Flybmi

Debate between Baroness McIntosh of Pickering and Baroness Sugg

Monday 18th February 2019 Lords Chamber

[Baroness Sugg]

I agree with the noble Lord on all those points. We are seeing supply outstrip demand on many of these routes. BMI cited 19 passengers per flight on a 50-seater plane; obviously, that would be very difficult to sustain. We are seeing other regional airlines take on those routes, but there is an excess of capacity. I agree with the noble Lord also on the importance of regional airports. Maintaining that regional connectivity is key. We provide a PSO on lifeline routes. Our aviation strategy, on which we published a consultation in December last year, looked at how we might support regional airports. They are important in providing connectivity not only for people but for freight and trade, and can act as a multiplier for local and regional economies. It is very important that we support them.

[Baroness McIntosh of Pickering (Con)]

My Lords, will my noble friend further address overcapacity, which she just mentioned? When airlines such as Ryanair and EasyJet are not making money, seeing their share price fall and issuing profit warnings, it obviously has implications for the whole industry.

[Baroness Sugg]

I agree with my noble friend. It is a challenging time to be in the aviation industry at the moment for many reasons. We are seeing airlines having to address those challenges. Ultimately, they are commercial enterprises, and the share price will be dictated by demand and their profitability. Through the aviation strategy consultation, we are looking to support the industry. The UK aviation sector is incredibly important to the UK economy, providing £22 billion per year and hundreds of thousands of jobs. We want to make sure that our aviation strategy helps it continue in its success.

Air Passenger Rights and Air Travel Organisers’ Licensing (Amendment) (EU Exit) Regulations 2018

Debate between Baroness McIntosh of Pickering and Baroness Sugg

Tuesday 12th February 2019 Lords Chamber

[Baroness Sugg]

I entirely understand my noble friend’s point of view. Of course it is important that we understand the full costs of this. The CAA is taking on a number of new responsibilities and functions after EU exit. As I said, we have confidence in its preparations. Regarding ATOL—I mentioned the figures before—we think the current level of staff will be able to provide this service, so we do not expect to see a significant increase in workload from this SI. The latest figure for the number of new staff is around 59, most of whom will carry out safety functions. The House will debate another SI on safety, which will have cost implications. I will ensure that I am able to provide actual cost implications for future aviation SIs. In this case, there are none, as we are expecting only a small number.

The best outcome for the UK is to leave the EU with a deal, and delivering a deal negotiated with the EU remains the Government’s top priority. However, as a responsible Government, we must make all reasonable plans to prepare for a no-deal scenario. This instrument ensures that, in the event of a no-deal exit from the EU, passengers travelling by air can continue to benefit from the same rights as they currently do, and that the aviation industry and consumers have clarity about the regulatory framework which would be in place in a no-deal scenario. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I have two brief questions on this statutory instrument. My noble friend the Minister has stated that compensation will be paid in pounds, converted from euros. What if the pound to euro ratio changes substantially over, say, the next two years? Is this something that her department and the Government are likely to keep under review?

I tried to follow the Minister’s explanation as closely as I could. If I have understood correctly, there is one category of flight that UK passengers will no longer be compensated for. I dealt with this myself when I was an MEP and, at one stage, rapporteur on civil aviation in the European Union. I would just like her confirmation that this category of flight is covered. These are flights where passengers start with a UK carrier out of London Heathrow, Gatwick or Stansted, but change at an airport within the EU, such as Amsterdam, to a connecting international flight operated by, for example, Singapore Airlines or Delta Airlines—both of which my husband worked for at separate times—to a destination such as New York or Singapore. Is my noble friend saying that, under these regulations, or in the event of no deal, a UK passenger who is denied boarding that flight in a third-country airport such as Amsterdam will no longer be compensated?

--- Later in debate ---

[Baroness Sugg]

My Lords, I thank all noble Lords for their consideration of these draft regulations. I am grateful for the scrutiny provided by noble Lords. These are important pieces of legislation, and it is right that they are properly scrutinised. I would not class the noble Lord, Lord Warner, or indeed any other noble Lord as a trouble-maker. I will attempt to get to all the questions, but if I do not manage to cover them, I will respond in writing.

On the point made by my noble friend Lady McIntosh, the Explanatory Memorandum sets out the exchange rate used to calculate the amounts. It is the average for the year to 31 December 2017, which has been used across the statutory instruments. There are currently no plans to change that.

In response to the noble Lord, Lord Berkeley, let me say that this regulation will cover all carriers with a UK operating licence. That is issued by the CAA, so that is how we define who will be covered by these regulations in the event of a no-deal exit. The requirements of the operator’s licence are set out in the operation of air services regulations, which we debated last year.

