Lord Whitty
To ask Her Majesty’s Government what assessment led to their decision not to participate in the European Union Aviation Safety Agency; and what plans they have to address any gap in regulatory oversight which results from that decision.
Lord Whitty (Lab)
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.
Lord Balfe (Con)
My Lords, I reflect the concerns of our side of the House and I hope that my noble friend Lady Vere is very soon back with us and in good health. I too declare my interest, as president of BALPA, the airline pilots’ association.
We are dealing with one of the many unfortunate consequences of the decision to leave the European Union. We are in limbo at the moment because we can no longer take part in any decision-making of the European Aviation Safety Agency, but its regulations continue to apply to us. If you look at its website, you see that we are no longer a member, and we are no longer represented on its board, but that it is accepting applications for a variety of certificates. However, the instructions state:
“Depending on the outcome of the current negotiations on future partnership between the EU and the UK, your certificate may be sent to you by email at the end of the transition period.”
It then goes on:
“This fee is non-refundable, regardless of the outcome of the Brexit negotiations”.
Even now we are costing people and the industry money which could be better spent elsewhere.
I wonder to what extent the whole objection is because the European Aviation Safety Agency, in its own words, is
“a body governed by European public law”?
In other words, it is subject—although, as the noble Lord, Lord Whitty, said, it very rarely if ever happens—to the ECJ and European law. Are we withdrawing because of the obsession with getting away from anything to do with Europe?
Where are we going to end up? The EFTA countries are already members with non-voting members on the board. Switzerland has a special relationship, while a large number of other countries, as can been seen on the website, have some form of liaison or other. When these powers come back to the CAA, will a mechanism be in force for us to consult anyone at all before we take decisions? Will there be any communality or platform where information can be exchanged, and what value will our recommendations have? We have the US system and we have the European one. What will be the outcome, for instance, of the recent investigations at Boeing? Will anyone listen to what the CAA has to say unless it is identical to what is being said by the European and United States agencies? Are we taking our skills away from Europe but not actually positioning them anywhere where they could be of use?
I want also to ask the Minister about the cost-benefit analysis of this. No doubt we will save some money by not being a member of the EASA, but we will also spend a considerable amount when we repatriate the powers back to the UK and set up an institution to do the same job. Has he any figures showing how much this will cost or what we will gain? I suggest that it will be a cost, but I could be wrong.
I alluded to the observers. Will we get any sort of structure that brings in an international dimension or will we just go along on our own? Moreover, we need to know if the CAA will apply different criteria from its certification specifications. Will they be the same or are we going to set out different ones? I ask that because at the moment it looks like, through our new agency, we will have to certify each new aircraft, each new aircraft engine and each new component part of an aircraft to certify its airworthiness and so on.
I am surprised because the whole of the industry is united in believing that our interests would be best served by remaining within this system. This is not a case where there is any demand to be outside it. As far as I can see, it is purely something that has come up as a by-product of the general approach. I would hope, therefore, that even at this late stage, the Government can look again at whether we actually need this divergence from a European standard which has worked well, to a standard that to put it mildly, is untested and will have to be developed over a good many years. I realise that the Minister may not be able to answer fully all these questions, particularly as he is standing in at the last minute, but I hope that when he replies he will agree to write to those noble Lords who are here today with the answers to my questions.
Lord Davies of Gower (Con)
My Lords, I thank the noble Lord, Lord Whitty, for tabling this Question because it is incredibly important. I declare an interest as co-chair of the All-Party Parliamentary Group on General Aviation, as a private pilot and as an aircraft owner/operator. Aviation is a globally connected industry at all levels. It is also a heavily regulated industry which is greatly affected by what individual Governments decide. It is clearly advantageous for the industry, which is already facing unprecedented challenges this year, if Governments can work together as much as possible to ensure equivalence in regulations and make things simple for businesses.
That is a general point. More specifically, the reality of our geography means that we must work very closely with both the EASA and the FAA to facilitate the prosperity of our airlines and air cargo operators in the future.
The UK is home to a number of world-leading airlines and many more big brands depend on us as a transatlantic hub. Maintaining this position in the global travel market must be a priority for the Government in their Brexit negotiations. I am sure that no noble Lord would be happy if they suddenly found themselves having to connect through Frankfurt on their next trip to the United States.
