Civil Aviation Bill

Henry Smith Excerpts

Monday 30th January 2012 Commons Chamber

[Maria Eagle]

My hon. Friend makes a good point. There are plenty of people who seek to read coded messages in what the Government do, or do not do, and in how they change their proposals, so in that respect there is a concern that the Government need to address.

If the Government’s green credentials had not already worn so thin, no ulterior motive might have been seen in their decision, but there will be considerable suspicion that it is yet another example of giving in to vested interests, coming on top of the Government’s failure to reassert the aviation emissions targets that we set in government, let alone to listen to the calls to look seriously at the UK’s share of international emissions and to include both in the UK’s carbon budgets. When the obligation on other sectors is to reduce carbon emissions by at least 80% by 2050 compared with 1990 levels, the aviation industry has agreed to work towards achieving the lower target of the same reduction but compared with 2005 levels. However, the industry believes that it can achieve the same reduction compared with 2000 levels. On that basis, we believe that the Committee on Climate Change should advise on the case for a tougher target. It is clear that the Bill sends out completely the wrong signal to industry.

The CAA, airport operators, airlines and National Air Traffic Services have a shared responsibility to achieve those goals. In addition to the original proposed duty on environmental and planning law, which has been deleted, there is surely a case for considering the practicality of using this Bill to reaffirm the shared responsibility on meeting emissions targets that have been agreed. That should be explored during the passage of the Bill.

The public should certainly be better informed about the environmental effects, including through emissions and noise, of civil aviation in the UK and about the measures that are being taken to limit the adverse environmental effects. I want to take this opportunity to welcome the CAA’s decision to open a three-month consultation on its environmental role and performance. The chief executive, Andrew Haines, has said that he is determined to work with the sector to help it manage its environmental footprint and realise its potential growth. He is clear that

“unless the sector faces its environmental impact head-on, it will not be allowed to grow.”

He is right to have set the goals to

“contribute to a cleaner and quieter aviation industry, improve airspace design through new operational measures, influence the environment debate and enhance consumer understanding of the environmental impact of flying.”

[Henry Smith (Crawley) (Con)]

Will the hon. Lady not concede that airport operators, such as the operator of Gatwick airport in my constituency, have for many years done an awful lot to ensure that there are environmental enhancements, such as through the Gatwick area conservation committee, which has made a positive difference locally?

[Maria Eagle]

I do concede that. I do not think that the aviation industry has anything to fear from closer scrutiny of the way in which it deals with these issues. I just want to ensure that this Bill does not send the wrong signals to industry and make it more difficult to do what many operators are starting to do in any event.

In addition to the revision of the statutory purpose of the CAA and its secondary duties, it is right that the Bill aligns the powers of the CAA with those of the Office of Fair Trading. That provides consistency with the approach taken for other regulated industries, including energy, water, telecoms and rail. The Secretary of State will be aware that there are concerns about the impact on competition of the sale of airlines and the slots that transfer ownership as a result. The recently agreed sale of British Midland International by Lufthansa to International Airlines Group has raised considerable worries, particularly in Scotland and Northern Ireland, about the impact on short-haul domestic routes and the price implications for passengers. The Government have to date refused to take those concerns seriously. My hon. Friend the Member for Glasgow East (Margaret Curran), the shadow Secretary of State for Scotland, and I have referred the sale of BMI to the OFT.

--- Later in debate ---

[Henry Smith (Crawley) (Con)]

I am grateful for the opportunity to take part in this important Second Reading. I commend the Government for introducing this much needed Bill in the first Session of this Parliament. I waited with bated breath to find out Labour party policy on the future of aviation in this country. I thought that the hon. Member for Garston and Halewood (Maria Eagle) was about to announce an Eagle island airport, but it seems we will have to wait a little longer for that. As my right hon. Friend the Secretary of State said in her introductory remarks, it has been more than a quarter of a century since legislation in the area has been properly reviewed. During that quarter of a century, the airline and airport industries have changed massively.

