SSE NEWS ARCHIVE - October to November 2003

Our Comment: Where did this rumour come from? Interested parties? Leaks designed to test reactions? There have been a series of such stories, to date all denied by the Government. We are surprised that a paper with the reputation of the Financial Times should present the story as fact. Write and tell the editor your views! Predictions that Stansted as well as Heathrow will also suffer from air pollution are persistently ignored. Such predictions cannot be mathematically removed by inventing new less polluting operational scenarios or by assuming that the smaller numbers of homes affected can simply be compulsory purchased. Everyone has the right to the protection of the law, and in the case of Air Quality legislation plants have protection too. Hatfield Forest cannot be dismissed or demolished.

Stansted is set to get the first new airport runway in south-east England for almost 20 years following a decision by the transport secretary that further expansion at Heathrow would not be possible in the near future without breaking European pollution laws.

Alistair Darling will next month defy the threat of a legal challenge from the airline industry when he unveils the 30-year strategy for British aviation, aimed at addressing an expected surge in air traffic.

However, he is expected to leave the door open for a third runway at Heathrow later in the 30 year period.

The airline companies, which have lobbied the Government intensively in recent months, said last night Mr Darling was making a "historic mistake" not to give Heathrow the green light for immediate expansion. They claim that restricting growth at the south-east's main aviation hub will hand airports in France and the Netherlands a huge competitive advantage.

A White Paper to be published in mid-december will set out the government's belief that building another runway at Heathrow in the short term would breach EU rules on emissions of the dangerous pollutant nitrogen dioxide. Expansion at Gatwick is prohibited until 2019 because of a 24 year-old deal with West Sussex County Council, so Stansted in Essex remains the only realistic option over the next decade.

The prospect of a new airport at Cliffe, on the Thames estuary, has been ruled out because of protests from bird-lovers and environmentalists. The decision is almost certain to be challenged in the courts, but the government believes, having taken legal advice, that it is on firm ground.

Big airlines, such as BA and Virgin Atlantic say that building at Stansted rather than Heathrow is legally contentious because the new runway could be funded by landing fees they pay, yet it would largely benefit rival companies based at the Essex airport.

This report goes on to quote Andrew Cahn of British Airways, who said he had "no idea" what the government would decide, … they should first build a runway which the market wants and where there's a demand…"

The report concludes by suggesting that Mr Darling has not yet made up his mind as to whether the second new runway could be built at Heathrow and avoid breaches of the EU Air Quality law.

Pat Dale

Britain's railways were left languishing as the poor relation of Europe yesterday as France's high- speed TGV network announced ambitious plans to roll out 200 mph trains across the continental mainland.

The report goes on to describe how passengers could reach Madrid, Barcelona, Milan, Fankfurt and Munich in from 3 to 5 or 6 hours from Paris. It goes on to compare French and UK performance and plans.

The UK Strategic Authority has plans for one service to Scotland, which is unlikely to be built until 2020. From being a leader in rail travel the UK is now the "slowcoach".

SNCF's chairman, Louis Gallois said that a more enlightened view towards railways could have avoided the British Government's dilemma over how to expand London's airports. "It's so difficult to build airports – it's a good thing to have high-speed railways to relieve the need for airports."

Our Comment: Mr Darling, please note.

Pat Dale

BAA Gatwick hosted the airport's first air quality seminar on Thursday 13th November at the Hilton Hotel.

A panel of experts from across the UK joined representatives from BAA Gatwick to deliver a series of presentations, which explained why air quality is such an important issue, how air quality is measured, and what the airport and other organisations are doing to improve it.

The seminar was attended by over 50 delegates including members of Gatwick's Consultative Committee, who represent local government, environment and community groups, policy makers from local NHS Trusts and senior managers from companies across the airport.

Roger Cato, BAA Gatwick's managing director, introduced the seminar, which focused on examining local air quality issues, as well as climate change on a global level. He said: "Air quality is a technically complex and emotive issue and is increasingly important to our local communities and other stakeholders."

"The seminar provided an opportunity to build understanding of key policy, technical and health issues concerning air quality at Gatwick, while hearing first hand the progress being made by BAA Gatwick and other organisations to improve air quality."

Dr Graham Earl, BAA Gatwick's environment strategy manager, highlighted the fact that while the number of passengers at Gatwick has risen in recent years, measured No2 levels on the airport has fallen.

He explained: "Advances in aircraft and vehicle engine technology, an improved understanding of the sources of emissions, together with our own air quality management programme, has contributed towards this improving performance."

He also illustrated that monitoring in the local community showed that all government air quality objectives were currently being met.

He continues: "However, we are not complacent and there is still room for improvement, but by adopting a responsible, integrated approach to tackling the issue in partnership with our airlines, local authorities, government and environmental specialists, we are demonstrating the progress which can be achieved."

BAA Gatwick has undertaken a range of activities to address local air quality, which include:

* Cutting fuel emissions by providing fixed electrical ground powers units for all aircraft stands and restricting the use of mobile ground power units

* Re-building the airport's fire-training ground so that in future, most training exercises can use the more environmentally-friendly liquid petroleum gas rather than kerosene

* Contributing towards local authority costs for air quality monitoring and to play an active part in local air quality management action plans

* Continuous air quality monitoring on the airport and a commitment to re-assess airport contributions to local air quality every 3 years

* Commitment to play an active part in influencing our business partners and other key stakeholders in the developments and take-up of new "cleaner" technologies

* Initiatives and incentives to improve the emission's performance of the on airport vehicle fleet

Our Comment: A little vague, paying for more monitoring will not help to reduce emissions. Of course, more electrical ground power units will help - and more electrically operated vehicles. The fact remains that aircraft are still the most polluting form of transport. Are BAA going to back those who are moving towards a greener-by-design aircraft? Will they introduce emission pollution charges at their airports?

Pat Dale

BAA, the UK airports group, is planning to invest about £450m at Heathrow during the next 10 years to prepare the airport to handle the A380 super-jumbo, the world's biggest-ever commercial aircraft, which is due to enter service in the second quarter of 2006.

The highly congested airport, the world's busiest international aviation hub, will be one of the main centres for services of the 555-passenger double-decker airliner with carriers including Virgin Atlantic, Emirates, Qantas and Singapore Airlines expected to fly the A380 to and from London.

The aircraft that is being developed at a cost of about $12bn ( £7bn) will have a big impact on Heathrow and could be accounting for 12 per cent of the airport's business within a decade of its introduction.

Paul Fairbairn, BAA development strategy director, said the aircraft would launch a new era at Heathrow in 2006 and would account for one in every eight flights or 60,000 take-offs and landings a year by 2016.

At present one in every nine flights at Heathrow is a Boeing 747 jumbo, but introduction of the A380 with 35 per cent more passenger capacity will enable nearly 10m more passengers to fly to and from the airport with no increase in flights.

Virgin Atlantic, the UK long-haul airline controlled by Sir Richard Branson, will become the first European operator of the A380 with the first of six firm orders due for delivery in July 2006, only a couple of months after Singapore Airlines becomes the world's first carrier to operate the aircraft.

Heathrow is already operating at peak capacity in terms of aircraft movements with no free slots available for most of the day.

Sir Richard called on the government to make the building of a third short runway at Heathrow an urgent priority of its long-awaited aviation white paper, due to be published late next year, rather than the addition of a second runway at Stansted. "We don't want to see a white elephant built at Stansted and financed by Heathrow," Sir Richard said. He called for BAA's three London airports to be broken up into separate companies.

Virgin, which will be the first A380 operator on the North Atlantic, said it would start its initial services between London and New York's JFK airport in summer 2006. In the following two years it plans to launch the A380 on routes between Heathrow and Los Angeles and Hong Kong, as well as to Sydney, if it can gain traffic rights to pick up passengers in Hong Kong for Australia. Other possible destinations are Tokyo, Johannesburg and Washington.

UK citizens spent £27bn abroad last year, mostly in Europe. Incoming tourists spent only £11.7bn. This is an increased loss to the balance of payments of a record £15.2bn. Officials said that it was the main reason for the country's overall trade deficit in 2002 of £19bn.

Our Comment: Does the Government really want to facilitate this drain by encouraging more opportunities for cheap travel to Europe? More air traffic? More runways?

Pat Dale

CAMPAIGNERS opposed to the expansion of Stansted Airport have received a boost after another organisation threatened legal action to halt the development.

The latest organisation to talk of possible court action is Bar UK, which is unhappy that the Government proposes to expand Stansted ahead of Heathrow and Gatwick, despite Stansted being expected to find it hard to pay for its own development.

Bar UK, is the trade association for scheduled airlines doing business in Britain.

The trade association wants the Government to build a third, short, runway at Heathrow airport in west London and a second runway at Gatwick airport in West Sussex.

But Bar UK said that, should the Government opt for a new runway at Stansted, it was doubtful if it could be funded from the income generated there. It said the money would have to come from profits made by airport operator BAA at Heathrow and Gatwick.

Bar UK's chairman, Mike Carter, said: "If the Government proposes to develop new runway capacity at Stansted before Heathrow and Gatwick, and to have that expansion funded by the users of BAA's other two London airports, I expect Bar UK members to support a recourse to legal action."

Chairman of the Stop Stansted Expansion Campaign (SSEC) Norman Mead said: "This confirms our view and although we don't wish the runway on Heathrow or anywhere else, it is good to see our arguments are being listened to."

Mr Mead said a report into the economics at Stansted Airport by Professor David Starkie made similar points as those made by Bar UK.

The report was commissioned by SSE and Uttlesford District Council and sent to MPs, airline operators, local authorities and other interested organisations.

Mr Mead said: "It is very much a deeper problem than just putting in a runway at Stansted. It has got to be paid for, it has got to be economical, airlines have got to want it and it has got to be sustainable. It is none of those things."

"We are looking at what further legal action we could take if things go against us but it is good to see these arguments being made elsewhere."

BAA admit that, while a new runway at Stansted was financially feasible, "the charges needed to remunerate the investment would need to be shared across users of the London system as a whole rather than applied to Stansted users only."

Transport Secretary Alistair Darling, who is expected to publish the Government's White Paper on airport expansion in London next month, has said that "doing nothing is not an option" as he seeks to lay down a firm policy to cope with aviation demands for the next 30 years.

Other problems facing Mr Darling as he prepares the White Paper include, a third runway at Heathrow raises huge environmental issues; A long-standing agreement not to expand Gatwick before 2019 would have to be overturned to build a new runway there; The operators of Luton airport are threatening legal action if expansion at the Bedfordshire airport is ruled out; The Civil Aviation Authority has expressed concern at allowing charges at one airport to pay for expanding another.

BAA chief executive, Mike Clasper, has written to the Chancellor cautioning against increasing taxes on aviation, citing new research which shows that aviation is the most heavily-taxed form of public transport in Britain.

