I would like to start with a very general question about your thoughts on the potential advantages of combining security and safety functions in the same regulator, and how best we can ensure a smooth transition between responsibilities from the DFT to the CAA in relation to the security functions in the Bill.
John Moloney: Thank you for the question, Minister. The PCS is obviously opposed to transfer because we think that it will not deliver what is claimed in terms of combining safety and security—that they are compatible and therefore combining them together will produce a better outcome. Security is a very distinct stand-alone operation that is properly integral to the Department for Transport. As you know, Minister, obviously much better than I do, the Bill proposes that Ministers would retain security policy, whereas the CAA would carry out the operations and instructions of the Department for Transport. That split will lead to organisational problems and miscommunications about what is the exact dividing line.
In the longer term, you mentioned how transfer could be smoothed. We have certainly raised the concerns of our members. At the moment, they have not the faintest idea about their terms and conditions in the CAA. They do not know about their pensions or whether their redundancy moneys will transfer. Obviously, for them, as individuals, that is vitally important. There is a cadre of very experienced security inspectors who are now thinking, “Should we remain in this field, or should we seek employment elsewhere in the Department or the wider civil service?”
As you know, there is a long run-in to the transfer, which probably will not happen until April 2014. Bluntly, those security inspectors have a long time to vote with their feet. What they say to us—this is why we are here—is that, in principle, they think there are lots of problems with the proposed transfers. If, however, it is the will of Parliament that that transfer takes place, they would like it to be on a voluntary basis. If that is not possible, they are looking for assurances on their terms and conditions, the key one being pensions, and redundancies.
It looks as though it is very likely that, under the transfer scheme as it is drafted in the Bill, those security inspectors’ redundancy rights would not transfer. We have people here with 20 or 30 years of service. If your redundancy rights do not transfer, you automatically revert to the statutory minimum. For a lot of people with a lot of years, that is a very daunting prospect.
We also have a number of people—I will finish on this—who are very close to retirement age. The thought of trying to start your career again in a completely different organisation with a different pension scheme may seem a parochial concern, but, on an individual basis, it is important and looms large.
To summarise, we do not think it is a good idea, but, if it did happen, it should be on a voluntary basis with proper safeguarding of people’s terms and conditions on transfer.
Jim McAuslan: There is sense in what is being proposed, but will it work in practice? Our concern, which runs through our submission, is that the CAA has responsibility for air safety, economic regulation, airspace regulation, consumer protection, environmental protection and, now, airport security.
In that bundle of responsibilities, our concern is that the safety aspect is going to get squeezed out and that this regulatory body, the CAA, cannot serve all those masters at once. For the end consumer, we can see the sense of this, but, in terms of how it is regulated, we are concerned that it will dilute the focus of the CAA on safety regulation.
I want to come back on one point. I am keen to hear whether you could expand on your concerns about safety being squeezed out, because, obviously, there are other sectors where economic regulation and safety are combined—in the rail industry, for example. I draw reassurance from the fact that the CAA’s reputation as a safety regulator is almost unparalleled in the world. The CAA is one of the world’s leading safety regulators and is highly successful. I am not convinced that an additional responsibility will compromise that very strong track record, so it would be useful if you could expand on why you think it might.
Jim McAuslan: I have a huge regard for individual members of the CAA. I do not think that any one individual would do anything that would jeopardise air safety, but, taken as a whole, the way in which the CAA is developing as a regulatory body will cause things to be squeezed out.
When you look at the structure of the CAA’s board, there is no one with current commercial pilot experience influencing the way in which the body operates. When we asked our members in our most recent survey last September, 51% believed that the decisions of the CAA were too influenced by the airlines. I think that individuals perform a terrific job and have very high ethics and values, but, culturally, a problem is developing in the CAA because it is trying to serve too many masters. Too many people are perhaps taking safety for granted, rather than saying, “Well, it should continue to be the focus.”
John Moloney: I think we should step back slightly. The security arrangements in the Department for Transport are partly based on the experience of the Lockerbie atrocity. After Lockerbie, a dedicated security organisation called TRANSEC was set up inside the Department for Transport. Unfortunately, TRANSEC has now been abolished, but the key point was that it recognised the potential tension between security and commercial interests in that, clearly, a security consideration might be to stop an airport or to restrict movement, whereas there is a commercial imperative to keep passengers and flights going, et cetera.
