Written evidence from Sir Roger Gale MP

EXECUTIVE SUMMARY.

Manston Airport is of strategic national importance.

The Airfield was, for most of its history, in military use.  It was latterly sold, first leasehold and subsequently freehold, for operation as an airport.

The present owner, Ms. Ann Gloag purchased the airfield for £1 at the end of November 2013 promising to invest significantly and to give the business two years to recover and succeed.

In March 2014 Ms. Gloag announced, after less than four months of effective ownership, that she was consulting with the intention to close the airfield and to seek consent for re-development for alternative purposes.

The Transport Select Committee is invited to consider whether measures should be introduced to seek to ensure that sites of strategic national importance should be protected against opportunist acquisition, asset-stripping and re-designation.

HISTORY

Manston Airport was establishes as a Royal Naval Air Station during the First World War in 1916. The original grass landing strip was subsequently enhanced to offer a tarmac runway with supporting administrative, operational and accommodation facilities.

Manston operated, and suffered severe damage, as a front-line airfield throughout the Second World War. Its runway, one of the longest and widest in the country, made it ideal for multiples of aircraft returning home with distress and damage from cross-channel sorties.

For eight years from the 1950s Manston was used as a fighter base by the American Air Force.

During  the 1960s limited civilian passenger services were introduced and Silver City carried cars and passengers between Kent and the Channel Islands.  Manston was also ideally placed to provide the RAF (Sea King) Search and Rescue Services covering the busiest sea-lane in the world, the Straits of Dover.

In 1989 a lease was granted to Seabourne Aviation, run by the freight haulier Clive Bourne, for civilian use and the existing air terminal was constructed. Manston became known as “Kent International Airport”.  The airfield is served by good road links (dual-carriageway from Westminster to the edge of the airport) and, potentially, by a sub-one hour high-speed rail service (HS1).

In the late 1990s the MoD withdrew from Manston as an operational airfield, retaining the Officers` Mess and the MoD Fire Fighting Training establishment. . MoD housing was sold as was the freehold of the airport, releasing Manston, as a civilian airfield, from any military demands or restrictions or covenants. (This has proved, with hindsight, to have been a serious mistake).

In 2004 EUJet began flights to Manchester, Dublin and Edinburgh with the airport under the ownership of PlaneStation.  In 2005 all EUJet and, other than General Aviation, non-freight services were suspended and the airport was sold , in August 2005, to the New Zealand based Infratil, owners of Scotland`s Prestwick airport.

Infratil`s management eventually attracted KLM/Air France, who operated a twice-daily flight to Schiphol commencing in 2012. This project was designed to allow inter-lining with major international routes from the Amsterdam Hub and, at the time of the announced plan to close Manston, business was building.

While a certain amount of General Aviation has taken place, notably and with distinction operated by TG Aviation (founded by former Red Arrows pilot Ted Girdler , it is arguable that bedrock freight business was under-developed because of the desire to attract passenger traffic .

In October 2015, having had the airport on the market for the best part of two years, Infratil announced their intent to sell the airport to Ms. Ann Gloag, a non-executive Director of Stagecoach, a company with whom Infratil had done business in New Zealand.

RECENT EVENTS

It is recorded that Ms. Gloag completed the purchase of Manston on Friday 29th November 2013 at a price of £1 plus some modest (in commercial terms) debts.

In a personal telephone conversation with me at that time Ms. Gloag indicated that she intended to invest heavily in the airport and would give it two years to turn around the business. I welcomed her statement and pledge of “real potential for growth” publicly.

I was in the Commons chamber with Laura Sandys on Budget Day , 19th March 2014, ironically listening to the Chancellor announcing a package of measures of  assistance for regional airports, when I received a pager (I still use one!) message from BBC South East asking me to comment on “the closure of Manston Airport”.  This was the first indication that Mrs. Sandys and I had been given of Ms. Gloag`s intent.

It subsequently became apparent that Cllr. Carter, Leader of Kent County Council, had been briefed about the proposed closure by Manston Skyport Limited some days earlier but had chosen not to impart this information to local Members of Parliament.  It was a still greater shock to learn that he had described Manston as “an exciting site” in development terms which, while not explicitly referring to housing or industrial use, gave the clear public impression that he accepted the proposed closure of this national asset and of its re-designation.

