Air Transport (Northern Ireland)

Debate between Simon Burns and Jim Fitzpatrick

Thursday 27th June 2013 Westminster Hall

[Mr Burns]

Treasury.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

Stereo.

--- Later in debate ---

[Mr Burns]

The hon. Lady is extremely charming and in many ways intellectually seductive. She too has been a Minister. There may be only four close honourable friends of mine sitting in the Chamber, but unfortunately the walls have ears. I have always found that it is extremely wise when one is a member of a governing Administration to be bound by collective responsibility, which I happen to believe in as well; one fully understands the merits of the cases that the Government put forward as their policy and one fully supports them. I hope that explains to the hon. Lady that what my right hon. Friend the Chancellor had to do was due to the unsatisfactory, if not catastrophic, economic situation we inherited in May 2010. We have had to take some tough and difficult decisions. He is right, because it is right that we address the problems of the debt and the deficit.

I shall move on to the probably more neutral subject of aviation policy frameworks. Overall, the Government want aviation to continue across the country. To that end, we continue to deliver: we have delivered the Civil Aviation Act 2012, to bring the regulatory framework up to date, and we are implementing the recommendations of the south-east task force. We have also acted to ensure that the Northern Ireland aviation sector remains competitive. We plan to create an economic climate that enables people to travel and to use aviation to conduct business and visit friends and family as easily and cost-effectively as possible. Many people in Northern Ireland are concerned, as those in the rest of the country are, about capacity, particularly capacity in London and south-east England. Although it is across the Irish sea from Northern Ireland, capacity there does, as hon. Members have said, have a knock-on effect on those who wish to fly long-haul from Belfast and other parts of Northern Ireland to the rest of the world. They will frequently travel to London to meet their connections and then travel on or, as hon. Members have said, in some cases they go to Dublin.

The Government believe that maintaining the UK’s status as a leading global aviation hub is fundamental to our long-term international competitiveness. To make decisions, we need our evidence on the way forward to be as up to date as possible. Dealing with airport capacity, increasing the size of existing airports or creating new airports is highly controversial and arouses strong emotions. It is essential that we get it right, which is why I welcome the comments from the hon. Member for Poplar and Limehouse on his party’s attitude to how we are moving forward, but I exclude from that welcome the comments he made about Boris island; I must be totally independent, so I do not want to comment on any option and compromise that independence.

[Jim Fitzpatrick]

The only difficulty we have with the Davies commission is the timetable the Government have given it to arrive at its conclusions, which is after the 2015 general election. Like Mayor Boris Johnson, the CBI and the aviation industry, we would much rather the deadline were brought forward to before the general election, so that parties have an opportunity to examine the recommendations and include them or otherwise in their manifestos, and people can have the opportunity to decide.

[Mr Burns]

I hear what the hon. Gentleman says, but perhaps I should let sleeping dogs lie; he kindly did not mention that topic in his comments. The time scale that has been given, with interim recommendations for the short term announced at the end of the year and a full-blown report with recommendations in the summer of 2015, is the right one. On a very complex, difficult and controversial subject, the commission must have the right amount of time to assess fully all the evidence and come to a proper decision, rather than rush it for an artificial, more short-term deadline. I fear that if it had had a shorter time scale, all those who did not like whatever recommendation the commission made, would accuse it of a botched job because it was a rushed job, because it did not have enough time.

[Jim Fitzpatrick]

Forgive me, Mr Amess, but I must comment that the Davies commission was appointed more than 12 months ago. It has a three-year job, but there is no way that it takes three years to arrive at conclusions on an issue such as aviation capacity in the south-east. There is so much evidence available. Three years is far too long. The timetable is a political stitch-up to get past the general election, because the issue is a deal breaker for the coalition. That is the reality in politics. I am not knocking it; it is just where we happen to be. The timetable could have been shorter and that would not have truncated the opportunity for a full, thorough and comprehensive examination of the issues by the commission.

Flight Time Limitations

Debate between Simon Burns and Jim Fitzpatrick

Thursday 22nd November 2012 Westminster Hall

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

Mr Robertson, it is a pleasure to see you presiding over the debate, sir. It is also a pleasure to follow the hon. Member for Milton Keynes South (Iain Stewart), who spoke so eloquently about safety, and I will return to his remarks later.

We welcome the Transport Committee’s first report of the 2012-13 Session. The key question for this whole debate is on the very first page of the Government response. The first sentence under the heading “General” says:

“The Government believes that the current draft of the European Aviation Safety Agency’s…proposals will not lead to a diminution of safety in the UK.”

Well, we have heard from two members of the Committee, who have quoted extensively from personal experience, constituents and BALPA submissions, and made it clear that there were a number of safety concerns about the regulations, and I want to emphasise some of them. Like the previous speakers, I look forward to the Minister’s response, and I seek the reassurance that I am sure he hopes to give us in due course.

Recommendation 1 of the Committee’s report says that the CAA should set

“out its strategy for enforcement and how it will ensure that operators comply”

with their responsibility. In their response, the Government say:

“The CAA will continue to work with EASA on this to ensure that comprehensive guidance material is established”,

adding that once the proposals have been finalised, there will be seminars and the rest of it. I would be grateful if the Minister could say a little more about the timing and about what progress is likely.

Recommendation 2 says the Government should follow up

“the CAA’s concerns about the frequency with which the maximum flight duty period can be exceeded during a scheduled seasonal period.”

The report is referring to the concerns of the CAA, not BALPA or the Transport Committee, and those concerns reflect the evidence the Committee received. The Government’s response says that they

“will raise this issue during EU discussions on this matter.”

That goes back to the point raised by the Chairman of the Committee, who asked about last week’s Transport Council, the UK Government’s response and, generally, where we are going on this issue.

Recommendation 3 calls

“on the CAA to investigate potential under-reporting of pilot fatigue”

so that there can be confidence in the procedures and structures put in place to protect the industry against bad practice. The Government response says:

“The Government accepts the recommendation to investigate the potential under-reporting of pilot fatigue and notes that this is already under consideration by the CAA.”