That slight tension exists now in the Department for Transport, because security is housed in the same division or directorate that is responsible for facilitating transport, and we think that will be exacerbated if it is put in with the CAA. It will just be a tiny strand in a huge organisation. We are talking about 90 people transferring, who have responsibility for security inspections around the country, to an organisation of several thousand. I think the fears that BALPA has about it being swamped or being a very small subdivision of a subdivision are correct, and will actually happen.
The Bill talks about the possibility of inter-terminal competition within an airport. I would be grateful for your views on whether that would be an advantage for passengers, or whether it will cause problems.
Jim McAuslan: For the average individual pilot at present, in terms of security—I am not able to talk about economic competition between terminals, but I can discuss our experience with security—it is a mess. We surveyed our members and only one in 10 believed that the current arrangements were satisfactory. Some 58% believed that they arrive at the aircraft more stressed having gone through security under the existing regime, so we find security arrangements at airports quite anarchic.
If competition will drive an airport to try to improve its processes, that is terrific, but our experience on a day-to-day basis is that that is not what happens. People make up their own rules at security and, forgive me, you get little Hitlers emerging who are going to give instructions. Our members find it particularly frustrating that they cannot predict that; I say that not in the sense of predicting a way to get round it, but in terms of predicting it and knowing what the process will be between different terminals. That is why we are concerned that the delegation of powers to airports—which is the consequence of delegating powers to the CAA for security, with this outcomes-based security arrangement—will cause a more anarchic situation on the ground, and even more frustration for pilots.
John Moloney: The PCS’s concern is specifically around the transfer of security functions. Like BALPA, we are worried about the potential change in the regime for safety testing, which we think will deliver variable testing across both the network and airports. Clearly, if, as part of inter-airport or inter-terminal competition, there is variable security—almost like a cost advantage between one terminal and another—we think that would be a problem.
As for the more general position on whether there should be inter-terminal competition, we are neutral. Our key concern is about the potential effect on security. As I said, the DFT has consulted on changing the safety regime. We think that would be a mistake, because it would literally institutionalise the variability of security across the network.
That leads into my question, actually. One proposal that has been put to the Minister is that you would not have a transfer until you had that risk-based approach to security. Can you expand a little more about what you think that would mean in practice, and the implications that could flow from it?
John Moloney: Our appreciation of the potential new regime is, as I said, that there would be institutionalised variability. As we understand the proposal, as it has been explained to the security inspectors, each part of the airline network would carry out its own risk assessment.
Although there would be a bedrock of EU regulations on which you would have to rest your security arrangements—though my understanding is that the Government are seeking to get an agreement in Europe potentially to change that position—in that situation, you would have an EU basic regulation and then, as far as we can see, a variable regime on top of that. At the moment, you have EU core regulations and then a uniform regulation applying to every airport, every airline and so on.
The variation, as we understand the outcomes-based regime, is based on an individual assessment of what you think the risks to you are. We think that there is a problem with that. If you were in Scotland, for instance, you might say, “We have no international links, so the risk of a terrorist incident in our airport is much lower than, for example, for Heathrow, which is a huge hub. We will therefore have a different security arrangement or lesser security arrangements than we have now.”
The problem we have is that our enemies clearly do not think, “Heathrow is a hard target and Scotland is a soft target, so I will not go for Scotland.” Unfortunately, they are constantly probing all our security arrangements, all the time. There are constant threats. If we have variable security—that is our understanding of what the new proposals are designed to produce—we will produce soft spots in the network. Where we have a soft spot, somebody might probe it, so we think that it is not a very good idea.
It would also change the nature of the inspectors from inspect and direct, which is what we do now. That is physically getting on the floor, seeing what is happening and, if you see something wrong, getting it changed, and, if it is serious enough, getting it stopped. Inspectors would become auditors of paperwork, because one of the key roles of inspectors under the proposed new regime will be literally to look at paperwork. As far as we understand it—obviously, it could be much more sophisticated than we have been led to understand—it will be that, provided the paperwork was all right, the assumption is that the security is all right.
In my members’ experience, that is not true. You have to have eyeballs on the ground. It does not matter what the reputation of an organisation is, human beings are variable, things change and people come under pressure. Without people constantly probing and checking, our worry is that moving to a paper-based system will lose the advantages of having eyes on the ground and constant pressure on organisations to maintain a uniform safety standard.
Jim McAuslan: If I may, this comes at the same time as two other developments on safety management systems within the airline industry. It is a major shift in how airline regulation is undertaken that we have a move towards safety management systems; we have a move towards fatigue risk management systems, which is a way of managing fatigue differently from set regulations; and now we have outcomes-based security as well, which is basically a security management system, but done with a light touch.
