PARLIAMENTARY DEBATE
Flying Schools - 12 September 2023 (Commons/Westminster Hall)

I beg to move,

That this House has considered flying schools.

It is a pleasure to serve under your chairmanship, Sir Robert. I am grateful to colleagues who have come along to contribute. On the face of it, this is quite a niche subject, but it has implications beyond constituencies, such as mine, that contain flying schools.

My interest is primarily because of Shoreham airport in my constituency—Shoreham airport, not Brighton City airport as it was somehow re-christened at some stage. It is the oldest commercial airport in the United Kingdom, founded in 1910, and the oldest purpose-built airport in the world still in operation. It mostly operates leisure flights. It has an art deco terminal building, often used for films and by air-related businesses. It encompasses helicopter training and fixed-wing pilot training.

Shoreham was known for its air show until the tragic air crash of 2015, in which 11 men sadly lost their lives and which I have raised before in the House. It was the end of what had been a very successful air show over the previous 28 years. Shoreham has had a flying school there since 1913, most recently operated by Flying Time Aviation Ltd, which was founded in 2006 but ceased trading in May this year. At its height, Shoreham was responsible for something like 6% or 7% of all the pilot licences granted in the United Kingdom. It was a very important place for people learning to fly.

As I said, my interest goes beyond Shoreham airport and my constituency. There are implications in what has happened there and elsewhere for the future of integrated flying schools across the country and the future capacity of the United Kingdom to train pilots sufficiently. No fewer than three major flying schools have gone bust in the last 10 months alone. The first, back in May, was the FTA flying school in Shoreham, which employed more than 12 instructors and had 160 students, typically paying up to £90,000 for a full pilot training course.

In November last year, Bournemouth Commercial Flight Training, the flying school at Bournemouth airport, founded in 2002, ceased trading. Tayside Aviation, based at Dundee airport—I am very pleased to see the hon. Member for Dundee West (Chris Law) here—founded in 1968, ceased trading in April 2023, just before Shoreham. It was a large training school, employing around 45 instructors, with 140 students. It offered pilot training for RAF pilots as well. This is a national issue. It is not just about Shoreham airport, which otherwise is a perfectly well-run airport.

Looking at the figures, we can see the looming problem. Back in 2015, around 2,500 commercial pilot licences were issued in this country. The prediction for this year is down to 500. We are losing a lot of capacity, and those three flying schools alone are responsible for a large chunk of that capacity. Hundreds of students are finding themselves seriously out of pocket because their flying school has gone down either before they started their course, having paid their fees up front, or mid-way through the course.

One of my constituents is affected by this issue. He paid significant fees up front for flight training, and that money has seemingly been lost. It is an issue that the Department for Transport needs to address. More broadly, as my hon. Friend rightly points out, the aviation industry, which is central to this country’s trade and connectivity, will start to suffer if the problem is not properly fixed.

I am grateful to my hon. Friend and near neighbour from Crawley who represents Gatwick airport. I know he can with us today only briefly due to a sitting of the Foreign Affairs Committee. One of his constituents contacted me, along with many other people from other constituencies who had relatives or were themselves being trained at Shoreham airport, then found themselves out of pocket with very serious financial implications. I will come on to what we need to do about that. It certainly has implications for capacity in the airline industry in the UK. If anybody knows about that issue, it is my hon. Friend, who represents one of the largest airports in the country. There is an angle whereby some of the commercial airlines may be able to help.

I am going to read out correspondence from some of those affected by Shoreham who contacted me. I invited a number of them to come and meet me in my constituency; we had a roundtable to hear some of their experiences and plan a way forward. It is my fault if Members have been contacted, because I encouraged people to contact their MPs to tell them about their experiences. That way we could get as many hon. Members as possible to put pressure on the transport authorities and others to look at the immediate problem, as well as address the longer-term implications and the weaknesses in the system.

I have also been working with the British Airline Pilots’ Association, which has been lobbying the Government for changes in the regulation of flight training schools, particularly to protect students who have made a big financial commitment and are, for all intents and purposes, completely unprotected. That is unlike the situation if they were at a university paying fees, or had other financial investments or obligations, which would be covered under Financial Conduct Authority provisions. The point I am making is that if someone is on a pilot training course, it is little different from any other form of tertiary education, yet it is treated completely differently from training on other expensive courses, such training courses for medics and lawyers. Pilot training is one of the most expensive training courses.

One potential protection that has been suggested, not least by the Minister and the Civil Aviation Authority, is that someone paying their fee could do so by credit card. The trouble is, many of the flying schools do not take credit cards. If someone has to pay £90,000 up front, not many people have got a limit on their credit cards that would allow them to pay it in one sum. That is not a facility that is open or practical for many potential students.

I wrote to the noble Baroness Vere in the Lords, who is the Minister responsible for aviation. I am grateful to the Minister of State, Department for Transport, my right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), for covering her position today. I am afraid that it took some months and a bit of chasing to secure a meeting, but I am glad to say we have now secured one for a few weeks’ time, and I will be taking a delegation along with representatives from BALPA to see Baroness Vere.

A statement from the BALPA interim general secretary, Miranda Rackley, rightly noted that there is no public funding for pilot training:

“Flight schools going bust is financially devastating to hard-working students who deserve to have their money better protected from flight school failures. Pilot training is amongst the most expensive training of all professions, and unlike other careers such as law and medicine, there is no student funding available…Many trainees resort to family support to fund their training, such as remortgaging family houses. Government needs to step up and protect students that are so vital to the future of the UK aviation industry.”

BALPA has given a number of examples, and I have some direct examples too. A couple from Worthing, in my constituency, had to raise £90,000 for their daughter to train as an airline pilot. The 19-year-old signed up with FTA at Shoreham, and had to make a downpayment of £10,000 and pay a further £4,500 each month. In late May the school went out of business, which left her parents with losses of £45,000. That is a lot of money.