Again, could the Minister elaborate a little on how that will be undertaken?

As has been mentioned, recommendation 4 covers long-haul flights and oversight. Again, the Committee quotes the CAA as having expressed reservations about the proposed flight duty at night. My hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) gave a good explanation of the concerns that have been expressed, given that the scientific evidence submitted to the European Aviation Safety Agency makes it absolutely clear that the 11-hour flight duty period at night is too long. The Committee recommends

“that the Government press EASA for a lower limit”.

The secondary question in respect of whether that was going to be done—I will perhaps come back to this a little later—is about the weight given to scientific evidence. My hon. Friend said that the Committee had spoken to the scientists, and as the report goes on to say, the Minister said that their evidence was part of the information used. The question asked is: what is the balance of objectivity? How much weight is given to the scientific evidence? How much weight is given to other submissions and where does the balance lie in terms of the Government arriving at their conclusions?

In their response to recommendation 4, the Government state that additional requirements will be included in the final draft of the impending rules. I am not sure whether that is covered by the Minister’s saying that that is misinformation and that there are not going to be any additional requirements.

Recommendation 6 states that information provided on “commander’s discretion” should be collated and made publicly available. The Government do not believe that publication of a single figure on discretion usage or even an operator’s average discretion usage would provide any safety benefit. I must question the logic of that on the basis that not publishing the data looks as though there is something to hide. Publishing the data, even though it is only a single piece of evidence, gives the safety community, the Transport Committee and others the opportunity to look at it and say, “Is it a single figure? Is it insignificant, or is it a single figure tip of an iceberg? Is there a lot more to this, and do we need to have a look at it?”

The Government’s response states that the CAA will review what information can be published without compromising the integrity of the reporting systems and how best it can be presented to ensure that it is intelligible to the public. I am not sure whether that demeans the public’s intelligence in terms of identifying good safety information. Most of the information will be analysed by experts, professionals and organisations such as the Transport Committee. The CAA will be deciding what can and cannot be published, but when it comes to safety, we want the greatest possible transparency so that everybody can have confidence in what is going on. Will the Minister comment on not publishing the data? After all, it is the commander’s discretion—we are talking about the pilots in charge actually making a judgment.

In recommendation 8, the Committee states:

“The Government should press EASA to amend its proposals to give national aviation authorities the power to monitor”.

That goes back to the point raised by my hon. Friend the Member for Liverpool, Riverside that the Government say that there is no discretion—

[Mr Burns]

No additional advice.

[Jim Fitzpatrick]

There will be no additional reporting. But in their response to the Transport Committee report, the Government say that the rules will fully address the Committee’s concern on the issue of oversight.

Finally, in recommendation 9, the Committee states:

“we would have expected scientific advice to have had a more prominent role in the rule-making process.”

That is the point that I was referring to earlier in one of the other recommendations and the question about the balance of consideration given to the scientific evidence, which the Government in their response state is one element of the development of the regulations. But surely scientific evidence would carry greater weight than the comments from an operator? Perhaps the Minister will outline what the balance might be.

Dr Rob Hunter, the head of flight safety for BALPA, has written to us. He has been quoted by hon. Members during the debate. He raises several concerns. I will mention three to reinforce that which has already been referred to. The first is:

“The provision for airlines to extend flying hours rather than it being a Captain's sole decision.”

The second, as mentioned by the hon. Member for Milton Keynes South is:

“A reduction in the number of pilots needed on many long-haul flights, so that, for example, a London to Los Angeles flight which would currently require three pilots would only require two”.

So at least one of them might be awake during the whole flight if 43% or 31% of the others are asleep. The third is:

“An increase of over 30% more time on home standby so that pilots could be landing aircraft after having been awake for over 24 hours.”

I heard the Minister’s comment about the 16-hour time limit. Will he reinforce that in his remarks? BALPA is a representative organisation, but it has a very strong safety record and a high reputation within the industry. I know that the Minister would not in any way impugn that. However, the fact that it is raising these issues obviously means that it has to be taken seriously.

The submission, which I am sure the Minister has seen, goes on to say that there is no increase in the hours, so this is not a protection issue in terms of carrying out more work. This is about the way in which the work is actually structured. I know from my time in the fire service, and we have seen it in other businesses, that sometimes managers think they can reconfigure the hours to get greater productivity or greater efficiency, when all they are really doing is tinkering with the mechanism. There is no increase in hours here. The validity of BALPA’s concerns that this is a safety issue are underscored in that respect.

BALPA gave evidence to the Treasury Committee on waking hours and provided specific examples of possible shifts. I will not repeat them, because they have been referred to by the Chair of the Select Committee and her colleague, the hon. Member for Milton Keynes South, and I have referred to them earlier.

My hon. Friend the Member for Liverpool, Riverside introduced the report and effectively outlined the EU consultation and the role of the UK Government. I have asked the Minister about our role within the EU. My hon. Friend raised the key questions of reporting procedures, the scientific evidence and separate national standards, and she sought reassurance on those issues.

The hon. Member for Milton Keynes South, as we all know, has established a sound profile on the Transport Committee. He has a reputation as a diligent member of that Committee, as demonstrated by his attendance here today, as well as by his speech. He reinforced the safety concerns of his colleague, the Committee Chair, and lucidly contrasted the different outcomes when harmonising EU standards through regulation. In some countries we will see a lowering of standards and in other countries they will be raised. What is the balance for the UK aviation industry and the travelling public? He gave a graphic illustration of what is at stake here, relating the experience of his constituent, who, hopefully, has now safely landed and is on his or her way through the terminal.

In conclusion, nobody here is saying that safety is anywhere other than at the forefront of Government thinking. However, when BALPA and the Transport Committee, two very reputable organisations in their different arenas, raise so many questions about safety, it is the duty of the official Opposition to reinforce that. We look forward to the Minister’s comments and we look for some reassurance. Hopefully, when we get to the end of this process, we will have a safer industry and not the reverse.

