Clause 27 - Determination of appeal

Civil Aviation Bill – in a Public Bill Committee at 11:30 am on 6th March 2012.

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Photo of John Woodcock John Woodcock Shadow Minister (Transport) 11:30 am, 6th March 2012

I beg to move amendment 37, in clause 27, page 18, line 19, leave out ‘and any directions given by the Commission’.

Photo of Linda Riordan Linda Riordan Labour, Halifax

With this it will be convenient to discuss amendment 38, in clause 27, page 18, line 33, leave out ‘other than the CAA’.

Photo of John Woodcock John Woodcock Shadow Minister (Transport)

Amendments 37 and 38 are probing amendments. In amendment 37, the Opposition seek to question the directions that the Competition Commission can give. Can it, for example, direct the CAA to ignore evidence or representations from interested parties that have been granted an appeal? I hope that the Minister will explain the full extent of the directions that the Competition Commission can give, and where that is set out. That is important, because clause 27(6) states that anyone who is given directions by the Competition Commission must comply with them.

I hope that the Minister will also be able to explain the scenarios in which the Government envisage that the directions in subsection (2)(b) will be more appropriate than those in (2)(c). For example, when an appeal is granted, when would the Competition Commission remit the matter to the CAA for reconsideration, as set out in (2)(b), and when would it substitute its own decision for that of the CAA, as set out in (2)(c)? The Competition Commission’s power to substitute its own decision for that of the CAA needs further explanation, because subsection (4)(a) gives the commission the power to give directions to the CAA even though it has already substituted its own decision for that of the CAA.

The purpose of amendment 38 is to question why the CAA will be exempted from the enforcement action that clause 27(7) allows through the courts in relation to appeals to the Competition Commission regarding licence conditions. I hope that the Minister will explain why that is the case when the Bill provides that all other parties are liable to enforcement action through the courts.

Photo of Theresa Villiers Theresa Villiers The Minister of State, Department for Transport

Clause 27 sets out what the Competition Commission must do once it determines an appeal on a licence condition. We are talking about the results of the appeal. Where the appeal is allowed, in whole or in part, subsection (2) gives the Competition Commission three options: to quash the decision taken by the CAA; to remit the matter to the CAA for reconsideration; or to substitute its own decision for that of the CAA. The second of those three options—remission back to the CAA for a fresh decision—is the focus of amendment 37.

The Bill provides that when the CAA makes the decision again, it must comply with directions given by the Competition Commission. Amendment 37 proposes to remove the obligation to comply with the commission’s directions.

I have listened carefully to the arguments of the shadow Minister, but I am not persuaded to support the amendment; I am grateful for the indication that it is more of a probing amendment than one that will be pressed to a Division. I am not entirely sure that I understand exactly the rationale behind the amendment—indeed, the Opposition appear to accept that the Competition Commission should be the appellate body for appeals against decisions on licence conditions. If they did not, I would have expected a lot of amendments to delete that role.

If one accepts that the Competition Commission is an appropriate appeals body—as I have said, many stakeholders, particularly the airlines, have welcomed  the new appeals rights that the Bill grants—I can see no good reason for preventing the CC from giving directions to the CAA when it has decided an appeal. I do not think it would be right for the Bill to state exactly what those directions might include. There is merit in giving flexibility to the Competition Commission to decide for itself what directions are appropriate within the constraints of the framework provided by the Bill, some of which we have already considered—namely that, in making many of its decisions, it is obliged to have regard to the primary duty.

I hope that sets out my response to the specific matters raised by the shadow Minister. This type of procedure works well in many other regulatory contexts, so there is no need to include in the Bill examples or specifics as to what the Competition Commission’s directions might be. The commission itself has agreed that giving it the ability to remit the matter to the CAA is important, and it is well aware that there may well be cases where it is more appropriate for the CAA to re-decide the matter in the light of the appeal to the Competition Commission. One of the key practical problems with the amendment is that without CC directions, the CAA’s reconsideration and decision could be more susceptible to another appeal.

In my view, the option to remit the matter back to the CAA, with directions to be taken into account when the CAA makes a fresh decision, provides a useful flexibility, and it would be unfortunate to remove that from the Bill. If it were deleted, that would probably lead to more instances where the Competition Commission would go for the option available in subsection (2)(c) and substitute its own decision for the CAA’s. I do not believe that is what the Opposition are intending, so I hope that the amendment remains just a probing one.

When preparing for today’s debates, I was unsure about the objective of amendment 38. It seeks to amend subsection (7), which provides that directions from the CC, given under clause 27, can be enforced in the same way as an order of the High Court or Court of Session against anyone other than the CAA. As we have heard from the shadow Minister, the amendment deletes the exemption for the CAA, which means that the CAA could be pursued through the courts as if in breach of a court order if it did not comply with a direction from the Competition Commission.

There are significant technical flaws with amendment 38. Clause 27(6) requires a person to whom a direction is given to comply with it, so if the CAA failed to comply with a lawful direction from the CC, it would be acting unlawfully. The Bill’s drafting is based on a precedent: section 175(8) of the Energy Act 2004 provides that directions, other than directions given to the Gas and Electricity Markets Authority, are enforceable as if they were orders of the High Court.

One of the reasons why an express sanction, such as that outlined in clause 27(7), is not needed for the CAA is the availability of judicial review. As a public body discharging public functions, judicial review, even without an express statutory remedy, could compel the CAA to comply with a lawful direction. Where a direction is given and a matter is remitted to the CAA for  reconsideration, failure to comply with the direction may form part of a subsequent appeal to the Competition Commission.

Where a direction is given in circumstances in which the Competition Commission substitutes its decision for that of the CAA, no further appeal is possible under chapter 1. So in this case, judicial review would be possible. Accordingly, although the obligation may not be enforceable as if it were an order of the High Court or the Court of Session, as provided for persons other than the CAA, compliance could be obtained through the appeals system or the courts, under judicial review, as appropriate.

I hope I have reassured the shadow Minister that, although the CAA is specifically excluded from subsection (7), that does not mean that directions cannot be enforced against it.

Photo of John Woodcock John Woodcock Shadow Minister (Transport)

On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 27 ordered to stand part of the Bill.