Operation of Air Services (Amendment etc.) (EU Exit) Regulations 2018

Baroness McIntosh of Pickering Excerpts

Tuesday 18th December 2018 Lords Chamber

[Lord Foulkes of Cumnock]

I do not. It is not just Michael O’Leary who has said that. I am trying to be briefer than usual, but if I was going to go on for longer I could mention many other examples. But if Michael O’Leary is wrong, we need to be told unambiguously that this is not one of the real threats from a no-deal Brexit.

Among the 700 statutory instruments required for the crazy prospect of a no-deal Brexit, the Secondary Legislation Scrutiny Committee drew special attention to these regulations because they,

“give rise to issues of public policy likely to be of interest to the House”.

That is why I negatived them in Grand Committee, so that we could have a debate in the House. That statement is certainly true, and the more we know about the potential implications, the greater the interest will be in this—and, I think, the greater the anger is likely to become. For example, how many people realise that it is not only flights within the European Union that are threatened by a no-deal Brexit? The whole basis of our aviation relations with the rest of the world is via the European Union. In all, the EU governs direct UK aviation access to 44 other countries, including the US and Canada. My second request for a guarantee is: what guarantees can the Minister give today on a smooth transition, which means no groundings or delays, for these routes beyond? Remember—we are going to keep careful note of this.

Also, what steps have been taken to guarantee that our safety and maintenance regimes, which again are framed within the EU regime, will be acceptable to every country in Europe and the wider world after 29 March? According to the European Aviation Safety Agency, certificates previously issued by the CAA before exit day would no longer be automatically accepted in the EASA system after 29 March. Has there been any progress on a definitive answer to the massive implication of that statement? How is it to be resolved?

When we last discussed these matters, the Minister was unable to say how many extra staff the CAA has taken on, or will take on, for its hugely increased workload. This is one of the many costs of preparing for Brexit; it is already taking on more staff. Can she give us an indication today of how many staff will be needed to deal with route licensing in that hugely increased workload, as well as its other responsibilities? These are huge questions. We are only three months away from our potential exit from the European Union, unless some hand of fate intervenes. We do not want vague assurances that discussions are continuing. They will guarantee nothing, and both business and private travellers now need specific, hard and clear assurances from the Government who have led us into this cul-de-sac.

I am not going to press this to a vote today. I would have liked to have done so, but some of my colleagues have said, “Let’s give the Government an opportunity to answer these points”. It is not because I am in any way satisfied, but I will give the Government the opportunity to make their explanation and give us the guarantees today. I am sure that the Minister will recognise that this in no ways absolves the Government from finding a solution that avoids a no-deal Brexit, thereby eliminating the extremely serious threats to civil aviation that we are discussing. Let us hope that sense prevails and we are not faced with a no-deal disaster—otherwise I believe that the kind of things I have predicted today will cause tremendous problems after 29 March. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted that this little debate has been called. I declare my interests at the outset, as a former transport spokesman in the European Parliament and a one-time rapporteur on a civil aviation report. Subsequently, I was a spokesman in the House of Commons for the Conservatives when in opposition.

I would like to put a number of small questions to my noble friend the Minister today. The House has been particularly well served by the Secondary Legislation Scrutiny Committee’s report on these regulations, which raised a number of policy issues that need to be addressed. I must say that I find the amendment to the Motion that the noble Lord, Lord Foulkes, has put before the House quite attractive.

My question relates to the implications for air service agreements with the EU and the EEA. There is also a broader question which does not seem to have been addressed in these regulations which I know is causing great concern. I omitted to say that at the time I married my husband he was an airline executive and is now in receipt of a pension from Delta Air Lines. I have not consulted him on my notes today, but perhaps it would have been better to have done so.

American carriers are concerned about cabotage and their right to fly internally within the EU. We are currently part of the common travel area. Will my noble friend address what happens when the United Kingdom leaves the European Union on 29 March regarding the fourth and fifth freedoms and US and other international carriers? That does not seem to be addressed in this regulation, but I know it will be exercising many of the airlines at this time.

Page 4 of the Secondary Legislation Scrutiny Committee’s report raises a number of issues and I think the House will take a great interest in the Minister’s reply. Paragraph 16 states:

“In the event of no agreement, EEA airlines will now also need to apply for a foreign carrier permit to operate in the UK”.