--- Later in debate ---

[Mr Burns]

The hon. Lady raises an important issue. I will return to this, but, yes, I do have faith in the CAA, because I do not think it is doing what she suggests. I will return to that when I address a number of questions, because it is an important issue and the hon. Lady and others beyond the House, who will be reading the comments of all hon. Members who have contributed to the debate, need an answer.

[Jim Fitzpatrick]

This is a small point, but it has yet to be stated in our deliberations and the Minister may well put something on the record in due course.

We finished considering the Lords amendments to the Civil Aviation Bill on Tuesday. The Bill transfers massive new responsibilities to the Civil Aviation Authority, with which everyone is quite comfortable. Obviously—I am sure this will happen, but I want the Minister to put it on the record—we want safety to remain paramount in the CAA’s responsibilities. Given that the organisation will grow in numbers, organisational strength and structure, will the safety element of its role grow commensurately?

[Mr Burns]

I am grateful to the hon. Gentleman for giving me the opportunity to reiterate that safety is paramount. Among other things, safety is the responsibility of the CAA. The CAA’s commitment, and the amount it devotes to ensuring that the safety of the aviation industry and airlines in this country is paramount, will continue, unaffected by the legislation.

I hope that reassures the hon. Gentleman. I am not sure whether it has reassured him, because he has not indicated either way, but I hope it does.

--- Later in debate ---

[Jim Fitzpatrick]

I am grateful to the Minister. Obviously, I fully accept his assurances. What was going through my mind was that, notwithstanding those reassurances and the respect I have for the CAA, ultimately we are going to disagree about the conclusions that it has reached on some of the issues we have raised. Unless the Minister can give us further reassurance, there will be question marks in our mind about the length of flight times, the reporting procedures and the balance of evidence. We have to go along with the Government’s objective analysis of all the evidence and with their conclusions because we cannot change them. Obviously, I accept the Minister’s assurances.

[Mr Burns]

I appreciate the hon. Gentleman’s last point. I hope that by the time I sit down I will have completely reassured him. If I were a betting man, I would not place a wager on that, but I will do my best to seek to assuage his concerns as much as possible.

Importantly, different safety standards in different member states can distort the market and could, if some do not provide a robust level of safety, put flight crews and passengers at risk, which we all find unacceptable and are united in wanting to address. The harmonised rules will apply directly to all EU airlines, ensuring that UK citizens flying within Europe enjoy the same high safety standards, regardless of where the airline is based.

The flight time limitation requirements are a package of closely interrelated measures that address a number of issues relating to fatigue, including work load, sleep and body clocks, in several different ways. Work load is addressed through setting limits on the length of duty times. The more intensive the work load in terms of take offs and landings, the lower the limit. Additionally, there are medium and long-term limits on duty hours to prevent cumulative fatigue.

Adequate sleep is ensured by the establishment of minimum rest requirements. Body clock issues are addressed by adjusting duty limits according to the time of day the duty starts. There are additional limits if crews are not acclimatised to the local time zone.

I emphasise again that those requirements and limits are closely interrelated. For their effectiveness to be properly understood, they need to be considered together as a package.

Limits are only one aspect of the new proposal. Airlines will also be required to put in place a number of new management processes, including flight time specification schemes tailored to the type of operation being undertaken. Airlines will have to ensure that schedules are planned so that aircrews can operate safely in all circumstances. All aircrews, rostering staff and their managers will have to undergo regular training in fatigue management. The training programme will have to be approved by the CAA.

Additionally, all airlines will be required under separate legislation to have safety-management systems. Under the EASA proposals, those will have to have a specific fatigue risk-management element in certain circumstances. The CAA will be responsible for approving and monitoring airlines’ safety management systems and flight time specification schemes. Airlines will no longer be able to rely solely on complying with fixed limits on flight times. Instead, they will also need to demonstrate how they are managing crew duties to prevent the risk of fatigue from arising in the first place. This part of the EASA proposal is a major step forward. It is very much in line with UK thinking and with international best practice in this field.

Although some provisions of the EASA proposals are slightly less restrictive than the current UK requirements, others are more restrictive. However, as I have said, the new flight time limitations requirements are designed to work as a package of measures. It does not make sense to draw comparisons with the current UK rules by looking at specific limits in isolation.

The CAA looked carefully at the package of new proposals and considered how the various elements will interact. It has assured me that, in its opinion, the package of measures will not lead to any reduction in safety for UK airlines. Moreover, the new proposals are much more stringent than the current EU rules. EASA has identified more than 30 separate provisions where this is the case. For example, it provides for safety improvements in addressing cumulative fatigue, including through extended recovery rest periods twice a month; increasing rest to compensate for time-zone differences and disruptive schedules; and expanding the application of the most restrictive flight duty period to 12 hours between 5 pm and 5 am. That will lead to a substantial improvement in safety across Europe. It is a good deal for UK passengers in today’s single market in air services. When they use any airline from any EU member state, passengers will be protected by the same high standards as those followed by UK airlines.

This is also a good deal for UK airlines, which will no longer have to compete against other EU airlines that follow less stringent rules. It has been suggested that the UK should consider opting out of some or all of the proposed rules or enhancing them. The hon. Member for Liverpool, Riverside raised the matter, but I have to say that this is not an option. We have checked, because there has been a belief that we could add to the proposals that EASA is bringing forward. However, the European Commission has once again confirmed categorically that no member state could do that. It is the package that is accepted. No member state can add on something if it wishes to and, fortunately, no member state can take away anything, either—that is the other side of the coin—which some member states might be interested in doing.

It is fair to say that the Transport Committee itself concluded that the legislation under which these provisions are made rules out the option of a separate UK regulatory regime or an add-on, but I accept that Committee members will have wondered about that in the light of other information that has been bandied around and been in circulation since the Committee produced its report.

I stress that the proposals are currently only an opinion of the European safety regulator. The European Commission has yet to issue its own legislative proposal and we will reserve our final judgment until we see it. We will not vote in favour of the regulation unless the CAA advises us that it provides an appropriate level of safety.

