(6 months, 2 weeks ago)
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The Minister of State, Department for Transport (Jesse Norman)
I beg to move,
That the draft Airports Slot Allocation (Alleviation of Usage Requirements) (No. 2) Regulations 2023, which were laid before this House on 18 July, be approved.
To the casual and untutored eye, this might seem a very small piece of legislation to bring to the Floor of the House of Commons. However, it is not only important to the sector but a useful illustration of the work of Ministers and parliamentarians in Committee, so it is nice to have a chance to focus on these quite technical and not especially controversial regulations.
The regulations will be made under powers conferred by the Air Traffic Management and Unmanned Aircraft Act 2021, which also rejoices in the name ATMUA. Following the UK’s departure from the European Union, that legislation created a more flexible set of powers for Ministers to implement alleviation measures for aircraft slots related to the impacts of covid-19, subject to a vote in both Houses. That allows the UK to adapt its approach so as to minimise disruption to consumers and support the recovery of the aviation sector. Under ordinary circumstances, airlines must operate aircraft slots 80% of the time to retain the right to those same slots the following year—that is known as the 80:20 rule, or the “use it or lose it” rule. It is designed to encourage a more efficient use of scarce airport capacity. As a result of the effect of covid-19 on air travel demand, however, alleviation from the rule has been provided since summer 2020.
The Department has seen a strong recovery in passenger demand during 2023, but there remains uncertainty and a lack of resilience in the industry, and demand on some routes remains below the levels seen before the pandemic. Those factors affect both demand, such as the number of returning passengers, as well as supply, such as aircraft availability and staffing. They add to what has been termed the long “covid tail” in rebuilding resilience in the sector. Thus, aircraft that were out of service during the pandemic now spend much longer in maintenance and overhaul than would normally be the case. That phenomenon is compounded by difficulties stemming from the pandemic, which have affected access to spare parts through global supply chains. Although the industry has taken steps to address those challenges, they are expected to remain an issue during 2024.
The Government have therefore designed a package of measures for the winter 2023 season to mitigate the adverse effects of that loss of resilience. The normal 80:20 rule on slots usage has been retained. However, it has been combined with some limited flexibility through a small pre-season hand-back allowance and a continuation of the previously adopted measures on the justified non-utilisation of slots. The Government have focused the measures on a return to business as usual. We are mindful of the need to balance supporting the sector through sensible and proportionate measures to aid its recovery and protecting consumers from disruption, with the need to avoid excessive alleviation, which could distort competition.
There are two key provisions. The enhanced justified non-utilisation of slots provisions were first introduced for winter 2022. They act as a safety net for airlines if new restrictions are introduced and they can justify not using slots. They protect the airlines’ historic rights to slots in scenarios in which any reintroduced covid-19 measures might severely reduce demand or the viability of a route. However, for any requests for justified non-utilisation of slots, a rationale must be given to the independent co-ordinator for assessment of its merits against the provisions.
The second provision is a limited slots hand-back. For this winter season, the Government will again allow carriers to claim alleviation on up to 5% of their slots at any airport handed back before the start of the season, as was done for this summer. The Government have offered that opportunity in the expectation that the industry will deliver a realistic schedule for winter 2023, thereby minimising last-minute cancellations and delays. The opportunity to hand back slots before the start of the season has been particularly useful in ensuring that airlines deliver a robust schedule, and has helped to provide certainty to consumers that scheduled flights will operate. The measures will cover the winter 2023 season. The Department for Transport is considering whether further alleviation may be required for future seasons.
Through these measures, the Government aim to strike a balance between supporting the sector and minimising disruption to consumers while encouraging recovery and ensuring the efficient use of slots.
Mike Kane (Wythenshawe and Sale East) (Lab)
The Minister said that the regulations before the House are a small piece of legislation. He is right, and scholars of Parliament will look back at this motion coming to the Floor of the House as a strange occurrence. Usually, we are up in the gods in this place, in a draughty, dusty Committee room off a long corridor in this great edifice, but this Government have run out of legislation to consider in those Committee rooms, and have to bring this to the Floor of the House. They have run out of time, and they are fast running out of track.
When we talk about the general demise of transport in the United Kingdom, we can see that the Government came to Manchester to cancel HS2—they cancelled it to my city in my city. They announced a tram to my constituency that was opened in 2014, and they launched Network North, which sounds like a dodgy 1970s ITV franchise and was done on the back of a fag packet. The industry was not impressed by the fact that the Secretary of State—who is not here—was making up conspiracy theories on the floor of the conference hall about 20 mph zones and 15-minute cities.