I can give other examples. Somebody wrote to me to say that their son

“was extremely keen on training to work for an airline. Because of that I remortgaged my house to fund him and almost paid for entire lessons in advance. Now I have no money left to support him financially for his dream job, and I am stuck in a predicament in how to move forward with my son’s education”.

Somebody from East Sussex said:

“My son was a student pilot at FTA in Shoreham, which has gone into liquidation. We have lost over £80,000.”

Somebody from London said:

“I paid a deposit to start training with them”

—Flying Time Limited—

“due to Covid and the changing of the schools schedule they were not able to provide lessons. When I asked for a refund they said they will get back to me and a week later they sent an email informing me the school is closing. It’s extremely sad and I’m not sure what to do or where to start as I want to continue with lessons.”

A constituent said:

“I have now been offered a place at one of the big ATO’s to continue my flight training as the FTA Global syllabus has been approved by the CAA and my training records have been reviewed by the training team at the ATO. So I am now in a situation that I am out of pocket”

—but could be transferred elsewhere—

“and the only way to get back into training without significant time off (due to being recent on training) is by gaining some sort of financial assistance. There is also a time frame I would need to start the training hence why us students would really need assistance from the government.”

There is a particularly poignant one from a Newcastle resident, who said that

“we have lost £50,313 that we had paid into my son’s training. Since a very young age all my son wanted to do was to be a pilot. He is unable to go into the RAF as he has corrected vision…and so we focused on the commercial training route. I have worked for the NHS for the last 27 years and you can imagine we are not rich people. We are hardworking and will give anything we can to enable my son to become a pilot. My husband…used some of his pension money to help…pay the school fees…It is astounding to realise that someone can pay in so much money for their education only to lose it all and that there is no route for any recompense.”

Their son

“will no longer be able to become a pilot as we cannot financially afford to fund a full course again. The failure of FTA has devastated my son and he no longer knows how to move forward in any career path.”

Here is another one from Uxbridge:

“I am a pilot student who was learning an integrated course at Flying Time Aviation limited in Shoreham-by-Sea. The course cost around £78,140, excluding the accommodation and cost of living”

On top of the fees, students have to fund living away from home and their general living expenses as well, which are not taken into consideration. The letter continued:

“The payment was made in 12 monthly instalments after paying an initial deposit of £14,190. On May 22nd, I received an email from the director of FTA informing us about the closure of FTA. I had assumed that the company would have the decency to give back what they owed to the students... However, it was made clear that no refunds would be made at all at the meeting held the next day. This has not only left me but more than 170 students in debt…I received an email last week from the liquidation company, which shows that the company owes me £65,500…however, with the company being extremely in debt, the chances of me and the rest of the fellow students receiving their money back are slim to none…we were only informed about the severity of this situation on the day they ceased trading.”

Finally, somebody from Kent said:

“I am one of the many who have been affected by this closure and have lost considerable amount of money and time—roughly £16,000 and only up until June to finish my flight training”.

There is a time consideration as well. People have 18 months under CAA regulations from the start of their course to the end and the examinations to complete that course. If people have started the course and cannot find or fund an alternative, they are right back where they started and that money has gone completely to waste.

I have taken up the case with Baroness Vere and the CAA, and they have both written back to me. The problem is that the CAA has oversight only of safety considerations and the quality of pilot training for flying schools, and has nothing to do with the finances or their sustainability, but surely the two are linked. There is growing evidence that the cash-flow problems that flying schools have had were leading to corners being cut, which could lead to compromised levels of safety, so financial sustainability is an important consideration in ensuring that flying training schools offer the full, safe and regulated pilots course that those students pay for.

Why do flying schools find themselves in this parlous situation? There are a number of reasons. First, they were hit hard by the pandemic. There was some support for them from the Government, but clearly flying training was not a priority at that time; indeed, much of it stopped for quite a long period. Secondly, flying schools are very dependent on fuel prices, which have rocketed because of events in Ukraine. The third consideration is that, perhaps uniquely in Europe, flying training courses in this country are subject to VAT, which is a large premium on top of already large fees. That does not happen in most if not all other European countries, where flying training is quite rightly treated as being educational, so is not subject to VAT.

I would like the Minister to comment on that last point. Does he think that flying training is a form of education and training, which the Government quite rightly encourage? If so, can he say why it is being treated as just any other sort of consumer item on which people are liable to pay VAT? That does not seem right.

There is also a Brexit element, which I am sure will greatly encourage the hon. Member for Dundee West. That is because previously flying training schools would only pay regulation fees to the CAA, but now, in some cases, if students have European pilots’ licences they will also pay fees to the European Union Aviation Safety Agency, or EASA. However, there is a Brexit bonus for pilots, which you, Sir Robert, will be glad to hear. Now that the UK has left the European aviation system, pilots are able to hold both a UK licence and a European licence, which was not possible previously under European regulations.

As a result of all these factors, many flying schools have had cash-flow problems, leading to claims that they have been demanding money up-front from students in order to keep themselves afloat. In the case of the FTA at Shoreham, it is claimed that it now has debts in excess of £5.5 million, including a £1-million debt to His Majesty’s Revenue and Customs, much of which will be accounted for by VAT liability. However, the FTA’s planes are all mortgaged and it has precious few assets, so it is highly unlikely that there will be anything left for the students who paid up-front or who are partway through their course; they will have to find a new flying school to transfer to, if they can afford to raise the necessary funds to do so.

As I have said, there is the added complication that this issue is time-limited, which is where I think the CAA has a far greater role to play. There are concerns that the CAA has not been as proactive as it might have been in trying to find solutions for some of the students at FTA, including reconsidering the way that exams are held and considering whether there can be any flexibility in that regard, particularly for those people whose course was delayed because of the pandemic; earlier, I cited the case of one such student.

