There were high hopes for the Chancellor’s budget speech. His promise to do “whatever it takes, for as long as it takes” to support UK jobs and businesses is exactly what the aviation sector needed to hear.
His plans to extend the job retention scheme seemed to signal an appreciation that the economic crisis is far from over, so his failure to even mention aviation will be a huge disappointment to the 1m people who work in the sector and its supply chain and who will be feeling vulnerable after the budget.
The extension of support for jobs and training is welcome and the “Super-deduction” announced may help contractors to invest, but so much else was missing.
How can there be hope for a green economy without support for specifics like sustainable aviation fuel? The Chancellor projects growth of below 2% in the medium term – how could stronger growth be sustained unless aviation is thriving?
Heathrow is the UK’s biggest port by value and Global Britain cannot get off the ground without it – and a strong aviation sector. Support for aviation is essential if it is to help boost the economic recovery.
Aviation benefits almost every other sector – when it suffers, so do the jobs it sustains, as was underlined by parliamentary data published recently which shows unemployment rising around Heathrow, Gatwick and Stansted at well over double the national rate.
The Chancellor’s failure to mention aviation at all is hugely disappointing. The only support offered is the existing Airports & Ground Operations Support Scheme, which offsets business rates, with a cap per airport of £8m – but Heathrow alone pays £120m per year.
Back Heathrow has long called for a 100% waiver of airport business rates as has been offered to other sectors. Local politicians of all parties support this but the Chancellor is not listening.
Heathrow CEO John Holland-Kaye said: “The absence of any meaningful support from the Government will weaken the sector and limit UK growth at the time it is needed most.”
It is difficult to disagree. So come on Mr Sunak, you said: “Whatever it takes, for as long as it takes” – now it’s time to put your arms around aviation.
Commenting ahead of the Budget statement, Parmjit Dhanda, Executive Director of Back Heathrow said the Chancellor must urgently address the lack of support for the UK’s aviation industry in order to prevent more job losses and further damage to supply chain infrastructure.
Back Heathrow – the campaign fighting to protect jobs and opportunities at Heathrow airport – says residents of west London know all too well how much their local communities rely on Heathrow and its supply chain for jobs and prosperity.
Mr Dhanda said: “Heathrow can spearhead an economic recovery, but it needs the government's help to make it happen. Things that government can do to help include extending the job retention scheme to protect aviation jobs.
“The business rate waiver for airports should also be extended to 100%. Currently Heathrow receives 7% relief on a bill of £120m – this fixed cost is crippling at a time when passenger and freight volume has collapsed.
“Finally, the restoration of VAT-free shopping for tourists would provide a welcome boost to revenues for all airports around the UK.”
Rivalry between Europe and the US over the best sustainable aviation fuels could hinder plans to tackle aviation emission targets set out in the Paris Agreement.
EU proposals will mean a minimum of ‘green’ fuel would have to be used in every aircraft flying within the EU, with incentives to boost production.
However, the last time something similar was attempted, the US objected and the proposals were subsequently dropped. Although greener fuels are around 80% less carbon emitting than conventional aviation fuel, they are also up to four times more expensive to produce. Needless to say in the current economic crisis no airline wants to be undercut by a rival, even if it is for a greener fuel.
And it isn’t just cost – debate also rages over the type of aviation fuel that best meets the carbon challenge and is commercially viable and sustainable – a choice between biofuels and electrofuels.
In 2021, renewable fuels account for just 0.05% per cent of total jet fuel consumption in the EU because previous attempts to encourage take-up of sustainable fuels through tax incentives and carbon trading schemes have failed.
But just how green is green? The debate within the aviation industry is about how sustainable ‘biofuels’ are, with some airlines opposed to the inclusion of crop based biofuels like palm oil because of environmental consequences. Palm oil is under scrutiny because processing it into fuel enhances its commercial value and encourages deforestation.
Technology now allows fuel to be produced from non-biological resources by blending conventional kerosene with renewable hydrocarbon and the term ‘sustainable aviation fuel’ (SAF) is used to highlight their sustainable nature.
Unsurprisingly, EU states will lobby for options that suit their own industries. Sweden favours a broad definition for sustainable fuels, including crop-based biofuels, whilst Germany is opposed to biofuels and wants to promote next generation electrofuels – created by combining hydrogen extracted from water with carbon taken from the air.
