Civil Aviation Bill

Lord Berkeley Excerpts

Wednesday 27th June 2012 Grand Committee

[Lord Soley]

The noble Lord might be surprised that I am not entirely unsympathetic to what he is trying to achieve but I do not think that he is trying to achieve it in the best way. I will not focus on his comments about Gatwick managing to be a hub or otherwise, although I think that if you told the people around Gatwick that we were to move Heathrow’s operation there, they might be a little less enthusiastic than the airport owners.

I think the noble Lord is right that there is a problem about surface access to airports generally. However, it is not my view that the CAA is the best organisation to do this—the Minister will tell us what he thinks. This flags up the problem which a number of us have referred to over many years: we lack an effective regional government structure in Britain that could provide the surface transport necessary around airports, as well as some of the other regional infrastructure that we need. The noble Lord is right that we end up doing things in a hit-and-miss way, with a bit here and a bit there, and then join it up afterwards. Heathrow Express came in but was that really the best idea when we had Crossrail coming? There are a lot of oddities in there. In my judgment, and I will be interested to hear what the Minister says on this, if we asked the CAA to suddenly become the organisation that has to comment on and recommend surface infrastructure we, will need a much larger organisation than the current CAA.

[Lord Berkeley]

We have heard two interesting speeches. I have a lot of sympathy with the amendment but what concerns me is starting off on the basis that this would add to the regulatory duties in Clause 1. Regulatory duties are terribly important issues for a regulator to take into account. I have had certain experiences with the Office of Rail Regulation over the years. Reminding it of its duties can be a good way of making sure that it remembers and acts on them.

Of course, Clause 1(2) says that the CAA must carry out its functions,

“in a manner which it considers will promote competition in the provision of airport operation services”.

I am not clear on what we are talking about when it comes to competition. This is something that will recur in later amendments. Is it competition between those airports included in the scheme in the south-east, or all airports, or competition for the provision of services within an airport? If it is the latter, this seems a big sledgehammer to crack a nut. When the Minister replies, maybe he can put me right on that.

There is also the issue that my noble friend Lord Soley raised on surface access and whether the CAA is the best organisation to do this. He might be right or wrong but there is a similar concern with ports and airports: who pays for the infrastructure and who decides? I thought that the general policy of successive Governments was that the private-sector operator of an airport or port invested within the boundary of the facility and then expected the state, local or regional authorities, or someone, to contribute to the cost of access, except when there was a Section 106-type agreement. We certainly got into a knot in the ports sector. Sometimes there was state aid available for some things and sometimes there was not.

We got into a right old knot with Heathrow over the years. BAA contributed to the cost of building the Heathrow Express line and operating the trains. It did not seem to want the Heathrow Express trains to go down the Crossrail tunnel, which most people would have thought would have made a very good piece of public transport planning, so it will not go down it. I was told by some people from BAA yesterday that the reason for that—they confirmed this—was that the most important customers who use the Heathrow Express, particularly in first class, do not like going into tunnels because their BlackBerry does not work. They would rather go from Paddington to Canary Wharf in a taxi, where they can still play with their BlackBerry. Frankly, that is a farcical argument. It was suggested that if there was a first-class carriage in Crossrail and it went straight to Heathrow, people might use it. This attitude will adversely affect the future public transport and surface access into Heathrow. I hope it will change its attitude; it has certainly said that it will look at the situation.

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[Lord Jenkin of Roding]

I think the local authorities would have some difficulty planning together an orbital railway joining up the HS2 to HS1, with a branch to a potential Thames Estuary airport. It is a very imaginative scheme.

Having lived with the concept of a Thames Estuary airport for about 20 years, the first proposal put forward for it envisaged an orbital rail link around the north of London. In which case, therefore, you do not have a situation where people have to come right into London and cross from one station to another in order to get out to their airport. There is a substantial issue here; however, as I said a moment ago, I cannot see that this could be a function of the Civil Aviation Authority. It has issues that go much wider than what falls within their level of responsibility. One would suspect also the competence of the advice that they have—it must be from my honourable friends in the Department for Transport.

Perhaps I could ask one question. I have asked my noble friend if he would meet some of the people who are proposing to put forward the case for the extension of the HS1—HS2 to go around the north of London—and he has undertaken to consider whether that would be appropriate. I hope I do not misrepresent him. I wonder whether he is yet able to give me an answer: can he meet those who have done a great deal of work on this subject and would be able to offer very valuable advice that may well not be available within the Department for Transport itself?

