Blackpool Airport: Public Service Obligation Funding

I beg to move,

That this House has considered public service obligation funding and Blackpool Airport.

As always, it is a privilege to serve under your chairmanship, Mr Gray. Blackpool airport has a long and proud history—from hosting the UK’s first official public flying meeting to playing its part in the war effort as RAF Squires Gate. During peacetime, the airport’s focus turned to private and commercial aviation. The arrival of low-cost air travel in the early 2000s saw the airport truly take off and resulted in a fivefold increase in passenger numbers, which peaked at more than 500,000 in the late noughties.

Changes in ownership and contractual issues with airlines triggered a period of decline. Passenger numbers halved from the peak of 500,000 in 2014, and that year saw the last commercial flights from the airport. Since then, I have fought to preserve the site’s viability for scheduled passenger flights, including by opposing development that would have left the airport with a shortened runway. The airport is now owned by Blackpool Council, which has brought much-needed stability and security. I share the ambition of the airport team to use the Government’s enterprise zone investment to make the most of the site. That includes exploring how scheduled passenger flights can return.

In June this year, I welcomed the then Prime Minister to Blackpool airport, along with my hon. Friend the Member for Blackpool South (Scott Benton). Prior to that, in March, I hosted a visit from the then Transport Secretary, who is now the Business Secretary. Most recently, the Northern Ireland Secretary visited the airport. On all three occasions, we highlighted the potential of Blackpool airport and discussed the possibility of kick-starting the revival of passenger flights. Nobody is expecting the immediate return of major airlines flying holidaymakers to the Costas, but there are opportunities to explore historic and important connections that will not only greatly benefit Blackpool but improve transport links between the regions of the United Kingdom.

Public service obligation routes are connections to which the Government provide substantial subsidies that open up routes that would otherwise not be commercially viable. Current UK Government rules dictate that PSO flights must be between London and a regional airport. That does not apply to devolved Governments, and Scotland has been particularly effective at using PSOs to support connections between the central belt, highlands and islands. I checked this morning and found that Blackpool airport is slightly more than an hour’s drive from Manchester and Liverpool airports, and therefore qualifies for PSO flights to London.

PSO flights would make it easier for people in Lancashire to travel for business, leisure or onward connections and would support the Government in delivering on the levelling-up promise to coastal communities, such as those I serve in Fylde. However, this must be about more than just improving access to London. The approach of focusing solely on London is out of tune with the Government’s commitment to levelling up and the future of our Union. Airports in London and the south-east have long struggled with runway capacity.

I want the PSO rules to change to allow a shift in emphasis to connecting our nations and regions. Indeed, that idea is supported by Sir Peter Hendy, who lists it among his recommendations in the Government’s Union connectivity review. As Sir Peter points out in the review, new regional PSO routes would likely be cost-neutral to the Treasury. This opportunity to boost regional growth, support levelling up and bolster links within the Union should not be missed.

My hon. Friend is making extremely powerful points. The House will know that I was Aviation Minister until the summer, and I was lucky enough to visit his outstanding airport and meet the energetic team there. I can see how important it is to his area.

He mentioned a couple of points that also have national importance, particularly that of PSO policy connecting not just with London but between regions. PSOs traditionally rely on subsidy—

Order. Interventions must be brief.

I beg your pardon, Mr Gray. Has my hon. Friend considered the role that targeted air passenger duty relief—not a direct subsidy, but targeted APD relief —could play on routes that are non-operational or marginal?

I thank the former Minister for his intervention; he brings some important material to the debate. I hope the Minister will consider that sort of targeted APD relief in his response. It opens up another way to support the recommencement of flights from Blackpool to airports around the United Kingdom, which is incredibly important.

I return to the point I was making. As Sir Peter points out in his review, new regional PSO routes would likely be cost-neutral to the Treasury. For example, Blackpool Airport has historic links to Northern Ireland, with a route to Belfast the last route to run commercially from the airport; it ended only because of contractual and licensing issues with the operation.

Blackpool has numerous advantages over alternatives in the north-west, being cheaper to operate from than Manchester and Liverpool. Given its proximity to the airport enterprise zone in my constituency and Blackpool town centre, there is a real possibility of desk-to-desk travel time of little over an hour and half for Anglo-Irish business. PSO routes to places such as Belfast and Londonderry could potentially be the first steps towards greater regional connectivity to places such as Scotland, and in particular the central belt, which has strong cultural and economic ties to Blackpool.

My hon. Friend has set out a powerful case for reforming public service obligation routes. I am sure he would agree that the Government have a good record on regional aviation so far, not just with the cut to air passenger duty but with the measures in the 10-point aviation plan and the regional connectivity review. However, Blackpool Airport is owned and run by Labour-run Blackpool Council. Does my hon. Friend agree that the council must do far more to look for opportunities to develop the airport and regional flights?

My hon. Friend makes an important point, in that the airport is owned and run by the council. Much of that I welcome, because under the previous private ownership there was a danger of that asset being run into the ground and developed for non-airport-related purposes. That would have been of great concern to me. There is an opportunity now for the Government to work in conjunction with the council to raise the ambition of the airport owners—the council—to seek ways to stimulate and bring forward flights from the airport. I am sure my hon. Friend and I will work with all parties to try to secure that.