As suggested, I would like to press the Minister about the basis on which these expectations are founded and what co-operation and negotiations she is having with EU carriers to ensure that the necessary permits will be in place before 29 March so that there is no gap in aviation post Brexit. How long does the Minister think it will take to apply for these permits? What cost will there be to the airlines in this regard? Will she take this opportunity to correct what I hope are incorrect newspaper reports over the weekend that passengers are being told not to fly after 29 March next year because it is all too difficult to know what rights will be in place and what permits will be required for passengers to apply for visas or permits to travel?

I would also be grateful for a response from the Minister on this question. When she referred to the current wet leasing arrangements, she said that this will be in relation to reciprocity. How will this carry on after 29 March, particularly as it is understood that carriers may not benefit from the current arrangements once we have left the European Union?

The amendment to the Motion tabled by the noble Lord, Lord Foulkes, asks for UK membership of the European common aviation area. Does my noble friend have a date for the application that we intend to make to that area?

I shall conclude with a general point. I understand that these regulations might have been put forward as a draft negative, in which case I am not sure that we would have had the chance to consider them. If that is the case, the House was given a very clear understanding during the passage of the EU withdrawal Bill that no policy should be decided by secondary legislation and that all policy should be decided by primary legislation. My fear is that the statutory instrument before the House today is getting perilously close to determining policy. I hope that the Government will put down a marker that when it comes to other Bills, such as the Agriculture Bill and the environment Bill, no policy will be applied through regulation but will be in the Bill. When we were in opposition that was always our very clear understanding.

[Baroness Randerson (LD)]

My Lords, I can well understand the sense of frustration that led the noble Lord to table his amendment. Indeed, “sense of frustration” is a massive understatement. The chaos which has prevailed in the Government for more than two years has turned lately to a deliberate intention to frustrate the will of the people and a determination to stifle debate in the other place and run down the clock to a point where MPs will be denied any meaningful vote. The chaos is not helped by the antics of the leader of the Official Opposition, to whom we would normally look for some guidance. A completely blank space is there, so it is good to see the spirit being shown here by the noble Lord, Lord Foulkes.

I was in Brussels at the weekend—I go there frequently for family reasons. I talk to people who live there, both British and many other nationalities. Over the months, I have noticed their sense of sadness turn to irritation and then to frustration; now, they are almost laughing at us, because of the chaos we are in. They are doing it with great sadness, because they have always looked to the British as the people who would get on with it and make the sensible decisions.

Last week, the EU Sub-Committee on the Internal Market, of which I am a member, reviewed the evidence that we had a year ago from representatives of the aviation industry. Then, they had brushed aside the possibility of a no-deal Brexit when we put that question to them as simply not a likely scenario or not credible. They also stressed the need for their industry to have the deal done by the end of August or September this year at the latest. We are now 70 working days away from 29 March. We are asking our businesses and our industries, and not just the aviation industry, to do an impossible job. Unless we just carry on as we are, it is too late for them to prepare for any change in situation.

This SI is part of the Government’s rather pathetic preparations for a no-deal scenario. When we discussed it in Grand Committee a couple of weeks ago, the Minister still managed to sound pretty confident, but a lot of plans have come unstuck since that time.

In Britain, we have the third largest aviation industry in the world. We are a nation that loves to travel and we have a highly competitive aviation market based largely on cheap air fares. If there is no deal, UK and EU airlines will lose the automatic right to operate services between the UK and the EU without the need for advance permission from individual states. The Minister told us that the Department for Transport expects to grant permission for EU carriers to fly to and from UK airports and for that to be reciprocated by other countries in the EU. However, a more recent report of the Secondary Legislation Scrutiny Committee on another, related SI—the draft aviation safety regulations—indicates that the European Commission has confirmed that licences, certificates and approvals issued by the CAA before 29 March will no longer be automatically accepted in the EASA system by other EU countries after exit day. The DfT’s hope of mutual recognition after a no-deal Brexit may be overoptimistic.

One thing is for certain: the CAA will have to shoulder many more responsibilities, some of which are set out in this SI, in the other SI to which I referred and beyond. We will have to consider those other SIs in future. Can the Minister explain to us in detail what additional resources have been given to the CAA already and what more resources the Government plan to give it in future?

--- Later in debate ---

[Baroness Sugg]

My Lords, I thank the noble Lord, Lord Foulkes, for initiating this debate, and other noble Lords for their contributions. Following the speculation in the media over the weekend, I am also grateful for the opportunity to provide clear reassurance on the Floor of the House that planes will continue to fly after 29 March 2019, and that people can continue to book their holidays with confidence.

