[Sir Edward Leigh in the Chair]
[Relevant documents: Second Report of the Transport Committee, The impact of the coronavirus pandemic on the aviation sector, HC 268; and the Government Response, HC 745.]
I beg to move,
That this House has considered the future of the aviation industry.
It is a great pleasure to serve under your chairmanship, Sir Edward. Before I start my remarks, I offer my congratulations to the Minister on his recent appointment. He was a very good member of the Select Committee and he is a very welcome addition to this role, even if the challenges he faces in it are pretty big at the moment. I wish him well.
The aviation industry is a vital part of our economy. It employs—or rather it did employ—hundreds of thousands of people around the country. It is an essential part of regional economies, which is why we see colleagues from around the United Kingdom here today, and it provides vital connections from the United Kingdom around the world. Today, it is a sector on its knees. Last weekend, I cast a quick glance at the Plane Finder app that some of us have on our phones. That afternoon, there were three aircraft in the air over the south of England—just three aircraft, and one of those was en route from France to the United States.
That is a disaster for this country. It is a disaster for all the staff and airline personnel who have lost their jobs, a disaster for the airport services companies and all their people, and a disaster for the suppliers to the industry, such as the catering services firms and the construction workers, who should be preparing to work on capital investment projects at our airports in the coming months but capital budgets have evaporated. They now face a bleak year ahead. The entire future of individual UK airlines is now under threat, and of course there is the broader issue of the impact on the aerospace sector as a whole.
We all accept that there was no way this pandemic could have passed without a major impact on aviation, but taking every step we can to mitigate that impact has been, should be, and must now be a national priority. However, as a loyal supporter of the Government who is sympathetic to them about the challenge they are trying to deal with, I must say that it does not feel like that at the moment. Public Health England, for example, produced what can only be described as highly questionable figures to justify the current restrictions. Only a couple of weeks ago, a Government Minister told the House of Lords that it is the view of the chief medical officer that travel is not a priority.
Although I really do understand the huge challenges that our medical community is facing, and they are doing a fantastic job in dealing with this pandemic, I fundamentally disagree with their view on this point about the sector. I urge the Government to change tack, to make at least the start of the reopening of our aviation sector an absolute priority and to use all the tools at their disposal to do so. That does not mean a mass opening of borders overnight, nor an instant return to mass holidays, but it does mean making a rapid move to restart key economic routes and to allow the return of travel without unnecessary restrictions to low-risk destinations.
The first key step that must be taken is to replicate what other countries are doing on testing. The current UK rules are simply too restrictive for low-risk destinations. I very much hope that the reports in the media about a reduction of the two-week quarantine rules are correct, but a decision to travel that still includes a period of several days when someone cannot leave their home, makes an important business trip, a short family holiday or a visit to an elderly relative in another country extremely difficult. Other countries are not asking for the same period of isolation.
I applaud my right hon. Friend the Health Secretary for the work he has done in expanding our test capabilities to the extent he has; it has been a phenomenal achievement and he deserves huge personal credit for that expansion. We have now by far the largest testing capability and the broadest range of testing capacity in Europe—well done. But if we can test the whole population of Liverpool quickly and effectively, why can we not open a handful of key economic routes quickly using those same technologies?
Why can we not reopen routes to New York and Washington, for example, setting aside the quarantine rules for those people who travel those routes and test negatively? Those are blue-chip routes for our industry; they deliver the highest level of profits and they are particularly vital for our economy. Are we really going to be putting the health of the country at risk by introducing the same kind of test rules that exist in other countries today and putting the same measures in place for those key routes?
Sir Edward, you or I could fly to Madeira tomorrow, taking with us a 72-hour-old test certificate. We would be allowed to enter the country freely, travel around and enjoy our visit. There is not a massive epidemic of the virus in Madeira. Why can we not apply the same rules for those key international destinations here?
The industry is starting to take steps itself. Heathrow airport, for example, is now providing travel to destinations such as Hong Kong, Cairo, Bahrain, the Seychelles, Japan, Italy and South Africa and pre-departure testing at the airport. The average turnaround time for test results is 67 minutes, and travellers have a certificate they can take with them to prove they have tested negative that same day.
British Airways is showing how it could be done on transatlantic routes by starting voluntary testing on key routes to the United States. Why not make those approaches official? Does anybody seriously think that that would be a less effective way of screening for risk than the current system, when it is patently clear, I am afraid, that many people are not following the self-isolation rules anyway? Allowing testing and restriction-free entry to the UK for those with negative results could unlock key routes and start the long rebuild of this vital industry.
I am not going to speak for long because many people want to contribute, but my message to the Minister is very simple; I also have one for the industry itself. Introducing airport testing and accepting a risk-based approach—which all the evidence suggests is low—is the easiest way to rebuild confidence in the airline industry and save jobs. That is the crucial piece: ultimately, the issue is about the welfare and employment of our fellow citizens. It is vital that we do this. Are we really going to continue to stand aside while entire airports risk closure and entire airlines risk disappearing? We have to act, and act now.
There is another issue for us as a Government and a nation. The first of January marks our first day outside the ambit of the European Union. The transition period will have ended and the post-Brexit world will begin—whatever the result of the negotiations. On the first day of global Britain, will there really be only three planes in the sky over the south-east of England? Will our global hub airport, and airports such as Manchester, Leeds, Bradford, Bristol, Belfast, Edinburgh, Glasgow and Cardiff, all be operating at a tiny fraction of their capacity? These are our global connections and have to be back in place for Britain in a global world post Brexit. For the sake of our economy, jobs and future role in that post-Brexit world, my message to Ministers is to make airport testing, and the flexibility that should come with it, the urgent priority that it should be.
One final word for the industry is that recovery must come and we have to do everything we can to make sure that it does, but it has to come with an eye for the future. I want to see that Plane Finder app full again, but aviation must rebuild with a focus on the environment as well. There is no magic technology solution that will make it a net-zero sector by 2050, although I welcome today’s announcements about support for improved technology in the sector.
I am hopeful that, before too long, hydrogen will power some short-haul planes, that all airports will have electric and hydrogen vehicles on their entire premises and that new technology for engines will continue to bring down emissions. I also believe that the industry needs to strengthen its offsetting strategy further to reduce its environmental impact. The Carbon Offsetting and Reduction Scheme for International Aviation, or CORSIA, was a start, but is a long way from what is needed and is too remote a concept for consumers starting to worry about whether they can, or should, fly in the future. That is a big item on the agenda for the industry.
Immediately and over the next few weeks, the priority has to be getting planes flying again; the environmental strategy is a challenge we should be thinking about now, but the priority is that. That first task lies with the Government. My message to the Minister, to the great team at my old Department and particularly to the Department of Health is that we need airport testing and a regime that allows the industry to start to recover. Quarantine is killing it, and it will kill the first few months of global Britain. Things have to change, and they have to start changing right now.
It is a pleasure to take part in this debate under your chairmanship, Sir Edward. I thank the right hon. Member for Epsom and Ewell (Chris Grayling) for bringing this topic to the floor today.
I would like to focus on a number of areas. Aviation is a wide area; it is not just about airports and passengers—there is also the manufacturing end. It is vital that we look after that and get the planes flying. Otherwise, our manufacturing industry will collapse. Northern Ireland depends heavily on one of our major manufacturers. That company employs many in the aviation industry, but it depends on planes being built and sold. That is vital.
There are many areas to look at. One is connectivity, not just with the wider world but regional connectivity. Northern Ireland is suffering at present with a reduction in the number of flights we can get. There is even difficulty in coming to London, our capital city. We used to have five or six flights a day coming out of the international airport to Gatwick, but that has been rationalised down to four a week. Those numbers make it difficult to grow business.
There is good news in relation to a vaccine and trying to bring back some confidence to the public when it comes to making use of flying. Flights could go ahead safely if we can get people vaccinated to ensure that it is safe to fly. Many within the industry have done everything asked of them to try to encourage people on to planes. Unfortunately, sometimes the Government have not moved with the industry when it has made recommendations about what can be done, and it has had to take measures itself.
