Operation of Air Services (Amendment etc.) (EU Exit) Regulations 2018 - Motion to Approve

– in the House of Lords at 3:22 pm on 18th December 2018.

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Moved by Baroness Sugg

That the draft Regulations laid before the House on 17 October be approved.

Relevant document: 4th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A). Debated in Grand Committee on 21 November.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

My Lords, these regulations will be made using powers in the European Union (Withdrawal) Act 2018, and will be needed only if the UK leaves the European Union next March without a deal. It is the duty of a responsible Government to prepare for a wide range of potential outcomes. A key element of this preparation is to ensure that the statute book continues to function, irrespective of the outcome of negotiations, and that there continues to be a well-functioning regulatory oversight regime for aviation. We set out in technical notices in September how this would work, and these regulations deliver some of those outcomes.

Specifically, the draft regulations before us ensure that the UK will be able to provide EU air carriers with the permits they would require to operate to the UK in the absence of a deal. Rules on ownership and control mean that UK-licensed airlines can continue to be licensed by the UK after exit day, and that the CAA continues to be able to deliver effective oversight of UK-licensed air carriers. The draft regulations also ensure that UK carriers can continue to wet-lease aircraft freely from the EU, meaning that they will have as much stability and continuity as possible regarding their ability to lease foreign-registered aircraft, and can continue to use their fleets as flexibly and effectively as possible. Finally, they ensure that rules governing public service obligations in aviation, which provide essential connectivity to outlying areas, can continue to operate as they currently do.

This SI is not about our negotiating position; it is purely correcting the regulations to ensure that we have a functioning statute book in the event of no deal. We are providing UK air carriers with certainty regarding the validity of their operating licences, stability regarding their ability to lease foreign aircraft, and continuity with regards to their regulatory oversight from the CAA. These regulations, along with others, aim to ensure that there is no disruption to air travel in the event that the UK leaves the EU without a deal. I beg to move.

Amendment to the Motion

Moved by Lord Foulkes of Cumnock

At end insert “but regrets that the effect of a no deal exit from the European Union risks grounding all civil aircraft after 29 March 2019; and calls on Her Majesty’s Government to seek United Kingdom membership of the European Common Aviation Area in its own right to prevent such an outcome.”

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

My Lords, the awful spectre of a no-deal Brexit grows relentlessly day by day. Like lemmings, the Government are heading blindly towards a cliff edge. There is paralysis in the House of Commons. The Prime Minister seems to be manoeuvring to get what she wants, irrespective of what is best for the country. I am pleased that we have this debate on the Floor of the House. That is why I negatived it in Grand Committee, when the Government were trying to slip it in quietly behind the scenes in the Room next door.

However, most of the talk about a no-deal Brexit is fairly abstract to most people. The implications have not been sufficiently discussed or understood. They are potentially quite disastrous and this is only one of them—we are not talking about the lorry parks, the medicines or all the other problems. This relates just to aviation. Whenever anyone tries to raise practical issues in this realistic way, they are shouted down with the usual cry from the Brexiteers of Project Fear. We saw that in Scotland in 2014. In fact, there is a great deal to be feared from no deal—and this, as I say, is just one example.

The basic question is whether planes will keep flying between the United Kingdom and European Union destinations, and elsewhere, after 29 March 2019—and, if so, on what terms and at what cost. We have already discussed this on two previous occasions. It is no reflection on the Minister personally that satisfactory answers have not yet been provided, because she cannot provide what does not exist. I will try again to see whether she can do her best—I know she will.

As I have pointed out previously, there is a straightforward way of resolving Brexit-related aviation issues, at least in the short to medium term, if we go ahead with no deal. Access to the EU’s internal market for air transport could be retained by the United Kingdom simply joining the European Common Aviation Area, which is not restricted to European Union member states. However—and it is a big “however”—membership would require the United Kingdom to accept EU aviation laws, which ultimately would come under the jurisdiction of the European Court of Justice. So what was seen by the Prime Minister as a red line has in fact become a straitjacket in which the Government have put themselves so that they are unable to take this sensible action.

Surely this is an example of where realism should triumph over dogma. Is there anyone in this House—or indeed the whole country—who would deny the common sense of accepting that one condition in return for the guarantee that, after 29 March, whatever else happens it would be business as usual for aviation—a very simple way forward?

Whatever you think of Michael O’Leary in other contexts, he certainly knows his industry and needs to be listened to, and his company provides cheap flights for millions of people in this country and others. He says that if there a no-deal Brexit, flights will be grounded. So can the Minister give an absolute guarantee now that this will not happen? I say this now and I will say it again: whatever she says will be recorded in Hansard and when it comes to 30 March, we will be able to see—if we go ahead with no deal, which I hope we do not.

Photo of Lord Adonis Lord Adonis Labour

Is my noble friend aware of anyone in the aviation industry who thinks that Brexit is anything other than an extremely negative and potentially disastrous step forward for this country?

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour 3:30 pm, 18th December 2018

I do not. It is not just Michael O’Leary who has said that. I am trying to be briefer than usual, but if I was going to go on for longer I could mention many other examples. But if Michael O’Leary is wrong, we need to be told unambiguously that this is not one of the real threats from a no-deal Brexit.

Among the 700 statutory instruments required for the crazy prospect of a no-deal Brexit, the Secondary Legislation Scrutiny Committee drew special attention to these regulations because they,

“give rise to issues of public policy likely to be of interest to the House”.

