Regional Connectivity
Grant Shapps Excerpts(4 years, 6 months ago)
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The Secretary of State for Transport (Grant Shapps)
The Department for Transport, the Treasury and the Department for Business, Energy, and Industrial Strategy have been in discussions with Europe’s largest regional airline, Flybe, which plays an important role in the UK’s connectivity by flying regional routes.
In a sign of the Prime Minister’s commitment to levelling up all regions of the UK, the Government have announced additional measures to support regional connectivity across the UK, to ensure all corners of the country drive the economy, and fully benefit from prosperity in years to come.
A review of regional connectivity will ensure all nations and regions of the UK have the domestic transport connections local communities rely on—including regional services from local airports. This review, led by DfT, will consider all options to ensure we continue to have good regional connectivity. The DfT will work closely with the aviation industry, local regions and devolved nations to identify how we can support connectivity.
As part of this work and ahead of the March Budget, the Treasury will also be reviewing air passenger duty (APD) to ensure regional connectivity is supported while meeting the UK’s climate change commitments to meet net zero by 2050.
The outcomes of these reviews will benefit the entire industry, passengers, communities, regions and nations across the UK.
These measures featured in discussions between the Department for Transport, the Department for Business, Energy and Industrial Strategy and HM Treasury and Europe’s largest regional airline, Flybe, which plays an important role in the UK’s connectivity.
HMG was notified about the difficulties of Flybe on 11 January, and since then we have worked intensively with the company to understand their financial position and explore options. In the light of these discussions, the management and shareholders on 14 January took action to set Flybe on a recovery path.
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Contingency Fund Advance
Grant Shapps Excerpts(4 years, 6 months ago)
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The Secretary of State for Transport (Grant Shapps)
I hereby give notice of the Department for Transport’s intention to seek an advance from the Contingencies Fund. The Department requires an advance to meet its cash requirements pending parliamentary approval of the Supplementary Estimate 2019-20.
The Department is operating within the budget agreed in the Main Estimate, however, we will be seeking an increase in our net cash requirement in the Supplementary Estimate. Accessing the contingency fund is to allow the Department to move cash around the group to support existing expenditure consistent with existing Parliamentary Estimates and does not represent additional spending.
When the Main Estimate was submitted for approval, part of Network Rail’s (NR) grant-in-aid was excluded. The grant funding for NR in control period 6 was agreed shortly before the Main Estimate was finalised and in the transition from loan funding to grant funding the full value of the required grant was not captured in the Department’s net cash requirement. It was the Department’s intention that the final classification and cash requirement would be covered by the Supplementary Estimates process.
The advance will be repaid immediately following approval of the Supplementary Estimate. We have taken steps to review our processes and capture lessons learned, to prevent any similar issues from happening again.
Parliamentary approval for additional cash of £3.6 billion will be sought in a Supplementary Estimate for the Department for Transport. Pending that approval, urgent expenditure estimated at up to £3.6 billion will be met by repayable cash advances from the Contingencies Fund.
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Northern Rail
Grant Shapps Excerpts(4 years, 6 months ago)
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The Secretary of State for Transport (Grant Shapps)
Passengers in the north have had to put up with unacceptable services for too long. We understand how frustrating this has been for people and we are taking action to make sure that performance improves.
On 16 October 2019 I informed the House, through the Transport Committee, that I had issued a request for a proposal to the current Northern franchisee, Arriva Rail North (ARN) and to the operator of Last Resort as the first phase of securing options for the continuation of passenger services on the Northern franchise. This was triggered by concern over the financial position of ARN.
It has now been confirmed to me from the most recent available financial information that the franchise will only be able to continue for a number of months. The proposal I requested from ARN is being evaluated. Following completion of this process I will consider whether to award ARN a short-term management contract or whether to ask the Department of Transport’s own operator of Last Resort to step in and deliver passenger services. Longer-term decisions on the franchise will be made in the light of the recommendations of the Williams Rail Review.
My decision on which short-term option to choose will be made in accordance with the key principles set out in the statement on how I use my rail franchising powers. This includes:
protecting the interests of passengers
ensuring business and service continuity
preserving the interests of taxpayers by ensuring value for money
the continued quality of the franchise proposition;
In order to inform this decision, the Department will assess the extent to which each option performs against these principles. Our value for money assessment will be based on a number of criteria, including which option returns most money to the taxpayer, the risks attached to each, and the value of any improvements in passenger services. I intend to announce my decision before the end of January 2020.
To clarify, the current financial position of the Northern franchise will not impact on the railway’s day-to-day operations. Services will continue to run and there will be no impact on staff.
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Northern Powerhouse Rail Programme: Accommodation
Grant Shapps Excerpts(4 years, 8 months ago)
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The Secretary of State for Transport (Grant Shapps)
I have today laid before Parliament a departmental minute describing a contingent liability raised as a result of a letter of comfort provided to Transport for the North.
Unfortunately, due to the need to secure value for money it is not possible to allow the required 14 days’ notice prior to the liability going live. A delay until after the general election on 12 December or until January when Parliament returns following Christmas recess is likely to result in higher costs.
The letter of comfort provided by the Department is in respect of a lease for office accommodation for Transport for the North. The accommodation is to support TfN’s work on the Northern Powerhouse Rail Programme and involves a taking seven-year lease of which five years remain (with no break clauses). TfN is concerned that if it no longer requires the space, it will not be able to cover any remaining commitments related to the lease from its core funding. The cost of the lease is £183,000 per annum and the maximum exposure, taking account of committed funding to April 2021 is £505,000. TfN proposes to cover these costs from NPR development funding. This is currently confirmed to 2021/22. TfN will actively seek to sublet the space if it is not required for their operations.
The Treasury approved this liability. I have also informed the Chairs of the Transport Select Committee and the Public Accounts Committee.
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Work of the Department
Grant Shapps Excerpts(4 years, 8 months ago)
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The Secretary of State for Transport (Grant Shapps)
Transport plays a critical part in all our lives and is central to some of the biggest issues the country faces, including decarbonisation, growing our economy and uniting the country. I would like to update the House on key recent achievements by the Department for Transport.
Rail
Launched the Williams Rail Review in September 2018 to look at the structure of the whole rail industry, including increasing integration between track and train, regional partnerships, and improving value for money for users and taxpayers.
Invested record levels in the railway between 2014 and 2019, with over £40 billion being spent on enhancing, renewing, and maintaining the network. £15 billion of this was spent on enhancing the railway. This included:
Capacity enhancement projects such as additional platforms, for example at Liverpool Lime Street and Manchester airport stations; and rail line capacity upgrades, such as re-signalling between Plymouth and Penzance, and four-tracking on the Filton Bank in Bristol.
Completing major infrastructure upgrades as part of the Thameslink programme in December 2018, creating 24 train paths per hour between Blackfriars and St Pancras, including readiness for digital signalling and automatic trains.
Opening new routes such as the reinstatement of the Halton curve, which enables passenger services from north Wales and West Cheshire to directly access Liverpool City Centre and airport for the first time in more than 40 years.
Electrification of the Great Western Mainline between London and Cardiff, due to be completed early in 2020.
Over 4,300 additional rail services per week have been introduced since May 2018.
Confirmed £47.9 billion is available for the railway between 2019 and 2024. This spending will be targeted on operations, maintenance and renewals to deliver a modern, reliable service for passengers across the network.
£450 million committed to digital rail as part of the national productivity investment fund at Autumn statement 2016.
Rail fares
Cancelled above-inflation (RPI) rail fare rises every year since 2014.
Introduced the new 26 to 30 Rail Card in January 2019, allowing 4.5 million young people to travel by train for less, and launched the new 16 and 17 Railcard which from September 2019 will give up to 1.2 million young people a guaranteed 50% discount on rail travel
Introduced the “Delay Repay 15” scheme in 2016 which allows passengers to claim compensation when trains are more than 15 minutes late.
Over 8,000 new railway carriages have been ordered since 2010.
More than 80% of passenger rail vehicles by summer 2019 now have on-train wi-fi available
We have committed to Northern Powerhouse Rail and are working with Transport for the North on proposals to improve the rail network across the north.
In August 2019, launched an independent review into HS2 to advise the Government on whether and how to proceed with the project. The review is ongoing.
Regional and devolution
Through the Cities and Local Government Devolution Act 2017, created new powers to put sub-national transport bodies (STBs) on a statutory footing. Transport for the north’s status was enshrined in law in April 2018.
As part of the Northern Powerhouse:
Established Transport for the North, bringing together northern transport authorities with the task of working with Government to create the first ever comprehensive transport strategy for the region, covering roads, rail, freight, airports and smart ticketing.
Committed record investment of over £13 billion in the strategic roads, local roads and rail infrastructure of the north between 2015 and 2020.
Local transport
Established a new £2.5 billion transforming cities fund, with funding announced at autumn budgets in 2017 and in 2018. Allocated £1.08 billion of the transforming cities fund to the six mayoral combined authorities. £1.3 billion is being made available competitively to 12 shortlisted cities. Initial funding for “quick win” transport projects in the initial shortlisted cities was allocated in March 2019.
Announced in September 2019 that 14 major road network and large local major schemes will go forward for further development. These included the Tyne Bridge and central motorway renewal and the A140 Long Stratton Bypass in Norfolk. On 18 October the York outer ring road became the first MRN scheme to be granted programme entry.
Around £1.7 billion has been awarded so far for 13 schemes through 2018 and 2019 from MHCLG’s housing infrastructure fund. These include delivery of significant new transport infrastructure, with £102 million towards delivering the Carlisle Southern Link Road, and £218 million towards a bypass and new bridges for the Didcot Garden Village.
In December 2018, published the results of a consultation on the creation of the major road network, which brought over 5,000 miles of local authority A roads into scope for new funding from the national roads fund.
Between 2011 and 2019, approved 74 major local transport schemes with over £2.3 billion of funding such as the extension of Nottingham Tram, Heysham to M6 Link Road and the A43 Corby bypass; and the Preston Western Distributor Road.
Played a key part in the setting up of the local growth fund, and made a contribution of over £7 billion to the £12 billion total, which devolved real spending decisions to local enterprise partnerships and prioritised over 500 transport schemes through growth deals in three funding rounds in 2014, 2015 and 2017.
Allocated a record level of funding of over £6.6 billion to local authorities for local road maintenance in the period 2015-21, including a dedicated pothole action fund.
Buses
Launched the “Better deal for bus users” in September 2019, a £220 million package to boost bus services. This includes trialling a new “superbus” network approach to deliver low fares, high frequency services in Cornwall, expanding our fleet of low emission buses with an all-electric bus town, funding to enable local authorities to improve current bus services or to restore lost services, and investment in bus priority measures in the West Midlands.
Committed £48 million to fund 263 zero emission buses in 2019.
Supported local authority spending of around £1billion per year on concessionary bus travel, enabling older and disabled people to make free off-peak bus journeys and helping them stay more connected to their communities and social surroundings.
Cycling
Government spending on cycling and walking has increased to around £2 billion over the 2016/17-2020/21 spending review period.
Invested over £40 million in the cycle rail programme since 2012 which has tripled the number of cycle parking spaces at over 500 stations, bringing the total to over 80,000.
Invested £22 million in 33 new and upgraded cycle routes on the national cycle network this year.
Launched a £2 million e-cargo bike grant programme in February 2019 to support the uptake of e-cargo bikes.
Announced a further £13 million in the Bike-ability training for school children in October 2018, to extend the scheme into 2020-21. In the year up to April 2019, around 400,000 children completed the scheme.
Secured funding through the cycle city ambition programme to improve cycling infrastructure in eight cities to get more people cycling by improving and expanding cycle routes between the city centres, local communities, and key employment and retail sites.
Published the first ever statutory cycling and walking investment strategy in April 2017.
Strategic roads and safety
Made good progress in delivering the first road investment strategy. At the end of the fourth year of the strategy, in March 2019, Highways England had started work on 28 schemes, in addition to the 16 schemes where works were ongoing at the start of the strategy; opened 29 schemes for traffic; and had 15 schemes in construction.
Ended tolls on the Severn Crossing in December 2018.
Announced that a second roads investment strategy will start in April 2020 with a record funding allocation of £25.3 billion from the national roads fund.
Produced a refreshed road safety statement in 2019 with a two-year action plan for four priority road user groups; young road users, rural road users, motorcyclists, and older vulnerable road users.
Strengthened drink-drive enforcement by removing—Deregulation Act 2015—the automatic right for drivers who fail a breathalyser test to demand a blood and urine test—"statutory option”—removing the opportunity to sober up while waiting for the test to be taken.
Provided £100 million of funding for the “safer roads fund” to improve the safety of 50 of England’s most dangerous local A roads.
Motoring and the environment
Launched the road to zero in 2018, our strategy on the transition to zero emission road transport, including that all new cars and vans will be effectively zero-emission by 2040.
Launched a new £400 million electric vehicle charging infrastructure investment fund, the first £70 million of which was allocated in September 2019 for 3000 rapid charge points, more than doubling the number across the UK to 5000.
Published the Clean Air Strategy 2019, which is the most ambitious air quality strategy in a generation, aiming to halve the harm to human health from air pollution in the UK by 2030.
We are investing in one of the most comprehensive global programmes of support for ultralow emission vehicles, including grants for vehicles and charge point infrastructure;
Since 2011, the plug-in car grant has supported the sale of over 170,000 vehicles ultralow-emission cars in the UK by Q2 2019, up from 111 in 2010, based on cars eligible for plug-in car grant support; including those cars not eligible for grant, there are currently 210,000 licensed ULEVs in total.
The electric vehicles home-charge scheme (EVHS) has supported over 120,000 charge points being installed in homes to date. All chargers installed using this grant must be smart from July 2019.
Invested £20 million to deliver new, dedicated charge points for electric taxis in local areas, with funding awarded to 27 local authorities in 2017 and 2019.
