taxi early in the morning. That would be considerably more expensive for any kind of estuary airport given where most business travellers will be travelling from. That is also something to be borne in mind. We have to remember that the transport infrastructure is already good and is already there for Heathrow.
Ian Mulcahey: We are in a changing situation. If you take the rail map as it stands now, it is going to be very different in 10 years’ time. We are making huge public investment in Crossrail, which facilitates that west-east movement. We are making huge investment in Thameslink, which is our north-south movement. The opportunity for interchange and to go west or east is going to be significantly improved over the next few years. Coupled with the investment in High Speed 1, which is already in place, and High Speed 2 coming up behind, there is an opportunity to rethink precisely where your national hub airport is. I think there is an opportunity to make better connections with that new infrastructure to facilitate better interchanges to make that facility accessible to the whole of the UK.
Q563 Kwasi Kwarteng: I am not clear in my own mind, once you get to Ebbsfleet, how long it will take to get to the proposed airport.
John Olsen: Ebbsfleet is 17 minutes from St Pancras.
Q564 Kwasi Kwarteng: I know that; that is the bit I know.
John Olsen: It is 15 minutes or so to Gravesend. Our proposal is that Gravesend is the beginning of the development of the airport we wish to construct.
Q565 Kwasi Kwarteng: Obviously it is going to be a vast airport. Do you have a place in mind as to where the final destination would be? If I want to go to Heathrow, I can decide whether I go to Heathrow 1, 2 and 3, Heathrow 4 or Heathrow 5, and I know exactly how long the journey is going to take. With your proposals, do you have a clear idea as to how long that journey from Ebbsfleet to whichever station it is in this airport will take?
John Olsen: Ebbsfleet runs through to Gravesend and beyond to the Medway towns.
Q566 Kwasi Kwarteng: But it is quite a slow service, isn’t it?
John Olsen: It is not high speed, but it is a continuation of the high-speed line from Ebbsfleet. St Pancras to Ebbsfleet is 17 minutes. It is really fast. The javelin trains go straight on to Gravesend. Gravesend is our gateway-
Q567 Kwasi Kwarteng: Forgive me for thinking aloud. What you are saying is that, from St Pancras, it will be high speed to Ebbsfleet and then you will have to change, presumably.
John Olsen: No; you stay on the same train, and it goes all the way through to Gravesend and eventually to Medway, but Gravesend to Medway is slower.
Q568 Kwasi Kwarteng: How long will that bit be? How long does that take?
John Olsen: I do not know. It depends on where it starts and whatever. Somebody will have-
Q569 Kwasi Kwarteng: Do you have a rough estimate? Is it going to be 10 minutes or 20 minutes?
John Olsen: If you are living in Medway and you want to get to the airport, you would go to Gravesend or directly to what we would call airport services complexes, which lie outside the main airport on the route to the airport.
Q570 Kwasi Kwarteng: You start at King’s Cross and go to Gravesend.
John Olsen: St Pancras, sorry.
Kwasi Kwarteng: St Pancras, sorry.
John Olsen: It is more or less the same thing.
Kwasi Kwarteng: You start at St Pancras and go to Gravesend. Then you take a slower train.
John Olsen: Gravesend, from where we are expecting the western edge of our airport project to begin, is 10 km or seven to eight miles. That will be serviced, for anybody who is familiar with the Hong Kong set-up, by a fast local train, which is dedicated to the airport. It can go from anywhere you like. In the case of Hong Kong, it goes from two places directly to the airport. In this case it goes from Gravesend. It will run in to a facility called the airport services complex. This is where you get out of the train, and from then on there will be no more emissions from internal combustion engines. That is where that stops. Everything from then on is electrically power-driven.
Q571 Kwasi Kwarteng: Let us go back to my first question, which was how long do you think it will take from St Pancras to the airport?
John Olsen: 35 minutes plus 10 km worth. It could be another 10 minutes.
Q572 Kwasi Kwarteng: So 45 minutes.
John Olsen: Yes; maximum, I would say.
Q573 Kwasi Kwarteng: Without any additional expenditure to infrastructure.
John Olsen: The only additional infrastructure would be to build a connecting railway from Gravesend into the airport services complex.
Q574 Kwasi Kwarteng: How much would that cost, do you think?
John Olsen: I cannot imagine it would be a great deal. I could do some research on what it costs.
Kwasi Kwarteng: It would be very helpful, if you could.
John Olsen: It is a relatively small amount of money. I think you would agree, Huw?
Huw Thomas: We have costed that. We allow for a grade-separated connection to High Speed 1. From St Pancras, you effectively go, just before Ebbsfleet, on a high-speed track without interrupting the existing high-speed rail network, straight in to the airport and a dedicated terminal facility, which services through a track transit system and an automated airport system. Once you have checked in, you go to your gate on the airport system.
Q575 Kwasi Kwarteng: Will this be high speed all the way through?
Huw Thomas: High speed right through to the terminal. You can check your bags at St Pancras and they will go straight off the train into the airport’s baggage handling system. You will get off into the check-in hall. You will check in and get on to your automated people-movement system to your gate and straight on to the plane.
Q576 Kwasi Kwarteng: How much longer is that going to take you?
Huw Thomas: It is 10 minutes more from Ebbsfleet to get to the airport; so you have 17 minutes plus 10.
Q577 Kwasi Kwarteng: It will be about half an hour or 27 minutes.
Huw Thomas: Yes. We believe that St Pancras could accommodate trains leaving every 10 minutes. If you were to utilise a French double-decker train, then you could be handling 1,300 people on a train every 10 minutes. We did St Pancras, Stratford and Ebbsfleet up to planning permission for High Speed 1. We believe there is capacity in the car parking currently under the extended-
Q578 Kwasi Kwarteng: Do you have a costing in terms of how much all of this would involve?
Huw Thomas: Yes. As I say, we have allowed £4 billion for four tracks to extend Crossrail and High Speed 1.
Q579 Kwasi Kwarteng: To the airport.
Huw Thomas: To the airport.
Q580 Chair: What studies, if any, have you undertaken to consider the implications of storm surges, flooding or rises in sea level?
Huw Thomas: At the tail end of last year, in November, the Environment Agency issued its "Thames Estuary 2100" report. That deals with a lot of the issues relating to sea water expansion, increased storm severity and the risks to the whole of the estuary area. In order to give us protection well into the next century and beyond, we have set our datum as 7 metres above current sea level. Our whole platform creation gives us a level 7 metres above sea level. We think that gives us more than adequate protection.
Q581 Chair: What costs in relation to the protection have you built in to your estimates?
Huw Thomas: We have had detailed topographic calculations on the amount of fill. It is somewhere in the order of 220 million cubic metres of fill. We have had conversations with the major dredge fleet operators out of Belgium and Holland. Indeed, we have had conversations with some of the Chinese, who would be interested in that sort of size contract. We have spoken to the Port of London Authority and Crown Estates about some of the impacts and as to where the fill material might come from. We have looked at the costs associated with the creation of the London Gateway port, which has had substantial fill put in place, and we have based our calculations on that.
Q582 Chair: And costs of reclaiming land.
Huw Thomas: The costs are in the order of £3 billion.
Q583 Chair: Is that all built in to the figures?
Huw Thomas: That is all built in to our costs, yes.
Q584 Chair: Mr Mulcahey, how has your work progressed in relation to these issues? Have you undertaken studies to look at the implications of storm surges, flooding or increased sea levels?
Ian Mulcahey: Yes. When we started out on the process of looking at this idea, that was one of the considerations we were trying to address. We felt that there was the possibility of locating centrally in the estuary and taking into account the possible changes in sea level or, perhaps more problematically, storm surges. The idea of floating the runways was borne out of that initial concern. The concept is to float the runways. That can address either changes over time or even short-term changes to do with tidal fluctuations.
Q585 Chair: Mr Olsen, have you undertaken any studies of this nature?
John Olsen: We have a similar view to Huw. There clearly needs to be flood protection on any raised platform in the Thames estuary. What Mott MacDonald did to the Halcrow suggestion originally was to add another £2 billion of fill to build up the platform for the airport to be constructed. That is a very generous additional budget to make sure that there will be no flooding possibilities on the actual platform.
Q586 Chair: Have you done or commissioned any specific studies to look at this?
John Olsen: No, we have not.
Q587 Chair: Mr Skelton, do you have any comment on this area?
David Skelton: Another of the benefits of using an existing site is that we know exactly what the potential risks and issues might be. Obviously, we had no specific engineering studies as part of our report.
Q588 Iain Stewart: I want to follow on from the Chair’s question. The Committee have received written evidence from Dr Skelton-one of my constituents and a retired academic geologist at the Open university-who drew our attention to the fact that, geologically, the estuary area is subsiding. Is this something you have taken into your calculations?
Huw Thomas: The whole of the south-east is subsiding. We are sinking, which is one of the problems we have with intertidal habitat and coastal squeeze. Not only do we have rising sea levels but the whole of the south-east is sinking.
Q589 Iain Stewart: Is your proposed 7 metres sufficient to counter this on a long-term basis?
Huw Thomas: Absolutely. We have detailed studies. Indeed, we have worked with Halcrow, who worked on the SERAS report and have done a lot of work for the Environment Agency in that very area. We are also cognisant of the fact that major investment has happened just on the other side of the estuary in Gateway Port, where an awful lot of work has been done. That has played into the assumptions that were taken as well.
