I beg to move, That the Bill be now read a Second time.
A successful aviation sector goes hand in hand with a growing economy;
they are two sides of the same coin. That is why we need to ensure that the regulatory framework for civil aviation in the UK enables the sector to make a full contribution to economic growth, without compromising the high standards consumers rightly expect from the industry. Passengers are the lifeblood of successful aviation, so, above all, the Bill puts the interests of the consumer first, enabling the regulator to address the things that passengers care about most.
The aviation industry in the UK is vital and dynamic, and it has changed dramatically since the current regulatory framework was introduced in the 1980s. In many areas, competition has flourished and passengers have benefited, but while the industry has innovated and diversified, much of its regulatory framework has remained fixed and inflexible. There is compelling evidence that the current regulatory regime is distorting competition between airlines and needs to be reformed. When competition is distorted, the people who suffer are the consumers and customers—the 211 million passengers who travel by air each year and the freight customers who rely on aviation to transport their goods quickly and efficiently and make reliable connections with global markets.
We need only recall the scenes at airports closed by bad weather last winter to be reminded just how much people can suffer when air travel lets them down. The current regulatory regime proved itself a blunt and ineffective tool when it came to dealing with the issues that arose last winter—and we need to put that right.
With our independent Civil Aviation Authority we already have a world-class expert regulator with a first-class track record on safety, so the aim of this Bill is to give more responsibility to the CAA and to provide a better regulatory framework that would enable it to introduce more flexible and proportionate regulation and to take timely action on the issues that matter to passengers.
The Bill will devolve more responsibility to the specialist regulator for aviation, and will remove regulatory functions and unnecessary intervention by Government. It will also ensure that the CAA operates in a transparent and accountable manner, so that when appropriate it can carefully weigh up the costs and benefits of regulation as an integral part of the decision-making process. As a result, future regulatory intervention will be directed only at areas in which it is strictly necessary. For the first time, the regulator will be allowed to give the public reliable information about the sector’s performance and its environmental impacts, and about measures taken to address them. Moreover—this will be important as we work to reduce the deficit—the Bill will substantially reduce taxpayer funding for the regulation of aviation. It surely makes sense for the costs of regulation to be met by the sector itself.
The Bill focuses on three key areas: reform of the economic regulation of airports, a range of measures giving the CAA a role in aviation security and in the reform of its own regulatory framework, and reform of the air travel organisers’ licensing scheme to improve the protection of passengers. I will explain each of those in turn.
Let me begin with the importance of competition and the economic regulation of airports, a vital area that accounts for two thirds of the clauses in the Bill. Most airports up and down this country are subject to effective competition and do not need economic regulation, but for the small number with substantial market power, economic regulation is vital to defend consumers’ interests.
The case for reforming airport economic regulation is compelling. Few people would claim that the current regime, which, after all, was designed 25 years ago, is giving passengers the quality of service that they deserve. The industry and the regulator have urged change as well, and three years ago the Competition Commission concluded that the legislative framework distorted competition between airlines by adversely affecting the level, specification and timing of investment at airports and the service that passengers receive.
Does the Secretary of State think that the takeover of British Midland International by the British Airports Authority will increase competition in the provision of air services to Scotland? What will the Government do to ensure that slots at Heathrow will be protected for the purpose of transport between Scotland and the rest of the United Kingdom?
The hon. Gentleman is right to raise an issue that we also consider important. BAA also wants to ensure that it remains competitive, with connections to new markets, and that is the balance that we want to be struck. I know that the subject was raised last week at Prime Minister’s Question Time, and I know that the Prime Minister takes careful note of such matters. The hon. Gentleman will be aware of the work that the Government did to help ensure that we kept the connection between Northern Ireland and Newark airport in New York. We are strongly committed to ensuring that we have the connections between airports and across the country that our economy needs to be successful.
Part 1 of the Bill replaces the current framework for the economic regulation of airports with a flexible, modern regime designed to put consumers first. The current “one size fits all” system of economic regulation is rigidly focused on a five-year price control regime. The Bill replaces that with a flexible licensing regime which can be directed at areas where regulation adds real value, and which will allow the CAA to reduce or remove unnecessary regulation. The CAA will have the power to incentivise and improve airport resilience, and to take more speedy action to tackle poor performance. When competition in the market grows, airports will be removed from regulation when that is in passengers’ interests.
I understand the importance of clear and certain decision-making to the ability of businesses to make long-term investments in our transport infrastructure, particularly when billons of pounds of investment are at stake. Independent economic regulation ensures that there is no political interference, which is why it is such a common feature of modern economic regulatory regimes. The Bill will remove the Secretary of State’s role in deciding which airports are regulated and will give that responsibility to the independent CAA, which will need to make decisions based solely on the need to regulate and to protect the interests of consumers.
The hon. Gentleman correctly points out that exclusion and I will address his point shortly. When Sir Joseph Pilling reviewed that matter in 2008 he concluded that the current approach was appropriate.
Importantly, the CAA’s decisions will become more accountable because the Bill will provide greater access to challenge regulatory decisions. As the CAA discharges its responsibilities, it is essential that its decisions are guided by the needs of customers. Therefore, clause 1 establishes for the first time a single, clear, primary duty on the CAA to further the interests of consumers—all passengers and owners of air freight both now and in the future—and, wherever possible, to do that by promoting competition.
Some airlines have argued that the CAA’s duty should be extended to airlines as users of airports, alongside passengers. The airlines are important of course, but I am in no doubt that if conflicts of interest arise between airlines and passengers, the regulator must be squarely on the consumer’s side. To protect consumers at all airports, the Bill gives the CAA powers to enforce competition law concurrently with the Office of Fair Trading in the airport services sector.
The Secretary of State makes a valid point about what should happen if a conflict of interests were to arise between passengers and airlines. However, can we not address this issue by stating in the Bill that the CAA’s prime obligation is to passengers and that the airlines are specifically a secondary priority?
I do not think we need to go that far. As I have said, the Bill’s key purpose is to provide clarity on what the CAA must focus on primarily, which is consumers. It is important to provide that clarity.
The Secretary of State rightly points out that consumers’ interests can be protected by promoting competition and thereby giving passengers greater choice, but how does the Bill address situations that cannot be dealt with by more competition, such as passengers facing long queues to get on and off planes? In the short term, that will not be addressed by competition, so how might the Bill help in such respects?
The Bill cannot deliver absolutely everything in respect of the aviation industry. It will, however, deliver a key element of the regulatory framework that will sit alongside how the industry operates. Competition is working. We need only consider the investment that both Heathrow and Gatwick are putting into winter resilience to see that passengers will make a choice between those two airports based on which one they believe they can rely on. As a result, we are seeing competition lead to far more investment on that side of airport operations. I have seen that development for myself, and I greatly welcome it. Providing the CAA with these new powers will promote effective competition by enabling the CAA to make use of its specialist knowledge and to co-ordinate its use of economic regulation and general competition powers.
Turning to modernising the regulators’ wider role, part 2 of the Bill includes changes to how the CAA operates by improving transparency and accountability, removing unnecessary Government funding and involvement and cutting red tape. Transparent information is of huge benefit to the public. It gives all of us as consumers the means, if we want to use them, to compare different services on offer to us and to judge for ourselves which we want to buy. In keeping with this approach, clauses 83 and 84 introduce two new information duties for the aviation regulator, to serve the interests both of consumers and those affected by air travel.
The CAA would arrange for consumer information to be published to help passengers and freight users make more informed choices about what is on offer, while having regard to the principle that the benefits of information should outweigh the cost. Similarly, the CAA would publish information for the public about the environmental effects of civil aviation in the UK, and the measures taken to limit environmental harm. What is more, it would be able to use both those powers to issue advice and guidance to the industry so that it can improve standards of service and operate more sustainably. As we modernise the legislative framework, we are taking the opportunity to give the CAA new freedoms to appoint its own executive directors and to carry out criminal proceedings without recourse to Government. As criminal proceedings can be both slow and costly, the Bill would also enable the Secretary of State to give the CAA powers to enforce existing offences through civil sanctions where they are more proportionate.
The Bill also includes some other measures enabling the disclosure of anonymised medical data about aviation workers who are subject to health checks by the CAA. That would pave the way for valuable medical research into the particular health risks for specialist workers such as flight crew and air traffic controllers.
Let me move on to our proposals to improve the regulation of aviation security. This section of the Bill is relatively short, amounting to just 5 clauses and 2 schedules, but I know the House will rightly consider it carefully. Above everything else, passengers expect the highest levels of safety and security.
For me, keeping people safe and secure when they travel is and will continue to be of key importance. At present, aviation safety is regulated by the CAA while security regulation is carried out by officials in the Department. The CAA has an excellent track record as a safety regulator, as good as any in the world, and it has empowered our airlines and airports to develop safety management systems that keep safety at the heart of their operations, striving for ever safer and more efficient systems. That is why I believe there would be real benefits to bringing the CAA’s impressive specialist expertise to the regulation of aviation security.
In the past, security regulation has been criticised for being too process-driven, too often relying on a tick-box approach. Although those arrangements have kept people safe, too often their inflexibility has caused frustration on the ground at airports. There would be attractive benefits for passengers if we could empower the experts to find the best and most efficient way of maintaining the highest levels of security for air travel. That means more involvement from the experts in aviation operations, which can bring real benefits. Of course, it is essential that the Secretary of State should stay responsible for aviation security policy and for giving security directions, although it also makes sense for the specialist expert regulator to have a role in maintaining and improving aviation security. Consequently, the Bill includes provisions for the CAA to keep under review security directions made by the Secretary of State and for it to provide advice and assistance to the industry and Government. With its track record in handling safety, I believe the CAA will approach those new responsibilities with the rigour they deserve.
We have considered that very closely and it is one reason why these changes will not happen overnight. They will take place over the next two to three years so that we can ensure we get the right staff transferred over with the right expertise. As my hon. Friend points out, we have a wealth of security expertise within the Department and across Government and that will still be there for us to draw on within the Department for Transport. I am assured of that.
Is the right hon. Lady at all concerned that the division of responsibilities will create new interfaces that might cause delay and problems in the swift implementation of policy?
That is a very fair question and it is one that I have considered carefully, too. I do not believe that it will cause a problem at all; in fact, it will enhance the security approach that we are able to take. It will mean a far more ongoing and rigorous approach to security that will manage to combine the highest standards of security and safety at airports while delivering a more streamlined approach for passengers on the ground. That is better for everybody.
Clause 82 makes provision for the transfer to the Civil Aviation Authority of rights, powers, duties and liabilities as the Secretary of State considers appropriate. That will allow us to transfer to the CAA the experienced staff who carry out the regulatory compliance and vetting functions currently carried out by civil servants in my Department. That will not only devolve more responsibility to the CAA but will have the further advantage of bringing the “user pays” principle to aviation security. It is not right or fair that the taxpayer currently subsidises the cost of aviation by paying for its regulation. At a time when our overriding priority is to reduce the inherited debt and when difficult choices are being made about funding priorities it is right that the cost of regulatory compliance should be met by the industry that benefits from it and not by the taxpayer.
Yes, we have considered that and we are very happy that we will continue to strike the appropriate balance in our internal departmental expertise on security in all those areas. That is absolutely vital and we will not compromise on it in any way. We seek to have a more proportionate and smart approach to ensuring that we maintain the very highest standards of security and safety in our airports.
The final area of the regulatory framework that the Bill seeks to reform is the regulations covering the air travel organisers’ licensing scheme, or ATOL as it is known to millions of people each year. Those people have the peace of mind that comes from knowing that their package holiday is financially protected and that they will not be left stranded if a travel company becomes insolvent. Since the scheme was set up the holiday market has diversified, partly due to the innovations that internet booking has allowed. As a result, the holiday industry has told us that it is no longer clear to consumers whether their holiday has the protection of ATOL. Clause 94 will allow us to make regulations to improve clarity for the consumer by adding more flight-based holidays into the ATOL scheme, including holidays sold by airlines. That will mean that businesses selling holidays that include a flight should have a more coherent and consistent regulatory framework in which to operate.
I refer hon. Members to my declaration in the Register of Members’ Financial Interests. This area is very important because it is not clear to consumers at the moment whether they are protected or not, with some people on a flight being covered while others on the same flight are not. I do not think the Government are going far enough in that they are not going to say that all people on all flights are covered, but why not?
No doubt my hon. Friend will want to return to this issue in Committee, but I think that our proposals are measured and will mean a real step forward in the number of consumers that ATOL can protect, while also making ATOL more financially sustainable in the longer term, which is important. The clauses that relate to the reform of ATOL are long overdue and are welcome. I appreciate that he might want them to go further and I look forward to having that debate in Committee because this is an incredibly important aspect of the Bill for people up and down the country who want to be able to book their holiday knowing that it has the protection they want behind it.
In conclusion, the Bill brings together the Government’s commitment to having a successful and sustainable aviation sector with our agenda on regulation. It will allow the CAA to modernise the way it regulates, bring a stronger consumer focus to its activities and improve transparency and accountability. It will also create a stable environment for investment in airports and will allow the UK aviation sector to continue to thrive and develop. I commend the Bill to the House.
Let me begin by wishing the aviation Minister, Mrs Villiers, well. Opposition Members were very sorry to hear of her accident and we wish her a speedy recovery from her injuries and from the surgery she is undergoing.
The Civil Aviation Bill started its life under the previous Administration and we were pleased, as was the industry, to see it included in the Queen’s Speech after the election. We will vote for the Bill’s Second Reading today and the Government will, in principle, have our continued support, subject to the scrutiny that this legislation should rightly receive as it progresses through its parliamentary stages and subject to the making of appropriate reassurances and necessary amendments.
The proposals that the Government inherited to reform the framework for airport economic regulation and modernise the CAA’s governance and operations are broadly correct. In a number of areas, we share the view of the Select Committee on Transport that the legislation could be improved, particularly in relation to passengers’ welfare and the sector’s environmental obligations. Should the Government not introduce their own proposals to do so we shall seek to improve the Bill in Committee.
We support the Government’s decision to use the legislation as a vehicle to reform and extend the ATOL scheme to provide greater protection for consumers, reflecting changes to the way in which holidays are sold today, as the Secretary of State set out. The Government have also decided to use the legislation to go beyond the economic regulatory purpose that was originally envisaged in the transfer of responsibilities relating to aviation security, which has emerged since the election or, more specifically, since the Government spending review. However, there are serious concerns about whether it is a desire to cut costs, rather than improve security, that is driving the changes. The Opposition will therefore require much greater assurance from the Government about how the changes will work in practice if we are not to seek to make amendments to the provisions or even to remove them during the Bill’s passage through the House.
The hon. Gentleman is correct, and proper security is always a balance between managing to make sure that the efforts of those who wish to commit terrorist offences on planes are foiled while, at the same time, not wishing to subject consumers and passengers to indignity or extensive delay. It is correct that the Department should have a full understanding of the extent of any threats so that it can make appropriate policy. It is just in those areas that we want to probe a little more in Committee precisely to assess the practical impact of the proposals.
It is unfortunate that the introduction of the Bill and its Second Reading should come so soon after the publication of the draft Bill. Considering that this package of reforms has been in preparation for many years, and given that it was widely believed that its introduction had slipped to the next Session, it is unfortunate that there has been a sudden rush of last-minute enthusiasm to bring it before the House. Consequently, the planned pre-legislative scrutiny, which we supported, has been curtailed. The Transport Committee has done its usual impressive job, but it had just three weeks to take evidence and produce recommendations on the proposals, many of which have been in gestation for six years or more. That meant that the Government have not been able to consider those recommendations in detail and improve the Bill before its introduction. Consequently, we are debating a Bill—and I hope that this is the case—that will doubtless be amended by the Government in Committee, which is a remarkable state of affairs for a measure so long in preparation.
The industry itself has rightly expressed concern about the limited opportunity it was given to engage with officials before the Bill’s introduction in Parliament. BAA, it is fair to say, may be affected more than other player in the industry by the legislation, yet it says that it could only secure a single one-hour meeting with the Department for Transport in the past three months, which falls short of what might be expected for a regulatory Bill of this nature. There will be, at the very least, a suspicion that the hasty introduction of the Bill has less to do with the industry’s needs and more to do with the needs of business managers, who doubtless begged the Secretary of State to let them have something for the Commons to do, because the Government’s legislative programme is bogged down in chaos in the other place.
I have met BAA on a number of occasions since taking on my present role, so I can assure the hon. Lady that there has been plenty of opportunity for BAA to raise any concerns with me.
There are three key reforms in the Bill—to economic regulation, to the Civil Aviation Authority itself, and to the transfer of security functions. I want to turn briefly to the wider aviation context within which the reforms will sit. We agree that the current framework for airport economic regulation is outdated and needs reform. It has been clear for some time that the CAA does not have the powers to apply the regulatory regime in a way that best benefits passengers and reduces costs for the industry. We are also dealing with a very different aviation landscape since the introduction of the existing regime, not least because of a major increase in passenger numbers, low-cost airlines, growth in regional airports and changes to ownership required by the Competition Commission. The proposed licensing regime, together with a more flexible and targeted set of regulatory tools, will better enable the CAA to carry out its work, while making its decisions more accountable, and reduce unnecessary regulation.
It is also right that the regulatory regime governing airports be reformed to put passengers at its core. The CAA’s primary duty should be to promote the interests of passengers. That was our intention in developing the reforms, and we are pleased that that approach has been accepted and adopted by the Government. We hope that in Committee the Minister will look carefully at the arguments that have been made and be clearer about how the CAA is to weigh the often differing interests of current versus future air transport users and, as the Select Committee has urged, explain in more convincing detail how the proposed aviation consumer advocacy panel will work in practice and, in particular, how it will identify, represent and promote the interests of passengers and relate to the regulatory process.
The lack of a specific requirement to publish passenger welfare plans is a major omission and should be addressed. It was a key recommendation from the Select Committee following its inquiry into the failure of both Government and industry to prepare and respond adequately to the severe winter weather in December 2010. The appalling experience faced by many passengers, particularly at Heathrow, demonstrated the need for the sector significantly to up its game in relation to passenger welfare. I welcome the new powers that the legislation will give the CAA and the Government and hope that the Secretary of State will issue clear and robust guidance to airport operators on winter resilience. However, we would like to see a specific obligation on the CAA to include in any licence issued a requirement that airports provide support to stranded passengers.
The Government must also ensure that each recommendation of the Quarmby report on the resilience of England’s transport systems in winter is implemented, particularly those relating to the need for early decisive action on whether to cancel services; the supply of de-icing and anti-icing products or road salt; better liaison between airports and local highway authorities over the treatment of appropriate public road networks; and improved access to performance statistics on the management of disruption by airlines and airports.
The former Transport Secretary, Mr Hammond, stood in the snow at Heathrow just over a year ago and pledged to learn the lessons of the chaos passengers faced. I know that because I was standing in the snow freezing alongside him and, more importantly, alongside thousands of stranded passengers. At the time he blamed Heathrow for seriously underestimating the amount of de-icer required and raised the prospect of establishing a central reserve for emergencies, much as exists for road salt. The Government should provide an update on this—they have gone quiet lately—and on the other promises made at the time. As well as the powers that this legislation rightly gives the CAA, the current Secretary of State must ensure that the Government do not take the view that this is all the responsibility of the industry. There is a strategic and economic need, as well as a UK reputational requirement, for the Government to get a grip on winter preparedness. I recall the Minister responsible for aviation telling the media on Boxing day 2010 that the Bill would do just that, but it is not obvious to me that it does it sufficiently well, so we will explore that further.
The CAA should also be required to focus licences on the specific experience of passengers in airports. That means, as the Transport Committee has urged, specifically structuring licences to address key areas of passenger satisfaction, including immigration and baggage handling. We all know that the failures that most give rise to frustration and anger, not to mention ruining business trips and holidays, are delays caused by inadequate management of immigration and poor baggage handling. Of course, although airports should rightly have obligations in this respect, the Government must also recognise that their decisions have an impact that is out of the hands of airport operators, not least the way they resource and manage the UK Border Agency. The speed and scale of the Government’s cuts is putting pressure on the agency. People across the country fear that corners are being cut and border security is being put at risk by the scale of the Government’s border cuts. Some 6,500 staff are going from the agency, with 1,500 going from the UK border force, including more than 800 this year alone. In the past year, we have already had the situation whereby the Home Secretary did not know what changes to border controls she had agreed to, how they were being implemented or how great the security risks were, and relaxing controls was a direct consequence of those staffing reductions.
It is incredible that the Government have overseen a reduction in checks at border control. The public expect proper immigration controls, and passengers expect there to be sufficient staff to prevent massive delays at airports which damage our image and can impact on investment and business competitiveness. We agree that the passenger must be placed at the heart of the regulatory regime, but the Government must do the same as they carry out their responsibilities.
The Government should also consider the airlines’ case that, in the context of airport regulation, they too are customers. Although we agree with the Government that the law should be absolutely clear that the CAA’s primary duty is to passengers, we agree also that there is a case for a secondary duty to airlines, so the Minister should look again at the decision not to include such a duty.
Although it is right that we set out a primary duty on passengers to send a clear signal to the CAA about how it should manage competing interests, it is right also that we set out further duties. In doing so, however, the Government have chosen to omit the reference to environmental obligations which we intended the legislation to include. That is a mistake, so I very much hope that the Minister will reflect on it and think again.
Back in March 2009, the consultation document on economic regulation which the then Secretary of State published proposed that
“the CAA should have an environmental duty with respect to its economic regulatory functions.”
The final report of the Cave review recommended
“a duty on the CAA to protect the environment, subject to guidance on specified environmental matters by the Secretary of State.”
In December 2009, the previous Government published their decision document on economic regulation and concluded that one of the supplementary statutory duties should be
“to have regard to the airport operator’s legal obligations to comply with applicable environmental and planning law.”
When one considers the secondary duties that have been set out, one finds the absence of any environmental obligation to be a clear omission—and a late one: it was included in the press release accompanying the publication of the Bill, just not in the Bill. The CAA will be obliged
“to ensure that licence holders can finance the activities which are subject to the relevant licence obligations; to secure that all reasonable demands for airport services are met; to promote economy and efficiency on the part of licence holders in its provisions of airport services at regulated airports; to have regard to guidance issued by the Secretary of State; to have regard to any international obligation of the UK; to have regard to principles of better regulation.”
All those obligations are of course right, and we support them, but there seems to be no justifiable reason for removing the proposed additional requirement on the CAA in terms of economic regulation: to have regard to the airport operators’ compliance with environmental and planning law. Without that, airports may be reluctant to invest in improving environmental performance, be it noise, vibration, visual disturbance or emissions.
It is not good enough for the Government to say it is obvious that airports must comply with statutory obligations and it does not need re-stating in the Bill. The issue is whether airports feel that they can recover the cost in charges to airlines. The consequence, as the Transport Committee has warned, is:
“Without giving the CAA a supplementary duty on the environment in relation to its economic regulation role, there is some risk that airports may be reluctant to invest in improving environmental performance.”