The research, by the respected independent economist Bridget Rosewell of Volterra Consulting, provides a detailed assessment of the disparities in the tax and subsidy treatment of air, rail and bus travel.

Volterra found that railways receive a net subsidy from the Government of over £1.6 billion a year, equivalent to almost half their annual revenues, and the bus industry receives a net subsidy of around £650 million, equivalent to one-seventh of its annual revenues. Aviation, however, makes a net annual contribution to the Exchequer of around £750 million and receives only negligible subsidies for Scottish highlands and islands flights.

In per passenger terms, air passengers contribute £4.15 per journey to the Exchequer, while rail passengers are subsidised by £1.69 per journey and bus passengers by £0.15 per journey.

Volterra concluded that if aviation enjoyed the same treatment as the railway industry, aviation's tax bill would be cut by nearly £300 million a year - equivalent to cutting average air fares from £136 per return trip to £89.

The research was commissioned by BAA, to provide an authoritative independent examination of claims by pressure groups that aviation enjoys favoured tax treatment and is heavily subsidised.

BAA chief executive, Mike Clasper, in his letter to the Chancellor, wrote: "Volterra's report reveals that aviation is already the most highly-taxed form of public transport in Britain and is the only mode of transport making a significant net contribution to public funds, while both the rail and bus sectors receive very large subsidies.

"Speculation is rife in the press that you may be considering an increase in Air Passenger Duty, in order to ensure that air transport fully captures its environmental externalities in its cost structures. I believe that air transport, like any other form of transport or industry, should cover its external costs, but that it should not be treated unfavourably, compared to other forms of transport or industry.

"Aviation is already far closer to covering its external costs than any other form of public transport, so the imposition of any further taxes on aviation alone would be punitive and inequitable.

"Taxes such as APD are blunt and ineffective instruments for dealing with environmental impacts. While they might capture the monetised value of the impacts, they leave the impacts themselves unaddressed. Far better are instruments which target and reduce the impacts at source, or which use market mechanisms, such as emissions trading, to incentivise real reductions in the impacts."

Mr Clasper added: "The aviation industry does not object to the financial support that Government provides for railways and buses, but asks that air transport is treated fairly and not singled out for punitive treatment. The UK gets a great financial deal out of aviation; not only do we pay for all our own infrastructure and operations, but we pay £750 million a year in net taxes to the Treasury on top."

Our Comment: His "facts" are suspect. What do YOU think of his arguments? Views please to p.m.dale@btinternet.com

Pat Dale

Graham Young replies:

I think the flaw in BAA's claims is the fact that most of aviation is NOT public transport. Most people fly for leisure or business and because they have no "public transport" alternative. If aviation is public transport then so is my car because both fit the same profile - polluting and desirable.

If you accept this and then compare taxation on aviation to taxation on car usage, you can see that the aviation industry is getting a very good deal from the government.

Public Transport commonly typifies a mode of transport that is partially public funded because it provides a more environmentally friendly alternative compared to other forms of transport. If aviation were public transport then my mother would probably have a free, government provided "plane pass". I can't see anyone suggesting that OAPs need free flights!

Brian Ross makes 16 points:

1) Air travel is exempt from fuel duty, VAT and environmental tax/charges.

2)  If aviation fuel was taxed at the same rate as the motorist pays for unleaded petrol, this would raise £6.3 billion a year for the Exchequer (precisely the amount required to fund a £25 a week increase in the single state retirement pension).

3) The VAT and other exemptions have been estimated at about £5 billion a year, making a total tax break of over £11 billion.

4) Compared to this, Air Passenger Duty collects only about £850 million a year.

5) The motorist pays a total of about £43 billion to the Exchequer. This amounts to net taxation of about £38 billion after allowing for investment in road building and road maintence.

6) Road transport accounts for about four times the level of carbon emissions but contributes more than 40 times as much in taxation.

7) In terms of the climate change impact, it is estimated (by the Intergovernmental Panel on Climate Change) that emissions from aviation are about 3 times more damaging compared to emissions from surface transport. This is because of the much greater impact of emissions at high altitude.

8) [Derived from the preceding points (6) and (7)], the climate change impact of air travel is three quarters of the climate change impact of road travel - but road travel pays 40 times more in (net) taxation.

9) Aviation is the fastest growing source of greenhouse gas emissions.

10) The Royal Commission on Environmental Pollution, the Sustainable Development Commission, the Institute of Public Policy Research, the European Environmental Agency - as well as others - have called for an end to subsidised air travel and have suggested that the cost of the average air ticket should increase by between £35 and £40 in order to address the problem of its increasing impact upon climate change.

11) It is disingenuos of BAA to describe aviation as "public transport".  When the airlines start putting clippies on the aircraft, giving free passes to senior citizens, and start providing scheduled services for the benefit of the poorer members of society, and for remote communities, then they might be entitled to make this claim.

12) Even buses and trains pay fuel duty - albeit at a modest rate compared to the motorist.

13) In the US, Japan and elsewhere, aircraft pay fuel duty for domestic flights.  There is nothing to prevent the UK government introducing a tax on fuel for domestic air travel.

14)  The Government is committed to making aviation pay the environmental damage it causes.  The Government is also entitled to decide that aviation should pay its fair share of the general taxation needed to fund decent schools, hospitals, retirement pensions etc.  The industry should accept its obligations to pay for the damage it causes to the environment and, in addition, its fair share of general taxation.  It is outrageous that BAA should be seeking to wriggle out from these obligations to society.

15) The BAA Report, by Volterra Consulting, was commissioned and paid for by BAA.  It deserves the same 'health warning' as air travel itself.

16) Apart from omitting to mention aviation's wide ranging tax breaks, the report also fails to mention that there is a history of the Government subsidising the development and manufacture of the aircraft themselves - everything from the billions of subsidy to develop Concorde to the most recent £500 million of taxpayers money given to the development of the new Airbus.

BRITISH AIRWAYS has told ministers they can give the green light to a new runway at Heathrow without fear of judicial challenge from environmental protesters. Rod Eddington, BA's chief executive, has commissioned a legal opinion from John Steel QC, one of Britain's leading planning-law experts, on the likelihood of a challenge to a third runway. The report, in which Steel judges a challenge unlikely to succeed, was sent to the government last Tuesday.

It is the latest salvo in a barrage of evidence BA has sent to ministers in the past few weeks in support of a new Heathrow runway.  Alistair Darling, transport secretary, is expected to set out the government's choice of a site for a new runway in southeast England in a matter of weeks. Senior executives at BA and other airlines operating from Heathrow are becoming increasingly worried that the government will choose Stansted as the first site for development.

On Thursday, Eddington, Sir Richard Branson, chairman of Virgin Atlantic, and Sir Michael Bishop, chairman of BMI British Midland, wrote to Tony Blair saying that the choice of Stansted would be an error. "We believe it would be a historic mistake to constrain the industry by requiring development in a location that is unsuitable for the needs of the market. It is also clear that funding for such a development would not be forthcoming," the letter said.

Government insiders expect Darling to pick Stansted, but leave the door open for the development of Heathrow a few years later. Ministers fear that European Union emission regulations may provide protesters with grounds to mount a judicial review if Heathrow is chosen for development first. But Steel, in a 30-page legal opinion, says that the government could easily see off any attempt at a judicial review.

"A decision of the secretary of state and government to include in the white paper (a third runway at Heathrow) as the principal or first option to accommodate the need for additional runway capacity in the southeast would be wholly in accordance with the law and would easily be defensible if any challenge by way of an application for judicial review were to be made," said Steel.

BA has also sent technical evidence to the Department of Transport, challenging emission forecasts that suggest Heathrow would be in breach of European Union standards. BA's own research found that emission levels around the airport were much lower than had been thought.

Airline-industry sources said ministers were now examining interim measures to increase Heathrow's capacity. Among these is a switch to "mixed-mode" working, which would allow take-offs and landing on each of the airport's runways. Heathrow is at present operated in "segregated" mode, with each runway handling only take-offs or landings.

Our Comment: There are always differing legal opinions on the coverage of any new legislation especially that based on a European Directive. Breaches of Environmental laws should be challenged - they are there for our protection. The situation at Stansted would be no better than at Heathrow - the predictions are that air quality legislation will be breached. The population may be smaller but everyone has rights that need to be protected. The same legislation also protects vegetation. Hatfield Forest, near Stansted airport is the most complete surviving example of a Forest dating from the early medieval period. It has over 850 ancient trees, some over 600 years old and is in the top ten forests in the UK. The National Trust is already concerned that the threshold limits for damage have been exceeded now, at 18 mppa. Does the destruction of 1049 acres of such irreplaceable forest not concern the Government? or the European Commission?

Pat Dale

RYANAIR DEMANDS APOLOGY FROM AIR FRANCE

Ryanair yesterday wrote to Air France's boss, Jean-Cyril Spinetta, demanding a formal apology for a highly unusual public statement in which the French carrier accused the Irish low-cost airline of spreading "fallacious information".

The dispute between the two airlines over flights to Strasbourg airport reached boiling point this week as Ryanair's boss, Michael O'Leary, launched an attack on Air France's fares. In a newspaper article, Mr O'Leary claimed that the French airline's cheapest mid-week ticket from London to Strasbourg cost Euros 780 or £570 return.

Air France insisted the figure was inaccurate, claiming it was "proof that consumers should not take Mr O'Leary's statements at face value, as he frequently has recourse to disinformation and untruths when making public pronouncements". The airline continued "Consumers should not be taken in by the fallacious information put out by Mr O'Leary. It is about time that they understood that Ryanair does not compete fairly." Air France claimed its cheapest price was Euros 56 though this was a weekend fare and not midweek.

The two airlines have been at war since September when Ryanair was forced to withdraw from Strasbourg following a successful court challenge by Air France which claimed that its deal with the city's airport was illegal. Now Air France's subsidiary has restarted the route from Strasbourg to Gatwick, Ryanair claims the airline is "ripping off" consumers and says passenger numbers have collapsed.

The Irish airline is fighting a rearguard action to fend off the expected ruling by the European commission that its cheap deals with publicly owned airports constitute illegal state aid.

The report concludes with a quote from BA's boss Rod Eddington, "The EC should apply their existing rules on state aid without fear or favour. No one should receive special treatment, no matter how loud they shout."

Our Comment: Repeat that quote – "No one should receive special treatment, no matter how loud they shout". We are happy to agree with BA. It must of course include all the special taxation favours enjoyed by all airlines and airports to the detriment of increasing numbers of those who live round airports.

Leaders of the airline industry buried their rivalries yesterday to issue a joint appeal to Tony Blair to make the building of a third runway at Heathrow airport the top priority of the aviation White Paper due to be published next month.

The report goes on to say that the letter tried to allay fears that Heathrow expansion would breach the Air Quality legislation "by the end of the decade", as predicted in the Government's consultation document. The airline chiefs were confident that the main environmental concerns could be addressed.

