Pension Schemes

Debate between Alistair Carmichael and Paul Maynard

Thursday 2nd May 2024 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Paul Maynard)]

It is a pleasure to be here today. I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) and the Backbench Business Committee for allowing the debate, which is a second outing on the issue within a few months.

We all agree that occupational pensions are crucially important. Many hard-working people across the country depend on their occupational pensions for an income in retirement, having spent years paying into their pension scheme. The right hon. Member for Orkney and Shetland spoke powerfully, once again, about the situation that his constituents face, and he referred to others as well. He spoke powerfully about the situation as he saw it. All of us have constituents who have done the right thing, worked hard and contributed to their occupational pension scheme, so it matters to all of us that they get what they have been promised when it falls due, as set out in the rules of the scheme.

When we last debated the issue, in Westminster Hall in January, I made the point that I would not speak about specific schemes, and I will not do so today. I will comment in more general terms. What comments I might make about the generality of the issue should not be taken as an oblique commentary on any of the schemes mentioned in the debate today, no matter how tempting that might be for some.

Since the debate in January, the world has indeed moved on, and I have tried to take some steps as well. As has been said, we published a consultation on options for defined-benefit schemes in February. The consultation reflected a new funding landscape, where funding levels are generally high and many schemes are in surplus. The consultation sought feedback on proposals to make surplus extraction easier, where it is safe to do so, and on the model for a future public sector consolidator, operated by the Pension Protection Fund. The consultation is now closed and we are currently analysing the responses. It closed only a fortnight ago, so we are not quite there yet, but there will be a Government response in due course. But I can be clear today that better outcomes for savers lie at the heart of our proposals. I stress, given the comments we have heard today, that the proposals on surplus sharing include a range of safeguards, as the starting and foundational principle, to ensure that member benefits are protected.

[Mr Carmichael]

I can understand the attractions of such changes for Governments and corporates, but I impress upon the Minister the need to ensure that if changes of this sort are to be made then the first protection always has to be for the beneficiaries. If there is to be flexibility for Governments and corporates to get investment in big infrastructure projects, that is to be encouraged but it should never be at the expense of the pensioners themselves.

[Paul Maynard]

That is very much the approach that I am taking with this matter. It has been discussed at great length at the sector roundtables that I have been present at. It has been a very strong theme that I have heard, so I can assure the right hon. Gentleman that I am acutely conscious that that is the lens through which I am looking at the issue.

Defined-Benefit Pension Schemes

Debate between Alistair Carmichael and Paul Maynard

Wednesday 17th January 2024 Westminster Hall

[The Parliamentary Under-Secretary of State for Work and Pensions (Paul Maynard)]

It is a pleasure to serve under your chairmanship, Mr Davies. I am grateful to the right hon. Member for Orkney and Shetland (Mr Carmichael) for securing this debate. We had a good discussion on this matter yesterday, but I hope I can say a bit more today.

First and foremost, I am very pleased that people are showing more interest in pension schemes more generally and the pensions they receive. I always think that we, as a nation, do not show enough interest in our pensions at the right time in our lives. I have heard very clearly the points made about individual schemes. Today I will not talk about specific schemes but will comment in more general terms about how these pension schemes are supposed to work. I recognise that many people depend on these schemes for their retirement income, but let me talk about the issues more broadly.

I understand the upset caused by schemes when pension scheme members no longer receive the discretionary increases that they had received previously. It is important to stress that legislation does not seek to set out exactly what every scheme must do in every conceivable circumstance; rather, legislation sets out minimum standards for indexation. That does not prevent more generous arrangements, which may be brought into a scheme through its rules or provided on a discretionary basis.

It is quite right that there should be some minimum standards—statutory requirements for DB indexation that all schemes must follow. These requirements are in place for all schemes, and they try to achieve a balance between providing members with some measure of protection against inflation without increasing a scheme’s costs beyond what most schemes can generally afford. That is a critical balance to strike.

It is important to provide a measure of protection for members, but we also need to have an eye to the future viability of a scheme, which could be compromised by creating significant additional liabilities. We also have to consider employer affordability. The best possible protection for the members’ future benefits is a strong and profitable employer, and we must remember that not all DB schemes are sponsored by monolithic employers with deep pockets. The setting of a statutory minimum is therefore a delicate balance to strike.

Some pension schemes go beyond the legal requirements and do indeed provide more generous indexation. Of course, if higher levels of indexation are set out in scheme rules, those levels of indexation must be paid. The scheme rules set out the pension package that the members have the right to receive.