On enforcement, if it is a UK carrier—that is, one with a UK operating licence—the CAA will enforce it. If it is departing from an EU member state, that member state will enforce it, and if it is a UK carrier departing from a third country, the CAA will again enforce it. So the example that my noble friend Lady McIntosh used of a flight departing from the UK will be enforced by the CAA, and the flight which then departs from the EU will be enforced by that relevant member state—I cannot remember which member state she referred to.

[Baroness McIntosh of Pickering]

My question was about those UK passengers who board the next leg of the flight in Amsterdam or what would be a third country with an international carrier. Does the regulation now exclude them from denied boarding rights and other privileges that they would otherwise be entitled to?

[Baroness Sugg]

I should first point out that these regulations apply to everyone who travels on a plane regardless of nationality, so actually the nationality is not important. The important part is the carrier that operates the flight. In that example, as I said, the flight leaving the UK would be covered by the CAA and the flight leaving Amsterdam, regardless of the nationality of the passenger, would be covered by the existing EU regulations, so that would not change.

Air Services (Competition) (Amendment) (EU Exit) Regulations 2019

Debate between Baroness McIntosh of Pickering and Baroness Sugg

Tuesday 12th February 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, if it is convenient, I will speak to both the Air Services (Competition) (Amendment) EU Exit Regulations 2019 and the Airports Slot Allocation (Amendment) (EU Exit) Regulations 2019. These instruments will both be made using powers in the European Union (Withdrawal) Act 2018 and will be needed if the UK leaves the European Union without a deal.

The two draft instruments will correct the following retained EU regulations: Regulation 868/2004, which is intended to provide protection for Community air carriers against injury caused by subsidisation and unfair pricing practices relating to air services between EU member states and third countries; and Regulation 95/93, which sets out the process for the fair and transparent allocation of airport slots—the right to use a bundle of facilities at airports for landing or take off of an air service at specific dates and times; for example, runways, stands and terminals where the demand at congested airports exceeds the available infrastructure.

I turn first to the draft air services competition instrument. The EU regulation sets out the process and requirements for imposing redressive measures in the form of tariffs or fines where it has been demonstrated that subsidies or unfair pricing practices by third-country bodies and air carriers, with respect to routes between EU member states and third countries, have caused injury to the EU aviation industry. This EU regulation has never been used and is currently in the process of being replaced. However, the effect of Section 3 of the European Union (Withdrawal) Act 2018 is that any direct EU legislation which is in force and applicable on exit day will automatically become part of the UK’s statute book. Therefore, the instrument that we are considering today simply makes those corrections necessary so that the version of Regulation 868/2004 brought into UK law by the EU withdrawal Act is, in principle, legally operable after exit day.

This instrument makes only technical corrections to the retained Regulation 868/2004, meaning that the substantive requirements for assessing whether there has been subsidisation, unfair pricing practices or injury to industry remain exactly the same. The corrections include ensuring that the scope of the retained EU regulation is correct once the UK has left the EU; for example, substituting references to “Community” with references to the “United Kingdom”. This has the effect that the retained regulation applies where there has been injury to the UK aviation industry. Instead of applying where there are unfair pricing practices by “non-Community” air carriers on certain routes to and from the EU, the retained regulation will apply where “non-United Kingdom” air carriers have engaged in unfair pricing practices on certain routes to or from the UK. Similar changes apply in relation to the subsidisation provisions in the retained EU regulation.

This instrument also transfers functions currently carried out by EU institutions to appropriate bodies in the UK. For example, it transfers the function of carrying out investigations covering subsidisation and/or unfair pricing practices from the European Commission to the Civil Aviation Authority.

Finally, this instrument transfers the function of imposing provisional or definitive redressive measures to the Secretary of State. As the EU regulation sets out that the process for this is through further regulations, this instrument also sets out that any provisional or definitive redressive measures would be imposed by the Secretary of State through regulations.

I turn next to the draft airports slot allocation instrument. The EU regulation applies at congested airports where the availability of adequate infrastructure is insufficient to meet demand. The regulation sets out conditions that must be met for an airport to be “schedules facilitated” on a voluntary basis or subject to “slot co-ordination”. A thorough capacity analysis must first be carried out, which must be done within six months, if air carriers representing more than half of the operations at an airport or the airport authority consider capacity to be insufficient for actual or planned operations, or upon request from the European Commission, in particular if new entrants encounter serious problems in securing slots.

The regulation also specifies that any decision that an airport should be subject to slot co-ordination should be taken following thorough capacity analysis and consultation with users of the airport and that an independent slot co-ordinator should be appointed by the relevant member state. The following airports in the UK are currently subject to slot co-ordination: Birmingham, London City, Gatwick, Heathrow, Luton, Manchester and Stansted; and Bristol Airport is partially co-ordinated for the summer season. Airport Coordination Limited, or ACL, has been appointed as the slot co-ordinator for UK airports, and has been performing this function for some time.

