Cycling: Infrastructure
Lord Berkeley Excerpts(13 years, 1 month ago)
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Lord Berkeley
To ask Her Majesty’s Government what proportion of the Highways Agency’s budget is allocated to infrastructure for cycling.
Earl Attlee
My Lords, the Highways Agency works with cycling organisations to provide parallel routes, safe access and crossing points to the strategic route network. These schemes are funded within the agency’s portfolio of small improvement schemes, on which the expenditure is approximately £50 million each year across the portfolio. Provision for cyclists is also a consideration of the agency’s major schemes. The specific investment relating to cyclists is therefore difficult to disaggregate.
Lord Berkeley
I am grateful to the Minister for that Answer and I congratulate the Government and TfL on the investment they have recently announced for cycling infrastructure. However, does he agree that possibly there is a need to go further? There is a poll in the Times today, coincidentally, which shows that 25% of the respondents think that segregated cycle lanes would make people cycle more. It also shows that only 2% of journeys in this country are by cycle compared with a figure of about 25% to 35% in Belgium, Holland and Denmark. Does he agree that it is time to look at reallocating space on the roads for cycles and providing much greater investment alongside that?
Earl Attlee
My Lords, the views of respondents to any survey are obviously important. We should not disregard them. We should take account of them. Segregation has its benefits because you will be able to reduce the number of accidents far more effectively. However, there is the issue of economic use of the road space and the business case if you want such a scheme. In London, these are matters for Transport for London.
British Transport Police
Lord Berkeley Excerpts(13 years, 1 month ago)
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Earl Attlee
My Lords, the noble Lord is absolutely right in his analysis of the problem. Unfortunately, we cannot make any suitable amendment to current legislation going through your Lordships’ House. I am advised that other routes, such as a regulatory reform order, are not suitable, so we will have to wait for a suitable slot in the primary legislation. However, the noble Lord’s point about legal uncertainties is extremely important.
Lord Berkeley
My Lords, how many BTP officers carry firearms? As my noble friend said, it seems odd that they do not have the same legal position as other police officers around the country who are able to carry firearms. What is the legal position of BTP officers who carry firearms? Are they at risk on a personal level in a way that the other police officers are not?
Earl Attlee
My Lords, in answer to the noble Lord’s first question, we are talking about only 53 police officers, so the bureaucracy load is manageable, although extremely inconvenient. The weakness in the legislation on the protection of officers who are involved in an incident, alluded to by the noble Lord, Lord Faulkner of Worcester, is an extremely important point.
Airports (Amendment) Bill [HL]
Lord Berkeley Excerpts(13 years, 2 months ago)
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Lord Berkeley
My Lords, I am grateful for the opportunity to speak in the gap. I apologise for not putting my name down. I did not think that I could be here. I find this a very interesting Bill, not least because it focuses on the issues of hub and spoke. As the noble Earl, Lord Caithness, suggested, there is more than one hub in the UK. He listed Gatwick, Stansted, Luton and Heathrow, but I suggest that Birmingham is an equally important hub of the future. It certainly seems to have intentions to become one. Once the sale of Stansted by BAA is complete, we will have five different airports in five different ownerships.
It seems to me that the objective of this—if there is an objective from the Government—is for the Government to do nothing about it and let the market decide, which is a good idea. Certainly, we have seen press comments that several of these airports are looking to be a so-called hub in their own right. I believe that there is a problem of suggesting that the only hub in this country is Heathrow. I think that the Government might get into trouble if they start designating slots in Heathrow but not in some other airports.
That moves me on to the designation of slots. I wonder whether that is right to do unless there is market failure. The noble Earl, Lord Attlee, recently gave me a Written Answer in connection with transport to the Isle of Scilly, which is the other end of the spectrum from Northern Ireland. It has rather less population but is a similar distance from the mainland and I would suggest that it has an even worse transport system. For me, surely a market failure means no or too few services, high prices, probably a monopoly supplier and not servicing the population as they would expect—although perhaps they expect too much. If there is a market failure, there needs to be an argument for saying that the subsidy is necessary to keep a service going, which certainly in Scotland is called a lifeline service.
I am aware that there are quite a few offshore islands and regions in the European Union where lifeline services are provided, which I think are all subsidised. Certainly, some of them are subsidised in Scotland. Mostly they are ferries but a few air services are subsidised. They are allowed under EU law on the basis that the subsidising authority goes out to tender in the usual way.
However, I question whether Northern Ireland is an offshore island in the same definition as some of the Scottish islands or the Isles of Scilly. If there was a subsidised service to Northern Ireland to a hub, which hub would it go to? If I was running an airport in one of the five airports around the south-east and the subsidised service went to another one, I would probably reach for the Competition Commission and ask whether it was fair. It is a case that would have to be made. There are quite serious problems about allocating slots at a particular airport for these services without it being a subsidised service and going through the whole process of justification for it, and whether there is any other way. I shall be very interested to hear what the Minister says when he responds.
Railways: London Midland Rail Franchise
Lord Berkeley Excerpts(13 years, 2 months ago)
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Earl Attlee
I am sure that the whole House will not be surprised to hear that I am very pleased at my grandfather’s achievements. However, there is a difficulty in having one nationalised industry: it is very difficult to determine the appropriate salary for a train driver when you have only one employer. We have several employers of train drivers and our experience is that train drivers are finding out who is the best employer, either in terms of salary or, as pointed out by the noble Countess, in relation to other terms and conditions.