In response to my Freedom of Information request we now know that Skyport representatives met with officers of TDC in February 2014 to discuss the possibility of housing on a piece of the Manston site known as “The Northern Grass”. No minutes of this meeting appear to have been taken.

Following the announcement of the proposed closure I met, at the start of the Easter recess, with Ms. Gloag. Ms. Pauline Bradley and Mr.Alastair Welch of Skyport. This meeting was witnessed by Mr. Kane Daniell from my own office.  Ms Gloag indicated to me in terms that she had been taken aback by the strength of the hostile public reaction to her announcement and wished to dispose of the airport.  At that meeting she informed me that “ I am in for £4 million”. In fact it emerged that at that time the costs of the airport were in the region of £1.5 million with a further £2.5 million still held on account and unspent  making a total technical investment of the £4 million.

Subsequently Mr Tony Freudmann of Annax Aviation, who had previously entered into a Heads of Agreement with Ms. Bradley (signed on behalf of Ms. Gloag on 29th January 2014) to purchase the airfield for the sum of £8 million, expressed further interest in the site.  At that point Mr. Freudmann and his then associates were not able to raise sufficient funds to purchase an airport that had, as a result of Ms. Gloag`s announcement, already been devalued.( KLM were forced to announce the termination of their flights, Cargolux, the major freight carrier, had to re-locate and other businesses were also affected).

At this point the US based RiverOak company entered the fray and Mr. Niall Lawlor and Mr. Freudmann visited Ms. Gloag at her home at Kinfauns Castle in Perthshire to discuss a possible purchase.  It is at this point that Ms. Gloag is reported to have said that “I need £7 million” for the airport.  RiverOak`s assessment was that the business had been seriously damaged by the closure announcement and my understanding is that an offer of £4 million was made.  This was rejected but no alternative from Ms. Gloag was forthcoming from Ms. Gloag who was “unreachable” in West Africa.. Offers made by the CEO of RiverOak, Mr. Steve DeNardo, to fly to the UK for further meetings were ignored.

During the period of `consultation`, which appears to have been little more than a paper exercise designed to satisfy statutory requirements, Laura Sandys and I convened a meeting in London at which the DfT, BIS, DCLG, Kent County Council, the LEP and Thanet District Council were represented.

This meeting followed discussions with the Secretary of State for Transport, The Minister for Aviation, The Minister of State (BIS) and the Secretary of State, DCLG. The purpose was to establish some Government commitment, which was forthcoming in the form of a possible extension of the Sandwich Enterprise Zone to include, for aviation and related purposes only, Manston Airport. Other information and advice was also made available in the hope that a deal could be brokered to enable Manston to remain open as, initially, a freight hub and Search and Rescue base under the operational management and ownership of a commercial company.

On Thursday 15th May a final offer to purchase Manston Airport as (at that time) a still-operational airport at the full asking price of £7 million was made by RiverOak and rejected. Manston ceased to operate on that evening and subsequently the airfield was clearly and deliberately “decommissioned” in order to prevent aircraft from using the airfield and to prepare the site for planning applications and development. 

Public reaction was again strong and on Thursday 26th June a 7000-strong petition was presented to the new Leader of Thanet District Council (who had made a public pledge that no housing would be built on the site) calling for Compulsory Purchase of the airfield and for its onward sale to a company willing to re-open it as a working airport. On 10th July a full meeting of Thanet Council gave overwhelming backing for the proposal that TDC should investigate the possibilities of a CPO.  On 17th July Kent County Council, notwithstanding the support of the Leader, Paul Carter, for re-development for housing and industrial use, resolved to help to explore ways to maintain Manston as an airport.  And from this time forward the DCLG was clearly prevented, given its quasi-judicial role in the CPO process, from further involvement other than the provision of factual advice.

RiverOak, maintaining that company`s interest in the airport, wrote to TDC offering to TDC offering to cover the full costs of a CPO and the purchase price. No public funds were sought or expected and no public funding has been sought since.