Is the situation not worse than that? Is there not a danger that specifically removing the reference to environmental planning concern might be taken by some airport operators as a coded message that the Government do not take such issues seriously now?
My hon. Friend makes a good point. There are plenty of people who seek to read coded messages in what the Government do, or do not do, and in how they change their proposals, so in that respect there is a concern that the Government need to address.
If the Government’s green credentials had not already worn so thin, no ulterior motive might have been seen in their decision, but there will be considerable suspicion that it is yet another example of giving into vested interests, coming on top of the Government’s failure to reassert the aviation emissions targets that we set in government, let alone to listen to the calls to look seriously at the UK’s share of international emissions and to include both in the UK’s carbon budgets. When the obligation on other sectors is to reduce carbon emissions by at least 80% by 2050 compared with 1990 levels, the aviation industry has agreed to work towards achieving the lower target of the same reduction but compared with 2005 levels. However, the industry believes that it can achieve the same reduction compared with 2000 levels. On that basis, we believe that the Committee on Climate Change should advise on the case for a tougher target. It is clear that the Bill sends out completely the wrong signal to industry.
The CAA, airport operators, airlines and National Air Traffic Services have a shared responsibility to achieve those goals. In addition to the original proposed duty on environmental and planning law, which has been deleted, there is surely a case for considering the practicality of using this legislation to reaffirm the shared responsibility on meeting emissions targets that have been agreed. That should be explored during the passage of the legislation.
The public should certainly be better informed about the environmental effects, including through emissions and noise, of civil aviation in the UK and about the measures that are being taken to limit the adverse environmental effects. I want to take this opportunity to welcome the CAA’s decision to open a three-month consultation on its environmental role and performance. The chief executive, Andrew Haines, has said that he is determined to work with the sector to help it manage its environmental footprint and realise its potential growth. He is clear that
“unless the sector faces its environmental impact head-on, it will not be allowed to grow.”
He is right to have set the goals to
“contribute to a cleaner and quieter aviation industry, improve airspace design through new operational measures, influence the environment debate and enhance consumer understanding of the environmental impact of flying.”
Will the hon. Lady not concede that airport operators, such as the operator of Gatwick airport in my constituency, have for many years done an awful lot to ensure that there are environmental enhancements, such as through the Gatwick area conservation committee, which has made a positive difference locally?
I do concede that. I do not think that the aviation industry has anything to fear from closer scrutiny of the way in which it deals with these issues. I just want to ensure that this legislation does not send the wrong signals to industry and make it more difficult to do what many operators are starting to do in any event.
In addition to the revision of the statutory purpose of the CAA and its secondary duties, it is right that the Bill aligns the powers of the CAA with those of the Office of Fair Trading. That provides consistency with the approach taken for other regulated industries, including energy, water, telecoms and rail. The Secretary of State will be aware that there are concerns about the impact on competition of the sale of airlines and the slots that transfer ownership as a result. The recently agreed sale of British Midland International by Lufthansa to International Airlines Group has raised considerable worries, particularly in Scotland and Northern Ireland, about the impact on short-haul domestic routes and the price implications for passengers. The Government have to date refused to take those concerns seriously. My hon. Friend Margaret Curran, the shadow Secretary of State for Scotland, and I have referred the sale of BMI to the OFT.
I am grateful to the hon. Lady for raising this issue again, because it is extremely serious. I have concerns not only about the flights into Heathrow but about the onward connectivity of those flights to the rest of the world. Aberdeenshire has a big energy sector and people are travelling onwards. She is right to highlight this issue.
I thank the hon. Lady for her intervention.
There are precedents within the EU of a single company controlling a larger percentage of slots at one airport, but I am sure that the Secretary of State will appreciate that the situation at Heathrow is different because of the capacity issues that significantly restrict the potential for competition. I fully understand and respect BA’s wish to expand its operations, not least to pursue the new long-haul markets from Heathrow that are needed for our economic competitiveness. However, many years before a high-speed rail service becomes a reality between Scotland and London, and Heathrow in particular, we must balance that with the need to maintain the domestic air links on which the Scottish economy depends.
I have two final points on the economic regulatory aspects of the Bill. First, there are concerns that there is no requirement on the CAA to consult on how it intends to prioritise and balance its new duties and discretion. Secondly, the Government must clarify who does and does not have a right of appeal on a decision by the CAA in respect of licence conditions, and how they intend to prevent repeated and unfounded appeals.
On the second major purpose of the legislation, which is to modernise the CAA’s governance, we agree that reform is needed and we support most of the proposed changes. Of course, there are changes that have been made without the need for legislation, such as the creation of a separate chair and chief executive. We do, however, question the decision to remove the requirement for the Treasury to approve the levels of remuneration for non-executive members of the board. Are we not seeing right now the need for greater, not less oversight of remuneration? I suppose that the experience of the past few days has shown that it is doubtful whether the Government would exercise their powers over excessive bonuses even if they retained them, but it might be a good idea to hang on to them.
It is also wrong that the CAA remains outside the remit of the National Audit Office, unlike all other industry regulators. That should be addressed, and there should be an explicit efficiency duty as recommended by the Transport Committee. I hope the Government will agree that it should be relatively straightforward to reach agreement on those issues in Committee. We agree on the outcomes that we want to see achieved through the modernisation, and I look forward to working with Ministers to improve the Bill further in the areas that I have mentioned.
We have much greater concern about the third major area with which the Bill deals, which is the Government’s proposals for a major change in how aviation security in ensured. They have not made the case for the change. It was included in the draft Bill at the last minute and has not been subjected to adequate scrutiny, and enough people across the industry have concerns about the proposals to require the Government to look again at whether they have got them right. We are open to being persuaded, but Ministers have more to do if they wish us to support the proposed changes.
I appreciate that under the Government’s proposals, the Secretary of State will remain responsible for aviation security policy and for making aviation security directions under the Aviation Security Act 1982. That is well and good and correct, but by enabling the transfer of a potentially very wide range of security functions to the CAA, the Government risk fragmenting an approach that has served us well. Let us not forget that the current arrangements, including the now abolished specialist unit Transec, arose from the tragedy of Lockerbie. We should not move lightly away from an approach that had such a tragic loss of life as its reason for existing, particularly not when the clearly stated purpose of the proposals is, to quote the Department’s impact assessment, to
“Reduce the costs to the taxpayer in line with SR”— spending review—
“commitments by introducing the user pays principle.”
The changes that the Government propose are not minor. For example, they want to pass to the CAA the obligation to make arrangements for carrying out vetting, including those for renewing and withdrawing clearance. The CAA, rather than the Secretary of State, will maintain the list of persons approved for the provision of a particular aviation security service.
There are also concerns about the ability to retain staff. The Bill will allow for the transfer from the Department for Transport to the CAA of about 85 aviation security posts currently responsible for the review and upkeep of aviation security regulations, and for the monitoring and enforcement of the industry’s compliance with security requirements. The Transport Committee’s recommendations on that matter should be considered carefully, including the permitting of secondments rather than transfers to avoid the loss of experienced staff and expertise.
The Committee’s recommendation to delay the change, to bring it in line with the introduction of the outcomes-focused risk-based security regime, also makes sense. The airlines are concerned about the lack of transparency of the likely costs of the changes, and therefore about the impact on passengers, on to whom costs will be passed. There is real concern that although the costs of the transfer will materialise, the supposed reduction in obligations as a result of the move to the outcomes-focused regime will not.
Those concerns are particularly acute for smaller regional airports, which play a vital role in their local economies and will not easily sustain major additional cost burdens. The Government need to reassure the sector that they will retain an active engagement in operational matters, enabling airports to take the lead in the knowledge that they will have ministerial backing.
It is clear that there are growing tensions between the UK Government and the EU over security issues such as the permitting of full-body scanners without a right to select an alternative form of search. We have strongly supported the Government’s stance on that, although it is now important that Ministers work closely with their European partners to ensure a common, and preferably similarly robust, approach to security across the EU. The approach taken in the Bill risks leaving the industry without a clear lead or protection from Government on the decisions that it takes, be they on trials of new forms of security screening or other matters.
According to the explanatory notes, the Government’s Regulatory Policy Committee estimates that
“the impact on public expenditure gives expected savings in the order of £5.4m per annum.”
It is far from clear how the cost savings to the Department from the abolition of the security function can be secured without putting at risk high levels of aviation security or imposing a burden that will ultimately fall on passengers.
The Regulatory Policy Committee also identified transitional costs of transferring the security function of approximately £1.5 million, as well as ongoing costs beyond the transition, not least because
“the CAA will be responsible for upgrading systems in perpetuity”.
It is therefore
“likely that the CAA may borrow from the National Loans Fund to fund IT improvements.”
I appreciate that the Secretary of State inherited her predecessor’s plans to meet the 15% cut in the Department for Transport budget. She has shown a willingness to look again at some of his rasher decisions, and I hope that she does so in respect of that major change to aviation security, for which the case has not yet been made.
I urge the Government to think again about one other aspect of their aviation policy. An announcement is expected in the Budget—if not before—on the sale of their remaining stake in NATS. Recent media reports have suggested that DFS, Germany’s state-owned air traffic service, has been in talks with the Government. Yet again, just as with our rail industry, the Government’s ideological obsession turns out to be not so much opposition to a public stake in delivering transport services as an opposition to a British public stake in doing so. Just as the Dutch national railway will this week begin to operate the East Anglia franchise, with Deutsche Bahn and SNCF snapping at its heals on other parts of the network, our airspace might be controlled, in effect, by the German Government.
There are several very serious reasons why the Government would be wrong to withdraw completely from NATS. The current shared-ownership model between Government and airlines works well. The airline group has opposed an outright sale of the Government’s stake and raised the prospect of the industry walking away. The airlines are best placed to ensure the success that NATS has become, not least because of their healthy self-interest in safety and industrial relations. There are concerns about the impact of a foreign power taking a stake in NATS on the integration of civilian and military operations, which would put at risk the operational benefits of that integrated approach. There are also questions about the Government’s ability to play a leading role in air traffic policy at EU level if they become the only Government to have given up their stake in their air traffic service.
I am well aware that the Labour Government sold a stake in NATS. I am talking about the Secretary of State’s predecessor’s proposal to sell all of it. It is a question of the Government retaining a stake. If she is willing to stand up and confirm that the Government will retain a stake, I would be happy to give way to her. She shakes her head.
That is indeed the worry. NATS does not cost the taxpayer a penny to run—in fact, it pays a dividend to the Government. In June last year, NATS paid a dividend of £42.5 million, and in November announced a further £8.2 million. The Government received a significant share of that as the majority shareholder. Their decision to sell all of NATS would therefore be a short-term, quick-buck decision. Like their approach to aviation security in the Bill, they are placing a narrow focus on deficit reduction ahead of the wider economic and security impact. I hope the Secretary of State ensures that she puts proper pressure on the Chancellor, whom she knows very well, to make a good decision and to retain a stake in NATS.
Finally, although the measures in the Bill are important —they are all concerns for the aviation industry—there is an elephant in the room, because the Bill does not and cannot address the capacity issues facing the industry, particularly in the south-east and the future of our hub status. The Government’s failure to set out a strategy for aviation and the lack of any plan to do so until late in this Parliament is putting jobs and growth at risk. Their call for airports to be “better not bigger” has always been a slogan, not a policy, but even they seem to be waking up to the fact that a blanket ban on growth and new capacity in the south-east makes no sense.
In government, Labour supported the industry’s proposal for a third runway at Heathrow—as the UK’s only hub airport—as the best way to add additional capacity. However, the Opposition have accepted the Government’s decision to cancel the third runway, and it is time to move on and seek an alternative way forward. Our decision can ensure that we do not waste another five years wrangling over that proposal while the industry risks falling behind our EU competitors, and while major airlines simply move more of their operations abroad, where there are no capacity constraints.
I am delighted that the hon. Lady’s party has come to its senses and ruled out the third runway. I hope that she will tell us what her suggestion is, because she has a long track record—such as on high-speed rail—of suggesting things but never quite pinning down an actual idea.
If the hon. Gentleman would wait just a moment, he might hear my suggestion.
Two weeks ago, the Prime Minister was apparently persuaded of the case for a new airport in the Thames estuary, a position that lasted a full 24 hours before the Under-Secretary of State for Transport, Norman Baker slapped him down. Then the papers were briefed that new runways at Gatwick or Stansted were back on the agenda, despite the coalition agreement seemingly ruling that out. British business cannot afford this chaos and confusion continuing until or even beyond the next election. That is why I have made a clear offer to the Secretary of State for us to work together and put aside our differences for the good of the country to see whether we can agree a joint position on how we can meet the capacity issues in light of the decision on Heathrow. We have been disappointed that, three months on, the Government have not responded to that offer.
“Some serious discussions—cross-party discussions—have to take place, because I don’t think anyone in this country wants us to be a republic which is left behind and really nobody wants to trade with.”
Leaving aside why the chair of the Conservative party believes that we are a republic, she is right to agree with us that we need a cross-party approach, and about the consequences of not agreeing a way forward. If the Transport Secretary would like to confirm that she does accept our offer and is willing to begin talks on how we can move forward on this issue together, then I am happy to give way.
Part of the challenge is that the hon. Lady’s party has so many different policies on so many different days, it is difficult to know whom we would be talking with.
Coming from a party that last week had a different policy every day, none of which was in accordance with the majority party’s manifesto or the coalition agreement, it is a bit of a cheek for the Secretary of State to put that point to us.
A successful, thriving aviation sector is crucial for our economic competitiveness. It is vital that industry can plan for the future with certainty, not least to deliver the investment needed to provide the additional capacity required if we are not to fall further behind our EU competitors. I welcome the Government’s decision to bring forward this Bill and take forward the reforms that we began—
I am coming to a conclusion now, so the hon. Gentleman should wait for his own speech—[Hon. Members: “Ah!”] I have given way to him once.
The regulatory regime governing the aviation sector is outdated and inflexible and this Bill will be an important modernisation, enabling the CAA to fulfil its functions in a way that better reflects the industry today, and in a way that can respond to the individual circumstances of our major airports. Putting the passenger at the heart of aviation economic regulation is overdue. I urge the Government to look again at those areas where there is considerable consensus that the Bill could be improved to provide even greater protection to passengers through clearer obligations on airports in respect of their welfare, not least during severe weather.
The Government should also live up to their increasingly hollow claim to be the “greenest Government ever” and place an environmental duty back on the face of the Bill, and give a much clearer steer to the industry by giving their firm backing to—at the very least—the emissions targets we set in government. In addition, Ministers should reflect very carefully on the concerns that have been raised over the proposed transfer of security functions from the Department and ministerial control.
It is one thing for us to agree on a credible regulatory regime for the aviation industry—and I believe that over the course of the passage of this Bill we will be able to agree these issues—but what the industry desperately needs is for us all to agree a credible long-term strategy for the sector, which will last across Parliaments and will not become a political football again at the next general election as it was at the last. So let us work together on the right way, consistent with the need to tackle emissions and the threat of climate change, to provide the capacity that the industry needs.
Order. To accommodate as many Members as possible, a 10-minute limit on Back-Bench contributions has been introduced, but the usual rules apply to interventions, in that injury time will be added on. However, the usual rules will also apply to any maiden speeches that might be made during this Second Reading, which means that no interventions should be allowed.
I am grateful for the opportunity to take part in this important Second Reading. I commend the Government on introducing this much needed piece of legislation in the first Session of this Parliament. I waited with bated breath to find out Labour party policy on the future of aviation in this country. I thought that Maria Eagle was about to announce an Eagle island airport, but it seems we will have to wait a little longer for that. As my right hon. Friend the Secretary of State said in her introductory remarks, it has been more than a quarter of a century since legislation in the area has been properly reviewed. During that quarter of a century, the airline and airport industries have changed massively.
In 1986, when the then British Airports Authority was privatised and became BAA plc, BAA nearly dominated the market in airports—certainly in London, the south-east and Scotland. At the time, the mix of airlines was different. At Gatwick, we now see the orange tailfins of easyJet, the largest operator from that airport and indeed the country’s largest airline. The new terminal 5 at Heathrow airport—I say “new”; it is some years old now—is a hub for British Airways. Virgin Atlantic, headquartered in my constituency, has developed significantly and is now a successful British brand representing the country abroad.
Our airport sector has developed considerably. In 2008, the competition authorities said—rightly, in my view—that BAA needed to divest itself of one of its airports. Gatwick was sold to Global Infrastructure Partners in December 2009. Already, in that short period, there has been significant development at Gatwick airport. I pay tribute to the chief executive of Gatwick airport, Stewart Wingate, and his management team, and to the many thousands of my constituents employed by Gatwick airport and the ancillary industries in the aviation sector locally, for the significant contribution that they have made to transforming the airport over those two short years.
More than £1 billion-worth of investment goes into Gatwick airport. I know that my right hon. Friend the Secretary of State went there recently to witness some of the works. They involve not only upgrades to the fabric of the north and south terminals but the introduction of state-of-the-art security facilities that make passenger travel through the airport more efficient and secure. The investment also includes more than £50 million to upgrade the station at Gatwick. Again, that involves not just the fabric but increased signalling and platform capacity, so that more direct trains can run from the airport to central London, and through London to Bedford and down to the south coast. A lot has happened in the aviation and airport sectors over the past quarter of a century. That has been the experience particularly at my local airport, Gatwick.
In the limited time that I have, I will refer to a few questions and clarifications on some of the Bill’s clauses. Clause 5 discusses competition between different parts of an airport. The Bill makes it possible for an airport terminal to be operated by a different company from the one that operates the runway and taxiway—something that we are more familiar with in countries such as the United States. I welcome the possibility of increased competition, which could improve the passenger experience, but I would be grateful if Ministers could clarify whether the CAA will have a power to force the sale or lease of parts of an airport, or whether that will remain subject to the competition authorities under the Enterprise Act 2002.
As my right hon. Friend said, clause 6, on the so-called “market power test”, outlines a series of tests that must be met if an airport is to be regulated. To determine whether an airport should be regulated, the substantial market power test is to be applied. If an airport is to be so regulated, what would the dominance test be, and would it come under competition law or be decided by the CAA? I would be grateful for clarification.
Clause 12, on the regulation of possible future market power, gives the CAA the power to decide whether regulation is needed in the light of possible future developments at an airport. Again, that power is fine, but will there be any possibility of a review if those events do not take place? It would be strange to regulate for something that does not happen.
I welcome clause 25, on the scope of the right of appeal, because it is important for the airlines that use Gatwick airport and other airports around the country, but I would be interested to know whether there will be any way of preventing vexatious appeals. Furthermore, how rigorous, transparent and fair will the appeals process be?
Clauses 83 and 84, in chapter 2, part 2 of the Bill, deal with information on performance of services at airports. Again, the provision is welcome and will help to enhance the passenger experience as much as possible, but I wonder whether the power of that performance test should be extended to other organisations and agencies operating within an airport. Mention was made earlier of agencies such as the UK Border Agency and of the transparency and efficiency of the UKBA. That point could be applied to other agencies, such as Her Majesty’s Revenue and Customs.
In what little time I have left, I would like to highlight one concern. I broadly welcome the CAA being given these powers—it is the agency best suited to have them—but being an important public body it, too, should be subject to the rigour of the National Audit Office. We are asking the CAA to regulate the performance of others, and it is important that, as a regulator itself, it should face the rigour of scrutiny as well.
I warmly welcome the Bill. It is overdue, and I am grateful to the Government for introducing it so early on. Most importantly, it will improve the passenger experience, but it will also provide for a fair and transparent system for our airport operators and airlines. As was rightly said earlier, as a trading nation we rely on a strong aviation sector, and the Bill does a lot to enhance that.
This is an important Bill. Civil aviation is a vital part of our economy. Regulation must support the industry to operate in the public interest. The call for a new look at regulation has been long standing. Indeed, the Select Committee on Transport in the last Parliament called for a review of the Civil Aviation Authority in November 2006. It has taken a long time to bring this Bill forward.
I am pleased that the Committee had the opportunity for pre-legislative scrutiny, but it was disappointing that the time for consultation was so severely curtailed. Indeed, our response to the draft Bill was published on the morning of the publication of the Bill itself. It is important that the Government should give an assurance that they will consider the points of concern that our report identifies. Our consideration was helped by the evidence of the Minister of State, Mrs Villiers. I regret that she is not able to be here today and wish her a speedy recovery.
I should make it clear at the outset that there was general support for the regulatory aspects of the Bill, in particular the flexible licensing system and the focus on passengers. However, we have concerns, including in areas where there was little or no consultation before the Bill was published. First, there is a need for clarity on the definition of the key part of the Bill, the focus on the passenger’s interest. There needs to be a clearer definition of “users of air transport services”. We recommend that this be clarified to read: “passengers and shippers of cargo, both present and future”. We considered the representations made by airlines, and recommend that the position of airlines should be recognised as a secondary duty.
There was support for light-touch regulation. Licensing conditions and their associated costs must be proportionate to the benefits gained, which means that impact assessments are required. We were told in evidence from the aviation industry that the impact of the Bill on an airport handling 10 million passengers a year could be £200,000 a year, a significant amount in these difficult economic times. The emphasis in the Bill on the needs of passengers is welcome. This requirement must be reflected in the licences and the conditions imposed by the CAA. It is important that the requirement for information on the passenger experience, together with the environmental implications, should be clear, relevant and useable. Costs should relate to benefits.
There are two areas of concern and possible omission. First, passport control and immigration are identified by passengers as areas of key concern, yet they are handled by the UK Border Agency, not the Department for Transport. A way must be found to include those aspects when considering the passenger experience under the Bill. Baggage handling was another area of concern identified by passengers, yet it is often provided by private companies on behalf of airlines. A way must be found to include that, too. We were also concerned about an omission in relation to passenger welfare—in particular, in relation to plans to deal with disruption, such as when adverse weather caused major disruption at Heathrow. Although the CAA has spoken about the need to insist on plans to deal with passenger disruption and look after passengers when disruption occurs, there does not seem to be a requirement for that in the Bill. It is important that that, too, should be looked at. We also questioned witnesses about the aviation consumer advocacy panel, which is due to replace the Air Transport Users Council. It was unclear how that panel, representing the interests of passengers, would work or whether its interests would cover cargo as well as passengers. We need much more clarification on that.
There are two areas where powers were introduced after we were able to consider the Bill in draft form. We have questions about both. First, the ATOL––air travel organiser’s licence—scheme, first introduced in the 1970s, deals with financial protection for consumers who have purchased air package holidays in the event of a company going into insolvency. The Transport Committee has looked at the operation of ATOL, and at its inadequacies, and we have called for greater clarity in the information available to travellers, so that they can be sure whether they are covered by such insurance, and in the extent of the scheme, so that it is clear which passengers are covered. A power to address this is included in the Bill, but we have not yet looked in detail at the Government’s proposals. We hope to remedy that tomorrow, when the Committee will look specifically at the Government’s plans for ATOL and at the industry’s view of them.