One tool vitally important from a Northern Ireland perspective is air passenger duty. A study by York Aviation on the removal of APD at a national level showed how that would be of benefit: it could save 130 routes that might otherwise be lost. The cost to the Exchequer would not be exorbitant—in fact, 3.3 times gross value added would be created by reducing the duty, given the increase in those who would travel. APD costs an additional £13 on every flight from Belfast to Bristol. When flying to Dublin, we would not see that because Dublin has been very active in reducing APD and encouraging people to use flights.
Interestingly, the Republic of Ireland Government made an announcement about injecting €80 million into the aviation sector—in a country with a population of about 4.5 to 5 million people. That is their predatory approach to sucking the life out of the aviation industry in Northern Ireland. We really need to wake up to that and see how we can put measures in place to ensure that, after the pandemic, we have an industry that is still vibrant and one that people will be willing to use.
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) on securing this important debate on the future of aviation—an issue that the negative impact of the covid-19 pandemic has put into even starker relief.
I have the privilege of representing Gatwick airport, which is in my constituency, and it is truly suffering as a result of the pandemic’s impact. I established, and am honoured to chair, the all-party parliamentary group on the future of aviation because the issue has not only had a devastating impact on my local community; it is, as my right hon. Friend said, of vital importance for the whole UK economy. Before the pandemic, aviation accounted for about 4.5% of UK GDP and, as he also said, many hundreds of thousands of people are employed directly in the sector and more widely as well.
Business at Gatwick airport has reduced by more than 61% since the start of the pandemic. In August—its peak time—when it would normally have more than 5 million throughput passengers, it had fewer than 1 million. Some 40% of jobs have been lost, as they have been at some of the airlines that operate from the airport, such as Virgin Atlantic, which is headquartered in my constituency, and easyJet, whose largest centre of operations is there too.
That is why I very much echo the solutions to deal with this unprecedented challenge. I do not think anybody doubts the sincerity of the Government and the incredible challenge that they face in these unprecedented circumstances. We need to move from quarantine, which was a natural response in the early days, to a testing regime. Our competitors, such as Germany and France and, further afield, the United Arab Emirates and Singapore, are testing, which is putting the UK aviation industry and business more widely at a competitive disadvantage.
Last week in the House of Commons, I asked for the global travel taskforce, which the Prime Minister rightly established, to report as soon as possible. I hope that testing will be part of that. Anything that requires a quarantine of more than three days effectively means that travel does not happen in any meaningful sense.
I echo the remarks about air passenger duty. We charge the highest air passenger duty anywhere in the developed world—twice as much as some of our competitors such as Germany. Many of our competitors do not charge any at all. We need that to be reduced or, indeed, scrapped for at least the year to come, and, I would argue, for longer still.
Business rates relief is important. In England, airports should be subject to business rates relief. Gatwick airport is operating only from the north terminal. The south terminal is completely shut down, but it is still paying business rates on that. I echo what the Prime Minister and my right hon. Friend the Member for Epsom and Ewell have said about building back better and greener. I welcome the UK aviation industry’s commitment before the covid-19 pandemic to reach net-zero carbon by 2050, and the Jet Zero Council. If we invest in technologies such as hydrogen, we can build back better, greener and more sustainably, which is good for our economy and contributes to the global environmental effort.
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate the right hon. Member for Epsom and Ewell (Chris Grayling) on securing this timely debate.
I completely agree with everything the right hon. Gentleman said about testing and the opportunity for testing at scale at our airports. He focused on long-haul routes, but on the routes that serve my constituency in the northern isles, it could be even more transformative. If we as an island community with few points of entry, and much lower rates of infection at the moment, could allow people in and out with confidence, it would be of enormous assistance. I very much hope that his words and mine will be heard in the parts of Government here and in Edinburgh where they need to be heard.
It is not rocket science; it is pretty straightforward. In an island community, if we get transport right, just about everything else—economic development, public services and the rest of it—falls into place. Aviation is critical, both within the islands to shift doctors, vets and teachers around the smaller island groups, and between the islands and mainland communities. Those are my principal areas of concern, but we need the same level of connectivity and interlining that other communities have. It is about us getting not just to Aberdeen, Edinburgh or Glasgow, but onwards to Heathrow or wherever else we may wish to go. For our businesses and communities, that connectivity is absolutely critical.
The situation facing Loganair, the operator of the lifeline services throughout the highlands and islands, is pretty serious at the moment. I should say parenthetically that I bow to nobody in my appreciation and admiration of the staff and management of Loganair, which just before the pandemic took on some of the Flybe routes, so it may soon be more familiar to other Members in this Chamber. I appreciate their professionalism and dedication and the approach they take to the business. They understand that they are there not just for an economic purpose, but for a social and community purpose. They are an exemplar for others, and a flying example of what corporate social responsibility means.
Loganair tells me that it faces a pretty bleak future. It has done well to provide a skeleton service throughout the lockdown, but as it looks towards bookings in quarter 1 of 2021, it sees very little to inspire confidence. It has the same fixed costs as all other airlines, including airport charges, standing charges and the cost of plane purchase and rental. Like other businesses it has the opportunity to put staff into furlough, but that is just part of the story.
In the Northern Isles, we are about to enter the third of three winters for our visitor economy. When we get to the end of the furlough period, at the end of March, we will be looking to open up and get our visitor economy going, because that is absolutely crucial to our running again. The availability of good, frequent, reliable air services in that time will be crucial.
On reliability, in the few seconds that remain to me, I place on the record yet again my exasperation at the fact that the Scottish Government, through Highlands and Islands Airports Ltd, continue to insist on the removal of air traffic control officers from airports throughout the highlands and islands, to centralise them all in Inverness. The service is not just good but reliable, so that should be put on the back burner for the foreseeable future.
It is a pleasure to serve under your chairmanship, Sir Edward. I apologise for my lateness; I had to be in a Delegated Legislation Committee. I congratulate my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) on securing this important and timely debate. I will focus my remarks on aircraft manufacturing, as Filton in my constituency is at the heart of the UK’s Aerospace Centre of Excellence, which is in the south-west of England.
The south-west hosts one of the largest and most significant aerospace clusters in the UK, and the top 14 global aerospace companies have a significant presence in the region. Some 17,500 people work in the sector, which generates £1 billion annually for the greater south-west. That includes the wider supply chain and research work in local universities, such as the University of the West of England in my constituency.
We must not forget that the UK aerospace sector represents more than 110,000 jobs across the country. The aviation sector is worth £52 billion a year, which equates to almost 3.5% of the UK’s entire GDP. In 2019, the aerospace sector contributed £32 billion in exports to the economy. In my constituency well over 10,000 jobs directly depend on it, and many more are involved in the supply chain.
The challenges are clear. The aerospace industry has been disproportionately hit by the pandemic, owing to the shutdown in global aviation. The sector has seen a contraction of 32% since February. Although UK GDP grew 15.5% between June and September, the aerospace industry saw only modest growth of 2.7%, which suggests that demand remains low, and that it will be one of the last sectors to recover. Manufacturers have therefore had to cut production rates significantly—by more than a third in some cases. Demand for new aircraft may not significantly increase until 2025 at the earliest, and possibly much later in the decade for long-haul aircraft. If aircraft are not being delivered, the industry will not be able to generate revenue and continue to invest in the technology, apprenticeships and jobs that we need to maintain the UK’s place in a very competitive global market.
The Government have given great support so far, which I welcome. The furlough scheme is now extended until March. There is support from the Bank of England’s corporate finance facility and funding for the Aerospace Technology Institute, which supports research and development. That sum is now approaching £9 billion.