That is why I negatived them in Grand Committee, so that we could have a debate in the House. That statement is certainly true, and the more we know about the potential implications, the greater the interest will be in this—and, I think, the greater the anger is likely to become. For example, how many people realise that it is not only flights within the European Union that are threatened by a no-deal Brexit? The whole basis of our aviation relations with the rest of the world is via the European Union. In all, the EU governs direct UK aviation access to 44 other countries, including the US and Canada. My second request for a guarantee is: what guarantees can the Minister give today on a smooth transition, which means no groundings or delays, for these routes beyond? Remember—we are going to keep careful note of this.

Also, what steps have been taken to guarantee that our safety and maintenance regimes, which again are framed within the EU regime, will be acceptable to every country in Europe and the wider world after 29 March? According to the European Aviation Safety Agency, certificates previously issued by the CAA before exit day would no longer be automatically accepted in the EASA system after 29 March. Has there been any progress on a definitive answer to the massive implication of that statement? How is it to be resolved?

When we last discussed these matters, the Minister was unable to say how many extra staff the CAA has taken on, or will take on, for its hugely increased workload. This is one of the many costs of preparing for Brexit; it is already taking on more staff. Can she give us an indication today of how many staff will be needed to deal with route licensing in that hugely increased workload, as well as its other responsibilities? These are huge questions. We are only three months away from our potential exit from the European Union, unless some hand of fate intervenes. We do not want vague assurances that discussions are continuing. They will guarantee nothing, and both business and private travellers now need specific, hard and clear assurances from the Government who have led us into this cul-de-sac.

I am not going to press this to a vote today. I would have liked to have done so, but some of my colleagues have said, “Let’s give the Government an opportunity to answer these points”. It is not because I am in any way satisfied, but I will give the Government the opportunity to make their explanation and give us the guarantees today. I am sure that the Minister will recognise that this in no ways absolves the Government from finding a solution that avoids a no-deal Brexit, thereby eliminating the extremely serious threats to civil aviation that we are discussing. Let us hope that sense prevails and we are not faced with a no-deal disaster—otherwise I believe that the kind of things I have predicted today will cause tremendous problems after 29 March. I beg to move.

Photo of Baroness McIntosh of Pickering Baroness McIntosh of Pickering Conservative

My Lords, I am delighted that this little debate has been called. I declare my interests at the outset, as a former transport spokesman in the European Parliament and a one-time rapporteur on a civil aviation report. Subsequently, I was a spokesman in the House of Commons for the Conservatives when in opposition.

I would like to put a number of small questions to my noble friend the Minister today. The House has been particularly well served by the Secondary Legislation Scrutiny Committee’s report on these regulations, which raised a number of policy issues that need to be addressed. I must say that I find the amendment to the Motion that the noble Lord, Lord Foulkes, has put before the House quite attractive.

My question relates to the implications for air service agreements with the EU and the EEA. There is also a broader question which does not seem to have been addressed in these regulations which I know is causing great concern. I omitted to say that at the time I married my husband he was an airline executive and is now in receipt of a pension from Delta Air Lines. I have not consulted him on my notes today, but perhaps it would have been better to have done so.

American carriers are concerned about cabotage and their right to fly internally within the EU. We are currently part of the common travel area. Will my noble friend address what happens when the United Kingdom leaves the European Union on 29 March regarding the fourth and fifth freedoms and US and other international carriers? That does not seem to be addressed in this regulation, but I know it will be exercising many of the airlines at this time.

Page 4 of the Secondary Legislation Scrutiny Committee’s report raises a number of issues and I think the House will take a great interest in the Minister’s reply. Paragraph 16 states:

“In the event of no agreement, EEA airlines will now also need to apply for a foreign carrier permit to operate in the UK”.

As suggested, I would like to press the Minister about the basis on which these expectations are founded and what co-operation and negotiations she is having with EU carriers to ensure that the necessary permits will be in place before 29 March so that there is no gap in aviation post Brexit. How long does the Minister think it will take to apply for these permits? What cost will there be to the airlines in this regard? Will she take this opportunity to correct what I hope are incorrect newspaper reports over the weekend that passengers are being told not to fly after 29 March next year because it is all too difficult to know what rights will be in place and what permits will be required for passengers to apply for visas or permits to travel?

I would also be grateful for a response from the Minister on this question. When she referred to the current wet leasing arrangements, she said that this will be in relation to reciprocity. How will this carry on after 29 March, particularly as it is understood that carriers may not benefit from the current arrangements once we have left the European Union?

The amendment to the Motion tabled by the noble Lord, Lord Foulkes, asks for UK membership of the European common aviation area. Does my noble friend have a date for the application that we intend to make to that area?

I shall conclude with a general point. I understand that these regulations might have been put forward as a draft negative, in which case I am not sure that we would have had the chance to consider them. If that is the case, the House was given a very clear understanding during the passage of the EU withdrawal Bill that no policy should be decided by secondary legislation and that all policy should be decided by primary legislation. My fear is that the statutory instrument before the House today is getting perilously close to determining policy. I hope that the Government will put down a marker that when it comes to other Bills, such as the Agriculture Bill and the environment Bill, no policy will be applied through regulation but will be in the Bill. When we were in opposition that was always our very clear understanding.

