Campaigners challenge the DfT on inflated figures for economic benefit, and number of jobs, created by the aviation sector

There are frequently statements by UK government ministers, by the DfT and by the aviation industry, about the level of economic benefit the sector creates for the UK economy – and the number of jobs it produces. Some figures mention direct jobs or benefits, and some more indirect.  The figure of “£22 billion benefit to the economy” is often heard, and numbers of jobs that vary from around 130,000 to half a million. Campaigners wrote to the DfT in November, and have written again now,  to ask for clarity on the figures, and consistency in what numbers are used. Figures of air transport, and work associated with it, are very different from those of the aerospace sector, making or maintaining aircraft and spacecraft.  The economic benefit of air transport itself is far nearer £10 billion per year, than £22 billion. The number of direct jobs is nearer 137,000 that many hundred thousand.  By repeating unsubstantiated numbers, the DfT creates an inaccurate picture of the value of air travel to the UK and its importance. The numbers often quoted by the DfT and the aviation sector also omit mention of the tourism deficit, and was (ONS figures) £33.9 billion in 2919. The DfT is also challenged for its continuous support for the sector, overlooking its negative impacts. 
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Email to DfT, 4 February 2021

Sent by Charles Lloyd and Martin Peachey, from the Aviation Communities Forum (ACF)

Subject: Meeting on DfT’s use of air transport industry data

We are writing to follow up our discussion and email exchange in November 2019 [see below] regarding, amongst other things, the economic and employment data the department uses to characterise the aviation industry.

At our meeting we argued that publications on airspace and the air transport industry should include data for those sectors but not for the aerospace or other manufacturing sectors.  It’s therefore disappointing to see figures that we think are misleading still routinely appearing in government publications.

For 2018 (the latest available data we are aware of) the ONS Annual Business Survey gives the following figures:

Gross Value Added (an ONS proxy for GDP):

SIC code 51 (air transport) £9.9bn

SIC code 52.23 (service activities incidental to air transportation) £7.1bn

Total £17bn

Average employment:

SIC code 51 (air transport) 80,000 

SIC code 52.23 (service activities incidental to air transportation) 57,000

Total 137,000

In our view the figures the government should provide when it is seeking to describe the historic economic contribution of the air transport industry are therefore £9.9bn contribution to GDP and 80,000 jobs.  This could conceivably be extended to £17bn and 137,000 jobs but only if the context justifies including incidental activities and if that is made clear.

Instead of those figures recent government announcements have said the following:

  • The Airport Support Scheme announcement on 29 January 2021 says “The aviation sector plays a crucial role in our economy, contributing £22 billion directly to the UK economy and supporting around half a million jobs“.
  • The night flight consultation says “The sector directly provided around 230,000 jobs with many more employed indirectly and the sector contributed at least £22 billion annually to UK GDP“.
  • The Government’s response to Transport Select Commitee says – “Prior to the emergence of the Covid-19 pandemic, air transport contributed at least £14 billion to national GDP, and more than 130,000 direct jobs across the UK …

 

More broadly, other Parliamentary and quasi-public bodies use equally or more misleading data.  For example:

  • the Transport Select Committee chairman said in the House of Commons aviation debate “the aviation sector is vital, not just from a business perspective but from a strategic angle. It is worth £28 billion to the UK economy. It employs 230,000 people directly
  • ACOG’s remobilising airspace change report said “The aviation sector contributes £50 billion to our economy each year and supports 960,000 jobs as well as thousands of businesses across the country.”  [ACOG is The Airspace Change Organising Group].

Although we appreciate this may not be a key issue for you in current circumstances, we think it’s important that government publications on the aviation industry provide accurate data and give a fair and balanced impression of the industry’s benefits and costs, and we hope that will be the case in future documents.

We’d be very happy to discuss this if you feel there are arguments or data we haven’t considered.

Regards

Charles and Martin

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Earlier email:

Email to DfT, 11 November 2019

Subject: Meeting on DfT’s use of air transport industry data

Thank you for seeing us last week.  Thanks also to your statistics colleague for sparing the time to consider the data we had provided and respond to it.