Q590 Chair: The SS Richard Montgomery is a ship which sank in the Thames estuary in August 1944, a couple of miles from Southend. It is loaded with 1,500 tons of munitions. It is suggested that this could be a problem. Do you think it is a problem?
Huw Thomas: If I were to take the most extreme theories, I would turn up to watch Elvis surf on the tsunami that would be unleashed by the explosion of the SS Montgomery. If it is as serious as people claim, then it is something that we should be dealing with right now. I would not be comfortable living there if the risk is as high as people claim it is.
Certainly, the advice we have taken from the Ministry of Defence is that we will not disturb the SS Montgomery in terms of the construction works we carry out. If there is a risk of the collapse of the SS Montgomery we believe that the platform and the defences we are creating adequately protect the airport. The airport would be designed to the latest bomb blast protection. Any aerial impact from an explosion would be accommodated by the design of the airport. It is the people who live in the towns on the low-lying lands around the estuary who I really think should be concerned about the SS Montgomery. If it is as serious as we would like to claim it is, we should be doing something about it for their sakes. We believe it has nothing to do with the airport.
Q591 Chair: Mr Mulcahey, is this something that troubles you?
Ian Mulcahey: No. We took a similar view. It sounds like something that really needs to be sorted out irrespective of the airport. There are huge oil tankers gliding past this wreck every day. There are cruise liners and people in private boats. If it is a problem, it probably ought to be sorted out. I always reflect on the fact that, if it was full of gold, I am sure the Americans would be over here sorting it out very quickly. You feel like there must be a solution to that.
Q592 Chair: Mr Skelton, do you want to talk about this?
David Skelton: It is clear, as has been said, that it needs to be resolved. What I would say is that it is another intangible and another uncertainty with an estuary project. The benefit of a Heathrow project is that it involves certainties and existing infrastructure.
Q593 Chair: I would like to clarify what your proposals mean for existing airports and, in particular, Heathrow. Mr Thomas, your proposal seems to be based on the assumption that Heathrow would close. Is that right?
Huw Thomas: There is general recognition that, if you are building a new four-runway hub, then there can only be one hub. We accept there is an argument that Heathrow could be downgraded to a London City-style airport. That is one potential for Heathrow. We do not think that is compatible with the impact Heathrow has. If you were to look at Heathrow without the airport there, the investment that we have already made and will be making in services and infrastructure to get to Heathrow provides Europe’s prime brownfield redevelopment site.
It is also important to say that the infrastructure that serves us is saturated. Indeed, the development to the west of London is curtailed by the impact that Heathrow has on the transport infrastructure. The section of the M25 to the west of Heathrow is the busiest section of the M25. If we were to expand Heathrow, we have to seriously consider how we would double the surface transport access. By reusing Heathrow for a new development opportunity, we maximise the investment we have already made and we free up the capacity for the development of London to the west.
Q594 Kwasi Kwarteng: On this particular issue what you are suggesting is that clearly we will build a new airport, which you are going to build. All the knock-on effects have nothing to do with you because essentially you are going to be moving that whole corridor of west London. A Reading MP, a colleague, said that he knows why there are lots of businesses in Reading. He thinks that Reading is a beautiful place but he also realises that it is very near Heathrow. You are essentially going to transfer all of that economy to your airport. That is going to have huge costs. All the businesses are going to have to have transfer costs. Of course, you will have done well because you will have built the airport, but everyone else will have to accommodate themselves to this new arrangement. Have you factored that in to your costs in terms of the cost to the UK economy?
Huw Thomas: Yes, we have. We have looked at some of the impacts, particularly on the airlines and the airport operators.
Q595 Kwasi Kwarteng: What about the businesses in the Thames valley?
Huw Thomas: In terms of the businesses, it is a very interesting debate what would happen if we did not expand our aviation capacity. Where would those businesses choose to be? Would they remain in the UK if connectivity was so important to them, or would they look at relocating to where another country was providing the connectivity? That is a bigger issue.
Kwasi Kwarteng: Forgive me, I do not see it as a bigger issue.
Huw Thomas: I was going to come on to say that it would take 15 years to provide a new solution. 15 years in the life of a business is quite a period of time. In order to be able to plan with certainty as to how your business might develop and know that your business was growing on the back of a substantially increased global hub aviation capacity, that could be argued as a substantial benefit to your business.
The same applies in relation to employees. Arguably, that is a third of someone’s working life. If the Howard Davies Commission gives certainty as to where we are heading, I believe that is something that businesses can plan around.
Q596 Kwasi Kwarteng: My issue in terms of the costing is that, obviously, you will have worked out the costs of building the new airport. What I am questioning is whether you will have worked out the costs to other people of moving.
Huw Thomas: Yes. We have substantial costs within our calculations within the business model that we have built, which we would be happy to share but it remains commercially sensitive.
Q597 Kwasi Kwarteng: Let me get this straight. You actually have a figure as to how much you think it will cost other businesses and the UK economy generally to transfer from Heathrow to your new airport.
Huw Thomas: Yes. We think there is a net benefit to the economy from the increased aviation capacity and the potential growth of businesses.
Q598 Kwasi Kwarteng: Over what time scale is that? Is that in perpetuity? Are you saying that the benefits of this new airport over 50 or 100 years are going to outweigh the immediate costs of transferring businesses and all the rest of it to the airport?
Huw Thomas: We believe there is an immediate gain. We think that just by saying we are going to do this will transform people’s opinion of our economy. At the moment, when you talk to people internationally, they characterise us as dithering and not making a decision as to what we are doing with aviation.
Q599 Kwasi Kwarteng: Forgive me, if we decided to go ahead with expanding Heathrow, then that would meet most of that challenge. The issue is that we are not doing anything.
Huw Thomas: There is certainly that argument. I would also put a big question-mark over that. Is there actually the space around Heathrow to capitalise on that? Heathrow is already constrained. In order to build four runways, from the plans that we have seen to move it west, you are reliant on the operational characteristics of that airport. You do not get full-length runways and you certainly do not get a lot of space pushing out to the west for additional development land.
The reality of London’s growth over the next 20 years is to the east. That is where the new housing will be built. It is certainly where we need to create employment opportunities. That is where the space for development of new businesses will be.
Q600 Kwasi Kwarteng: I have a very simple question. If you look at the plans for a four-runway Heathrow that have been published and you look at your own plans for the new airport, which has more capacity?
Huw Thomas: We have more capacity.
Q601 Kwasi Kwarteng: Than the four-runway Heathrow.
Huw Thomas: Yes.
Q602 Kwasi Kwarteng: By how much?
Huw Thomas: We believe that there are not operational constraints in terms of hours of operation. There are not operational constraints in terms of approach angles or type of aircraft that would have to use the airport. Also, a key part of our proposal is to create an enterprise zone immediately adjacent to the airport.
Q603 Kwasi Kwarteng: Do you have a figure? Is it 50% more capacity than a four-runway Heathrow or 60% more capacity?
Huw Thomas: I do not have a figure, no.
Q604 Chair: Mr Mulcahey, what assumptions have you made about Heathrow? Would it have to close?
Ian Mulcahey: We have made a similar assumption. Ultimately, you will close Heathrow. For a new hub airport to operate successfully it needs to be the hub airport; there cannot be two hub airports. That is clearly a process of transition. It does not necessarily close Heathrow immediately, but ultimately that would be the end game. The advantage of thinking along those lines is to see the creation of a new airport and the new infrastructure links to it in the context of the whole long-term planning of London. London has to add another million or so people by 2030. Where are you going to house those people and where are those people going to be employed? Heathrow is part of that solution in that it releases huge amounts of land with very good infrastructure that can be used for housing and employment.
The analogy I would draw is the same debate they had when they closed the docks on the Isle of Dogs. Everyone said, "This is the end of the world and people will never work here again." For 20 years that was the case.
Q605 Kwasi Kwarteng: What are they supposed to do for those 20 years?
Chair: We are just trying to establish what your proposal means for Heathrow.
Ian Mulcahey: But now the Isle of Dogs employs more people than it did before.
Q606 Chair: Mr Mulcahey, you are saying that, yes, Heathrow would close, but it might not be a bad thing after 20 years.
Ian Mulcahey: I am saying that, inevitably, Heathrow would close eventually, but, when it does, it could house and employ more people.
Q607 Chair: That is a different issue. We are just trying to establish that. Mr Olsen, what does your proposal mean for Heathrow?
John Olsen: Our proposal would involve the closure of Heathrow, full stop. In terms of shifting the emphasis or the actual occupation of slots and activities from the Heathrow asset to the airport asset, it is often exaggerated in its difficulty.
Q608 Chair: These are other issues. I just want to have it quite clear what the implications are.
John Olsen: Sorry; you are asking about the implications of closing Heathrow or the implications of producing another-
Chair: For Heathrow. You have given a clear answer about Heathrow.
Q609 Graham Stringer: I have two questions to follow up on the questions you have been asked. The first is, how do you do it? How do you expunge BAA’s business? How do you finish off BAA as a company? How do you say, "You are running a successful airport. No, you are not"?
John Olsen: The best way to protect BA is to provide it with a successful hub operation.
