Lord Rosser
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(11 years, 6 months ago)
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Lord Empey
My Lords, it will come as no surprise that I am sympathetic to the amendment in the name of the noble Lord, Lord Stephen, albeit that I accept that it may not be in the right place today, as the noble Lord, Lord Soley, said. However, it chimes with what I have been trying to do over the past 18 months. As I said earlier to the noble Earl and the noble Lord, Lord Davies of Oldham, we will have the pleasure, on the graveyard shift on Friday afternoon, of discussing my Private Member’s Bill, the Airports (Amendment) Bill, which is designed to deal with this issue, but in a different way.
Things in my region are fine right now—there are 10 or 11 flights a day to Heathrow—but the airline sector is very volatile. Already, Mr O’Leary of Ryanair is trying to buy out Aer Lingus, while Etihad has taken a small stake and is looking to increase it; they are not known for their interest in the regions. The point made by the noble Lord, Lord Soley, is that there is a key economic driver here. I have spent quite a lot of time over the years in politics and economic development. One thing is absolutely clear: if you cannot get businesspeople quickly to and from a region, the opportunities to develop economically are severely restricted. People will not go all round the countryside for hours, waiting to get flights. They need to come to a hub and get quickly to a region. Any other route is just a huge obstacle in their way. That is just common sense.
I have attempted to deal with this at two levels, both within the UK and at a European level, because there is a major European component to this. I know that I will have the opportunity to share this with the noble Earl on Friday, but a major piece of work has been undertaken in Europe; by sheer coincidence, it happens to be working in parallel on reviewing its whole slot activity and related matters. I am pleased that the European Parliament, because it accepts the Europe of the regions, understands and is sympathetic to a lot of these issues. We are gradually moving in a positive direction in Europe, to the extent that the Government will not ultimately be in the position of saying, “Well, we may be sympathetic to what you need, but we cannot do it because it is against European law, and we will have to get that law changed in parallel”.
As the noble Lord, Lord Soley, said, in quoting the letter from the Minister, the connectivity issue is at the core of regional development policy and has been for donkey’s years. That is why we have regional policy in the UK. For years, Europe has been putting large amounts of money into the regions, to improve their connectivity and their infrastructure. There is not much point in doing that if we cannot then fly from a region to a major hub; all the investment is wasted. At least in Scotland, and to some extent in the south-west, there are alternatives, albeit slow ones—that is, road or rail. In our part of the country, we do not have the luxury of that option. In practice, it is basically air or nothing. That is the dilemma that we are faced with. So while I have a lot of sympathy with what the noble Lord, Lord Stephen, is trying to do, I suspect that he will probably suffer a technical knockout this afternoon. Nevertheless, his heart and his aspirations are in the right place and I hope that the sentiments expressed in the Minister’s letter will be followed up positively.
Lord Rosser
My Lords, this amendment is fairly wide-ranging in calling for the CAA to,
“have regard to the economic and social impact of services, provided by airport operators and users of airport facilities, on the UK as a whole”.
In moving his amendment, the noble Lord, Lord Stephen, referred in particular to services between London and Aberdeen. That is presumably the issue that has primarily prompted this amendment. We are aware of the concerns about the present arrangements for determining slots and charges at airports and about the operation of routes in such a way that cities such as Aberdeen may lose out, which would not be to the economic advantage of the UK either, bearing in mind the importance of Aberdeen and north-east Scotland in the global oil and gas market.
Reference has already been made to the letter from the Minister in which he expressed some sympathy with the concerns that have been raised. However, he went on to say that he did not think that this Bill was the appropriate vehicle to address them. Interestingly, he also said that he did not believe that air services between London and Aberdeen were under threat since it was a commercially attractive route for airlines. I will not go through the other points made in the Minister’s recent letter. However, as he said that he had some sympathy with the concerns raised, I am sure that he will want to put on the public record through his response to this debate what action the Government feel should be taken by others and by them to address the issue that has been drawn to the attention of your Lordships’ House through the amendment.
Earl Attlee
My Lords, I thank my noble friend Lord Stephen for tabling the amendment, which provides us with an opportunity to discuss the deeply important issue of regional connectivity. I certainly have sympathy for the underlying issues, and I hope that I will not have to deal a “technical knockout” to my noble friend. He mentioned rail journey times. I hope that he will join me, the noble Lord, Lord Adonis, and, I suspect, most of the opposition Front Bench in supporting HS2 when we come to debate it.