Under the regulation, slots are allocated to air carriers that held the slot in the previous season and have demonstrated use of the slot at least 80% of the time during that season. The remaining unused slots are returned to what is known as the slot pool, alongside any newly available slots; 50% of the slots in the slot pool are available to new entrants. The regulation also makes provision for member states to reserve certain slots for essential domestic services, such as public service obligations, and for slots to be exchanged between carriers or transferred between different routes or types of service.

Finally, the regulation contains provision for reciprocal action, to ensure that Community carriers requesting slots in non-EU countries are treated fairly.

Once again, the draft instrument we are considering makes only minor changes to ensure that the retained EU regulation, Regulation 95/93, continues to function correctly once the UK has left the EU, alongside the domestic Airports Slot Allocation Regulations 2006 which were made to implement the EU regulation. Most of the changes the instrument makes are to ensure that the scope of the retained regulation is correct; for instance, reflecting that the retained regulation will only apply to airports in the United Kingdom after exit day, removing references to “Community law” and EU treaties, and removing or amending references to member states, as these will no longer include the UK after exit day.

Through the 2006 implementing regulations, the UK has fulfilled the requirements for member states to appoint a body or person to carry out functions such as designating an airport as schedules facilitated or co-ordinated, and appointing a schedules facilitator. The UK conferred these functions on the Secretary of State through the 2006 regulations. This instrument corrects the provisions in the EU regulation so they read consistently with the 2006 implementing regulations, reflecting that the UK has already fulfilled its obligation to confer these functions on an appropriate authority. Other roles for EU institutions, such as the European Commission’s role of carrying out investigations, are removed or replaced.

The instrument also makes corrections to some of the definitions contained in the EU regulation; for instance, substituting the definition of a “Community air carrier” with a definition of a “UK air carrier”. For the purposes of allocating slots from the slot pool, the EU regulation defined “new entrant” as including air carriers with few, if any, slots which requested slots for scheduled services between two Community airports where at most two other carriers operate that route. This instrument amends that part of the definition to provide for continuity, so that it captures both air carriers requesting slots for passenger services between two UK airports and carriers requesting slots for services between a UK airport and an airport in an EEA state.

The regulations provide that a proportion of slots can be reserved for PSOs. This SI amends the definition of a PSO in line with the corrections already made to provisions in EU law on PSOs, through the Operation of Air Services (Amendment etc.) (EU Exit) Regulations 2018. This means that, instead of being open to Community air carriers, “qualifying air carriers” will be eligible to operate PSOs in the UK. This will include UK air carriers and carriers from other countries that have cabotage rights in the UK—the right to fly between two points within the UK. As is currently the case, any PSO can be limited to one carrier by the Secretary of State only after a tender process has been followed. This change has no effect on the PSO routes already operating in the UK.

In terms of reciprocity, this instrument amends the provisions in the EU regulation so that, instead of the Commission being able to take action to ensure that Community carriers requesting slots in non-EU countries are treated fairly, the provisions give powers to ensure that UK carriers requesting slots in another country are treated fairly in the allocation of slots at that country’s airports. This instrument therefore sets out that it is the Secretary of State, rather than the European Commission, who may wholly or partially suspend the operation of the retained Regulation 95/93 in relation to air carriers from a non-UK country, with a view to remedying discriminatory behaviour of that country. The EU regulation currently provides for this action to be taken through a regulation and this instrument transfers that function to the Secretary of State, who could carry this out through regulations.

Finally, this instrument makes some minor changes to the 2006 implementing regulations, for instance removing the requirement for co-ordination committees at airports to invite the European Commission to meetings. It also makes a change to Annexe XIII to the EEA agreement, which requires parties to the agreement to inform the European Commission about serious difficulties encountered by UK air carriers in obtaining airport slots in third countries. This provision will not apply to the UK after exit day in the event of no deal, as we will no longer be a party to the EEA agreement, so it will be removed by this instrument as it will be redundant.

As I said during the debate on the previous SI, the best outcome for the UK is to leave the EU with a deal, and delivering a deal negotiated with the EU remains the Government’s top priority. However, as a responsible Government, we must make all reasonable plans to prepare for a no-deal scenario. These instruments ensure that, in the event of a no-deal exit from the EU, the legislative framework for aviation, in particular relating to the allocation of slots at congested airports in the UK, continues to work effectively, and that the aviation industry has clarity about the regulatory framework in which it would operate in a no-deal scenario. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, this is designed to be helpful, so I hope that my noble friend will not put me in the “troublemaker” category. I will start with a couple of questions on the airport slots allocation. What will happen to the current grandfather rights, in particular those that might be enjoyed by EU carriers? Will they continue to be enjoyed after exit day? If that is the case, and this regulation comes into effect, what will happen to the grandfather rights currently enjoyed by UK carriers in EU airports?

