HGV Road User Levy Bill

Jim Shannon Excerpts

Tuesday 29th January 2013 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I should also like to thank all the Committee members, the Minister and the shadow Minister for working together so well to get this Bill through. It is always good to see positive work coming out of the House. We all like to see that happen, and this is a good example of it. The House can be proud of this good work.

I represent a constituency in Northern Ireland in which road transport is, to put it simply, the key to the economy. It is also the key to the economy of Northern Ireland. The Freight Transport Association and the British Vehicle Rental and Leasing Association have collectively expressed concern about clause 7(3), which deals with the cost burden. They felt that there had been a clear undertaking that there would be no extra costs for UK hauliers. The FTA has stated that there will be a cost of some £2.7 million, but I understand that the Minister has given an assurance that that figure has been greatly overestimated. If that is the case, it will be good news. I hope that he can give us confirmation of that, and reassure the FTA and the BVRLA that the provisions will not adversely affect their industry. It will be important to get such an assurance on the record in Hansard, because the people out there who contact us will want to know the final word on the matter.

The FTA has identified three issues

“where current details are sparse or under review and where further consultation is expected”,

and I would like the Minister to give us some clarification on them. The first point is that the arrangements for the operation of the levy in Northern Ireland involve the only UK land border with another EU member state. The second point is about compensation arrangements for holders of RPCs—reduced pollution certificates—which will be withdrawn following the introduction of the levy. The third point is about the mitigation of the disproportionate increase in charges for operators of 2x2 axle, 28-tonne articulated vehicles—commonly referred to as “urban artics”—used for deliveries to pubs and retail stores in town and city centres. I ask this question because I have some of them in my constituency, and I suspect that other Members will have them in their constituencies as well. We are not being awkward; we are just looking for the necessary clarification. I am sure that the Minister will give us the reassurance we need in his response.

It is not often that all the political parties work together to initiate legislation on behalf of an industry. There seems to be a real willingness to make sure that it all happens—for my constituents in Strangford and for those involved in the freight trade business. There are many of them. I wish to represent them at the highest level in this House. I therefore seek reassurances from the Minister.

Rising Cost of Transport

Jim Shannon Excerpts

Wednesday 9th January 2013 Commons Chamber

[Mrs Ellman]

People often travel at peak times because those are the times when they have to get to work. They have no choice. However, there are other ways of addressing the question of demand, and I shall say something about them later.

The report also talks of the importance of achieving efficiencies, although we think that the aim of making efficiency savings of £3.5 billion by 2018, as McNulty recommends, is a challenging one. The bringing together of different parts of the rail industry in the Rail Development Group, and through other means, is welcome, but it is important for the industry then to work in the interests of passengers and the taxpayer, not just in its own interests. It is also important for it not to cut corners and put safety at risk in order to achieve efficiencies. We have high safety standards which should not be jeopardised, and strong regulation is particularly important for that reason. The regulator needs to be able to act firmly and decisively.

Members have mentioned other means of achieving efficiencies and reducing fares, or at least reducing the rate of increase in fares. We need to think about smart ticketing and innovation, and about introducing more flexibility in the way in which fares policy is drawn up and implemented, which has been sadly lacking. There should also be more transparency in the use of public funds. It is extremely important for the rail service to receive a public subsidy, because it is a public service, but it is equally important for the £4 billion public subsidy going into the system this year to be dealt with in a way that people understand, so that they can assess whether it is being used effectively. Not all the information that we have at present enables them to do that.

[Jim Shannon (Strangford) (DUP)]

Will the hon. Lady give way?

[Mrs Ellman]

I am sorry, but my time is very limited.

Some information has been published about the subsidy for the London North Western route, which, we are told, amounted to £1.2 billion in 2010-11. That is a significant proportion of the £4 billion that is going into the overall system. The area covers wide expanses, including the west coast main line run by Virgin and Cumbrian rail services run by Northern Rail. We have been given an overall figure—a very major figure—but we do not know how the subsidy is allocated between different services, or indeed between different parts of the country. That is just one example of the need for more transparency so that we can assess whether subsidies are effective.

I welcome Network Rail’s recent announcement that more than £35 billion will be invested in the next control period, 2014-19. However, the Committee will look at the figures in detail and consider what they actually mean, and the rail regulator will look at them as well before anything is finally approved. It should be noted that although the announcement of more much-needed investment in the rail system has been welcomed, passengers have expressed the fear that they will have to pay for it through even higher fares, which renders the need to look again at a policy on regulated fares even more urgent. The Committee has asked Ministers to do that.

In due course there will be an opportunity to discuss the Committee’s complete findings, and we will do more work on rail franchising and rolling stock acquisitions, another important area in respect of savings. I hope my comments this afternoon have helped to inform the debate. Rail is increasingly popular and a good service is currently offered, but there is increasing concern about fare levels, and we must address that.

--- Later in debate ---

[Mark Lazarowicz]

Let us leave aside the fact that there are not many operators in the field to bid. I am not saying that an individual operator is necessarily inefficient, but that the system as a whole leads to inefficiencies as well as to profits being paid out to private companies when they could be invested in the system.

I said that not all companies are inefficient. One example that showed the difficulties and negative effects of privatisation at their highest was the disaster of Railtrack, which was linked not just to private ownership and that company’s motivation in its operations but to the fragmentation of the operators and Railtrack’s distance from the train operating companies. That example also shows how some of the damage caused by privatisation began to be turned around. It is not a perfect organisation, but the publicly owned Network Rail has managed to repair some of the damage caused by fragmentation of the system and we have seen a safer railway network and better value for the taxpayer, for passengers and for other users of the rail network in the costs of maintaining the system.

[Jim Shannon]

One of the greatest burdens for people in employment is that 30% of their wages can go on travel. People are travelling further, too, to get jobs and employment. Does the hon. Gentleman feel that consideration has been given to those people who regularly use public transport, be it bus or rail, to get to work?

[Mark Lazarowicz]

Absolutely. That is an example of how increased rail fares damage people daily and effectively worsen their standard of living.