Hosted the world’s first international zero-emission vehicle summit in September 2018.
Tackling poor air quality
Published the 2017 N02 plan and its 2018 supplement, which has led to 61 local authorities being required to assess what action is needed to address the exceedances.
Committed £495 million as part of the Government commitment to improving transport and tackling air quality, which has now increased to £572 million technology and innovation
Committed £250 million to help position the UK as a global leader in the development and deployment of connected and self-driving vehicles, and have launched 90 projects as of summer 2019, involving over 200 organisations.
Created the centre for connected and autonomous vehicles (CCAV) in 2015 to help position the UK as a global leader in the development and deployment of connected and self-driving vehicles.
Passed the Automated and Electric Vehicles Act (2018) through Parliament to enable drivers of automated cars to be insured on UK roads, and are working with the Law Commission on exploring regulations for self-driving vehicles.
Launched the future of mobility urban strategy in 2019 which set out nine principles to guide the UK's approach to emerging mobility technologies and services, as well as actions for regulatory reviews of further areas such as e-scooters.
Accessibility
In August 2019 the eligibility for disabled parking badges—blue badges—was expanded to include those with non-visible disabilities or conditions, where these severely affect an individual’s mobility.
Following improvements to the gov.uk service, the percentage of blue badge applications submitted online has increased substantially, with 61.2% online in October 2019
Launched the inclusive transport strategy in 2018, to create a transport system that provides equal access for disabled people by 2030, with assistance if physical infrastructure remains a barrier.
Progress has been made, for example by mid-2019, 91% of heavy rail vehicles met modern accessibility requirements and 99% of buses either had an accessibility certificate or had low-floor access by March 2018, compared to only 81% at March 2010.
Aviation
Launched Operation Matterhorn to repatriate over 140,000 people over a two-week period in Autumn 2019, resulting in the UK’s largest peacetime repatriation effort to date. The Civil Aviation Authority led the operation with support from HM Government, covering over 700 flights with support from 50 partners from around the world. About 94% of people were flown back on the original day of their cancelled Thomas Cook flight.
Environmental
In 2019, along with BEIS, HMT and the devolved Administrations, consulted on options for ensuring that our post-Brexit approach to emissions trading is at least as ambitious as the current arrangement.
Worked with International Civil Aviation Organisation (ICAO) to secure the first worldwide scheme to address CO2 emissions in any single sector, the carbon offsetting and reduction scheme for international aviation (CORSIA)
Established the independent commission on civil aviation noise in 2019, an important voice for communities concerned about the impact of aviation .
Passenger interests
Updated the ATOL scheme and brought it in to line with modern trade practices. In 2012, updated the scheme to address gaps in consumer protection by extending the ATOL scheme to include “flight-plus” arrangements. Then, passed the Air Travel Organisers’ Licensing Act 2017 to allow for UK businesses to trade across Europe more easily, and ensure a wider body of consumers are protected.
Sustainable growth
Set out that airspace modernisation, reforming the way airspace is used, is vital to help deliver quicker, quieter and cleaner journeys for passengers and businesses, legislation is forthcoming.
Made progress on delivering a revised aviation strategy, which aims to make the country’s aviation sector world-leading in prioritising passengers, fostering sustainable growth, and promoting trade
Connectivity
Protected air routes into London that are in danger of being lost by providing financial support for several routes through public service obligations, currently routes from London to Dundee, Derry and Newquay.
Drones
Implemented a package of new legislation to keep our skies safe and secure, including extending the zones around airports in which it is illegal to fly drones above 400 feet or within the airport’s air traffic zone.
Worked with the Home Office, the police, and the Ministry of Justice to introduce primary legislation providing police with new powers to help tackle the misuse of unmanned aircraft, and contributed to the Home Office counter unmanned aircraft strategy.
Responded successfully to planned disruption by Heathrow Pause at Heathrow airport in September 2019.
Aviation Security
Created the first aviation security strategy in 2018 that sets out our strategic response to the threats to civil aviation. This is currently being revised.
Regulated that all major airports must introduce new 3D cabin baggage screening equipment by the end of 2022.
Aviation Skills
Recruiting a new general aviation advocate, and nine general aviation ambassadors.
Launched the women in aviation and aerospace charter in 2018, which seeks to bridge the diversity gap.
Launched the reach for the sky programme with the aim to increase the number of young people entering the sector as well as increase diversity.
Maritime safety
Published the maritime safety action plan in 2019, which sets out a number of actions to achieve ambitious safety targets.
Maritime growth
London international shipping week took place in 2019, helping to advance London’s status as the world’s capital for maritime services and demonstrate the UK maritime sector’s world-leading capabilities.
Published the maritime 2050 strategy in 2019, which provides a long-term strategic vision for the sector. It establishes clear trajectories against which Government and business can plan for the long-term, maintaining the UK's position as a global maritime leader through to 2050.
Maritime environment
Published the clean maritime plan in 2019 which sets out how Government see the UK’s transition to a future of zero-emission shipping. It includes that by 2025, all new vessels being ordered for use in UK waters are designed with zero-emission propulsion capability, and zero-emission commercial vessels are in operation in UK waters.
Other departmental priorities
Provided significant input into the Government’s 2018 year of engineering, leading to 5.1 million direct experiences of engineering for seven to 16-year-olds.
Published the transport infrastructure skills strategy and set up a task force to deliver it. By mid-2019, some 5,000 new apprenticeships had been created.
Published the transport investment strategy in 2017 which sets out the Department for Transport's priorities and approach for future transport investment decisions. Government have since confirmed that it is spending £72 billion in the five years to 2020-21 on transport. This strategy ensures Government’s investment decisions are aligned to wider goals, including building a stronger more balanced economy.
Published the transport infrastructure efficiency strategy in 2017.
Published the rail sector deal in December 2018 to build on the strong partnership working between the rail sector and the Government to exploit the opportunities of new technologies, improve the efficient use of our rail network capacity and enhance the experience of those who use our railways.
Established an organisation to boost the export of UK transport expertise.
Brexit
Substantial work preparing for Brexit and ensuring that sufficient contingency plans are in place in the event of a no-deal to keep freight moving and ensuring the supply of essential medicines into the country.
Roads
Passed the Haulage Permits and Trailer Registration Act 2018 which will ensure that the UK has the powers it needs to support British hauliers to continue operating internationally after exiting the EU.
Aviation
Put in place measures to ensure that flights between the UK and the EU can continue in any Brexit scenario.
Secured new bilateral agreements or effective mitigations in place for the 17 non-EU countries where market access is currently provided for by virtue of our EU membership. This includes new agreements with the US and Canada.
Put in place new arrangements to cover bilateral aviation safety agreements (BASA’s) with the US, Canada and Brazil, which are currently provided for by virtue of our EU membership.
Ensured that in any Brexit scenario, UK security standards will be recognised, allowing for the continued flow of air cargo between the UK and EU.
Maritime
£10 million for 16 ports across England to help their preparation for Brexit through the port infrastructure resilience and connectivity fund.
Secured the supply of vital medicines to the UK after Brexit, whatever the circumstances.
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Oral Answers to Questions
Grant Shapps Excerpts(4 years, 9 months ago)
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Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
The Secretary of State for Transport (Grant Shapps)
I want to echo the sentiments expressed yesterday by my right hon. Friend the Prime Minister regarding the awful events in Grays, Essex. Inquiries are ongoing, but, having worked with the haulage industry over the past few months, I feel keenly the tragedy that has taken place, and the Department stands ready to assist in any way we can.
On 15 October, I announced that the Government would develop a world-leading transport decarbonisation plan. That will bring together the bold and ambitious programme of action across transport that is needed to achieve our net zero target by 2050.
Deidre Brock
I associate myself with the remarks of the Secretary of State about the terrible tragedy yesterday. The Scottish National party and Members across the House have been deeply shocked by it, and we hope that matters will be investigated thoroughly so that those who are guilty of this terrible crime are brought to justice as quickly as possible.
The Government’s electric car strategy is obviously not working, with sales still only at approximately 2%. Transport for London figures confirm that any successful scrappage scheme requires central Government support. The SNP has been calling for such support for years. When will the UK Government invest in a proper diesel scrappage scheme?
Grant Shapps
The figure is 2.6% for low emission and electric cars, and the hon. Lady will be aware that there has been an 122% increase in sales of electric cars this year compared with last year—indeed, I am proud to make up one small percentage of that percentage by owning one. Electric cars are fantastic, and for that reason we are about to see a big increase in the number of them on the road. There are already more public charging locations than there are petrol stations, and we will be doing a whole host of things—40 or 50 different measures—that I will describe in the decarbonisation plan. I think the hon. Lady will be pleased with a lot of the things that she sees coming along.
Stuart C. McDonald
On aircraft emissions, will the Government agree to incentivise the use of aviation biofuels? Does the Secretary of State have ambitions similar to those of the Scottish Government, who are seeking to introduce electric aircraft in the highlands and islands?
Grant Shapps
The hon. Gentleman will be interested to know that just the other day I went to see the aircraft that is being developed at Cranfield University by Britten-Norman for electric flights in the highlands and islands. The day before yesterday I had a meeting about biofuels, which are very important for meeting our commitment to net zero emissions by 2050 in aviation.
Derek Thomas (St Ives) (Con)
Road improvements are a key part of making transport sustainable for the future. The A30 goes all the way from London to my home town of Penzance, and part of it runs through villages and has traffic lights. Will the Minister meet me to ensure that improvements to the A30 are included in road investment strategy 2?
Grant Shapps
My hon. Friend has been fighting hard on this issue, and I would be more than happy to meet him, with the Minister of State, Department for Transport, my hon. Friend the Member for Mid Norfolk (George Freeman), who has responsibility for roads.
Dr Matthew Offord (Hendon) (Con)
Sustainability also includes safety. Last November, my constituent Priscilla Tropp suffered a fatal fall at Mill Hill Broadway station. Staff did not follow the emergency plans, and people walked over her as she lay dying. At her inquest, Govia Thameslink said it would introduce a new local incident response plan, but that has not been introduced. Can the Secretary of State advise whether that is the responsibility of the Office of Rail and Road, or some other organisation, because sustainability and safety at stations is not happening?
Grant Shapps
I am very concerned to hear about my hon. Friend’s constituent Priscilla and the way that that incident unfolded. Rail safety, in all its forms, is clearly a big concern to Members across the House, and I propose a meeting between my hon. Friend and the Minister of State, Department for Transport, my hon. Friend the Member for Daventry (Chris Heaton-Harris), on this issue.
Alan Brown (Kilmarnock and Loudoun) (SNP)
More than half of total carbon emissions in the UK come from cars on our roads, yet so far the UK Government have refused to introduce mandatory E10 fuel, which would reduce emissions. Unlike in Scotland, the UK Government remain wedded to cars that use fossil fuels until 2040. Will the Secretary of State heed the assertion by the Committee on Climate Change that action is required if the UK is to meet its targets for 2025 and 2030, let alone have zero emissions by 2050? What corrective measures will he take, and will he tell us about the exiting new measures that he spoke about earlier?
Grant Shapps
For the record, let me correct the figures given inadvertently by the hon. Gentleman. About a third of emissions come from transport, and about 90% of those are from vehicles. On the specifics, and E10 in particular, yes, I intend to move on the issue very soon.
Alan Brown
Norway has the highest per capita sales of electric vehicles in the world, and an average of 50% of new cars sold there in the first half of this year were electric vehicles. Second and third in the world are Iceland and Sweden. The UK still hovers at an average of about 2%, although the Secretary of State said 2.6% earlier. Is it not the case that Scotland could fulfil its ambitions and commitments like those Scandinavian countries if it was only independent?
Grant Shapps
The interesting thing about the countries the hon. Gentleman cites is that largely they do not produce cars. It is very, very easy if you are not a car manufacturer to introduce all sorts of measures that essentially mean that only electric cars will be favoured and sold. In this country, we have a big car manufacturing sector and we export 80% of the cars we produce. I am very anxious to move the sector to a faster timetable, but to protect jobs as well as the environment it is a question of doing that at a programmed pace. We have managed to do that so far.
Andy McDonald (Middlesbrough) (Lab)
May I associate myself with the Secretary of State’s remarks concerning the terrible tragedy in Essex? The nation is reeling from that abject horror. We send our sympathies to all the families of the deceased, wherever they may be across the world. I reassure the Secretary of State that Her Majesty’s loyal Opposition will want to co-operate and work with him to take whatever steps are necessary, legislative or otherwise, to reduce the likelihood of this terrible event ever happening again.
We are in a climate crisis. Transport is the most emitting sector of the economy and the only sector where emissions have risen in recent years. Given that the Government have slashed subsidies for electric vehicles and failed to invest money promised for charging points over two years ago, does the Transport Secretary seriously believe his announcement earlier this week for a consultation on whether to introduce green number plates for electric cars is really going to save the planet?
Grant Shapps
I thank the hon. Gentleman for his comments about the events in Grays, Essex yesterday. We will work together on that.
Green number plates are just one very small part of a very, very large package that includes £1.5 billion to subsidise the take-up of electric cars; £400 million on a charging infrastructure investment fund, which I announced earlier in the summer, to help to supercharge the number of charge points; and many, many other activities. As I say every I time I stand at the Dispatch Box, electric cars are fantastic. They are available new and on the second-hand market. The cost of ownership overall, because it costs £5 or £6 to drive from here to Manchester and refuelling with those charge stations is much easier, is something that everybody can invest in now.
Andy McDonald
I am afraid the Transport Secretary ignores my warnings, but will he listen to the Government’s own advisers when they say the UK is way off track to meet their climate targets? Labour would invest £3.6 billion in charging networks, introduce 2.5 million interest-free loans for the purchase of electric vehicles, and target a 2030 phase-out for the sale of new diesel and petrol cars. The Government are attempting to disguise their lack of action on the climate crisis with a lick of green paint. Is the Secretary of State not embarrassed at his poverty of ambition?