Sir Mike Penning (Hemel Hempstead) (Con)
The hon. Gentleman is very generous in giving way, but can I ask him what part of his speech is to do with slots and aviation?
Mike Kane
I am coming on to that. This is about the general demise of transport—about abandoning the centre ground and abandoning an industry. We do not even have a Minister for aviation or for maritime in the House of Commons, whereas we in Labour support aviation and maritime to the hilt. When the Secretary of State was making up those conspiracy theories, the Minister—who is so keen on active travel: he walks the walk, talks the talk, and rides his bike as well—must have had his head in his hands. We in Labour offer industry reassurance and hope that things will get better.
To respond to the right hon. Member for Hemel Hempstead (Sir Mike Penning), let us talk about the motion at hand. As we know, the “use it or lose it” rule was relaxed throughout the pandemic: it was dropped to 70:30 to ensure that no environmentally damaging ghost flights were taking off. That was the right decision. Slots are commercially important and highly prized by airlines, giving them a monopoly on a route. Since the pandemic, there has been a strong recovery in passenger numbers and we are all grateful for that. However, the aviation industry can still exhibit a lack of resilience and some uncertainty at times and some routes are still not yet at capacity.
The pandemic has left airlines and airports with little resilience and tight staffing numbers and, as the Minister has mentioned, there are issues with aircraft availability and the global supply chain. With the benefit of hindsight, the Government’s failure to support our world-class aviation sector during the pandemic has led us here. We, as well as workforce representatives and unions, warned the Government that, if tens of thousands of skilled, trained workers were sacked or let go during the pandemic, it would be nigh on impossible to get back up to full speed—to be dynamic and react to industry demands.
The two main provisions in the regulations act as a safety net for airlines. The first allows them to justify not using a slot if new restrictions are to be introduced on particular routes. Of course, I hope that that will never be necessary, but if it should be, what data and metrics will be used? Does the Minister have an agreed plan with industry on this?
The other main provision is a limited slot hand-back of up to 5% of all slots, which are to be handed back before the start of the season. The justification for that is to ensure minimum delay and cancellations for consumers; however, the autumn timetable begins in just 11 days. The explanatory memorandum says that passengers are expected to benefit from the relief contained in the legislation by retaining good levels of historic connectivity, but also points out the downside of this provision: a potential negative impact on the marketplace.
The regulations are important to enable more airlines to deliver realistic winter schedules, and should minimise the cancellations and delays that have blighted the industry over the past few years. As I referenced earlier, many of those problems were predicted and avoidable: we cannot hollow out a skilled workforce with security requirements and expect there to be no impact on the consumer. Can the Minister update me on the work the Government have done to strengthen consumer rights, ensuring that passengers are paid compensation and refunds that they are entitled to in a timely fashion? We know that many airlines sit on tens of millions of pounds-worth of vouchers that were claimed during the pandemic, which are due to run out for customers.
These measures were brought in under exceptional circumstances. In a previous debate of this nature with one of the Minister’s predecessors back in 2021, it was said that it would take until 2023 for air traffic volumes to increase back to 2019 levels. I believe the current figure is that, on average, we are at around 88% of those 2019 levels. Do the Government have a plan for what they will do in March 2024, four years after the first debate of this nature took place? The sector has still not bounced back fully.
In May this year, I raised the point that the Government’s approach was a very short-term one and, even taking that into consideration, impact assessments were not being fully carried out. The Minister at the time assured me that the Government would continue to monitor impacts as they went. Have they been doing so, and what are their findings? I am still keen to see a retrospective assessment of the impact of the measures to ensure that these steps are proportionate—neither too harsh nor too weak. Have the extraordinary circumstances we found ourselves in in 2020 now become the norm in the aviation sector? Earlier this year, the Minister suggested that there would be a consultation on slots reform later in the year. Could I be updated on the progress of that consultation?
I have previously raised—and will continue to raise—the issue of airspace modernisation, which I know is something the Minister was keen on when he held that post. That issue needs to be addressed strategically, so when will we see more progress on it? We could cut carbon tomorrow by 10%, 20% or 30% if we upgraded our airspace. We have an analogue system in a digital age. As passenger demand is still in a recovery phase and we feel the hangover of the covid pandemic industry-wide, it is more important than ever to consider ways to future-proof our airspace and achieve lower emissions in the process.
Sir Mike Penning (Hemel Hempstead) (Con)
I am thrilled that this statutory instrument is being taken in the House—where I can talk about it—rather than up on the Committee corridor, because I would probably not have been selected to sit on that Committee.
On slots, my constituents are very concerned at the moment, not least about Luton airport, which has blighted my constituency with its overflying. That does not affect the town of Luton at all, even though the airport is owned by Luton Council. The flights massively affect the northern part of my constituency, particularly Markyate, Flamstead and the Gaddesdens.