The most recent example of the damage caused by the privatised regime on the railways has been the fiasco of the west coast main line franchise. That fiasco is likely to land the Department for Transport—and therefore the taxpayer—with a bill for hundreds of millions of pounds, which could have been spent on improvements to routes, stations and rolling stock. In contrast, we have the experience of the east coast main line, to which my hon. Friend the Member for Gateshead (Ian Mearns) referred earlier. Bringing the franchise into the public sector has been good business for the taxpayer and the directly operated company has brought money back into the public sector. In the last year, it has brought a premium of almost £200 million into the Department, which has gone back into the public sector rather than being siphoned off into a privately owned company.

The problem is that there is an inherent difficulty in the tendering system that operates on the railways under the privatisation scheme introduced by a previous Conservative Government. In order to bring about long-term investment and security, a Government will want to see long-term tenders, but the longer the tender the less reliable any prediction of future traffic and income can be. That leads to a risk of the tender becoming either a loss-maker, with the operator seeking to hand it back to the Government and to make them pick up the tab, or one in which excessive profits are reaped by the private operator. The system itself is at the heart of the problems with the railways and of the fact that money that could be used to benefit our passengers has unnecessarily flowed out of the rail system.

I want to concentrate on the east coast main line, which is of particular relevance to my constituency and to communities further south along the line. I urge the Government to drop the ideology and to choose the option that works and that will keep prices down for the traveller. They should keep the east coast line, which is successfully operated by Directly Operated Railways, in the public sector. I would rather that that was done on a permanent basis, but if the Government, for ideological reasons, are not prepared to do that, they should at least give the operators a long-term contract rather than leaving a sword of Damocles hanging over the company, the staff who work for it and the passengers and communities that rely on it.

The Government could also take the opportunity to allow Directly Operated Railways’ east coast line to be a genuine public sector comparator for the rest of the network. If the Government will insist on reprivatisation for the west coast main line, they should at least ensure that a public sector bid can be put on the table as a comparator against which we can judge which provides best value for money for the taxpayer and the best services for the passenger. That is the way forward. Let us start putting passengers first and make sure that they get the benefit of investment rather than the companies, which have taken too much out of the railways for too long since privatisation was introduced by a previous Conservative Government.

HGV Road User Levy Bill

Jim Shannon Excerpts

Tuesday 20th November 2012 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

As the Member for Strangford in Northern Ireland, I know the importance of a viable freight industry that can deliver all the products we have. The UK freight industry has supported the principles in the Bill for the past few years, and there is a consensus in favour of the Bill. Members on both sides of the House are of that opinion, and the freight industry is telling us the same thing as well. The industry is vital to Northern Ireland and my constituency in particular. Some hon. Members, their families and their constituents will enjoy the vegetables and potatoes that come from my constituency, because 70% of our food is exported to the rest of the United Kingdom. So when Members sit down to the humble Comber spud on Sundays, quite possibly it has come from my constituency. It is important, therefore, to have a viable freight industry.

I have a couple of quick questions. The Bill makes it explicit that the vehicle excise duty will be the means by which the rebate will be made. Can the Minister give us the precise reductions in the duty that could bring that about? I rather think that they will not be known until the Budget statement of 2014, when they will be included in the Finance Bill. The levy is to be introduced for UK operators from May 2014, but the process must be operational in time for the vehicle excise duty renewals. Will he assure us of that time scale? It is vital for the industry.

Figures released by the Department indicate that about 6,500 vehicles fall into bands for which vehicle excise duty rates are already too low to offset the cost of the levy. I understand that half of these vehicles—about 3,250—are 28-tonne 2x2 articulated vehicles. Will the Minister indicate, either today or later, the breakdown of operators using vehicles requiring a higher net charge than at present? In particular, where do they operate from? Are they one-man bands or small companies that need a bit of help? It would help if consideration could be given to that. It is unclear whether the 2% of vehicles identified in the money resolution debate as facing significant extra charges as a result of the change are to be found largely in a particular sector or sub-class of vehicle.

It is important that the Minister considers another matter. Businesses need to plan ahead and have some indication of what the costs will be for the future. That is particularly important, as down-plating might not be possible for some operations.

I would like to focus on one final point touched on by the hon. Member for Folkestone and Hythe (Damian Collins). I would like the Minister to clarify a few points for Northern Ireland Members in particular—given that we have a land border—about how this will affect us. How will the charging work in Northern Ireland across the land border with the Republic of Ireland? I ask because I understand that the Irish Government have already begun discussions with Ministers about the amount of cross-border trade. If that is the case, could Irish vehicles be regarded as a special case? It would be useful for Northern Ireland MPs and the House as a whole to know whether the UK Government are minded to permit this exemption. Finally, how will holders of reduced pollution certificates be compensated through replacement grants?

We are moving to a better place with this Bill. We have a chance to do something that is important for the freight industry in the area I represent and the many companies that depend on it. It is also important for the produce that is moved from Northern Ireland to the rest of the United Kingdom and the Republic. The Bill will have an important impact on those industries. I want to see the Bill go through and the benefits that come from it. I understand that I will not be on the Committee, but others will, and I will keep a watchful eye on it.

Civil Aviation Bill

Jim Shannon Excerpts

Tuesday 20th November 2012 Commons Chamber

[Mr Reid]

My understanding is that amendment 2 was an amendment to a Government amendment and only worked because it was combined with the Government amendment.

I did not intend to speak for long, Mr Deputy Speaker, but have been waylaid by Opposition Members. I will conclude by saying that the Bill now focuses both on passengers and on the environment. I believe it strikes the right balance and I am pleased to support it today.

