We shall now take oral evidence from Passenger Focus. Welcome to the sitting. Would you care to introduce yourself for the benefit of those who cannot see your nameplate?
I would be very interested to hear your thoughts on the appropriateness of moving to a system in which the primary duty on the Civil Aviation Authority is to have regard to the end-user, and on how that compares with your experience in other regulated sectors.
Anthony Smith: That shift is absolutely essential. The purpose of all this activity, the purpose of the transport sector, is to move people. Regulation mimicking competition where it does not exist or enforcing licence regulations must have the user at its heart. If it has other interests there, in terms of the industry involved or other players, it will get confused, and the regulation will become very opaque indeed, so that aspect of the Bill is absolutely essential. We have seen that in our relationship with the Office of Rail Regulation over the years and its emphasis on putting the user, be it the passenger or the freight user, at the heart of its regulatory activities. That experience, gained over many years, shows quite clearly that it is the right approach. So from our experience, we would fully endorse that move.
That is very welcome. The CAA is reforming its approach to consumer matters with its proposed new consumer panel. Part of its remit will involve research on what passengers want. Do you have any thoughts that you could express to us as a result of your experience on these matters? I ask that because of course passenger-focused research has proved extremely useful in other sectors of the transport industry.
Anthony Smith: We base all our work on research. We carry out the rail national passenger survey, which talks to about 65,000 passengers a year. We now do a bus passenger survey, which talks to about 40,000 bus passengers a year. That gives an independent view of what passengers think about the services that they are currently getting, what they think about stations and what they think about information; and it gives a sense of priorities for improvement in the future. For any regulator or consumer body, not to have access to primary consumer research means that they are simply acting on anecdote and invalidating a lot of what could be done. It is a key part of what needs to be pushed forward. What we have learned at Passenger Focus, from adopting this method in the past six years of using research to drive change, is that it is very effective because you cannot quibble with it. If you do not quibble with the methodology, the results are the results. They are what passengers are saying and they should form a common basis on which all parties can group decisions.
One aspect of the Bill is the suggestion of having inter-terminal competition in future. Have you had a chance to look at that, and do you think it would be appropriate in the UK, given that it is not expected to be relevant at this point in time? We have been told that it has been incorporated into the Bill so that in the future the CAA will not have to come back to Parliament if it does become appropriate.
Secondly, there is a clear difference of opinion between airports and airlines about airlines having a secondary duty. The CAA was very strong this morning in its view that there should be a secondary duty. Is that something you have had a chance to look at?
Anthony Smith: In any industry, the best protection for consumers is competition. That is quite clear from all the experience of the regulated industries over the years. In the absence of competition the more competition you can introduce, and the more information you can introduce to any regulatory system, will benefit consumers. The provision of airline services does look pretty competitive. Airlines are at each other’s throats. They are competing on price, quality, food, seat pitches or whatever. It is at airports where there is a lack of competition. Most airports have a monopoly for a variety of reasons, as you all well know. It is in those sectors where consumer power can be more brought to bear. Inter-terminal competition sounds like a sensible way forward, because it would increase accountability, transparency, information and, hopefully, choice.
On the second question about having a secondary duty, to pick up the point I gave in the original answer, that would be a mistake. I think a secondary duty would cloud what the regulator is trying to do. It would give a trump card to the industry that it should not have. The industry already has rights to appeal, through various mechanisms, against various decisions. Of course, the industry is well able to look after its own interests in terms of efficacy or whatever, so having the key primary duty focused on the user is actually, ultimately, to everyone’s benefit.
Mr Smith, you welcomed the Bill, particularly because it puts the user at the heart. The publication of information provision seems to stop at the arrivals hall, which is a fairly big part of the customer experience. Do you have a view on whether the provisions on the publication of information—on, say, queuing times—should be extended to include the UK Border Agency operation at the arrivals hall?