On the civil aviation competition regulations, paragraph 7.2 of the Explanatory Memorandum states—my noble friend clearly said it in her opening remarks too—that it is not expected that this regulation will come into force. That begs a question. I cannot believe that there have been no unfair pricing practices and no cases of subsidy; if there have, what legislation has been used? There are some very worrying issues about this regulation and the European Commission regulation on connectivity which is going through the EU institutions at the moment.

My noble friend raised the question of cabotage rights in the UK currently enjoyed by EU carriers. Of much greater concern is that the market access proposals in the EU regulation currently before the EU institutions set alarm bells ringing, for me and I am sure for many of the UK carriers, when they were set out in December. It is my clear understanding that cabotage rights and fifth freedom rights will be lost.

I declare my interest; I was one of those in the European Parliament at the time who campaigned for years to get cabotage and fifth freedom rights. When I met my husband, who was at the time working for Delta Airlines, my opening line was, “Why will the US Government not allow cabotage and fourth and fifth freedom rights for European carriers in the US?”, which I think is currently not the case. If UK and EU carriers are going to retain only third and fourth freedom rights, how can that be in the interests of the UK airline sector?

I am sure that my noble friend is more aware than anyone of the importance of the UK airline sector. It turns around £52 billion a year, exports £26 billion, supports almost a million jobs and clearly supports the economy, whether it is Leeds Bradford Airport or any of the London airports. All international airports support their local economies as well. Therefore I would be grateful if my noble friend could say what the impact will be on UK airlines of the loss of cabotage and the loss of fifth freedom rights in the EU, whether or not there is a deal, because I understand that will be the position anyway, whether it is this regulation or another regulation going forward.

I understand that there will also be an impact on capacity. Obviously airlines such as Ryanair are currently going through difficulties. I am not a shareholder in any airlines. I almost lost my shirt on British Airways, so I am currently not investing in any airlines, but it is fair to say that Ryanair has the potential to expand, as do easyJet and a number of other UK carriers. Did the Government therefore have any input into the decision that has been taken—namely, that UK carriers will be allowed to operate in the EU only at the level that is frozen to 2018 levels? Presumably what is before us would be a temporary regulation, so that if there is a deal then these regulations would not come into play. However, I am extremely concerned that in future we will be locked into the 2018 frequency levels, affecting UK travellers who desire to travel within the European Union and UK airlines that desire to expand. Is there anything the Government or this House can do to reverse that?

At the end of March, the summer season schedules will be published. What are those timetables for flights going to look like? Will they be as full as they were last summer? Will they be provisional and will they have to be revisited?

There is some toing and froing according to press reports as well, and the Government face a deadline imposed by the European Commission of seven months to decide on the make-up and composition of an EU airline. As touched on in an earlier debate, this has severe implications for this regulation—no doubt it will for other regulations as well. It has ramifications for Ryanair, which we imagine is based in Dublin but which has a large number of non-EU shareholders, but of more concern is the UK flag carrier, British Airways, which is now under the umbrella of the IAG. Are we going to face the fact that British Airways under the IAG might not be recognised as an EU carrier?

--- Later in debate ---

[Baroness Sugg]

My Lords, I thank noble Lords for their consideration of these draft instruments. On the slot allocation system, we are not moving to operate on our own. The current system of slot allocation, including the EU regulations, is based on guidelines produced at an international level by IATA. Those guidelines are not affected by EU exit. The system for slot allocation at UK airports will be the same after exit day as it is today, except that the role of the EU Commission will no longer apply.

The noble Lord is quite right to point out that slot reform in general has been around for some time, but there is an international consensus around this and we are considering it in our consultation strategy, Aviation 2050: The Future of UK Aviation. We set out a number of potential issues with the current process for slot allocation affecting competition in the aviation markets, such as historic grandfather rights and retiming, but there is a long-standing international system, so we will work very closely with the industry, IATA and countries with which the UK has aviation links to discuss that.

My noble friend Lady McIntosh asked whether current grandfather rights will be the same. Again, those will remain the same after exit day. As the noble Lord, Lord Tunnicliffe, pointed out, this does not change any policy on this and those rights that UK carriers have at EU/EEA airports will also not be affected.

On the point about the replacement of the competition regulation, raised by the noble Baroness, Lady Randerson, and my noble friend Lord Balfe, the UK has participated fully in the legislative process regarding the replacement regulation; it is now ready to be put to the European Parliament and the Council of Ministers, and it is intended to serve the same purpose as the current regulation—ensuring fair competition. But the powers, as I said, and as highlighted by my noble friend Lady McIntosh, have never been exercised and it is unlikely that they ever will be. The EU has reviewed the regulation, but the vast majority of our bilateral air services agreements have articles governing fair competition, and these are what we use to ensure that there is a level playing field in the operation of international air services. That is why it has not been used and we do not expect it to be used.

