Lord Harper (Con)

My Lords, in moving Amendment 108 in my name, I will also speak to Amendments 116 and 117, also in this group. I am afraid it is my group, I suppose. This seems an appropriate moment, given that it is about economic impacts and competition, to remind the Minister that when on Tuesday my noble friend Lord Moylan and I referred to the Government’s commitment to reduce the administrative burdens on business by 25% during this Parliament, he said he could not furnish us with the details immediately but confirmed that he would come back to us today with whatever information he was able to lay his hands on. Since this is effectively an economic-related matter, I thought I would mention that at the beginning of my remarks, and I hope that when he winds up he can give us what he was able to find. If he was not able to pull it all together comprehensively, if there is more to come, I am sure my noble friend Lord Moylan and I will be content for him to write to us with that further information. I wanted to give the Minister a bit of notice rather than springing it on him at the end. Amendment 108 is distinct and Amendments 116 and 117 are effectively linked. I will deal with Amendment 108 first. If noble Lords are wondering why I have raised it, it is because part of the Long Title of the Bill is to: “Make provision for the protection of purchasers and users of air transport and airport services”. One of those protections is obviously to look at the cost of those services and what services people get. One of the things that is going to drive up the cost of those services is the 2026 business rates revaluation, which has had a particularly significant impact on our airports. Rateable values will increase more than sixfold at some regional airports. To be fair, the Government have put in place transitional relief, but all transitional relief does is delay things. Most airports are going to see their rate bills more than double in the next three years. I do not want to spend too long talking about rates in general, but they are a particularly bad tax because they are not linked to the profitability of a business. They are not like corporation tax, where you pay only if you make a profit. They are a cost that hits your business above the line. Given that the aviation sector in general is not a high-margin business, it is inevitable that the cost of that business rates revaluation is inevitably going to flow through to the customers of airports—that is, the airlines—and they will inevitably have to pass that cost on to consumers. From the figures that I have managed to lay my fingers on, for example, Manchester Airport is going to see an extra £4.2 million per annum on its business rates bill. That is a significant percentage increase, going up to £18 million. Bristol Airport is going to see an increase of just over £1 million, taking its bill to just over £5 million. Those organisations have explained the consequences. Manchester Airports Group, for example, has said: “Airports were already some of the highest rates-payers in the country and were prepared to pay significantly more. But increases of more than 100% mean we have to look again at our plans to invest more than £2bn in our airports across the UK over the next five years. It is inevitable air travel will become more expensive”. I draw attention to that because the Government’s position is that aviation and airport expansion are an essential part of driving economic growth, and they keep telling us that economic growth is their number one priority. It seems to me that having a significant increase in your business rates bill of more than 100% over the next three years in a sector where margins are quite tight is inevitably going to increase the price to consumers, business travellers and those shipping cargo in a way that is not going to drive economic growth but do the opposite. The purpose of my new clause is to say that the Secretary of State, within three months of the day that this Bill is passed, should publish an assessment—that is all; we are not telling her to change the taxes—of the impact of that business rates revaluation on the provision and regulation of airport services and specifically to look at the cost, the ability of airports to meet their obligations, the investment that airports have available to invest in the facilities and infrastructure, their ability to expand the financial sustainability of airports, the effect on consumers and, an important issue that has come up in this Committee before, regional air connectivity. All the amendment does is ask the Government to assess the impact of that business rates revaluation on this sector. That seems to me to be a reasonable request. It would also have the benefit that if the amendment were accepted and that assessment was done by the Secretary of State for Transport and it showed that the business rates revaluation had a negative impact on the sector, it would give the Secretary of State the evidence base that she could use to have a good conversation with the Chancellor about changes that might be needed to reduce the burden on the sector. There seems to be no downside to producing that information. It might be a useful tool for the Secretary of State and provide some transparency for business. The second two amendments that I have tabled, Amendments 116 and 117, are related to the conversations we had earlier about the role of the CAA and the cost of flying. The first is about adding to the CAA’s duties when it is exercising its economic regulation functions. It should have a primary duty to promote effective competition in airport operations, services and infrastructure where that competition can deliver benefits to passengers, airlines and operators. The CAA’s objectives are set out in the letter that the Secretary of State sends to the chair of the CAA. The six priorities for 2026-27 in the letter sent by the Secretary of State to the chair of the CAA on 20 April are growth and innovation, economic regulation, airspace modernisation, decarbonisation, modernising its consumer focus and efficiency, effectiveness and resilience.