Leaving the EU: Aviation Sector

Philippa Whitford Excerpts

Wednesday 31st October 2018 Westminster Hall

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

I beg to move,

That this House has considered the effect on the aviation sector of the UK leaving the EU.

It is, as ever, a pleasure to serve under your chairmanship, Mr Hollobone. The focus of today’s debate is the aviation sector and the risks and opportunities that will be presented when we leave the EU. Aviation and the international connectivity it provides are one of the key drivers of trade, exports and tourism, bringing economic growth and prosperity to the UK.

To many people, an airport is a place they pass through on their way to and from a summer holiday, and an aircraft is simply a thing they board to go on a weekend away or a business trip. However, like many Members here today with airports in and around their constituencies, I know that aviation is about a lot more than that. It is a large, technical and complex industry, and the ease and regularity with which we use it often hides the expertise and investments that go into making it so safe, simple and affordable for all our constituents.

In my own constituency, the sector is a vital source of employment, with more than 25,000 jobs directly supported on the Manchester airport campus. Hundreds of businesses outside the airport work to supply it, sustaining thousands more jobs. Those benefits come from just one airport, and there are many more like it across the country. Imagine the headlines that would follow if a new business was brought to the UK with the promise of creating 25,000 jobs. Imagine the crisis headlines we would read if even a fraction of employment on that scale was suddenly lost.

Aviation is a key enabler of overseas trade. As an island nation, we rely on flight connectivity more than most as we strive to get British products on the shelves of markets around the world, or foreign goods on ours. In addition, as an economy with such a prominent services sector, being able to move British expertise around the world plays a major role in our overseas trade, and that role will only continue to grow.

It is well known that we as a nation need to export more and to ensure that British businesses are competing effectively on the world stage. It is clear that, for those businesses that export, travel and trade abroad, their international exploits are made a lot easier when they have access to direct air links to their chosen markets. Growing our access to those markets will be even more important after Brexit, as will ensuring that they can access the UK market. I am very proud to represent an airport that has the most point-to-point connections of any airport in the UK.

Tourists from all corners of the world flock to the UK to sample our countryside, our history and our cultural, sporting and other assets. In Manchester alone we are surrounded by the Peak district and the Lake district. We have the world’s most famous and successful football teams—some of my hon. Friends here today might argue about which is the most successful of the two. Manchester has an international cricket ground, fantastic universities and even the British Broadcasting Corporation.

As Britain leaves the EU, we need people from right across the globe to find it quick and easy to visit the UK to support our tourist economy. I am sure that colleagues from all parties in this House, regardless of their political background and how they voted in the EU referendum, would agree that it is critical that we continue to enjoy those benefits and that the choice available to our constituents today remains the same. That is critical to those who rely on tourism as their source of income, and it is critical to the businesses that the Government want to support—those that export and trade with the world.

I want to outline both the risks and the opportunities for the aviation sector as we edge closer to the EU exit door. The most fundamental of those is maintaining the connections that are utilised so much today. Some 74% of flights from Manchester airport go to other EU nations. The EU remains our biggest export market and the place where most Britons travel on holiday, with about two thirds of overseas holidaymakers going to Europe every year. It is clear that we have a mutual interest with the EU in a deal being done so that the doomsday scenario of planes being grounded on 29 March next year does not play out. I ask the Minister whether he can provide reassurance that aviation remains at the top of the list as negotiations continue, and that it will be prioritised quickly should no deal become a reality.

Lucy Chadwick, the director general of the Department for Transport, recently said to the Public Accounts Committee that air and rail services between Britain and the EU are an “area of growing concern.” The House of Lords EU Committee reported last year:

“There is no adequate ‘fall-back’ position for aviation services in the event that no agreement is reached with the EU. Air services are excluded from the WTO.”

That is worth repeating: there is no World Trade Organisation fall-back position for aviation when we exit the EU next year. Although airlines and airports are optimistic that a deal will be negotiated, there is a very real danger that planes will be unable to take off if we leave the EU without a deal. Can the Minister comment on that and, furthermore, describe the practical steps the Government are taking to secure the mutual recognition of aviation safety standards, which is currently provided for under the European Aviation Safety Agency system? This must be about not mitigating any risk to aviation, but actively supporting it after Brexit.