I should like to say something about the use of scientific evidence in developing the proposals, because several hon. Members have raised this matter. Some have expressed concern about this. During the development of its proposals, EASA reviewed more than 50 scientific studies and employed three independent scientists to review its proposals. It also took into account a large amount of operational data and experience across the EU. EASA provided, in the regulatory impact assessment published alongside its opinion, a detailed assessment of the evidence and advice that it considered.

The CAA gave this House, in its evidence to the Transport Committee in February, a detailed account of the procedures followed and the evidence taken into account by both it and EASA. I will not repeat that evidence here. The important thing is that I am satisfied with the CAA’s assurance—that view is shared by EASA and by the CAA’s counterparts in other member states—that a thorough, transparent process has been followed in this case.

The draft legislation imposes a legal obligation on EASA to review the effectiveness of the rules three years after they have come into force. EASA has also said that it plans to carry out further research in a number of areas, to help improve understanding of crew fatigue. The CAA will work closely with EASA to ensure that this research is carried out effectively.

As I have said, we have yet to see a legislative proposal from the Commission. I repeat, to provide reassurance I hope, that we will reserve our final judgment until the CAA has had the opportunity to review that proposal when it is produced.

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[Mr Burns]

That is helpful, because I was genuinely confused. The advice that I had—I will check it, because it is at such variance with what the hon. Lady has been told—is that we are not aware of any meeting that took place last week. We are aware of an EASA committee meeting in October at which the proposals were discussed, and no member state raised any significant concerns about them. As I said, we will check that, and I will ensure that she is informed of the results.

Both the hon. Lady and the hon. Member for Poplar and Limehouse asked a number of questions arising from the recommendations of the Select Committee report. As both of them will know, the Government have responded to those recommendations. The responses that we gave are still our responses, and we still believe in them. I could go through them one by one, but I suspect that Opposition Members in particular would not want to hear the sound of my voice for quite that long. However, I can confirm, particularly on the questions raised by the hon. Gentleman, that our responses on all issues linked directly to the recommendations of the Select Committee report are as valid today as when we published our response. I hope that is satisfactory.

[Jim Fitzpatrick]

I certainly hear what the Minister is saying. In one or two of my comments, I was acknowledging the Government’s published response while seeking a bit more information. For example, as he says, the new regulations have not been introduced, so I was asking what the time frame was for EASA coming forward, the Commission considering regulations and national consultation. Recognising what the Government have said in response to the Select Committee recommendations, I was seeking elaboration on one or two points, not reiteration. I certainly do not expect the Minister to read into the record the Government’s lengthy responses to the Select Committee recommendations.

[Mr Burns]

The hon. Gentleman is absolutely right. The only downside of not doing so is that people will not have the opportunity to hear once again the wisdom of the Government’s responses to the excellent report by the hon. Lady’s Committee. However, I accept what he says.

The hon. Gentleman talked about the time scale for adoption. As I said, we are waiting for the Commission to introduce legislative proposals. We expect that the regulation adopting the implementing rules will come into force next summer, but will allow a transitional period of two years before the requirements become applicable. That is the best advice I have at the moment. As he will appreciate, it is outside our control, but we assume that EASA and the European Commission intend to stick as closely to that timetable as possible.

The hon. Lady asked how the CAA will tackle the under-reporting of fatigue. I have a considerable amount of sympathy with her point, because I believe that the problem is potentially serious if it is happening on the scale of the poll that she referred to. I do not cast doubts on the poll, but we lack clear evidence of the extent of the problem. However, as we said in our response to the Committee’s recommendation, the CAA is investigating possible under-reporting. I understand from what she said, conversations that I have had with the British Airline Pilots Association and my correspondence on the subject with constituents of mine that in certain cases, there may be an incentive for people to under-report for a variety of reasons. We must change the culture. We need an open and transparent system so that we know exactly what the level of the problem is, if there is one, and how to minimise it. It would seem from the poll that the problem has persisted under the existing rules, never mind what some people say might happen under any changes.

[Jim Fitzpatrick]

The Minister gave a good explanation of the new reporting procedures and fatigue management systems that airlines will have to introduce. That is reassuring, because it is far more structured, but one point of the questions that my hon. Friend the Member for Liverpool, Riverside raised is this. Notwithstanding that the airlines will compile their own data, how does that compare with the confidential reporting systems that exist at the moment, in which pilots can report directly to the CAA? Will those lines of communication still exist? It might be easier for a pilot to send a confidential e-mail or, more likely, a verbal report to the CAA if they want to tell somebody that they are worried. Telling their employer could be entirely different; they might be worried about future employment, promotion prospects and so on.

[Mr Burns]

The hon. Gentleman makes an important point. As he said, an individual would find it easier to report directly to the CAA, so that brings more openness and honesty to the reporting system. He is absolutely right, and that is why the system will continue. Individuals will continue to have the opportunity to make contact through that channel.

The hon. Member for Liverpool, Riverside talked about what happened to flights that reached the maximum limit permitted under the proposals and the need to report to national aviation authorities as part of an open and transparent approach. The new EU implementing rules governing the oversight of operators will come into force later this year. The rules will give national aviation authorities the power and responsibility to monitor all aspects of the application and performance of any flight time limitation.

The Government share the Committee’s concern on the theoretical length of the flight duty period. EASA has acted on the UK’s advice and amended the proposal to limit the combination of stand-by and flight duty periods to a maximum of 16 hours, as I mentioned to the hon. Lady in an intervention during her comments. I hope that goes some way to reassuring her.

To the best of knowledge, and looking at my notes, I think I have covered the main points made by the hon. Members for Liverpool, Riverside and for Poplar and Limehouse, as well as embracing the spirit of the comments made by my hon. Friend the Member for Milton Keynes South. In concluding, I thank the hon. Lady and her colleagues on the Transport Committee for their work and for the care that they took to produce an important and interesting report. We considered it carefully before responding. I have sought to reassure hon. Members about more of the background, the Government’s attitude and what we and the CAA have been doing.

