The Head of Justine Greening on a Platter

The aviation industry got what it wanted: the head of Justine Greening on a platter.  Immediate policy on Heathrow is unlikely to change – the new Transport Secretary Patrick McLoughlin has a record of opposing a third runway (http://www.publicwhip.org.uk/division.php?date=2009-01 28&number=26&mpn=Patrick_McLoughlin&mpc=West_Derbyshire&house=commons) and the Liberal Democrats remain firmly opposed – but the industry’s marketing onslaught has paid off.

That onslaught started the day Justine Greening was appointed.  On the day she was appointed in October 2011 BA chief Willie Walsh called her “compromised” because of her opposition to a 3^rd runway and because she had a constituency under the Heathrow flight path (As had her predecessor Philip Hammond, but that was never mentioned by the industry) – http://www.telegraph.co.uk/finance/newsbysector/transport/8829387/New-minister-compromised-over-Heathrow-expansion-says-Willie-Walsh.html.

From day one the criticism by the industry and its allies was relentless.  Last month (23/8/12) Richard Wellings, head of transport at the Institute of Economic Affairs think-tank told The Financial Times Justine Greening’s position was “untenable”: http://www.ft.com/cms/s/0/c881f3a0-ed00-11e1-9980-00144feab49a.html#axzz25ZihFSMr.

But the industry’s campaign was more subtle than simply personal attacks on Greening.  They put it in the context that she was standing in the way of urgent decisions being required to expand our airport capacity or UK plc will lose out.  They know that is nonsense.  They know Department for Transport figures show that that Britain has enough airport capacity until almost 2030.  They know that London is voted the top city in Europe for business in survey after survey.  The influential Cushman & Wakefield found: “London is still ranked – by some distance from its closest competitors – as the leading city in which to do business.” (Cushman & Wakefield, The European Cities Monitor (2011)

https://www.cushwake.com/cwglobal/docviewer/2120_ECM_2011__FINAL_10Oct.pdf?id=c50500003p&repositoryKey=CoreRe).  And just this month a Bircham Bell Dyson came to the same conclusion, even putting a plane on the cover of their report to illustrate it! (http://www.bdb-law.co.uk/media/440379/settingupbusinessintheuk.pdf).

The industry know all this.  They also know that their oft-repeated assertion that Chinese firms are locating to other European cities because of an alleged lack of airport capacity in the UK is playing hard and fast with the facts.  They know that the number of flights between China and the UK is limited to 62 a week by bilateral treaty.  They know that the difficulty and cost of Chinese people getting visas to come to Britain is a major disincentive.  Ian Birrell wrote in the Guardian (14/5/12)>: “Getting a visa for the UK is “torture with a system judged the worst in Europe. Perhaps stupidest of all is how we treat the Chinese.”

The industry know all this as well.  But facts have not been their main concern.  Nor lofty thoughts about what is best for the UK economy.  Their aim has simply been to generate headlines to make the position of Justine Greening – and, ideally, also the aviation minister Theresa Villiers who was also firmly opposed to a third runway – untenable.  The industry has produced no hard economic evidence.  That was never their intention.  It was simply, as Greening put it in an interview with the Evening Standard ‘a pub-style’ debate. 

And it worked.  Greening was moved not because she was a poor Transport Secretary.  She had won plaudits across the board for her policy of developing a long-tern strategy.  She went in order to get aviation out of the headlines.

My guess is the frenetic campaign by the aviation industry and its allies will now cease.  They’ve got their prey.  They’ve always known no big decisions will be taken until after the next Election.  But they could not live with independent-minded ministers at the Department for Transport.  It was all very predicable.  As Chris Mullin, a former aviation minister who tried to stand up to the industry, said. “During my 18 months as a junior minister responsible for aviation policy, I learnt two things. First, that the demands of the aviation industry are insatiable. Second, that successive governments usually give way to them”. 

Why I’m backing Justine….and Maria

It may be a first.  I certainly can’t recall any previous occasion when voters have taken direct action in an attempt to influence a cabinet reshuffle.  Reshuffles are usually of less interest to most people than the football results of the Scottish third division. (I’m an exception to that incidentally having watching my parent’s home team Ross County move from the lowest tier of Scottish football to a proud fourth in the premier division). 