It cannot be right for Ministers to keep at arm’s length, as it were, outside expert evidence that could greatly improve the quality of their decision-making. It arises only peripherally from this amendment, but we are talking about surface access, and therefore it is highly relevant.

While I am in some sympathy with my noble friend’s amendment, I am not able to support it for the reasons that I and others have mentioned, that it cannot possibly be the responsibility of the CAA to have to make provision for surface access in the way that the amendment suggests.

[Lord Berkeley]

Before the noble Lord sits down, perhaps I may press him a little further on what he said with respect to the proposed airport in the Thames Estuary—that it could apply anywhere. As the Government want, and as is suggested in this Bill, the airports are effectively in competition with each other. If they then want to expand, they will have to apply for planning permission in some way or another, then demonstrate what transport plans they have, and who will pay for them. That will then go back to the Government, who will decide which development happens where according to whether they are prepared to pay for the transport links. Is that the way the noble Lord thinks it should happen?

[Lord Jenkin of Roding]

Certainly, the question of paying for it would have to be considered in some detail. The great advantage of the Foster + Partners proposal as put forward is that they recognise that this would be financed not by the taxpayer but by investment which they would attract perhaps from around the world. There should be a great deal of investment interest in a project of this kind. The noble Lord, Lord Berkeley, is absolutely right, of course, that when this goes to the IPC or its successor, this is precisely the sort of thing that would need to be demonstrated, along with all the other things that the planning system requires. If, however, the Department for Transport is unable to meet the proponents of such a scheme, it will start with not one but two hands behind its back. That is why I have pressed my noble friend to say that in the context of the HS2 consultation he will meet the people concerned, and I very much hope that his officials will feel that it is appropriate for him to do so.

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[Earl Attlee]

My noble friend makes very good points, and they are the ones put to the Permanent Secretary at the department. However, I have to accept the advice that I am given.

[Lord Berkeley]

How can the department consult with outside bodies if it does not meet any outside bodies?

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I do not intend to detain the Committee further in developing my argument: I have made my case. I repeat my offer to the Minister and I look forward to his response. I beg to move.

[Lord Berkeley]

My Lords, I do not know what the scope of general and business aviation covers but what about the increasing number of hot air balloons that go around the country? Some are quite high; some are propelled, some are not; some make noise—I do not think it is as serious a problem as surface noise, to which the noble Lord, Lord Bradshaw, referred earlier—but they should not go anywhere near airports. What regulation is there for them if they get near airports and in the air generally? It is probably a problem for air traffic control.

[Lord Hunt of Chesterton]

My Lords, I support the amendment as part of my philosophy of more than 20 years of noting that public servants in Britain who work in agencies—I used to run the Met Office in civil aviation—do not have as part of their job description a requirement to help British commerce and industry. The leader of the Conservatives today said that growth in this country will only come about from businessmen and entrepreneurs. He is wrong. It will also come about from civil servants working with industry to create environments in which these things happen.

It is quite extraordinary that in no case is the job description of any civil servant such that he is judged at the end of the year on how he has done in his service and also promoted industry. This is a good example. The role of the CAA is enormously important for industry. Surely part of the role of the Secretary of State will be to define the terms of reference of the director of the CAA in that direction. The amendment takes us in that direction.

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[Lord Jenkin of Roding]

I will be very interested to hear my noble friend’s response as to why the obligation contained in earlier legislation has not been repeated in the present Bill. I do not want to repeat what others have said. I, too, feel that Amendment 69 is likely to be the more acceptable of those in the group. One consequence if such an obligation were imposed is that it would go a long way to answer the question that I put to my noble friend at Second Reading on what Clause 84 is about. Clause 84 obliges the CAA to give all sorts of information. When I asked my noble friend at Second Reading what that meant, he said the Bill was,

“designed to require the CAA to publish such … information as it considers appropriate to draw passengers and freight owners into the Government’s wider efforts to address the environmental impact of aviation”.—[Official Report, 13/6/12; col. 1378.]

If the CAA does not have any sort of duty, I find that a very difficult paragraph to understand. Of course, as my noble friend Lord Cathcart said with eloquence, and as has been moved by the Opposition Front Bench, if the CAA had that duty then that would fall into place. It would be quite right, if it had that duty, that it should publish that information. The information by itself, without a duty, seems a pretty off way of drafting the legislation.

My noble friend the Minister was extremely good at answering several of the points that I raised at Second Reading but he did not quite have time to answer them all and he did not answer my question about what that paragraph in the Explanatory Note meant. I merely mention this as a consequence of the amendments to restore a duty to have regard to the environmental consequences of aviation and of the airlines.