The amendment would impose wide and unclear obligations on the CAA, as the noble Lord, Lord Rosser, observed. It could be construed as requiring the CAA, when performing any of its regulatory functions, to take into account the economic and social impact not only of the services provided by UK airports but of the people who use them on the entire UK. However, the duties in Clause 1 of the Bill relate only to the CAA’s economic regulation functions. While the intention of the amendment is not clear, I am aware of my noble friend Lord Stephen’s particular concern over connectivity between Aberdeen and Heathrow. The noble Lord, Lord Soley, suggested that this was not the place for this matter. Fortunately, in your Lordships’ House we have great flexibility to discuss whatever we want. I always find the noble Lord’s contributions very illuminating and I am very happy to debate the issue.
The issue of regional connectivity was raised previously in Grand Committee with specific reference to connectivity between Belfast and Heathrow airports. My noble friend referred to the economic activity around Aberdeen, with the oil and gas industry. When I was on holiday in the area, I was definitely aware of that activity. On the issue of connectivity, I will take the opportunity to commend the work of the noble Lord, Lord Empey, who has been extremely active and effective both in Westminster and Brussels on this issue. As the noble Lord observed, he will be promoting his Private Member’s Bill this Friday, and I am sure that he will succeed in breathing life into the Chamber on Friday afternoon.
Noble Lords will be aware that the primary objective of the Bill is to reform the framework for airport economic regulation. However, the amendment appears to apply to all the CAA’s functions, including safety and the enforcement of European consumer protection law. I am sure that that is not my noble friend’s exact intention. For many functions, such as safety, it is not appropriate for the CAA to have regard to economic and social impacts because the safety of an aircraft is of paramount importance. Furthermore, the CAA has well established duties set out in Section 4 of the Civil Aviation Act 1982. These duties are disapplied for some of the CAA’s functions, such as airport economic regulation, where the CAA has alternative duties as set out in Clause 1 of the Bill. It is unclear how the duty contained in the amendment would interact with existing duties. Which set of duties should the CAA prioritise?
Despite these concerns, the duty in the amendment appears to be most relevant to the CAA’s airport economic regulation functions. However, I fear that the amendment would not have the desired effect of improving regional connectivity. Airport economic regulation concerns the regulation of the services provided at an airport by the airport operator, as well as the regulation of the landing fees that the airport operator charges to airlines. The noble Lord made a point about landing fees and I will write to him about that. Airport economic regulation is not concerned with the allocation and regulation of landing slots, which are governed by EU law, and an airport operator does not have control over where airlines fly to. Consequently, this Bill is not the right vehicle to address my noble friend’s concerns. In the UK, airlines operate in a commercial market environment and thus it is for an airline to determine what services it operates between Aberdeen and Heathrow, doing so based on its own assessment of the commercial viability of the route. These are not matters for economic regulation. Therefore, seeking to impose a duty like the one in this amendment will not influence which routes airlines decide to operate.
Lord Rosser
My Lords, the Minister said that he would be speaking for 15 minutes, but he has obviously gone rather faster than he thought since it says only 12 minutes on the clock. I can assure him that I shall be speaking for rather nearer 15 seconds than 15 minutes.
The Minister has spoken to a series of government amendments, the purpose of which he has explained. They are, in essence, tidying-up or technical amendments, clarifying amendments, or those which will include in the Bill wording that perhaps should have been included initially. There are also amendments which would implement, as the Minister said, the recommendations of the Delegated Powers and Regulatory Reform Committee which ensure that where the Secretary of State seeks to increase for inflation reasons the annual turnover threshold by which an airport becomes eligible for statutory undertaker status, the order will be subject to parliamentary control under the negative resolution procedure. In the case that the increase is for any other reason, the order will be subject to the affirmative resolution procedure. As the Minister has said, there is also a further government amendment which allows the Secretary of State to remove a non-executive member of the Civil Aviation Authority from office if he is satisfied that the member is a person in respect of whom a debt relief order has been made under Part 7 of the Insolvency Act 2000.
We have no objections to the amendments. Indeed, we welcome in particular the amendment which addresses the concerns raised by the Delegated Powers and Regulatory Reform Committee.
Lord Rosser
“(a) the individual employed in the civil service of the Crown, and(b) representatives of individuals employed as defined in paragraph (a).”
Lord Rosser
My Lords, we considered this amendment and Amendment 54 in Committee. There is concern that there could be a significant or damaging loss of staff with experience relevant to security issues when aviation security regulation functions are transferred from the Department for Transport to the Civil Aviation Authority. The amendments are designed to ensure, first, that the Secretary of State consults fully with all those directly affected before making a transfer scheme to the Civil Aviation Authority and, secondly, that the Secretary of State reviews the impact of such a transfer on the security functions of the Civil Aviation Authority before making such a scheme.
