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

Jesse Norman Excerpts

Monday 19th November 2018 General Committees

[The Minister of State, Department for Transport (Jesse Norman)]

I beg to move,

That the Committee has considered the draft Operation of Air Services (Amendment etc.) (EU Exit) Regulations 2018.

May I say what a pleasure it is to serve under your chairmanship, Sir Christopher? Following the UK’s decision to leave the European Union after the referendum in 2016, the Government have been working to develop a positive future relationship with the EU, including a comprehensive and ambitious air transport agreement. The Department for Transport has undertaken a significant amount of work with respect to the withdrawal negotiations and to prepare for the range of potential outcomes. The best outcome, as we all recognise, is for the UK to leave with a deal. A draft withdrawal agreement that delivers on the referendum, brings back control and protects jobs is now being considered by the House.

[Michael Fabricant (Lichfield) (Con)]

May I tell the Minister how relieved I am to hear what he said? If I believed others, I would think that, once we left the European Union, planes could not fly into the UK, and planes from the UK could not fly to Europe. Do I take it that all that was a load of hogwash?

[Jesse Norman]

I cannot comment on the wisdom or otherwise of comments made at the time, but on 7 March this year the President of the European Council, Donald Tusk, said,

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

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Apropos of that intervention, may I say that I have been a chairman of the Transport Safety Commission for many years, and am chair of the committee on air safety for the Parliamentary Advisory Council for Transport Safety? The industry—this vital sector to our economy and our country—is very worried. I hope that these regulations give some comfort to many in the industry who believe that there are many unresolved issues affecting our ability to travel by air.

[Jesse Norman]

The Committee will understand that this is one of a series of affirmative resolution statutory instruments that we are putting before the House. We can discuss each of those issues as it applies to them, but I am sure the hon. Gentleman is pleased that the EU recently commented that, for example, there will be no difficulty in overflying Ireland, which was one of the worries that people had. I expect that positive progress to continue.

As the Department responsible for aviation, we have conducted particularly intensive work to ensure that there continues to be a well-functioning legislative and regulatory regime for aviation. In the technical notices in September, we set out how that would work, and this instrument provides the means to deliver some of those outcomes.

It should be emphasised that this legislation is required only in a scenario in which the UK leaves the EU without a deal or an implementation period. The European Union (Withdrawal) Act 2018 converts EU law as it stands on exit day into domestic law, and preserves laws made in the UK to implement EU obligations. It will provide continuity and certainty to industry and consumers without prejudice to the outcome of the negotiations. However, as in other areas, some fixes are inevitably required to address deficiencies in the retained EU legislation to ensure it continues to function effectively once the UK has left the EU.

[Mr Sheerman]

I take it that the Minister is in regular communication with the Civil Aviation Authority. Is he also talking to the Irish Aviation Authority? As he knows, one of our biggest carriers, Ryanair, comes under the Irish authority, not the CAA, for regulation.

[Jesse Norman]

The hon. Gentleman is absolutely right. The officials and I would not be surprised if, in due course, Ryanair makes an application for a UK operator’s licence, in the way that many other carriers have done already. We are in regular contact, directly and through the CAA, with our opposite numbers among the officials to head off those kinds of concerns and to give that kind of comfort.

Although it is quite tightly defined, this SI relates to a formidably technical and complex area. Many of the references to the EU in what I am going to say later should be taken to include the EEA, depending on context. EU Regulation 1008/2008 provides the basis for the internal market in air services and consolidates provisions in a number of prior regulations that had gradually liberalised the market for air services within the EU. The regulation sets out harmonised conditions for licensing air carriers in the EU and provides the right for any EU-licensed air carrier to operate on any route within the EU without prior authorisation.