Grant Shapps
As I have already said, I passionately believe in bringing this forward. I have already said that I am going to investigate moving forward from 2040 to 2035 a commitment given before the 2050 net zero, and I have a package of measures, which I was referring to before, that will be in the decarbonisation plan to ensure we meet all those targets.
Alex Norris (Nottingham North) (Lab/Co-op)
Andrew Lewer (Northampton South) (Con)
The Secretary of State for Transport (Grant Shapps)
I take the performance of the railway very seriously and think that trains should run on time, which is why I have changed the industry’s performance standard from trains being five or even 10 minutes late to their being on time to the minute.
Robert Courts
Commuters in west Oxfordshire have long been frustrated by reliability problems on the Cotswold line. What support can Ministers offer me and the Cotswold line promotion group? The group is campaigning for further redoubling on the line, which will not only improve reliability but will give us scope to increase the services available.
Grant Shapps
I congratulate my hon. Friend on his tireless campaigning for improvements on the Cotswold line. The line will benefit very soon from the Great Western Railway timetable change in December, which will offer shorter journey times and more frequent services to key locations. Moreover, services from North Cotswold via Oxford and London will be restructured to deliver more, and more consistent, services. So I feel that my hon. Friend’s campaign is making progress.
Sir Henry Bellingham
Will the Secretary of State give us an update on the investment in Ely north junction, which is pivotal to the introduction of a half-hourly service from London to King’s Lynn as well as improving services from Cambridge to Norwich? Will he work alongside Network Rail and local authorities to ensure that this vital scheme is delivered?
Grant Shapps
I certainly will. The project is currently being scoped, and I should be happy to work on it with my hon. Friend and Network Rail.
Sir David Evennett
As my right hon. Friend is well aware, in my borough of Bexley we suffer from a very poor rail service operated by Southeastern. We experience regular cancellations—including the cancellation of my train this morning—and persistent short delays. What more can my right hon. Friend do to get our train company to improve punctuality and reliability?
Grant Shapps
I know that my right hon. Friend recently met the rail Minister, my hon. Friend the Member for Daventry (Chris Heaton-Harris). He is absolutely right: poor services are unacceptable, which is why the Williams review is so important. I do not agree that nationalisation is the answer, not least because railway numbers have doubled since privatisation. [Interruption.] It has a lot to do with the £6 billion invested by the private companies. However, there is much, much more to be done, and we will be doing more in time.
Andrew Lewer
Will the Minister elaborate on the plans to open the proposed Market Harborough line as part of the Oxford to Cambridge expressway and the benefits that it will bring to the local economy, especially around Northampton?
Grant Shapps
I understand that the reopening is at a formative stage, but I am very supportive of it. Indeed, I support the reopening of many of the smaller lines that were closed as a result of the Beeching cuts under a Labour Government, and I should like to see as many reopened as possible.
Clive Efford (Eltham) (Lab)
I, too, would like to meet the rail Minister, to talk about the Southeastern franchise, the tender for which has been postponed. I should like to see trains from Victoria on the new Eltham to Mottingham line; I should like to see them retained on the Eltham and Falconwood line; and I should like to see extra capacity, so may I have a meeting with the Minister to discuss how we are going to do that?
Grant Shapps
My hon. Friend the rail Minister has informed me that he has met many of the hon. Gentleman’s colleagues and will be happy to meet him as well, as will I.
Ruth George (High Peak) (Lab)
Grant Shapps
I think that the hon. Lady may be referring to the Hope Valley line. I should be very happy to speak to her about it in more detail and look forward to our meeting up.
Kate Green (Stretford and Urmston) (Lab)
Confidence in Northern Rail has collapsed among commuters in my constituency as a result of delays, cancellations and poor-quality rolling stock over a number of years. Just how bad does the service have to get before Ministers take action and take the franchise away from this failing company?
Grant Shapps
Perhaps the hon. Lady missed it, but I mentioned to the Transport Committee last week that I had already issued a request for the proposal, which, as she will know, is the first stage towards either a direct award or a last-resort operation. I agree that poor service is unacceptable, and the financial problems are well documented.
Nick Smith (Blaenau Gwent) (Lab)
The Ebbw Vale to Cardiff line is critical to Blaenau Gwent’s economy, but with growing demand we urgently need physical improvements in the line. There is a complicated UK Government, Welsh Government and Network Rail problem here. Will the Secretary of State, or one of his Ministers, meet me, Welsh Government Ministers and transport officials to discuss this important issue?
Grant Shapps
Yes, and the hon. Gentleman will be interested to know that I had a conversation yesterday about setting up exactly such a meeting for those purposes. So the answer is yes.
Peter Grant (Glenrothes) (SNP)
The Secretary of State for Transport (Grant Shapps)
Now that the repatriation of those Thomas Cook passengers is complete, my focus is on the next steps, including the announcement in the Queen’s Speech that the airline insolvency review will be turned into an Act of Parliament.
Peter Grant
May I first pay tribute to the staff of Thomas Cook in Glenrothes, who for a great many years have provided my constituents, and indeed myself, with a very professional and courteous service? Last week, the Government finally admitted that no Minister had spoken to Thomas Cook directly before the company collapsed. The Secretary of State claimed that the company could not be saved, but then some parts of the company in other countries were indeed saved. Will he now accept that if the Government had engaged sooner with Thomas Cook, they could have mitigated the impact of this failure, fewer people would have lost their jobs, the cost to the taxpayer would have been less and fewer people would have seen their holidays ruined?
Grant Shapps
That is simply not correct. I met the chief executive of the company on 9 September, and I have checked my closing words to him at that meeting, which were—[Interruption.] The hon. Gentleman might want to listen. My closing words to that company and to the chief executive were: “If there is anything that Her Majesty’s Government could do then please get in touch.” The response was: “There is nothing that can be done at this time.” Later, on 18 September, he wrote to the Government asking for not the £200 million that has been reported, but up to £250 million. That decision would have required accounting officer sign-off for a company with debt of perhaps £1.7 billion or, we now hear, perhaps even £3 billion. It simply would not have stacked up. We would have spent all the money that has been spent on repatriation in any case, as well as money to bail out a company that had enormous debts.
Mr Peter Bone (Wellingborough) (Con)
The travel industry has a proud record of pulling together when a company goes under, and that happened in the Thomas Cook case. Thomas Cook would have had an air travel organisers’ licence, so the money that was used to repatriate people from abroad should be recovered from that fund, which is levied on the travel industry. The net cost to the Government should therefore be very small.
Grant Shapps
My hon. Friend is right, at least in part. The ATOL coverage will cover a large proportion of the cost. However, the company was an airline as well as a travel company and, as my hon. Friend will be aware, airlines are not currently covered under ATOL—that is part of the review. In any case, we will ensure that laws are in place to make sure that the fleet can be used regardless.
Karl Turner (Kingston upon Hull East) (Lab)
The truth is that it is shocking that this Government let down Thomas Cook staff. They lost their livelihoods while the gaffers got rich off their bonuses. The subsidiaries Condor in Germany, Thomas Cook in Spain and Thomas Cook in Sweden are still flying. The Government have stood by and let the business in the UK fail. When the Secretary of State gets to his feet, will he just say sorry for letting down all those hard-working staff and the British taxpayer?
Grant Shapps
The whole House and, indeed, the whole country is aware that those on the Opposition Front Bench do not understand how an economy functions.
Grant Shapps
If there was any possible way to ensure the survival of a company whose directors were allegedly being paid millions of pounds—it is interesting to hear that the Opposition want us to have backed those millions of pounds of bonuses with yet more money from the public purse—we would have done it, but, as I said, it would have required accounting officer direction, because it simply did not stack up. As the hon. Gentleman knows, the reality is that Hays Travel has come in and rescued many of those jobs, because well-run companies survive. Poorly run companies cannot survive.
Mr Speaker
Observers of our proceedings will doubtless have heard the sedentary exclamations of the hon. Member for Kingston upon Hull East (Karl Turner), who is further validating the assertion that I make to audiences around the world, which is that he is the loudest Member of the House.
Daniel Zeichner (Cambridge) (Lab)
The Secretary of State for Transport (Grant Shapps)
Mr Speaker, this is my first topical questions session and my last opportunity with you in the Chair. I have been in post for 93 days and, with your permission, will give a couple of quick updates.
I know the House is concerned about smart motorways. I have heard those concerns being raised today and previously, and I have asked my Department to carry out, at pace, an evidence stocktake to gather the facts quickly and make recommendations.
As we have heard, my Department was involved in Operation Matterhorn, which successfully repatriated the most people to this country since the second world war. We are also getting ready for Brexit and, of course, decarbonising transport.
Daniel Zeichner
There was widespread disappointment across the taxi and private hire sector last week when the Secretary of State indicated to the Transport Committee that he would not be bringing forward legislation to tackle some of the safety issues relating to licensing. He will know that councils can introduce high standards but cannot enforce them against drivers who are licensed elsewhere. Will he think about that again?
Grant Shapps
The hon. Gentleman pressed me hard on this matter in the Select Committee sitting, and I have done some work on it before and since. We intend to go down the statutory taxi and private hire vehicle standards approach, with standardised checks and a national database. I have spoken to Professor Mohammed Abdel-Haq, who is present in the Gallery and who chaired the task and finish group. I invite the hon. Gentleman, along with others in the House, to join us in that programme, and I thank him.
Sir John Hayes (South Holland and The Deepings) (Con)
Grant Shapps
I pay tribute to my right hon. Friend for his work on this matter, and particularly for action in commissioning that task and finish group. I absolutely look forward to working with him, other Members across the House and the maritime Minister, my hon. Friend the Member for Wealden (Ms Ghani), who deals with this issue as well.
Mr Jim Cunningham (Coventry South) (Lab)
Grant Shapps
I should just clarify for the hon. Gentleman that we are not going out to consultation; we are in fact acting on statutory taxi and private hire vehicle standards.
Andrew Rosindell (Romford) (Con)
Grant Shapps
My hon. Friend is absolutely right, of course, that Transport for London has a big impact on constituencies outside, including mine in Welwyn Hatfield. I do note, however, that there are widely differing views, including in my area, for example, where people would welcome more Transport for London involvement. In his area, perhaps the opposite is the case. I do think that it is a case of making sure that whatever we do fits in with the Williams review and the White Paper, which is to be published shortly.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
Dame Cheryl Gillan (Chesham and Amersham) (Con)
Grant Shapps
My right hon Friend has campaigned on this issue, quite rightly, for a very long time, and she gives me the opportunity to correct something that was suggested from the Front Bench earlier, which is that I somehow have a copy of the report, which I absolutely do not. I have not seen any of it, not even its emerging conclusions. When Oakervee is ready, he will present that report. I stick with everything I said. This is very important. As soon as we have this information, I will make it available to the House. As for non-disclosures, there are, of course, sensitive commercial matters involved in these things, and it is important that all members of the panel work together without releasing those inadvertently in a manner that would be commercially problematic. None the less, I do agree with the basic principle that, as soon as the information is available, this House will have it.
Dr Philippa Whitford (Central Ayrshire) (SNP)
Mary Glindon (North Tyneside) (Lab)
Grant Shapps
The hon. Lady may be surprised to hear that I agree with her. Some of these salaries—in both road and rail—have gone off the scale, and I am already addressing the issue.
Philip Davies (Shipley) (Con)
Many of my constituents think that, as far as the Government are concerned, “northern powerhouse” only means Leeds and Manchester, so will the Secretary of State prove my constituents wrong by unequivocally committing to a station stop in Bradford for Northern Powerhouse Rail, which is vital for the local economy?
Lilian Greenwood (Nottingham South) (Lab)
Further to the Secretary of State’s earlier comments on the intention to carry out a review of the safety of smart motorways and all-lane running, he will know that the Transport Committee questioned Highways England on this yesterday. Is that review being carried out in the Department or by someone independent? I would be grateful if he clarified that.
Grant Shapps
I watched with great interest the evidence from Highways England in front of the Committee yesterday and noted the comments of the chief exec. I will ensure that the Department is making decisions on this, because some of the statistics have been difficult to understand. We know that people are dying on smart motorways. We also know that 70 or 80 people a year die on full motorways. Understanding whether smart motorways are less safe, the same or safer turns out not to be as straightforward as Members might imagine. I want all the facts and I want recommendations that could be put in place to ensure that all our motorways are as safe as they possibly can be. I will get this done in a matter of weeks.
Sarah Newton (Truro and Falmouth) (Con)
Growing towns and villages in my constituency need investment in cycle and walking infrastructure. Will the Secretary of State join my representations to the Treasury at the forthcoming Budget to make sure that there is dedicated funding for villages and towns to expand this infrastructure?
Transport
Grant Shapps Excerpts(4 years, 9 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Transport (Grant Shapps)
I would like to update the House with the latest information and give hon. Members a sense of the scale of the operation that has been going on. We have put arrangements in place to bring back 150,000 people, across 50 different countries…
So far, 95% of people have been repatriated to their original point of departure.
[Official Report, 25 September 2019, Vol. 664, c. 689.]
Letter of correction from the Secretary of State for Transport.
Errors have been identified in the statement I made on Thomas Cook.
The correct information should have been:
The Secretary of State for Transport (Grant Shapps)
I would like to update the House with the latest information and give hon. Members a sense of the scale of the operation that has been going on. We have put arrangements in place to bring back over 150,000 people to the UK, across 50 different locations…
So far, 95% of people have been repatriated on their original date of departure.
Thomas Cook
Grant Shapps Excerpts(4 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Transport (Grant Shapps)
With your permission, Mr Speaker, I would like to make a statement about the steps that the Government have been taking to support those affected by the collapse of Thomas Cook, particularly for the 150,000 passengers left abroad without a flight back and the 9,000 people here who have lost their jobs in the UK.