Lord Berkeley
My Lords, do the Government have enough staff in the Department for Transport to micromanage all these franchises, to ensure that each driver is paid the right amount and that there are enough drivers, and then to impose the penalties if they fail? After the west coast main line franchise, possibly it should be recruiting another 50% of its civil servants.
Earl Attlee
My Lords, I assure the House that my department does not have enough staff to micromanage the franchise. We have no intention of doing that. We receive reports on the cancellations but we do not need to micromanage.
Isles of Scilly: Helicopter Services
Lord Berkeley Excerpts(13 years, 2 months ago)
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Lord Berkeley
To ask Her Majesty’s Government what steps they are taking to ensure a lifeline passenger service to the Isles of Scilly following the closure of the helicopter service on 1 November 2012.
Earl Attlee
My Lords, the Isles of Scilly Steamship Company, which operates the ferry and fixed-wing services, has already announced plans to increase those services to meet some of the passenger demand following the closure of the helicopter service. My honourable friend the Parliamentary Under-Secretary of State, Mr Norman Baker, has recently met, and is due to meet again, delegations including the Isles of Scilly Council to discuss transportation to and from the Isles of Scilly.
Lord Berkeley
I am grateful to the Minister for that reply because it marks some progress, even if the Isles of Scilly Steamship Company is now a monopoly supplier of transport services. Is he aware that during the five months between now and the beginning of next April, there will be only a small fixed-wing service of aeroplanes that are susceptible to wind and fog— for example, the service did not run yesterday? If the evidence of last winter is taken into account, the service would not run for 22 days over five months. With a population of around 2,000 people earning the fourth lowest wages in the UK and a reliance on tourism, those who use the aeroplane service have to pay £140 return. Does the noble Earl agree that in Scotland, most of the islands have both air and ferry services as lifeline services, and the fare for the equivalent distance is £25 return? Will the Government now look at a lifeline service for the Scilly Isles so as to take this forward and make the service comparable with that in Scotland?
Earl Attlee
My Lords, the noble Lord used the word “monopoly”, which implies that there can be only one operator. It is a free market and other operators can come in. We need to see how the market develops. The noble Lord also talked about the “lifeline”, which is a term generally used to describe vital transport connections between mainland and island communities. However, it carries no formal or legal status. The Government recognise that many people regard maritime passenger and freight services to the Isles of Scilly as a lifeline, and that is why we have said that we are committed to ensuring that these continue.
Crime: Drink-driving
Lord Berkeley Excerpts(13 years, 3 months ago)
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Earl Attlee
My Lords, we have carefully considered this issue, and we have considered and reported back on the North report. The difficulty is that if we lower the limit to 50 milligrams, we would divert resources away from the cohort of drivers who ignore the law and drive quite often at double the legal limit. The police would be tied up with dealing with these low-level offenders and would not be dealing with the much higher-risk offenders.
Lord Berkeley
Is not the real argument that the Minister is putting forward that any reduction in the level to that of the rest of Europe goes against the total anti-Europe policy that we see across so many fronts, rather than trying to save a lot of lives on the roads by lowering the limit?
Earl Attlee
No, my Lords. We act on good advice from our officials. It is important to understand—
Civil Aviation Bill
Lord Berkeley Excerpts(13 years, 6 months ago)
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Lord Berkeley
Could the Minister explain what Clause 105(5) means in practice? It refers to,
“power to apply certain provisions to Crown aircraft”.
The Minister will know that we debated transport to the Scilly Isles a week or two ago. I heard that Prince Charles visited there last week with great success. However, there was thick fog and the only plane that was allowed to fly was his. I hope that it was safe— I am sure that it was—but in terms of safety of navigation it is odd that only one plane was allowed to fly. Was everybody else banned or did they not have the right equipment? Maybe this is irrelevant to the clause but what is special about “Crown aircraft”?
Lord Rotherwick
It may help if I jump in. I suspect that planes landing in the Scilly Isles were under CAT—Civil Air Transport. In certain situations, a private plane can be landed under VFR when a public plane cannot under IFR. I only suggest that that might be the case
Civil Aviation Bill
Lord Berkeley Excerpts(13 years, 6 months ago)
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Lord Berkeley
Like the noble Lord, Lord Jenkin, I, too, was confused. I suppose there could be competition with baggage handling taxi services. The heart of an airport is, after all, the runways. Is it envisaged that there is competition between two runways? If it is, that is remarkably stupid. One never knows, and it will be interesting to hear what is subject to competition in this clause and what is definitely not, within a particular airport.
Earl Attlee
My Lords, I thank the noble Lord, Lord Rosser, for the explanation for the rationale behind this amendment. I am afraid that I must oppose it, for two reasons. The first is substantive and the second is technical.
The amendment would oblige the regulator to review its market power determinations at such intervals as it considers appropriate. Clause 7 provides that a market power determination is a determination by the CAA that an airport operator does or does not meet the market power test in relation to an airport area. Where it does, the operator is subject to economic regulation under the Bill. Where it does not, it is not subject to economic regulation.
Let me now turn to my reasons for opposing this probing amendment. The substantive reason is that the amendment is unnecessary. Clause 7(1) expressly empowers the CAA to make a market power determination,
“whenever it considers it appropriate to do so”.
I am mindful of the underlying purpose of Part 1 of the Bill which is broadly to further the interests of end users by regulating airport operators where necessary. I note also the CAA’s subordinate duty at Clause 1(4)(b) to have regard to the principle that,
“regulatory activities should be targeted only at cases in which action is needed”.