[Jim Shannon (Strangford) (DUP)]

Given that the Government have no plans to protect access to the hubs, I would like to ask a question in reference to clause 6. Access to the hubs of Heathrow and Gatwick is important for Belfast City airport and Aldergrove International airport. Ever mindful that air transport is a volatile business, the matter was debated in another place through an amendment tabled by Lord Empey. Referring to a report by Birmingham MEP Philip Bradbourn, the noble Lord said:

“It was drawn up in April this year and, I believe, was passed by the European Parliament in May. The report, ‘considers it essential for regional airports to have access to hubs’.”—[Official Report, House of Lords, 9 November 2012; Vol. 740, c. 1252.]

Lord Empey advanced that view in his amendment, which was not accepted.

I raise the point because on 6 November, Jim Nicholson MEP tabled two amendments to a proposed European regulation. I do not intend to read out the text of amendment 45 in its entirety, but it is about the slot allocation system established in 1993, and states in italics:

“In addition it is important that access to hub airports from regional airports should be maintained where such routes are essential to the economy of that region.”

That amendment was adopted by the European Parliament, as was amendment 178, which, after the provision,

“The coordinator shall set up a pool, which shall contain all the slots. All new slot capacity determined pursuant to Article 3(3) shall be placed in the pool”

would add,

“This procedure shall be without prejudice to regional airports connectivity to hub airports. If such connectivity is undermined Member States shall be permitted to intervene.”

After all that lead-in, my question to the Minister is quite simple. Will he assure this House that he will support those amendments, which will protect access to the hubs and give life and continuity to Belfast City and Aldergrove International airports, when they come from Europe to this House?

[Mr David Ruffley (Bury St Edmunds) (Con)]

I rise to speak briefly in this short debate. Amendment 3, which relates to clause 2, refers to

“the need to secure that each holder of a licence… is able to take reasonable measures to reduce, control or mitigate the adverse environmental effects of the airport to which the licence relates”.

I would like to quiz the Minister on the meaning of “environmental effects”, because I am a strong supporter of an estuary airport solution and very much opposed to the idea of a third, or conceivably a fourth, runway at Heathrow.

It seems fairly clear that aviation pollution from Heathrow, if the airport was extended, would compound an already poor state of affairs. There are about 50 early deaths a year as a result of pollution, and the Massachusetts Institute of Technology has calculated that the number could climb to 150 if a third runway is built. We also know that the prevailing winds at Heathrow are south-westerly and that pollution from the airport already spreads over a huge swathe of north London.

Finally, we also know that noise from Heathrow accounts for 95% of all the noise impacting people from London airports and that around 725,000 people live under the flight path and experience noise in excess of 55 dB. If Heathrow is extended, we can expect all those environmental impacts to be exacerbated. Will the Minister indicate whether the rather welcome amendment, which would require adverse environmental effects to be mitigated, will include the list I have just given?

Disabled Access (Aviation Industry)

Jim Shannon Excerpts

Wednesday 7th November 2012 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Weaver Vale (Graham Evans) on bringing this subject to Westminster Hall. It is of great importance to some of my constituents and to many who are here. I suspect that a great many others would like to be here, but unfortunately cannot be.

As a Northern Ireland MP, over the past two years I have had more opportunity to fly than I ever had in the past. In the first two months of being an MP, I travelled more by aeroplane than I probably did in all the years of my life before that. Air travel has become a regular part of life for those travelling from Northern Ireland to here. Doing that has given me the chance to observe what happens in airports and how disabled people are treated. In addition, numerous constituents have pointed out to me that the so-called budget airlines have the worst attitude to those who need a little extra help—my hon. Friend the Member for East Londonderry (Mr Campbell) touched on that, and many other hon. Members will probably be of the same opinion. As a result, I am not surprised by many of the stories that I have heard so far and will probably hear before the afternoon is out.

Although I am not surprised, I am certainly disgusted by some of the attitudes adopted by some airlines and their staff. The hon. Gentleman referred to the attitude to customers, which could be improved greatly. It is not hard to be kind and courteous or to help when someone needs help. Some of the budget airlines have achieved a reputation for treating people like cattle—I use the term advisedly—and not taking their circumstances and situations into account. That should be addressed at the highest level, and I hope that in his response the Minister will give us some positive vibes on how the Government intend to do that, so that airlines may no longer discriminate against those who need a little extra help or time to get aboard. The essence of air travel is speed. People rush to get to the airport, they rush to get to the plane and then, when they have just about caught their breath, it is time to get off and repeat the exercise in the other direction, but disabled people, wheelchair users or those with mobility issues have greater problems.

I stress that I am not tarring all airlines with the same brush, to use a phrase that we use at home. Alongside the examples of those that do not treat disabled people correctly are examples of those that do. I will give one example that highlights the issue and how we can have faith in some people’s goodness. One of my constituents was on a British Airways flight—I identify it because the carrier provided good care—from South Africa back to England. She had suffered a miscarriage on the morning of the flight and there was concern about whether she should fly because of the high altitude and so on, but she was desperate to get home. After getting medical assistance and advice, she was put into a wheelchair at the airport—her medical condition had been confirmed as stable to fly. The British Airways pilot came down to see her; she was upgraded on board the flight, along with her husband; and throughout the 11-hour flight, airline staff brought her hot water bottles and fluid.

Some airlines excel, which is good. That is the standard that all of them should be trying to adhere to. It would be good if they did. Some go above and beyond what should reasonably be expected, which should be commended, but when others refuse to give even a basic level of help and respect, we must step in. As parliamentarians, we have an opportunity to speak on behalf of the people who contact us.

A survey of young disabled air passengers showed that 90% of wheelchair users are unable to use airline toilets and must therefore avoid drinking before or during flights. Some 60% of disabled passengers say that their wheelchairs have been damaged when travelling with an airline, as the hon. Member for Weaver Vale mentioned, and 60% said that they felt unsafe when transferring from a wheelchair to an airline seat. Those are small things, but they are important to a disabled person. Airlines and their staff must show compassion for such people and ensure that their flight experience is every bit as good as mine and that of everyone here who travels by air regularly. Another 50% stated that they had had disability-related problems booking airline tickets—even booking a ticket is a problem for 50% of disabled people. Lots of elements of the process must be improved to ensure that disabled people can travel much more easily and with less hassle.