That said, I will focus my comments on how this change will impact the UK’s very important general aviation sector, which contributes more than £3 billion to our economy. General aviation is the lifeblood of the commercial aviation sector. Small clubs train the pilots and engineers of the future and local airfields provide the easy access entry point that inspires people into lifelong careers in the aviation industry. Yet general aviation is probably the aviation sector most reliant on EASA regulations, since its operations tend to be more localised to the European continent.
EASA has made it clear in recent weeks that it is determined not to make things easy for the UK by removing the exemptions we once held on several GA activities. One particularly damaging change is that UK national private pilot licence holders—people who have private pilot licences just for operating in the UK airspace and within visual rules—will be able to fly an aeroplane with an EASA certificate of airworthiness from 8 April, effectively meaning that many pilots will be prevented from flying until after the transition period. However, there have been more changes. Take the refusal to renew the exemption on distance from cloud minima within class D airspace, which is a safety issue, since our prevailing weather in the UK includes frequent low cloud bases. In fairness, the Department for Transport wanted to renew the measure, but its application was rejected by EASA for no reason other than rules tidying.
My point is that it is clear from these measures that this divorce is not one-sided and that the UK Government should not shoulder all the blame for this split. That said, the new situation of uncertainty about a life after EASA is unsettling for the small businesses of the GA industry. The Government must be on hand to provide clear and concrete answers about regulation changes so that businesses have time to plan. Furthermore, the Government must ensure that the transition occurs as quickly and painlessly as possible to a UK-based system. This means that pilot licences must be validated in a timely manner and that all current EASA-certified aircraft must receive an equivalent UK certification in good time.
I will say a bit about CAA resources. To facilitate the smooth transition, it is critical that the CAA is provided with increased resources, especially staff, to manage its newfound responsibilities. EASA currently has hundreds of British employees working across many different fields. The Government should look at ways to bring these people back so that we can use their expertise to make sure that the newly independent CAA gets off to a strong footing.
I will highlight the particular problems faced by flying schools in this process. Schools in the UK have students at various stages of training towards commercial licences, which can take years. These students will now be unsure whether this training will be valid or useful when they come to the end of it. The businesses themselves are concerned that student numbers will drop dramatically, since perspective candidates will get more value out of completing a licence registered in an EU country, compared with a purely UK-based licence. I therefore contend that the Government must act urgently in the wake of a split with EASA to prevent an exodus of flight training from the UK. By the way, any such measures should be accompanied by a reduction of the taxes on flight training to make the UK’s industry more competitive globally and to off-set any disruption potentially caused by a split with EASA.
The UK must recognise, as it takes back control of its aviation regulation, that global integration is advantageous for the industry. I therefore implore the Government to work with the European authorities now to agree a system of regulatory equivalence on certification, maintenance and licensing. Equivalence on certification would streamline the process for GA manufacturers, meaning that they would not have to go through bothersome processes to certify separately in the UK and Europe. This would encourage manufacturers of new, safer and greener aircraft designs not to bypass Britain in their investment plans. Equivalence on maintenance would make aircraft and the engineers who service them more interchangeable between the UK and our neighbours, benefiting the market on both sides of the channel.
Lastly, we need equivalence in licensing, allowing pilots, both commercial and private, to maintain European privileges through a paperwork exercise rather than retraining. This is similar to the arrangement EASA enjoys currently with the FAA.
Baroness Randerson (LD)
My Lords, I thank the noble Lord, Lord Whitty, for putting down this important Question and welcome the Minister to his new role. I hope he will take it in the right way when I say that I hope it is only temporary and that the noble Baroness, Lady Vere, will be back soon.
In the Government’s framework document for the UK-EU partnership, published in June 2018, the section on transport has this to say:
“We seek a comprehensive agreement on air transport, providing continuity of services and opportunities, supporting growth and innovation in the future.”
On EASA specifically, it says that participation would mean:
“Regulatory burdens for businesses would be minimised across Europe, supporting continuous improved safety outcomes for all. We would continue to provide our technical expertise.”