[Mr Carmichael]

I agree with most of what the Minister is saying, but there is something more that comes into play here, which is the question of light-touch regulation. Light-touch regulation only works if it is possible to proceed on the basis of good-faith acting by both parties, particularly the companies. Where there is evidence of the lack of good-faith acting, as we have with BP and Shell, is it not necessary to adjust the system to ensure that at the end of the day the beneficiaries are not suffering as a consequence?

[Paul Maynard]

I note the right hon. Gentleman’s point. I am also conscious of time, so I do not think that I will be able to make my entire legal presentation. He very kindly said in his speech that I was alive to the issues, which I hope I can demonstrate towards the end of my speech by setting out where my thinking is moving to.

As the right hon. Gentleman rightly said, the Government’s role is to ensure that the fundamental promise of a DB scheme, as set out in its rules, is met. Whether discretionary payments are made must be a matter for the trustees and the sponsoring employer. The Government have no power to intervene to require a scheme to pay an annual increase above that required by the law or to go beyond the rules of the scheme.

It is up to trustees and sponsors to agree how their specific scheme should be run in the best long-term interests of all parties. It would not be appropriate for the Government to interfere in decisions made by individual schemes, beyond setting clear and reasonable minimum standards that apply to all schemes, including through regulation.

Oral Answers to Questions

Debate between Alistair Carmichael and Paul Maynard

Monday 18th December 2023 Commons Chamber

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

16. Whether he has had recent discussions with the Pensions Regulator on the adequacy of the administration of defined-benefit pension schemes.

[The Parliamentary Under-Secretary of State for Work and Pensions (Paul Maynard)]

I am fortunate in having already been able to meet representatives of the Pensions Regulator twice since my appointment to discuss the full gamut of their responsibilities.

[Mr Carmichael]

Members of the BP pension scheme, a defined-benefit scheme, have seen the value of their pensions fall by 11% in real terms as a consequence of their senior management’s refusal to upgrade them in line with the cost of living, although the pension fund itself has a £5 billion surplus. Does the Minister agree that if the rules allow companies such as BP to deal from the bottom of the deck when it comes to their own pensioners, these are rules that need to be changed?

[Paul Maynard]

That is certainly something I need to look into. When people raise the issue of specific pension schemes, I am always conscious of just how many thousands of scheme members are potentially watching, so I do not wish to speak off the cuff and raise hopes that I may not be able to fulfil. However, I shall be happy to meet the right hon. Gentleman to discuss the circumstances in greater detail and see what can be done.

Cash Acceptance

Debate between Alistair Carmichael and Paul Maynard

Monday 20th March 2023 Westminster Hall

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

It is a pleasure to serve under your chairmanship, Ms Bardell. I thank the hon. Member for Linlithgow and East Falkirk (Martyn Day) for his presentation of the topic.

I declare an interest: I am a member of the Consumer Council for Link, which runs the national network of free-to-use ATMs. It also assesses the impact of banking closures and looks at what should replace them, whether it is a banking hub such as the one in Cambuslang, which the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) mentioned, or one of the alternatives.

The hon. Member for North Ayrshire and Arran (Patricia Gibson) and I are often in this Chamber discussing this very topic. When we were first here, almost three years ago, I made the point then the issues are twofold: acceptance of cash and access to cash. There is no point accessing cash if it cannot be spent, as she said; but here is no point accepting it in the first place if no one has it to spend.

This debate is not really about acceptance of cash; that is a misnomer. It is about who pays for our cash system. Is it businesses? Retailers do not get to keep every penny if people pay by cash, and the extra costs associated with handling cash and with the cash system are passed on to consumers. The financial services sector —everyone boos it quite happily—passes the cost on to account holders. Fundamentally, the cost of our cash system always ends up back with the customer. Tinkering with the intermediaries handling the cash and introducing new rules, as some have advocated today, will not change that fact, even if it makes for some media-friendly, savvy headlines in the Daily Mail.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

The hon. Gentleman makes a very good point. Nothing in life is free; eventually, somebody has to pay for it. This trend has been driven by Governments of all colours for decades. The most significant move towards a cashless society was the Labour Government’s decision to prevent people from being able to access pensions at the post office by handing over a pension book, and insisting that all pensions go into bank accounts. There will have to be a different culture in Government before they have the authority to lecture banks.

