Civil Aviation Bill

Viscount Simon Excerpts

Wednesday 13th June 2012 Lords Chamber

[Viscount Simon]

My Lords, when this Bill passed through the other place there was a great deal of agreement with relatively few areas of disagreement, which may well be the case here. Airports provide many jobs and are a convenient means of travel, as we have heard, be it for business or pleasure, but they also have some unwelcome impacts on local communities and the local environment. It is always a question of striking the right balance.

This Bill has many attributes but it also has a serious shortcoming in that it does not include any environmental duty for the CAA and, therefore, does not enable the CAA to strike a proper balance between what are sometimes competing interests with competing objectives. I understand that there are two levels for consideration: first, the general statutory framework for the CAA as a whole; and secondly, the specific statutory framework applicable to the CAA in its role as economic regulator for the UK’s largest airports. As those airports are subject to economic regulation, the Bill makes clear that the CAA should give priority to passengers’ interests. Environmental considerations will not even be of secondary importance because they are not mentioned in the Bill, other than some requirements relating to the publication of environmental information. This means that the CAA will not have the statutory authority to allow regulated airports to recover discretionary environmental expenditure through airport charges.

What does that mean in practice? Hatfield Forest, where I live, is adjacent to Stansted Airport and is a site of special scientific interest with a history going back nine centuries. It is managed by the National Trust and has many ancient trees, which are thought to suffer damage from the fumes emanating from aircraft. For many years the airport owner, BAA, has worked with the National Trust, funding research into the effect of air pollution on Hatfield Forest and providing monitoring equipment to check the levels of pollution. Some of this effort has related to a Section 106 obligation, but most has been discretionary expenditure that would be at risk if the CAA’s new remit made no reference to environmental considerations.

It is true that the regulatory remit that has applied to the CAA for the past 25 years, laid down by the Airports Act 1986, does not specifically include an environmental duty. However, this is so widely framed—some would say woolly—that it allowed the CAA flexibility to balance a range of competing objectives. In contrast, this Bill places a clear statutory duty on the CAA to put passengers’ interests first and foremost and the CAA will not have any statutory remit to take account of environmental factors even as a supplementary or secondary consideration. Noble Lords will be aware that some of the so-called low-cost airlines have a reputation for seeking to save every available penny. Stansted is dominated by such airlines. Indeed, a certain Irish airline accounts for more than 70% of Stansted’s passengers. That perhaps makes it easier to understand the concern that, if the CAA does not have any form of environmental remit, it risks being challenged in the High Court by an airline if it ever seeks to allow the airport to recover discretionary environmental expenditure. The Bill gives the CAA no means of defending such a challenge.

The argument has been made in the other place that it would distort the market if the CAA were to be given a supplementary environmental duty, because it would apply only to airports subject to regulation—currently Heathrow, Gatwick and Stansted. However, the converse is also true. Non-regulated airports, such as Birmingham or Luton, would not need the CAA’s permission to increase airport charges by a few pence to improve their environmental performance. If the risk of distorting the market is the only objection, that risk could be avoided by giving the CAA a general economic duty applicable to all airports, not just those subject to economic regulation.

The noble Earl, Lord Cathcart, who is not in his place, comes from the same direction, and I will expand slightly on what he said. Every other comparable UK regulator has some form of statutory environmental duty. For example, the Rail Regulator has a duty,

“to have regard to the effect on the environment of activities connected with the provision of railway services … to contribute to the achievement of sustainable development”.

Ofwat has a duty,

“to have regard to any social or environmental guidance issued by the Secretary of State and Welsh Assembly … to the achievement of sustainable development”.

Ofgem has duties,

“to have regard to the effect on the environment of activities connected with the generation, transmission, distribution or supply of electricity … to have regard to the effect on the environment or activities connected with the conveyance of gas through pipes … to have regard to any social and environmental guidance issued by the Secretary of State … to contribute to the achievement of sustainable development”.

It cannot be unreasonable to ask that, like the other regulators, the CAA should be given some form of environmental duty. Indeed, the Department for Transport seems to have come very close to including such a duty in the Bill because, on the day the draft Bill was published—23 November last year—the department’s press release proudly stated that it included an obligation on the CAA to have regard to,

“the effect on the environment and on local communities of activities connected with the provision of airport services”.

If only that had been true at the time. I hope, however, that when this Bill proceeds, it will be true. We will then have a better balanced Bill and, therefore, a better Bill.