Clause 64 - Review etc of airport operation services

Civil Aviation Bill – in a Public Bill Committee at 4:00 pm on 6th March 2012.

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Question proposed, That the clause stand part of the Bill.

Photo of Nigel Mills Nigel Mills Conservative, Amber Valley

This wide-ranging clause sets out that the CAA must

“keep under review the provision of airport operation services in the United Kingdom and elsewhere, and…collect information about…such services…with a view to facilitating the carrying out of its functions under this Chapter.”

This is all about competition. It would help if the Minister clarified exactly what she expects the CAA to do, and what it is allowed to do. Does she expect it to produce a detailed report on the level of airport capacity in the south-east and on whether there is a need for a  new airport—or, heaven forbid, a new runway at any of those airports? To provide competition for passengers in their choice of airlines, routes and airports, there may be a need for more infrastructure.

Does the Minister expect that the CAA could do a review on whether regional variations in air passenger duty could aid competition by diverting traffic elsewhere in the country? That is another idea suggested to us by various people outside the Committee. Those all seem pretty reasonable things that the CAA could review and advise Ministers on to enhance competition or help to develop competition in the air travel market.

I am not sure that the Minister would envisage the CAA generally wandering off, doing things off its own bat and commissioning huge numbers of reports on various things that might or might not contradict the policy of the Government at the time. It would be helpful if she clarified exactly what the Government intend the CAA to do, and when it should be in response to a request, rather than proactive work.

Photo of Theresa Villiers Theresa Villiers The Minister of State, Department for Transport 4:15 pm, 6th March 2012

In response to the points raised by my hon. Friend, I shall explain the aim of clause 64. It contains provisions designed to ensure that the markets relevant to airport operation services are kept under review by the CAA and that the CAA has appropriate mechanisms to provide advice and assistance to the Office of Fair Trading, the Secretary of State and the wider public.

Subsection (1) places a qualified duty on the CAA to keep the provision of airport operation services in the UK under review and to collect information about such provision to facilitate the CAA in carrying out its concurrent competition functions set out in chapter 2. Subsection (2) places a duty on the CAA to provide information, advice and assistance to the Secretary of State and the OFT about any matter relating to its concurrent competition functions—on request, if that is practicable, or on its own initiative.

The power to prepare and publish reports relating to airport operation services in subsection (4) is intended to enable the CAA to publish market studies where it considers that appropriate. That will enable the CAA to make use of its sectoral knowledge in examining a whole market in order to identify, and assess the best way of remedying, competition concerns. Subsection (5) gives the CAA the discretion to exclude commercial information or information relating to private affairs from the published document in certain circumstances. Subsection (6) enables the CAA to carry out, commission or provide financial or other support for research in respect of exercising its functions under this clause.

In response to the examples raised by my hon. Friend, I am, as I have said on a number of occasions, reluctant to start suggesting constraints in the context of the Public Bill Committee on the flexibility that we propose to give the CAA, but he can be reassured that as the CAA is subject to a duty to act in a proportionate way, there are limits to the scope of what it would be appropriate for it to do by way of reviews.

The CAA is required to act in an efficient manner by the regulatory framework. That naturally puts constraints on the ambition of the reviews that it would carry out. I would not expect the CAA to seek to trespass on what  is, rightly, the territory of Ministers in making decisions on potential capacity needs in the south-east, and I certainly cannot envisage this provision being used to create lots of research on air passenger duty. I think that that would certainly fall outwith the scope of the kind of reviews contemplated.

I do not want to make absolute declarations on what the CAA might or might not do—as I said, this is a flexible provision—but I do not think that either of those areas of work is likely to be the focus of the CAA’s work on this.

Photo of Nigel Mills Nigel Mills Conservative, Amber Valley

I am grateful for those reassurances. However, I expect that people will regularly complain that there is no access to a major hub airport for new connections or new airlines and that that is stifling competition. Does the Minister expect that that would trigger the CAA into having a need to do this review in the short term, or does she think that that is not what the scope of this clause is designed to achieve?

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

I can reassure my hon. Friend that the Government are looking at overall matters in relation to aviation. We will publish a policy framework for consultation shortly. We are also considering a call for evidence in relation to maintaining a flourishing hub in the south-east. The Government are considering such matters.

The function of the clause is focused on competition matters, which are the focus of economic regulation, examples of which might include dominance or cartel activity, rather than the broader capacity issues that my hon. Friend mentioned.

Question put and agreed to.

Clause 64 accordingly ordered to stand part of the Bill.

Clause 65 ordered to stand part of the Bill.