5 October 2010

Transport Secretary Philip Hammond spoke about the need to internalise the costs of aviation using higher taxation. He also recognised the need to embrace new methods of developing transport such as Local Enterprise Partnerships (LEPs) and better technology. Mr Hammond was speaking at a Conservative Party Conference fringe meeting organised by the Transport Hub titled ‘Question time – transport is vital to the economy’. Transport Hub is a series of transport organisations that have come together to put transport back on the political agenda. Also speaking at this event was Stephen Alambris representative from the Federation of Small Businesses, Simon Moppett, representative from the Conservative Transport Group and Phillip Gomm, Head of External Affairs at the RAC Foundation. Steve Agg, Chief Executive of the Chartered Institute of Logistics and Transport Chaired the event.

Mr Hammond began by replying to a question on aviation and growth. He said that short-haul aviation was unsustainable if it remains carbon intensive but remained optimistic about improvements in technology allowing low carbon fuel.

The Transport Secretary stated that the aviation industry would be brought into the EU Emissions Trading System (EU ETS) and assured the audience that the UK would pursue the establishment of an international emissions trading system that includes aviation. He also insisted that the aviation industry must prove that it does not have a detrimental impact on the quality of the local environment in terms of noise pollution.

According to Mr Hammond, there was no capacity at Heathrow but Stansted still had potential for growth. He explained that freight could be dispersed to other airports to create space for passenger growth, promising to work with airlines to see capacity was utilised. He did not see taxation of the industry being reduced, asserting that aviation is the most lightly taxed sector. He asked airlines to engage constructively with the low carbon agenda. Mr Hammond would like aviation to feel the imperative to lower carbon and bear its external costs.

Answering concerns about obstacles in the planning process, Mr Hammond said that the attempt at using the Infrastructure Planning Commission (IPC) for depoliticisation was a “cop out”. Politicians need to balance national and local interests and accept responsibility for their decisions in a democracy. Decision-makers, in his opinion, cannot pretend to leave the decision to the bureaucratic process. He favoured compensating people whose property values have been damaged by decisions. Regarding LEPs, Mr Hammond argued that they have to be business-led. Putative LEPs will only be approved if they have a business agenda.

The Transport Secretary spoke positively about high-speed rail, stating that it will free up main lines and allow more frequent services to peripheral areas that have seen frequency of services falling. He was concerned about making sure the system interconnects properly. Mr Hammond explained that in London an intermediate stop might be added with access to Crossrail because Euston could not cope with 900 people on each train entering the Underground. Smart ticketing technology was going to be the way forward, he said. This would include electronic tickets that can be used multiple times, intermodally, with variable costs depending on transport used and timing.

According to Mr Gomm, the high-speed train systems may not be the best investment. The modelling assumes a high occupancy rate, which is open to challenge, and he does want the public to pay high subsidies if it is a service that he does not want.

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