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The Parliamentary Under-Secretary of State for Transport (Rachel Maclean)
I beg to move,
That the draft Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2020, which were laid before this House on 5 March, be approved.
It is a great pleasure to debate this statutory instrument. It is my first SI debate on the Floor of the House, and I had my first ever SI debate only yesterday.
This draft instrument will be made under the powers conferred by the European Union (Withdrawal) Act 2018 and will be needed at the end of the transition period. As hon. Members are aware, the Government are committed to ensuring that the UK has a functioning statute book at the end of the transition period, while we continue to work to achieve a positive future relationship with the EU. Although the Government will seek to reach the best outcome for the UK and the EU, it is our duty to make reasonable preparations for all scenarios, including by ensuring that there is a functioning statute book, irrespective of the outcome of the negotiations. To that extent, we have conducted intensive work to ensure that there continues to be a well-functioning legislative and regulatory regime for aviation, including for insurance.
This instrument is made under section 8 of the European Union (Withdrawal) Act 2018. It is subject to the affirmative procedure because it transfers an EU legislative function to a public authority in the UK. This procedure also enables the right level of parliamentary scrutiny for the proposed changes.
EU regulation 785/2004 requires air carriers and aircraft operators to be insured in respect of passengers, baggage, cargo and third parties, and against other risks, such as acts of war, terrorism, hijacking, sabotage, unlawful seizure of aircraft and civil commotion.
The amounts for which carriers and operators are required to be insured are measured in special drawing rights, an international reserve asset created by the International Monetary Fund.
The EU regulation also requires air carriers and aircraft operators to demonstrate their compliance with the minimum insurance requirements set out in the regulation. Elements of the regulation were developed in the aftermath of the 9/11 terrorist attacks in the US. They make provision for exceptional situations where a failure of the insurance market means that carriers are not able to demonstrate that they are adequately insured in respect of all the risks specified in the regulation.
The withdrawal Act will retain regulation 785/2004 in UK law in its entirety at the end of the transition period. The draft regulations we are considering make further changes that are necessary so that the EU regulation continues to function correctly after the end of the transition period. The withdrawal Act will ensure that the same minimum insurance requirements for air carriers and aircraft operators that apply today continue to apply after the transition period.
The Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2018, which were debated in Committee in October 2018, made changes to the retained regulation so that it continues to function correctly after EU exit. The need for this additional statutory instrument arose due to the EU adopting regulation 2019/1243, which amended regulation 785/2004, after the 2018 regulations were made. The purpose of this SI is to fixed further deficiencies introduced by those amendments.
The amendments made by this SI are technical in nature. Regulation 785/2004 includes powers for the Commission to adjust minimum required levels of insurance where international treaties make that necessary. The 2018 regulations converted those powers into powers for the Secretary of State to do the same via regulations. However, since the 2018 regulations were made, the EU’s amendments to regulation 785/2004 have replaced the Commission powers with new versions more closely aligned to the legal framework established by the treaty of Lisbon.
To ensure that UK legislation continues to function correctly after the end of the transition period, these regulations take the same approach used in the 2018 regulations for the previous versions of the Commission powers. They replace them with powers for the Secretary of State to amend the minimum insurance requirements by regulations. That is what the SI is for. In summary, no change in policy is made by these regulations; they make only minor technical and consequential changes to ensure that UK legislation on aviation insurance continues to function effectively after the end of the transition period.
As I said in my opening remarks, we continue to work to achieve a positive future relationship with the EU. However, this instrument is an essential element in ensuring that we have a functioning statute book at the end of the transition period. It makes technical changes to ensure that UK legislation on aviation insurance continues to function. I hope colleagues will join me in supporting the regulations, which I commend to the House.
Kerry McCarthy (Bristol East) (Lab)
It has been some four years since I stood at this Dispatch Box, so it is a pleasure to be back. I took part in Transport orals a few weeks ago, but that was on one of the screens above us. I am very pleased to be here shadowing the Minister today. We have already established a constructive relationship. We debated our first statutory instrument together yesterday in Committee. As I said to her, I will be writing to her and scrutinising what she does, but in a spirit of constructive working. We have the decarbonisation of transport brief and the EU transition brief, both of which are incredibly important in the current circumstances.
The statutory instrument that we are discussing today is uncontroversial in that we accept that, now that Britain has left the European Union and the end of the transition period is in sight, we need to transfer relevant powers away from the European Commission and to the Secretary of State for Transport as smoothly as possible. I understand, a number of statutory instruments will be issuing forth from the Minister in the coming months, and that could be seen as a mechanistic process to ensure continuity. That does not mean to say, however, that we will not scrutinise and challenge if we have concerns about the way that the Government are doing things.
