Aviation Industry

Edward Leigh Excerpts

Wednesday 18th November 2020 Westminster Hall

[Several hon. Members rose—]

[Sir Edward Leigh (in the Chair)]

Order. A lot of people are trying to take part, so I am afraid we will have to start with a four-minute limit. We should probably avoid interventions otherwise some people will not get in.

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[Paul Holmes (Eastleigh) (Con)]

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) on securing the debate. It is good to see the Minister in his place; he visited Southampton airport within days of becoming the Minister, for which we are grateful. I will focus predominantly on Southampton airport this afternoon.

The pandemic has dealt the aviation sector a huge blow —Southampton airport, in my constituency, in particular. With airports predicted to lose around £4 billion by the end of 2020, and with possibly 20,000 jobs under threat, it is clear that a number of things need to be done urgently to support the sector. I want to raise two points in the short time that I have.

First, as has been discussed, we need a proper airport testing regime. The 14-day quarantine rules are inflexible and the process of setting up an airport testing regime is too slow. Airports are willing, but the speed of the Government response has hampered progress, and the delay in the committee’s reporting is regrettable. As my right hon. Friend the Member for Epsom and Ewell said, advice now needs to be re-examined to see how we can get that regime set up as quickly as possible, to unlock the industry.

Southampton airport has its own unique set of circumstances. With the collapse of Flybe, which represented 94% of all flights, and an application for a runway extension of 164 metres to allow larger planes to land, Southampton airport is now in a fight for survival. That situation could be exacerbated because any application, if refused, could take 18 months to appeal and any application, if successful, could be subject to judicial review.

The Minister and I have spoken about this before, but it seems bizarre to me that I can receive letters from the Cabinet Office for numerous special development orders being awarded for Brexit preparedness, but special development orders are not forthcoming or being examined by the Department for Transport or the Cabinet Office for a major regional airport like Southampton. I would ask the Minister to look for further advice on that as time goes on.

That brings me to my second and final point. I know that this is a Treasury issue and I know that the Minister is sitting on the Front Bench, but I would reinforce many of the comments made by other hon. Members: airports such as Southampton and Exeter, which are operating at 10% of the capacity of this time last year with the same running costs, are still paying the same business rates to local authorities and the Government while they are not operating at full capacity.

I really hope that the Minister will raise with the Treasury the prospect of extending the business rate relief that has been made available in the devolved Administrations. That would show some fairness in the industry and make a vital difference, going forward. Southampton is paying £1.5 million a year in business rates and it has not had that relief. For an airport that is fighting for survival, taking that figure off the balance sheet would be appreciated.

We have all acknowledged that the aviation industry is facing a fight, nowhere more than in Southampton. I am asking the Minister to speed up the support around testing and business rate relief to the industry, so that airports around the country such as Southampton can survive, and we can have a vibrant regional airport offer when the pandemic finishes.

[Sir Edward Leigh (in the Chair)]

I am afraid we are still running out of time, so for the next speaker I will have to reduce the time limit to three minutes.

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[Mike Kane (Wythenshawe and Sale East) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Edward. It is normal to thank the Member who secured the debate, but I have to apologise to the right hon. Member for Epsom and Ewell (Chris Grayling) instead. When he was Secretary of State for Transport, I asked him on the Floor of the House what first attracted him to build a high-speed line from his home in the south-east of England to his season ticket seat at his beloved Old Trafford in Manchester. That is the last time I will be flippant today.

I congratulate the right hon. Gentleman on securing this much-needed debate. It was entitled “Aviation Industry”, but that is the last thing we have talked about—we have talked about the pandemic. I would love to discuss how the sector could evolve to honour our commitments to the Paris agreement; to investigate the scope for even more highly skilled, highly unionised jobs; to discuss airspace modernisation, which is needed in this country; and to talk about how Britain can continue to be a leader of nations. Frankly, there will be no aviation sector in the UK if the Government do not get a grip of the pandemic and provide the appropriate and necessary support that the business needs.

As has been pointed out, the UK is already a world-class leader in aviation. The Prime Minister wants to look for new world-class industries—that is great, but my advice would be to protect the ones we have first. During the first four months of the pandemic, there were 99% fewer passengers. The current lockdown measures mean that, again, many airports are experiencing zero scheduled passenger arrivals or departures. Many hon. Members have defended their airports today. If airports are not turning over a million passengers, they are not really making a profit, so national infrastructure could be wiped out over the next few months if we do not do something.

Before the introduction of the second lockdown, UK airports were already projected to lose at least £4 billion by the end of the year. There will clearly be consequences such as shorter operating hours, fewer routes, long-term job losses and the risk that some airports may close their doors for good. UK aviation has now faced nine months of losses. While the rest of the economy began to open during the summer and early autumn, international quarantine measures prevented air travel from reopening and destroyed consumer confidence in flying.

Decisions such as letting all those people in in the first place, then introducing a global travel ban, and now the hammer of quarantine are killing the industry. The Department for Transport has to talk to the Foreign, Commonwealth and Development Office. The Foreign, Commonwealth and Development Office has to talk to the Department for Transport. They both have to talk to the Home Office at the same time. We need a co-ordinated approach from the Government.

Emerging from the most drastic and sustained reduction in passenger numbers that the aviation system has ever seen, UK airports are in a critically poor state to perform their role as enablers of growth and prosperity. A few weeks ago, there was a story about geological activity in another Icelandic volcano. A decade ago, the ash cloud shutdown was over in less than a week and cost the sector more than £1 billion. A new eruption would not do anywhere near the lasting damage that the Government are currently doing by not intervening in the aviation sector.