This is a very sad situation. All parties considered options to avoid the company’s being put into administration. Ultimately, however, Thomas Cook and its directors themselves took the decision to place the company into insolvency proceedings, and it ceased trading at 2 am on Monday 23 September. I recognise that this is a very distressing situation for all those involved. I assure Members of the House that the Government are committed to supporting those affected, including by providing repatriation flights free of charge for all those people.
We have been contingency planning for some time to prepare for this scenario, under Operation Matterhorn. The Government and the Civil Aviation Authority have run similar operations in the past and have been working hard to minimise the disruption to passengers and to try to assist Thomas Cook’s staff. Even with our preparations, and previous experience with Monarch, the task before us represents the largest peacetime repatriation ever undertaken in the UK. Some disruption and delay is therefore inevitable, and we ask for understanding, particularly for Thomas Cook’s staff, many of whom are still working, alongside the Government, to try to help ensure the safe return of their customers.
For example, the media reported on the situation in Cuba overnight. That aircraft has now left this morning, and all the passengers from Cuba who were scheduled to come home today are on that flight.
Normally, the CAA’s responsibility for bringing back passengers would extend only to customers whose trips are covered by the ATOL scheme. However, there would have been insufficient capacity worldwide in the aviation market to allow people whose trips were not covered by the ATOL scheme to book tickets independently and bring themselves home. Some passengers would have had to wait for perhaps a week or longer, and others would have suffered financial and personal hardship as they waited for another flight. In my view, that would have created further economic problems, with people unable to return to work and unable to be reunited with their families. With tens of thousands of passengers abroad and with no easy means of returning to the UK, I instructed the CAA to ensure that all those currently abroad were able to return, ATOL or non-ATOL.
Due to the size, complexity and geographical scope of the Thomas Cook business, it has not been possible to replicate the airline’s own flying programme and its schedule. In the case of the Monarch collapse back in 2017, the CAA was able to source enough aircraft of the right size and the right types to closely match the airline’s own aircraft. But Thomas Cook was a much bigger airline, and it also provided a global network of package holidays; as a result, this operation has been much more challenging. Some passengers will be travelling home on commercial flights, where other airlines have available seats. I know that the whole House would want to thank all the airlines and ground staff who have offered assistance to Thomas Cook passengers in this difficult situation.
I would like to update the House with the latest information and give hon. Members a sense of the scale of the operation that has been going on. We have put arrangements in place to bring back 150,000 people, across 50 different countries.[Official Report, 30 September 2019, Vol. 664, c. 9MC.] That requires over 1,000 flights by CAA-chartered aircraft over the next two-week period. Passengers will be able to complete their holidays, so that they should not be leaving early, and should return on the day that they were intending to.
So far, in the first two days of the operation, we have brought home nearly 30,000 of the 150,000 passengers, on over 130 dedicated CAA flights. We hope to repatriate a further 16,500 passengers today, on about 70 flights. I checked before I came to the House, and the operation is proceeding according to these amended schedules.
So far, 95% of people have been repatriated to their original point of departure. Again, we have not been able to bring everybody back to the airport from which they left, because of the difference in size and shape of available aircraft. In the first two days, we have therefore provided onward travel for 2,300 passengers, and have arranged an additional fight from Gatwick to Glasgow to relocate passengers who have flown back to the wrong airport because of that scheduling issue.
The CAA has reached out to over 3,000 hotels, issuing letters of guarantee to ensure that British holidaymakers can remain in the hotels in which they are booked, and that has been followed up by calls and contact from FCO officials.
Over 50 overseas airports are involved—around the Mediterranean, in north Africa and in north America—and 11 UK airports are engaged in this programme. There have been over 100,000 calls to our customer service centres, and on the first day alone there were over 2 million unique visitors to the CAA’s dedicated website—thomascook.caa.co.uk—with close to 7 million page views. In total, 10 Government Departments and agencies have been involved, including the Department for Transport, Foreign and Commonwealth Office, Department for Business, Energy and Industrial Strategy and Department for Work and Pensions, in London, and our extensive diplomatic and consular network in the affected countries.
I have been hugely impressed, as the programme has been rolling out in the past couple of days. The response from everyone involved, including Thomas Cook passengers, has been generally positive, with many praising the CAA, local staff and government officials, even though there has been considerable disruption. For example, people have not been able to check in in advance, as they are used to doing these days, but have instead had to queue to check in for every single flight. That has caused some of the queues that we see on television. The programme has, though, been generally well organised and all those involved have been extremely professional.
Despite these robust plans and their success so far, this is an incredibly distressing situation for all concerned. One of my top priorities remains helping those passengers abroad to get back to the UK and do so safely, but in addition to supporting passengers, we have been working across Government to ensure that the 9,000 former Thomas Cook employees in the UK and those overseas receive the support that they need. The decision by the Thomas Cook Group’s board has been deeply upsetting for employees, who are losing their jobs. DWP’s Jobcentre Plus rapid response service is in place, helping workers get back into employment. The Jobcentre Plus rapid response managers across the UK are ready to engage with the liquidators to start that vital work. Special arrangements are in place for UK employees who are owed redundancy pay and notice pay by their insolvent employer: the redundancy payments service in the Insolvency Service can pay statutory amounts owed to the former employees through the national insurance fund. I want to say more about that later, but I will do so in answer to questions.
My colleague the Secretary of State for Business, Energy and Industrial Strategy is establishing a cross-government taskforce to address the impact on employees and local communities. That will help to overcome barriers to attending training, securing a job or self-employment, such as by providing child care costs, tools, work clothes and travel costs.
My colleagues and I have been in contact with those Members whose constituencies will have been hardest hit by these job losses, and have given assurances that we will work with the industry to offer what support we can. In fact, pretty much every hon. Member’s constituency is affected in some way, even if only through the number of people working in a single shop location.
My right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has written to the Financial Reporting Council to ensure that it prioritises, as a matter of urgency, an investigation into both the causes of the company’s failure and the conduct of its directors and auditors.
I am also aware of the duty that this Government have to the taxpayer, and while affected passengers have been told they will not have to pay to be flown back to the UK, we have entered into discussions with third parties with a view to recovering some of the costs of this large operation. Around 60% of passengers have ATOL protection, and the CAA’s air travel trust fund will contribute proportionately to the costs of the repatriation, as well as refunding ATOL future bookings. We will also look to recoup some of the costs from the relevant credit and debit card providers and travel insurers, and will look to recover costs from other travel providers through which passengers may have booked their Thomas Cook holiday. We are also in discussion with the Official Receiver to understand what costs can be recouped through the company’s assets.
The final cost of the operation to repatriate Monarch passengers back in 2017 was about £50 million, including ATOL contributions. The repatriation effort for Thomas Cook is now known to be about twice the size and is more complicated, for reasons that I have explained.
I have also seen it suggested in the press that the Government should have avoided the collapse with a bail-out of up to £250 million for the company and shareholders. Given the perilous state of the business, including the company’s own reported £1.5 billion half-year loss which was reported in May and followed by a further profit warning in November, this simply was not the case, with no guarantee that an injection would have secured the future of the company. Our concern was that if we put in £250 million, we would risk throwing away good money after bad and still having to pay the cost of this repatriation. It is quite clear that in the last several years the company ran into a number of problems by trying to expand itself through investing more in the high street rather than less, while the entire market was moving in the opposite direction.
The loss of an iconic British brand with a 178-year history—one of the oldest travel companies in the world—is an extremely sad moment. However, this should not be seen as a reflection on the general health of the UK aviation industry, which continues to thrive. Passenger numbers are actually up, and people are traveling more. However, the truth is that the way people book their holidays has changed an enormous amount over the years, but it did not change as much within the company. None of this should distract us from the distress experienced by those businesses reliant on Thomas Cook, by passengers and by Thomas Cook employees who, as I have said, have worked above and beyond, particularly in recent days during this distressing situation.
We have never had the collapse of an airline or a holiday company on this scale before, but we have responded swiftly and decisively. Right now, our efforts are rightly focused on getting those passengers home and looking after those employees who have lost their jobs, but we also need to understand whether any individuals have failed in their duties of stewardship within the company. Our efforts will then turn to working through the reforms necessary to ensure that passengers do not find themselves in this ridiculous situation again. We need to look at the options within ATOL, and also to ascertain whether it is possible for airlines to be wound down in a more orderly manner. They need to look after their customers, and we need to be able to ensure that their planes can keep flying so that we do not end up having to set up a shadow airline for no matter what period of time. This is where we will focus our efforts in the next couple of weeks, but in order to do this we will require primary legislation and, dare I say it, a new Session of Parliament.
In what has been a challenging time, I want to put on record my appreciation for the work of all those involved in this effort, particularly Richard Moriarty, the chief executive officer of the CAA. He and his team, and my officials in the Department for Transport, have done an extraordinary job so far. I am also grateful for the support of others, including the Mayor of Manchester, who has acknowledged the Government’s repatriation effort and its work with all the agencies involved in helping to get people home. This has been an unprecedented response to an unprecedented situation, and I am grateful to all the parties who have stepped in to support these efforts. I commend this statement to the House.
Andy McDonald (Middlesbrough) (Lab)
I would like to thank the Secretary of State for giving me timely advance sight of his statement; that is a welcome change. What I do not welcome is the collapse of Thomas Cook, which is a tragedy for the 178-year-old business, its customers and its staff. The travel company went under because successive chief executives failed to steer the group effectively or to evolve the business. Thomas Cook had five offers for its airline business, yet these were rejected by the board. I, too, would like to pay tribute to Richard Moriarty and his team at the Civil Aviation Authority for the work done yet again to repatriate holidaymakers. I applaud their sense of public service and duty.
Aviation is a fiercely competitive industry that has lost services because of terrorism and Brexit uncertainty. The Government’s dithering on their aviation strategy has only added to these difficulties. In May, speaking on airline insolvencies, the Secretary of State’s predecessor said that the Government
“will work swiftly to introduce the reforms that are needed to ensure a strong level of consumer protection and value for money for the taxpayer.”—[Official Report, 9 May 2019; Vol. 659, c. 33-34WS.]
This was misleading. The Government have done nothing to protect consumer or taxpayer interests. The Government have sat back and let the company fold.
Yesterday, Governments in Scandinavia stepped in to back Thomas Cook subsidiaries in that region. The German Government also stepped in with a loan of €380 million for the Thomas Cook subsidiary Condor, to help that company to survive. The chief executive of Thomas Cook Airlines, Christoph Debus, has seamlessly just gone to work for Condor, and jubilant scenes of the survival of the subsidiary are doing the rounds on social media. Can the Secretary of State tell the House what steps his Government took to enter into a joint investment with other interested nation states? It is reported that the Governments of Spain and Turkey were understandably willing to do this, but seemingly the UK Government were not.
We are somewhat reassured that there is provision to return holidaymakers to the UK, but sadly there is no provision for the return of Thomas Cook’s staff. The unions Unite and the Transport Salaried Staffs Association have valiantly fought for their members, while this Government have done nothing. Can the Secretary of State guarantee that all staff will be repatriated? Can he say what provisions he is putting in place to ensure that customers who have lost their planned holidays are fully compensated and able to make alternative arrangements at no expense to themselves?
The Government learned nothing from the Monarch collapse two years ago. Monarch cost taxpayers £40 million in repatriation costs and Thomas Cook looks set to cost a similar amount or more, not to mention redundancy and future welfare payments. Can the right hon. Gentleman give us an estimate of what the total costs are likely to be? Monarch was the victim of financial engineering by Greybull Capital two years ago, and of conflicts of interest with the company’s administrator. Similarly, the collapse of Thomas Cook raises major questions about the accounting of the firm by PwC and EY, never mind the bonuses paid to senior executives. On that point, will the Secretary of State make it clear to those executives that they should return their undeserved and unwarranted multi-million pound bonuses, including that of Peter Fankhauser, who has had £4.6 million in bonuses since 2014?
I say again that the Government have not acted to protect the public interest, and that nothing has been learned or done to improve how our insolvency arrangements deal with such exceptional and complex circumstances. What is more, the ATOL fund has been much reduced by the Monarch fiasco and has had to rely on insurance to make up the shortfall. Does the Secretary of State believe that the reforms of ATOL enacted by his Government have been effective? The Government must confirm that they will immediately guarantee the workers full compensation for unfair dismissal, given the lack of proper consultation, and that those workers will not have to pursue the matter through the courts. Can he confirm that they will be relieved of that burden and stress?
In a further sad development, we also learned today that Northern Ireland’s last manufacturer, Wrightbus, has gone into administration with the loss of 1,400 jobs. In July, the Prime Minister said that
“we will do everything we can to ensure the future of that great UK company.”—[Official Report, 25 July 2019; Vol. 663, c. 1496.]
Is it not the case that this Government are guilty of the industrial neglect of this country? In contrast to other countries, UK Ministers have stood by and let some of our great companies wither and die. This Government are engulfed by inertia and incompetence. They are not a functioning Government, because of the Brexit chaos and Prorogation paralysis that they have brought upon themselves. The people of Britain are paying a high price for their inadequacy. They have failed to reform insolvency rules and failed to improve financial reporting. This is a colossal failure of political leadership from this Government. They were warned, but they did nothing. That is a shameful failure to fulfil their duties and their responsibilities.
Grant Shapps
Let me see what we can deal with here. It is true, as the hon. Gentleman outlined, that the world has changed. In 2007, Thomas Cook bought MyTravel just as the internet was starting to take off. In 2016, when the high street was clearly struggling because the internet had taken off, it bought the high street shops of Co-op Travel, further expanding its problems and its massive debt to £1.7 billion. I agree with him that this was, in the end, a very poorly run business that was going in the wrong direction at the wrong time.
The hon. Gentleman made a very sensible point in his query about the return of the bonuses that we have all been reading about. I have described how my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has written to the Insolvency Service. Under the Insolvency Act 1986, the official receiver has the power to require the return of bonuses in certain circumstances. I absolutely agree with the hon. Gentleman that that needs to be fully looked into, including the role of the auditors.