The statistics that we were sent in our parliamentary briefings—I know that other Members received them as well—scream for us to address them, and I hope that that will be achieved through this debate. We hear too many tales of disabled people being seated halfway down a plane and then paraded through the flight with other passengers looking on, so the person feels like they are part of a sideshow. It is absolutely disgraceful that small and easy improvements are overlooked by some airlines and their staff. It seems prudent to me to allocate disabled people the seats closest to the exits, to enable a less conspicuous transfer whenever they get on or off the plane.

[Yasmin Qureshi]

In the light of what the hon. Gentleman is saying about the variation in services provided to different people by different airlines, does he agree that it would be helpful if the Secretary of State required the Civil Aviation Authority to produce an annual report on the experience of disabled passengers using air transport services, including whether the airlines have complied with relevant legislation?

[Jim Shannon]

I thank the hon. Lady for that suggestion. It would be a good marker if every year the airlines had to reflect on whether they had met their target and helped people, and on the number of people who had complained. It would certainly sharpen them up.

No one should fear taking some water on a flight, as we are all recommended to do in order to prevent blood clots and other problems, just because they know they will have to go through an ordeal to use the toilets. Again, it is a small thing, but it is important: it is one of the basics of life. I read of one young man—it must have been a terribly difficult situation for him—who had to relieve himself into a bottle at his seat when he could not access the toilets because staff were not available to help. How embarrassing it must have been for that young man. I suspect that that is replicated on many airlines across the United Kingdom and further afield. It should clearly be avoided. Something has to change in how disabled people are viewed by some airlines. As the change is not forthcoming, we are having this debate to highlight the issues and hopefully to get a helpful response from the Minister. I believe that we must step in.

I want to highlight another issue that is important to my constituents, who have come to me in some numbers. During 30 years of conflict in Northern Ireland, as well in fighting in Iraq and Afghanistan, numerous constituents of mine have been injured and now have metal in their bodies to repair those injuries. As a result, they have to go through security checks at airports that are a most humiliating exercise for someone with six inches of metal in his leg or back as a result of fighting for the Army, or serving in the police force in Northern Ireland or elsewhere. They go through a strip search every time they go to an airport. I ask the Minister to consider that issue. I asked the airport and the authorities whether, if such people presented a doctor’s letter, it would be sufficient, but they were unwilling to accede. As a result, every time those people travel, whether from Northern Ireland to Heathrow or from here to Florida, Paris or elsewhere in Europe, they go through a statutory strip search because they have metal in their bodies, which shows up clearly on the screen.

[Yasmin Qureshi]

On the issue of scanners going off if somebody walks through, does the hon. Gentleman agree that one of the best ways of dealing with people with medical conditions who must go through security checks is to provide somewhere private where the person can be taken and spoken to, so that they can explain what their condition is in private, rather than stand with everyone else in the queue while they are questioned about their medical issues?

--- Later in debate ---

[Jim Shannon]

That is obvious. Another issue that crops up sometimes involves people with colostomy bags going through airport checks, because fluids are checked at security. That unpacks the hon. Lady’s point. Some privacy should be afforded to people who need help at that point.

I am positive that I am not the only person amazed by what was achieved by our superb Paralympian teams, as the hon. Member for Weaver Vale mentioned. The Olympics were a tremendous boost to the United Kingdom and Great Britain, for both those who are able-bodied and those who are not. The team excelled. I remember sitting with my wife Sandra watching the Olympics—it became compulsive viewing—and saying, “Sandy, pass me a hankie. I think we’ve won another medal.” It was engrossing to be involved in everything happening on the field of medals.

The Olympians, and particularly the Paralympians, excelled. To watch them accomplish what I could not have accomplished even in my prime brought a tear to my eye and, I believe, to many other eyes as well. The idea that some of those people could be and are restricted from travelling on flights because of their disability is unacceptable. The celebrations of the Paralympics have passed, but the time has come for us to realise that it is not enough to say that there are no facilities or inadequate facilities; we must say instead that we will work on all those who refuse to fall into line to make access available. This House must put pressure on them to do the right thing. I believe that that should start now.

High Speed Rail (Scotland)

Jim Shannon Excerpts

Tuesday 6th November 2012 Westminster Hall

[Sheila Gilmore (Edinburgh East) (Lab)]

It is a pleasure to speak under your chairmanship, Mr Chope. I sought the debate because of the huge importance that high-speed rail has for us in Scotland—for our economy and for Scotland’s development over a long period into the future. Obviously, like many other Scottish MPs, I have a personal interest: when Parliament is sitting, I spend nearly 10 hours a week sitting in trains. I quite enjoy it and I can get a lot done, but I think we are on the cusp of being able to achieve a modal shift in the way that people travel between Scotland and London. That is important, including for environmental reasons, because at the moment the journey time is such that on some occasions or in some circumstances, flying seems preferable. That adds to the pressure on London airports. If we could make progress on rail, it would help us to meet our environmental targets.

This debate follows a debate earlier this year led by my hon. Friend the Member for Glenrothes (Lindsay Roy). Since then, two things have happened. First, we have a new Secretary of State and a new Minister of State. Secondly, and perhaps even more important, the new Secretary of State made a very important commitment in his speech at the Conservative party conference last month. This is what he said:

“At the start of this year, the government committed to build a new line not just to Birmingham but on to Manchester and Leeds. Soon, I’ll publish detailed plans for the route north of Birmingham, but I want even more parts of our country to benefit. So we’re launching a study on the way to get fast journeys further north still, with the aim of getting the journey from Scotland to London to under three hours and making sure the north-east benefits too, because this will be a scheme for every person in Britain.”

[Jim Shannon (Strangford) (DUP)]

To follow on from what the hon. Lady is saying, this scheme will benefit everyone in the United Kingdom of Great Britain and Northern Ireland. Does she envisage this high-speed rail having contact with Larne, Cairnryan and Stranraer, thereby ensuring that the people of Northern Ireland can also benefit from the high-speed rail link, which ultimately will take them to London? Based on a very significant business plan—

[Mr Christopher Chope (in the Chair)]

Order. We must keep interventions short.

