Financial Assistance to Industry

Robert Courts Excerpts

Monday 24th May 2021 General Committees

[The Chair]

I remind Members to observe social distancing and to sit only in places that are clearly marked. I remind them also that Mr Speaker has stated that masks should be worn in Committee, other than when speaking. Hansard colleagues would be most grateful if Members sent their speaking notes to hansardnotes@ parliament.uk.

[The Parliamentary Under-Secretary of State for Transport (Robert Courts)]

I beg to move,

That the Committee has considered the motion, That this House authorises the Secretary of State to undertake to pay, and to pay by way of financial assistance under section 8 of the Industrial Development Act 1982, sums exceeding £30 million with an estimated total sum of £44 million, to be made available, through the renewed Airport and Ground Operations Support Scheme announced in the 2021 Budget, to eligible commercial airports and ground operators to compensate for the damage caused by COVID-19, on the basis of business rates liabilities or COVID-19 losses—whichever is lower—from April-September 2021, subject to certain conditions and a cap of £4 million per eligible company.

It is a great pleasure to serve under your chairmanship this afternoon, Mr Robertson. With your leave, before I speak to the motion, I will say a word or two about the situation in Belarus.

Belarus’ reported actions represent a danger to civilian flights everywhere. The whole international community has an interest in ensuring that civilian aircraft can fly safely and unmolested. That is why we are calling for the Council of the International Civil Aviation Organisation to look into the matter urgently. In the meantime, my right hon. Friend the Secretary of State for Transport is taking the following actions: we will be issuing an advisory notice to strongly advise all UK airlines to cease overflights of Belarusian airspace, and we are suspending Belarusian airline Belavia’s operating permit, with immediate effect; furthermore, the Civil Aviation Authority will be instructed not to issue any further ad hoc permits to Belarusian carriers. I am sure all hon. Members agree that those immediate and decisive measures are necessary to protect both the right to freedom of expression and the safety of international travel.

The motion before the Committee comes during one of the most challenging periods faced by this country. The covid-19 pandemic has affected every aspect of our nation, and the Government have put in place an unprecedented package of measures to support the economy. The Government recognise the challenging circumstances facing the aviation industry, which continues to operate with demand significantly below pre-pandemic levels. In total, we estimate that by the end of September 2021, the air transport sector will have benefited from about £7 billion of Government support since the start of the pandemic. That includes support through loan guarantees, support for exporters, the Bank of England’s covid corporate financing facility and the coronavirus job retention scheme.

The Government recognise the importance of protecting aviation infrastructure in the short term, to continue the operation of vital services that we rely on for passengers and freight, and of avoiding any longer term retrenchment of the sector but preserving capacity and connectivity, so that as recovery gains pace we are able to build back better. That is why in November I announced the introduction of the airport and ground operations support scheme to support eligible businesses and limit the harm caused by covid-19 losses.

The scheme was designed by the Department for Transport under pressure of circumstances and limited time. It was opened at the end of January for three weeks, with payments made to successful applicants by April. Over the winter, it became clear that the situation remained challenging. Despite the recent opening of international travel, on 17 May, measures remain in place at the border to protect public health. It is therefore right that we continue to support the sectors hardest hit by covid-19. That is why the Chancellor announced the renewal of the AGOSS in the Budget.

The renewed scheme continues to provide support to eligible airports and ground handler companies up to the equivalent of their business rates liabilities or covid-19 losses, whichever is lower, from April to September 2021, subject to certain conditions and a cap per claim of £4 million. To provide financial assistance to the sector, the Government intend to use powers contained in section 8 of the Industrial Development Act 1982. Under the Act, Parliament’s consent to the use of the powers is required where a project will exceed £30 million. Given the need to continue to protect our vital aviation infrastructure and support the recovery, I ask the Committee to support the motion.

--- Later in debate ---

[Robert Courts]

I am grateful to the hon. Member for his comments, particularly on the Belarusian situation and the Ryanair flight. I echo his comments about our parliamentary staff—I would echo his tribute to my own staff. It is a perhaps under-recognised aspect of this place that there are people working very hard for very little recognition, helping constituents, supporting constituency MPs and holding the Government to account, day in, day out. They make this place tick and they make our democracy work. The hon. Member is quite right to pay tribute to his long-serving staff, and I do so as well on behalf of all Members.

I share the hon. Member’s passion for the aviation sector and I agree with every comment he made about the importance of the sector. I am determined to see it get back in the air and fighting fit as we build back better after the pandemic. I entirely understand the challenges facing the aviation sector, which is why I hope the Committee will support the measures in the motion today. The hon. Member suggested several areas where we could to further. I am grateful to him for raising those points and will continue to work him and others in all parts of the House and in the sector as we consider what measures we can take. I believe the measures set out in the motion strike an appropriate balance between supporting airports and ground handlers and protecting the interests of the taxpayer.

The hon. Member mentioned the rates relief fund. I confirm that work is ongoing between Her Majesty’s Treasury and the Ministry of Housing, Communities and Local Government to lay out the terms of the scheme. I cannot give any more precise details today, but I understand that as soon as further details can be provided, they will be.

I am grateful for the hon. Member’s comments and questions. As we start to relax the restrictions and to rebuild after covid-19, the picture is encouraging. Of course, we have to note that the recovery is cautious and remains under constant review. Despite the efforts to drive down the incidence of covid-19 and the success of the vaccination programme, the aviation sector remains sensitive to the recovery here and elsewhere, and demand is of course still down on pre-pandemic levels. It is right that we continue to support our commercial airports and ground handlers, preserving and protecting jobs and safeguarding vital infrastructure.

Question put and agreed to.