Anthony Smith: The power of information cannot be underestimated. Most passengers will not actually spend much time poring over the information, or using it to complain to BAA, Edinburgh airport or whoever. However, for interested parties the access to that information is key. It enables you to drive change. The work we do with the rail and bus industry—the fact that independent comparative data are available does not allow us to tell people how to run the industry, but allows us, the regulator and the others to say, “They’re doing quite well. You’re not doing quite so well. Why is that?” It starts the conversation about the provision and quality of services in a sensible place, rather than, as I say, a string of anecdotes. I argue that the power to request and publish that information should be as wide as possible, as is commensurate with the commercial interests of the parties involved. The more information you get out there, passengers will be better looked after.
Mr Smith, thanks for coming in today. Thinking about your experience in research, particularly in the rail industry, passengers will report general levels of satisfaction for different reasons—they could be related to the rail company, to Network Rail, the Office of the Rail Regulator. Various people are involved in that. Translating that into the airline experience, how easy do you think the CAA will find it to look through that information and correctly discern where problems lie? Various people are involved in that. Translating that into the airline experience, how easy do you think the CAA will find it to look through that information and correctly discern where problems lie? As we know, there are airlines, airports and the UK Border Agency, for example. How difficult is it, when you get the raw information, to divide up whose responsibility problems are?
Anthony Smith: In the rail industry, it is relatively straightforward, because, by and large, you are dealing with the person you have paid the money to. Therefore, the primary, contractual relationship is between the passenger—the consumer—and the rail company. That is quite straightforward, and it is the same on the buses. We can sort out afterwards who is responsible for the decisions and the actions behind that, be it Network Rail, the local authority or whoever. But the primary responsibility is between the person who has paid the money and the person who is providing the service. We can then unpick, from the data, where the real problems lie. We can find out from the data what the drivers of satisfaction are and what the drivers of dissatisfaction are when people are answering questions about overall satisfaction. That helps you understand the ways you can perhaps direct your attention. The quality of the research that is now possible means that the CAA would have absolutely no problems doing those things and would find that really useful.
In terms of the Bill, as you understand it, giving those powers to the CAA, do you see the CAA having any problems in being able to enforce its will on different parts of the industry?
Anthony Smith: I think these things are always best done as a partnership, rather than through people having to enforce their rights against each other. Clearly, there is quite a history of bitter arguments about what should be done at airports and what should not be done, and about how much should be spent and how much should not be spent. I would hope that the provision of more independent information, or more consumer information, would help gather people round some sensible decisions, because passengers’ interests over the next 12 months will be quite different from passengers’ interests over the next 25 years. Through research, you can help define what the generalised passenger interest is. We have a lot of input into the rail industry’s long-term planning processes, be it five years or 15 years ahead. For example, as I think you will know, we have just done a piece of work with Network Rail about what to do with the spare capacity on the west coast once High Speed 2 is built, and that is talking about 2026. There are perfectly valid research methodologies that can bring out very clear conclusions about what people want, and I cannot see anything so different about the airline and airport sector which would mean that you could do these things with railways but you could not do them with airports.
One of the issues passengers have with airports and airlines is that you get a headline price for your flight, but by the time you have paid baggage charges, seat charges, trolley fees and, heaven forbid, use-of-toilet fees, and you have been corralled through a duty-free shop where people try to flog you drink and cigarettes, you feel the system has milked you from every angle. In terms of the information passengers need, do you think airports should be made, in the way that airlines now are, to publish all the different charges they will try to sneak in from when passengers get someone to drop them off by car and they finally get on the plane?
Anthony Smith: As I said before, the more information, the better. The proposition has to be clear. We have done a lot of work with the rail industry about the clarity of information that is available when you are buying a rail ticket and about what you are buying. It is quite clear in the rail industry that there is some way to go in making things as clear as they could be. If consumers are to have confidence in an industry, and if they are to have confidence in a system that is looking after them, the clarity of the charges and the price is paramount. If people do not have confidence in those things, and they feel they are somehow being fleeced or not being given all the information, that saps the value-for-money rating they will give. We have seen that quite strongly in the rail industry, where overall satisfaction is relatively high as a result of investment over the last few years, but value-for-money ratings remain relatively low. It is quite interesting to think why that gap is there.
