Road Safety: Hand-held Devices
Lord Rosser Excerpts(6 years, 8 months ago)
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Baroness Sugg
I am afraid I do not have the figures that the noble Baroness refers to, but I will look into the issue and write to her with that information.
Lord Rosser (Lab)
The Home Secretary recently told police and crime commissioners to stop pointing out the pressing need for more money for our underresourced police and instead concentrate on those who are breaking the law. That outburst was clearly an admission by the Government that they will let down the police yet again in the forthcoming Budget by not providing the resources that PCCs and the police need to do their job. What representations, if any, have Transport Ministers made to the Treasury that on increasing numbers of occasions road traffic offences—including vehicle theft and using hand-held mobile phones while driving—cannot even be pursued by the police, let alone see perpetrators brought to justice, due to the continuing squeeze on police budgets and continuing reductions in the number of police officers? Can I take it that the Department for Transport, despite the recent publicly expressed concerns of HM Inspectorate of Constabulary, has remained utterly silent on the issue of inadequate police resources?
Baroness Sugg
My Lords, we are very sensitive to the pressures which police face. We recognised the importance of wider police spending in the 2015 spending review, which protected overall police spending in real terms. It is of course up to police and crime commissioners and chief constables of each police force to decide how they deploy resources. As my noble friend Lady Pidding highlighted, as well as working closely with the police to support enforcement action, police forces across the country are doing valuable work in the campaign to reduce hand-held mobile use and we should commend them.
Railways: Reliability
Lord Rosser Excerpts(6 years, 8 months ago)
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Lord Rosser (Lab)
My Lords, I too extend my thanks to the noble Baroness, Lady Randerson, for securing this debate. I also take this opportunity to welcome the Minister to her new and enhanced role, and extend to her my congratulations. I also extend my best wishes to the noble Lord, Lord Callanan, in his new role. Clearly, he is not looking for a quiet life. The Minister’s two most recent predecessors have moved on to departments dealing with people and issues outside our national boundaries; clearly, being a Transport Minister produces a desire to travel beyond our shores.
The noble Baroness, Lady Randerson, made reference to her lack of enthusiasm for seeing train operating companies in the public sector, so it would appear likely that the Government will be rather more in agreement with what the noble Lady, Baroness Randerson, had to say than they will almost certainly be with my contribution to this debate. Railway operation being in the public sector is not something new or original in this country, even today. London Underground is in the public sector, and it carries quite a few passengers. Even the previous Mayor of London did not seem to think this was an unacceptable state of affairs that had to be changed. There also seems to be quite a wide measure of public support for having the railways in public ownership, judging by opinion poll data.
However, I will use the time I have—indeed, I shall not take up all the time I now have—to raise a few specific questions with the Government on issues that potentially affect reliability and quality of service. In so doing, I make it clear that I would be more than happy to receive the responses in a letter following this debate.
Recently the Secretary of State wrote—as set out towards the end of the helpful House of Lords Library briefing for this debate—that, while one of his “biggest priorities” was northern transport projects,
“they must be designed and managed by the North itself”,
and that:
“It is not up to central government to grasp these opportunities”.
He said this despite the fact that Transport for the North is dependent on central government for the necessary resources to carry out projects of substance. In the light of rumours—let us hope that that is all they are—that seem to be circulating, can the Minister give a clear assurance that the Government are not contemplating or considering any change in the status, role or powers of Transport for the North?
I would also be obliged if the Minister could clarify—I sometimes get confused by this—which electrification proposals or schemes, or parts of electrification proposals or schemes, have recently been abandoned and which have been officially paused or deferred. I refer in particular to the Great Western electrification, the Midland Main Line electrification, the electrification of the trans-Pennine route and the Oxenholme to Windermere electrification.
On the Great Western electrification, when will the electrification of the route into Bristol now be completed—assuming that this part has been deferred or paused and not abandoned? As has already been said, at a time when the Government are seeking to reduce the use of diesel fuel and vehicles on our roads, they have just made a decision on railway electrification which will increase the expected future use of diesel power on our railways. The Government’s left hand does not always seem to know what their right hand is doing.
As is clear from this debate, we all want to see the railways expand and progress and have a successful future. However, this Government have almost certainly cancelled or deferred more electrification projects than any previous Government, on top of their record of hitting passengers by increasing fares faster than the rate of inflation at a time of austerity and no or low pay increases.
To come back to the Great Western electrification, what aspects of the contracts with Hitachi are having to be revised or renegotiated in the light of the Government’s decision to delay or abandon parts of the electrification scheme? Since the new bi-modal trains will now have to be used more than expected in diesel rather than electric mode, running costs and maintenance costs are likely to be even higher. That is on top of the fact that the bi-modal trains are presumably heavier than all-electric trains, since they have a diesel engine to carry around, which in itself already makes them more expensive, with higher running costs. Electric trains are usually regarded as being more reliable and cheaper to run than diesel trains. Do the Government accept that view?
There has recently been a change to the operation of the south-western franchise. Is the introduction or extension of driver-only operation included as part of the contract signed by the new operator of the south-western franchise?
On the issue of reliability, how much of the network grant to Network Rail, both in the current period and the next, is needed to meet contractual commitments to franchise operators under franchise agreements covering, for example, infrastructure improvements and levels and standards of maintenance—and thus presumably is not an amount that can be cut by central government—and how much of the network grant to Network Rail is potentially vulnerable since it could be cut by the Government without adversely impacting on contractual commitments with franchise operators under franchise agreements?
Talking of franchise agreements—this relates to something that the noble Lord, Lord Astor of Hever, said—how much have train operators been fined or otherwise penalised under the terms of their franchise agreements, and how many operators, for poor performance?
The Government’s statement of funds available in the period from April 2019 to March 2024, states that the Secretary of State is,
“looking to the ORR to ensure a strong and robust challenge on cost and deliverability. An important part of this will be to support an ambitious implementation of route devolution to deliver the benefits of competition and improved understanding of costs through better benchmarking”.
Can the Government say what precisely “route devolution” means in this context and what it is expected to deliver, and what is the nature and extent of the competition that will be created, as referred to in the statement of funds available?
I repeat that I would be happy with a written response to the questions I have asked, and I look forward to the Minister’s response to the many interesting and different points and issues raised during the course of this debate.
Air Travel Organisers' Licensing Bill
Lord Rosser ExcerptsWednesday 25th October 2017
(6 years, 9 months ago)
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Lord Rosser
“( ) In subsection (1)—(a) in paragraph (a) omit “or (1B)”;(b) in paragraph (b) omit “or (1B)”.( ) Leave out subsections (1B) and (1C).”
Lord Rosser (Lab)
My Lords, in the Government’s Oral Statement on Monarch Airlines of 9 October, the Secretary of State said that,
“right now our efforts are rightly focused on getting employees into new jobs and getting passengers home. After that, our effort will turn to working through any reforms necessary to ensure that passengers do not find themselves in this position again. We need to look at all the options—not just ATOL, but whether it is possible to enable airlines to wind down in an orderly manner and look after their customers themselves, without the need for the Government to step in. We will be putting a lot of effort into that in the months ahead”.—[Official Report, 9/10/17; Commons, cols. 27-28.]
The demise of Monarch Airlines, along with the Secretary of State’s Statement, has raised questions about the current UK financial protection regime generally for air travellers. The ATOL scheme is intended to ensure that those who purchase ATOL-protected flights and holidays are flown home at no extra cost if an ATOL company fails. However, the scheme does not offer that protection to customers who buy airline seats from airlines which are not within the ATOL scheme.
The Government have estimated that the proportion of Monarch Airlines passengers affected who were covered by the ATOL scheme and ATOL protection amounted to some 10% to 15%. As we know, the Government decided to step in and repatriate Monarch’s passengers regardless of whether they were among the small minority who were protected by the ATOL scheme, a decision which would appear at least to raise questions about the current scheme and arrangements.
While this Bill will update existing powers to enable different and separate arrangements to be established to align with new practices, such as linked travel arrangements, there remains a gap in consumer protection for flight-only seats sold by airlines, despite—I understand, perhaps incorrectly—the industry and the CAA’s previous calls for such a protection regime. The Bill does nothing to address that gap.
The amendment, whose intention has the support of ABTA, would through its proposed deletions to the 1982 Act provide an opportunity for the Government to say how they intend to review and update the existing arrangements and regulations, particularly in respect of flight-only travel under the Civil Aviation Act 1982, to ensure the protection of passengers in the event of a future airline failure—which as I understand it from the Secretary of State’s Statement of 9 October is, at least in part, what the Government intend and want to do.
It is really a matter for the Government, in consultation with the industry and consumers, to determine the precise framework and model for delivering any new protection regime. The Government appear to be looking for a new arrangement which would ensure that passengers in any subsequent Monarch situation are flown home at no extra cost but at the lowest possible cost to the taxpayer and, presumably, to the airlines in particular and the travel industry in general.
A substantial proportion of the failure costs incurred in the ATOL scheme over the years has related to airline failures: Clarksons with Court Line; Laker and Arrowsmith Holidays with Laker Airways; ILG with Air Europe; XL Leisure Group with XL Airways; and now Monarch Travel Group with Monarch Airlines. These failures have also led to significant costs being incurred either by customers not protected under the ATOL scheme or by the taxpayer. Travel companies are also affected by the failure of an airline as they are liable for all aspects of a package holiday under the package travel regulations. While the exclusion of airlines from a scheme of protection means that their customers are not protected against financial loss, in practice those passengers—both British and those in other European countries such as Italy and Germany—have been repatriated at a cost to taxpayers and other industry participants. This surely adds to confusion when failure occurs, particularly around what is and what is not protected under the ATOL scheme. There is also a lack of clarity around the meaning of the ATOL-protected branding and ABTA has consistently called for it to be made much clearer that ATOL protection applies only to a particular set of holiday arrangements rather than the company as a whole.
The amendment is designed to provide the Government with the opportunity to say how they will end the area of exposure to the Government, passengers and taxpayers caused by unprotected airline seat-only sales, and to consider what a new regulatory framework might look like in the event of insolvency. In so doing, it would also enable the Government to fulfil the Secretary of State’s commitment of 9 October to,
“look at all the options”,
and,
“ensure passengers do not find themselves in this position again”.
The Government have said they are going to consult and look at all the options as part of the process of,
“working through the reforms necessary to ensure passengers do not find themselves in this position again”.
Indeed, the Government said in their 9 October Statement that they would be putting a lot of effort into this,
“in the weeks and months ahead”.
More than two weeks since that Statement, have the Government made official approaches to the industry and consumers with a view to commencing consultation about the sorts of mechanisms beyond ATOL which could be implemented to address the issue and consequences to passengers of future airline insolvency? What will be the timespan of such consultation? Which organisations, companies and bodies do the Government intend to consult, and who from beyond and outside the industry do they also intend to approach? Finally, by when do the Government expect to reach conclusions about the actions and changes they intend to make to deliver on the Secretary of State’s promise following the demise of Monarch airlines that,
“passengers do not find themselves in this position again”?
Presumably that commitment was not made without at least some idea of the possible ways of achieving that particular goal.
We certainly cannot continue with a situation where nobody is sure whether the Government will or will not fly people back home in future at no extra cost in the event of another airline failure, and where there is also an apparent lack of clarity for many passengers and potential passengers under the existing arrangements and ATOL scheme about their rights or lack of rights and their protections or lack of protections. In moving my amendment, I express the hope that the Minister will be able to give some answers to the points and questions I have made and asked in the light of the specific commitments given by the Secretary of State on future objectives and intentions in his Statement of 9 October. I beg to move.
Baroness Randerson (LD)
My Lords, I have added my name to this amendment because I felt that it raised some important issues for the Government to look at. I also felt it would be genuinely useful if the views of the Government on the progress made so far were put on record.
At the time of the failure of Monarch Airlines the Minister, in his Statement to the House, emphasised that it was the largest repatriation since D-day. But I put in contrast what the airline industry said in my discussions with it: that Monarch was a small airline and that the problems would arise if a big airline were to fail. Of course, those I spoke to believe that their whole industry is in robust health and that Monarch is definitely not an example of its state generally. The point is that, as the noble Lord, Lord Rosser, has just said, airlines have failed before and undoubtedly, at some point in future, something like this will happen again.
We are looking here at whether the Government have set some kind of precedent by bringing everyone back, for understandable and excellent reasons. I think everyone supports the way that was done and the reasons for doing it. But the point is that if and when it happens again people will expect a similar response and, for that to be possible, there needs to be a scheme. The consumer understands that there is a need for a scheme and understands the ATOL scheme. What the Monarch passengers probably did not understand was why some of them were covered by something and others were not. In the end, the Government need to look at the new ways of working—the new ways in which travel is offered—and present a new scheme which covers them. In the days when the ATOL scheme was devised, package holidays covered a huge percentage of the market. That is very much less the case now.
It is also important to look not just at the passengers who are affected by this. One airline’s failure can often adversely affect a number of package holiday operators. If one airline fails, several package holiday operators will find their business seriously affected. There is a serious knock-on effect within the industry from this and it needs to be addressed. I shall listen to the Minister’s answer with interest.
Lord Rosser
My Lords, I thank the Minister for his response and the noble Baroness, Lady Randerson, for her helpful contribution to the debate.
I think I made it fairly clear—and the Minister accepted it—that in moving the amendment the principal objective was to try to get some more information from the Government about how they intend to progress the consultation. I do not intend to ask the Minister further questions as we are on Report, but those in the industry and, one assumes, consumer organisations will take considerable interest in what he said and, perhaps, in what he did not say in his response. There was a very clear, specific commitment by the Secretary of State—which I do not doubt the Government will seek to adhere to—that they would work through any reforms necessary to ensure that airline passengers do not find themselves in this position again of being stranded.
It is presumably incumbent on a Government making that kind of specific commitment to get the consultation under way as quickly as possible, to make it wide-ranging and to come to conclusions reasonably quickly. After all, if we get another incident like Monarch, and changes have not been made to the procedures and arrangements which ensure that passengers do not find themselves in that position, a number of organisations within the industry and consumer organisations, as well as us, will be asking the Government why they did not act earlier and more quickly.
I mean it when I say I am sure it is the Government’s intention to seek to resolve this issue, and I do not doubt that it is their intention to seek to consult widely or to seek to deliver on the very specific commitments given by the Secretary of State in the Statement of 9 October. However, I beg leave to withdraw the amendment.
Baroness Randerson
The Minister has already referred to the importance of an airport strategy, and the Government are working on that. As the noble Lord states, there is clearly an interrelationship between the availability of flights and the availability of package holidays.
We need clear wording akin to the words used in the ATOL protection. That phrase “ATOL protection” works because over many years the consumer has come to understand what it means, partly through government advertising, partly through the work of consumer groups and, sadly, partly through the hard lesson of the failure of holiday companies. We need similar clear wording for any new scheme, and I fear that “linked travel arrangements” is not a phrase that trips off the tongue or that will be instantly understood by the holiday-buying public.
I turn to an issue that I have raised before: the variation in protection between credit cards, debit cards and PayPal. We might want to pay for a flight by debit card because in many cases, using a credit card costs additional money—a fee for the privilege of using it. However, it is important that at the point where consumers choose how to pay, they are warned that if they pay by debit card they will not get the same protection as if they pay by credit card. It is important that we modernise the system. I am not sure that this Bill is the place to do that, but it is important that the Government take the point away and look at it.
Lord Rosser
My Lords, I add our support to the amendment moved by the noble Baroness, Lady Randerson. I do not intend to go through all the points she has so ably made, but I share her view that there seems to be a lack of clarity over the rights and protections—or lack of them—available, as the amendment says, to those,
“purchasing flights, package holidays and linked travel arrangements”.
Certainly, in some adverts, to which the noble Baroness, Lady Randerson, has already referred, the situation is not made clear. So we agree with the objective of the amendment, which is designed to make much clearer for people, when booking flights, package holidays or other travel arrangements, exactly what their rights are and are not, and what protections are and are not available.
Space Industry Bill [HL]
Lord Rosser ExcerptsMonday 23rd October 2017
(6 years, 9 months ago)
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Lord Moynihan (Con)
My Lords, I declare my interest as a member of the Delegated Powers and Regulatory Reform Committee and say that I am speaking personally in this debate and not on behalf of that committee. I support what the noble Lord, Lord McNally, is seeking to achieve in these amendments and the important principle he has raised. I also echo the words of my noble friend Lord Deben as well as the views both of the noble and learned Lord, Lord Judge, and the noble Lord, Lord Lester.
This is an issue which, every Wednesday, I consider in detail during the Select Committee’s proceedings. It is not an issue that is receding—it is growing. In the original draft of this Bill, there was provision in regulations to allow the Secretary of State to do this, and this was consequential on any provision in the Space Industry Bill. It included a Henry VIII power to amend, repeal, or revoke any Act of Parliament made since the beginning of parliamentary history—in other words, completely changing any aspect of preceding law in the context of this Bill.
I recognise that the Government have moved on from where the draft Bill was published to where we are today. I welcome this and thank them. They have taken into account a whole series of concerns that have been expressed very eloquently this afternoon, and in previous debates. Many of the Henry VIII powers have gone. Many of the statutory instruments will now be by affirmative rather than negative resolution. It is all in the right direction to enable Parliament to determine its view on many of the key issues in this Bill.