There are also serious questions to be asked of the owners of FTA, who apparently were in touch with the potential receivers back in January, and there was also a reorganisation of debt liabilities to a new company, even though FTA was still taking up-front fees from students virtually up to the day on which it went under. As I have said, those students are not covered by basic Financial Conduct Authority protections, and the advice from the CAA and Ministers has been that they should pay with a credit card which, as I have also said, is not very practical. Consequently, those students are not covered by the protections in section 75 of the Consumer Credit Act 1974 that other credit card purchases would attract. The FTA flying school in Shoreham was a key academy, offering a European flying licence, and it looked like one of the safer and more sustainable flying schools. Consequently, its closure has shocked the industry and clearly other flying schools remain vulnerable.

When I wrote to the Minister, Baroness Vere, her response, as I have said, was that

“the extent of the CAA’s regulatory oversight of flight training organisations is limited to ensuring each organisation complies with specified safety requirements, including suitable training to an agreed safety standard.

The CAA has no direct regulatory oversight of the financial health of a flight training organisation or of the individuals operating within that business, and any proposals to grant these powers to the CAA would first require the Department to consider amending existing legislation, through its rule-making programme, to introduce such powers. In this regard, any changes to the scope of the CAA’s role and functions would likely require a process of developing and consulting on new draft regulations, new regulatory guidance, training for CAA inspectors and the establishment of a framework for regulatory oversight and insurance of the initial and ongoing financial resilience of flight training organisations.”

Right—let’s do it, because, as I have said, all of that will be needed before long if we are still to have a flying school business left in this country in the future.

BALPA contends that the CAA has a statutory responsibility, under retained EU law, to operate an ongoing oversight programme for UK-approved flight schools, which includes requiring “evidence of sufficient funding”. BALPA does not believe that, to date, the CAA has discharged that responsibility diligently or at all, and I agree. There is a financial oversight aspect of the CAA’s regulatory role. Clearly, demanding fees up front to keep operations afloat does not smack of flying schools having sufficient funding. The CAA needs to step up and step in.

BALPA has been working with students to introduce protections to avoid some of the disastrous financial consequences that have befallen students at Bournemouth, Shoreham and Dundee. Specifically, it has brought in its finance fairness charter, under which it asks that, as dedicated approved training organisations, flight schools

“commit to a fundamental principle of not accepting advance payments or deposits from cadets that exceed”

a certain amount

“for training services. This financial limit aims to assure cadets while promoting fiscal responsibility.”

Additionally, it asks that ATOs

“pledge to furnish cadets with comprehensive information regarding payment alternatives if available, further underscoring transparency in line with these commitments”

and

“pledge to extend the convenience of payment by credit card without imposing any undue surcharge providing the cadet with additional consumer protection.”

The BALPA charter adds:

“Transparency is paramount. ATOs undertake the commitment to furnish cadets with accessible information pertaining to their training programs, associated costs, payment protocols, refund mechanisms, and all pertinent terms and conditions.”

That seems perfectly sensible to me, and I hope the Minister will consider taking it up with the CAA. One person who has been caught up in all this wrote to me, referring to the

“seemingly disinterested attitude the CAA has taken towards investigation of misuse of Student monies”,

with the CAA just rolling out the excuse that that does not come its remit, when many of us think that it does.

“For many pilot hopefuls,” BALPA says,

“the costs involved in attaining the necessary qualifications have meant going to extreme measures to secure the funding required, including re-mortgaging family homes”—

I have given examples of that—

“taking out multiple un-secured loans, maximising limits on credit cards and/or borrowing sums of money from family, far exceeding any normal student borrowing.”

It adds:

“In the UK, a trainee professional pilot is not viewed in the same way as a student in any other field or profession. In 99% of cases in the UK, a trainee professional pilot does not even qualify for student status.

For too long, trainee pilots have been viewed and treated as customers. They are students in education, investing in their futures and they are the future of the UK’s aviation industry.”

I wholly agree.

There is another issue, which I referred to briefly: VAT. Interestingly, this point was raised by the now Defence Secretary in a question to the Chancellor of the Exchequer in June 2018, when he was on the Back Benches. He asked the Chancellor,

“with reference to Strategic Review of General Aviation, published by the Civil Aviation Authority in July 2006, whether his Department has conducted a review of whether the current VAT treatment applied to flight training places UK flying schools at a competitive disadvantage to those based in other countries; and if he will make a statement.”

The Treasury replied:

“The government does not hold information on tax revenues that can be broken down to assess the impact of tax on flight training.”

This is not a new issue and many senior colleagues have raised it in the past. I cannot stress enough the financial impact that these closures have had on students who have saved or begged families hard to train as pilots to fulfil their dreams. Why do we not treat flying schools like any other places teaching students in tertiary education, rather than treating students as consumers of a product that happens to be a training course? Why is flight training subject to VAT in this country, unlike anywhere else in Europe?

Having said that, the consequences of the recent closures go far beyond the implications for individual students who find themselves severely out of pocket and need protections. BALPA says that we also need new protections to help secure the training pipeline of commercial pilots to aid forward planning for airlines. We need those new protections to prevent the loss of foreign investment from airlines investing in the UK’s highly experienced flight training industry. We used to be the pride of the world and many foreign pilots would come here for their training. We need new protections to support smaller airfields across the country that support thousands of skilled jobs, including flight instructors, engineers and air traffic controllers.