In answer to the question of the noble Lord, Lord Rosser, it is implicit that where changes in circumstances lead the CAA to believe that there are reasonable grounds to believe an operator presently subject to regulation should cease to be regulated, or vice versa, then it would investigate further. If appropriate, it would then conduct a full market power determination. I am reinforced in my view because Clause 7(2) obliges the CAA to make a market power determination in certain circumstances. Against this background, the noble Lord’s amendment adds little to the Bill
There is a further technical difficulty with the amendment, which I accept is a probing one. It is not wholly clear what is meant by a “review” of a market power determination. Presumably it is something short of conducting a full market power determination. Perhaps it may involve a consideration of whether the underlying circumstances have changed. However, no further provision is made to publish the results of the review or to take action in the light of its conclusions. In short, neither the purpose nor the effect of undertaking a review is made clear in the amendment.
My noble friend Lord Jenkin asked about competition between different facilities in an airport. The recommendation was made by the Competition Commission; we are implementing it.
Earl Attlee
My Lords, if they were under separate management there could be a competition situation. Under the current legislation, one simply cannot regulate because it does not provide for competition within one airport. Therefore, we are future-proofing the legislation.
The CAA’s functions under Chapter 1 comprise, broadly, deciding whether an airport operator should be subject to regulation—and if it should, regulating it accordingly. Clause 1(1) requires the CAA to carry out its functions under Chapter 1 in order to further the interests of passengers and freight owners in the provision of airport services. Under Clause 1(2) the CAA is required to promote competition when doing so, but only where it is appropriate to its carrying out its functions under Chapter 1. This is set out in Clause 1(2).
The concept of competition in provision captures competition in the provision of airport operational services between all airports, regulated and non-regulated, and competition in airport operational services within airports—for example, competition between terminals. However, the CAA must promote competition only where appropriate. It would not be appropriate to promote competition where the CAA was not carrying out its duty under Clause 1(1)—specifically, where promoting competition does not further the interests of users of air transport services in the range, availability, continuity, cost and quality of airport operational services.
Lord Berkeley
Perhaps I might seek confirmation of what the Minister said to the noble Lord, Lord Jenkin. Will he confirm that Clause 7(4) applies to airports where the number of passenger movements exceeds 5 million—I refer to a Written Answer of 20 June to the noble Lord, Lord Laird—and that therefore Heathrow, Gatwick, Stansted and Luton would all be covered by the clause?
Earl Attlee
My Lords, the large airport test certainly applies in Clause 7(2), which refers to areas located in large airports. It goes on to define a large airport. I suspect that the CAA can make a determination on any other airport at a later stage if it becomes apparent that it might be in need of regulation and meets the tests in the Bill. Therefore, I invite the noble Lord, Lord Rosser, to withdraw his amendment.
Lord Berkeley
My Lords, I shall expand a little on the comments of my noble friend Lord Davies of Oldham. A question needs to be asked: who will benefit from these three clauses? Will the passengers benefit? In my experience, when I want to go from A to B by air, I go to a website and look at the different airlines on different routes. Let us consider Stansted, for a change; we keep on talking about Heathrow. We are told that Stansted has lots of capacity. It has one terminal and one or two satellites from where the lower-cost airlines operate, and they make you walk a hundred miles to compensate you, presumably for paying lower landing fees. I suppose that those satellites, with a little engineering work, could be converted into a separate terminal, but how will the passengers benefit? When you book with an airline, you do so by considering price, timing or convenience. If you are going to book with easyJet to go to Dublin, for example, you do not have a choice of which part of the terminal, or which terminal, the plane will arrive at after landing. You are told where it will be. The passengers do not, therefore, have any choice over which terminal they can go to. They choose the airline and the airline tells you where you are going to end up.
I still cannot see who is going to benefit from these clauses. The airlines will not benefit, I imagine. Some of them pay lower landing charges than others and, as a result, are told to use a particular terminal—either close by or far away from convenient public transport and other facilities. You do not book with an airline because there is a better class of McDonald’s or a restaurant in some terminals. Are the airport operators going to benefit? I cannot see how. It will cost more, as my noble friend said. The suppliers will not get as big a volume of trade as they would if they were supplying a whole terminal. You could argue that they or someone might benefit from competition. And the passengers? I would be pleased to hear from the Minister about how they would benefit from these clauses.
Earl Attlee
My Lords, I thank noble Lords for their contributions but I am afraid that I must oppose the amendment and support the Question that these important clauses stand part of the Bill.
Inter-terminal competition may be some time off and the Bill makes no provisions about timing. However, it is important that we future-proof the legislation. The noble Lord, Lord Davies of Oldham, talked about disruption and consternation. Clearly, this would not be in the interests of passengers, and the CAA would therefore not allow such competition because it would be in conflict with its primary duty to the passengers and owners of cargo.
The noble Lord said that different airlines have different needs. He is, of course, quite right. Some airlines want to run a premium service and others want to be no-frills. However, the CAA will have to strike the balance between those differing requirements as well as replicate the effect of competition.
The Bill does not, in general, require inter-terminal competition but does accommodate the possibility. Promoting competition between terminals under the Bill would not happen if the cost implications of doing so meant that it would not benefit the passengers, again under the CAA’s primary duty. In the circumstances postulated, there is no question that the CAA would seek to require inter-terminal competition. If, however, an airport chose, say, to lease a terminal to a third party, the Bill would remain in service, and I will come back to that in a moment.
