Civil Aviation Bill

Julian Huppert Excerpts

Monday 30th January 2012 Commons Chamber

[Maria Eagle]

That is indeed the worry. NATS does not cost the taxpayer a penny to run—in fact, it pays a dividend to the Government. In June last year, NATS paid a dividend of £42.5 million, and in November announced a further £8.2 million. The Government received a significant share of that as the majority shareholder. Their decision to sell all of NATS would therefore be a short-term, quick-buck decision. Like their approach to aviation security in the Bill, they are placing a narrow focus on deficit reduction ahead of the wider economic and security impact. I hope the Secretary of State ensures that she puts proper pressure on the Chancellor, whom she knows very well, to make a good decision and to retain a stake in NATS.

Finally, although the measures in the Bill are important —they are all concerns for the aviation industry—there is an elephant in the room, because the Bill does not and cannot address the capacity issues facing the industry, particularly in the south-east and the future of our hub status. The Government’s failure to set out a strategy for aviation and the lack of any plan to do so until late in this Parliament is putting jobs and growth at risk. Their call for airports to be “better not bigger” has always been a slogan, not a policy, but even they seem to be waking up to the fact that a blanket ban on growth and new capacity in the south-east makes no sense.

In government, Labour supported the industry’s proposal for a third runway at Heathrow—as the UK’s only hub airport—as the best way to add additional capacity. However, the Opposition have accepted the Government’s decision to cancel the third runway, and it is time to move on and seek an alternative way forward. Our decision can ensure that we do not waste another five years wrangling over that proposal while the industry risks falling behind our EU competitors, and while major airlines simply move more of their operations abroad, where there are no capacity constraints.

[Dr Julian Huppert (Cambridge) (LD)]

I am delighted that the hon. Lady’s party has come to its senses and ruled out the third runway. I hope that she will tell us what her suggestion is, because she has a long track record—such as on high-speed rail—of suggesting things but never quite pinning down an actual idea.

[Maria Eagle]

If the hon. Gentleman would wait just a moment, he might hear my suggestion.

Two weeks ago, the Prime Minister was apparently persuaded of the case for a new airport in the Thames estuary, a position that lasted a full 24 hours before the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker) slapped him down. Then the papers were briefed that new runways at Gatwick or Stansted were back on the agenda, despite the coalition agreement seemingly ruling that out. British business cannot afford this chaos and confusion continuing until or even beyond the next election. That is why I have made a clear offer to the Secretary of State for us to work together and put aside our differences for the good of the country to see whether we can agree a joint position on how we can meet the capacity issues in light of the decision on Heathrow. We have been disappointed that, three months on, the Government have not responded to that offer.

I was, however, encouraged by the constructive response from the Conservative party chair, Baroness Warsi, on last week’s BBC “Question Time”, in response to my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg). She said:

“Some serious discussions—cross-party discussions—have to take place, because I don’t think anyone in this country wants us to be a republic which is left behind and really nobody wants to trade with.”

Leaving aside why the chair of the Conservative party believes that we are a republic, she is right to agree with us that we need a cross-party approach, and about the consequences of not agreeing a way forward. If the Transport Secretary would like to confirm that she does accept our offer and is willing to begin talks on how we can move forward on this issue together, then I am happy to give way.

[Maria Eagle]

Coming from a party that last week had a different policy every day, none of which was in accordance with the majority party’s manifesto or the coalition agreement, it is a bit of a cheek for the Secretary of State to put that point to us.

A successful, thriving aviation sector is crucial for our economic competitiveness. It is vital that industry can plan for the future with certainty, not least to deliver the investment needed to provide the additional capacity required if we are not to fall further behind our EU competitors. I welcome the Government’s decision to bring forward this Bill and take forward the reforms that we began—

[Dr Huppert]

Will the hon. Lady give way?

[Maria Eagle]

I am coming to a conclusion now, so the hon. Gentleman should wait for his own speech—[Hon. Members: “Ah!”] I have given way to him once.

The regulatory regime governing the aviation sector is outdated and inflexible and this Bill will be an important modernisation, enabling the CAA to fulfil its functions in a way that better reflects the industry today, and in a way that can respond to the individual circumstances of our major airports. Putting the passenger at the heart of aviation economic regulation is overdue. I urge the Government to look again at those areas where there is considerable consensus that the Bill could be improved to provide even greater protection to passengers through clearer obligations on airports in respect of their welfare, not least during severe weather.