Today, I received a note from Airlines UK, which makes some interesting observations. Of the 15,295 holders of CAA-issued commercial pilot licences aged between 18 and 64, only 2,954 are under 30, while 3,500 are between 51 and 64. We have an ageing population of pilots who are already trained and working. In the last decade, the total number of UK commercial pilot licence holders fell by 10% and the number under the age of 30 fell by 4%. Airlines UK therefore supports many of the proposals made by BALPA, including that we should remove

“VAT from pilot and air traffic control officer training”;

that we should

“enable student and/or other self-funded options to be used for courses to qualify as a pilot”;

and that there should be an update of the apprenticeship levy

“to enable employers to overcome existing barriers to use apprenticeship funding for pilot and ATCO training.”

We should bring together people from the Department for Education, the Department for Transport and the Treasury, BALPA, and the rest of the airline industry, which plays a role because it is the beneficiary of pilot training—the bigger airlines do not tend to pay for some of this training, but I think they have a role too—to find an immediate solution for those prospective pilots left severely out of pocket, and to introduce financial protections to ensure that that is highly unlikely to happen again, and to ensure that there is oversight of financial sustainability and that the CAA, or an alternative body, can regulate the future of flight training schools.

Without that, we will have an awful lot of students who find themselves at a loose end, unable to fulfil their dreams of becoming the pilots that this country desperately needs. There will also a big confidence issue for pilot training in the United Kingdom. Other countries send their students to this country to train, but people from our own country who want to train as pilots will not be able to do so in the United Kingdom, either because of a lack of capacity or because it is too risky, so they will go abroad and decide to stay and work there, and we will lose them.

There is a severe risk to the UK airline industry unless this situation is sorted out urgently, and that is my ask of the Minister and his colleagues. This issue has big implications for the flying industry in the United Kingdom and a big implication for a lot of the students represented by hon. Members here today. It cannot be ignored any more. I hope that in our forthcoming meeting with the Minister she will be able to progress some urgently needed solutions to the problem.

I thank the hon. Member for East Worthing and Shoreham (Tim Loughton) for raising this matter and putting on the record so skilfully the perplexing and, in many respects, heartbreaking saga that students are going through.

Although this is not a registered interest, I declare that my son is a trainee pilot. Thankfully he is not in one of the schools that have been mentioned in this debate. He has nearly completed his training. He is currently in the United States of America finishing his night school training for jet aircraft and hopes sometime next year to be a pilot flying the skies around the United Kingdom and Europe. I wish him all the best, because I am immensely proud of him for the job that he has done.

Considering the points that have been raised in the debate, I feel for the parents and the students. The sagas described by the hon. Member for East Worthing and Shoreham are personal lives; they are the stories of young kids who dared to dream, who wanted to get their jet licence, who wanted that as their career, and whose mothers and fathers sacrificed everything for them. We heard about parents putting houses on the line and remortgaging to facilitate that for their children, because they believed in them, and then that being cruelly snatched from them. There is no chance that they will get to start again, get a refund, or get picked up and taken on by another school. Their stories are heartbreaking.

I know that the Minister is a passionate man and that he will care about those individual stories. They are the lives of young people. They are the future of our nation’s aviation sector. If we do not put this right, we will suffer consequences down the line—and very quickly. One airline has something like 500 pilot vacancies over the next two years. Those must be filled. Anyone who has recently been at any of our local airports will know of the delays and the lack of crew availability, and the problems that those things cause. We need to fix that now, because we are an island nation that relies on aviation not just for passenger travel but for cargo travel and postal access. As a nation that relies on aviation, we will feel the consequences if the matter is not fixed immediately.

Pilots are necessary to our economy, and the training pipeline put in place by a number of these schools is crucial for economic growth and development. The smaller airfields across the United Kingdom where a number of these pilots initially trained will also feel the impact and could be damaged. A number of private and smaller airfields across Northern Ireland, which have been the incubator for young pilots, are at risk, and it is the same for smaller airlines and airfields across the rest of the United Kingdom.

A number of things need to be done, but it is important to reiterate this point. As a parent who had to pay the deposit for my kid’s training, I could not pay it on a credit card. There was zero protection. It was an eye-watering amount: the first deposit was just shy of £15,000, and in some instances deposits are not refundable. People are really staking a lot on these companies. I remember going around the banks with my son and saying, “Can this young lad get a loan? I believe in him.” No—he was not getting a loan for a pilot’s licence. I took him to inquire about whether he could get a student grant. He is a student—he is doing a degree alongside his pilot’s licence—but no, he could not have a student grant at all, for any part of it. Mummy and daddy would have to pay for that. It is a big decision when you put your house on the line and say, “I’ll remortgage the house to get that person the career that they need.”

As the hon. Member for East Worthing and Shoreham indicated, when training is cruelly snatched from kids in circumstances like this, it not only wrecks their lives, dreams, hopes and aspirations, but it devastates their parents. The fact that the money paid in for the student cannot be protected needs to be fixed. There are no refunds for an aviation course after the first £10,000. As I said, the initial payments are eye-watering—and those are just the fees. My son trained at Gatwick for the first nine months, so he had to live in London. He had to pay fees, living costs and all the rest of it. Other kids across the United Kingdom are faced with the same thing: they have to come down to Gatwick or one of the other big airports, live near it and pay their fees and living costs. They get zero support, whereas other students get reduced rates, railcards and all sorts of other things. Trainee pilots do not benefit from any of that, and they have to pay for food and board on top of all those fees. Banks will not give a loan without an asset being put up.

A number of asks have been outlined, but I want to ask the Government to look at incorporating trainee pilots into the student loan system, so that they can get a loan that is paid off more easily. They will move into a bracket whereby they are able to pay off such loans, so they should be regarded as worth backing. They will probably be able to pay off the loans more quickly than students who do an arts degree. Trainee pilots do a necessary qualification that takes them into a sector that the economy actually needs. Something should be put in place to allow the Government to say that the student loan system can be used for trainee pilots. That is a reasonable ask, and it is something the Government should look at.