HGV Road User Levy Bill (Ways and Means)

Jim Shannon Excerpts

Tuesday 23rd October 2012 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

The Minister referred to a previous matter in relation to the Irish Government. A new bridge is to be built across the narrows, near Warrenpoint, and the Irish Government are going to pay for that. There will be no toll on that bridge. Is there an agreement with the Irish Government that they provide the bridge and there will be no toll?

[Stephen Hammond]

Well—[Interruption.] Mr Deputy Speaker, you are right on all matters, and certainly on that one. If I may, I will write to the hon. Member for Strangford (Jim Shannon) as I am afraid I do not know the answer. Although I could stand here and talk about something, it is better to say that I will write to him when I have the answer.

My hon. Friend the Member for Braintree (Mr Newmark) congratulated a number of his road hauliers—rightly so—and he got to the essence of the argument, which is about equity and economics. He was right to point that out and place it on the record, and I am delighted that his constituency has benefited from the pinch points plan that the Government announced two weeks ago.

This has been a well-informed debate and we heard two contributions, including from my hon. Friend the Member for Milton Keynes East (Iain Stewart), about modal shift.

Oral Answers to Questions

Jim Shannon Excerpts

Thursday 18th October 2012 Commons Chamber

[Maria Miller]

My hon. Friend is absolutely right that schools have an important role to play here, although I stress that it is not just about studying business studies or economics. Businesses want to ensure that the young people they are employing have the literacy and numeracy skills needed in a successful business today. I applaud the Secretary of State for Education on his work in this area.

[Jim Shannon (Strangford) (DUP)]

A recent study in Northern Ireland showed that 80% of women were in part-time work, and I understand that the figures on the UK mainland are similar. Does the Minister agree that we need a strategy that allows women to fulfil their potential, when they desire it, instead of being seemingly pigeonholed into a part-time working pattern?

[Maria Miller]

The important thing is that women and parents are able to balance their work and family lives. Our work on the modernisation of the workplace is important to that. I also reiterate my comments about universal credit and the ability of women to access child care support when they are working shorter hours. Some £300 million is being invested in that. That is something that was not forthcoming under a Labour Government.

Petrol Prices (Wyre Forest)

Jim Shannon Excerpts

Wednesday 12th September 2012 Westminster Hall

[Mark Garnier]

I am grateful to my hon. Friend and neighbour, who is also a member of the Welsh Affairs Committee, and takes a keen interest in what happens in Wales. I will come to that anomaly between cities and smaller rural towns and semi-rural areas, which is a great problem.

[Jim Shannon (Strangford) (DUP)]

The hon. Gentleman has mentioned a topical and important matter in the area I represent in Northern Ireland, which is a rural community. He referred to demand and pressure in urban and rural areas. Some of my constituents must travel long distances to get to work because of where the work is, and may spend £50 or £60 a week just on petrol and diesel. Does that not underline the issue for many people in rural communities, where we need a price structure that is achievable, fair and affordable?

[Mark Garnier]

The hon. Gentleman hits the nail on the head. People living in rural communities are doubly penalised. They face not only high prices, but higher mileage because they probably have worse access to public services. I will continue to make that point throughout my speech. The hon. Gentleman was absolutely right to raise it on behalf of his constituents.

I said that fuel retailers have cut the premium locally as a result of my pressure, but there may be other reasons, not least that last week the Office of Fair Trading announced an inquiry into fuel prices. That welcome U-turn by the OFT is important because pressure on households is, as we all know, incredibly high. It is tough enough having to pay high fuel prices because of currency and commodity prices, but when duty and tax are added, and then local factors, households face a toxic mix of costs.

Despite local success, a number of serious factors must be taken into account. First, special offers provided by the supermarkets do not constitute a fuel price management policy. If anything, unreasonably high fuel prices locally provide an opportunity for offer-making. Although the big retailers say that helping the consumer is the reason for making offers, we all know that it is about one thing: competition between retailers. Tesco is against ASDA, and against Sainsbury and the rest of them. One offers loyalty points; another offers a discount if a minimum amount is spent in the supermarket alongside the petrol station; a third will discount fuel prices if certain items are bought, and on it goes.

Such offers are marketing plugs that associate the retailers’ names with what seems to be a special offer. I am sure that some offers are taken up, but the reality is that people refuel when the needle is on empty, and not when they have just done the weekly shop. In any event, such offers may seem enticing, but when we were paying 6p a litre more in Wyre Forest, the discount was worth 6p less than in neighbouring Wolverhampton and Dudley because the discount was from a higher level. The fundamental problem was always high local prices in Wyre Forest and other rural and semi-rural communities.

Secondly, the pricing model adopted by supermarkets and fuel retailers favours those in big cities. Fuel retailers try to be the cheapest within a three-mile radius or thereabouts. In a large conurbation such as Birmingham and the black country, many petrol stations will create a chain within 3 miles of one another. In that instance, a petrol retailer east of Birmingham who decides to have a few days undercutting the local market to try to stimulate more demand for their product will create a ripple that spreads across the whole city and probably into the black country. Given that there is a significant number of petrol retailers in that area, there will always be healthy price competition, stimulated by occasional but regular mini price wars.

However, in districts such as Wyre Forest, Strangford and Redditch there are far fewer petrol stations and, importantly, around areas such as Wyre Forest, there is a desert of petrol stations, rather like a doughnut, so the only price competition will be within the locality itself. With far fewer retailers in that closed area, price competition is lower, and it is suggested that some of the big retail chains have deliberately undercut local independent suppliers to drive them out of business, ensuring less competition on pricing. That is anecdotal, and there is no evidence to support it, but it is what people talk about.

[Jim Shannon]

Is the hon. Gentleman aware that some retailers sell petrol and diesel with no profit, and perhaps at a loss, just to keep the small independent retailers out?