Our Comment: Well, they would say that wouldn't they! We understood that levels of nitrogen dioxide are already above mandatory limits around Heathrow. If they have not found a solution to an existing problem how will they solve it in 10 years time with even more aircraft and aircraft related traffic? It can't all be blamed on passing vehicles!

Exactly the same excesses are predicted for an expanded Stansted, fewer houses in a rural area but the legislation also covers plant life – Hatfield Forest and farming land. BAA themselves predicted in the Environmental Impact Assessment for expansion to 25 mppa that there would be breaches at Stansted. As with Heathrow efforts have been made to reduce these predictions but, as long as aircraft engines continue to emit significant amounts of pollutants, local air quality will be affected.

The European Commission will shortly complete its investigation into Ryanair's low cost base at Brussels Charleroi Airport in Belgium. Will the Commission allow publicly owned airports to compete on a level playing field against privately owned airports? Or will the Commission prevent government-owned airports from competing and end the low-fare revolution pioneered by Ryanair at underused airports such as Charleroi?

The chief beneficiary of the Ryanair revolution has been the European consumer, who can now travel right across Europe at prices that start from less than Euros 10 ( £7). This year, Ryanair's 24m passengers will pay an average one-way fare of just over Euros 40 before tax. Consumers are not the only beneficiaries. Secondary and regional airports in the UK have enjoyed rapid traffic and profit growth over the past decade. So have those airports in continental Europe where Ryanair and EasyJet, among others, have expanded rapidly. This case is not just about Ryanair: it is about promoting more competition between private and public airports to lower costs for the benefit of the consumer.

Southwest Airlines of the US has a 30-year record of growth, in part based on encouraging local communities and airports to bid against each other for the enormous benefits that flow from the carrier's investment in their local communities. Developers of out-of-town shopping malls compete to attract the big retailers such as Tesco, J. Sainsbury and Ikea. What Ryanair has done at Brussels Charleroi is no different.

In 2001, Brussels Charleroi was an unused, empty airport, competing against a number of privately owned airports such as Glasgow Prestwick, Frankfurt Hahn and Stockholm Skavsta to be selected as Ryanair's next European base. Charleroi was successful and, as a consequence, Ryanair traffic at the airport has grown in just two years from zero to more than 2m passengers. It is only because of this success that high-cost competitors like Brussels International Airport are now asking the Commission to take action that would block Ryanair's growth, limit competition and force up air fares.

If the Commission does not allow competition between public and private airports, high fares will return to many other European airports and the surrounding regions. At Strasbourg, a court case brought by Air France recently succeeded in blocking Ryanair's low-cost deal, forcing us to move services to Baden-Baden. Air France/Britair has replaced Ryanair's Euros 19 return fares to London with a midweek lowest fare of Euros 780 return, over 40 times more expensive than Ryanair. As a result, traffic to London has collapsed. Is this really the future for air travel in Europe?

European integration and the free movement of people depend on low-cost air travel. Air travel should not be the preserve of the rich. But if the Commission rules against Ryanair's Charleroi operation, that will be the inevitable consequence. EasyJet's deal at Berlin will be the next to be challenged by its high-cost competitors. Costs will rise and consumers will be forced to pay higher fares.

Ryanair's deal at Charleroi complied with the European Union's state aid rules. First, Ryanair pays a fee for every passenger - we are not, as some have claimed, net recipients of subsidies. Second, the agreement, which was offered to all our competitors, is already the most widely publicised airport deal in history. It could not be more transparent. Third, if competitors think the cost base at Charleroi is so low, they should stop complaining and move there. Charleroi has offered them a similar deal, so there is no question of distorting competition. Fourth, the state aid rules allow the Walloon government to use lower prices to stimulate traffic at an unused airport facility in exactly the same way that every private airport reduces its charges if it wishes to grow its business.

Europe's passengers have been ripped off for more than 40 years. Before Ryanair, airports, airlines and regulators conspired to protect national carriers at the expense of consumers. We negotiate hard but fair deals with underused airports. They cut their charges; we deliver low fares and enormous traffic growth. Above all, we then pass on these lower costs to passengers and force our high-fare competitors to reduce their prices. What we do is great for passengers and good for Europe. If the Commission wants the interests of consumers to come first, it must support us.

The writer is chief executive of Ryanair

Pat Dale

Mr. Randall (Con, Uxbridge): To ask the Secretary of State for Transport (1) what research he has commissioned on methods of maintaining levels of nitrogen dioxide around Heathrow Airport within EU limits; (2) whether a third runway at Heathrow Airport would remain an acceptable option in the forthcoming Aviation White Paper in the event that relevant pollutants could not be contained within EU limits; (3) what assessment his Department has made of the action plan to minimise emissions from Heathrow Airport which BAA plc was required to produce as a condition of the planning permission for the fifth terminal.

Mr. McNulty: The Government has reviewed a wide range of evidence, including information contained within the BAA pic Air Quality Strategy and Action Plan, in considering the future development of Heathrow. The Government remains of the view that a new runway at Heathrow could not be considered unless it could be confident that levels of all relevant pollutants could be consistently contained within EU limits. Final decisions will be announced in the forthcoming air transport White Paper.

Our Comment: We must remind the Minister that the same concerns must apply to Stansted.

Pat Dale

Tony Coleman has gone into great detail on the need for the environmental impacts of aviation to be fully taken into consideration when planning future aviation expansion. He considers the need for environmentally friendly aircraft and asks why successive governments have not invested in the necessary technology.

The debate should be read in full. It covers all the important points, all of which SSE has already made, and now they are being presented to MPs.

A full Report can be found on this website. Read it!

Pat Dale

4. Mr. Jim Cunningham (Coventry, South): What estimate he has made of the energy efficiency of (a) high-speed train travel and (b) short-haul flights for journeys (i) within the United Kingdom and (ii) between the United Kingdom and France.

The Secretary of State for Transport (Mr. Alistair Darling): I am aware there have been a number of studies, but with no firm conclusions.

Mr. Jim Cunningham: I thank my right hon. Friend for that answer. Does he agree that if there were synchronisation between rail and air travel in the advance booking systems, more people would use the rail services?

Mr. Darling: I agree that it is important to provide people with better choice in transport, and I can tell my hon. Friend that, once the first phase of the west coast modernisation is complete next year, journey times between Birmingham and London, for example, will come down to just over one hour and 20 minutes, and between Manchester and London to just over two hours. Those journey times will provide a favourable choice compared with travelling by air. In relation to domestic journeys and those made using the new channel tunnel rail link, I believe that rail can offer a very good choice, providing a faster journey. The key is to ensure that it is reliable as well.

Mr. John Wilkinson (Ruislip-Northwood): Will the Secretary of State come to one firm conclusion now—namely that RAF Northolt should be eliminated from the review on airport facilities in the south-east of England for short-haul operations? The airfield is far too small, it is in a highly built-up area, and I am sure that his ministerial colleague, the hon. Member for Harrow, East (Mr. McNulty) would concur that there would be fury from local residents if short-haul scheduled services were permitted there.

Mr. Darling: I have made it clear on a number of occasions that we will deal with all airports in the aviation White Paper, which we will publish next month. The hon. Gentleman will just have to wait and see what our conclusions are.

Mr. Lindsay Hoyle (Chorley): Obviously we welcome my right hon. Friend's comments on using the tunnel. I think that it is a benefit, but it ought to be a benefit for all in the UK. Will he try to ensure that there are direct links from the north-west to give us the same service and benefits that people get in the south-west and the south-east?

Mr. Darling: My hon. Friend makes a good point. The first stage of the channel tunnel rail link was opened in September, and I am pleased to tell the House that today the Under-Secretary, my hon. Friend the Member for Harrow, East (Mr. McNulty), was able to present a bouquet of flowers to the millionth passenger to use that service since then. [Hon. Members: Ooh!] I understand that the reaction of the passenger was just the same as that of hon. Members, and that the upgrade to first class was probably more greatly appreciated than the opportunity to meet my hon. Friend.

The point is that the channel tunnel rail link means that journey times between London and Paris and Brussels are reduced, and that the journey between London and Paris will come down to two and a half hours when the project is completed in 2007. When the route runs through to St. Pancras, it will allow for far better connections to the rest of the country. As I was saying a moment ago, that will provide a better choice for passengers wishing to go to the continent. It does not, of course, get round the point that it is likely that the demand for air travel—not just to Europe, but to other parts of the country—will continue to grow as well. That is one of the things that we have to consider as we reach our conclusions in relation to aviation.

7. Mr. Peter Lilley (Hitchin and Harpenden): When he plans to publish his White Paper on airports in the south-east of England.

The Secretary of State for Transport (Mr. Alistair Darling): We expect to publish the air transport White Paper covering the whole of the UK next month.

Mr. Lilley: I am grateful to the Minister for his reply. When he publishes the White Paper, will he ignore the blustering threats of legal action by the operators of Luton airport and accept that there is massive local opposition—I have got another 1,000 signatures to add to the many that he has already received—to over-expansion of the airport to the size of Gatwick? There are no direct rail links to the airport, and the overflying stacked above it means that it will be less safe. The airport is closed more frequently than any other airport serving London because of weather conditions, and, on the right hon. Gentleman's own calculations, development is the least cost-effective option of all those that he is considering.

Mr. Darling: I am aware of the right hon. Gentleman's strong feelings about development at Luton because he has made them clear on previous occasions. My answer to him, as it will be to everyone else who catches your eye, Mr. Speaker, is that people just have to wait a short while longer before finding out our conclusions.

Mr. Kelvin Hopkins (Luton, North): While there is always some opposition to airport development, my right hon. Friend must know that there is strong support for the development of Luton locally. There is unanimous support among Government Members for the development and even, I think, strong support among Opposition Members. Is it not the case that Luton could be expanded quickly, simply and cheaply and contribute substantially to airport needs?

Mr. Darling: My hon. Friend is right that, in relation to just about every airport in the country, there are strong feelings both for and against. I am acutely aware of the fact that when I publish the White Paper there will be a lynching party from one direction or another.

Mr. Mark Prisk (Hertford and Stortford): Regardless of what is in the White Paper, it is crucial that our scrutiny of the Government's plans is both informed and thorough. Will the Secretary of State therefore confirm that he will publish the evidence that he receives before the White Paper, and that he will give us a proper, full debate in this House in January?

Mr. Darling: The question of whether the matter will be debated is in the hands of the usual channels, but for my part I would welcome a debate. As I have said, whatever we decide, our conclusions are bound to be controversial, and there are bound to be strong feelings on both sides of the argument. Indeed, I know of the hon. Gentleman's feelings about the issue of airports in his constituency, because he has spoken to me about it.