At the moment nearly half of aviation emissions are generated by long-haul flights which are not suitable for electric and hydrogen technologies so SAFs remain the fuel of choice in aviation. There is hope that COP26 – the UN climate change conference in Glasgow in November - will broker global agreements to ensure the future use of SAFs.
Back home the conundrum that faces the UK is how to achieve growth and cut carbon. Solving it is crucial to achieving the aim of meeting the global demands for trade and travel, whilst meeting the all-important target of net zero carbon emissions by 2050. International agreements on SAFs will have a crucial role to play.
The idea of a health passport has been floated for a few months now. Airports, airlines and governments have all expressed interest in an online system that could track immunisation to Covid-19.
This would be in the form of an app or digital certificate – including vaccination and test records – giving everyone immune to Covid-19 digital proof of their health, and the ability to travel to countries that participate in the scheme.
European countries have urged the EU to come up with a co-ordinated certification that will be accepted across all member states.
The UN World Tourism Organisation secretary-general, Zurab Pololikashvili, said: “The roll-out of vaccines is a step in the right direction, but the restart of tourism cannot wait. Vaccines must be part of a wider, co-ordinated approach that includes certificates and passes for safe cross-border travel.”
Australian airline Qantas has announced it will require passengers to provide proof of a COVID-19 vaccination before they board. Australian borders are closed to visitors and residents must quarantine for 14 days from arrival. A vaccine passport would offer an alternative to that system.
In October 2020, a trial of a digital ‘health passport’ was held at Heathrow Airport. CommonPass was the first step towards creating a common international standard for Covid-free certificates. Participants were required to take a Covid test no sooner than 72 hours before their flight. If negative, the app generates a ‘QR’ code to be scanned by border officials and airline staff, without disclosing any other sensitive data.
The International Air Transport Association is also working on a system (called Travel Pass) which in its simplest form will be a centralised database of national entry requirements. It will also carry vaccine and testing information.
Mvine and iProov (identity management companies) have already developed such an app in the UK, which is in the final stages of testing. This app will give access to the vaccination and testing data of individuals, without disclosing their identity. Additionally, it will piggy-back on existing NHS infrastructure, so roll-out may become easier and cheaper.
The pandemic has brought the travel industry to its knees. While we are still early in the process of mass vaccination, making it compulsory to have a vaccine to board a plane or enter the country will not give the travel industry the boost it so desperately needs. Not in the short term anyway.
But if vaccine passports also carry information about a recent negative test or anti-body presence, then they can become part of an approach that can help revitalise the travel industry and begin and kick start economic recovery.
There is hope around the corner, and it can’t come soon enough.
Trade unions have teamed up with the campaign group Back Heathrow to urge the Prime Minister to help communities impacted by the crisis in aviation caused by the Covid 19 pandemic.
In a joint letter the trade unions GMB, USDAW, Community and Back Heathrow have asked the government for a business rate waiver for Heathrow airport – the country’s biggest payer of business rates – and its biggest single site employer.
Parmjit Dhanda, Executive Director of Back Heathrow said: “Airports in Scotland and Northern Ireland have received a 100% business rate waiver, as have other sectors of our economy. Airport communities in England are suffering badly due to lockdowns and reduction in flights.
“Despite losing over 80% of its flights, Heathrow’s business rates bill is still a massive £120m. The airport has only been given a 7% waiver. This is not sustainable and makes a bad situation worse for those depending on Heathrow and its supply chain for work. Airport communities in England need the same level of support as those in other parts of the UK. That’s why Back Heathrow and the trade unions have written to the Prime Minister.”
Under recent government measures, supermarkets were given 100% waivers to their business rates bills. The big supermarkets have handed back their waivers – so far worth £1.4bn. The trade unions and Back Heathrow say this should be used to help Heathrow survive.
In respect of the £1.4bn, the letter signed by leaders of three of the UK’s largest trade unions states: “Less than one-tenth of this waiver money would help Heathrow survive the present crisis, save countless local businesses, and thousands of jobs. We urge you to use this money as a lifeline for everyone who depends on Heathrow for their livelihoods and protect the future of our airport.” Download the letter here.
