I beg to move, That the Bill be now read the Third time.
I am grateful to everyone, or nearly everyone, who has taken part in the debate and in Committee. We have given the Bill a thorough consideration.
I shall be brief in my remarks but I would like to spend a few minutes on an aspect of the debate that we unfortunately did not have sufficient opportunity to discuss. On Second Reading, we promised to return with a statement on our attitude to the Civil Aviation Authority's proposal for a £1 levy on all air passengers departing from the UK to help us deal with tour operator and airline insolvency. Those amendments were not selected so I placed a written statement before the House setting out our response to the proposals.
We decided on balance that regulation on that scale would not be proportionate given that the risk to passengers can be reduced in other ways and that the risk of airline failure is small.
Has the Minister considered the number of airlines in the United States that are under chapter 11 and on the edge of bankruptcy? Swissair has already gone belly up and other European airlines are in the same position. In such cases, what will happen to UK passengers if they are not covered by insurance, which is the present state of play?
My hon. Friend will be aware that there was a failure during the summer. Although it received astonishingly little publicity, there is no doubt that a lot of people were stranded. It happened to be convenient that many people got on other planes. She should seriously consider the fact that airlines can go belly up.
I will address my hon. Friend's remarks. As I have said, the CAA's advice states that
"the chance of failing is roughly between 2 and 3 per cent."
We believe on balance that insurance should only be compulsory in exceptional circumstances. We do not require travellers to take out medical insurance or an E111. Even with car insurance, the legal requirement is limited to third-party liabilities. The Government have already been working with the airline industry to improve consumer information about insurance cover when booking flights. UK airlines have helped us to develop a basic message for passengers.
Is not this also effectively a third-party liability, which is roughly equivalent to the other scale of risk where compulsory insurance ingredients are required?
I am not sure what the hon. Gentleman means. I cannot see that there is third-party liability; this is a form of compulsory insurance. We weighed up a number of pros and cons—the argument was finely balanced—and we found no other area of public policy where we would expect people to be insured compulsorily.
The costs effectively fall on different parts of the industry. In considering the issue, we bore in mind not only the points about consumer protection and insurance, but the fact that the different parts of the industry had very different interests. The tour operators were generally in favour of one approach, and the airlines were generally, with some exceptions, in favour of another. So it is a question of considering all the different players and then making a decision.
My hon. Friend Mrs. Dunwoody referred to the Irish airline, EUjet, which failed this summer. Other low-cost airlines stepped in to help passengers get home. Similarly, when Swissair and Sabena failed, other full-service airlines honoured the homeward tickets of passengers abroad. The Government have been encouraged by the willingness expressed by airlines to ensure that travellers have better information about insurance and by airlines' assurances that they would continue to take voluntary action on repatriation. I will talk further to airlines in the coming weeks to ensure that effective voluntary measures are in place as quickly as possible.
The Government are also asking the CAA to review whether the system of ATOL—air travel organisers' licensing—bonds could be replaced with a less burdensome means of meeting tour operators' obligations to package holiday-makers under the package travel directive, while replenishing the air travel trust fund following the passage of the Bill. I am also aware that the Transport Committee, which is chaired by my hon. Friend the Member for Crewe and Nantwich, will consider the issue and invite evidence on it during the next few weeks. I am sure that that will give us an opportunity to discuss this in detail.
Does my hon. Friend share my bemusement that the proponents of the scheme seem to suggest that someone who takes a Ryanair flight to Dublin for a stag weekend at a cost of £30 should pay £1 in insurance—the same as someone who is quite rich who goes to the Bahamas first class?
That was certainly very much one of the considerations that was weighed up. Some advocates of the proposal claimed that it would end a two-tier system; but, on closer examination, it would merely replace one form of two-tier system with another. As I say, the proposal will be considered by the Select Committee, and no doubt, it will be considered further.
We do not deny the environmental impacts of aviation, which have been at the core of the debates on Second Reading and in Committee. We seek to reduce and mitigate those impacts wherever possible, but the Government remain of the view that, wherever possible, local solutions are best for local problems. We believe that airport operators will make appropriate use of the powers the Bill will make available to them to tackle environmental issues at local level. The Government have statutory powers that we can use where the voluntary approach does not suffice, and those powers will be deployed if necessary.
I am extremely grateful. I know that the Government use the expression "local solutions" quite frequently, but I am not sure that they know what "local" means. Does "local" mean close to the airport, or does it cover people, such as my constituents, who live 20 to 50 miles from the airport and who are adversely affected by it? At the minute, it does not look as though it means that.