The regulation prohibits market distortions that had historically existed in Europe, such as restrictions on pricing or air carriers’ ability to set air fares freely and lease each other’s aircraft. It also sets out common rules for the provision of public service obligations—that is, scheduled flights to peripheral regions that would not otherwise be commercially viable. A further element of the internal market for which the regulation provides is what is known as wet-leasing. A wet-lease is when one air carrier leases an aircraft together with its crew, maintenance and insurance from another operator. EU air carriers can freely wet-lease aircraft registered in the EU, provided that that would not endanger safety, but restrictions are imposed on the lease of aircraft from beyond the EU.

The EU has also pursued an external aviation policy by making comprehensive air transport agreements with third countries, and by seeking consistency in the provisions of the bilateral air service agreements between member states and third countries. Regulation 847/2004 establishes a procedure for member states to notify each other and the Commission, and to work together on the negotiation and conclusion of air service agreements.

The draft regulations we are considering today fix deficiencies in the retained EU regulations, as I have briefly described, alongside the preserved domestic legislation made to implement aspects of those regulations, so that the statute book continues to function correctly after exit day. The effect of those changes was described in the technical notice published in September, which set out how the UK would regulate air carriers. Many of the changes make it clear that the retained legislation applies only to the UK, so, for instance, references to “Community air carrier” are replaced with “UK air carrier”. Alternatively, another amendment requires air carriers to have their principal place of business in “the United Kingdom” rather than in “a Member State”; that is one to which the hon. Member for Huddersfield referred earlier.

Since the UK would no longer participate in the EU’s external aviation policy and the Commission would have no authority in the UK, Regulation 847/2004 would be revoked. The UK would be free to negotiate ambitious bilateral air services agreements with other countries without regard to the Commission or to EU member states.

The European Union (Withdrawal) Act ensures that operating licences previously issued to UK air carriers remain valid. An operating licence is required by air carriers before they can offer commercial air transport, and ensures that UK air carriers are financially robust, appropriately insured and managed by fit and proper persons. A separate air operator certificate is also required, which ensures that the air carrier meets essential safety requirements. While all commercial aircraft operators require an air operator certificate to show that they are safe, some will not provide air transport services: for example, a hot air balloon offering pleasure flights would not do so and thus would not require an operating licence.

Separate instruments on aviation safety, security and the rights of air passengers will be brought to the House in the coming weeks. UK-licensed air carriers will need to continue to meet all the substantive requirements for a valid operating licence, with one exception: the requirement in Regulation 1008/2008 for air carriers to be majority owned and controlled by EU nationals would be revoked, since this is a definition that would no longer apply to UK nationals.

That requirement would be redundant for two reasons. First, nationality requirements are routinely specified in the terms of our air services agreements, which determine the eligibility of air carriers to operate under them, based on the nationality of their ownership. We expect that to include any agreements with the EU. Secondly, UK air carriers would require a route licence in order to operate beyond the UK, and there is a nationality requirement for a route licence. UK route licences predate the EU operating licence, and in many ways were superseded by it, so air carriers were exempted from the requirement for a route licence for operations to the EU.

Route licences serve a useful purpose in that, unlike an operating licence, conditions can be attached to the licence preventing air carriers from operating certain routes. Route licences are provided for free by the CAA to any UK carrier which requires one, and one of the conditions for a route licence is that the applicant should be a UK national, or an undertaking controlled by UK nationals. The Secretary of State also has long-established powers to instruct the CAA to waive this requirement, which he has historically done, most recently for easyJet UK and WizzAir UK.

As a result of this instrument, the rules for wet-leasing foreign aircraft will remain stable. UK air carriers seeking to wet-lease a foreign-registered aircraft will be required to demonstrate to the satisfaction of the CAA, as they do today, that doing so would not endanger safety. If that aircraft was registered in a country other than in the EU, they would also have to demonstrate to the Secretary of State that safety standards equivalent to the UK’s would be met.

[Mr Sheerman]

I appreciate that we are limited in time, but the Minister is going quite fast through some quite technical stuff. What happens to the air accidents investigation branch and its remit? In future, how will it co-operate across Europe on accidents? We have gone through a long period where we have had very few air accidents, but recently we have had some pretty bad ones; these things go in cycles. The great thing about the European sector is that there is a very good comprehensive agreement on the investigation of every fatal accident. Could he put my mind at rest on that?