The Government should also live up to their increasingly hollow claim to be the “greenest Government ever” and place an environmental duty back on the face of the Bill, and give a much clearer steer to the industry by giving their firm backing to—at the very least—the emissions targets we set in government. In addition, Ministers should reflect very carefully on the concerns that have been raised over the proposed transfer of security functions from the Department and ministerial control.

It is one thing for us to agree on a credible regulatory regime for the aviation industry—and I believe that over the course of the passage of this Bill we will be able to agree these issues—but what the industry desperately needs is for us all to agree a credible long-term strategy for the sector, which will last across Parliaments and will not become a political football again at the next general election as it was at the last. So let us work together on the right way, consistent with the need to tackle emissions and the threat of climate change, to provide the capacity that the industry needs.

--- Later in debate ---

[Dr Julian Huppert (Cambridge) (LD)]

I do not want to disappoint the House but I am not going to speak in great detail about Cambridge international airport and the wonderful services it provides. Hon. Members can come on some other occasion to hear about that.

Changes to the regulatory framework of civil aviation are long overdue and the changes in the Bill are broadly welcome. The Bill builds on the findings of the 2008 Pilling review, which noted in particular the need to bring the legislative framework up to date. Work on the proposals began under the previous Administration and is being carried forward by the coalition, so the measures clearly have cross-party support, which I welcome. We in the Liberal Democrats particularly welcome the Government’s aspiration to put passengers at the heart of airport operations and the sections of the Bill that help to accomplish that. For too long, transport policy has been based on the top-down, central control of large systems. An effective transport system, whether for airports, trains or anything else, should be passenger-focused and should be viewed from the bottom up, so the new duty on the CAA to focus on end users is extremely welcome. Having said that, I would like to see more in the Bill about environmental considerations and I would be interested to hear whether a duty to consider such issues could be put into clauses 1 and 2, because the environmental performance of the aviation industry matters.

I should also like to know a bit more from Ministers about the measure that puts a duty on the CAA regarding

“the need to secure that all reasonable demands for airport operation services are met”.

I should particularly like to know what is reasonable. Is it reasonable for me to expect there to be flights from Cambridge international airport to any destination I choose? I presume not, but what would be a reasonable expectation?

I welcome the reforms to the air travel organisers’ licensing regime, which was put in place back in 1982. Since then, the way in which we buy holidays, and what those holidays involve, has changed dramatically. It is entirely appropriate for the Secretary of State to have the power to extend the scope of ATOL to give passengers the assurances they deserve, and it is clearly absurd that only a small proportion of holidays are covered currently and that many consumers are simply unaware whether they are protected or not. However, I am concerned that some organisations might still be excluded under the proposed changes, and I hope that it might be possible to consider going somewhat further. I believe that the Transport Committee is talking to ATOL tomorrow—

[Iain Stewart (Milton Keynes South) (Con)]

indicated assent.

[Dr Huppert]

I am grateful to see the hon. Gentleman nodding, and I hope that some of the information the Committee produces can be taken into account in the Bill.

There are some welcome provisions in the Bill that will open up Government data concerning airports. Having open public data is a key aim of the Liberal Democrats and of the coalition’s programme for Government. The CAA will be given the power to enable airports to publish data to assist passengers or potential passengers in making informed choices. The best way in which the Government can drive up standards is by empowering individuals to make informed choices, and that is what these measures will achieve. The new power for the CAA to publish information about the environmental impact of aviation is also welcome. The real costs of airplane emissions are often hidden, and the Government have a duty to make them known as a first step towards making sure that something can be done to reduce them.

Most of the changes in the Bill have been subject to extensive consultation over the many years of its gestation. Papers from the previous Administration and the coalition Government have generally had positive feedback and the recent draft Bill was broadly welcomed by the industry. However, there are some aspects of the Bill that I hope will be considered in more detail in Committee. First, it seems slightly odd that there are new powers for information regarding the environmental impact of aviation to be published but that there is no commensurate duty for the CAA to do anything about the issue after publishing that information. The CAA will have a new power to publish information to benefit passengers and a duty to work in their interests. I therefore think that the power to publish information about the environment should be matched by a duty to act on that information.

[Mark Lazarowicz]

Is it not more serious than that? The Bill will allow licensed conditions to be imposed, based on certain criteria, but those conditions will not include environmental ones, so it seems that the CAA will not be able to include environmental considerations in the licences it grants.

[Dr Huppert]

The hon. Gentleman makes a fair point and I am sure that this issue will form a significant part of our discussions in Committee.