If my memory serves me, the default position is about 40 km from the central airport, and it can be extended further to 60 km. I believe that "local" is reasonably widely defined, and I hope that that is enough to satisfy the hon. and learned Gentleman that his concerns are covered by the powers in the Bill.
I appreciate hon. Members' concerns regarding the powers by which we control noise at Heathrow, Gatwick and Stansted. That was also the subject of a considerable amount of discussion in Committee. Any future proposals for changes to the noise control regime at Heathrow, Gatwick and Stansted would be subject to public consultation. The next night restrictions regime until 2012 will be based on current legislation and will continue to incorporate a movements limit. Airports' ability to set up noise control measures and impose penalties on aircraft operators will be enshrined in statute, but airports should follow a "balanced approach" when introducing new measures.
The Bill will also transfer the costs of the CAA's aviation health unit from the taxpayer to the aviation industry; a much fairer arrangement because those that benefit from this service will pay for it. Our Bill will sweep away unnecessary restrictions on public airport companies to develop their businesses.
I am afraid that I am just about to conclude.
The Bill will abolish appeals to the Secretary of State in respect of route licence applications, which will speed up the take up of new air services, thus benefiting the consumer.
I believe this to be a good and balanced Bill, and I commend it to the House.
I do not want to detain the House long except to review our attitude to the Bill, which we have expressed from the very beginning. Where a lot of thought could have been put into devising a coherent policy enshrined in legislation for us to consider, we really have a complete hotchpotch. We have a random and arbitrary piece of legislation that lays down no coherent policy for the future benefit of the world. The Bill gives us no opportunity to distinguish properly between the poacher and the gamekeeper, and no coherent and consistent regime for either emissions or noise. It is apparent from the mood of the House that the Minister has very little enthusiastic support for the Bill from Labour Members.
I am sure that, had we had the opportunity on Report to reach clause 7, hon. Members on both sides would have warmly welcomed the groundbreaking proposal to place a statutory duty on the Secretary of State for Transport to safeguard the health of aviation passengers. My understanding is that this is, indeed, a first in the world, and the Government should be congratulated on it. I just regret that that duty of care was not extended to the airlines themselves.
Most of the health issues in the Bill, as well as in the amendments that we might have discussed today, are about the health of people on the ground, not in the air. If the hon. Gentleman has any objection to not being able to reach those clauses, he should take it up with his party, his Chief Whip and his Prime Minister for programming legislation and denying the House on every occasion that we consider a Bill the opportunity properly to scrutinise it. If the hon. Gentleman stands up and complains in the way that he has done, he has only himself to blame.
No, I will not give way again.
It is apparent from what we have seen in the House tonight that there is very little support for the Bill on the Labour Benches. We have had a couple of speeches from Members with specific interests in airports in their constituencies, and it is distressing that we have heard no clear arguments for the environmental benefits of the Bill—be they about noise or emissions. The Bill is arbitrary and incoherent.
Perhaps the most dismaying comment was made just a second ago when the Minister said that she thought that local problems were best dealt with at local level. Emissions are not a local problem; they are a global problem. She should perhaps have come up with better solutions to that problem than she has tonight.
We are perhaps able on Third Reading to concentrate, as the Minister did, on the travel trust, the insurance against companies going bankrupt. I said on Second Reading that there was a clear argument for saying that the state should not insure anybody at all and that, in the modern world of travel, everyone should insure themselves as they do their house, their life or anything else. We are, of course, compelled to insure our motor cars, largely, as the Minister rightly said, because of the damage that they might do to other people.
We have pointed out that it is the inconsistency and inequity of the current regime of travel insurance that has become a complete and utter nonsense. We have inherited a model that was designed in the 1970s, when most people went abroad on package holidays. If a package tour company went bankrupt, the system potentially covered well over 90 per cent. of people travelling in such a way. The rise of low-cost airlines and increased international travel has shifted the balance dramatically away from such models, so far fewer people are now covered by the insurance that currently exists. We also have an insurance arrangement that leaves the supposedly effective model in deep deficit, so the Government are required to top it up. Many travellers think that they are covered when they are not. The perpetuation of the flawed model is thus the one option that is nonsensical.
There are two options. One is to say, "You all cover yourselves", and the other is to put a quid on everyone's ticket for perhaps four years so that we can get a kitty to cover people. The Government have shied away from that option by arguing that the modern world says that people can travel on a low-cost airline, insure themselves and somehow get home if they need to. However, an absurd piece of EU legislation called the package travel directive remains in place and that perpetuates the absurdly limited and fragmented model of cover. I have not heard from the Government about how they will introduce consistency after rejecting the model offered by the Civil Aviation Authority.