I agree that the civil aviation sector must do much more. After all, all pilots are trained initially by civil aviation, and it is civil aviation that they benefit. Something must be done, not necessarily to step in and save flying schools that have become failed businesses, but to save the students, help them to progress in a much better way, and help them get what they are entitled to: a very expensive but very beneficial thing called a commercial pilot’s licence for jet aviation, which is essential for our economy. I appeal to the Minister to look at the points that were raised by the hon. Member for East Worthing and Shoreham, to see whether there is some way we can help students who are directly affected by the flying school closures, and to look at the wider picture for aviation students going forward.

It is a pleasure to speak in this debate. I congratulate the hon. Member for East Worthing and Shoreham (Tim Loughton) on leading it, setting the scene extremely well and outlining the issues.

I give special thanks to my hon. Friend the Member for North Antrim (Ian Paisley), whose son is training to be a pilot, and I hope that one day we will both be in a plane of which he is the pilot. We look forward to that accomplishment. My hon. Friend put forward our request that trainee pilots be part of the same system as students, because it is a simple system and easier to regulate. The wherewithal to do that is already there. Being a pilot seems to be a vocation. If we do not make preparations now, we could find ourselves in a position whereby we might not have the number of pilots we need.

As someone who flies twice a week to get to the House, I have the greatest respect for our pilots and airlines. It is important that we do more across the UK to better support and fund flying schools for trainee pilots, so today’s debate is very important. I want to make a case and give some specifics for Northern Ireland, as I always do.

My constituency, which is rich and diverse, has its own flying clubs to train pilots, and we are fortunate to have them training at this very moment. One of the flying schools in Strangford is called the Ulster Flying Club, located in Newtownards. I have had a relationship with it throughout the years I have been a councillor, a Member of the Legislative Assembly and an MP. The club holds open days every year and other events, and it is very much an integral part of the community. It trains trainee pilots to be pilots.

I know of one constituent who just completed 10 flying lessons when he was only 13. That was because a provisional pilot’s licence was available. It is often the first step in becoming a commercial airline pilot. It is just fantastic that so many training grounds offer an opportunity in aviation for those of all ages who are interested. My own son was interested at one time. It may have been a “flight of fancy”, if I can use that terminology, but at one time he wished to be a pilot. I think what put him off was the cost factor. Also, he met his future wife and she had different ideas. It was one or other of those things that changed his opinion, but the fact was that the opportunity to be a trainee pilot at Ulster Flying Club in Newtownards was one of the options considered.

Whether a provisional pilot’s licence or a pilot’s licence is purely for leisure and recreation or because of professional interest, it is great that such openings are available for our young people. I encourage them all to take up the opportunities. I congratulate the Ulster Flying Club in Newtownards on its clear commitment to try to make that happen for all—not just for the constituents of Strangford but for those further afield. I was in contact with the British Airline Pilots’ Association ahead of this debate, and it made me aware of its role in protecting young, aspiring pilots and supporting the aviation industry in general.

To be specific, I agree that we must have better financial protection for trainee pilots, as the hon. Member for East Worthing and Shoreham set out so well in his introduction. In 2023, three UK flying schools have collapsed, which is devastating not only for the aviation industry but for the trainee pilots, who in some cases have paid tens of thousands of pounds in advance fees. The hon. Gentleman gave a number of examples of that. One that I read about in the information I was sent was of a young girl who had paid some £90,000, which is an incredible loss. It is quite unsustainable for any young person and for the family—the bank of mum and dad—to stand over that. They then have to face the fact of the vocation they had chosen not being achievable.

There is absolutely no doubt that we as policymakers in this place have a responsibility to support young people in their career choices, especially one where the financial aspect is so huge. The smaller airfields—such as the one in my constituency of Strangford—support thousands of skilled jobs, including those of engineers, air traffic controllers and trainee instructors. All these things have to be paid for. I am very fortunate that the Ulster Flying Club has such member strength and is so strong. It has lots of adult pilots who have their licences and it has a strong youth section as well. But it takes money to keep it all going, so we must invest in these facilities and not risk their closure altogether.

BALPA has recommended that the Government regulate such that an ATO’s ongoing approval requires it to take advance payments or deposits from consumers in instalments no greater than £5,000, or perhaps 5% of the total course cost at a time. That is something to look at. I look to the Minister to consider these proposals and see whether something can be done. Can this be regulated? Can it be done in a different way? Clearly, if action is not taken, we have a severe problem. As stated by other Members, the financial burden is just huge, and to ask a young, aspiring pilot to risk that after the closure already of three schools is a massive ask for anyone and for their family.

I have always been a big supporter of encouraging young people to pursue their dreams in terms of their careers. We as parliamentarians in this House and also as parents—as a grandparent in my case—have a duty, I believe, to encourage our young people to do so. How many times have we been at a careers event, or how many times have we been speaking in a school, where we have encouraged young people to achieve their goals? If they have a dream—a goal that they wish to achieve—we encourage them to reach out and grasp it. If we say that, we have to mean it in this place as well, which is why we look to the Minister for help.

We have the second largest national aerospace industry in the world—after the United States—here in the United Kingdom of Great Britain and Northern Ireland. Whether our flying schools are teaching young people to fly purely as a hobby or preparing them for a life in which they are flying planes for some of the biggest airlines globally, this industry must be supported by the Government in order to ensure that young people—our future and, indeed, the Government’s future—are not let down but have the financial means to learn, without the worry of closure.

I very much support what has been put forward. I thank right hon. and hon. Members for their contributions and look forward to those of the shadow Ministers. We look to our Minister for a response that gives us the reassurance that we can then give to our constituents.

I thank the hon. Member for East Worthing and Shoreham (Tim Loughton) for securing this debate that allows us to discuss what is a wide-ranging and important topic, given the number of flying schools that have closed over the past 12 months and the impact that has had on those affected by the closures. Unfortunately, like others who have already spoken, my constituency of Dundee West has direct experience of that, and its situation has many parallels with what other Members have described.