The Space Industry Bill requires a lot of detail in secondary legislation to achieve the single most important objective—the commercial success of this industry within an appropriately regulated authority. We are focusing on the regulations, but it is all too easy for Government to either make a success or a commercial failure with the industry in terms of the regulations they propose. Because of the importance of the commercial aspect of the Bill in encouraging this industry to come to this country and to provide potentially tens of thousands of jobs and activities in areas of unemployment, what is in that secondary legislation will be critical. That is why I think it is right that the noble Lord, Lord McNally, and others have spoken to this subject in the context of this Bill as well as in principle. If we do not focus now, as we will during this debate, on the nature of the Henry VIII powers and where there will be affirmative or negative resolutions and procedures, we could be putting into law a Bill which actually is of no value, unless the secondary legislation and the negotiations with industry are successful. We will need to come back to this House to look at what is achieved in that context and have our say. That is vital for the success of the objectives of this Bill.
Having said that, I reiterate once more that there has been huge progress as a result of the reports of the Delegated Powers and Regulatory Reform Committee, reports in another place and the fact that the Government have been listening. We should also place that on record, because there are significant changes from the original draft Bill, which have taken into account the importance of Parliament having a say on the secondary legislation that will be coming forward.
Lord Rosser (Lab)
We have Amendment 42 in this group, but I will also speak to Amendments 40 and 41 since that will save me having to go through the points all over again when we come to my Amendment 45.
As has been said, the Bill gives extensive delegated powers to the Secretary of State, and thus the Government, without the policy details and parameters of those delegated powers being spelled out in the Bill. The Delegated Powers and Regulatory Reform Committee has described it as a “skeletal Bill”. Consequently, it is difficult to scrutinise it meaningfully. The Government have not published any draft regulations because such regulations are little more than a twinkle in the Government’s eye at present. Formal consultation will not even start on those draft regulations for at least another year. Even then, the Government do not expect the regulations to be laid until the summer after next—nearly two years at the earliest.
Why, then, the necessity for the Bill now? The Government maintain in a letter the Minister sent to me on 6 September that it is needed to give a, “concrete indication to investors that the UK is serious about promoting growth in the space sector and delivering on spaceflight”. So serious and committed, though, are the Government to promoting that growth that the statutory instruments will be laid in nearly two years’ time at the earliest,
“subject to Government priorities and Parliamentary time”,
according to page 5 of the Government’s policy scoping notes. It does not seem to indicate that this is a government priority when there is apparently still some doubt as to whether those statutory instruments will be laid in nearly two years’ time.
The reality is that, with the crucial regulations, a Bill of 71 clauses and approximately 100 delegated powers not being laid at the earliest for another two years and then only subject to Government priorities and parliamentary time, this proposed legislation would not yet see the light of day if the Government still had a legislative programme to enact at present. Since, because of Brexit, they do not, this skeletal Bill, which seeks to avoid proper parliamentary scrutiny on future key details through excessive use of delegated powers, is being brought forward now to try to fill up some of the gaping holes in parliamentary business arising from the Government’s programme of non-legislation in the current Session.
The Government appear to have very little idea what the surfeit of regulations will say, whose interests they will impact on or what existing legislation or even legislation still being enacted or to be enacted in the present Session will be cut across by those regulations. As a result, the Government want Henry VIII powers, giving them the right effectively to bypass Parliament by being able by regulations to make provision that is consequential on any provision made by this Act, with the power being used to,
“amend, repeal or revoke any enactment passed or made before this Act or in the same Session”.
The Government have produced policy scoping notes, which tell us that, “The purpose”, of Clause 66,
“is to give effect to the minor and consequential amendments contained in Schedule 12”.
If that is the case, why have the Government not put that in the Bill? The reason is simple: the purpose of Clause 66, despite the wording of the scoping notes, is not intended by the Government to give effect to the minor and consequential amendments contained in Schedule 12. Instead, it is merely one of the purposes of Clause 66. As even the scoping notes subsequently say,
“it is possible that other changes may be required and clause 66(2) and (3) confer a power for the Secretary of State to make such changes through secondary legislation”.
The notes then go on to say:
“This power is needed to make any further minor and consequential amendments to other enactments passed before the Act or during the same Session that become apparent during the development of detailed secondary legislation”.
What is the definition of “minor and consequential amendment”, wording used in the Bill as the heading for Clause 66? Perhaps there is not one; perhaps it is whatever the Secretary of State deems minor and consequential. The Government do not use the words, if my memory serves me right, but they use the words “minor and consequential amendments” in respect of the powers in subsections (2) to (4). Why is that?
The policy scoping notes, outlining the content of subsections (2) and (3), state:
“Spaceflight is a complex activity and whilst related areas of law have been scrutinised it is impossible to rule out the possibility that some other rule of law might be engaged in the future. Equally, spaceflight or associated activities might need to be brought in scope of other laws, as the possibility of spaceflight activities from the UK would not have been contemplated when they were drafted. Therefore the content of the regulations in relation to subsections (2) and (3) will only become known as the secondary legislation develops and further regulations may also be made in the future as and when they are required”.
Precisely—so how can the Government now say that any amendments relating to other enactments, including repeal or revocation, will be minor and consequential and go no further than that? Would the provisions of Clause 66 enable the Government to amend, repeal or revoke any part of the Space Industry Bill by regulations, once it becomes an Act?
The wording of the scoping notes and, indeed, Clause 66 makes it clear that the power to “amend, repeal or revoke” is permanent and apparently not time-limited. The Government have not proposed a time limit on the use of those powers; not even up to October 2019, when presumably the main regulations, covered by six statutory instruments, will have been made and dealt with by Parliament. We surely cannot have such largely unrestricted powers on the statute book in respect of effective parliamentary scrutiny of the powers under Clause 66(2) and 66(3) for ever and a day, on the basis of a Government statement in their policy scoping notes that because spaceflight is a “complex activity”,
“further regulations may also be made in the future as and when required”,
when these are regulations that may,
“amend, repeal or revoke any enactment passed or made before this Bill or in the same Session”.
In that context, we already know that the amendments in Schedule 12 alone already cover 20 Acts of Parliament, including two terrorism Acts and the recent Modern Slavery Act. Neither does the argument hold that there will be insufficient parliamentary time to deal with matters under Clause 66 by primary legislation where the regulations involved are amending such legislation, and that is leaving aside the argument that the convenience of government and the Executive should not take priority over the role of the legislature in examining, challenging, amending and passing proposed legislation.
The Government propose in 2019 to lay the tranche of regulations enabling them to exercise the 100 or so delegated powers in the Bill, apparently through just six statutory instruments. That suggests there would hardly be a blizzard of Bills for Parliament to consider if the Henry VIII powers in Clause 66, in respect of Acts of Parliament, were not there.
I share the views that have already been expressed that the Government need to have another long, hard look at Clause 66 and what it actually means, as opposed to what they say it means.
The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)
My Lords, I thank all those who have contributed to the debate so far. I have carefully noted all views.
I know there is considerable concern about the granting of Henry VIII powers—I would be worried if noble Lords did not express such concerns—because of the wide scope of such powers to amend primary legislation that underwent parliamentary scrutiny and debate. However, I assure the Committee that we have given very careful consideration to the need to include such a power. The noble Lord, Lord Moynihan, acknowledged that we have already acted on many of the concerns expressed, and we have modified the Bill considerably as a result of many of the points put to us by committees in this House and the other place.
Lord Steel of Aikwood (LD)
My Lords, I will speak very briefly in support of what my noble friend has just said. As a former Presiding Officer of the Scottish Parliament, I must admit that I know nothing about this particular Bill—but the principle she had enunciated is very important. Indeed, it seems to me that this clause, unamended, almost falls foul of the Scotland Act as we passed it in this House. So I hope that the Minister will take this issue away. I see no reason for having this in the Bill at all. It surely should be possible, as a matter of courtesy, simply to talk to the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly—if it was recreated. I do not see the need for this issue to arise at all. It is a very dangerous principle and I am grateful to my noble friend for raising it.
Lord Rosser
My Lords, my name and that of my noble friend Lord Tunnicliffe are attached to the amendment moved by the noble Baroness, Lady Randerson. The points have already been made in support of the amendment and reference made to the views expressed by the Constitution Committee in its report. One hopes only that the Government are going to take on board what the Constitution Committee had to say.
Lord Judge
My Lords, I apologise to the Committee that when I spoke a few minutes ago I did not indicate that I was a member of the Constitution Committee. I indicate it now. I do not want to repeat everything that the Constitution Committee said—but, with respect, although I do not speak for the Constitution Committee, there is an awful lot of constitutional sense in that paper.
Lord Fox (LD)
My Lords, there appears to be a theme developing in this afternoon’s debate. In moving Amendment 44, I will also speak to Amendments 46, 47, 48, 49, 50 and 51. Again, we are on the subject of catch-all powers. Despite our having about 45 minutes left, I will keep this relatively brief.
Clause 67(1) states:
“Regulations may make provision generally for carrying this Act into effect and for achieving the purpose set out in section 1(1)”.
We regard this as a catch-all power that should be removed, which would be done by Amendment 44.
Amendments 46 to 50 relate to Clause 67(6), which stipulates that general regulations must be made using the affirmative procedure but that for those that will be made under certain sections, only the first regulations are subject to it. In other words, the first go through the affirmative procedure but the rest follow behind without it. These amendments would remove the word “first” in each paragraph, subjecting all regulations that will be made under the relevant sections to affirmative procedure. I believe that Amendments 46 to 50 enjoy Cross-Bench support. During Second Reading, my noble friend Lord McNally highlighted the need for the sector to be continuously consulted to ensure that legislation is fit for purpose.
Amendment 51 proposes that before any secondary legislation is made under the Act, the Secretary of State must consult the various relevant bodies to ensure that this is done. The Minister may have a view as to which the relevant bodies are, but the principles of consultation and affirmative change are enshrined in these amendments. I beg to move.
Lord Rosser
I will be very brief. Most of the amendments in this group relate, as the noble Lord, Lord Fox, has already said, to views expressed by the Constitution Committee and the Delegated Powers and Regulatory Reform Committee. The reasons for the committees holding the views that they do are set out in their reports before us at the moment. I simply add that our names are attached to Amendments 44 to 50, and once again we hope that the Government will take note of what the Constitution Committee and the Delegated Powers and Regulatory Reform Committee have to say.
Lord Judge
My Lords, I rely on the report of the Constitution Committee but I wonder what the point of the clause actually is. We have a proposed Act of Parliament, Clause 1 of which tells us that the Act is going to regulate,
“space activities … sub-orbital activities, and … associated activities, carried out in the United Kingdom”.
Then there are the Henry VIII powers in Clause 66, with the Secretary of State able to dispense with any part of the statute. Now we have a regulation-making power in Clause 67(1) that enables the creation of regulations to carry the Act into effect, presumably because something has gone wrong with the way in which Clause 1 operates. If Clause 1 gives statutory power to regulate space activities and so on, what on earth do we need a further regulation-making power for? This Act is brim-full of regulations. Is this just belt and braces, or is it belt, braces and a rather heavy boot?
Lord Rosser
“(6) A statutory instrument containing (whether alone or with other provision)—(a) regulations under section 4(2),(b) regulations under section 5(2),(c) regulations under section 7(4),(d) regulations under section 7(6),(e) regulations under section 9,(f) regulations under section 12(7),(g) regulations under section 18,(h) regulations under section 22,(i) regulations under section 34(5),(j) regulations under section 35(3)(a),(k) regulations under section 58,(l) regulations under section 64, or(m) regulations that create offences,is subject to the super-affirmative resolution procedure.(6A) For the purposes of this Act the “super-affirmative procedure” is as follows.(6B) The Minister must lay before Parliament—(a) a draft order; and(b) an explanatory document.(6C) The explanatory document must—(a) introduce and give reasons for the order,(b) explain under which power or powers in this Act the provision contained in the order is made, and(c) give a detailed explanation of provisions included in the order.(6D) The Minister must have regard to—(a) any representations,(b) any resolution of either House of Parliament, and(c) any recommendations of a committee of either House of Parliament charged with reporting on the draft order,made during the 40-day period with regard to the draft order.(6E) If, after the expiry of the 40-day period, the Minister wishes to make an order in the terms of the draft, he must lay before Parliament a statement—(a) stating whether any representations were made under subsection (6D)(a); and(b) if any representations were so made, giving details of them.(6F) The Minister may after the laying of such a statement make an order in the terms of the draft if it is approved by a resolution of each House of Parliament.(6G) However, a committee of either House charged with reporting on the draft order may, at any time after the laying of a statement under subsection (6E) and before the draft order is approved by that House under subsection (6F), recommend under this subsection that no further proceedings be taken in relation to the draft order.(6H) Where a recommendation is made by a committee of either House under subsection (6G) in relation to a draft order, no proceedings may be taken in relation to the draft order in that House under subsection (6F) unless the recommendation is, in the same Session, rejected by resolution of that House. (6I) If, after the expiry of the 40-day period, the Minister wishes to make an order consisting of a version of the draft order with material changes, he must lay before Parliament—(a) a revised draft order; and(b) a statement giving details of—(i) any representations made under subsection (6D)(a); and(ii) the revisions proposed.(6J) The Minister may after laying a revised draft order and statement under subsection (6I) make an order in the terms of the revised draft if it is approved by a resolution of each House of Parliament.(6K) However, a committee of either House charged with reporting on the revised draft order may, at any time after the revised draft order is laid under subsection (6I) and before it is approved by that House under subsection (6J), recommend under this subsection that no further proceedings be taken in relation to the revised draft order.(6L) Where a recommendation is made by a committee of either House under subsection (6K) in relation to a revised draft order, no proceedings may be taken in relation to the revised draft order in that House under subsection (6J) unless the recommendation is, in the same Session, rejected by resolution of that House.(6M) In this section the “40-day period” means the period of 40 days beginning with the day on which the draft order was laid before Parliament under subsection (6B).”
Lord Rosser
I will be brief in moving this amendment. When we discussed the first group, Amendments 40 to 42, which dealt with the issue of the Henry VIII powers, I expressed our concern about the extent to which they appeared to preclude proper parliamentary scrutiny of what is, after all, simply a skeletal Bill, and in respect of regulations that were not even expected to be laid for nearly two years at the earliest.
I do not wish to go through again everything that I said when we discussed the first group of amendments, but obviously the points that I made then are applicable to the reason for putting down this particular amendment. The amendment provides for the use of the super-affirmative procedure rather than, when applicable, the affirmative procedure in the Bill for considering regulations and secondary legislation under what is a skeletal Bill. The amendment is similar to the terms of the provisions of the Legislative and Regulatory Reform Act 2006.
The super-affirmative procedure provides that a Minister must lay a draft order and explanatory document before both Houses and take account of any representations. Motions passed have to be passed by either House, and recommendations of a committee of either House also have to be taken into account by the Minister. After a 40-day period, the draft order must then be passed by both Houses. The procedure also gives the committee scrutinising the order the power to kill it by recommending that no further proceedings be taken, with this recommendation being able to be overturned only by a vote of the whole House.
If the Government and any future Government are to be held in check by Parliament to try to stop any novel or expanded interpretations of minor and consequential amendments—including, of course, under Clause 66, since the Government have declined to move on that—the super-affirmative procedure provides the best route, if the Government prove to be determined to keep Henry VIII powers in the Bill. No Government ought to be concerned about the super-affirmative procedure, rather than the affirmative procedure, in the context of a skeletal Bill, which it is difficult for Parliament to scrutinise effectively, since, as I have said, the crucial regulations will not even be consulted on until next year and will not come before Parliament for nearly two years at the earliest. Through using this procedure, at least the political and statutory consequences of any overenthusiastic government interpretation of what it is appropriate to put in regulations requiring the affirmative procedure can be properly drawn to the attention of both Houses before they decide whether to give their agreement to the secondary legislation in question. I beg to move.
The Deputy Chairman of Committees (Lord Brougham and Vaux) (Con)
I advise the Committee that, if this amendment is agreed to, I cannot call Amendments 46 to 50 inclusive.
Lord Callanan
I will ensure that all noble Lords who participated in these discussions are made aware of the consultations. I will even try to make sure that they reach some parts of Scotland—in which my noble friend seems to have an interest at the moment. With those assurances, I hope that the noble Lord will agree to withdraw the amendment.
Lord Rosser
I thank the Minister for his response and thank the noble Lord, Lord McNally, for his contribution to this short debate. I am sure that the Minister did not anticipate that I would stand here expressing great enthusiasm—
Lord Callanan
May I correct something I said earlier? I am told that, apparently, it is possible to amend an SI.
Lord Rosser
If the Minister has been told that, perhaps he could write to me and to other noble Lords who have spoken to set out clearly the circumstances in which an SI can be amended. Some of us may be slightly surprised by that blanket answer, which apparently covers all SIs—and which, presumably, means that any SI can be amended. I think that that has caught one or two of us slightly on the hop. So we will look forward to the letter from the Minister setting out how a statutory instrument can be amended.
Before the Minister’s interesting intervention just now, I was saying that I am sure that he will not be surprised to hear me say that I am not overenthusiastic about the response he gave. It is clear that the part of the super-affirmative procedure which causes—or appears to cause—the Government the most problem is the bit which gives a committee scrutinising the order the power to kill it by recommending that,
“no further proceedings be taken”,
with that recommendation able to be overturned only by a vote of the whole House. I suppose that that is a good example of how the Government put their own convenience and that of the Executive ahead of proper parliamentary scrutiny.