In the Minister's response in Committee, he confirmed that the real driver for the switch of aviation security functions from the Department for Transport to the Civil Aviation Authority was financial. He said that,
“this is about efficiency and that the principle is that the user pays”.—[Official Report, 4/7/12; col. GC 353.]
It has nothing to do with enhancing aviation security regulation since it is generally recognised that the current arrangements are highly successful and effective. The Government intend to change the current successful and effective arrangements for financial reasons and thus could be placing effective airport security regulation at risk. The onus is on the Government to provide convincing evidence that that will not be the case.
In Committee, the Minister said that his department had already begun to engage with staff and their trade union representatives on the proposed transfer of staff from the Department for Transport to the Civil Aviation Authority. He went on to say that his department would engage with staff and their trade union representatives as the transfer arrangements were developed over the coming months until the planned transfer in spring 2014, if memory serves me right. If the Minister’s contention is once again going to be that no problems are anticipated over the retention of the necessary experienced staff due to the change, will he substantiate that stance by telling us whether any significant outstanding issues have appeared that still have to be resolved with the staff and their trade union representatives over the transfer arrangements? Will the Minister also tell us how many staff it is now expected will be either transferred or seconded from the Department for Transport to the Civil Aviation Authority?
These are perfectly reasonable questions to raise in the light of the Minister's statement in Committee that the Government would not make the change if they thought they would lose a majority of experienced staff as a result and in the light of the concerns on this issue expressed by the Transport Select Committee in the other place. What hard evidence do the Government have that aviation security regulation functions will not be weakened by this transfer, or is it the case that when the Minister expresses such a view—namely; that they will not be weakened—that, frankly, is just a statement of hope?
The most important thing should not be the financial considerations that are clearly driving this change: the most important thing is the need to retain effective aviation security regulation arrangements. On that point, the Government have so far failed to prove their case. The amendments are designed to address the concerns that have been raised. I beg to move.
Earl Attlee
My Lords, the noble Lord raises an important point. It is vital that these issues are handled correctly and sensitively. The Department for Transport has already begun engaging with staff and their trade union representatives on the proposed transfer of staff from the DfT to the CAA. The noble Lord, Lord Rosser, talked about the risk of the loss of valuable staff and I agree that it is essential that this is avoided to the maximum possible extent. The department’s human resources unit is formally engaging with the Public and Commercial Services trade union and the Prospect trade union on matters relating to the proposed transfer of posts and post holders to the CAA. There have been regular briefing events for staff and visits to the CAA building in central London, where staff can see their new office space and meet existing CAA staff. I should also remind your Lordships that many of the staff in those posts due to transfer to the CAA are mobile and routinely work at airports across the country.
Staff are kept informed with regular written and oral updates and we shall continue to engage with staff and their trade union representatives as we develop the transfer arrangements over the coming months and up until the planned transfer in spring 2014. So there is no shortage of time. The department appreciates that engagement with staff is vital, not least because we want to ensure that as many as possible transfer to the CAA, taking their skills and experience with them. We are working with staff to provide as much visibility and clarity as possible about the transfer. The transfer will follow the principles of TUPE and we aim to set out to staff the terms and conditions in April 2013—that is one year before the planned transfer.
The noble Lord, Lord Rosser, talked about the risk of deterioration in security performance. I am satisfied that there is no reason why this should occur. Indeed, it may be better—we do not know—but I am satisfied that there is no reason why there should be a deterioration.
The noble Lord asked whether there are any outstanding issues. There will always be HR issues with these changes. What is important is that these issues are handled sensitively and effectively. I am sure that that will be the case.
The Government believe that there is no need to amend the Bill to achieve something that is already happening. I hope that, with that comfort, the noble Lord will feel able to withdraw his amendment.
Lord Rosser
The question I asked was not whether there were any outstanding issues still to be resolved but whether there were any “significant” outstanding issues to be resolved. I accept that there will always be some issues. I am not sure, therefore, that the Minister has answered my question as it was whether there are any significant outstanding issues.
Earl Attlee
My Lords, I do not know whether there are any significant outstanding issues. It depends on what you call “significant”. An individual staff member who is possibly being disadvantaged would regard it as very significant but at the strategic level it might not be regarded as significant. I do not know the answer but one would expect that there are issues to be managed. As I said before, it is important that these matters are handled sensitively.
Perhaps I may give the noble Lord a little more information about the need to ensure high levels of security. The Government believe that the industry will benefit from the efficiency that could be gained through having aviation security and safety regulation in one place. The CAA has potentially valuable experience of safety management systems designed to manage risk as effectively as possible. This move will also mean that the user-pays principle is applied to aviation security as it is currently applied to aviation safety.