The opportunity is there for us to pull the levers we need to to further improve our links with the rest of the world and to edge ahead of our competitors. We have the chance now to think about the markets we want to access if we are serious about Britain competing on the world stage after Brexit. There is no better time to consider the kind of aviation sector we want and the role we want it to play in driving growth and prosperity, particularly in our regions. It is clear that those benefits need to be spread across the whole of the UK—not only by allowing people in the north to fly south, but by allowing people from all over our country to fly wherever they need to. That strategy goes hand in hand with defining what a post-Brexit Britain will look like.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

The hon. Gentleman talks about Brexit allowing a reorientation so that we can look at where else in the world UK airlines can fly to. Can he explain why we cannot do that now, and why we need to lose our flights to Europe to gain flights to elsewhere?

[Mike Kane]

We are doing that now at my own airport. I will be going to the inaugural flight from Manchester to Mumbai next week. We now have direct connectivity to Beijing and Hong Kong, and shortly we will announce direct connectivity to Shanghai as well. Airports are increasingly going from point to point, and that seems to be the way of the future.

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[Dr Philippa Whitford (Central Ayrshire) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. As hon. Members have mentioned, Brexit is five months away, and aviation is not covered by World Trade Organisation rules and is not usually covered in other free trade agreements. The idea that we can replace the European common aviation area easily is not true.

The single aviation market has transformed flight for ordinary punters. Most people in the Chamber will know that my husband is German, and when we first started our four-year long-distance romance, it cost £220 to fly from London to Hanover. Now, people can fly all over the place, often for less than £50 each way, which has transformed how much we fly. We have seen a huge rise in connectivity across Europe, in people travelling in both directions and, in particular, in people flying. That is because airlines registered in the EU can fly domestically in another country or between two third countries, which allowed them to drop prices—[Interruption.] I apologise; the hon. Member for Strangford (Jim Shannon) is trying to throw me off.

As we know, easyJet has registered in Austria to try to get around the fact that it is a UK airline and might have difficulties flying within Europe’s single aviation market. The airline that flies to Glasgow Prestwick—the airport in my constituency—is Ryanair, an Irish-EU airline, and may be forced to consider registering in the UK. The problem is that it would then be a part-UK, part-EU airline. That does not replace what we have at the moment; it avoids triangular flying. Very few routes just shuttle backwards and forwards; often, we hear that the plane we are boarding has just come from somewhere else.

This issue is critical for my local airport. Prestwick is a major airport: we have 50% of the Scottish aerospace industry and a huge cargo industry. Although our passenger numbers have dwindled, they are still a significant proportion of our income. In particular, they represent the main part of Ryanair’s flights to the Iberian peninsula. The problem is that in recent years we have had no strategic plan for regional airports across the nations and regions of the UK, and, obviously, we have had air passenger duty. The hon. Member for Strangford talked about competing with the Republic of Ireland where they have not just got rid of air passenger duty but have dropped tourism valued added tax to 9%. If people in Europe or America decide whether they fancy the mountains of Scotland or the mountains of Ireland, unfortunately one is much more expensive than the other.

Things can be done in UK policy to try to support our network of airports, but Brexit clauses are already creeping into airline bookings. Already, tourists are holding off because they are not sure what will happen. The International Air Transport Association said that the Brexit deadline might be next March, but tourists book six months to a year in advance. For airlines the deadline is in October 2018 right now, but they have no idea what the landscape will look like.