I will conclude on this final point—made for the third time—to ensure that people can be reassured, as I hope they can: we will wait for the publication of the proposals and the CAA’s final recommendations and views before we take any definitive action on this important issue. The Government are as determined today as they were yesterday, and as the previous Government were, to ensure that the safety of passengers and those working on aircraft and in the aviation industry is paramount.

Resolved, That the sitting be now adjourned.— (Mr Simon Burns.)

Air Travel Organisers’ Licensing

Debate between Simon Burns and Jim Fitzpatrick

Thursday 22nd November 2012 Westminster Hall

[Mr Burns]

I am extremely grateful to the hon. Lady, who is being remarkably generous in the circumstances. Although I appreciate her kindness, there is no excuse for what has happened. I should have been here at 1.30, but I do thank her.

It is clear that the hon. Lady’s Committee has taken a keen interest in ATOL reform and I am glad to have the opportunity to discuss it further following the Committee’s report, which was published in April. Since the Committee reported on ATOL reform, significant changes to the scheme have come into effect that have greatly improved its functioning. Reform of the ATOL scheme is necessary to increase consumer clarity, ensure its efficient functioning and, in the longer term, put it on a self-sustaining financial basis.

On 30 April, the same day as the Committee’s report was published, the Civil Aviation (Air Travel Organisers’ Licensing) Regulations 2012 came into force, bringing flight-plus holidays into the scope of the ATOL scheme. A flight-plus holiday is one where the consumer requests to book a flight and accommodation or car hire within a two-day period. That change gives consumers greater clarity and covers many more people. It means that, essentially, if one buys something from a travel agent or tour operator that looks like a package holiday, including a flight, one should be protected by ATOL.

The Civil Aviation Authority has reported that in 2012-13, 2.5 million more holidaymakers can be covered, thanks to that single change. The flight-plus reform has enjoyed broad support from industry, consumer groups and other stakeholders. As the Committee and our analysis have suggested, it is critical that consumers are aware of their coverage. Flight-plus has gone a long way towards clarifying the ATOL scheme and reducing the chances of consumers mistakenly thinking that they are covered, but further to address that, on 1 October, we introduced the ATOL certificate, which is a standardised document given to every person booking an ATOL-covered holiday. It sets out the coverage and says what to do if things go wrong.

The introduction of the ATOL certificate has been widely welcomed by the travel industry and consumer groups alike. On its launch, it received favourable coverage in the travel industry and national press. The travel trade has worked hard to get ready for all the ATOL reforms, and I applaud its efforts to do so. The CAA has also done a very good job in supporting the travel trade in its preparations. Receiving the ATOL certificate shows that holidaymakers and travellers are covered; equally, not receiving an ATOL certificate with a booking indicates that people are not covered. It removes any uncertainty and gives holidaymakers and travellers peace of mind.

To make the changes effective, the holiday-buying public must be aware of them. To that end, the CAA is preparing for a publicity campaign in the next few months to increase awareness of the changes. Fortunately, that will coincide with a significant period when people are preparing for and buying their summer holidays, immediately after Christmas. That is a relevant and appropriate time to start getting the message across.

We are pleased with what we have achieved with the ATOL scheme thus far. It goes a long way towards addressing a number of the points in the report. We intend to address some of the remaining issues in the ATOL scheme using new powers in the Civil Aviation Bill, which completed its progress through Parliament earlier this week and will receive Royal Assent in due course.

[Jim Fitzpatrick]

I hope that the Minister will forgive me if I have missed this point in his comments, and if he has not covered it, perhaps he will do so.

We referred to the fact that the percentage of holidays covered by ATOL is falling because of the different ways in which people book their holidays. The figure was 98% in 1992, but it is down to below 40%. Will the Minister tell us the percentage of holidays covered by the current scheme and the estimate of the number that will be covered following the reforms that he has introduced and the amendments made to the Bill? How much of a gap will there be?

Will the Minister be looking to address that gap, which we need to close, when he undertakes consultation in the spring, although we will never get to 100%, because some people will always book their own holiday and do their own thing? Will he give us those answers at some point?

[Mr Burns]

I am extremely grateful to the hon. Gentleman, and I will certainly come back to him because I also want to deal with a number of points raised by the hon. Member for Liverpool, Riverside.

Before the hon. Gentleman’s valid intervention, I was about to say that we are pleased with the achievements that the ATOL scheme has so far realised. We believe that they go a long way to addressing a number of the points in the report. We intend to address some of the remaining issues in the ATOL scheme using the new powers in the Bill. For example, holidays sold by airlines are not required to be ATOL protected. That creates a regulatory inequality and potential confusion for holidaymakers. It is important to have a consistent regulatory framework for businesses selling holidays, including a flight, as far as is consistent with EU law.

Further, some consumers are not protected when buying a holiday because that holiday was procured on an “agent for the consumer” basis. That means that, rather than selling a holiday to the consumer, the travel agent technically buys one on the consumer’s behalf, as we discussed on Tuesday in the main Chamber, which means that it is outside the scope of the current ATOL scheme. The powers in the Bill will allow that method of avoiding the scheme to be removed.

Some companies might claim that they are merely facilitating a purchase of a flight, but neither buy on the consumer’s behalf nor make available or sell flight accommodation to them. Thus, they might argue that they are outside the scope of the ATOL scheme. That business practice is a potential avoidance approach. The Bill will give my right hon. Friend the Secretary of State powers to require such businesses to hold an ATOL licence.

The Bill is awaiting Royal Assent. Our intention is to create a level competitive playing field and to avoid holidaymakers mistakenly thinking that they have protection when they do not. Holidays including a flight that look like package holidays should be protected like package holidays under the ATOL scheme. These further reforms will go a long way towards ensuring that.

Of course, before taking further steps, we will consult widely. Subject to parliamentary processes, we expect to produce an impact assessment and launch a consultation on draft regulations in 2013. Our decisions will be based on the outcome of that consultation.