That is where we agree. Where we disagree is that it is not the case that this situation is somehow unique to Thomas Cook. As I mentioned, airlines elsewhere in the sector are in good health. Many of them have been very helpful in bringing Thomas Cook passengers home over the past couple of days and have offered extraordinary help, even lending aircraft and, in the case of one well-known airline, cutting prices for Thomas Cook customers, rather than charging more. However, in response to what the hon. Gentleman said about this insolvency, it is only right to point out that Germania, a German airline, went bust; Primera Air, a Danish airline, went bust; Air Berlin, a German airline, went bust; as did Cobalt Air of Cyprus and FlyVLM of Belgium. This is not a UK issue; this is an issue where some airlines manage to do the right things and succeed, and others do not.
The hon. Gentleman rightly mentioned what has happened with Condor. Here, we will find partial agreement and partial disagreement. Condor was operating under a somewhat different business model. In Germany, people do not book holidays in quite the same way as they do in the UK, partly because UK citizens tend to use the internet in a different way and are much more becoming their own travel agents. With Condor, the business remained profitable. [Interruption.] The hon. Member for York Central (Rachael Maskell) asks what difference that makes. The difference is that it was a profitable business, unlike the business here.
It is also the case—this is where I think there will be a degree of agreement—that German insolvency rules allow for administrations to take place, and then for aircraft to carry on being used and for other buyers to come in during the administration process. That is not something that our current rules on airline liquidation and insolvency allow for.
The hon. Gentleman rightly pointed out that the previous Secretary of State said he wanted to do something about that and commissioned a review. So that we are all clear on the timeline, that review reported on 9 May 2019. It suggested that we should have rules that are not dissimilar to the German rules to allow our airlines to trade in administration. That would make repatriation massively easier, because we could use those airlines. I entirely agree with the hon. Gentleman on that. Perhaps he did not hear me mention it during my statement, but we need a new Session of Parliament to introduce that primary legislation in order to bring that in. We are very happy to have a new Session of Parliament. If we get agreement, perhaps that is something we can progress.
I believe that, given the number of people and the number of lives that have been affected by this situation, we should be working together cross-party to get this job done. I welcome the hon. Gentleman gesturing that he will provide support to sort out this problem, because that would clearly be in everybody’s interest.
The hon. Gentleman referred to whether foreign Governments were prepared to ride to the rescue. I confirm that I received no approach from the Turkish Government and that the only contact via the Spanish Government was not a viable plan and came so late in the day that the company was already starting its administration proceedings. There was no viable plan out there at the time.
I agree with the hon. Gentleman that the ATOL system should be reformed. As he rightly pointed out, although the funds are limited because of Monarch, ATOL itself is reinsured to cover most of that cost. Finally, on a point of accuracy, he mentioned that £40 million has been spent on Monarch. In fact, we think that the final cost was £50 million.
Mr Shailesh Vara (North West Cambridgeshire) (Con)
The UK headquarters of Thomas Cook are based in my constituency. The collapse of the company has meant the loss of 1,200 local jobs. Our thoughts go out to all those people and to the thousands more across the UK who have been affected. Will my right hon. Friend join me in paying tribute to the many local organisations and companies that have come forward offering jobs to those who have been affected? The local newspaper, the Peterborough Telegraph, has been co-ordinating the activities. We have also seen acts of kindness. Peterborough United and Peterborough Phantoms, a local ice hockey team, are offering free tickets to those who have been affected. Does my right hon. Friend recognise that at this difficult time we need to appreciate and applaud the generosity that is coming through?
Grant Shapps
May I start by paying tribute to my hon. Friend, who has been working very hard through the last few difficult days with people from Peterborough who have found themselves without work? He has done tremendous work with his community to support all those who have lost their jobs. There are 630 jobcentres running the rapid response service that has been mobilised to pick up this issue for every single former Thomas Cook employee who has lost their job as a result of this appalling news. I should say that the best thing we can do is to make sure that we operate an economy where there is record high employment and record low unemployment, because that will give people the best opportunity to get back into a good job.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I thank the Secretary of State for advance sight of the statement. I pay tribute to the work of the CAA and to the Thomas Cook employees who have gone above and beyond to help stranded holidaymakers. I express my sympathies for all those who have lost their jobs.
Instead of the UK Government using the mantra that this is the biggest peacetime repatriation, they should be apologising for this collapse happening on their watch. The Secretary of State spoke of reforms and new legislation that are required to stop this happening again with another company, but why were lessons not learned from the collapse of Monarch just two years ago? What are the timescales for the new legislation? I point out that, procedurally, a new Session is not required for legislation. The Government could bring it forward if they wanted.
Will the Secretary of State explain the position with Spain and Turkey, and the fact that they were looking at ways to keep Thomas Cook trading, while the UK Government were not willing to? The German Government led the way in keeping Condor going.
The Secretary of State said that £250 million would have been good money after bad, but what discussions did the Government have with Thomas Cook and what financial appraisal did the Government make before saying that they could not fund that money? This is a Government who can find £100 million to advertise that Brexit is good for us. I think they should spend that money on supporting jobs instead.
Will the Secretary of State explain what impact Brexit had on the collapse of Thomas Cook, because it warned about the impact of Brexit? What impact did the collapse of sterling have on the company’s trading position? What assessment have the Government made of the pension liabilities of Thomas Cook? What plans do the Government have to curb outrageous executive pay, given that close to £50 million has been taken out of Thomas Cook in recent years?
I welcome the update on the holidaymakers in Cuba, but are any other holidaymakers effectively being held to ransom or captive? What discussions are the UK Government having with foreign Governments when such ruthless actions are taken?
Thomas Cook vouchers are now worthless. When will the Government finally implement the scheme to protect vouchers and gift cards when companies become insolvent?
What actions are the Government taking to support the 13,000 employees who are still abroad?
Finally, I have constituents who have lost their jobs. Can the Secretary of State look my constituents in the eye and honestly say that there is nothing more the Government could have done to save their jobs?
Grant Shapps
I should have picked up the point about Thomas Cook employees abroad in answer to a previous question. We are actually bringing back some of those people, starting with the crews and the operational people. I think I am right in saying that yesterday we had brought back about 150 so far. We are not ignoring them, but we need to bring passengers back first. I have asked the CAA to be as flexible as possible in bringing back Thomas Cook employees, and the hon. Gentleman is right to remind me that I had not mentioned that before.
The hon. Gentleman asked a number of other questions that I have previously answered, and I do not want to go round in circles. The House must know that no Government would want to lose an iconic, 178-year-old famous British name. I hear people ask, “Why don’t you just put the money in?” All those people have to do is open the books to realise that there is a £1.7 billion debt, with £1.5 billion lost in six months alone, and that another profit warning had been issued.
I am afraid that this situation is entirely different from that with Condor, which is a fundamentally profitable airline, and it just would not be responsible to throw good money after bad. We would probably be back here in a very short time to offer a bail-out to get people home, rather than to bail out the company. This company just was not a going concern with which we could do that.
The hon. Gentleman asks sensible questions about whether other holidaymakers are being held to ransom or being held captive elsewhere in the world, and I am not aware of any other location in which that is the case at the moment. However, it is a live and moving situation, and under our direction the CAA has been issuing proactive letters to explain that holidaymakers’ bills will be settled in places where some hotels have not had bills settled for the past three months because of the company’s bankruptcy. I pay tribute to and thank our foreign mission in Cuba for proactively getting in touch with Ministers yesterday to resolve that appalling situation.
I think that covers the majority of the questions that I had not previously answered.
Andrew Jones (Harrogate and Knaresborough) (Con)
As somebody who worked in the travel industry for many years, I am saddened to see the demise of Thomas Cook, but it is also worth noting that the sector has seen some notable collapses over the years. The scale and complexity of this repatriation operation are significant, and I thank my right hon. Friend for his update. After this urgent work on repatriation has been completed, and because this sector is prone to significant collapses, may I ask him to focus on the industry structure and a sector insurance scheme that would protect passengers and taxpayers in the future?
Grant Shapps
My hon. Friend is absolutely right. The airline insolvency review, which reported in May, provides a few useful ideas about things that could be done, including some that require primary legislation and others that do not and on which we have already started to act. We cannot keep returning to this situation. It is terrible for passengers and for all those involved, and there is a problem in finding sufficient aircraft to solve this problem when it happens.
Mr Speaker
The Secretary of State will be aware that the hon. Member for Harrogate and Knaresborough (Andrew Jones) is a distinguished former Transport Minister. Indeed, I well recall that when he served as Parliamentary Under-Secretary of State for buses, being a man of the people as he is, he was wont to come to work on the bus, no doubt to the very considerable delight of his fellow passengers.
Lisa Forbes (Peterborough) (Lab)
Following the sudden collapse of Thomas Cook, which was headquartered in Peterborough, and the loss of 1,200 jobs there, many of my constituents turned up for work only to find that their jobs were lost with Christmas fast approaching. The hon. Member for North West Cambridgeshire (Mr Vara) is absolutely correct that there has been an incredible outpouring of unity from individuals and businesses in Peterborough who have stepped up to show their support and solidarity at an extremely difficult and distressing time for so many in Peterborough.
Can the Secretary of State tell me what specific support the Government are giving to my constituents, who have mortgages and bills to pay and families to support, in finding alternative employment? What measures have they put in place to support the city’s economy as a whole, given the loss of so many good jobs?
Grant Shapps
The hon. Lady is absolutely right, including on the response in Peterborough, which I have been tracking closely through hon. Members, including my hon. Friend the Member for North West Cambridgeshire (Mr Vara) and others. A bespoke service will be available through Jobcentre Plus, and I have spoken at length to my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, who is leading a cross-Government taskforce that is meeting again tomorrow afternoon to continue to work on the issues of helping people to find new jobs.
I mentioned in my statement the additional assistance that is available through retraining, or even simple things like childcare while people go for interviews and the like. It is heartening to know that jobs are available regionally, but it would be an economic shock to any region to lose 1,000-plus jobs. Through the various mechanisms, particularly the rapid response service, we are determined to support all the constituents of the hon. Member for Peterborough (Lisa Forbes) and my hon. Friend the Member for North West Cambridgeshire.
Robert Halfon (Harlow) (Con)
I thank my right hon. Friend for what he is doing, but my constituents have lost their jobs. The directors go back to their £1 million-plus houses, having taken £47 million in bonuses and wages over the past few years. My constituents worry about their jobs and their pensions. Should we not be seizing the assets of the directors who plundered this company and took it to ruin? Will he guarantee that my constituents’ pensions will be protected?
Grant Shapps
I understand my right hon. Friend’s concern, and I congratulate him on his work over the past few days with his constituents who have lost their jobs.
We have touched on this before, and there have been a lot of reports in the newspapers, but it is important to allow the correct channel, the official receiver, to do its job. I stress to the House that, under the Insolvency Act 1986, the official receiver, as liquidator, may seek to overturn a range of transactions made prior to the liquidation, which includes things like bonuses, although I think we need to leave it to due process to see whether that would be appropriate.
There is also the Company Directors Disqualification Act 1986, and I fully support that idea. As I said in answer to a previous question, the Government were concerned to ensure that we did not prop up an organisation that was already doing things wrong.
Lilian Greenwood (Nottingham South) (Lab)
I begin by welcoming the tremendous efforts of the Civil Aviation Authority, staff across Government and others to repatriate and support the many thousands of stranded holiday- makers, but I ask the Secretary of State to provide clarity on two points in relation to his previous answers. Can he confirm that all Thomas Cook staff will be helped to return home? He referred to some of them, which I do not understand. Why not all of them?
In the four and a half months since the airline insolvency review reported, what action have the Government taken to implement its recommendations?
Grant Shapps
First, with regard to the repatriation of staff, it is not the case that all the staff necessarily want to come straight back. Aircrew, for example, have been or are being repatriated, but many others are still assisting with the operation on the ground in many different locations, and we are hugely grateful to them.
The next two weeks are critical. The largest group of people, the 150,000 holidaymakers, is so large that there is no way to get them back other than chartering aircraft to fly them back. The number of other people involved is of a size at which commercial flights can be used to return them.
We are urgently addressing not only the cabin crew and that side of things but the other employees and the scheduling for when they need to get back. I have been clear with the CAA that it should offer them every possible assistance along the way.
Sorry, I have forgotten the hon. Lady’s second question.
Lilian Greenwood
If they are important, what have you been doing in the past few months?
Grant Shapps
I did not come into this job until 23 July. Some recommendations of the airline insolvency review have already been taken into account and, indeed, used in this particular case, but we also require primary legislation and I am happy to have cross-party discussions about that.
It is not, as one might imagine, quite as simple as it seems. There are ideas around, including allowing what happens in Germany, where the airline is run in administration, and, separately, the interaction between ATOL and a proposed additional charge per flight of perhaps 50p or so for every flight taken, regardless of whether it is to a holiday destination. There are different ideas to be worked through; discussions are ongoing and I am keen to accelerate them.
Huw Merriman (Bexhill and Battle) (Con)
I find this situation maddening, because two years ago, during the statement on Monarch, I welcomed the then largest peacetime repatriation effort—I welcome the current largest peacetime repatriation effort, too—and I called for reform, so that we had an insolvency regime for airlines similar to the chapter 11 arrangement in the United States and the regimes in Germany and Italy. I was told by the then Secretary of State that the Government would consider that. Two years on, we have had a review but not delivered anything. Rather than repeat what has happened before, will the current Secretary of State make sure that we reform the sector, so that jobs are not put at risk, holiday experiences are not ruined and taxpayers’ money is not lost? It is all about actions, not words.
Grant Shapps
In simple terms, yes. As I mentioned, the review reported on 9 May, and I have been in my post since 23 July. However, the answer is yes, we will get on with it.