[Lord Berkeley]

My Lords, as my noble friend Lady Worthington said in her opening remarks, it is useful to reflect on some of the industries which are regulated in this respect and to reflect that these industries have, for their own rights and reasons and in order to comply with the regulator’s duty, made big improvements in the areas of emissions, noise, water, energy and construction. The rail industry has been required to reduce its diesel emissions, as has the road sector. I am not sure that it will be quite as easy to persuade some ship owners to change their fuel but the European Commission is intent on doing so. I am sure that it will happen one day and that it will be either voluntary or forced upon them. As my noble friend Lord Clinton-Davis said, the air industry has made significant improvements.

It would be odd if the Bill did not contain a requirement or duty on the CAA to take into account environmental matters. That does not mean that the air industry is particularly bad at doing so but there is evidence from other industries that, because of these regulatory duties, they probably try a little harder and in a way that they would not do otherwise.

I am inclined to support Amendment 69 but it is very important that we include something here so that there is commonality with some of the other regulators’ duties to consider environmental issues, and to encourage airports and the airline industry to go that little bit further.

Many noble Lords will recall the debates when the third runway was last on the agenda about the emissions from Heathrow and whether they were over the limit. Were they caused by emissions from the M4 running past on the north side or from the M25? There were many debates—I do not want to go into who was right and who was wrong—and one solution was to put the M4 in a tunnel. I cannot see the point of that because emissions will still take place in a tunnel and will have to come out somewhere. They might come out further away but, to me, that would be cheating. Again, this concerns the idea of the noble Lord, Lord Bradshaw, of including surface access, which I am sure will come up again.

However, matters have improved since then in the quality of emissions from the air and road industries. It is essential that something along the lines of the amendments is included in the Bill.

[Earl Attlee]

My Lords, the issue of aviation and the environment was raised by several noble Lords during Second Reading. I am pleased to return to the matter again and to give further consideration to this important subject. I have not tabled a government amendment because I am reluctant to pre-empt the Committee’s consideration of this topic. However, I hope that when we have finished the Bill the noble Baroness, Lady Worthington, will not be disappointed.

The noble Baroness almost fell into the trap of being political. She will know that we take environmental issues very seriously indeed and that that is why the coalition Government will not agree to a third runway at Heathrow. It is clearly for environmental reasons, particularly noise. This was referred to by the noble Baroness, Lady McIntosh. Perhaps the noble Baroness, Lady Worthington, will state what her party’s policy is with regard to the third runway at Heathrow. Does she or does she not support it? I can assure your Lordships that I have listened to the points raised today and that I shall carefully read Hansard.

The point was raised about the drafting of the amendment. Yes, Amendment 13A was substituted for Amendment 12 on the Marshalled List.

Many noble Lords asked why other economic regulators have an environmental duty but not the CAA. Other economic regulators apply economic regulation across most or all of their respective industries, but the CAA regulates only the three London airports, as observed by my noble friend Lord Cathcart. Why should Manchester not be subject to environmental regulation while Gatwick is? If the CAA had an environmental duty, no noble Lord has explained to me, by way of example, what it would do with it that is not already done by some other means.

My noble friend Lord Jenkin asked about the publication requirements in Clause 84. We are not quite there yet but I will write to my noble friend and, if necessary, he can table an amendment to Clause 84.

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[Earl Attlee]

My Lords, I assure the Committee that I have a very well thought-out speech. I believe that the upcoming aviation policy framework, due to be adopted by March 2013, represents a more proportionate and effective way for the Government to address the environmental impacts across the aviation sector as a whole. As I have said, this Government take seriously the environmental impacts of all airports. With regard to the other amendments, several of these have been extensively debated in the other place, and the Government’s position on these remains unchanged.

First, I turn to Amendment 4. As your Lordships will be aware, the previous Government decided to include a similar duty to that contained in Amendment 10. However, in practice the supplementary duty would have no substance, so the Secretary of State decided in July 2010 to omit it. This is because the duty as drafted would appear to require the CAA, in discharging its primary duty, to take account of the licence holder’s obligation to comply with planning obligations. It is not for the CAA, as an economic regulator, to enforce planning law through licence conditions. In so far as a licence condition purported to require the licence holder to breach planning law or otherwise act in breach of planning law, it would appear to be unlawful. Regardless of whether the CAA had this explicit duty or not, the CAA will need to have proper regard to the airport’s obligation to comply with all applicable legal obligations, including planning law.