The Bill denies us proper parliamentary scrutiny. It is a skeletal Bill; the Minister has never sought to deny that. The consultation on the regulations does not even start until towards the end of next year, and they will not be laid at the earliest until the summer of 2019—and then, interestingly enough, only if they fit in with government priorities, despite the fact that the Minister and the Government have gone to great lengths to tell us that we need to pass the Bill now to provide certainty to the industry. Yet now the industry is told that the regulations may not appear in the summer of 2019 if by then the Government have decided that it is no longer a priority or that there is no parliamentary time to do it.
The reason we are in this difficulty over lack of parliamentary scrutiny is, as I say, because the Government have decided to bring the Bill forward so far in advance of the quite crucial regulations. We all know why: it is because they have a very bare legislative programme and had to think of something to fill the gap. They chose the Bill and were quite happy to see a skeletal Bill, and then to expect all of us to accept that there would be no proper parliamentary scrutiny because it is a skeletal Bill of that sort.
I am not entirely surprised by the Minister’s response. He was not overenthusiastic about the concerns raised about the Henry VIII powers. Clearly, as far as the Government are concerned, anything that will either provide proper parliamentary scrutiny of the Bill or take away some of the draconian powers contained in it are things that at this stage—I hope that the words “at this stage” have some significance—the Government are not prepared to countenance. We have Report to come and I know that the Minister is prepared to have discussions with us and, I am sure, with the Liberal Democrats and other parties. I hope that he will reflect on the very strong feelings expressed today about the powers in the Bill and that he will come forward with at least some proposals to mitigate and address the concerns that have been expressed. In the meantime, I beg leave to withdraw my amendment.
Space Industry Bill [HL]
Lord Rosser ExcerptsMonday 16th October 2017
(6 years, 9 months ago)
Lords ChamberRead Full debate Space Industry Act 2018 View all Space Industry Act 2018 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 7-II Second marshalled list for Committee (PDF, 79KB) - (16 Oct 2017)
Lord Kennedy of Southwark (Lab)
My Lords, I am sure that the noble Lord’s amendment is excellent but I do not want to speak about that, but to make brief reference to the fact that on the previous Question I should have declared that I was a vice-president of the LGA. I forgot to do that, and I apologise to the House.
Lord Rosser (Lab)
I just add one or two brief comments to what the noble Lord, Lord McNally, quite rightly said, seeking to explore further what the impact of withdrawal from the European Union might or might not have.
At Second Reading, the Minister made reference to the issue and said:
“The Government’s policy to exit the EU does not affect the UK’s membership of the European Space Agency. The UK has a strong and healthy space economy with an international outlook. We have a long history of collaboration and participation in European space programmes and missions through the European Space Agency. The Government will continue to take an active role in European space programmes, supporting UK industry in its bids to win contracts overseas and developing our national capability to keep the UK competitive in the global market”—[Official Report, 12/7/17; cols. 1268-69.]
Those were clearly welcome statements, but I am not sure that they went to the heart of the question: namely, what impact could our withdrawal from the European Union have on spaceflight and the space industry in this country? Apparently, there has been talk in government circles of the possibility of leaving on the basis of no agreement at all being reached with the European Union on the terms. Can the Minister spell out what the consequences might be for the space industry and the level of co-operation that currently takes place if we ended up withdrawing from the European Union without any agreement? Perhaps he could also compare and contrast that with the situation whereby we left with what I think is known in the official jargon as a soft Brexit.
The noble Lord, Lord McNally, rightly made reference to the fact that the industry would like a degree of clarity and certainty for the future. Indeed, that was the Government’s argument for bringing forward the Bill at a time when we know nothing about the regulations, on which consultation will not take place until next year and which will not be produced until 2019. Presumably, if the Government are saying that the Bill is needed because the industry requires clarity, they will use this opportunity to offer the industry clarity on the impact of our leaving the European Union on the space industry and spaceflight in this country.
Baroness Randerson (LD)
My Lords, there are 38,000 jobs in the UK in the space sector, and they are top-quality, well-paid, highly skilled jobs. Brexit threatens the majority of those jobs, both directly and indirectly. Although the Bill is welcome and in itself uncontentious, it does nothing of any significance to plug the gaps that are threatening those jobs.
How and why does Brexit threaten those jobs? Two sets of work are ongoing on which we rely for a very large part of our jobs in this country relating to the space industry; they are funded by the Galileo and Copernicus projects. The UK Government have said that they want to remain part of those projects but they have failed to make a binding commitment to them. The problem is that talk of a no-deal Brexit seriously undermines the Government’s verbal assurances on this issue. They need to make it clear that they want to buy into those programmes in the future—beyond 2019. Clearly that could not happen in a no-deal scenario.
Let us be clear that we do very well out of EU space activity. In terms of what is technically called “geo return”, we put in 12.5% of funding and get back 14% of spend. We are talking about very large amounts of money. When applying for funds, companies now have to make it clear to the EU how they will ensure that after March 2019 they will still have a base in an EU country. This is a new requirement. The impact is that those companies with other EU sites are leading their bids from there, not from the UK. Those companies without another base are obviously thinking of moving to another EU country. Because there is such a long lead-in time in this industry, these decisions are being made now or in the very near future.
The second factor is the supply chain, a lot of which is foreign inward investment into the UK, and there is some current rethinking on that—so more good jobs in the UK are at risk. A major aspect of this problem is the free movement of people. The industry relies a lot on EU nationals, many of whom are already leaving. But British staff, working in the industry, are also looking abroad for opportunities and we cannot afford that brain drain. It is essential to the aerospace sector as a whole that there is free movement. The kind of visa for highly skilled workers that the Prime Minister has already talked about simply would not suit their needs. They need flexible, long-duration visas because they require staff to be so mobile and flexible. Their needs are very much like those for the rest of the aerospace sector.
For example, as many noble Lords will know, Airbus has plants in Toulouse, Broughton and a number of other places. A technician might arrive at work in Broughton one morning and be told that he is off to Toulouse by lunchtime and will be back tomorrow or the day after. Airbus, as a company, moved employees 80,000 times last year between the EU and the UK. It has its own jet shuttle between sites. The kind of visa that the Prime Minister talked about does not start to tackle that problem. The perception in Europe is that we have already left. So whatever the Government’s good intentions with this Bill, if you hollow out what we already have in our space industry in the way in which I have outlined, there is not much point in this Bill. We simply cannot afford to keep losing such high-value industries and high-quality jobs. It is important that the Government persuade us here today that they have already taken on board the key issues that we have raised in relation to Brexit and our relationship in the future with the EU.
Lord Rosser
“( ) the effect on the environment and on local communities of activities connected with the operation of spaceflight activities or the operation of a spaceport as licensed under this Act;”
Lord Rosser
My Lords, the Bill has been drawn up with the objectives and the future of the spaceflight industry in mind. There is obviously nothing wrong with that, but other interests and considerations also need to be safeguarded and addressed. The calls at Second Reading for light regulation and what is described as no unnecessary bureaucracy or red tape make one a little wary. Light regulation is what we apparently had for the financial services sector a decade ago, and we all know what some involved there got up to, which cost the country dear. One person’s light regulation and so-called red tape can be a weakening of another person’s protections and safeguards.
One of the areas on which we need to be satisfied that the Bill either provides or does not remove appropriate safeguards and protections is over the impact that spaceflight development as envisaged in the Bill could have on the environment and local communities. There appears—subject to what the Minister may say in response—to be surprisingly little in the Bill that addresses potential concerns in these two important areas.
The duties and powers of the regulator, as set out in the Bill, are geared to the promotion of spaceflight. Indeed, at Second Reading there were calls for a more specific statutory government duty to achieve this objective. Clause 2(2) states:
“The regulator must exercise the regulator’s functions under this Act in the way that the regulator thinks best calculated to take into account”,
with the first two matters listed being,
“(a) the interests of persons carried by spacecraft or carrier aircraft”,
and,
“(b) the requirements of persons carrying out spaceflight activities”.
There is no specific reference to local communities in the other matters listed under Clause 2(2), and the reference to the environment appears to be,
“environmental objectives set by the Secretary of State”.
Those could prove to be wide-ranging but, equally, they could prove to be non-existent or even negative, depending on the outlook of whoever is the Secretary of State at the relevant time.
Lord Rosser
I thank the Minister for his response. Obviously, the issue of the significance or otherwise of someone who is exempt from the licence will come up later in a separate debate, but presumably, if someone is exempt from the licence, the regulator cannot apply conditions that have to be abided by on a licence because the operator will not need one.
Lord Callanan
That is true, but it does not exempt operators from the relevant planning provisions.
Lord Rosser
But it would exempt the person from some of the duties in Clause 2, which would be covered by the licence. That includes the things the Minister has prayed in aid in rejecting the amendment. Presumably, it does not include the requirement regarding,
“the interests of any other persons in relation to the use of land, sea and airspace”,
or,
“any environmental objectives set by the Secretary of State”.
The regulator could not take those into account when issuing the licence because no licence would be required by the person who was exempt.
I thank the Minister for his response, but if the Government really are determined to make sure that environmental considerations are covered and mentioned fair and square on the face of the Bill, I put it to him that they would not have used the phrase,
“the interests of any other persons in relation to the use of land, sea and airspace”.
I think they would have been a little more specific, because it begs the question as to how one interprets,
“the interests of any other persons”,
which does not say anything specific about the environment or anything else. It would presumably be left open to the regulator, who could be the Secretary of State, to define what they thought that phrase covered. I ask the Minister to think hard about that on the Government’s behalf, because if, as he said, we are all as one in wanting to make sure that environmental considerations are taken fully and properly into account, why not make that a lot clearer in the Bill?
The Minister referred to Clause 2(2)(e):
“any environmental objectives set by the Secretary of State”.
“Objectives” implies something fairly wide-ranging, not something that has to be abided by or adhered to. I have already made the point—which I do not make in relation to the current Secretary of State—that an awful lot will depend on the attitude to environmental objectives of the Secretary of State of the day and the extent to which they are taken into account. Different Secretaries of State may have very different views on that point, so, frankly, I do not regard the Bill as it stands as satisfactory—particularly since the Government seem to accept that we are all as one in wanting to ensure that environmental considerations are properly taken into account.
There are a large number of regulations still to come in the Bill. I know the Minister will say that those affect only minor issues and none of substance, but regulations have a habit of being extended somewhat. I posed the question as to whether regulations could be drawn up that weaken or take away any of the current planning and environmental protections. I also referred to the Henry VIII powers in Clause 66, which by definition enable the Government to alter legislation. I again put it to the Minister that, given the Bill’s current wording, environmental considerations could very much take second place.
I will withdraw the amendment, but I refer to what the Minister said—perhaps I misunderstood him—on Second Reading:
“We do not believe that the Bill engages obligations to produce an environmental impact assessment”.
He also said:
“Environmental impacts are heavily correlated with the type, frequency and location of spaceflight activities. At this stage, it is very difficult to ascertain specific environmental issues. For example, the sensitivities of a site cannot be known until we know the location of the spaceport”.—[Official Report, 12/7/17; col. 1268.]
I would have thought it extremely difficult to argue, as one could interpret the Minister was arguing on Second Reading, that there could be a spaceport site for which no environmental consideration at all needed to be taken into account, and that there was therefore no immediate need for an environmental impact assessment. That part of the Bill could be strengthened.
I hope the Minister will think long and hard about what has been said today, and hopefully he can be more positive during the Bill’s later stages. However, I beg leave to withdraw the amendment.
Lord Lucas (Con)
My Lords, I may have misheard, of course, but I did not hear my noble friend the Minister address my noble friend’s question about whether some other activities that should not need a licence might fall under the wording of the Bill because “spaceflight activities” can refer to activities associated with spaceflight rather than just launches. I hope I have understood my noble friend correctly.
Lord Rosser
I do not want to prevent an answer to the noble Lord’s question but if the Minister is going to reply to the noble Lord, Lord Lucas, I want to come in afterwards.
Lord Callanan
I thought I had responded to it but I will reflect on the point that he has made.
Lord Rosser
The noble Lord, Lord Moynihan, moved an amendment to Clause 3 and the Minister went on to talk about Clause 4, perhaps because they are grouped together on the list in front of us. If the Committee is willing to bear with me, I have a stand part resolution down in relation to Clause 4. If I could just make one or two points about that, I would be grateful.
Clause 4(1) refers only to not requiring,
“an operator licence to carry out spaceflight activities”.
It does not refer to operating a spaceport. Can the Minister say whether the provisions of Clause 4 apply only to spaceflight activities—that is, the flight itself—or do they also apply in any way to the operation of a spaceport? Clause 4(1) refers also to international obligations, which the Minister has referred to already. I will read Hansard carefully to see exactly what international obligations he referred to in giving an example of the kind of situation in which an exemption would be given.
What role or powers will the regulator have in relation to a person who does not require an operator licence under the provisions of Clause 4? We partially dealt with that in the discussion on the previous amendment, and I think the Minister referred to later amendments and suggested that he would deal with the matter then since it is not immediately clear what powers the regulator has in relation to a person who is exempted from having a licence or what difference that exemption makes in terms of the regulator.
Clause 4(2) states:
“Regulations may make provision for other activities or persons to be exempted, either by the regulations themselves or by the regulator”.
What other activities or persons could we be talking about—which in relation to activities or who in relation to persons—that would be exempted from an operator licence or does the reference to activities go beyond activities for which an operator licence is required? Although I listened to what the Minister said, I am not quite sure exactly what he said about the need for the provisions in Clause 4(2) as opposed to the provision in respect of Clause 4(1).
Clause 4(4) states:
“Regulations may … make provision about the revocation or renewal of an exemption”.
Why is “may” there? In what circumstances would an exemption from an operator licence be granted which did not contain a provision for that exemption to be revoked?
Lord Callanan
I shall first address the noble Lord’s question. It is considered that the activity of operating a spaceport will not qualify for an exemption as the activities that will take place from the spaceport will have safety implications, for example, the storage of hazardous materials, the launching of spacecraft et cetera.
I shall give the noble Lord a few more details on the kind of exemptions that we are considering under these clauses. These exemptions are based on similar exemptions contained in Section 3(2) of the Outer Space Act 1986. The first exemption in Clause 4(1) is for situations under the UN space treaties where the UK and another state are jointly liable for a space activity. This provision allows the UK and the other state to allocate responsibility for regulation, supervision and monitoring activities between themselves. This exemption would be made by way of an Order in Council. The second exemption provides that activities or persons can be exempt from the requirement to hold an operator licence if the activity does not give rise to safety concerns or invoke the international obligations of the UK. There is also an exemption in Clause 7(4) that regulations may exempt persons or services from the requirement to hold a range control licence if the activity does not give rise to safety concerns or invoke the international obligations of the UK.
The terms “operating a space object” and “operating a spacecraft” in the Bill are drafted to be intentionally wide. Although this is useful and necessary to capture all activities for which a UK liability might arise under the UN liability convention, certain activities could be captured where there are no safety or security implications and the state liability is already indemnified by someone else. In such a case, a licence might not be necessary and could be overburdensome on industry. Clause 4 therefore provides for exemptions in these circumstances.
I shall give some examples of activities that could be exempted from licence requirements. The Bill provides that persons engaging spaceflight activities and range control services can qualify to be exempt from the requirement to hold a licence. Some aspects of manned suborbital activities could qualify for an exemption. However, the exemption under Clauses 4(2) and 7(4) will apply only in cases where the activity does not give rise to concerns for public safety or the safety of those involved in the activity. If there were any concerns that the activity would put people’s safety at risk, then it would not qualify for an exemption. To qualify for an exemption under Clause 4(1), another country would be required to take on all the international obligations of the UK. I hope that my response satisfies the noble Lord’s concerns.
Lord Rosser
I must say that I rather support the thrust of the points that the noble Lord, Lord Moynihan, has made. Later on, though not today, we will come to the amendment we have tabled about how regulations should be dealt with in view of the number of them that will be associated with the Bill.
I shall confine my comments now to the view of the Delegated Powers and Regulatory Reform Committee, particularly in respect of the issue in Amendments 9 and 10 where clearly there was a disagreement, with the Delegated Powers and Regulatory Reform Committee arguing that where there was a requirement to abide by the terms of what the Government described as “guidance”, and where there was a requirement that an applicant must do something of importance with that guidance for the regulations to be satisfied, it should in fact be subject to parliamentary scrutiny given its legal significance. The noble Lord, Lord Moynihan, has of course drawn attention to that point.
The Government seem less than enthusiastic about going down the road of the Delegated Powers and Regulatory Reform Committee on that issue. However, they did not actually address the point being made by that committee, which was the distinction between guidance that an applicant may take into account and guidance that an applicant must take into account in order for the regulator to be satisfied. Although I certainly support the thrust of everything the noble Lord, Lord Moynihan, said, I confine my specific comments to that point in the Delegated Powers and Regulatory Reform Committee report and invite the Minister to think again about what appears to be the Government’s rejection of it.
Lord Fox (LD)
My Lords, at this stage, I declare my financial interest in GKN and Smiths Group, both of which probably have some activity in the space industry, although I am not currently aware of it. I associate these Benches with the amendments and the overall thrust, which I am sure that the Minister is beginning to get, that there is considerable concern about the exercise of delegated powers. As the previous speaker mentioned, that will come up in a series of later amendments.