Luciana Berger (Liverpool, Wavertree) (LD)
Further to the important question from the hon. Member for Bexhill and Battle (Huw Merriman), will you indulge me, Mr Speaker, by allowing me to repeat three important sentences in the statement the Secretary of State shared with the House? It says:
“our efforts will turn to working through the reforms necessary to ensure passengers do not find themselves in this position again. We need to look at all the options, not just ATOL, but also whether it is possible for airlines to be able to wind down in an orderly manner and look after their customers themselves without the need for Government to step in. This is where we will focus our efforts in the weeks and months ahead.”
Exactly the same words were used in the response to the collapse of Monarch in October 2017 given by the previous Transport Secretary, the right hon. Member for Epsom and Ewell (Chris Grayling).
Luciana Berger
He is not here, but the House has heard everything the current Secretary of State said. Frankly, it is appalling that, two years on, we find ourselves in exactly the same position. What has happened to the Government’s plan, and what could have been done to ensure that the devastating impact on staff and holidaymakers, as well as the cost to this country, did not happen again?
Grant Shapps
I reject the assertion that nothing has happened. The airline insolvency review required time—in fact, the final version was published only on 9 May. A few months later, we are getting on with it. I will ensure that we work on this, and I hope we can do so on a cross-party basis. It is not quite as simple as one might imagine, because there are multiple facets to address, not one single thing to be done, but the hon. Lady has my undertaking that we will get on with this.
Mr Owen Paterson (North Shropshire) (Con)
I thank my right hon. Friend for his statement. I especially liked the passage on employees, having received a call today from a constituent who was a senior employee of Thomas Cook Airlines and has been made redundant. He is, quite rightly, seriously aggrieved that directors of Thomas Cook Airlines are continuing to function as directors of Thomas Cook Condor, and to be remunerated. My right hon. Friend mentioned in his statement that our right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has asked for a report from the Financial Reporting Council. Will he commit to looking at the relationships between Thomas Cook Airlines and Thomas Cook Condor, and the propriety of directors continuing to receive compensation while other employees are all being made redundant?
Grant Shapps
It is for the official receiver to do that work. The official receiver has the powers of the Company Directors Disqualification Act 1986, and will no doubt use them. I should say that we know, rightly, about all the payments to executives because of the transparency established, also rightly, over the past few years to ensure that, among other things, shareholders can see and hold CEOs to account.
Several hon. Members rose—
Rachel Reeves (Leeds West) (Lab)
The BEIS Committee believes that Thomas Cook’s directors and auditors have serious questions to answer. In the past five years, £20 million in bonuses has been paid to directors, and the company has now gone under with debts of more than £3 billion. Will the Secretary of State for Transport confirm that the directors of Thomas Cook will not be able to continue as directors at any other firm until the Insolvency Service has completed its investigation? Will the Government commit to replacing the FRC with a regulatory framework that holds directors to account, as our Committee has called for?
Grant Shapps
I think I answered the first question about the Insolvency Act and the Company Directors Disqualification Act. As the hon. Lady knows, it is for the official receiver to do that part of the work, and I cannot pre-empt it. She tempts me to stray into other areas, which are a long way from the transport brief, so I think I had better not answer now.
Several hon. Members rose—
Jeremy Lefroy (Stafford) (Con)
Is there any way the disgraceful hiking of prices—often double or triple—by other providers can be looked at under competition regulation?
Grant Shapps
My hon. Friend will be interested to hear that I put those questions to the CAA just yesterday, and asked it to investigate for me. The CAA believes that automatic pricing kicked in and was then quickly overridden. I mentioned in my statement that some airlines have done the opposite—Easyjet actually cut its prices by 15% for Thomas Cook passengers—and I am grateful to them and to the airlines that have lent their aircraft.
Lucy Powell (Manchester Central) (Lab/Co-op)
With more than 3,000 Thomas Cook employees in Greater Manchester, our economy is being hit particularly hard. May I press the Secretary of State on what has been done in the past four or five months, when the warning signs were all there but people could still buy package holidays 24 or 36 hours before the collapse? Should we not be doing more when the warning signs are so clear?
Grant Shapps
I do have a lot of sympathy with the hon. Lady’s comments. To me, the process of knowing that an airline is struggling and having Operation Matterhorn underway without being able to say anything, lest it precipitate collapse, is highly unsatisfactory. Many hon. Members have mentioned the need to have a route out of this situation—one that includes administration, so that there is no instant collapse and there is a much better and more controlled path for everyone, including employees. I agree absolutely with the hon. Lady, and we will get something done about this.
Antoinette Sandbach (Eddisbury) (Ind)
Will the Secretary of State join me in praising Thomas Cook employees who turned up for work on Monday to help to repatriate passengers? Will he make sure that the inquiries by the Insolvency Service take in the impact on Thomas Cook of the 20% depreciation in the pound against the euro, to help an assessment of whether other travel industry firms based in the UK are vulnerable to those currency movements?
Grant Shapps
My hon. Friend is right about the extraordinary work done by employees who know they have lost their job still working, even today, and by those who are uncertain about their future in many foreign and British locations. I pay tribute to them on behalf of the whole House, I am sure.
Many factors led to the collapse of Thomas Cook. Management, which has been mentioned many times, makes a large contribution, but so do other factors, including a very hot summer last year, which stopped people from going away, following the wrong business model, and the growth of the internet—problems that stretch back way before any of us in this House voted to have a referendum on Brexit.
Mr Clive Betts (Sheffield South East) (Lab)
The Secretary of State says we need to legislate to reform the travel industry, and we need a new Session of Parliament to do that. Will he guarantee the presence of a Bill to that effect in the Queen’s Speech?
Grant Shapps
Although I do not want to reveal the contents of the Queen’s Speech, I hope the hon. Gentleman will appreciate that I have hinted broadly at where we want to go. With the reassurance of those on the Opposition Front Bench, I think he will have his asks answered.
Henry Smith (Crawley) (Con)
Will the Transport Secretary join me in paying tribute to airlines such as Virgin Atlantic and EasyJet and to travel operators such as TUI, which have reached out to former Thomas Cook employees offering employment? I encourage the Government to get on with changing insolvency law and adopting a system similar to chapter 11 protection, which has saved so many US airlines.
Grant Shapps
My hon. Friend is absolutely right. He mentioned some airlines, and I should mention British Airways, TUI, Virgin, EasyJet and Ryanair. All of them, and others, have been incredibly helpful. It is also worth mentioning that many of them are very profitable; there is nothing systemic in the British business that is causing a problem, and most of these British airlines are doing very well. I have already answered the point about chapter 11 or an equivalent.
Ronnie Cowan (Inverclyde) (SNP)
I have two constituents who are stuck in Mexico. They were told they were on a flight; when they turned up for it, they were told they were not. They face the real possibility of no accommodation and no flights. They are tired, they are anxious and they are running out of money. What have the Government done under Operation Matterhorn to help people stuck in transit who are trying to get home?
Grant Shapps
It is hugely distressing to hear about people who are stuck. The CAA is actively monitoring anyone who calls in—the line is there, and the website is there—and even people who post on social media. If the hon. Gentleman would like to get assistance for his constituents, I will make sure that he is able to hook up with the CAA to get the message through. It should be said that I do not know his constituents’ particular circumstances, or whether they are under ATOL—in other words, whether their hotel is automatically being paid for, although it looks like it is not—but every effort is being made to bring people home. I hope the hon. Gentleman will understand that hiring 45 aircraft, when the 737 Max is out of commission and the market is therefore restricted, has made this an enormous project. Sometimes that has meant that we have had the wrong size aircraft for the number of passengers. However, the hon. Gentleman’s constituents, if they are stuck, will be given every assistance, and I think he and I can help get them that assistance.
Nigel Mills (Amber Valley) (Con)
Given that we cannot distinguish in this situation between passengers on a package holiday booking and passengers on a flight-only booking, does the Secretary of State agree that we should now bring flight-only bookings into the ATOL regime so that we have a fair contribution from those passengers and airlines?
Grant Shapps
It is not quite the case that we cannot distinguish, although I take my hon. Friend’s point. We can distinguish between the two, but there is a strong argument for making sure that, when someone books a flight one way or the other, it is insured and that the cost does not ultimately fall on the taxpayer.
Mr Kevan Jones (North Durham) (Lab)
The directors have walked away with millions while hard-working employees of Thomas Cook, such as Jemma Lynch in my constituency, who contacted me at the weekend, have lost their jobs. Will the Secretary of State outline how she and others can contact the Department for Work and Pensions for the help that has been outlined? Secondly, will he comment on the pensioners in receipt of pensions and on the future pension arrangements for those who have already paid into the pension schemes?
Grant Shapps
On the pensions front, I think there are four different Thomas Cook pensions, the largest of which is a £1 billion fund. That will now be handled through the usual insolvency pension fund process. It is, of course, a worrying time for everyone involved. With regard to the constituent the hon. Gentleman mentioned, the DWP is ready for her to make contact through the rapid response unit. If there are any difficulties, will the hon. Gentleman please alert me? I will make sure that the Business Secretary and the taskforce are immediately switched on to any problem that occurs. We are very keen to get realtime feedback on this.
James Cartlidge (South Suffolk) (Con)
Like many colleagues, I have a Thomas Cook branch, in Sudbury, in my constituency, which has closed, and I am grateful to the Secretary of State for the work he will be putting in place to support redundant staff. However, does he agree that the biggest cause of the collapse was the unsustainable debt that the company had, which came from a merger strategy that was completely flawed? Does he agree that those who oversaw those mergers, who would have earned handsomely from them, and those who have run this company into the ground must be held to account?
Grant Shapps
I entirely agree with my hon. Friend. Look, companies do sometimes go bust. The problem here is that they are going bust leaving a massive number of people and leaving this country with an enormous problem to resolve. That is why he is right about everything he has just said.
Daniel Zeichner (Cambridge) (Lab)
Airports such as Stansted have really stepped up in terms of helping people come home, but they also offer job opportunities. Can I have an assurance from the Secretary of State that every Thomas Cook employee will be made aware of the opportunities that are available at airports such as Stansted?
Grant Shapps
The hon. Gentleman is absolutely right. Stansted and, in fact, all the other airports—I have been in touch with many of them—have been very forthcoming with their assistance. Stansted is building a science, technology, engineering and maths college, with lots of job opportunities. The hon. Gentleman has made the point, which is on record, that Thomas Cook employees, who are losing their jobs, will no doubt find some of those travel-related jobs very interesting.
Douglas Ross (Moray) (Con)
Moray had two Thomas Cook branches prior to the collapse—one in Buckie and one in Elgin. I have been in discussions with the Business Secretary over the last few days, but can the Secretary of State reiterate what the Government are doing to support, advise and help former employees of this company, not only in high streets across Moray and the United Kingdom but abroad?
Grant Shapps
Yes, absolutely. This Jobcentre Plus rapid response service is absolutely set up, ready and mobilised to assist. As I said in a previous response, if any of my hon. Friend’s constituents walk in and find that that is not the case, I will certainly want to know about it, so that we can work on the cross-Government taskforce to ensure people are getting the help they need.
Wera Hobhouse (Bath) (LD)
Following the closure of 588 Thomas Cook outlets, including the one in Abbeygate Street in Bath, what are the Secretary of State and the Government doing about halting the further decline of the high street?
Grant Shapps
My right hon. Friend the high streets Minister has already been in contact with me about the further hole that this leaves in our high streets. He has a number of fantastic programmes, and the local authorities of many of us in the House will be bidding under them to enhance and improve high streets. As this latest collapse has shown, our high streets are dramatically changing as people need to come to the high street for an experience or a service that they cannot get elsewhere, including perhaps online. My right hon. Friend will be very happy to speak to the hon. Lady about that.
Richard Graham (Gloucester) (Con)
I welcome the action taken on the priorities, which are to repatriate customers as soon as possible and to help innocent staff, such as those at Thomas Cook in Gloucester, to get new jobs as quickly as possible. However, does my right hon. Friend agree that, as well as carrying out an investigation into the corporate behaviour, the directors’ decisions, the future protection for pensioners and so on, his Department should also look at the aviation sector, and at great British strengths in general, to see whether parts of that sector—particularly package tour operators—have not adjusted to changing circumstances as quickly as they should and to see what more can be done?
Grant Shapps
My hon. Friend is absolutely right: there are very profitable parts of this sector. One large British airline has just made record profits, which shows that there is money to be made in the sector. However, I would not want to be in the position of dictating to the sector how it runs its businesses—some will succeed, and some will not. What I am passionately interested in is that, when they do go wrong, as has been discussed, the problems do not fall on the taxpayer’s shoulders.
Alison McGovern (Wirral South) (Lab)
I can tell the Secretary of State that my constituents are not happy with the Government’s response. However, at the heart of this problem is a company that was signed off by auditors last year. The Government know that the audit system is not working well, and they had the Kingman review look into this issue and make recommendations. In terms of the cross-Government arrangements the Secretary of State is speaking about, what have the Government done to reform audit, alongside the recommendations that they themselves asked for?
Grant Shapps
The hon. Lady is well versed in these matters, and she will know that there are moves afoot to change the process. We have expressed concerns ourselves over the audit approach in this country. I do not want to completely jump to conclusions; because someone reads something in the weekend paper, that does not always mean that it is true. I read that repatriation would cost the taxpayer £600 million, but that is not the case. We do need to allow the process to work its way through. I know that the hon. Lady is actively involved in ensuring that the way that auditing takes places in this country is changed and improved. The taskforce will no doubt work on that as well.
Alan Mak (Havant) (Con)
I thank the Secretary of State for the support he has given to Thomas Cook employees in my constituency. Can he reassure me that British officials at embassies and missions around the world are also working hard to provide support where needed?
Grant Shapps
I must pay tribute to the extraordinary work that has been done in the foreign missions around the world. We are very grateful to the Foreign and Commonwealth Office staff, without whom we could not carry out that work. I also want to put on record my thanks to the surge staff from HMRC and the Civil Aviation Authority who have been absolute troopers in airports across the world.
