Exiting the EU and Transport

Angus Brendan MacNeil Excerpts

Wednesday 23rd November 2016 Commons Chamber

[Andy McDonald]

My hon. Friend makes a good point. We have seen the inability to see such things through and deliver them not only on this issue, but through the prism of the franchising system in the rail market. He raises a grave concern about something that we will be watching with great care in the weeks and months ahead.

Through its membership of the EU, the UK currently relies on the EU single aviation market, which allows airlines to operate freely inside the EU without restriction on capacity, frequency or pricing and enables the use of the EU’s external aviation agreements. Leaving the European economic area could mean that we are no longer part of the single aviation market and could lose access to those external air service agreements. That is critical, because unless the position is clarified urgently UK airlines will lose the right to operate within the European Union and airlines will lose the right to fly UK domestic routes. The Government must ensure that Brexit does not damage the UK’s connectivity. The aviation sector has been clear about the importance of retaining an unchanged operating environment.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The hon. Gentleman and others have talked about getting the best out of Brexit as it arrives. Given the seven options for that process, does he imagine that any will be as good as the situation that we have at the moment? People are looking for the best decision, but the question is whether it will be as good as what we have.

[Andy McDonald]

The hon. Gentleman raises a critical point that is the whole focus of this debate. It is our concern in this House that we are simply not going to be able to deliver the same level of interoperability and accessibility as we currently enjoy throughout Europe. In the aviation sector, it is critical to achieve that before we even begin discussions about our trading relationship going forward.

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[Andy McDonald]

I am delighted to hear it.

Will the Secretary of State explain to the House his plans for the UK’s relationship with the European Aviation Safety Agency on leaving the EU? What is his intention? Will he seek to maintain technical co-operation through a bilateral aviation safety agreement approach, as with the United States, Canada and Brazil, or through a working arrangement with the EU, as is currently enjoyed by China, New Zealand and Russia? I urge the Government to confirm that air service agreements will be negotiated separately from the UK’s negotiations on future trade with the EU, as well as specifying the nature of those agreements. I invite the Secretary of State to outline his plans for UK airlines to retain the right to operate within the EU and retain access to the EU’s external air service agreements.

[Mr MacNeil]

The hon. Gentleman has touched on an important point about retaining the work done on the open skies agreement, because if we look back on UK air policy before that time, as I have done, we see that it was about bilateral agreements that specified flying into London airports only. I believe Iceland broke that by getting into Glasgow, because the father of one of the negotiators wanted to go shopping for suits in Glasgow. That absolutely points out the problem we faced when the UK was managing this itself: it was centralised for the benefit of the south-east of the UK, to the detriment of others.

[Andy McDonald]

I do not know where you get your suits, Mr Deputy Speaker—[Interruption.] Neither in Iceland, nor in Glasgow. It appears we should always go to Glasgow. The issue the hon. Gentleman raises is particularly pertinent given the decision we have just had on the additional south-eastern runway, so he makes the point well.

Numerous rail projects in the UK receive support via loans or direct funding as a consequence of our membership of the EU, and now is not the time for the Department to row back on investments in our railways, as we have seen happen repeatedly in respect of electrification works, which hon. Members have spoken about so eloquently this afternoon. I invite the Secretary of State to reassure the House that any funding shortfalls will be made up by the Government and that investment in rail will not suffer as a consequence of Brexit.

The Secretary of State said during the EU referendum that he wanted to take back control. Labour Members very much wish to take back control of our railways from private and foreign state-owned companies, which currently profit from the system at the expense of passengers and taxpayers. Ours is a policy supported by two thirds of the public, but, as the Secretary of State is aware, although running services in the public sector is currently entirely consistent with EU legislation, the fourth railway package may restrict the different models of public ownership that might be available. Does he agree—I believe he said so earlier—that it should be for UK voters to decide how best to order our railways? If so, will he confirm that his Government will not attempt to retain any European requirements in domestic law that would frustrate any future attempts to bring railways back into public ownership? I was delighted to hear what he had to say about HS2, and I suppose that if there is going to be a silver lining from leaving the EU, it will be that we will not be able to blame “them” any longer for any problems we have with disabled people getting access to our railway system.