Photo of Baroness Randerson Baroness Randerson Liberal Democrat Lords Spokesperson (Transport)

My Lords, I can well understand the sense of frustration that led the noble Lord to table his amendment. Indeed, “sense of frustration” is a massive understatement. The chaos which has prevailed in the Government for more than two years has turned lately to a deliberate intention to frustrate the will of the people and a determination to stifle debate in the other place and run down the clock to a point where MPs will be denied any meaningful vote. The chaos is not helped by the antics of the leader of the Official Opposition, to whom we would normally look for some guidance. A completely blank space is there, so it is good to see the spirit being shown here by the noble Lord, Lord Foulkes.

I was in Brussels at the weekend—I go there frequently for family reasons. I talk to people who live there, both British and many other nationalities. Over the months, I have noticed their sense of sadness turn to irritation and then to frustration; now, they are almost laughing at us, because of the chaos we are in. They are doing it with great sadness, because they have always looked to the British as the people who would get on with it and make the sensible decisions.

Last week, the EU Sub-Committee on the Internal Market, of which I am a member, reviewed the evidence that we had a year ago from representatives of the aviation industry. Then, they had brushed aside the possibility of a no-deal Brexit when we put that question to them as simply not a likely scenario or not credible. They also stressed the need for their industry to have the deal done by the end of August or September this year at the latest. We are now 70 working days away from 29 March. We are asking our businesses and our industries, and not just the aviation industry, to do an impossible job. Unless we just carry on as we are, it is too late for them to prepare for any change in situation.

This SI is part of the Government’s rather pathetic preparations for a no-deal scenario. When we discussed it in Grand Committee a couple of weeks ago, the Minister still managed to sound pretty confident, but a lot of plans have come unstuck since that time.

In Britain, we have the third largest aviation industry in the world. We are a nation that loves to travel and we have a highly competitive aviation market based largely on cheap air fares. If there is no deal, UK and EU airlines will lose the automatic right to operate services between the UK and the EU without the need for advance permission from individual states. The Minister told us that the Department for Transport expects to grant permission for EU carriers to fly to and from UK airports and for that to be reciprocated by other countries in the EU. However, a more recent report of the Secondary Legislation Scrutiny Committee on another, related SI—the draft aviation safety regulations—indicates that the European Commission has confirmed that licences, certificates and approvals issued by the CAA before 29 March will no longer be automatically accepted in the EASA system by other EU countries after exit day. The DfT’s hope of mutual recognition after a no-deal Brexit may be overoptimistic.

One thing is for certain: the CAA will have to shoulder many more responsibilities, some of which are set out in this SI, in the other SI to which I referred and beyond. We will have to consider those other SIs in future. Can the Minister explain to us in detail what additional resources have been given to the CAA already and what more resources the Government plan to give it in future?

These additional resources come with a hefty price tag—for taxpayers, who will have to fund them directly but also for passengers to fund in future. In future, UK licensed air carriers will need both a route licence and an operating licence to provide services outside the UK. There are also implications for pilots and cabin crew, with the question of whether their qualifications and licences are recognised in the rest of the EU. They are likely to need to have their qualifications and licences agreed in the EU as well as the UK.

There is a whole picture of increasing complexity for companies trying to operate in a highly competitive market and for the individuals working in the industry. Complexity means additional costs—to be paid, ultimately, by customers, in a market that cuts costs to the bone to be competitive.

As the noble Baroness said, at the weekend, we heard that government departments were gearing up to warn potential customers not to book holidays for the period after 29 March. This has until now been the great unspoken fear of our travel industry. Anyone here who has not heard a friend or contact refer to the fact that they are deferring holidays in the spring may be unusual. There is a definite sense among the public that it will not be a good time to go abroad.

Whatever the situation and whatever the truth behind what was in the media this weekend, it is now out there in the open. It is bound to do considerable damage to the companies concerned. Can the Minister tell us exactly what government advice is on this, for the sake of the passengers, the customers and the aviation industry?

Finally, the Minister suggested that there may be up to 70 SIs related to transport which flow from Brexit. So far, we have seen only half a dozen or so—the tip of the iceberg. How do the Government plan to manage the rest in the timescale? As the noble Lord, Lord Foulkes, has shown today, along with the noble Baroness, Lady McIntosh, here in this House we will not be willing just to nod them through. We expect to look at them in considerable detail.

Photo of Lord Adonis Lord Adonis Labour 3:45 pm, 18th December 2018

My Lords, I extend my commiserations to the Minister for having to defend an impossible policy today. Nobody engaged in this business thinks that what we are discussing today is anything other than ridiculous: dismantling our entire existing system of civil aviation regulation, mutual recognition and European supervision and the rights of carriers to operate in different countries, all for the pursuit of an ideologically crazed venture which never at any point focused on issues of aviation and travel within the European Union.

None the less, having extended my commiserations, I point out that the Minister does have great responsibilities to the House and to Parliament. As the noble Baroness, Lady Randerson, so rightly said, people are making real travel decisions based on their fear of what may or may not happen from the end of March next year. It is almost unbelievable that people should be cancelling their travel plans and not arranging holidays for next Easter and summer, due to their fears of what will happen because of inadequate government preparations for our relations with our European partners. In the House of Commons yesterday, the Prime Minister herself ramped up the real possibility of a no-deal Brexit in a big way and posited it as the main alternative to the passage of her deal. It is hard to exaggerate how irresponsible that was on her part, because almost nobody in Parliament believes that this deal is going to go through in a month’s time. The Prime Minister is saying to Parliament, and to the country, that the most likely scenario now facing the country is that there will be no deal at the end of next March.