I defer in my knowledge to the noble Lord, Lord Moynihan, who is expert in these matters, but it is clear that we want to get the balance of affirmative and subsequent negative delegation right, and the excuse or otherwise that parliamentary time may not be available for the return of legislation is probably insufficient. Again, I hesitate to say this in front of the noble Lord, but safety is often dealt with by safety cases rather than a line by line, “You should do this, you should do that”, style of legislation. It does not require line-by-line scrutiny by government or Parliament.
With those points in mind, we associate ourselves with the amendments. We ask the Minister to review the Government’s position on delegated powers and are interested to hear how he stands on the amendments.
Lord Rosser
“( ) The regulator may not consent to the transfer of a licence under subsection (1) unless the provisions in section 8(3) are met with regard to the licensee to which the licence will be transferred.”
Lord Rosser
Clause 14(1) states:
“A licence under this Act may be transferred with the written consent of the regulator”.
The Bill then appears to say little more of substance on this issue. It does not appear to set any considerations the regulator has to take into account before giving such written consent, nor does it appear to say to whom or to what a licence can be transferred or what licences are or are not able to be transferred. Clause 8(3) says:
“The regulator may not grant an application for a licence under this Act unless satisfied that … the applicant has the financial and technical resources to do the things authorised by the licence, and is otherwise a fit and proper person to do them”,
or that,
“the persons who are expected to do, on the applicant’s behalf, any of the things authorised by the licence are fit and proper persons to do them”.
Amendment 22 seeks to ensure that the provisions of Clause 8(3) will also apply to the regulator when deciding whether to give written consent to the transfer of the licence.
An argument could be made for saying that the provisions of Clause 8(2) should also be included in this amendment, since presumably one would want the regulator to be satisfied in agreeing to transfer a licence that it would not impair national security, that it would be consistent with our international obligations and that it would not be,
“contrary to the national interest”.
However, this is Committee stage and I will wait to hear the Government’s response to the amendment as it stands.
On a more general point about the transfer of a licence, can the Minister set out for the record the circumstances in which a transfer might be considered necessary and those in which the Government would not expect written consent to be agreed? Finally, for the granting of a licence, the consent of the Secretary of State will also be required under Clause 8(4) if they are not the regulator granting the licence. That provision does not appear to apply if a licence is being transferred. If this is the case, why is that so?
Lord Fox
My Lords, I will be very brief. We welcome this probing amendment because this issue is very important. It is analogous in one sense to the potential for flagging out a particular enterprise. If the regulator is minded to allow a transfer of licence, what legal basis would there be for any enforcement of those licence agreements once they cease to be within the domain of this country? The second point is on the role of takeovers and acquisitions, where companies that own a licence and are within the remit of the United Kingdom are acquired and move beyond these shores for regulatory purposes. Perhaps the Minister can include those points in his answer as well.
Lord Callanan
My Lords, Clause 14 enables a licensee to transfer their licence to another party, provided that the regulator has given written consent. This provision enables a new body or company to take over the licence without starting a licence application afresh. In addition, the Bill requires that a licence holder has the necessary financial and technical resources, and that they are fit and proper persons, to do the things authorised by the licence.
Amendment 22 would ensure that the regulator would need to be satisfied that the new licensee met the requirements under Clause 8(3) before consenting to a transfer. I can confirm that it is our intention that the regulator will need to do this. Where the regulator is appointed under Clause 15, Clause 14(5)(c) requires them to consult the Secretary of State before consenting to a transfer. Thus the Secretary of State can ensure that they are satisfied that the new licensee meets the requirements under Clause 8(3).
The noble Lord, Lord Rosser, asked why the power to transfer a licence is necessary. The power avoids the need for wasteful bureaucracy that could affect businesses and local communities. For example, where a spaceport licence has been issued, it should not be necessary to demonstrate the suitability of the site again just because of a change of operator. However, the regulator would need to be content that the new operator met the eligibility criteria under Clause 8. Both the regulator and the Secretary of State would need to be satisfied that the transfer of a licence was appropriate, ensuring that there were the proper checks and balances in the system if that occurred.
I am confident that the amendment is not necessary but I will reflect on whether it is appropriate to make our intentions explicit in the Bill. On those grounds, I hope the noble Lord will feel able to withdraw his amendment.
Lord Rosser
I thank the Minister for his reply and the noble Lord, Lord Fox, for his valuable contribution to this debate. The Minister has indicated—at least I think this is a fair reflection of what he said—that he will reflect further on this issue. I would certainly have thought that if the transfer under Clause 8(3) will apply, it would be helpful if it said so. One would assume that the provisions of Clause 8(2) would also apply—that is, the parts about not impairing national security, being consistent with international obligations and not being contrary to the national interest. I take it from what the Minister said that he will indicate to us before Report whether the Government intend to make any amendments in the light of the amendment that I have moved.
I have a question on one point that I asked about at the end, which I appreciate is mainly a point of detail. For the granting of a licence, the consent of the Secretary of State is also required under Clause 8(4). If the regulator granting the licence is not the Secretary of State, is the intention that that would also apply in relation to a licence being transferred or is the Minister likely to come back on that when he has reflected further on the issues raised during this debate?
Lord Callanan
I will reflect on that and come back to the noble Lord on it.
Lord Rosser
“( ) An enforcement authorisation must be referred to a justice of the peace for evaluation within 48 hours, following the 48 hour period under subsection (7) in which the enforcement authorisation remains in force.”
Lord Rosser
I have just about recovered from the shock of hearing the noble Lord, Lord Moynihan, refer to not being here for a much later amendment. I was rather hoping we would not get to that because it says here that the target for the day is to complete the group beginning Amendment 32, which is the group we are about to embark on. I sincerely hope that this is the last group we deal with today.
This amendment relates to a view expressed by the Constitution Committee in its report on the Bill published last month. Much of what I will say is lifted straight from that report. It points out that Clause 31 sets out an enforcement regime under which,
“a justice of the peace may issue an ‘enforcement warrant’ in certain circumstances if, for instance, there are reasonable grounds for believing that a person is carrying out spaceflight activities without a licence or in breach of licence conditions”.
The committee points out that:
“Enforcement warrants may authorise extensive powers, including powers to enter property and to use reasonable force. For urgent cases, an alternative regime is set out in clause 32. This allows the Secretary of State to grant an ‘enforcement authorisation’ if satisfied that the case is urgent and that relevant conduct or anticipated conduct gives rise to a serious risk (a) to national security, (b) of contravention of any international obligation, or (c) to the health or safety of persons. Such an authorisation permits a named person to do ‘anything necessary’ for protecting national security, securing compliance with international obligations or protecting health or safety”.
Even though the power conferred by Clause 32 is very extensive and broad, the Bill does not appear to lay down any,
“system of judicial oversight (either anticipatory or post hoc). The House of Commons Science and Technology Committee expressed concerns about this aspect of the Draft Bill”.
In its response to that committee, the Government said that:
“In line with the Committee’s recommendation, we have reduced the period for which an authorisation would be valid from one month to 48 hours. This limits the Secretary of State’s power and if a longer authorisation is required, it will be necessary to get a warrant from a Justice of the Peace under clause 31 (Warrants authorising entry or direct action)”.
The Constitution Committee went on to say that:
“The reduction in the time for which an urgent authorisation may apply is welcome. However, we are concerned that such wide-ranging and potentially draconian powers would be exercisable without anticipatory or rapid post hoc judicial involvement. We draw attention to these enforcement authorisations and call on the Government to consider post-hoc judicial approval of their use”.
Amendment 32 provides that an urgent enforcement authorisation under Clause 32 must be referred to a justice of the peace for evaluation within 48 hours, following the 48-hour period under Clause 32(7) of the Bill, during which the enforcement authorisation remains in force. I hope that the Minister will give a sympathetic and helpful response to this amendment and others in the group. I beg to move.
Lord Fox
My Lords, as the noble Lord, Lord Rosser, set out, Clause 32 as it stands offers strong powers to the Secretary of State in which there is no judicial involvement authorising the activities. I support Amendment 32 and will speak to Amendment 33. Those noble Lords who have read them will see that Amendment 32 is repeated by Amendment 33, which goes into more detail at some length, also taking into account the judicial systems of the countries of the United Kingdom.
As the noble Lord said, Clause 32 allows the Secretary of State to authorise the regulator to do “anything necessary”, which is a very dramatic—possibly cinematic—phrase, but we understand what it means. We can understand that there are times when moving quickly would be an issue, but this is not necessarily a block to judicial oversight. In contrast to the proposal in Clause 32, I point to the Investigatory Powers Act 2016 where warrants issued urgently by the Secretary of State, without advance approval by a judicial commissioner, must be approved by a judicial commissioner within three working days of the warrant. If it can be done in those circumstances, I suspect it can be done in those which we are talking about today. The Government have not offered sufficient justification for the wider scope of the powers offered in Clause 32, so Amendment 33 is based on provisions in the Investigatory Powers Act and ensures judicial scrutiny of any enforcement authorisations under that clause. In similar vein to the amendment in the name of the noble Lord, Lord Rosser, it calls for a 48-hour period through which a justice of the peace can be involved. Our amendment stipulates that, if an enforcement remains in force for 48 hours, a justice of the peace should offer authorisation within that time or the action would cease to exist. Furthermore, no future enforcement authorisations may be granted under Clause 32 in relation to the same incident.
Amendment 33 then goes on to spell out the roles of the courts in Scotland, Wales and Northern Ireland, and the detail therein. Overall, we would welcome strong support for this principle from the Government and some idea of how other judicial oversight will be added to what currently appears to be a very wide legal writ for one person in government.
Lord Callanan
I thank noble Lords for their consideration of the significant powers in this clause, which we recognise are significant. I hope noble Lords will allow me to take this opportunity to provide assurance that this important power, which will be used only when immediate action is necessary, is both proportionate and subject to sufficient safeguards.
Clause 32 confers on the Secretary of State the power to grant an enforcement authorisation in the most urgent cases, where there is a serious risk to national security, compliance with our international obligations or health and safety. In such emergency situations there may not be sufficient time to obtain authorisation from a justice of the peace under Clause 31. I assure the House that there are adequate safeguards in place. Such an authorisation can be granted only to a named person who the Secretary of State is satisfied is suitably qualified to carry out the necessary action. Each time this power is used the authorisation must be in writing, must specify the action required and will remain in force for only 48 hours from the time it is granted. As an additional safeguard, improper use of this power by the appointed person could be challenged by judicial review. It is worth noting that this power is more conservative and requires more stringent authorisation than other comparable powers of entry: for example, those for nuclear inspectors or health and safety inspectors who are provided with a standing authorisation and may act at their discretion. It is anticipated that this power would be used only in the most serious and urgent of cases where there can be no delay in taking action.
I turn to the amendments specifically. The need to find a justice of the peace to review an enforcement authorisation during the period of validity would impose unhelpful bureaucracy on the person authorised at a time when they are trying to take urgent action to protect people from serious risks. A review of an enforcement authorisation by a justice of the peace after the authorisation had expired would not serve any purpose since the power granted would have already been exercised. In addition, a review by a justice of the peace, whether while in force or afterwards, would place an unnecessary and disproportionate burden and cost on the judicial system, given the other safeguards in place. Moreover, appeal by the Secretary of State, which Amendment 33 provides for, may not realistically take place in time to enable the emergency action needed to address the serious risk in question.
I assure noble Lords that the Government are listening. We have taken on board comments from the House of Commons Science and Technology Committee and have reduced the time for which an enforcement authorisation remains in order from one month to 48 hours. The noble Lord, Lord Fox, asked why we have used the wording “to do anything necessary”. It would not be possible or appropriate to list possible actions that may be taken under an enforcement authorisation as this would restrict the scope of the authorisation. The action must, however, be necessary to protect the national security of the UK, secure compliance with the international obligations of the UK or protect the health or safety of persons. An enforcement authorisation will not be issued unless the Secretary of State is satisfied that the risk will be eliminated or mitigated as a consequence. Improper use of this power by the appointed person could be challenged by judicial review.
I understand the concerns of many noble Lords that this power is excessive. However, it is more restricted than other comparable powers of entry: for example, as I said, those for inspectors in the Energy Act 2013 or the Health and Safety at Work etc Act 1974. It is similar to those powers approved by Parliament in that there is no independent judicial authorisation before or after exercise of the power. The power in Clause 32 requires authorisation for each and every use, is in place only for a 48-hour window and cannot be used routinely at the discretion of the person who is authorised to enter. I am confident that our approach is proportionate and contains sufficient safeguards to address the concerns raised while retaining the flexibility necessary to deal with the very serious risks that this clause is designed to address. With the assurances that I have provided, I hope that the noble Lord feels able to withdraw Amendment 32.
Lord Rosser
I thank the Minister for his reply and thank the noble Lord, Lord Fox, for speaking to his amendment.
The Minister has produced various arguments but not surprisingly, because he probably cannot get into the mind of the Constitution Committee, he has not said why it was not moved by the kind of considerations that he has put forward. Clearly, that committee regarded this issue as something which could lead in extreme circumstances—at least, one hopes that it would be in extreme circumstances—to an abuse of power if there was no check after the event on whether the power under Clause 32 had been used appropriately and proportionately. My amendment sought to cover that, as did the view expressed by the Constitution Committee. Having a check that this power is not misused, which is what my amendment would provide, is a point that the Minister did not address in his reply. He referred to the difficulties of finding a magistrate or justice of the peace to do this within 48 hours, or at least I think he did. I think he will find that justices of the peace can be produced fairly quickly for a range of rather more minor warrants and issues, and well within the 48-hour period. Unless there is an issue over a Sunday, you can find justices of the peace at a magistrates’ court any day. If some sort of emergency measure needed to be undertaken—as it would in such a case—I imagine that the court would be prepared to co-operate.
The Minister mentioned costs. Frankly, if the Government are throwing at us concerns over costs as a reason for not having a check on whether a draconian power—the wording used by the Constitution Committee—is being used correctly or is being abused, we have reached a fairly sorry state of affairs. The Government must do a bit better than try to argue that this is unacceptable on grounds of cost, which I think was one of the points made by the Minister.
I will, of course, read Hansard and reflect on what the Minister has said but I come back to the point that this view has been expressed pretty strongly by the Constitution Committee, having seen the Government’s response to the House of Commons Science and Technology Committee. These are fairly draconian powers and it is desirable to ensure that those who exercise them know that there will subsequently be a check on whether they have been used appropriately or proportionately. That would help to ensure that they are not abused. However, in the meantime, I beg leave to withdraw the amendment.
Air Travel Organisers’ Licensing Bill
Lord Rosser ExcerptsWednesday 11th October 2017
(6 years, 9 months ago)
Grand CommitteeRead Full debate Air Travel Organisers' Licensing Act 2017 View all Air Travel Organisers' Licensing Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 58-I Marshalled list for Grand Committee (PDF, 65KB) - (9 Oct 2017)
Lord Rosser
Lord Rosser (Lab)
I apologise for my late arrival; I had to be on the Front Bench for the Home Office Private Notice Question in the Chamber. I do apologise for the delay I have caused.
I will be brief in speaking to the amendments. Their purpose is to raise the issue of linked travel and flight-only arrangements in relation to ATOL protection. In respect of linked travel arrangements, the Minister said that the Bill would extend protection to consumers making these less formal holiday arrangements. Can he say which clause or subsection says this specifically, or is this a matter that the Government intend to address in regulations? If it is the latter and the Government intend to address it in regulations, why not include the extension of the protection to linked travel arrangements on the face of the Bill, as provided for in my Amendment 2? I take it that linked travel arrangements will be quite significant. Will the Minister let me know, either now or later, what proportion of what I would describe as ATOL sales the Government think linked travel arrangements will make up? Are they contemplating a new separate air travel trust for linked travel arrangements, in view of later clauses?
Turning to flight-only arrangements, one issue that surfaced during the debate on the Monarch Airlines Statement on Monday was the very low percentage of Monarch passengers covered by the existing ATOL provisions. I think the Minister said it was likely to be some 10% to 15%, and that this percentage was unlikely to have been much higher even under the provisions of the revised EU directive and the Bill. As I understand it, that is because nearly all Monarch Airlines passengers were flight-only. The Government decided, particularly because of the numbers involved, to provide flights back home for those Monarch passengers stranded abroad. This is a power the Government have but as I understand it, it is entirely up to them when and if they use it. Surely that can only create a degree of uncertainty, which is not a desirable state of affairs, certainly not for stranded airline passengers.
I put it to the Minister that the Government should consider setting out clear criteria against which they will determine whether to provide flights back home for stranded flight-only passengers whose airline has become insolvent or, alternatively, consider extending the ATOL protection scheme to flight-only passengers, who made up the vast majority left stranded by the demise of Monarch Airlines. Perhaps in that regard, the Minister could give an estimate of the cost to travel organisations of extending the ATOL protection scheme in this way.
Can the Minister expand on the paragraph in the Government’s Statement on Monarch Airlines on Monday? It reads:
“But then our efforts will turn to working through any reforms necessary to ensure that passengers do not find themselves in this position again. We need to look at all the options, not just ATOL, but also whether it is possible for airlines to be able to wind down in an orderly manner and look after their customers themselves without the need for the Government to step in. We will be putting a lot of effort into this in the weeks and months ahead”.—[Official Report, 9/10/17; col. 46.]
What do the Government include in “look at all the options”? Can I take it that this will include flight-only passengers not ending up being stranded abroad with no automatic provision available to fly them back home at no additional cost? I beg to move.