We appreciated the opportunity to understand better the ways in which DfT derives the air transport data it uses in government publications and to discuss the presentation of that data.

In general we have few issues with the underlying data itself.  But, as you’ll have gathered, we have serious concerns about the way DfT currently chooses to present air transport data in its publications and we are writing to put those on the record.  We very much hope our comments will be taken into account as you develop the White Paper and other future government publications on the industry.

Key economic data

In relation to GDP data you told us that the figures used in recent publications comprise the aggregate of

SIC codes 51 (air transport),

52.23 (service activities incidental to air transportation),

30.3 (manufacture of air and spacecraft and related machinery) and

33.16 (repair and maintenance of aircraft and spacecraft).

Equivalent categories are used to generate employment data.

Our firm view is that only the first two of these are relevant to the publications we discussed. Aviation 2050, for example, is plainly about air transport and not about aerospace or other manufacturing.  The same applies to an even greater extent to publications on airspace.

The inclusion of additional, non relevant, SIC code data gives a misleading impression of the scale of the air transport industry and encourages incorrect conclusions to be drawn on trends.  For example the employment trend for air transport has been downward since 2002 whereas government publications give the impression employment in the industry has been increasing.

We accept these misrepresentations may not have been intentional, but we think it is important that only data which is clearly relevant to the subject of a publication should be used in future.

Assertions deriving from economic data 

In relation to growth, government publications assert that air transport industry growth “benefits the UK“.  We do not believe the data supports that view.

As discussed above, relevant employment appears to have been declining notwithstanding growth in ATMs and passenger numbers.  In addition the industry facilitates a very substantial tourism deficit.  In that area the Green Paper sets out a one-sided view by repeatedly emphasising the benefits of inbound air tourism (which we acknowledge) whilst being almost silent on outbound air tourism, which is twice the size of inbound air tourism in both numerical terms and financial terms.

We do not believe it is right for a government publication to present a one-sided perspective in this way.

Similarly, for the reasons set out in SSE’s response to the Green Paper, we do not think that its assertion “Our regional airports and the connections, jobs and investment they provide spread these benefits across the country” is supported by an analysis of the underlying data.

 

Data not included in government air transport publications 

We touched briefly on data that is not generally included in government air transport documents but which is widely referenced in third party commentary on the industry and which, in our view, would help readers of government documents understand the nature of the industry and the markets it serves.  In particular we think future documents would benefit from presenting clearly:

  • the split between the industry’s business and leisure customers (where the key trend is a steady and long-term decline in the proportion of business travel); and
  • the proportion of UK flights taken by different proportions of the population.

Market segmentation data of this sort would help commentators and the public understand the extent to which the industry’s services are provided to the population as a whole or to sub-sets of the population.  Given the extent to which the industry is – in our view at least – subsidised, supported and occasionally bailed out by government and society at large we feel an appreciation of this data is important in any assessment of the industry and policies for it.

We hope it can therefore be included in future publications including next year’s White Paper.

We also think it would help readers understand the relationship between government and the industry if key documents contained analyses of support provided by the government to the industry.  That would in our view include direct subsidies (e.g. for Public Service Obligation routes ), bail out funding such as Thomas Cook recently and support for aerospace research and innovation which benefits the industry through lower long term costs.

Tone of government air transport documents

Finally we discussed the tone of government air transport documents.  You made the point that the overall tone of documents is set by ministers, and we understand that.   But the detailed drafting is done by officials, and your views on what should be included and the way it should be presented are influential, perhaps particularly when they reflect specific feedback such as this.

Many community groups feel DfT air transport documents reflect an excessive desire to advocate and champion the industry, rather than to present a balanced picture of its benefits and costs.

Many also feel that their portrayal of the impacts aviation has on communities is partial and patronising.  We provided examples of that.  We noted that DfT’s air transport documents strike a very different tone to those published by some other departments on industries whose impacts (positive and negative) are, arguably, comparable.  We pointed specifically to DCMS publications on the gambling industry.

At a time when the impacts air transport has on society at large, and the environment, are under scrutiny as never before we hope future DfT documents will strike a more sceptical and balanced tone, rather than seeking primarily to advocate on behalf of the industry.

Regards

Charles and Martin

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