Aviation Sector

Huw Merriman Excerpts

Thursday 10th September 2020 Commons Chamber

[Huw Merriman (Bexhill and Battle) (Con)]

I beg to move,

That this House has considered the aviation sector.

Thank you, Madam Deputy Speaker, for calling me to open this debate, which I do on behalf of the hon. Member for Erith and Thamesmead (Abena Oppong-Asare). I thank the Backbench Business Committee, the Petitions Committee and my own Select Committee on Transport for making this debate happen.

To frame the debate, I will talk about the current aviation picture, the Government’s welcome interventions, what more the Government can and should do, the jobs at risk in the aviation sector, and passenger and consumer rights. I am happy to take interventions, as stated, but I ask right hon. and hon. Members to remember that they will be within my time limit, so perhaps they could make them snappy.

Let us talk about the current picture. The aviation network in the UK is the third largest in the world and the largest in Europe. It is a sector that we should all be proud of. As a nation—an island nation—we have travelled the world, explored the world, sent our entrepreneurs around the world and brought people to us. I say to the Government that the aviation sector is vital, not just from a business perspective but from a strategic angle. It is worth £28 billion to the UK economy. It employs 230,000 people directly, and for each one of those, 4.7 more jobs are created in the supply chain or the passenger experience.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

I thank the Chair of the Transport Committee for helping, along with my hon. Friend the Member for Erith and Thamesmead (Abena Oppong-Asare), to get this debate. Does he agree that the national picture that he describes of job losses and the impact on the supply chain also has an impact on local areas where airports are a major part of the local economy? Does he agree that it would be worth the Government considering not just sector-specific support but specific short-term area-based support for the aviation communities that have been very badly hit at this time?

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[Huw Merriman]

My fellow member of the Transport Committee is absolutely right. We should bear in mind what has happened to passenger numbers. Numbers in April this year compared with April last year were down by 97%. To put that in focus, that means 5,800 flights whereas we previously had 201,000. It has been an absolute collapse. The hon. Lady is absolutely right to highlight not just the impact on aviation but on communities that work in it or indeed support it from a retail perspective.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for bringing this debate forward and for giving me the chance to ask a question as well. The sector is worth some £1.9 billion to the economy of Northern Ireland. It is also very important strategically for the jobs it creates, and equally relevant to the other regions. Does he agree that there must be a meaningful sector-specific programme for aerospace from 1 November this year that recognises not only the centrality of technology and development in terms of the upcoming comprehensive spending review, but the decades-long challenge we have in improving productivity and skills retention and development. All the areas—Northern Ireland, Scotland, Wales and parts of England—must work together and focus on the Minister to get the help that we need, for all those reasons.

[Huw Merriman]

I thank the hon. Gentleman, as ever, for his contribution. He is absolutely right. Perhaps this is where I should put in my asks with the new Minister, who I absolutely welcome to the Dispatch Box. Yesterday was his first day in front of the Transport Committee and today is his first day at the Dispatch Box. It has been a busy week for him already, with more to come.

[Lilian Greenwood (Nottingham South) (Lab)]

rose—

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

rose—

[Huw Merriman]

Before I take any further interventions I will make a little more progress.

The airports have already lost £2 billion just in the first few months, and they expect to lose another £4 billion as well. I would like to put on record my thanks to this Government for the £330 billion injection into businesses to keep them going. That has meant that 9 million people have been able to stay in employment through the furlough scheme. But of course I am going to stand here and ask for more, as is always the annoying case for Ministers with Back Benchers.

[Lilian Greenwood]

rose—

[Huw Merriman]

I will take some more interventions in a moment.

I would like the Government to look at the aviation sector specifically. I say this because the Government—and I do understand this—have brought in quarantine to keep us healthy and safe in travelling to these countries. That is the right thing to do—a nuance-based approach to ensure that where it is safe to travel we can do so on air bridges and not quarantine for 14 days. None the less, that intervention does have an impact on aviation, and that justifies more Government support. In addition, testing is happening in other parts of the world. The Government have not yet brought testing forward. I very much hope that during the quarantine period we can allow people to take a test and then come off quarantine. That may well be later in the process, but I would like to see that measure.

Those interventions from Government, which the aviation sector would say intervene on its ability to keep going, justify a sector-specific deal. I would like an extension of the furlough scheme for aviation. I would like a complete cut of air passenger duty for a period, which EasyJet says would allow 60% of national flights to continue. I would like a business rate cessation to be brought forward as the Scottish Government have done. I would like to see those measures from the Government in return for our continued approach on quarantine and testing.

[Ms Nusrat Ghani (Wealden) (Con)]

I am grateful to my hon. Friend and neighbour for giving way. As well as asking for a greater financial package, does he believe that the Government need to work much more closely with our airports, particularly Gatwick and Heathrow? They are proposing testing and screening that will help our aviation sector to get to where it needs to be considering where we are with covid and the economy.

[Huw Merriman]

I thank my hon. Friend for that point. As she and I know, Gatwick is the jewel in our crown in the south-east. Many of our constituents rely on it for good, well-paid jobs, but it is looking at staff reductions of 25%, which worries me greatly.

[Lilian Greenwood]

rose—

[Huw Merriman]

I will, of course, take an intervention from my hon. Friend—the hon. Lady who is a previous Chair of the Transport Committee.

[Lilian Greenwood]

I hope that we are also hon. Friends. The hon. Gentleman is speaking about the intervention and support required from the Government. A few moments ago we heard about the report from Climate Assembly UK that was launched today, which includes bold recommendations about the future of aviation and our route to net zero 2050. Does he agree that taxpayer support for the sector should be conditional on action to both protect workers and to cut emissions, as we transition to a more sustainable future for the aviation sector?