--- Later in debate ---

[Jim Fitzpatrick]

I appreciate the statistics that the Minister has just cited. I confess to being a little surprised that, with the advent of flight-plus, the protection goes only to 55% of people travelling abroad on holiday. I am not pointing the finger at anyone and saying that they are responsible for that, but it shows the size of the problem facing the Government, because the other 45% of travellers are the ones the Government will have to pick up the tab for if they need emergency flights to get them home. Those are the people the taxpayer wants to ensure are paying some insurance cover for themselves.

[Mr Burns]

I can understand the hon. Gentleman’s point. I think, though, that, up to a point the relatively small increase in the coverage reflects the fact that the number of people who buy a package holiday in the conventional sense is far greater than the number of people who will buy a flight-plus plan. I think that that is one of the main reasons for the relatively small increase in the percentage.

On ATOL and our proposals, our aim—from the actions that we have already taken and those that will flow from the Civil Aviation Bill—is to provide clarity about coverage rather than to protect everyone. The ATOL certificate will help to show consumers when they are or are not covered. They can then decide what level of protection they purchase through insurance or by paying by credit card, which is an element of the protection in the scheme. The scheme will give greater clarity to individuals before they decide what to purchase.

[Jim Fitzpatrick]

One point referred to earlier is the consumer’s awareness of whether what they purchase is ATOL-protected. That is a huge issue, because the more that people realise they are uninsured or unprotected, the more likely they are to think about that and to decide that it is worth the £2.50, as it currently is, to protect their family and themselves against anything that might happen, and with which they may not be familiar.

The Minister may not be able to respond on this now, but in due course, when the CAA launches the extended scheme, will it seek the biggest possible buy-in, particularly from the companies that offer protection, to have as much publicity as possible? That would raise the awareness of consumers, and allow companies engaged in the scheme to point the finger at those that are not, and say to people, “If you go with them, you are not covered; if you come with us, you are.”

[Mr Burns]

The hon. Gentleman makes an extremely valid point. For any scheme, a crucial element, apart from its effectiveness, is people’s understanding and knowledge of what they may—or, more importantly, may not—have protection against.

I have every confidence that companies, whether tour operators or airlines, will do all they can to make potential customers aware that they are covered by the scheme, because that is a positive selling point for customers and gives them peace of mind. However, as I said earlier, the CAA will also publicise the scheme proactively to ensure that people are generally aware of their protections if they make purchases from those covered by the scheme or from those who, in due course, will be brought within its ambit through our use of the powers contained in the Civil Aviation Bill.

It will become part of people’s mindset that the protection exists, and they will want to know whether they are protected because of the possible implications if they are not. This is slightly off the subject, so I will keep the comments brief, but that is like people going abroad under their own initiative, who may not get the health card for the reciprocal health arrangements in Europe if they travel there, or private health insurance if they travel further afield—to the United States or wherever—although, if they are taken ill or have an accident and need medical treatment, they will face catastrophic bills that could, for instance, completely change their family’s financial position.

The more publicity there is and the more that people are aware of what the situation is and what protections they have, the more the consumer will be interested and concerned to find out exactly what they are buying.

[Mr Burns]

I am grateful to the hon. Lady for that intervention, because it raises an important issue. As I said earlier, we expect the campaign to be launched by the CAA immediately after Christmas. That is when many people consider purchasing holidays for the summer, so it will be relevant at that time. It will seek to make people aware not only of the ATOL scheme—for those who are not aware of it, and I fear that many are not or do not fully understand what it is—but of the changes and improvements made during this year. It will also provide clarity, so that the message gets across to those who are purchasing a holiday, flights or whatever, that as well as looking for value for money and so on, they should check whether their purchase is ATOL-protected and what that protection means.

[Jim Fitzpatrick]

I was going to ask the Minister another question but, if I may, I will ask him a supplementary to the one from my hon. Friend the Member for Liverpool, Riverside.

The Minister has said that the CAA is looking to start advertising in the new year. We all know that summer holidays start being advertised on Boxing day. That is the sort of time when people are indoors and when those who work have a few days off, and they will be tempted by the adverts on the TV. That is the time for the industry to advertise. My hon. Friend asked whether the CAA will be engaged with the industry. An imprimatur on adverts—that they are CAA-approved—might be the way to co-ordinate the publicity campaign between the industry, which will have greater buy-in from the customer, and the CAA, which might have their future bills reduced.

I wanted to ask about the Minister’s earlier comment on people not taking out private health insurance, for example, when they go to the United States. Most people know that if anything happens to them there, they face a massive health bill, and I think that most people therefore take out private insurance. Are there any figures for the comparison between the number of those who travel to such difficult places and the 50% to 55%, who the Minister says are ATOL-protected against the collapse of their airline?

[Mr Burns]

On the last point, to the best of my knowledge, there are no figures, and I suspect that, by their nature, it would be difficult to find any accurate figures. However, there is one benefit. The hon. Gentleman talks about the north Atlantic route, on which the two main carriers are British Airways and Virgin. At the moment, they have both voluntarily signed up, so their passengers have the protections. They have done that simply because they want to give such protection to their customers, and I pay tribute to them for doing so voluntarily.

As the hon. Gentleman rightly says, the start of the advertising campaign is intended to coincide with the Boxing day bank holiday. He and I are familiar with the huge number of adverts that traditionally emanate immediately after breakfast on that day.

On whether the CAA will consult the industry, I have no doubt that it will. The CAA wants a focused system of advertising that gets across the message. It is open, as the Government are, to views, opinions and recommendations that will help it come up with the most informative and best advertising, and with maximum coverage for their message.

I am not sure that I altogether have the same faith as the hon. Gentleman in human nature. Although, to the best of my knowledge, no figures can prove or disprove this, I suspect that significantly more people do not bother to get health insurance to go across the Atlantic than either of us might think, particularly those who go for only a short period and try to wing it, believing that nothing will happen to them. However, that is a slightly different point.

