Leaving the EU: Aviation Sector

Alan Brown Excerpts

Wednesday 31st October 2018 Westminster Hall

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship again, Mr Hollobone. I want, like other hon. Members, to congratulate the hon. Member for Wythenshawe and Sale East (Mike Kane) on bringing forward the debate. The opportunity is timely, given the ticking of the clock towards Brexit day. The hon. Gentleman was right to highlight the aviation industry’s skills and its scale—the fact that it supports thousands of jobs, as well as exports, imports, businesses across the entire UK, and of course inward and outward tourism. He went on to highlight the risks and opportunities, and I found some parts of what he said easier to agree with than others.

Unfortunately I agreed with the negative points, rather than the positive ones. As to risks, the hon. Gentleman was right to highlight the risk to connectivity. There is clearly such a risk, and the UK Government are now beginning to acknowledge that. He highlighted how critical the EU is for Manchester airport’s connectivity, citing the figure of 74% of its flights. With respect to connectivity risks and day-to-day operations, he mentioned evidence to the Public Accounts Committee that air and rail services between Britain and the EU are an “area of growing concern.” That point was recently echoed by Michael O’Leary of Ryanair, who last month stated industry concerns about the implications of no deal, and the lack of preparation for that. Along with my hon. Friend the Member for Central Ayrshire (Dr Whitford), the hon. Gentleman was correct that the WTO is not an option; that is not an alternative that is compliant with the aviation sector. The UK Government need to get their act together.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

Does my hon. Friend agree that the Department for Transport has been telling the aviation industry since the Brexit vote that it will be all right on the night? I warned the Airport Operators Association and others that, while that might be the case, there was no justification for that confidence. Does my hon. Friend agree with the EASA and Civil Aviation Authority employees I spoke to a few months ago, who think that there is a huge risk that the UK Government are sleepwalking into an aviation crisis, and that it is time we in this place, and the industry, made a lot more noise about it?

[Alan Brown]

I completely agree. The UK Government’s attitude is completely blasé and lackadaisical.

The hon. Member for Wythenshawe and Sale East, in discussing opportunities, spoke about future markets, but I agree with my hon. Friend the Member for Central Ayrshire, who intervened on him to say we do not need Brexit for those opportunities. The whole growth of the airline industry is the result of our membership of the EU, so it is hard to see what opportunities there are. The hon. Gentleman spoke of aviation as an essential component of an outward-looking Britain, but unfortunately that is not the message that people from outwith the UK get at the moment. Britain is becoming too inward-looking, rather than being outward-looking. However, I agree with the sentiments of the hon. Gentleman’s “how” questions to the Minister, and I should like to hear the response.

Clearly, no Westminster Hall debate would be complete without a contribution from the hon. Member for Strangford (Jim Shannon). He certainly knows how to maximise the lack of a time limit; he used all his experience there. It was good to hear him talk about the importance of Bombardier to his constituency, but it reminded me of the games that can be played in trade negotiations, and protectionism such as the recent carry-on in the US. I am glad that that has been resolved, and it was good to hear about the new order for 60 planes to go to Latvia. I wish them well with the opportunities and jobs that it will bring.

The hon. Gentleman spoke about bringing positivity, but then even he had to admit that Brexit is not a quick and easy process, so I find it hard to believe in the opportunities that will suddenly arise the day after Brexit. I agree with him about the opportunities that the third runway at Heathrow would bring, but I hope he shares my concern at the fact that the UK Government have not confirmed how they will provide protection to domestic slots that are supposed to open with the expansion.

My hon. Friend the Member for Central Ayrshire confirmed that the single aviation market is what has transformed travel in the UK and within the EU, with the connectivity and opportunities it has brought. However, Brexit now brings risks to companies such as Ryanair, which is so important to her local airport, Prestwick. She highlighted the fact that those companies operate using the freedoms of the European common aviation area, and the registration issues that will arise post-Brexit.

