My Lords, before I start my remarks, let me say that I regret the absence of the noble Baroness, Lady Vere, as Minister. I am sure that I speak for the whole House, such as it is at present, in sending her our best wishes. We hope to see her back here very soon.
This Motion relates to problems for the airlines and the aerospace industry. As noble Lords will know, the airline sector has manifold problems at the moment, but this is one that the Government can do something about. When the UK left the EU at the end of January, we instantly left not only the political and judicial structures—the Commission, the European Council, the Parliament and the European Court of Justice—but nearly 40 EU executive agencies that deal with day-to-day issues relating to sectors of our society and industries.
I took an interest in this dimension during the passage of the now countless withdrawal Bills over the past three years. I frequently asked different Ministers what future arrangements the Government envisaged for our relationship with each of the agencies. In general terms, the reply was that we would be leaving, full stop. The view from the EU side was not much more helpful. The EU made it clear that even for the duration of the transition period, which we are now in, the UK is no longer a decision-making member of the boards of these agencies, even though for this period, which lasts until the end of this year, we must be fully compliant with their rules and procedures.
One of the most important of these agencies is the European Aviation Safety Agency—EASA. It has been vital for the testing and certification of aircraft, aircraft parts and aerospace manufacturing processes, and for the certification, safety and flight-time rules for pilots and engineers. The enforcement of these airworthiness standards is vital across Europe. Moreover, EASA has been of global significance: together with the US Federal Aviation Administration, it has set global aviation standards. The reality is that the UK has been a key influence within EASA, through the Government and the CAA. But beyond the end of this year, we will be treated as a third country in this context. This is of vital interest to British-located aerospace manufacturing and British-based airlines and their workforces. Both sectors not only operate and sell across Europe but have significant European ownership; think of Airbus, or IAG’s ownership of British Airways. They also have a very substantial pan-European supply chain, in which many British SMEs are heavily involved.
It has always been clear that, post Brexit, the UK would have to negotiate a new aviation relationship with Europe, specifically regarding aviation safety. However, there were a number of options. EASA includes certain third countries such as Switzerland, Norway and Iceland effectively as full members. We could have sought a form of associate membership, as advocated by ADS Manufacturing, or observer status, like Ukraine, Moldova and other ex-Soviet countries. We could have sought a formal joint working arrangement between EASA and the CAA, which would have avoided duplication and the divergence of standards.
Until recently, it has been unclear which road the Government would take. However, a couple of weeks ago, the Secretary of State for Transport, Grant Shapps, made it clear that there would be no halfway house. The CAA would in effect take over all responsibility for regulation and enforcement and we would be able to set our own standards, which might well diverge from EASA standards. This complete break has caused considerable alarm among manufacturers, airlines and unions. In the union context, I declare my vice-presidency of BALFA, whose pilot members are deeply concerned, and also my membership of GMB, which has members involved in both sectors. This concern unites all parts of the industries.
If the CAA has to replicate the role of EASA for the UK, but nevertheless its standards remain the same, then for the industry there will be substantial issues of administrative duplication, costs and delay, as it will have to go through dual processes. If, as the Government threaten, standards diverge, then there is a much bigger problem of aircraft, components and personnel being legal at one end of a European flight but not at the other. There are also questions about whether the resources and capabilities of the CAA to take on all these responsibilities in a purely UK structure of standards and enforcement will be provided and funded by the Government.
There is a history to this. When Mrs May was Prime Minister, in two of her most important speeches, in 2018 and 2019, she identified EASA as being one of only three EU agencies she considered we would need to continue to be involved in and to operate on a level playing field. Incidentally, the others were the medicines agency and the chemical agency, in both of which there are parallel problems, where questions should be asked and answered by the Government.
It is not clear what has changed—apart from the change of personnel in the top reaches of the Government—except that the new regime is simply taking an absolutist line, at least publicly. The ostensible reason for this is that, ultimately, EASA decisions are appealable to the European Court of Justice, but in practice that has hardly ever happened.
There is still hope for a more constructive approach. In the new negotiations on future relations, two of the early areas for seeking agreement proposed by the EU were aviation and aviation safety—some sort of bilateral air safety agreements. It is possible, despite Mr Schapps’s apparent negative stand, that there is still a sensible bilateral agreement to be had by both sides on relations with EASA, but at the moment that is not clear to anyone. I hope that the Minister today will be able to reassure the House and the aviation sectors that a constructive arrangement is being sought. If it is not forthcoming, I have to tell him that there will be grave concerns in all parts of the aviation industry.