Let me now move on to the European angle that the report covered. The Committee called for a clearer distinction between the consumer protection and the repatriation functions of ATOL. Much depends, however, on what happens at the European level with the planned reforms of the package travel directive. The ATOL scheme implements in part the PTD requirement for insolvency protection for consumers. We expect the Commission to announce its reform proposals in spring 2013, and the Government will consult on what position the UK should take. The form of the Commission’s proposals will help determine how we implement further changes to the ATOL scheme, so we will not consult on the new ATOL regulations until the Commission has announced its proposals, because, as both the hon. Lady and the hon. Member for Poplar and Limehouse will accept, it would be rather pointless to put the cart before the horse.

The scheme is financed by the air travel trust fund. For historic reasons, the ATTF has a deficit and requires a commercial borrowing facility, backed by my Department, of up to £20 million. The introduction of the ATOL protection contribution and the increased number of protected passengers have, thanks to our recent reforms, brought more money into the fund, and the deficit now is on track to being eliminated in the next year or so. That presents an opportunity to reform the finances of the ATOL scheme.

The Government will consider broader changes to the scheme and invite comments on its funding and management to ensure its continued effectiveness. Our aim is to ensure that the scheme is equitable for consumers, the travel industry and the taxpayer.

The hon. Lady raised a number of matters during her contribution. On some, for the reasons that she is aware of and that I am acutely aware of, I will have to write to her to give her the answers. She asked whether airlines and tour operators based in other countries will be covered by the scheme. All sales of package holidays in the EU are covered by the protections in the PTD, but under EU law we cannot require airlines or tour operators established in a European economic area state, other than in the UK, to have an ATOL licence to protect sales of flight plus holidays. That is why we want to examine the Commission’s proposed reforms to the PTD before consulting on any new ATOL regulations, as that might extend protection to all or some flight- plus type holidays. We want to understand the impact on UK airlines and other businesses as part of that consultation, and, as I say, we will engage in that once the Commission has published its proposals.

The hon. Lady also asked about the discussions on travel insurance between the EU and the Government. All I can say is that they are ongoing. The most appropriate time to discuss them is within the whole consultation process on the PTD in due course next year.

In conclusion, as might be clear by now, ATOL reform is not a simple process, but at each step of the way, the Government have acted to create an effective and financially self-sustaining scheme. To ensure effective protection for travellers and holidaymakers, the Government have increased the extent of coverage, improved consumer clarity and moved to bring more holidays into the scope of the ATOL scheme. We shall keep the principle of effective protection in mind as we consider further changes to the ATOL scheme in the near future.

Once again, I thank the Transport Committee for its constructive comments and I am glad to have had the opportunity to debate this important issue. Again, I offer my sincere and deepest apologies to the members of the Committee for the position that I put them in at the beginning of the debate.

Civil Aviation Bill

Debate between Simon Burns and Jim Fitzpatrick

Tuesday 20th November 2012 Commons Chamber

[Mr Burns]

In an increasingly globalised world, air travel is fundamental to the long-term competitiveness of the United Kingdom. However, much of the legislation that governs aviation dates from the 1980s, and it is therefore imperative for the legislative framework to be brought up to date. The Civil Aviation Bill introduces, and makes possible, reform in four key areas: the economic regulation of airports, the legislative framework of the Civil Aviation Authority, the air travel organisers’ licence scheme, and aviation security. The Bill has secured wide support, and we have worked hard to address issues that have raised concern in this House, in another place, or in the industry.

The vast majority of the amendments made since the Bill was last in this House are minor and technical, including Lords amendments 23 to 27, 29 to 36 and 44 to 71. I shall refrain from entering too deeply into the details of those amendments at this stage; suffice it to say that they are predominantly concerned with improving the drafting, clarifying the wording, removing areas of ambiguity, or excluding doubt to ensure that our policy intentions are properly met and delivered in full.

Let me deal briefly with three notable issues on which amendments have been agreed in another place: the imposition of environmental duties on the CAA, the efficiency of the CAA, and the Secretary of State’s powers to make regulations relating to the ATOL scheme.

The environmental impact of aviation has been raised during the Bill’s passage through both Houses, and the Government take it very seriously. In particular, there has been a great deal of focus on giving the CAA additional duties to take account of it. Lords amendments 1 to 4 respond to that concern by giving the CAA a supplementary environmental duty to which it must have regard in performing its airport economic regulation functions. The amendments are intended to make it clear that in conducting those functions, the CAA must have regard to the ability of the regulated airport operator to take reasonable measures to reduce, control or mitigate adverse environmental effects that are generated by the activity of the airport—and aircraft using the airport—to which the licence relates. For example, a reasonable measure could be a cost-effective energy saving investment project, such as the installation of solar-powered lighting in terminal buildings, which would lower the airport’s future energy costs. Environmental issues in this context would include noise, vibration, emissions and the effects of works carried out at the airport. The amendments also provide clarity that reasonable costs of environmental measures undertaken by licence holders may continue to be taken into account in the regulatory settlement, where the measures are in the interests of passengers and owners of cargo and to do with the provision of airport operation services.

We have always been clear that airport operators, whether or not they are subject to economic regulation, should be able to invest in appropriate environmental measures. For example, if an unregulated airport undertakes investment in environmental measures that benefit passengers, the Civil Aviation Authority will be able to look to this and approve a reasonable similar investment in the regulatory settlement at a regulated airport.

The Government do not believe that the absence of an environmental supplementary duty would prevent the CAA from approving environmental investment where that is in passengers’ and cargo owners’ interests. However, following detailed consideration of the matter, the Government decided there is a benefit to making this clear in the Bill. Certainly, the Bill should not be seen as placing a restriction on investment in environmental measures at licensed airports where they benefit passengers and freight owners in the provision of airport operation services.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

I am sure departmental officials will have briefed the Minister that we debated at length in Committee whether an environmental duty should be placed on the CAA in respect of the operation of airports. There was a subsequent debate about the suggestion of the Minister’s predecessor, the right hon. Member for Chipping Barnet (Mrs Villiers), that such a measure would apply only to Heathrow. There is therefore a debate to be had about whether the environmental duty should cover all airports, or just Heathrow. Will the Minister confirm that the proposed CAA environmental duty that the Government have accepted will operate across the entire aviation industry?