Finally, the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) correctly highlighted issues to do with EASA—that it is not just a matter of safety. He pointed out the standards that it imposes for pilot registration, and consequent issues relating to conversion to the CAA and a bilateral agreement. We need to know the Government’s plans as to membership of EASA.

It is clear that from the perspective of Tory Back-Bench Members the future of the aviation seems not to be of much concern. It is surprising that those Benches are empty.

As the clock ticks towards Brexit, the UK Government’s handling of the aviation sector sums up their shambolic approach, including the attitude of the Secretary of State for Transport, who is an arch-Brexiteer and has the blasé attitude that, as my hon. Friend the Member for Paisley and Renfrewshire North said, “It will be all right on the night; everything will be okay.” I am speaking of a Secretary of State who does not know how the US-Canada border works for lorry crossings, and who seems still not to accept Brexit’s implications for the Ireland-Northern Ireland border. He is someone who goes along with the mantra “They need us more than we need them,” and the assertion “You know what—Spain needs flights, and the tourists who come from the UK, or their economy will crash.” That level of arrogance is not enough to get over the finishing line, which will need hard thinking, hard negotiations and a willingness to compromise.

Let us consider the promises on an aviation deal, to date. In November 2016, in a debate on Brexit, the Transport Secretary said he was

“in absolutely no doubt that we will secure in good time and effectively the agreements that our aviation sector needs to continue to fly around the world”.—[Official Report, 23 November 2016; Vol. 617, c. 953.]

In October 2017 he told the Transport Committee:

“I am absolutely certain that over the coming months we will have mutual sensible arrangements put in place”.

On the open skies agreement with the US, another EU benefit, he said in October 2016 that his

“expectation and my intention would be that we retain the open skies arrangement for the United States.”

In March 2018, after media reports that the US would offer only its standard bilateral agreement, those claims were rebutted. We heard from Nick Calio, the chief executive of Airlines for America, who said:

“In terms of the timetable, we hope something will be in place as early as the end of the month or the beginning of April.”

There we are. Two years on from initial claims of how easily and imminently those definite agreements would be reached, I ask the Minister where they are. Yesterday in an article in The Guardian we learned that with five months to go the Secretary of State for Transport admits that negotiations on an aviation agreement have not even started. What does the Minister say about that? It is truly shameful, if it is true.

It is now five months to Brexit day. As my hon. Friend the Member for Central Ayrshire said, airlines are now selling seats with disclaimers for post-Brexit issues. Clearly, people are being put off from making bookings beyond Brexit. It is a fact that lack of certainty is curbing airline expansion and the opening of new routes in the EU, with respect to the UK. If an EU airline has a choice of a new destination, it will clearly choose the internal EU market over the UK. That will be a simple business decision to make.

The UK Government have clearly been operating on the premise that there is no way the EU will allow flights to be grounded, because of the inconvenience that that would cause EU citizens and airlines. I agree that it seems inconceivable; but it also now seems to be a real possibility, and our only method of overcoming it seems to be to kick it into the long grass of a transition period. It is clear that the proper preparations for no deal are not in place. There will be some sort of fudge. It will be kicked down the road and not be dealt with properly. Why do not the UK Government look at staying in a customs union, the single market and the single aviation market? It just makes sense.

We have heard that the UK Government have been making contingency plans for no deal. They, too, have warned about the risk of planes being grounded. However, the advice about the no-deal technical notice for aviation seems to be that each airline is to negotiate directly with the relevant authority in each country that it wants to fly to, and must get approval from EASA, with the slight caveat added that at present there is no process enabling individual airlines to do that. What kind of no deal preparations are those? It is saying to the airlines, “It is over to you lot, because we don’t know what to do.”

[Dr Whitford]

Does my hon. Friend recognise that the open skies agreement is not just with America, but also with 16 other countries, and that those agreements would also fall?