Aviation sustains 1.6 million jobs around the country. The International Air Transport Association tells us that 300,000 jobs are at imminent risk. The biggest impact of the failing industry will be in local airport communities such as Hounslow, Luton, Crawley, Manchester, Liverpool and Leeds—so much for the levelling-up agenda in our country. Those communities have grown dependent on their airports, which drive much of the local economy. Heathrow is famously the biggest business rates payer in Europe. As has been pointed out, in England and Wales, the Government have refused to give the resources and business rates relief to airports bleeding cash, as has happened in Scotland and Northern Ireland.

The sector brings £22 billion a year into the economy and is a critical part of its fabric. We have all seen the impact of cuts and what they have meant for staff, with some 4,500 jobs lost at easyJet; bases closing at Newcastle, Stansted and Southend; 12,000 job losses at British Airways; 3,000 jobs lost at Ryanair; 4,500 jobs lost at Virgin Atlantic; and more job losses at Heathrow, Manchester, Gatwick, Stansted and our smaller regional airports. The country cannot get back to economic health if we erode the foundations of our economy.

It appears that everybody is calling for a sector deal for aviation. It was not that long ago that the Chancellor reflected that the Government would have to make such an intervention. We are led to believe that there was a sectoral deal ready. I have also asked the Minister about that at the Dispatch Box. Where is the plan that we are all expecting?

This has been a terrific debate and I pay tribute to Members who have participated. The hon. Member for South Antrim (Paul Girvan) spoke eloquently about regional connectivity and the importance of airways to Northern Ireland. I disagree on everything politically with the hon. Member for Crawley (Henry Smith), except aviation and the respective Chagossian communities that serve our airports, which is Manchester in my constituency.

I could not agree more with the right hon. Member for Orkney and Shetland (Mr Carmichael), because I spend most of my holidays there. The sooner we get connectivity up and running, the better for me and my wife. As the hon. Member for Filton and Bradley Stoke (Jack Lopresti) pointed out, the aerospace sector in Bristol is dependent on getting aviation running. There were Members who supported Heathrow. My hon. Friend the Member for Feltham and Heston (Seema Malhotra) made an eloquent speech. The hon. Member for Eastleigh (Paul Holmes) defended Southampton airport.

My right hon. Friend the Member for Hayes and Harlington (John McDonnell) made a really good political point. He knows that my politics is about human dignity. We undermine people’s human dignity when we cut their terms and conditions in the face of a pandemic, when they have gone over and above to help keep that industry going. The hon. Member for East Devon (Simon Jupp) made such a good point: how come Tesco gets rates reductions but our airports do not?

My hon. Friend the Member for Luton North (Sarah Owen), who continually makes good speeches, stood up for her constituency airport. My hon. Friend the Member for Easington (Grahame Morris) and the right hon. Member for East Antrim (Sammy Wilson) asked where the plan was. We are eight months in and we need that leadership. The hon. Member for Meriden (Saqib Bhatti) talked about Birmingham airport and defended it excellently. The Chairman of the Select Committee, the hon. Member for Bexhill and Battle (Huw Merriman), has been a clarion voice in standing up for the industry.

The hon. Member for Paisley and Renfrewshire North (Gavin Newlands) said that we are probably now going to listen to the Minister give a list of business loans. Sir Edward, you will get this reference. It will be like a litany of saints, a beatification, on a Roman balcony. There will be one after the after, but what we do not need is lists. We need leadership and we need it now.

[Sir Edward Leigh (in the Chair)]

Thank you for mentioning everybody who spoke in the debate. That does not often happen in wind-ups and it is rather a good habit.

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[Robert Courts]

I will in a moment. I want to inform everybody that the taskforce will report back to the Prime Minister very soon.

[Sir Edward Leigh (in the Chair)]

Can you give some time for the right hon. Member for Epsom and Ewell (Chris Grayling) to sum up?

[Mike Kane]

I withdraw my request to intervene.

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[Chris Grayling]

I applaud all the contributions to the debate from Members from all parts of the House, and I hope that our comments are listened to more widely than simply in this room. I do not seek to challenge the Minister. He is new to his job, and he faces some of the same challenges as others in similar positions in Departments across Government. These are not decisions that are being taken in the Department for Transport, but there is an expectation in this room that action will come more quickly than the official Government line has suggested.

I do not understand why a 72-hour test prior to departure, coupled with a check-up test on arrival in the UK, represents a greater risk than the 14-day quarantine. Given the urgency of the situation that the aviation sector faces, I do not really understand why the global taskforce has not reported already. I hope it will be understood clearly elsewhere in Government that that must happen, and it must happen now.

However, those are not things that I level at the Minister. He has been a great champion of the sector, and I know he will be a very effective aviation Minister. I know that he will do everything he can to unlock the challenges that the industry faces and put it back on a path to recovery. The message from everyone in this room to the Government is this: we cannot afford to let the sector carry on dying on its feet. Every action possible must be taken across Government to enable the industry to recover. Whether we are a former Minister, a Select Committee Chair or member, or an Opposition spokesperson, we will all be watching carefully. This will not be the last time we raise the issue, if the problem is not solved.

Motion lapsed (Standing Order No. 10(6)).

[Sir Edward Leigh (in the Chair)]

I suspend the sitting for two minutes to allow for safe exit.