My constituency is also a major tourist part of the country, where golf is a significant attraction in beautiful rolling countryside on the west coast of Scotland. We think often about the outward-bound tourists—and that is us when we go on our holidays. Three quarters of visits from the UK are to the EU, and EU passengers make up half of all passengers who fly backwards and forwards. Nine out of 10 of the flight destination top 10 are in the EU, the US being the only non-EU country in the top 10. However, inward-bound tourists are more important because they do not just generate a bit of duty-free and the price of a flight but stay in hotels, eat out and go to pubs and to the theatre. That is a major part of the tourism industry—I use that term advisedly because tourism is often overlooked as an industry, but in the more rural parts of the United Kingdom, tourism often is the main industry. If we are not attracting people because it is harder to get here, flight numbers are decreasing or APD puts people off, that will lead to huge shockwaves right through our local economies.

Another part of the significant work in Prestwick is maintenance, repair and overhaul work. Multiple companies perform that work, including for Ryanair. If Ryanair decides not to fly to Prestwick, we would not only lose that passenger income—Ryanair will not fly there just to get its MRO work done if it no longer brings planes through. It is critical that we stay in the European Aviation Safety Agency, because the companies that carry out MRO work do so under EASA part-145 that allows them to release a plane as safe to fly in the EU. Their engineers are licensed under part-66; they could go off and license themselves in the national aviation agency of another country, but the company cannot do that. We are talking about companies that could do MRO work only for United Kingdom airlines but not for European airlines. That would take away an enormous swathe of MRO work.

We have companies such as Chevron or GTSMRO that are local, home-grown companies in Ayrshire, but we also have major multinationals such as UTC Aerospace Systems, Goodrich Corporation, Woodward, BAE Systems and more. As the hon. Member for Nottingham South (Lilian Greenwood) mentioned, they generate high-quality, high-paid engineering jobs—not something that can be easily replaced. We have companies in our aerospace cluster that manufacture parts for planes, such as Spirit AeroSystems, which makes the leading edges for Airbus wings.

If the aviation industry starts to shrink, inevitably that will have a follow-on impact on MRO work and manufacturing work. Those are really good jobs. With the clock ticking down to Brexit, we are already getting past the aviation deadline. It is important that we start to get some vision from the Government of their plan with regard to the EU, the single aviation market and staying in EASA, and of what they plan to do to support airlines in the UK, tourism and our regional airports.

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[Luke Pollard]

I share my hon. Friend’s concerns. We need certainty about what is going on, and we need to ensure that we hear the authentic voice of British business. The Government’s use of non-disclosure agreements in some of the discussions taking place between them and industry about certain aspects, especially no-deal preparations, concerns me. We are not getting the clarity that we need from Ministers and, unfortunately, the hands of business have been tied by NDAs, preventing them from exploring how the worst effects of no deal can be dealt with.

I share some of the concerns of my hon. Friend the Member for Wythenshawe and Sale East about planes being grounded, but I want to deal with a couple of other aspects of EASA membership. Our debate in Parliament to date has focused on the safety role of EASA, but our participation in EASA is about more than safety certification and standards, although they are important. We also need to deal with pilot registration and engineering standards and qualifications. I want the UK to remain part of EASA. I simply cannot believe that any competent British Government would sanction our departure from that vital body.

The UK’s expertise makes an important contribution to EASA, with 40% of its staff coming from the UK. The UK also participates in nearly every single technical programme to facilitate the movement of both passengers and cargo. In our future relationship with EASA, which I hope is as a full member, we must maintain full participation, especially in EASA’s technical working groups, to get the detail of what is going on. EASA is not a body where we have no influence. Britain’s hard and soft power in EASA is strong. A third of EASA regulations come directly from the UK’s CAA, so we have a strong voice in that body and we need to maintain it.

The issue of CAA pilots’ licences was raised with me by pilots ahead of this debate. Currently, CAA pilots’ licences, gained at considerable cost to the individual, are recognised throughout Europe, and European licences are recognised in the UK. After Brexit, unless a provision can be made, all pilots flying in the UK will need a full CAA UK licence, and not necessarily an EASA one that is recognised in the rest of the EU. At present, pilots are swapping their EASA licences for UK licences to enable them to fly UK planes in UK airspace, but there is a considerable backlog in processing applications. Will the Minister tell us what the current waiting time is for processing the transfers of EASA licences to CAA licences? What plans does he have to reduce that considerable waiting list, and what guidance is given to the CAA on prioritising pilot licences for commercial flyers, perhaps ahead of leisure pilots, who might be less time-dependent? At the moment, they go into a single queue and are not prioritised.