Our concern is whether, culturally, the industry is capable of taking on this light touch. It is one where we have too often seen experiences where the light touch has meant people saying, “Well, we can ignore this and we can ignore that.” The industry has a history of relying on hard numbers, hard details and hard processes, which are applied and then audited. For us, the jury is out on whether another delegation of regulatory power through a security management system can be digested at the same time as the delegation of safety management systems and fatigue risk management systems.
Jim McAuslan: Take, for example, the issue of fatigue. We asked our members whether they would feel comfortable reporting a fatigue incident to their airline. Some 51% of pilots said that they were comfortable reporting to their chief executive officer that they were fatigued.
We do not believe that there is, however good or however big the airline is, an open safety management culture inside airlines. When you look at accident investigations that have been carried out over a number of years—look at the reports carried out by Charles Haddon-Cave into a range of major accidents—you will find that it is the lack of openness in the culture that has been the driving force behind them. There has not been a just culture within the airlines. People do not file reports and they do not say they are fatigued, because they are fearful that by so doing they might put themselves in jeopardy. We have evidence, which I can supply to the Committee if it so wishes, as to where we think the culture is wrong at present.
Both your submissions correctly focus on the impacts on your members, which is entirely logical. Having had a chance to look at the Bill, do you or your members have any views on, or welcome, its other aspects? Mr McAuslan, from my time at the Department for Transport, I remember your statistic about 58% of pilots going through security and feeling more stressed by the time they reach the plane. Will you expand on why pilots feel that going through routine security gives them additional difficulty and causes greater stress?
Jim McAuslan: It is happening because they feel that they are not being treated with the responsibility that they believe they carry: 85% believe that the airport does not take notice of who they are, that it does not listen to them, and only 28% trust airports to make sensible decisions about security.
I do not know how Members of Parliament arrive at security. You have a pass, which acknowledges that you are a trusted person who can navigate without any undue queue. It is not the same with pilots. Even though they have a pass and are about to be put in charge an aircraft, they are, nevertheless, made to do exactly the same as a passenger. Nail clippers are taken off them even though they will sit on the flight deck with a crash axe next to them. The whole atmosphere is of pilots feeling that they are not trusted to make decisions, so they do not feel that they are respected. I am sorry—what was the first part of your question?
Do you have any general views on the Bill now that you have had a chance to look at it, given that you are a professional in the industry with great experience?
Jim McAuslan: The issue for us is the way in which the CAA operates and the various masters it must serve. We are concerned that if it is to take on more responsibility, it will lose focus on safety. You talk about the Bill’s main aim being the end user. We agree, but we do not see the end user purely in economic terms; we see the end user as an egg that must be carried safely from one place to the other. That is the role of our members, which is why I pick you up on the view that we are doing this on their behalf. We are doing this very much on behalf of the travelling public, to ensure that we can transfer them safely. If we saw the end user in economic terms, we would lose our focus on the end user as a human being to be carried safely from A to B.
I want to pick up on a particular area of concern that I raised this morning. When you gave evidence to the Transport Committee, you talked about the risk of losing expertise in security. In your evidence today, you have referred to potential secondments, rather than total transfers of staff. Does that happen anywhere else in the civil service in relation to other bodies? Do people ever remain employed by the civil service while being managed by another body, with the cost head then going to that other body, too?
John Moloney: It is incredibly common. Every department has people on secondment to other departments, other public bodies or commercial organisations. Every department will have a transfer team whose sole job is to handle secondments. In other words, it is so regularised and routine that you must have dedicated people in each agency to do it, so in concept and practice, it would be easy to do.
Can I go back to safety versus security, because the PCS has a particular line on an interesting point that was made, which may be of interest? On the difference between safety and security, there is an implicit assumption that everyone wants to be safe. Although you find people who make mistakes, generally, people want to be safe and follow safety routines. The problem with security is that it is designed to stop people who literally want to do you harm. That is why you cannot superimpose one system on to another. One is based on the implicit assumption that people want to be safe and follow rules, whereas the other is based on an explicit assumption that people—well financed in some cases, certainly dedicated—want to do us harm.
I want to pick up on some of the uncertainty that the legislative changes create for the industry. Mr Moloney, you are obviously concerned about your members. Do you have an expectation that by changing these different roles, some of your members will lose their jobs?