My noble friend Lord Balfe asked, as he did previously, about our future plans. We keep our legislation under ongoing review and will continue to do so after exit day to make sure that it meets our policy objectives and legal obligations. While we would not be under an obligation if we left without a deal, if we chose to implement the replacement regulation it would be through primary legislation. Again, my noble friend is right to point out that, of course, in the event of a no-deal exit the EU’s statute book will continue to move on and we will need to be flexible about ours.

My noble friend Lady McIntosh asked about timetables. Airlines have already published their timetables for flights post March 2019 and tickets are being sold. The noble Lord, Lord Bruce, asked about Aberdeen and the allocation of slots. As I mentioned before, slots are allocated through ACL and the EU: the Government have no role in the allocation of slots and airlines determine how they are allocated on a commercial basis. Of course, if a carrier does not use its slots 80% of the time, they will be returned to the slot pool for allocation. We have the option of PSOs if needed, but the decision about specific slots will be down to the commercial airline.

My noble friend Lady McIntosh asked about the EU regulations. She is right to point out that they were published in December. There has been many a conversation on those, through industry and through member states. We are seeing some proposed changes, particularly on a capacity freeze, as my noble friend pointed out. I agree with her that the aviation sector is incredibly important to this country, which is why we are working hard to ensure that the industry can continue to grow sustainably. She is right that there are issues around ownership and control. We have not seen the headquarters of easyJet move but we have seen easyJet take on a Swiss air operator certificate. There is no immediate issue, as my noble friend pointed out, but, as one might expect, EU carriers are working closely with the Commission on that.

We are seeking continued participation in the European Aviation Safety Agency. That will help us continue trade as well as flights. We have played a significant role in EASA over the years and we very much hope to continue to do so. PSOs will be open to qualifying carriers—those with cabotage rights in the UK—and that has already been fixed in the operation of air services SI. Those carriers with cabotage rights could include those from the EU and other countries, so there will be the same requirements for PSOs going forward.

I hope that I have answered most of the questions. If I have not, I will follow up in writing.

[Baroness McIntosh of Pickering]

On the question of the damage to UK carriers arising from the loss of cabotage rights and freedom rights, do we have any estimate of what that will be?

[Baroness Sugg]

We are working very closely with the Commission on that. Obviously, there are implications both ways. We remain committed to working with the Commission on the regulation to avoid that. Of course, there are UK airlines which fly cabotage in the EU, in the same way that there are EU airlines flying cabotage in the UK. That is another example of how it is in our mutual best interests to ensure that we continue the market access we have today. Those discussions are ongoing and as soon as I have an update on them I will be happy to share it with noble Lords.

While we are working to agree a deal with the EU that is supported by Parliament, we need to continue our responsible preparation. Both the UK and EU have set out their intention to put in place arrangements to ensure that planes will continue to fly; none the less, these instruments are essential to ensure that we have a legal framework, particularly in respect of the allocation of airport slots, that continues to work effectively in the UK from exit day. That will help ensure the continued smooth operation of air services, irrespective of the outcome of the negotiations. I beg to move.

Seaborne Freight

Debate between Baroness McIntosh of Pickering and Baroness Sugg

Monday 11th February 2019 Lords Chamber

[Baroness Sugg]

I thank my noble friend for those comments. The contract with Seaborne was specifically designed in recognition of the risk posed by contracting with a new operator and it protected the taxpayer, as it was always designed to do. As I said, no taxpayers’ money has been paid to Seaborne. My noble friend is quite right to point out the assurances that we received from Arklow Shipping. Noble Lords would expect a responsible Government to ensure that we are able to deliver capacity for critical goods in the event of no deal and that is what we are doing.

[Baroness McIntosh of Pickering (Con)]

May I press my noble friend?

Seaborne Freight

Debate between Baroness McIntosh of Pickering and Baroness Sugg

Tuesday 8th January 2019 Lords Chamber

[Baroness Sugg]

I assure noble Lords that this is not a joke but part of our contingency planning. We are concerned that in the event of no deal, there will be disruption at the port of Dover. Our first priority is to minimise that disruption on the narrow straits, but we are aware it is a real issue, which is why we are making these contingency plans and why we are looking at alternative ways of ensuring that trade carried on ro-ros can continue to come and go from this country.

[Baroness McIntosh of Pickering (Con)]

My Lords, would my noble friend consider other ports, which do not require dredging and which operate ferries? I declare an interest: I represented the port of Harwich for 10 years as a Member of the European Parliament, and I was a frequent user of DFDS when it operated ferries to Denmark. Would my noble friend consider looking at the option of a new ferry service out of the port of Harwich? I am sure the port would benefit too from this revitalised process.

[Baroness Sugg]

As I said, the current work at Ramsgate will certainly benefit that area. With this procurement, the Government set the criteria of the additional freight capacity, within which the port of Harwich would have been in scope, but we did not specify the origin or destination ports. We left that up to the commercial operators. We regularly engage with a wide range of ports across the country, including Harwich, and we will continue to discuss how the Government can support them in the development of the maritime industry.