[Huw Merriman]

I thank my predecessor for all the amazing work she did on the Transport Committee, as well as today with the climate change report. She is absolutely right. When the Government bring out their sector renewal programme for aviation—I hope we will hear more from the Minister on that—I hope we will see incentives for greening aviation. That must be the future.

[Several hon. Members rose—]

[Huw Merriman]

I will make a little more progress as I have only a few minutes left, and I might then take one or two more interventions. I wish, certainly from the Government Benches, to touch on the opportunity for more competition in the market. If airlines are not going to expand, and if they are to cut their workforce drastically, I would like the way that we allocate slots at our airports to be changed dramatically. If companies such as British Airways do not have the staff to continue to utilise the slots—hon. Members should bear in mind that from a legacy perspective BA has 51% of Heathrow slots—I would like those slots to be auctioned to new entrants to the market, so that we can make more money and see a bit more responsibility. Those are good free-market principles, and once we leave the European Union, we can start to make such changes. I know we are somewhat bound by IATA rules, but so is the US and it still makes its own rules. I urge the Government to look at the competition argument for slot reallocation.

Jobs and redundancies are a huge worry, and 30,000 jobs in the aviation sector have already been directly put at risk. Virgin and Ryanair have each suffered 3,500 job losses, and easyJet has lost 4,500. The Transport Committee report made clear that redundancies were inevitable with such a drop in passenger numbers, but I am afraid I must make a special mention of British Airways, our national flag carrier. Of its 42,000 staff, 12,000 jobs have been put at risk. Across the board, those members of staff were given the option of taking voluntary redundancy, and if they did not sign a settlement agreement they would lose their staff travel allowance, or they had effectively to reapply for their old jobs on terms that had not been set out. That was a big Russian roulette gamble for them and a big risk. If they did not agree to voluntary redundancy they could be looking at reductions in terms and conditions at more than 50%. For them not to even know those conditions when being given such a choice is, in my view, absolutely shoddy treatment, especially at a time when British Airways’ parent company, International Airlines Group, is looking to spend €1 billion on a new airliner, and 66% of its profits was put in by British Airways staff.

The reason there is so much suspicion about the behaviour of British Airways is because this restructuring has been tried before. This was dusted off, and there is a perception and a feeling, and I think the evidence, that the pandemic has provided the perfect backdrop for BA to start paying its staff on low-cost terms. If that is the case, why do I have pay premium for that to occur?

[Greg Clark (Tunbridge Wells) (Con)]

My hon. Friend is making a powerful speech. Does he agree that premium brands are built on people, and it is incumbent on companies that aspire to be a premium brand to treat their people in a way consistent with that?

[Huw Merriman]

My right hon. Friend is right. Across the House we expect the best from our premium brands if they are to be our flag carriers. If a company is saying to its staff, “You might be required to allow us to put you out of work for eight-weeks during the year without pay”—that is two months—“and at other times we might effectively put you on furlough without pay”, how on earth is a member of staff supposed to react?

What I would say before I take one more intervention—[Interruption.] I will not take another intervention, Madam Deputy Speaker. I see an opportunity for British Airways here. It is fair to say that the new chief executive, Luis Gallego, is a thoughtful and reasonable man who is two days into his job. I do not believe he will have the same scorched earth approach to industrial relations as his predecessor. There is still time, because these terms have not yet come out, for British Airways to do the right thing. Perhaps it will do what Ryanair has done and said, “There is a 20% pay cut across the board, for everybody. That pay will be returned when better times come.” We know that our aviation sector has better times to come. I say to IAG’s chief executive: it is not too late, you still have time to do the right thing and protect your workforce and your brand. On that note, Madam Deputy Speaker, I give way completely and allow the debate to continue.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I thank the hon. Gentleman for his courtesy and for understanding that a great many people wish to speak this afternoon. We will therefore begin with a time limit of five minutes, and I call Abena Oppong-Asare.

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[Huw Merriman]

On behalf of myself and the hon. Member for Erith and Thamesmead (Abena Oppong-Asare), I thank all right hon. and hon. Members who have spoken with such passion and determination for the aviation sector. I particularly thank all those who have waited so patiently after putting in to speak but have not been able to. It is incredibly frustrating that an aviation sector worth £28 billion to our economy that employs 230,000 people directly and over 1 million through the supply chain does not get more than two hours of debate in which we can show our concern, but I do hope that those voices have been heard.

I welcome the views, determination and commitment of the Minister and the Government to stand by the aviation sector. The hon. Member for Erith and Thamesmead and I want to ensure that there is a collaborative approach, where we work with the Government to truly see better times ahead for the aviation sector.

I also thank all the amazing workforce who have got in touch with the Transport Committee. They are the kindest, most loyal people and workforce that I have ever come across, and they are well represented by their unions.

I want to send a message not just to the Government but to employers. We have used BA as the poster child here, and it is not too late to turn back. There is a new chief executive of BA’s parent group and I say to them: please change your mind and stand by your workforce; stand up for that great badge on your airliner, which is supposed to demonstrate the best of Britain; and do the best for your workforce.

Question put and agreed to.

Resolved,

That this House has considered the aviation sector.

[Mr Deputy Speaker (Mr Nigel Evans)]

We are now going to suspend very briefly. Once both Dispatch Boxes have been sanitised and the main players are here, we will commence the next debate, and there will be a three-minute limit after the introduction.