John Moloney: The current proposal is that everybody who is around at the time—that is the important point—will transfer en masse under the transfer scheme proposed in the Bill, so in theory, nobody will lose their job. However, there is a worry about our administrative staff. At the moment we have security inspectors. There is a core of policy makers who draft various regulations that people then use and implement. There is also a small admin team of people who deal with travel assistance and so on. The CAA is thinking of moving out of London, as far as we can see. So what happens to all the London-based staff? The inspectors are mobile across the whole country, so it is no problem for them. In essence, their home base is their home. There is a potential threat that they will lose their jobs because the CAA will say, “We’ve got our own administrative staff. As for the policy makers, can you all move to Heathrow or Gatwick because that is our main area of operations?” People will probably say no, and so will lose out.
As I said, the security inspectors and everybody else will move en masse but, as we flagged up in our evidence, our real worry is that with such a long lead-in there is a clear possibility that people will lose redundancy money. In other words, it is not contractual. In those circumstances people will try desperately to get out before the transfer. They have two years to do it. So the current cadre of dedicated, experienced people could be denuded and people nearing retirement might decide to take early retirement, rather than take a risk. So it is a complex picture, but I hope that has answered your question.
Obviously, there is a shift from the public purse on to the industry in terms of the cost of these reforms. Does that add to any sense of uncertainty? Do you feel that the industry itself might put a downward pressure on the amount of money it gives which perhaps the Government might not?
John Moloney: The Bill Committee will obviously have to consider whether the “user pays” principle should apply in this instance. Clearly, it is an added cost. It may be relatively low, but obviously if you are a budget airline every cost will be argued about. We think that the main driver for transferring work from the Department for Transport to the CAA is that the CAA can charge. It is almost as though the DFT looked around to see what body it could transfer the work to, so that it can be charged for. We do not think you should base your security principles on whether you can find a convenient accountancy system to plug in, so that you can charge. If you want the Department to charge for something, let it charge. We think that the main driver is this: the CAA levies charges already; you need to levy an extra charge for security, so why not put it with the CAA, which can easily accomplish that extra security levy in accountancy terms?
Jim McAuslan: The CAA’s responsibility is to ensure that British airlines provide air transport services that satisfy all substantial categories of demand at the lowest possible cost, with a high degree of safety and ensuring efficient delivery of business. But you have to look at the meaning of those words and how “lowest cost” and “high standard of safety” tie together. When people are making decisions, what gives? This is the theme we have developed in our paper about the culture within the industry at present. Who is paying? Who will call the tune? Where will those decisions be taken? That is our concern and why we think there should be a focus, perhaps by splitting the regulator or, as has been suggested elsewhere in the context of economic efficiency, by having the NAO audit the CAA. Perhaps the Health and Safety Executive should monitor and audit the safety standards of the industry.
The budget airlines would counter that by saying that their record on passenger safety is better than some of the more established airlines’, even though they have driven down costs considerably. Is it always true that purely a downward pressure on costs leads to a weakening on passenger safety?
Jim McAuslan: No, I think that a lot will depend on the culture of the airline and how effective it is. Throughout the world, where global accidents have happened it has clearly been because the culture has been got wrong and things have been glossed over. The Colgan accident, which happened three years ago last week, occurred because corners were being cut. In that case, fatigue was an issue, but it is not always fatigue.
We would contend that being low-cost does not mean you are unsafe. Each airline must be looked at on a case-by-case basis, but we would contend that certain standards have to be maintained. What happened in the UK over the past few years to give us the high safety standards is that a set of regulations has evolved through science, medical evidence and experience. Why throw those out—there has not been an accident, therefore things must be safe—and then run the risk? Why not codify and keep them, which is what we argue elsewhere with the fatigue rules, rather than just saying that it has not happened?
In looking at a low-cost airline, there are questions we would raise about how effectively that airline is regulated, because it is operating across a number of countries through various jurisdictions, with no obvious link with any national regulator that can keep control, so a lot will hinge on how effectively that airline operates. The history of the merchant navy was one of, “Do we have to regulate?”, and we saw the emergence of flags of convenience and what happened there. The way in which safety standards dropped in the merchant navy became a real concern. I do not think we should do this lightly, which is why our contention with the Bill is that Parliament needs to think about giving more responsibility and diluting even further the focus of the CAA.
Any further questions. No? In that case, that brings us to the end of the session. Thank you very much for joining us this afternoon, Mr McAuslan and Mr Moloney. We are grateful to you.