It goes on to say:
“The Commission has said that the UK will not have an automatic membership, but there is an established legal mechanism for third country EASA participation.”
So far, so logical, and strongly supported by the industry and, at the time, by the CAA. Wind forward to 6 March this year and reports suddenly appear in trade journals in the US that the Secretary of State has announced to them—not to Parliament or to the industry in the UK, but in the US—that the UK will be leaving EASA. On 9 March, I was at an aviation-related event attended by hundreds of senior industry representatives. Their anger was palpable: “A huge own goal” and “You do not negotiate with people’s safety” are two of the comments that stick in my mind.
Ironically, the Secretary of State was the keynote speaker. He came to the stage to thin applause. He chose not to refer to the elephant in the room, omitting to mention the whole topic of EASA. He left the stage to even thinner applause. On 12 March, the Secretary of State finally addressed the issue in the Commons in answer to a Question. He stated that EASA membership was incompatible with the Government’s red lines on the ECJ.
The aviation industry wants a number of questions answered. Why can the UK not follow the Swiss precedent and seek associate membership, which would allow the UK to continue to influence regulations? Instead of ECJ competence, there would be a joint EU-UK committee to resolve disputes. Do the Government appreciate that EASA membership is the most cost-effective and practical way to improve aviation safety? Safety is at the forefront of the travelling public’s mind. Have the Government made any assessment of the ability of the CAA—within the timescale of before the end of this year, which is very tight—to hire and train staff to issue licences and approvals once the UK becomes a third country? It is estimated that this process will take five to 10 years to fully implement, at a cost of up to £40 million a year, compared with an annual cost of £1 million to £4 million for EASA membership. By the way, EASA has a lot of British employees working abroad, and the word so far is that they are not falling over themselves to come back home.
Where does the demand to leave EASA come from? The only section of the industry which seems to think it a good idea consists of those involved with small-scale private aviation, who venture little outside the UK. The vast majority of those involved in aviation recognise that this is not a “little island” activity. It requires an international perspective, almost by definition.
Have the Government considered the impact on those involved in pilot training, especially commercial flight training? In order to be able to continue to train pilots for European airlines, such as easyJet and Ryanair, they will need to re-register the whole of their operation and individual instructor licences with an EU country.
What discussions have the Government had with industry representatives about this decision? I mean not just representatives from ADS—a big organisation which represents over 1,000 firms—but with the big individual manufacturers and airlines, and specifically with the thousands of SMEs in the supply chain? This will hit areas outside London hardest of all, since 90% of aerospace jobs are located outside the prosperous south-east of England.
The Secretary of State made his announcement on 6 March; his timing was spectacularly bad. At that event on 9 March, people were referring to hitting an industry when it was already down, as Flybe had already failed and the impact of coronavirus was already being felt throughout the sector. But I do not think anyone there realised how rapidly and drastically things would escalate. They need help, not additional hurdles. Of course people will fly again and companies will rebuild, but some of them, particularly SMEs, will fail entirely.
Even in good times, the decision to leave EASA was a typical example of ideology outbidding common sense. I hope that the events of the last two weeks have led the Government to reconsider and that, when he replies to this debate, the Minister can reassure us that this latest example of Brexiteer bravado is being rapidly reconsidered.
Lord Tunnicliffe (Lab)
My Lords, I thank my noble friend Lord Whitty for creating this debate. I too am sad to see that the noble Baroness, Lady Vere, is not in her place and I hope that the Minister will pass on the good wishes of the whole House. I am incredibly sympathetic to the Minister. He does not have to answer anything, frankly, because he is going to have to write a letter anyway. I am going to speak for nine minutes because that is what the rules say—thank you very much, Patrick. I spent 22 years in the civil aviation industry, and for nine of them I flew jet transports. I was a shop steward in the famous union BALPA, which has already been referred to. I am also a remainer, but I have to make the point that this has nothing to do with that fact; it is about sheer common sense and how to run this industry.