[Mark Garnier]

I am grateful for the hon. Gentleman’s intervention. In Wyre Forest, the pricing policy of a local, independent retailer is to make a 3p per litre profit on the cost at which they buy their petrol and diesel. That is interesting, because for a great period, that retailer was substantially undercutting big chain retailers, and as a result, I recommended that my constituents visited it, because it provided the best deal. However, when I checked its price again, that retailer is now 3p or 4p more expensive. The big chain retailers are almost certainly buying wholesale fuel from the same wholesale outlet, and they are probably paying the same amount for that fuel. Therefore, if Callow Oils is still adopting its pricing policy of 3p more per litre, it would indicate that the big chains are running at a loss. It would be interesting to find out more—if the retailers answered my telephone calls, I could find out. I think, however, that the big retailers may well be working at a loss to stimulate local demand.

With fewer retailers in a specific area, there is a greater demand against available supply than would be seen in bigger conurbations, so the price is inevitably higher. In this instance, local factors push the price along the price/demand curve against consumer interests. It is important for big retail chains to have such areas of high pricing. If they are to ensure a sustainable average price of fuel across the whole marketplace—across the whole country—they must ensure that areas of low pricing, such as cities, are balanced by areas of high pricing. That penalises rural regions in favour of urban areas, which is very unfair, as I think we would all agree.

If someone lives in Birmingham, London, Cardiff, or any other city, they will have easy access to far more efficient local public transport infrastructures. The availability of a sensible local public transport service also provides competition to petrol retailers; they are competing not only against each other for customers, but against local public transport. However, if someone lives in a rural or semi-rural area, such as Wyre Forest, their local public transport is neither as accessible nor as user-friendly. They will need to use their own car far more than their urban-based cousin. They will have little practical choice, and will have to buy fuel to run their car. That lack of choice helps drive up local fuel prices, doubly penalising the high-mileage rural commuter.

What am I trying to achieve with this morning’s debate? First, I want yet again to highlight the inequity of the pricing policies of big supermarkets and fuel retailers. We all know about that issue, and many of my colleagues raise it again and again. This is another push in the effort to get big retail chains to heed the plight of rural consumers. People living in rural communities should not be used to subsidise the fuel bills of town and city dwellers.

Secondly, I want to appeal to the retail chains to adopt a more pragmatic pricing policy. I accept that a national pricing policy would probably not work, but using a rigid three-mile radius is probably too tight in certain areas. I would like to see a pricing policy that never allows a district to become isolated within its own pricing area. A pricing link that jumps significant gaps is needed. That can be achieved either by having a larger radius across the country, or by having a radius that takes regional petrol station density into account.

As I mentioned, the OFT last week announced its investigation, which I welcome. It will look at a range of areas. The fact that prices go up pretty quickly with oil price rises but are rather slow to come down is a key concern, but I am particularly keen for that investigation also to look into regionalised price anomalies.

I am grateful to the Minister for his time and attendance this morning. As a free marketer, I am reluctant to ask him to legislate on fuel price equalisation across regions. Fair competition must be the answer, and if the competition turns out to be unfair, or evidence emerges of local cartels, I sincerely hope that the OFT will uncover that and deal with it appropriately. The experience in Wyre Forest, where it appears that local pressure has brought the reward of better local pricing, suggests that retail chains might listen, even if they are reluctant to get together for a meeting—notwithstanding Tesco. Sainsbury’s, take note.

The Minister, of course, has a far louder voice than I or many of my Back-Bench colleagues, and I appeal to him to use every opportunity at his disposal to give petrol retailers a regular prod to ensure that the plight of rural dwellers is taken into account.

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

Although it is a surprise to be here this morning, Mr Howarth, it is a pleasure to serve under your chairmanship, on what is my first outing representing the Government, and to respond to the debate secured by my hon. Friend the Member for Wyre Forest (Mark Garnier). I thank him for his kind words. I remember well the day in Wyre Forest, although he forgot our trip on the steam train, in addition to the driving centre. I am pleased, too, to see my hon. Friend the Member for Redditch (Karen Lumley) and the hon. Member for Strangford (Jim Shannon) here today, as it shows the interest in this matter from communities beyond Wyre Forest.

I am surprised to be here this morning, because the debate has been misallocated to the Department for Transport. Many of the comments made by my hon. Friend the Member for Wyre Forest were about competition and fuel price policies, but neither is the Department’s responsibility. Therefore, I apologise if it is not appropriate for me to answer all his points, as the responsibility to do so lies with the Department for Business, Innovation and Skills.

I was pleased, but not surprised, to hear my hon. Friend say that he is a free marketeer and that he does not wish to see the market regulated. As he knows, the petrol retail market is not economically regulated now. As with standards and competition policy, there are legal restrictions, and it is for the Office of Fair Trading to investigate breaches and enforce those. I will come on to the OFT’s investigation in a moment, but clearly, the existing situation is right, and the market operates on that basis. Like my hon. Friend, I do not wish to see economic regulation.

This debate goes to the heart of the fact that, in this time of economic difficulty, high fuel prices are putting a lot of pressure on households and businesses. Businesses are working hard, as are the Government, to ensure that motoring remains affordable for all. We have taken extensive action to ensure that motorists are supported. In the 2011 Budget, the Government cut the fuel duty by 1p a litre, and we have scrapped the previous fuel duty escalator, replacing it with a fair fuel stabiliser. That mechanism, which was effective from Budget day 2012, is designed to ensure that the burden of higher oil prices is better shared between oil companies and motorists through the increased taxation of oil and gas production when oil prices are high. When oil prices are above the trigger price of £45 a barrel, fuel duty will increase by the retail prices index only. When they are below that trigger, it will increase by RPI plus 1%, but that happens only when prices fall below the trigger point for a sustained period. My hon. Friend will remember that, in the autumn statement 2011, the Government deferred the 3p a litre fuel duty increase until August 2012. In June this year, the Chancellor of the Exchequer announced that that increase would be further postponed.