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

Debate between Baroness McIntosh of Pickering and Baroness Sugg

Tuesday 18th December 2018 Lords Chamber

[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.

Railways: East Coast Main Line

Debate between Baroness McIntosh of Pickering and Baroness Sugg

Tuesday 30th October 2018 Lords Chamber

[Baroness Sugg]

My Lords, I am happy to give some more information on the timings. The first trains were due to enter service in December this year, but LNER has recently announced that these will not be introduced until early next year. There remain challenges relating to electromagnetic capability, ORR approvals and train design. Of course, this is disappointing for all involved, but when introduced the trains will provide more seats and faster journeys. As I said, the full rollout of the east coast fleet is still scheduled for completion in 2020.

[Baroness McIntosh of Pickering (Con)]

My Lords, my noble friend will be aware of my interest in this. I congratulate the Government on their involvement in this programme. Can my noble friend put a date on when the trains will actually run the full route to London? How will this coincide with the improvements to King’s Cross station that have been announced?

[Baroness Sugg]

My Lords, I am afraid that I am not able to give a definite date. We are trying to introduce the trains as soon as possible, but there remain issues that we need to work through. LNER has said that it hopes to start introducing the trains early next year. On my noble friend’s point about King’s Cross, we are carrying out essential works on King’s Cross to replace the expired track and signalling to ensure that we can see the full benefits of the east coast main line enhancements.

Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2018

Debate between Baroness McIntosh of Pickering and Baroness Sugg

Wednesday 24th October 2018 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, these draft regulations will be made under the powers conferred by the European Union (Withdrawal) Act 2018 and will be needed if the UK leaves the European Union next March without a deal. The regulations amend EU regulation 785/2004, which sets out insurance requirements for air carriers and aircraft operators, and the domestic legislation made to implement this regulation.

EU regulation 785/2004 requires air carriers and aircraft operators to be insured in respect of passengers, baggage, cargo and third parties and against other risks such as acts of war, terrorism, hijacking, acts of sabotage, unlawful seizure of aircraft and civil commotion. It also requires air carriers and aircraft operators to demonstrate their compliance with the minimum insurance requirements set out in the regulation and makes provision for exceptional situations where a failure of the insurance market means that carriers are not able to demonstrate that they are adequately insured in respect of all the risks specified in the regulation.

The withdrawal Act will retain in UK law EU regulation 785/2004 in its entirety on exit day. The draft instrument that we are considering makes the changes necessary so that the EU regulation continues to function correctly after exit day, alongside the domestic Civil Aviation (Insurance) Regulations 2005, which were made to implement the EU regulation. This is essential to ensure that the regulatory regime in place after exit continues to make the UK a safe place for passengers to travel by air.

The changes that the draft legislation makes are technical in nature. Both the risks against which air carriers and aircraft operators must be insured and the levels of insurance required, which are measured in special drawing rights—an international reserve asset created by the International Monetary Fund—remain the same.

To illustrate some of the proposed changes: they ensure that the scope of the retained EU legislation is correct so that it applies to “the United Kingdom” rather than,

“a Member State to which the Treaty Applies”,

and ensure that EU processes set out in the regulation, which will not apply to the UK after exit, are replaced with equivalent domestic processes. The EU regulation also makes provision for certain legislative functions. For instance, Article 7 sets out the minimum insurance cover in special drawing rights per accident for aircraft according to mass, and the EU regulation provides that the values in Article 7 may be amended where this is required as a result of changes to multilateral treaties, such as the 1999 Montreal Convention.

As the EU legislative procedure prescribed in the regulation will not apply to the UK once it has left the EU, this SI makes provision for the Secretary of State to amend these values by regulations if, and only if, required as a consequence of changes to international treaties. To ensure that any use of these powers is subject to appropriate scrutiny, we have provided that any such regulations must follow the affirmative resolution procedure and be approved by both Houses of Parliament.

We remain confident of securing an agreement on aviation with the EU. Across Europe, people benefit from liberal aviation market access, and we are focused on securing the right arrangements for the future so that our aviation industry can continue to thrive and passengers across the UK and the EU can continue to benefit from high levels of connectivity and choice. However, irrespective of the outcome of negotiations, it is crucial that we prepare our regulatory and legislative framework so that it continues to enable the UK’s aviation industry to operate safely and effectively in all scenarios. I commend these regulations to the Committee.

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate my noble friend on moving these regulations. I will take the opportunity to raise a number of personal concerns. I declare an interest in that when I was an MEP, I was Conservative spokesman for aviation in the European Parliament for a number of years, and at the time I met my husband, he was working for Delta Air Lines.