Amendment 6, in the name of the noble Baroness, Lady Worthington, covers climate change. While important, this is also unnecessary because other policies seek to achieve it. Separately, the Government have committed to producing a sustainable framework for UK aviation that supports economic growth and addresses aviation’s environmental impacts. In addition, there are other policies, such as the European Union Emissions Trading System, which was mentioned by the noble Baroness when she touched on efficiency issues. Furthermore, this amendment would appear to go beyond airport economic regulation and it is unclear how the CAA would go about fulfilling this duty—a point I made earlier.

However, the Government have some sympathy with the thinking behind the remaining amendments—that is, Amendments 5, 7 and 13A. In particular, this debate allows us to acknowledge the importance of allowing appropriate investment at airports to mitigate their environmental impacts and those of activities associated with them. Without a doubt, this Government support the idea that airport operators—whether or not they are subject to economic regulation—should be able to invest in appropriate environmental measures. This concern was frequently raised in the House of Commons. However, obligations should not be put on some airports but not others depending on their economic regulatory status.

Our position is that a licensed airport operator should not be unable to recover, through the regulatory settlements, costs arising from undertaking environmental investment where an unregulated competitive airport would choose to incur similar costs for similar purposes and be able to recover those costs. After all, the overall aim of economic regulation is often cited as delivering the outcomes that would otherwise occur in a competitive market. Therefore, it is my belief that environmental investment that is in the passengers’ interests in the provision of airport operation services should be included in an airport’s regulatory settlement. This is a point on which more clarity could be provided in the Bill.

However, I am hesitant to accept these amendments today because I believe that it would be desirable to specify some or all of the environmental effects to which the CAA must have regard. Furthermore, we need to ensure that the drafting does not have the capacity to create distorting effects by putting greater obligations on regulated airports relative to non-regulated airports. With the assurance that I will consider these matters in detail ahead of Report, I hope noble Lords will be willing to withdraw Amendment 4, and not press Amendments 6 and 69. However, I am willing to consider Amendments 5, 7 and 13A—

[Lord Berkeley]

The Minister gave a very interesting speech and I congratulate him. He mentioned some or all environmental issues, but is that not moving into a rather dangerous area of lists and what goes into a list? Are you going to include bats but not tadpoles, or noise and things like that? I hope that he will take into account that it is very dangerous to produce lists of these things because you might leave things out or add things in that you subsequently do not want.

[Earl Attlee]

The noble Lord makes a very good point, and I am sure that my officials will not let me go too far. However, I am willing to consider Amendments 5, 7 and 13A in greater detail, with a view to returning to the matter on Report. I would find further meetings with noble Lords extremely valuable.

While I appreciate the spirit in which noble Lords have proposed these amendments today, as I have said, there are a few reasons why I am hesitant to accept them now. Interested parties have made it clear that the CAA should not be the environmental regulator. If such duties were to be imposed, I also believe it would be desirable to specify some or all of the environmental effects to which the CAA must have regard. With the assurance that I will consider this matter in detail ahead of Report, I hope that the noble Baroness and other noble Lords will be able to withdraw and not to press their amendments.

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[Lord Berkeley]

My Lords, this is an important pair of amendments because surely the regulator is independent and should therefore be able to make its own decisions about whether it carries out an investigation and, if so, what action it takes following the transparent, accountable, proportionate and consistent rules. If both paragraphs (b) mentioned in these amendments are included, I can see some companies being regulated starting legal challenges to suggest that they do not need to be regulated and that it is going to be very expensive for them and asking why should they answer this question. I understand that the Government have a deregulation agenda and are trying to get rid of unnecessary regulations, quangos and everything else, but this indicates that the company being regulated will be able to put pressure on the regulator in an unsatisfactory way. It is quite clear from paragraph (a) that,

“transparent, accountable, proportionate and consistent”,

set out how it would do it. Paragraph (b) is rather dangerous. It will be difficult for the CAA not to get involved in it, and I am not sure why it needs to be there. Perhaps the Minister can explain.

[Lord Clinton-Davis]

On the face of it, paragraph (b) is otiose. I have dealt with several cases in the sub-committee investigating legislation, of which I am a member. It is incumbent upon the Minister to say why this provision is included.

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Earl Attlee: My Lords, further to the question of the noble Lord, Lord Clinton-Davis, the noble Lord, Lord Rosser, asked me a most ingenious question—which my officials and I will carefully study in Hansard—and if he has exposed a problem I will deal with it. However, I suspect that the advice from my officials is correct. For these reasons, I hope the noble Lord will withdraw the amendment.