However, David Cameron’s reshuffle is different.  And all because of one woman:  the Transport Secretary Justine Greening.  West London residents have taken to posting ‘I’m backing Justine’ stickers all over the underground – see report in the Evening Standard:  http://www.standard.co.uk/news/london/poster-battle-to-save-greening-from-reshuffle-8078787.html.  The fact that residents are going to this length – and are now calling for a demonstration in favour of the Transport Secretary – shows the strength of  support there is for her and for her stance on a third runway.

Justine Greening must be the first member of any Cabinet to be under threat because she is supporting Government policy.  But the aviation industry has been gunning for her from day one.  Her position was untenable, its representatives argued, because of her well-known opposition to Heathrow expansion and because her Putney constituency was under the flight path.  Just like the Egham constituency of her predecessor, Philip Hammond.  But the industry never raised that as a problem.

The current argument that the industry and its friends in business and the media use is that she must go because she is a block to a sane discussion about future aviation policy which must include the option of a 3^rd runway.  What actually bugs them is that the debate about a 3^rd runway has been had and they lost it.  What bugs them even more is that there are three ministers at the Department for Transport – Justine Greening, Theresa Villiers and the Liberal Democrat Norman Baker – who are independent-minded and not in the pocket of the aviation industry.

As Chair of HACAN, I know these ministers have changed the department.  The previous “collusion” with the aviation industry – ironically exposed by Justine Greening when she was in opposition http://www.thesundaytimes.co.uk/sto/Test/politics/article82312.ece – has been replaced by a serious debate about future aviation policy which includes environmental organizations and residents’ groups as well as the aviation industry.  

And that brings us to Alastair Darling….and Labour’s Transport Secretary Maria Eagle.  When I read in today’s Independent on Sunday that Darling was still supporting a third runway – http://www.independent.co.uk/news/uk/politics/darling-defies-miliband-over-third-heathrow-runway-8081429.html – I had to remind myself that he was once Secretary of State for Transport.  I just don’t recall anything he did.  He certainly didn’t attempt to shake the Department for Transport out of its bias towards the aviation industry.  Somehow it is difficult to imagine an ‘I’m backing Darling’ campaign.

With the backing of Ed Miliband, Labour’s current shadow transport secretary Maria Eagle has reversed Labour’s backing for a third runway.  I’m not too sure either of them would than me for saying this but I see real similarities between Justine Greening and Maria Eagle.  Both were educated in comprehensive schools in the North of England.  Both are more interested in developing serious, evidence-based polices than giving into the demands of interest-based groups.  Both value practical results above empty rhetoric.  That’s why I backing Justine….and Maria.

It’s beyond parody.  The call by the Free Enterprise Group of MPs for TWO new runways at Heathrow is bad news……for them.  To ignore the successful fight that stopped the third runway (http://www.hacan.org.uk/resources/reports.php?id=290) is politically naïve.  To spell out a range of destructive options for a fourth runway is bordering on political suicide.  It will simply result in a myriad of communities being up in arms.

It reminds me of the disastrous mistake the then Roads Minister Peter Bottomley made in the 1980s.  He publicised all the options for new roads across London.  It resulted in 250 local groups banding together under the umbrella of All London against the Road Building Menace (ALARM).  Just a few years later, in 1990, the Government was forced to abandon all the road schemes (http://www.roadblock.org.uk/alarmuk/roadblock.pdf).

Yet, people like Spelthorne MP Kwasi Kwarteng, a leading figure in the Group and author of the report on which the proposals are based, are not stupid.  So why are they doing this?  I suspect that most of them know their current proposals are folly.  If they don’t, they are not living in the real world.  Any attempt to build two new runways at Heathrow would result in the defining environmental battle of our time.  Even if the thousands of people who stood to lose their homes and businesses meekly accepted generous compensation packages, the amount of opposition the proposals would generate would be enormous:  hundreds of thousands of residents under the flight paths, climate activists, environmentalist from across Europe, anarchists of every hue…….the resulting campaign would make Occupy St Pauls look like a sedate church service on a quiet Sunday morning.  Surrey ladies would be standing shoulder to shoulder with the children of Swampy.      

It would be the campaign against the third runway writ large.  Ian Martin, writing in the Daily Telegraph (1/04/08), said of that campaign quote “There is an anger and a rebellion that runs from eco-warriors through to merchant bankers.”  No government could contemplate two new runways at Heathrow.