I think that I am right in saying that in the entire history of the European Union, no directive has been repealed by this House. We thus have a constitutional structure that is forcing on us a fossilised picture of cover, and this House, in debating this Bill, has neither the power, nor even the will, to overturn a directive that puts in place something that is now clearly nonsensical and absurd. I ask the Minister to her face whether it is now Government policy to persuade the European Union—perhaps we will have more influence now that we have the presidency—to repeal the package travel directive.
I can tell the hon. Gentleman that we intend to enter into discussions with the CAA to examine a reform of the bonding system to ensure that companies that are currently covered by the package travel directive will be able to determine whether the burden on them, which they believe to be disproportionate, can be covered in an alternative way. We intend to do that because we realise that there is an issue for consumers and a possible inequity for different kinds of holiday providers.
Quite clearly the answer is no. The Minister has no intention whatever of trying to repeal the package travel directive. Although we get 150 or so directives and 1,000 or more regulations a year, I believe it is true—I am happy to be disproved—that none has ever been revised or repealed. We are thus in a constitutional and legislative ratchet. The situation is a perfect example of the Government believing that they are empowered to decide how companies and passengers should be affected, yet declining to make even an effort to address the problem and thus revise the situation. In other words, they accept whatever comes from the European Union and somehow work around it.
We shall be stuck with the ridiculous picture of an insurance that covers an old-fashioned part of the travel market. However, in the Government's own words, as they argue explicitly in a written statement published today—they at least deserve credit for putting out something detailed in a written statement—they do not accept the arguments for extending cover. They intend to perpetuate an unacceptable position and I am sorry that the Bill does not deal with that.
The Bill has good intentions. We all want to control noise and emissions, but it is a great pity that the opportunity to introduce a sensible and modern regime to control noise and emissions in a crowded and busy world has been lamentably missed.
This is an extraordinarily incompetent piece of legislation. It misses most of the things that are important. I am concerned in particular about financial protection for air travellers. That should have been debated at great length. The original scheme, which was tailored for a particular set of circumstances, has been overcome by changes in the way in which people travel. It is also nonsense to suggest that people who buy furniture are the same as those who take a holiday abroad on a low-cost airline. By definition, people who use low-cost airlines with their families are not able to buy alternative tickets. If we seriously think that there will always be other seats available and that other airlines, including the two or three very good ones that are opposed to the measure, will always find places for people, we will get a bad shock. The Government will have to take responsibility for the large number of holidaymakers who are unable to return.
After two full years of consultation, a course of masterly inaction will now ensure that nothing is done to halt the erosion of consumer protection. Presumably, the Minister means that she will ask for it to be removed altogether. Nothing will be done to reduce the incentive for tour operators to de-package their existing business, which threatens the viability of the ATOL scheme. Nothing will be done to simplify the system so that consumers can understand it. Nothing will be done to combat the increased risk of airline failures. That is a real risk. It is a pretend industry that hardly owns any assets and is sailing, in literal terms, very close to the wind. We will undoubtedly see a number of crashes—if not literal, then certainly economic ones—before long.
The unlevel playing field between tour operators and airlines will continue unless the Government intend to remove all protection. It is extraordinary for a Government who are trying so hard, under the guise of consumer protection, to wreck the way in which the national health service works to say that they are not interested, for the sake of £1 a ticket, in protecting the people who travel out of this country on holiday with their family.
It is a shame. I am sorry that the Government have taken that attitude. We shall return to the subject, but before that time comes, they will have the opportunity to rue their decision.
Clearly, the Bill is beneficial in parts. Clarifying the law on what airport operators can charge for noise and emissions, giving commercial freedom to public airport operators and making the CAA responsible for the health of people on board aircraft are positive developments. There are great concerns, however. The clearest of those is in relation to noise and breaking the link with the number of flights. The Bill does not reflect the House's concern about that.
As hon. Members said, the Bill has a gaping hole. The Minister was decent enough to recognise that by devoting a large part of her speech to the air travel trust fund and the £1 levy. I do not understand why the Government are failing to make moves on that simple issue, especially when the CAA has provided them with a simple solution that has the backing of the Federation of Tour Operators. The introduction of the £1 levy would have made things clear to passengers who are confused about where they stand in relation to cover should the airline they are flying with fail. We are not talking about a small number of people. Each year, 84 million people are travelling without that insurance, and a large percentage of them will believe that they are insured.