Huw Thomas: BA or BAA?
Graham Stringer: BAA.
John Olsen: I beg your pardon. BAA, which used to be British Airports Authority and is now BAA Plc, invested £13 billion in buying five or six UK airports-principally, Gatwick, Heathrow, Stansted, Glasgow and Edinburgh; we all know that. They have already sold two of their airports and are coming up to three. One was for £1.4 billion, one for £1.5 billion and Edinburgh for £0.845 billion. Their asset base has been drastically reduced. They are now trying to make Heathrow work, and it won’t because it is constrained by a multitude of factors which will not allow them to profit by their investment in Heathrow. My personal view-2
Q610 Graham Stringer: Hold on. Are you saying that they are going to go bankrupt?
John Olsen: They are basically in severe financial difficulties already. They have loans at 10%. They are struggling to make it pay. We know what happened last week. The revenue is not up to expectation. They still have a huge debt to pay off.
Q611 Mr Sanders: Can you source that, because that is rather important if that word gets out? Can you source that allegation that you have just made about a major company that most people think has a licence to print money because it runs airports?
John Olsen: Well, that’s not true.
Q612 Chair: Mr Olsen, did you actually mean that? I do not want to get into another-
John Olsen: Ferrovial, which is the major shareholder of Heathrow-they have just disposed of several percentages of shareholding in the company-are basically financed by a Spanish bank, which is not in the best of health. BAA itself has seen its asset base shrink and its revenue base decline. This is not a particularly good solution3.
Q613 Kwasi Kwarteng: If that is the case, why are the slots so much more valuable at Heathrow than at the other airports?
John Olsen: Because most people want to operate from Heathrow, being a long-haul destination.
Q614 Kwasi Kwarteng: But you are saying it is a bad business.
John Olsen: Let us put it this way: BA, who had a section of new slots available to them with the purchase of BMI, tried to finance their business by mortgaging the slots. I think you will recall this effort to refinance BA so that they could buy new aircraft. It failed because they then realised that the asset value of those slots was not what BA was hoping to raise in terms of finance. That indicates to everybody that the value of having those slots has been reduced. There is, in our view, no particular problem with capacity at Heathrow. There are still slots available. Unlike what the Government invited them to do, which was to operate to more long-haul destinations such as China and India, BA is now putting services into Liberia, Sri Lanka4.
Q615 Kwasi Kwarteng: In your view was Stansted airport profitable?
John Olsen: No; it is not profitable now. It is getting less and less so. Stansted is a one-trick pony. Mike O’Leary is the principal operator. Aside from him, it is now down to one German LCC and that is it. It is really on a knife edge5.
Chair: I do not want to get into speculative discussions about the future of all the airports.
Q616 Graham Stringer: I want to return to my first question. I am surprised at the analysis of that. It is an extraordinary statement.
Kwasi Kwarteng: Unorthodox.
Graham Stringer: Assuming that BAA goes on trading and Heathrow carries on operating its 60 million or 70 million passengers a year, or whatever it is, how would you close that airport down?
John Olsen: We have suggested an alternative and, hopefully, that would be proceeding. When that new airport is available, then action would be taken to move aviation from-
Q617 Graham Stringer: That is the point. What action? What legal process-
John Olsen: It used to be under the distribution laws, if you recall.
Q618 Graham Stringer: It is a very important point. If you are going to go out to investors and say, "We want to build a very expensive four-runway airport in the estuary somewhere, so cough up however many billions that is and we will make a profit", you have to be able to guarantee that Heathrow will be closed, don’t you? I just want to know how you will close it.
John Olsen: It used to be under the control of the CAA and British Government under the distribution rules. It is no longer the case, so you have a point6.
Q619 Graham Stringer: No; I have a question and I would like an answer to it.
John Olsen: We will make a very favourable offer for the real estate which comprises Heathrow.
Q620 Jim Dobbin: I was going to ask this question in a different form. Mr Olsen made the comment that he did not think that Stansted was a viable option. I just wondered if the Mayor of London knew that, because he seems to have changed his view from an estuary hub to Stansted. He may change his mind next week to something else, but that is the situation. I just wondered what the panel thought of his intervention.
David Skelton: One point to make is that 77,000 jobs do depend on Heathrow. Heathrow does have the benefit that Stansted does not have of having a natural interline. The stat I gave before was that 25% of business travellers get to Heathrow within half an hour of starting their journey. It is 2% for Stansted. Getting the transport links from where business travellers start their journey to Stansted would be considerably more expensive and difficult than would be the case with the four-runway Heathrow proposal that Policy Exchange are proposing.
I would like to come back on the previous question as well.
Q621 Chair: Let us pause for a moment and then we will come back to you. Mr Dobbin, do you have further questions?
Jim Dobbin: No; I was just interested in the comment which Mr Olsen made.
John Olsen: The business base of Stansted has been declining, as you know, for the last three to four years and it will probably continue to do so. Efforts made by intercontinental carriers to operate there have ended in failure. The airport has now been sold for £1.5 billion to Manchester airport.
Chair: Mr Olsen, I think we should stop this line of discussion. I do not think we are here to cause massive problems for existing airports. We are looking forward to the future now.
Q622 Mr Sanders: The national interest is surely what should come first. I do not understand this fixation of moving east. I would have thought the national interest would be to move west or north-west, somewhere between Birmingham and Swindon. That area is where you should be looking for your hub airport so that it is almost equidistant to the other main centres of population but does not disadvantage London. With regard to the idea that you want more building in London, the south-east is already sinking and we do not want any more building on it. Isn’t it "Go West, Young Man!" rather than to go east? Why do you want to go east?
Chair: Who is going to answer that one? We are on safer ground now, aren’t we? Would anybody like to comment on that?
Ian Mulcahey: It is a good point. It is like in planning terms when you think where is the place you should have your national capital. You should probably put it right in the centre of the country, but countries and places build up an inertia and there is a logic for certain things being in certain places. Heathrow has maintained that position since the war. It was not planned to be a global hub airport. It just became the airport after the war because there was an RAF field there.
We are now at a point where we are building really significant infrastructure. We are making really significant decisions about the future planning of our city and our country, and in that context you need to rethink where it should go. There is an argument for saying it should be more centrally in the country, but the difficulty with that is that no one wants the airport near them because they do not want the noise, the pollution or the congestion. They do not want all the things that come with Heathrow. That is why with every airport proposal there is a campaign to stop the airport, as there is with high-speed rail.
The beauty of the estuary is that there is a fewer number of people just because of the geographical disposition of people. They are on the bank side rather than living right in the estuary. That is the beauty of the estuary. It avoids that nuisance. All the other suggestions like expanding Heathrow, removing the M25, building over the motorways and demolishing houses in Hounslow are not acceptable.
Chair: We have your point there.
Q623 Kwasi Kwarteng: This is one of the most extraordinary sessions of the Committee I have ever attended. How on earth do you know how many people are opposed to the estuary airport compared to the other suggestions?
Ian Mulcahey: I can’t quantify it.
Q624 Kwasi Kwarteng: But all your objections to those other airports could equally be applied to the estuary.
Ian Mulcahey: No, because there is no one living on the site where we are proposing an estuary airport.
Q625 Kwasi Kwarteng: So you think the people in Kent are quite happy to have an airport.
Ian Mulcahey: But there is no one living on the site. There is no one’s house there.
Kwasi Kwarteng: There is no one living in the water. But they are living under the flight path.
Q626 Chair: Let us leave that there. We will say it is self-evident. Have those of you with new proposals for the estuary airport discussed the airspace implications with NATS? Can I have a yes or no answer from you all?
Huw Thomas: Could I just make another point there?
Chair: I don’t want to go back over that. Have you discussed this with NATS?
Huw Thomas: Yes.
Q627 Chair: What did they say to you?
Huw Thomas: They say that anything is possible but it is not easy. The discussion we had was in the context of SESAR-the single European airspace review-and how whatever solution we decide on, whether an expanded Heathrow, a second runway at Gatwick or six runways at Stansted, we have to readdress the airspace problems in the south-east.
Q628 Chair: I am not asking about those other things. You have not had a discussion with them about your proposal to which they have said, "Yes, this can be done."
Huw Thomas: They have said that, yes, it can be done but it is not easy.
Q629 Chair: That is not what they said to us. Mr Olsen, have you had a specific discussion with NATS?
John Olsen: No, but I have read what they have been stating on this issue, which is the contiguous nature of the Dutch airspace and British airspace.
Q630 Chair: I am asking a specific question on this. Mr Mulcahey, have you had any discussions with NATS?
Ian Mulcahey: We have not had any conversation with them, nor have they approached us as yet.
Q631 Graham Stringer: Do you know how many more people in your proposal would be brought within, say, a 50 dB area who previously were not affected by airport noise?
Chair: Mr Mulcahey, do you know that?
Graham Stringer: That would be a good way, wouldn’t it, to estimate opposition?
Ian Mulcahey: I agree and-
Q632 Graham Stringer: There would be a lot more people affected by airport noise than were previously.
Ian Mulcahey: The measure is not so much whether there is a change, but there is a measure about how many people are caused nuisance by a proposal. That should be a measure.
Q633 Graham Stringer: There would be a lot more people who previously were not affected by airport noise.