Baroness Randerson (LD)
I thank the noble Lord for his remarks, which have provided a useful introduction to his thinking. Clause 1(3) inserts new subsection (1E) into Section 71 the 1982 Act to clarify that the Secretary of State can make regulations to exempt any form of flight-only arrangement from ATOL. As the noble Lord, Lord Rosser, said, most of the passengers in the Monarch situation were not covered by ATOL arrangements, but it inevitably leads one to reconsider the situation and what needs to be done—we will refer to this later on. The key question is whether it is desirable for flights-only to be covered by some kind of scheme of the ATOL type. That would inevitably mean an addition to the cost of flights. In the case of low-cost airlines, it would be a significant addition to the cost of a short-haul flight. In a situation of what I think the Minister will agree is brutal price competition, I suspect, although I do not know, that the airlines would not welcome any additional costs of this nature.
On Monday, the Minister emphasised the massive scale of the repatriation that the Government, via the CAA, have undertaken, and it has been a very effective way of dealing with the problem. However, Monarch was a small airline. It might have been, as the headlines said, the biggest repatriation since D-Day, but it was a small airline that went bust. When one combines the size and complexity of that situation with the issue of linked travel arrangements and the possible development of such a concept, we have to consider what sort of compensation should be available to people throughout the market. We are in a rapidly changing market and just because airlines seem to be in robust health at the moment, it does not mean, in the uncertain future we face, that this will necessarily continue in the decades ahead. I would welcome the Minister’s comments on what forms of compensation the Government are considering for those in situations where airlines go into liquidation, and by contrast what compensation should be considered for those who still stick to the old-style package holiday arrangements—if I can call them that.
The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)
First, I thank the noble Lord, Lord Rosser, and the noble Baroness, Lady Randerson, for their co-operation on this matter. I will address the amendments first and then come on to their specific questions about Monarch and other issues.
I recognise the purpose of Amendments 1 and 2 and we have looked very closely at the legal implications of both of them. I understand and recognise the intention to ensure that ATOL protection covers flight-only bookings and linked travel arrangements. Amendment 1 would remove subsection (3) from Clause 1. I will explain why this has been included in the Bill. It is quite complicated so I will go through it. It clarifies the extent of the Secretary of State’s powers to exempt businesses from holding an ATOL when they are selling flight-only tickets. It is not changing the status quo; it is merely adding clarity about exemption from the ATOL scheme.
I think there is a small amount of confusion here. Airlines selling airline tickets are already exempted from ATOL in primary legislation—the Civil Aviation Act. What we are referring to here is ATOL holders—for instance, travel agents—selling an airline ticket. The ATOL protection applies from the moment the travel agent takes your money off you—you might choose to pay for it in instalments—until the airline actually issues the ticket, when you become a customer of the airline and part of the EU 261 compensation arrangements. Your money is protected while it is with the ATOL holder—the travel agent—until it is converted into an airline ticket, when you become the responsibility of separate regulations. Under the Civil Aviation Act, airlines are exempt from ATOL provisions.
Noble Lords may be aware that Section 71(1B) of the Civil Aviation Act already provides a specific exemption for airlines selling flight-only tickets on their own aircraft. This exemption recognises that airline operators are already subject to separate licensing requirements, set out in EU law. Member states do not have discretion to impose additional requirements.
Separately, the Civil Aviation Act also includes a wide power under Section 71(1A)(b) to make further exemptions in the ATOL regulations. This power is not expressly limited in any way in the Civil Aviation Act. However, arguably the presence in the primary legislation of the specific exemption for airlines selling flight-only tickets could be misinterpreted as narrowing this wider power. That is why we have introduced Clause 1(3) to clarify the relationship between these existing exemption powers, and remove any scope for misinterpretation. We believe there is a benefit in having this clarity in law and, as I say, the presence of the airline exemption already exists in primary legislation. If the noble Lord’s concern is that the Government intend to remove flight-only sales from the ATOL scheme, I can provide an assurance that the Government have no such plans. If the noble Lord’s aim was to bring airlines within the ATOL scheme, this amendment would unfortunately not achieve that. We would need to amend the Civil Aviation Act in order to do that.
The noble Lord’s second amendment would add linked travel arrangements and flight-only to regulation 17(1) of the ATOL regulations, which sets out the types of travel arrangements that require an ATOL certificate. I should make it clear that flight-only arrangements are already covered in regulation 17(1)(a), and we do not have any plans to change that. To accept this amendment would therefore duplicate what is already in place.
With regard to the proposal to add linked travel arrangements to regulation 17(1), once this legislation is in place we will introduce regulations to make provision for insolvency protection and the provision of information for linked travel arrangements, as required by the package travel directive. Indeed, work is already under way to draft the package travel regulations and the ATOL regulations to effect this change. The ATOL regulations will be published in draft for consultation. I am sure noble Lords would agree that it would not be appropriate to pre-empt that process by making a change now to the regulations without such consultation, as proposed by this amendment. In summary, if the noble Lord’s concern is that the Government intend to remove flight-only sales from the ATOL scheme, I am happy to provide an assurance that the Government have no such plans. If the noble Lord’s aim was to bring airlines within the ATOL scheme, this amendment would not achieve that aim. I hope therefore that he will withdraw Amendment 1.
I turn to the questions that the noble Lord, Lord Rosser, posed. He asked what percentage of the ATOL scheme would be taken up by linked travel arrangements. It is hard to say definitively but our estimate at the moment is a very small percentage. Part of the reason why we want to consult with industry before we introduce the regulations is that it is not entirely clear what a linked travel arrangement actually is. The directive expands the scope of the package travel arrangements, and the extension of the ATOL scheme will of course take effect for that regulation.
The noble Lord asked why linked travel arrangements are not included in the Bill and which clause deals with them. The Bill extends the ATOL powers but they are used to apply these arrangements throughout the European Economic Area. As such, all clauses apply to linked travel arrangements, and we will implement them in secondary legislation later on in the year when we have consulted with industry.
The noble Lord asked if we will be establishing a new trust for linked travel arrangements. The Government, together with the CAA, are still assessing the best way to implement linked travel arrangements that include a flight. We will consult on more detailed proposals later in the year. BEIS recently completed a consultation on the implementation of the package travel directive, and the responses to the consultation are currently being analysed. The consultation closed on 25 September.
The noble Lord asked about extending ATOL to flight-only. The ATOL scheme does not apply to airlines, as I said earlier, when they are acting as a flight-only provider, which are specifically exempted from it under primary legislation. Such airlines are subject to separate EU regulation and licensing arrangements, which include financial fitness requirements. We are not proposing to make any changes to the arrangements at this stage.
The noble Lord, Lord Rosser, and the noble Baroness, Lady Randerson, asked about Monarch. As I said in repeating the Statement yesterday, we believe the circumstances are unique. Monarch was quite a large airline—the UK’s fifth largest—and the circumstances were unique in that, even if we had not agreed to the repatriation package for non-ATOL holders, there was insufficient capacity available in the market so that people who had insurance cover, credit card insurance et cetera would not have been able to purchase alternative flights to bring them home. Because of the scale of the collapse and the time of the year when this occurred, there was insufficient capacity available and therefore there was a very real danger of British citizens being stranded. In those circumstances we thought it was right to step in and fund the repatriation effort, although we are currently in negotiations with ABTA and the credit and debit card companies to try to recoup some of the costs. We hope that the particular set of circumstances that applied in the Monarch situation will never be repeated.
With the answers that I gave to the noble Lord, Lord Rosser, I would be grateful if he will agree to withdraw Amendment 1 and, on the basis that Amendment 2 duplicates what is already in place in respect of flight-only and pre-empts what we will shortly consult on with respect to the relevant regulations, I hope he will agree not to press it.
Lord Rosser
I am sure it will come as no surprise to the Minister to know that since we are in Grand Committee I will withdraw the amendment, but I would like to raise one or two questions in the light of the response.
I gather from what he said that nobody quite knows what linked travel arrangements are. I only mentioned them in the amendment because the Minister used the phrase at Second Reading when he said the Bill:
“will also extend the scope of protection to a new concept of linked travel arrangements”.—[Official Report, 5/9/17; col. 1840.]
I had assumed that as the Minister referred to linked travel arrangements the Government would know what they were talking about. I now understand that people are still trying to find out what linked travel arrangements are. If I understood him correctly—and I have not heard any other argument why there should not be a reference to them in the Bill—the Government’s reluctance to put them in the Bill is because they would not know exactly what they were putting in because they do not know what linked travel arrangements are and therefore what they might be committing themselves to. Perhaps the Minister could say whether that is a fair analysis or synopsis of the reply he gave on that point.
Since the Government have expressed a lack of enthusiasm for it, I also asked what would be the cost of extending compensation arrangements or ATOL protection arrangements to flight-only passengers. I did not get a response. It may be that the Government do not have a figure. Clearly, it might impose additional costs. My only comment is that when additional costs are imposed on public sector services, the argument is usually that they will have to be found from within the budget and from efficiency savings. Presumably the same argument might be used elsewhere if the Government chose to do so. I would like the Minister to clarify his response. I got a bit confused, I readily admit, not because the Minister expressed it badly but probably because my powers of taking things on board are not as great as they might be. As I understood him, he did not say that the Government could not introduce compensation arrangements in relation to flight-only passengers, whether ATOL protection or something else, because of EU regulations but that the Government do not wish to do so. Perhaps the Minister can confirm that if the Government wanted to do it, they could, but if they do not want do it as opposed to being unable to do it because of EU regulations, that makes their estimate of the cost even more significant.
The Minister has indicated a lack of enthusiasm on behalf of the Government for going down the road of protection for flight-only passengers. Where does that sit with what was said in the Monarch Airlines Statement? We were told that,
“our effort will turn to working through any reforms necessary to ensure that passengers do not find themselves in this position again. We need to look at all the options—not just ATOL”.—[Official Report, 9/10/17; col. 46.]
Surely one of the options must be a similar kind of protection package for flight-only passengers, bearing in mind that the great bulk of Monarch passengers were in that category. Is the Minister saying, only two days after Monday’s Statement, that one of the options has already been shut down?
Lord Callanan
Let me try to clarify the issues. The fundamental reason we are extending the ATOL scheme to cover linked travel arrangements is that the concept of linked travel arrangements is introduced by the EU directive. We had slight difficulty in defining exactly what that is in our discussions yesterday with the noble Baroness, Lady Randerson.
Let us assume that the Rosser family are going on their annual holiday and so book airlines tickets. Within the website used to book the airline tickets, they may be offered a hotel or car hire at the same time. They might be offered those at the behest and specific recommendation of the low-cost airline or through a Google advert placed on the website but with no direct connection to the airline. In the first instance, if you follow up purchasing an airline ticket with booking a car and a hotel, and you do it within 48 hours, it might be a linked travel arrangement. In the second instance, if you respond to an advert placed on the same webpage, it may not be a linked travel arrangement.
The answer to the noble Lord’s question is: we are attempting to define what a linked travel arrangement is through consultation with the industry. The concept itself was introduced in the EU directive. As someone who has taken part in many late-night trialogue sessions at the end of the process of EU legislation, I can see why sometimes the drafting of EU directives is not as good or forthright as it should be.
The package travel regulations extend the definition and scope of what a “package” comprises. From informal discussions that we have had so far with the package holiday companies, we think that the vast majority of products they sell would be covered under either the old or new definition of a package holiday. On their current business models, a very small percentage would potentially be linked travel arrangements. As part of the directive, the information provisions would have to make clear to a customer that if they were signing up to a linked travel arrangement, there may be a lesser standard of protection than that provided by the package holiday directive for those who have purchased a package holiday, which would be guaranteed under the ATOL scheme. I hope I am explaining it well—it is rather complicated, and the noble Lord can come back to me if he wants further clarification.
The noble Lord asked whether we are prevented by EU regulations from extending the ATOL scheme to airlines. My understanding is that we could extend it to airlines—no doubt I can write to him if I have the wrong impression—but to do that we would have to change primary legislation, because the Civil Aviation Act states that airlines are exempt.
Turning to ATOL-protected flight-only booking providers, which we are talking about in this Bill, they are concerns such as high street travel agents. As well as being able to sell package holidays, they can also sell flight-only products. Obviously, before the airline actually issues the ticket, the customer would have ATOL protection in case the travel agent or the high street provider goes bankrupt in the meantime. Once the ticket has been issued, the customer becomes subject to the separate provisions of the EU 261 compensation regulations.
With regard to the Monarch situation, we still have a few days left in which to finish the rescue operation, and I am pleased to say that so far it is going well. On the face of it there are no easy answers to this situation. Of course we could extend ATOL protection to every airline ticket that is sold in the UK, but no doubt the noble Lord will have received the same representations as I have from airlines and others complaining about the impact of air passenger duty and how it makes the UK travel and airline market uncompetitive in many respects, although there are other issues around what might happen in Scotland or Northern Ireland. If we were to extend the insurance scheme to every airline, in effect that would just increase air passenger duty because we would be adding an amount to every airline ticket. That would apply to every airline operating from the UK or anyone transiting through this country, including Emirates, American Airlines and every other operator that travels through the UK. Many are in very robust financial health and people would already have an element of protection through the EU 261 directive.
There are no easy answers to the Monarch situation. The other area that we could look at, but which is outside the scope of the ATOL Bill before us today, would be the insolvency regulations. We can ask whether it is possible to arrange the orderly wind-down of an airline so that it can continue to operate. Again, however, that has some potential problems, not the least of which is creditor action. As soon as an aircraft is abroad in a foreign airport, if creditors know that an airline is in financial difficulties and they want payment for services upfront, they typically impound airplanes and refuse to allow them to return to their home country. It is a potential avenue that we could look at and we are not ruling anything out. We will examine all the possible ways of protecting the taxpayer in the future, but there are no obvious solutions to prevent this happening. However, I should say that we are not aware of any other airlines that might cause us anxiety at the moment.
Lord Rosser
I am not surprised that the Minister has not been able to give us an estimate of what the cost would be of extending the ATOL provision to all flights, obviously including the Monarch situation. I assume from that that the Government do not have a figure. I take it from what the Minister has said that the reference in the Statement to all options being looked at still stands, including the options in one form or another that we have been discussing in this debate. On the basis that I have not misunderstood the Minister and that all options are genuinely being looked at, I beg leave to withdraw the amendment.
Lord Callanan
Perhaps I may provide some clarification. EU law actually prevents us from adding additional licensing provisions that go beyond EU law in the case of the licensing provisions of airlines.
Lord Rosser
I will be brief. It seems that the terms of this amendment are entirely reasonable, since people will surely want to know whether changes are going to be made to the protection arrangements, if and when we leave the European Union. There is a need for people to be clear what the impact is. It may be that there is no impact and so that needs to be clear, but people certainly need to know what the impact is, whether it is negative or not adverse at all. That is what this amendment is seeking. I do not know whether the Minister is going to accept it or not. If he is not, I shall listen with interest to his reasons for saying he cannot.
Lord Rogan (UUP)
My Lords, this sensible amendment should be added and I fully support it.
Lord Rosser
“Potential impact on consumer protection of UK consumers using EU-based companies
(1) The Secretary of State may, within two years of this Act coming into force, require that the Air Travel Insolvency Protection Advisory Committee review the impact on UK consumers of booking a holiday through an EU-based company rather than a UK-based company.(2) The Secretary of State must lay a report of any assessment carried out under subsection (1) before both Houses of Parliament.”
Lord Rosser
This amendment would enable the Secretary of State to require the—now well-known from our previous debate—Air Travel Insolvency Protection Advisory Committee, within two years of the Act coming into force, to,
“review the impact on UK consumers of booking a holiday through an EU-based company rather than a UK-based company”,
and require the Secretary of State to lay such a report before both Houses of Parliament.
As we know, the Bill updates the Air Travel Organiser’s Licence so that it is harmonised with the 2015 EU package travel directive. In so doing, the Bill extends ATOL to cover a wider range of holidays and protect more consumers. The expectation is that UK travel companies will be able to sell more easily across Europe, since in future they will need to comply with protections based not in the country of sale but in the country in which they are established. The purpose of the amendment is to provide a degree of certainty that there will be a review, in this case via the Air Travel Insolvency Protection Advisory Committee, of the impact of the ATOL revisions to help ensure that there are no adverse impacts on UK consumers using EU-based companies, since the intention and objective of the Bill is to improve the range and extent of the protections available.
There is a possibility that with the change to EU-based companies having to comply with ATOL-equivalent insolvency protections applicable in the member state where a business is based, rather than in the country of sale, such companies selling holidays to UK consumers may not offer the same ease and lack of expense of processing a claim which are afforded by the ATOL provisions that would apply to a UK company. It appears that some half a million passengers could be affected.
The review referred to in the amendment would enable hard facts to be obtained on the impact of this legislation on UK consumers booking holidays through EU-based companies, and the extent to which the protections offered, the processes and timescales for securing recompense and the costs involved differ from our ATOL arrangements. With that information available, the Government would be in a position to make informed decisions on what further action, if any, could be taken or pursued to help ensure that UK consumers using EU-based companies were either not disadvantaged or at least made aware beforehand that they were liable to find themselves in a less favourable position.
A broadly similar amendment was pursued on Report in the Commons. The Minister there appears to have taken some 40 minutes over his reply, taking interventions like there was no tomorrow, some 15 of which were from his own Back-Benchers. One, as the debate reached its pinnacle, was as follows:
“May I say to my right hon. Friend, with the seriousness and candour that the moment demands, that he is a bright flame on a dull and grey afternoon to which the moths of Parliament are being drawn?”.—[Official Report, Commons, 11/7/17; col. 234.]