All of the concerns raised in the reports we have been debating today, leading to profound discontinuities and companies and individuals in this country experiencing massive economic and social damage, will come to pass. At the moment, we are just talking about one small fraction of aviation, but we face an extremely serious situation. As the noble Baroness said, this is just one set of regulations. There is a string of regulations relating to the complex and difficult area of aviation safety which I hope will come to the Floor of the House because they involve extremely important issues. There are dozens of other transport regulations.

I am told—because I know one or two things about what goes on in the Noble Baroness’s department—that a significant proportion of the staff in the Department for Transport are now working solely on Brexit-related issues. This is part of the reason for the massive cost overrun on Crossrail, which is not being delivered on time. We have inadequate supervision of HS2—we could continue down the list. There is only a certain amount of expertise, energy and capacity in Whitehall and at the moment, it is all being sucked in by Brexit, including the extremely valuable time of the noble Baroness and other Ministers in her department, which is having to be spent dealing with proposals for what happens if we crash out of the EU in three months’ time, rather than staying in. I suspect that the noble Baroness agrees with almost everything I have said, although she cannot say it quite like that. All this is worth saying because we are going to have this time after time, day after day, between now and the end of next March if we carry on with this present process.

My noble friend Lord Foulkes has done a great service to the House by bringing up this matter and moving his amendment. I was surprised when he said he was not going to push it to a vote. Indeed, I was little short of astonished, as my noble friend never knowingly undersells when it comes to fulfilling the duties of opposition. I cannot believe that, at this late hour, he is going to wimp out of pushing this to a vote. I hope he has not come under pressure from these people called Whips, who apparently exercise some influence in this House. I cannot think of any good reason for not pushing it, since the matters raised in his amendment are of profound public policy concern. I cannot think of an issue that this House has more of a duty to raise than this: it goes to the heart of the continuity of our transport arrangements. It may be that the noble Baroness gives such an impressive and detailed reply that my noble friend will not feel he needs to press this further. However, to give him some slight encouragement, if the reply is not of the calibre he would expect, giving give him absolute assurance of continuity in our transport arrangements at the end of next March, he might think of pressing the amendment. He might find that one or two other noble Lords will be with him in the Lobby. I might even be prepared to be a Teller with him.

It is not just about a vote at the end of this debate. We have got to send a message to the Government that we are on their case, regulation after regulation, when issues of this variety come before the House between now and the end of next March.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

As my noble friend said, there are going to be dozens, scores—maybe hundreds—more of these SIs. We need to keep a very close watch on them in Grand Committee and make sure that the important ones are negatived and come here. We may have many other opportunities for considering them, moving amendments and even voting. Even if he does not have the excitement today, I think there are going to be many other opportunities.

Photo of Lord Adonis Lord Adonis Labour

I entirely agree with my noble friend and with the noble Baroness, Lady McIntosh, who rightly said that issues of first-order public policy were being raised in regulations. At the moment, whether they come before the House is almost entirely random. I also say in passing that there is a growing sense of frustration about this. The House is about to go into Recess in what is—let us be frank—a national crisis. It is going into Recess on Thursday and not coming back until the second week in January. By then, we will have literally a matter of days before we leave the European Union. We should be doing our duty and assembling here in Westminster and debating these issues regulation by regulation from the beginning of the new year. I might have something further to say about that when the Motion for the Adjournment comes forward on Thursday.

Turning to the specific issues at stake here, the situation is very serious. The report of Sub-Committee A of the Secondary Legislation Scrutiny Committee, which examined the regulations and—I echo the Baroness—did an excellent job on these and others, says of air carriers that,

“in the event of ‘no deal’ the UK expects to grant permission to EU carriers to operate at UK airports”.

The noble Baroness, Lady Randerson, said that part of the reason why we have such a big aviation sector is cheap airlines. They are part of the reason, but it is also that in Heathrow, we have Europe’s preeminent hub airport. It is one of the biggest earners for this country in terms of international income and the promotion of inward investment, because it is so successful. Anything that promotes discontinuity in operations at Heathrow will be lethal to its success, to our ability to attract inward investment and to be an aviation world leader in future. If our European partners and other European airlines think that we are not going to put in place all the regulations necessary to ensure that Heathrow operates completely smoothly and with no discontinuity whatever, they will very rapidly—the noble Baroness is nodding because she understands this completely—move their operations to Frankfurt, Charles de Gaulle, Dubai or other international hub airports that are at least as accessible as Heathrow in terms of facilities. The stakes are extremely high: one of our major national industries could be at stake if we get this wrong.

The Select Committee said that,

“in the event of ‘no deal’ the UK expects to grant permission to EU carriers to operate at UK airports. We expect this to be reciprocated by EU states granting permission to UK air carriers to operate to points in the EU. If a multilateral agreement with the EU can’t be reached, we would seek bilateral agreements with individual states”.

Buried in those words are matters of huge complexity and difficulty. Not only would we need a bilateral arrangement for each of the 27 other member states of the EU in the event of no deal; as my noble friend Lord Foulkes said, there are also the other 144 arrangements that we have in place which govern our international aviation. When the Minister replied to the heated debates in Grand Committee on these issues and was invited to give an update on the state of the negotiations with our 27 EU partners on the reciprocal arrangements and the other countries that are covered by them, she was unable to give a great deal of information. She said that,

“we are having conversations with the Commission and the member states about a wide range of issues. I am not able to give further detailed information at this moment”.—[GC 21.]">Official Report, 21/11/18; col. GC 21.]