As the Minister said, the function of the measure is to ensure that there are minimum insurance requirements for air carriers and aircraft operators in respect of passengers’ baggage, cargo and third parties. My understanding is that that stems from the 1999 Montreal convention, whereby airlines are responsible for compensation in the case of death and injury to passengers, and are required to be adequately insured to cover any liabilities. The EU civil aviation insurance regulation sets out the minimum level required.
I have one question, which the Minister may have answered in her opening remarks. Given that the statutory instrument transfers power from the European Commission to the Secretary of State to set those minimum requirements, and that he—or she in future—can do so by regulation, is there potentially a risk that the minimum insurance levels will not be the same as they would be if we were still part of the EU scheme? I think that is quite an important point to note.
The statutory instrument is one of many that the Government are having to rush through Parliament as a result of what I would say is an unnecessary focus on an arbitrary date in our exit from the transition period. Given the limitations on parliamentary scrutiny at the moment because of the need for social distancing and the fact that not as many Members can take part in proceedings, as well as the delay that we have had over the past few months, there is a danger that we could be rushing delegated legislation rather than giving it the proper attention that it deserves. Given the need for certainty for the people who will be affected by such legislation, we do not want a logjam towards the end of the year, giving rise to uncertainty about whether arrangements will be put in place or not.
The fact that we have now got started, and that we have dealt with two of the statutory instruments this week, is a good start. I do not think, however, that fixing in law the end date for the transition period has been beneficial to the legislative process, and I am uneasy about the apparent lack of progress in ongoing negotiations with the European Union. The concerns about a damaging exit at the end of the year are very real. That is particularly important for the aviation industry, given that we are in a time of unprecedented economic upheaval for the sector.
The aviation sector’s need for certainty has never been greater. Brexit will inevitably have an impact on a business that is, by its very nature, about crossing borders and relationships with other countries, and the global pandemic has hit aviation especially hard. There has been a devastating collapse in air traffic of approximately 90%, which is putting at risk an economically vital industry that supports 230,000 jobs.
We need clarity from the Government on three major policy areas. The first is the one that we are discussing today—the legislation related to the European Union and the transition period. We also need clarity on the financial support for the industry, and on the nature of the measures that the industry must implement to avoid further spread of covid-19.
I am pleased that today we are establishing a degree of clarity on one aspect, as it relates to the EU transition period, but confusion still reigns over the Government’s quarantine for new arrivals, and we continue to wait for a specific conditional support package for the aviation industry. I and my colleagues in the shadow Transport team are very happy to work with Ministers to try to ensure that the aviation industry is given the certainty, the clarity, the direction and the support that it needs.
Andrew Griffith (Arundel and South Downs) (Con)
This is my first chance to welcome the Minister and the hon. Member for Bristol East (Kerry McCarthy) to their places. I congratulate them both on securing such an important brief at such a critical time.
I am pleased to support the Government on the Bill. As we leave the European Union and become a sovereign state once again, we should feel capable of regulating our own affairs, and to set our own level of insurance requirements in aviation. Just as it makes sense to control our own fisheries and protect our own marine environment, so it makes sense to do so for the sky above our heads. The acid test of a regulatory structure, however, must be whether it supports the aviation and aerospace sectors.
Having taken back control, we must be generous and collaborative with our international partners. I encourage the Minister, therefore, to seek bilateral aviation safety agreement with both the US Federal Aviation Authority and the European Union Aviation Safety Agency and ensure that where there are opportunities to deregulate further than either, we remain in alignment with both in respect of matters such as type certification, personnel licensing and trading standards.
While I am on the subject of regulation, I should like to congratulate Sir Stephen Hillier on his appointment as the new chair of the Civil Aviation Authority. My constituency, as well as being one of the most beautiful from the ground, is even more spectacular from the air. It is home to the excellent South Down gliding club, formed in 1930 and one of the oldest in the United Kingdom. Sir Stephen has a distinguished aviation career, and I ask him to consider making one of his priorities during his term in office the protection of airspace for recreational general aviation, such as gliding, which is so critical to providing affordable access to the skies and thereby inspiring future generations.
Going into this pandemic, our aviation sector was world leading in growth, jobs and competitiveness, but that is now at real risk. Aviation has taken the full force of the economic impact of the covid-19 crisis, devastated by border closures and the drop in passenger demand. Many of my constituents work for British Airways, Virgin, TUI and other airlines, or for businesses that are part of the extended Gatwick supply chain. I know of constituents such as Antonello and Grainne Patteri, who have served British Airways loyally for 24 years but whose loyalty sadly is not being reciprocated. I share their worry and frustration at how they are being treated, and it is right that I raise it with the Minister today.