With great sadness, Tayside Aviation in Dundee, one of Scotland’s leading flight schools for more than 50 years, went into administration and ceased trading in April. At the time of the school’s collapse, around 60 trainee pilots were either participating in or enrolled in training, with fees paid in advance. As we have heard, unlike for most other career paths, student loans cannot be used to fund flying training. The likelihood of the payback of student loans from a pilot career is arguably greater than many others, and that anomaly needs to be fixed.

Furthermore, pilot training is uniquely subject to VAT in the UK, whereas it is exempt in other countries. That is astonishing, because it is about education. We are taxing those who often take loans from their parents an extra 20%, on top of fees that could be upwards of £70,000 or £80,000. The Minister will surely agree that we need a level playing field. Charging VAT limits the number of people who can afford flying as a career path and increases the numbers who choose to train abroad, thus reducing the viability of training schools in the UK.

The costs associated with flight training are very significant and have to be wholly met by the trainee pilot. They encompass tuition fees, aircraft rental, exams and licences. For many aspiring pilots, realising their dream of taking to the skies comes with a hefty price tag. The closure of Tayside Aviation left numerous trainees in a dire situation after investing significant sums of money in their training, only to see their dreams shattered.

It has been reported that some students have lost upwards of £50,000, with no indication of whether they will receive any of it back and their future career ambitions now in jeopardy. In one instance, a trainee made a £6,000 payment to Tayside Aviation just five hours before the company went bust. Although some who paid using credit cards have been successful in clawing back some of their moneys, most will receive very little of what they paid. Many families were in contact with me about their individual cases, and I share deep concern and sympathy for those who, for instance, had to remortgage homes to fund their training and were subsequently affected by the business’s collapse.

The lack of financial regulation in the flying school industry exacerbates the financial risks. Unlike many other educational institutions, flying schools are not subject to the same level of oversight and financial protection measures, which begs the question: why? Trainee pilots are left without adequate safeguards to protect their investments when a flying school faces financial difficulties. In the case of Tayside Aviation, trainees are left with uncertainty, struggling to recover their investments and unsure of where to turn for support. In a recent letter to the Transport Secretary, it has been noted that the potential sum owed to the customers of now-defunct flying schools is estimated at around £4 million.

Furthermore, the schools often required advance payments because of the elevated risk of insolvency. Disturbingly, anecdotal reports suggest that certain flying schools refuse to accept credit card payments for such advances, as we have already heard, leaving consumers without the protection afforded by the Consumer Credit Act. This concerning situation underscores the need for greater financial safeguards and transparency in the aviation education sector to protect the rights and investments of aspiring pilots.

Although flight schools fall under the regulatory purview of the Civil Aviation Authority, it is crucial to note that that oversight primarily covers safety measures and the quality of pilot training. It does not extend to monitoring financial stability or providing protections for would-be pilots. To enhance consumer protection and financial transparency in the aviation education sector, it has been suggested by representatives of BALPA, Wings Alliance, Flyer magazine and Bristol Groundschool that the CAA should consider implementing specific requirements as part of a flying school’s approval process. Requirements could include limiting advance payments from consumers to a maximum of £5,000 and mandating the availability of credit card payment options without additional surcharges. Sounds perfectly reasonable, surely?

Additionally, the CAA should conduct a comprehensive review of its oversight procedures for flying schools, aiming to ensure full compliance with retained EU law. Furthermore, the establishment of a dedicated consumer protection scheme, akin to the ATOL—air travel organisers’ licence—scheme for package holiday customers, could be explored to safeguard the funds of student pilots and provide them and their families with greater financial security.

The demise of Tayside Aviation has been of detriment not only to its trainees but to the city and its wider economy. Tayside Aviation supported 22 full-time jobs and delivered the RAF air cadet pilot scheme. The collapse also threatens to undermine a key project in the Tay cities deal. Tayside Aviation played a pivotal role in the Tay cities initiative to establish an aviation academy for Scotland. The project aims to cultivate a proficient workforce comprising aircraft engineers, air traffic controllers and emerging pilots. With a budget of over £8 million, the initiative seeks to enhance infrastructure and foster the seamless integration of aviation education and training at local, regional and national scales.

The lion’s share of the investment is designated for Perth College and its subsidiary, Air Service Training Ltd. An allocation of £2 million was specifically earmarked for the Dundee campus of the aviation academy for Scotland, to be operated by Tayside Aviation. The Dundee campus would have a primary focus on delivering comprehensive training programmes for aspiring pilots and future air traffic management professionals. It is therefore imperative that a flight school at Dundee airport is re-established. I firmly believe that the facilities there remain an attractive proposition for any prospective buyer, including airlines looking to train their own pilots.

Moreover, the viability of the airport itself is dependent on its regular use, through flying clubs, education and training and the maintenance of commercial passenger routes. Bearing that in mind, the UK Government must recognise how vital it is that the public service obligation for flights between Dundee and London is renewed at the end of next month, when the current contract ends. Historically, the PSO has been funded by the UK Government, the Scottish Government and Dundee City Council. The case for the continuation of the PSO has been accepted, which has allowed the competitive tender process to commence. However, no confirmation has been given in respect of future funding for the PSO. The total tender amount is expected to increase, so it needs to be affordable for all parties.

The PSO underpins the wider activity at Dundee airport and is vital to its future success and connectivity. It makes the city and the region more attractive to investors, businesses and tourists. Analysis has shown that the economic benefit brought by the PSO has the potential to be six times the cost of the PSO contract. First, in principle, do the UK Government continue to support the Dundee-to-London PSO? If so, do they recognise the importance of the Tayside Aviation flying school, alongside the route, to the future of Dundee airport?