[Dr Whitford]

I would be grateful for clarification. If pilots are changing their EASA licences for CAA licences, would that not limit their ability to fly within Europe?

[Luke Pollard]

Indeed. We need to recognise that, and that is why the full participation of the UK in EASA is vital. There is no point having a UK-only licence enabling flights within UK airspace, because the vast majority of flights from UK airports leave UK airspace. We therefore need those licences recognised at the point of destination and at the point of departure as well.

Will the Minister look at what actions can be taken to speed up the processing? Pilots need to carry their licences every time they fly, and when they do not have their licences they are grounded. Delays of six weeks are not uncommon. That is important because groundings of over a month trigger a requirement for additional time in flight simulators to ensure compliance with safety standards, and rightly so. However, that means the flight simulators are not being used for pilot training, and we know that we have a shortage of pilots not only in the UK, but around the world. That puts pressure on UK airlines when ensuring that they have a sufficient number of pilots to fly the aircraft that we need them to.

There are also concerns around engineering licences because EASA looks after the qualifications and certification of engineers as well as pilots. If UK engineers are no longer allowed to work on EU planes, as was hinted at in the technical notices that came out, it is deeply concerning. As we have already heard from the hon. Member for Central Ayrshire (Dr Whitford), the UK is a hub for not only aviation but aviation maintenance and support. Those jobs are not done only at London’s big airports; they are done mainly in our regions and nations, bringing much needed high-skilled jobs into those localities. In the far south-west, Flybe has an excellent facility at Exeter airport, providing a good number of decent, well-paid jobs, recruiting from the local area and training people for a career in aviation that will, in theory, do them well. If UK engineers are prohibited from maintaining EU aircraft, how will such jobs be protected in future? A key part of keeping costs down in the UK is bringing foreign planes into UK airports; maintenance costs are subsidised by ensuring that, when there is space in the schedule, foreign planes can be maintained as well. If there is no authorisation to do so because we sit outside EASA, it has serious implications for the future of our industry.

Creating certainty is key, and the upcoming aviation strategy is an opportunity to create that certainty. Far too much of our aviation debate to date has been focused purely on London Heathrow. Although it is a very important airport for not only London but for the rest of the country, including Plymouth, we need to make sure that the future aviation strategy deals with airports big and small, in every region of the country, and creates more certainty. Ministers need to do more than just put out a bold statement. They can do more in several areas to create more certainty. It is about accelerating what, in many cases, the Government have already planned.

The confirmation that Five Eyes countries will be able to use e-gates was a welcome step, but what is not clear is when they will be able to use them. It needs to happen before 29 March next year. Confirmation that that will be brought in ahead of that Brexit departure date and not afterwards is important for airlines and airports.

We need to look again at our funding for the border. The queues are too long. If we are to have a comprehensive and positive welcome to Britain, at a time when there is increased uncertainty not only in the UK but among our international trading partners, we need to make sure that people are not queuing at the border. Additional investment in Border Force, and particularly its staff, is absolutely vital.

We also need Ministers to recognise that the flight is only one part of the customer journey. That is really important. People do not simply magic up at an airport and then disappear when they land. They have a journey to get to an airport, which is why surface connectivity is so vital and needs to be looked at. What are the opportunities that can be maximised by Brexit, and how can the impact be mitigated? Projects have been promised for some time, such as western rail access to Heathrow, and we need to accelerate that programme. Will the Minister set out when the timetable for funding western rail access will be delivered?

We also need the Government to look at regional connectivity to airports. Some have good connectivity in our regions, but others less so. At Exeter, Plymouth’s local airport, we have a bus to the city centre only once every hour, which is not good enough. Supporting regional economies is vital.

