Civil Aviation Bill

Debate between Lord Rosser and Lord Jenkin of Roding

Monday 2nd July 2012 Grand Committee

[Lord Rosser]

My Lords, this is a probing amendment. The Bill provides that operators of dominant areas located at dominant airports require a licence to levy charges for airport operation services, and states that an airport area is dominant if the CAA makes a determination that the market power test is met in relation to the area. Subsection (8) of Clause 7 states that the Civil Aviation Authority may make separate market power determinations in respect of different areas at the same airport with the same relevant operator and may also make a market power determination in respect of an airport area that consists of two or more areas that are not adjacent if the areas are located at the same airport. Subsection (9) then states that a market power determination ceases to have effect if the Civil Aviation Authority publishes a notice of a further market power determination in relation to the airport area or in relation to an area that includes all of the airport area.

The effect of the amendment, which would add further words to the end of Clause 7(8), would be to require the Civil Aviation Authority, at such intervals as it considers appropriate, to,

“review market power determinations made on the basis of an earlier analysis”.

It is not clear whether other wording in the clause, or elsewhere in the Bill, is intended to require the Civil Aviation Authority to review decisions that it has made on market power determination. Circumstances can change over a period of time, and factors that were important in the original decision may cease to be so, or other factors may come into play.

Other subsections in Clause 7 say that the Civil Aviation Authority may make a determination that the market power test is or is not met in relation to an airport area, and that the Civil Aviation Authority must make a market power determination if asked to do so by the operator of the airport area or any other person whose interests are likely to be materially affected by the determination, subject to certain laid-down criteria being met.

There ought to be a requirement for the Civil Aviation Authority to review market power determinations it has made, irrespective of whether it is asked to do so. Subject to what the Minister has to say in reply, that does not appear to be a requirement laid down in the Bill. Even the reference in subsection (1) to the Civil Aviation Authority making a determination whenever it considers it appropriate to do so is not clear as to whether it also means reviewing a market power determination it has made that the test has been met or whether it applies only to making determinations where it has not previously been decided that the test has been met.

If the Minister does not intend to accept the amendment, I hope that he will say why the Government do not consider it appropriate, if that be their argument, or which provisions already in the Bill cover the issue raised in the amendment. Perhaps the Minister could also say how often the Government expect the Civil Aviation Authority to be making market power determinations. Are they likely to be regular occurrences and is it anticipated that such decisions will have to be revised or amended on a regular or frequent basis or only rarely? I beg to move.

[Lord Jenkin of Roding]

I was surprised at the last sitting of the Committee when my noble friend made it clear that it is envisaged by the Government that there should be competition between two different terminals at the same airport. At an airport such as the JFK International in New York, where the terminals are situated widely apart and are approached in different ways, there may be some sense in that. Even in as large an airport as Heathrow, which now has five terminals, I find it difficult to conceive how there could be competition between the various terminals. It is built into this clause, on which the noble Lord, Lord Rosser, has moved his amendment, which seems to have some merit.

I would be grateful if, in responding, my noble friend could describe how he sees such competition arising. At the moment, taking Heathrow or Gatwick as an example, they are all under the same management. It may be separate between the airports; I find it difficult to conceive how it might happen between terminals. I would be grateful if my noble friend could explain how this might come about. It would obviously need to involve a change of ownership between the different terminals. Is there any prospect of that or is it somehow envisaged that there should be competition without a change of ownership? Perhaps my noble friend might explain that.

London Local Authorities and Transport for London (No. 2) Bill [HL]

Debate between Lord Rosser and Lord Jenkin of Roding

Monday 28th March 2011 Lords Chamber

[Lord Jenkin of Roding]

I have much sympathy with that. I do not think an agreement of this kind could be disclosed to Parliament without the agreement of both parties. I will draw the attention of the promoters to what the noble Lord has said and see whether they can secure the agreement of the sporting bodies that this should be made public before the Bill goes to a Select Committee in another place.

[Lord Rosser]

Can the noble Lord tell the House how long ago this memorandum of understanding was signed?

[Lord Jenkin of Roding]

It was reached in the early part of this year. The original agreement had been left before the election. As often happens when negotiations are dragged out over a long period, new objections were made, and it was not until the beginning of this year that finally there was an agreement. Part of the agreement was that the clauses be removed and replaced by that memorandum of understanding. Nobody is in any doubt that if the sporting clubs do not negotiate agreements with the local authorities in good faith, the promoters will bring back the clauses in some form. Having heard the noble Lord, Lord Faulkner, they should be in no doubt that a Committee would take a fairly clear view on the merits of those clauses.

The noble Lord, Lord Rosser, is entitled to his complaints. This has been a very long drawn out matter. One can argue about whether the promoters ought to have given in to the clubs. They clearly thought that the whole Bill might eventually fall on this basis, not just what were then Clauses 26 and 27. They will read in Hansard the criticisms that have been made, and I hope that the lesson will be learnt and this will not happen in this form again. I feel particularly sorry for the Select Committee which spent a good deal of time on this Bill only to find that its decisions had been subverted by this memorandum of understanding. I think I have gone on long enough, unless there are any points that I have missed out.