The Government are acutely aware that the high price of oil is a burden for people at this difficult time. As a result of our actions, motorists are being helped, and frankly, if that help had not been in place, whatever the price pertaining—whether petrol is more expensive in Wyre Forest than in Birmingham, or in Redditch than in Cardiff or Strangford—the reality is that the price would be 10p higher than it is now. The existing situation is a direct result of the Government’s action.

[Jim Shannon]

Even allowing for the Government’s steps, which I very much appreciate, in 2008, the price of a barrel of oil was $147, and the price at the pump was £1.04 a litre. In 2012, the price is about $100 per barrel and the price is £1.39 a litre. I am not a mathematician, but even taking into account those extra charges, that does not add up. I know that the responsibility does not lie with the Minister, but it illustrates to many of people inside and outside the House that oil companies are making exorbitant profits, and there is a need for the regulator to take control.

[Stephen Hammond]

The hon. Gentleman has put an interesting point about mathematics on the record. He tempts me to pre-empt the OFT investigation, which I would be ill-advised to do. I advise him and other hon. Members present to see what that investigation says. None the less, I hope that he takes the point that the Government are taking action because we recognise the burden of cost. In a moment, I will say a little about the Government’s concerns in relation to market transparency, because that is the line that he is going down, and I understand that.

The road fuel retail market in the UK has always been an open market, not an economically regulated market. The Government consider that to be very much in the wider interests of consumers. Regulation is undertaken by independent competition authorities. However, my predecessor made the point clearly that the Government are concerned about the lack of transparency in the market. As has been expressed not only in this debate but more widely, many people are concerned about fuel prices. They are concerned that the recent reductions in crude oil prices are not being seen at the pumps either at all or as quickly as motorists would like.

The Government have made their position very clear. The previous Secretary of State for Transport, my right hon. Friend the Member for Putney (Justine Greening), spoke several times about motoring costs, as did the Secretary of State for Business, Innovation and Skills and the Secretary of State for Energy and Climate Change. We have made the point that it is in our mutual interest for motorists and businesses to be confident that they are being treated fairly. That is important for the long-term benefit, and that point has been made several times.

When wholesale costs are coming down, those reductions should be passed on transparently and without unnecessary delay. Certainly, the aim of the fair fuel stabiliser is to ensure that action as well. Many members of the Government—the previous Secretary of State for Transport and other Secretaries of State—have made the point that motorists have the right to expect that when there are changes in the crude oil price—they can see those changes on the evening news—they will be reflected at the pumps. There is a duty on the fuel retailers to reflect that. The Department for Transport is on the record as saying that we want not only to see that happening, but to see it happening more obviously, so that there is greater transparency.

The previous Secretary of State put pressure on the fuel retailers to ensure that there was some transparency in their pricing policies. I was delighted to hear from my hon. Friend the Member for Wyre Forest that at least one of the major retailers of petrol was prepared to engage with him; it is to that retailer’s credit that it did so. Of course, being a financier of some repute in his previous life before first entering the House, he will recognise that those are quite normal pricing strategies. Whether his constituents see them as equitable or fair is another question. He will recognise that what that retailer said to him was not that different from what can be found in almost any economics manual.

As I said, the Government are clear that there needs to be transparency in this market and that we need to see that transparency being enacted. We also need to be clear that the industry is giving confidence to consumers. That is why both the Department for Transport and the Department of Energy and Climate Change wrote to several industry organisations, challenging them to ensure that there is transparency and encouraging them to work with the Government to take that forward.

The continuing and increasing public concern about the inability of some fuel retailers directly to reflect the reductions in crude oil prices in pump prices is the reason why on 5 September the OFT, which is, as my hon. Friend knows, the independent authority with responsibility for reviewing markets and enforcing the legal standards that relate to competition in this market as well as other markets, issued a call for evidence to help it to identify whether there are competition issues and a lack of transparency.

My hon. Friend mentioned that he thought that there might be anecdotal evidence of collusion, price undercutting and an attempt to drive out local independent retailers. He would therefore want to recognise—I think that he did so in his speech—that it is right and proper that the OFT gets on with its job and identifies whether there are competition issues overall in the sector or in parts of it.

The Government have made it clear that we fully support the call for information on the road fuel retail market. We clearly recognise the importance of fair pricing to cost-conscious motorists. It is clear that the OFT has been given a brief to explore what are a number of claims about how the road fuels sector is operating. I congratulate my hon. Friend, because almost everything that he spoke about in his speech is in the terms of reference for the OFT’s work. That is why I made the points about collusion, transparency, price fixing and driving out local independents. All those points are explicitly set out in the OFT’s terms of reference.

The Government have asked the OFT to call for evidence, and it is getting on with that. It has said that it will publish its key findings in January, alongside recommendations for action if it believes that to be necessary. It will obviously be appropriate at that time for the Government to make some response. It would clearly be inappropriate for the Government to pre-empt the outcome of that consideration and to speculate on what the next steps might be. Therefore, if my hon. Friend will indulge me and perhaps speak to the relevant Department in January about the outcome of the OFT’s work, I hope that he will get satisfaction. It is vital to the Government that we increase consumer confidence in this area. That is why the Government have asked the OFT to investigate. It is why Secretaries of State have been putting on pressure to ensure that the wholesalers ensure that there is retail price transparency.

I again congratulate my hon. Friend on securing this important debate. I have no doubt that the message about his standing up yet again for his constituents in Wyre Forest will ring through Wyre Forest tonight via the local press, and I congratulate him on that.

High Speed 2 (Heathrow)

Jim Shannon Excerpts

Tuesday 17th July 2012 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Gentleman on bringing this matter to the House. When the Civil Aviation Bill was discussed in Committee and on the Floor of the House, rail links were clearly important factors. The hon. Gentleman is outlining that case now. Does he believe that if a rail link is established along the lines that he is suggesting, that will provide an economic boost? I am thinking of, for instance, connections with the BRIC countries—Brazil, Russia, India and China—the world’s developing economies, where job opportunities come from and where contacts are made. Does he believe that there will be job creation in his constituency and other constituencies as a result?