Ian Mulcahey: Possibly, but the net nuisance-
Q634 Graham Stringer: It would be a good figure to know, wouldn’t it?
Ian Mulcahey: It would, yes. The net nuisance, you would hope, would be less.
Q635 Graham Stringer: But it would be new people. Some people have chosen to live near Heathrow and some people have lived there for a long time. Some oppose expansion and some are in favour of expansion. From what you have said previously, do you think that all these new people will welcome you putting aeroplanes over their heads which make a noise?
Ian Mulcahey: Again, it would be similar to Heathrow; some will and some won’t.
Graham Stringer: I doubt it.
Ian Mulcahey: Some will benefit from employment and other things.
Q636 Chair: Mr Skelton, you wanted to comment on this.
David Skelton: Yes. One of the things about the four-runway Heathrow proposal that we are proposing is that we believe it would increase capacity from 476,000 movements a year to 850,000 but would also decrease the noise. It would be a quieter airport. We are proposing four things that would ensure that would happen.
First, the runways would move 3.9 km to the west, further away from the major conurbations in west London. Secondly, we would introduce a ban on night flights so that no flights would take off or land between 11 o’clock in the evening and 6.15 in the morning. Thirdly, we would ban the noisiest aircraft by 2030. We think aircraft technology is evolving at such a pace that it will be possible to ban the noisiest aircraft by 2030. Fourthly, for narrow-bodied aircraft, we would have them landing at a steeper angle than is the case at the moment. That is already the case at London City airport.
We have had some noise analysis done that says the noise of a four-runway Heathrow in 2030 would be lower than a two-runway Heathrow in 2030. We would have expanded capacity and diminished noise. One of the major reasons for political opposition to the expansion of Heathrow has been the objections based on increased noise.
Q637 Chair: Mr Thomas, have you done any specific studies about noise?
Huw Thomas: We have indeed overlaid the current noise contour from Heathrow over the proposal we have made. Currently, Heathrow has 760,000 people, maybe a little bit more on the latest calculations, within that no-noise profile. We believe it will be around 10% of people who will be affected by a similar level of noise from an estuary airport.
Q638 Chair: You say "we believe". Have you done some specific work on that?
Huw Thomas: Yes; we believe it would only be 10% of people.
Q639 Chair: Is that from specific work that you have done?
Huw Thomas: Yes-by overlaying the existing contour.
Q640 Chair: Mr Olsen, have you done any specific work on noise?
John Olsen: We have, and I agree with Huw.
Q641 Chair: What does that show?
John Olsen: As far as an estuary airport is concerned, the noise impact on the neighbouring populations would be minimal. We have drawn graphs to show that.
Q642 Chair: I just want to know the answer. Have you done a specific study?
John Olsen: Not a specific study about how many people would be affected by the positioning of our proposal at Cliffe.
Q643 Chair: I just want to know what specific work has been done. I want each of you to give me a one-word answer to this. If your proposals went ahead, when would your projects be operational? Mr Mulcahey, when would your proposals actually be operational?
Ian Mulcahey: When you say it goes ahead, do you mean it is given permission?
Chair: If your proposal was given permission, when would it operate?
Ian Mulcahey: Our current estimate is that, from being given permission, it would be about 12 to 15 years to construct. Again, there are a lot of unknowns in there to do with the fixed rail links.
Q644 Chair: So 12 years.
Ian Mulcahey: Yes; 12 to 15 years.
Q645 Chair: Mr Skelton, if yours was agreed.
David Skelton: We expect it would be fully operational by 2030.
Q646 Chair: Mr Thomas?
Huw Thomas: We are seven years, with detailed analysis of all of the components of construction.
Q647 Chair: Seven years from permission.
Huw Thomas: From permission.
Q648 Chair: Mr Olsen?
John Olsen: 11 years.
Chair: Thank you very much, gentlemen, for a very interesting contribution.
<?oasys [pg6,cwe1] ?>Examination of Witnesses
Witnesses: Paul Outhwaite, Public Affairs for the South East, Matt Williams, Climate change Policy Officer, Royal Society for the Protection of Birds, Jean Leston, Senior Transport Policy Adviser, and Dr Keith Allott, Chief Adviser, Climate Change, WWF-UK, gave evidence.
Q649 Chair: Good afternoon and welcome to the Transport Select Committee. Could I have your name and organisation, please?
Paul Outhwaite: I am Paul Outhwaite from the RSPB South-East England.
Matt Williams: I am Matt Williams, also from the RSPB.
Jean Leston: I am Jean Leston, WWF.
Dr Allott: I am Keith Allott, Chief Climate Change Adviser, WWF.
Q650 Chair: Do you accept that there is a need for greater aviation capacity?
Jean Leston: WWF does accept that there is a need for aviation growth but within the environmental limits recommended by the Committee on Climate Change. Those recommendations say that we can expand airport passengers by 60% and air traffic movements by 55% across the UK. We think there is already sufficient existing capacity to allow that level of growth without needing to build new runways or new airports.
Q651 Chair: Does that mean you do not think there is a need for any new runways; it is about using existing capacity?
Jean Leston: It is about using the existing capacity better.
Matt Williams: From RSPB’s point of view, we would agree that the starting point has to be the environmental limits. There are very clear figures from the Committee on Climate Change that indicate what sort of levels of expansion we could have. We also believe that, with the levels of demand forecast, there is sufficient existing capacity that could be used better without the need for building new capacity.
Q652 Chair: So you are against any new runways at all.
Matt Williams: We think the right starting point is to set environmental limits and to look at the demand and whether that is sufficient to justify new capacity.
Q653 Chair: What does that actually mean in practical terms?
Matt Williams: That means we believe there is a strong case that there is enough existing capacity to meet demand. That is even clearer when you start from the point of the environmental limits. If you start from the environmental limits and climate change limits, then the Committee on Climate Change has made it very clear that you can only have a 60% increase in passenger numbers.
Q654 Chair: I just want to know how you interpret that in relation to any existing capacity. Are you saying that you do not think there should be any more capacity?
<?oasys [pc10p0] ?>Matt Williams: We interpret that in the same way. We think there is sufficient existing capacity if you stick within those limits.
Q655 Chair: Mr Outhwaite, what is your view?
Paul Outhwaite: The only thing I would add to that is that obviously you have to take account of any habitat damage against the environmental limits. If you can do it without that damage, then expansion can go ahead within the constraints that my colleague has just expressed.
Dr Allott: I would simply repeat the point that the environmental limits are very real. They do exist for a reason. They are also enshrined in the spirit of the Climate Change Act that was passed by this House only four years ago in terms of respecting our carbon limits.
Q656 Chair: What do you think could be done now by existing airlines and airports to reduce the environmental damage in current aviation?
Jean Leston: We welcome efforts by organisations such as Sustainable Aviation to work on fuel efficiency improvements, technology improvements on aircraft and so on, but the sad fact remains that technological improvements in terms of efficiency gains are far less than the actual growth of aviation emissions.
The Committee on Climate Change says to plan for 0.8% per year efficiency improvements in aircraft, and yet the latest DfT forecasts published show we have 1% to 3% annual growth forecasts for aviation in the UK to 2050 compared to 4% to 5% annual growth forecast globally. Basically, aviation growth is outstripping any kind of technofix.
Q657 Chair: Does anybody else have any ideas about what could be done at the moment to reduce environmental damage?
Matt Williams: I would simply reaffirm that point. We would welcome marginal improvements that can be gained from efficiency. It is possible that small marginal improvements can be gained from biofuel technologies. Again, the rate of expansion of emissions and of the sector is going to outweigh those benefits. I would simply reiterate that.
Q658 Chair: Are you saying that no significant improvements can be made by aircraft design, alternative fuels or any other means? Are you saying that nothing can be done?
Matt Williams: I am saying that we would concur that there are small, marginal annual expected improvements-0.8% is the figure that is given-that can be made through improvements in technology.
Q659 Chair: You think that is all. You do not think the industry could do better than that.
Matt Williams: We think that is a realistic figure.
<?oasys [pc10p0] ?>Dr Allott: Efforts to improve aviation efficiency, aircraft efficiency and efficiency of routes are to be welcomed and perhaps could be increased somewhat, but we are talking about steady marginal improvements and a long time to see turnover of the aviation fleet, not just in the UK but also globally. There are certainly interesting, rather blue-sky ideas for radical changes to airframe design but, let’s be clear, that is many decades away from penetrating the market to any significant scale. In the meantime, we risk locking ourselves in to a very high carbon infrastructure. There are potential approaches using alternative fuel such as hydrogen, but that is an incredibly low-density fuel, which would not help. It also emits lots of water vapour at high altitude, which adds to the warming problem. Biofuels may have a role, but there is a lot of competition from other sectors of the economy for a very scarce natural resource which has limits to what you can produce sustainably without having big impacts upon food production and nature.
All of these tend to push to a crunch about asking are we going to throw all of these technofixes at a never-ending business-as-usual growth model, when other parts of the economy are looking very carefully at what sustainable levels of growth look like-
Q660 Chair: What I am asking you is what can be done at the moment. You are all very negative about it. Mr Outhwaite, do you have a view on it?
Paul Outhwaite: It is not an area of expertise of mine so I would just agree with them.