[Alan Brown]

Absolutely, and that highlights the absolute chaos there would be if there is genuinely no deal and no arrangements are in place to fly to those countries.

The no-deal preparations confirm the UK Government’s incompetence, lack of direction and inability to manage this process. Will the Minister say what contingency plans have gone into border control? We have already heard that UK Border Agency currently fails to meet its waiting time targets, so what are the proposals for increased personnel and preventing queues at the border? What plans have been made for customs checks? I accept that airports are probably more suited to deal with the implications of no deal than the ports currently are, but we still need to know about the Government’s plans, discussions and dialogues with airlines. I look forward to getting some clarity from the Minister. It would also be ideal to hear directly from the aviation Minister, but—this kind of sums up this place—the aviation Minister is in the other place, so MPs do not get to scrutinise and interrogate her properly.

--- Later in debate ---

[Alan Brown]

Can the Minister explain what the Government’s confidence in reaching an aviation agreement is based on, given that the Secretary of State told the Airport Operators Association conference that discussions have not yet begun?

[Jesse Norman]

As so often the case, I am sad to have given way to the hon. Gentleman because these points are covered precisely in my speech and if I had had the extra 45 seconds to be allowed to make them, I could have reached them. We are seeking liberalised aviation access. We recognise that is what UK and EU consumers and businesses want and need. As we move forward it is important to be clear that we recognise that it is in everyone’s interests to do a deal quickly and to make it a good deal.

Before I turn to the many specific points that have been raised, as colleagues have said aviation is crucial to the UK’s economy and its standing as a great trading nation. It has been a global success—there can be no doubt about that. We have the third largest aviation network in the world and the biggest in Europe, with direct flights to more than 370 international destinations in 100 or so countries, providing at least £22 billion to the UK economy every year and supporting more than half a million UK jobs.

As a Government we do not wish to see the introduction of new barriers that would hinder the growth of our aviation industry—I do not think any Member of Parliament wishes to see that. That is why we are seeking to strike the right deal with the EU, one that allows that sector to grow and prosper. We should be clear that not just the UK will benefit from a liberal aviation market. It is in the interest of all EU countries and citizens that a comprehensive air transport agreement is negotiated.

Lest we forget, 164 million passengers travelled between the UK and EU airports in 2017. UK residents made 42.7 million visits to the EU and spent an estimated £21.3 billion while they were there. It cannot be in the interests of either UK or EU businesses or consumers for flights to stop, let alone be interrupted. That is why we are working so hard to reach a deal which continues the current arrangements, in as close to a liberalised form as we can.

As hon. Members across the Chamber have said, consumers and industry want certainty, and quickly. So do the Government and much, if not all, of the EU and its member states. It is true that negotiations on transport have yet to begin—that is an EU decision—but let me assure Members that we are ready for that when they do. We work closely with the aviation industry to ensure that the needs of the global sector are factored into our negotiations. Our objectives for future partnership on aviation are precisely to preserve the connectivity, the high safety standards and the efficient use of airspace that consumers benefit from today.

There are many reasons why the EU should and will, I think, agree to a liberal aviation deal with the UK. The UK has been at the forefront of driving forward the liberalisation of aviation markets across the world, precisely the point made eloquently by the hon. Member for Central Ayrshire (Dr Whitford). It is that liberalisation that has driven down prices and opened up accessibility to aviation markets for many people across this country.

We provide EASA with a significant amount of expertise and have played a key role in enhancing safety standards across Europe. One of the ironies of the present situation is that EASA was set up if not largely by the Civil Aviation Authority then with heavy influence from this country. We are a global leader in aviation security, with one of the best security systems in the world. Our geographical position in the aviation network means that along with Ireland, the UK services more than 80% of traffic entering or leaving EU airspace from the north Atlantic.

We start from a unique position of having wholly aligned regulatory standards with the EU. No two agreements are exactly the same; we recognise that. Each one will inevitably be tailored to suit the circumstances of the parties involved, but we seek an agreement on which we can build a further liberal future aviation relationship. The benefits that both sides gain from air transport are clear, and the benefits that we have described are so evident that we feel some justification in believing that the arrangements will continue.