Unions have also urged the government to include a caveat that the funds will only be spent after a dialogue with unions to ensure jobs are protected at the airport and the wider aviation supply chain.
Back Heathrow speaks for 100,000 residents and businesses that depend on the airport for their livelihoods.
A recent report by Oxford Economics suggests that up to 62,000 local jobs could be at risk due to reduced activity at Heathrow airport. The Oxford Economics report is here.
Speaking after the Supreme Court judgement that ruled that Heathrow’s plan for a new runway is not illegal, Parmjit Dhanda, Executive Director of back Heathrow said: “This is an important moment for local communities who are desperate for jobs and apprenticeships at a very hard time for our economy.
“It is also a huge moment for the UK as it moves towards an uncertain Brexit, but now with the confidence that international trade will be boosted by additional capacity at the country’s only hub airport.
“Alongside our supporters in the CBI, TUC, and local communities, we see this as an opportunity to make progress, whilst also working to ensure the Paris carbon reduction targets are met as part of the planning application.
“This judgement reflects the alignment between the highest court in the land with a parliamentary majority of 296.”
Back Heathrow says expansion will bring 180,000 new jobs and 10,000 apprenticeships – something the whole country will benefit from. This can be done with strict compliance to the Paris Agreement on Climate Change and investing in sustainable technology that will improve aircraft efficiency and boost the development of commercial sustainable fuels. It’s crucial for the UK to now get on and build the new runway.
Parmjit Dhanda, Executive Director of Back Heathrow said: “The Supreme Court judgement comes at a crunch time for the UK’s struggling economy. The go-ahead for a new runway will give hope for new jobs and a post Covid recovery. Else we face the loss of much needed trading opportunities, at a time of growing Brexit uncertainty.
“The CBI, the TUC and over 100,000 local residents have been campaigning for a new runway for many years, with the backing of a 296-vote majority in Parliament. It’s time to get on and build it, and meet our climate reduction targets too.”
Back Heathrow says expansion will bring 180,000 new jobs and 10,000 apprenticeships – something the whole country will benefit from. This can be done with strict compliance to the Paris Agreement on Climate Change and investing in sustainable technology that will improve aircraft efficiency and boost the development of commercial sustainable fuels. It’s crucial for the UK to get this long-awaited scheme built.
The Appeal Court ruled against a new runway in February, stating that it did not contain legal commitments on carbon targets set out in the Paris Agreement. All other objections to expansion were not upheld.
Unemployment in constituencies around Heathrow has soared since March, a new study by the House of Commons Library shows.
In Hayes and Harlington, the constituency that includes Heathrow, unemployment climbed from 2,725 in March to 7,750 in October – a 184% increase.
The study reveals that other aviation communities across the UK have also suffered – unemployment in Gatwick, Manchester, Luton and Stansted is a third higher compared with regional averages.
Business rates relief paid back to the government by Sainsbury’s, Tesco, Aldi and Morrisons should be used to save jobs in the communities around Heathrow airport. That is the verdict of Back Heathrow the community campaign that represents the views of over 100,000 residents and businesses that depend on the airport for their livelihoods.
Whilst booming supermarkets were given 100% waivers to their business rates bills, Heathrow airport has only been given a waiver of 7% of its £120m bill. Heathrow is the country’s largest single site payer of business rates, and its biggest employer.
Back Heathrow Executive Director, Parmjit Dhanda said: “The decision by big supermarkets to hand back over £1bn in business rates relief is welcome. However, Heathrow is on its knees and the west London communities that depend on it are facing a jobs crisis.
“The government could redirect the supermarket money to waive Heathrow’s business rates and save thousands of jobs. Airports in Scotland and Northern Ireland have received a 100% waiver, but not Heathrow. West London needs equal treatment.”
Heathrow airport pays £120m in business rates, yet because of the pandemic it has lost 82% of its flights. So far in 2020 Heathrow has lost £1.5bn in income and has been offered a waiver of just 7% of its business rates.
A recent report by Oxford Economics suggests that up to 62,000 local jobs could be at risk due to the downturn at Heathrow airport. Heathrow is the country’s biggest single site employer and is also the biggest employer in the Prime Minister’s own constituency.
The Oxford Economics report into reduced activity at Heathrow is here