Leaving the EU: Aviation Sector

Philip Hollobone Excerpts

Wednesday 31st October 2018 Westminster Hall

[Several hon. Members rose—]

[Mr Philip Hollobone (in the Chair)]

Order. The debate can last until 4 o’clock, and I am obliged to call the Front-Bench spokespeople no later than 3.28 pm. The guideline limits are 10 minutes for the Scottish National party, 10 minutes for Her Majesty’s Opposition and 10 minutes for the Minister, with Mr Kane having two or three minutes at the end to sum up the debate. Until 3.28 pm, it is Back-Bench time. The first Back-Bench contribution will come from Jim Shannon.

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[Karl Turner (Kingston upon Hull East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone, and I pay tribute to my hon. Friend the Member for Wythenshawe and Sale East (Mike Kane) for securing this important and timely debate. His excellent speech set out the current and future benefits of the aviation sector, as well as the possible risks. He said that more than 25,000 jobs—a staggering number—are directly supported by the Manchester Airport campus in his constituency. That is remarkable, and I pay tribute to Manchester Airports Group for its great work.

Labour believes that a strong aviation sector is crucial to the UK’s status as a global, outward-looking nation, and it is even more important following our decision to leave the European Union. As we have heard, Britain has the largest aviation network in Europe and the third largest in the world. It creates a million jobs, brings in tax revenues, and is vital for importing and exporting trade.

We are now just five months away from leaving the EU, and as the days pass, the risk of a no-deal Brexit becomes greater. Regrettably, it seems to be becoming more likely by the day that we might leave the European Union without a deal. Let us be clear: a no-deal Brexit would be a disaster for the UK aviation sector—indeed, the Government’s aviation technical notices relating to no deal confirmed that crashing out of the EU without a deal would be a total disaster for the UK’s aviation sector. It would have a serious impact, and that cannot be dismissed as scaremongering. It is crucial that the Government now prioritise securing a deal for the aviation sector, and provide the industry with the certainty it needs in the run-up to March 2019 and beyond.

Labour has always maintained that the aviation sector should have been the first priority for the Government in their negotiations with the EU. Despite that, when the Transport Secretary addressed the annual conference of the Airport Operators Association on Monday, we heard that the Government are still negotiating future arrangements for air services with the EU. Indeed, it is worse than that because, as I understand it, the Transport Secretary has not had a single meeting with one of his counterparts from the 27 European member states to discuss what would happen if we are in no-deal territory.

Ministers might like to boast that 95% of the Brexit withdrawal agreement is done, but that is completely irrelevant as there can be no agreement unless everything is agreed—a point reiterated time and again by the Prime Minister—and that includes reaching a suitable agreement on aviation. Consumers and businesses have benefited from the UK’s global connectivity and access to markets, and the Government must build on that as we leave the EU. I would be grateful if the Minister could set out what steps the Government are taking to improve our global connectivity through aviation, post Brexit.

Labour believes that any new service agreements for the aviation industry following Brexit should seek to replicate existing arrangements as much as possible. First, and foremost, we must retain access to the Single European Sky air traffic management system. Since 2007 we have enjoyed an open skies agreement with the United States of America which, as the hon. Member for Central Ayrshire (Dr Whitford) made clear, includes 16 other countries. That must also continue.

Through our membership of the EU we are members of the European single aviation market, which allows airlines based in Britain to operate throughout Europe. There is no World Trade Organisation fall-back for the aviation sector, which means that unless the Government negotiate a deal there will be no legal right to operate flights to Europe. It is no good saying continually that everything will be all right on the night. The sector is worried, and it is crucial that we retain our status as a full and engaged member of the European Aviation Safety Agency. Alongside France we have been a key contributor to the development of European safety regulations and rulemaking, and nobody wants the UK to lose that influence. UK air passenger rights following Brexit should not be fewer than they currently are, and that is particularly important for disabled travellers and passengers with reduced mobility.

The entire aviation sector in the UK has developed through EU law, and it has led to cheaper fares and greater choice for consumers. Our current deal has given us greater consumer rights, and passengers can claim compensation for delayed and cancelled flights. We are members of the European Aviation Safety Agency, which deals with the safe operation of aviation. All that could easily be put at risk if we leave the EU without a deal. Will the Minister say what steps the Government are taking to ensure that we will have the same air passenger rights once we have left the European Union? Overall, the Government’s shambolic handling of the Brexit negotiations could lead to thousands of skilled jobs being lost in the aviation sector unless they change tack and get a grip now.

[Mr Philip Hollobone (in the Chair)]

If the Minister could conclude his remarks no later than 3.57 pm, that will allow Mr Kane time to sum up the debate.

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[Jesse Norman]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Mr Philip Hollobone (in the Chair)]

I call Mike Kane to bring the debate in to land.