On that topic, one thing that must give passengers some comfort is that if an airline—especially a charter airline—goes bust on them, they will get flown back or they will get a refund. It is not easy for many passengers to work out what is actually covered by the ATOL regime, or similar regimes, and what is not. Do you think the extensions the Bill proposes to such regimes will help passengers understand when they are protected and when not?
Can I just pick you up on what you said about the more information the better? Give me your views if you can about simplicity and clarity. Can there not be a danger of confusion with too much information? Do you have any insight in relation to that into the environmental information that is to be published, and whether it should be in a particular form? I do not know how much you have looked at it so far.
Anthony Smith: The key tenet of any consumer information is that it must be comparable. That is quite clear. If it is not comparable, you are looking at apples and pears across one industry or different ones. It has to be clear, relevant and couched in simple language. We work hard with the rail and bus industries to do that with regard to the passenger information that we put forward in those sectors.
You are right that the absence of competition, especially at airports, probably argues for a higher level of information than perhaps you might have if there were more intense competition. Usually, if competition is providing the protection that consumers want, you can perhaps have slightly less information available. When there is less choice, as there often is in the rail sector and possibly the airport sector, the hurdle for information should be set higher.
Following on from Mr Woodcock’s question, I agree with your assessment that as much information as possible is important. With specific regard to environmental data, which the CAA will have a duty to publish under the Bill, do you think that will really affect passenger choice as to which airport they use? Or is this just an additional piece of information? Will it change travel habits in any real sense?
Anthony Smith: Personally, I would need a bit of convincing that it was going to change people’s travel habits. We once did a bit of work about passengers and the environment. It was the shortest session of focus groups I have done in my life. It was quite embarrassing; they lasted about 10 minutes and then people got into the sandwiches straightaway. The view very much was that public transport is green. That is it. There was nothing else to say particularly, because compared with other modes, it is green. People do not know whether they are on an electric or diesel train by and large; they do not have a clue. The sense is that it is green. The way all of us make travel choices is based on cost and convenience by and large.
There is a small number of people for whom green issues are a key factor. That is great, that is up to them. For the vast majority of people, when you look at how people travel, it is the interrelationship between cost and convenience, and people trade those two things, often very subtly, about which train station they drive to, where they park in the car park, where they stand. There are very subtle decisions that people make to speed themselves up. I am fundamentally to be convinced that the green argument has really arrived in terms of travel. That is certainly in terms of rail and bus. As regards air, I think it is even more difficult to say.
Could I press you further on that? We discussed the same question this morning and compared the way that white goods are given energy-efficiency ratings. Do you think part of the reason why the public do not really engage with environmental issues when it comes to transport has to do with the way the information is presented to them?
Anthony Smith: I think it is partly that, but I still think it has a lot to do with the fact that people make choices in a very simple way. “How much does it cost? When is the next bus?” That is very simple stuff. You could present vast amounts more of information but I am not sure that people would find it terribly helpful, to be honest. Anything you can do to simplify the information, such as with white goods, to make it comparable and so on will help, but I am not sure it is going to drive decision making.
To follow on from that, why do you think it is a good thing that the lack of competition means that there should be a higher level of information? If you are profoundly sceptical as to whether it will change behaviour, why would you put those reporting requirements on?
So I probably was not clear enough in my initial question, when I was actually talking about environmental information. What value do you think it would have?
Anthony Smith: I think it has a much more generalised value, making people aware of the impact of their decisions—simple as that. It is not for any of us to dictate what people do, but I think the more people are informed about the impact of their decisions, the more they can make informed decisions, which is probably what all consumers ultimately want to make.
Mr Smith, you have probably answered my question. How far do you think people make green choices on the basis of the information that they have? Before I came into Parliament, I worked for a company and every time I made a journey or had a ticket, they wrote on that ticket the impact of the journey, so something was said. If I went by rail, they would tell me what the impact would be—and the same in respect of going by air or driving. That had a profound effect on me and my choices. People make better choices if they have the right information.