[Mr Burns]

The hon. Gentleman is right: I have been extremely well briefed by some excellent civil servants, who have had to play catch-up, because I am a Johnny-come-lately to this debate as a result of the events of 4 September this year. I confirm that this duty will apply not just to Heathrow, but also to the other regulated airports of Gatwick and Stansted. I hope that reassures him.

A regulated airport should not be required to spend on environmental measures where a competitive airport would not do so, because that could create market distortions by placing greater burdens on regulated airports than non-regulated airports. Furthermore, not only have the Government sought to address these concerns through their own amendments, but on Report in another place Opposition amendments to the proposed Government amendments strengthening the wording of this duty were also accepted. I hope the House will recognise that as a genuine effort to reach an agreed position on including appropriate environmental considerations in the Bill. We are confident that we have struck the right balance on the environment, and that the CAA will be better placed than ever before to take environmental matters seriously.

On CAA efficiency, we agree with industry stakeholders that it is important to hold the CAA to account. There are a number of provisions in existing legislation that require the CAA to carry out its activities efficiently. Lords amendment 22 inserts a new clause that will provide for greater transparency and accountability in the CAA’s efficiency measures. Section 21(3) of the Civil Aviation Act 1982 already requires the Secretary of State to lay before each House of Parliament a copy of the CAA’s annual report on its performance and its functions in that accounting year. If Lords amendment 22 is accepted, in future this annual report laid in each House will include an efficiency statement by the CAA and an assessment by the independent auditors of that efficiency statement. The provisions will give the CAA a further incentive to secure value for money and to be as efficient as possible in performing its functions. I am pleased to say that the amendment was welcomed in the other place, where the Opposition commended it, saying:

“This is an excellent proposal, which will guarantee that the efficiency of the CAA will be subject to scrutiny”.—[Official Report, House of Lords, 7 November 2012; Vol. 740, c. 1062.]

I hope that the new clause will enjoy a similar level of support in this House.

Lords amendments 17 to 20 provide the Secretary of State with further powers to close down potential ways around the ATOL scheme. The Secretary of State already has the power to regulate businesses that make available flight accommodation and, under clause 94 of the Bill as introduced, will have the power to regulate businesses acting as an agent for the consumer. However, after the Bill was introduced, the Government and the CAA found possible loopholes that needed to be addressed in further powers.

The first loophole concerns a potential business model whereby a business argues that it is neither making available flight accommodation nor acting for the consumer but is instead merely facilitating making available flight accommodation. That business could then argue that it is not in the scope of either the existing ATOL regulation-making power or those in the Bill as introduced. Lords amendments 17 and 18 address that loophole by giving the Secretary of State powers to include businesses that facilitate making available flight accommodation in the ATOL scheme.

Secondly, amendments 19 and 20 give further necessary clarity to the regulation-making power in instances where goods and services sold alongside flights, such as accommodation or car hire, can be protected under the ATOL scheme. By closing potential avoidance approaches, those four amendments will help the Government meet our stated objectives of providing greater clarity for consumers about what holidays and flights are included in the ATOL scheme as well as a more consistent regulatory framework for businesses.

I have dealt with the main substantive issues covered by the Lords amendments. The remaining amendments, as I alluded to, are the majority and are technical and drafting amendments that clarify issues so that there is no shadow of a doubt about the Bill’s intentions.

[Jim Fitzpatrick]

Like the Minister, we welcome the Bill and the Lords amendments. We supported much of the Bill in Committee and continue to do so today. This is my first opportunity to welcome the new Minister of State to his position and to face him across the Dispatch Box, so I wish him well in his new role. It is probably good to be meeting on relatively friendly terms on our first outing.

We are very pleased that the Government have accepted a number of amendments. In the other place, the noble Earl Attlee said:

“The noble Lord, Lord Davies of Oldham, is very insistent and persuasive. He is clearly convinced that his amendments will improve the Bill. My Bill team manager will probably kill me, but I can accept”.—[Official Report, House of Lords, 7 November 2012; Vol. 740, c. 1003.]

Clearly, I need to take advice and lessons from my noble Friend on how to be insistent and persuasive, because we tabled those amendments, a number of which were accepted in the other place, in Committee and raised the subject again on Third Reading. We were spectacularly unsuccessful in persuading the Government to accept a single amendment, so we obviously need to speak closely to our colleagues in the other place to see how they were able to secure agreement.

--- Later in debate ---

[Jim Fitzpatrick]

rose—

[Mr Burns]

I am beginning to regret giving such a detailed response because it has invited an intervention, to which I am more than happy to give way.

[Jim Fitzpatrick]

I am grateful to the Minister. In the absence of the European emissions trading scheme and of an international agreement in the ICAO, but with ongoing dialogue, will the Government engage with the Committee on Climate Change to look at aviation and, for that matter, shipping emissions, because they are not incorporated in UK targets although people naturally feel that they are significant?

[Mr Burns]

We will engage wherever necessary to seek to reach solutions that are viable and will achieve the objectives set out, provided that they are the right course of action and the correct way forward.

Let me pick up the points made by the hon. Member for Strangford (Jim Shannon) and my hon. Friend the Member for Bury St Edmunds (Mr Ruffley), because I think that I dealt with the matter raised by the hon. Member for Hayes and Harlington (John McDonnell) in my intervention. [Interruption.] Well, I thought I did; I hope that he will be generous so that we can make progress. As the hon. Member for Strangford and my hon. Friend the Member for Bury St Edmunds will know, the context for dealing with the environmental issues surrounding Heathrow, Gatwick and Stansted, for example, are all fully dealt with in the Bill.

I felt at times that the hon. Member for Strangford was going a little further on to the wider issue of hub airport status. I have to say to him, in the nicest possible way, that that is obviously beyond the scope of this Bill. However, I hope that he will take reassurance from the fact that in order to look at the whole area of the future of aviation policy, to meet our commitments and to protect our position as the significant hub airport presence for western Europe, we have set up, under my right hon. Friend the Secretary of State, the Davies inquiry, which will look across the range at the best way forward on aviation policy, the best way to deal with capacity and connectivity issues—