Secondly, subject to detailed assessment of tenders received, will UK Government funding for the PSO continue at the same level and increase if necessary? Given that it is a PSO route, what further steps can the UK Government take to support the viability of connectivity between Dundee, Scotland’s islands and the rest of the UK?

Furthermore, recognising the importance of the PSO to the operations at Dundee airport, is there scope to explore further revenue funding to support the PSO through the Tay cities deal, as part of a wider Dundee airport project, should there be a funding deficit? I have written to the Minister responsible for aviation to request an urgent meeting to discuss this issue and to look for a way forward for both the flight school and the PSO, so that they can secure a future at the airport. I would be grateful if the Minister could address those points.

Finally, with flying schools closing, airports and routes at risk, and the number of UK commercial pilot licence holders down 10%, we do not want to be in the same situation as the USA, where regional air services have been decimated by pilot shortages and more than 100 small communities have lost some or all of their air services in the last two years.

Our airports and airlines and the people who work for them are vital for domestic and international connectivity, which we value so highly. The loss of flight schools does not involve simple cases of enterprises going out of business. The closures are devastating to the careers of potential pilots, who have had to invest huge sums of money that are not expected of those in other professions. Flight schools are crucial to the aviation industry and, as outlined, critical to the success of smaller airports throughout the country. It is essential that would-be pilots are supported properly and that flights schools are regulated properly, enabling trainees and the industry to have the confidence and certainty to succeed.

It is a pleasure to serve under your chairmanship, Sir Robert.

I, too, congratulate the hon. Member for East Worthing and Shoreham (Tim Loughton) on the powerful personal testimony that he brought to us of constituents and others affected by the closure of flight schools. I also congratulate the hon. Members for North Antrim (Ian Paisley) and for Strangford (Jim Shannon) on their testimonies. For one moment, I thought the Democratic Unionist party was getting on a biblical stage—the tale of two sons, like Cain and Abel, one becoming a farmer and the other a shepherd. One will become a pilot and, on behalf of His Majesty’s official Opposition, I wish that son well in his endeavours.

We are in this debate because two flight schools have closed, one at Dundee airport and the other at Shoreham airport—I say that before I am admonished by the hon. Member for East Worthing and Shoreham, as my notes call it Brighton City airport—which is a sad loss of the jobs for trainers and staff. As the hon. Member for Strangford said, we have a world-class aviation sector in the UK, and we want to keep it that way.

The closure of those valuable facilities most severely impacted the aspiring student pilots who were just setting out on their careers. The closures left them and their families seriously out of pocket, as we have heard. Commercial pilot training can cost up to £150,000 and is not currently eligible for student funding, which is available for other professions such as law and medicine. With no mechanism for student finance, many aspiring pilots take extreme measures, such as multiple loans and—when they can—credit cards, borrowing from friends and families or, as Baroness Vere said as Aviation Minister back in 2019, relying on the bank of mum and dad to get through training.

In May this year, the Government published a report called, “Addressing the cost of pilot training”, which was a fascinating 62-page read in preparation for this debate—

I thank the Minister for his support on that.

The report highlights the fact that the lack of diversity and the barriers to access are something we all agree on. This is in no way data, but in my capacity as shadow Aviation Minister I attend many events and conferences, and I am still surprised at the lack of diversity in the industry. I get the irony of somebody who looks like me saying that.

To return to the collapse of the two flight schools, the amounts owed to the individual students affected is about £4 million, with an average individual loss per student of some £90,000. That money is unlikely ever to be recovered, as some flight schools do not take payment by credit card—as has been pointed out—so the consumer protections afforded by that method of payment have not been possible. In addition to that, the students are unsecured creditors, so there is no legal requirement for them to be repaid the money—morally, however, that is another issue.

In the decade since 2007, the average cost of initial pilot training in the UK increased by about 54%. Various academic and industry studies undertaken on pilot recruitment have noted that of the thousands of potential pilots who start flight training every year, about 80% leave. The failure to fund tuition fully is cited as a major reason for the drop-out rate.

Research commissioned by the Department for Transport showed that increasingly dynamic market conditions in the light of covid-19 meant:

“Training organisations and airlines suffered financially from lack of operation during the pandemic and lockdowns”.

There is little doubt that being unable to operate would impact on such businesses. For example, Lufthansa Aviation Training suspended its training from the beginning of the pandemic. Interestingly, Lufthansa was able to offer all its 850 students full refunds. I wonder whether the chaos in the sector and the refusal by the Government to offer a sector-specific deal might have added to the knock-on effects we see now.

The heavy reliance on self-funding creates barriers to entry to the pilot profession, disproportionately affecting some demographic groups more than others. Only 6% of pilots worldwide are women, and just 4% are from BAME communities. How can that be? I would be interested to find out the figures for children of a traditional working-class background who cannot rely on the bank of mum and dad. Kids like me ruled out ever becoming a pilot, because there was not, and clearly still is not, a route for working-class children and children with no access to credit who were unwilling or unable to go into debt to fund the training. If I may, I will quote Baroness Vere again: back in 2019, she said that

“social mobility is a fundamental right and it should not be that some people are blocked out of entire careers just because they don’t have the ‘Bank of Mum & Dad’”.

The cost of learning to fly not only plays a key role in limiting the pool of talent that the profession can draw on, but hampers the diversity of the pilot community. There was an attempt to address diversity in the pilot workforce with the creation of a first officer apprenticeship, which is a level 6 qualification that involves training as a co-pilot over a two-year period. Although the scheme is welcome, it is flawed by its very design. Industry sources have said that the £27,000 funding cap is not sufficient to cover flight training. Furthermore, apprentices cannot be asked to take on debt to supplement their training, which puts the onus on the airlines. There are restrictions on bonding apprentices to training providers, but airlines are likely to be unwilling to invest sufficient sums of money in a person who might leave immediately on qualifying. Almost by design, the scheme is flawed.