Anthony Smith: Yes, I think they do. I think it helps people make better choices. As I say, I am not convinced about how widespread that level of awareness is. I congratulate you on that level of decision making. For most people there is not a lot of choice, so they take the transport mode that suits what they need to do and, especially with air travel, it is relatively occasional thing for many people.
Many of the rail passengers that we are dealing with use the trains 10 times a week. They know the route better than the train companies, by and large—it is intense and they know, probably, too much about it—whereas air travel is a much more occasional choice.
Any move in that direction is helpful, but I remain unconvinced that it is a major driving force for many people.
I am afraid, Mr Smith, that I am going to draw on you and your experience of data in this situation. An issue that came up earlier was that there are obviously a number of things that individual airports will monitor. I gave the example of Heathrow, where, during the period of snow and disruption in 2010, they hit some 90% or 95% of their own targets, but missed on the one big target, which is running an airport successfully.
Do you think that a light-touch form of regulation that does not look at information in individual silos is better, more generally, and would you ask the CAA to adopt that?
Anthony Smith: I recognise the problem you are outlining, in that sometimes all the indicators are saying that we are succeeding, when you are losing the war, actually, in the front line. I think that is quite common. That is why we concentrate quite ruthlessly on the outputs, in a sense, asking what has happened to passengers.
We have a simple business model. We go and ask passengers what they think, we write it down and we publish it. It is brilliantly untainted by analysis, in a sense. It is very simple: tell us a story and we write it down and we publish it. Of course, it is methodologically much more sound than that, but it is simple. The more you concentrate on the outputs, and the more you concentrate on the outputs in a generalised sense to get people to engage and to answer and, afterwards, to work out why they are saying some of those things—that, for us, has been quite a fruitful approach, because if you are going to engage people in these types of questionnaires, you have to keep it relatively simple.
We have quite long questionnaires, which I am amazed that three out of 10 people fill in. That is astonishing. But people want to give their views, which is great.
Anthony Smith: No, we don’t have a current role in the air sector. We have a role as far as our remit for Britain’s rail passengers and England’s bus, coach and tram passengers extends to getting people to or from the airport by public transport, which we do a little bit of work on, but to be honest not a huge amount.
You will probably be aware that there were some proposals in 2009 that Passenger Focus might take on the representation of air passengers as well, but for various reasons that was not taken forward. If asked, obviously, we would be happy to help. What the Civil Aviation Authority is doing in setting up a consumer panel is a very good start. Hopefully, it will build confidence over time, so that that panel might ultimately be able to have more independence.
What we have learned from the rail sector is that, if you have an independent regulator and an independent consumer body, they do very different things. The regulator’s job is to enforce what people have said they are going do or what they ought to do. The consumer body’s job is to be an advocate. They play very well together, because being a regulator can be quite lonely at times. There is a huge industry that is very well resourced and very articulate and good at advocacy bearing down on your decisions. Sometimes it can be very helpful to have a friend who independently says, “Well, this is what passengers want.” We have no axe to grind; we do not have shares; we do not have interests. All we are interested in is what passengers think.
I presume what you see from your rail passenger surveys, or parts of them, is complaints about how much it costs to buy food or drink on long train journeys or even at stations. For most rail passengers, you pretty much have a choice: you can bring it from home or it might only be a short journey. For a lot of air passengers, they are not legally allowed to take any drinks through security, so if you have a long flight, you are pretty captive in terms of whatever they want to charge. Do you think there is some need for regulation on the level of charges for passengers once they are in that captive place?
Anthony Smith: I always worry about the regulation of crisp prices because you think, “Is that really where Government or a regulator ought to be?” It is interesting. You are right. In terms of rail services, catering does not figure at all as an issue. It just does not get anywhere in the top 30 issues, mainly because the quality of the offering at stations has improved so much in the past decade that people have some choice. I do not think I would like to answer that until I have seen some research on the subject about what passengers really think. I must admit that, from my personal experience, not being able to get a glass of water seems like a human right, rather than a consumer right.
On that note, Mr Smith, if you choose to go away and do some work and send it to the Committee, I sure it would be welcome. I thank you very much indeed for taking the trouble to come this afternoon and for giving us the benefit of your opinions. You are most kind.