As a responsible Government, we must also contemplate the unlikely event that we might conceivably be forced to leave the EU without a deal. We believe that flights between the UK and EU will continue, even if that happened. It would be in nobody’s interest to introduce obstacles to airlines or to limit the choice of destinations that passengers enjoy today. The continuation of flights is far and away the highest probability, but we have to prepare for all eventualities until we can be certain of the outcome of negotiations. Our preparation plans continue at pace, against the possibility of a no deal, in part to support the final deal we eventually agree.

As part of that planning we have published three aviation technical notices. These set out the pragmatic approach that the UK would take in any no-deal scenario. The point of that approach is to avoid disruption to air services, to support businesses and consumers, and to maintain their rights across the EU. We expect the EU to do the same. We think they will. It is character for them and in the interests of both UK and EU consumers and businesses. Our preference, of course, would be to have in place a multilateral contingency agreement with the EU27. We are pleased that the EU is preparing for contingency plans as well as for future partnership discussions. We would welcome a common approach, but we must prepare for all scenarios.

It is certainly true that the UK and EU aviation sectors urgently need reassurance that we are working on positive post-EU exit solutions for all possible outcomes and that in any scenario there will be continued connectivity. Regardless of the outcome, the European Union (Withdrawal) Act 2018 will provide the maximum possible certainty to individuals and businesses about their legal rights and obligations as we leave the EU.

Turning to third countries, we are also aware that the issue reaches beyond the EU. We are working hard to deliver another priority, which is to replace quickly EU-based third country agreements with countries such as the US and Canada. We are working with these countries to ensure new replacement arrangements are in place after we leave the EU. Despite some reports to the contrary, talks have been positive and we have made significant progress. We believe with some confidence that these arrangements will be ready for exit.

The UK also has 111 independently negotiated bilateral air service agreements with countries all over the world, including China, India and Brazil. There will be no change to these when the UK leaves the EU. As always, we will continue to seek new and improved bilateral air service agreements with the rest of the world, seeking to improve connectivity, choice and value for money for businesses and consumers.

I turn now to the points raised in the debate, starting with those of the hon. Member for Wythenshawe and Sale East. He said that it was critical that the choices that constituents are able to make remain the same. We recognise that. It is important to be aware that tourism is booming across the UK and is now worth over £66 billion annually to the economy. As he knows, we are proposing reciprocal visa-free travel arrangements to enable UK and EU citizens to continue to travel freely for tourism. The Home Office has set out proposals on the movement of workers and will set out future immigration policy shortly. We have been clear that we seek a comprehensive agreement on air transport that provides for continuity of services and opportunities.

The hon. Gentleman asked whether there was an adequate fall-back. As I said, our preference is for a contingency agreement with the EU27 to be in place, but since the Commission will not engage with the UK at the moment, for tactical reasons of negotiation, we need to discuss bilaterally with member states what arrangements will be put in place. The aviation technical notices clearly set out the pragmatic approach we propose in any no-deal scenario. Specifically, we intend to give permits to EU airlines—this addresses the point the hon. Member for Central Ayrshire made about Ryanair—to allow them to operate in the UK, and we expect that to be reciprocated by the EU.

The hon. Member for Wythenshawe and Sale East and other colleagues asked what practical steps the Government are taking to secure the mutual recognition of aviation safety standards. Of course we recognise that our continued participation in EASA in some form will reduce regulatory burdens for the sector. As we set out in the White Paper, there is an established mechanism and a precedent for third countries to participate in the EASA system.

All UK-issued safety approvals and certificates conform with the international requirements of the Chicago convention, so all those associated with the international operation of UK-registered aircraft should continue to be recognised for the operation of air services by UK aircraft. Let me be clear that we are pressing the EU for technical discussions to take place between the CAA and EASA as soon as possible, to ensure that any respective contingency and other plans are fully aligned. We seek an improved shared understanding of the situation on all sides.