Lord Rosser
A significant outstanding issue would be one which might lead to a damaging loss of staff with experience of relevant security issues. That would be a significant issue. Another would be one which could result in a weakening of the current aviation security regulation arrangements. In the context of the Bill and what the Government are trying to achieve, I would define those as significant outstanding issues.
The Minister said that he is not aware of any significant outstanding issues that would jeopardise the two quite crucial aspects to which I have just referred. He said in relation to the possible weakening of aviation security regulation functions that they might be strengthened—but he did not know whether that would be the case—and that there was no reason why there should be a weakening as a result of the transfer. The Minister saying simply that he can see no reason why there should be such a weakening is not quite the same as saying that he is absolutely satisfied that there will not be.
The only other point I wish to make—I intend to withdraw the amendment—relates to the Minister’s accurate comment that as the move does not take place until the spring of 2014 there is “no shortage of time”. The difficulty with that—I am sure it will not happen—is that sometimes a feeling that there is no shortage of time to get things resolved can lead to a degree of complacency and then you suddenly find yourself in a situation where there is a shortage of time. I beg leave to withdraw the amendment.
Lord Rosser
“( ) the full cost of travel for users of air transport services, including all relevant surcharges such users would be expected to pay.”
Lord Rosser
My Lords, the Civil Aviation Authority’s primary and overriding duty under this Bill is to carry out its functions in a manner that it considers will further the interests of users of air transport services, including in relation to the cost of current airport operation services.
This amendment adds an additional requirement on the Civil Aviation Authority to publish information and advice to assist users of air transport services to compare the full cost of travel for users of such services, including all relevant surcharges that they might be expected to pay. In Committee, we argued that it was surprising that the specific duty to make such information relating to cost available to users was not already in the Bill. Apparently it was left entirely to the discretion of the Civil Aviation Authority under the part of the Bill that says that the CAA should publish such information and advice as it considers appropriate.
We tabled this amendment because of concerns expressed about the extent of significant add-on charges, sometimes running into three figures and levied chiefly by budget airlines for such things as having a bag in the hold, changing the name on a ticket, having a bag even marginally over the weight limit, seat reservations and flight change fees. The purpose of this amendment is not to stop such charges but to ensure that they are transparent and readily known rather than, as appears to be the case at present, imposed with a degree of stealth on unsuspecting passengers, to whom it may well not have occurred that charges of such magnitude would be imposed for such relatively minor matters.
If the Civil Aviation Authority published the full, actual and potential costs of air travel, including all relevant surcharges, passengers would soon come to recognise that there was an independent source of information on charges that would enable them to make realistic judgments and comparisons on the full cost of travel, and potential full cost of travel, if surcharges were incurred. This would help reduce the likelihood of users getting caught out by a charge that they had not anticipated and of which they were unaware.
In his response in Committee the Minister referred to Clause 83, stating that the Bill already provided for the CAA to be able,
“to publish comparable information on air transport service pricing”,
and that the showing of,
“the full costs of travel and surcharges … is being addressed in other ways”.—[Official Report, 4/7/12; col. GC374.]
However, I do not think that the wording in Clause 83 is as precise as the Minister implied. It refers to,
“such information … as it considers appropriate for the purpose of assisting users of air transport services to compare … air transport services provided to or from a civil airport … services and facilities provided elsewhere in the United Kingdom and used, or likely to be used, in connection with the use of air transport services provided to or from a civil airport”.
Where in that wording—or any other wording in the Bill—does it refer to the Civil Aviation Authority being required to publish information on pricing, which, if it was as comprehensive as it should be, would have to include the full costs of travel for users of air transport services, including all relevant surcharges such users would be expected to pay, as called for in the amendment? The short answer is, surely, that it does not.
I will of course wait for the Minister to respond to the House and indicate, if he is going to do so, which words in Clause 83 do lay that requirement on the Civil Aviation Authority, in clear and unambiguous terms. The Minister also said in Committee:
“On the full cost of travel, consumers are already protected throughout the EU by Article 23 of EU Regulation 1008/2008, which … requires airlines to display at all times their prices”,
with prices for so-called optional extras being,
“displayed at the start of the booking process”.
The Minister then went on to say that the CAA considered that some airlines are,
“now compliant with Article 23 of the regulation”.—[Official Report, 4/7/12; col. GC374.]