The Minister’s response was to wonder whether anyone else wanted to intervene in a similar vein. One could take the view that in the Commons the Government were regarding the whole debate on the amendment as a joke. Alternatively, one could take the view that, since a vote was coming at the end of the debate, the Government were playing for time because they were not sure whether sufficient of their troops had yet returned to be confident of their winning the vote. Since there will not be a vote on this amendment as we are in Grand Committee, I hope to have a more adult debate than the Government promoted in the Commons.
When the Government Minister commented in the Commons on a broadly similar amendment to the one we are discussing now, he said:
“It will be for protection schemes in other member states to provide the protections for UK consumers to which the amendment refers. Because that is not our responsibility—we do not have the power that the amendment suggests that we should have—I am not sure that the amendment works on a technical level”.—[Official Report, Commons, 11/7/17; col. 226.]
I am not sure what power suggested in that amendment the Commons Minister was referring to, but his comment was not exactly encouraging. However, despite having said that the issue referred to in the amendment in the Commons was not our responsibility, the Government Minister in the Commons went on to say that the Air Travel Insolvency Protection Advisory Committee, which provides advice to the Civil Aviation Authority, the Air Travel Trust and the Secretary of State on the protection of consumers, would receive a letter from him asking it to review the implementation of the changes provided for in the Bill. They presumably include the impact on UK consumers of booking a holiday through an EU-based rather than UK-based company.
However, the promise of a letter to the ATIPAC from a Minister who had already declared that the matter is not our responsibility is frankly not sufficient. This is a serious issue with potentially serious consequences for passengers, as recent events relating to Monarch Airlines have shown. We need something on the face of the Bill which, while not compelling the Government to require the review from the ATIPAC, makes it much more difficult for the Government not to proceed down this road, and certainly would in a situation where complaints were coming in from passengers booking a holiday through an EU-based rather than UK-based company, over arrangements and procedures on insolvency protection. I beg to move.
Lord Callanan
My Lords, please forgive me if I repeat a number of the points that I made on the previous answer, as this covers the same ground. We are proud that we have always been a leader when it comes to providing protection for holidaymakers. We set up the ATOL scheme in UK legislation several years before the original package travel directive was agreed in Europe. That is the significant point. It means that the ATOL legislation is not dependent on European legislation. The Bill will harmonise ATOL with the package travel directive in the immediate term. However, the ATOL legislation and protection will still exist and remain in place as we leave the EU.
I fully understand why this amendment has been proposed, in order that we consider the ongoing impacts on consumer protection as we leave the EU. As I said earlier, this is already catered for in the legal and policy framework in place. As referred to by the noble Lord, Lord Rosser, during the Commons passage of the Bill, my colleague the Minister of State for Transport, the right honourable John Hayes, wrote to the Chair, John Cox, to consider this precise point in ATIPAC’s 2017-18 annual report. I am sure that they are already minded to keep a close eye on consumer protection both before and after we leave the EU. In fact, these reports will be submitted to the Secretary of State within four months of the end of each financial year and will be published on the ATIPAC website.
The noble Lord, Lord Rosser, also asked about HMG’s problem of our UK passengers purchasing from EU businesses. If a travel business is established in Europe, it will be able to sell holidays to consumers in the UK without ATOL protection. However, it would still be obliged to have in place insolvency protection that meets the strict requirements of the new directive. This protection will be broadly similar to ATOL and will need to cover both online and traditional package holidays.
In light of the explanation that I have given and the scrutiny and the annual review already in place, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Rosser
I am disappointed but not surprised by the answer that I have received. One issue will relate to EU-based companies that are selling holidays here but which are required to conform to requirements in their own nation. What will the process be for obtaining that compensation and protection? What expenditure may have to be incurred by a UK resident who has purchased a holiday through an EU-based company? Those processes and procedures, and the cost of going through them, may well be rather more extensive than might apply in relation to a UK company under our own ATOL arrangements. That aspect of it has been rather ignored in the answer given. We come back to a situation where the Government seem willing to write letters to people and to stand up and say in one of the Houses of Parliament, “Yes, we intend to do this”, but when it comes to being asked to put their words on the face of the Bill so that everybody can see their commitment, making Ministers much more accountable, and being required in this case to place the report before both Houses of Parliament, the Government resile from such a suggestion without giving a proper justification as to why it would be inappropriate or unworkable. I am disappointed with the reply, since I think that the Government could have gone further, but I beg leave to withdraw the amendment.
Lord Rosser
I have Amendment 6 in this group to which I would like to speak. As the noble Baroness, Lady Randerson, has said, it is similar to, although not exactly the same as, the amendment that she has just moved. My amendment states:
“The Secretary of State may not amend the definition of ‘Air Travel Trust’ under subsection (6) until a report outlining the criteria under which those amendments have been proposed has been laid before both Houses of Parliament”.
Clause 2 relates to the Air Travel Trust, which holds the money that is used to refund consumers under ATOL protection. It gives the Secretary of State the power to define separate trust arrangements to reflect different market models. Presumably it has been included in the light of changes in the package holiday market, but no doubt also in the light of Brexit because changes to ATOL and the Air Travel Trust could conceivably be considered necessary by the Government in the event of our leaving the European Union, depending on the basis and terms on which we left. Indeed, in the light of the discussion we had earlier on Monarch Airlines, the Government’s Statement on Monday and now looking at all the options, it could well be that, as a result of looking at those options, the Government have come to the conclusion that changes might be needed as far as the Air Travel Trust and ATOL arrangements are concerned.
During the Commons Committee evidence sessions in relation to the measures contained in this Bill, a trustee of the Air Travel Trust said that he recognised the possible merits of separating the trust to reflect variations in the products in the market, but that we are not there yet and that it would not be appropriate for the Government to use the Bill as a means of making wholesale changes without due consultation. Moreover, the impact assessment does not consider proposals for ATOL reform beyond what is currently required. In the Commons, the Government declined to accept an amendment requiring them to undertake a full impact assessment and consultation before bringing forward regulations to create any new air travel trusts through an affirmative resolution—a very similar amendment to that moved by the noble Baroness, Lady Randerson. In response, the Government said that there would be full consultation and a comprehensive impact assessment in respect of any regulations to be made under these measures. Can the Minister say whether that applies to any measures covered in the whole of the Bill or did the Government’s response refer only to regulations made under new subsection (6) inserted by Clause 2(2) relating to air travel trusts? The Government’s lack of enthusiasm to date for putting these declarations of intent into the Bill, bearing in mind the considerable powers which subsection (6) gives the Secretary of State, is worrying.
We have therefore tabled Amendment 6. It would mean that prior to amending the definition of “Air Travel Trust” the Secretary of State would have to lay before Parliament a report setting out the criteria under which the amendment was being proposed. This would at least enable a view to be formed on the need, or otherwise, for such amendments, ensure a degree of consistency over the reasons for bringing forward such amendments and enable a view to be taken on whether the amendments address the reasons or criteria that had been advanced for bringing them forward. That does not seem unreasonable in the light of the extent to which the powers given to the Secretary of State under subsection (6) to make potentially significant changes by regulations could be used, bearing in the mind the impact they could have, to which reference has already been made, on the viability and sustainability of the current Air Travel Trust or a future, more fragmented trust and thus the whole ATOL protection scheme.
Lord Callanan
My apologies for the delay: when you walk through the Lobby, you get trapped by Members wanting to talk to you about various issues. I return to the two amendments. In light of the responses to our consultation last year, the Government are proposing to take the power to establish additional trusts to give them the flexibility to make separate provision for different types of risk, or different business models. The impact of failure can be significant, as we have just witnessed in the failure of Monarch Group, to which Members have referred. This makes the need for regulatory flexibility vital for market efficiency and consumer certainty.
This change has the potential to make the scheme’s operation easier for industry to apply and more robust for the consumer. The new looser types of package arrangement called linked travel arrangements are the most obvious example. Currently, we do not know how the industry will react to this innovation and whether riskier products will appear that might require us to separate the trust arrangements. Richard Moriarty from the CAA said in the evidence session when this clause was part of the Vehicle Technology and Aviation Bill that,
“it would be prudent and sensible for Government to have the flexibility to respond to that”.—[Official Report, Commons, Vehicle Technology and Aviation Public Bill Committee, 14/3/17; col. 65.]
There is already a legal duty in Section 71B of the Civil Aviation Act which places a requirement on the Government and the Civil Aviation Authority to consult if we introduce regulations under Section 71A. Like my right honourable friend John Hayes, Minister of State for Transport in the other place, I am happy to give the noble Baroness a commitment today that there will be a thorough impact assessment and consultation before we use these powers.
Throughout the ATOL review process we have consulted on the basis of impact assessment. In 2012 we changed the Civil Aviation Act to better reflect current market practice. In 2013 we launched a call for evidence on our long-term review of the ATOL scheme. Last year we consulted on the very changes to the Civil Aviation Act that we are discussing today, and shortly we will launch a series of consultations on the detailed regulations that will follow the Bill. As noble Lords can see, each stage of this work has been the subject of extensive impact assessments and consultations every step of the way. Indeed, both the Civil Aviation Authority and the industry’s leading trade body—ABTA—have commended the Government’s approach to reform. We will be working closely with them and consulting with industry as and when we develop plans to implement this clause. Given that the Government are already obliged by Section 71B to consult on the use of these powers, it is not necessary to introduce a further requirement in the manner described, particularly when we are midway through an extensive process of consultation and engagement, which has been commended by those involved.
The noble Lord, Lord Rosser, asked whether the requirement to consult is for all ATOL powers. The regulations under Section 71A of the Civil Aviation Act include a requirement to consult for all the powers. The noble Baroness, Lady Randerson, asked whether the Government’s action to repatriate passengers under the Monarch scheme undermined the ATOL scheme. I think she has an arguable case. I hope she is not suggesting that we could segregate people in overseas airports and say, “You are protected by ATOL and you are not”. As I have explained, the Monarch situation was an exceptional collapse. There was insufficient capacity on alternative airlines. Had it happened at a less busy time of the year, it may not have been necessary for the Government to step in and get people home. We looked at the particular circumstances of that airline, the sheer number of passengers involved and the lack of available capacity on alternative airlines to get people home.
However, it is important to say that the ATOL scheme is an important part of the rescue operation. It will help refund the repatriation costs for the ATOL-protected passengers and they will also be covered for additional accommodation and subsistence costs if they are delayed beyond their original date. ATOL protection will also ensure that any protected passengers who are yet to travel with Monarch will receive a full refund. As I mentioned earlier, the Government will be seeking the recovery of costs from card providers—both credit cards and debit cards—and the travel industry has also been asked to contribute towards the costs of the operation. I understand the concentration on the Monarch collapse but those were exceptional circumstances and, as I said in my Statement yesterday as well as earlier today, we would not want to be hamstrung by that in future.
Lord Rosser
I will not say that the Minister has dismissed this—that was not the way he did it—but he referred to the Monarch Airlines scheme as being exceptional, somehow in the hope that it will not happen again, and I am sure that hope would be endorsed, but the Monarch Statement given on Monday said that the Government’s,
“efforts will turn to working through any reforms necessary to ensure that passengers do not find themselves in this position again ”.—[Official Report, 9/10/17; col. 46.]
So the Government have to produce measures and proposals that will ensure that if there is another circumstance like Monarch Airlines, passengers do not find themselves potentially stranded without any protection and the Government do not have to pay the cost of getting them home. That is the commitment the Government have given, is it not? The Government can say that Monarch is exceptional, but they have committed themselves to making sure that there are measures that prevent passengers being stranded not knowing whether the cost of bringing them home will be paid for. The Government are committing themselves to measures to ensure that that cannot happen and that there will be certainty for passengers that the cost of getting them home will be met.
Lord Callanan
As we said in the Statement, we will be looking at the feasibility of extending the ATOL scheme. I referred earlier to some of the difficulties involved in that. We have also said that we will look at the insolvency regime, but that does not necessarily provide an easy answer. We are looking at the circumstances. We are still in the middle of the repatriation operation, but we will look at the circumstances and see whether there is anything we can do that would obviate the need for government to step in in future.
I have given reasons why these amendments are unnecessary, along with assurances, particularly with regard to full consultation and providing impact assessments. The Government have a good record in this area, which I have already outlined. We have consulted on these and all previous changes and have produced impact assessments, so I hope that the noble Baroness will withdraw her amendment and the noble Lord, Lord Rosser, will not move his amendment.
Monarch Airlines
Lord Rosser Excerpts(6 years, 9 months ago)
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Lord Rosser (Lab)
I thank the Minister for repeating the Statement made earlier in the Commons by the Secretary of State. I also appreciate that the Minister has himself been directly involved in these issues as the Aviation Minister.
The demise of Monarch Airlines has caused a great many problems and much distress for both passengers and certainly some 2,000 staff who have lost their jobs. Could the Minister say how many Monarch staff have so far either found alternative employment or, perhaps more realistically at this stage, been offered alternative employment?
The government Statement said that the CAA had essentially set up one of the UK’s largest airlines to conduct this operation. I agree that this is a very good example of how a state-run enterprise can deliver effectively and efficiently. Those involved in bringing home Monarch customers left stranded by its demise are to be congratulated, not least the staff of the Civil Aviation Authority. There are, though, a few questions I would like to raise.
First, how long before the demise of Monarch Airlines did the CAA start to organise aircraft to bring stranded passengers home, since concerns have been expressed about the reality that Monarch Airlines was still selling flights a few hours before it ceased trading? If the CAA knew that Monarch Airlines was on the verge of failing, and it must have done otherwise there would not have been the issue over renewing the licence, why did it not warn the public of the potential adverse consequences of continuing to purchase Monarch flights? Is this part of a general issue that the Government are looking at in the light of the comment in the penultimate paragraph of the Statement that they intend to look at all the options for ensuring that passengers do not find themselves in this situation again?
Secondly, the organisation that took over Monarch in 2014, Greybull Capital, a private investment firm, frankly has form when it comes to the collapse of companies—My Local convenience stores and Comet, for example. Bearing in mind that the taxpayer is having to pick up at least part of the price tag of Monarch’s failure, do the Government intend to consider what role they should play in future when companies are being taken over in situations where the taxpayer is likely to have to pick up a not insignificant part of the bill if the company that has been taken over then fails?
Thirdly, I understand that KPMG was appointed to seek buyers for Monarch’s short-haul business prior to the airline’s collapse, and was actively doing so. If that is correct, is it also correct that KPMG is now acting as Monarch’s administrator, and, if so, does that not raise questions about at least potential conflicts of interest?
Fourthly, I understand that that there was a report in yesterday’s Sunday Times suggesting that the £165 million rescue package to Monarch last year was largely funded by Boeing as part of a cut-price deal for an order for aircraft. Is that suggestion correct or incorrect? It has also been claimed that Monarch had £50 million in the bank. Is that correct and, if so, who will get that money, and indeed the money from the value of Monarch’s landing slots, claimed to be £60 million?
Fifthly, the Statement says that the Government are currently engaged in discussions with the relevant credit and debit card providers with a view to recouping from them some of the cost to taxpayers of what the Government describe as repatriation flights. What is the current cost to taxpayers of these flights? What is the likely final cost before any money is recouped? What is the legal position of credit and debit card providers, and indeed the other travel providers with which the Government have said they are in discussions, when it comes to paying the cost of those government repatriation flights?
Sixthly, and finally, the government Statement says that the CAA’s responsibility for bringing passengers back extends only to customers whose trips are covered by ATOL, but that the Government instructed the CAA to ensure that all those currently abroad were offered an alternative flight home, although I understand this does not apply to those returning after next Sunday. Perhaps the Government could say if, and if so why, this latter point is the situation. In the light of the penultimate paragraph of the Government’s Statement, which referred to looking at the options and trying to prevent passengers being, to put it mildly, inconvenienced in this way again, there appear to be issues about the Government’s future intentions, to be pursued perhaps more appropriately during the Committee stage of the ATOL Bill on Wednesday.
Baroness Randerson (LD)
My Lords, I start by thanking the Minister for repeating the Statement and for having provided the opportunity to talk to him about this issue following the failure of Monarch.
Clearly, this is a massive task and our thanks must go to those who are engaged in bringing people back to Britain. This is probably the first failure of a major UK company that can be directly ascribed to the impact of the falling pound caused by the Brexit vote. I fear that it will not be the last such failure and that the Government will have to intervene to alleviate the impact of Brexit-induced failure on numerous occasions in the future.
It is true that other factors, such as increased costs of security, were involved in this situation, but the falling value of the pound increased the costs of fuel, handling charges and lease payments in a way that proved fatal for this company. So, despite a 14% growth in the number of passengers travelling with Monarch, the company was not viable any more and nearly 1,900 Monarch employees have lost their jobs. Our sympathy must go to those who have been made redundant. It also needs to go to those customers who experienced distress and will face considerable financial loss, as many are not covered by the ATOL scheme.
My questions to the Minister are as follows. First, rumours about the financial instability of Monarch had been swirling around for weeks, yet it continued trading. I received an email a couple of days before the company collapsed tempting me to buy one of hundreds of thousands of holidays on offer. Why was the company allowed to continue not just to provide holidays to those who had already booked but to entice new customers at a time of such instability?