Clause 10 empowers the CAA to determine, by applying the criteria set out in Clause 9, including in cases where one or more separate entities have some form of management control over that area. Clause 11 contains provisions for the publication of operator determinations made under Clause 10 by the CAA. Clause 12 empowers the CAA to make operator determination in advance, on the basis of circumstances that may not yet have arisen.
The amendments to Clause 12 seek to remove the CAA’s powers to carry out an advance operator determination. However, before I get on to why the amendments are not desirable, I wish to reassure your Lordships on why “standard” operator determinations under Clauses 9, 10 and 11 are a necessary part of the legislation. These clauses are important for regulatory certainty, enabling a person to know whether they are the operator of an airport area for the purposes of Part 1. Otherwise, in difficult cases it will be uncertain who the operator is and who is not, and therefore who is and who is not subject to economic regulation. This means that they cannot be clear as to their legal obligations, and neither they nor their financial backers can know with certainty whether they will be subject to economic regulation.
The clause is not focused solely on the possible future scenario where intra-airport competition can be introduced. For example, it could apply where a whole airport was leased and some management functions were split between lessor and lessee. However, noble Lords have rightly pointed out that these clauses are important for ensuring that the Bill allows for the regulatory regime to work in a scenario where there are multiple operators of different airport areas at one airport—in other words, where there is inter-terminal competition. Inter-terminal competition is more likely to lead to more complex ownership arrangements.
I have already mentioned that it was a recommendation of the Competition Commission in its BAA Airports Market Investigation report of 2008 to allow for the regulatory regime to function where inter-terminal competition is present. The present legislation, the Airports Act 1986, does not allow for this possibility. If we, the Government, had not made these provisions, no doubt noble Lords would suggest that we should have done so, praying in aid the Competition Commission’s recommendations. It is important to note that these clauses do not empower the CAA to introduce inter-terminal competition; they merely ensure that if inter-terminal competition becomes a reality, the regulatory regime can accommodate the scenario.
Clause 10 empowers the CAA to make binding operator determinations on the basis of the circumstances at the time the determination is made. However, this is considered insufficient where a person wants to know whether they will comprise the “operator” in the event that they take some control over an airport area. Against this background, to allow for greater regulatory and commercial certainty, Clause 12 empowers the CAA to make advance determinations—that is, determinations on the basis of circumstances that have not yet arisen. This would include a determination that, if a lease were executed with specified terms, the lessee would or would not comprise the operator.
The first amendment would deprive the CAA of the power to make an advance operator determination. The Government cannot agree to this because it would increase regulatory uncertainty and possibly stultify commercial transactions. I therefore urge noble Lords to withdraw their opposition to the clauses.
Lord Empey
My Lords, I am sure that most of us travelling through airports have been approached at one time or another by the person with the dreaded clipboard. No doubt all noble Lords here were free and giving of their time and answers to help these people establish their true feelings.
Whether the particular methodology contained in these amendments is right, I am not sure. No one wants to add to the difficulties of getting a licence or to the bureaucracy involved. Nevertheless, underneath all that, the noble Lord, Lord Davies, is making a fundamental point that we all share. There have been a number of cases in recent years where the whole image of this country and the welfare of many thousands of passengers have undoubtedly been put to the test. Unfortunately, on some occasions, the relevant airports have failed that test. One constantly hears that there is an absence of information being fed back to the passenger.
Of course, these emergencies obviously come out of the blue in many cases. Sometimes the airports are not properly prepared, they do not have enough staff or facilities and one understands that this is not easy to cure. Nevertheless, it should be at the core of what we are trying to do. We are trying to make aviation more efficient but, in parallel with that, we have to make it a more pleasurable experience.
In so many walks of life—we are talking mostly about finance—consumer welfare and consumer benefits are put at the core of many of the things that we do in this country. That is right and there is therefore some merit in these amendments. Whether this methodology is the right one is not necessarily the issue today. The point is that there is a fundamental issue, and I hope that the Minister will refer to it in his reply. Should there be a broadly understood standard that would apply to all airport operators in the event that an emergency will arise, as it inevitably will; and how are people to be treated? Are we to continue to see our television screens covered with images of passengers complaining about their treatment, delays and lack of information?
In order to raise standards, which is our general objective, there should surely be some methodology. I have an open mind as to whether or not it should be this precise mechanism but I hope the Minister will at least acknowledge that this must be at the core of what we do.
Lord Berkeley
My Lords, following the comment of my noble friend Lord Soley about immigration, by coincidence I have in the Crime and Courts Bill an amendment about the immigration service which may be discussed later tonight. The service is woefully inadequate, as my noble friend said. The delays are reflecting very badly on the country.
Passenger satisfaction should be measured in respect of immigration delays as well as many other things, because they are quite significant. My suggestion that I shall probably put tonight is that the immigration service should be given targets. I am not sure that this Government like targets but there might be a target for people with EU passports to wait for not more than 10 minutes, and for those from third countries to wait for not more than half an hour. We can debate what the targets should be. The crucial thing is that the immigration service should be required to pay some kind of compensation to the airlines if they exceed those targets, unless there is an emergency or something like that.
As several noble Lords have said, the key is to have this information. I would much rather see it come from the licence holder than from the immigration service, which might be tempted to massage the figures slightly. My noble friend Lord Davies can think about whether it should go in as a further amendment on Report, but we ought to measure this matter along with some of these other issues to get independent information on passenger satisfaction regarding everything they see when they arrive at or leave an airport.