Q661 Mr Sanders: Shouldn’t we be looking at how, as an environmental movement-and you may be able to answer whether the environmental movement is doing this-we prevent people needing to travel so much and focus on reducing the number of journeys we have to make? Do you not have something to say on that?
Jean Leston: We have a lot to say about that. We believe that UK plc can continue to be profitable and competitive without airport expansion. They are already moving very much in that direction. WWF has done a lot of work in this area. We run a scheme called the One in Five Challenge with some of the UK’s largest and most progressive companies. We are talking the likes of Balfour Beatty, Marks and Spencer, Lloyds TSB and Vodafone; you get the picture. Those companies, with us, have been set the challenge of reducing their flights by 20% over five years by reducing unnecessary flying and using alternatives such as video-conferencing and greater use of rail. Members that have been with us for two years have already reduced their flights by 41%, saving an average of £2.4 million per company.
Those are the hard benefits. There are also soft benefits. Staff wellbeing improves because you have to spend less time on the road. You can make faster decisions. You can have greater productivity with less time out of the office. There are lots of other reasons besides cost and carbon savings to work in this way. We think there is a permanent move towards reduced reliance on business flying. At the same time, the Government are seriously thinking about building new runways and airports.
Q662 Kwasi Kwarteng: But it is not just an issue of trying to reduce people flying in Britain. If we look at China, and I was in India over Christmas, there are millions and millions of people who are coming in to the middle class for the first time. A lot of them are going to want to fly to see Europe for the first time. Whatever we do in terms of the worthy attempts that you are making to speak to companies, there is still going to be an increased demand for this thing. I am just putting an argument to you. If we do not build runways, then we are going to miss out on that business. Does that argument have any traction with you?
Jean Leston: No, it does not, because we think there is sufficient spare capacity in the system to welcome-
Q663 Kwasi Kwarteng: The millions of people who want to come in.
Jean Leston: Millions?
Q664 Kwasi Kwarteng: Potentially millions.
Jean Leston: Isn’t it good that the UK has absolutely the best connectivity already to some of those key emerging markets where those new tourists are going to come from?7
Q665 Kwasi Kwarteng: So there is enough and we don’t need to improve on anything.
Jean Leston: We have a lot of capacity; just use it better.
Dr Allott: I would make the point that in some of the emerging economies like China, for example, they are already hardwiring in extremely efficient domestic high-speed rail services because they are concerned about becoming excessively reliant, even within a huge country like China, on internal domestic flying. They have the opportunity to develop different business models as they grow their economies.
Q666 Kwasi Kwarteng: They are doing both. They are expanding and improving their rail network, and they are building airports.
Dr Allott: They are clearly building airports. It is a rapidly growing economy. The key point here is that none of us are necessarily saying that aviation is going to shrink. We are not saying that. We are saying that we have a choice about how much aviation grows both in this country and globally. We should be looking very carefully and not assuming that business as usual is a given.
Q667 Graham Stringer: If you go along with the Committee on Climate Change’s limits on aviation growth, how do you decide who does not get on the aeroplanes?
Chair: Who wants to try that one? Who doesn’t get on?
Graham Stringer: There is going to be greater demand in all probability for flying if you restrict it to 55% over the next 30-odd years. How do you decide whether Mr Kwarteng or I get on the aeroplane if we both want to fly?
Jean Leston: This is an interesting argument, particularly when you consider that 50% of the people in the UK do not fly in any one year and it is the wealthier classes that fly the most. Do we want to create huge airports and more expansion so the rich can fly more often?
Q668 Graham Stringer: I am asking the question. How do you decide? Are you going to stop rich people flying on that basis and only allow poor people to fly? Is whether you fly going to be means-tested or are you going to price it? I just want to know. If you limit the amount of capacity that is available, there has to be some mechanism for saying that Mr Kwarteng can fly and I cannot. It will either be by price or assessment of some sort. What is it?
Chair: Does anybody else want to comment on that?
Matt Williams: I do not think we are trying to say that you suddenly start allocating flights and you only have a certain rationing-
Q669 Graham Stringer: But if you are serious about a limit on expansion and the demand is greater than that, then that is the natural consequence of it.
Dr Allott: There are two arguments here. First, there is the argument of business travel. We are hearing a lot of the main justification for new runways and new airport expansion being justified on the argument that we need to build more capacity to service London in particular as a business centre.8
Q670 Chair: Mr Stringer is asking you about how you would deal with this issue of not enough capacity to meet demand.
Graham Stringer: The Committee on Climate Change are very clear that they only want expansion until 2050 by 55% or 60%. If there is greater demand-and it is likely to be greater because that is the world’s experience-how do you decide who gets on the aeroplanes?
Dr Allott: I am afraid I think you need to look at this also in the context of some of the issues to do with aviation taxation, which, compared with other modes of transport, is relatively low.
Q671 Chair: Would you like increased taxation? We are just trying to find out what you want to do.
Dr Allott: We would like to see aviation taxed at the same sort of level and in the way in which other modes of transport are already taxed. I am interested to know what an alternative would be. We already have, you could say, inequitable access to flying. As Jean has said, we see a significantly different proportion and use of flying by the wealthy, but that is not an argument to carry on regardless of our environmental limits.
Q672 Chair: Dr Allott, it might be that nobody wants to give an answer to this or there is not an answer.
Dr Allott: There is no easy answer to any of the questions.
Chair: What is it that you would want to do? You said taxation. I do not think we are going to get any further.
Q673 Graham Stringer: I want to ask another question that is related to this. If you go back to the Committee on Climate Change, it is all related to emissions targets. At the present time in Europe, emissions have come down and there has been growth, but carbon consumption has gone up by a greater amount than the emissions. Do you think the emissions targets are working?
Dr Allott: Can I ask which emissions targets? Is it the EU’s?
Q674 Graham Stringer: The 2020 target in Europe. The emissions are working, but, because of consumption, because we are importing goods from China, the actual carbon budget is going up by considerably more.
Dr Allott: To answer that briefly, the existing European emissions targets for 2020 set on a territorial basis are working but are not ambitious enough to be in any way aligned to the climate science. The other point you raise is about the embedded carbon in imports. That is an issue to do with the evolution of the international climate regime to bring in other manufacturing countries such as China under a future agreement in 2020. That is a moving target. It is work in progress. I do not think we are going to fix this by shifting to an international accounting system based upon all regulation of consumption emissions. It is too complex and would not work.
Q675 Jim Dobbin: I am interested in the issue of competitiveness. Mr Stringer has just alluded to the growth of world trade and the shift from here to the east or the Asian bloc. When we are in competition with other countries-and, of course, airports in this country are in competition with Paris, Frankfurt, Dubai and other large growing hub airports-is your campaign ongoing on all of these sites as well?
Jean Leston: When you say our "campaign", do you mean to help companies reduce their flying?
Jim Dobbin: Yes.
Jean Leston: We have worked in other offices, yes.
Q676 Jim Dobbin: I am assuming that everybody in this room wants to see competition and wants to see this country succeed.
Jean Leston: Yes. It is a powerful message that reverberates in lots of different countries. Our colleagues in the United States, in parts of Scandinavia, Sweden and Canada are all telling business the same thing. It makes sense commercially and environmentally to reduce unnecessary flying.9
Q677 Kwasi Kwarteng: What we are suggesting is that, if you go to Dubai and the emerging world, they are all trying to increase capacity. They are building runways and airports. What you are saying is that we should not be doing that.
Jean Leston: What we are saying is that we think it is possible to protect our premier hub status in the UK without needing major airport expansion. We would like to see-
Q678 Chair: So the answer is that you do not want major airport expansion.
Jean Leston: We do not want major airport expansion. We do want to see more routes to emerging markets than we have now. We think it is possible to do that within existing capacity. We think a lot of reform will be necessary to achieve that, and particularly at Heathrow, where we accept that runway capacity is an issue. You need to free up capacity by moving flights of lower economic value, predominantly leisure flights, to other airports where there is lots of spare capacity.
Q679 Chair: How are the airlines going to be persuaded to do that?
Jean Leston: What should be our primary purpose in this kind of strategic review? Is it pleasing the airlines or helping the-
Q680 Chair: I am asking you a question. You have said what should be done. Have you any ideas how the airlines are going to be persuaded to do that?
Jean Leston: I think the airlines will undoubtedly prefer to see expansion in one place because that makes their life easier.
Chair: I am asking you a question. You might not have an answer but I am asking you the question. You do not seem to have an answer.
Q681 Mr Sanders: On an international basis, as the World Wildlife Fund you must talk to people in other countries. Do you hold a view about the taxation system and the fact that there is no tax on aviation fuel? That is something that clearly no individual country can put right, but are you working on an international basis to ensure that the aviation industry pays the full environmental cost of its ability to transport people across the world?
Jean Leston: Unless one of my other colleagues wants to take this, yes, we are working on exactly that. There is the opportunity within the EU to reconsider fuel duty for international flights within the EU. Although the Chicago Convention has some restrictions on taxing international flights, there is seemingly nothing preventing us in law from putting a fuel duty on jet kerosene for domestic flights. Ending the ban on taxation of aviation fuel for international flights is a subject that is now under consideration at EU level.10
Dr Allott: If I can add one other point, you will be aware that, because of the dispute over the European Union Emissions Trading System, there is now a renewed momentum hopefully towards long overdue international agreement on aviation emissions under ICAO. We are working with many stakeholders to explore opportunities as to what the common ground would be for an environmentally robust international deal, which would hopefully introduce a price on carbon at an international level and towards an international deal. Our first best solution is a global fix to this, but we recognise that that will not be built overnight.