Clause 84(2) says that the CAA

“may publish guidance and advice with a view to reducing, controlling or mitigating the adverse environmental effects of civil aviation in the UK.”

I think the wording could be stronger and say that it “must” do so and, hopefully, take that further. Aviation accounts for a significant and growing proportion of our carbon emissions and it also has a significant noise impact, which we must take into account. The body that regulates aviation must have regard to these facts and bear some responsibility.

[Mr Donohoe (Central Ayrshire) (Lab)]

Will the hon. Gentleman at least concede that the airline business has improved its environmental impact greatly in the past 10 or 20 years?

[Dr Huppert]

Indeed, it has, and I have had discussions with Rolls-Royce, which makes a number of new engines that perform significantly better in that regard, but there is still a long way to go. It is certainly true that emissions per passenger have declined, but the number of passengers has gone up and there is a complex factor relating the two. We need to go further in making sure that planes are fully utilised. We have had discussions in the Chamber about trying to change from a per passenger duty to a per plane duty, and I hope we will be able to go further and resolve the anomalies regarding the Chicago convention that prevent that change.

The Bill provides the Secretary of State with the power to ensure that information is published but does not go as far as requiring the CAA and airports to do so. It could go slightly further in that direction to ensure that passengers are provided with the information to which they are entitled rather than leaving it to the whim of whichever Secretary of State happens to be in charge. I am not suggesting that any Secretary of State in the current Government would be so foolish as not to go the full way in that regard, but one can never know what a future Government or Secretary of State might do. Of course, environmental information should be provided as a matter of course, and I hope, for clarity, that clause 84(2) will explicitly include carbon dioxide emissions and other greenhouse gases.

I should also like to understand a little more about how the penalties in the Bill were arrived at. Obviously, we hope never to have to use any of the penalties for failure to comply or to provide information, but they are somewhat complex. Clauses 44 and 45 have a complex formula based on turnover, clause 51 has fixed amounts, clause 52 has unlimited ones, clause 86 has very low penalties and clause 87 goes back to unlimited ones. I hope that the Minister can give us some clarity as to exactly how those penalties were decided.

Clause 104 deals with the disclosure of medical information, which requires proper scrutiny and some clarification. The clause allows the CAA to disclose medical information relating to flight crew and air traffic controllers in an anonymised form for the purposes of medical research. I can absolutely see how that would be beneficial and why we should want to introduce it, but I am concerned that in a small airline it might be possible to identify an individual using a combination of the information provided and data that are publicly available on the internet. That could pose a serious threat to privacy. This clause requires close scrutiny to ensure that de-anonymisation of data is not possible. I am aware of academic work that has been done on data that were about to be released by the Ministry of Justice. A group was challenged with trying to de-anonymise information from anonymised data and it turned out to be worryingly easy to do in a number of cases. I hope that Ministers will look at that issue.

[Mark Lazarowicz]

Will the hon. Gentleman give way?

[Dr Huppert]

A number of people still wish to speak, so I shall not give way again.

The Select Committee on Transport made some sensible recommendations to the Government, which I am sure will be given due consideration. For example, it noted that the aviation industry has concerns about the way in which the CAA will implement the new provisions, given the difficult business conditions that many regional airports face. It also noted, as have many hon. Members today, that the CAA is the only economic regulator that does not fall under the remit of the National Audit Office, and it recommended that an explicit efficiency duty for the CAA be inserted in the Bill or, indeed, we could make the NAO responsible for supervising the operation of the CAA. The Government have not yet provided a full response to the Committee’s recommendations, but I hope that they will do so as soon as possible and look at those sensible ideas.

Overall, the Bill offers crucial modernisation for civil aviation regulation, and it will help to promote success and competition in aviation. The Liberal Democrats welcome the focus on passengers, the reform of ATOL, the sensible framework for economic regulation and the opening up of public data. I hope that in Committee we can ensure that the Bill properly delivers the Government’s aims and creates a sustainable future for civil aviation in this country based on open data, proper regulation, sustainable transport and passenger-led reforms.

--- Later in debate ---

[Dr Huppert]

The shadow Secretary of State promised me some ideas in her speech. Has the hon. Gentleman had a chance to ask her what they are? If so, could he tell us, because she failed singularly to come up with any?

[Jim Fitzpatrick]

The hon. Gentleman was not listening. My hon. Friend held out the prospect of cross-party talks to see whether there is a way forward to develop a national plan. Labour proposed a third runway at Heathrow but lost the election. We recognise that it would be unrealistic to continue with that proposal. To demonstrate that there were no preconditions to cross-party talks, she said we are dropping the plan for the third runway, so let us talk about options, and about how we increase capacity and whether we need to do so.