Nearly 70 aircraft flown by UK-registered aircraft are more than 15 years old. They could be replaced by new aircraft that have better environmental standards and use at least 25% less energy. The Prime Minister announced the ambition that this country should be the first to build an all-electric commercial airliner. That will encourage the development of jet zero technology—a net zero carbon emissions target by 2050. The Government should support the scrapping of those 70 aircraft, allowing manufacturers and designers to build newer aircraft, to protect jobs and skills for the future. I have also been working closely with the West of England Combined Authority and I applaud the action it has taken, under the leadership of Tim Bowles, to support the aerospace sector, with £5 million of funding for the digital engineering technology and innovation initiative—DETI—delivered with the National Composites Centre. The combined authority is supporting both initiatives as part of the regional recovery plan. It has pivoted to focus to ensure that it supports our recovery, accelerating access to skills and ensuring that our major industry can keep going.
Apprenticeships are a great way of providing high-skilled jobs and social mobility. The Government need to be a bit more flexible on the levy. Finally, we need to get aircraft flying back to more normal numbers and see the aerospace industry earning revenue again, or we risk losing the industry in this country and our world-renowned expertise.
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate the right hon. Member for Epsom and Ewell (Chris Grayling) on securing this debate on an industry that is vital to my constituents, thousands of whom work at Heathrow.
I want to make a few points. First, we urgently need a plan for aviation, including a plan for passenger testing, to help get planes flying safely, inbound and outbound. Secondly, we need a realistic, targeted support package to tackle the impact of the pandemic in the medium term on jobs, businesses and aviation communities. Thirdly, we need to plan for the future and invest more, not less, in the pace of decarbonisation in the sector.
In March, the Government promised a recovery plan for aviation. Eight months later, an integrated plan has not yet been published, while redundancies continue to rise. To help the industry recover as quickly as possible, we need a robust testing regime at our airports, which could reduce quarantine. Some welcome pilots are under way, which put public health first while taking advantage of swifter testing.
The Government have said that families will be able to fly abroad for Christmas with a new testing regime, but that is still six weeks away. United Airlines has already begun pilots on the London-New York route, but closer international working is needed. Are the Government planning to commit to a common international standard for health screening measures? The UK lags behind more than 30 countries around the globe that are doing more on aviation testing.
Getting planes flying safely will be key to saving jobs, including those that will be viable for the long term. We need more flexible and targeted schemes to keep people in work, and in their jobs, until aviation recovers. In Hounslow, we have seen devastating impacts. My constituency has the third-highest number of furloughed employments in the country, but 40,000 jobs are still at risk unless we see a recovery. I thank our unions and councillors, like Councillor Khulique Malik, who works at Heathrow, for the support that they have given the community at this time.
Businesses also need to work together for the long term. I am grateful to Unite for highlighting the imbalance of power that we are seeing at Heathrow. Heathrow Airport proposes changes that could see workers’ pay cut by £8,000 a year—equivalent to a 20% slash in salary. Heathrow workers are set to go on strike next month. Much more concerted dialogue with management is clearly needed.
The GMB, Prospect and Unite have been clear in their ask of Government to put forward an aviation-specific package, and they will contribute to the thinking that goes into it. Furlough has been welcome, but the job support scheme, as expected, was criticised as not workable for the aviation sector and aviation jobs, which involve more complex 24/7 shift-work patterns. More support for transition where jobs are lost in aviation communities is vital.
Finally, on plans for the future and decarbonisation, we know that progress on decarbonisation has been painfully slow. We welcome the jet zero plans and the work going on in government on the aviation sector in that regard. More of that will be debated at the important conference, which the Minister is aware of, hosted by West London Business this Friday on “reimagining our global hub”, looking to the future of aviation and transportation, and our leadership in the UK and across the world.
What incentives are required to drive the innovation essential to delivering a zero-carbon aviation, and how can we look to the longer-term infrastructure development, including Southern rail access to Heathrow? Supply chains also matter. That is why we need an integrated sector-based plan now.
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) on securing the debate. It is good to see the Minister in his place; he visited Southampton airport within days of becoming the Minister, for which we are grateful. I will focus predominantly on Southampton airport this afternoon.
The pandemic has dealt the aviation sector a huge blow —Southampton airport, in my constituency, in particular. With airports predicted to lose around £4 billion by the end of 2020, and with possibly 20,000 jobs under threat, it is clear that a number of things need to be done urgently to support the sector. I want to raise two points in the short time that I have.
First, as has been discussed, we need a proper airport testing regime. The 14-day quarantine rules are inflexible and the process of setting up an airport testing regime is too slow. Airports are willing, but the speed of the Government response has hampered progress, and the delay in the committee’s reporting is regrettable. As my right hon. Friend the Member for Epsom and Ewell said, advice now needs to be re-examined to see how we can get that regime set up as quickly as possible, to unlock the industry.
Southampton airport has its own unique set of circumstances. With the collapse of Flybe, which represented 94% of all flights, and an application for a runway extension of 164 metres to allow larger planes to land, Southampton airport is now in a fight for survival. That situation could be exacerbated because any application, if refused, could take 18 months to appeal and any application, if successful, could be subject to judicial review.
The Minister and I have spoken about this before, but it seems bizarre to me that I can receive letters from the Cabinet Office for numerous special development orders being awarded for Brexit preparedness, but special development orders are not forthcoming or being examined by the Department for Transport or the Cabinet Office for a major regional airport like Southampton. I would ask the Minister to look for further advice on that as time goes on.
That brings me to my second and final point. I know that this is a Treasury issue and I know that the Minister is sitting on the Front Bench, but I would reinforce many of the comments made by other hon. Members: airports such as Southampton and Exeter, which are operating at 10% of the capacity of this time last year with the same running costs, are still paying the same business rates to local authorities and the Government while they are not operating at full capacity.
I really hope that the Minister will raise with the Treasury the prospect of extending the business rate relief that has been made available in the devolved Administrations. That would show some fairness in the industry and make a vital difference, going forward. Southampton is paying £1.5 million a year in business rates and it has not had that relief. For an airport that is fighting for survival, taking that figure off the balance sheet would be appreciated.
We have all acknowledged that the aviation industry is facing a fight, nowhere more than in Southampton. I am asking the Minister to speed up the support around testing and business rate relief to the industry, so that airports around the country such as Southampton can survive, and we can have a vibrant regional airport offer when the pandemic finishes.
It is a pleasure to serve under your chairmanship, Sir Edward. I thank the right hon. Member for Epsom and Ewell (Chris Grayling) for securing today’s debate; I fully agree with much that he said.
With Heathrow in my constituency, I have a natural interest in protecting the livelihoods of my constituents who work at the airport and in the supply chain. Before I stood down as shadow Chancellor, one of the last conversations I had with the Chancellor was about securing an aviation strategy and bringing various partners in the sector together to do that. I regret that no effective co-ordinated strategy has been forthcoming, and in the absence of that strategy, we have seen the law of the jungle rule that sector. As a result, many of my constituents are experiencing real uncertainty, stress, distress and hardship, as they lose their jobs and have their wages cut.
Companies such as British Airways and Heathrow Airport Ltd have seen the pandemic as a crisis not to be wasted—an opportunity to secure long-held ambitions to reduce wage levels and withdraw hard-won benefits in the terms of employment secured in negotiations over the years. Many employees feel as though they have been treated like chattels rather than loyal employees for decades.
Although the pandemic might be with us for the next year in some form, with the potential of effective vaccines in sight, covid is likely to have a relatively temporary effect. That is why the aviation trade unions were willing —indeed, proposed—temporary measures, including temporary reductions in wages and job numbers to tide us through the pandemic. Instead, Heathrow Airport Ltd and British Airways are demanding permanent pay cuts and the permanent erosion of conditions of employment. That has provoked palpable anger among workers at Heathrow. As my hon. Friend the Member for Feltham and Heston (Seema Malhotra) said, we now face a strike before Christmas, which would not be necessary if management recognised their responsibilities.