Lisa Nandy (Wigan) (Lab)
Thousands of people in Greater Manchester, including many in Wigan, have lost their jobs, but the Scandinavian and German subsidiaries of Thomas Cook are still flying. The Government have failed not just to provide the financial assistance that would have been necessary to keep those companies going, but to bring forward legislation that would enable those airlines in the UK to continue flying in protective administration. It did not have to be like this. This Government have barely brought anything to this House in recent months. They do not need a Queen’s Speech to do that; they should do it right now.
Grant Shapps
The hon. Lady confuses two points. It is absolutely true, as I have said many times, that we need a new administration regime, but the fundamental difference that she refers to in the Scandinavian and German examples is the profitability of the underlying business there due to the different influences in their particular markets and the way that the businesses have been run at that sub-level.
Kevin Hollinrake (Thirsk and Malton) (Con)
Does my right hon. Friend agree that we should always be cautious about bailing out private sector businesses, particularly ones that are £1.9 billion in debt and struggle to make money even in a good year? We should also look at our competitions policy and try to avoid businesses getting so big that when they fail, they have a widespread effect on UK consumers.
Grant Shapps
My hon. Friend makes a very good point. We do get back to this fundamental point that I know is causing some concern on the Opposition Benches, which is that the underlying business has to be profitable; otherwise there is nothing to bail out—there is nothing to lend money to. When money is being lost at that rate, the idea that yet more taxpayers’ money is pumped into something that will lose it in a matter of weeks or months seems to me to be crazy.
Stewart Malcolm McDonald (Glasgow South) (SNP)
What advice does the Secretary of State have for my constituent, Alan Paterson, who is stuck right now in Ibiza? He did not realise that he was entitled to a repatriation flight home, and, as he wanted to get back for his new job this weekend, he spent hundreds of pounds on flights that he did not need to buy in the first place. KLM is now refusing to refund him that money. Does he agree that that is mean-spirited, and that it should not be profiting from this disaster?
Grant Shapps
I am very sorry to hear about his constituent’s situation. No airlines should be trying to profit out of this situation. As I have mentioned, the UK airlines in particular have really tried to assist once we got over this issue of some initial surge pricing that seemed to kick in. For the most part, they have been extraordinarily helpful, lending aircraft and cutting some of their prices. I am very concerned to hear about this KLM case.
Vicky Ford (Chelmsford) (Con)
We are living through a digital age, and businesses that do not adapt will struggle, but may I thank the Government for thinking about the people who have been affected here? What assistance is there likely to be for people who have bought flights or holidays that have not yet started?
Grant Shapps
A large number of people have bought holidays that are yet to start. If they were package holidays, they are ATOL-protected and people will simply get their money back. Those who have bought flights-only will not automatically get that money back, and will want to refer to their credit cards, debit cards, holiday insurance and, sometimes, an alternate travel agents from whom they have booked.
Anneliese Dodds (Oxford East) (Lab/Co-op)
Yes, there are legal differences between the UK and Germany, but there is a big, big difference in political will as well. The Secretary of State keeps mentioning Air Berlin, so I have one little general knowledge question for him. The German Government loan that was provided to Air Berlin enabled its operations to be transferred in a planned manner into other companies. Has it, or has it not, been paid back?
Grant Shapps
The big difference with the airlines that are surviving or even sub-surviving within this group is their profitability. I think we have gone round this quite a few times. I am in agreement with the hon. Lady that we do need to have an airline administration system that enables airlines to continue flying, but those two differences—profitability and/or the ability to be in administration—are fundamental differences from the situation that existed here. This idea, which I think is the third option that she is trying to inject into this, that somehow for some crazed reason the Government would not want to do everything possible to try to save a 178-year-old British icon is completely ridiculous. Of course, we want to save it.
Paul Masterton (East Renfrewshire) (Con)
The Thomas Cook branch in Clarkston was operated by a small but excellent team who are now worried about their futures and it also occupied a key high street unit. I very much welcome the cross-departmental taskforce, but can the Secretary of State ensure that Members across the House continue to be updated as to its progress, so that we can continue to provide the best support and advice to our constituents?
Grant Shapps
I will ask my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy, who is part of the cross-departmental taskforce, to make sure that that happens and I will continue to take a keen interest in the matter myself.
Susan Elan Jones (Clwyd South) (Lab)
My constituents and many, many other constituents across the country have been affected by this awful situation. What I do not understand is the fact that this Government and the Opposition, and pretty much everyone, have recognised that we need new legislation. Why the heck do we have to wait for a new Queen’s Speech? Why can we not have emergency legislation next week?
Grant Shapps
This has been the most interesting part of this afternoon. As has been discussed, we have an airline insolvency review that has now reported, and there seems to be a very strong desire across the House to do something with that. So let us talk about it.
Mike Wood (Dudley South) (Con)
Will my right hon. Friend work with other travel companies, as well as ministerial colleagues, to ensure that the skills of Thomas Cook employees up and down the country can be retained within the sector?
Grant Shapps
My hon. Friend will be pleased to know that the skills are in high demand and that many of the other travel companies are employing. Indeed, as we have heard from other hon. Members, both airlines as well as skill centres, such as those in Stansted, are actively reaching out. I am very hopeful that those who have lost their jobs through Thomas Cook will, in fact, be employed very quickly within the travel sector.
Kate Green (Stretford and Urmston) (Lab)
What discussions are the Government having with the commercial lending sector, both in relation to the very substantial debt that will be the legacy of this debacle, and to the personal debt of employees? Some of my constituents are extremely concerned about the attitude of their creditors to their mortgages and other loans.
Grant Shapps
My right hon. Friend the Business Secretary is writing to the lenders on this specific point, and so perhaps can provide more detail about what she has asked them to do at this Dispatch Box, or I will ask her to write separately. It is also the case that we will be looking to provide as much support as possible. It is important to remember that the deal that Thomas Cook was trying to arrange was actually with a Chinese company for £900 million, so the corporate funding issue is another interesting part that will, I know, be unpacked over time.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
On behalf of my constituents in Aberdeenshire, who have found themselves in difficulty of late, may I thank my right hon. Friend, all the staff at the Department for Transport and the CAA? For those people who might find themselves in difficulty after the two-week period of the official operation has ended, will he commit his staff at the Department for Transport and the CAA to continue their support for those who find themselves in difficulty in a fortnight’s time?
Grant Shapps
I should mention why it is a two-week period. It is actually because the holidays mostly coincide with those dates when people are coming back on the normal day of their holiday, after which point there would be sufficient capacity in the travel system to get people home on regular commercial flights. We will stand by people who have already booked, who are already out there, and who are perhaps on a two-and-a-half week holiday, to get them home by alternative means.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I have many constituents who are pilots. Two holiday reps who have been affected by this crisis have contacted me. Is the Secretary of State aware that some former and current employees until very recently of Thomas Cook are affected themselves, because employee holiday benefits do not appear to be covered by ATOL? I know of one constituent whose relative is now currently stuck in Turkey. They used employee holiday benefits and are not covered by ATOL. Will he look urgently at that matter, because it is a double whammy for the employees of Thomas Cook?
Grant Shapps
Yes, that is right. The hon. Gentleman will know the strict rules that apply through the Insolvency Service on people’s redundancy pay, which cover the holiday element as well as the non-holiday element being tax free. If the hon. Gentleman wants to write a letter to me, I would be very happy to look into the case for his constituent.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
Will the Secretary of State pay tribute to Peel Park firm AGO Outsourcing in my constituency, which is very keen to offer job opportunities to the staff affected at the two stores in my area? It really is remarkable and we are so pleased that the company is doing that. East Kilbride is particularly affected by the situation, so I would be grateful if the Secretary of State would arrange for me to have a meeting with the taskforce to ensure that I can help people on the frontline.
Grant Shapps
I am very pleased to pay tribute to the employers in the hon. Lady’s constituency that are providing or offering employment. She is not the first Member this afternoon who has suggested that others are stepping in to offer employment. I would also be very happy to ask my right hon. Friend the Business Secretary to set up that meeting.
Bill Esterson (Sefton Central) (Lab)
Those of my constituents who have lost their jobs tell me that the airline was indeed profitable, so why did the Government not intervene to ensure that the airline and any other parts of the business that were profitable—along with the jobs in those businesses—could have been saved?
Grant Shapps
I am interested to hear that the hon. Gentleman’s constituents say that, because the accounts clearly show that the company lost £1.5 billion within a six-month period alone, and then issued a further profits warning. There is obviously a lot of detangling of the business to be done. As the hon. Gentleman will understand, the Government are not in the business of running a travel company, but we do want to ensure that whatever went wrong here is properly investigated and we will certainly ensure that that happens.
Liz McInnes (Heywood and Middleton) (Lab)
The Secretary of State talks about throwing good money after bad, but surely it would have been better for British business if Thomas Cook had been bailed out, rather than spending millions of pounds on repatriating holidaymakers.
Grant Shapps
I mentioned the £900 million Fosun deal that eventually fell through to indicate the extent of the money required just to keep the business afloat. That was the deal that was on the table while this was all going on. It then turned out, at the eleventh hour, that even Fosun was not happy to go with a deal, because it had concerns. A new number then started to emerge: an additional £250 million. Any rational person—including, incidentally, the accounting officers throughout Government —would have looked at the deal and refused to sign off such a payment. I am absolutely certain that anyone looking into this matter in detail will demonstrate that the deal would have been a very poor move for the taxpayer, and that it would probably have led us to exactly the position we are in today of repatriating 150,000 people—yet having spent up to £250 million of taxpayers’ money as well.
Paula Sherriff (Dewsbury) (Lab)
I have been contacted by a constituent—and I am aware of a small number of others—who has been contacted by a person purporting to be responsible for delivering refunds on behalf of Thomas Cook Group, asking for their credit card details. These people are adamant that they have not booked flights or holidays, and that they do not have any outstanding financial arrangements with the Thomas Cook Group. Is the Secretary of State aware of what appears to be a scam? If so, what is he doing about it?
Grant Shapps
The hon. Lady is right. I was made aware of this scam yesterday, and it is absolutely disgusting that it could happen at this time. We have issued messages through things such as Neighbourhood Watch’s Online Watch Link email system, which the hon. Lady will be familiar with, telling people to be on the lookout for these sorts of scams; obviously, to someone who did not actually even have a holiday booked, it is absolutely ridiculous.
Hannah Bardell (Livingston) (SNP)
My constituent, Mr Boland, lost his wife Elizabeth last year in Cuba on a Thomas Cook holiday. It now turns out that the cause of death was wrong on the death certificate, and for the last year I have been trying to get Thomas Cook to investigate the issue properly and to give due compensation. In the past day, I have been told that the company will not investigate because it has gone under and that the case is closed. I am sorry, but this is not good enough for my constituent. Will the Secretary of State meet me to discuss the issue?
Grant Shapps
That is obviously very distressing. I would be pleased to meet the hon. Lady and to take up the case with the Insolvency Service.
Julie Cooper (Burnley) (Lab)
I have constituents who are due to travel on their holidays in October—holidays provided by a third party, booked using Thomas Cook travel agency services—but who have found out this week that the final moneys have not been paid to the holiday provider and that there is going to be no holiday for them. Can the Secretary of State tell me what support will be available to people in that position?
Grant Shapps
Yes. That situation will depend on whether the holiday was in the end booked through an ATOL-protected scheme or not. From the hon. Lady’s description, it sounds like it may have been, but I suggest that she writes to me with the full details and I will ensure that the case is investigated.
Douglas Chapman (Dunfermline and West Fife) (SNP)
In this House on 16 May, I raised the issue of the sustainability of Thomas Cook following a Brexit-related trading warning. The ministerial response at that point reeked of complacency on stilts. What discussions have taken place between the Government and Thomas Cook during this period, and what actions were agreed between the Government and Thomas Cook to avoid the company’s collapse?
Grant Shapps
The CAA holds a large part of the duty of ensuring the sustainability of an airline. In fact, it would have been responsible for renewing the airline’s licence at the beginning of October, so it was keeping a close eye on things. The Department will—latterly, as things got much more serious, particularly through the later profit warnings—have become increasingly involved. I was made aware at some point after I joined the Department of the difficulties that the company may have been in. Of course, everyone was hoping that the airline would be rescued, and there were very serious and full talks in place to rescue it. The problem for anyone commenting on such things is that they can precipitate exactly the thing they are trying to avoid.
Jo Platt (Leigh) (Lab/Co-op)
May I thank the Greater Manchester Mayor and the Greater Manchester Combined Authority for their work over the past few days, helping to signpost customers and staff stuck overseas? Like my colleagues, over the weekend I have been contacted by several Thomas Cook employees who are understandably distressed. Thomas Cook executives have taken home £20 million in bonuses over the last five years. Does the Secretary of State agree that this shows just how broken our system is?
Grant Shapps
As the hon. Lady knows, I share her concerns. I do not want to abuse Mr Speaker’s counsel, so I refer the hon. Lady to my previous comments and will have the Insolvency Service look fully into the situation.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
About 250 Thomas Cook staff based at Glasgow airport in my constituency, along with countless others in shops across Renfrewshire, have lost their livelihoods; my thoughts are very much with them. Can the Secretary of State tell us whether, in taking his deeply disappointing decision not to intervene, he asked his Department and other Departments to calculate not only the cost of Operation Matterhorn itself, but the related costs, including out-of-work benefits, the loss of tax revenue to the Exchequer and the wider economic impact of the collapse?
Grant Shapps
As the hon. Gentleman will know, there are pretty strict rules involved in when the state can and cannot intervene in private businesses. If it intervened all the time, other much more successful businesses would be disadvantaged and those employments could be affected. As I mentioned briefly earlier, an accounting officer would not have signed off that kind of intervention because it simply would have represented a big problem for the state, and we almost certainly would have ended up having to repatriate people in any case, as we are today.