Earl Attlee
My Lords, I am aware that similar amendments were tabled in the Committee and Report stages in the House of Commons. These amendments provide us with a welcome opportunity to return to some important issues for passengers.
The noble Lord, Lord Bradshaw, talked about comparisons with the bus and rail industry arrangements. There is no reason, however, why the CAA cannot look at those rules and regulations when devising licence conditions and learn from what happens in another industry. The noble Lord, Lord Soley, talked about first impressions. They do matter and I have been impressed with the work going on at Gatwick to improve the appearance of the airport and the way it works.
The noble Lord, Lord Empey, touched on the issue of a market survey and said that passenger satisfaction is at the core of what we are trying to do. It is, but it is the duty of the CAA to achieve the desirable outcomes by means of the licence conditions.
The noble Lord, Lord Berkeley, talked about immigration issues, as did other noble Lords. A few years ago, I declined to visit the United States, even at public expense, because, frankly, I thought that the immigration arrangements there were so awful that I did not want to do it. I just said, “No, I will stay here and be with your Lordships”.
Earl Attlee
We will see what happens in the next reshuffle.
My honourable friend the Immigration Minister is reviewing what additional data may be published by the Home Office and shared with port operators. Meanwhile, the border force has responded to recent problems in a number of ways. It is tackling short-term peaks with a pool of trained staff, working with airports and airlines to ensure that they provide more accurate passenger manifests and flight schedules so that the border force can flexibly deploy staff at the right times and places, creating a new central control room for the border force at Heathrow that uses mobile teams for rapid deployment, and implementing new rostering and shift patterns. The border force is also working with Gatwick and Heathrow airports to improve passenger flows, using more specific measures such as e-gates and other biometric checks.
There can be no doubt that passengers want efficient baggage-handling services when they travel by air. The experience of recent years has also demonstrated how vital it is that airports prepare effectively for potential disruption. It is clear that the aviation sector as a whole needs to have effective means of dealing with passenger welfare during disruption of services. While I can therefore understand and agree with the sentiment behind these amendments and what noble Lords have said, I cannot recommend accepting them into the Bill. The text of the Bill already provides the most effective means of protecting passenger interests in relation to the matters raised.
Clause 18 and the licensing regime as a whole will give the CAA the flexibility to tailor licence conditions to the specific circumstances facing individual airports with substantial market power. This flexibility is an important means of minimising the distortions associated with regulatory intervention and ensuring that action taken by the CAA is proportionate. However, we also believe that giving the independent expert regulator flexibility and discretion in deciding the content of the licence is the most effective way to protect the interests of present and future passengers. If Parliament chooses to use this legislation to hard-code certain points in licences, it would constrain the regulator’s freedom to decide what priority should be afforded to different passenger concerns and what costs should be allowed for the delivery of competing consumer priorities. As the Minister of State said in Committee in the House of Commons, amendments such as these would make the licence system unbalanced because passengers care about a whole range of different issues. Moreover, a prescriptive approach in the Bill is likely to make it more difficult for the regulator to adapt its approach to the changing concerns of passengers. In 2005, who would have thought that volcanic ash would have been a major problem later on?
If we were to adopt these amendments, they would oblige the CAA to give greater weight to these factors than other matters that might become equally or more important to passengers in the future. This danger was recognised by the noble Lord, Lord Soley. Your Lordships can be very confident that the CAA will already use the new licensing powers proposed in the Bill to focus on, for example, operational resilience and passenger welfare in the event of extreme disruption—not least because of the CAA’s Clause 1 duties, as the noble Lord, Lord Davies, recognised. And why it would it not do so?
As we have discussed in Committee, in response to a request for advice from the Secretary of State, the CAA published an indicative licence in January to assist Parliament in its scrutiny of the Bill, and a copy has been sent to the House of Commons Library. At the request of the Department for Transport, the draft licence includes provisions on operational resilience. The proposals in condition 7 would require the licence holder to operate the airport efficiently and use its best endeavours to minimise detriment to passengers arising from disruption. The noble Lord, Lord Davies, mentioned disruption due to winter. When I visited Gatwick Airport before the most recent winter and saw all the new equipment in place, I was absolutely confident that the winter would be very mild.
It would also require the airport to draw up, consult on and gain the CAA’s approval for an annual resilience plan setting out how it would secure compliance with its obligations under the condition. The licence holder will then be obliged to comply with the commitments it has made in its resilience plan. The CAA sought initial views from industry in drafting the indicative licence. However, since Parliament has not yet concluded its consideration of the Bill, the CAA has not yet started to consult on proposed licence conditions for each airport that will be subject to regulation.
If the system proposed in the Bill is implemented, the CAA will consider the extent to which it is necessary or expedient to include conditions in a licence for operational resilience and other matters such as passenger welfare. The CAA expects that activities that might be expected to be part of the new licence regime would include taking into account other obligations on service quality standards, and the success of codes of conduct and voluntary arrangements being adopted by industry. Against this background we believe that putting specific requirements in the Bill on issues such as baggage handling and operational resilience could prove to be a disproportionate response that would place an unnecessary restriction on the CAA’s flexibility to develop proportionate and effective ways to address passenger concerns—and might even lead it to address the wrong ones.