The hon. Gentleman expressed concern that the Government may not be prepared to use the opportunity to prepare the aviation sector for the next five to 10 years. As colleagues across the House have rightly pointed out, that issue is in many ways independent of Brexit. As colleagues know, the Government are developing a new aviation strategy, the purpose of which is specifically to achieve a safe, secure and sustainable aviation sector. That is a long-term strategy. It is not a 10-year or even a five-year thing—it is a strategy out to 2050 that is designed to lay the foundations of a strategic shift and development in the way our aviation industry operates.

We have a strong focus on consumer issues, but of course we also champion the economic benefits of aviation. We will consider how we can maximise the role of our world-class aviation sector in developing trade links, but we recognise the need to focus inward on industrial strategy as well as outward on international trade. On 7 April, the Government published the aviation strategy next steps document, which outlines the key challenges ahead for aviation and our considerations in responding to them. We plan to deliver a final aviation strategy in early 2019—for those who asked, that is not so far away.

Turning to airports and Border Force, the Department for Transport continues to work closely with Border Force on the “Welcome to the UK” initiative. Border Force recognises that, given predicted passenger growth, which is undiminished by the concerns that were raised, queues at passport control may get longer. The purpose of the recent announcement that millions more people will be able to use e-passport gates was precisely to meet that long-term contingency. The two sides are committed to working closely with the industry to minimise queuing times by reducing last-minute schedule changes and ensuring that service-level agreements are set at the right level. Alongside that, the Government plan to consider whether there are additional or alternative funding mechanisms in the medium term.

The hon. Member for Wythenshawe and Sale East rightly asked whether skills and training will be adequately maintained in the face of the changes to the sector after Brexit. I reassure him that the Government are very much committed to working with industry to support the aviation sector. The Department is working closely with officials across Government to explore all those issues and to incentivise the growth of the UK aviation sector in the longer term by examining options to stimulate skills and training alongside and through the work that is being done in this sector under the industrial strategy. We believe aviation is critical to both the UK and the EU, and we are determined to make it so in the future, too.

The hon. Member for Strangford, who was not in his place when I mentioned him earlier, is absolutely right to highlight the continued investment in this country. He said good times are around the corner. I think times are pretty good at the moment, given the way tourism is booming and the economy continues to grow. We have a late-stage economy that is still growing at more than 2.5%—I think we can all be very pleased about that. He is absolutely right that that performance is not discounting a disaster post Brexit; it is actually discounting continued business and economic growth, and rightly so.

The hon. Member for Central Ayrshire rightly pointed out the huge falls in flight costs that resulted from liberalisation. She highlighted Hanover. I am pleased to say that when George I came to this country from Hanover he did not have to go by aeroplane, but it would have been a lot cheaper if he had done so—in her judgment, the Elector of Hanover could have come here in a matter of hours for something like £50. Let me reassure the hon. Lady that Ryanair should have no reason at all not to fly to Britain. The UK intends to continue to offer arrangements that will allow it to fly unimpeded to this country, and we expect the EU, in the open spirit I described, to do the same, as we grant permits to EU carriers. But we want a comprehensive, liberalised agreement, and she rightly focused on the benefits of that.

The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) raised non-disclosure agreements. I do not think there is anything that any Government could or should be concerned about in that respect. This is a very delicate time in discussions with the EU over Brexit, and such agreements are quite common.

I was invited to wind up by 3.57 pm, so I will quickly pick up some other points. The hon. Member for Plymouth, Sutton and Devonport mentioned licences, and I have a private pilot’s licence myself. Tragically, I have not used it much recently, but I am sensitive to the point he raised. I am confident in the capacity of the CAA to manage any issues and to ramp up. Given the time, I should probably sit down. Thank you very much indeed, Mr Hollobone.