Teesside Airport is a possible destination and an inspiration for what a future Blackpool Airport might look like. I believe the PSOs can be a vital catalyst and a first step towards the return of flights from Blackpool, ultimately to continental Europe. Importantly, those opportunities may not be seen as contrary to environmental commitments. Just last week, easyJet and Rolls-Royce trialled the first jet engine powered by hydrogen, providing a glimpse of a lower-carbon future. Blackpool Airport has ambitions to be a leader in sustainable short-haul aviation, be that through electric and hydrogen-powered aircraft or innovation through new low-carbon fuels. The airport is keen to include electric charging and hydrogen fuelling infrastructure in its redevelopment plans.

Regional airports, such as Belfast and Londonderry, are within the range of the generation of electrical aircraft in development. Currently, the opportunity to introduce those on a commercial basis is very much on the horizon. As we look to a low-carbon future, Blackpool provides a fantastic opportunity to support and showcase the development of a clean, green short-haul flight technology.

Furthermore, as Lancashire continues to grow as a green energy hub, with its strategic location on Britain’s energy coast for wind and tidal power, and its position in the north-west nuclear arc, we can use the flights to connect other areas, leading to the technologies of the future. There are 41,000 workers in the energy and environment sector in Lancashire. Those industries have a significant footprint for Scotland and the north-east of England and will continue to grow in future decades. The Fylde coast is already training the next generation of engineers in those industries at the renowned Blackpool energy college which, incidentally, is located on the site of the former terminal building.

It is a delight to see you in the Chair, Mr Gray. I am also delighted to respond to the very good speech and useful interventions made by my hon. Friends the Members for Fylde (Mark Menzies), for Witney (Robert Courts) and for Blackpool South (Scott Benton). I am a man with a family background in general aviation. Many years ago, I got a private pilot licence, and my uncle designed the Britten-Norman Islander. I do not know whether Members recall the moment in the James Bond film “Spectre” when the plane is flying along and gets its wings knocked off and goes skiing. That was a Britten-Norman Islander designed by my uncle, so we have a certain amount of traction in this field, and a certain sympathy for the issues raised by my hon. Friend the Member for Fylde.

Let me be clear that within the Department for Transport we recognise the importance of Blackpool airport to the region. We also recognise it as the centre of the Blackpool airport enterprise zone, set up as a hub for business, medevac, flying schools and general aviation. I note that this is the second debate that we have had this year on this topic, or a related topic. I thank my hon. Friend the Member for Blackpool South for his earlier debate, which I note that my hon. Friend the Member for Witney responded to very ably as the Minister. There is a certain circularity here, but there is also a sense of energy and purpose that all three of my hon. Friends have rightly brought to the issue. I thank them very much for what they have said.

As my hon. Friends have been at pains to emphasise, the UK enjoys what is in many ways a world-leading competitive commercial aviation sector, with airports and airlines operating and investing to attract passengers and respond to demand. Airports themselves have a key role to play as part of the sector. Where opportunities for growth exist, local partners can come together with the industry to develop the business case for new commercial flights. My hon. Friend the Member for Fylde rightly focused on the key goals of commercial development and sustainability of the airport, levelling up, and Union integration.

The Minister makes a good point. The 50% APD cut was welcome, but my point is about what the Department calls open PSOs. Those are not a further Treasury subsidy, but simply the removal of APD on routes that are non-operational—where the Treasury is getting no revenue or marginal revenue. There is a business growth opportunity there. That is what I am asking him to push the Treasury on, though I appreciate it is not in his gift.

That clarification is very helpful. There is a way of thinking with open PSOs that is not just tied to APD, but I will come back to the question of PSOs in general.

We have some support for administered connectivity through domestic APD. We are continuing to explore alternative routes and are seeing whether there are other ways to address this. In the context of PSOs, I will lay a slightly different emphasis from my hon. Friend the Member for Fylde. It is important to recognise that the PSO policy as it presently is set up is designed to support not new flight—that is the question being raised by my hon. Friend the Member for Witney—but routes that have previously been operated commercially or are now at risk of being lost.

The question of new routes is somewhat different. The routes that are funded at the moment, at least across the UK, are modest. There are three public service obligations: from Londonderry/Derry to Stansted, Newquay to London Gatwick, and Dundee to London City. An additional 17 PSOs connect the highlands and islands of Scotland, which are wholly within the borders of Scotland. The administration and funding of those, by agreement with the Department for Transport, is the responsibility of the Scottish Government.

We operate within a context of existing policy. To the point about the stance of the local authority, as raised by colleagues, it is important to say that my officials have so far received no requests from the local authority to discuss the need for any PSO routes from Blackpool airport—I will leave local colleagues to decide how they want to interpret that. Of course, if there was going to be PSO support, it would have to be initiated and agreed with the local authority, and the fact that we have heard nothing from them is not helpful to the cause being promoted.

As I say, PSOs are considered in the context of commercial services that either are at risk of being lost or have recently—generally speaking, within the past two years—been lost. The loss referenced by my hon. Friend the Member for Fylde goes outside that remit and therefore does not fit within the existing policy. If and when it did apply, which would undoubtedly be part of the same process as the consideration of any new routes in the future, which I will come on to shortly, it would be through a business case, warmly and widely agreed locally, in which the local authority would play a leading role. That is very important. Hon. Friends will be aware that levelling up works effectively only when everyone is lined up in the same way. When business, the local authority, local Members of Parliament and other key stakeholders are so lined up, it can be enormously effective and successful.

No, you don’t. Not in a half-hour debate.

In any case, I will not abuse the privilege by speaking further. I thank my hon. Friend the Member for Fylde very much for his comments, and I thank my hon. Friends the Members for Witney and for Blackpool South for their interventions and the interest they have shown in this issue.