[Paul Maynard]

I take the right hon. Gentleman’s point, but I am not lecturing the banks on the basis of being a politician. I apologise if my approach today is technocratic, but I am not seeking to be political. The Minister can explain what the Government are actually doing on this front.

We have all had substantial lobbying on this issue. My inbox has been full of press clippings, videos of the hon. Member for Linlithgow and East Falkirk and so on. I am a little troubled by the emphasis on the compulsory acceptance of cash, and particularly by the suggestion that we should adopt something like the Spanish legislation that limits card payments to a €30 minimum. If someone wants to spend less than €30, they cannot use a card. That seems to be the very opposite of payment choice, and the cost would be passed on to consumers through higher prices. The cost to retailers comes in the form of driving further to deposit the takings at the end of the day. If they have to drive a long distance, they might have to close earlier to get to the post office or bank before it closes. That means they forgo income, so they might have to raise their prices.

In my constituency, the signs in shops saying “No card payments under £3” or, “No card payments under £5” have disappeared since the pandemic. That is progress; it gives people more choice. New technology, such as handheld card readers, has made payments both easier and cheaper, although I recognise that the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) might intervene to say that broadband is still not good enough in many rural areas to make such things reliable, particularly in the tourism sector.

Before people out there start to shout at me, let me say that I certainly do not believe that cash should be killed off and that the future is entirely digital—far from it. People will always need cash, particularly the financially vulnerable and marginalised in society. My constituency of Blackpool North and Cleveleys has eight of the 10 poorest neighbourhoods in the country, and I know that some people rely on cash to manage their income. Some are nervous about using technology; they may struggle to remember their PIN or manage their personal finances. They may be among the 1.8 million people who are still unbanked, relying on a jam-jar approach and monitoring pots of money for bills, which cannot be done with a card.

I was troubled by some of the proposals briefed out ahead of this debate. One suggestion was that in return for requiring businesses to accept cash, certain denominations of coin would be done away with—giving with one hand while taking with the other. That fills me with dread. Another suggestion was requiring “exact-amount services”, which is a euphemism for “rounding up”—something priced at 33p would be priced at 35p, for example. That would make no sense in the midst of a cost of living crisis. There is no mandate for it from the public, and it has no legitimacy in the eyes of consumers or, indeed, retailers.

The Minister is here to tell us what the Government have done, but I will make brief reference to the legislation on access to cash, which is entirely welcome. I would love him to talk about free access to cash, but I bet he will not—he has been disappointing me on that front for some time, so I will not hold my breath. I am also a bit frustrated that the policy statement explaining how we will guarantee access to cash will not come out until we pass the legislation, so we cannot judge how spot on it is, but he may be listening to me on that.

I have not heard many people talk about the notion of cashback without purchase, something for which the Government have legislated. It solved a long-term problem known as the £3.22 issue. Someone may want to take out a precise amount of money—they might not want £10 or £20 because they are managing their finances. They cannot take £3.22 out of an ATM, but they can now take out that amount from their local PayPoint in the newsagent without having to make a purchase. It is life changing for many people in areas such as the one I represent, but all the vested interests in this debate hate talking about cashback without purchase. They do not want people to know about it. They would far rather that the most vulnerable people in my constituency went down to a pay-to-use ATM.

The banks have produced some fascinating research into why people in the most deprived parts of this country often go to a pay-to-use ATM, which may charge £2 or £2.50 to take out small amounts of money, when they are actually very near to a free-to-use ATM. Understanding that strange behaviour is a real challenge for the financial services sector, and it is something that I find frustrating about this entire debate.

I commend the work of the access to cash review and Natalie Ceeney, who has done so much on access in recent years. Like her and the group, I believe that banking hubs are the way forward, but I also know from Link’s work scrutinising the impact of bank closures that the introduction of a banking hub is not the only remedy to bank closures. I think of post offices, ATMs, and deposit-taking “reverse” ATMs. I was doing my own private secretary work, as a sort-of pretend Minister, by checking on my phone what happened in Holt when Barclays closed; I understand that an ATM is now going to be installed. When I checked Axminster, I found that its residents are getting a banking hub—I am not sure when, but congratulations on that. I am sure they have heard how good it was in Cambuslang.