In summary, the Bill provides the CAA—the body with the relevant operational expertise—after appropriate consultation, with the flexibility to determine appropriate and effective licence conditions. The amendments in this group could undermine our goal of giving the specialist regulator a flexible toolkit to protect the passenger. Therefore, I hope that the noble Lord will withdraw his amendment.
Lord Davies of Oldham
My Lords, I do not think that the issue of payment is likely to arise with members of the Royal Family or diplomatic staff because the arrangements for how they should be treated are agreed with the airport authorities. That is very different from saying that you can enhance the value of your ticket with extra money to get through the queue quickly. That is the practice to which I object. I am not saying that the Royal Family fit into that category. I imagine that it is also not the case for diplomats. We also have control over the process of entry to the country for air crews, but we do not expect them to take their turn in the queue because we recognise that special arrangements should be made for them. I do not want to exclude some special arrangements; I object to a scheme that enables those who are wealthy enough to purchase privilege.
Lord Berkeley
I suppose my noble friend is thinking in particular about those bankers who are now all over the press for possibly having committed criminal acts to fiddle the LIBOR. They are probably the only people who could afford to spend an extra £2,000 or so to save five or 10 minutes—or maybe several hours—coming into the country. There is just one thing that I would add to this. There is some benefit in having famous people who are prepared to speak out going through the same process as everyone else. Occasionally, they get so fed up that they go to the media and complain about it. I suspect that part of the reason why things are getting better at immigration in airports is that one or two people have had the guts to speak out and say, “This is iniquitous”. If these people were tempted to jump the queue by paying £1,000 or £2,000, we would lose that. My noble friend has made a very strong argument for having this in legislation on the basis that people should not pay extra for special treatment.
Lord Jenkin of Roding
I should like to be reassured that the noble Lord, Lord Davies of Oldham, does not seek to insist that everyone must stand in the same queue for check-in. If you buy a first-class ticket, many airlines have special check-in counters for such travellers. That seems entirely appropriate and entirely different from going through immigration, either outwards or inwards. The amendment specifically mentions check-in. However, it seems entirely appropriate that if you buy a first-class ticket you can go to a first-class check-in desk and not wait as long as you would if you had bought a standard fare.
Lord Davies of Oldham
On the latter category, we are shortly to debate the arrangements for the disabled, and I hope to provide reassurance. I accept what the noble Lord is saying; of course there are special arrangements for the disabled. We all know why it is necessary for the law to be strengthened in that area, and I shall be proposing an amendment to deal with that matter.
The situation that I have identified is not concerned with people going through different routes according to their ticket, but the question of how one goes through the state’s immigration controls. The contention that you are less of a security risk because you are wealthy is dubious. After all, I seem to remember Bin Laden did not come from a totally impecunious family. It is not the case that those who have a great deal of money are better security risks. Why on earth should everyone else, for the necessary security of the nation, be obliged to suffer some of the privations that occur from time to time? I fail to understand how one can market a package that guarantees that one is whisked through security.
Lord Berkeley
Does my noble friend agree that the key to the amendment is the word, “buying”. There is nothing to stop the provision of different queues for first-class passengers or others at check-in or security. The question is: have they paid extra to go through that facility rather than for the facilities on the flight?
Earl Attlee
My Lords, I am aware that a similarly worded amendment was tabled in Committee in the House of Commons, but that related to Clause 83, on provision of:
“Information for the benefit of users of air transport services”.
The stated aim of that amendment was to close a perceived gap in the information that will be published under that clause on what passengers can expect to experience when departing or arriving at an airport, especially in relation to how long they should expect to wait to have their passport checked. The Government supported the broad intention of that amendment. Giving consumers more information on the quality of service provided by airports and airlines will help to maximise the benefits that markets deliver to passengers. However, the Minister of State ultimately resisted the amendment on the basis that the Bill already enables the CAA to require the collection and publication of information on check-in, baggage handling and security queues. He further explained that the UK border force, the authority responsible for border controls relating to arriving and departing passengers and goods, is responsible to Ministers and Parliament, and said that this is a more effective and appropriate means to hold the UK border force to account than giving the CAA power to oversee its activities.
The amendment today goes further than the previous one by seeking to prevent users from buying preferential access to check-in, security, immigration control and baggage reclaim processes. In considering the amendment, the Committee should note the distinction between check-in and baggage reclaim processes, and aviation security and border-control processes—the latter being subject to exacting standards enshrined in legislation. For example, airports are required, pursuant to international standards and EU and domestic regulatory requirements, to ensure that all passengers undergo security screening to specified levels. This is subject to monitoring and enforcement through security inspections and tests by the regulator. Legislation also requires full travel document checks to be conducted on all passengers, including all British citizens, arriving at the UK border. As the Minister of State made clear in the House of Commons, the security of our borders and the checks that need to be undertaken to protect us from those who would enter our country to do us harm are treated with paramount importance.
I am aware that the BAA runs a VIP suite scheme at Heathrow. The UK border force does not charge BAA or the VIPs any money for the provision of this service, nor does the BAA cover any border force costs. I will write to the noble Lord, Lord Davies of Oldham, with full details of the number of years that these arrangements have been in place. As long as standards of security and immigration are maintained at all times and in respect of all passengers, the Government do not wish to prevent the market offering access to these services, which are tailored to the needs of passengers. However, there is no question of reduced security, as suggested by the noble Lord, Lord Davies.