My hon. Friend the Member for Blaenau Gwent (Nick Smith) has not had an answer to his question, because he made it abundantly clear that he was talking about the infrastructure. The Secretary of State suggested he should be satisfied with improved services, but those will come only with improvements in the infrastructure.

The skills footprint, to which the Secretary of State referred with great regularity—of course we share some of his concerns—should be delivered whether or not we are in the European Union. That is not a consequence of any move. It should be an absolute prerequisite that is woven into everything we do.

Although we have decided as a nation to leave the European Union, co-operating with, and retaining our connectivity to, the EU is vital. We would greatly appreciate it if the Secretary of State enlightened us on what progress is being made to ensure that hauliers from the UK can carry goods between other member states and on whether it is his intention to secure an agreement for British driving licences to continue to be exchangeable with those of EU member states after Brexit.

Finally, let me mention UK ports, which directly employ more than 25,000 people, many of whom voted to leave because of anxiety surrounding EU ports services regulation. Many leave campaigners argued that leaving the EU would ensure full exemption from those regulations. However, the former shipping Minister, the hon. Member for Scarborough and Whitby (Mr Goodwill), was reported as saying that the ports services regulation would still apply under an arrangement that granted the UK access to the European economic area. Can the Secretary of State clarify the Government’s intentions on any withdrawal from ports regulations and guarantee that any exemptions do not inadvertently undermine strong industrial relations and the welfare standards of dock and port workers?

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[Sir William Cash]

Indeed, and I know where the hon. Gentleman—my next-door neighbour—has got that figure from. It is from paragraph 6.2 of the Library note, which I can see he has been reading. I am glad that he has been so assiduous. The principle is that, despite the fact that we are an island, we compete with continental ports for certain types of traffic. Those in the ports industry are therefore concerned by a lack of a level playing field between the UK and continental ports.

[Mr MacNeil]

The hon. Gentleman will have probably seen the report published on the front page of the Financial Times perhaps four, five or six weeks ago that the UK might have some difficulty carrying out customs checks at ports and other such points. At the moment, we carry out 35 million checks a year. We as the UK would need to carry out up to 240 million checks a year, but the new system has the capacity to handle about 100 million checks. If this situation emerges, it will cause a huge difficulty post-Brexit and inevitably damage trade, because the infrastructure is not there to do customs checks at ports.

[Sir William Cash]

My response is quite simple: if we do not continue to have an efficient ports system because of the effect of the port services regulation, nothing that the hon. Gentleman says will make any difference to the fact that our ports will be put not only at a severe disadvantage, but in a dangerous situation vis-à-vis the other continental ports. However, despite the fact that there was an attempt to get state aid rules imported into the regulation, the ports employers believe that

“it is essential that legislation aimed at regulating less commercial ports on the continent does not cause unintended damage to the UK’s thriving commercial sector.”

On that basis, there is a matter of principle that affects our whole import and export business that goes through the ports.

The effect that the proposal will have is so obvious that I need not even attempt to explain it. It aims to regulate market access to port services, port charges and financial transparency. The ports employers say:

“The text as a whole”

—this is some time ago, but I will catch up in a moment with what they have said most recently—

“even if heavily amended, cannot deliver on its states aims. Instead, it will create severe legal uncertainty, reduce investment and will ultimately be detrimental to the safety standards and working conditions which currently exist in EU ports. EU ports may have different ownership structures, but all require a high level of confidence in a stable legal and policy framework in the long term if they are to operate safely”,

which is for the benefit of the workers,

“and contribute to the EU agenda for jobs and growth”,

which is vital to everyone, whether they are employers or workers in the ports.