Many campaigners ask, “Is this enough? Are we going far enough and fast enough? Why aren’t they all open now? Why doesn’t a banking hub open the moment the bank shuts its doors?” but 38 banking hubs and 38 more deposit-taking ATMs have been announced so far, which is a pretty good first step. I would love things to move faster—that might stop the Daily Mail campaigning against banking hubs—but they are a rather new concept and certain legalities need sorting out. Indeed, in one case, they are still trying to remove asbestos from the preferred location. People who thought that the moment a branch shut a banking hub would pop up as a like-for-like replacement misunderstood the situation.

Campaigners set the bar so high that I think they will not be satisfied until they have a maternity unit included in the hub, as well as everything else—they almost seem not to want to win this battle that they have been fighting for so long. We need to keep the pressure on those introducing the banking hubs; we need to ensure that the pace of their introduction accelerates and that these initial hurdles are overcome, but I do not think we should talk down the idea of banking hubs because somehow they are not perfect.

I wonder if the aspirations are too high. I listened carefully to the House of Lords debate on the Financial Services and Markets Bill, in the special way that the House of Lords does it. Their lordships suggested in one amendment an obligation on banking hubs to have a representative from every single bank. That just is not feasible. Digital-only banks, such as Monzo and First Direct, offer a better service to customers because they do not have the overheads of a physical network. We would wholly undermine their business model if we were to insist that banks like Monzo suddenly have to recruit someone to physically exist in a banking hub. That makes no sense at all.

What the banking hubs should be used for is digital training and addressing financial exclusion. Someone mentioned decimalisation—I think it was the hon. Member for Linlithgow and East Falkirk. To me, a more pertinent example is the switch from analogue to digital television and the emphasis, training and preparation that went into that process, so that no one was left unserved when analogue was switched off. People knew it was coming and were helped through that process. I am not saying that cash will ever be switched off, nor do I want it to be, but we could learn from that process how we walk and talk people through it.

I want to make two final points. One is around deposit-taking ATMs. This may sound like a rather anodyne and technocratic point—I suppose it is—but not all ATMs are equal. Members may have heard me refer earlier to the challenges retailers face in having to go much further to deposit their takings at the end of the day. A deposit-taking ATM is fundamental to solving that problem.

The post office is not always the solution. My post office in Cleveleys is tiny, despite it being a town of 16,000; people queue out the door even when there are no financial services activities, let alone every time a bank branch closes and they have to start using the post office again. I was speaking to the postmaster of the nearest post office to where I live. I have been hearing worrying tales that local businesses are struggling to deposit cash because the banks are putting limits on the amount a business can deposit in any one calendar year, to the point that some businesses are having to shut down, simply because they cannot deposit the cash takings at the end of the day. I tell the financial services sector and all those banks that normally monitor what I say in this place that I am not happy. I expect an email tomorrow morning from at least one of those banks that are obsessed with everything I say. This policy is a real deterrent.

I end on a note of agreement, though, with the UK Cash Supply Alliance. I know I have been giving them a bit of a hard time in the debate. This is the most technocratic issue imaginable, but it is the cost of the hardwiring of our cash system. The wholesale distribution of cash remains far too costly—£5 billion to the economy overall—and there is far too much duplication. We have not seen the radical reform I believe was needed when the Bank of England set up the wholesale distribution steering group to try to find an alternative model. I fear that some in the cash distribution sector are defending their commercial turf under the guise of protecting customer interests. That is simply not good enough.

I had a fascinating trip to Vaultex near Warrington several years ago. Vaultex is one of the cash-handling and cash-distribution centres that covers the north of England. All our bank notes come in and come out of the centre. I have never stood near so much money in my life. There is absolutely no chance of getting in or out with it—it even has a special roof that a helicopter cannot be landed on just to avoid any shenanigans—but what I saw there was duplication after duplication. Every bank required their bank notes to be counted, stored and separated in a specific way; there was no attempt to rationalise the process. I sat there thinking, “If only more banks could agree to handle their money in the same way, it would start to reduce this £5 billion cost.” I do not know how that is going. I gather there were proposals for a public utility model that would help to bring it all together to reduce the costs, but it is such an opaque process. The Bank of England does not update the minutes on its website for this wholesale distribution steering group, so I know very little about what is going on, which is frustrating.

Reducing that £5 billion cost is the answer to what we have been discussing today, making it cheaper and more affordable for small businesses to keep taking cash. If that does not happen, we will have a problem. The best way to protect the acceptance of cash is not by penalising consumers with higher costs or penalising retailers by forcing them to raise costs, but by addressing the reason why retailers choose not to accept cash in the first place, which is about cost and convenience. We should reduce the cost of wholesale distribution, and make depositing cash easier with more deposit-taking ATMs. If we do that, we will start to tackle the vested interests which have hovered ghoulishly over this debate for far too long.