Whether it is Heathrow’s brutal treatment of my constituents or Rolls-Royce’s appalling treatment of the Barnoldswick community, we must all call upon these companies to withdraw their threats to their employees and get back round the table to negotiate a sensible way forward. We also now need the Government to live up to their responsibilities to bring together all the partners in the sector, employers and trade unions, and then bring forward a programme for the immediate and long-term future of aviation. It should include the support that airport and aviation communities need immediately. I think there is a consensus building on many of the measures that hon. Members have set out today, but there also needs to be support as part of the just transition to an environmental aviation policy. That will mean, in some instances, ongoing financial wage support and retraining and educational opportunities to assist people into alternative employment, and, in my constituency, investment in the west London area to rebalance our economy for the long term. What we need, in short, is an aviation community strategy.
I feel a sense of desperation among my community about what is happening to them at the moment. I believe that desperation will feed through, unfortunately, into internal levels of distress. We are already seeing a rise in mental health problems within our community now, and we need action from the Government. Eight months on, after first mooting an aviation strategy, now is the time for further—and decisive—action from the Government.
I am grateful to my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) for securing the debate. Planes transporting people to places across the UK, Europe and further afield have been a regular sight in the skies above East Devon for decades. Earlier today, I checked the number of arrivals and departures at Exeter airport. There were no flights and no connections. Passenger numbers have dropped by 95%. That should be a stark wake-up call for the levelling-up agenda. We cannot level up every region of the country if we level off regional aviation.
Everyone who flies to and from Exeter airport contributes to our local economy. Many of the remaining jobs at the airport are highly skilled, retaining local talent and bringing investment to our area. The current problems faced by the aviation sector are not solely issues stemming from the pandemic; they have firm roots in the consolidation of airport slots in London and the south-east. The lack of capacity at major hub airports in the UK and the air passenger duty regime penalise domestic air travel. Air passenger duty needs to be reformed to give the smaller, regional airlines mentioned in this debate a lifeline, and to help new, rebranded airlines such as Flybe, to get back in business.
I have repeatedly called for the Government to scrap business rates for airports for 12 months—a call that I have heard again this afternoon. It feels like groundhog day for me. I cannot fathom why my call remains unanswered. It would cost £680,000 to scrap Exeter airport’s business rates bill for a year—a drop in the ocean compared with the business rates bills for major supermarket chains, for example. I raised the issue at Prime Minister’s questions last week. The Prime Minister confirmed that the Department for Transport is looking at bespoke support for particular regional airports, to keep them going in these tough times. I support that move; I just hope it is not too late.
Regardless of whether additional support is forthcoming, it will take time for passenger confidence to return. The global testing taskforce is working with the industry on solutions to safely reduce self-isolation periods with testing. Hundreds of thousands of jobs at airports, airlines, travel agents and many more businesses depend on solutions that were needed yesterday. We all recognise the need for a cleaner, greener aviation industry, but we need the industry’s jobs and expertise to help deliver that aim. I fear that without further support for the aviation sector, that hope, those jobs and our regional airports remain at risk on our watch.
It is a pleasure to serve under your chairship, Sir Edward. I thank the right hon. Member for Epsom and Ewell (Chris Grayling) for securing the debate.
We in Luton are proud of our airport and its aviation industry. Thousands of local jobs depend on the airport and its supply chain, but the industry has been hit by a double whammy. Coronavirus has taken foreign travel off the table for millions of people and, coupled with the Government’s unforgivable lack of sector-specific support for workers and the industry, that risks ripping the heart out of my town’s economy.
It is not just pesky Labour MPs on this side of the Chamber who are crying out for support, but the industry, workers, charities in Luton who rely on our airport’s support, and Luton council, which is intrinsically linked with the airport. We in airport towns are all worried about what will be left for our constituents and their jobs in 12 to 18 months’ time.
My hon. Friend the Member for Luton South (Rachel Hopkins) and I have raised the issues faced by aviation workers in our town whenever we have been able to—we will never stop fighting to save the jobs of the people who we represent. Every time, however, we have received the same stock answer, which I am sure the Minister has in front of him again: the Government
“have confirmed that we are prepared to enter discussions with individual companies seeking bespoke support as a last resort, having exhausted all other options.”
I am pretty sure that everyone in the room has received that response. Will the Minister tell us what discussions have taken place and how many jobs have they saved? What are the criteria? Have any green commitments been secured for that support?
Does saving thousands of jobs not represent value for taxpayers’ money? Is this about saving the jobs of my constituents or saving the pay checks of their bosses? How many more times will those of us in the Chamber with airports in their constituencies have to come here to ask the Government to support the industry, as the Governments of France, Germany and Spain have done, only to receive platitudes but no action?
The Government should know full well that this is exactly the sort of behaviour from politicians that the public hate: all talk, no action. In fact, despite the Government’s promises to do whatever it takes to get people through covid, they clearly have a blind spot when it comes to airport workers and airlines. Where is the response to job losses in Luton? Where is the plan for testing at airports, for which the industry has been crying out for months? The Government’s travel corridor policy is failing.
There is still time for the Minister to prove me wrong, and I hope that he does. I hope that he acts to save thousands of jobs in my town of Luton and in all the towns represented here today.
It is a pleasure to serve under your chairmanship, Sir Edward. I thank my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) for securing this important debate. I congratulate the Minister on his role—I listened to his first speech at the Despatch Box, and wish him a long and successful career on the Front Benches. Today, the privilege is all mine.
I am lucky enough to be the Member of Parliament for the constituency that is home to Birmingham airport. It is often referred to as a regional airport, but it is actually a global hub. It is the single greatest economic asset that we have in the west midlands. To understand its importance, we must understand its context and the cost of losing it.
It is no secret that we in the west midlands were experiencing an economic renaissance pre-covid. The airport, and therefore my constituency, were and are right at the heart of that. In normal times, the net impact of the airport is about £1.5 billion of gross value added, and it is responsible for 31,000 jobs. Those figures were set to rise to £2.1 billion and 34,500 respectively by 2033. Our region has consistently had a trade surplus with the United States and is the only region in the country to have a trade surplus with China.
Pre-covid, 35 airlines flew all over the world from the airport, which served around 13 million passengers and was set to serve 18 million by 2033. In short, the airport is a key economic accelerator for the region, providing the air connectivity that is vital to the expansion of international trade, investment and employment, and to the growth of inbound tourism and outbound leisure destinations.
Covid, however, has been absolutely devasting. The number of airlines operating out of the airport has been greatly reduced. Since March, about 800,000 passengers have been through the airport and the current lockdown has, of course, prevented the airport from staging a recovery. The Government have made significant steps through the job retention scheme and that has obviously been helpful, especially because recruitment in the aviation sector is so difficult: that takes time, especially with helping the workforce maintain security credentials.
As we have heard, the need to protect our aviation sector is more acute than it has ever been. Many of our airports have fixed costs such as security and rates, as we heard. My airport pays about £5.6 million a year. There is also air traffic control. I ask the Minister to do everything he can to help find innovative solutions to support our airports, whether it be business rates relief working with colleagues in the Treasury, or a testing regime that protects passengers and the UK without disincentivising travel to the UK. That is all important because of what our airports represent. They are more than just buildings, hangars and hubs for big flying buses, they are communities, supply chains and jobs. They represent our vision as a nation, our ambition, and our dreams. They represent how we see ourselves and our place in the world. As we see light at the end of this long covid tunnel with vaccines and faster testing, we will be able to start that long but necessary journey to recovery. I promise to work with the Minister to help our aviation sector get back on its feet, and I encourage him to do so.
I thank the right hon. Member for Epsom and Ewell (Chris Grayling) for securing a debate on such an important issue. It is an honour to follow the hon. Member for Meriden (Saqib Bhatti).