I commend the work of the Transport Committee on the Bill. One area of concern is the effect that the changes will have on the industry and on the economy. Will the Committee investigate that element of the proposals? It seems that only the Minister has shown any optimism about economic growth, and I hope that the Select Committee will look again at that subject when it revisits the Bill.
Economic growth is indeed an important area and, while the Minister stated that it was an objective, it was not made clear how the changes would actually operate. So, yes, we would certainly like to look into that matter further.
Another area of concern relates to the proposed changes to responsibility for security in aviation. Transec was set up in 1991, following the Lockerbie disaster. Aviation security is a matter of prime importance, and aviation terrorism remains a magnet for terrorists who wish to inflict mass loss of life as well as economic disruption. It is a matter of concern that changes are being proposed in the area of responsibility for aviation security without a full consultation on how they will work.
It is proposed that the Secretary of State remain responsible for aviation security policy, with the CAA adopting new responsibilities that would include conducting a review of the aviation security directive, giving advice and assistance to the industry on security measures, monitoring and enforcing compliance with EU and domestic requirements, and carrying out national security vetting on individuals. The changes are linked with a change of approach from “direct and inspect” to an outcome-focused, risk-based approach.
These are major, substantial issues. The changes will involve a £5 million a year transfer of payments from the taxpayer to the aviation industry and passengers. Of greater importance, however, is the fact that they will result in divided responsibilities for aviation security. That is a matter of prime concern, and we call on the Department to be more explicit about exactly how the new system will operate, and to reassure passengers that their safety will still be a matter of supreme importance.
I am grateful to my hon. Friend for giving way, and I apologise for missing the first part of her speech. Airport security has suffered from an ongoing problem of a division of funding, with local authorities having to fund their security. Does she accept that airport security should be funded not only adequately but nationally, as it is a national concern? It should not place a burden on local police forces.
As the bill for security mounts, it is important to give full consideration to how it is to be footed. Passenger security is a matter of prime importance, and it needs to be assessed in an international context as well as in national and regional contexts.
The Transport Committee gives its general support to the Bill, but the areas of concern that we have identified are important ones, and I seek an assurance that the Minister will consider them as the Bill proceeds, so that civil aviation can be promoted to benefit the economy and to enhance the passenger experience.
I welcome the Bill, which puts the passenger at the heart of airport regulation and operations. Previously, the airlines were the customer, so the new responsibility to make consideration of the needs of passengers the primary duty is an important step, but it remains important, too, to look at how the Civil Aviation Authority will balance the competing demands of the passengers. Indeed, which passengers carry the most clout? Leisure passengers are by far the biggest users of our airports, so are they the most important because of their volume? Business passengers are lucrative and economically vital to our airports, but they lack the clout of volume, so which passengers will have the most pull?
Business and leisure passengers have competing needs at the airport. One may want a quick and slick process; the other may want more services while waiting to depart. More retail and more seating means less space for security screening: one generates income, one incurs expenditure, so how will the regulator balance those competing demands?
What about the airlines? The passenger may be the end-user of the airport, but the airlines have the operational interface with the airport infrastructure, so a secondary duty to have regard to the airlines is important—indeed, crucial. It remains unclear how the regulator would balance those needs against those of the passenger. For instance, a budget airline might choose to use steps and buses because it is cheaper than using air bridges, but in terms of passenger experience air bridges are far more popular, so which wins out—the passenger or the airline? These competing demands will, I hope, become clearer as the Bill proceeds.
Passenger experience is key, but one aspect of it that the Bill does not address is the experience of inbound passengers at immigration operated by the UK Border Agency. I do not believe that any Bill dealing with passenger experience can choose to ignore that part of the welcome to the UK—for British or external citizens. I appreciate that the UK Border Agency is a Home Office responsibility, while airport regulation is a Department for Transport function, but we need to ensure that customer experience during one section of the journey is not destroyed by poor service at the end of the journey. As the Bill proceeds, it should be possible to ensure that there is no departmental turf war. It is time for the UK Border Agency to become more transparent on behalf of customers and the airlines.
The current UKBA target is to clear 95% of non-European economic area passengers within 45 minutes. The measurement of this target is based on sampling, with queues sampled at various times of the day. The latest figures I saw for the first half of 2011 showed that 95% cleared in 45 minutes, but that is completely misleading for the customer experience. In fact, terminal 4 is by far the worst, with queues averaging more than 45 minutes 17 times a week—about three times a day. If we are to talk about civil aviation and UK passenger experience, it is important that UKBA immigration is brought into the picture.
Transparency must be dealt with as the Bill proceeds. It must be possible to force the UKBA and the unions to address rostering flexibility and the redeployment of staff across terminals to match the passenger volume information provided by the airlines. Airlines provide passenger loading information 48 or 24 hours—sometimes even two weeks—before a landing, yet the UKBA seems incapable of rostering and redeploying people across the terminals appropriately.
Let me move on to deal with the issue of regulated and unregulated airports. The decision rests with the CAA, but the danger is that Heathrow will end up as the only regulated airport, which could place it at a disadvantage, especially if there continue to be more flights to the BRIC economies—Brazil, Russia, India and China—from Frankfurt and Schiphol than from Heathrow. The list of regulated airports needs continuously to reflect competitive forces between airports—not just market influence and not just within the UK markets.
Let me deal with one particular example of customer experience that needs to be looked at as the Bill proceeds. I refer to the impact on security. I think it right for the proposed regime to involve risk-based outcomes, and if risk-based outcomes lead to different screening regimes, we must accept that. The risk profile of a pensioner from East Finchley returning from a package holiday on the Costa Brava is very different from that of someone returning from a terrorist hotspot elsewhere in the world, and that person will need to be screened differently.
We need to work with our European partners to establish a Europe-wide procedure that reflects risk. For example, a passenger leaving New York is heavily screened, and is virtually strip-searched before entering a plane departing from the United States. When that passenger lands at Heathrow, an equally strict security regime applies. We force him virtually to leave the airport and check in again, undergoing all the necessary security procedures. That not only worsens the customer experience of the transit passenger, but lengthens the queues of people seeking to undergo the normal security checks. I realise that there are Schengen rules that need to be dealt with, but I do not believe that it is beyond the wit of the Department for Transport to deal with them.
That is a good point. However, this is about not just staffing but the use of technology and the deployment of staff. Airline representatives tell me that there can be a quiet arrival hall in one terminal and a packed arrival hall in another, but that it is impossible to redeploy staff from one terminal to the other quickly. It is not merely a question of the number of people manning the desks; it is a question of how the UKBA and the unions choose to deploy them.
We must work with our European partners to dovetail changes to Schengen in at least the major European airports, so that those who have already passed through highly screened areas are not forced to be screened again, and we can improve customer service and relieve the pressure on domestic passengers. The customer must be an integral part of civil aviation, and penalties for poor performance are crucial.
The Bill takes a significant step to protect airline-based holidays for the customer, and I welcome it.
Thank you for giving me an opportunity to contribute to the debate, Mr Deputy Speaker. Let me begin by offering my best wishes for the speedy recovery of the Minister of State, Department for Transport, Mrs Villiers. I trust that when she returns to her duties after that speedy recovery, she will use her ministerial car rather more often and her push bike rather less often.
I would never suggest that any Minister should do anything other than what I did when I was a Minister.
Too often in these environmentally conscious days, those in the airline industry are seen as the bad guys. I see a parallel with the car industry and car ownership. Although I do not consider myself to be a class warrior, I observe some class consciousness in the debate. Car ownership was initially seen as a good thing that improved the quality of the lives of those who could afford it, but as cars became cheaper and more ordinary working people could afford to own one, they suddenly became a threat to the environment. I see the same happening with air travel. It was a wonderful thing that made every corner of the globe accessible; but then ordinary people had the damned cheek to afford to use it regularly. Fares were reduced, and suddenly it too was a threat to the environment—what a surprise—rather than the opportunity that it used to be. My own view, which I hope is shared throughout the House, is that a healthy, expanding airline industry is essential to any successful nation, and if the Bill contributes to that end, I welcome it.
Does my hon. Friend agree that it is also important for the aircraft industry to try to produce more environmentally friendly and environmentally efficient aeroplanes, and that the absence of measures to encourage that is regrettable?
I entirely agree, and that is precisely what is happening in the airline industry. It is acutely aware of its responsibilities in this respect, which is why I do not see it as the enemy of the environment.
I note that my party’s Front-Bench team has accepted the Government’s decision not to go ahead with the third runway at Heathrow; indeed, the shadow Secretary of State said that in today’s debate. I trust that that acceptance is based on the parliamentary arithmetic—on the fact that the Members who support the third runway are outnumbered by those who do not—rather than on agreement with the Government’s arguments. The real reason why the Conservative party opposed the third runway when in opposition was votes. It was concerned about seats to the west of London, not the health of the UK economy and the airline industry on which we depend. It was seats that were uppermost in the Conservative party’s mind when it chose to oppose the previous Government’s support for Heathrow.
I entirely agree. In 2009, I spoke twice in support of the Government’s plans to build a third runway, and I did so with jobs and the economy in mind, along with the conviction that the Conservative party’s stance at that time was based on cynical electoral calculation rather than any concern for the environment.
I look forward to hearing the contribution of Kwasi Kwarteng. I believe that, like me, he supports the third runway—although he might wish to correct that. His predecessor in this House also supported it; he courageously stood against his party’s line, and it is a pity that he chose to retire at the last election—although I am, of course, delighted that the current hon. Member for Spelthorne is now a Member of this House.
Pete Wishart referred to the sale of British Midland International and the impact on Scottish air services. Those of us who supported—and still support—Heathrow’s third runway pointed out the blindingly obvious fact that a continued squeeze on capacity at Heathrow would inevitably lead to the withdrawal of domestic slots in favour of more profitable international slots. Earlier this month, BAA chief executive Colin Matthews warned:
“Capacity constraints are damaging the UK economy today when the country can least afford it.”
The Conservatives may have won the vote on the third runway, but they have certainly not won the argument.
May I point out both that our party has also accepted that there will be no third runway at Heathrow and that one way of relieving capacity at
Heathrow would be by shifting some medium-haul and short-haul flights to Luton?
My hon. Friend makes a perfectly understandable constituency point, which I am sure will not have gone unnoticed by the Luton Observer, or whatever his local paper is called.
The provision of security is of great concern to all our constituents. The Government’s policy paper that was published at the same time as the Bill in November claimed that the transfer of aviation security regulations functions would save the taxpayer £24.6 million over 10 years. However, it also stated that the CAA would incur costs of £5 million each year, more than double the level of savings to the Department for Transport. Will the Minister explain either in summing up or in Committee why this transfer of powers appears to result in a net annual cost increase of £2.5 million? If that is because we can expect a more secure airport experience, I welcome the move, but if there are to be higher costs but no improvement in security, I will be concerned, particularly if that extra cost is to be passed on to the travelling public, which I understand is the case.
I welcome this Bill, however, and, without wishing to second-guess the great wisdom of the Labour Whips Office, may I say that I look forward to scrutinising it in Committee in the weeks ahead?
I had prepared some introductory remarks, but in view of the kind comments of Mr Harris, I should perhaps clarify my view on the third runway. In the course of my brief parliamentary career, I have never explicitly come out in favour of the third runway, but those who know me know that I am very partial to it, even though I am not necessarily saying it is the only solution to the aviation capacity problem the country faces. It is, however, vital for the economic future of our country that we solve this problem, especially given the stagnant growth here and in the eurozone. Too often in our post-war history we have adopted short-term policies that have impeded our long-term growth. I hope that our future aviation policies will not impede our future growth, however. The question of aviation capacity in the south-east is very important. We have debated it in the House before, and I have written about it.
I turn now to the Bill itself, which is a slightly different subject. The Bill is to be welcomed for a number of reasons. Most notably, our current civil aviation rules were framed almost three decades ago in the 1980s, and the Bill makes laudable attempts to modernise the regulation of this important industry. The broad thrust of the Bill is to place the customer at the centre of any considerations, and that should be supported. Its measures will establish as the Civil Aviation Authority’s primary focus the promotion of the interests of the passenger, and the entire industry accepts that that should be the case.
There is, however, a wider question, which was raised by the Select Committee, of which I am privileged to be a member. We found in our pre-legislative scrutiny report that the CAA should have as a secondary duty the need to take account of the reasonable interests of the airlines. Some might say that the airlines are very good at looking after themselves as they are quite well financed and have good lobbyists. When addressing aviation issues, however, we must consider all the participants, including airports and airlines as well as passengers. It is a commonly held belief that in the field of competitive air transport the needs of the airlines are closely aligned with those of the passengers, and I agree. As their interests are generally aligned rather than in conflict, we must consider including this secondary duty in the Bill. As this is to a considerable extent a co-operative industry, with airlines, airports and passengers all part of the mix, I strongly support the Bill’s providing for symmetrical rights of appeal, allowing airlines as well as airports to appeal to the Competition Commission.
The Bill’s provisions granting publication duties to the CAA in respect of all airports is also welcome. These days, transparency is essential; customers rightly want it, and airlines should welcome it too. The CAA must promote better information on customer service and environmental effects. No one disputes that the airline industry stands on the front line in the war against carbon emissions, but we must recognise the achievements of the industry in our country: the airline industry in Britain is at the forefront of addressing climate change and environmental protection. In that regard, it is better than any airline industry in any other country. Before we burden our industry with yet more regulation, we must pause to acknowledge its achievements in this field. Naturally, the information about airlines should be comparable and fair, but the move to transparency is certainly a step in the right direction.
I think that the transference of security regulation from the Department for Transport to the CAA is a good thing. Obviously, details will have to be refined and clarified and in many cases things will have to evolve, such as how the structure will work, but it is quite right that a Government who have made decentralisation one of their guiding principles should delegate responsibility in this regard. There is a view that such a move is simply a way of reducing Government costs, but in my view it is quite right so to empower the CAA, although more details will have to be supplied.
Clearly, this is only Second Reading, so I am happy to support the Bill at this stage, but there are wider issues of concern. The CAA is the only major economic regulator for which the National Audit Office has no real remit, as has been mentioned, so there should be an explicit duty for the CAA to act in an efficient manner. That, indeed, was what the Transport Committee found.
More broadly, we must be very careful as regulation in civil aviation throws up the important issue of regulatory costs. If Britain’s aviation industry is to thrive, it is clear that we should not impose too many or too onerous burdens on our businesses that operate in the field. Not only are financial burdens onerous, but a more complex regulatory environment can pose its own problems. The CAA already charges airports a small levy for every arriving passenger, from which source of finance the CAA seeks to undertake its functions. Those charges are set to increase by a third in April 2012 and it is apparent that the provisions in the Bill might add to the costs for airports. Given the increase in air passenger duty, we are in danger of burdening the industry with ever more costs, impeding its ability to drive the economic growth we all keenly anticipate.
This is Second Reading, however, and I am quite happy to support the Government at this stage. I only hope that more details can be thrashed out and considered in Committee and on Report.
Aviation makes a major contribution to the UK economy: the industry makes up £19 billion to £20 billion a year of our gross domestic product and employs 600,000 to 700,000 people. My concern tonight, in the context of this Bill, is the future of regional airports and the connectivity they offer between the regions they serve and the rest of the world.
In 1995, Heathrow served 21 domestic destinations and today it serves only six, only two of which are in England. Durham Tees Valley airport in County Durham, which is in my constituency and has part of its runway in the Stockton North and Stockton South constituencies, was once connected to Heathrow, but in February 2009 British Midland International—bmi—withdrew its service. Durham Tees Valley still has a twice daily flight to Schiphol airport in Amsterdam, and Schiphol and Charles de Gaulle airport in Paris now serve more regional airports in the UK than does Heathrow. I understand that bmi withdrew its slots from Durham Tees Valley to Heathrow as it wanted to use them for more lucrative long-haul flights into the capital, but those slots have yet to be filled. Although it might make sense to have the long-haul flights, there is a problem for connectivity between the regions, economic development and the global economy.
BAA bills Heathrow as our global gateway, but that cannot be true if only two regional airports in England have access to the international links through that airport to the rest of the world. The route to Schiphol from Durham Tees Valley is excellent and serves the Tees valley well.
Let me tell hon. Members something about the Tees valley and why it is so important that we maintain the connectivity between the airport and the rest of the world. It has to do with the size of the industry in the area. The economy of the Tees valley is based on the largest integrated process industrial complex in the UK. It contains industries specialising in petrochemicals, energy, renewable energy, biofuel and steel making. It has the third largest port in the UK and there is also a world-class advanced engineering industry based on the design, construction and maintenance of petrochemical plants, power stations and major infrastructure such as bridges. In addition, the region has the Wilton centre, which is Europe’s largest non-military private sector research centre. The petrochemical industry alone contributes £3.5 billion to the UK economy and 70,000 UK jobs depend on it. On top of that, Hitachi Rail Europe is coming to Newton Aycliffe, which is in my constituency and about 12 miles to the west of the airport. Again, a worldwide industry has been attracted to the region.
Although we have the link to Schiphol, I understand that it does not provide a connection with Australia and that the number of flights that connect to the middle east and north America have reduced in recent years. That is why the routes into Heathrow are so important.
As the bmi slots into Heathrow have yet to be filled, I want the Government to consider some kind of public service obligation so that the slots remain reserved for flights from Durham Tees Valley into Heathrow. I have been pressing for that for several years, even before 2010, when Labour was in power. I would like to have the opportunity to discuss the matter with the Minister, in a meeting if possible, to see whether we can make progress. At the moment, there are about three PSOs in the UK: two in Scotland and one in Wales. In Europe, however, there are about 250, and they keep regional airports connected to international hubs.
That proposal is important for Durham Tees Valley airport, especially today. As we know in the north-east, the airport is being put up for sale by Vancouver Airport Services and Peel Airports Ltd.
My hon. Friend and neighbour has proved to be a great champion for our local airport, which, as he said, is up for sale. Does he agree that when considering the future of Durham Tees Valley airport, as well as taking into account all the points he has made, the directors must seriously consider all offers to secure an expert company that is interested in providing the widest range of services at the airport rather than potential owners who are simply interested in serving the interests of shareholders and are not committed to a long-term viable future for the airport?
My hon. Friend makes a very important point. Transparency is very important when it comes to the sale and I know that the board is meeting every week at the moment to ensure that everything is out in the open. It is vital that whoever takes over the airport ensures it is there for the benefit of all the region, not just the shareholders.
Five or six years ago, approximately 900,000 passengers a year used the airport, but that figure is now down to 180,000 or 190,000. The largest part of those passenger numbers comes from the KLM flights between Durham Tees Valley and Schiphol. It is important that in the sale of the airport we ensure we get someone who will invest in the facility.
The airport has a proud history. It was originally known as Goosepool airport and then as RAF Middleton St George, and it was an RAF Bomber Command station during world war two. The airfield began its life as Royal Air Force Station Goosepool and in 1941 became RAF Middleton St George. The aerodrome opened as a Bomber Command station in that same year and, after the war, it served various squadrons. In 1964 it was sold and became Teesside International airport and, in 2004, it became Durham Tees Valley airport.
I understand that there are several prospective buyers for the facility at Durham Tees Valley, and I want to make sure that, whatever happens, it remains a commercial airport. If that is not to be the case, I want to make sure that it still has an aviation purpose for the north-east, whether as a general aviation facility, a cargo facility or a commercial operation. It is vital that there is a future for some kind of aviation in the Tees valley in whatever guise, because the business is needed—as I have said, it is a massive industrial complex—the tourism is needed, and investment in the facility by whoever buys it is needed.
I want to see an aviation future for Durham Tees Valley because connectivity is very important to an area with such a huge and internationally important industrial base. It is important to keep a commercial airport, but there is also a great need for the wider aviation facility. There has been criticism of the airport in the local press, but now is not the time for criticising Durham Tees Valley—we should be supporting its sale. I want the airport to have a viable aviation future that will benefit the whole region, as it is an important economic asset. The time for criticism, celebration or both is after the sale period, which I understand will be in the next week or so. In the spirit of the cross-party consensus this Bill has secured, I hope that the cross-party consensus among Tees valley MPs will also continue.
Finally, I should like to ask a question about the Bill. I understand that some of the inspections that the CAA currently undertakes will continue but that their cost will be transferred to regional airports and ultimately, I should think, to the customer. To avoid placing unnecessary burdens on regional airports and customers, will the Minister look at this issue again and let us know in today’s debate whether that is case? In an age in which greater connectivity and globalisation are bringing the world closer together, regional airports and the regions they serve deserve to be part of that economic growth, connectivity and globalisation and the economic wealth they can bring.
I do not want to disappoint the House but I am not going to speak in great detail about Cambridge international airport and the wonderful services it provides. Hon. Members can come on some other occasion to hear about that.
Changes to the regulatory framework of civil aviation are long overdue and the changes in the Bill are broadly welcome. The Bill builds on the findings of the 2008 Pilling review, which noted in particular the need to bring the legislative framework up to date. Work on the proposals began under the previous Administration and is being carried forward by the coalition, so the measures clearly have cross-party support, which I welcome. We in the Liberal Democrats particularly welcome the Government’s aspiration to put passengers at the heart of airport operations and the sections of the Bill that help to accomplish that. For too long, transport policy has been based on the top-down, central control of large systems. An effective transport system, whether for airports, trains or anything else, should be passenger-focused and should be viewed from the bottom up, so the new duty on the CAA to focus on end users is extremely welcome. Having said that, I would like to see more in the Bill about environmental considerations and I would be interested to hear whether a duty to consider such issues could be put into clauses 1 and 2, because the environmental performance of the aviation industry matters.
I should also like to know a bit more from Ministers about the measure that puts a duty on the CAA regarding
“the need to secure that all reasonable demands for airport operation services are met”.
I should particularly like to know what is reasonable. Is it reasonable for me to expect there to be flights from Cambridge international airport to any destination I choose? I presume not, but what would be a reasonable expectation?
I welcome the reforms to the air travel organisers’ licensing regime, which was put in place back in 1982. Since then, the way in which we buy holidays, and what those holidays involve, has changed dramatically. It is entirely appropriate for the Secretary of State to have the power to extend the scope of ATOL to give passengers the assurances they deserve, and it is clearly absurd that only a small proportion of holidays are covered currently and that many consumers are simply unaware whether they are protected or not. However, I am concerned that some organisations might still be excluded under the proposed changes, and I hope that it might be possible to consider going somewhat further. I believe that the Transport Committee is talking to ATOL tomorrow—
I am grateful to see the hon. Gentleman nodding, and I hope that some of the information the Committee produces can be taken into account in the Bill.