The review of APD has already been mentioned. It could be a big boost to the UK economy. We need to bring forward the airspace review that Ministers have been considering for some time. We need certainty about how airspace will operate in future. The creation of flight paths that make it better and easier for airlines to invest in and fly from the UK could bring considerable benefits.

We also need to make sure that aviation is greener. Will the Minister set an objective for the UK to be the greenest and most sustainable aviation market in the world? That means really motoring the work of Sustainable Aviation, the industry-led body, to look at how improvements can be brought in.

Finally, will the Minister look at removing uncertainty by reopening Plymouth airport? This has been absent from most people’s speeches so far, which surprises me. Plymouth airport, which closed in 2010, could make a big contribution to the future economy of my city, and also help provide the certainty for businesses to invest in the region as well. Plymouth airport was not a bucket-and-spade airport; it was an airport built on senior-level connectivity and high-value investors. It provided connectivity for our marine, maritime, oil and gas, and science industries. We need to preserve that. The loss of the airport has been detrimental to Plymouth. There are other forms of connectivity, but the train has to get through Dawlish, and we know that the impact of the hanging bridge, when the line was washed away, affected business confidence in terms of investing in the west country.

In conclusion, the more the Government can bring certainty to the aviation debate around Brexit, the better. In many cases, the tools are already sitting with Ministers. We need to be able to commit to full participation in EASA and to deal with the uncertainty around pilots’ licences and engineers’ certifications. We should also bring forward projects for aviation investment that can make a real difference in making journeys smoother, quicker and greener.

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[Alan Brown]

I completely agree. The UK Government’s attitude is completely blasé and lackadaisical.

The hon. Member for Wythenshawe and Sale East, in discussing opportunities, spoke about future markets, but I agree with my hon. Friend the Member for Central Ayrshire, who intervened on him to say we do not need Brexit for those opportunities. The whole growth of the airline industry is the result of our membership of the EU, so it is hard to see what opportunities there are. The hon. Gentleman spoke of aviation as an essential component of an outward-looking Britain, but unfortunately that is not the message that people from outwith the UK get at the moment. Britain is becoming too inward-looking, rather than being outward-looking. However, I agree with the sentiments of the hon. Gentleman’s “how” questions to the Minister, and I should like to hear the response.

Clearly, no Westminster Hall debate would be complete without a contribution from the hon. Member for Strangford (Jim Shannon). He certainly knows how to maximise the lack of a time limit; he used all his experience there. It was good to hear him talk about the importance of Bombardier to his constituency, but it reminded me of the games that can be played in trade negotiations, and protectionism such as the recent carry-on in the US. I am glad that that has been resolved, and it was good to hear about the new order for 60 planes to go to Latvia. I wish them well with the opportunities and jobs that it will bring.

The hon. Gentleman spoke about bringing positivity, but then even he had to admit that Brexit is not a quick and easy process, so I find it hard to believe in the opportunities that will suddenly arise the day after Brexit. I agree with him about the opportunities that the third runway at Heathrow would bring, but I hope he shares my concern at the fact that the UK Government have not confirmed how they will provide protection to domestic slots that are supposed to open with the expansion.

My hon. Friend the Member for Central Ayrshire confirmed that the single aviation market is what has transformed travel in the UK and within the EU, with the connectivity and opportunities it has brought. However, Brexit now brings risks to companies such as Ryanair, which is so important to her local airport, Prestwick. She highlighted the fact that those companies operate using the freedoms of the European common aviation area, and the registration issues that will arise post-Brexit.

Finally, the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) correctly highlighted issues to do with EASA—that it is not just a matter of safety. He pointed out the standards that it imposes for pilot registration, and consequent issues relating to conversion to the CAA and a bilateral agreement. We need to know the Government’s plans as to membership of EASA.

It is clear that from the perspective of Tory Back-Bench Members the future of the aviation seems not to be of much concern. It is surprising that those Benches are empty.