[Lord Berkeley]

Perhaps I may press the Minister a little more on the text in paragraph (b). On what basis does the CAA or the Secretary of State decide that action is needed? Surely they have to investigate before they can come to a conclusion. It seems a circular process.

[Earl Attlee]

Yes. However, we are talking about the principle of regulation that you do not do things that are unnecessary: you target your effort at a problem. If there is not a problem, you leave it alone.

The noble Lord, Lord Empey, asked whether the subsections could leave the CAA open to JR. These are secondary, subordinate obligations to which the CAA must have regard. Provided the CAA turns its mind to these matters and considers them, it will, prima facie, have complied with the obligation.

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Debate on whether Clause 5 should stand part of the Bill.

[Lord Berkeley]

This is by nature a probing question. I apologise to the Committee for not having been here at Second Reading. I am confused and I am sure that the Minister can help my confusion. We are talking here about an economic regulation of possibly three airports around London. Clearly there are issues of competition for businesses within specific airports, and from the way I read it that is clearly in the Bill. I am slightly surprised that there is nothing in it—that I can see—about competition between airports. If Stansted is sold, you will have three different owners of the three major operators, as well as Luton. We are talking about economic regulation and I would have thought that the Bill must include, in addition to the things that are there, regulation of slots and charges and consideration of dominant position. I know that we will come on to that last issue later.

What is the market in which the dominant position is supposed to be considered? The noble Lord, Lord Bradshaw, in his remarks on Amendment 1, listed a number of airports within the London or south-east area. I think that he forgot Southend International, which is now marketing itself as an international airport, and Manston and other similar airports. It is a question of how these would be considered. What is within the scope of the CAA on these issues given that we have dominant areas and dominant airports? As I read it, there are the three main airports around London that we have just mentioned, but Luton is pretty big and there are others. It seems odd to put this into the legislation without some explanation. An explanation would help me, but I apologise if this has already been explained at Second Reading.

[Earl Attlee]

The noble Lord mentioned slots. These are regulated by the world slot guidelines and, in Europe, by the EU slot regulations. They are implemented by Airport Coordination Limited in the UK. The Government do not and cannot have a role in slot allocation.

[Lord Berkeley]

If there appears to be a dominant position in slots, does that come under the CAA or the Government? Is there any competition authority, or is it completely outside?

[Earl Attlee]

My Lords, that is clearly a competition issue. I am not certain about it but I will write to the noble Lord.

Clause 5 defines what comprises a “dominant airport area” and a “dominant airport”. Under subsection (3), “airport area” means an area that consists of or forms part of an airport, including land and buildings. This provision is included to allow for the possibility of there being more than one operator at an individual airport. This could be the case if, for example, an airline acquired or leased a terminal building. As there can be more than one airport area at an airport, it follows that there can be more than one operator of an airport area at an airport.

Subsection (1) states that an airport area is dominant if the CAA has made a determination that the market power test is met in relation to the area and publishes a notice to that effect. Subsection (2) provides that an airport is dominant if all or part of its core area is a dominant area or part of a dominant area. Subsection (4) describes what comprises a core area. Broadly speaking, the core area includes runways and associated facilities, passenger terminals and cargo processing areas. It follows from that that non-core airport areas include car parks with pedestrian access to the terminal building, or the forecourt of a passage in the terminal, including pick-up and drop-off points. Therefore, if the only dominant airport area at airport X comprised the pick-up and drop-off points, airport X would not be a dominant airport because no part of the core area would comprise or be included in a dominant area. We should remember that the core area is the runways, associated facilities, passenger terminals and so on.

In such circumstances, no part of the airport could be subject to regulation. The underlying thinking is to ensure that no part of an airport should be subject to regulation unless some part of the core area is dominant. This construction is required to prevent unnecessary regulation where there is a problem only with peripheral areas. This distinction between core and non-core airport areas is necessary to ensure that the CAA regulates ancillary airport operation services only where some or all of the core area of the airport is dominant; it is unable to exercise regulatory control over core areas where only non-core areas are dominant.

Allowing for more than one operator at an airport differs from the approach used in the Airports Act 1986, which refers to an airport operator as,

“the person for the time being having the management of an airport, or, in relation to a particular airport, the management of that airport”.

That Act does not include provision about cases in which there is more than one operator of an airport. I make clear to the Committee that there are no powers in this clause to introduce intra-airport competition. Rather, the clause allows for the possibility that competition may be introduced within our airports—for example, inter-terminal competition. These provisions are included to keep open the option of competition within airports in future.