Q682 Chair: Mr Outhwaite, can you tell me your views on an airport in the Thames estuary? What are the problems from your point of view and can they be overcome?
Paul Outhwaite: Putting to one side climate change-
Chair: Yes; we are looking at other issues now.
Paul Outhwaite: The specifics of the Thames estuary are that most of it is protected by environmental regulation and laws under the habitats regulations. Under those, if a development goes ahead, there are various tests it has to pass, the first of which is overriding public importance. That is debatable. The second is that there are no alternatives. From what we have heard this evening, there are alternatives. Only then do you start looking at compensation. If it happened to pass the first two of those tests and it got to a place where it said, "Right, you are going to build an airport in the Thames estuary", you have to compensate for the land and the habitat you are going to destroy. We do not believe that it is possible to do that within the Thames estuary and possibly within the UK. There just is not the amount of land available. Under the rules we have governing our wildlife protection, it is not possible to do it without breaking the law. That said, if it were possible to do it, the habitats regulations themselves do not prohibit the development of an airport in the Thames estuary.
Q683 Chair: Is there a specific problem about a bird strike in the Thames estuary?
Paul Outhwaite: Bizarrely, from an RSPB point of view, the issue is not so much the bird hitting the plane-that is not our concern, though we would be a little upset by it-but it is the plane hitting the bird, so bringing down the plane. A number of birds might die if they hit the plane, but what you have to do to minimise that risk of a bird strike is the key issue.
As I understand it, the Civil Aviation Authority requires up to a 13 km zone to be made safe. That would be at the extreme edges. If you did that for, say, the Foster plan, it would take in three of our top protected sites-our special protection areas-which are designated under the environmental laws.
Would it be possible to make that safe in an area where there are 300,000 birds and make sure there was no impact? It is difficult to see how it could be done and if it could be done. If a way was found, could it be done without impacting on the populations of birds for which the areas are important in the first place? I don’t think so. If that was the case, then you are back to the habitats regulations and those three tests again. It is just incredibly difficult to think of a way that an airport in the Thames estuary could go ahead without breaking environmental laws as they stand at the moment.
Q684 Graham Stringer: You are clearly against increasing capacity. We have received evidence in this Committee that, because of lack of capacity at primarily the hub but elsewhere in the UK system, people choose to use Frankfurt, Charles de Gaulle, Schiphol, Copenhagen and Madrid as hubs to go elsewhere, and there is a great deal of stacking at Heathrow and sometimes at other airports. Do you believe that, following the policies that you want of no further expansion, there will be more or less carbon dioxide produced?
Matt Williams: On the issue of stacking in particular, reducing stacking is something that we would welcome, but again it is comparable to the improvements in efficiency of aircraft. The increase in CO2 as a cause of stacking is fairly marginal compared with the sorts of massive increases we are talking about if you were to develop new runways or a new hub airport.
Q685 Graham Stringer: The point you have made on stacking is fair enough, but there seems to be an assumption in what you are saying that you will restrict the number of flights by restricting runway capacity. In actual fact, people would just go and find another runway for a long-distance flight elsewhere in Europe, so you double the amount of taking off and the amount of carbon dioxide produced. It is a simple question. On your policy, would there be more carbon dioxide produced or less than by expanding the airports?
Jean Leston: Your question assumes that we will basically be exporting our emissions if we fail to expand. We would question the assumptions behind that question in lots of different ways.
Q686 Graham Stringer: Would you stop people going abroad?
Jean Leston: It is also assuming that the continent would be willing to expand to accommodate on our behalf. There is no sign of any continental Government-
Q687 Kwasi Kwarteng: Frankfurt has built four runways-
Graham Stringer: Charles de Gaulle, Frankfurt and Schiphol have all put on extra runways. They are desperate for the trade.
Chair: One at a time.
Jean Leston: Okay, but in the future no other continental Government are planning a major expansion programme such as this Government may be countenancing. If you question-
Graham Stringer: It just isn’t true.
Jean Leston: -whether continental airports are going to have massive expansion, they already have a lot of spare capacity in their system. That is the first point. The second point is that civil society groups are opposing what current expansion is in their system such as the fourth runway at Frankfurt, and further runways at Nantes and Munich. Who says they are going to expand and we are going to lose out?11
Q688 Chair: Let me just stop you. One of the issues at the moment, from the evidence that we have heard, is that, because of the problems we have at the hub airport at Heathrow, a large number of people are going from their local airports and flying out to a hub somewhere else in Europe, getting off the plane and getting on another plane to go to their destination. That is two lots of flights. Is that something that is of concern to you in relation to emissions? That is all we are asking.
Jean Leston: It really isn’t.
Q689 Chair: You are not concerned.
Jean Leston: First of all, I think such claims are based more on hearsay and anecdotal evidence.
Q690 Chair: No; are you concerned about-
Jean Leston: We are saying-
Q691 Chair: Ms Leston, this is the evidence we have had. What I am asking you is whether this is something that concerns you. You are saying that-
Kwasi Kwarteng: It doesn’t.
Chair: I want you to speak for yourself. You are not concerned.
Dr Allott: This is to do with the role of different hub airports servicing different needs and different destinations. A model under which every major city in Europe has a hub airport servicing every other destination in the world appears to us to be a recipe for madness.
Q692 Chair: No, no, Dr Allott, let me stop you. I am asking you a question. The evidence we have shows that, because of difficulties with enough capacity at our hub airport now, a large number of people are flying to another European hub from the UK, getting off the plane and going on another plane. Is that something that gives you concern? That is all I am asking.
Jean Leston: But people are only doing that because of poor use of existing capacity.
Q693 Chair: Please, I am asking Dr Allott a question. I asked you and you did not want to answer it. Dr Allott, I just want you to have the opportunity of answering. Do you wish to? Does that concern you?
Dr Allott: My answer is that I have not seen evidence that that is increasing.
Q694 Chair: It exists. Are you concerned?
Dr Allott: I think it has always existed ever since hub airports were created.
Q695 Chair: Yes, but is that something that concerns you? That is all I am asking.
Dr Allott: It does not concern me as long as we are operating within a sensible and strategically designed overall European approach towards hubs and hub destinations. There is nothing wrong with flying to a European hub to get a connecting flight.
Chair: I just want an answer from you.
Q696 Kwasi Kwarteng: You will appreciate that we have not built a runway since 1946-
Graham Stringer: Yes, we have.
Kwasi Kwarteng: In the south-east we haven’t. You will appreciate that these other countries have expanded. We had a third runway in Frankfurt in the 1980s and then a fourth in 2009. Do you see the concern that we have in terms of trying to maintain our international competitiveness? Do you understand some of the reasoning behind those of us who want to expand?
Jean Leston: Absolutely, yes. We need to keep those concerns in perspective. That is all we are saying. Let us view all of this with cool heads. It is very easy to have scaremongering push us into precipitous decisions. Within our London airports, we have 50% more seat capacity according to the latest OAG aviation statistics than the next biggest European competitor, which is Paris. We are a long way ahead of other airports.
According to our international connectivity research that we did with AirportWatch, we have more connectivity to the top business destinations than Charles de Gaulle and Frankfurt combined. We have a big head start-a big advantage. No, we don’t want to lose that advantage, but we think that we can retain it and our particular strengths with the capacity that we already have.
Chair: Thank you very much for answering our questions today.
Examination of Witnesses
Witnesses: Robin Cooper, Director of Regeneration, Community and Culture, Medway Council, Joseph Ratcliffe, Principal Transport Planner - Strategy, Kent County Council, Councillor Colin Ellar, London Borough of Hounslow, and Mrs Jales Tippell, Head of Planning, Transportation and Community Engagement, London Borough of Hillingdon, gave evidence.
Q697 Chair: Good afternoon and welcome to the Transport Select Committee. Could you give your name and organisation?
Colin Ellar: I am Councillor Colin Ellar, Deputy Leader of the London Borough of Hounslow.
Mrs Tippell: I am Jales Tippell, Head of Planning, Transportation and Community Engagement at the London Borough of Hillingdon.
Robin Cooper: I am Robin Cooper, Director of Regeneration at Medway Council in North Kent, which has two of the proposals you have heard about today.
Joseph Ratcliffe: I am Joe Ratcliffe, Principal Transport Planner, Kent County Council.
Q698 Chair: Do you agree that the UK needs greater aviation capacity? Who would like to answer that one? You must not be put off by anything you may have heard here today. Do we need more aviation capacity without saying where it should be? Is that needed?
Joseph Ratcliffe: Yes; I believe extra capacity is needed.
Q699 Chair: Is there a need for greater hub capacity rather than capacity overall? You are all very shy. Somebody must say something.
Joseph Ratcliffe: If you look at the London airport system as a whole, then there is sufficient capacity across the major London airports, with the exception of Heathrow and to a lesser extent at Gatwick and Stansted in the peak times, although off peak there is sufficient capacity. In answer to your question, yes, this is a hub capacity issue.