However, that does not solve the problem. If the Minister considers that it does, why does he think that three Members of your Lordships’ House, from different parties, came in to support my amendment at Committee stage? I suggest they did so because they were aware that there continues to be a problem, as indeed is highlighted in surveys. My noble friend Lord Soley said in Committee:
“It is one thing to say that they”—
airlines—
“must publish information under Article 23”,
but it is another to say that they are completely up front with that information,
“so that a passenger knows”.—[Official Report, 4/7/12; col. GC375.]
If we are to address this matter then there needs to be a clear requirement on the Civil Aviation Authority to publish this information on comparative fares and charges, including surcharges, in order to assist passengers and show them that, as an authority, the interests of users are crucial to its role, as provided for in Clause 1. If the CAA does not provide this comparative information, in a transparent, impartial and objective manner, nobody else will—whatever Article 23 of EU regulation 1008/2008 may say and however much the Government or the CAA may feel that the problem of unanticipated additional charges and surcharges has already been addressed. I beg to move.
Earl Attlee
My Lords, I suspect that there are sanctions but I would prefer to write to the noble Countess and other noble Lords to give the full details. I believe that we will all find the answer to the noble Countess’s question to be very interesting.
Secondly, on payment surcharges, I share consumers’ concerns about the high level of payments surcharges applied by some companies and the fact that often people are not aware of the level of these charges until they are almost at the end of the booking process. This makes it difficult to compare prices and to shop around for a good deal. Noble Lords will recall the debate initiated a while ago by the noble Lord, Lord Mitchell, on this point—a very useful debate, I thought.
It is not right that a business should try to hide the true costs of its services by implying that its prices are made up of elements beyond its control when they are not. Your Lordships will be aware that consumers are already protected against misleading pricing under the Consumer Protection from Unfair Trading Regulations 2008. The CAA has been able to enforce the principal obligations imposed by Article 23 through these regulations. In addition, the Government have publicly consulted on whether there should be early implementation of the payment surcharges provision of the new European consumer rights directive ahead of its deadline for introduction into the UK in 2014. This is important to aviation consumers because some businesses add a charge to the price of goods or services when the consumer chooses to pay by a particular method, for example by credit card or debit card. These additional charges are known as payment surcharges.
The BIS consultation set out the Government’s proposal for early implementation of a provision of the consumer rights directive. This will put in place legislation to ban businesses from imposing excessive payment surcharges on consumers. Businesses will remain able to add a charge only so far as it covers the actual costs of processing any particular form of payment. The consultation has sought views on the timing of the implementation of this legislation and how best to define the scope and application of the provision. Consultation on this early action closed on 15 October and BIS is now considering the next steps. The responses to the consultation will inform BIS guidance to businesses on how to set its fees in compliance with the directive.
I hope it is clear from what I have said that the intent of this amendment is already implicit in the primary duty of the CAA and that there are actions in hand and effective mechanisms already in place to secure the intended result. Given this, I hope that the noble Lord will feel able to withdraw the amendment.
Lord Rosser
I thank the Minister for his response and I thank the noble Lord, Lord Lucas, and the noble Countess, Lady Mar, for their contributions to the debate.
We are back in an argument that we seem to have so often. We put forward an amendment that highlights a problem and seeks to address it and the Minister says to look elsewhere in the Bill or to refer to European Union regulations where the problem has already been solved, and therefore the proposed wording need not be put in the Bill. It is never very clear why the Minister makes that objection. The wording that we are seeking is very precise in the sense that it covers fares, charges, surcharges and matters like that, whereas much of the Bill is addressed in more general terms and does not actually give a guarantee that the Civil Aviation Authority will pursue this particular issue.
I asked the Minister if he could tell me where in Clause 83 it referred to fares and charges, but he did not respond. He has given a lengthy reply, but he has not actually responded to that quite key point, bearing in mind his assertion, as I understand it, that Clause 83 covers this issue. I believe that it covers this issue only if the Civil Aviation Authority chooses to interpret this general wording as covering this issue. It does not in fact put a requirement on it to do so.
As to seeking to tie the hands of the Civil Aviation Authority, Clause 83 sets out a number of things where it could be argued it is tying the hands of the CAA, in the sense of telling the CAA that there are certain things it has to do. Is it really tying the hands of the CAA to tell it to provide information to the travelling public on something as important as fares, charges and surcharges? The Minister makes it sound like a minor issue.
Earl Attlee
My Lords, it is an important issue and therefore I expect that the CAA will cover it. Why would it not?