As I said, these regulations are an important element of this Government’s sensible contingency preparations. Obviously the debate has not focused quite on the detail; as the noble Lord, Lord Tunnicliffe, said, we focused on that in Grand Committee, so I will address my comments to the contributions from noble Lords.

In the amendment to the Motion, the noble Lord, Lord Foulkes, calls on the Government to seek membership of the European common aviation area. That is a multilateral agreement and, as he will know, signatories to it are the EU and its member states, Norway, Iceland and the western Balkan states. We are already putting in place replacement arrangements with the eight non-EU signatories for that agreement. We have got three—very nearly four—of those agreements signed, and others are progressing well.

It would not be straightforward for the UK simply to sign up to the ECAA agreement. That would require the active consent of all the EU 27 and the eight non-EU parties to that agreement. As I said, we have arrangements in place with many of the non-EU parties. As for the EU 27, the Commission has been clear that it will negotiate separately on that. As the noble Lord points out, the ECAA agreement also necessitates full and continued application of EU legislation and, with regard to the interpretation of the agreement and the associated legislation, it is the European Court of Justice that will decide. As the noble Lord will be aware, the Prime Minister has set out red lines for the UK’s future relationship with the EU, one of which is to end the jurisdiction of the ECJ in the UK.

Civil aircraft are not at risk of being grounded after 29 March. That would be in nobody’s interests and is entirely avoidable. As Donald Tusk said earlier this year, he is,

“determined to avoid that particularly absurd consequence of Brexit that is disruption of flights between the UK and the EU”.

That confidence is shared by industry as well as the UK Government. Ryanair, to whom the noble Lord referred, last month reported that its forward bookings for flights to and from the EU remain strong, as we have seen across the sector. Its chief marketing officer was quoted as saying that even if we were in a no-deal Brexit, flying would be fine.

The noble Lord, Lord Adonis, mentioned Heathrow. He is quite right that we need to ensure that we have these regulations in place to avoid disruption. John Holland-Kaye of Heathrow said yesterday that he was confident that planes would still fly and people could book with confidence. But I understand noble Lords’ concerns and it might be helpful if I set out in a little more detail our position and the Commission’s published position on this.

We set out in September in our technical notices, to which the noble Lord, Lord Tunnicliffe, referred, that we envisage granting permission to EU air carriers to operate to the UK. In its own contingency action plan published on 13 November, the Commission set out that it would also bring forward measures to ensure that UK air carriers could operate to the EU. Explicitly, in its contingency planning note of 13 November regarding traffic rights, to which this statutory instrument refers, the Commission said that it will propose measures to ensure that air carriers from the UK are allowed to fly over the territory of the EU and make technical stops, as well as land in the EU and fly back to the UK. The Commission said that these measures would be subject to the condition that the UK applies equivalent measures, and we have provided that reassurance as set out in our technical notices and as this SI actually delivers.

On aviation safety, which is of course important both to ensure that planes keep flying and that we keep our passengers safe, the Commission has said that EASA will be able to issue certificates only once the UK has become a third country, which will not be until after we have left the European Union. But it said in its notice on 13 November that it would propose measures to ensure continued validity of such certificates for a limited period. Those measures will be subject to the condition that the UK applies similar measures. Again, we have set out that we will recognise the EASA certificates for up to two years in our technical notices. That position was detailed in the aviation SI that was laid earlier this month and will be debated in your Lordships’ House in the new year.

I can give an update since Grand Committee to show further progress. On 29 November, following a meeting between the EU 27, we received a further update from the Commission on its position. On market access, the Commission has confirmed that it will propose a regulation to ensure basic connectivity for EU-UK flights on the basis of reciprocity. On aviation safety, the Commission will propose a regulation for continued validity of type certificates and organisation approvals, and for UK certified parts and appliances placed on the EU market before the withdrawal date. On aviation security, the Commission has confirmed that it will adopt an implementing Act to list the UK for the one-stop security system, which will include cargo security. We do not yet have a timeline on that, but we are working closely with the Commission to deliver it. Noble Lords are quite right to point out the importance of the reciprocity in this, but we are delivering our commitments through this programme of secondary legislation. The EU has confirmed that it is doing the same.

Not all our aviation relationships are governed through the EU. We already have in place 112 separate bilateral agreements with other countries. They will continue as they are today as we leave the European Union. I can provide noble Lords with some updates on further negotiations around bilaterals. We have recently concluded a new bilateral air services agreement with the UK and the US. That is confirmed and signed. That will come into effect once the EU-US air transport agreement ceases to apply to the UK. That is a good deal that guarantees the continuation of our really important transatlantic routes. It means that airlines can continue to operate as they do now and it will allow them to develop new services.

