Clause 12 - Advance determinations

Part of Civil Aviation Bill – in a Public Bill Committee at 10:00 am on 1st March 2012.

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Photo of Theresa Villiers Theresa Villiers The Minister of State, Department for Transport 10:00 am, 1st March 2012

I am grateful to my hon. Friend. Before responding, I should mention that I welcome the fact that the clauses that we have just agreed to were adopted with consensus.

The goal of clause 12 is to give operators and prospective owners greater certainty about whether and when they would require a licence to levy charges and whether they are likely to come within the economic regulatory system. That is why the clause empowers the CAA to make market power determinations and operator determinations in advance.

As with much of the rest of the Bill, a key goal of clause 12 is to try to retain as much flexibility for the independent expert regulator as possible. That is the golden thread that runs not only through the Bill, but through best practice across the regulatory sector in the UK.

It would not be appropriate for me to seek, through the representations that I make to the Committee, to narrow down the scope of the CAA’s discretion in the future. However, the best practical example of where the clause may be useful is when someone is contemplating buying an airport. It is important that the CAA has the option of considering determinations in advance of the relevant circumstances occurring. Someone seeking to purchase an airport may seek an advance determination to establish whether they would be subject to economic regulation if they went ahead with the purchase.

Under subsection (3), the power to make an advance determination may be used only if the CAA is satisfied that the specified circumstances are likely to arise. I hope that gives my hon. Friend the Member for Amber Valley some reassurance that wholly speculative advance determinations are shut out. We have found a pragmatic way, through how the clause has been drafted, to enable the CAA to look at such determinations in advance, but without opening the door to a flood of multiple and vexatious requests for determinations about particular airports. Under subsections (5) and (6), the advance determination does not take effect until the circumstances described in the determination arise.

The CAA is empowered by subsection (4) not to publish a notice of an advance determination, or the supporting reasons, if the circumstances have not yet arisen and doing so would involve disclosing commercially sensitive information. That essentially disapplies the publication obligation on the CAA, to enable it to deal with requests confidentially where, for example, disclosure might be sensitive. A number of circumstances could be imagined in which that might be the case, such as where an application is triggered by the pending purchase of an airport.