There are questions that the Minister needs to answer. I asked her about the £100 million of savings in regulatory costs and gave her an opportunity to clarify what cost savings she expected to derive from her proposal, and she was unable to provide those figures. Has the Minister seen the economic analysis by Ernst and Young, commissioned on a brief agreed by the Department for Transport and the CAA, which looked at various options and concluded that a £1 levy on all flights is the most economically rational solution to the issue of providing passenger protection? What does the hon. Lady think of that analysis, and why has it been so readily dismissed by the Government? The Minister of State said on Second Reading that he would listen to Members' views and take them into account. I am sure that he listened, but there is little evidence that he took into account the views on the air travel trust fund—quite the contrary.
Other Members have referred to EUjet. Is the hon. Lady aware that only 16 per cent. of the EUjet passengers were able to take advantage of special offers from other airlines to fly them back? What would she say to the 84 per cent. who found themselves stranded and had to make their own financial arrangements—in some cases, I am sure, at great cost—to get themselves repatriated to the UK?
The Minister has given the House nothing in the way of reassurance about how she will tackle the decline of ATOL protection. That is the biggest weakness in the Bill. There are lots of other valid measures, but the Minister and the Government have missed a huge opportunity to address one of the biggest issues in the industry, and I am sure that this will come back to haunt them the next time a UK airline fails and hundreds of passengers are stranded abroad. They will be wondering why the Government did not take up the CAA's offer of a solution to the problem, but left them stranded.
Earlier this evening, I made a point of order about an amendment that I had tabled and indicated to you, Mr. Speaker, that I was surprised that it had not been selected. Despite your explanation, I remain extremely disappointed that the matter was not voiced as it should have been in our debates. The time that we had did not allow us to expand our discussion to address the issue properly.
It is not very often, Mr. Speaker, that I have differences with you in our debates, but in this instance I have to say that I am at variance with what the Government are saying about the £1 levy. I cannot believe that they equate the failure of an airline with a store going bankrupt. I find it astounding that anybody would suggest that it is like someone losing money after employing cowboy workmen. There is no common sense whatever in saying that the situation is like that of someone who is unfortunate enough to have losses on the stock market.
Mr. Duncan raised the question of Europe. He was right to do so because, at some point, the Government will be forced to make significant alterations to the Bill. It is clear to me, at any rate, that there is an anomaly, and some discrimination, in the situation of the no-frills airlines and that of the chartered airlines. I do not know how the Government can say that, on balance, they have come to these conclusions. I want to know from the Minister what that balance was—was it 60:40, 70:30 or, as I suspect, something like 90:10?
I declare an interest as one of three members of the flying community in this House, together with the hon. Members for Aldershot (Mr. Howarth) and for Edinburgh, South (Nigel Griffiths). I reassure hon. Members that I am not a commercial pilot, so I speak in a private capacity. I shall make two points about the Bill and one observation about general aviation.
Some aspects of the Bill need to be considered a little more, as we have heard. As a pilot, I have been flabbergasted at the increase in costs at many of the large airports, particularly for general aviation pilots. The fact that the authorities have total jurisdiction over what they charge has resulted in a sky-rocketing of some of the costs. As has been made clear on Report, there is considerable concern over the proposed financial penalties, which the authorities will also be able to set at any level without recourse to appeal. That could be damaging to aviation as a whole, because there will be an enormous temptation to use such penalties as a revenue-making scheme. I know that the legislation states that all the money should be passed to those who are perceived to be suffering ill effects, but it is not as simple as that. I hope that if the scheme shows itself to be flawed the Government will be willing to reconsider it.
My second point relates to the explanatory notes. Any pilot would be concerned about paragraph 20 on page 5, which says:
"Requiring aircraft to take off or land in a given direction at a given time could also reduce the numbers of people subjected to the most severe aircraft noise."
On the face of it, that sounds perfectly reasonable—until one realises that pilots always have to land into wind. It is the most basic requirement. So it is disturbing, to say the least, to see in the explanatory notes the implication that the direction of landing may be altered in order to reduce the discomfort of noise for local people. As far as I can see, the Government could achieve that only by introducing a scheme to alter wind direction. Unless the Prime Minister can control the weather, which even he does not pretend, the explanatory note should be modified. If it is used as an opportunity to interpret the legislation, it will make things more rather than less dangerous.