While other industries are beginning their recovery, the downturn for aviation has only been exacerbated by the imposition of blanket quarantine, which hangs the “closed” sign on Britain just as our competitors reopen for business. I believe that the Minister fully understands, having previously worked in the financial sector, that if planes full of passengers from Iceland, whose last death from covid was in April, or from covid-free New Zealand were landing in the UK this afternoon, it would actually lower our average infection rate. I am reassured by the Government’s undertakings to implement air bridges as a matter of urgency, as well as to look again at testing on arrival—something I first raised in April—but could she be so kind as to provide an update in her winding-up speech?
My final point relates to future opportunities. Together with quantum computing, artificial intelligence, fintech and the life sciences, aviation and aerospace is one of the key industrial sectors where UK businesses have a global competitive advantage in a growing and high-value industry.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I apologise for my late entrance, Madam Deputy Speaker. I was sauntering over unaware that the last SI had been moved formally. The sauntering turned into a sprint when I saw the monitor.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. For the avoidance of doubt, I must say that in current circumstances it is not necessary for everyone who is taking part in a debate to be here at the beginning—just in case the House happens to be full and we want to keep the numbers down. Most unusually, therefore, the hon. Gentleman has done nothing wrong.
Gavin Newlands
I will take that in the spirit in which it was intended, Madam Deputy Speaker.
The SI comes at a difficult time for the aviation sector, as has been highlighted, and one that undoubtedly will see a significantly impacted and reduced sector by the time these regulations come into force. Notwithstanding the fact that Scotland is being dragged out of the EU and the transition period against our collective will, and that the regulations are therefore a matter of regret to us, it is not in our or anyone’s interest to interrupt regulations that ensure minimum insurance requirements for air carriers and aircraft operators in respect of passengers’ baggage, cargo and third parties.
With that said, in looking at the issue of insurance in aviation, perhaps we should be debating whether airlines have or can access appropriate business interruption insurance to cover situations such as the one that we face right now. If they had that insurance, we might not now be in a situation in which so many of our constituents waited inordinate lengths of time to secure a refund—indeed, many are still fighting to get one. That is why we on the SNP Benches have called on the Government to implement a travel guarantee fund, which may well still be necessary.
In my dealings with operators, they have said that the rights in respect of cancellation refunds in essence go only one way. In other words, if the holiday provider cancels a holiday, be it because of travel advice or any other reason, the consumer is entitled to a full refund, but if the passenger cancels a holiday because of Foreign and Commonwealth Office travel advice on the date of travel or the Government’s quarantine policy, only a portion of the refund, according to the terms and conditions of the bookings, is payable. Although it strays outside the scope of the regulations, does the Minister think that is fair?
The sector may not be as scaled down as we fear if the Government show the same level of support for this strategic sector as that shown by many other Governments around the world, including Scotland’s. I do not want to stray any further from the tight confines of the regulations, but other issues—including the situation facing workers at Rolls-Royce and British Airways, and right across the sector—may well be raised in much detail in my Adjournment debate, which will follow proceedings and which I am shamelessly plugging right now.
To conclude, I reiterate that despite the fact that we do not accept the basis by which the UK Government give effect to legislation that takes Scotland out of the EU, nor the transfer of discretionary powers from the Commission—an organisation accountable to the European Parliament and member states—to Ministers as individuals, we recognise the need to ensure that EU regulations are maintained on exit day, regardless of the constitutional situation. That is in the interests of consumers, passengers and businesses, and as such, we will not vote against the motion.
Jim Shannon (Strangford) (DUP)
First, I wish the Minister every success in her new role; we look forward to watching her progress. It is also nice to see the shadow Minister, the hon. Member for Bristol East (Kerry McCarthy), in her place. I am sure a long career beckons for both—perhaps in different roles, but it is none the less important to say that.
I thank the Government, and the Minister in particular, for bringing forward the regulations to ensure that the removal of what would be onerous European legislation is complete. The very nature of aviation means that we travel large distances into different countries and uphold their aviation rules, but the fact is that we must be the ones who set our own standards, and they must be safe and appropriate and give the cover that is needed, as the Minister indicated.
Regulation (EC) 785/2004 established minimum insurance requirements for air carriers and aircraft operators in respect of passengers, baggage, cargo and third parties. It also required air carriers and aircraft operators to have insurance that covers specific risks, including all things that could possibly take place—acts of war, terrorism, hijacking, acts of sabotage, the unlawful seizure of aviation and civil commotion. Such protections obviously need to be in place, yet the point of the matter is that if anything is to change in our aviation, it is imperative that although we will in all likelihood align with basic regulations, the decision lies where it should: with Ministers of our Government.