The UKMPG goes on to say:

“The Port Services Regulation proposal does not provide such confidence and risks leaving a legacy of legal and practical difficulties across the EU.”

The UKMPG

“supports a return to the previous EU ports policy approach based round application of the general provisions of the Treaty reinforced, where appropriate, by guidelines on state aids.”

We now have Brexit so, as the hon. Member for Stoke-on-Trent South (Robert Flello) suggested in relation to the great repeal Bill, are we going to reach a point, as I think we must, where we transpose the legislation into UK law but then, through statutory instruments and our own decision within the framework of this Westminster jurisdiction, as a result of the decisions taken by the people of this country, including Government Members and Opposition Members—with the exception, I suspect, of SNP Members, but they will pay a price for this in their ports areas—[Interruption.] They may find this amusing, but there are people in the ports of Scotland who do not like the proposal and will resist it if they can. They will not be allowed to do so if the SNP can get away with it.

The bottom line is that this is an issue of great national interest. The European Scrutiny Committee has been following the matter for several years. We first recommended it for debate on the Floor of the House in July 2014—over two years ago. On 19 October, I wrote to the Minister:

“We understand that it is intended that the European Parliament will adopt this text for a First Reading Agreement at its 12-15 December plenary and we presume that this will be followed shortly by Council agreement.

You will understand, therefore, that the Committee expects that the Government will finally, after a disgracefully long delay”—

which I underlined several times—

“schedule the floor debate on the proposal which it and its predecessor have recommended.”

In fact, there have been two debates, which have been aborted. One of them, I can assure the House, was so shambolic that the Chairman of the Committee had to suspend the sitting. I will not go into the details of that—they are all on the record.

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[Drew Hendry]

Let me answer that by giving the right hon. Gentleman the words of easyJet itself. EasyJet is currently registered in the UK and can fly largely without restriction from the UK to other member states—France and Germany, for example—and wholly, in terms of the domestic market, within countries such as Italy. EasyJet is now setting up a separate operation outwith the UK to ensure that it can continue to fly without restrictions after the UK leaves the EU. As its chief executive officer, Carolyn McCall, said, current EU flying rights might have to be renegotiated, and the new company will ensure easyJet can operate within the EU. She added:

“We are not saying there will be no agreement. We just don’t know the shape or form. We don’t have the luxury of waiting. But we have to take control of our own future.”

That is in no small part due to the lack of clarity from the UK Government over what aviation agreement the UK will eventually come up with. The Secretary of State and his colleague the Secretary of State for Exiting the European Union have said:

“Market access remains a top priority, and we want to make sure we have liberal access to European aviation markets.”

Strikingly, however, there was no guarantee that the UK would stay within the open skies agreement. The UK Government need to explain to us now how this is going to work. When open skies was agreed back in 2008, the UK market was one of the key attractions for the United States. At the time, the UK accounted for a 40% share of the EU-US market. If the agreement ceases to apply, as was mentioned earlier, will the UK have to revert to the Bermuda II bilateral agreement, signed in 1946 and last amended in 1991?

[Mr MacNeil]

Perhaps there is an opportunity for the Secretary of State to come to the Dispatch Box and tell us whether we will be in the open skies agreement post-Brexit.

[Drew Hendry]

I am happy to allow the Secretary of State to intervene on that point if he wishes to do so, but obviously he does not.

The aviation market has changed considerably since the days of the Bermuda II agreement, and any reversion could cause disruption to UK airlines and transatlantic trade and passenger routes. If this is not the case, then what is the plan?

The implication of new border controls is negative in both ways. Ease of travel within the EU is attractive to our constituents and to those visiting the UK. Undoubtedly, passport checks and processing times for visitors from the EU will impact on our attractiveness to visitors. The fact that EU visitors will need to enter the UK through the non-EEA lines will require Border Force to commit significantly more resources at airports. Even with extra staff, queuing times for European visitors will still almost double to about 45 minutes. Those of us representing constituencies with a significant tourism economy find this extremely concerning.