I imagine that the list my noble friend gave is not exhaustive, but there are increasingly incidents of drones—indeed, there has been a near miss. Is this currently covered by the EU legislation, and will that also transfer? Is this an opportunity that my noble friend and the Government may wish to look at in order to increase the cover? As I understand, there was a near miss involving a passenger aeroplane at a London airport, which would have had devastating consequences. I remember once looking at my insurance policy when I lived in a rented flat in Brussels, and one of the exclusions was from a plane falling from the sky. I wondered what the chances were of that happening, until a cargo plane did just that at Amsterdam airport, and the consequences were obviously absolutely devastating, not just for the passengers on the plane but for those in the apartments underneath.

I do not know whether this is the correct time to ask, but can my noble friend confirm that we will continue to have reciprocal cover, so that we will recognise the insurance cover of European carriers and other international carriers who use our airspace, emanating from EU airports? I understand that that is covered at the moment, but reading the specialist press, there seems to be some concern about whether this will carry on.

As my noble friend will be aware, there is deep concern among the airline industry, and no doubt airports as well, that we will continue to enjoy use of European airspace, and that our membership of EASA, the European Aviation Safety Agency, will continue. Does that fall within the parameters of these regulations or will my noble friend have another opportunity to update those of us who are concerned?

In her latter remarks, my noble friend said that the value of the insurance cover will continue to be reviewed. From memory, these values are set by either the Geneva or the Warsaw convention. Is my noble friend able to tell us when these values were last reviewed and whether in future we will continue to review the values of the insurance cover on a multilateral, reciprocal basis with our existing EU partners and others, such as Norway and Iceland, with which we will have reciprocal arrangements—I imagine that through the EEA they are already members of EASA—or is it the intention of the Government to do that on a bilateral basis? I believe that would be highly regrettable.

Heathrow Airport

Debate between Baroness McIntosh of Pickering and Baroness Sugg

Thursday 7th June 2018 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

Will my noble friend put my mind at rest? I should perhaps say in passing that I was Conservative transport spokesman in the European Parliament for nine years. There is concern across the north of England that a number of direct international flights, which have built up very successfully from regional airports such as Leeds Bradford Airport, Doncaster Sheffield Airport, and perhaps East Midlands Airport as well, will lose those direct connections as part of the deal that has been negotiated with the expansion of Heathrow Airport. That would be a very regrettable step, and I hope that my noble friend will take this opportunity to put my mind at rest. Will we continue to enjoy a raft of choices for international flights, directly from regional airports across the north of England, to make sure that we are not adding to congestion at London Heathrow?

[Baroness Sugg]

My Lords, I am happy to confirm to my noble friend that we absolutely continue to support regional airports. With an expanded Heathrow, we will still see regional airports growing and benefiting from long-haul flights, such as the recent introduction of the flight from Manchester to China, which has been so successful.

--- Later in debate ---

[Baroness McIntosh of Pickering]

My Lords, in the event that I perhaps did not express my question as well as I might, it is particularly the point-to-point regional flights between airports such as Leeds Bradford through Amsterdam, and onward to international connections, that I have in mind. Can my noble friend give me a categorical assurance that these will not be poached by Heathrow?

[Baroness Sugg]

I am afraid that I cannot predict exactly what is to happen with future flights. All I can do is to reiterate our support for regional airports. Another announcement we made yesterday was on making best use of existing capacity, which will allow regional airports to grow as long as they get permission from the local authority area. As I said, regional airports are supportive of Heathrow expansion and, even with that expansion, we expect them to continue to grow.

Rail Timetabling

Debate between Baroness McIntosh of Pickering and Baroness Sugg

Monday 4th June 2018 Lords Chamber

[Baroness Sugg]

My Lords, the noble Lord is quite right to point out that many of these issues have been caused by not having enough trained drivers to run the routes. Manchester, the north-west and the north-east have been particularly affected because of the recently completed infrastructure upgrades such as the Ordsall Chord, at Liverpool Lime Street and the tracks between Manchester and Liverpool and Manchester, Preston and Blackpool. There is an issue around rest-day working for drivers on Northern, which has exacerbated the situation and means that it has been unable to train the drivers as quickly as it had hoped. However, I assure the noble Lord that driver training will be closely looked at by the review.

[Baroness McIntosh of Pickering (Con)]

My Lords, does my noble friend agree that one of the problems with driver training is that small companies such as Northern trains and the TransPennine Express train the drivers and then the larger companies—such as the one that will now be called “London whatever”—poach them? A particular problem has emerged this week because not all the trains are now stopping at Northallerton and many passengers are being abandoned at York on their return journey from London because of the shortage of drivers. Will my noble friend agree to look into that to see how passengers can safely reach their ultimate destination?

[Baroness Sugg]

My Lords, I will certainly look into the point that my noble friend raises. She is quite right to point out that, because of these changes and the reduced timetable that has been brought in, trains are not stopping at every station. It is important that we deal with the train operating companies and do all that we can to communicate with them. However, I will certainly look at the provision available to transport passengers if they are not able to get off at the stop that they wish to.