Our aviation sector is in unprecedented times. The regulations before the House remind the industry that we have a role to play in the industry going forward, as other Members have said. Whether that is by supporting the industry through production in the Bombardier factory in Newtownards in my constituency, similarly to the situation mentioned by the hon. Member for Arundel and South Downs (Andrew Griffith); by supporting our airports to enable them to maintain connectivity across the whole of the United Kingdom of Great Britain and Northern Ireland, and globally; by supporting airline staff and their baggage handlers; or by supporting individual airlines—for instance, British Airways, to which the hon. Member for Arundel and South Downs referred, and in respect of which a number of my constituents, some with 30-plus years of loyal commitment to British Airways, are very concerned about their future—the pandemic will mean change for our aviation sector. Hard times are ahead, but tomorrow can be a better day if we have the commitment that the Minister and our Government are showing for the aviation sector.
We have a role to play, and this statutory instrument clearly shows that we are determined to leave Europe and stand alone at that date, regardless of coronavirus and European determination to exploit an awful time not just for the global economy, but for all the families directly involved with the aviation sector in the UK. This small wording and legislative change shows not only that are we prepared to leave, but that we are mindful of the needs of the industry and are equipped to deal with those needs. It is such a small change, which may seem meaningless to some, yet the message is clear: the aviation industry is a priority for Members of this House. I, for one, will look into anything that affects the strength of the industry. With that in mind, I support this instrument, which brings power back to the House.
Rachel Maclean
This is a great opportunity for Members across the House to express their support for the aviation industry in their own constituencies and across the whole country. The Government share that support.
The hon. Member for Bristol East (Kerry McCarthy) has given a clear and welcome commitment that she will be supporting this SI, although I understand that she may reserve the right to oppose and debate in the future, as is absolutely right. She asked about the transfer of powers from the European Commission to the Secretary of State. I can reassure her that as part of preparations for leaving the European Union, we, as a responsible Government, are preparing for all scenarios. We absolutely expect that the minimum insurance levels will apply for aviation in any scenario. She referred to the amount of SIs that we have to get through. Ministers are working closely with officials in the Department to ensure that we can reach those commitments, and we expect to be able to do so. We expect to stick to the commitments that we have given, especially on aviation.
The hon. Lady referred to the financial support that we are looking to provide to the aviation industry. The Aviation Minister, the Under-Secretary of State for Transport, my hon. Friend the Member for Rochester and Strood (Kelly Tolhurst), has discussed those points at the Dispatch Box, and I will certainly take the hon. Lady’s comments back to her. A vast range of support has been given to businesses across the country, including many of the airlines that we all use. We expect that to continue and will keep all those measures under review.
The hon. Lady finally asked me a little bit about the Government’s position on social distancing and quarantine. As she will know, all the measures are kept under review, and our priority is to keep people safe and to be guided by the science. We will continue that dialogue because we understand the pressures on the aviation sector.
It is a great pleasure to hear from my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), who highlighted the importance of aviation in his constituency. I understand that there is a gliding club there. I am not sure whether he is a keen glider himself, but I wish the club well. I reassure him that we have already agreed, and have in place, a bilateral aviation safety agreement with the US. He also touched on air bridges. This policy has been introduced because it is our priority to keep people safe. We are looking into these matters closely and are keeping them under review as the position of the coronavirus pandemic progresses in this country.
Gavin Newlands
In looking at the potential dates for the introduction of air bridges, are the Government taking into account the different holiday seasons around the UK? England and Wales obviously have a significantly later holiday season than Scotland and Northern Ireland. Scottish and Northern Ireland airports will therefore be adversely affected if air bridges are brought in at the end of, or after, the Scottish and Northern Ireland holiday seasons.
Rachel Maclean
I thank the hon. Gentleman for his point. That matter is outside the scope of this particular SI, but I assure him that I speak to the devolved Administrations on a regular basis, so all these concerns are being discussed in the Department and I will certainly take his point back with me.
The hon. Member for Strangford (Jim Shannon) expressed his support for aviation security, and mentioned the Bombardier plant in his constituency. We are aware of all those concerns, and are keen to work closely with him. I discuss connectivity with colleagues from Northern Ireland in my regular meetings with them. The Government recognise the importance of preparing throughout the year to ensure that we bring forward the required legislation for all possible scenarios at the end of the transition period and for Parliament to have the opportunity to scrutinise it in the normal way. This instrument, as we have seen, is essential to ensure that the legislation on aviation, which is an important part of the regulatory framework for civil aviation, continues to work effectively at the end of the transition period. I hope that the House has found this informative and that it will join me in supporting these regulations.
Question put and agreed to.
Madam Deputy Speaker (Dame Eleanor Laing)
Once again, I will not suspend the House, because the last piece of business passed very swiftly and I perceive that everyone who was intending to leave the Chamber has done so and that everyone who requires to be here for the next piece of business is here, so we will move immediately on.