As the treasurer of the all-party group on road passenger transport, my hon. Friend the Member for Central Ayrshire(Mr Donohoe) asked whether Northolt was the answer. Is the answer the Thames estuary, which has been raised by a number of colleagues, including the Mayor of London? Is it Gatwick? The Opposition, supported by industry, say that there is a capacity issue in the south-east that needs to be addressed. It is all well and good if we come up with a consensus, but let us sit down and talk about it. That is the invitation from my hon. Friend the Member for Garston and Halewood.

As I said, at least we have the Bill. We look forward to the Public Bill Committee and engaging with the Government to improve the Bill. We are happy to support it on Second Reading, and I look forward to the Minister’s reply.

--- Later in debate ---

[Norman Baker]

I am happy to advise the hon. Gentleman that the Department for Transport is producing a comprehensive aviation strategy, which according to the Department’s business plan will be published in March. He will be able to look at that and see whether it deals with the Northern Ireland situation in which he is clearly interested.

The shadow Secretary of State referred to the issue of future passengers, as against present passengers. I recognise that that is an issue, and clause 1(5) empowers the CAA to determine how to fulfil its primary duty to promote the interests of users when conflicts arise. This is in line with affording requisite discretion to the regulator and taking politics out of regulation. In other words, it would not be helpful for the case the hon. Lady makes to be more specific about the CAA’s powers than the Bill currently is.

One or two hon. Members asked why the airline consultation supplementary duty has been dropped. Stakeholders, including airlines should be consulted by the CAA when it carries out its economic regulatory functions. There is an obligation to consult bodies representing airlines on licence conditions, licence modifications and penalties. Any airline is free to make representations, and we do not believe that the CAA would ignore any relevant representation. Furthermore, whenever a conflict arises between passengers’ interest and those of airlines, the CAA will be bound to act in passengers’ interests, given the primary duty in the Bill. A further secondary duty would not affect that position, which is why we came to that conclusion.

The shadow Secretary of State also asked about resilience. The implication of her comments was that since the former Secretary of State for Transport—with her, it appears—was out at Heathrow, nothing has happened, but nothing could be further from the truth. There have been extensive discussions between the Department and the owners and operators at Heathrow about winter resilience. This winter, I am happy to say that the major airports in London are much better prepared than they were last year. But when the CAA proposes full airport licences, it will of course be required to consult on the content of licences and any subsequent changes to them. It will have to take into account any representations during those consultations when setting conditions, and we will require it to include welfare plans if those are in current and future passengers’ interests. I hope that that gives the hon. Lady the satisfaction she was seeking on that point.

Several hon. Members referred, rightly, to the welcome proposals in the Bill on ATOL, especially my hon. Friend the Member for Cambridge (Dr Huppert). He wanted an assurance that consumers would know when a holiday was ATOL-protected, and I can assure him that that is a key objective of the Government in the changes we are proposing. We are also interested, of course, in the Transport Committee’s deliberations on this important issue.

The hon. Member for Amber Valley (Nigel Mills) asked whether the Ryanair holiday model would be covered by the ATOL reforms. The intention is to ensure as far as possible that any holiday booked with a flight is covered by the changes. The hon. Members for Bolton West (Julie Hilling) and for Congleton (Fiona Bruce) also raised issues relating to ATOL reform. I confirm that we consulted over the summer on proposals to improve clarity for consumers about the ATOL scheme’s coverage. I agree fully that the current situation can be unclear and misleading for consumers, which is why action is needed as soon as possible.

We propose to expand the ATOL scheme to include flight-plus holidays that work like packages but lie outside the narrow legal definition. We also propose that an ATOL certificate should be issued whenever consumers purchase an ATOL-protected flight or holiday, as a further means of providing clarity. We aim to announce a decision shortly on the reforms, which can be implemented by new regulations under existing powers. We are taking steps forward on that. The holiday industry has made strong representations that it is no longer clear whether holidays are ATOL-protected. As I said, we think we can deal with that problem by allowing for the addition of more flight-based holidays.

In her introductory comments, the Chair of the Select Committee referred to impact assessments. The Transport Committee stated that

“licence conditions, and their associated costs to airports, may not be proportionate to the benefits delivered”,

and that was the thrust of her point. Ultimately, where costs are associated with licence conditions, users of air transport services will pay those costs. Where the costs of a proposed licence condition are seen to outweigh the benefits to passengers, it will not be in passengers’ interests to impose the condition, so the CAA’s primary duty would not be met if it did so.