Lord Rosser
I will tell the Minister why it would not: because it has not been put explicitly in the Bill. This amendment does so, and the Minister is backing off from it. He keeps saying that it is covered in the Bill, but when I ask where it is in the Bill, once again I do not get an answer. I realise that we are banging our heads against a brick wall—it is quite clear that the Minister is not going to move. I think that this is a matter of real regret because the amendment is designed to assist the travelling public and to make sure that they can be aware of charges and not face the kind of scenario described to us by the noble Lord, Lord Lucas.
We have had the argument again from the Government, as we had in Committee, that people do not know about the CAA website. Frankly, if this kind of comparative information were published and publicised, the public would very soon get the message that the website is the place to go to find out what the charges are. If it is not being published, or if it is to some degree but no one really publicises that fact, then of course people will say that the CAA website is not where they would normally go to look for that kind of information.
I am very disappointed with the Minister’s response. I do not quite know why he wants to dig in in this way on an issue that even he accepts is a problem—a problem that this amendment is one way of addressing. As far as I am concerned, the Minister is not prepared to accept an amendment which is in the interests of the public who use air services. The Minister accepts that there is a problem but, in my view, is not prepared to address it by accepting this amendment. We express our strong regrets at the Minister’s stance, but nevertheless I beg leave to withdraw the amendment.
Lord Rosser
“Access for disabled and reduced mobility air passengers
The CAA will produce an annual report on disabled and reduced mobility air transport passenger experiences of airport operation services and air transport services which must include evidence on the extent to which airport operations and air transport services are compliant with relevant legislation, regulations and codes of practice for the time being in force.”
Lord Rosser
We discussed this amendment at some length in Committee. I do not intend to go through all the points that were made then, which related to a possible conflict concerning the duties of the Civil Aviation Authority. As the Minister will know, this amendment seeks to ensure the production of,
“an annual report on disabled and reduced mobility air transport passenger experiences of airport operation services and air transport services”.
In Committee, the Minister said that one of the reasons he could not support the amendment—I do not wish to suggest that there was the only one—was that it was drafted in such a way as to put the obligation to produce an annual report jointly on the Secretary of State and the Civil Aviation Authority, and he had a significant doubt about linking together the regulator and the Secretary of State in that way. We hope that we have addressed that issue since we have removed the reference to the Secretary of State, leaving just the Civil Aviation Authority to produce the annual report.
In Committee, the Minister also said that,
“the CAA already publishes an annual report and corporate plan and makes a considerable amount of consumer information available on its website”—
a matter that we were discussing in the previous amendment. He went on to say:
“An extra annual report on a specific area of legislation, on top of those more wide-ranging reports, would be disproportionate”.—[Official Report, 4/7/12; col. GC 384.]
I do not see that even with this amendment there necessarily needs to be a separate report from the existing annual report, which I think goes a little way towards addressing that particular concern raised by the Minister in Committee.
The reality is that the Civil Aviation Authority will have a more influential role under this Bill, which gives it additional responsibilities and lays on it a general duty to carry out its functions in a way that,
“will further the interests of users of air transport services”.
The CAA’s enhanced role in furthering those interests of users of air transport services justifies this amendment, which calls for an annual report on the extent to which,
“relevant legislation, regulations and codes”
are being complied with in the experience of disabled and reduced-mobility air transport passengers.
Our main concern is not that there has to be a separate document but that the issue is actually addressed. If the Minister is not prepared to accept the amendment—I imagine that I am not being unrealistic in supposing that that will be the case—can he give assurances that in the annual report from the Civil Aviation Authority there will be a relevant section addressing the issue referred to in this amendment in order to ensure that the interests of disabled and reduced-mobility air passengers are properly furthered and protected by the Civil Aviation Authority, which should stand out as a beacon to be followed in this field? I beg to move.
Earl Attlee
My Lords, I hope that I can do a bit better to meet the needs of the House and the noble Lord, Lord Rosser, on this amendment.
A similar amendment was debated in Grand Committee and during the Commons Committee stage of this Bill. As the noble Lord, Lord Rosser, observed, the key difference with this amendment is one of form rather than substance as the requirement to produce an annual report is placed only on the CAA, not jointly with the Secretary of State, as previously tabled.
I am afraid that I must oppose this amendment again and I will try to explain why. Of course, the Government agree that it is very important that airlines and airports are sensitive to the needs of disabled people and those of reduced mobility and that they fully comply with the European regulation that has been enacted to give access to air travel for people with disabilities.