Moreover, there is a concern that the cost of training to secure a pilot’s licence in the UK may begin to put UK airlines at a competitive disadvantage relative to counterparts in the European Union, where pilot training is less expensive. Other changes have an impact on that situation: since the UK exited the EU, potential non-UK candidates now require settled status to live and work in the UK. In addition, those undergoing pilot training in the UK will be required to sit additional exams to get additional licence approval, which has additional cost and time implications for students. Taking those matters into consideration, there is a real concern that trainees will opt out of a UK licence and fly on an EU licence only, which will significantly reduce the pool of pilots available here. A 2020 study shows that the emerging shortage of qualified pilots is a high priority for airlines. Respondents to the flight operations survey noted upcoming pilot shortages as a top five focus, and 22% said it was their leading focus.

The collapse of the schools only serves to highlight a number of issues in flight schools and wider issues with pilot training: flight schools’ operating models, funding for aspiring pilots, lack of diversity in the workforce and the complexity of the first officer apprenticeship scheme, which by its own construction and in its current format is destined to fail. There is much to be done to ensure that the job of a pilot is open to all, not just to those with a well-resourced bank of mum and dad. I look forward to the Government’s acting on the recommendations of their own report, “Options for addressing the cost of pilot training”, and ensuring a pipeline of talent from all demographics.

I am slightly disappointed by the Minister’s comment. This is not a huge mass industry; it is not beyond the wit of a regulator or of the Treasury to ensure that VAT savings are directly passed on, or else the companies would not be eligible. Even if the Minister will not consider this for the future, does he not think that there is a moral case for students who have lost their fees and are severely out of pocket at least to be refunded the VAT element that they paid, which has gone or may still go to the Treasury for a service that they have not received?

I am trying to reflect on what the Minister has said about VAT, and specifically on one of the clear points that has been raised. We are at a competitive disadvantage because we charge but no other country in Europe is charging. If we look at the decline in flying schools and the issues with financing to go and study in the first place, and then someone is being asked to pay 20% on top, what is to stop any young aspiring pilot from saying, “Wait a minute, I’ll just go to Europe where I won’t have this extra 20% surcharge”?

I understand and appreciate the Minister’s Treasury background. Does he accept that the student loans scheme is an investment in the value of what an educated person brings to society? We recognise the value of an arts degree, which we relate to salary, and that is very commendable. We recognise that for a pilot, it relates not the school they go to, but to the individual. A pilot will be in the higher echelons of earning, probably from day one, in a jet company. Surely the Government recognise that giving them a soft loan under the student loans scheme would be of great benefit to society, because society would get the money back more quickly. Is that not of value?

It is not unlike a doctor or a lawyer as they get further up the commercial tree in their training—it has that cross-application. A pilot may be training in instrument rating and instrument readings, which is a skill like an engineering skill.

I will not take up too much more of the Chamber’s time, because I spoke fairly extensively to start with, but I would certainly like to thank hon. colleagues who have brought to bear their own experiences and those of their families, particularly from the Northern Ireland angle, and from Dundee and the large and important training school that the hon. Member for Dundee West (Chris Law) spoke about in detail.

As I started by saying, this is not a localised issue; it is a UK-wide issue, and we have had three parts of the United Kingdom represented in contributions today, for which I am grateful. But I must say that I am disappointed by the Minister’s response. I fear that he spoke rather more with a Treasury hat on than with his more recent Transport Minister’s hat on. He does seem to be in a state of denial about a very real and serious problem, which is recognised by the industry. He just does not seem to acknowledge that flying schools are in a state of decline and the number of pilots that they have the capacity to produce is substantially declining.

I quoted, again at the outset, that around 2,500 pilot licences were granted in 2015, whereas this year, they are anticipated to be one fifth of that, at 500. That is not a healthy, vibrant business as it stands.

Okay, well, those are the figures that have been provided by those in the industry. The three flying training schools that have gone under produced many hundreds of pilots a year. That represented a substantial part of the capacity within the United Kingdom. Therefore, I am afraid that this is not a localised problem, involving just a few individual schools. There are serious fears for the sustainability of many of the surviving large schools in particular.

I will not rerun all of the issues that we came up with earlier, but there are serious problems that I hope we will be able to air in more detail when we meet the Minister about the immediate problem of the hundreds of students who find themselves without a course, without the funds to find an alternative course, and without an awful lot from the CAA. I am afraid that that has been the experience, hence the request for the CAA to step up and step in rather more proactively than it has. We need an acknowledgment that students who pay fees up front are vulnerable to the flying schools going out of business, and are without the protections we take for granted when we buy goods and services or embark on educational courses elsewhere. Again, I take issue with the Minister’s challenging that this is some form of education. The clue is in the title: these are flying schools, which are training people, in the air rather than on the ground, to provide a vital public service on which this country relies.

It is not just the training schools and their immediate employees that will be suffering. It is the local economies—the economies of smaller regional airports that rely on the flying training schools for a great deal of their revenue, from touchdown fees or the purchase of kerosene. That is often the most profitable part of the business of those small airports and crucial to their survival, not least my own in Shoreham.

Contrary to what the Minister says, the implications go beyond just the three individual cases of flying training schools that have gone under in the last 10 months. I am grateful that we have had this airing of an issue that has not had a great deal of publicity but which has a great many implications, well beyond the constituencies represented today and the three specific training schools I have mentioned. I hope we can take those points further when we meet the noble Baroness, which I think is next week. I will be happy if any colleagues here wish to join me in that delegation along with BALPA. I am grateful for the time in the Chamber.

Question put and agreed to.

Resolved,

That this House has considered flying schools.