Photo of Viscount Waverley Viscount Waverley Crossbench

Is the noble Lord able to say when the discussions can be kicked in with the member states, or does the Commission have total ownership of the situation until such time as Brexit actually comes about?

Photo of Lord Adonis Lord Adonis Labour

That is actually a question for the Minister, but my understanding of the situation—the Minister might correct me—is that we are, at this moment, having bilateral discussions. Indeed, they are, in effect, negotiations, because we have to make preparations for what will happen in the event of no deal with our 27 other member colleagues in the EU and the other countries with which the EU currently has bilateral arrangements. They must be taking place, because if they are not, we risk, in the event of no deal, having no legal basis for the operation of a substantial part of our aviation industry from 29 March.

Because this is a matter of the utmost gravity, I invite the Minister to update the House on what is happening with these conversations. Can she give us an absolute assurance—I echo my noble friend Lord Foulkes—that the bilateral arrangements will be in place with all the other 27 member states of the EU and with all those nations with which the EU has bilateral arrangements, which cover all the matters in these regulations, so that there will be no discontinuity whatever in air services from the end of next March?

Nothing the noble Baroness said in Grand Committee on 21 November would give anyone any reassurance that that is the case at all. On the contrary—I will not quote at length from Hansard—she made reference to a forthcoming meeting of the Council of Ministers, of EU Heads of Government, and said that she hoped that further progress would be made, all of which left me feeling profoundly concerned at the inadequate state of our preparations at the moment and convinced of the need for something substantial to be sure that we will not face a crisis in a few months’ time.

I will not continue at greater length, because I want to hear what the Minister says, and we might intervene on her when we hear further detail from her, as this is important. The issue that underlies this, which is of extreme importance, is that almost nobody who deals with any of the great industries of our country thinks that it is viable for this country to leave the European Union on 29 March next year with literally no deal.

Indeed, on the Government’s own policy in respect of no deal, we are using surreal language here: words which purport to mean one thing but mean another. The language of “no deal” is not in fact of no deal. The reciprocal arrangements we are talking about, and which the Minister referred to, are a deal; each of them involves a deal between this country and another country. It may not be a comprehensive deal which involves a treaty extending to 580 pages, like the EU withdrawal agreement, but each of them is a deal. The consequence of having literally no deal is no planes flying from Heathrow and the closure of one of our major transport hubs, so there will have to be a deal. The only question is what kind of a deal: a comprehensive deal of the kind the Prime Minister has negotiated, or individual and bilateral deals of the kind covered by these regulations, which will need to be extremely comprehensive, covering all the issues currently under the surveillance of the European Union authorities to ensure that there is not a discontinuity.

It is of course hard to escape the conclusion that the right thing to do is to stay in the European Union and not go down this track at all. I think we will get to that through a referendum; the Prime Minister has simply kicked the whole thing down the line for another month. But since it is our duty to make preparations for what happens if a disaster takes place in public policy next month, we look forward to the Minister updating us on the state of these bilateral negotiations. In particular, we will listen carefully to her giving this House an undertaking that there will be no discontinuity whatever in air services from this country to other European countries and international destinations on 29 March next year.

Photo of Lord Berkeley Lord Berkeley Labour 4:00 pm, 18th December 2018

My Lords, all noble Lords who have spoken so far have raised serious concerns about the future of the air services after 29 March. People will take very seriously the statement at the weekend advising people not to travel by air after 29 March—which I am sure was denied by everyone in whose interests it was to deny it. Apart from not knowing whether flights will operate, if you are going on holiday or on business there is an equally serious question as to whether, if you have booked a flight after 29 March, you will get any compensation if it does not fly, and from whom one will get compensation. It could be the complete end of the cheap holidays and cheap flights as we know them, which have been so successful here.

I will not repeat what other noble Lords have said, but a statement came to me last week from people in the ports sector, which I think is probably the same in that it covers all sectors. It said that all industries involved had to sign non-disclosure agreements before government would talk to them. This might be why we do not hear too much from the sector: it is frightened of saying things that, frankly, the Government might not like and of thereby being excluded from further negotiations. Perhaps the noble Baroness, when she responds, could explain why the Government think it is necessary for industries, which will be severely affected by this, to sign non-disclosure agreements. Their businesses are at stake and it is perfectly reasonable that they should know from the Government, with maximum transparency, what is going to happen, why and when. They can then judge what the effect will be on their businesses. My gut feeling is that it would be very unwise to book a holiday or a business trip after 29 March, until we receive the kind of assurances from the Minister that many noble Lords have requested.

Photo of Viscount Waverley Viscount Waverley Crossbench

My Lords, the Minister might care to respond to another point. I recognise that the issue of air services is before us, but does she agree with—or can she comment on—the words of the Minister for European Affairs in France, who has said that the same issues apply to the Eurostar which will not be able to travel post-Brexit? Perhaps she would be kind enough to give some consideration to that point.

Photo of Lord Judd Lord Judd Labour

My Lords, the whole House should be grateful to my noble friend for having alerted us again to this crucial issue. There has been a lot of talk about holidays, but we must remember that a lot of families cross boundaries with sick or increasingly frail relatives; certainty about travel is actually crucial to their way of life. I cannot help feeling a little cynical; I believe many members of the public who have been blindly supporting the idea that “we must get out” will have a rude awakening when they are hit by the realities of what will happen on the travel front.

