The following Answer to an Urgent Question was given on Wednesday 3 June in the House of Commons.
“The Covid-19 crisis has affected every person in the country and every sector of the UK economy, and aviation is essential to that economy. It connects the regions together and it plays a huge part in the UK’s future as a global trading nation. That is why the Government have responded to the crisis with an unprecedented package of measures.
On 24 March, my right honourable friend the Chancellor of the Exchequer wrote to the aviation sector, setting out the schemes being made available, including the deferral of VAT payments, the Covid-19 commercial finance facility and the coronavirus job retention scheme. The Civil Aviation Authority is also working with airlines, airports and ground handlers to provide appropriate flexibility within the regulatory framework. If airlines, airports or other aviation organisations find themselves in trouble because of coronavirus and have exhausted the measures already available to them, the Government have been clear that they are prepared to enter discussions with individual companies seeking bespoke support.
We recognise that there remain serious challenges for the aviation sector, despite the measures that have been put in place. It will take time for passenger numbers to recover, and the impact will be felt first and foremost by the sector’s employees. The recent announcements about redundancies from companies such as British Airways, Virgin and easyJet will be very distressing news for employees and their families. These are commercial decisions that I regret, particularly from companies that benefit from the job retention scheme, which was not designed for taxpayers to fund the wages of employees only for those companies to put the same staff on notice of redundancy during the furlough period.
The Government stand ready to support anyone affected, with the Department for Work and Pensions available to help employees identify and access the support that is available. My department has set up a restart, recovery and engagement unit to work with the aviation industry on the immediate issues affecting the restart of the sector and its longer-term growth and recovery. As part of that, we have established an aviation restart and recovery expert steering group, which is formed of representatives from across the sector, including of airports, airlines and ground handlers, industry bodies and unions.
The sustainable recovery of the aviation sector is a core part of our commitment to global connectivity and growing the UK economy. With airports, airlines and other parts of the aviation sector, we are putting in place the building blocks for recovery. The House will be updated as soon as possible on the next steps.”
The Answer was considered in a Virtual Proceeding via video call.
My Lords, I declare my interest as a British Airways pensioner.
Aviation is a key industry in this country, contributing £22 billion a year to the economy and sustaining 230,000 jobs across the sector and the wider supply chain. As the former Prime Minister herself stressed yesterday, the sector is just as important in terms of our global ambitions. Airlines and airport operators will need support, but that support should meet several conditions. They must protect jobs, salaries and workers’ rights, take steps to tackle climate change, maintain their tax base in the UK, not pay dividends until doing so is liable, and fully comply with consumer law, particularly in relation to refunds. Does the Minister agree with these conditions? If not, why not?
My Lords, the aviation sector has made use of various elements of the financial package put forward by the Treasury. These were non-sector-specific interventions and industry-specific conditions were not applied to them, so that they could be as accessible and easy to use as possible. However, if a firm seeks any bespoke financial support from the Government, the Government would expect that to be done in the taxpayers’ interests. That support may be subject to conditions that may include some of those outlined by the noble Lord.
I join the Minister in condemning BA’s disgraceful behaviour, but will she confirm what action the Government will take to ensure that BA cannot continue to take public money and at the same time use this crisis to treat its employees in the worst possible manner?
Aviation urgently needs a support package that tackles climate change. What it does not need is quarantine. Does the Minister agree that the plan is three months too late to be effective and sends out the wrong signals about opening our economy?
As the level of infection in the UK reduces below that of other countries, we need to minimise the risk of transmission that might be reintroduced from abroad. That is why the quarantine has been put in place. We accept that it is going to have a negative impact on the aviation industry and the tourism sector, and we are working closely with both sectors to make sure that they get through this crisis as best they can.
My Lords, will the 14-day isolation period after arrival at UK airfields include individuals who travel overseas on business from the UK and return later that day, or perhaps, say, after less than 48 hours at their destination? If so, will regulations state a maximum time allowed overseas for economic reasons to forgo the isolation period? Will the regulations apply to private charter passengers flying out from and back to small regional or private airfields, as well as those flying on commercial airlines?
My Lords, the quarantine requirements apply to all individuals who are arriving in the UK, irrespective of the time that they have spent outside the UK. They are all required to self-isolate, except for a very small number of exemptions. This applies to all individuals, however they choose to leave the UK, whether that be on a charter aircraft or indeed using another form of travel—for example, a ferry or the Eurostar.
How will it help British industry to get going again if our borders are now to be closed for marginal health gains at the cost of putting at risk our huge key aviation industry, which employs thousands and, even more importantly, is vital for our exports? Now we read in the papers that Her Majesty’s Government are contemplating interfering in landing rights at Heathrow. Will my noble friend reflect on the seriousness of the situation and give some positive help to this industry? Let us see some positive action to help aviation, to the benefit of all our economy.
The noble Lord is quite right that we need some positive support for the aviation sector. That is why we have the aviation restart and recovery expert group, which includes representatives from airlines, airports, unions and industry bodies. It is putting together the best minds to work out how we can make sure that our aviation sector comes out of this as well as it possibly can. For example, it is setting up common health standards to be applied to an air passenger’s journey, from home all the way through to the other side. That is the sort of system that will help the sector to get back on its feet.
My Lords, with an estimated 16,000 of the world’s commercial aircraft grounded and stored, airlines are doing whatever they can to cancel orders and delay the delivery of ordered aircraft. Some airlines are falling into administration. Many older aircraft have been placed in store and are unlikely ever to be able to be flown again. Commercial aircraft and engine manufacturers, along with those engaged in important supply chains, have been forced to act to ensure survival. How can we ensure a healthy and fit-for-purpose aviation industry, which will be crucial for economic recovery and hoped-for growth? Have our experts made any prediction that the Government are using for planning purposes of when the recovery of airline usage will occur and when, if ever, it will return to current levels? Will Project Birch provide similar support for our aviation industry as that being provided by the US Government and the Dutch and German Governments for their national airlines?
I refer the noble Lord to the response that I have just given about the aviation restart and recovery expert group. It is looking at all the issues that he has, rightly, pointed out, including the impact on the wider supply chain across the aviation sector. Project Birch is not industry-specific but is open to any company that makes a significant economic contribution to our country. It will offer bespoke support to a specific company, and that will be done from a value-for-money perspective for the taxpayer, on a company-by-company basis. In that regard, we will be able to support some of our most important companies that contribute to our economic future.