The Competition Commission has previously expressed interest in this concept and suggested that the,

“legislation … should allow for terminals to be developed or redeveloped and to be operated separately from runway facilities, where appropriate”.

While the Competition Commission has no present intention to impose such intra-airport competition, it is supportive of keeping the option open for the future. We therefore need to ensure that the regulatory framework is capable of operating in the event that inter-terminal competition becomes a feature of the UK airport sector. By including it in the Bill, we avoid the need for a future Government to have to return to Parliament for fresh primary legislation.

[Lord Berkeley]

I am grateful to the Minister for that very clear, if somewhat complex, explanation. If I have it right, a core area has to include the landing and take-off runways. I cannot see how more than one landing and take-off runway can be owned in one airport. If Heathrow separated the ownership of the north and south runways, then you would have some competition. However, if the core area has to include the landing and take-off, surely it would be impossible to have competition within any of the airports in the south-east. Have I misunderstood this? I would be grateful if the Minister could explain further.

[Earl Attlee]

I do not know whether or not the noble Lord has misunderstood. I suspect that he will have to read what I have said very carefully in order to understand it.

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[Earl Attlee]

My Lords, I shall speak also to Amendments 16 and 23. These three amendments are being taken together. Collectively, they will ensure that the CAA must have regard to the extensive guidance and advice published by the EU and UK competition authorities, for example the Office of Fair Trading.

We have been reflecting on comments made in the other place regarding the definition of “substantial market power” in the Bill. In particular, during debates in Committee in the other place, points were made that there could be some uncertainty regarding how the CAA might assess “substantial market power”. Although we believe that the definitions and specific meanings of the terms relating to market power that are used in the Bill are clear, we see merit in providing more clarity that the CAA must have regard to relevant competition guidance when carrying out the market power test.

Clause 6(1) states that market power test is met in relation to the airport area only if the CAA is satisfied that tests A, B and C are all met by the operator of that airport area. These tests are designed to ensure that operators of airport areas are subject to economic regulation only if under test A,

“the … operator has, or is likely to acquire, substantial market power in a market, either alone or taken with … other persons”,

under test B, general,

“competition law does not provide sufficient protection against the risk that the … operator may engage in conduct that amounts to an abuse of substantial market power”,

and under test C,

“the benefits of regulating the … operator … are likely to outweigh”

the costs.

On a previous amendment, I was asked what the market is. A market for airport operation services could be as narrow as the baggage handling services at Heathrow Terminal 5, or as wide as airport operation services at airports in London and the south-east. Other examples of airport operation services include the provision of airport facilities for car parking, facilities for shops and ground handling services.

The term “substantial market power” in test A is the term used in the current criteria that the Secretary of State applies when making designation decisions on whether an airport should be subject to price control. It is well understood and accepted in this context. The previous Government consulted on the wording of this limb and the other limbs of the test for whether an airport should be subject to economic regulation. In light of that consultation, we see no reason to change the wording. In carrying out test A, the CAA expects to follow the guidelines published by UK competition authorities—for example the Office of Fair Trading and the European Commission—for the assessment of market power. This amendment will put that beyond doubt. These are generic guidelines for use in any industry and provide a useful starting point for assessing the degree of competition faced by an airport. I beg to move.

[Lord Berkeley]

I am grateful to the noble Earl for that explanation. I have a couple of very simple and quick questions. I assume that when he says there is an issue about being subject to price control, he is talking about baggage handling, car parking and things like that rather than the price of slots, which I think he said is outside everything. I would be grateful for his confirmation of that.

[Lord Davies of Oldham]

The Minister will, no doubt, give an answer to that in just a moment. I am grateful to him for these amendments. As he said, there was considerable anxiety in the other place when discussing the concept of the dominant market. I am still trying to get my head round the position in respect of baggage at Heathrow being a dominant market, but will take the Minister’s word for that. I certainly accept the other extreme he put forward: all the airports in the south-east. We appreciate that, with these amendments, the Minister has helped to reassure us over the anxieties that were expressed in the other place. We all appreciate that it is not easy to get to this definition and that considerable efforts have been made. At first, I thought the cross-reference to the European Commission looked a bit like overkill, but the Minister is making sure he has belt and braces with regard to this, in response to the challenges that were made in the other place. I am quite sure my colleagues there will join me in thanking him for these amendments and accepting that they go a considerable way to allaying past anxieties and help the Bill.