There are, however, a number of reasons why the Government do not support this amendment. First, there are effective mechanisms already in place to secure the result intended. The CAA already publishes an annual report and corporate plan and makes a considerable amount of consumer information available on its website. The noble Lord, Lord Rosser, asked me to commit the CAA to including a section on this issue in its annual report. I have already made my Bill team manager very cross and I do not intend to risk doing it again. The noble Lord will understand that I would be making a serious mistake if I agreed to commit the CAA to include anything in its report that was not actually required by statute. An extra annual report on a specific area of legislation, on top of these more wide-ranging reports, seems disproportionate.
The CAA is already committed to the principles of Better Regulation and aims to be as transparent as possible in all its work, including in relation to compliance and enforcement with consumer protection legislation. It is also worth pointing out that disabled consumers benefit from the whole suite of EU consumer protection legislation for aviation, not just regulation 1107/2006 on specific rights for disabled persons and persons with reduced mobility when travelling by air, but regulation on cancellation and delays and on ticket price transparency. Therefore, it makes more sense for consumer issues to be considered in the round when these matters are reported on.
Secondly, such an obligation could result in an extra administrative and resource burden on the CAA, whose costs would have to be passed on to the industry. Thirdly, and most importantly, there is a new and better mechanism that I believe should be utilised instead. The CAA has set up a new consumer advisory panel to act as a critical friend to the regulator on behalf of all consumers as it moves forward in putting the consumer at the heart of its regulatory effort.
In April, the CAA announced that Keith Richards would chair the new consumer panel. Mr Richards has considerable experience of the disabled air passenger experience, having been chair of the aviation working group at DPTAC for many years, as well as being a former head of consumer affairs at ABTA. Since then, the CAA has completed the process of recruiting nine panel members to complete its complement, and the new body has had its first meeting. I hope that the noble Lord, Lord Rosser, is not going to suggest that Mr Richards is not a good appointment for this task. I am sure that he will do an excellent job.
Clearly, the CAA and the new panel will need time to develop their relationship, but it would not be unreasonable to suppose that the passenger experience of disabled people at airports and on planes would be of considerable interest to the panel. I suggest that it would be better to allow the panel to have the space to develop how it will go about its work and how best to support and inform passengers rather than to have an obligation imposed on the CAA in this way. In view of this, I hope that the noble Lord will agree to withdraw this amendment.
Lord Rosser
Before I do that, I am aware of the panel, not least because the Minister referred to it in Committee. As I recall, it is an advisory panel—it is not any the worse for being that but it does not have executive powers. Is the Minister able to say whether this panel will produce a report that will be in the public domain?
Earl Attlee
My Lords, I would expect it to produce reports that would be published. If I am wrong on that, of course I will write to the noble Lord.
Lord Rosser
I would be grateful to know from the Minister what the position is on that. Clearly, if this panel were to produce reports that would be made public, one would be able to see that the panel was giving appropriate attention to issues affecting disabled and reduced-mobility air transport passengers. More importantly—since I am sure that it would seek to do that—one would be able to see what action the Civil Aviation Authority had taken in the light of any recommendations, complaints or problems the panel had drawn attention to. I would certainly be interested if the Minister could let me know if it will be producing reports that all of us will be able to see. In the light of that, I withdraw the amendment.
Lord Rosser
“Accounts and audits
(1) Section 15 of the Civil Aviation Act 1982 (accounts and audit) is amended as follows—
(a) in subsection (1), for paragraph (c) substitute—“(c) to send copies of the statement of accounts to the Secretary of State and the Comptroller and Auditor General before the end of the November following the accounting year to which the statement relates;”(b) in subsection (2), for paragraph (a) substitute—“(a) the National Audit Office shall examine, certify and report on each statement of accounts received under subsection (1) and shall lay copies of the statement of accounts and of its report thereon before each House of Parliament.”(2) In Part 1 of Schedule 4 to the National Audit Act 1983, (nationalised industries and other public authorities), leave out “Civil Aviation Authority”.”
Lord Rosser
My Lords, this amendment provides for a new clause which would give the National Audit Office oversight of the Civil Aviation Authority’s accounts. Other regulatory bodies including economic regulators which are also industry funded, such as Ofgem, Ofwat and Ofcom, are subject to National Audit Office oversight. The Office of Rail Regulation is also subject to National Audit Office oversight and is likewise funded from within the industry.
As we know, the Civil Aviation Authority is funded from the aviation industry and also receives a limited amount of money from the taxpayer, but it is not subject to National Audit Office oversight. In its report, the House of Commons Transport Select Committee called on the Government to explain why the Civil Aviation Authority is apparently unique among industry regulators in being outside the remit of the National Audit Office. So, clearly, it did not think that a strong case had been made for that situation to continue.