When we publish the White Paper, we shall of course then publish the representations that have been received, but perhaps it would help the hon. Gentleman and the House if I point out that the White Paper will set out a framework against which the industry and people can plan for the future. It is not as if its publication will be the end of the story, with no more debate. If further expansion takes place, there are planning procedures to go through and there will be all manner of debate and discussion, so there will be plenty of opportunity in this House and elsewhere to discuss the proposals. But it is important that we publish the White Paper, because it will be the first time since the mid-1980s that a Government have set out what their strategy ought to be, taking into account the fact that more and more people are flying for business and leisure reasons. Any Government have a duty to set out a framework against which people can plan.

David Taylor (North-West Leicestershire): Can the Secretary of State reassure the House that he will not seek to decant the excess growth that cannot be absorbed by London airports to other regional airports without there being environmental frameworks in place of a similar standard to those in the south-east, in order to protect the communities surrounding those airports?

Mr. Darling: On the first point, the demand and pressure on airports is not just a phenomenon in the south-east of England—it is happening right across the country. As I have said many times, this year about half the population will fly at least once, and of course, a substantial number fly more often than that. As I have also mentioned before, in 1998 about 5 million people flew on low-cost airlines, but this year the figure will be in excess of 45 million. That is happening throughout the country. However, my hon. Friend makes the important point that environmental measures must be put in place to ensure that the environment is preserved. As we have said on many occasions, aviation, like every other industry, has to meet the consequences of the damage that it causes, so his point about environmental protection is very important.

Mr. Jonathan Sayeed (Mid-Bedfordshire): The High Court ruled that the Government's air transport White Paper was flawed, and I trust that the Secretary of State will agree that the consequence has been even more delay. That has meant uncertainty for those who live around Heathrow, Gatwick, Stansted and other airports in the south-east, and a continuing planning blight. Has he ever apologised for getting the White Paper so wrong that the High Court had to throw it out and the Government had to start again?

Mr. Darling: The White Paper has not been published yet, so if there has been a ruling against it I should be very surprised. What I think the hon. Gentleman is trying to get at is the consultation process, during which, as he rightly says, the Government took the view that Gatwick should be excluded because of the legal agreement between the then British Airports Authority and the county council. Before he starts demanding apologies, I should point out that many of his colleagues representing constituencies around Gatwick welcomed that decision when it was taken.

The hon. Gentleman will recall that on 28 November last year, I told the House that, in the light of the High Court ruling, rather than prolonging the agony, we should consult on the basis that Gatwick had to be considered, and we are now doing that. As I pointed out 12 months ago, that would inevitably mean a delay in reaching our conclusions, which I had originally hoped to publish in the summer. I made it clear then that they would not be published until the end of this year, and I am determined that they should be published by then—that is, next month—so that the problems of blight and uncertainty that the hon. Gentleman complains of can be addressed.

Mr. Ben Chapman: To ask the Secretary of State for Transport what assessment he has made of the effect on regional economies of a third runway at Heathrow Airport.

Mr. McNulty: The assessment of additional capacity options is based on direct benefits to passengers from allowing more people to fly and giving passengers a greater choice of timings and routeings. No assessment has been made of the wider economic benefits including those to regional economies of additional airport capacity, though some of these will be captured in the direct benefits, particularly to business passengers.

Lord Berkeley asked Her Majesty's Government: Whether their consideration of airport capacity in the south-east includes the option of a new airport in the Thames estuary.

Lord Davies of Oldham: My Lords, my right honourable friend the Secretary of State for Transport has made it clear that he would consider all serious proposals for new airport capacity submitted in response to the consultation paper. A number of proposals that are alternatives to, or variants of, options set out in the consultation have been submitted. Those include proposals for new airports in, and around, the Thames estuary area.

Lord Berkeley: My Lords, I am grateful to my noble friend for that Answer. Will he confirm that there are no serious technical problems associated with building an airport in the Thames estuary, as it is quite shallow? Will he also confirm that many fewer people would be affected by noise if the airport were built in that location, although one must accept that more seagulls would be affected?

Lord Davies of Oldham: My Lords, there are advantages with a number of the additional submissions that have been made as a response to the consultation paper. The Secretary of State is in the process of considering those matters on a factual basis, taking into account all issues. The White Paper will be published before the end of the year.

Lord Mowbray and Stourton: My Lords, before I ask my question, I should say that for many years I have been on the board of the Thames Estuary Airport Company. I was grateful to hear the Minister's comments. The company has twice submitted our plans for the area.

I hope that the Prime Minister's meeting with the CBI yesterday may have caught on with the House. He suggested to the CBI the need to find new ways of attracting private finance into transport infrastructure improvements. Our offer to fund privately and build an offshore airport in the Thames estuary, together with the cost of all supporting infrastructure, to a sum in excess of £33 billion, surely provides an excellent opportunity to take up the advice of the Prime Minister. It would be almost folly to ignore private investment on that scale. Is it not essential, therefore, that the proposal should be accepted in principle and included as a valid and possible option in next month's White Paper?

Lord Davies of Oldham: My Lords, as I have said, all serious proposals—that is a serious proposal—in addition to the ones contained in the consultation, are subject to evaluation at present. As the House will recognise, the extension of airport capacity is not an easy issue. It involves the interests of a very large number of people, and there are disadvantages attendant on any solution, as well as a very real need to provide additional capacity. I assure the noble Lord that the proposal that he has advocated with strength today is fully under consideration.

Lord Faulkner of Worcester: My Lords, does my noble friend agree that, if the Government were to accept the airline industry's forecasts of the doubling of passenger numbers by 2020 and a trebling by 2030, we would have no chance whatever of meeting our Kyoto targets or reducing greenhouse gas emissions? Would it not be more appropriate for the Government, while they carry out their review of airport capacity, to consider seriously the role that long-distance rail services can play in replacing short-haul aircraft, especially now that the first stage of the high-speed Channel Tunnel link is open?

Lord Davies of Oldham: My Lords, undoubtedly, one advantage with rail, as opposed to internal airport capacity for internal flights, is its lower level of pollution. However, my noble friend will recognise that, even if it were believed that the capacity necessary in 2020 or 2030 was exaggerated by the airlines, it is still the case that airline travel, including overseas and internal flights, is increasing by a very significant factor. We must take account of the pressure of demand.

Baroness Thomas of Walliswood: My Lords, is it the Government's intention that the White Paper, which as the Minister said is due by the end of the year, or perhaps even by Christmas, will be their final view, or will it be a consultation paper? Will the Minister accept that, if it is the latter, he will have a lot of extremely worried people coming to him on the subject of Gatwick? The destruction of the surrounding countryside, were another runway to be built there, is almost impossible to imagine, unless one has actually been there and seen what would happen.

As for Stansted, are the Government determined to ensure that ground transportation, including rail transportation in particular, would be large enough to sustain an additional runway there?

Lord Davies of Oldham: My Lords, the noble Baroness seeks to draw me into debate on the White Paper in circumstances in which I am not prepared to be drawn in detail. However, she is right that we cannot conceive of an expansion of Stansted without considering the question of infrastructure and transport. That is true of all the other airport proposals as well. The noble Baroness is also right when she suggests that there are disadvantages to any expansion of Gatwick. The simple fact of the matter is that, with any proposal, there are manifest disadvantages. However, there is also a very real need.

Viscount Ullswater: My Lords, what weight do the Government give, in considering the capacity for future airports, to an airport being able to operate 24 hours a day, as I believe will be done in other countries? We need to keep up with that.

Lord Davies of Oldham: My Lords, if there is one way to upset those who live near airports, it is to suggest that the plague that they suffer from frequent flights during the day should continue at the same level overnight. That is a path down which I would not want to commit the Government at this stage. However, as all noble Lords will recognise, if we do not increase airport capacity, we will not only cause a severe reduction to our economic capacity in this country but disappoint the very large number of people who increasingly use air flights for their holidays abroad. We would certainly affect the capacity of London to be the finance capital of the world.

Baroness Finlay of Llandaff: My Lords, will the Minister confirm that broader considerations have been given in the deliberations, to issues such as job creation and the traffic and rail flows, in view of the large number of passengers who currently fly in and out of the London area but do not live in that area and travel significant distances? I refer particularly to those who come from west of Reading.

Lord Davies of Oldham: My Lords, the noble Baroness has a point, in that we may see the build-up of regional airports in order to reduce the use of Heathrow for on-flights by passengers. That puts very considerable pressure on all the south-east airports, and not only Heathrow. However, the noble Baroness will also recognise that the airline industry and the airports are a very significant contributor to the economy and a major form of employment for a large number of our fellow citizens.

Baroness McIntosh of Hudnall: My Lords, does my noble friend agree that merely to refer to the demand for air transportation is only one side of the argument? Historically, the provision of roads on a demand basis only has resulted in a policy that has run out of road—if I may be allowed a small pun. Would it be possible at least that, in thinking about the expansion of airport capacity, the Government might consider that merely meeting demand is not necessarily the way forward?

Lord Davies of Oldham: My Lords, I agree with the noble Baroness: we are not into "predict and provide", or simply making an assessment of the number of airline journeys that might be made and extending airports to meet that capacity. She will recognise from the figures that I have quoted that the potential expansion is so huge that it will need some response, even if it was scaled down very significantly. In some respects it will need to be, because of the necessity of meeting our Kyoto targets for emissions of carbon dioxide, to which reference was made earlier. To meet those requirements, we shall need to restrict some aspects of air travel. However, she must also appreciate that demand is such that to go some way to meet it requires extension to airport capacity, without any doubt.

Pat Dale

THE future of cheap flights to Europe was in severe doubt yesterday after Ryanair said it expected many of the discounts it enjoys on airport charges to be declared unlawful.

The airline's 18-destination French network was under particular threat as a result of a ruling by the European Commission that incentives airports have offered to Ryanair constitute illegal state aid. Routes could be cut before next summer. More than two million passengers have flown between the operator's Stansted base and the French regions this year, many visiting holiday homes bought by Britons on the strength of the air link.

All the no-frills carrier's French bases are publicly-owned. They will thus be affected by the result of the Commission's lengthy investigation into Ryanair's agreement with Brussels Charleroi airport. The airline said it had learned that the Commission's draft report found that "substantial parts" of the deal breached EU rules.

The airport is owned by the Walloon regional government, which approved grants worth an estimated £5 million a year to subsidise landing and handling charges and marketing costs.

Ryanair pays a landing fee 85 per cent lower than the list price. However, since the airline's arrival, the annual passenger "throughput" at Charleroi has risen eight-fold to nearly two million, sharply boosting the local economy.

The Commission's final decision is expected next month. The company says it will lodge an immediate appeal with the European Court, though this process could take two years.