This is not just about air traffic, which we are talking about today. What disruption will happen to other means of communication, such as Eurostar or the ports? No definite information is available. Over and over again, those of us who are active in the community hear, for example, from business people, “Please just get some certainty into the situation; it is impossible to operate in the current atmosphere of uncertainty”. That also applies to universities and higher education.

There is one thing we must be very careful about: if one set out to design a nation that was utterly dependent on international relations in all aspects of its economic, private and social life, it would be difficult to come up with a better example than the United Kingdom. Central to a Government’s approach to what is happening should be how we get this right and preserve what we have. We must be careful not to join, inadvertently, a sort of emergency operation that asks, “What are we going to do about the catastrophe about to overtake us?” The real challenge is to say, “We must not let this catastrophe overtake us”. It is immensely urgent that we ensure an opportunity is given to all sane people in Britain, and in Parliament, to say, “No, we cannot go on with this nonsense; we really have to think again about leaving the European Union”.

Photo of Lord Tunnicliffe Lord Tunnicliffe Opposition Deputy Chief Whip (Lords), Shadow Spokesperson (Defence), Shadow Spokesperson (Treasury), Shadow Minister (Transport)

My Lords, I start by declaring my interest. I am in receipt of what is, for me, a substantial British Airways pension and, if this disruption were such as to cause British Airways to go broke, I would not get all of it. I have consulted the Registrar of Members’ Interests and am assured that the interest is sufficiently tenuous to allow me to speak. I have a rather more acute interest in the fact that my wife has planned a holiday in the Canaries on 18 April.

I will speak from a presumption of no deal. There is an acceptance that the execution of the intent of this SI will depend on agreements. As I have to take part on probably 70-plus SIs between now and the end of March, I usually avoid general debates on Brexit, but when agreeing these SIs, it is necessary to look at two issues. First, are they technically valid? I have looked through them and there has been a good debate on them in Grand Committee, and I think that they are technically valid. Secondly, what is their chance of being successfully executed? I will speak to only the second question.

The whole of this SI depends on there being agreements to carry on flying. Indeed, in Grand Committee the Minister said that the Government would be seeking multilateral agreements with the EU in order to allow aviation to continue. However, she said that, failing that, we would have to fall back on bilateral agreements. There will be a requirement for 27 bilateral deals with the EU and, if I have read the briefings properly, 17 bilateral deals with non-EU countries presently enabled by EU agreements, including the US—a US under a President who strongly believes in America first. This would mean that if a multilateral agreement were not concluded, 44 sets of negotiations would have to be completed by 30 March next year.

The logic of why that will work is set out in a number of places, including at one point in the Explanatory Memorandum before it was revised, but I thank the Government for publishing a document called Flights to and from the UK if there’s no Brexit deal, which was published on 24 September 2018. It explains the logic of why we will succeed in achieving, first, traffic rights and, secondly, appropriate safety recognition. The paragraph on traffic rights states:

“If there is ‘no deal’ with the EU, airlines wishing to operate flights between the UK and the EU would have to seek individual permissions to operate from the respective states (be that the UK or an EU country). In this scenario the UK would envisage granting permission to EU airlines to continue to operate. We would expect EU countries to reciprocate in turn. It would not be in the interest of any EU country or the UK to restrict the choice of destinations that could be served, though, if such permissions are not granted, there could be disruption to some flights”.

So, if there is not a multilateral deal, the whole concept falls back on an expectation that the EU will reciprocate. A similar section on the same page relating to safety says:

The UK would expect this recognition of equivalent safety standards to be reciprocated by the EU in its ‘Part-TCO’ authorisations”.

That is the logic behind the presumption that this SI will work. However, it did not seem to be a very strong assurance, so I read the document with a little more care. Another paragraph states:

“The European Commission has previously acknowledged”— here, there is a link to a website—

“that a ‘bare bones’ agreement on air services would be desirable in the event of the UK leaving with ‘no deal’”.

I thought, “That’s a bit better. It sounds like good solid stuff”. I took the trouble to seek out the publication on that website. It turned out to be a series of slides used for an internal EU meeting. It discusses airline preparations, but it does not get round to a no-deal situation until slides 11 and 12. There, it says:

“If no-deal, EU-wide contingency measures to ensure basic connectivity”, and just adds a bullet point:

“Bare-bones EU-UK agreement”.

Over the page it goes through a whole series of jumps, and almost en passant repeats,

“if no-deal, EU-wide contingency measures to ensure basic connectivity”.

As an assurance, I do not find that very warming. Putting these slides on the fire would create more warmth than their words.

If we are to return to individual bilateral agreements, 44 nations will seek improvements in their deals, as they always did before. Admittedly, my experience in this area is some 30 years old. But aviation is a highly prized national issue, and bilateral agreements—even the simplest ones—are negotiations. Those negotiations will take place in a tense and acrimonious atmosphere. I have done a lot of negotiations in my life, and my view is that they consist of emotion, power and logic. Sadly, I have always found that logic comes a rather poor third.

In terms of the emotion, we have got to remember that this is where we have failed to conclude a deal with the EU. It is difficult to imagine a more toxic atmosphere. In terms of power, it would be a stand-off as to who would be hurt more. The logic might come in eventually.