There are some welcome provisions in the Bill that will open up Government data concerning airports. Having open public data is a key aim of the Liberal Democrats and of the coalition’s programme for Government. The CAA will be given the power to enable airports to publish data to assist passengers or potential passengers in making informed choices. The best way in which the Government can drive up standards is by empowering individuals to make informed choices, and that is what these measures will achieve. The new power for the CAA to publish information about the environmental impact of aviation is also welcome. The real costs of airplane emissions are often hidden, and the Government have a duty to make them known as a first step towards making sure that something can be done to reduce them.
Most of the changes in the Bill have been subject to extensive consultation over the many years of its gestation. Papers from the previous Administration and the coalition Government have generally had positive feedback and the recent draft Bill was broadly welcomed by the industry. However, there are some aspects of the Bill that I hope will be considered in more detail in Committee. First, it seems slightly odd that there are new powers for information regarding the environmental impact of aviation to be published but that there is no commensurate duty for the CAA to do anything about the issue after publishing that information. The CAA will have a new power to publish information to benefit passengers and a duty to work in their interests. I therefore think that the power to publish information about the environment should be matched by a duty to act on that information.
Is it not more serious than that? The Bill will allow licensed conditions to be imposed, based on certain criteria, but those conditions will not include environmental ones, so it seems that the CAA will not be able to include environmental considerations in the licences it grants.
The hon. Gentleman makes a fair point and I am sure that this issue will form a significant part of our discussions in Committee.
“may publish guidance and advice with a view to reducing, controlling or mitigating the adverse environmental effects of civil aviation in the UK.”
I think the wording could be stronger and say that it “must” do so and, hopefully, take that further. Aviation accounts for a significant and growing proportion of our carbon emissions and it also has a significant noise impact, which we must take into account. The body that regulates aviation must have regard to these facts and bear some responsibility.
Indeed, it has, and I have had discussions with Rolls-Royce, which makes a number of new engines that perform significantly better in that regard, but there is still a long way to go. It is certainly true that emissions per passenger have declined, but the number of passengers has gone up and there is a complex factor relating the two. We need to go further in making sure that planes are fully utilised. We have had discussions in the Chamber about trying to change from a per passenger duty to a per plane duty, and I hope we will be able to go further and resolve the anomalies regarding the Chicago convention that prevent that change.
The Bill provides the Secretary of State with the power to ensure that information is published but does not go as far as requiring the CAA and airports to do so. It could go slightly further in that direction to ensure that passengers are provided with the information to which they are entitled rather than leaving it to the whim of whichever Secretary of State happens to be in charge. I am not suggesting that any Secretary of State in the current Government would be so foolish as not to go the full way in that regard, but one can never know what a future Government or Secretary of State might do. Of course, environmental information should be provided as a matter of course, and I hope, for clarity, that clause 84(2) will explicitly include carbon dioxide emissions and other greenhouse gases.
I should also like to understand a little more about how the penalties in the Bill were arrived at. Obviously, we hope never to have to use any of the penalties for failure to comply or to provide information, but they are somewhat complex. Clauses 44 and 45 have a complex formula based on turnover, clause 51 has fixed amounts, clause 52 has unlimited ones, clause 86 has very low penalties and clause 87 goes back to unlimited ones. I hope that the Minister can give us some clarity as to exactly how those penalties were decided.
Clause 104 deals with the disclosure of medical information, which requires proper scrutiny and some clarification. The clause allows the CAA to disclose medical information relating to flight crew and air traffic controllers in an anonymised form for the purposes of medical research. I can absolutely see how that would be beneficial and why we should want to introduce it, but I am concerned that in a small airline it might be possible to identify an individual using a combination of the information provided and data that are publicly available on the internet. That could pose a serious threat to privacy. This clause requires close scrutiny to ensure that de-anonymisation of data is not possible. I am aware of academic work that has been done on data that were about to be released by the Ministry of Justice. A group was challenged with trying to de-anonymise information from anonymised data and it turned out to be worryingly easy to do in a number of cases. I hope that Ministers will look at that issue.
A number of people still wish to speak, so I shall not give way again.
The Select Committee on Transport made some sensible recommendations to the Government, which I am sure will be given due consideration. For example, it noted that the aviation industry has concerns about the way in which the CAA will implement the new provisions, given the difficult business conditions that many regional airports face. It also noted, as have many hon. Members today, that the CAA is the only economic regulator that does not fall under the remit of the National Audit Office, and it recommended that an explicit efficiency duty for the CAA be inserted in the Bill or, indeed, we could make the NAO responsible for supervising the operation of the CAA. The Government have not yet provided a full response to the Committee’s recommendations, but I hope that they will do so as soon as possible and look at those sensible ideas.
Overall, the Bill offers crucial modernisation for civil aviation regulation, and it will help to promote success and competition in aviation. The Liberal Democrats welcome the focus on passengers, the reform of ATOL, the sensible framework for economic regulation and the opening up of public data. I hope that in Committee we can ensure that the Bill properly delivers the Government’s aims and creates a sustainable future for civil aviation in this country based on open data, proper regulation, sustainable transport and passenger-led reforms.
I am extremely grateful for the opportunity to speak in this important debate, and to follow Dr Huppert. I am disappointed that he did not spend more time discussing his airport, of which I am a great fan, as I flew from there when I was in the Air Training Corps. However, there is an airport slightly closer to my heart now, given that I represent Luton South.
Many hon. Members have said that aviation is crucial if we are to achieve economic growth and change—a green economy—in future. I do not dissent from that view, as aviation has an important role to play. There are pressures on capacity in the south-east, for example, that I should like to discuss, but first I shall turn to the Bill. I was a member of the Select Committee on Transport when it examined the woeful performance of BAA in the winter weather of 2010. It was clear that there were major, extensive problems at Heathrow, and our report, which was quite authoritative, if I say so myself, underlined the way in which regulatory issues ended up affecting BAA’s performance.
I shall give an anecdote that stuck out for me when we took evidence on the inquiry. When Heathrow published its monthly performance figures in December 2010, it passed 56 of the 60-odd measures proposed at the time, because they did not measure what was important to passengers: the ability to leave the gate on time, and the conditions in which they were looked after. It is crazy, given the fact that there were delays of up to 72 hours for many passengers—we saw the scenes on our screens—that the performance measures that were taken into account did not show the problems at the airport.
It is not just Heathrow that is a problem, as the issue is on everyone’s mind. It is also about how the wider industry relates to the CAA, and how we hold the CAA to account. In that regard, the Bill is extremely welcome. The role of the CAA in taking on security is a welcome measure, as is the CAA having more flexibility and setting the licensing scheme for UK airports. However, airlines too are customers of airports; it is not just the end passenger who is buying a ticket. Indeed, as a user of airlines, I put my primary faith and expectation that everything will work in the airline’s hands: whether it is easyJet, BA, Virgin Atlantic or Ryanair, I would want to hold them to account. Sadly, when there are failings in airport operation, customers and passengers go to the airline in question, and the Bill could do more. I therefore support the introduction of a secondary duty for the CAA. The primary duty to the 210 million or so passengers is important, but there should be a secondary duty to ensure that airlines are served effectively by the CAA.
The CAA believes that its adoption of security functions will impose an additional £5 million charge on the industry, but there is little in the Bill about how scrutiny will be enhanced for the CAA. As my hon. Friend Jim Fitzpatrick pointed out, we will seek to be helpful in Committee and amend the Bill. The NAO has a role to play in holding that major economic regulator to account.
On the wider issue of aviation, the Bill is extremely welcome, as it does many sensible things in a sensible way. However, it does not serve to fill the vacuum of aviation policy in this Parliament. We face a major capacity issue in the south-east, and there are broader environmental and economic concerns—we all accept that. However, the policy vacuum on capacity, particularly in the south-east, is not answered by the measures. In my own patch, London Luton airport can do much to assist with the solution to those problems.
Indeed, but I am not qualified to make that assessment.
My hon. Friend does, however, make the point that no options should be off the table. We have said, despite the fact that we made a manifesto commitment to a third runway at Heathrow, that we are willing to take that off the table if it enables us to enter into cross-party talks. These are long-term decisions taken for the country’s future, and that is a statesmanlike approach by our Front-Bench transport team. Failure to do anything is not an option. The capacity challenge in the south-east can be tackled if Luton airport increased its capacity from 10 million passengers to 18 million over a period. That is part of the answer, but it does not answer the broader question of how we establish a serious hub airport that can compete with other airports, particularly in Europe, on level ground.
In Luton, we can achieve 18 million passengers without significant ground works, and without extending the runway or building a second runway, which is welcome. We are 25 minutes from St Pancras—practically zone 3 on the London underground. We are one of the big four airports that, I believe, we are seeking to expand. Luton ultimately can absorb only a small amount of the additional capacity that is required, and we have heard different suggestions from different people in recent weeks. The expansion of Heathrow is not on the table, and we understand why the Secretary of State holds her personal convictions. An additional runway at Stansted has been ruled out. We have heard about the plans for “Heathwick”, linking Heathrow and Gatwick, although I am not sure exactly what those proposals would achieve. In the past fortnight, we have heard about “Boris island”, but whatever option we choose, we must find a long-term solution to the problem of capacity. If the Government are unwilling to do so while they are in power, we will have to face up to those problems when we are in government.
Does my hon. Friend not agree that one of the drawbacks of “Boris island” or, indeed, any other plan for the Thames estuary is that it would set at naught all the ideas about linking high-speed rail to Heathrow airport if, at the end of the day, that airport moved somewhere 30 miles east?
My hon. Friend makes a good point about high-speed rail, which is not a substitute for additional air passenger transport movements. It may be excellent at linking, for example, Birmingham and Heathrow, and our Front-Bench team has suggested proposals about how better to do so. This is a real issue of capacity that affects our economy. We cannot leave it to future generations to solve the long-term problems that we must face up to ourselves.
I welcome the Bill and propose to speak chiefly to clause 94, which amends section 71 of the Civil Aviation Act 1982 and improves ATOL protection for consumers, as I believe that these are the provisions that are of most interest to my constituents. To clarify why the proposals are so welcome, I will briefly outline the current ATOL scheme’s inadequacies that require remedying in order to meet the requirements of passengers in the 21st century.
The ATOL scheme, which was introduced in the ’70s, provides financial protection for consumers who purchase air package holidays in the event of a travel company going into insolvency. Affected passengers are entitled to a full refund if they are yet to travel or repatriation after completing their holiday if they have already reached their destination. However, the current ATOL scheme does not apply to airlines that are specifically excluded under legislation or to airline agents where airline tickets or a similar airline booking confirmation has been issued, which means that a booking made directly with an airline just for a flight on an aircraft they operate, for example by using their website, is not covered by ATOL. Airlines can sell flights and flight plus without providing financial protection, flight plus being a booking for a flight that is sold together with accommodation and/or car hire at the same time or within a day of each other. Many consumers are totally unaware that they have no financial protection for such bookings.
However, confusingly for consumers, under the 1990 EU package travel directive airlines are now required to provide financial protection for the sale of package holidays. In practice, some airlines sell package holidays with ATOL protection, but other airlines sell only flight plus without any statutory financial protection at all. Even more confusingly for the consumer, although the ATOL logo on websites and in brochures signifies that the business in question holds an ATOL licence and thus meets the CAA’s financial fitness criteria, that does not mean that every holiday the business sells is ATOL protected. The ATOL licence holder may sell holidays and travel arrangements that are not ATOL protected since they fall outside the legal scope of the current scheme. In effect, it is left to the consumer to check whether their holiday arrangements are covered by ATOL, but how many would know how to do that?
The last decade has seen important changes in the UK market for holidays and flights, particularly a move away from traditional package holidays in favour of independent travel. This has been facilitated by the emergence of low-cost, no-frills airlines and the use of the internet. Holidays are often created by consumers buying the various components from a range of flight, accommodation and other options. This might involve purchasing from a single provider or, in many instances, from linked websites. For instance, an airline website might contain a link to an accommodation provider’s site. Holidays created and sold in this way are often referred to as dynamic packaging, mix-and-match holidays, DIY packages or tailor-made holidays. This development could not have been foreseen when the ATOL scheme was introduced 40 years ago or when the package travel directive was agreed more than 20 years ago. Indeed, the proportion of ATOL protected holidays has dropped from 97% of all leisure flights in 1997 to less than 50% in 2010 and, if action is not taken, will undoubtedly decrease further.
There is therefore a strong case for reforming the ATOL scheme to reflect better today’s holiday market and so that consumers can be clear when their holiday is protected. The CAA agrees and has stated that
“ATOL needs reform… to remove the risk of increasing financial detriment to consumers.”
This is particularly so in the current economic climate, when significant sums from a household’s annual budget are spent on such transactions.
In addition, holidays purchased on an “agent for the consumer” basis are also in many respects outside the current ATOL scheme. Traditionally, travel agents act as agents for the supplier and sell holidays to customers on behalf of travel trade suppliers, but they can also sometimes act as agents for the customer and technically buy the holiday on their behalf. This is an important distinction. Agents for the consumer are not legally making flight accommodation available and so are currently not required to have an ATOL licence or to provide any other form of financial protection for holidays.
However, it can be difficult, if not impossible, for consumers to know in what capacity a travel agent is acting, which can create considerable detriment and uncertainty. In practical terms, the distinction is completely irrelevant for a consumer until they need to claim for cover and might find cover non-existent. Then it becomes very relevant indeed. Even some travel companies are not fully aware of what acting as “agent for the consumer” entails or their obligations to explain to consumers the implications for ATOL protection. In short, the current ATOL scheme no longer fulfils its intended purpose.
Clause 94, by greatly broadening consumer protection and bringing airlines and “agent for the consumer” transactions into the scope of the ATOL scheme, effectively brings the scheme into the 21st century. Following appropriate consultation, the Bill will enable the Secretary of State to make regulations requiring airlines to hold and act in accordance with an ATOL licence when making available flight accommodation, except where they are doing so on a flight-only basis on aircraft that they operate. For the purposes of the clause, flight accommodation is taken to mean accommodation for the transport of persons on flights in any part of the world. In effect, all airline package holiday and flight-plus sales are to be ATOL protected. Having said that, some exceptions remain, and I welcome the discussions, which have been referred to, between ATOL and representatives from the Transport Committee on opening up the possibility of ATOL cover being widened even further. I very much welcome the Bill and the effect it will have in providing additional consumer protection.
Before concluding my remarks, I want to touch on another point relating to passenger protection: pilot fatigue. Although perhaps peripheral to the Bill’s main aims, this issue is vital to the many pilots in my constituency who work out of Manchester airport and, in turn, to their passengers’ welfare. I have spoken with a number of pilots about the matter and attended briefings, in the House and elsewhere, where it has been raised with great concern. Pilots in my constituency are extremely concerned that any relaxation of this country’s current restrictions on permitted crew flight hours could push pilot fatigue to intolerable levels and seriously affect passenger safety. The issue was raised in the other place only last week by the noble Lord Monks, who is president of the British Airline Pilots Association.
Pressure on crew and aircraft for turnarounds is increasing as demand for air travel rises, and this is reflected in the requirements that airlines are putting on pilots. The European Aviation Safety Agency has made proposals that would reduce the current UK standards on flight time limitations. The Government spokesperson in the other place replied to the noble Lord Monks that the Government would support the proposed requirements only if the CAA determines that they provide an appropriate level of protection against crew fatigue. That was a welcome comment pointing in the right direction.
I have been contacted by many of my constituents who work in the aviation industry, including pilots, and who are extremely concerned about the proposals. I am sure that the whole House is with the hon. Lady in wanting to see the Government and the European authorities ensure that no danger to safety is brought about by the proposed changes.
I thank the hon. Gentleman for that intervention.
In responding to the debate, will the Minister clarify how in practice such an important determination will be made in light of the delegated powers that are going to be passed to the CAA under the revised regulatory regime and the fact that when introducing the debate the Secretary of State said that CAA decisions should be “guided by the needs of customers” and that the safety of customers was of “key importance”, and, finally, bearing in mind that the Secretary of State remains ultimately responsible for aviation safety and security?
I welcome the Bill.
First, I add my voice to those who have expressed concerns about the Bill having been rushed. As a member of the Transport Committee, I was part of the pre-legislative scrutiny process, but as has been said on several occasions, only tomorrow will we have our session on ATOL. The Government therefore have not had the chance to take on our concerns; even more than that, airports have expressed huge concern that they have not had time to consider the proposals and to make recommendations.
Secondly, the Government have missed an opportunity to include environmental measures in the Bill. People living near airports had been hoping for stronger regulation on noise and pollution controls, and I appreciate that the Bill’s purpose is primarily economic regulation, but it has already been widened to include ATOL and security. Aviation Bills do not arrive every day, so this one should have included environmental duties, and I really hope that it will be amended in Committee to include them.
The industry has generally welcomed the legislation, but some proposals have created much consternation. The cost of regulation is certainly a problem for airports such as Manchester. Currently, the regulation charge is 95p for every arriving passenger, but with no consultation the charge is going up in April to £1.26 per passenger. The airport expects that the additional charges for security and enforcement will be another 4p, and, although that does not sound a great deal, it estimates that it will have to find an additional £274,000.
Airports are not in a position to pass on those charges to airlines. The only way of doing so would be to increase landing charges, but because of competition between regional airports, airlines would simply go elsewhere. Airports cannot agree to fix landing charges, as they would fall foul of competition rules. I can understand why the Government believe that the user should pay, but why is the charge being levied only against the airport? Why cannot part of it be levied directly against airlines, and why can it not be phased in to give airports a chance to build it into their budgets?
The Bill also allows an airport to be compelled to hand over a terminal to another operator, but there is no industry demand for that, and it has been said that it is an “idea without merit”. I have been told that the measure has been included just in case in future someone, somewhere decides that it is a good idea, but it would only ever be a good idea if we wanted to increase the employment opportunities for accountants and solicitors.
Currently, the airport operator plans for the whole airport. It has to deal with its neighbours, take account of environmental concerns, work out how to get people to and from the airport, invest in transport infrastructure, invest in improvements to the terminal and so on. What will happen to all that if there is more than one operator? Manchester airport is investing £50 million to bring the Metrolink system to the airport, and it has recently made a large investment in the airport’s railway station. Would that have happened if there were two or more operators at the airport? What if one operator does not want to invest in infrastructure? We have only to look at what happened with rail privatisation: a huge increase in transactional costs and the use of accountants and solicitors, hours and money wasted on deciding who is to blame for any incident and who owes whom money, and a waste of taxpayers’ valuable money.
Transferring an airport terminal to another operator would hugely increase transactional costs, and a great deal of time and money would be wasted on commercial negotiations and agreements. The cost-benefits of one efficient operator would diminish, and one contract and, therefore, good deals with Smiths Group, SSP and the Compass Group and with brands such as Costa Coffee and Burger King would disappear. Bean counters would have to spend time working out how they split things such as car park fees, and each operator would have to have headroom, thereby diminishing overall capacity. The proposal makes no sense, it will not improve the passenger experience and it should be removed from the Bill—or, at the very least, apply only to regulated airports.
I have some concerns about security transferring to the CAA and regulations now being based on an outcome-focused security regime. I accept that it is unnecessary to insist on screening by a certain machine at every airport, but as we know, terrorists only have to be lucky once, and we must ensure that we have no weak links in our airport security. It was also worrying when the trade unions reported to the Transport Committee that many people would not want to transfer from the civil service to the CAA and, therefore, that expertise would be lost.
A major issue was pensions. The Transport Minister of State told the Committee that the CAA and civil service pensions are under review, but will transferring staff be given an equivalent pension? Have Ministers also considered other employment models, such as staff remaining employed as civil servants but seconded to the CAA? Security is not an area where we can take risks, and we must not lose the expertise of current staff, so do the Government have any proposals for retaining them?
ATOL reforms are badly needed, as Fiona Bruce said just a moment ago, but I am frustrated that the Transport Committee is going to look at the details of such reform only after Second Reading. Most people believe that they are already ATOL-protected when they book a holiday, and that if the operator goes bust someone will get them home or, if they have not yet travelled, refund the cost of their holiday. It is ludicrous that a holiday booked through an airline—a holiday that looks and feels like a package holiday—is not treated as one. I welcome the inclusion of such holidays in the ATOL scheme, and the removal of the distinction between travel agents acting as agents for suppliers and as agents for consumers—a definition so unclear that even travel companies are confused about the distinction. I welcome also the proposal that customers be issued with a certificate to inform them that they are ATOL-protected, but as the legislation will not protect everyone, customers should be issued with a certificate that makes it clear when they are not protected, just as they are issued with one when they are protected.
The time frame for buying components of a holiday in order to qualify for protection is too short, as customers will be protected only if they buy the components within 24 hours. There are situations in which people book flights immediately to ensure that they reserve a seat but agree the rest of the package only later, when the travel agent has sorted out their itinerary. A package is still a package, and therefore the time limit should be longer than 24 hours. In 1997, 97% of all leisure flights were ATOL-protected; now it is less than 50%. This new legislation is timely, but let us use this opportunity to ensure that it protects the maximum number of people.
I look forward to further discussion on the Bill and hope that this time the Government will be open to amendments to improve it.
I am pleased to speak after Julie Hilling, some of whose points I agree with, but I am also intrigued and somewhat amused by her introductory remarks and by those of Maria Eagle, who said that there was an elephant in the room and that the Bill has been in gestation for six years. Such gestation would bring tears to the eyes of the biggest elephant, and if the Opposition believe that this Bill is being rushed they would do well to remember that they had six years in which to bring a Bill forward and to make it an Act. Clearly, however, they had other things on their mind at the time.
I am grateful to the hon. Gentleman, but I fear that he is being slightly disingenuous in mixing up what Opposition Members have said. The Bill was clearly designed to be introduced in the next Session, but it has been brought forward in this Session, because there is no legislation—because many Bills from this Session are at the other end of the corridor, in the other place.
I am grateful for that intervention. The hon. Gentleman clearly intends to carry on for Luton South where Lorraine Chase left off; we have brought forward this Bill, and we have heard what the Secretary of State had to say.
I welcome the Bill, which is timely, because we all know that aviation is an industry that is as important to Britain as it is maligned. It is important because it employs 1 million people throughout the country, sustains a tourist industry employing 2.6 million people and generates about £9 billion of Treasury receipts every year, plus all the Treasury receipts that it generates by making our economy work more effectively and better.
There is no doubt in the minds of operators that they want better regulation. We want regulation that puts passengers first. We want regulation that ensures that security in the age of the terrorist with trainers is sharpened and honed. We want to ensure that transparency at the Department for Transport, at the CAA, among operators and at airlines is the best that it can be. However, we do not want regulation that loads unnecessary bureaucracy on to airport operators or that drives up costs that are of no benefit to the travelling public or to operators that simply want to make a fair buck by doing better and more efficient business.
Birmingham is the airport in my neck of the woods. It has one runway and carries 8.6 million people a year. It could double its capacity without changing its infrastructure in any way. It has a plan to extend its runway so that it can carry bigger planes with more passengers, more fuel and more baggage for further distances, as far as the far east. That could extend its carriage capacity by up to 27 million passengers a year. At that point, it would begin to compete with airports such as Gatwick.