Thirdly and finally, commercial aviation in this country is underpinned by general aviation, which is a multi-billion pound industry that does much to feed commercial aviation with pilots and to transport all manner of people around the country from small aerodromes. In interventions on Report, I sought reassurance—I think that I received it—that the intention of the Bill is not to influence general aviation. However, I hope that the Government will return to a couple of things that are very important to the general aviation sector. One is the question of N-registered aircraft—those registered in the United States but used in the UK for general aviation.
The Minister will be aware that general aviation is very concerned about the potential for banning N-registered aircraft from the British register. There have been signs of a change of heart, suggesting that that will not happen in the short term, but I hope that the Minister will be willing to meet representatives of the general aviation sector—I see her nodding, so I will take that as a yes—in order to discuss their concerns and the rationale behind allowing N-registered aircraft to continue.
Connected to that there is a concern that, as we consider safety issues, Britain should learn from the experience of the United States, which provides pilots, particularly private pilots, with the opportunity to gain a less stringent instrument-rating qualification. In the United States, 50 per cent. of private pilots have that instrument rating, but in the United Kingdom, where instrument rating is far more complicated and difficult to secure, the qualification is possessed by less than 2 per cent. of the private pilot population. That has a bearing on safety for all carriers, including civil aviation and the commercial sector, because we all share the same airspace. Again, perhaps we can raise that subject in a meeting outside the Chamber.
My hon. Friend Tom Brake has highlighted our concerns. I hope that the explanatory note will be clarified and that the Government will keep a close eye on changes to costs and charges after the Bill is implemented.
"organising, carrying out and encouraging measures for safeguarding the health of persons on board aircraft."
That is a major breakthrough, which will have a significant impact on the health of passengers. However, I regret that we were unable to reach the amendments that would have extended that duty to responsibility for those who live in the vicinity of airports.
Research is demonstrating the impact of airports on those who live close to them. Emissions problems lead to increases in respiratory disease and we now have information and research from America on cancer rates in certain areas. In my constituency there is increasing evidence of birth defects resulting from air pollution in the area—some emanating from the airport, but some from the airport-related transport infrastructure, which has an impact on south Hillingdon. I would have liked some responsibility to be placed on the Secretary of State to consider and evaluate that information and to propose solutions to tackle such problems. Perhaps that is an issue for future legislation, which many of us will work to promote.
There is much to commend the Bill to the House, although it is difficult for me to disguise my disappointment about the £1 levy. I ask the Minister to ensure that those who have long taken a close interest in the matter and who are not members of the Select Committee are able to take part in any continuing debate with the Civil Aviation Authority. I shall be most grateful if we are included, and I take heart from the fact that there will be an opportunity to examine the matter further.
It seems stupid to me to say that a baggage loader at Gatwick airport is less interested in his or her environment than anyone else. I firmly believe that we can work in partnership on airport issues and I accept that people are able to reach voluntary agreements. There is much in the Bill that will improve the atmosphere surrounding airports. There should be no poachers and gamekeepers. We should work in partnership with one of the most successful industries in the UK. We must protect the environment and protect the industry itself.
I shall make only a brief speech at the end of this interesting Third Reading debate. I support the Bill: it is generally good, but I am absolutely delighted with the provisions of clause 7. The members of the campaign group VARDA—the Victims of Air Related Deep Vein Thrombosis Association—share my gratitude to the Government for taking the courageous step of introducing this legislation. Mr. Duncan clearly has not read the Bill, because clause 7 imposes for the first time ever, in any country, a statutory duty to safeguard the health of airline passengers. It creates the aviation health unit, which will be financed through a levy on the airlines and which will carry out research into aviation health concerns and publish advice to passengers. It also extends air navigation orders to include, for the first time, health matters relating to the aviation industry.
In Committee, I tried to introduce a new clause that would have extended the Bill's powers and amended the Carriage by Air Act 1961 to override article 17 of the 1929 Warsaw convention, which limits the liability on injury to airline passengers—
Thank you for your ruling, Mr. Speaker.
We would have liked to see the Bill extended so that airlines had exactly the same duty of care towards their passengers as any other passenger carriers. It is absurd in the 21st century, when 1.5 billion people fly every year and when more than 16 million people in this country fly long haul, that they have no protection from risks to their health and the airlines have no responsibility. I hope that the Government will revisit the situation. I am certain that the Bill is a step in the right direction and that it is only a matter of time before airlines come into line with all other passenger carriers. I support the Bill.
Question put and agreed to.
Bill accordingly read the Third time, and passed.