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
Three thousand people in Greater Manchester—the loyal workforce of Thomas Cook—are affected by this situation, and we are disgusted by the greediness of the directors and management of the company. The Secretary of State mentioned that the Turkish Government did not make an approach, and that the Spanish Government did but were too late. Why were the UK Government not proactive? Why did they not pick up the phone and make the call to those Governments?
Grant Shapps
Let me explain so that the House fully understands the situation. This is a private company that was getting on with trying to put together its own rescue deal, which—just to be clear—the British Government would absolutely want it to do. As I said before, why on earth would we want to lose a landmark British company? Of course, we would not want to do so. But it is for the directors of that business properly to organise for its rescue. Had any kind of substantial plan been put to us by the company, or by other interested parties or countries, we would have been very interested in it, but the truth is that no viable plan was put forward.
Chris Ruane (Vale of Clwyd) (Lab)
I thank the Minister for his answers to questions about Thomas Cook workers who work abroad, but they were a little bit woolly, so let me ask him specifically: can he give a cast-iron guarantee that not one of those workers will be left stranded abroad, and that each and every one of them will be paid in full for the hours that they have worked since the company was declared bankrupt?
Grant Shapps
I have tried to be as clear as I can about Thomas Cook workers abroad. I have asked the CAA to work on the matter urgently. Obviously the first priority is getting 150,000 people home. In terms of getting the employees home, we are obviously not going to leave people stranded. As regards pay, that is very tightly set out under legislation in an insolvency situation, and that is exactly what will be followed.
Mr Gavin Shuker (Luton South) (Ind)
When Monarch collapsed in my constituency, we learned that many people with sector-specific skills, such as pilots, cabin crew and so on, could walk into a new job, but those who were lower-paid with less sector-specific skills really struggled. What is the Secretary of State doing on that particular issue? If his honest answer is that it had not occurred to him, will he look at it urgently?
Grant Shapps
It absolutely has occurred to us. There are 630 jobcentres and the Rapid Response Service, alongside the National Careers Service. They are already working with local partners in all the different areas to try to ensure, through the national employer partnership teams, that people get back into employment. I have already mentioned some of the other support to do with childcare and the tools needed when people are going for interviews. We absolutely stand behind that. I say to the hon. Gentleman and everyone in this House that, at a time of record employment and record low unemployment, I hope that people find that that support helps them into another job very quickly.
Mary Glindon (North Tyneside) (Lab)
Given the importance of the rapid response teams, will the Secretary of State say what extra Government resources they are receiving so that they can fully support these unemployed workers?
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
I used to work for Thomas Cook and ABTA doing holiday protection, so I know that the ATOL scheme covers repatriation and also refunds. The Secretary of State has set out the repatriation costs. Will he set out how much the refunds cost is, because I understand that it is nearly £1 billion? Is that a figure he recognises?
Grant Shapps
I know that the hon. Gentleman has considerable expertise in these areas. The answer to his question is that £420 million is the projected cost of future bookings through the ATOL system, insured or through its funds.
Christian Matheson (City of Chester) (Lab)
Over the weekend I was contacted by numerous constituents, most of whom work out of Manchester airport. The message that they were giving me was that trading could have continued, if not a bail-out but a £200 million line of credit guaranteed by the Government had been extended. Is that correct, and if so, why was it not extended?
Grant Shapps
We have this slightly strange situation where everyone is acknowledging how badly they think the company may have been run and expressing concern about the decisions that have been made and the directors, but at the same time saying, please bail out this failing—what people think is a failing—organisation. The simple answer is that if we thought that it was possible, we absolutely would have done something.
Justin Madders (Ellesmere Port and Neston) (Lab)
My constituents who have lost their jobs are absolutely furious at the sight of directors waltzing off to Germany with their jobs intact, as I am sure the Secretary of State can understand. I hope that in due course the directors disqualification proceedings come in. In the meantime, people need the statutory payments due to them as soon as possible, so can he assure me that the Redundancy Payments Office is sufficiently well resourced?
Grant Shapps
Yes, I absolutely can. In fact, early indications are that the first payments will start flowing this Friday the 27th.
Several hon. Members rose—
Chris Stephens (Glasgow South West) (SNP)
Going back to the question of the £250 million, will the Secretary of State confirm that that was for credit purposes—that it was effectively in order for Thomas Cook to be able to say to the bank that it had that reserve fund of £250 million?
Grant Shapps
Yes. The problem was that it was never apparent that there was a package to sit behind that that somebody putting money in would support—in other words, that it was not necessarily going to save the company even then.
Mike Amesbury (Weaver Vale) (Lab)
Penny Jepson has lost her job after working for Thomas Cook for 16 years—one of 9,000 people. She is concerned about the inept response from the Government. It is costing an absolute fortune to repatriate people. Why not simply invest in this company via a bridging loan?
Grant Shapps
I know the hon. Gentleman has heard this answer before, but Governments are not about running travel companies, obviously. If there was any way in which we thought a short-term guarantee or loan would have kept the company going, it would have been a serious prospect, but I am afraid that there was never a serious plan brought to us on that front.
Several hon. Members rose—
Stephen Lloyd (Eastbourne) (Ind)
Is the Secretary of State aware that scam telephone artists are fanning out across the country phoning people offering a refund if they provide their bank details? People will lose money. Will he publicise the fact that the public should be aware of this?
Grant Shapps
I certainly will. The hon. Gentleman’s question has helped to highlight the issue, and I will do my best to do the same.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
It would be helpful if the Secretary of State set out the cost to the taxpayer of Operation Matterhorn so far and what likelihood there is, realistically, of getting money back from individual people’s travel insurance.
Grant Shapps
Broadly speaking, we know that the previous Monarch operation was £50 million, and this issue is probably about twice the size, so that indicates a cost of some £100 million.
Patricia Gibson (North Ayrshire and Arran) (SNP)
My constituents in Largs and Saltcoats will be keen to make sure that outstanding wages are paid to them. What words of advice does the Secretary of State have for the other airlines that are clearly and ruthlessly profiteering on the back of this collapse?
Grant Shapps
There were some early examples of what looked like incredible surge pricing, and that is very unwelcome. We contacted the airlines through the CAA. Most of them have overridden that system, as I mentioned. Some of them are undercharging and others have lent their planes. I would therefore be interested to see any ongoing examples that I can ask the CAA to investigate.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
The EU package travel directive protects those who are travelling if their package holiday has been cancelled. Does the Secretary of State believe that we should be retaining this protection for future generations of travellers?
John Mc Nally (Falkirk) (SNP)
I would like to make the Secretary of State aware that one of my constituents has had three emails today wondering why he has cancelled his direct debit for his Thomas Cook holiday next year.
Grant Shapps
Again, I am very happy to look into any individual circumstances that the hon. Gentleman might write to me about.
Ruth George (High Peak) (Lab)
There are many young, vulnerable travel reps stuck abroad. The Secretary of State’s statement that he is talking to the CAA about their position does not offer them much reassurance when they will have no right to continue working in the EU after 31 October. What will he do to make sure that he can give them the assurances they need that their costs of coming home will be paid?
Grant Shapps
It is important not to worry unnecessarily worry people who are already in a very distressing situation. This will be done well before 31 October, given that we are not even into October yet and this operation is going to run for another 12 days, plus time to bring people home. The two issues are not connected. I absolutely want to reassure anyone working for Thomas Cook, “We absolutely are with you.”
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
The Secretary of State has sought to assure my constituents in the Vale of Leven and in Clydebank, and in offices across the UK, that their pensions are fine and that employment opportunities are available for the future. Nevertheless, can he take a step forward and also assure them that if they need to claim universal credit they will not need to wait six weeks for it; and more specifically, for those abroad who are UK nationals, that Thomas Cook has paid their national insurance contributions, allowing them to claim social security when they return home?
Grant Shapps
As I said, the pension set-up is very clearly described through the usual channels. It depends on whether somebody is retired, what stage they are at and so on. With regard to universal credit, if people go in for it now, they can get an advance payment on it.
Ian Murray (Edinburgh South) (Lab)
What discussions has the Secretary of State had with the travel insurance sector to ensure that individual claims can be put in easily and no obstacles will be put in the way of settling those claims?
Grant Shapps
We will absolutely put every pressure on to make sure that these claims are settled as quickly as possible. Along with my right hon. Friend the Business Secretary, we are on the case.
Alison Thewliss (Glasgow Central) (SNP)
I appreciate what the Secretary of State has said about employment opportunities, but my constituent, a Thomas Cook employee of 17 years, is pregnant and worried about her prospects for future employment. Is there anything specific he can say to assist my constituent at this time?
Grant Shapps
As I say, I am very heartened by the fact that we live in a time of high employment levels that will give the hon. Lady’s constituent the very best opportunity. Also, the sort of bespoke arrangements being made through Jobcentre Plus should enable her constituent—I would be grateful to the hon. Lady for keeping me posted on the case—to find herself in new work. I would be very happy to follow up the case with the hon. Lady.
Brendan O'Hara (Argyll and Bute) (SNP)
Can Thomas Cook employees, including those in my constituency—particularly, in the towns of Dunoon and Helensburgh—be assured that there is absolutely nothing more the Secretary of State could have done to help? If he was given the chance again, would he follow exactly the same path as he has done?
Thomas Cook
Grant Shapps Excerpts(4 years, 10 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Transport (Grant Shapps)
I am today updating the House at the earliest opportunity on the action the Government are taking to support those affected by the collapse of Thomas Cook, in particular the 150,000 passengers left abroad without a flight back to the UK and the 9,000 people who have lost their jobs in the UK. This situation is deeply regrettable. All parties considered options to avoid the collapse of the company. Ultimately, however, Thomas Cook’s directors took the decision to place it into liquidation and it ceased trading at around 2 am on Monday 23 September.
It is normal practice, when a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, for the Minister concerned:
To present a departmental minute to Parliament, giving particulars of the liability created and explaining the circumstances: and
To refrain from incurring the liability until 14 parliamentary sitting days after the issue of the minute, except in the cases of special urgency.
I am making this statement to provide the House with retrospective notice of two contingent liabilities (both uncapped) created by my Department in responding to the collapse of Thomas Cook:
Providing an indemnity created by an agreement with the CAA, under section 16 of the Civil Aviation Act (1982), for the repatriation of non-ATOL-protected Thomas Cook passengers (the CAA indemnity); and
Providing an indemnity to the official receiver (OR), in his capacity as liquidator of the failed Thomas Cook companies (in liquidation) (the OR indemnity).
In both cases, I was unable to refrain from incurring the liabilities, or to provide the normal 14 sitting days’ advance notice, due to the rapid development of the situation in the days leading up to Thomas Cook’s insolvency, which occurred while the House was not sitting, and the special urgency that resulted. The terms of the contingent liabilities were also commercially sensitive at the point they were created.
The CAA indemnity is identical to that provided in relation to the Monarch repatriation exercise in October 2017. The indemnity could be called, in respect of any claim against the CAA if there is a successful legal challenge relating to the repatriation requiring damages to be paid.
The official receiver (OR) was appointed liquidator of the Thomas Cook companies on Monday 23 September 2019. The OR indemnity has two elements and is based on the precedent of the indemnity provided by the Department for Business, Energy, and Industrial Strategy to the OR following the insolvency of British Steel in May 2019:
An indemnity to meet any shortfall in the OR’s costs that cannot be covered by the realisation of the assets of the Thomas Cook companies. This would include any unexpected costs arising from a services agreement which the CAA has entered into with the Thomas Cook companies (in liquidation) to keep some key elements of Thomas Cook running to facilitate a smooth repatriation of UK passengers (e.g. key IT systems containing passenger information and flight booking details). Without this indemnity the OR would not have taken the appointment. This approach is playing an important role in achieving a smooth repatriation of all UK passengers who were overseas at the time of Thomas Cook’s insolvency. In the absence of the services agreement there would have been a markedly higher risk of Thomas Cook being immediately wound up. This would have had the effect of creating an extremely disjointed insolvency process, with CAA having no meaningful ability to plan or control the provision of repatriation flights, and no means of informing affected passengers about their new flight arrangements.
The OR also requested, and with my authorisation was provided with, an indemnity against any liabilities arising from any claims brought against him as liquidator. This is reasonable in the case of the OR, who although an office-holder, is acting in his personal capacity and, in this case, was being asked to do something which would not normally be done in a liquidation, namely to maintain part of the Thomas Cook companies running to provide services to the CAA, which is crucial to the repatriation exercise.
Authority for any expenditure required under both liabilities will be sought through the normal supply procedure. HM Treasury has approved the proposal in principle including conditions to require both CAA and OR to demonstrate reasonable endeavours in their actions.
[HCWS1831]
Transport
Grant Shapps Excerpts(4 years, 10 months ago)
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Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
Will the Government widen this review not just to their complete lack of grip on the HS2 project, but to the continued failure of the Department to remember that there are towns as well as cities in this country? It is continually locking billions of pounds into ever-delayed, ever-escalating projects for cities, while towns such as Castleford and Pontefract have inadequate trains—overcrowded, old Pacer trains, with no disabled access to our trains—and, once again, we are just expected to accept a trickle-down of benefits many decades into the future. It is not good enough. When will we actually get a fair deal for our towns?
Grant Shapps
As the representative of two towns—one, Welwyn Garden, calls itself a city, but it is actually a town—I absolutely agree with the idea that towns have a significant part to play in the economic and social life of our country. One good piece of news: those Pacers are finally going by the end of this year.
[Official Report, 5 September 2019, Vol. 664, c. 357-8.]
Letter of correction from the Secretary of State for Transport:
An error has been identified in the answer I gave to the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper).
The correct answer should have been:
Grant Shapps
As the representative of two towns—one, Welwyn Garden, calls itself a city, but it is actually a town—I absolutely agree with the idea that towns have a significant part to play in the economic and social life of our country. One good piece of news: most of those Pacers are finally going by the end of this year.