Presumably, the high-speed link from London will work in reverse and people will be able to get up to Birmingham and increase the airport’s capacity, making it a south-east England airport.
My hon. Friend is trying to draw me into the trap of discussing High Speed 2. Birmingham airport carries only 40% of the passengers in its catchment area, so it could extend capacity without picking up passengers from the south-east or elsewhere.
The operators are concerned—the hon. Member for Bolton West touched on this—about changes that might allow the CAA to increase costs by a third on undesignated airports such as Birmingham. In designated airports such as Heathrow and Gatwick, those costs can easily be passed on to airlines. In undesignated airports, they cannot. That places a burden on those airports as they develop their plans of expansion and as they try to build the regional economy, such as that of the west midlands.
It is striking that Britain, with a population of 60 million, has only one formal hub airport, whereas Germany, with a population of more than 80 million, has five hub airports and plans to expand that to six. It seems that the Germans recognise the importance of aviation in building their regional economies. I hope that we will do the same. As we take the Bill through Parliament, as the Secretary of State and Ministers consider it and as it goes through the Public Bill Committee, we must ensure that the clauses do not disadvantage regional airports, which can be so important in building our regional economies.
I will make two more points, thanks to the injury time that has been granted to me. The first relates to environmental protections and reports. We all agree about the importance of demonstrating the effects that aviation can have on carbon emissions and about ensuring that proper environmental reporting is built into the Bill. I ask those on the Treasury Bench to ensure that the information that they wish airports to develop and deliver is not already available through the Department of Energy and Climate Change or reports that are produced by the Department for Transport. We do not want to overburden airports or demand that they duplicate information that is produced already.
My final point relates to the levy, which has already been touched on. Operators are worried that demanding 10% in penalty clauses because of events that are outside their control can place a significant burden on the airport. They say, and I agree with them, that when there are extreme weather conditions or when planes are grounded, the decision on safety is also made by the airlines. Should the airlines not, therefore, also be responsible for carrying some of the penalty clause that is imposed? If that is not appropriate or possible because airlines can choose whether to take slots and can go elsewhere—it is much more difficult for airports to move—is it not possible to reduce or abolish the penalty, so that we do not place undue burdens on our airports?
My hon. Friend Henry Smith said that we are a trading nation. Of course, we are an island trading nation. Aviation is therefore all the more important to our competitiveness in Europe. It provides the quickest and best connections to markets for our goods and services. I hope that when the Government further consider the Bill and when it goes through the Public Bill Committee, we will place front and centre the importance of balancing and regionalising our economy, and ensure that aviation plays a part in that. We must protect and promote our regional airports. I look forward to the Minister, in winding up, saying that we will.
Those of us who emphasise the importance of ensuring that the environmental consequences of aviation are at the heart of our policy are in no sense anti-aviation. We recognise the importance of the industry to the UK and to our economy but simply want to emphasise the fact that unchecked and uncontrolled, the growth in aviation will lead to increasing CO2 emissions in the UK and internationally. It is therefore important to encourage the kind of measures that will ensure that that growth can be controlled. That means encouraging more environmentally friendly forms of travel where possible and encouraging the industry to be environmentally efficient in the development of new aircraft and in the way that airports operate.
The way to achieve that direction of policy is to put in place measures that will encourage it. It is right to say that there should be tough emissions controls at European and international level to encourage more efficient aircraft.
A lot has happened in that area—I recognise and welcome that. Without those measures in place, we will not get the changes that we want. That is why, as the shadow Secretary of State said, we need to put environmental and planning considerations in the Bill.
I made the point in my intervention on Dr Huppert that the Bill allows the CAA to put conditions in licences on a number of grounds, but only if they come within the specifications in clause 1. Clause 1 does not allow environmental and planning considerations to be taken into account, so the CAA will not be able to put conditions on such matters in the licences of particular airports. I hope that the Bill is improved in Committee so that it takes account of environmental and planning concerns over airport developments and aviation more generally.
Environmental considerations include noise pollution. As more and more aeroplanes circulate around London, the noise gets greater, even in my leafy constituency in Kent. I hope that environmental considerations will be taken into account and that the noise made by Rolls-Royce engines, for example, will be reduced even more.
The hon. Gentleman makes an important point. As I understand it, the Bill does not specifically encourage such measures, but it could be changed to allow them. I hope that he will support such a change.
My second point is about the consumer interest. It can certainly be promoted by encouraging competition, which I welcome, but the Secretary of State referred to the possibility of passengers choosing between Heathrow, Gatwick and other airports. People in the south-east of England can do that, as they have four, five or six airports to choose from, but in other parts of the UK there is not that option. That is why it is important that the Bill should put in place not just competition measures but other provisions to recognise the consumer interest. If people have a long wait at an airport and are queuing for a plane, they want something to be done pretty quickly rather than having to wait until a new franchise or licence is granted some years hence. The Bill needs to be strengthened to provide for the consumer interest in that way as well.
I want to say something about the proposed sale of British Midland International to International Airlines Group. Like every MP from Scotland, I am very concerned about the effect of that sale not just on competition on routes between Scotland and Heathrow but, as my hon. Friend Maria Eagle said, on people’s ability to change flights at Heathrow and access all parts of Scotland. That will affect Scotland’s ability to attract tourism and business. The sale of BMI would also have consequences for its other routes—for example those to Brussels, Copenhagen, Zurich and so on, which are important for business and tourism in Scotland. Although that matter does not specifically fall within the terms of the Bill’s competition provisions, it certainly concerns us now that the future of BMI and its routes is up for grabs.
Another point that concerns many people in Scotland, and which my hon. Friend mentioned, is the cuts to the UK Border Agency. They are concerned that delays in entry to the UK could be made worse. At Edinburgh airport there are fairly regular complaints about the difficulties of passengers arriving late at night, who have to queue to get through the border formalities and even to get into the terminal. They have to wait behind locked doors for the appropriate staff to arrive. That is not a criticism of the staff, who of course do an excellent job, but they are already under pressure and if there are cuts to the UKBA there will no doubt be still further pressures on them and delays for passengers. It would certainly not be a good advert for people coming to Scotland or elsewhere in the UK if we had unnecessary delays because of cuts to border authority staff.
At a time when some Members propose the idea of independence for Scotland and the separation of Scotland and England, today’s debate emphasises the fact that there are many areas in which co-operation between England, Scotland and the rest of the UK is by far the best way of arranging things. I certainly cannot see how having a separate Scottish CAA, presumably with extra costs and extra demands on its resources, would improve the situation of airports and airlines in Scotland.
Earlier we had the somewhat amusing spectacle of Scottish National party Members, who I am sorry are not in the Chamber at the moment, demanding that the UK Government intervene to ensure that there is proper competition between the different airlines and other modes of transport in England and Scotland. Surely it cannot escape most people’s notice that without a UK Government to operate in such a way, there would be no reason for such competition to be encouraged. In the absence of SNP Members, I will not pursue that point. Clearly we may be able to do so at a later stage.
My final point is that the airline industry is important to many of our constituents and requires people to be confident in its safety. That was why I was glad to be able to intervene on Fiona Bruce to mention concerns about extra pressure on pilots due to the proposed changes to regulations. Once again, I hope that the Government will ensure that no such changes are made, as they would jeopardise both the perception and, I fear, the reality of passenger safety. I am glad that there has so far been unanimity throughout the House about that, and I hope that the Minister will say something about it in his closing remarks as it is concerning people who work in the industry and the passengers.
I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
I welcome the chance to contribute to the debate. As a member of the Transport Committee, I was involved in the pre-legislative scrutiny of the Bill. I warmly welcome it and agree with the overall objective of overhauling and modernising the system of economic regulation, which is too rigid and in need of reform. Other Members have spoken about that in detail, and I will not repeat the points that have been made, but I particularly welcome the fact that the interests of passengers will be the top priority of the CAA. It is very important to stress that point.
I wish to focus my comments on part 2 of the Bill, and specifically the clauses that will give the CAA the power to require all airports to publish information for the benefit of passengers. I strongly support that and believe that it is vital, in the interests of competition, that the correct information is easily available to passengers. As well as weighing up the performance of airlines on the convenience of flight times and on price, they should be able to weigh up the performance of airports when they make their decision about which mode of transport to choose and which airport to use.
I fully appreciate that not all air passengers have freedom of choice about which airport to use, because their geographic location may restrict them to one particular airport or their destination may be served by only one realistically close airport. However, a large number of passengers have a choice of which airport they go to.
I offer the example of Milton Keynes to illustrate that point. It does not have a local airport as such, but if I choose to visit family in Scotland, I can either choose to drive up, get the train or fly from four or five airports that are within easy travelling distance. I can use Birmingham, Luton, Heathrow or East Midlands, and even London City is not a huge travelling time away. I have used all those airports to fly up to Scotland, and their performance has varied enormously. I have had some very good experiences and some fairly hellish ones, and I found out about the airports’ performance by trial and error.
I will not name and shame the airport that was poor —[Hon. Members: “Go on!”] I shall resist the temptation, but let us just say that there was a song about it a few years ago. I do not know whether the bad experience I had was just on an off-day for the airport or whether it was part of a longer-term performance issue. Proper information should be available about the performance of an airport over time—for instance the time it takes to get through security and the time it takes passengers flying in to get through passport control. Scottish National party Members are not in their place, but I very much hope that flights from Scotland will not require passport control as they wish. There should also be information on other issues, such as airport charges that contribute to the cost of a ticket and charges affecting passengers using the airport. Some airports levy a charge on those simply dropping travellers off at the front gate, and some charge for the little plastic bag we must put our liquids in, whereas others give them out for free. Information on such things is valuable for passengers when they are evaluating which airport to use.
Other information that should be included are airports’ records on dealing with things going wrong, be that bad weather or strikes. Airports perform differently, and passengers booking some time in advance wish for some reassurance that their interests will be looked after if things go wrong.
The requirement to publish environmental information is important, and I am glad to see it in the Bill. I am open-minded about whether there should be a specific duty on environmental performance, but it is important that information on environmental performance is published so that people can choose to weigh it up when deciding how they will travel and from which airport. Transparency is the best guarantor of the objectives we want, and it is incredibly healthy to promote competition.
I am aware that different organisations have responsibility for delivering the different aspects I have described. Some aspects are the responsibility of the airports and some are the responsibility of the airlines. Different Government Departments have different duties: immigration and passport control is the duty not of the Department for Transport but of the Home Office. Due weight should be given in the published information to which part of the airline industry is responsible for providing the different services. I support the Transport Committee recommendations on those points.
As valuable as that information is, it should not be over-bureaucratic and it should not impose too great a burden on airlines or airports. I would make one suggestion: the new aviation consumer advocate panel, the role and remit of which are a little unclear at the minute, could decide what information was relevant to the interests of the passenger and what imposed too much bureaucracy and cost on airlines and airports.
I shall share one further concern: the balance of needs between current and future passengers. For all the reasons I have explained, it is important that information is available to passengers. However, it is clearly in the interests of passengers in the long term for an airport to invest heavily in new infrastructure, even if there is a short-term cost in disruption. Any information that is published should be value added in some way to show performance over a long period, not just as a snapshot.
The Bill is a good one and I welcome it. I hope the Government reflect on my suggestions as it progresses through the House, but I am happy today to give it my full support.
I should like to begin by thanking hon. and right hon. Members on both sides of the House for their warm welcome since my election in December. Little can prepare people for stepping into the Chamber for the first time, and for the overwhelming sense of history that has unfolded on these green Benches.
I am proud to be able to represent an area where I grew up. Before moving to Bedfont, we lived above my parents’ shop in Osterley—a community shop that sold school uniforms along with imported crafts and jewellery from India. I attended Heston infants and junior school, where my mother was a teacher for nearly 20 years. The school has transformed now, being one of the 4,000 schools built or refurbished by Labour since 1997—investment that is still making a difference to the education of young people across the country.
I am the first member of my family to be active in politics. I remember taking part in my school elections at Heston junior school in 1983, when, as a 10-year-old, I pretended to be Michael Foot and argued for better pensions for the elderly. It would not surprise the House—with children often voting as their parents might—that in 1983, Labour came second in our school elections. However, we remained ambitious for our future.
My predecessor, Alan Keen, is a great loss to this House and to my constituency, where prior to becoming an MP he served as a councillor in Hounslow West. He was one of the first MPs I ever knew. The Guardian described him as “charming, amiable” and “kindly”. His passion and forte was sport, music, arts and leisure. The House will remember him as a long-standing member of the Select Committee on Culture, Media and Sport and chairman of the all-party parliamentary group on football.
He was a scout for his favourite club, Middlesbrough, for almost 20 years, where, working with Jack Charlton, he spotted footballers including Graeme Souness. He remained friends with both throughout his life. An active football player and manager of the House of Commons football team, even at age of 73, he was an inspiration to all, so much so that the House of Commons chefs and catering staff have dedicated an annual football tournament in his name.
Many will be aware of how he bravely fought cancer. Members will remember how he carried on his duties as long as he could. Our thoughts go out to his family and to his wife Ann, whom many of us in this House know and know well, and who nursed Alan through his illness.
Before and during my campaign, I heard many personal stories from people Alan helped—stories that are still being shared in mail I receive I every week. It is an honour to continue his work for the people of Feltham and Heston. He was without doubt a committed constituency MP. Alan was loved, and on more than one side of this House.
I want to share a little about Feltham and Heston. My constituency is the gateway from Heathrow to London, and a powerful symbol of our nation’s diversity and of hope for the future. Hounslow has rivers, canals, nature reserves and open spaces including an urban farm near the hamlet of Hatton, by Heathrow, and the award winning Bedfont Lakes country park.
More than 140 languages are spoken in the borough of Hounslow, with a third of the population being from ethnic minorities. With our strong faith communities and inter-faith work, it is truly an example of where the global meets the local. Our multi-faith community has many active churches, temples, mosques and gurdwaras, but they are not just places of worship: the community work that volunteers lead on education, information and advice, and health and well-being, often in partnership with public agencies, is a major service to the whole community.
My constituency is supported by strong local media. The Hounslow Chronicle leads the way as the local newspaper, with ethnic minority media including Des Pardes newspaper, Maya News, Jang News, Janomot, Asian Voice, Eastern Eye—you have probably heard of them all, Mr Speaker—Sangat TV, ARY Digital, Midlands Asian Television, Channel S—
Yes—and the Irish Post, plus radio stations such as Sunrise, Desi radio, Panjab radio and Kismat. All play their vital part in ensuring that we reach our diverse communities.
An overwhelming message from the election was that my constituents are concerned about their jobs, their cost of living and their public services. The youth claimant count last year in my constituency rose 25.2%. The long-term claimant count for the over-50s saw a rise of 48%. Both statistics are more than twice the UK average. Increased investment in Feltham and Heston and support for local businesses will be vital for the parents I met last week who are worried about the future for their children.
Heathrow to my constituency and to the nation. My constituency borders Heathrow and has a long history of contributing to aviation. London’s first airport was in my constituency, in what is now Hanworth air park. The world’s first air passenger terminal was at Heston aerodrome in Heston West ward—it is where Prime Minister Neville Chamberlain arrived with his famous “Peace in our time” agreement from Hitler in 1938.
Today, Heathrow is the third busiest airport in the world, but it is more than just an airport. It is a hub for manufacturing for Britain and for the whole of Europe. Its success has been its proximity to London, to our motorway and rail networks and to the support that successive Governments have given to its development, acknowledging its continuing, core importance to our economy.
The operation of Heathrow airport supports well over 110,000 local jobs—approximately 22% of total local employment, and adds a gross value added of £5.3 billion. As the world’s entrance to the Olympics, it is set to be even busier this summer, with
Recently, there has been increasing talk of a new airport near the Thames estuary, with the vision as it stands threatening the future of Heathrow. Heathrow needs to continue to be an integral part of our future national transport strategy. A successful, thriving aviation sector is crucial for our economic competitiveness. I support the call to work together on a cross-party basis to agree a long-term strategy for aviation. Confusion about our aviation future will put jobs and growth at risk, with investors being unclear about whether to invest for the long term in Heathrow. Any strategy going forward must make the best use of existing runways and airports.
I look forward to the development of the High Speed 2 line to Heathrow. A direct link would transform accessibility from the midlands and the north, bringing Leeds and Manchester within 75 and 70 minutes respectively of Heathrow.
The Civil Aviation Bill we are debating today is designed to modernise the regulatory framework for civil aviation, which there is a pressing need to do. The Bill is welcome as it brings greater flexibility in how airports are regulated. However, there also needs to be greater clarity about how environmental impacts will be regulated. This is a key concern for my constituents and the wider west London population who are the most impacted by noise and emissions. It is important to ensure that the aviation industry is fully involved as plans for the new Civil Aviation Authority develop, to help provide greater understanding and certainty about how new regulations may be implemented.
My constituency is a place that is brimming with ambition—of families for themselves and the next generation, and of businesses for growth. It is a place where young people, such as the young men I met at
Feltham skills centre training to become mechanics and engineers, want the chance to prove what they can do and create a better life for themselves and their families; where the woman I met on Feltham high street wants the help to set up her own business; and where the graduate I met in Cranford wants a chance to do more than just short-term temporary contracts. It is a place where mums and dads such as those I met at Southville community and children’s centre want to know that streets are safe for their children to play on, and that they and their daughters can walk home safely at night. It is a place where older people want to play their part in the community too, as mentors and support for the new generation coming through, but with the confidence that their needs too will be supported.
My constituency is also a place where the community spirit is strong. I am proud to carry on Alan’s Co-operative and union relationships and to join the group of Labour and Co-operative Members of Parliament, especially in the UN international year of the co-operative.
After a 15-year career in professional services, working with industry and Government Departments, it is indeed a privilege and an honour to be elected as the new Member of Parliament for Feltham and Heston, and to follow my predecessor Alan Keen in fighting for fairness and progress for a place that has so long been my home, and that has given me so much.
It is a great pleasure to follow the maiden speech from Seema Malhotra, who gave such an eloquent, thoughtful and intelligent speech, much of which I could agree with. I shall come on to the substance of her remarks about airports and Heathrow in a moment. I am also grateful for the opportunity to echo her remarks of tribute to Alan Keen.
I had the privilege of serving for just over a year on the Culture, Media and Sport Committee with Alan Keen. He was a great colleague on the Committee and continued its work as best he could, right through last summer, including taking part in our questioning of the Murdochs and the phone hacking inquiry. He was, of course, present for the launch of the Committee’s report on football governance, a topic that was a lifelong passion of his. He is sorely missed, not only by hon. Members on both sides of the House, but by members of the Committee.
The hon. Lady demonstrated in her speech that communities that live alongside and around airports are vibrant and have a strong affinity to those airports as a great source of wealth, jobs, income, skills and training for the local economy. Communities that live alongside airports are by no means blighted, but can benefit an awful lot from them. My constituency has a somewhat smaller—in fact, much smaller—airport than Heathrow at Lydd, which works under the name London Ashford airport. It is applying for an extended runway so that it can offer more local and regional services. But the arguments that people in Romney Marsh in my constituency would make about why they support the expansion of that airport are very similar to the hon. Lady’s remarks about Heathrow. The economic benefits of that investment in aviation and having a vibrant airport in the locality are good for the local economy and create jobs, rather than turning people away. That is appreciated by many of the hon. Members who have spoken in this debate so far, whose constituencies either contain an airport or are within the economic hinterland of one.
I welcome the thrust of the Bill, in particular the remit of the Civil Aviation Authority to focus on the consumer experience and passengers as its primary motivation. That is something that will help the regulation and support of airports. I am especially drawn to clause 1 of the Bill, which sets the CAA’s general duty. Subsection 1 provides that it
“must carry out its functions…in a manner which it considers will further the interests of users of air transport services”.
Subsection 2 adds a duty to promote competition. I am sure that people will have amendments and ideas that will be discussed in Committee, but I wonder whether those two points may be combined into one, so that the CAA should consider promoting competition as part of supporting and furthering the interests of air transport services, rather than as a separate point. Many of us would see that those two things can be combined, because competition helps to improve the level of quality and service.
I have in mind especially issues of capacity, which may be at the heart of the concerns that many air transport users face. It was mentioned earlier in the debate that one of the particular issues that air transport passengers might face is the time delays caused by flights being required to stack because they do not have a landing slot. In my constituency in Kent, that is a particular cause of noise and environmental pollution. One of the best ways to clean up the aviation industry and reduce its carbon footprint would be to reduce the amount of time planes spend in the air unnecessarily. Much of that happens simply waiting for a landing slot.
My hon. Friend’s constituency is 30 miles or so from mine. I am sure that his constituents and mine share that concern.
Extra runway capacity in the south-east of England is a way to manage aviation much more effectively and reduce planes’ stacking time. Although some might say that increasing aviation capacity might lead to environmental pollution, much better management of planes in the air would significantly reduce it. It is a serious point, and the CAA should think of it when considering the air passenger experience.
The hon. Gentleman is making a powerful case. Does he accept that the argument made by some that we should just manage things differently, rather than having more runways, does not make sense? We need more runway capacity.
The hon. Gentleman has anticipated my next point. Extra runway capacity helps deal with issues such as stacking. It is also increasingly important to ensure that the UK economy is connected to the world. I am concerned by the fact that numerous economic centres in emerging economies around the world, such as India, Brazil and particularly China, do not have direct flight connections to the UK and London. That must be cause for concern, and extra runway capacity would help manage it better. It would also help us to deal with some issues that hon. Members raised earlier, such as the fact that domestic flights are priced out of the major hub airports when more attractive international options become available. That reduces the number of options available to domestic aviation customers. The CAA should give particular consideration to that under the terms of the Bill.
Indeed, the CAA’s own report on aviation, published earlier this month, highlighted that the need for extra runway and aviation capacity, particularly in the south-east of England, was of primary concern. It should be a concern for all of us considering the future of aviation in this country and the need to connect our economy to the economies of the world.
As has also been discussed, some major European regional airports and hub airports have more connecting flights to UK airports than does Heathrow. We are all aware of the number of UK regional airports that now have direct flights to Amsterdam and Frankfurt, and from there to the rest of the world. Indeed, the people who own Lydd airport in my constituency might see that as a model for sustaining the business case of smaller regional airports like theirs, which could offer flights to other hubs with connecting flights to the rest of the world.
We cannot ignore the fact that well-connected hubs are at the heart of a thriving aviation system. Our major hub, which will always be near London, will need to be connected to major points around the world. We must also ensure that there is extra capacity that our regional airports can use as well. That is of primary importance. The Government have said that they want to consider where future aviation capacity might come from. I welcome that step, and I think that we should consider it wherever it might be, but it means that the UK will have to plan for a major, substantial hub airport that will serve us and our economy well for many years to come.