Q700 Chair: How do you think this should be addressed? Should it be about expansion to existing airports or is there a case for a new airport?
Robin Cooper: We have estimated existing capacity for about 60 million additional passengers per year just using the existing airports in the south-east and those which could be connected up, certainly through High Speed 2, which we have all heard about today. It seems to us that the starting point has to be to use those 60 million spare slots that are available at the moment, which would probably get us through the next few decades.
Q701 Chair: Do you think that increased capacity at Heathrow would benefit its performance? Would there be more resilience? Would that make it better?
Mrs Tippell: Could I just come in on some of the points that were raised before? In terms of Hillingdon’s views, we feel that there is enough capacity across London but the shortage is in hub capacity. We feel that there may be enough hub capacity through short-term measures up until about 2030, but beyond that we need to plan forward for additional hub capacity.
Q702 Kwasi Kwarteng: Can we get straight to the point? Do you think that there should be an estuary airport?
Mrs Tippell: We don’t have a view on where that new hub is. We just don’t feel that there is any scope for more expansion at Heathrow. If the UK’s economy is being stifled by the capacity of the hub airport at Heathrow, then it needs to think through to how that is contained. The Davies Commission was specifically asked to look at options for maintaining the UK’s global aviation hub status. That matter is exactly what the Draft Aviation Policy Framework said it needed to look at. The National Infrastructure Plan in 2011 also talked about the hub status for the UK as being of importance. If the Government believe that, they need to address that issue.
Q703 Kwasi Kwarteng: We are probably going to have 30 to 40 minutes, but, essentially, you are going to be saying that you do not want expansion in your back yard and you will be saying, Mr Ratcliffe, that you do not want an airport anywhere near the estuary, which is your back yard. That is the long and the short of it.
Joseph Ratcliffe: Yes.
Q704 Graham Stringer: I would ask both of you, following that question, whether or not you have done any detailed opinion polling on those issues.
Mrs Tippell: We have had feedback from before with the third runway proposals. There was significant opposition to a third runway at that time.
Q705 Graham Stringer: I recognise that, but I am asking specifically whether you have gone out and used an accredited opinion poll company to find out what the opinion is.
Mrs Tippell: We will be looking to do a referendum in May.
Q706 Graham Stringer: But not an opinion poll.
Mrs Tippell: That will be an independent poll.
Robin Cooper: We have polled through MORI, so it is a recognised pollster unit. Roughly eight out of 10 people that were polled across the UK did not support a Thames estuary airport. In terms of the airlines, nine out of 10 did not.
Colin Ellar: Likewise, in the past we have done a lot of polling. We got a very convincing anti-expansion message back from our residents. That is ongoing. We are doing work with the community at the moment. We also have the intention very shortly of doing a full consultation with every household on what their thoughts are not just on expansion but the relationship with the airport.
Q707 Graham Stringer: Who did those opinion polls for you?
Colin Ellar: They have been done through Cogitamus. They have been taking the lead on it. That is a group that we work closely with. It has been ongoing over several years and they work on our behalf. They are doing that. So it is not somebody like MORI but somebody who organises that for us.
Q708 Kwasi Kwarteng: You will appreciate that I am a Member for a borough that is adjacent to both of your boroughs. Of course the borough I represent has a different view from your boroughs.
Colin Ellar: On some issues, yes.
Q709 Kwasi Kwarteng: Certainly on the third runway debate, which is past. They were for it because of the economic reasons.
Colin Ellar: We would disagree on that, yes.
Q710 Kwasi Kwarteng: Let me put this to you. If there were a hub airport in the estuary or away from Heathrow, have you considered the question or worked out what the impacts would be on your borough if Heathrow were to close for any reason?
Colin Ellar: Yes.
Q711 Kwasi Kwarteng: Could you share what those findings were with the Committee?
Colin Ellar: If there was a hub airport in the estuary that caused Heathrow airport to be closed-and there is a debate whether or not it would close-the word I would use would be "devastating". It would have a devastating impact on the west London economy. I have lived in a mining village where the mines closed. We lost a third of our population in a very short time. We talked earlier about Docklands. I would expect you to see devastation certainly in the job field; you would lose so many jobs. There are 70,000 jobs at Heathrow. If they went, you can imagine what impact that would have on west London. There is then all the ancillary employment. There are all the large companies and all the various companies that serve the airport. You would imagine that they would lose their livelihoods as well. It would have, as I say, a devastating impact if that was the case.
Q712 Kwasi Kwarteng: This is work that Hounslow borough has done, is it?
Colin Ellar: Those are our thoughts, yes. That is certainly something we have been discussing since the option-because it is a relatively new option-of closing Heathrow. This was something that was not on the cards up until really fairly recently, since the Foster plan was put on the table. Then it has been talked about. Before that, I do not think that even the concept has been talked about of closing Heathrow.
Q713 Kwasi Kwarteng: Is the Hillingdon view similar?
Mrs Tippell: It would be down to the market as to whether or not Heathrow remained in some shape or form if there was a new hub.
Q714 Kwasi Kwarteng: But you are quite happy to see it close then.
Mrs Tippell: I would not say we are happy. I think we are realistic. We understand that there is the possibility. We can’t say there should be no expansion but no closure either. We have to be open to that. Yes, there are 76,000 jobs at Heathrow, but only about 8,000 of those are for Hillingdon residents.
Q715 Kwasi Kwarteng: So the 8,000 don’t-
Mrs Tippell: It is 12%. It is not insignificant, but, given the future of that site, it is a big site. It is as big as Kensington and Chelsea borough. Kensington and Chelsea have 114,000 jobs and 86,000 homes. Going forward, we could get a really good development that provided more jobs and homes. We are open to whatever happens. We are open for business in Hillingdon. We will talk to whomever, whatever the market decides to do. What we cannot do is bury our heads in the sand and say, "We don’t want any expansion"-we need a hub for the UK, if that is the decision-"and, no, we want to keep Heathrow." It is not going to happen. We are realistic.
Q716 Kwasi Kwarteng: So you do not see the devastation that Mr Ellar talked about.
Mrs Tippell: In the short term, obviously, there will be negative impacts. We cannot deny that, but it will be phased over a period of time. The closure of Heathrow is the worst case scenario. There may be an alternative role for Heathrow. There is going to be something else, possibly.
Q717 Chair: What would those negative impacts be in the short term?
Mrs Tippell: In terms of what?
Chair: In terms of Heathrow closing. You said that in the short term there would be negative impacts.
Mrs Tippell: There would be loss of jobs before the new businesses-
Q718 Chair: How many jobs? What would the scale of it be?
Mrs Tippell: If there are 76,000 on site, that is going to affect west London. For our borough it is about 8,000 jobs.
Q719 Kwasi Kwarteng: So you are quite happy-
Mrs Tippell: We are not happy
Kwasi Kwarteng: You are not happy but you are more resigned.
Mrs Tippell: We are not happy, and I do not want you to say that. We would look positively at what we can get to replace that. West London has enough of a buzz about it, as does London as a whole, to be able to cope with a new hub airport.
Q720 Jim Dobbin: When you write your referendum, if that is what you intend to do-
Mrs Tippell: Sorry?
Jim Dobbin: I thought you gave evidence earlier on to say that you were going to have a referendum.
Mrs Tippell: In May.
Jim Dobbin: When you put that referendum to the people, will it be a simple question for or against or will you be suggesting other questions about noise, pollution, discomfort and all of that?
Mrs Tippell: I do not know the detail of that at this stage.
Colin Ellar: We will put a comprehensive set of questions, not just an in/out, in essence. We won’t be saying, "Do you support this? Do you support that?" We will be testing different opinions. It is more of a consultation. We think that is a better way to deal with the issue because it is a complex issue and it is something where we want to sound out what the opinions of the whole community are about.
Q721 Kwasi Kwarteng: On this issue you clearly have a slight difference of opinion from Hillingdon borough, as expressed a few minutes ago, about the economic impact.
Colin Ellar: Certainly.
Q722 Kwasi Kwarteng: In a way, the Hillingdon view is more open, in the sense that they are open to the idea of Heathrow closing down, whereas you would say it is devastating. What about the alternative, if you cannot expand Heathrow, of it being shut down? What would you do if that was presented to you?
Colin Ellar: That is a very difficult choice.
Kwasi Kwarteng: That is why I am asking.
Colin Ellar: It is rich in either sense. As Hounslow, we are caught between a rock and a hard place. If the airport gets bigger, it necessarily has an impact on us. There is more noise, more pollution and so on. Yes, we might get some more jobs out of it. If the airport closed down, it will have a devastating effect on us. We talked about the third runway. If the third runway were to happen, as was policy until a couple of years ago, that would have impacted very heavily on probably 100,000 to 150,000 people. They would have had a complete change in their lives inasmuch as they would then start to have several hundred aeroplanes going over their heads every single day from the point when it became operational. I know the impact that it has in my daily life because I live under one of the flight paths and have done for several years.
If you say, "Do you want that or do you want that?", the truth is that I probably don’t want either of them. What we want-
Kwasi Kwarteng: To stay the same.