So what are the Free Enterprise MPs up to?  Their proposals are so off the wall it is difficult to be certain as to their motive.  They do seem to be trying to show that Heathrow, even with two new runways, is a cheaper option than an Estuary Airport.  Many of the MPs are close to business and are probably reflecting the views of the many businesses who don’t want to see Heathrow replace by an Estuary Airport. 

But they are probably also using their report to make a business case for airport expansion per se.  Their aim is to create a climate of opinion where it becomes generally accepted that expansion is required; the only question that remains to be answered is where?  They seem to challenging the Transport Secretary: “If not a Heathrow, where will expansion take place, Justine?”

Justine Greening, the most informed Transport Secretary on aviation for a generation, is sticking to her guns.  She first wants evidence-based responses on whether more capacity is needed and, if so, how much would be required long before looking at the question of where is should be.  These proposals from the Free Enterprise Group are a parody of the sort of evidence-based arguments Justine Greening is looking for.

There’s nothing unfair about Air Passenger Duty

It’s become a summer fixture.   As regular as Wimbledon, Henley or cricket as Lords.  It is the call by the aviation industry to end what it terms ‘the tax on people’s holidays’: the start of its annual Fair Tax on Flying campaign. The industry of course is talking about Air Passenger Duty (APD).  What is doesn’t talk about are the considerable tax breaks it enjoys through tax-free fuel and exemption from VAT.  Nor does it mention that APD would need to rise four-fold to pay for the money the Exchequer loses each year as a result of these tax-breaks (outlined in more detail on this AirportWatch page: www.fairtaxonflying.org.uk).   

The purpose of this blog is not to kill off holidays in the sun but to unravel the industry spin around APD.  Let’s start with the tax-breaks. Motorists pay 58p a litre in fuel duty + VAT at 20%. Thus petrol tax is at a rate of approx 160%. Tax on aviation fuel is 0%.  http://en.wikipedia.org/wiki/Fuel_tax.  The Treasury estimated in October 2009 that, if aviation paid VAT and its fuel was taxed at the same rate as petrol for cars, the UK would earn at least £10 billion a year. With the increase in fuel tax and VAT since then, the figure is now between £10 – 11 billion.

http://fullfact.org/factchecks/airline_industry_subsidies_green_taxes-3256

Let’s pause for a minute to let this figure sink in.  The country is losing over £10 billion a year because of the tax-breaks the aviation industry enjoys.  This at a time when cut-backs are being made to social services, schools, libraries, old people’s homes………Where’s the “fairness” in that?  Even Bob Diamond, the disgraced head of Barclay’s Bank, would struggle 

 with this definition of fairness.  This is Orwellian language.  It’s Animal Farm relocated to Heathrow Airport.  

 The much-derided APD only brought in around £2.6 billion in 2011/2012, expected to reach £2.8 billion in 2012/2013:  http://www.telegraph.co.uk/travel/travelnews/air-passenger-duty/8923504/Autumn-Statement-2011-Air-Passenger-Duty-rise-confirmed.html. The difference between the lost revenue to the Treasury – £10-11 billion per year -and the tax take from APD – £2.8 billion – is £8-9 billion, the figure by which aviation is effectively subsidised each year.

Of course the industry correctly argues that it contributes billions to the economy each year.  But for it to claim, as the Manchester MP Graham Stringer did recently, that Air Passenger Duty puts UK in a “ridiculous anti-competitive position” http://tinyurl.com/bm3cfr4  is once again play fast and loose with the facts.  Although it is true that other countries do not impose APD (through some impose VAT and tax fuel for domestic flights) there is no hard evidence to back the sort of claims Stringer is making.  

Stringer, of course, has form.  Not for nothing is he known amongst his fellow MPs as ‘the honorable member for Manchester Airport.’  For a number of years he was chairman of the Manchester Airport Group.  Go though the pages of Hansard and, as regular as the first flight from Heathrow, you’ll find Stringer attending each debate on aviation making the industry case.  

The fact of the matter is that the rate of APD for most passengers flying on holiday is only £13 for a return flight.  Only once you travel beyond Europe do the rates rise.  It is only fair that we as passengers should pay this tax.  As aviation minister Theresa Villiers has said on several occasions:  if APD is abolished, the Government would need to raise the tax from elsewhere.

The good news is the Government is not falling for the industry spin about a tax on people’s holidays.  Every summer the industry mounts its campaign.  Every autumn the Chancellor announces another rise in APD.  That’s as it should be until the tax-breaks the industry enjoys are no longer.  It is only fair.