Ryanair's lawyers hope they can delay implementation of the ruling until the appeal is resolved. If they fail, however, the airline will cease operations at Charleroi and transfer the aircraft involved to a privately-owned Continental hub. Managers say they would adopt the same approach for other publicly-owned airports. Negotiations are already under way with a dozen private alternatives.

Some European countries, such as Italy, Germany and Sweden, have a significant number of non-state airports, but not France. The removal of Ryanair from the French market would be likely to result in British Airways and Air France fares moving upward, as competition eased. Ryanair routes to Italy, Germany and Sweden are not expected to come under threat, and may expand. The airline also indicated that most of its Spanish destinations would be safe.

The Irish-registered carrier is the prime victim of the Commission's position because it has specialised in deals with small regional airports to which few, if any, other operators fly. The vast bulk of demand comes from leisure travellers.

Easyjet tends to prefer higher-cost, mainstream airports which will attract business passengers. However, the airline's recently announced plans for flights from Luton, Liverpool, Bristol and Newcastle to the state-sector Berlin Schonefeld airport could face the axe.

Michael O'Leary, Ryanair chief executive, said outlawing discounted charges would do "untold damage to the growth of low-fare flights and competition in European air transport".

He added: "This decision will be a great day for high-fare airlines and high-cost airports like Brussels Zaventem, which brought the case against us. It will mean a return to expensive travel and less choice as publicly-owned regional and secondary airports will not be able to compete fairly against the private sector."

Mr O'Leary said the cancellation of routes would not take place until legal avenues had been exhausted.

He expressed the hope that the French government might put pressure on the Commission to soften its decision, as the closure of so many routes would do substantial damage to the country's tourism industry. Ways in which airports might be privatised to circumvent the ruling were being discussed by regional chambers of commerce, he said.

Marcelle Speller, of Holiday-Rentals.com, which represents about 1,000 people who let out houses in provincial France, described the EC ruling as a "great blow". "This is going to hit a lot of people," she said. "There will be those who have made their home in France and relied on Ryanair to come home to see friends and family. They will find themselves cut off. "On a business level, property owners will lose a lot of bookings."

Amy Coley, 32, and her husband Benn, 31, run an activities holiday business based at their house near Pouillonin Aquitaine, south-west France, only about 40 minutes away from Pau and Biarritz airports. Such was the importance of Ryanair that they included an internet link to its site from their own web page.

"This is going to make a massive difference to our business," Mrs Coley said. "Benn collects people from the airport and now the nearest one is going to be three times as far away."

This report, after describing how BA has found a hole in its pension fund has had to increase its annual pension contributions. BA has been hit by competition from the "no-frills" airlines and has had to axe 12,000 jobs. However, EasyJet has revealed a 28% slump in its profits to £52, blamed on the Iraq war. Their Chief Executive was quick to predict a rise in passenger numbers from 20m to 24m this year, which would pass BA's European operation.

The report comments that critics have suggested that the airline could be hit by the expected European Commission's ruling that Ryanair's cut price deals with publicly owned continental airports constitute illegal state aid.

EasyJet counterattacked, saying that Ryanair was unique in expecting to be paid by airports for landing passengers. The Chief Executive, Ray Webster, is reported as saying "My message to O'Leary is to shut up and face the music. It's his problem – he created it".

Our Comment: During the last few weeks Ryanair has been conducting an advertising campaign comparing their very low fares to EasyJet's alleged higher ones. Recently Ryanair offered free tickets plus a promise to pay £1 of the passengers' airport tax. Any Takers? Who benefits? Who suffers? Is this really beneficial to our economy?

Pat Dale

Sir, If nothing else, Michael Meacher ("The false arguments for airport expansion", November 10) has started the debate on air travel, which incidentally should extend to all travel, and is long overdue. We have made a commitment to the Kyoto agreement to reduce our carbon dioxide emissions and the transport sector is an important source of such emissions.

The Cabinet Office published the Energy Review document last year with the objective of reviewing national energy creation and use. Transport is a big energy user and desperately requires government to play its part in order to "drive" transport users to make sensible choices with regard to energy use in exercising their right to enjoy freedom of movement.

Aircraft require a great deal of energy during take-off to arrive at their cruising altitude. This can be best expressed in terms of CO emitted per passenger kilometre. Cruising at the selected altitude and landing are relatively efficient in terms of energy use. It makes sense, therefore, to make long-distance journeys by air. It is a nonsense to make short journeys by air such as from London to any other destination in England, Scotland or Wales where the aircraft starts to make its descent almost as soon as it reaches its cruising altitude.

For such national journeys, we should be using a high-speed electrified railway system. Shorter distances make sense using bus, coach or private car.

Your correspondents from British Airways and BAA (Letters, November 12) are understandably critical of Mr Meacher and nationally applied fuel duty on aviation fuel would not be competitive. Government could "drive" transport users in the direction of more appropriate transport systems by using the air passenger duty selectively. For example, a passenger arriving at Heathrow from the US, say, does not have a reasonable alternative to air and so the APD could be set at £10. A passenger arriving at Heathrow from Glasgow, on the other hand, does have a more appropriate alternative and so in this case the APD could be £50 or more.

The idea that the aviation industry pays its way compared with the railway industry is incorrect. The rail fare and subsidies pay for the infrastructure. In aviation the infrastructure is the atmosphere and nobody pays for this. The contribution of aircraft to global warming and environmental pollution is enormous and the APD is the measure for correcting this imbalance.

Essex, Stansted

British Airways and other Heathrow-based airlines will fight "every inch of the way" to prevent Stansted Airport expansion, it has been revealed.

BA said it would even resort to legal action to prevent "the expansion nobody wants" happening at Stansted. The company said it was not prepared to pay crippling extra costs to the British Airports Authority to subsidise any work at Stansted.

"No other airline based here will want to pay out to help their competitors at Stansted either. It is known the airlines, or most of them, already at Stansted are reluctant to pay for the expansion themselves," said BA.

Campaign director, Carol Barbone, said: "We'll be demonstrating to the Prime Minister and his colleagues that we are continuing to fight proposals to expand Stansted tooth and nail, just as we have over the last 17 months."

Sir, Philip Mickelborough's case for releasing BAA's stranglehold on airport provision in the South East (Letters, November 11) will be cheered by regular air travellers in Scotland, where the same BAA also owns three important airports: Glasgow, Edinburgh and Aberdeen. The impact of this monopolistic structure on the development of services for passengers could not have been to the fore of government thinking at the time the Conservatives privatised BAA or, presumably, at any time since under Labour.

Retail space maximisation seems to take priority over the more mundane mechanics of handling aircraft and travellers primarily for the benefit of the latter. The sheer sameness and lack of imagination or real consideration for the customer are so often apparent. Readers will have their own experiences: the hour-by-hour management of security staff numbers (reduce until there is a good queue?); the herding of passengers on and off buses even when gates at the terminal and air bridges are clearly available; and so on.

Many travellers could and would choose between Edinburgh and Glasgow and among Heathrow, Gatwick and Stansted on the basis of passenger convenience and comfort while at the airport - very often a longer period than in the air. Break this edifice into three businesses (Heathrow; Gatwick, Glasgow and Aberdeen; Stansted, Edinburgh and Southampton) and release the energy that competition for airlines and passengers could create! Lifting the dead hand and diseconomies of monopoly should even release value for shareholders.

The chief executive of Britain's second largest airports operator is to warn the Government today that he will take legal action if Luton airport is frozen out of plans to expand air services in the South East.

Keith Brooks, head of TBI, also plans to raise concerns about the impartiality of the Government's relationship with BAA, his more powerful rival and owner of Heathrow and Gatwick airports, The Times has learnt. Any action by Mr Brooks could have serious consequences for the Government's plans to build another runway at an airport in southeast England, plunging the issue into a lengthy regulatory battle.

Mr Brooks said the potential of Luton, owned by TBI, had been ignored by government officials working on a White Paper on airport expansion, which could be unveiled as early as next week. He will today tell advisers to Alistair Darling, the Transport Secretary, of his frustrations at trying to "get Luton on the agenda".

Mr Brooks said: "We are not going away. If we feel that we have been marginalised then I will take whatever political or judicial action is open to me, in Britain and in Brussels."

He will also raise his concerns about BAA's influence in the corridors of power. "I am concerned about BAA using its monopoly position in the South East. I am concerned about the impartiality, given (BAA's) connections with government."

Mr Brooks believes that some independent advisers working for the Government and other authorities on the airport issue are former BAA employees. "I would question the independence of some of these people," Mr Brooks said. The White Paper is expected to recommend where another runway should be built in the South East, as well as measures to help to ease the congestion at the region's airports.

Heathrow is the big airlines' favoured location, though it faces formidable opposition from the environmental lobby. Gatwick, once ruled out on legal grounds, is now also a contender for the runway.

Stansted is also emerging as a real possibility, because the strength of opposition to Heathrow and Gatwick means that the Government might not be able to build the runway in time.

BAA's runway capacity in the South East will run out by 2013 and some in the Government believe that Stansted is the only airport that could be expanded by then.

However, BAA says it would have to fund the cost of building a Stansted runway by raising its fees at Heathrow and Gatwick. That would anger Heathrow's big airlines, such as British Airways and Virgin.

With Luton just 40 miles from Stansted, supporters of TBI believe that the arguments for putting a runway at its airport are just as strong as its near neighbour.

Mr Brooks said that local opposition to an additional runway was not as strong in Luton as elsewhere.

Even if prevented from opening another runway, Mr Brooks said Luton should be allowed to raise the threshold on the number of passengers that can use the airport.

He said: "In the short term, Luton provides the solution for the Government. Gatwick has 32 million passengers off one runway. Luton has seven million." A spokeswoman for BAA said: "This is a democratic process involving extensive consultation by a democratically elected government. It would be ridiculous to imply that we played any different role to any other organisation in this process."

Our Comment: TBI is a relative newcomer to the Airports business. It owns several airports in the UK and many more in various parts of the world. Luton airport is very near Luton itself. What do local residents feel about TBI's zeal to expand? Ask the local group campaigning against the expansion of Luton airport. LADACAN Tel: 01582 713535. Email: info@ladacan.org

Pat Dale

Green/EFA Conference on Noise Pollution
Commission should ban night flights and state aid

MEPs from the Green/EFA Group called today for the Commission to fulfil its role as Guardian of the European Community's treaties and protect the citizens of Europe by banning night flights and stopping state aid for airlines. Ten million Europeans currently suffer from noise disturbance at night and at a Green/EFA conference in the European Parliament held yesterday and today, nearly 200 people from the aviation industry, NGOs, the European Commission and academia met to discuss how to tackle the problem of noise pollution. Green MEPs addressed the press this morning to explain the outcome of the conference, and their plans for the future.

Dutch MEP Alexander de Roo, Vice-President Parliament's Committee on the Environment, Public Health and Consumer, said: "We call for an immediate ban on night flights between 11.00pm and 7.00am at all airports in the European Union. This ban must be introduced across Europe to create an equal level playing field. We also want the night to last for at least eight hours for all European citizens."