Civil Aviation Authority: Aviation Safety

Debate between Alistair Carmichael and Paul Maynard

Thursday 6th February 2020 Westminster Hall

[The Parliamentary Under-Secretary of State for Transport (Paul Maynard)]

It is a pleasure to serve under your continued chairmanship, Mr Bone, in which we all rejoice. I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael), not only on having secured this debate but on the way in which he presented his case. He clearly has very detailed knowledge that far exceeds mine, although I am the Minister. Perhaps we can swap places—who knows?

In recent years, we have had few opportunities to discuss this subject. Every year, the CAA’s reports and annual accounts are laid before the House and are tabled, but that rarely results in a debate. The hon. Member for Kingston upon Hull East (Karl Turner) and I rarely get a chance to talk about these issues, so today is a good chance to do so.

We recognise that the CAA has accrued many duties down the years, including functions relating to aviation security, economic regulation, unmanned aircraft, space and consumer rights. It almost seems like a case of you name it, the CAA does it. However, the core of what it does has to remain aviation safety: the safety of passengers, crew, and the wider general public. That is partly because aviation is such an important part of our national economy, contributing at least £22 billion, along with over 230,000 jobs. For the seventh consecutive year, passenger numbers have increased. Safety is vital to maintaining that thriving aviation sector.

Regional airports such as Kirkwall and Sumburgh and the connections, jobs and investment they provide ensure that we spread those benefits across the country. The right hon. Gentleman spoke eloquently about the fundamental role played by air links, both between the islands and the mainland and between the islands themselves—I know that “mainland” means two things on Shetland, not just the mainland as I understand it. I also recognise why aviation safety is especially crucial in that part of the world, given the history of the local area. The right hon. Gentleman will remember the Chinook incident in the mid-1980s.

Back in April 2019, the right hon. Gentleman wrote to the then Secretary of State for Transport to draw his attention to the incident at Kirkwall, copying us into a letter he wrote to Richard Moriarty at the CAA. The person making the report claimed that the incident amounted to a passenger flight departing from Kirkwall airport at a time when that airport was closed. The then Secretary of State noted that the incident potentially raised serious safety concerns that were being investigated by the CAA. At that time, the CAA had conducted an initial assessment and provided an assurance that no immediate or urgent safety actions were required. The CAA then intended to conduct an in-depth investigation to ensure that it understood all the facts treating to this report, and that appropriate action could be taken.

As the right hon. Gentleman has set out, the incident involved a Loganair aircraft with 32 passengers on board departing Kirkwall airport in the evening, without air traffic control in attendance and without the aerodrome being declared open through the notice to airmen process. The flight crew of that late-running flight were told that they would not be permitted to take off as the time was too close to the closure time of the airport, and an extension to the opening hours could not be granted by air traffic control due to the industrial dispute that the right hon. Gentleman mentioned. Management at Loganair called their counterparts at Highlands and Islands Airports Ltd to see if anything could be done to allow the flight to depart, and were initially informed by Highlands and Islands Airports Ltd that this would not be possible.

[Mr Carmichael]

The Minister says that the flight crew were told that it would not be possible to extend due to the industrial action, but I do not understand that to have been the case. It may or may not have been—I do not know—but my understanding is that this was the end of the day and no link was made.

[Paul Maynard]

I am sure that the right hon. Gentleman has more detailed knowledge than I do, but that is the sequence of events I have been informed about. His information may well be more accurate than mine, so I will go back and consider his point carefully.

Once both Loganair and Highlands and Islands Airports Ltd had looked into the matter further, they agreed conditions by which the flight could depart under visual flight rules, meaning that there would be no need for an air traffic control service to be deployed. Under that agreement, the flight could depart if the airport fire service was in attendance and if the pilot of the aircraft agreed. The fire services were then recalled to the airport, arriving after the flight had commenced to taxi but before its departure, as the right hon. Gentleman set out. The aircraft departed under visual flight rules and contacted the Scottish area control centre after departure for an air traffic control service. The CAA was alerted immediately by Loganair, and received two separate whistleblower reports in the course of the following week.

