Oral Answers to Questions

Debate between Jesse Norman and Oliver Heald

Tuesday 2nd July 2019 Commons Chamber

[The Financial Secretary to the Treasury (Jesse Norman)]

The loan charge tackles so-called disguised remuneration arrangements, which use loans to avoid tax. It applies in the same way to people in the public and the private sectors. A tax information and impact note published in 2016 and a report on disguised remuneration published in March 2019 both considered the impacts.

[Sir Oliver Heald]

What more can be done to tackle the promoters of loan schemes who gave workers and businesses assurances, even though the Treasury had made it clear that the schemes were unacceptable? Should they not be brought to book? Have any of them been convicted yet?

[Jesse Norman]

My right hon. and learned Friend is absolutely right and HMRC will continue to take firm action against those who promote tax avoidance schemes. As he will know, and I think has been made public, it currently has more than 100 promoters under civil inquiry. It is important to be clear that although there are no criminal offences of promoting or marketing tax avoidance schemes specifically, HMRC may conduct criminal investigations and make referrals to prosecuting authorities where, for example, there is evidence that promoters have deliberately misrepresented the facts to it.

Draft Aviation Safety (Amendment etc.) (EU Exit) Regulations 2019

Debate between Jesse Norman and Oliver Heald

Wednesday 19th December 2018 General Committees

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

I beg to move,

That the Committee has considered the draft Aviation Safety (Amendment etc.) (EU Exit) Regulations 2019.

It is a delight to serve under your chairmanship, Mr Evans. I wish you, Committee members and the Clerks a very happy Christmas.

The draft instrument 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 without a deal next March. Following the UK’s decision to leave the EU after the referendum in 2016, the Government have been working hard to develop a positive future relationship with the EU. The Department for Transport has undertaken a significant amount of work with respect to the withdrawal negotiations themselves, and to prepare for the full range of potential outcomes from the negotiations. As Committee members will be aware, the best outcome will be for the UK to leave with a deal, and hon. Members will know that a draft withdrawal agreement is being considered. We remain confident that that agreement will enter into force at the end of March next year.

However, we must, of course, also make all reasonable plans to prepare for a no-deal scenario. To that extent, we have conducted particularly intensive work to ensure that there continues to be a well-functioning legislative and regulatory regime for aviation. We set out how this will work in the technical notices published in September, and the draft instrument will provide the means to deliver some of those outcomes.

The draft instrument corrects five principal EU regulations relating to aviation safety, together with several Commission implementing regulations made under them. As Committee members will understand, and as you will appreciate, Mr Evans, these are rather technical matters, but it is important to be clear about them. The most important of the regulations is EU regulation 2018/1139, more commonly known as the EASA—European Aviation Safety Agency—basic regulation, which establishes a comprehensive regulatory framework for aviation safety in the EU. In particular, it provides for the continued establishment of EASA and the adoption by the European Commission of implementing regulations on aviation safety. These implementing regulations also ensure that EU member states can meet their obligations under the wider convention on international civil aviation, known as the Chicago convention.

There are 13 implementing regulations dealing with different aspects of aviation safety that will be corrected by the draft instrument. These cover the design, construction, maintenance and operation of aircraft; the licensing of flight crew, maintenance engineers and air traffic controllers; the provision of air traffic management and air navigation services; and the design and operation of aerodromes.

The other principal regulations are: regulation 3922/91 on technical harmonisation, which has largely been replaced by the EASA basic regulation, although the flight and duty time limitations established under the regulations still apply to the crews of aeroplanes undertaking air taxi, emergency medical service and single-pilot commercial air transport operations; regulation 2111/2005, which establishes the list of air operators banned from operating to the EU on safety grounds; regulation 996/2010, which sets requirements for the investigation of air accidents and incidents; and regulation 376/2014, which establishes requirements for civil aviation occurrence reporting.

The draft instrument will correct deficiencies in the retained EU regulations that I have listed. It will also correct domestic legislation made to implement aspects of those regulations. These changes should ensure that the statute book continues to function correctly after exit day. Many of the corrections are to make clear that the retained legislation applies only to the UK. For instance, references to

“the territory to which the Treaties apply”

are replaced with “the United Kingdom”. References to “the competent authority” are replaced with references to “the CAA”. Other amendments relate to the relationship between member states. For example, requirements on mutual recognition are deleted, as are requirements for co-operation and the sharing of information.