I would like briefly to put the debate into perspective. Deciding whether to build a washing machine to the same standard as Europe’s, so that you can sell it in Europe, is a business decision. The whole of the European market works after having created that market. Aviation is different. I think it was in 1947 that aviation created ICAO, the International Civil Aviation Organization, and it did so because it realised that civil aviation was about flying bombs over other people’s territory. It is entirely different from typical rules of trade. It is about letting 747s that are built in the US, flown by all the pilots in the world and maintained to standards all over the world, fly over London while we, as a nation—a sovereign part of ICAO—have confidence that they are not going to fall out of the sky on to this building.
That is why it is so important that this structure is adhered to. In the initial ICAO days, we were a big aviation power and had a lot of might. We had things called the British civil airworthiness regulations. In the late 1960s and early 1970s, they eventually morphed into the CAA, which morphed into EASA and the FAA. EASA and the FAA between them have done a great job for many decades. Their reputations are deeply stained—almost disgustingly stained—by the 737 MAX tragedies; they failed there. But they are so dominant that every major manufacturer of jet transports will build its aeroplanes to be certificated by EASA and the FAA. Realistically, there are only two major manufacturers: Airbus and Boeing.
In many ways, the level of certification, testing and so on is beyond the minds of most people. Aeroplanes fly through the air nice and gently most of the time, but they are manufactured to standards that allow them to go through very rough air, to be handled in various manoeuvres and to crash. Quite a big chunk of the regulations is about what happens to aeroplanes when they crash; internal fittings must not fly away and be an additional hazard and so on. There is absolutely detailed certification and testing.
Does this absurd declaration by the Secretary of State mean that the CAA will genuinely certificate aircraft and their components? He has to remember that it is down to the last bolt, fastener and tyre; it is that detailed. If you look back to the days when we were in competition with the FAA and take something like the 747, the CAA of the day demanded that British test pilots fly that aeroplane to the very edge of the envelope to try to stall it, because the requirements of the British standards were such that it should be unambiguously obvious to the pilot that this aeroplane was going too slowly. They did that. Can you imagine today the idea of generating the skills necessary to do this testing and to certificate the testing that manufacturers do? Can you imagine someone sitting and watching the tests to create the certification? It will not happen. One way or another, we will have to accept the testing and standards of EASA and the FAA; they are dominant.
If, as happened in the late 1960s, the British come up with an added little bit—in those days, when we were neurotic about stalling, things called stick pushers were invented—the manufacturers would be deeply reluctant to do it, because they would have to take that modification back to the original certificating authority to prove to it that it does not actually reduce the safety. This is exactly what happened with the 737 MAX. The aeroplane had an aerodynamic characteristic that the FAA found unacceptable. A fix had to then be bolted on, which has not worked and has killed people.
It is inconceivable—unless the Minister wants to assure me otherwise; I suggest he writes a letter and does not do it now—that the CAA will develop the skills and resources to genuinely certificate aeroplanes, engines and their parts. The skills, training and involvement necessary to do so would be at enormous cost. It is impossible to believe that this decision is anything other than pure doctrine.
Going back to refrigerators, this does not matter there. If we demand refrigerators made a bit differently from European ones, it would be a daft thing to do but, nevertheless, it would not matter. Here, it matters. At the end of the day, the maintenance of aeroplanes and their crews must be done to an internationally accepted standard.
Two days ago, we heard a financial Statement. I am delighted that the highly doctrinal Government threw doctrine out of the window and are spending money like a one-armed paper hanger to solve the crisis we face. I wish that the Department for Transport would take some of that positive pragmatism and recognise in one form or another a close relationship with EASA that would allow us to certificate all the things that matter in creating a civil aviation operation and that was acceptable to ICAO’s standards. I wish the department would create a situation in aviation similar to what we have enjoyed in Europe, where we were one of the most influential countries in developing new standards and ensuring that those standards were achieved. I hope that the Minister will convey to the Secretary of State that this should be reviewed completely and judged not from a doctrinal approach but a pragmatic one, which would be cost efficient and overwhelming efficient and effective on safety.
Lord Parkinson of Whitley Bay (Con)
My Lords, I thank the noble Lord, Lord Whitty, for instigating this debate and I thank the small but select group of noble Lords who took part in it. I thank all noble Lords who kindly expressed their good wishes to my noble friend Lady Vere of Norbiton. She is indeed indomitable, as they will know, and I am sure that she will be back in her place soon. As her co-pilot on this occasion, I will do my best to answer the points that have been made but I will be happy to consult Hansard afterwards and write on any further points, particularly points of detail that I am unable to cover today.