In March, the Government promised an aviation plan. We have had a change of minister, but eight months later—with redundancies rising and the widespread use of abhorrent employment practices—we are still waiting for the plan. I ask the Minister this: when will the plan be published? Among all the uncertainty, the aviation industry has adopted some absolutely abhorrent employment practices which I and many others believe should be banned in the UK, namely “fire and rehire”.
As a member of the Transport Select Committee, I have had the opportunity—as have other colleagues here today—to question Mr Álex Cruz, who was chief executive of British Airways until recently. The initial pandemic response of British Airways was to threaten to fire all of its 42,000 staff and rehire about 30,000 of them on permanently reduced terms. The inferior terms and conditions left some workers facing huge wage cuts of between 55% and 75%. In his evidence, Mr Cruz reassured the Transport Select Committee that an agreement had been reached with the unions, and that there would be no need to issue new contracts. Frankly, I believe Mr Cruz misled the Committee, because 850 British Airways cargo workers forced to sign new contracts or be fired have received pay cuts of 25%. British Airways have threatened to outsource that part of their business, while attempting to renegotiate and weaken the collective bargaining agreement with Unite. In response to that, those staff will start balloting for strike action tomorrow, I believe, and I stand with them in solidarity as a member of Unite the union against the imposition of drastic cuts to their wages and living standards.
I ask the Minister, who previously served as a colleague on the Transport Select Committee chaired by his Conservative colleague and my friend the hon. Member for Bexhill and Battle (Huw Merriman) this: does he agree that the Government should seek to minimise job losses in aviation while protecting pay and employment rights? I sympathise with the aviation industry: it has been hit hardest by covid and has been left in uncertainty. Loyal and skilled staff should not, however, pay the price for Government failure and the pandemic, and the disgraceful practice of “fire and rehire” must be banned.
I thank my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) for bringing the debate. I also thank the Minister for listening to our reasons, and for meeting me late last week on this subject and for the support he is giving us. I wrote a longer speech, but I have decided not to read it as the last time I wrote a long speech I missed the ending, which was the main ask. I am going to start with the asks first, and if I overrun it does not matter too much, does it? The asks are for regional airports to be helped with business rates, because they are struggling and that would help, and for the Minister to continue speaking to the Secretary of State for Health and Social Care about the testing that is desperately needed at airports. If we can get testing sorted out at airports, then we can get planes in the sky again.
Now for the reasons why. The airport industry in the UK is the third largest aviation industry in the world, and it is super important. It is 4.5% of our GDP. It is a great industry within our country, but it is struggling. Doncaster Sheffield Airport in Don Valley, which I represent, is no exception to that and it is really struggling. It is a shame because it has fantastic potential. Only a month ago, Wizz Air made Doncaster Sheffield Airport the second place to fly their planes from. They have two aircraft there and I went to the usual MP’s ceremonial ribbon-cutting event. It was wonderful to be there, only for us to go into lockdown a fortnight later, which made things really difficult.
I know it is not the Government’s fault and I have been a big fan of what the Government have done. The furlough scheme has been fantastic and has helped a lot of industries, including the airline industry. I am sure the Minister knows, but I want to get over to him how important the industry is, how important Doncaster Sheffield Airport is to Don Valley, and Doncaster as a whole, and how important it is for the country as we come out of covid. We would be grateful for anything that he can do to help this industry.
I, too, congratulate the right hon. Member for Epsom and Ewell (Chris Grayling) on securing the debate. It is surprising that we have to have a debate on this issue, so long after the problems in the aviation and the aerospace industry were apparent.
It was clear from the first day of this crisis that here was an industry that required specific attention to be given to it. We have had a strategy for the hospitality industry, but we are still struggling with a response for an industry that is important for regional connectivity, investment in regional economies, businesses in regional economies and trade, because a lot of trade is now carried in passenger planes.
In highlighting the problems with the aviation industry, it would be remiss if I were not to mention that some of the responses from the industry itself have been less than satisfactory, especially the way in which it has treated some of its employees through hire-and-fire schemes. It would be wrong if we did not mention the impact that has had on many loyal workers.
A number of issues have been mentioned today, but I want to highlight three things to the Minister. First, there is the need to give people the confidence to get back into planes, so that we do not have to keep giving bail-outs to airlines or airports. We have had a good discussion about the testing regime that is required and what is needed to put that in place. I hope the Government will look at that as a priority.
Secondly, I want to highlight how we encourage people not only to have the confidence, but to get moving back into the aviation industry. I know it is not the Minister’s remit, but, as the hon. Member for Eastleigh (Paul Holmes) pointed out, a substantial piece of work has been done on the impact that a temporary reduction in air passenger duty would have on getting people flying again. The Government’s argument has always been that that is costly, but given the fall in numbers at present there is not a great deal of revenue coming from air passenger duty anyway. If we can get people flying again, get the country connected and get airlines moving, that is a bonus.
The last point I want to make is about duty-free shopping. It is surprising that at a time when airports have problems tax-free and duty-free shopping has been removed. It is a major revenue raiser and in Northern Ireland there will be nothing in those airports. I should like the Minister to address that.
It is a pleasure to serve under your chairmanship, Sir Edward. I thank my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) for securing the debate. The right hon. Member for East Antrim (Sammy Wilson) is right: we have been here before. I remember my right hon. Friend saying, in a debate on, I think, the Minister’s second day in his job, that he had not intended to speak about areas of his old portfolio, but that he was driven to do it by the plight of the aviation sector. Yet here, as the right hon. Gentleman said, we still are.
It is right for us to recap the matter. Looking at aviation from the UK perspective, we have the largest aviation network in the Europe and the third largest in the world, contributing £22 billion to the UK economy. It employs—or employed—230,000 people with employment for an extra five people created off the back of each one of those workers. We have been a leader and a success story in aviation, but from there we have gone to being a laggard at opening up our skies again and getting passengers flying. That is what the aviation industry needs.
When the Transport Committee, which I have the honour of chairing, delivered a report on the impact of the coronavirus pandemic on the aviation sector, we called for financial support measures for the aviation industry, but we can see that there is pent-up demand. When the air bridge was opened up to the Canaries, bookings went up by 112%. Unfortunately, that was a few weeks before the November restrictions, so they collapsed again, but it shows that the demand is there, if only we can find a testing mechanism to allow passengers to fly with confidence.
It is not as if that mechanism is not out there. I received a spreadsheet from an aviation company: I would call it a spreadsheet of shame for the Government. It showed 30 countries that have already delivered testing, either before the passenger reaches the airport that they are going to transfer to, or once they have arrived. If those other countries can demonstrate, with science, that that can be done safely, why on earth can the UK not do the same thing, when we have been the leaders and pioneers in aviation? That is absolutely what is required.
The Minister, for whom I have much respect, was a member of the Select Committee so I know that he is passionate about the issue and that he believes in what I am setting out. My big question is whether No. 10 and No. 11 are really listening. The combined Department of Health and Social Care and Department for Transport aviation taskforce was supposed to report to No. 10 by the end of October with a proposal for bringing in testing. I do not believe that it did so. We still have not heard anything and while we cannot do anything right now, during November, there is so much negativity that we need to show real signs of opening. Perhaps the Minister can pass on that I would like No. 10 to ensure we get early indications of what the testing mechanism would be. Let us unlock our skies again. The industry is a great one, and it needs to come back with Government policy and support.
It is an honour to serve under your chairmanship, Sir Edward. I thank the right hon. Member for Epsom and Ewell (Chris Grayling) for securing this important and timely debate. I also thank the Unite and GMB unions for campaigning so passionately and effectively on the issue, since the covid pandemic began, to safeguard the future of all those working in the aviation sector. As many colleagues have said, the livelihoods of 230,000 people employed in the sector—the third largest in the world and the biggest in Europe—are threatened. To challenge, slightly, something that was said by the hon. Member for Bexhill and Battle (Huw Merriman), who chairs the Transport Committee of which I am a member, the sector actually contributes £28 billion to the economy.