Your Lordships will no doubt be aware that a number of airlines offer faster check-in services to premium travellers who are willing to pay a premium for the service. The Government do not wish to prevent passengers benefiting from such products. If the concern is that the purchase of preferential access to check-in or baggage control processes would be an impediment to competition, the Bill already provides the CAA with the necessary powers to address that.
In summary, aviation security and immigration processes at UK airports must comply with exacting standards that are enshrined in legislation. There is no scope for passengers to pay to avoid these processes. The Government believe that the amendment goes too far in attempting to prevent the market offering access to these and other services that are tailored to the specific needs of users. I hope, therefore, that the noble Lord will consider withdrawing the amendment.
Lord Soley
I shall be similarly brief and just wish to add to what the noble Lord, Lord Jenkin, said. The figure involved for investment at Heathrow alone is £100 million a month. Putting that into context, you raise that on the bond market and you secure it against the airport in just the same way as someone buying a house secures a mortgage against the house. If there were appeals of the type indicated by the noble Lord, Lord Jenkin, they could have a very disruptive effect on the financial markets. I think that there is a question about whether the bankers entirely agree with BAA about the risk involved but the point is that, if the risk is there and we can deal with it fairly easily, then frankly we should. If there were an appeal, it would be a severe and difficult embarrassment, particularly if the fight became bitter. The risk of a challenge to £100 million a month investment at our major airport is not funny. I suspect that the CAA would not allow an appeal but, again, this is a case of being sure that we have the safeguards in place, as the noble Lord, Lord Jenkin, indicated, and I certainly support his amendment.
Lord Berkeley
My Lords, I, too, support the noble Lord, Lord Jenkin, and others on this amendment. An appeal may be very unlikely but, as other noble Lords have said, the consequences would be bad. I cannot see how anyone appealing under Clauses 24 and 25 would find it relevant to question the financing of BAA—or any other operator, for that matter. That would seem to have nothing to do with any appeal but one occasionally gets vexatious appeals. Given the size of the sums and the disaster that would ensue if investments did not go ahead because the bankers became uncertain about an appeal, this would seem to be an extremely sensible set of amendments. I, too, shall be interested to hear what the Minister has to say in response.
Earl Attlee
My Lords, I have listened very carefully to the points that have been raised. As my noble friend Lord Jenkin pointed out, I have met BAA to discuss this issue in some detail, and since that meeting I have considered its concerns.
First, I assure the Committee that the Government remain of the opinion that there are good reasons to include derogations to financial resilience licence conditions where these would otherwise cut across existing financing arrangements. The CAA, which will be issuing the first airport licences, has also confirmed that it supports the broad principle that ring-fencing licence conditions, which does not cut across existing financial arrangements, could bring benefits to users.
The practical effect of the amendment would appear to shut out an airline’s right of appeal in respect of an entire licence condition, even if only a small part of it contained an exception relating to financial arrangements. Therefore, the scope of the amendment appears to be wider than the reason advanced for its inclusion. None the less, it is a perfectly good amendment for us to debate. The Government remain of the opinion—
Earl Attlee
My Lords, just in case the issue about the Competition Commission comes up again during our debate today, I would like to clarify what I said in response to the point made by the noble Lord, Lord Rosser, about the CC having regard to the CAA’s general duty. As an appeal body, the CC must have the flexibility to decide an appeal justly and according to law. A duty to “have regard to” is not the same as a case where the CC must apply exactly the same duty as the CAA, but the primary duty will have great weight in the CC’s decision. It seems very unlikely, having regard to the constrained grounds under which an appeal may be made—an error of law, fact and so forth—that the CC would allow an appeal that was inimical to passengers’ interests.
Flexibility arises from Clause 1(5). Where there is conflict between the interests of different classes of passengers, the CAA is generally free to choose whose interests it prefers. The CC would also have regard to this provision. I will write to noble Lords so that any interested parties can pick up this clarification.
I welcome this debate about the slots and thank the noble Lord, Lord Empey, for explaining his concerns. I also pay tribute to the work that the noble Lord has done not just in Westminster but in Brussels. It is an object lesson in how to achieve these objectives. The new clause is intended to allow the CAA to take actions to help protect the provision of regional air services to congested London airports, such as directing airports to ring-fence slots for regional services or structure their charges so as to favour regional services.
The Government take the matter of regional connectivity very seriously. The noble Lord, Lord Davies, mentioned the problems of regional airports, for example some of those in Scotland. As I said before, we recognise the vital contribution that regional airports make to local economies, and that high-quality regional connectivity is hugely important. For remoter areas of the UK, regional air services are not a luxury but a vital means of connectivity. As the Committee will be aware, and as I confirmed at the first Grand Committee sitting, European Union regulations govern the allocation, transfer and exchange of slots at Heathrow and other slot co-ordinated airports in the UK.
EU slot regulations follow the Worldwide Slot Guidelines determined by the International Air Transport Association, reflecting the fact that commercial aviation is a global business. Council Regulation (EEC) No 95/93 on common rules for the allocation of slots at community airports provides common rules throughout Europe for slot allocation. These are aimed at providing airlines with fair and equal access to airports across the EU through independent and transparent slot allocation procedures. Members are required to ensure that independent airport slot co-ordinators are appointed to manage slot allocation at airports where capacity problems occur.
EU law does not allow either the Government or the CAA to have any role in slot allocation apart from the limited exception provided by the public service obligation procedure. EC Regulation No 1008/2008 allows member states to impose public service obligations to protect air services to airports serving a peripheral or development region or on thin routes to any airport on its territory where such a route is considered vital for the economic and social development of the region.