The Government have been clear that our future relationship with the European Union must reflect the fact that we will regain our legal and economic independence on 1 January 2021. Being a member of the European Aviation Safety Agency is not compatible with that, as it would require that we continue to apply EU aviation safety laws with the associated jurisdiction of the Court of Justice of the European Union, which we cannot accept.
The noble Lord, Lord Whitty, and the noble Baroness, Lady Randerson, mentioned various other options, including the Swiss option. These would require the UK to continue to apply EU law, which crosses our red lines. The noble Lord also alluded to the fact that previous deals were available; I would gently point out that neither his party nor that of the noble Baroness chose to avail themselves of them. We want a future aviation relationship with the EU based on friendly co-operation between sovereign equals. The EU’s negotiating mandate does not allow for the UK’s participation in EASA, but it does set out its ambition to agree co-operative aviation safety arrangements with the UK.
We are seeking two separate aviation agreements based on precedent. We want to agree a bilateral aviation safety agreement with the EU. This will facilitate the recognition of aviation safety standards, maintain high safety outcomes and enable continued regulatory co-operation between the UK and the EU. We are also seeking to agree with the European Union a comprehensive air transport agreement that includes provisions on market access for air services, close co-operation on aviation security and collaboration on air traffic management.
The negotiation of these two agreements will enable UK and EU passengers to benefit from high levels of connectivity, choice and value for money, and will help to provide operational and commercial flexibility to UK and EU industry. The noble Lord, Lord Whitty, was right to point out the interconnected nature of many companies in this sector. The comprehensive air transport agreement will also facilitate the maintenance of high aviation security standards, both in Europe and internationally, and will protect the continued interoperability of UK and EU airspace.
The UK’s Civil Aviation Authority currently oversees most aspects of civil aviation safety in the UK. After the transition period, the CAA will take on some additional functions from EASA and will continue to ensure that the UK has world-leading safety standards. The CAA has been preparing for the possibility of leaving the EASA system since the EU referendum in 2016, including recruiting and training new staff across the organisation.
It is important to note that, unlike on participation in EASA, both the UK and EU are willing to negotiate regulatory co-operation on aviation safety. This increases the likelihood of concluding aviation safety negotiations before the end of this year and providing some certainty to industry. Given that the EU and UK will have the same regulatory regime at the end of the transition period, it should be possible to agree a bilateral safety agreement that minimises regulatory burdens and removes the need for duplication of technical assessments in certification processes.
My noble friend Lord Balfe asked about divergence. It will be possible, but the UK is not seeking to diverge from common safety rules unnecessarily and will only do so where it makes sense for UK industry. Outside of the EASA system, the UK will have the autonomy to regulate in a proportionate manner that effectively meets the needs of industry. We are committed to agreeing these future arrangements for aviation by the end of this calendar year.
As noble Lords know, EASA, as an agency of the European Union, is responsible for drawing up safety rules and directly overseeing safety of some aspects of the aviation system. Its remit includes the design of aircraft and parts, manufacturing, aircraft operations, licensing of aviation personnel and oversight of training organisations. The aviation authorities of individual member states remain responsible for applying many of these rules. For example, they license pilots, issue certificates of airworthiness for individual aircraft and approve most organisations based in their territory. EASA itself undertakes three main areas of work: first, advising the EU on the updating of safety regulations that apply to all member states; secondly, ensuring that the rules are correctly and consistently applied across the EU and participating states; and, thirdly, issuing some certificates and licences in specific areas—for instance, certificates for the approval of design of aircraft parts or for the approval of design organisations.
Meanwhile, the Civil Aviation Authority undertakes most aspects of civil aviation safety oversight here in the UK. Any certificates or approvals that it currently issues in accordance with EU legislation are legally valid throughout the EASA system. For example, the CAA currently issues licences to pilots and engineers, certifies the airworthiness of individual aircraft and approves production, maintenance and flight training organisations based in the UK. After the transition period, much of the CAA’s work will continue as today, but it will also take on some additional functions from EASA. These include the approval of organisations designing products such as engines and propellers, the type certification of products—that is, approving the design of types of aircraft and component parts by issuing a type certificate—and responsibility for approving organisations based in third countries, including EU states, that supply services to the UK industry.