Secondly, it appears to have been revealed that credit card firms withheld from the airline an estimated £30 million from ticket sales because they feared that it would go under. Is the Minister satisfied that this practice was legal and that it did not contribute to tipping Monarch over the edge? Do the Government intend to investigate this situation and to ensure that in future cases of a similar nature there is no knock-on effect from action of this sort by credit card companies?
Thirdly, what percentage of customers are not covered by the ATOL scheme? I appreciate that the Minister may not be able to give us a precise figure at this stage but some indication would be helpful. In what respect will the ATOL Bill, which is before this House at the moment and will be discussed in Grand Committee on Wednesday, improve the situation in the future? Will he undertake to re-examine that Bill in the light of these events to see whether more could or should be done to protect customers buying flights as part of a holiday in the new online arrangements that the vast majority of us now participate in?
Finally, how much will the repatriation cost? How far do the Government believe that they will be able to recover that cost and what steps will they take to do so?
This collapse of a company nearly 50 years old and the sheer number of customers involved emphasises how much we travel abroad these days and how important it is that the Government grapple urgently with the challenges that the transport industry faces in relation to many aspects of Brexit.
Roads: Congestion
Lord Rosser Excerpts(6 years, 10 months ago)
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Lord Callanan
The noble Baroness makes an important point. Again, we are investing enormously in expanding the bus network. Many local authorities are dedicating sections of the highway to bus-only networks, funded by grants from the Department for Transport. The bus network is improving massively in many of our great cities and rural areas, and we should be proud of that.
Lord Rosser (Lab)
My Lords, the Minister has set out how much money is being spent, but in the light of this Question, clearly, it is not having much of an impact. The 2010-15 Government set up a fund for sorting out pinch-points in the road network, and this Question would suggest that it was not particularly successful. Can the Minister say how much money from that fund was spent, how many projects it covered and how many were put forward which were not supported? Has the fund continued, or was it only for a limited time-span? If the latter, why was it brought to an end, rather than continuing with it?
Air Travel Organisers’ Licensing Bill
Lord Rosser ExcerptsTuesday 5th September 2017
(6 years, 10 months ago)
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Lord Rosser (Lab)
My Lords, I thank the Minister for his explanation of the purpose and content of the Bill, which we support, although that does not mean that we will have no issues to pursue during the further stages of the Bill. I am not quite sure whether the numerical shortage of Back-Bench speakers is despite or because of who the Front-Bench speakers are.
In a situation where those booking holidays do so many weeks or even months in advance, and often do so by paying up front in a situation where services are frequently provided by third parties, to ensure up-to-date and effective appropriate protection for airline passengers in the event of the bankruptcy of their travel company is an objective with which I am sure all agree.
Indeed, in the light of the problems there have been at times this year at some of our airports as a result of difficulties over, for example, IT systems and the enormous adverse impact that that can have on passengers, one is tempted to feel that maybe the protection offered by statute is not as all-embracing as it might be. The consumer, we are led to believe, is king. I am not sure that air travellers always feel that that is the case.
In his letter to Members of this House in July, the Minister states that this Bill is intended to modernise the Air Travel Organisers’ Licensing consumer protection scheme for package holidays that include a flight. The ATOL scheme was introduced in the 1970s for UK holidaymakers flying overseas and, as the Minister said, was most recently updated in 2012. The ATOL scheme is also a crucial means by which UK businesses can meet their obligations to have insolvency protection under EU directives.
As the noble Baroness, Lady Randerson, said, the content of this Bill originally formed part of the Vehicle Technology and Aviation Bill, which met a sticky end as a result of the Prime Minister’s sudden desire to hold a snap election. Perhaps the Minister can tell us whether, and when, all the other parts of the Vehicle Technology and Aviation Bill are likely to reappear and whether the impact of drones and laser beams on the safety of aircraft will also then be addressed.
ATOL is a statutory financial protection scheme managed by the Civil Aviation Authority on behalf of the Government and at present applies only to flights with accommodation sold in the United Kingdom. Businesses selling air holiday packages, or flight-only sales by third parties, in the UK are required by law to hold an ATOL licence. Should an ATOL-licensed firm become insolvent, the Civil Aviation Authority can refund protected customers or, if they are already on holiday, ensure that they can get back home. As has already been said, the scheme is funded by contributions made by travel companies into the Air Travel Trust Fund at the rate of £2.50 for each person they book on a holiday. It has been estimated that the ATOL scheme protects over 20 million holidaymakers each year.
As we know, in November 2015 the European Union adopted a revised directive on package travel and linked travel arrangements, and member states—which, contrary to the belief of some, still include us—have until 1 January 2018 to implement the directive, which will apply from 1 July 2018. The Government supported the updating of the EU package travel directive as it was consistent with our own ATOL protections and should provide a consistent approach to protection, including in respect of holidays booked online.
The revised directive takes account of the major changes that have occurred over the last 20 years or so in the way that holidays are bought and sold with the growth of the internet and mobile phone technology. In particular, the internet has enabled people to mix and match the components of their holiday in a way that often falls outside the scope of ATOL and the current EU directive. One survey has estimated that about 75% of UK customers now book their holidays over the internet. This has led to a fall in ATOL sales as a share of all leisure flights from over 90% in 1998 to, I believe, around 50% more recently.
One aim of the 2015 EU directive is to bring greater clarity on what constitutes a package holiday, with a further objective being to harmonise protection within the EU. The first clause of the Bill updates ATOL to ensure that it is harmonised with the recent EU directive. Many of the changes will be covered in regulations, but a wider range of operators, including more dynamic package providers which offer a greater choice of destinations, activities and providers and enable people to tailor bespoke packages for themselves, will probably be covered under the changes, bringing protection to many more UK holidaymakers not covered under the existing ATOL provisions.
In addition, the requirement for travel companies to be in line with standards at “place of establishment” instead of at “place of sale” will mean that UK companies can sell more easily across Europe by simply adhering to the widely respected ATOL arrangements and requirements. Existing ATOL legislation applies only when the first leg of a relevant flight booking departs from a UK airport. However, will the Minister say whether this change will also mean that EU-based companies selling in the UK will have to adhere only to an ATOL-equivalent protection laid down in the member state where the business is based, which could have processes and timescales for recompense distinctly different from what many UK consumers would expect under our ATOL arrangements? Some 500,000 passengers could be affected.
The second clause relates to the Air Travel Trust, the legal vehicle used to hold the money to refund consumers under ATOL, giving the Secretary of State power to define separate trust arrangements to reflect different market models. This change is not directly relevant to the EU regulation addressed in the first clause, but is a dormant power that would enable the Government to make wholesale change to the structure and applicability of the ATOL brand, subject only to the affirmative resolution. Will the Minister say what consultation—and with whom—will take place prior to the regulations under this clause being laid by the Secretary of State, and will a full impact assessment be undertaken? What separate trust arrangements to reflect different market models are the Government contemplating under Clause 2, and why, and will they provide more, less or the same protection as is provided to consumers under the present trust arrangements?
The third clause extends the scope of the powers under which the Civil Aviation Authority is currently able to request information. Specifically, the clause would ensure that the information power would apply to any airlines established in the UK selling relevant holidays in the EEA that are not covered by the Civil Aviation Act 1982.
The last clause, Clause 4, provides for commencement of the provisions of the Bill, with Clause 3 coming into force on whatever day or days the Secretary of State decides by regulations, and the other provisions coming into force on the day on which the Bill receives Royal Assent. The comment has already been made that the travel industry is one that has to plan, and to sell holidays, up to 18 months or more ahead. Much of the detail implementing the Bill will be done through secondary legislation, the content of which at the moment is unclear. What discussions—and with whom—have taken place and are taking place on the detail of the secondary legislation and when is it expected that secondary legislation will appear, assuming that this Bill becomes an Act?
Further, what guarantees can the Government provide that departure from the EU will not result in any of the existing rights and protections for passengers provided for in EU law, including those provided for in this Bill, being weakened or diminished? Finally, what guarantees can the Government offer the airline industry on the operating environment situation following our withdrawal from the EU, bearing in mind that aviation does not even have World Trade Organization rules to fall back on?
We support the aims and objectives of the Bill, but there are a number of points on which more detail is needed from the Government. The purpose of the Bill will be somewhat diminished if our aviation industry is in trouble following withdrawal from the European Union.
Lord Callanan
I thank the small number of noble Lords who contributed to the debate this afternoon. I hope, like the noble Lord, Lord Rosser, that it is because of the quality of the Front-Bench contributions that other noble Lords decided not to contribute, but I suspect it probably has more to do with being the first day back after the Recess. Nevertheless, it is about the quality rather than the quantity of the contributions. It has been a good, brief debate.
The travel market has moved on significantly in the past decade, with changes to the way holidays are offered and sold. The market has diversified with the growth of the internet and smart technologies, as many Members have pointed out. Consumers now have a great many options at their fingertips to buy holidays and to put together their own packages. As the methods for selling holidays modernise, we must also update and modernise the schemes and laws that protect them. As I said in my opening remarks, this Bill is a vehicle by which the UK will implement the EU package travel directive. It will ensure that informally booked holidays will have protection similar to that for traditional package holidays, regardless of whether they are booked on the high street or online. This Bill complements the steps we took to update the ATOL scheme in 2012 and is required to ensure that consumer protection can keep pace with the changing travel market.
While it is fair to say that the Bill may not be the largest in terms of clauses, not many Bills can bring peace of mind to so many people. The scheme protects more than 20 million people each year by regulating entry into the market and acting as a fund to compensate consumers who might be caught up in a failure. It has provided robust consumer protection for more than 40 years and is held in high esteem by the travel industry and consumers alike. It has been able to do so by evolving over time and adapting to changes in the travel market. The Bill will help to align our regulatory framework with the changes coming in across the EU in 2018. The combined effect of the clauses will help to cut red tape, allowing UK-established companies to sell holidays more easily throughout Europe. They will be able to protect more holidays through the ATOL scheme, removing the need to comply with different schemes in each member state.
I shall move on to some of the question that have been asked. The noble Lord, Lord Rosser, raised the point about the future of consumer protection once the UK leaves the EU. The UK has always led the way in protecting holidaymakers. We remain committed to consumer protection and will continue to do so after Brexit. For example, we established the ATOL scheme two decades before the original package travel directive was agreed across Europe. ATOL is of course enshrined in UK legislation and will remain on the statute book until such time as these Houses decide otherwise, regardless of what happens with Brexit. We also made improvements to the scheme in 2012 which are now being echoed in the new package travel directive that was passed by the EU in 2015. So I think that I can claim some authority here when I say that we have a track record over many years of being at the forefront of consumer protection in this field and that we hope to remain so.
The Bill will extend the Civil Aviation Authority’s information powers so that it is more able to regulate the scheme and cross-border activity. It will update the ATOL powers so that they align with the scope of the directive and will provide more flexibility to set up new trust arrangements and so on to respond more effectively to an increasingly diverse pool of risks. The scheme now needs to manage a greater variety of risks and business models, and the update the Bill will make to ATOL will mean that consumer protection can extend to a broader range of holidays. This will mean that protection is provided for traditional and online package holidays as well as for the looser combinations of travel which had previously been out of scope. Of course, we must be mindful that the regulatory landscape will need to be able to adapt to future changes in our relationship with the EU, but we will also retain flexibility in the ATOL regulations to adapt to future changes in our relationship, thus ensuring that we continue to have strong consumer protections in place as we leave the European Union. These measures will ensure that the scheme remains fit for today’s world, a world in which digital technologies are offering increasing opportunities for consumers to select the way they purchase a holiday.
Moving on to some of the other questions that were asked, my noble friend Lord Flight reflected on his Burma experience. I hope that he has now recovered from his back operation and his problems with insurance. It is important to say that the ATOL scheme is not designed to replace holiday insurance and we do not want to give consumers the impression that it should or might do so. People should still take out holiday insurance, ideally before they book their holiday, which for its relatively modest cost provides the considerable protections they will need above and beyond the ATOL scheme. Arrangements for flight-only and for airlines are regulated separately, and I am sorry that my noble friend was not able to take advantage of them with his Burma experiences. I am not sure that there are any package holidays to Burma that would be covered by the ATOL regulations.
In response to the point made by the noble Baroness, Lady Randerson, no distraction is intended from any other worthy causes. She got her points in about Brexit anyway, so maybe she could cut and paste them and repeat them in the Brexit debate later this afternoon and save everyone the trouble of listening to them again, worthy though they were. She also asked about drones and lasers, a point also raised by the noble Lord, Lord Rosser. I announced just before the start of the summer vacation the measures we intend to take on drones. We are currently working on further measures to deal with the scourge of laser pens. I cannot be more specific on a timescale at the moment, but I assure the noble Lord that as soon as we can we can provide precise timings I will do so, but we recognise the threat and have published measures on what we intend to do on drones. We will act as soon as is possible.
The noble Baroness, Lady Randerson, also said she thought there was a degree of irrelevancy about the Bill. I am afraid I do not agree. We need to have protection measures in place. As I said, it will exist long after we leave the EU. We were 20 years in advance of the EU package travel directive and our protections will remain in place afterwards.
The noble Baroness raised so-called regulatory shopping. This is a concern, but we have seen no evidence of it so far. Indeed, the package travel directive in many respects implements what we already have in the UK, so it will make it less likely that companies can move to a lower-regulation environment in the rest of the EU. It will raise guarantee standards in countries such as Spain effectively to what we already have in the United Kingdom, so it will prevent the problems associated with Lowcost Holidays that I mentioned earlier.
The noble Lord, Lord Rosser, and the noble Baroness, Lady Randerson, mentioned the new trust arrangements. They are right to do so. I hope I will be able to reassure them. We have no plans to establish any other trust schemes beyond what we already have. Indeed, in response to the noble Baroness’s question, we have £175 million in the ATOL scheme, but there have been periods when it has been in deficit. I think I am right in saying that up until 2011 the scheme was in deficit and the Government needed to provide a guarantee for a loan to be taken out to refund failures at that time. Since then, we have had proportionately fewer failures and proportionately more people paying in, so the fund is now in considerable surplus.
We have no plans to change the contribution, but we propose to give ourselves the power to respond innovatively to changes in the market. As I said, we have no plans to do so but it is possible and we would not want to exclude the ability to establish new trust fund arrangements if new and innovative models were to be produced. If we did, we would consult extensively with the scheme providers in the CAA, and with package tour operators, various internet firms, et cetera. Of course, such arrangements would be subject to affirmative resolutions in both Houses.
Lord Rosser
To pursue the point on the purpose of Clause 2, the Minister has said the Government have no plans at present, but then goes on to refer to possible changes in the future. Will he give some examples of the changes that might take place that would necessitate using the powers under Clause 2?
Lord Callanan
I suppose the short answer to that question is no. If I knew what innovative solutions and changes might come up, we would allow for them now. For example, if a particularly new and what we would consider riskier form of package could be developed, we would maybe want to set up a larger contribution protection than the £2.50 that applies to other schemes. As I said, we will consult extensively with all providers and with the CAA, and the arrangements will be subject to the affirmative resolutions of this House. As I said, these models have not been developed yet, so we do not know what they might be, but we think it prudent to allow for the possibility that they may be developed in the future, even though we have no plans to do so at the moment.
I believe I have responded to all the questions I was asked—somebody will no doubt shout if I have not.
Lord Rosser
The Minister may feel he has answered this already, in which case he will obviously say so, but I asked about the secondary legislation, what consultations have already taken place and with whom, and what consultations are currently taking place. I also asked about the production of an impact assessment, because the concern is that there may not be proper consultation or an impact assessment, and we shall have just an affirmative resolution for what are, or could be, quite extensive powers and changes.
Lord Callanan
As I said, we can give an undertaking to consult extensively if we propose to do this in the future. I will write to the noble Lord with details of any consultations that have already been carried out; I hope he will consider that an adequate response. I think I have responded to the points that others put to me and I ask the House to give the Bill a Second Reading.
Transport: Remote Island Communities in England
Lord Rosser Excerpts(7 years ago)
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Lord Rosser (Lab)
My Lords, this has been an interesting debate, which, although on the subject of the transport needs of remote island communities in England as a whole, has centred mainly on the position of the Isles of Scilly, a favourite holiday location of a former Labour Prime Minister, Harold Wilson, who indeed is buried on St Mary’s. I have also visited Holy Island, in the right reverend Prelate’s diocese—although I am afraid I visited by car—and I regard Northumberland as among the most scenic and attractive counties in England, one that seems to remain largely undiscovered by most people south of the Wash.
My indefatigable noble friend Lord Berkeley has raised his concerns about the transport links between the Isles of Scilly and the mainland on a number of occasions in this House. One has always sensed a deep frustration on his part at some of the replies he has received, and the very helpful briefing prepared by our Library sets out some of those previous exchanges. My noble friend has set out in some detail the concerns over the present transport links in relation to the needs of the Isles of Scilly in his powerful speech that opened the debate.
As my noble friend said, the present transport links from the Isles of Scilly to the mainland are provided by a 40 year-old ship that runs from Penzance to St Mary’s six days a week from mid-March to late October. There is a separate freight vessel that operates two or three times a week and can take a handful of passengers, and there are flights from St Mary’s to and from Land’s End and Newquay all year round—again for six days a week, I think—and to Exeter in the summer only. As I understand it, those services are all operated by the Isles of Scilly Steamship Company. A new helicopter service has been proposed to serve the Isles of Scilly from Penzance, but it is both literally and metaphorically yet to get off the ground following a judicial review challenge by the steamship group.
