There is a “strong case” for government taking public equity stakes in airlines, says Labour

Labour activists have declared victory following a “bailouts for workers and planet, not billionaires” campaign as the party has agreed that there is a “strong case” for taking public equity stakes in airlines.

Labour for a Green New Deal had highlighted that the proposals put forward by Shadow Transport Secretary Jim McMahon in May did not ask the government to take stakes in struggling airlines, whereas Ed Miliband backed the idea.

McMahon called for a “robust plan” to protect aviation sector jobs, with bailouts conditional on “a clear commitment to tackling climate change and for the industry to use cleaner fuels and other cutting-edge low or zero emission technologies”.

A statement from Keir Starmer’s office to LabGND similarly advocated attaching environmental commitments to support for the airline industry but did not mention the idea of struggling companies being part-nationalised.

Miliband as Shadow Business Secretary, however, did come out in favour of taking public equity stakes while on a call with activists, with the aim of supporting workers as part of a just “low-carbon transition”.

With shadow climate change minister Matthew Pennycook on the call, Miliband said the government should support the aviation and aerospace sectors and force companies to produce business plans in compliance with the Paris Agreement.

Pennycook specified that “conditionality in this moment isn’t going to be enough”, although it seemed that conditionality on aviation sector bailouts were all that Labour’s transport team was proposing at that point.

Miliband also gave renewed backing to the 2030 decarbonisation target, which was pushed by LabGND at party conference last year, and told the 150 activists in the meeting: “I’m not in this job to scale back on ambition.”

Following criticism of the apparent difference in policy commitments between the Labour frontbench teams, the i reported that senior party sources insisted there was no disagreement over Labour’s aviation stance.

LabourList understands that Labour and McMahon have backed stakes throughout this time and that the confusion arose because the policy detail was not included in a shorter press release that was sent out.

The original full six-test plan stated: “This makes a strong case for an equity stake in the company since this will mean a commitment to a clear climate plan, consistent with the Paris agreement, can be built into the company’s objective.”

A Labour spokesperson said: “The story is complete nonsense. The Labour Party is calling for a financial support package for the aviation sector with strict conditions on tackling the climate crisis, protecting jobs and ensuring that gains are shared with the public.

“There is a strong case for the government to take equity stakes in airlines to save jobs and make the transition to a green economy.”

In response to the fresh comment from a party spokesperson on Tuesday night, Labour for a Green New Deal co-founder Angus Satow said: “We welcome Labour’s call for public equity stakes in struggling airlines.

“As thousands of workers lose their jobs and the Arctic burns, we urgently need state intervention to ensure a just transition for workers and planet, winding down domestic air routes while providing a training and jobs guarantee for affected workers.

“It’s time now for Labour to make this case to the government, and to take up the fight for a Green New Deal and a million green jobs.”