Caroline Lucas, MEP for South-East England, said: "NGOs in my constituency, where London Gatwick airport is located, have long accepted that they must work together to ensure that opposition to airport expansion in their region does not simply lead to expansion elsewhere in the country. This conference builds on the same principle of solidarity but at a European level. The current rapid growth in air traffic is due primarily to the cost of flying remaining artificially low. The Commission has accepted that this growth is unsustainable. We feel that by introducing laws to internalise the costs of air traffic – forcing airlines to pay for the costs of their emissions and noise pollution – demand can be managed and we can avoid recklessly increasing the number of European airports as is currently proposed."

Belgian Ecolo MEP Paul Lannoye said: "The European Investment Bank granted €8bn in loans to the air transport industry between 1998 to 2002, and certain European regions give significant financial incentives to 'low cost' airlines. This thinly disguised state aid is detrimental not just to an open market – it effectively constitutes environmental 'dumping'. Therefore, I call on the Commission to clamp down on activities that distort competition and that contradict the EU's policies on sustainable transport and the protection of European citizens against harmful noise pollution."

Hiltrud Breyer, German member of the Parliament's Environment Committee, said: "Noise has negative effects on the mental development of children. Their reading ability and long-term memory is being considerably damaged. A recent study has shown that allergies and respiratory diseases increase when children are subjected to a combination of emissions and noise. We cannot continue to neglect the damaging effect of noise on children's health."

If the Government sanctions a new runway at London Stansted, not only will it never be built, but the decision itself will blight Britain's aviation industry.

The stark warning comes from the UK's two largest airlines, British Airways and Virgin Atlantic, which are desperately lobbying the Government to allow a new runway to be built at Heathrow.

Alistair Darling, the Secretary of State for Transport, is due to announce plans for at least one new runway in the south-east of England in an aviation White Paper next month.

The Cabinet is said to be split between whether to allow the first new runway to be built at Stansted in Essex or at the more popular Heathrow. Gordon Brown is said to favour the Heathrow option while Tony Blair believes Stansted is more acceptable politically.

BAA, which owns both airports, has not said which it prefers, though it concedes that the Heathrow scheme makes more sense economically. The Stansted plan, though, faces opposition from not only the airlines, but business and trade unions.

Andrew Cahn, the director of government affairs at British Airways, said: "A runway at Stansted would not get built. Nobody wants it. Nobody would pay for it. The tarmac wouldn't even get laid."

BAA has admitted the only way to make a new runway at Stansted viable would be to cross-subsidise it, probably by forcing airlines to move flights from Heathrow.

The airlines have vowed to take the Government to court to prevent this cross-subsidy.

"The prospect of airlines funding the development of an airport that we do not want is beyond the pale," said a spokesman for Virgin Atlantic.

Mr Cahn said that failing to build a new runway at Heathrow would send business to alternative European hubs at Charles de Gaulle in Paris and Schiphol in Amsterdam.

"The UK long-haul aviation industry would go into terminal decline. Charles de Gaulle will overtake Heathrow in the next five to six years," he said.

Digby Jones, the director-general of the Confederation of British Industry, is also throwing his weight behind the Heathrow campaign. "There should be built, as quickly as possible, a new runway at Heathrow," he said.

The CBI believes the south-east needs as many as three new runways, at Heathrow, Gatwick and, only then, Stansted.

Holidaymakers could face soaring air fares if the Government does not give the go-ahead for a third runway at Heathrow, Tony Blair will be told this week.

Major airlines and trade unions will unite to call on the Prime Minister to back plans for the extra runway, which they claim could create 70,000 jobs.

Airline bosses fear that congestion at the country's busiest airport could turn Britain's skies into "the M25 of European airspace", leading to delays and pushing up fares as more and more travellers - who prefer to fly into Heathrow than London's other airports - compete for the same number of flights.

Transport Secretary Alistair Darling is expected to publish within weeks the Aviation White Paper containing the Government's recommendation on where to build another runway in the South-east.

The big airlines all favour Heathrow, despite huge opposition from the environmental lobby, but there are growing fears that the Government may opt for either Gatwick or Stansted.

The TUC and the GMB, TGWU and Amicus trade unions, as well as Balpa, the pilots' union, will all call on Mr Blair to back the plans to expand Heathrow.

Heathrow already provides about 150,000 jobs in west London and a further 100,000 across the UK. TUC general secretary Brendan Barber has written to Mr Blair warning of a "very serious impact on the future international competitiveness of the UK aviation industry" and damage to the UK's economy.

He wrote: "A new short runway at Heathrow can be expected to generate net economic benefits to the UK of £7.8 billion, which is significantly greater than any other options."

"No other airport in the UK can develop into an effective global hub to rival Heathrow and provide effective competition to our European rivals."

GMB general secretary Kevin Curran said: "A new runway at Heathrow is critical to regional expansions. Heathrow will become Europe's major hub airport, which will boost the economy not just in London and the South-east but across the whole of the UK."

"We strongly recommend that the Government gives the new runway to Heathrow as it is in the best interests of the whole country. Whether you're a holidaymaker or a business traveller, the new runway will make it easier to travel across the country and around the world."

The bosses of Britain's top three airlines - British Airways, Virgin Atlantic and BMI British Midland - have also all appealed to Mr Blair to back Heathrow.

Dan Hodges, director of Freedom to Fly, the aviation industry group, told the Sunday Express: "It is absolutely vital that we get a quick decision from the Government to safeguard British jobs and keep Britain at the centre of the aviation world."

"Without an extra runway at Heathrow, air fares will soar and bring an end to the cheap flights boom that has made it possible for every family to fly abroad on holiday."

"With the busy Christmas period coming up, every holidaymaker knows about the problems with delays because of congested airports."

"This runway is crucial if Britain's skies are not to become the M25 of European airspace."

Officials at the Department for Transport have insisted that "no firm decisions" have yet been taken on the runway's location.

A RESEARCH project to design an airliner so quiet that its noise would be imperceptible beyond airport boundaries was launched yesterday.

Aeronautical engineers at Cambridge University plan to reduce noise by 50 per cent compared with today's quietest airliner within 15 years. Their backers include the Civil Aviation Authority, British Airways and Rolls-Royce.

The noise impact of aircraft engines has fallen about 80 per cent since 1960. But the huge growth in the number of flights has created semi-permanent noise corridors under the approaches to airports, which have become a major obstacle to airport expansion.

Prof Ann Dowling, a project leader, said she wanted to achieve a "radical change" in the shape and appearance of aircraft with noise reduction the top design priority.

The team expects to focus on 350-seat designs with engines in the body of the aircraft, rather than under the wings, to shield jet noise from the ground.

Sir, Michael Meacher raises some interesting and controversial points in his article about the true costs of aviation ("The false arguments for airport expansion", November 10), but the unwelcome prospect of a third runway at Heathrow does demand a more immediate solution.

Having used two of London's airports I doubt whether passengers' convenience, expense or comfort will appear on the airport managements' priorities until there is competition between Heathrow, Gatwick and Stansted. Furthermore, as someone who lives in the south of England I do not welcome the increasing concentration of wealth, economic activity and population in the South East. Both these issues, and the third runway, might be addressed by breaking up BAA and transferring ownership of each of London's three airports to the owner of a different airport in the Midlands or North. Not only would there then be competition within the London airport market, but the new owners would have an incentive to rebalance aircraft flights between parts of the country.

And if a third runway serving London were still necessary, perhaps it should be built in northern France close to the Channel tunnel; with duty-free shops, baggage reclaim and customs on board the trains it might have faster access to central London than Heathrow does at present.

Sir, Michael Meacher argues ("The false argument for airport expansion", November 10) that there is a collision between the needs of the economy and the environment when it comes to airport expansion.

That is not so. The aviation industry takes its environmental responsibilities extremely seriously and has an excellent record in improving its environmental performance. For example, at Heathrow, the number of people suffering noise disturbance is down nearly 90 per cent over the past 30 years, despite the very significant growth of the airport over that period.

The aviation industry is not subsidised. Air passenger duty is a tax that raises nearly £1bn each year. The industry also pays all its own infrastructure costs. This is in stark contrast to the massive public subsidy injected into the rail industry.

In the absence of international agreement, the imposition of fuel tax or other surcharges related to global warming would penalise UK airlines. Emissions trading is a much more effective and efficient means of limiting our contribution to global warming. British Airways is already a member of the UK emissions trading scheme and we support the move to include aviation within emissions trading in Europe and worldwide.

We are also confident that the local environmental challenges of a third Heathrow runway can be overcome. Noise limits can be maintained within the level set at the Terminal Five inquiry and nitrogen dioxide emission levels around the airport can be kept within new legal limits that will be introduced in 2010.

Creating profitable expansion opportunities by developing Heathrow will allow the aviation industry to continue its good record of environmental improvement. With appropriate safeguards to limit noise and emissions, the construction of a third runway at Heathrow can yield both environmental and economic benefits.

Andrew Sentance, Chief Economist and Head of Environmental Affairs, British Airways

Our Comment: When is a subsidy not a subsidy? That is the question! Yes, passengers do pay a modest airport tax, but the sums when added up do not in anyway approach the amount of fuel tax that would be received if aircraft paid the same for fuel as road vehicles do. Neither do airports pay for all the extra roads and rail links that are required for airport traffic. Rail transport is the least polluting form of transport and as such deserves to be subsidised to encourage people to use it. Air travel is today the most polluting form of travel. A subsidy can only be justified for a new "greener by design" aircraft.

Sir, Michael Meacher rightly points out (November 10) that the economic case for airport expansion is fallacious.

About one international passenger in five at UK airports is on business, so the business traveller does not need more runways. The steady rise in the number of overseas businessmen who use Heathrow en route to another overseas location, with fewer flights but better business opportunities than the UK, contradicts the argument that the UK would lose business if more runways are not built.

Additional runways are on the menu because of the recent and projected growth in leisure flying - particularly frequent, short breaks by those with disposable income to pay the derisory fare and the much higher costs of hotels. The latter costs explain why more than half the population does not and is not forecast to fly for leisure.

Mr Meacher argues that environmental taxes should be introduced to compensate for the tax exemptions the airlines enjoy. Increasing air passenger duty would be simpler and sounder. The duty was introduced 10 years ago as a surrogate tax because under international agreements the airlines can be charged only limited fuel duty and VAT. But APD raises only £1bn a year, whereas the fuel duty and VAT exemptions have increased in value to £10bn a year.

The Department for Transport's passenger forecast model has shown that, if the airlines had to pay £10bn tax a year rather than £1bn, the rate of growth in leisure passenger demand would drop to well within existing runway capacity.