The Bill requires the CAA to consult on proposed licence conditions and states that a licence may not include conditions that differ significantly from those on which it has already consulted. It must set out the reasons for conditions included in the licence, how it has taken into account any representations made, and the reasons for any differences from the conditions initially proposed. I think that that makes the case for the approach that we are taking. The fact that putting the passenger centre stage is the CAA’s primary duty will we hope give the hon. Lady the reassurance that she rightly seeks. I will come to security issues in a moment.

The shadow Secretary of State referred to vexatious appeals. I do not think that they are likely to occur. The Government’s proposed regime has features to deter frivolous or vexatious appeals. In particular, in most cases the appeal will not suspend the licence condition’s coming into effect, although the appeal body will have the power to impose interim relief under circumstances. There is therefore limited incentive to appeal for the purpose of delaying the decision.

The shadow Secretary of State also referred to the consumer panel. We believe that it is a useful innovation in the Bill. As she might know, the successor body to the Air Transport Users Council is being consulted on. It was announced on 18 January this year. The CAA will set up the CAA consumer panel as soon as possible and will immediately seek a suitable chair.

Environmental issues were raised by several Members, including my hon. Friend the Member for Cambridge, who was concerned, as were some Opposition Members, about the absence from the Bill of an environmental duty. The matter has been considered carefully. One reason why the Bill does not include such a duty at the moment, although the Government fully accept the need to take the environment into account in aviation, as everywhere else, is that it is thought that economic regulation is not the appropriate vehicle for doing so, not least because it enables the CAA to address only airports with substantial market power and only where regulatory intervention is warranted. That currently includes only three airports, but environmental externalities are present at a wider range of airports and need to be factored in. That is why the Government decided to proceed by placing on the CAA an information and publication duty that is considered to be more concrete and of more practical benefit to the public than the previously proposed environmental objective. The CAA is under an obligation to publish such information and can also issue advice and guidance to airport operators.

[Dr Huppert]

I hear what my hon. Friend says. He is correct that information is helpful and that all airports have a role to play, but will he consider more carefully whether it would be a good idea to put that environmental duty in the Bill so that as many steps as possible can be taken to protect the environment?

[Norman Baker]

My hon. Friend makes a point that others have made. If he or others want to pursue it in Committee, they will need to demonstrate that there is information that needs to be provided or actions that need to be taken that would not be provided or taken under the regime in the Bill. If he can demonstrate that, I am sure that Ministers will have an open mind.

The hon. Member for Milton Keynes South (Iain Stewart) made an interesting point about the CAA’s new consumer panel, suggesting that it could help the CAA to decide how to use those powers and what information to collect. That sounds like a good idea, and we will encourage the CAA to consider it. I am grateful to him for his suggestion.

Members on both sides of the House mentioned the National Audit Office. The NAO’s role is to scrutinise public spending on behalf of Parliament, but the income that the CAA derives from the industry is not public spending, as Parliament recognised when it removed the NAO’s role in 1984. The issue of the CAA’s auditors was considered by Sir Joseph Pilling, as my right hon. Friend the Secretary of State mentioned, as part of his 2008 strategic review of the authority. He concluded that there was no need for the NAO to be involved directly with the CAA.

Many other points were raised in the debate, but I am conscious that I have taken much longer than the shadow Minister. I therefore do not have time to deal with the issue of the smalls raised by my hon. Friend the Member for Daventry (Chris Heaton-Harris)—he went on at some length about that—but I can assure Members that all comments will be taken onboard. If I have not answered any questions, I will ensure that a letter is sent from the Department.

I think that this is a useful Bill. I am grateful for the support of Members from across the House, and I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Civil Aviation Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Civil Aviation Bill:

Committal

1. The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 15 March 2012.

3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

4. Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.

Other proceedings

7. Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(James Duddridge.)

Question agreed to.

Civil Aviation Bill (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Civil Aviation Bill, it is expedient to authorise—

(1) the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided, and

(2) the payment of sums into the Consolidated Fund.—(James Duddridge.)

Question agreed to.

CIVIL AVIATION BILL (CARRY-OVER)

Motion made, and Question put forthwith (Standing Order No. 80A(1)(a)),

That if, at the conclusion of this Session of Parliament, proceedings on the Civil Aviation Bill have not been completed, they shall be resumed in the next Session.—(James Duddridge.)

Question agreed to.