Colin Ellar: -is an airport that is a fantastic economic driver. We have had the benefit of that, but what we would like to see is possibly a bit less noise, a bit less pollution and a better use of what you have there already. As we saw in the Olympics, there was a lot more throughput and a huge amount of people went through it with no more flights. That is probably the direction we are looking in, at least for now. You can make better use of the infrastructure that you have.
Q723 Chair: What are your concerns, if any, about the proposals for an estuary airport? Are there specific environmental concerns that you have?
Robin Cooper: There are several reasons. One is plainly the environmental one and we heard that from the RSPB. It is a very important international bird reserve. It is simply the volume of birds. There are 300,000 birds that live there. What do you do with them? There is also the effect on the people who live in Medway, where the Foster and Olsen proposal is. 23,000 people live on that part of the land-the Hoo Peninsula.
The Foster proposal suggests that something like nine villages would completely disappear. How you relocate that number of people I do not know. I suppose we have experience of slum clearances back in the 1960s, but in the modern day I am not aware of how you would relocate that number of people or compensate them.
There is an effect on people and the environment. It seems to us somewhat perverse to put an international airport on the furthest south-east part of Britain you could get before you drop in the sea. We are talking about an international airport, not an airport for Kent or for Essex.
We have done some work with the local enterprise partnership, which in our part of the world is Essex, Kent and East Sussex. It is a very big geographic area. Parsons Brinckerhoff, who have done that work for us, presented it to the LEP board, which is made up of businesses and politicians. They have unanimously endorsed their findings-this is with businesses speaking-which are that businesses do not support the Thames estuary airport, but they do support getting better utilisation of the spare capacity and investing in high-speed rail links.
Q724 Chair: Mr Ratcliffe, do you want to add anything?
Joseph Ratcliffe: I would completely agree with everything that Mr Cooper has just said. If you look from a transport point of view, the previous questioning session mentioned the use of High Speed 1 to move passengers to the airport in the estuary. Doing some quick calculations, it would be wholly insufficient for the current capacity on High Speed 1 to fulfil this role. If the airport has the maximum amount of movements and so forth, you could be looking at 48,000 passengers needing to be moved per hour. That would require 70 fully loaded high-speed trains per hour. That would be 30 to 35 in each direction. Currently there are around eight every 15 minutes.
In terms of road infrastructure, which for most airports in the world is still how most people get to an airport, Kent county council along with Essex is pushing for a third lower Thames crossing. That is needed at the moment without an airport. If you are thinking about an airport being put there, you would need not only a third lower Thames crossing but also a fourth and maybe even a fifth. In terms of transport infrastructure, the M25 would need extra lanes. It just would not stack up.
Q725 Chair: Have there been any assessments of the costs of surface access to an estuary airport? Have you been involved in any discussions on that?
Joseph Ratcliffe: We have not done any direct costings ourselves, although we do question the amounts quoted by supporters of the Thames estuary proposals. No, we have done no direct calculations ourselves.
Robin Cooper: Parsons Brinckerhoff, in the work which was done for the local enterprise partnership, estimated that the cost would be at least £70 billion; that is the total package. We know that the cost of the airport, according to Foster, is round about £20 billion, so we are talking about a £50 billion investment in the infrastructure needed to get out to the Thames estuary.
Q726 Chair: That would be public sector investment.
Robin Cooper: Public sector investment by the Government.
Q727 Chair: That is what you would be talking about.
Robin Cooper: Absolutely, yes.
Q728 Chair: I have one further question to Hillingdon and Hounslow. Councillor Ellar, you have spoken about wanting Heathrow to be used more efficiently. You are concerned about the potential introduction of mixed mode operations at Heathrow. Tell us why you are concerned.
Colin Ellar: At the moment, we live in an environment where from approximately 5 o’clock in the morning-it depends whether it is your on day or your off day-you have flights going overhead until about 3 o’clock in the afternoon. It is either that or you have the planes starting at 3 o’clock in the afternoon going through to about 11 o’clock at night. You get about half of your days free of aircraft noise.
With what is going on at the moment with operational freedoms, when there is any kind of delay so you get a backlog, some planes are being switched from the runway that is in use on to the one that should not be in use. With that alternation, the flights just stop and you get peace so you can go out in your garden or listen to your radio without aircraft noise. At the moment, we have a trial period to test the impact of using both runways simultaneously. We are not very happy about that because it destroys that quiet period that we have.
With mixed mode, you are basically going to have planes flying in non-stop every day for almost 24 hours. You are only getting about six hours’ peace at night. I don’t welcome that. I get it a lot in my life and I do get woken up. I get things late at night. I don’t really want any more of it and neither do the residents of Hounslow. I imagine there are a lot of other people in London that don’t want it either.
Q729 Kwasi Kwarteng: Can I ask you a difficult question on it?
Colin Ellar: You can ask me a difficult question, yes.
Q730 Kwasi Kwarteng: If the choice is between a third runway and having mixed mode, which would you go for?
Colin Ellar: Neither.
Q731 Kwasi Kwarteng: I thought you would say that.
Colin Ellar: Then it was not so difficult.
Q732 Kwasi Kwarteng: Do you see what I am trying to get at? With Heathrow, we have almost reached the limit of its capacity. People who are economically tied in to Heathrow are going to have to ask difficult questions about its future.
Colin Ellar: Yes, and they are very difficult to answer. As I say, until about two years ago the policy of the Government of the day was to implement a third runway. Our position was always mitigation. We get very poor mitigation as it is in the existing two runways in terms of soundproofing public buildings. We never have sufficient.
Kwasi Kwarteng: I agree.
Colin Ellar: Our attitude in the borough was that we did not want a third runway but, if it was going to happen, if it was going to be the policy, we were going to fight ever so hard so that the people who would be affected in the future would get a better mitigation package and, hopefully, we would get some of that as well. That was our position. Obviously, we did not want it because we did not want to inflict that level of noise, that disruption, on a whole bunch of new people who have never had it before.
Mrs Tippell: In Hillingdon, we would entirely agree with Hounslow. We have a duty of care to the health and well-being of our residents, as have the Government. At the moment that duty of care is being ignored by the Government. European limits are being exceeded on noise and air quality. They should have been met by 2010. We doubt they will even be met by 2020. Any further expansion is just going to worsen that situation. We are really worried about operational freedoms and the trials.
Q733 Chair: If there was a ban on night flights, would that make any difference to your views on expansion?
Colin Ellar: My partner would be so happy because she gets woken up very early. She is a lighter sleeper than me.
Q734 Chair: So you would be happy as well.
Colin Ellar: I would be happy for her. I am only a man.
Chair: I am glad we are making someone happy today.
Mrs Tippell: I think a ban on night flights would help, but unfortunately you cannot control these international flights. If they come over and have to land early, that is a scheduling problem, isn’t it?
Q735 Chair: If there were a ban on night flights, would that change your views on more runway capacity? Would that make any difference, Councillor Ellar?
Mrs Tippell: I do not think it would increase it that much, actually.
Colin Ellar: It is a very important factor. There are two principal factors in our concerns. Night flights, certainly, because it disturbs your sleep, and we want to keep that period of peace.
Mrs Tippell: The respite.
Colin Ellar: Those are the two things that are critical for us. If we could have less night flights, we would be very pleased with that. If we can keep our respite, we are also very protective about that.
Q736 Chair: Would it make you more willing to agree to more runway capacity if there was a ban on night flights?
Colin Ellar: If you were looking at what was suggested earlier-the four-runway option, which is further away so it is quieter, with more flights but less noise for us and it would do away with night flights-then, yes, that would certainly be a more welcome option than either more night flights or mixed mode. It would be better for us with less noise and less interruption.
Chair: Thank you very much for coming and answering our questions.
 IAAG’s proposed costings would include the local railway extensions to the Airport services complexes in K ent and Essex which lie outside the main terminal areas. Already in place are major road improvements i.e. the A13 and A2 which will serve the airport. Also Crossrail and Lower Thames crossing will be joined to improved road and rail access
 T here is no intent nor need whatsoever to damage BAA (Heathrow Ltd). The Executive Summary in our written evidence describe s how we intend to support Heathrow short, medium and long term, if the inability of Heathrow to expand means support for an alternative site, the residual land resources at Heathrow could be fully exploited to the great benefits of the shareholders in developing a large mixed development or Eco city. BAA could then be given the choice of disposing or managing the new development or even participating in the alternative new airport development.
 Although some financing was at a high level of interest BAA has successfully renegotiated its debt portfolio to reduce aggregate debt financing to around 6% However the present constraints on capacity and throughput limit the levels of income required to cover interest and CAPEX requirements.
 Airport business is not a “bad” business but it is difficult to generate significant profits. Recent expected results were10% less than expected. Heathrow now has to cover a £646m shortfall.
 Stansted with a presently declining through p ut and one dominant LCC carrier, Ryanair, does not qualify for major expansion into a 4 runway hub. It has an important part to play in concentrating on low cost, IT and point to point traffic. We wish it every success under its new owners.
 IAAG’s continuing objective is to improve resilience (to adverse events) and improve efficiency in all airport locations to keep overall costs under control and stabilise airport charges in to the foreseeable future.
 AS 69A, Subsidiary point 1
 AS 69A, subsidiary point 2
 AS 69A, subsidiary point 3
 AS 69A, subsidiary point 4
 AS 69A, subsidiary point 5