[Jesse Norman]

Yes, of course. Sir Christopher, you will understand that, as I said, there is a lot of material to get through and because of taking interventions, I have been keen to try to compress the amount of time that I spend on my feet.

[Mr Sheerman]

I wanted to let the Minister catch his breath—give him some breathing space.

[Jesse Norman]

It is all very welcome. The hon. Gentleman will understand that the CAA predates the European Aviation Safety Agency, and in many ways has acted as a model, and in some respects a coach, to it. The AAIB has a well-established reputation in its field. I have no doubt they will continue to co-operate very closely. The precise arrangements remain part of the wider picture of the negotiation, but there is absolutely no reason to think that the close co-operation that currently exists should not be extended after withdrawal next year.

I will continue on the issue of wet-leasing. If the aircraft in question was registered in a country other than in the EU, UK carriers would also have to demonstrate to the Secretary of State that safety standards equivalent to the UK’s would be met and that the lease was justified on the basis of exceptional needs, or to satisfy seasonal capacity requirements or overcome operational difficulties. Permission may be refused, of course, if there is no reciprocity with regards to wet-leasing to the country in which the aircraft is registered.

Notwithstanding the continuity provided for and the fixes that I have described, this instrument makes a number of changes to reflect the fact that EU-licensed air carriers would no longer enjoy the automatic right to operate to, from or within the UK. Contracts for public service obligations in the EU can be won by any EU-licensed carrier, but changes made by this instrument would mean that only UK-licensed air carriers, and carriers from countries with which the UK has exchanged the right to operate wholly within each other’s territory, would qualify for PSO contracts in the UK.

As all the PSOs in force in the UK are currently operated by UK-licensed air carriers, there will be no impact on existing services. Similarly, existing domestic regulations provide for a rarely used process in cases where the frequency of operations between the UK and another country is constrained by provisions in the relevant air service agreement.

Although air services are not included within the scope of the World Trade Organisation, there is an international legal framework for the operation of air services—the Chicago convention of 1944. One of its provisions is that scheduled international air services are prohibited except with the special permission of the state concerned. The UK provides this permission through the air services agreements it concludes with other countries and the issuing of foreign carrier permits by the CAA. Amendments made by this instrument would require EU air carriers to apply for a permit before operating to the UK. That will ensure that all air carriers operating to the UK have full and proper safety oversight and that their aircraft are properly maintained and operated.

We envisage granting permits to EU carriers to continue operating to the UK, and I was pleased that, in its Brexit preparedness communication on 13 November, the Commission confirmed that it intends to reciprocate for UK air carriers. In addition to the announcements about visa-free travel, the Commission said that UK air carriers would still be able to fly over the EU, including Ireland, and to land in and fly back from the EU. Those points reinforce what I believe is a positive and encouraging emerging picture of future co-operation.

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[Jesse Norman]

I am grateful to all hon. Members who have made interventions and speeches in the debate so far. Let me pick up the various points that have been raised, because they are of considerable interest. I am very grateful to the hon. Member for Kingston upon Hull East for his recognition of the level of engagement that my officials and the CAA have had with their opposite numbers across Europe. He is absolutely right about that, and I know they will be grateful that the Opposition have recognised the work they have been doing.

Secondly, the hon. Member for Kingston upon Hull East says the Opposition’s position is that any agreement should seek to replicate the current law with a comprehensive agreement governing air services, safety, and the like. Of course, that is absolutely right, and the Government agree with him. He has asked me, as has the hon. Member for Edinburgh North and Leith, whether we can be confident that problems will not emerge, or might not emerge in the future. The answer is that no one can predict the future, but the Government believe there is every reason to think that air connectivity will be retained between the UK and the EU. It is in no one’s interest to disrupt air services, and I remind the Committee that the European Commission has confirmed in the past few days that it intends to reciprocate grants of permits to EU air carriers in relation to UK carriers. It has also made announcements about 90 days of visa-free travel and overflights across the EU, including Ireland. All of that points in a direction that gives confidence to anyone who might be concerned, and I am grateful that the issue has been raised.