That is why it is astounding that eight months since the Chancellor stood at the Dispatch Box and promised a financial support package for the aviation sector, that has yet to be delivered in a substantive way. In that time we have had wave after wave of redundancies, despite the furlough scheme, and one airport operator even described that as little more than a drop in the ocean in relation to fixed costs. The Government’s failure to provide the rescue package has meant such disgraces as the 13,000 redundancies at British Airways, and the firing and rehiring—things that are totally out of step with British values and the way our companies should behave. That is why the Transport Committee report damningly branded British Airways a “national disgrace” for its behaviour. The Committee Chair spoke of standards falling “well below” those expected of an employer.
It is simply unacceptable that the Government have not stepped in to do more to drive this level of change. For the Government to stand by when companies take advantage of these situations is deeply frustrating, because we know that there are options on the table that could be taken, such as prioritising loans or taking stakes in companies. Businesses that receive such support should then be prohibited from paying dividends, undertaking share buybacks or making capital contributions—potentially, even executive pay could be capped. We need to show that the needs of ordinary British workers are the priority for this Government and our country.
There are many examples from around the world of Governments backing the aviation industry. The US injected $45 billion into the sector. Another good example is France, where Macron’s Government unveiled a series of historic rescue packages but also put in place important mechanisms to tie parts of those packages to very clear decisions that airline bosses had to make to bring forward plans to reduce carbon dioxide emissions, to transform the fleet and to treat their staff, including their long-term employees, far better. By the way, it is vital that such efforts to tackle climate change are not lost while all the focus is on retaining jobs.
Consideration should be given to publicly financing smaller airports—there are many near me, such as City airport—and air traffic control, as well as specific routes within the UK’s aviation sector. Time is running out, and the Government really must act now.
It is a pleasure to see you in the Chair, Sir Edward, and I congratulate the right hon. Member for Epsom and Ewell (Chris Grayling) on securing what has been an interesting and very welcome debate. I agree with a huge amount of what was has been said by Members from all parties.
The stark truth is straightforward and simple: the UK Government have essentially abandoned the aviation sector to its fate. To be clear, when I refer to the aviation sector, I include its large and varied supply chain, including the strategically important aerospace sector. I say “abandoned” because the Government appeared at the start of the pandemic to be in lockstep with the industry. The Secretary of State for Transport came to the Dispatch Box and said that he had saved Flybe; the Chancellor promised back in March that there would be sector-specific support for the aviation industry; and the Secretary of State stood in the same hotel ballroom as myself and the Minister’s predecessor, looked industry representatives in the eye, and said:
“I understand the enormity of what you are facing, and this Government will stand by your side.”
The new Minister—he is still relatively new, but he has an extremely difficult job to repair broken relationships and a near-broken industry—is not responsible for making any of those promises, but he is now responsible for trying to deliver on them. I know what he will say in his closing remarks about the aviation sector having had access to x millions, loan-funding from the Treasury and, of course, access to the furlough scheme, but that is not enough and it is not what was promised. How many jobs in the sector might have been saved if the Chancellor had been clear from the start that furlough would continue throughout the winter period, as many of us had called for? We will never know.
Going into this crisis, the UK had the third biggest aviation sector in the world. I would be very surprised if we come out of it in the same lofty position, such has been the difference in the levels of support given to the sector by other Governments across the world. Plenty of other countries recognise the massive and strategic importance of the sector, including the Scottish Government, which rolled out support including full business rates relief for a full year. I know that many in this Chamber have called for that to be replicated in England. The Scottish Government have also worked with Highlands and Islands Airports to invest in infra- structure and economic stimulus as we come out of the pandemic, and they have worked with the aerospace response group, industry and trade unions to preserve aerospace, manufacturing and related sectors—protecting jobs in the short term, while expanding in the long term.
However, the blunt fact is that the Scottish Government have gone just about as far as they can with the limited powers they have. I know that the Prime Minister thinks devolution is “a disaster”, but it is a fact, and the fact is that the UK Government hold the bulk of the powers—legal and financial—that can make a difference in the aviation industry.
Instead, we have seen the Government watch as the aviation industry teeters on the edge of a cliff, and then give it a shove, with their baffling decision—I accept that it is not a Department for Transport decision—to propose scrapping the VAT retail export scheme and the airside extra-statutory concession scheme. In combination, those schemes created thousands of jobs, not only at the airports themselves but in retailers across the country.
For Glasgow, the airside concession is worth £8.6 million in revenue, which will now be lost, and 170 retail jobs will be put at risk, at a time when between 1,500 and 2,000 of the 5,000 jobs based at Glasgow airport have either gone or are under threat. Across the UK, the scrapping of both schemes is estimated to cause £1.5 billion of losses at a time when the industry is on its knees. It is beyond irresponsible to slash one of the few remaining income streams that offers a glimmer of hope for many airports. I hope the Treasury sees sense and reverses course in the coming weeks, and I hope that the Minister will confirm that he is lobbying the Treasury to do just that.
That is not to say that I think all parts of the aviation industry have been behaving entirely reasonably. It would not be a speech of mine if it did not mention fire and rehire; I agree wholeheartedly with every single word that the hon. Member for Easington (Grahame Morris), my colleague on the Transport Committee, said on the issue, and for that reason I will curtail my remarks—not least because I spoke for 15 minutes on the issue yesterday in a debate that I secured.
When I come out in public to support the industry, it makes my life and the lives of everybody else who advocates for it much more difficult when companies such as Menzies Aviation and, of course, British Airways engage in such disreputable behaviour against their own staff. I would have little objection to making Government support conditional on those companies’ complying with the idea that they must treat their staff with dignity and respect, instead of working out the cheapest way to shove them out the door. I again ask another Government Minister, in his closing remarks, to confirm whether he thinks the practice of firing and rehiring should be legal and whether he thinks action should be taken.
While passenger numbers have recovered slightly over recent months, even the latest statistics from August show the scale of the challenges now and for the immediate future: Exeter, Cardiff, Norwich and Southampton are all down more than 90%, Glasgow is down 82% and Edinburgh is down 79%. The best-performing airports are those that provide a lifeline service such as the Isles of Scilly or Tiree, but even their passenger numbers are down significantly. If action is not taken soon, we face a crisis of connectivity, threatening not just regional airports, but rural communities for whom air service is essential. That would be an economic disaster not only for the communities served by those airports, but nationally: regional aviation is worth £4 billion to the Scottish economy, which is the same as its value in London.
In September, the First Ministers of the devolved Administrations—before the Prime Minister decided devolution was a disaster—jointly wrote to him asking for urgent intervention to support the aviation and aerospace sector. I am interested to know whether the Minister can confirm that they have even received a response. Certainly we have heard nothing publicly from the Prime Minister or his colleagues on what he and the Government intend to do to preserve a sector that is fundamental to what is left of our manufacturing base.
My constituency has already seen that base butchered, with 700 jobs axed at Rolls-Royce in Inchinnan and the remaining 600 or so of the workforce deeply anxious about the plant’s very future. The Government’s response in my Rolls-Royce debate was to commend the company for carrying out redundancies voluntarily rather than by compulsion. Our workers and our industry deserve a lot better than that. The Scottish Government continue to try their level best to support the sector, which also includes companies such as Spirit AeroSystems and GE, among many others. I mentioned earlier that there is an aerospace response group that meets fortnightly, but there is also a separate specific Rolls-Royce working group, which includes the company itself, trade unions, a Government Minister and officials.
Over the past 20 years, the UK proportion of the Rolls-Royce global workforce has been slashed. In the year 2000, 43,700 out of 53,000, or 82%, were based in the UK; with the latest job cuts in the system, that figure is now down to 17,000 out of 46,500, or 36%. Over the past decade and more, the UK Government have funded Rolls to the tune of well over £3 billion, and around 12% of Rolls-Royce profits have been generated as a result of UK Government grants and tax breaks. I do not mind the Government’s supporting companies such as Rolls-Royce—in fact, I welcome it—but the Government must exert a bit more influence on this offshoring issue if they are to continue to support the business so well.