So, what progress can the Minister report with multilateral and bilateral negotiations? There is considerable activity needed from the airlines; what procedures are the Government putting in place to ensure they are doing their bit? It is no good saying it is their responsibility. As the Minister will have learned from the debacle over the railway timetables, the Government turning round and saying that it is their responsibility is pretty ineffective. If it goes wrong, the Government will be blamed, and I will ensure that happens.

I hope and pray that the Minister can convince me that my scepticism is ill founded. But surely the lesson is that a no-deal outcome is wholly unacceptable and we should all work together to stop that happening.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport) 4:15 pm, 18th December 2018

My Lords, I thank the noble Lord, Lord Foulkes, for initiating this debate, and other noble Lords for their contributions. Following the speculation in the media over the weekend, I am also grateful for the opportunity to provide clear reassurance on the Floor of the House that planes will continue to fly after 29 March 2019, and that people can continue to book their holidays with confidence.

As I said, these regulations are an important element of this Government’s sensible contingency preparations. Obviously the debate has not focused quite on the detail; as the noble Lord, Lord Tunnicliffe, said, we focused on that in Grand Committee, so I will address my comments to the contributions from noble Lords.

In the amendment to the Motion, the noble Lord, Lord Foulkes, calls on the Government to seek membership of the European common aviation area. That is a multilateral agreement and, as he will know, signatories to it are the EU and its member states, Norway, Iceland and the western Balkan states. We are already putting in place replacement arrangements with the eight non-EU signatories for that agreement. We have got three—very nearly four—of those agreements signed, and others are progressing well.

It would not be straightforward for the UK simply to sign up to the ECAA agreement. That would require the active consent of all the EU 27 and the eight non-EU parties to that agreement. As I said, we have arrangements in place with many of the non-EU parties. As for the EU 27, the Commission has been clear it that it will negotiate separately on that. As the noble Lord points out, the ECAA agreement also necessitates full and continued application of EU legislation and, with regard to the interpretation of the agreement and the associated legislation, it is the European Court of Justice that will decide. As the noble Lord will be aware, the Prime Minister has set out red lines for the UK’s future relationship with the EU, one of which is to end the jurisdiction of the ECJ in the UK.

Civil aircraft are not at risk of being grounded after 29 March. That would be in nobody’s interests and is entirely avoidable. As Donald Tusk said earlier this year, he is,

“determined to avoid that that particularly absurd consequence of Brexit that is disruption of flights between the UK and the EU”.

That confidence is shared by industry as well as the UK Government. Ryanair, to whom the noble Lord referred, last month reported that its forward bookings for flights to and from the EU remain strong, as we have seen across the sector. Its chief marketing officer was quoted as saying that even if we were in a no-deal Brexit, flying would be fine.

The noble Lord, Lord Adonis, mentioned Heathrow. He is quite right that we need to ensure that we have these regulations in place to avoid disruption. John Holland-Kaye of Heathrow said yesterday that he was confident that planes would still fly and people could book with confidence. But I understand noble Lords’ concerns and it might be helpful if I set out in a little more detail our position and the Commission’s published position on this.

We set out in September in our technical notices, to which the noble Lord, Lord Tunnicliffe, referred, that we envisage granting permission to EU air carriers to operate to the UK. In its own contingency action plan published on 13 November, the Commission set out that it would also bring forward measures to ensure that UK air carriers could operate to the EU. Explicitly, in its contingency planning note of 13 November regarding traffic rights, to which this statutory instrument refers, the Commission said that it will propose measures to ensure that air carriers from the UK are allowed to fly over the territory of the EU and make technical stops, as well as land in the EU and fly back to the UK. The Commission said that these measures would be subject to the condition that the UK applies equivalent measures, and we have provided that reassurance as set out in our technical notices and as this SI actually delivers.

On aviation safety, which is of course important both to ensure that planes keep flying and that we keep our passengers safe, the Commission has said that EASA will be able to issue certificates only once the UK has become a third country, which will not be until after we have left the European Union. But it said in its notice on 13 November that it would propose measures to ensure continued validity of such certificates for a limited period. Those measures will be subject to the condition that the UK applies similar measures. Again, we have set out that we will recognise the EASA certificates for up to two years in our technical notices. That position was detailed in the aviation SI that was laid earlier this month and will be debated in your Lordships’ House in the new year.

I can give an update since Grand Committee to show further progress. On 29 November, following a meeting between the EU 27, we received a further update from the Commission on its position. On market access, the Commission has confirmed that it will propose a regulation to ensure basic connectivity for EU-UK flights on the basis of reciprocity. On aviation safety, the Commission will propose a regulation for continued validity of type certificates and organisation approvals, and for UK certified parts and appliances placed on the EU market before the withdrawal date. On aviation security, the Commission has confirmed that it will adopt an implementing Act to list the UK for the one-stop security system, which will include cargo security. We do not yet have a timeline on that, but we are working closely with the Commission to deliver it. Noble Lords are quite right to point out the importance of the reciprocity in this, but we are delivering our commitments through this programme of secondary legislation. The EU has confirmed that it is doing the same.

Not all our aviation relationships are governed through the EU. We already have in place 112 separate bilateral agreements with other countries. They will continue as they are today as we leave the European Union. I can provide noble Lords with some updates on further negotiations around bilaterals. We have recently concluded a new bilateral air services agreement with the UK and the US. That is confirmed and signed. That will come into effect once the EU-US air transport agreement ceases to apply to the UK. That is a good deal that guarantees the continuation of our really important transatlantic routes. It means that airlines can continue to operate as they do now and it will allow them to develop new services.