[Mr Sheerman]

On that point—

[Jesse Norman]

No, I will come to the hon. Member for Huddersfield’s speech, and he can intervene on me at that time. [Interruption.]

[The Chair]

Order.

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[Jesse Norman]

Having taken many interventions, Sir Christopher, I am sure you will understand if I respond in an orderly way to the points raised. If the hon. Member for Huddersfield wishes to intervene in relation to his own speech, he is welcome to do so.

The hon. Member for Kingston upon Hull East also raised the question of whether Ministers were happy with the resourcing of the CAA. Of course, the answer is yes. The CAA is already the licensing authority for UK carriers. It has conducted internal assessments and, in discussions with officials, has determined that it does not require additional resources, so we think that the CAA will remain the robust and highly effective organisation that it has been for many years.

The hon. Member for Huddersfield raised a series of questions. The first, which he raised in his interventions, was about the AAIB. I want to recognise the work that the AAIB has done very rapidly in relation to the tragic incident at Leicester City football club. That shows what a high-quality organisation it is, and we are grateful that it did not waste any time. The hon. Gentleman asked whether the legislation has been rushed through, and spoke eloquently about parliamentarians’ duty to their constituents to make sure that legislation has been properly scrutinised. Of course, he is absolutely right about that. Precisely for that reason, and because I know he takes an historical interest in air travel, the Committee can be sure, I am certain, that he read carefully the technical notices outlining the Government’s position when they were published some months ago. I am sure we can take it that he knew—I am surprised he did not mention it in his speech—that this statutory instrument was published on 17 October and, therefore, colleagues have had a full month to debate and consider it.

[Mr Sheerman]

The Minister is being very generous in giving way and I do not want to be unfair to him. We work on transport safety in different sectors very harmoniously. However, can I just ask him how many chief executives and chairmen of major airlines has he spoken to on this? How many people has he spoken to in Europe? I want to know chapter and verse who he has spoken to and at what level before he put this forward to the Committee.

[Jesse Norman]

I am very happy to answer that. As the hon. Gentleman will know from his close scrutiny of the Government, the lead Minister on this brief is Baroness Sugg. I am the spokesman in the Commons. She has met many chief executives across the industry. I can assure him that she is extremely expert and has taken plenty of advice and input from all of them. I do not think that there can be much question about the fact that, had the hon. Gentleman wished to avail himself of the time available, he could have given this legislation the scrutiny that he says it deserves. It surprises me that he has not given it that scrutiny.

[Mr Sheerman]

Is the Minister saying I have not done my homework?

--- Later in debate ---

[The Chair]

That is not a point of order.

[Jesse Norman]

Thank you, Sir Christopher. I was not, of course, doing what the hon. Gentleman suggested. I was merely pointing out the slight incongruity in suggesting that we had been rushing through a piece of legislation when in fact we have published technical notices and this statutory instrument has been before the House for a month, in which he or any other parliamentarian, and any other public or private party, could have scrutinised it and given it their attention. Unfortunately, there is some evidence from his own speech that he did not, because he suggested that I had said that there would be no impact on existing services, but in fact I said no such thing. I said—let me be clear again—that, in relation to public service obligations, we anticipate that there will be no impact on existing services, and those are all currently delivered by UK carriers, so one can take a high degree of comfort that that will be the case.

We believe and remain confident that we will reach an agreement with the EU, but it is important that the Government prepare for the unlikely outcome that we leave the EU with no deal. This statutory instrument is essential to ensure that a crucial part of the regulatory framework for civil aviation continues to work effectively in the UK from day one after exit, and continues to provide consumers with connectivity, choice and value for money, irrespective of the outcome of negotiations.

I hope that the Committee has found the sitting informative as well entertaining, and that hon. Members will join me in supporting the regulations.

Question put.