[Geoffrey Clifton-Brown]

That is why I think that world-class infrastructure is vital—for job creation and economic prosperity—but it is also vital, when spending these very large sums, to ensure that we have the best solution. I will go on to explain why I believe that my proposal not only is cheaper, but could be delivered quicker and will produce a better result.

As there is no airport in the UK larger and more important than Heathrow, which alone accounts for 1% of the UK’s GDP, should we not do whatever we can to improve rail links, including with the HS2 project, as I was saying to the hon. Gentleman? The Government have repeatedly stated their wish to see Heathrow become a “better, not bigger” airport, but Heathrow continues to grow in terms of the numbers of passengers using the airport. That is something that we should celebrate, frankly. However, air quality, congestion and delays are already significant issues at Heathrow and, in the case of the air quality, it is illegal. Without an integrated approach to surface access, Heathrow’s challenges can only get worse.

How would a direct link between Heathrow and HS2 help? The answer can be found in the Conservative party’s rail review, published in opposition by the Minister. Although she will not thank me for quoting it, I will nevertheless. It clearly sets out the benefits of integrating air and rail infrastructure. It states:

“Good connections to major airports…also significantly enhance the benefits of high speed rail. So a Conservative Government will support proposals…for a new Heathrow rail hub. This would link Heathrow terminals directly into the main rail network and the lines to Reading, Oxford, Bristol, Plymouth, Cardiff, Swansea, Cheltenham and Southampton, greatly improving public transport links to the airport.”

It also stated:

“The plan would also include construction of a new high speed link connecting Heathrow…to the Channel Tunnel Rail link and the new route north, providing a viable alternative to thousands of short haul flights now clogging up the airport. By freeing up landing slots, our proposal would help tackle overcrowding problems and allow more space for long haul flights, making Heathrow a much better airport, but without the environmental damage that would be caused by a third runway.”

I could not have put it better myself.

It is potentially billions of pounds cheaper to route the high-speed line via a Heathrow interchange on the Great Western main line, compared with the current proposal for the development of a series of branch lines, loops and spurs. The current costs of building HS2 from London to Birmingham, followed by a spur from HS2 to Heathrow and then a loop to rejoin the HS2 main line at Old Oak Common, is projected to be in the region of £20.5 billion to £20.7 billion. However, a connection along the lines that I am suggesting, between HS1 and HS2, connected directly to Heathrow and then on to Birmingham and further north, is projected to cost £17.5 billion, which represents a significant saving on the current proposal. That route, I believe, would be quicker to build, and the passage of the hybrid Bill through Parliament might well be easier, as there would be fewer objections.

Shifting passengers from road to rail and making Heathrow operate more efficiently by reducing passenger and aircraft overcrowding mean that the environmental impacts will be reduced. Let me give an example. Unite the Union calculates that a B747 taxiing and holding for 40 minutes on the ground—a not uncommon occurrence at Heathrow—uses as much fuel as it does at cruise altitude from the UK to New York. Of course, that not only contributes to Heathrow’s air quality failing to comply with legal limits, but increases airlines’ costs. Additionally, the relocation—the point that the hon. Member for Hayes and Harlington (John McDonnell) was making—of landside facilities outside the existing congested airport site will create more space for aircraft, allowing for more efficient operations. It is suggested that removing unnecessary ground facilities and streamlining the structures of the terminals at Heathrow could allow the creation of an additional 18% of air capacity in one fell swoop. Although that would not remove the demand for a third runway at Heathrow, it would certainly provide the breathing space necessary for the Government to undertake full consideration of the options available to them, as my hon. Friend the Member for Warwick and Leamington (Chris White) suggested.

A high-speed route via Heathrow also avoids the major environmental impacts of the current proposals on the Chilterns and west London. It would follow the example of HS1 by following motorway corridors and the shortest route through an area of outstanding natural beauty, with tunnelling below existing rail corridors where the new line passes through urban areas. The proposed route of HS2 will pass underground from Euston to Old Oak Common before moving overground through large parts of densely populated west London. The line then goes through 20.8 km of an AONB, of which 7.6 km will be above ground and the remaining 13.2 km in a tunnel.

My alternative route via Heathrow would see the entire route through west London tunnelled underneath the Great Western main line before surfacing near Heathrow. Of course, that would involve significantly more tunnelling in London than the current proposals. However, the greatest costs of tunnelling are in the initial set-up. The cost per mile of tunnelling drops as we tunnel further. That approach would greatly reduce noise and air pollution during the construction phase for very large numbers of people. It would follow the precedent set by HS1: much of the line is tunnelled under London, with only a 1-mile section approaching St Pancras overground. It would then have far less surface impact than the current HS2 route, which will pass overground through vast swathes of west London.

The line would then proceed overground to Beaconsfield in the M40 corridor before entering a 12-km tunnel through the entire width of the Chilterns AONB at its narrowest point. In other words, the impact on the Chilterns would be minimised. This tunnel not only would be shorter, but would remove almost entirely the impact of HS2 on the AONB. That might assuage the extremely vocal and well funded local opposition groups that have been set up and that are heavily involved in the judicial review proceedings against the Government in relation to the current HS2 proposals.

Directly connecting Heathrow with the UK’s regions and Europe in the first phase of high speed rail allows rail to replace both domestic and European short-haul flights, releasing vital additional capacity and resilience while linking the UK’s regions to the country’s hub airport. Improving access from the UK regions to Heathrow, our only hub, means that business links with global markets are improved, giving passengers the choice of flying via Heathrow or from regional airports.

I am sure that the hon. Member for Hayes and Harlington would agree with this. The UK is beginning to lose the aviation advantage that we have consistently had in the past by offering more flights to Asia. Heathrow is now losing out to airports such as Charles de Gaulle, Schiphol and Frankfurt, which are offering more flights to Asian destinations. The knock-on effect is that businesses—