Sir, Michael Meacher (November 10) claims to have detected "false arguments for airport expansion". Unfortunately, his own argument is based on false data.

He says, for example, that the number of passengers at airports in south-east England is forecast to quintuple by 2030. Not so. The government's own figures suggest growth in the South East will be slower than in the rest of the country, where the predicted rise is roughly threefold.

He then argues that aviation, "unlike other branches of the transport industry", gets big tax breaks. On the contrary, aviation is the only form of public transport that is unsubsidised and also pays for all its own infrastructure. Air passengers, unlike rail or bus passengers, also pay £900m a year in air passenger duty, which is a proxy for aviation fuel tax.

We agree with Mr Meacher that aviation should pay for its accurately calculated environmental impact, which is why BAA believes aviation should sit within the Kyoto protocol and be subject to an effective regime of emissions trading. This approach would certainly have some impact on demand, but would also ensure that aviation continues to provide the mobility that people of all social backgrounds value highly.

Mike Clasper, Chief Executive, BAA

Rob Marris
Janet Dean

Total Signatures 2

That this House supports efforts to encourage travellers to use railways instead of short haul flights, but notes that, whereas several airlines allow booking up to one year in advance, railway operators in, for example, France and Belgium, do not allow booking more than three, and sometimes only two months in advance, thereby making it less likely that families will book their holidays by rail instead of by air; and calls upon the United Kingdom Government to encourage such railway operators promptly to introduce booking up to one year in advance.

Our Comment: Ask your MP to support this. (Sir Alan Haselhurst cannot do so as he is Deputy Speaker)

Mr. Prisk (Hertford and Stortford Con): To ask the Secretary of State for Transport what assessment his Department has made of the cross-subsidy in favour of Stansted Airport.

Mr. McNulty: Stansted is a designated airport subject to price cap regulation under the 1986 Airports Act. As such, the issue of cross-subsidy in favour of Stansted was considered by the CAA as part of its price cap review and decisions on BAA's London airports, published in February 2003. The Government will set out their policy on this issue in the Air Transport White Paper.

Mr. Maude (Horsham Con): To ask the Secretary of State for Transport what estimate he has made of the total demand for air travel in the UK in 2060, expressed as a multiple of the present number of passengers using Heathrow, on the basis of the forecast rates of growth used to calculate the economic benefits of various runway options in the consultation on the Future of Air Transport.

Dr. Howells: The forecasts presented in the consultation document, "The Future Development of Air Transport in the United Kingdom: South East", 2002, extended to 2030. No forecast has been made of the total demand for air travel in the UK in 2060. However, for the purposes of the analysis of economic benefits of runway options, the forecasts were projected forward to 2060, assuming a 50 per cent. increase in demand from 2030 to 2060.

Mr. Maude: To ask the Secretary of State for Transport pursuant to the answer of 11 September 2003, Official Report, column 373W, on air travel, what estimate has been made of the percentage change in the cost of air travel from 2000 to 2030, if no new runways were to be built in the UK.

Dr. Howells: The mid point forecasts in the consultation document: The Future Development of Air Transport in the United Kingdom-South East, assumed an underlying trend reduction in air fares of 1 per cent. per annum. In addition to this, if no new runways were built in the South East, passengers at Heathrow would pay a fare premium of £67.50 on a single journey in 2030. This fare premium would be higher if airport capacity outside the South East was also constrained, but no estimate has been made of this. The combined effect of these two factors would be an 18 per cent. increase in the cost of air travel in this case.

Mr. Challen (Morley and Rothwell Lab): To ask the Secretary of State for Transport what (a) financial and (b) other support his Department will provide for new airport infrastructure, including associated transport links.

Mr. McNulty: The question of Government support for any new airport infrastructure is being considered in the context of decisions about future development. In our consultation, we invited views on the use of public money to support airport development and surface transport links, and we are analysing the responses. We will set out our policy in the air transport White Paper.

THE viability of a second runway at Stansted has been thrown into doubt by airports operator BAA admitting it could only realistically be funded by cross-subsidies from Heathrow and Gatwick.

Responding to the Government's consultation on new runways in the south-east, BAA said: "We currently believe that the option for one new runway at Stansted would be financially viable but the charges needed to remunerate the investment would need to be shared across users of the London system as a whole rather than applied to Stansted users only."

The admission from BAA, which owns the three major south-east airports, threatens to wreck the case for a second runway at Stansted.

The Civil Aviation Authority, the industry regulator, has told the Government it is opposed to cross-subsidisation, while airlines and rival airport operators are threatening legal action should Stansted get the go-ahead.

The Government plans to publish its Aviation White Paper close to the centenary of the Wright brothers' first flight on December 17. The industry hopes it will recommend where the next south-east runway should be built.

In its response, BAA says that funding a £4 billion runway at Stansted on a "stand alone" basis would require the current maximum charges per passenger allowed by the CAA at Stansted to rise by 120pc to £9.39.

In reality, Stansted's charges would treble because BAA has kept them more than £1 below the maximum to attract low-fare airlines, such as Ryanair and Easyjet. The pair provided most of Stansted's 17m passengers last year and would bitterly oppose such a hike in charges.

Using a "system" approach, however, charges per passenger would only have to rise by 35pc to £5.79, BAA said.

Such an approach would fall foul of the CAA, which this summer told the Government: "It is less clear that allowing cross-subsidy from charges at one airport to finance capacity enhancement at another would be desirable or justifiable.

"Airlines based at Heathrow are likely to question why they should pay for capacity enhancement at Stansted, when they would receive little or no benefit and indeed could be improving the ability of airlines at Stansted to increase market share at their expense."

On Monday, British Airways chief executive Rod Eddington said if BAA tried to "milk" Heathrow to expand Stansted to the benefit of rivals such as Ryanair, "we will fight it tooth and nail".

Yesterday a Virgin Atlantic spokesman said if Stansted gets the nod: "There will be a massive row and frankly we think it would be difficult to push through."

Keith Brooks, chief executive of TBI, the operator of Luton airport, said such cross-subsidisation was an abuse of BAA's monopoly power.

"We have to compete with Stansted. The cross-subsidy thing is exercising everyone. The airlines are crying foul and so are we." He believes he would have a strong case with the competition authorities.

Yesterday a spokesman for BAA, whose seven UK airports handled 11.8m passengers last month, up 4pc year-on-year, admitted trying to fund Stansted on a "stand alone" basis would "delay" construction.

A Department for Transport spokesman said "no firm decisions" had yet been taken on the location of the next runway. Heathrow, the airlines' favoured option, also faces tough opposition on environmental grounds.

Our Comment: Surely any extra runways at Stansted also face tough opposition on environmental grounds. We keep asking why the legal protection afforded by Regulations on clean air should be denied to Stansted residents - they may be fewer in number but we are all entitled to the same rights. In addition, air quality limits for plants will be exceeded at Stansted - what about Hatfield Forest and all the farmland and other ancient woodland round the airport? These predictions cannot be changed simply by recalculating the figures. JUST AS IMPORTANT IS THE NUMBER OF LISTED HOUSES THAT WOULD NEED TO BE DEMOLISHED SHOULD THERE BE EVEN ONE EXTRA RUNWAY.

There would be a loss of all the countryside along the M11 and the A120, thousands of new houses, plus all the roads and services that would be needed, schools, hospitals and all in an area with a very limited water supply. Who would pay for all these developments?

Pat Dale

After his battles on GM crops Michael Meacher has entered the Airport Expansion Battle. In an article in the Financial Times he reiterates some of the principal arguments against unconstrained airport expansion, the same arguments that have been repeatedly put forward by SSE.

Here is a summary of the main points he makes:

*  The official demand projections for air travel are based on an assumption that air fares will continue to fall by 1% a year and that aviation will continue to benefit from substantial "tax breaks" and be allowed to avoid their social and environmental responsibilities.

*  He gives examples of tax breaks - fuel tax and VAT, estimated at £10.3 bn a year, and the hidden costs of environmental pollution at £1.6bn a year tripling to 4.8bn by 2030, as estimated in the Treasury consultation document "Aviation and the Environment". Figures from the European Environment Agency suggest that the total hidden costs could have already risen to £12-16bn a year.

*  The economic case is even weaker. Taxpayers are, in effect, subsidising the aviation industry to fly tourists out of the UK to the net disadvantage of the UK balance of payments. Estimates for 2001 showed a net deficit on tourism of £14bn.

*  What about the advantages of cheap air travel for lower income groups? He points out that the CAA survey in 2001 showed that fewer than half the population fly, and they are overwhelmingly higher income earners, even on the budget airlines - three quarters of all flights.

*  The arguments for "Predict and Provide" do not stand up to scrutiny when the true costs of aviation are exposed.

*  The hoped for benefits of some 30-50% reductions in greenhouse gas reductions in other sections of the economy could be wiped out by the suggested growth in aviation. At the moment aviation contributes about 5% of all UK carbon dioxide emissions. This would rise to over 50% by 2030. Aviation is also responsible for nitrogen dioxide emissions which pollute the air round airports and, with aircraft contrails, add to the climate change effects of carbon dioxide.

*  No other city in the rich world tolerates what London does, aircraft flying low over their homes and workplaces, every 30 seconds at peak times. Disrupting conversation by day and sleep by night. Even more flight paths would be required if expansion goes ahead with more and more people affected.

He finishes by suggesting that an emissions charge should be levied at the EU level and that aviation should be brought within the Kyoto protocol, with an international emissions trading regime and global emissions capped at an acceptable level. Air pollution and noise limits should be set for all airports and night flights should be restricted, preferably ended.

Long distance rail travel is potentially the substitute for internal UK flights and needs to be "ambitiously examined". Above all, if the existing subsidies were phased out, the need for expansion would be "much reduced".

Pat Dale

The first new UK aviation policy plan for a generation is heading for a pre-Christmas takeoff. But will it fly high enough to break through the clouds and reach the clear blue skies beyond? The public focus until now has been concentrated on where we should be siting the next runways for London and the South East. But we need to be much more radical than that.

Sufficient runway capacity where it is most needed is an essential ingredient for maintaining a vibrant and competitive UK economy. More runways are long overdue and the Government needs to give a firm direction on their location and set a tight timetable for their introduction.

However the whole shape of UK aviation has changed out of all recognition since the Government last produced a White Paper. Domestic flights have become routine, providing stiff competition for the train on journeys as short as London to Manchester and helping regional airports to become a real force in transport. Meanwhile low-cost flights have opened up a new world, which has encouraged passengers to make journeys they would never otherwise have taken.

When the taxi to the airport can be more expensive than the airline ticket for a weekend break we have to ask whether we need a serious alternative to predict and provide and start to live up to our environmental responsibilities.

Long-haul holidays have become the norm rather than the exception. The figures are stark. Passenger numbers at UK airports almost doubled in the 10 years to 2001 - leaping from 84 million to 160 million. Mid-range forecasts show them doubling again to 333 million a year in just 12 years' time.