The existing services to the Isles of Scilly are not always as reliable as they might be, as my noble friend and other noble Lords have said. On my one visit to the Scilly Isles three or so years ago, our flight from Exeter was cancelled due to fog. We were driven by taxi from Exeter to Penzance, where we stayed in a hotel overnight before being driven out to Land’s End Airport the following morning for a flight to the Isles of Scilly. It was a somewhat longer journey overall than we had expected, and this was not in the middle of winter. I have to say I spent most of my time on the flight from Land’s End to Saint Mary’s wondering what the consequences would be if the one person who appeared to be flying the plane had a sudden heart attack. However, the flight back to Exeter at the end of our holiday ran as scheduled and with two people at the controls.
On previous occasions when my noble friend Lord Berkeley has raised this issue, and again today, he has drawn attention, as have other noble Lords, to the difference between the support—or rather the lack of it—for transport links to the Isles of Scilly and that given by the Scottish Government to transport links to Islay, which has a population comparable to that of the Isles of Scilly and is a not dissimilar distance from the mainland. The fares to Islay on the ferry are much lower and the ferry runs much more frequently, including throughout the year. When the Government were asked in 2012 by my noble friend why the Isles of Scilly cannot be treated in a similar way transport-wise to Islay, the reply was:
“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”.—[Official Report, 25/06/12; col 1.]
That seems less like an answer to the question that my noble friend asked and more like an attempt to avoid answering it. If the Minister is going to give a similar response today, perhaps he could explain what the circumstances are that make it difficult to make a valid direct comparison, and in what way the service is so much more complicated that it makes such a comparison with Islay and the Scilly Isles difficult.
The Government gave a similar answer when the matter of the contrast with Scotland was raised again in October 2012 by the noble Lord, Lord Cameron of Dillington. They said that,
“the situation in Scotland is different because it involves much more complicated and wide-ranging services that cannot be operated on a commercial basis. At the moment, the service to the Isles of Scilly is operated on a commercial basis”.
When challenged again, the Government said that,
“we could make a public service obligation if the market failed. The market has not yet failed. In addition, there would have to be a competitive bidding process. We do not want to interfere at this point because we want to see whether there will be a commercial solution to the problem”.—[Official Report, 24/10/12; cols. 202-03.]
That is an interesting answer. Note from it that for the Government in 2012 providing an all-year-round ferry service to the Isles of Scilly, with lower fares and charges, was regarded as “interference”. I am not sure that is how the residents of the Isles of Scilly would see it, nor those considering whether they can afford the cost of travelling to the Scilly Isles for a holiday.
With what the Government presumably see as “interference”, the service to Islay has much lower fares and greater frequency and runs throughout the year. The market has failed to deliver that to the Isles of Scilly. This issue affects not just passenger fares, whether by ship or by air, but, as has been said, freight costs for those seeking to run businesses and provide employment on the Isles of Scilly. The ferry service to the Isles of Scilly cannot be operated on a commercial basis that delivers a higher frequency all year round or at fare levels comparable to the Islay service. Indeed, even when the scheduled ferry service runs between March and November, I believe it is not possible—although the situation may now have changed—to do a day return trip from the Scilly Isles to the mainland on the regular scheduled ferry service.
In their response on 24 October 2012 that I repeated a few moments ago, the Government said that,
“we want to see whether there will be a commercial solution to the problem”.—[Official Report, 24/10/12; col. 203.]
What do the Government regard as the “problem” to which they referred in that response and what would a “commercial solution”, to which they also referred in that response, have to deliver to resolve that problem?
There is the prospect of a helicopter service being reopened between the Isles of Scilly and Penzance. While planning permission has been granted for a new heliport at Penzance, there is, as has been said, apparently an outstanding judicial challenge to the grant of planning permission from the company that operates the existing air and ferry services to and from the mainland. The chair of that company has apparently said:
“Our primary concern relates to the serious socio-economic consequences of creating a new heliport and the effect the proposal will have on the long term sustainability of the wider transport network and future investment in it, including a replacement for the”,
present vessel operating the ferry service. Obviously I cannot comment on the validity or otherwise of that concern, but it seems to say that there is not room for both the existing operator services and a new helicopter service on the route from Penzance. If that is the case, would it not explain why the fares are so high and the level of service so inadequate? Does it not suggest that insisting that the links between the Isles of Scilly and the mainland must be run on a commercial basis means in reality a virtual monopoly for whichever operator is running the services?
As has been said, the Scottish Government have introduced a road-equivalent tariff for lifeline ferry services as the basis for single fares. There have been reports in local media that this has resulted in significant increases in tourism due to the reduction in ferry fares under the scheme. Tourism accounts for 75% to 80% of the local economy on the Isles of Scilly, so presumably better, more reliable, all-year-round transport links at fares more akin to those applicable on ferry and air services to comparable islands in Scotland could be of considerable benefit to the main revenue-earning industry for the Isles of Scilly. In that context, we are talking about one of the poorest areas in both the UK and the EU when referring to the Isles of Scilly and the wider Cornwall area.
It may be that in their response, the Government will be able to provide figures indicating a rather different picture from that painted so far in this debate. They may be able to show that tourism in the Isles of Scilly is booming. They may be able to show that the present transport links do not act as a deterrent to tourists considering whether to visit the Isles of Scilly. They may be able to show that businesses and residents on the Isles of Scilly are not hampered by high freight charges or the level of passenger fares by air or sea. They may be able to show that the benefits to the economy of the Isles of Scilly of improved transport links at lower fares and charges would be a lot less than any additional costs of securing those improved links at lower fares and charges. They may be able to show that the gross disposable income per head and gross value added figures for the Isles of Scilly paint a picture of steadily increasing prosperity with the existing level of transport links. Alternatively, they may not be able to show any of those things.
I hope that the Government will respond positively to the points and concerns expressed by my noble friend Lord Berkeley. I would not want to be left—I say this tongue in cheek—wondering whether the Government’s seeming lack of enthusiasm for addressing the transport needs of the Isles of Scilly was being influenced by the fact that a former Labour Prime Minister loved the Isles of Scilly and has them as his final resting place.
The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)
My Lords, first, I pay tribute to the noble Lord, Lord Berkeley, for securing this debate on the transport needs of remote island communities in England. I know that he has for many years taken a keen interest in the future of island connectivity—in particular, to his beloved Isles of Scilly. In the presence of so many other admirers of the Isles of Scilly, at this point I should say in confession, in front of the right reverend Prelate the Bishop of Newcastle, that I have never been to the Isles of Scilly but I have been many times to Lindisfarne, the holy island in the north-east but, given the glowing descriptions from many noble Lords, I look forward to the opportunity to visit the Scilly Islands.
Most of the speakers in the debate have concentrated on the Isles of Scilly, except for the right reverend Prelate, who waxed lyrical about the wonderful Holy Island, in Northumberland, which, as I said, I have visited many times. There is indeed a road connection for part of the year, and it is a source of amazement to me—as it will be to other Members from the north-east—that every year there are tales of people’s cars floating off the causeway. I assure your Lordships that it is not possible for the council to put any bigger signs indicating the required crossing times and the consequences if you do not adhere to them. The most amazing thing is that normally, they are not people who speak a foreign language and do not understand English, but people from the local area or other communities in the United Kingdom, who just wilfully ignore the signs and see their car floating away in the distance as the tide comes in. They normally take to the rescue shelter halfway across. There is no legislation against stupidity, I fear.
I take note of the right reverend Prelate’s suggestion of a park-and-ride scheme. I am sure that she will understand that is a matter for the local authorities to determine. I am sure that under its new leadership, Northumberland County Council will look closely at her suggestion. She is fortunate to represent what is in my biased opinion one of the nicest dioceses in the country.
As an island nation, the movement of goods and people by air and sea is vital to the economic well-being of this country—95% of our trade by volume either arrives or departs by sea—but it is equally vital on a smaller scale for internal traffic within our smaller island communities. Indeed, that is the subject at hand. With three operators and around 9 million passenger crossings each year, as the noble Lord, Lord Berkeley, observed, I am not so sure that the Isle of Wight falls into this category. I read with interest the briefing produced by the House Library, which concentrated to a remarkable extent on the Isle of Wight, which no one could argue is a remote island community. However, it shares with other islands the basic fact that it costs more—consumes more resources—per passenger mile to move people by ferry or by air than by road.
The Isles of Scilly are of course by far the most obvious example of our subject for debate today, and most Members have concentrated on them. Perhaps it will help the House if I briefly recap the background to the Isles of Scilly’s services by sea and by air, to build on the excellent introduction provided by the noble Lord, Lord Berkeley.
Passenger and freight ferry services from the mainland to the Isles of Scilly have always been provided commercially without operating subsidy—under Conservative and Labour Governments, as the noble Lord, Lord Rosser, will be aware.
The noble Lord, Lord Greenway, referred to the passenger ship RMV “Scillonian”, as did several noble Lords. It is now 40 years old, although it underwent a substantial refit in 2012. I have heard the various criticisms, but it is also fair to say that it is duly certificated, registered as seaworthy and entirely fit and appropriate for the services which it provides. If it was not, it would not be allowed to provide them.
In recent years the local partners—led by Cornwall Council—known as the Route Partnership put together a funding bid for a new purpose-built passenger and freight vessel to replace the two current vessels, and for significant harbour improvements at Penzance and St Mary’s. The new vessel was to be owned by Cornwall Council and chartered to an operator by competitive tender. The rationale for that proposed arrangement was that the Isles of Scilly Steamship Company could not afford to replace the current passenger vessel when it reached the end of its useful life, and neither could any other operator provide a financially viable service.
The Department for Transport then invited bids for smaller-scale harbour improvements, but declared that as long as passenger services remained in commercial operation, it did not believe that there was a case for an ongoing subsidy. I am sorry to say that that, in essence, remains the Government’s position now.
In the meantime, the Isles of Scilly Steamship Company has also undertaken to replace its year-round cargo ferry, the “Gry Maritha”, having acquired a significantly larger vessel, currently named “Mali Rose”, which could also carry up to six passengers in the winter months, at the master’s discretion. This vessel, I understand, requires substantial refurbishment before it can replace the “Gry Maritha”.
The Isles of Scilly Steamship Company has said that it intends to replace the current passenger vessel, the RMV “Scillonian III”, probably with a new build vessel, but that it believes that the ship can continue operating beyond 2020 if necessary. We await developments on that front, but the vessel appears capable of meeting demand during its months of operation.
Although the Government do not believe that there is a case for an ongoing subsidy, we remain committed to ensuring that services to remote island communities continue. The noble Lord, Lord Cameron, referred to subsidies for freight services. The Government have invested over £6 million towards the £11 million project to improve the quays at St Mary’s, dredge Penzance Harbour and undertake land access improvements to improve the vital sea connection between the Isles of Scilly and the mainland for passengers and freight by opening up both harbours to a wider range of vessels in future. Building on the development work initially undertaken by the Council of the Isles of Scilly and Penzance Town Council, Cornwall Council undertook to act as the lead delivery authority and the works were completed in June 2016.
Scheduled commercial flights to the Isles of Scilly commenced as long ago as 1937. Today, regular flights operate to St Mary’s Airport from Land’s End and Newquay airports, and, seasonally, Exeter Airport. The runway at St Mary’s has recently been resurfaced and Land’s End Airport now has its first tarmac runway. Flights are operated commercially—again by the Isles of Scilly Steamship Company under the Skybus brand—and, like ferry services, have continued to operate free from subsidy. The Isles of Scilly Steamship Company has also invested in additional aircraft and expanded its service following the discontinuation in October 2012 of the British International Helicopters’ Penzance to St Mary’s helicopter service. According to the steamship company, passenger traffic by sea has increased in recent years, from just under 105,000 in 2014 to just under 116,000 in 2016. Air passengers have also increased from just under 91,000 to 95,000 in the same period, although this remains below the 155,000 passengers that were transported in 2011, which was the last full year of the helicopter service.
Transport to remote island communities is a free market and other operators are able to enter that market if they wish. In fact, I am aware of the current proposals—as noble Lords have mentioned—to recommence helicopter services to both St Mary’s and Tresco through the construction of a replacement heliport at Penzance. I understand that planning consent was approved by Cornwall Council in March 2017. However, noble Lords will understand that, because the proceedings are subject to judicial review, I am unable to comment further on that service.
The noble Lords, Lord Berkeley, Lord Cameron and Lord Rosser, and the noble Baroness, Lady Randerson, referred to the issue potentially being referred to the Competition and Markets Authority—I think the noble Lord, Lord Teverson, also mentioned this. Let me set out the position. The relevant legislation is Chapter 2 of the Competition Act 1998, on abuse of a dominant position, and Chapter 3, which covers investigation and enforcement. The CMA has wide discretion to construe a relevant market, which could include more than one transport mode and could extend to a market as modest in scale as the Scilly service—much smaller indeed than the Isle of Wight market, which was previously examined by the CMA’s predecessor, the OFT, and the Competition Commission. However, the CMA also operates formal prioritisation principles, which include the size of the market and the impact of the case. Depending on other workload, it may decide that the complaint about the Scilly services does not have sufficient priority to justify the resources required to investigate a case of this sort. It is a matter for the CMA.
A number of Members raised the issue of the Scottish islands and made comparisons with the services there. The Scottish Government, through Transport Scotland, provide financial assistance to reduce the cost of ferry travel on routes that are considered lifelines for remote island communities, and support a number of air routes to the islands through public service obligations. The Scottish Government are, of course, answerable to Scottish taxpayers for their own funding priorities, but I highlight that it is very difficult to compare the needs and services of groups of islands around the UK, and that the situation in Scotland is very different because the services mostly cannot be operated on a commercial basis. While there is no specific legal impediment in relation to public service obligations for remote island communities in England, at the moment the services to the Isles of Scilly are operated on a commercial basis. If the situation changes in this respect, then of course the matter could be reviewed.
The noble Lords, Lord Berkeley and Lord Rosser, also raised the issue of the abuse of a monopoly—the same company providing both air and sea connections. We do not believe that this, in itself, is sufficient evidence to show abuse; despite the modest capacity of the terminals, it remains open to other providers to provide ferry and/or air services to the Scillies. I would be delighted if the market came to support more than one operator; however, that is not yet happening from either Penzance or elsewhere. The fact that it is not suggests that there is not some huge super-profit being exploited, into which a competitor could easily make inroads. The growth in passenger traffic at least suggests that fares are not prohibitive.
I will answer some of the other questions that noble Lords have raised. The noble Lord, Lord Berkeley—I think—asked about the quality and reliability of the air service. I totally appreciate the annoyance and distress caused to passengers when such events occur, but this is a matter for the interested parties, including the relevant local councils and users, to take up with the operator of the commercial services. Of course, it is for the pilot in command to decide whether to operate a flight in adverse weather conditions. The noble Lord also asked why cheaper air or ferry services cannot be offered for permanent residents. I understand that discounts are already available for permanent residents; further discounts would, again, be a matter for the interested parties to consider, including the operators, users and local councils. So long as EU treaty rules apply, in the first instance it would be for them to produce a draft notification justifying the preferential terms as aid of a social character in a remote region.
The noble Lord, Lord Cameron, raised the issue of the Scottish islands—I think I have responded already to that question—and asked about an air discount scheme. The air discount scheme for flights within Scotland is of course a matter for the Scottish Government. The scheme is not applicable to air routes in Scotland supported by public service obligations. Any exemption applied for in respect of air routes to the Isles of Scilly would have to be eligible for this type of aid under European Union state aid guidelines.
The noble Lord, Lord Bradshaw, raised the issue of the current train franchise and sleeper service from London. The current Great Western franchise is due to be replaced by April 2020 and officials have begun engaging with interested parties to identify potential priorities for the route franchise. I will ensure that the noble Lord’s points about the sleeper service are considered as part of the franchise replacement process. In addition, train services to Penzance are being substantially upgraded. A new £360 million fleet of bi-mode intercity express trains will replace the older high-speed trains on the London route, bringing journey time savings. Local services to Plymouth are being upgraded to two trains an hour, enabled by Network Rail’s re-signalling work. We particularly welcome the substantial contributions being made by Cornwall Council and the Cornwall and Isles of Scilly local enterprise partnership to the modernisation of the Night Riviera sleeper trains and improvements to stations in Cornwall and London for sleeper passengers.
The noble Baroness, Lady Randerson, made a very good point about the provision of emergency medical evacuations. Where commercial transport is not suitable or available, there are arrangements in place to evacuate patients who require emergency treatment using either Cornwall Air Ambulance or search and rescue services, both of which are based at Cornwall Airport Newquay.
The term “lifeline” is often used to describe vital transport connections between mainland and island communities. Although this term carries no formal or legal status, the Government recognise the importance of passenger and freight services to remote island communities in England, and that is why we remain committed to ensuring that these continue. My officials have met delegations on a number of occasions to discuss transportation to and from island communities such as the Isles of Scilly, and I assure noble Lords who have spoken in the debate that they remain available to do so in the future.
Lord Rosser
My Lords, is it the Government’s view that the present air and sea services to the Isles of Scilly, including the current fares and charges, are having a dampening effect on the economy of the Isles of Scilly?
Lord Callanan
As I said earlier, passenger traffic is increasing. The services continue to be operated on a commercial basis. I accept the points noble Lords have made about the desirability of increased connections—of course, everybody would like increased connections and better services to their communities—but there is no evidence of a detrimental effect on the community.