The Civil Aviation Authority conducted a review in accordance with its own procedures, interviewing key individuals at both Loganair and Highlands and Islands Airports Ltd. After concluding its investigation, the Civil Aviation Authority highlighted its findings with the organisations involved during the summer. The CAA has since held several meetings with the airport to discuss progress. The airport has also conducted its own investigation, and as a result commissioned a study into the findings raised by its own report. The right hon. Gentleman might wish to request that report from the airport company.

I understand and sympathise with the right hon. Gentleman’s wish for the CAA’s report into the Kirkwall incident to be placed in the public domain. The sixth principle of the Government’s regulators’ code—I am getting a bit technical here, for which I apologise—states:

“Regulators should ensure that their approach to their regulatory activities is transparent”.

However, transparency in that sense means regulators setting clear standards for the services that they deliver, not necessarily publishing investigations themselves.

One issue that the Civil Aviation Authority needs to consider when deciding whether to publish the report has to do with trust and openness between the regulator and those it regulates. Aviation bodies need to be confident that, in certain cases and for certain investigations, the information they provide will not be made public. That helps the CAA to fulfil its role of regulating the UK aviation industry and ensuring organisations comply with required safety standards. It might be likened to no-fault reporting in the NHS, where people can admit that something has gone wrong and seek to learn some lessons from it without feeling themselves to be placed in personal professional jeopardy. The right hon. Gentleman will be aware that the air accidents investigation branch routinely publishes reports. A further consideration in this instance is that the relevant information came through two whistleblower disclosures. It is particularly important that staff feel able to make such sensitive disclosures without suffering adverse consequences.

[Mr Carmichael]

We come to the nub of the matter. I make no complaint about the CAA and the way it has conducted this process, inasmuch as it has done so entirely in accordance with its own rules, and the basis for those rules is sensible and rational. It has conformed to international regulation and good practice. However, what has been done remains unsatisfactory. Information was put into the public domain right at the start, which caused some distress to the air traffic controllers in Kirkwall, and that remains uncorrected. That has two consequences. First, there is lingering concern about safety, the culture within HIAL, and the operation of the relationship between it and the air traffic controllers. Secondly, in the circumstances, there is a public interest point about the likelihood of future whistleblowers coming forward.

[Paul Maynard]

I appreciate the right hon. Gentleman’s point. I was about to say that I understand the jeopardy that the individual concerned feels placed under. There is an apparent asymmetry of information available in the local community, with, on the one hand, a public discussion about what occurred, and on the other hand, the private information as to what was found and what was done with that information. I am more than happy to make a commitment to talk to the CAA to see what more can be done to assist the individual concerned, and perhaps try to provide some degree of reassurance or to resolve the matter in that way. I hear his point and I hope that we can find a solution.

The right hon. Gentleman spoke about the wider issue of the remote control towers being centralised in Inverness. I understand his points. When I started out in the House, I was a member of the Transport Committee. My first big victory on that Committee led it to challenge the Government about the withdrawal of the emergency towing vessels in Shetland and the closure of some of the Maritime and Coastguard Agency stations. The Transport Committee flew up to Stornoway from Newquay on a regional flight; we were the only people on board. I saw for myself how rapidly conditions change in that part of the world and the significance—the vital importance—of having reliable communications facilities for those remote locations. I understand entirely where he is coming from.

[Mr Carmichael]

That is a good parallel, because the proposal was for all the coastguard services to be provided from two stations, one in Hampshire and the other in Aberdeen. It is the same point that the hon. Member for Na h-Eileanan an Iar (Angus Brendan MacNeil) made to me. I asked the coastguard, “Why Aberdeen and Hampshire?” and they said, “Well, that’s one at the top of the country and one at the bottom”—ignoring the fact that Shetland is hundreds of miles further north than Aberdeen. I said, “Why not put the north one in Shetland, which is properly the top of the country?” They said, “Oh no, we couldn’t do that. The connectivity’s not good enough.”

[Paul Maynard]

The right hon. Gentleman tempts me to go further than my brief.

I recognise the worry that the new system might include a single centre with a consequent single point of failure. I also hear the right hon. Gentleman’s concerns about retaining skilled jobs in the peripheral areas and the potential wider impact on the local community and economy. The air traffic management system programme across the highlands seeks to bring together air traffic management for a number of airports in one location, as he set out. Innovative approaches to air traffic control have already been implemented successfully elsewhere, such as in Scandinavia in 2015 and at Cranfield in 2018. London City airport plans to launch its digital remote air traffic control tower later this year, as the right hon. Gentleman mentioned. There are precedents for the centralisation of air traffic control. I do not share the universal scepticism about it as a model of provision, and I have not encountered that scepticism when visiting air traffic control towers around the country, many of which are at high altitude, so full 360° visibility of the surrounding area is often not possible due to cloud.