The draft instrument will also reassign functions that currently fall to EU bodies. The majority of regulatory functions required under the EU regulations are currently undertaken by the competent authorities of the member states. Those include licensing pilots, air traffic controllers and maintenance engineers, certifying the airworthiness of individual aircraft, certifying airports and airport operators, approving production, maintenance and flight training organisations, and approving air traffic management and air navigation service providers.

However, EASA is responsible for a number of functions, which include preparing proposals for new technical requirements and for amendments to existing technical requirements; approving organisations that design aircraft and aircraft engines, and certifying the design of aircraft and engine types; approving organisations based in third countries—for example, flight training and aircraft maintenance organisations; and functions relating to the management and oversight of the aviation safety regulatory system, which include managing the mechanisms for the exchange of information and auditing the application of technical requirements by a member state’s competent authorities.

The Civil Aviation Authority will take on those functions, with the exception of those relating to the management of the EU safety regulatory system. While design certification has formally sat with EASA since 2008, it is not a capability that the CAA has totally relinquished, and we are confident that it will be able both to meet the needs of industry and to fulfil the UK’s international obligations as the state of design. The CAA is implementing contingency plans to ensure that it will be able to undertake the new functions effectively from exit day. In all, the CAA will need to take on around 59 new staff.

The European Commission also has a number of functions under the EU regulations. Most notably, it has the power to adopt regulations, to adopt or amend technical requirements, and to make limited, specified amendments to the principal EU regulations. Those functions will be assigned to the Secretary of State. The power to amend the retained principal EU regulations is very limited, and is designed to ensure that the regulatory system can adapt to technical developments and changes to the international standards adopted by the International Civil Aviation Organisation. Those powers mainly relate to the annexes to the regulations.

Most notably, the Secretary of State will have the power to amend the essential requirements contained in the annexes to the EASA basic regulation by making regulations subject to the negative resolution procedure. The essential requirements are the high-level safety objectives, which are implemented through the technical requirements. Amendments can be made only where it is necessary to reflect technical, operational or scientific developments or evidence in the relevant technical field to the extent necessary to achieve the objectives of the EASA basic regulation. In addition, the draft instrument revokes four implementing regulations that set out internal procedures for EASA, as they will not be relevant to the UK after EU exit.

Finally, I should stress that none of the amendments changes any of the technical requirements established by the retained EU regulations. All certificates, licences and approvals issued by EASA or EU/European economic area states prior to exit day will remain valid in the UK by virtue of the withdrawal Act if valid in the UK immediately before exit day. The draft instrument provides that such certificates shall be treated as if they were issued by the CAA. With the exception of certificates relating to aircraft design, the instrument also limits the validity of such certificates to two years after exit day, after which CAA-issued certificates will be required.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

I do not want to detain the Committee for long. I have a question on the amendment of regulation 2111/2005, on the banned operator list. At the moment, the banning of an air carrier is based on information from right across the EU, so if an air carrier has performed badly in eastern Europe, it could well be banned. Will we in the UK have access to that sort of information when deciding who should be banned in Britain, or will it be a less full process?

[Jesse Norman]

It is a fair question. As my right hon. and learned Friend will be aware, we are discussing a context in which we do not have a deal with the EU, so this is a contingency that is not covered by the main case. Even in this contingency, however, there is every reason to think that the very extensive information sharing that exists would continue, even if only informally, for a period until the necessary protocols could be retained. He will know that the CAA was itself one of the progenitors of EASA, and there are extremely close working relationships between the two sides.

The restriction I have described is necessary, as the CAA needs to issue the safety certificates to have full oversight of aviation safety in the UK, in accordance with our obligations under the Chicago convention. We are working to achieve a positive deal with the EU, but this instrument is an essential element of our contingency planning for a no-deal exit; it will enter into force on exit day only under those circumstances. The instrument will ensure, in the event of a no-deal EU exit, that the UK’s aviation safety regulatory regime continues to work effectively and the aviation industry has clarity about the regulatory framework in which it would operate. I commend this instrument to the Committee.