Civil Aviation Bill

Julie Hilling Excerpts

Tuesday 22nd May 2012 Commons Chamber

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I beg to move, That the Bill be now read the Third time.

Throughout the consideration of the Bill, the debate has been informed and constructive. I thank all Members who have taken part, including Opposition Front Benchers such as the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), the shadow aviation Minister. We have also been assisted by the excellent report prepared by the Select Committee on Transport. I reiterate the thanks that I have given to the Committee and its Chair for their work on pre-legislative scrutiny.

The Bill has enjoyed considerable cross-party support at every stage in its passage through the House, and its key elements have been broadly welcomed by airports, airlines and a number of other stakeholders. That reflects the efforts made not just by this Government but by our predecessors in office to listen to the industry’s concerns and respond effectively to them to put together a balanced reform package.

In the year of the London Olympics and the diamond jubilee, we are reminded once again of the crucial role that the aviation industry plays in bringing millions of tourists to this country. That is just one element of its wider contribution to the UK economy. The Bill will modernise the framework for the economic regulation of airports, greatly improve transparency and accountability and put the passenger interest right at the heart of the new regulatory system. There is widespread agreement that the current one-size-fits-all regulatory regime is inflexible and outdated. The system proposed in the Bill will deliver more effective protection for passengers and a lower regulatory cost for industry.

At the heart of our proposals is a new primary duty to further the interests of passengers and freight owners. The Bill will also enable the Civil Aviation Authority to tailor measures to each individual airport, allowing it more flexibility to target intervention in the most proportionate way.

With a strong emphasis on the price control process, the current rules leave the CAA with very limited options if problems occur between five-yearly reviews. The new licence system in the Bill will allow for real-time regulation, empowering the CAA to act swiftly if an airport is failing its customers on, for example, service quality, winter resilience, volcanic ash or any challenges that it is not yet possible to foresee.

Clause 1(3) and (4) require the CAA to carry out its economic regulation functions in a transparent, accountable, proportionate and consistent way. To respond to points made in earlier debates, we are strengthening the scrutiny to which the CAA is subject by giving a new accounting direction to the regulator, requiring it to include an efficiency statement in its annual report, which will be subject to validation by its external auditors.

The primary duty to passengers, which is so pivotal to the Bill, will provide greater certainty and clarity for airport operators, which in turn will encourage long-term investment in the improved facilities that passengers want. A shift to more independent economic regulation also removes risks associated with political interference, which is why it is a common feature of modern regulatory regimes.

The Bill will also make the CAA’s decisions more accountable than they have ever been by introducing a new appeals process. The Government worked hard with both airlines and airports to come up with an appeals system that gives effective redress to airlines without turning the new regulatory regime into a two-tier system, which would have dragged the Competition Commission or the Competition Appeal Tribunal into everyday CAA decision making. The result of that work is that the Bill provides appeal rights to both airlines and airport operators that are significantly more effective than existing remedies. However, not just businesses benefit from greater transparency and clarity. The Government believe that providing the right information for consumers can sometimes achieve better results than traditional regulatory intervention, so the Bill will give the CAA new functions on collecting and publishing information on issues such as service quality to help consumers to make informed decisions on competing operators in the aviation sector.

The Bill contains important security provisions—keeping people safe and secure when they travel is paramount. The Secretary of State is responsible for aviation security policy and for giving security directions. That will not change under the new approach we are advocating, but the Government believe that giving the experts in aviation operations a greater say in how security is delivered will improve our ability to guard against the very real threats we face.

The CAA has valuable experience not just of regulation generally, but of safety management systems that ensure that risks are controlled as effectively and efficiently as possible. We believe that that track record on safety will assist the CAA in overseeing the delivery of the new security management systems, which are an important element of the move to an outcome-focused, risk-based approach to security, which has been debated extensively during the Bill’s passage through Parliament.

I am also convinced that vesting those regulatory functions for security in the CAA will benefit the aviation industry, because it will henceforth be able to deal with a single regulatory body rather than the current two bodies. Moreover, we expect that the complementary measure—the introduction of an outcomes-focused, risk-based approach to security—will enable security checks to be integrated more closely into the general business of the airport. That should open the way to more cost-effective and more passenger-friendly ways of delivering security outcomes.

Plans for the proposed move of responsibilities in relation to security regulation to the CAA are already being developed. The Department for Transport is in discussions with the Department’s staff who are likely to be affected and with their trade union representatives, because we are keen that as many employees as possible stay in post when their jobs transfer to the CAA, taking their skills and valuable experience with them.

[Julie Hilling (Bolton West) (Lab)]

The Minister said that the Department has had conversations with the staff and their representatives. Can she give us any more information about that, because—as she will be well aware—one of the concerns we raised during the passage of the Bill was about the loss of expertise if staff did not follow their jobs to the CAA?

[Mrs Villiers]

We are in discussions with both the CAA about the practicalities of the move and with those Department for Transport staff whose posts we expect to move. At the moment, we are not able to give them all the answers on all the issues, partly because the Bill has not passed as yet, but also because issues such as pensions are under review both in the civil service and in the context of the CAA. But we are very conscious of the need to try to provide as much visibility and information as possible, and we are working to do that, although it will take time to work through certain issues.

On environmental matters, the Opposition tabled an amendment on Report—it was extensively debated—that would have imposed a supplementary environmental duty in relation to the CAA’s airport economic regulation functions. I understand the motivation for such an amendment, as I said on Report and in Committee, but I believe that its aim is already provided for in the Bill, which already allows the CAA to approve reasonable investment in measures that mitigate environmental impact. No doubt the discussion on whether further clarification on that point is needed on the face of the Bill will continue in the other place in the same constructive and thoughtful way that it has in this House.

I must emphasise, however, that the Bill already includes important new information provisions to help us address the environmental impact of aviation. The Bill gives the CAA powers to collect and publish information about the environmental effects of civil aviation. Not only could that be used to give more information to communities affected by aircraft noise—hon. Members know how significant an issue that is for many people—but it will ensure that passengers have better information about the environmental impact of their travel choices than is currently available. We believe that improving transparency will help us to harness consumer power in pushing for progress towards cleaner and quieter planes.

Some have called for more on the environment to be included in the Bill, but to be effective, environmental measures need to be applied proportionately across the whole sector and not just focused on those airports that happen to be subject to economic regulation. So separately from our efforts contained in the Bill to reform economic regulation, a number of initiatives are under way to deliver cross-sectoral action on the environmental impact of aviation. Adding aviation to the European emissions trading system is expected to deliver carbon savings across Europe of some 480 million tonnes in the period to 2020. Both NATS and the CAA have a strong focus on reducing fuel burn and addressing noise in their work on improving airspace management, and the Government will soon publish a consultation on a sustainable framework for aviation. We are clear that aviation should be able to grow, but it must also play its part in delivering our environmental goals and protecting the quality of life of local communities affected by aircraft noise and other local impacts.

[Julie Hilling]

The Minister said that the consultation document will be published “soon”. During the passage of the Bill, we have talked about future legislation that would enable environmental concerns to be addressed, so can she tell me what “soon” means in this context?