PARLIAMENTARY DEBATE
Covid-19: Aviation - 3 June 2020 (Commons/Commons Chamber)
Debate Detail
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 hon. 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 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 into 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 across the sector, including 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.
This is a hugely challenging time for the aviation economy. Job losses are inevitable, but many of us are concerned that companies are using the pandemic as a justification to slash jobs and employment terms—step forward British Airways, the only airline that is effectively sacking its entire 42,000 workforce and replacing it with 30,000 jobs on inferior terms. BA has tried that before, but its workforce resisted. It is ethically outrageous that our national flag carrier is doing that when the nation is at its weakest and when we expect the country to do its bit.
May I ask the Government to use their full weight to stop unscrupulous employers using the pandemic as a chance to slash terms and conditions? Will the Department ask the Civil Aviation Authority to undertake an urgent review of reallocating lucrative landing slots at Heathrow to companies such as British Airways that indicate that they are downsizing, and perhaps handing them to companies that wish to expand and take on workers? BA has 51% of Heathrow landing slots, including the most profitable to John F. Kennedy airport. Will the Government change the job retention scheme to stop employers using it while simultaneously putting employees on redundancy notice?
On quarantine, that is the wrong policy at the worst possible time for the aviation sector and the economy. It gives companies such as BA justification for shedding staff and worsening terms and conditions. Thirteen of our 15 most popular international destinations have a lower R rate than we do. Will the Government commit to reviewing quarantine, bringing in air bridges from safer destinations, and developing an immediate exit strategy to allow the aviation sector to plan ahead? The situation is grave, but there is still time to save the aviation sector with further Government support and action to ensure that companies such as British Airways do their patriotic duty and stand by their hard-working and loyal staff, rather than deserting them.
My hon. Friend asked about the Government’s ability to stop employers making poor use of the pandemic to slash terms and conditions. I certainly would not expect employers to use the pandemic as a chance to do so. I think most people would agree that terms and conditions are usually a matter for employees and employers, but employees have recourse to a number of options for support in cases in which that is happening. I highlight the fact that in crises such as this we would hope that all organisations that are taking such measures treat their employees with the social responsibility that one would expect. I will do everything in my power to make sure that that is understood by those organisations.
My hon. Friend asked about the ability to reorganise the slots process. He is right to raise that. The Government are currently legally prevented from intervening in the slots allocation process. However, we want airport landing and take-off slots to be used as effectively as possible for UK consumers. As the UK aviation market recovers from the impacts of this terrible disease, I want to ensure that the slots allocation process encourages competition and provides connectivity, so that is something I will be looking at.
The Prime Minister has been clear, and I will be clear again today, that the job retention scheme was not designed for this purpose. It will be for Treasury to review the specifics of the scheme, and I am sure that colleagues will be taking note of today’s proceedings.
The Home Secretary will be making a statement on the quarantine measures immediately after this, and I do not want to pre-empt her, but I can confirm that the measures will be subject to regular review. My Department, through the aviation restart and recovery unit, is working non-stop with the sector and Government partners to plan for the future of aviation, enabling it to recover. No option is off the table, and we are looking closely at air bridges, which are also known as international corridors. I will be working tirelessly, as I have done over the last 10 weeks, to do whatever I can to mitigate the impacts that have been felt by the aviation sector.
This is a sector that contributes £22 billion a year to our economy, with 230,000 jobs across the industry and the manufacturing supply chain dependent on it. It needs to change to meet the challenge of climate change. So why did one industry leader tell the Transport Committee just a fortnight ago that the Government were “asleep at the wheel”? Can the Minister go back and wake the Treasury up?
We have been calling for an aviation sector deal. Can we have one? If so, by when? British Airways has taken taxpayers’ cash to furlough its staff. Why is anyone surprised by that? We warned the Government that this would happen. Will the Government now ensure that any bail-outs come with conditions to protect jobs, workers’ rights and taxpayers’ money? Will the Government ensure that any company in receipt of support from British taxpayers also has its tax base here in the UK? Will the Government hold such companies to tougher environmental targets to achieve our net zero ambition, rather than simply allowing them to go bust through Government inaction and incompetence?
Finally, we have the Home Secretary ambling along this afternoon with a face-saving quarantine plan that has huge consequences for our economy and without any publication of any evidence to support it on public health grounds. None of this is good enough. This is an issue for our whole economy. With respect to the Minister, her Department is neither use nor ornament. We need the Treasury to act. The Chancellor should be here. They should have turned up this afternoon, and I hope she will take that message back in the strongest possible terms.
We cannot overestimate the impact that the coronavirus has had on the whole UK economy, and the aviation sector has been acutely affected. We have been working hard in Government, and it is pretty clear for most people to see the unprecedented level of support that the Chancellor and this Government have delivered across the economy, which has had a massive impact in the aviation sector. The Chancellor was incredibly clear that any business that had explored all the Government schemes and needed bespoke support as a last resort could enter into discussions with the Government. It is absolutely right that we request those private businesses to exhaust all other options before that, including raising capital from existing investors and exhausting all the economy-wide measures that are in place.
The job retention furlough scheme has had a massive impact in the aviation sector in keeping people employed. As I outlined in my opening answer to the urgent question, I will do whatever I can as aviation Minister to encourage companies to use the furlough scheme and make use of the other Government schemes without making people redundant. We absolutely have not been asleep at the wheel. I am not sure that anybody else recognises that description. Of course, a bail-out by the taxpayer or any other Government support would need to comply with state aid rules and require us to meet our legal obligations, particularly on climate change.
On quarantine, the Prime Minister made it very clear at PMQs just now that we need to keep the infection under control, and the Home Secretary will introduce measures to try to mitigate it.
Aviation supports 1 million jobs in the UK, including 114,000 in aerospace and 1,700 in my constituency, and international air travel is necessary for trade; without it, there is no global Britain. Given that, instead of introducing measures to close Britain off to the rest of the world, why are the Government not taking a lead in developing an international aviation health screening standard, to save jobs and ensure that Britain is open for business?
This affects the supply chain too. Sadly Rolls-Royce has today confirmed it intends to cut 700 jobs at Inchinnan in my constituency. The company is looking to offshore yet more work, despite having taken UK Government research and development money and job retention scheme money. The UK, but particularly Inchinnan, is being disproportionately affected. Are the Government engaged with, or have they offered any support to, Rolls-Royce to mitigate job losses? Finally, will the Minister join me in urging Rolls-Royce to engage meaningfully with the Scottish Government on supporting jobs at Inchinnan?
On business rates, which the hon. Gentleman has, rightly, mentioned before, the Chancellor was clear about where those business rate alleviations would happen and that is obviously a matter for the Treasury. On the impact of the reduction in aviation on the wider jobs market in the aerospace industry, and particularly on Rolls-Royce, as I have outlined, the furlough scheme was not introduced in order for businesses to put people on notice of redundancy while they were on furlough. As hon. Members would expect, we will work across Government, including with colleagues in the Department for Business, Energy and Industrial Strategy, to assess the significant impact that will be felt across the economy, and particularly in the wider aerospace sector. We will do whatever we can to ensure that we engage with those businesses and protect as many jobs as possible.
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