We really do need to start to put the brakes on and focus on growth where it is most needed and restraint where it is not.

So what are the key issues we should be looking for in the new White Paper? Regional airport growth is important. It attracts inward investment, making areas outside the South East more competitive.

Thriving regional airports can also ease pressure on hub airports like Heathrow, where up to a third of passengers are just changing flights and do not leave the airport at all. For example, if you live in the North West, why fly to the United States from Heathrow when you have your own direct flight from Manchester?

Just as importantly, a thriving regional airport cuts down on unnecessary car, rail and coach journeys to connect with flights, easing the strain on overcrowded road and rail networks. But if we are to encourage regional airport growth we must make sure that we take every opportunity to encourage access to it by public transport just as Manchester and Gatwick, in particular, have done.

However, the big prizes are to be had in the way we manage demand. A successful policy could both encourage airlines to make more use of regional airports - limiting pressure on South East runways - and reduce the pollution and environmental damage that aviation is causing.

Ten years ago the aviation industry worldwide was responsible for 3.5 per cent of all climate change emissions caused by humans - the equivalent of the UK's entire greenhouse gas emissions. By 2050 it is forecast to rocket to 15 per cent.

The current UK aviation passenger duty of between £5 and £40 a passenger raises £800 million a year. But this is only about half the cost of the climate change emissions the industry causes - let alone any of the other impacts. And there are no incentives for the industry to change.

The Government's new policy needs to focus much more on congestion on runways and in the air, local environment impacts, health effects and land blight. We need to be auctioning slots, setting tough ceilings on noise, putting a cost on congested airspace and giving local communities more control over the local impact of aviation so that it develops in harmony with the communities it serves.

Together these measures will rein back demand, reduce the pressure for new airports, use financial levers to divert flights from honeypot hubs like Heathrow to regional airports, make passengers more aware of the environmental cost of their flights and give local communities more powers to limit pollution.

If the UK is not to be disadvantaged, some of these measures will need European, if not wider, support. But now is the time for us to give a lead.

Huge UK airport expansion plans are in turmoil this weekend after British Airways threatened legal action if Ministers develop Stansted instead of Heathrow. This raises the prospect of a legal challenge to any of the likely options, as government officials also that fear environmentalists or residents could fight development at Heathrow or Gatwick.

In a further blow to the Government, some airlines are understood to be threatening to boycott an expanded Stansted.

Transport Secretary Alistair Darling is expected to say next month where in south-east England up to three new runways should be sited, and in particular where the first of them should be built. The main options are for a third runway at Heathrow, up to two more runways at Stansted and a second runway at Gatwick, although planning problems make this unlikely before 2019.

Government officials said they have not ruled out Heathrow for the first new runway, but they need to be '100 per cent convinced' that pollution could be cut to below the European Union limit to avoid a legal challenge on environmental grounds.

Environment Ministers are understood to want less expansion, possibly approving just one runway for now.

However BA warned that it and other airlines would also want a judicial review if the most likely alternative - a second Stansted runway - is chosen. Andrew Cahn, BA's head of government affairs, said paying for expansion at Stansted would need cross-subsidy from Heathrow, which has been rejected by airlines such as BA which use that airport.

They could contest the argument that there is demand for more capacity at Stansted, whose development is opposed by operators there such as Ryanair, said Cahn.

'We don't want to start threatening judicial review [but] we'd want to look at everything we could do to try to change [government's] mind,' he added. 'It would be an historic mistake for UK plc and the aviation industry.'

Some insiders believe it will be 'extraordinarily difficult' to persuade the Government they can reduce pollution around Heathrow below the EU targets, which come into force in 2010.

However BAA, the owner of Heathrow, Gatwick and Stansted, said its studies showed pollution would be lower than the government forecast and BA said it could be cut to below the EU limit.

Our Comment: Those predictions again? We have already asked when are the full details of these Heathrow "Studies" going to be made public? AND if there is any question of Stansted being the choice for an extra runway then full studies should be carried out here. The existing consultation predictions are totally inadequate and cannot be relied on. Even the initial predictions for 25 mppa showed NO2 pollution creeping outside the airport. The ancient protected Hatfield Forest already shows signs of pollution effects. Decisions should not be influenced by squabbles within the aviation industry.

BAA Stansted FD Andy Mears has spelt out the stark, commercial reality of the Airport's massive expansion over the next 11 years. Its borrowing commitment explodes the myth promoted by antagonists that the growth plans hinge on subsidy. Stansted has committed to an investment of £786m over that period - and that excludes the costs of a new runway (or two) mooted in the Government's 30-year airport expansion blueprint.

Bearing in mind that Stansted would also have to build a new terminal and ancillary facilities to service any new runways, billions more may need to be found from the airport company's own coffers. Stansted's budgeting for the eventuality of new runways has been hampered by the long-term nature of the Government's decision-making process. Once a final decision is made by Whitehall, it may have to raise these billions at relatively short notice and at pertaining interest rates that may, by then, be swingeing. The only certainty is that the final outlay will be raised on the usual commercial basis.

Mears says: "There have been reports that Stansted is in some way subsidised and that future growth would be propped up by the BAA group. This is not the case. "We have an arm's length agreement with the holding company whereby borrowing is charged at the going rate. Our current interest bill, for example, net of capitalisation is currently £15 million. This is most certainly borrowing dealt with on a commercial basis."

"The Government's consultation document treats Stansted as part of a south-east system of air transport which has created the impression in some quarters that it is not a stand-alone airport. While we are keen to play our part in a 'London solution' to the UK's future air travel requirements, we reject the contention that Stansted's performance is hidden behind that of the group. "As part of a public company, Stansted files statutory results, which are in the public domain. We have shareholders, whom we must look after, which means that we must seek commercial returns on our investment. "Any capital expenditure project would be subject to stringent checks to ensure that we are doing the best by our shareholders. It is the only way a public company can operate."

"BAA has invested heavily across all of its airports, funded by its shareholders, without money coming in from the Government." BAA Stansted has pumped millions into the airport's infrastructure over recent years. In April 2002, Stansted opened a £60 million, 11,500 sq m extension to the airport terminal building. BAA co-funded with the Highways Agency a £36.5 million project to provide direct slip roads to and from the M11.

Mears said Stansted was still a young airport by any standards. He was fiercely proud of what had been achieved against a challenging backdrop. He is quoted as then praising the financial performance of Stansted against all the recent international difficulties and claiming a profit of £43.im for 2002/2003. He finished by suggesting that any new runway would take about 10 years to meet all the Planning requirements and that it had already been revealed that management expected the present runway to expand to 35 mppa in the not too distant future.

The statutory accounts for Stansted Airport Ltd for the year ended 31 March 2003 show a £43 million operating profit on an asset base of £1,133 million (fixed assets of £1,114m + working capital of £19m). This is a return of 3.8% - 12 years after the 'new Stansted' opened. BAA's cost of capital is currently 10.55% (RPI + 7.75%) so it needs to earn £120 million at Stansted before the 1990/91 investment starts to pay its way.

The nonsense of the current regulatory system is that it doesn't matter whether BAA invest the money at Heathrow, Gatwick or Stansted - or whether they invest it wisely or not - it all goes into one pot and the regulator allows BAA plc as a whole to earn 7.75% + RPI on whatever they invest. So they keep pumping up Heathrow charges where they have a sellers market.

Thus British Airways, Virgin, BMI etc passengers are subsidising Ryanair's 'penny flights' and 'stag night specials' out of Stansted. No wonder BA etc are angry and no wonder the regulator has said that cross-subsidy must end by 2008. But BAA are putting pressure on the Government to allow the cross-subsidy to continue indefinitely.

It is BAA itself who argue that they cannot build a second Stansted runway without cross-subsidisation. (ref para 7.51 of their formal response to the DfT consultation, May 2003).

Pat Dale

Mr. David Marshall (Glasgow Shettleston Lab): To ask the Secretary of State for Transport if he will make a statement on the fairness of competition between airlines operating in the UK; and if he will make a statement.

Mr. McNulty: Fairness of competition between airlines is a matter for the UK competition authorities and, insofar as there is a potential effect on trade between EU member states, the European Commission.

Mr. David Marshall: To ask the Secretary of State for Transport what plans he has to equalise aviation landing charges throughout the UK; and if he will make a statement.

Mr. McNulty: There are no plans because the Government do not set landing charges. These are set by the airport operator and, in the case of the designated airports, the CAA sets a price cap to airport charges in its capacity as economic regulator.

Our Comment: All these differing charges have nothing to do with the Government ! Back to BAA!

Mr. Randall (Uxbridge Con): To ask the Secretary of State for Transport what steps his Department will take to instigate levels of nitrogen dioxide consistently within EU limits by 2010 at Heathrow Airport.

Mr. McNulty: Heathrow Airport lies within an Air Quality Management Area declared by adjacent local authorities. Various emissions sources may contribute to potential NO2 exceedances in 2010. In the vicinity of Heathrow Airport mitigation strategies could apply to aircraft, airside and road traffic sources, although general 'background' levels of NO2 are also a major contributor (as elsewhere). BAA plc is required to produce and review an Action Plan to minimise emissions from Heathrow Airport as a condition of the planning permission for the Fifth Terminal.

Our Comment: Stansted airport is not within an Air Quality Management Area but it must be getting very near qualifying. Predictions for 25 mppa for NO2 at two places outside the airport breached the Air Quality legislation but BAA carried out sensitivity tests which of course reduced the forecast levels. However, inside the airport is another matter and some results of tests carried out by BAA have yet to be published. Obviously the situation has to be monitored and Uttlesford Council have equipment in place outside the airport. We have to remember that the forecasts for even one extra runway showed that the EU Directive would be breached. BUT once again, expect the forecasts to be subject to "sensitivity tests" (i.e. more calculations) and attempted reassurances that this is unlikely to happen. Such reassurances will be contested!

Mr. Lazarowicz (Edinburgh North and Leith Lab): To ask the Secretary of State for Transport what steps the Government are taking in (a) European and (b) other international fora to encourage other countries to include international aviation in the Kyoto Agreement.

Mr. McNulty: Emissions from international aviation are not included in national targets under the first commitment period of the Kyoto Protocol (2008–12). However, the Kyoto Protocol does require contracting parties to work through the International Civil Aviation Organisation (ICAO) to reduce greenhouse gas emissions from international aviation. The Government are therefore working hard in ICAO to engage other countries in the climate change debate and to reduce emissions from aviation. Discussion on action beyond 2008–12 will begin in 2005 when the Government will work closely with all Parties and argue strongly that the framework for global action after 2012 should address international aviation emissions.

Pat Dale

Sir: Your story about Gordon Brown's and Tony Blair's disagreement on new runways (24 October) ignores the real issues about airport expansion.