In 1986, when the then British Airports Authority was privatised and became BAA plc, BAA nearly dominated the market in airports—certainly in London, the south-east and Scotland. At the time, the mix of airlines was different. At Gatwick, we now see the orange tailfins of easyJet, the largest operator from that airport and indeed the country’s largest airline. The new terminal 5 at Heathrow airport—I say “new”; it is some years old now—is a hub for British Airways. Virgin Atlantic, headquartered in my constituency, has developed significantly and is now a successful British brand representing the country abroad.

Our airport sector has developed considerably. In 2008, the competition authorities said—rightly, in my view—that BAA needed to divest itself of one of its airports. Gatwick was sold to Global Infrastructure Partners in December 2009. Already, in that short period, there has been significant development at Gatwick airport. I pay tribute to the chief executive of Gatwick airport, Stewart Wingate, and his management team, and to the many thousands of my constituents employed by Gatwick airport and the ancillary industries in the aviation sector locally, for the significant contribution that they have made to transforming the airport over those two short years.

More than £1 billion-worth of investment goes into Gatwick airport. I know that my right hon. Friend the Secretary of State went there recently to witness some of the works. They involve not only upgrades to the fabric of the north and south terminals but the introduction of state-of-the-art security facilities that make passenger travel through the airport more efficient and secure. The investment also includes more than £50 million to upgrade the station at Gatwick. Again, that involves not just the fabric but increased signalling and platform capacity, so that more direct trains can run from the airport to central London, and through London to Bedford and down to the south coast. A lot has happened in the aviation and airport sectors over the past quarter of a century. That has been the experience particularly at my local airport, Gatwick.

In the limited time that I have, I will refer to a few questions and clarifications on some of the Bill’s clauses. Clause 5 discusses competition between different parts of an airport. The Bill makes it possible for an airport terminal to be operated by a different company from the one that operates the runway and taxiway—something that we are more familiar with in countries such as the United States. I welcome the possibility of increased competition, which could improve the passenger experience, but I would be grateful if Ministers clarified whether the CAA will have a power to force the sale or lease of parts of an airport, or whether that will remain subject to the competition authorities under the Enterprise Act 2002.

As my right hon. Friend said, clause 6, on the so-called “market power test”, outlines a series of tests that must be met if an airport is to be regulated. To determine whether an airport should be regulated, the substantial market power test is to be applied. If an airport is to be so regulated, what would the dominance test be, and would it come under competition law or be decided by the CAA? I would be grateful for clarification.

Clause 12, on the regulation of possible future market power, gives the CAA the power to decide whether regulation is needed in the light of possible future developments at an airport. Again, that power is fine, but will there be any possibility of a review if those events do not take place? It would be strange to regulate for something that does not happen.

I welcome clause 25, on the scope of the right of appeal, because it is important for the airlines that use Gatwick airport and other airports around the country, but I would be interested to know whether there will be any way of preventing vexatious appeals. Furthermore, how rigorous, transparent and fair will the appeals process be?

Clauses 83 and 84, in chapter 2, part 2 of the Bill, deal with information on performance of services at airports. Again, the provision is welcome and will help to enhance the passenger experience as much as possible, but I wonder whether the power of that performance test should be extended to other organisations and agencies operating within an airport. Mention was made earlier of agencies such as the UK Border Agency and of the transparency and efficiency of the UKBA. That point could be applied to other agencies, such as Her Majesty’s Revenue and Customs.

In what little time I have left, I would like to highlight one concern. I broadly welcome the CAA being given these powers—it is the agency best suited to have them—but being an important public body it, too, should be subject to the rigour of the National Audit Office. We are asking the CAA to regulate the performance of others, and it is important that, as a regulator itself, it should face the rigour of scrutiny as well.

I warmly welcome the Bill. It is overdue, and I am grateful to the Government for introducing it so early on. Most importantly, it will improve the passenger experience, but it will also provide for a fair and transparent system for our airport operators and airlines. As was rightly said earlier, as a trading nation we rely on a strong aviation sector, and the Bill does a lot to enhance that.