Of course, we have a terrible situation at the moment with thousands of cars still trapped at Luton airport after the horrendous fire there. My constituents still cannot get to their vehicles, and they do not know when they will be able to. Flights are arriving and taking off, but there are still massive problems with parking, because the airport was never designed to be the size it is now.
I rise to speak on this because the Government have made a decision—I am pleased it was called in; and the decision was not made by Luton Council—that there will be a massive expansion of flights from Luton airport. I appreciate that this is not in the Minister’s portfolio, but I used to be the shadow Minister, and I know how it is for someone on the Front Bench: this may not be in his portfolio, but I am afraid he is going to cop it. It is a ridiculous decision to allow Luton airport to expand when there are so many complaints from residents not from Luton. We have seen the problem with the fire, but the airport is just not designed to be this size, and it is not geographically suitable.
I am not a hypocrite. Have I flown from Luton airport in the past? Yes, I have.
Sir Mike Penning
I hate to say this to the shadow Minister, but this is about slots at Luton airport—in a Labour-controlled constituency—which I thought he might be interested in, because my constituents really are.
I just want to put on the record that increased slots will cause increased pollution and increased noise for my constituents. The decision to allow increased number of flights—the expansion will almost double Luton airport—was fundamentally opposed by me, and it will be a very sad day when it goes ahead.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I have been so looking forward to this debate—now an annual debate—on airport slots. It was very good of the Leader of the House to invite us into the big room to discuss it, although I am not sure how much this will pad out this Session of Parliament, to be perfectly honest. I have spoken about this issue many times before. I will not be speaking for long, because of my voice and, ironically, because I am supposed to be meeting an airline as we speak.
The other reason I will not be speaking for long is that this is to do with the eight slot co-ordinated airports, not one of which is in Scotland. However, we clearly have a huge interest in this with domestic flights. Indeed, if the Government were to bring forward legislation on guaranteed slots for domestic travel, particularly to London airports from Glasgow airport in my constituency, I would be grateful indeed.
Clearly, we are not going to oppose this motion. The Government are displaying uncharacteristic common sense in this motion, so it is one we will be supporting.
Gavin Newlands
Indeed. It chills me to the bone to support Tory legislation, but here I am doing just that.
I will not repeat all the questions asked by the hon. Member for Wythenshawe and Sale East (Mike Kane). They included a question on consumer rights, which he so skilfully shoehorned into a debate on airport slots, so I congratulate him on that. In particular, he raised the issue of airspace modernisation, which I have raised a number of times over the years and have pushed this Government on. They really need to get a grip on modernisation and push on, but I look forward to the Minister’s answer. [Interruption.] I hope he is paying attention because I am about to sit down. We will support him, and I look forward to his answers to hon. Members’ questions.
Wera Hobhouse (Bath) (LD)
We Liberal Democrats were supportive of relaxing the 20:80 rule during covid; we could not have allowed airlines to fly empty flights just so they could keep their slots. The situation is now more complex. The dysfunction in the aviation industry now is just as much about managerial capacity failings as it is about the problems stemming from the pandemic.
There have been numerous allegations of abuse of the temporary rules by some airlines to flex their muscles in the marketplace. We must guard against anti-competitive practices, which make it hard for new entrants to enter the market. Alleged attempts to hoard valuable Heathrow slots have an impact on the availability, choice and price of flights. Airlines, airports and travel operators are one of the biggest single contributors to global emissions. It is crucial that we ensure that flights are taking off only when there is proper demand for them.
There has been recovery in passenger demand, but there is continued uncertainty and a lack of resilience in the industry. Recruitment remains a challenge. Demand on some routes remains below pre-pandemic levels, and changes to our working patterns have caused a drop in business travel. We must accept that these new patterns are the norm. The motion proposes a package of measures for the winter 2023 season that lets the normal 80:20 “use it or lose it” rule stay. However, there remains some limited flexibility for airlines to keep hold of their carrier slots at airports through a small pre-season hand-back allowance of 5%, and a continuation of the previously adopted justified non-utilisation of slots measures.
Although we are broadly supportive of the Government’s plans, we are concerned that there has not been parity of Government support for public transport. The rail industry and public transport such as buses are also facing changed markets. Railways still face a £2 billion annual fares shortfall from pre-covid days that the Government are unwilling to fill. The bus and coach industry is experiencing driver shortages. There is no justification for the Government to protect just one industry from inefficiencies and uncertainties in the market, and they must outline a timeline for when the covid mitigations given to airlines will come to an end. Why prioritise aviation over other modes of transportation? Airlines need clarity and time to prepare, but there must come a point when the Government tell industry that it needs to get on with things itself.