Under the EASA system most certificates, licences and approvals are issued by an individual member state’s aviation authorities. This means that the CAA already has the capability to provide a high-quality safety oversight regime. Further, the CAA is currently working on plans to develop its capability to meet its additional obligations and will continue to refine these plans over the coming months. It is also implementing plans to take over the responsibilities of EASA. This includes ensuring that it has the correct resources and level of staffing in place. In line with the user charges principle, the majority of the CAA’s costs are, and will continue to be, funded largely through charges on industry. However, the negotiation of a bilateral aviation safety agreement aims to minimise costs and burdens for industry.
The primary area where EASA performs certification functions for member states is with regard to aircraft design. The CAA is actively rebuilding its capabilities to undertake this work with additional resources and training.
As part of the no-deal contingency preparations, the CAA had previously engaged extensively with the UK industry to inform it of activities that would be necessary to prepare for a future where the UK was outside the EASA system. That work continues today, with regular updates to information on the CAA’s own dedicated EU exit site. For example, the CAA has already supported many businesses and individuals in securing the permissions that they would need to operate in Europe outside EASA systems—for instance, by supporting thousands of UK pilot licence holders and hundreds of UK maintenance engineer licence holders in transferring their licences to other national aviation authorities.
Provisions in the EU withdrawal Act mean that approvals, certificates and licences issued before 1 January 2021 will remain valid in UK law for a period of two years after the transition period ends. This includes those issued by EASA and other member states. Therefore the CAA will not be required to fulfil a responsibility to approve and oversee a large number of European-based organisations until January 2023. This has reduced the amount of additional capacity that the CAA has had to develop in the short term. If a bilateral safety agreement is agreed before that point, as expected, it may not need to develop that additional capacity.
My noble friend Lord Balfe asked about costs and benefits, and how it might be helpful to talk about how a bilateral safety agreement can help the industry. In short, a bilateral safety agreement provides for technical co-operation between national civil aviation authorities. It can help to reduce the duplication of activity and aim for the mutual acceptance of certificates and approvals. Importantly, a bilateral agreement will allow the airworthiness certification of civil aeronautical products to be shared between two countries.
In the case of the UK and the EU, a bilateral safety agreement aims to reduce the duplication of certification activity and regulatory checks undertaken by the CAA and EASA by recognising where the UK and EU aviation safety regimes deliver equivalent outcomes. This means, for example, that someone designing or building a propeller in the UK will go through fewer regulatory processes to get the product certified in the EU, as there will be mutual recognition of regulatory regimes. This means that a bilateral agreement will reduce the time and expense for an aerospace company when it comes to complying with different regulators. That will be important in minimising the regulatory burdens and costs for industry. As both the CAA and EASA will have the same regulatory regime at the end of the transition period, there will be no initial divergence in the regimes, which in practice will mean that technical recertification or reassessment will not be needed.
Importantly, there is a precedent for negotiating bilateral safety agreements in both in the UK and the EU. For example, the UK has negotiated such an agreement with the United States and Canada and with Brazil, so I make the point to my noble friend Lord Davies of Gower that this is not an untested route.
My noble friend also asked about staffing numbers. Most EASA staff are employed directly by EASA and based in Cologne, so it is a decision for UK nationals employed there whether they will remain within that agency. The Civil Aviation Authority previously had a small number of secondees working in EASA, but they have now returned to the UK.
The Government are committed to working with stakeholders to understand their views and concerns on the potential bilateral agreement. It is right that we continue to engage closely with the industry to ensure that future arrangements can deliver the best outcomes for the industry. We hope that the industry will continue to work constructively with the Government to ensure that we achieve the best possible outcome for the future.
I am close to my time. I hope that has answered all the questions that I am able to answer today. As I said at the beginning, I will be very happy to consult the Hansard of this debate and write to noble Lords on any points that remain.