We have also concluded agreements with many countries where the current arrangements are governed by EU-level agreements. We have concluded agreements with Albania, Canada, Georgia, Iceland, Israel, Kosovo, Montenegro, Morocco and Switzerland. We are working very closely with other international partners to agree replacement bilateral arrangements designed to come into effect with the other countries currently governed under an EU agreement. Those countries are Bosnia and Herzegovina, Jordan, Liechtenstein, Macedonia, Moldova, Norway and Serbia. Talks on those are progressing well. We expect these arrangements to be in place well ahead of exit day.

Some noble Lords asked about resources for the CAA. The CAA is of course making appropriate contingency preparations to deliver the continuity of service we want. That includes ensuring it has the appropriate staffing levels to deal with any increase in workload. It is recruiting 59 additional staff in preparation, 39 of whom are already in position. It is important to remember that the additional functions the CAA would take on in a no-deal scenario are limited. They are mostly for aviation safety, particularly in design certification. The EASA system works for the most part on the basis of automatic recognition of certificates issued by national authorities, so the CAA is already our competent authority for most approvals. As I said, both our and the EU’s positions have said that we will recognise those certificates for a limited period after we leave the European Union.

I turn to some questions from my noble friend Lady McIntosh. I again add my thanks to the Secondary Legislation Scrutiny Committee for its continued work on our lengthy SI programme. It brings many SIs to the House’s attention, and I thank it for doing so. My noble friend asked about the CAA burden. I have already mentioned its resourcing. Specifically on route licences, as I said, the CAA already provides regulatory oversight on all UK-licensed air carriers and has the resource in place to ensure it can continue to provide that oversight. All holders of a type A operating licence, which is the majority of aircraft over 20 seats, already hold a route licence. All holders of type B operating licences have already been individually contacted and invited to apply for a free route licence from the CAA. The CAA is absolutely confident that those route licences will be issued in advance of exit day.

My noble friend also asked about reciprocity of wet leasing. Maintaining the current wet-leasing arrangement is the right thing to do for the industry as a whole, as well as for passengers. We are making every effort to minimise disruption to aviation on a no deal. Maintaining the current system for wet leasing of foreign aircraft is part of that effort.

Noble Lords raised some questions about the transport SI programme. We are expected to lay approximately 65 EU exit SIs. That number is approximate because ongoing EU business means that further legislation might come into force. Of those 65 SIs we have laid 36 to date. That is over half. Of those laid so far, 18 have been affirmative and have been debated on the Floor of the House or in Grand Committee, and 18 have been negative. There are 14 aviation SIs, 10 of which have been laid so far. Noble Lords have referred to the important issues of safety and security, and passenger rights and compensation. Those SIs have been laid and will be debated early in the new year. The remaining SIs will be spread between now and exit day to make sure we have a fully functioning—

Photo of Baroness McIntosh of Pickering Baroness McIntosh of Pickering Conservative

I am very grateful for my noble friend’s response. I asked a rather techy question about fourth and fifth-freedom rights, but currently there are routes that fly, for example, from London through Shannon to the US. Has that been resolved in the context of the new UK-US agreement to which my noble friend referred?

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

The current direct operations from the UK to the US will continue to stand. Obviously if there are flights through the EU that will be subject to the negotiations.

Photo of Baroness McIntosh of Pickering Baroness McIntosh of Pickering Conservative

To be very clear, I am asking about routes that I think still operate from London via Shannon in Ireland to the States: has it been resolved that they will continue?

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

I am sorry if I was not clear. No, the current UK-US deal deals only with direct flights between the UK and the US. Obviously, a flight that stops off at Shannon will be part of our discussions with the EU.

I hope I have been able to provide reassurance on this. I think that the EU Commission has been very clear in setting out its position and we have been very clear in setting out our position. They are broadly the same position: they both rely on reciprocity. We are delivering our position through this series of statutory instruments and, as I said, the EU is working on a timeline of when it will deliver its position. While we are working hard to get parliamentary agreement to the deal with the EU, we of course have to continue to make responsible preparations to ensure that, in the absence of that agreement, we will be able to avoid disruption. This SI and the others we have debated and will debate over the coming months are a key part of those preparations. Both we and the EU have published contingency plans, of which these regulations are just one small element. Taken together, those plans will ensure that planes can continue to fly to and from the EU in the event of a no-deal exit. They will ensure that our legal and regulatory framework for aviation is ready so that flights can continue whatever the outcome of the negotiations.

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

My Lords, the Minister has been more helpful than she was in Grand Committee, and my noble friend on the Front Bench made a splendid speech referring to this guidance of 24 September. It says right at the end:

“This notice is meant for guidance only”.

If I were booking a flight to the Canaries in April I would take account of the next sentence:

“You should consider whether you need separate professional advice before making specific preparations”.

I am sure that that will be helpful for my noble friend. However, we have noted what the Minister said. All this work is being done, all these great people in the Department for Transport are working very hard indeed and it really is quite outrageous, as my noble friend Lord Adonis said, that they are being deployed on this work which we hope will be totally unnecessary when they could be doing something really useful. However, in light of the Minister’s helpful reply, I do not intend to press my amendment to a Division.

Amendment to the Motion withdrawn.

Motion agreed.