Clause 43 - Amount of penalty

Civil Aviation Bill – in a Public Bill Committee at 12:00 pm on 6th March 2012.

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Photo of John Woodcock John Woodcock Shadow Minister (Transport) 12:00 pm, 6th March 2012

I beg to move amendment 45, in clause 43, page 29, line 25, at end add—

‘(d) any steps taken by that person which aggravates the damage caused by contravention of the condition or requirement.’.

This is another probing amendment that seeks a response from the Minister on whether penalties given by the CAA for contravention of a licence should take into consideration whether any actions taken by the person who broke the licence could be seen as having been done in an aggravating manner. I have tabled the amendment because clause 43(3)(c) obliges the CAA, when setting the penalty level, to have regard to

“any steps taken by that person towards remedying the consequences of the contravention”.

A penalty can be lowered if the person who broke a licence condition took action to reduce the impact of that breach, so surely it is only right for someone who did the opposite to be penalised. Why does the Bill not set out provisions to do that?

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

First, I welcome the consensus that has greeted the clauses that we have just adopted. They contain important provisions and I welcome the fact that they have been adopted unanimously and without dissent—an indication of the strength of the overall framework in the Bill. The enforcement regime that it contains is echoed in a number of existing areas of economic regulation, and I welcome the support that the Committee has shown.

Amendment 45 gives us the opportunity to look more closely at the penalties regime, which is an important element of the new system for economic regulation. As the shadow Minister explained, amendment 45 would oblige the CAA to take account of any steps that a person had taken that aggravated the damage caused by their contravention of a relevant condition or requirement. I note that the amendment does not require that the  person should have intended to aggravate the damage, but only that the contravention should have had that effect.

The purpose of the enforcement and penalty regime in general, and clause 43 in particular, is to bring airport licensees back into compliance as soon as possible and to discourage non-compliance. The factors set out in clause 43(3), to which the CAA must have regard in determining the amount of penalty, are mitigating factors. When the CAA determines the amount of penalty, those factors permit it to make allowance for the licence holder’s efforts to return to compliance, and they are likely to motivate the operator by providing a financial incentive to move towards compliance.

Other regulatory regimes adopt similar mitigating factors. Ofcom, for example, must have regard to the same considerations under section 97(2) of the Communications Act 2003. The addition of an aggravating factor to clause 43(3) for the purposes of penalising the licence holder would be inconsistent with the Bill’s approach to the use of penalties for encouraging compliance.

Nothing in the Bill prevents the CAA from taking the matters raised in the amendment into account in determining the amount of the penalty. I hope I can reassure the shadow Minister on that point. If the CAA wants to do so, it may set out that intention in its statement of policy on penalties, which it is required to prepare and publish under clause 58.

It is also worth noting that no one who provided evidence to this Committee or the Transport Committee requested such a change. For those reasons, the Government do not consider the amendment to be necessary, but I hope I have been able to reassure the shadow Minister that the CAA will have the option of taking into account matters such as those specified in the amendment.

Photo of John Woodcock John Woodcock Shadow Minister (Transport)

I thank the Minister for that helpful explanation. If the Bill does not need to confer on the CAA the power to increase a penalty, because the CAA can do so anyway, why does the Bill give it the power to lower a penalty?

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

It is important to provide licensees with a financial incentive to remedy their behaviour as quickly as possible, so there is a reasonable argument for including that provision in the Bill. I have listened to what the hon. Gentleman has said about aggravating factors, but I assure him that there is nothing to prevent the CAA from taking those into account in determining the level of a penalty. For that reason, I must continue to oppose the amendment.

Photo of John Woodcock John Woodcock Shadow Minister (Transport) 12:15 pm, 6th March 2012

I hear what the Minister says about the financial incentive for acting, but one could equally make the case for spelling out the deterrent effect of the approach set out in the amendment. We will not force the amendment to a vote, but we will consider returning to it further down the track, so I hope that she will reflect on it ahead of Report. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 43 ordered to stand part of the Bill.