Planning and environmental concerns have been raised, particularly their impact on small regional airports. I have been frustrated by the process that Lydd airport in my constituency has gone through. I appreciate that the expansion of airports is always controversial, particularly for local communities, and often divides opinion. I know that some people feel strongly against it. I believe that it would be good for the local economy, as do many people who live in proximity to the airport. After the decision is taken—in the case of Lydd airport, the district council has voted clearly to approve expansion—it is frustrating when that decision is called in and there is a further time delay of some years so that a public inquiry can consider the application. It is certainly frustrating when that happens at the end of a process that involved a previous public inquiry and public debates.
In the planning system, if we believe that we need extra runway capacity, particularly in the south-east of England where demand is very high, and if communities and the Civil Aviation Authority are prepared to support it, we should consider how such projects can be delivered efficiently and in a timely fashion, to support not only the greater needs of the aviation industry in our country but the needs of local economies. It is of fundamental importance if the community are on board and want the decision to be taken.
I support the thrust of the Bill. I believe that its objectives are to give this country a more efficient aviation network and improve and streamline the system of regulation. However, I will make one final point. In considering the role of Heathrow airport, which, as other hon. Members have said, might be the only airport facing a price cap given its dominance of the UK market, we should ensure that it competes and will continue to compete not only with airports in the UK but with major hubs in Europe. In many ways, Heathrow’s natural competitors are not Gatwick, Birmingham and Manchester but Amsterdam and Frankfurt. As a trading economy, we must ensure that our major hub airport is at the centre of the aviation world, not in the siding.
It is my privilege and great pleasure to be the first member of my party to congratulate my hon. Friend Seema Malhotra on her maiden speech. It was a superb speech of which she can be rightly proud. I am sure that members of her family who heard it will be equally proud. She mentioned Russell Kerr as one of her predecessors. In the 1960s, when I was a student, Russell Kerr came to speak to our university Labour club, of which I was then president. I knew him well, and I know that were he alive today, he would be equally delighted to have such a wonderful successor. She spoke very well and has a strong speaking voice. I am sure that she has a great future in the House.
I will speak briefly about aviation matters. It is nice to follow Damian Collins, because my first ever holiday flight was taken from Lydd airport in a Bristol 170, too many years ago to remember now. It was an interesting experience.
I support some of the previous speeches. My hon. Friend Gavin Shuker spoke for the town, as I hope to. My hon. Friend Julie Hilling made a particularly strong speech, on which I commend her. I listened with great interest. Christopher Pincher made a point about developing the regions and building regional airports.
My first point involves security and immigration. We must ensure that the UK Border Agency and all security staff at our airports are sufficient to do the job, that all our airports are properly staffed, that staff are properly paid and that the whole system of immigration control and security at airports is adequately funded. We cannot cut corners in such matters.
I know from experience that we have not funded Luton airport as well as we should have done. I visited immigration staff there some 10 years ago, and they complained bitterly that there were not enough of them to do the job properly. They wanted to stop drugs coming in—from Amsterdam, for example—but they could not do a proper check on all passengers. We must ensure that airports are properly staffed and that, in these times when the Government have chosen to cut spending, those important matters are not underfunded.
Another important point was made about airport capacity, particularly in the south-east. I was one of those in our party who did not support building the third runway at Heathrow, and I am pleased that both our party and the Government have now accepted that it will not be built. I have always argued that we should make maximum use of existing capacity in the south-east in the first instance, and that we should ensure that we make greater use of regional airports.
Germany was mentioned, and it has several major airports in different parts of the country. We have focused too much on the south-east, and we have a lopsided geography; too much of our population and economy are in the south-east, and not enough are spread out into other areas. Although I represent the south-east, I appreciate that we need to do much more to develop the regions economically. That means serving those regions with long-haul flights so that they can be developed better.
Luton airport can make a significantly greater contribution to capacity in the south-east. We heard from my hon. Friend the Member for Luton South that we could take at least 7 million more passengers a year. At the moment, the airport cannot take the longest-haul flights, but new generations of aircraft are coming through, such as the Boeing Dreamliner, a composite-bodied aircraft that can fly longer distance with a higher payload and more efficient fuel usage. If the Dreamliner flew from Luton, it could serve the south Asian subcontinent, which would be significant for Luton, and the western seaboard of the USA. That generation of aircraft is coming, and I look forward to them flying from Luton.
In the meantime, however, we must maximise Luton for the use of medium and short-haul flights. Much of the traffic that goes to Heathrow could come to Luton. I have even argued that Luton could become a satellite airport for Heathrow—part of the south-eastern hub, in a sense—but we would need a rapid transit link between the two airports, which is possible. There is a railway track that diverges at Cricklewood on to the western region, so we could have a fast shuttle service from Luton Airport Parkway station direct to Heathrow, and it could act as a satellite to Heathrow in the longer term. Imaginative measures could be taken to enhance airport capacity in the south-east.
I will not say much more, as others wish to speak. I hope, however, that the Bill will be improved as it passes through the House, and that the important points made, in particular by my hon. Friend the Member for Bolton West, will be taken into account and acted on.
It is a pleasure to follow Kelvin Hopkins and to have witnessed the maiden speech of Seema Malhotra. Having visited her constituency several times a couple of months ago, I can understand why she chose to speak in this debate—I have never seen planes fly so low, except at an airport, and at one point I could almost see what passengers were eating for their lunch. It is obviously an important part of her area’s local economy.
I cannot claim to live in or represent a constituency quite so close to an airport, my nearest one being East Midlands airport, which is about 20 miles away—I know that number well because I use East Midlands Parkway station to travel down to London. It is one of those deceptive airport parkway stations in that it is not possible to get to East Midlands airport from it without catching a bus—except that the bus has been cancelled because no one used it. It is a bit confusing, therefore, for someone arriving from abroad at East Midlands airport, thinking that they can catch a train but finding that they need to get a taxi or some other form of transport to get there. Perhaps, in the long run, HS2 might rectify that, and we might actually get a rail station on the site of the airport.
I join other Members in recognising the Bill as a sensible way of improving the regulation of airports. It is right to start by acknowledging how important airports are to the economic growth of their local areas and of the country as a whole. Many Members will know that East Midlands airport has the distinction of being one of the biggest freight hubs in the country, employing a substantial number of people. Not everyone living under the flight path and who gets to experience night-time freight planes, which sadly do not tend to be the most modern or quietest of planes, will share that enthusiasm, but the effects of the serious number of jobs created ripple out to nearby constituencies, including mine, which is home to the UPS depot in Somercotes.
There are issues, however, with changing any regulatory regime and the possibility of introducing an economic regulator. When I saw the Bill, I feared that these regulators might decide that only regulating three airports was not enough and that they might want to expand their remit to cover a few more, including, for example, Birmingham or Manchester—two airports that my constituents would use regularly, being only about 55 to 60 miles apart—so I welcome the fact that the Bill introduces no real change to how new airports can be brought under that regulatory regime. I do not see the need for economic regulation, given the amount of airport competition in the wider midlands area. I carried out some research to see how many airports I could get to in a 60-mile drive. In addition to East Midlands airport, there were Birmingham, Coventry, Doncaster, Sheffield and Manchester. That is a lot of choice for people booking a holiday, and the number of destinations available from all those airports provides plenty of choice for both scheduled and packaged flights.
My hon. Friend Christopher Pincher said that even with so many airports in the area, many people still have to use Heathrow for long-haul flights. Those of us who, to our shame, do not always holiday in the UK know, from comparing flights and prices, how often we can only fly from Heathrow—unless we fancy a couple of changes at Paris or Amsterdam, for example. We need to spread out to the rest of the country some of that capacity and some of those direct flights to the most important trading countries and holiday destinations.
I have touched on the environmental impacts of airports. It is strange that we are producing a Bill setting out how airports can be licensed under an economic regulatory regime, because most of our constituents would think that, when looking to license an airport or impose conditions, the possible environmental damage would be taken into account. The main consideration that people raise is probably the noise for surrounding houses. There must be some link between that and regulation, because it would be strange if a licence could not be removed from a company that was blatantly and flagrantly flouting those regulations—although I accept that we do not want multiple regulators regulating the same things, and I recognise that those noise issues are best addressed elsewhere.
The one issue in the Bill that will get the attention of consumers and passengers is the welcome extension of the ATOL rules. I speak as someone who keenly looks at the price of flights and holidays—I check out the various travel agents and airlines, and pick the cheapest one—but it is always difficult to find out whether something is covered by ATOL. That problem is not helped by the reality of how people book holidays. Everyone knows that package holidays are covered. Twenty years ago, 97% of holidays were package holidays, but it is now less than 50% and falling. The concern is that people do not realise that they do not have ATOL protection. Some might say, “Well, we should all have travel insurance, and surely airline failure is covered in my travel insurance policy,” but actually people have to check their travel insurance carefully to find out whether they are covered—many do cover it but some do not or put a limit on how much can be claimed.
If I book a flight with a cheap airline—let us take Ryanair as an example, although they are all much the same—I will probably appreciate that it is a point-to-point flight and that the airline does not take responsibility for delays or anything else that might impact on me. When I get my ticket confirmation, however, I might get an advert reading, “Do you want cheap car hire?”—through a separate car hire company—or, “Do you want one of these cheap hotels we’ve found?” To what extent does that become a package that would come under the flight-plus rules, or are those completely separate bookings that I choose to make through the hotel and car hire providers? It is not entirely clear whether that would be a package in the way that I might understand a Virgin Holidays package, with a flight and hotel, to be.
It is important to tease this out and ensure that when we make this change we make things clearer for the consumer, and that we do not lead more people to think, “I’m definitely safe and covered now,” when, actually, they have bought the flight separate from the car hire company or hotel. One option would be to make everything covered by ATOL. That would ensure complete clarity and freedom of competition between travel agents and airliners. I accept that there is the risk that if I book my flight through the Dutch KLM website, rather than the UK one, I might get it for £2.50 less because I would not have to pay for the ATOL cover, but we are not talking about a huge material amount on the price of the flight. It would, however, get us the clarity that we are rightly seeking.
Overall, I strongly welcome the Bill as a simplification of the regulatory regime for airports. Everyone wants all our airports to offer the biggest range of destinations and airlines, and to be as cheap as possible so that we can get the cheapest flights. The Bill will take us some way in that direction. I welcome the clauses requiring airports to publish full passenger service information, and I agree that it should include the whole passenger experience, from arriving at the airport to the annoying behaviour of some airports that prevent us from dropping people off without paying for parking or make us drop them off so far from the airport that they have to lug suitcases around—not to mention those trolley charges that result in us carrying three suitcases around the airport just to save £1. All those costs should be clearly published, so that I can compare what my full journey costs will be and ensure that I do not need a taxi from somewhere or have to pay all those little hidden costs, and so that I can also understand and fully appreciate what the cost and quality of my full airport experience will be.
Otherwise, this Bill will be a great step forward, and I strongly welcome it.
It is a pleasure to follow my hon. Friend Nigel Mills, who spoke eloquently about a range of subjects and touched on the licensing issues arising from this Bill, which I, too, hope to speak about. It is also a pleasure and an honour to follow Seema Malhotra, who spoke so clearly and persuasively about her constituency. Having visited Feltham and Heston only quite recently, and given its close proximity to Heathrow, I have no doubt that she will take a long-standing interest in aviation matters.
I welcome this Bill, which is a long overdue piece of legislation to tackle some of the problems arising from outdated regulation that our aviation industry faces. There are a number of good measures in the Bill. In such a monopolistic market, it is important that the Government should set out a clear set of regulations to ensure that passengers get the best deal. This Bill goes a long way towards delivering that, notwithstanding the range of comments made by Members from across the House this evening.
For me, one of the most interesting parts of the Bill is the commentary on, and the rules set out for, the role of the Civil Aviation Authority. Clause 1, chapter 1—one of the first things in the legislation—says:
“The CAA must carry out its functions under this Chapter in a manner which it considers will further the interests of users of air transport services regarding the range, availability, continuity, cost and quality of airport operation services.”
We are presented in this Bill with an opportunity to look at how we deliver aviation services right across the country and, in particular, what might be done to secure the future of some of our regional airports. In their comments on the legislation and the draft legislation, members of the Transport Committee have raised their concern that regional airports do not always feature as highly or prominently as they perhaps should. They are a vital part of our economy. They produce an extremely important economic boost for the areas in which they are based, but they are also important for transport right across the UK.
My hon. Friend is making some powerful points about regional airports. He is absolutely right that we need to encourage investment in regional airports to get our economy growing. Does he not also think that investment in regional airports in the north is probably more important than investment in regional airports in the south-east, in moving us away from the north-south divide, which is having an impact on our economy in the north?
My hon. Friend, who is a member of the Transport Committee, has, in true expert fashion, predicted much of what I want to say. Later I will touch on some of the points that he eloquently raises.
The regional issue, which is so important for those of us in the north, as well as those in the south-west—indeed, it is important for those in any part of the country that is that much further from the capital—should not and will not go away. My constituency is served by Teesside airport, which covers three constituencies: Sedgefield—I see Phil Wilson in the Chamber—Stockton North and my constituency of Stockton South. Teesside airport has quite a long and interesting history, which I will not dwell on, although the recent history, which is relevant to what I want to say, sadly shows a certain level of decline. In 2006, around 1 million passengers went through the airport; in 2011, the figure was fewer than 200,000.
When I say Teesside airport, some hon. Members look at me with a little confusion, because they will have heard it referred to as Durham Tees Valley airport. A few years ago the name was changed, against much local opposition and with much local concern. As far as I can tell, whether by looking at maps or historical records, Tees valley as a geographical area does not exist, and Durham is rather a long way away from the airport. None the less, Teesside international airport was officially renamed Durham Tees Valley airport. As a local MP, I raised the issue over the summer. Indeed, I was involved in a campaign to change the name back to Teesside airport, because I know that the issue concerns many of my constituents and those in surrounding areas. Indeed, the Evening Gazette, an excellent local daily newspaper, ran the campaign quite prominently and, certainly recently, it was the second most subscribed to and commented on campaign that it had run. The campaign sparked off a great deal of comment and contributions from local people, because it goes to the heart of some of the challenges we face in that sub-region of the north-east, the strength of identity in Teesside and the value that local people place on it. However, a name alone would not change the future trajectory of an airport or its business or economic success.
I rise to give my hon. Friend some hope for his campaign. A few years ago, East Midlands airport changed its name to Nottingham East Midlands airport, in the face of huge opposition in Derbyshire and Leicestershire, which jointly fund the airport. The name was eventually changed back to East Midlands airport, so such campaigns can be successful.
I thank my hon. Friend, and I hope that in the fullness of time that is exactly what will happen. However, there is a more pressing issue, which is relevant to today, than simply the name of the airport, important as that is: the airport has recently been put up for sale.
Again, I will not go through too much of the detail of how the airport got into that position—the hon. Member for Sedgefield recounted much of the recent history earlier—but I can say with absolute certainty that the fact that it has been put up for sale is a cause of great concern for many of my constituents. We know—I know, as a local person and a local MP, and my constituents know—that only recently Teesside airport was vibrant and successful. It was a highly successful sub-regional transport hub that provided not only international flights, but quick and easy domestic flights down to London Heathrow. Those flights were provided by BMI—British Midland International—and when that service was withdrawn, that had a serious detrimental impact on what has proved to be the airport’s long-term future.
The issue was raised, at some length and on a number of occasions, by Mr Brown when he was Regional Minister, under the last Government. He campaigned diligently to have Heathrow slots reinstated for Teesside, on the basis that it was an important domestic route that would put passenger flow through the airport and play an important part in providing an economic transport times boost to that part of the north-east. He campaigned hard, although sadly unsuccessfully. This is a cross-party issue, with, I believe, cross-party support.
That brings me to some of the specific parts of the Bill before us today. Subsection (1)(b) of clause 18, which deals with what the CAA has to take into account in putting conditions on an airport’s licence, refers to
“such other conditions as the CAA considers necessary or expedient having regard to the CAA’s duties under section 1,” which I have already mentioned, and which include those relating to the continuity and range of airport services that passengers must be able to enjoy. In addition, clause 1(3) says:
“In performing its duties under subsections (1)…the CAA must have regard to…(d) any guidance issued to the CAA by the Secretary of State for the purposes of this Chapter”.
It is my contention that this Bill opens the door for the Secretary of State to instruct the CAA, through the guidance issued, that it must give proper attention and pay heed to the overall economic needs of the sub-region in the north-east.
I accept that this issue has been visited before. As I have mentioned, the right hon. Member for Newcastle upon Tyne East raised it a number of times when he was Regional Minister on behalf of the region as a whole. However, there is a new factor that should now be taken into account: the Government’s recent announcement—a welcome announcement for the economy in the north—that High Speed 2 is to go ahead. At the moment, HS2 goes up as far as Leeds. It will provide some travel time benefits for those travelling down from the north-east, but it does not yet reach stations in the north-east of England. I am sure that in the fullness of time it will do so. Indeed, I and other hon. Members—on a cross-party basis and across the north-east—will no doubt be making the case for investment to bring high-speed rail as far north as is necessary for our constituents to benefit from the economic opportunities that it provides.
None the less, in the foreseeable future, high-speed will not come up as far as Teesside, Newcastle or the north-east region at all. Therefore, although the Government have recognised, through their investment in HS2, the value of cutting journey times to the capital and ensuring that our country—and our nation—is as interconnected as possible, with high quality, high-speed journeys from north to south, they have not yet come up with a proposal that would help to bridge the gap that little bit further north, in the areas and communities that I and so many colleagues across the House represent.
HS2 therefore provides an opportunity for the Secretary of State to consider whether provision should be made for Teesside airport to be given particular weighting to ensure that it has a slot at Heathrow. Teesside will feel the benefits that HS2 will bring to the north, but not quite as acutely as those living in Leeds, for example, or in places from which they can travel to the stations that it will serve directly. Those benefits have been recognised by the Government, and the Bill provides the Secretary of State with the opportunity to set criteria that would allow the CAA to take into account the need for faster travel times from Teesside airport and from that part of the north-east that I represent.
This is both my appeal and my question to the Minister. My appeal is that the Department consider whether the guidance that will be issued under the Bill should take special account of Teesside’s unique position, just outside the envelope of HS2, so that it could benefit from regular, high-speed connectivity with the capital. My question is whether that interpretation of the Bill is accurate, and whether that option would be open to the Secretary of State if the proposals should become law. If it is not, I urge the Government to consider amending the Bill. If it is accurate, I am sure that colleagues across Teesside and the north-east will join me in urging the Secretary of State to ensure that the provisions are used to maximum effect to take into account the needs and views of individuals and businesses in my constituency and in the surrounding communities. They have used Teesside airport over many years and they have been well served by an excellent, local, well-managed service on their doorstep and offered a range of flights. Sadly, however, that service has gone into what I hope is a short-term decline in recent years. I ask for action to be taken, and for the Government to deliver the Heathrow route that would bring great benefit to the people whom I am proud to represent.
I should like to associate myself with the comments made by colleagues following the maiden speech of Seema Malhotra. She gave the most powerful exposition of Heathrow’s economic contribution that I have ever heard. When so many people are calling for a brand new hub in the Thames estuary, it is worth bearing in mind that for every person who finds that overhead air traffic disturbs the ambience when they are enjoying a gin and tonic, there are many others, including her constituents, who depend on Heathrow for their livelihood. I hope that as we consider the future capacity of aviation, we will be able to have a mature debate on the economic consequences of moving an airport and of airport expansion, as well as on the environmental consequences.
The Bill has been a long time coming, and I was slightly amused by Opposition Members’ complaints about the so-called lack of scrutiny, given that it has had a gestation period of some six years. It contains some new measures, but we shall have plenty of time to consider them in detail during its passage through the House. They lend themselves to being added to the Bill, and many have already been fully considered by the previous Government as well as this one. It is also worth noting that although a number of airlines have raised concerns about the Bill, the industry generally supports this package of reforms.
The Bill will put the regulation of civil aviation on a modern footing. A great deal of effort is often put into drawing up systems of regulation that are fit for purpose at the time, but they generally get parked and are not looked at again until something goes wrong. In this case, nothing has gone wrong, but it has become patently obvious that this system of regulation is not fit for purpose, as it is the best part of 30 years old. It was drawn up at a time when the aviation industry was rather different from the one we have now. In the intervening period, we have witnessed massive growth in the number of airlines, a greater propensity to fly among business travellers and consumers alike, and the emergence of an industry characterised by much more aggressive competition. Those changes in the marketplace have created a need for a different kind of regulator from the one provided by the current regime.
A key aspect of the existing system is the duty to secure adequate provision of services, but that task is clearly redundant, given the amount of competition that now exists in the industry. Better and more efficient regulation means removing those responsibilities, which will not deliver the efficient marketplace that we need, and ensuring that the regulator focuses instead on those duties that will do so. Putting the interests of the air passenger first will achieve that, as it will ensure that the market works effectively and not to the disadvantage of consumers.
I welcome the fact that at the heart of the Bill are reforms of the duties of the Civil Aviation Authority to ensure that protecting the interests of the air passenger will become its primary purpose. This amounts to a simplification of the previous regulatory structure, which was much more about economic regulation. At the core of the new regulator’s functions is the need to ensure that the market works effectively and to the benefit of all passengers.
By focusing on outcomes for passengers, rather than on the provision of services, the Bill provides a framework that is more likely to deliver a better customer experience. I speak as someone with a background in regulation from a consumer perspective. Many other methods of regulation could learn from this model. It has always been my view that if we get the focus on the consumer right, many other benefits will follow. That is not to say that we should throw away all models of economic regulation, because the structure of the market must obviously be taken into account, and regulatory action is still required to ensure that providers do not act as cartels. However, we need to look at the consumer’s experience from start to finish.
Central to the Civil Aviation Authority’s new consumer focus will be its duty to promote better public information. I reiterate the point made by other colleagues that information is all, and that transparency is the best way to empower consumers to look after their own interests. The provisions will give consumers a one-stop shop where they can find information and compare airlines and airport providers, enabling them to make a more informed choice.
My hon. Friend Nigel Mills talked about booking his holidays, and I have to say that I have had similar experiences. People tend to look at the headline price, but that does not always tell us the whole story. The most obvious example of that is Ryanair, but of course we all know that we are going to get screwed over when we fly with Ryanair. The reality is, however, that we need to bear in mind the cost of parking the car, the cost of dropping off and the cost of travelling to the airport. When we do a straightforward search to book our airline tickets, we are never going to get the whole picture.
We need as much information as possible to be presented to us in a user-friendly way, although it will be a challenge for the CAA to provide it in as user-friendly and easily navigable a form as possible. A similar example is the Financial Services Authority, which draws up massive amounts of consumer information. It provides comparative tables allowing us to compare 400 types of mortgage or 1,000 insurance products, but almost no one knows that they exist, and very few people access them. The new duty on the regulator is welcome and will be valuable to consumers, but it will be of use only if consumers know how to access it and navigate their way round it.