It would be remiss of me not to mention climate change and its impact on the sector before I conclude. There is some great work being done by many in this area, including by the FlyZero project and the Aerospace Technology Institute. Given the perilous financial state of the aviation and aerospace sectors, I have some concerns that, without more Government support, the UK will struggle to maintain its position as a global leader in this field. I echo calls for increased funding for the institute itself and towards developing and manufacturing sustainable fuels. Much as I have urged the Government to increase incentives for motorists to switch to ultra-low emission vehicles, I also ask them to consider a scrappage scheme for older aircraft, which would have the double benefit of decreasing carbon emissions and providing a needed boost to our aerospace sector.
In previous debates on aviation during the pandemic, I have asked the Government to act and said that it was not too late to intervene; I fear that we are rapidly approaching the point when it will be too late. It is time for the Government to act, and to act now.
It is a pleasure to serve under your chairmanship, Sir Edward. It is normal to thank the Member who secured the debate, but I have to apologise to the right hon. Member for Epsom and Ewell (Chris Grayling) instead. When he was Secretary of State for Transport, I asked him on the Floor of the House what first attracted him to build a high-speed line from his home in the south-east of England to his season ticket seat at his beloved Old Trafford in Manchester. That is the last time I will be flippant today.
I congratulate the right hon. Gentleman on securing this much-needed debate. It was entitled “Aviation Industry”, but that is the last thing we have talked about—we have talked about the pandemic. I would love to discuss how the sector could evolve to honour our commitments to the Paris agreement; to investigate the scope for even more highly skilled, highly unionised jobs; to discuss airspace modernisation, which is needed in this country; and to talk about how Britain can continue to be a leader of nations. Frankly, there will be no aviation sector in the UK if the Government do not get a grip of the pandemic and provide the appropriate and necessary support that the business needs.
As has been pointed out, the UK is already a world-class leader in aviation. The Prime Minister wants to look for new world-class industries—that is great, but my advice would be to protect the ones we have first. During the first four months of the pandemic, there were 99% fewer passengers. The current lockdown measures mean that, again, many airports are experiencing zero scheduled passenger arrivals or departures. Many hon. Members have defended their airports today. If airports are not turning over a million passengers, they are not really making a profit, so national infrastructure could be wiped out over the next few months if we do not do something.
Before the introduction of the second lockdown, UK airports were already projected to lose at least £4 billion by the end of the year. There will clearly be consequences such as shorter operating hours, fewer routes, long-term job losses and the risk that some airports may close their doors for good. UK aviation has now faced nine months of losses. While the rest of the economy began to open during the summer and early autumn, international quarantine measures prevented air travel from reopening and destroyed consumer confidence in flying.
Decisions such as letting all those people in in the first place, then introducing a global travel ban, and now the hammer of quarantine are killing the industry. The Department for Transport has to talk to the Foreign, Commonwealth and Development Office. The Foreign, Commonwealth and Development Office has to talk to the Department for Transport. They both have to talk to the Home Office at the same time. We need a co-ordinated approach from the Government.
Emerging from the most drastic and sustained reduction in passenger numbers that the aviation system has ever seen, UK airports are in a critically poor state to perform their role as enablers of growth and prosperity. A few weeks ago, there was a story about geological activity in another Icelandic volcano. A decade ago, the ash cloud shutdown was over in less than a week and cost the sector more than £1 billion. A new eruption would not do anywhere near the lasting damage that the Government are currently doing by not intervening in the aviation sector.
Aviation sustains 1.6 million jobs around the country. The International Air Transport Association tells us that 300,000 jobs are at imminent risk. The biggest impact of the failing industry will be in local airport communities such as Hounslow, Luton, Crawley, Manchester, Liverpool and Leeds—so much for the levelling-up agenda in our country. Those communities have grown dependent on their airports, which drive much of the local economy. Heathrow is famously the biggest business rates payer in Europe. As has been pointed out, in England and Wales, the Government have refused to give the resources and business rates relief to airports bleeding cash, as has happened in Scotland and Northern Ireland.
The sector brings £22 billion a year into the economy and is a critical part of its fabric. We have all seen the impact of cuts and what they have meant for staff, with some 4,500 jobs lost at easyJet; bases closing at Newcastle, Stansted and Southend; 12,000 job losses at British Airways; 3,000 jobs lost at Ryanair; 4,500 jobs lost at Virgin Atlantic; and more job losses at Heathrow, Manchester, Gatwick, Stansted and our smaller regional airports. The country cannot get back to economic health if we erode the foundations of our economy.
It appears that everybody is calling for a sector deal for aviation. It was not that long ago that the Chancellor reflected that the Government would have to make such an intervention. We are led to believe that there was a sectoral deal ready. I have also asked the Minister about that at the Dispatch Box. Where is the plan that we are all expecting?
This has been a terrific debate and I pay tribute to Members who have participated. The hon. Member for South Antrim (Paul Girvan) spoke eloquently about regional connectivity and the importance of airways to Northern Ireland. I disagree on everything politically with the hon. Member for Crawley (Henry Smith), except aviation and the respective Chagossian communities that serve our airports, which is Manchester in my constituency.
I could not agree more with the right hon. Member for Orkney and Shetland (Mr Carmichael), because I spend most of my holidays there. The sooner we get connectivity up and running, the better for me and my wife. As the hon. Member for Filton and Bradley Stoke (Jack Lopresti) pointed out, the aerospace sector in Bristol is dependent on getting aviation running. There were Members who supported Heathrow. My hon. Friend the Member for Feltham and Heston (Seema Malhotra) made an eloquent speech. The hon. Member for Eastleigh (Paul Holmes) defended Southampton airport.
My right hon. Friend the Member for Hayes and Harlington (John McDonnell) made a really good political point. He knows that my politics is about human dignity. We undermine people’s human dignity when we cut their terms and conditions in the face of a pandemic, when they have gone over and above to help keep that industry going. The hon. Member for East Devon (Simon Jupp) made such a good point: how come Tesco gets rates reductions but our airports do not?
My hon. Friend the Member for Luton North (Sarah Owen), who continually makes good speeches, stood up for her constituency airport. My hon. Friend the Member for Easington (Grahame Morris) and the right hon. Member for East Antrim (Sammy Wilson) asked where the plan was. We are eight months in and we need that leadership. The hon. Member for Meriden (Saqib Bhatti) talked about Birmingham airport and defended it excellently. The Chairman of the Select Committee, the hon. Member for Bexhill and Battle (Huw Merriman), has been a clarion voice in standing up for the industry.
The hon. Member for Paisley and Renfrewshire North (Gavin Newlands) said that we are probably now going to listen to the Minister give a list of business loans. Sir Edward, you will get this reference. It will be like a litany of saints, a beatification, on a Roman balcony. There will be one after the after, but what we do not need is lists. We need leadership and we need it now.
It is an honour to serve under your chairmanship, Sir Edward. I shall do my best to acknowledge as many Members as I can in my remarks.
I thank my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) for securing this debate on the future of the aviation industry, and everybody who has contributed in what has been a wide-ranging and fascinating debate. Every single Member here is passionate about aviation, which was made very clear in the course of the afternoon.
We have heard from a number of hon. Members about the critical role that aviation plays in connecting the whole of the UK and the world. I thank my right hon. Friend for all his tireless work when he was Secretary of State. That was a point that he was keen to make clear during his time, and we have seen that reflected today.
I hope that my right hon. Friend will be pleased to see—as will my hon. Friend the Member for Crawley (Henry Smith), to whom I will return in a moment—that work started in May on upgrades to the Gatwick airport rail station. That is a £150 million project, which my right hon. Friend announced when he was Secretary of State. That expanded, modern station will provide an impressive gateway to a global Britain, and I thank him for his work on that.