Jesse Norman
It is a delight to wind up this debate, and I thank colleagues who have spoken in what have been brief but deep and thoughtful exchanges. The hon. Member for Bath (Wera Hobhouse) rightly pointed to the anti-competitive potential of these measures, and also highlighted their modesty and, therefore, the sensitivities—she is absolutely right about that. She is also right in her concern about ghost flights. At the risk of violently agreeing across the Chamber, I think she is also right on the question of how long these measures will continue for. I will address that issue further in my remarks.
The SNP spokesman, the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), was right to point out that there is no direct Scottish interest in this, and I thank him, as I thank the hon. Member for Wythenshawe and Sale East (Mike Kane), for supporting this Conservative legislation. I hope it becomes a habit for the hon. Member for Paisley and Renfrewshire North, as it has done for his former colleague, my hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron)—I think that is a useful development in SNP politics.
My right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning)—[Interruption.] That is what I said. I said my right hon. Friend the Member for Hemel Hempstead, as the record will show. I was very sorry to hear again about the situation that his constituents have faced in relation to what happened at Luton. I absolutely take on board, and the House will have noted, his comments and concerns about expansion and its impact locally. He will appreciate that, as with Active Travel, the bus and coach sectors, and other items raised in the debate, that issue has nothing to do with the subject of this debate, and he was rightly critical of those who would crowbar in things that are not relevant. However, the concern of any colleague is always relevant if it is a direct constituency matter. He was right to raise it and I thank him for that.
I thank the hon. Member for Wythenshawe and Sale East for his support. As my right hon. Friend the Member for Hemel Hempstead said, the joy of having this debate on the Floor of the House of Commons is that a wider range of colleagues can come and express a concern, and we can shine a little light on the statutory legislative process, which is of enormous importance to the conduct of this House and the two Chambers of Parliament.
The hon. Member for Wythenshawe and Sale East asked about the metrics for use in relation to non-utilisation. Those are set out in the excitingly entitled “Principles of slot allocation” document at section 8.8, which concerns the “Justified non-utilisation of slots”, and those are the rules. To respond to his question about slots, obviously there is a consultation to be launched in due course, but those are the rules as they stand.
In relation to work on consumer rights, my right hon. Friend will be aware that on 27 June 2023 the Government published our response to the aviation consumer policy reform consultation, which set out legislative reform and non-legislative measures to ensure that passengers receive the best service possible. Among the non-legislative measures is a considerable range of efforts to work with industry on a variety of measures designed to accelerate and speed up the protection of those rights. He is absolutely right.
In relation to the use of these measures in future, Baroness Vere of Norbiton, the aviation Minister, said in the House of Lords recently that she was asking herself the question as to when these measures would wind up, and she hoped it would be soon. I think that represents the Government’s position.
It is true that we have a consultation planned on slots reform. Members will also note that the level of consultation that informs this set of measures is well spelled out in the explanatory memorandum to the legislation, and that sets out in some detail what conversations and discussions have been had with the industry, and it provides a fairly compelling background to these modest but flexible measures.
Bob Stewart (Beckenham) (Con)
I thank my right hon. Friend for allowing me to intervene. I am one of those people who came in here just to listen, because this debate was not being held in a dusty corridor somewhere upstairs—I am here to learn. I understand from my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) that the Ministry decides the number of slots, but who decides who gets those slots? Is it the airport or some other body?
Jesse Norman
I had sat down, but I am happy to take a late question from my colleague. The number of slots derives from historical control over and entitlement to slots at existing airports, but there are also mechanisms for reallocating slots that have been handed back and for allocating slots when they become available. Those are conducted by an independent process and reviewed by an independent process, and there are no plans in this legislation to make any changes to that.
Sir Mike Penning
Going back to my speech earlier and the increase in slots at Luton airport, can the Minister indicate when the increase in flights will start to occur, so that I can inform my constituents how much of their life is going to be blighted even more by the flights from Luton airport?
Jesse Norman
I am not sure I quite caught the force of the question, because I was being interrupted when my right hon. Friend spoke.
Sir Mike Penning
What are the timescales for the increase in slots from Luton airport, now that the Government have given permission for the expansion of Luton airport? That will have a massive impact on my constituents, and I would like to inform them factually about what is going on.
Jesse Norman
Existing slots will follow the procedures laid out in the legislation. As regards future slots, they will be allocated according to the consultation that we will be launching shortly. I should say that this is the last intervention I will take, Madam Deputy Speaker, since I had sat down before the two previous ones.
Question put and agreed to.