Shifting the focus on to consumers will make the experience of passing through an airport much more enjoyable. The speed with which consumers can disembark, collect their baggage and get through passport control makes a great deal of difference, and I hope that that kind of information will also be properly communicated by the regulator. It goes without saying that if someone knows that their experience in a particular airport or with a particular airline will be easy, they are much more likely to choose that option. As Jim Fitzpatrick will know, using London City airport is a delightful experience. People can turn up within 10 minutes of their flight, get through the airport, get on the plane and take their baggage with them. It is a much more user-friendly experience than at any other airport. People will pay more for that advantage, even though they might not get the best quality aeroplanes. Information is very important for helping people to make an informed choice.
As for the tools and penalties the regulator will need to perform the job, we have already talked about information, but that will get us only so far. When the regulator has to intervene because the service is not good, it needs to have appropriate tools and penalties. I see that the Bill will mean the transfer of some powers from the Secretary of State and from the Competition Commission. That is welcome, but in this new system of regulation it is important that all players understand their own obligations.
As we have seen elsewhere, when multiple bodies are involved in regulation, there is often some overlap and, indeed, some underlap, as it is not quite clear where the buck stops. We saw that happen with catastrophic consequences in the financial services industry and in health. I hope that the Department for Transport will provide much more clarity on who should act, when, why and how so that it is absolutely clear where the buck stops for each part of the responsibility under the new system.
Serving the customer is central, and I have already mentioned information issues. I welcome the provisions for the CAA to produce more information about the environmental consequences of aviation. As I said, this will become more important as we look at the options for future airport capacity. It is clear that there is a need for expansion to serve London and the south-east. When so much noise is being made about the potential for a new hub airport in the Thames, I hope that the CAA will pay due regard to the environmental consequences of such a development, as well as to the economic consequences for airports such as Heathrow. I am glad to see the hon. Member for Feltham and Heston back in her place.
On behalf of colleagues in north Kent and south Essex, I have to say that the case made so far for a Thames estuary airport is weak. The only strong argument I have heard is that it is beyond the boundary of Greater London. For me, that is not sufficient justification for the creation of a new airport hub.
I am pleased that the new CAA will have to consider the health and safety impacts, as well as measures taken with a view to reducing, controlling and mitigating the adverse environmental effects of civil aviation across the UK. Once it takes forward these responsibilities, we may end up being able to have a much more mature debate about these issues than the present one, which frankly tends to bring out the worst nimbyish tendencies in all of us.
Finally, I would like to say something about the provisions that will transfer the security regulation powers from the Government to the CAA. I strongly believe that the CAA is better placed than the Department to ensure that airlines and airports are discharging their responsibilities effectively, although it is of course important that Ministers retain responsibility for overall policy. This move clearly makes financial sense, as I believe it will save the taxpayer some £25 million. That cost will ultimately be borne by consumers, but as it works out at 2p per user, I think it is one that the consumer can afford to absorb.
To summarise and conclude, aviation policy and provision are essential ingredients in the competitiveness of a 21st century economy, and it is clear that some of our competitors are making more progress than the UK in this regard. If we get our aviation policy right, there will be clear advantages for jobs and growth. An appropriate system of regulation fit for the 21st century is central, so I am pleased to support the Bill.
I start as others have done by paying tribute to Seema Malhotra for her maiden speech. All Members who visited her constituency during the by-election campaign recognised and appreciated the economic significance of Heathrow airport to her constituents. For me, it was a complete reality check to recognise how closely her constituents experience the airport through the flight paths and the low-flying aeroplanes that travel down in proximity to the runway. That was a real eye-opener for many of us, but we recognised at the same time that many of her constituents were employed by the airport. I for one maintain that Heathrow is a massive economic hub, not just for London and the south-east but for our country. I have been a frequent traveller through Heathrow.
I am listening to my hon. Friend’s comments. I had assumed that when people were coming in to land, they normally wanted to be in close proximity to a runway.
I welcome my hon. Friend’s intervention, and make the observation that that is indeed very true; it really is!
I welcome the Bill and the emphasis it places on furthering the interests of passengers and the modernisation of the Civil Aviation Authority. I suspect that many of my remarks will already have been made, but there is no doubt that reforming the existing framework to slash back the rigid regulation and the burdensome bureaucracy currently in place is a positive step. Granting the CAA greater independence from the Government will take important aspects of aviation regulation—the designation of airports for price capping, for example—out of the political sphere, while enabling the CAA to take on the responsibility to enforce competition law will help empower passengers and cargo owners.
The future of aviation in this country and the economic benefits derived from air travel that we have heard about in the debate will no doubt depend heavily on this legislation and subsequent actions from the CAA. I hope that the CAA will utilise its new powers wisely and act in a way that promotes competition to make our airports competitive and strong.
We should remember that our airports are not just places where passengers and cargo are transported across the world, as they are vital economic hubs essential to jobs and growth in our economy across the country—not just in London and the south-east. As we have heard from many colleagues, regional significance is key. Ministers and the CAA must be mindful that while this Bill will support competition between airports in the UK, our airports need a regulatory framework that, importantly, lets them attract investment so that they can compete with their global rivals.
Anyone who has travelled regularly overseas on business will recognise and acknowledge the improvements that many other countries have made to their airports. As we have heard, whether it be Amsterdam, Frankfurt, Hong Kong, Shanghai, Dubai and the Gulf or India, amazing things are being done with their airports. This brings us back to the point about consumer experience, but also the experience of business travellers. This is not about convenience alone, but about making sure that these are vital economic and competitive hubs.
Many of the airports are impressive. They have expanded their capacity. Dubai, for example, built another airport in next to no time. Such developments make these cities and countries much more attractive for business and leisure purposes. Passengers who travel to various destinations are stopping off at these airports, which have incredible facilities—new runways and terminals, for example. This frees up capacity and enables our economic rivals to develop airport hubs. We need to wake up to this and learn from their experiences. We need to look at what has worked and what has not worked. It is amazing that some countries seem capable of building these airports overnight. We talk about being open for business, but if we want to be an economic powerhouse, we have to get some insights from these other countries.
These rival airports offer ever-increasing numbers of destinations to fly to, so we have to face the challenges of capacity—not just at Heathrow, as the regional airports are also important. I do not want to see our airports becoming the end-point for global aviation travel rather than being an important hub. We must facilitate this hub issue and link up to worldwide destinations. I certainly do not want to see the UK losing out to other hubs, including European hubs. At a time when we need to ensure that Britain is open for business, if we do not act swiftly enough to come up with the right kind of aviation approach and strategy, we will lose out on international competitiveness. I hope the Minister will assure me that, observing their duties as set out in clauses 1 and 2, the CAA and the Secretary of State will further the interests of users of air transport services, will take all necessary steps to ensure that our airports are the most attractive places for passengers to visit, and will offer passengers more choice.
As consumers, passengers want not just the best possible price but a good travelling experience. Over the years terminal 5 has overcome its initial major teething troubles, but I remember what it used to be like there for people travelling with families. Nothing can be worse than a dreadful airport experience, particularly for those travelling with young children. Such experiences can be really off-putting, especially when airlines are not co-operative in informing people about what they can and cannot take on board, and I hope that there will be some improvement in that regard.
Innovation and investment are also key issues. I think that we can do more to increase business travel, and to help our regional airports. We in Essex have Stansted airport, which is not far from my constituency: it is 15 minutes’ drive up the A120. Stansted has had an interesting time over the past few years, partly because it has expanded to become a hub for new airlines servicing the United States and Asia. That initially represented something of a trial for the airport. It started at what was a bad time for the global economy, when there was a lack of business passengers. I believe that the Bill can help to empower Stansted and other regional airports, so that they can innovate and invest in accordance with their own regional growth strategies at a time when enterprise zones are coming on stream.
My hon. Friend has mentioned regional airports, airports in Essex, and innovation and investment. Is she aware of the work that has been done at Southend airport, which has received considerable support to enable it to expand and provide the area with a real economic boon?
I know about that work. I also know how hard organisations such as Essex chamber of commerce and other business partners and stakeholders are working to assess viability and sustainability and attract investment to Essex and the south-east.
Stansted serves more than 18 million passengers each year, and is the third busiest airport in the United Kingdom in terms of passenger numbers. In that respect, it ranks only slightly below Heathrow and Gatwick. Its planes fly to 150 destinations, and it offers many scheduled flights to European airports as well as flights on low-cost airlines. My hon. Friend Jackie Doyle-Price mentioned one of those. Members have also mentioned the environment. Stansted has a great record of mitigating environmental problems, minimising the disruption caused by noise by ensuring that 99% its of aircraft stick to their flight paths. Half the number of passengers travelling to Stansted use public transport.
I have mentioned Stansted for economic reasons. It is a vital catalyst for regional and national growth, it is a cargo hub, and it employs more than 10,000 people. One in six of those jobs is filled from my constituency and the wider district of Braintree. Such airports—Heathrow was mentioned in this context by the hon. Member for Feltham and Heston—are vital in providing our constituencies and regions with employment and investment.
It is essential for Ministers and the CAA to bear in mind that increasing airport capacity is not an unreasonable objective. Environmental concerns have been mentioned, but above all we should consider the interests of passengers and the need to demonstrate to the world that the United Kingdom is open for business. This is not just about airports in the south-east; it is about UK plc. I touched on the role of enterprise zones earlier. They will be central to the facilitation of inward investment, and I think that they should be complemented by a great and robust aviation strategy for the United Kingdom.
It is a pleasure to take part in a debate that has featured a sparkling maiden speech from Seema Malhotra. I spent a great deal of time in what is now her constituency, trying to ensure that she did not get the job. My wife lived there when we were courting, and I know it reasonably well. I know, too, how important the biggest airport in the country is to the constituency, and how many people work there. I know that she will be a very good champion of all her constituents, and I congratulate her again on her maiden speech.
It is also a pleasure to follow Priti Patel, who reminded us of the importance of runways in the context of aviation. There was an incident not so along ago when a jet coming into Heathrow did not quite make it, and that proved that runways are all-important.
Let me record my sympathy for the Minister of State, Department for Transport, my right hon. Friend Mrs Villiers, who was to have responded to the debate. I hope that I am correct in describing her as a right hon. Member. If she is not one, she should be, for she is excellent. Unfortunately, in a bid to become road safety Minister, she was injured in a cycling accident and is undergoing surgery.
As we have heard from Members on both sides of the House, including the hon. Member for Feltham and Heston and my hon. Friend Christopher Pincher, aviation plays a critical role in UK plc. My constituency, which is in the heart of the midlands, near junctions 15 to 19 of the M1—anyone who remembers seeing the old Rugby radio mast while driving up the M1 will know where it is—is now typified by a number of jobs that rely on the aviation industry. It is a hub for all the cargo that is shipped up from Heathrow, down from East Midlands airport and across from Birmingham. It is because so many jobs in my constituency rely on the aviation industry that I wanted to speak in the debate.
However, aviation is important to the economy in many other ways. I was recently lucky enough to travel to Kazakhstan, Azerbaijan and Georgia. All the people whom I met in those growing economies had this in common: they were desperate to come to the city of London, and, if they had any money, they wanted to spend it here. We need a gateway that can accept all those fantastic consumers of the future, and can welcome those who wish to do business with us and invest in us.
The experience at Heathrow airport is very different, however; it is a shopping centre with a couple of runways attached. For the Heaton-Harris family, getting to a gate at Heathrow airport involves an awkward shopping experience. The last flight I caught out of there cost me only a couple of hundred pounds, but the shopping experience almost trebled that. I know only too well, therefore, how much business comes from airport shops.
I have an airport in my constituency. The wonderful airport of Sywell has a rich history and an interesting and controversial present, which is why that is the only comment I shall make about it.
Turning to our country’s larger airports, much of our aviation regulation is governed by 1980s-style legislation, which is one of the reasons why this Bill has been introduced. This Government and the last Government both realised it needed to be updated.
I am suddenly enamoured by 1980s-style legislation. Indeed, I had the haircut to go with the music of that era—I had some follicles back then.
The Bill offers a package of reforms to make regulation and the sanctions that support it flexible, proportionate, targeted and effective. It proposes removing unnecessary regulation and intervention by central Government and devolving more responsibility to the independent specialist regulator, the CAA. It also seeks to make the CAA accountable and to ensure that it weighs both the costs and benefits of its decisions. Further, it proposes that some of the costs of regulating aviation should be moved from general taxation to the aviation industry, so that the people who use it, pay for it. That is the right way forward.
Above all, the Bill puts the consumer first, and I am all in favour of that. I am a regular customer of the aviation industry—although I would like to be a more regular customer—and when booked on a Ryanair flight I become the Michelin man, as I will wear all my clothes because I do not want to pay the excess sum for booking in a suitcase. I am also the man who has to repack his “smalls” in front of the waiting British Airways passenger queue because my baggage weight has exceeded the limit and the lady at the check-in desk has said, “23 kilos and a few extra grams is too much.” I am all for more deregulation and common sense in the aviation industry, therefore. It is very important that the consumer is put first in respect of the regulation of airports, which have substantial market power. The CAA’s primary duty should be to consumers. Passengers and, importantly, the owners of cargo must have a greater say.
The Bill also gives the CAA a role in promoting better public information about airline and airport performance. I support the clauses that provide that. Transparency and greater information are essential. As a consumer, I like to be able to look at relevant information and choose my airport and carrier. In that regard, the more transparency, the better.
I agree about the need to reform regulation. Does my hon. Friend agree that we also need a proportionate approach? Newquay airport is in a neighbouring constituency to mine, and it serves all of west Cornwall. It is vital for connecting Cornwall with the rest of the UK and beyond for business and other purposes. We must bear in mind the importance of such small and remote airports that may not—
Order. Members must make brief interventions, not speeches. I have been very lenient. I also ask Members to face the Chair when intervening.
I agree with my hon. Friend. I used Newquay airport once, and it is small but perfectly formed. The small airports around our country serve as important regional hubs. Because they serve the regions so well, they become very important to the local business community, such as in respect of inward investment. My hon. Friend is right to stress the need for a proportionate approach.
The environmental impact of aviation gets the juices of Dr Huppert flowing; indeed, the bulk of his speech was about that subject. Measures to be taken to mitigate adverse effects are relatively well addressed in this Bill, and I am sure they will be fleshed out in Committee.
The Transport Committee raised a handful of concerns during its pre-legislative scrutiny of the Bill. It agreed with just about every Member in the Chamber that the UK needs a healthy, competitive and sustainable aviation industry that includes the very important regional airports, as we have heard, and air services. There are some questions, however, that have yet to be completely answered about the transfer of safety and security to the CAA. There are concerns that the Government are proposing to transfer that important area without proper planning and consultation just to reduce costs. I do not believe for one second that that is the case, but it would be very useful if the Minister could outline exactly what consultation and planning went into the decision. Indeed, there might be some reason to return to these matters in Committee. It also remains unclear how far the Department for Transport will go towards a more efficient outcome-based approach to such regulation. This is an important area of regulation, as the security and safety of aviation is possibly the most emotive part of security and safety.
The Bill also proposes to permit the Secretary of State to change the CAA’s remit through secondary legislation, which, in itself, creates a certain amount of uncertainty. One never knows what will come around the corner next. The Select Committee also found that the division of responsibilities between the Government and the CAA was slightly unclear. I would like to think that the Government will ensure that all uncertainties in that area are completely cleared up as we go through Committee.
The main themes of the Bill are very important: growth and competition, consumer benefits, better regulation, the “user pays” principle and the need to reduce the role of central Government. Very few people could argue with those main themes. Indeed, under the “user pays” principle, the savings for the taxpayer as regards aviation security should be about £4 million a year. It is important, obviously, that we get this exactly right.
I broadly support the Bill—and the industry supports many of its measures—but it is important to secure buy-in for all the measures and ensure that they are all properly implemented. It is also important to listen to the industry when making the laws that relate directly to it. When we give power to its regulator in such a way, it is vital that there is, as I said, complete buy-in. Indeed, I know a number of Members received numerous pieces of correspondence from different airlines. The latest to hit my inbox was from British Airways—not that I hope that by mentioning it I will get the black card for the invitation-only lounge, although I know that the other Deputy Speaker was very keen to receive that—[ Interruption. ] And, of course, he would have declared it, in any event. I mention that company because it is vital that the views of the big players in the industry are taken into account. I do not think I will ever be called to make another speech, so I am going to enjoy the next two minutes and fifty five seconds.
Too often, laws have been made and those directly affected by them have not had their views taken into account. Who is directly affected in this case? The airlines and, most importantly, the consumers. That is why I welcome the emphasis.
I am also wary about the cost of regulation. Using the “polluter pays” principle, we are passing a huge amount of cost away from the taxpayer, which is a very good thing, to the people who use the businesses.
I welcome the theme that runs through the Bill of reducing Government intervention in the regulation of industry. I listened with great interest to Julie Hilling, who was greatly concerned about the competitiveness of airports and passing down the costs. Past events show why it is important for the CAA to be able to respond, which is not something that many Members have been able to talk about because the Bill is so important and so big. The industry and the regulator must be able to respond in real time to emerging issues, such as the snow of last year and the ash cloud that we all remember from when we were campaigning in the 2010 general election. That is when I realised that the constituency I hoped to represent was relatively prosperous—when I went to villages in its northern part and found the people had all been stranded abroad because of the ash cloud. I am very pleased that the Bill emphasises the need to give the CAA the chance to respond quickly to the kind of awkward situation that we in the United Kingdom have not always been able to respond to properly before.
I conclude by broadly welcoming the Bill. I hope that, as my hon. Friend Jackie Doyle-Price said, when we talk about transparency we will have the consumer fully in our minds, because we certainly see no transparency in the fares that the aviation industry sticks out there when we try to find a flight at the advertised fare without any extra costs. There should probably be a call at some point for proper transparency to mean that the fare advertised should be the full, final fare and not much else.
It is a pleasure to follow my hon. Friend Chris Heaton-Harris, who told us about his courting days under the Heathrow flight path. I am sure that colleagues were delighted to hear that he still regularly returns to Heathrow with his now wife. It is not clear whether they do this on their anniversary or not, but it seems that a certain amount of shopping at Heathrow is involved.
I am also pleased to follow my hon. Friend Priti Patel, who put the case for Essex very well and looked strongly after the interests of her constituency and Essex more widely in her remarks about Stansted, the strong progress on expansion and the strong economic role being seen at Southend. I know that the councils for Southend, Thurrock, Medway, Kent and Essex are working together as a local economic partnership on sensible proposals on aviation and alternative options to the Thames estuary option, which was so ably dismissed by my hon. Friend Jackie Doyle-Price. The Secretary of State was not in her place at that time, but I have every confidence that the Under-Secretary of State for Transport, Norman Baker will pass on those very strong arguments in private as strongly as he does in public. Let me also take this opportunity to thank the Secretary of State for the very strong support she has shown for our area by holding back the increase in the Dartford tolls and in what she has done on train regulation and fares.
The debate has been largely non-partisan. Indeed, the regulation of aviation has been a non-partisan and technical area on which both parties have worked closely with Whitehall going back all the way to 1967 when the Edwards committee first looked at aviation regulation. It took a full two years to report, in 1969, to the then Secretary of State Anthony Crosland, and the report led to a White Paper from the then Labour Government. With the new Conservative Government in 1970 came the Civil Aviation Bill, which followed through on that preparatory work. There are clear parallels between that work and the way we are working together on these issues now.
It is worth noting that when the CAA was set up it was a pathbreaker for other regulators. The then Minister for Trade, Michael Noble, said, on introducing the Bill, that the CAA would be a “constitutional innovation.” He went on:
“The key point perhaps is that we are in this Bill hiving off a regulatory function. Ministers remain responsible to Parliament for policy, but detailed decision rests with the Authority.”—[Hansard, 29 March 1971; Vol. 814, c. 1173.]
That was new then, but we have since seen the development of regulators in many different contexts. The challenge between ministerial and parliamentary responsibility and expert opinion remains with us today and is core to this Bill.
A very positive development, in contrast with what we saw in the late 1960s and early 1970s, was the fact that the Pilling review of the Civil Aviation Authority was brought about by elected colleagues on the Transport Committee rather than by ministerial decision. That report was published in July 2008 and was followed up by Labour Ministers in the previous Government in a statement to the House and then in a consultation paper. The fact that that all came as a result of the Select Committee is new and is very much to be welcomed. When the previous Government engendered the proposals, the then Minister noted that
“as now, the CAA will only be able to act where it is reasonable and proportionate and where it has legal power to act.”
However, the CAA responded:
“The DfT’s proposals build on many activities already undertaken by the CAA, but give them a clear statutory basis”.
The then Minister did not explicitly accept that the CAA had been operating beyond its statutory remit, but the Bill is long overdue, as it will bring clarity to what the CAA does, and make sure that that is Parliament’s intention.
Our right hon. Friend the Prime Minister set out three clear principles on quangos and cases in which they might be justified. Conservatives are strongly against unaccountable quangos, but the three scenarios that the Prime Minister set out were, first, a precise technical function that needed to be performed to fulfil a ministerial mandate; secondly, a requirement for politically impartial decisions on public money in particular circumstances; and thirdly, cases in which the facts needed to be transparently determined. The CAA fulfils the need for a precise technical function to be performed to fulfil a ministerial mandate.
I welcome the Bill. Although, as my hon. Friend Steve Baker said, it provides more flexibility, it engenders far greater clarity. To date—and we have given this to the CAA—the authority has had four different objectives, but there is a lack of clarity about their order, so, inevitably, it has great discretion in how it chooses to balance those potentially competing objectives.
In the Bill, under the single duty that the Government propose giving to the CAA for consumers and their interests, it is much clearer where the authority is going. Regulation, while more flexible, should none the less be more predictable to people in the industry and to other stakeholders. That is broadly welcome. The same applies to appeals. If anyone is dissatisfied with a CAA decision, the only recourse is simply judicial review and the application of Wednesbury principles as to whether the decision has been properly made. The appeal process in the Bill is much improved, because a specialist competition tribunal will be introduced, and it will look at the objectives that have been set for the CAA by Parliament. It will assess in an expert yet judicial way whether or not they have been properly met. Ministers are not persuaded that there should be a right of appeal for the Secretary of State on licence conditions, but when regulations are extended to price cap anew or to remove a price cap, the Secretary of State may have the right to appeal. It is not clear from the explanatory notes whether that reflects the EU dimension or whether Ministers genuinely believe that that is a positive measure.
The cap application is significant. Manchester was de-designated, and Ministers made that decision—a statutory order was made—but the principles behind that de-designation were not clear, making investment difficult in some circumstances for the aviation industry. If we have a clear parliamentary test of when a price cap is needed, that should provide greater clarity for industry participants.
It would be difficult to have an environmental objective and a consumer objective, then look to an independent regulator to balance the two. The right approach for the greenest Government ever is for Ministers to make those decisions and to set a clear framework, whether in taxation or planning, for industry. That is the best way to balance those objectives.