Air traffic control arrangements are a commercial matter for Highlands and Islands Airports Ltd. I read today the debate that occurred in the Scottish Parliament, which was led by the right hon. Gentleman’s MSP colleagues, Beatrice Wishart and Liam McArthur. It was a cross-party debate, with concerns raised by Members from all the political parties represented in the Scottish Parliament. I noted Michael Matheson’s response too.

I am now aware that Highlands and Islands Airports Ltd will undertake an island impact assessment in line with the Islands (Scotland) Act 2018. I assure the Chamber that, before any new air traffic management system could take effect, the CAA would need to approve it. In giving its approval, the CAA would be bound by its overarching duty for the maintenance of air safety, so Highlands and Islands Airports Ltd will need to make sure that its proposals satisfy the local conditions. The CAA will not accept the safety case if all that can be said is, “Well, it worked at London City.”

The right hon. Gentleman’s points about the road cutting across the runway are germane to what HIAL has to prove to the CAA. I assure him that it will be treated as a single isolated application, not just one of many, so it will recognise those local conditions definitively. I note his observations about board membership; I am sure that Mr Matheson did as well. I note his comments about why Inverness was selected; I gather that was down to a staff survey. I also believe in the importance of an ongoing conversation with the CAA about many of these issues, not least the resilience of the digital connection, which he referred to.

More widely, I recognise that Highlands and Islands Airports Ltd is a vital part of the community across the north of Scotland. I have embarked on a review of regional airports and regional connectivity, and I look forward to visiting Scotland. I have not got there yet, but it may well be that Kirkwall and Sumburgh are on my schedule. I did three visits in Northern Ireland on Monday, so I am sure I can fit more in across the Highlands as a whole. I hope that if I am in Shetland or Orkney and the right hon. Gentleman is too, he will join me on my visit and we can see the roads running across the runway for ourselves.

The hon. Member for Dunfermline and West Fife (Douglas Chapman) made a number of interesting additional points that I will try to cover as best I can. It was rather difficult to prepare for the debate, because it was so widely set. I wondered who would attend and what issues they would raise. Many of the hon. Members I predicted would attend are not here and some of the issues that I did not predict have arisen. Such is the joy of having officials to tell me what to say occasionally.

I understand the hon. Gentleman’s concerns in the light of our departure from the European Union. Historically, aviation safety across the world has been led by this country and by the CAA. We remain a leading player in the International Civil Aviation Organisation. We have always been a leading player in the European Union Aviation Safety Agency. Our expertise is valued around the world. One of the CAA’s major roles is to provide services across the world to improve aviation safety. I do not think for a moment that that expertise, or the appetite for it, will be diminished. We take that very seriously.

The hon. Gentleman mentioned the various freedoms that enable as broad a range of destinations as possible to be served. I am sure he agrees that it is in no one’s interests to diminish that ability. Our objective in any future relationship is to agree as ambitious and comprehensive an air transport agreement as possible with the EU. I am confident that we can do so in the timescales described.

The hon. Gentleman also mentioned the interesting issue of drones and the extent to which technology is outpacing our ability to legislate. That is often a challenge in government and in Parliament. In many Bill Committees that I have sat on, we have tried to see into the future, but the important thing is to have a flexible approach to legislation, so that as things develop over time, the regulations can also develop. It is as much about the framework that we set up as about prescribing exhaustively every possible combination of circumstances that may or may not occur in future. All too often, our predictions about the future prove entirely wrong. I remember watching “Tomorrow’s World” as a teenager; I thought I would have my own jet pack by now, but I still take the District and Circle lines.

Our concept of the future can be misleading, but we can get the framework right. As the hon. Gentleman correctly points out, the Air Traffic Management and Unmanned Aircraft Bill is in the House of Lords and will come down here. If he were the SNP Member on that Bill Committee, I would be delighted. He could help with my futurology by making sure that the legislation is fit for purpose.

I thank the hon. Member for Kingston upon Hull East (Karl Turner) for his comments and for allowing me to focus on the concerns of the right hon. Member for Orkney and Shetland. I thank you, too, Mr Bone.