In Committee, the Minister said:
“I remain unconvinced that there are compelling reasons to believe that NAO scrutiny of the CAA would deliver a different result from the current and new mechanisms by which the CAA's functions are already audited and scrutinised”.—[Official Report, 9/7/12; col. GC 464.]
He accepted that other industry-funded regulators come under the scrutiny of the National Audit Office. In our view, the onus lies on the Minister to show why the arrangements for the Civil Aviation Authority should be different from those for other regulators, rather than, as he put it in Committee, saying that we have to make the case. It is the Minister who has failed to make the case for not having NAO involvement, and for that reason we have brought this amendment back on Report. We hope that the Minister may have had a change of heart on this point. I beg to move.
Earl Attlee
My Lords, I fully agree with your Lordships on the need for the CAA to be efficient in carrying out its functions, and I welcome the points made in the debate to provide for auditing of the CAA. However, I am still not able to support the amendment or its principle.
Noble Lords will recall that very similar amendments to Amendment 61 were tabled in the other place both in Committee and on Report and also in this place in Grand Committee. As I explained in Grand Committee, the Government would look to those proposing to reinstate the role of the Comptroller and Auditor-General to provide compelling reasons why NAO scrutiny of the CAA would deliver a different result from its current mechanisms. In the absence of such a justification, and having considered this issue further myself, I remain unconvinced that there are compelling reasons to believe that NAO scrutiny of the CAA would deliver a different and better result than the Government’s current and proposed mechanisms for the audit and scrutiny of the CAA.
The CAA is already under a duty to keep proper accounts and records in relation to the accounts and to make an annual report to the Secretary of State on the performance of its functions in that year. Copies of the accounts, the annual report and any report made by auditors are laid in each House of Parliament by the Secretary of State. Section 15 of the Civil Aviation Act 1982 already provides that the Secretary of State will appoint the auditors. The Government have tabled an amendment to the Bill that will provide for better transparency of the CAA’s efficiency measures and for better accountability for those measures, and we will debate this shortly as Amendment 62.
That amendment will provide for increased transparency of the CAA’s action to improve its efficiency by, first, requiring that the CAA includes in its annual report a statement about efficiency in the performance of its functions; secondly, providing a specific power for the Secretary of State to give directions about matters that must be covered in that efficiency statement; thirdly, requiring that the auditors, appointed by the Secretary of State pursuant to Section 15 of the Civil Aviation Act 1982, produce an assessment of the efficiency statement; and, fourthly, providing that the CAA’s annual report includes the auditors’ assessment of the CAA’s efficiency statement in respect of that accounting year. These are sufficient to give the CAA a strong incentive to secure value for money and to be as efficient as possible in performing its functions. I take it that the noble Lord is worried about the CAA’s efficiency and proper performance of its functions rather than that it properly accounts for expenditure.
Furthermore, it is not appropriate for the CAA to be audited by the NAO. First, NAO audits are usually of bodies whose income is largely from public sources, whereas only 4% of the CAA’s income comes from those sources. Secondly, one consequence of an NAO audit role would be that the CAA’s auditors would no longer be appointed following a competitive tendering process. This would remove efficiencies made possible by the tendering process that would precede any appointment of auditors for the CAA by the Secretary of State. Thirdly, the independent review of the CAA by Sir Joseph Pilling, published in 2008, considered the need for an NAO role and rejected it. The recommendation was subsequently accepted by Ministers under the previous Government, and I have yet to see convincing reasons why they were wrong.
Representatives of airlines have suggested to us that the benefit of an NAO role lies more in the value-for-money audits that the NAO would be able to carry out than in the audit of the CAA’s accounts. In that respect, I remind your Lordships that such NAO reviews typically occur on a cycle of five or so years. However, the efficiency statement and report that are now under consideration would be annual.
In conclusion, while the Comptroller and Auditor-General and his staff at the NAO do a highly effective job, I am not persuaded that it is necessary to bring the CAA within their remit. I therefore see no reasons at the current time why the NAO should audit the CAA. I ask that the amendment be withdrawn, and we should look forward to debating my Amendment 62.
Lord Rosser
I thank the Minister for his response. He is obviously very keen to get on to Amendment 62 on the efficiency aspect. I shall withdraw the amendment since the Minister has clearly not changed his view on this, but the reality is that the CAA appears to be largely unique among industry regulators in being outside the remit of the National Audit Office. I was not entirely clear about the significance of the Minister’s point about loss of competitive tendering, if I understood him correctly, since I do not know whether that is meant to suggest that the role of the National Audit Office in relation to other industry regulators is being reduced or eliminated—if that is the Government’s argument for not doing it here. I beg leave to withdraw the amendment.