We have also concluded agreements with many countries where the current arrangements are governed by EU-level agreements. We have concluded agreements with Albania, Canada, Georgia, Iceland, Israel, Kosovo, Montenegro, Morocco and Switzerland. We are working very closely with other international partners to agree replacement bilateral arrangements designed to come into effect with the other countries currently governed under an EU agreement. Those countries are Bosnia and Herzegovina, Jordan, Liechtenstein, Macedonia, Moldova, Norway and Serbia. Talks on those are progressing well. We expect these arrangements to be in place well ahead of exit day.

Some noble Lords asked about resources for the CAA. The CAA is of course making appropriate contingency preparations to deliver the continuity of service we want. That includes ensuring it has the appropriate staffing levels to deal with any increase in workload. It is recruiting 59 additional staff in preparation, 39 of whom are already in position. It is important to remember that the additional functions the CAA would take on in a no-deal scenario are limited. They are mostly for aviation safety, particularly in design certification. The EASA system works for the most part on the basis of automatic recognition of certificates issued by national authorities, so the CAA is already our competent authority for most approvals. As I said, both our and the EU’s positions have said that we will recognise those certificates for a limited period after we leave the European Union.

I turn to some questions from my noble friend Lady McIntosh. I again add my thanks to the Secondary Legislation Scrutiny Committee for its continued work on our lengthy SI programme. It brings many SIs to the House’s attention, and I thank it for doing so. My noble friend asked about the CAA burden. I have already mentioned its resourcing. Specifically on route licences, as I said, the CAA already provides regulatory oversight on all UK-licensed air carriers and has the resource in place to ensure it can continue to provide that oversight. All holders of a type A operating licence, which is the majority of aircraft over 20 seats, already hold a route licence. All holders of type B operating licences have already been individually contacted and invited to apply for a free route licence from the CAA. The CAA is absolutely confident that those route licences will be issued in advance of exit day.

My noble friend also asked about reciprocity of wet leasing. Maintaining the current wet-leasing arrangement is the right thing to do for the industry as a whole, as well as for passengers. We are making every effort to minimise disruption to aviation on a no deal. Maintaining the current system for wet leasing of foreign aircraft is part of that effort.

Noble Lords raised some questions about the transport SI programme. We are expected to lay approximately 65 EU exit SIs. That number is approximate because ongoing EU business means that further legislation might come into force. Of those 65 SIs we have laid 36 to date. That is over half. Of those laid so far, 18 have been affirmative and have been debated on the Floor of the House or in Grand Committee, and 18 have been negative. There are 14 aviation SIs, 10 of which have been laid so far. Noble Lords have referred to the important issues of safety and security, and passenger rights and compensation. Those SIs have been laid and will be debated early in the new year. The remaining SIs will be spread between now and exit day to make sure we have a fully functioning—

[Baroness McIntosh of Pickering]

I am very grateful for my noble friend’s response. I asked a rather techy question about fourth and fifth-freedom rights, but currently there are routes that fly, for example, from London through Shannon to the US. Has that been resolved in the context of the new UK-US agreement to which my noble friend referred?

[Baroness Sugg]

The current direct operations from the UK to the US will continue to stand. Obviously, if there are flights through the EU, that will be subject to the negotiations.

[Baroness McIntosh of Pickering]

To be very clear, I am asking about routes that I think still operate from London via Shannon in Ireland to the States: has it been resolved that they will continue?

[Baroness Sugg]

I am sorry if I was not clear. No, the current UK-US deal deals only with direct flights between the UK and the US. Obviously, a flight that stops off at Shannon will be part of our discussions with the EU.

I hope I have been able to provide reassurance on this. I think that the EU Commission has been very clear in setting out its position and we have been very clear in setting out our position. They are broadly the same position: they both rely on reciprocity. We are delivering our position through this series of statutory instruments and, as I said, the EU is working on a timeline of when it will deliver its position. While we are working hard to get parliamentary agreement to the deal with the EU, we of course have to continue to make responsible preparations to ensure that, in the absence of that agreement, we will be able to avoid disruption. This SI and the others we have debated and will debate over the coming months are a key part of those preparations. Both we and the EU have published contingency plans, of which these regulations are just one small element. Taken together, those plans will ensure that planes can continue to fly to and from the EU in the event of a no-deal exit. They will ensure that our legal and regulatory framework for aviation is ready so that flights can continue whatever the outcome of the negotiations.