A key issue is flexibility, and flexibility in the price cap is particularly valuable. The CAA currently has an opportunity to set the price cap only once every five years, and when circumstances change the price regime can be left looking inappropriate, but nothing can be done about it. For example, the CAA’s decision notice, published in March 2008, states that
“at Heathrow, the CAA has built into the price caps contingent funding for the costs of developing further”— during the five-year period—
“the option to expand the capacity of the airport.”
The House of Commons Library has confirmed that that was a reference to the potential third runway at Heathrow, which of course did not happen and—Ministers are very clear—will not happen. None the less, Heathrow is still to be regulated on the basis of an RPI plus 7.5% a year increase in the overall landing charge revenue, but there is no opportunity to review that in the light of the decision not to develop a third runway at Heathrow.
The shadow Secretary of State, if I heard her correctly, said that the Government have a blanket ban on expansion at airports in the south-east. I believe that that is quite wrong. Look at what Luton airport is doing through its road show and expansion in capacity or, as my hon. Friend the Member for Witham explained, what Southend airport is doing. Last week I met representatives of Birmingham airport, who talked about expanding by 25 million passenger movements, the vast bulk of which would relieve pressure in the south-east. At Gatwick a significant increase in capacity is planned, even before the second runway restriction runs out in 2019.
The key criterion is the benefit to consumers of the regulation. However, there is something about aviation regulation that makes it different from other regulation, because in the middle there are the airlines. Sometimes their interests are the same as the consumer’s, but other times they are not. The landing charge at Heathrow is perhaps only £16 a passenger, compared with £50 to £80 for “Boris island”, and £16 or thereabouts is really not expensive. Given the economic benefits of using Heathrow, a huge amount of the benefit accrues to the airlines that happen to have slots there. The regulation in those slots is imperfect and has developed over time, but were the regulator to increase charges at Heathrow, it is not immediately obvious to me, as an economist, whether that would be passed on to consumers in the usual way. To the extent that Heathrow is almost at capacity and landing charges are so low, despite the high value of a slot, an economic analysis suggests that lower restrictions on landing charges might lead to a lower slot price and greater flexibility for the efficient allocation of slots, rather than that necessarily being passed on to the consumer. How the CAA will regulate this is therefore an important area of principle to consider.
The chairman, deputy chairman and non-executive directors of the CAA will be appointed by the Secretary of State, which is very sensible. It is difficult to see why the Secretary of State would also want to appoint all the executives, let alone determine their precise remuneration. We want to ensure proper accountability to Parliament. Some colleagues have mentioned the National Audit Office. I understand that the chief executive would be signed off by the Secretary of State as well, although the nomination would be made by the non-executive directors. I also hope that we would have appropriate parliamentary scrutiny of those appointments.
I am grateful to colleagues on the Transport Committee for the work they have done on this. It is excellent that everyone is working together and I look forward to hearing the Minister’s comments. It is certainly a strong positive for the regulation of the sector in this country.
It is a pleasure to follow Mark Reckless in what has been an interesting debate with many informative contributions. As my hon. Friend Maria Eagle said in her opening remarks, however, the Bill’s arrival is something of a surprise and seems to have more to do with the lack of Government business than with anything else. It is timely none the less, and we welcome it and look forward to it reaching Committee.
The Select Committee on Transport has, with its report published on
I am sure that the House is grateful for that update and good news from the Secretary of State.
As I was about to say, we have a good idea about those aspects of the Bill which we will want to look at in particular, given all the background information, briefings and papers with which we have been supplied.
There have obviously been numerous briefings from industry stakeholders, community groups and others, mostly welcoming the Bill in general but asking for specific issues to be raised, and we will do our best to examine them. Some we will be able to support, but all we will wish to look at more closely.
My hon. Friend spelt out several issues in some detail. There is a broad welcome for the general reform of the CAA and its role, but questions will need to be addressed about security, environmental duty, passenger welfare and protection, NATS and the role of the National Audit Office. As she said, we have interests in all those areas. She outlined our concern about security and the need for assurances that the proposed new arrangements will be able to respond quickly to events, and on the quality and experience of the staff who will have to be either transferred or recruited. There are also the questions of costs and ultimate decision making.
On the environment, there is a clear change of policy from that of the previous Government. The Transport Committee explored the issue with the Minister of State, and we will wish to return to it because, notwithstanding the fact that many airports are good neighbours to nearby residents, we want best practice to be adopted at all airports. It appears to us that a duty would have been the best way forward.
The passenger as customer needs to be assured that their position as consumer is protected at the airport and against companies failing, so we, like many hon. Members, welcome the ATOL changes. As my hon. Friend graphically recalled, however, her experience in the snow last year with the former Secretary of State was not a happy one for her, for him or, most importantly, for the passengers who were stranded, so we want safeguards against such situations. Passengers deserve the best protection against failure, but we recognise that airports are at the mercy of other forces outside their control.
The question about the role of airlines and secondary duties, which the Transport Committee raised, seems to be addressed in the Bill but warrants consideration, as do the various competition structures and appeal mechanisms outlined in the Bill and its schedules.
My hon. Friend raised several other issues, which the Bill Committee will I am sure be keen to discuss with Ministers, including how the aviation consumer advocacy panel will work, the lack of detail on the requirements to publish passenger welfare plans, the performance of the UK Border Agency and baggage handling, to mention just a few.
The Secretary of State opened the debate and clearly outlined the measures in the Bill: the greater accountability in the CAA reforms, the transfer of security and the extension of ATOL. I have mentioned the points that my hon. Friend the Member for Garston and Halewood made in reply. She welcomed the Bill but expressed the hope that we would improve it in Committee. She commended the Transport Committee, but expressed concern about the time that it had been given to do its work. As I have mentioned, she covered comprehensively our concerns, especially on the security provisions.
My hon. Friend the Member for Liverpool, Riverside, the Chair of the Transport Committee, made a useful and insightful contribution, in which she referred to a number of concerns that the Select Committee had registered. As I and other hon. Members have said, we will consider those concerns in the Public Bill Committee.
Mike Freer, who apologised that he would not be here for the winding-up speeches, spoke up for business travellers. He and my hon. Friend the Member for Garston and Halewood raised important questions about the UK Border Agency. He also spoke about regulation and security.
My former ministerial colleague at the Department for Transport, my hon. Friend Mr Harris, made the case for ministerial cars strongly. He expanded on the need for a vibrant aviation industry. He argued that aviation need not be and is not the enemy of the environment. He also made a powerful case about the capacity constraints at Heathrow.
Kwasi Kwarteng, who I do not think is in his place, confused the Chamber about his position on the third runway. He seemed to make points both for and against it. I wish him well in maintaining the ability to articulate opposite positions. He is in good company in this place. Perhaps he could send me a copy of his press release on his speech, as I am sure that it will be worth reading. He also made good points about the industry and the Bill.
My hon. Friend Phil Wilson and other hon. Members spoke about regional airports and asked about their role and capacity. He spoke specifically about the future of Durham Tees Valley airport and the impact of the value of Heathrow’s slots on UK aviation. He made a strong case for the continuance of his local airport, as did others. He has been lobbying on that issue for a considerable time.
Dr Huppert raised a number of issues that he wanted to be raised in Committee. I am sure that they will be. He apologised to the House and hoped that we would not be disappointed at his brevity. I assure him that we would never be disappointed at his brevity. I cannot imagine how he arrived at that conclusion.
My hon. Friend Gavin Shuker is another member of the Transport Committee and also has an airport close to his constituency. He drew on both aspects to raise some key points, including capacity.
Fiona Bruce raised a number of issues about the extension of the ATOL scheme and its weaknesses at present.
My hon. Friend Julie Hilling raised questions about timing, the level of scrutiny, the absence of an environmental duty in the Bill and security.
Christopher Pincher did not seem to accept that the Bill has arrived earlier that expected. Perhaps his ministerial colleagues could clarify that for him and reassure him, as did my hon. Friend the Member for Luton South. The hon. Gentleman raised European comparisons and the critical role that aviation plays in the economy.
My hon. Friend Mark Lazarowicz raised the need for environmental progress. He spoke about the environmental progress that has been made and about the absence of such a duty in the Bill. He raised the BMI takeover, as did a number of other colleagues.
Iain Stewart, another member of the Transport Committee, gave us the benefit of his examination of the key issues. He confirmed that Milton Keynes neither has nor needs its own airport.
My hon. Friend Seema Malhotra made her maiden speech. It was warmly received on both sides of the House, as maiden speeches generally are. Her contribution demonstrated a confidence and self-assurance that I am sure will serve her constituents well in the years ahead. Her description of her constituency and of the significance of Heathrow underpinned the relevance of her contributing to this debate. I hope that her mention of various local media outlets will ensure that her speech is covered well. I would be very surprised if it was not. She undoubtedly has the prospect of a long and distinguished time in this place. I look forward to watching her progress in the years ahead.
Damian Collins was generous in his praise of my hon. Friend’s maiden speech and made a number of points, particularly about how to reduce the environmental impact of stacking by increasing capacity rather than constraining it. I strongly recommend that he talks to his party’s Front Benchers to suggest that they take up the offer of cross-party talks made by my hon. Friend the Member for Garston and Halewood. His contribution was very thoughtful and covered the role of his local airports, and I agreed with much of what he said.
In contrast, I disagreed with many of the points made by my hon. Friend Kelvin Hopkins, who is not in his place. He spoke briefly about security and his opposition to increased capacity, and argued for more regional airport usage. His local airport is already very successful, and he argued that it could do more.
I have to report that, as Nigel Mills rose, the batteries in my hearing aids ran out, and sadly the spare batteries were also flat. Some would say that that was good timing, but that would be very cruel. He is very softly spoken even with the amplification at the back of the Benches, but he spoke of the need, or rather lack of it, for regulated competition and of the five airports within 50 or 60 miles of his constituency. He raised questions about the ATOL provisions which I am sure will be asked in Committee, whether he is with us or not.
James Wharton mentioned Durham Tees Valley airport and powerfully supported my hon. Friend the Member for Sedgefield in the cross-party campaign for it to maintain its position. He was generous to my hon. Friend the Member for Feltham and Heston; in fact, I believe he was the first Conservative Back Bencher to own up to having been a recent visitor to Feltham and Heston. A number of colleagues repeated that afterwards.
Jackie Doyle-Price argued for less regulation and more market influence, and consequently a better deal for the passenger, but she also called for clarity in decision making and for a more mature debate—something that Labour has been offering and would very much like to take place.
Priti Patel, another visitor to and admirer of Feltham and Heston and its new MP, accepted that she was making a number of points that had already been raised, but wanted to cover them again. She also raised the important point of investment in aviation across the globe and our falling behind our international competitors in developing our infrastructure.
Chris Heaton-Harris explained how important aviation was to his constituency in particular, and agreed that the regulations covering the industry needed updating. He made a strong pitch for a British Airways business lounge pass, and I sure The Daily Telegraph will be very keen to report his progress. He might want to keep us all posted as to how he gets on with that one.
As many Members have mentioned, the aerospace and aviation sectors are vital elements of the UK economy. Collectively, the industry is a major earner, manufacturer and exporter. Aviation’s role in connecting us with the rest of the world is key to growth, which has sadly been lacking in the Government’s economic performance since they came into office.
Aviation has made huge strides in addressing its environmental sustainability. At a recent aerospace reception here in the House, it was stated that the new A380 was 25% cleaner and quieter than its predecessors. In fact, it was said to be more fuel-efficient than a Toyota Prius. If someone drove it down the M4, they would not have to pay the London congestion charge.
Aviation is worth £11 billion to UK gross domestic product and employs 200,000 people directly and 600,000 indirectly. It is a critical industry, yet Government policy is in disarray. As my hon. Friend the Member for Garston and Halewood outlined, she offered cross-party talks to address the critical need for a national plan, and it is a very sad comment on the coalition that the Government did not respond positively. The offer still stands.
The CBI, London First, the British Chambers of Commerce, the TUC and the industry stakeholders are seeking a plan—a strategy to map out how aviation will develop and contribute to our economy recovery. They will clearly have to wait for that, for as my hon. Friend pointed out, “better not bigger” is a slogan, not a policy. At least we have the Bill.
The hon. Gentleman was not listening. My hon. Friend held out the prospect of cross-party talks to see whether there is a way forward to develop a national plan. Labour proposed a third runway at Heathrow but lost the election. We recognise that it would be unrealistic to continue with that proposal. To demonstrate that there were no preconditions to cross-party talks, she said we are dropping the plan for the third runway, so let us talk about options, and about how we increase capacity and whether we need to do so. As the treasurer of the all-party group on road passenger transport, my hon. Friend Mr Donohoe suggested whether Northolt was the answer. Is the answer the Thames estuary, which has been raised by a number of colleagues, including the Mayor of London? Is it Gatwick? The Opposition, supported by industry, say that there is a capacity issue in the south-east that needs to be addressed. It is all well and good if we come up with a consensus, but let us sit down and talk about it. That is the invitation from my hon. Friend the Member for Garston and Halewood.
As I said, at least we have the Bill. We look forward to the Public Bill Committee and engaging with the Government to improve the Bill. We are happy to support it on Second Reading, and I look forward to the Minister’s reply.
I welcome the kind comments from Members on both sides of the House in respect of my right hon. Friend the Minister for Transport—she is indeed my friend. If she is watching, she ought not to bother but get some rest.
I welcome the many constructive comments in the debate, and I am particularly grateful to the Transport Committee for expediting the process of pre-legislative scrutiny when this earlier slot became available for the Bill. The Committee found that both airlines and airports welcome the Bill.
The Bill process has been going on a very long time, as Opposition Members will know only too well. I accept that it would have been ideal to have slightly more time for scrutiny but, on the other hand, in the aviation industry if a slot becomes available, we must take it. It would not have served customers, passengers or the industry well to have let that slip while a number of months went by, because there is a great deal of Government business to fit in.
My right hon. Friend and I welcome the Transport Committee’s response and look forward to the comments of members of the Public Bill Committee. We will listen carefully to members on both sides of that Committee.
Many hon. Members have made the case for the continuing importance of our aviation sector. We have a vital, dynamic aviation industry. The continuing success of that industry is essential to our economic growth. Our reforms have been designed to allow competition to flourish and for our industry to innovate and thrive.
I shall do my best to respond to the many points made in the debate. A number of hon. Members spoke up for their local and regional airports, including Luton airport and Teesside—or is it Durham and Tees Valley?—airport. Phil Wilson asked for a meeting about his particular situation. I am sure my right hon. Friend will be very pleased to see him and other hon. Members on a cross-party basis to discuss that situation when she is back in the saddle.
As the Secretary of State made clear in her opening remarks, most airports in this country are competitive and look after their passengers. Our reforms are designed to protect the interests of passengers, particularly at the small number of airports such as Heathrow that have substantial market power. For all other airports, the main change introduced by the Bill is that the CAA will be able to bring its expertise to the investigation and remedy of anti-competitive behaviour by having concurrent powers with the Office of Fair Trading.
The Bill replaces an inflexible, one-size-fits-all approach based on five-year price controls with a flexible regime under which regulation can be tailored to individual airports’ circumstances so that the CAA can reduce the scope of economic regulation while retaining essential protection for passengers.
At the heart of the new proposals is a single, clear, primary duty to further the interests of end users—passengers and freight owners, now and in the future. The passenger is centre stage. This will enable the CAA to undertake enforcement action in real time when this becomes necessary. The Chair of the Transport Committee, and the Committee’s report, asks if we might have greater clarity in the Bill’s definition of users of air transport services and suggested the phrase
“passengers and shippers of cargo, both present and future.”
I would draw to her attention clause 69 which defines air transport service as
“a service for the carriage by air of passengers or cargo to or from an airport in the United Kingdom”.
Users of air transport services are persons present and future who are or will be passengers carried by such services, and persons with a right in property carried by such services. This will not cover shippers of cargo, unless they have a right in property in that cargo, because we think it is more important to protect the interests of the owners of cargo, rather than the shippers—again, putting the customer at centre stage. I hope that the Chair of the Select Committee will recognise that the clarification she seeks is in that clause in the Bill.
I am happy to advise the hon. Gentleman that the Department for Transport is producing a comprehensive aviation strategy, which according to the Department’s business plan will be published in March.
He will be able to look at that and see whether it deals with the Northern Ireland situation in which he is clearly interested.
The shadow Secretary of State referred to the issue of future passengers, as against present passengers. I recognise that that is an issue, and clause 1(5) empowers the CAA to determine how to fulfil its primary duty to promote the interests of users when conflicts arise. This is in line with affording requisite discretion to the regulator and taking politics out of regulation. In other words, it would not be helpful for the case the hon. Lady makes to be more specific about the CAA’s powers than the Bill currently is.
One or two hon. Members asked why the airline consultation supplementary duty has been dropped. Stakeholders including airlines should be consulted by the CAA when it carries out its economic regulatory functions. There is an obligation to consult bodies representing airlines on licence conditions, licence modifications and penalties. Any airline is free to make representations, and we do not believe that the CAA would ignore any relevant representation. Furthermore, whenever a conflict arises between passengers’ interest and those of airlines, the CAA will be bound to act in passengers’ interests, given the primary duty in the Bill. A further secondary duty would not affect that position, which is why we came to that conclusion.
The shadow Secretary of State also asked about resilience. The implication of her comments was that since the former Secretary of State for Transport—with her, it appears—was out at Heathrow, nothing has happened, but nothing could be further from the truth. There have been extensive discussions between the Department and the owners and operators at Heathrow about winter resilience. This winter, I am happy to say that the major airports in London are much better prepared than they were last year. But when the CAA proposes full airport licences, it will of course be required to consult on the content of those licences and any subsequent changes to the licences. It will have to take into account any representations during those consultations when setting conditions, and we will require it to include welfare plans if those are in current and future passengers’ interests. I hope that that gives the hon. Lady the satisfaction she was seeking on that point.
Several hon. Members referred, rightly, to the welcome proposals in the Bill on ATOL, especially my hon. Friend Dr Huppert. He wanted an assurance that consumers would know when a holiday was ATOL-protected, and I can assure him that that is a key objective of the Government in the changes we are proposing. We are also interested, of course, in the Transport Committee’s deliberations on this important issue.
Nigel Mills asked whether the Ryanair holiday model would be covered by the ATOL reforms. The intention is to ensure as far as possible that any holiday booked with a flight is covered by the changes. The hon. Members for Bolton West (Julie Hilling) and for Congleton (Fiona Bruce) also raised issues relating to ATOL reform. I confirm that we consulted over the summer on proposals to improve clarity for consumers about the ATOL scheme’s coverage. I agree fully that the current situation can be unclear and misleading for consumers, which is why action is needed as soon as possible.
We propose to expand the ATOL scheme to include flight-plus holidays that work like packages but lie outside the narrow legal definition. We also propose that an ATOL certificate should be issued whenever consumers purchase an ATOL-protected flight or holiday, as a further means of providing clarity. We aim to announce a decision shortly on the reforms, which can be implemented by new regulations under existing powers. We are taking steps forward on that. The holiday industry has made strong representations that it is no longer clear whether holidays are ATOL-protected. As I said, we think we can deal with that problem by allowing for the addition of more flight-based holidays.
In her introductory comments, the Chair of the Select Committee referred to impact assessments. The Transport Committee stated that
“licence conditions, and their associated costs to airports, may not be proportionate to the benefits delivered”, and that was the thrust of her point. Ultimately, where costs are associated with licence conditions, users of air transport services will pay those costs. Where the costs of a proposed licence condition are seen to outweigh the benefits to passengers, it will not be in passengers’ interests to impose the condition, so the CAA’s primary duty would not be met if it did so.
The Bill requires the CAA to consult on proposed licence conditions and states that a licence may not include conditions that differ significantly from those on which it has already consulted. It must set out the reasons for conditions included in the licence, how it has taken into account any representations made, and the reasons for any differences from the conditions initially proposed. I think that that makes the case for the approach that we are taking. The fact that putting the passenger centre stage is the CAA’s primary duty will we hope give the hon. Lady the reassurance that she rightly seeks. I will come to security issues in a moment.
The shadow Secretary of State referred to vexatious appeals. I do not think that they are likely to occur. The Government’s proposed regime has features to deter frivolous or vexatious appeals. In particular, in most cases the appeal will not suspend the licence condition’s coming into effect, although the appeal body will have the power to impose interim relief under circumstances. There is therefore limited incentive to appeal for the purpose of delaying the decision.
The shadow Secretary of State also referred to the consumer panel. We believe that it is a useful innovation in the Bill. As she might know, the successor body to the Air Transport Users Council is being consulted on. It was announced on
Environmental issues were raised by several Members, including my hon. Friend the Member for Cambridge, who was concerned, as were some Opposition Members, about the absence from the Bill of an environmental duty. The matter has been considered carefully. One reason why the Bill does not include such a duty at the moment, although the Government fully accept the need to take the environment into account in aviation, as everywhere else, is that it is thought that economic regulation is not the appropriate vehicle for doing so, not least because it enables the CAA to address only airports with substantial market power and only where regulatory intervention is warranted. That currently includes only three airports, but environmental externalities are present at a wider range of airports and need to be factored in. That is why the Government decided to proceed by placing on the CAA an information and publication duty that is considered to be more concrete and of more practical benefit to the public than the previously proposed environmental objective. The CAA is under an obligation to publish such information and can also issue advice and guidance to airport operators.
I hear what my hon. Friend says. He is correct that information is helpful and that all airports have a role to play, but will he consider more carefully whether it would be a good idea to put that environmental duty in the Bill so that as many steps as possible can be taken to protect the environment?
My hon. Friend makes a point that others have made. If he or others want to pursue it in Committee, they will need to demonstrate that there is information that needs to be provided or actions that need to be taken that would not be provided or taken under the regime in the Bill. If he can demonstrate that, I am sure that Ministers will have an open mind.
Iain Stewart made an interesting point about the CAA’s new consumer panel, suggesting that it could help the CAA to decide how to use those powers and what information to collect. That sounds like a good idea, and we will encourage the CAA to consider it. I am grateful to him for his suggestion.
Members on both sides of the House mentioned the National Audit Office. The NAO’s role is to scrutinise public spending on behalf of Parliament, but the income that the CAA derives from the industry is not public spending, as Parliament recognised when it removed the NAO’s role in 1984. The issue of the CAA’s auditors was considered by Sir Joseph Pilling, as my right hon. Friend the Secretary of State mentioned, as part of his 2008 strategic review of the authority. He concluded that there was no need for the NAO to be involved directly with the CAA.
Many other points were raised in the debate, but I am conscious that I have taken much longer than the shadow Minister. I therefore do not have time to deal with the issue of the smalls raised by my hon. Friend Chris Heaton-Harris—he went on at some length about that—but I can assure Members that all comments will be taken onboard. If I have not answered any questions, I will ensure that a letter is sent out from the Department.
In conclusion, I think that this is a useful Bill. I am grateful for the support of Members from across the House, and I commend the Bill to the House.
Question put and agreed to .
Bill accordingly read a Second time.