I have listened carefully to the points that have been made. I will endeavour to address as many of them as possible. However, as the hon. Member for Wythenshawe and Sale East (Mike Kane) and my hon. Friend the Member for Don Valley (Nick Fletcher) rightly said, it is not always possible for Back Benchers to make all the points they would like in their speeches or for me to acknowledge all of them, but I will do my very best.
These are incredibly challenging times for the aviation sector. We all realise that, and none more so than this aviation Minister. I would like to record at the outset how crucial the sector is to the UK and its economy, as was said eloquently by the Chair of the Select Committee, my hon. Friend the Member for Bexhill and Battle (Huw Merriman).
Before the covid-19 outbreak, the UK’s aviation sector was growing rapidly. Air transport and aerospace together contributed £22 billion to GDP and supported half a million jobs. The hon. Member for South Antrim (Paul Girvan) and my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) referred to the aerospace sector. This country and their constituencies excel in it, and they are right to draw attention to that. Aviation supports the economy through trade, aerospace, investment and tourism and by providing regional connectivity. It is the Government’s fervent desire and utmost intention that the aviation sector recovers quickly from the dreadful pandemic that it and the country have been through.
I want to dwell for a moment, in response to hon. Members’ calls, on the support that the Government have given to the sector. We should remember, despite the cynicism of the hon. Members for Paisley and Renfrewshire North (Gavin Newlands) and for Wythenshawe and Sale East, that the response has been unprecedented. It has enabled businesses across the industry to draw upon an unprecedented package of cross-economy support measures, including the Bank of England’s covid corporate financing facility, which has helped airlines’ liquidity. The sector drew down £1.8 billion of support by September 2020. The aviation sector as a whole is the largest beneficiary of CCFF, accounting for approximately 18% of the total amount of CCFF paid out by November.
As hon. Member know, on 5 November the Chancellor announced that workers across the UK will benefit from the increased support of a five-month extension of the furlough scheme—the coronavirus job retention scheme. It will now run until the end of March 2021, with employees receiving 80% of their current salary for hours not worked. My hon. Friends the Members for Meriden (Saqib Bhatti) and for Don Valley are right to point out how significant that support is. Overall, we estimate that the sector has received about £2.5 billion to £3 billion of support through the CCFF and the job retention scheme.
Hon. Members made a number of other points. The hon. Member for Luton North (Sarah Owen) asked me about conversations with individual companies. I hope she will understand that I cannot comment on any commercially confidential matters relating to individual companies. The Government have heard the broader requests for further support and are considering them carefully.
The House has powerfully reminded us that the impact of redundancies on employees, their families and their broader communities is serious. We heard a number of powerful speeches. The hon. Members for Feltham and Heston (Seema Malhotra) and for Ilford South (Sam Tarry) referred to Heathrow in particular, and other hon. Members also made powerful contributions. I see it myself from the correspondence that I receive from hon. Members and people up and down the country, and I understand that the impact on those who work in the aviation sector is very significant indeed. We must always remember that, ultimately, it is people who stand behind this.
My predecessor and officials have met unions regularly—I hope that the hon. Member for Easington (Grahame Morris) will be pleased to hear that—and I will meet them again shortly. I have spoken directly to companies that are considering redundancies and changes to terms and conditions, and I have offered my support and that of the Government for engagement efforts with staff where that is appropriate. I encourage unions and employers to sit down, speak to each other and find a solution where appropriate. The Government recognise that the aviation sector is home to highly skilled, highly trained staff, and their retention is vital. I thank all hon. Members who drew attention to that point.
On quarantine and travel corridors, I recognise the frustration of hon. Members, holidaymakers and businesses about the matters arising from the health measures that we have introduced and changes to the travel corridor exemption list. We must not lose sight—I know that hon. Members do not—of the reason why we have had to make those changes; it is simply to protect the health of the nation.
The right hon. Member for East Antrim (Sammy Wilson) rightly talks of confidence. That is why we took the action that we did with the introduction in July of travel corridors, which were a major step forward in safely reopening international travel while retaining the ability to act quickly if public health were at risk. We continue to keep that policy under review, and it is clear from the steps we have taken that it is an evolving policy. We update the exemptions list weekly to reflect the changing health situation in each country, and we continue to evolve that policy as new and enhanced data becomes available. That allowed us, on 7 September, to introduce the islands policy, under which island destinations can be considered separately from the mainland. That provides increased flexibility to add or remove them, as distinct from the mainland, as infections rates change. Unfortunately, as right hon. and hon. Members will realise, the incidence rates in this country are growing, which is why we had to take the steps that we have taken from 5 November.
I want to say a few words about testing, which has obviously been a major part of the debate. There has been some powerful advocacy, and none more so than from my hon. Friend the Member for Crawley. He represents Gatwick airport, and his constituents who work there, with power and dedication. They could have no finer voice, and I thank him for everything he has said in the debate and outside.
On testing at airports, we have previously explained, and I want to explain again for the record, that we cannot currently endorse testing passengers immediately on arrival—in other words, at airports—as a means of avoiding the 14-day self-isolation period. The reason for that is that the long incubation period means that a significant proportion of infected but asymptomatic passengers might receive a negative result but go on to develop the virus over the following days.
However, we are taking action. My right hon. Friend the Member for Epsom and Ewell referred to the global travel taskforce that we have created, and I want to explain to the House what that is considering. It is looking at how a domestic testing regime for international arrivals could be implemented in order to boost safe travel to and from the UK, and to allow UK residents to travel with confidence. It will consider what steps we can take to facilitate global business and tourist travel, including through bilateral agreements and multilateral forums. We will continue to explore with key international partners issues such as global common standards, testing models, measures around enforcement, exemptions and other border management measures. Beyond that, we will explore what steps we can take to increase consumer confidence, ensure that current measures are being properly adhered to, and restart international travel safely.
I want to inform the House and the Chair of the Transport Committee, my hon. Friend the Member for Bexhill and Battle, who asked the specific question—
There are many points that I would like to make—I am conscious of the time, Sir Edward, and I am grateful to you for reminding me—about recovery, but they have been made very well by right hon. and hon. Members. There are a number of points around decarbonisation that I would like to have addressed. Given the time, perhaps we can have a debate about that on another occasion.
I thank everybody who has taken part in the debate, and I thank my right hon. Friend the Member for Epsom and Ewell once again for securing the debate. We are all aware of the scale of the challenge facing the aviation sector and, indeed, the entire country. The combination of the steps that we are taking on public health, the work that we are taking forward on testing and travel corridors, and the unprecedented economic support provides a strong foundation for the recovery of the sector. My hon. Friend the Member for Meriden encouraged me to work together with the sector. I will do so tirelessly, and I will work with every Member who has spoken in the debate.
I applaud all the contributions to the debate from Members from all parts of the House, and I hope that our comments are listened to more widely than simply in this room. I do not seek to challenge the Minister. He is new to his job, and he faces some of the same challenges as others in similar positions in Departments across Government. These are not decisions that are being taken in the Department for Transport, but there is an expectation in this room that action will come more quickly than the official Government line has suggested.
I do not understand why a 72-hour test prior to departure, coupled with a check-up test on arrival in the UK, represents a greater risk than the 14-day quarantine. Given the urgency of the situation that the aviation sector faces, I do not really understand why the global taskforce has not reported already. I hope it will be understood clearly elsewhere in Government that that must happen, and it must happen now.
However, those are not things that I level at the Minister. He has been a great champion of the sector, and I know he will be a very effective aviation Minister. I know that he will do everything he can to unlock the challenges that the industry faces and put it back on a path to recovery. The message from everyone in this room to the Government is this: we cannot afford to let the sector carry on dying on its feet. Every action possible must be taken across Government to enable the industry to recover. Whether we are a former Minister, a Select Committee Chair or member, or an Opposition spokesperson, we will all be watching carefully. This will not be the last time we raise the issue, if the problem is not solved.
Motion lapsed (Standing Order No. 10(6)).