It would be open to regional bodies—for example, local enterprise partnerships and the devolved Administrations—to apply to the Secretary of State for Transport to impose a PSO on an air route if they feel that a case can be made which satisfies the EC regulation. If approved, this would permit slots to be ring-fenced at a relevant London airport. However, one of the important principles of the PSOs is that they can be imposed only when it is necessary to ensure adequate services between two cities or regions, rather than for the purposes of linking individual airports—a point recognised by the noble Lord, Lord Empey. Importantly, that means that when judging whether a region has adequate services to London, it will be necessary to take into account the level and nature of services to all five of London’s main airports, as well as surface transport connections.
Unfortunately, I have to repeat what I said before: there is no other mechanism for the Government to intervene in the allocation of slots at Heathrow or other London airports. Under European law, the potential for the ring-fencing of slots at Heathrow to protect regional services is to be dealt with by the rules on PSOs only. Therefore, any proposals to override the strict criteria and processes by which European Governments can intervene in route operations would be incompatible with EU law. I think the noble Lord understands that but still seeks a solution.
Lord Berkeley
On the basis of the noble Earl’s argument, it would seem that there can be no grounds for having a third runway at Heathrow until all four of the other airports that he just mentioned are full.
Earl Attlee
My Lords, this is not a debate about the third runway. Whether we have a third runway at Heathrow is not relevant. If we got a situation in which we had a third runway and then ran out of capacity at Heathrow, we would still have the same problem.
In addition, the application of traffic distribution rules—the TDRs—is also governed by EU law, which prohibits the implementation of discriminatory rules, including on geographical grounds. As a result, the introduction of TDRs to protect particular regional air services is not an option as it would also be incompatible with EU law. If the amendment seeks to empower the CAA to give a direction to the airport to structure its charges so as to discount airport usage for regional services, I regret that this would not be possible for a number of reasons. If it is not in the interests of users of air transport services on the grounds of the range, availability, continuity, cost and quality of airport operation services, it would not be consistent with the primary duty for the CAA to give such a direction.
In addition, EU directive 2009/12/EC on airport charges introduced common principles on the levying of airport charges at community airports above a certain size to ensure transparency and consultation. That directive was transposed into UK law through the Airport Charges Regulations 2011. Airport charges must not discriminate between users but charges can vary in the interests of the public and in the general interest, provided the reasons are relevant, objective and transparent. The CAA has an enforcement role regarding the Airport Charges Regulations, so it would not be consistent for it to direct on the structure of airport charges. However, as your Lordships are aware from the opening remarks of the noble Lord, Lord Empey, the EU slot regulations are in the process of being reformed in Europe at present. The European Commission’s “Better Airports” package includes proposals to amend the EU slot regulations, which provides an opportunity for the UK to highlight this issue with the European Commission and to explore the inclusion of measures to help secure the ongoing provision of air services between UK regions and congested London airports.
I fully understand the concerns behind the noble Lord’s proposed new clause, but I am unable to support it for the reasons given. Nevertheless, I assure the Committee that the Government are committed to supporting regional airports and regional connectivity. We will also consult on a new aviation policy framework, which will include a focus on regional airports. We will also issue a call for evidence on maintaining the UK’s international connectivity. I would welcome the contribution of the noble Lords and their constituents to that debate and I hope that the noble Lord, Lord Empey, will consider withdrawing his amendment.
Civil Aviation Bill
Lord Berkeley Excerpts(13 years, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
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.
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.
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?
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.
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.
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.
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.
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.
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.
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.
Transport: Isles of Scilly Ferry Link
Lord Berkeley Excerpts(13 years, 6 months ago)
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Lord Berkeley
To ask Her Majesty’s Government what action they are taking to create a lifeline passenger ferry link to the Isles of Scilly in line with the Scottish Government’s ferries policy.
Earl Attlee
My Lords, I am aware that passenger transport services to and from the mainland are regarded by residents of the Isles of Scilly as a lifeline. Ferry services, unlike most of those to the Scottish Islands, are able to operate commercially without subsidy and have done so for many years.
Lord Berkeley
I am grateful to the Minister for that Answer. Perhaps he is not aware that Cornwall has the lowest GDP in the UK and has been awarded continuing convergence funding, and that it also has the fourth lowest average wage in the UK as well as very expensive housing.
His Answer is correct but the ferry only runs for seven months every year and the return fare is £90. This compares with Islay in Scotland where there are several ferries a day all the year round and the return fare is £12.50. Will he not take forward the report from the Council of the Isles of Scilly proposing an affordable lifeline service every day of the year and as a start allow the Council of the Isles of Scilly to use some of the ERDF money that is still outstanding for some key extensions before the deadline runs out?
Earl Attlee
My Lords, I am aware of the economic difficulties in Cornwall. As regards the comparison with the Scottish situation, it is difficult to make valid direct comparisons when the circumstances vary and the service is rather more complicated.
It is important to remember that transport links to the Scilly Isles are provided on a commercial basis, whether by sea or by air. Cornwall Council rules itself out of leading the smaller-scale infrastructure schemes so development work has been undertaken by the Council of the Isles of Scilly and Penzance town council. These involve improving provision for freight handling, extending the quay at St Mary’s and dredging at Penzance to accommodate a deeper-hulled vessel. The noble Lord is quite right that the ERDF funds are time-limited.