RiverOak had hoped to be considered as a preferred indemnity partner by TDC. A Prior Information Notice, to which RiverOak responded, was issued by the Council . A soft-market testing exercise was undertaken by TDC and there was an expectation at that time that RiverOak would emerge as the preferred Indemnity Partner.

In spite of the provision of copious information by RiverOak to TDC and several meetings in person the Council`s Section 151 Officer and the Acting Chief Executive appear to have taken a view that to recommend that the Council proceed, with RiverOak, to a CPO would put Council funds at risk. In response to an e-mail from RiverOak Director George Yerrall sent as late as 24th November indicating that “we asked how much you would like RiverOak to fund into a British account and to my knowledge that question was never answered” the Section 151 Officer, Mr. Paul Cook, simply responded that “We are not at this stage taking further information”.  

On Wednesday December 3rd, following a release of the officers` draft report, and prior to any consideration by elected members of TDC, Thanet Council issued a Press Release effectively indicating that no suitable indemnity partner had been found at that the Council could not proceed with a CPO.   At the time of writing the Report is due to be formally received by Thanet`s “Cabinet” on Thursday 11th December and discussed in full council on 16th December.  In the interim it is anticipated that RiverOak will publish a line-by-line dissection and rebuttal of a TDC report which they regard as flawed.

CONCLUSIONS

We are faced locally and nationally with a situation under which the freehold of a significant piece of potentially strategically important transport infrastructure has been sold by the MoD to a commercial owner who now seeks, in partnership with others, to realise the value of that asset not for transport purposes or in the national interest but as a development project unrelated to aviation.

It is now my informed belief, as the local Member of Parliament, that from the time of the acquisition of Manston Airport by Ms. Gloag and her associates there has been a pre-determination to fail the airport, to run it down, to strip its assets and to treat it as a piece of real estate rather than as a piece of valuable transport infrastructure.  Further, the disposal of part of the interests in the site to another party (Mr. Musgrave and Mr. Cartner, the developers of Discovery Park at Sandwich) may be seen as a desire to “launder” the provenance of Manston in order to de-toxify potential development for planning purposes.  The alacrity with which the Leader of Kent County Council, Paul Carter, moved to endorse this  `change in ownership` might suggest to a cynic that at least one arm of the Local Authority  has been more interested in releasing land for development than in protecting an airport to which the County Council has claimed that it is committed.

If permitted, a change of use at Manston will mean the loss of a proposed Search and Rescue site, capacity for use as a strategic diversion and emergency landing field and the additional loss of runway capacity for freight and passenger services in the South East at a time when such capacity is clearly needed and when the whole future of aviation in the South east is under review. (Sir Howard Davies has made it plain that while Manston will not feature in any Passenger Hub Airport discussions – hence its omission from his reports – he does not fail to recognise its other potentials).

Because of the legal complexities of the CPO process it is, as things stand, not possible for Ministers  to intervene directly without exposing the Government to the threat of judicial review. This has led to accusations of “no help from Government” when in fact it is a matter of record that, from the Prime Minister down, such help and comfort as can properly be offered has been forthcoming.

As a result the process has been left in the hands of local officers who are inevitably inexperienced in dealing with the kind of project with which they have been faced, leading to a nervousness that has militated against the perceived and very publicly expressed wishes of the overwhelming majority of local council taxpayers and very possibly to a decision that may or may not be reversible.

The writer respectfully suggests to the Select Committee that measures need to be put in place to allow the Government of the Day to put in place the designation of sites that may correctly be regarded as of strategic importance (a form of “listing”) and to permit the relevant Secretaries of State (Transport, Environment, Defence, Business, Health for example) to call-in any proposal for re-designation or change of use.

This would allow for a cooling-off period for genuine consultation and review long before any irreversible decisions are taken.  In theory, this might become a part of the Local Plan process but in practice those plans are too-long term in preparation and in lifespan to offer adequate protection and as has been indicated not one but a number of Government Departments might have a proper interest in what constitutes a “strategic site”.

North Thanet. 7th December 2014