My noble friend raised an interesting point about driver training. The necessary driver training was not completed in time and my noble friend is quite right to point out that sometimes train drivers move to other franchises. We are hoping to benefit from that in this situation. We are working across all train operating companies to see whether we can use other drivers on these lines to deliver better services. But the point about the transfer of drivers to different franchises is certainly something that I can take back.

Railways: East Coast Main Line

Debate between Baroness McIntosh of Pickering and Baroness Sugg

Wednesday 23rd May 2018 Lords Chamber

[Baroness Sugg]

My Lords, that is a key question. As the noble Baroness pointed out, they have delivered an incredibly high passenger service and we should absolutely pay tribute to them for doing so. They have seen a number of changes in the train operating companies over the years. We can reassure staff that changes will not impact on their continued employment; it will be no different from a normal franchise change. Staff will be transferred and their existing terms and conditions of employment will be protected.

[Baroness McIntosh of Pickering (Con)]

Will my noble friend confirm that the new trains planned for the east coast route will come into service next year?

[Baroness Sugg]

I can confirm to my noble friend those services planned for next year will come in. The good news also is that we fully expect the new intercity express trains to be introduced on the east coast main line from the end of this year, as planned. That will bring an increase in seat capacity and enable reductions in journey times.

Rural Bus Services

Debate between Baroness McIntosh of Pickering and Baroness Sugg

Wednesday 14th March 2018 Lords Chamber

[Baroness Sugg]

My Lords, I certainly agree with the noble Lord that buses can be a lifeline in rural areas. The Bus Services Act, which I mentioned earlier, provides extra powers for local authorities to work with bus operators to improve the bus services in rural areas. We are also encouraging local authorities to deliver better rural services through efforts such as our Total Transport pilot schemes, which have explored ways of commissioning publicly funded transport so that services and funding are able to go further.

[Baroness McIntosh of Pickering (Con)]

My Lords, does my noble friend agree that one issue that has a perverse result is concessionary fares in rural bus areas? People travel out of towns into rural areas and the concessionary fares camouflage much of the subsidy that goes to rural bus fares. We support concessionary fares but, when they were set up, the local councils were not given the funding to run the level of service that has come into effect.

[Baroness Sugg]

My Lords, as I said, we fully support the concessionary fare programme and we want to continue the £1 billion a year we spend through local authorities to guarantee that service. It certainly supports bus services and that is something we want to carry on with.

Railways: East Coast Main Line

Debate between Baroness McIntosh of Pickering and Baroness Sugg

Tuesday 13th March 2018 Lords Chamber

[Baroness Sugg]

My Lords, of course there were some errors in the granting of this franchise, and the suggestion concerning passenger numbers was indeed incorrect. We have learned some lessons and introduced new measures to deter overbidding, and have improved our financial modelling and stress testing. With this added testing, the department can forecast bids which are likely to default and exclude them in the future. On fares, the Secretary of State for Transport has underlined our aspiration to move from RPI to CPI but we must manage this transition properly and take into account staff costs, which are a third of operating costs.

[Baroness McIntosh of Pickering (Con)]

Will the Minister join me in congratulating the east coast operator on taking brand new trains into service in 2019? These are built locally to a very high specification, and will reduce the journey time to London considerably.

[Baroness Sugg]

My Lords, I certainly join my noble friend in congratulating east coast on this, which again will not be affected by the decision on who is to run the franchise. As my noble friend has said, the Azuma trains are due to start being introduced on the east coast network from the end of this year, and I am sure that passengers will enjoy the benefits.

Railways: Fares

Debate between Baroness McIntosh of Pickering and Baroness Sugg

Tuesday 12th December 2017 Lords Chamber

[Baroness Sugg]

The noble Baroness mentions the freezing of fuel duty, which is obviously widely welcomed by motorists, following the Budget. I am afraid that we cannot freeze rail fares because by doing so, we would have to decrease investment in our railways, which is sorely needed.

[Baroness McIntosh of Pickering (Con)]

Can the Minister explain why, exceptionally, rail fare increases are tied to RPI, when every other cost of living increase is tied to CPI?

Brexit: World Trade Organization

Debate between Baroness McIntosh of Pickering and Baroness Sugg

Wednesday 11th October 2017 Lords Chamber

[Baroness Sugg]

I am quite happy with my brief but if there is anything specific which I have not answered then I will write to the noble Lord.

[Baroness McIntosh of Pickering (Con)]

I commend my noble friend on her command of her brief on what is probably her first outing. Is it not of the utmost importance that the department clarifies what our status is with the World Trade Organization if there is any possibility at all, as the Prime Minister raised yesterday, of us leaving the European Union without a deal and without a transition period, so that we can then proceed to do those negotiations, as my noble friend has set out so clearly today?