As the clock ticks towards Brexit, the UK Government’s handling of the aviation sector sums up their shambolic approach, including the attitude of the Secretary of State for Transport, who is an arch-Brexiteer and has the blasé attitude that, as my hon. Friend the Member for Paisley and Renfrewshire North said, “It will be all right on the night; everything will be okay.” I am speaking of a Secretary of State who does not know how the US-Canada border works for lorry crossings, and who seems still not to accept Brexit’s implications for the Ireland-Northern Ireland border. He is someone who goes along with the mantra “They need us more than we need them,” and the assertion “You know what—Spain needs flights, and the tourists who come from the UK, or their economy will crash.” That level of arrogance is not enough to get over the finishing line, which will need hard thinking, hard negotiations and a willingness to compromise.

Let us consider the promises on an aviation deal, to date. In November 2016, in a debate on Brexit, the Transport Secretary said he was

“in absolutely no doubt that we will secure in good time and effectively the agreements that our aviation sector needs to continue to fly around the world”.—[Official Report, 23 November 2016; Vol. 617, c. 953.]

In October 2017 he told the Transport Committee:

“I am absolutely certain that over the coming months we will have mutual sensible arrangements put in place”.

On the open skies agreement with the US, another EU benefit, he said in October 2016 that his

“expectation and my intention would be that we retain the open skies arrangement for the United States.”

In March 2018, after media reports that the US would offer only its standard bilateral agreement, those claims were rebutted. We heard from Nick Calio, the chief executive of Airlines for America, who said:

“In terms of the timetable, we hope something will be in place as early as the end of the month or the beginning of April.”

There we are. Two years on from initial claims of how easily and imminently those definite agreements would be reached, I ask the Minister where they are. Yesterday in an article in The Guardian we learned that with five months to go the Secretary of State for Transport admits that negotiations on an aviation agreement have not even started. What does the Minister say about that? It is truly shameful, if it is true.

It is now five months to Brexit day. As my hon. Friend the Member for Central Ayrshire said, airlines are now selling seats with disclaimers for post-Brexit issues. Clearly, people are being put off from making bookings beyond Brexit. It is a fact that lack of certainty is curbing airline expansion and the opening of new routes in the EU, with respect to the UK. If an EU airline has a choice of a new destination, it will clearly choose the internal EU market over the UK. That will be a simple business decision to make.

The UK Government have clearly been operating on the premise that there is no way the EU will allow flights to be grounded, because of the inconvenience that that would cause EU citizens and airlines. I agree that it seems inconceivable; but it also now seems to be a real possibility, and our only method of overcoming it seems to be to kick it into the long grass of a transition period. It is clear that the proper preparations for no deal are not in place. There will be some sort of fudge. It will be kicked down the road and not be dealt with properly. Why do not the UK Government look at staying in a customs union, the single market and the single aviation market? It just makes sense.

We have heard that the UK Government have been making contingency plans for no deal. They, too, have warned about the risk of planes being grounded. However, the advice about the no-deal technical notice for aviation seems to be that each airline is to negotiate directly with the relevant authority in each country that it wants to fly to, and must get approval from EASA, with the slight caveat added that at present there is no process enabling individual airlines to do that. What kind of no deal preparations are those? It is saying to the airlines, “It is over to you lot, because we don’t know what to do.”

[Dr Whitford]

Does my hon. Friend recognise that the open skies agreement is not just with America, but also with 16 other countries, and that those agreements would also fall?

[Alan Brown]

Absolutely, and that highlights the absolute chaos there would be if there is genuinely no deal and no arrangements are in place to fly to those countries.

The no-deal preparations confirm the UK Government’s incompetence, lack of direction and inability to manage this process. Will the Minister say what contingency plans have gone into border control? We have already heard that UK Border Agency currently fails to meet its waiting time targets, so what are the proposals for increased personnel and preventing queues at the border? What plans have been made for customs checks? I accept that airports are probably more suited to deal with the implications of no deal than the ports currently are, but we still need to know about the Government’s plans, discussions and dialogues with airlines. I look forward to getting some clarity from the Minister. It would also be ideal to hear directly from the aviation Minister, but—this kind of sums up this place—the aviation Minister is in the other place, so MPs do not get to scrutinise and interrogate her properly.