‘(3) The CAA must report annually to the Secretary of State and to Parliament on the exercise of its duties under this Part of this Act and on the progress made towards the establishment of an outcome-focused, risk-based aviation security regime.’.
(b) if making directions under this subsection, the Secretary of State must by order set out the framework for the introduction of the outcomes-focused, risk-based aviation security regime;
(c) an order under this subsection must be approved by a resolution of each House of Parliament.’.
Amendment 33, in clause 109, page 64, line 29, at end insert—
‘(2A) In relation to section 78, an order under this section must set a commencement date which is later than the date of the satisfactory introduction of an outcomes-focused, risk-based aviation security regime.’.
The amendment explores what the changes to security will mean. Not mentioned in the Bill, but mentioned in the arguments in favour of transferring security, is the relationship of the changes to an outcomes-focused, risk-based security system. Before I get on to that, I refer to the Committee to yesterday’s statement by the Department for Transport on security, which included a quote on the costs to industry:
“We have estimated that the ongoing cost to the CAA of its new security’s functions would be £4.8m per year. This cost, if it were to fall equally to passengers and cargo, would equate to approximately £0.01 per passenger movement per year and £0.001 per kilogram of cargo.”
That is very interesting but I am sure all members of the Committee will have studied carefully the regulatory impact assessment on page 148, which states that the costs will be tuppence per passenger, not a penny. Footnote 3 gives a simple division sum of the original cost of the £4.8 million transfer, divided by the total number of passengers. Why has there has been a change in costs of 50% from the original estimate or of 100% from the current estimate? Although the figure of one penny or tuppence seems small, it is a significant change and I should be grateful if the Minister explained the thinking behind this. I am surprised that she did not want to make a clarifying statement before we got into this debate.
There is a general point, which I have referred to previously. The more I look at the regulatory impact assessment and the more I listen to the debate in Committee and consider whether the Bill as a whole is putting unnecessary burdens on business, the more I am concerned about the Government’s calculations and their justifications for doing this. The basis of the regulatory impact assessment, like most such assessments, is the status quo against the changes proposed, and against a third option, which is to set up a new body.
The Committee will remember that the Transport Committee complained in its review that it did not have enough time to consider this issue. In 2006 it had quite a lot of time, and wrote a much longer report on the CAA. The first recommendation on page 4 of its report reads:
“in its failure to undertake strategic reviews of the role, remit and objectives of the CAA as required by the Sponsorship Statement. We recommend that the Department for Transport carry out a root and branch review to examine the continuing need for the CAA and the extent to which its functions could be more effectively undertaken in other ways.”
Although that is nearly six years ago, I do not believe the previous Government or this Government carried out that review. To that extent, the regulatory impact assessment, which is a very large document, is not as good as it could be and the four or five sections of its conclusions are deficient or incomprehensible.
I have asked the Minister on a number of occasions whether she thinks the Bill is imposing unnecessary extra regulations and burdens on the industry, and her response to the Select Committee was that overall, it would have less impact. I have looked at what she said, and it relates to the amendment directly, but if this is the statement her justification is relying on I would be grateful for an explanation of it. Any other member of the Committee who can explain what it means might get a free glass of dandelion and burdock off me. On page 3 of the regulatory impact assessment, it states that
“it is difficult to conclude … that the estimated benefits to business are robust for the purposes of One-in, One-out. Since the IA provides sufficient evidence to suggest that the benefits to business will outweigh the costs, we propose that this is treated as an OUT with a value of zero.”
That strikes me as a strange basis for the Minister’s justification, particularly when we look at the quantification of that figure beyond that it should be treated as zero. That quantification is a range of £4.6 million to minus £61.2 million. I suppose that is the Government’s definition of zero, which means that they do not know which way the costs and benefits are going.
Against the background of an increasingly muddled Bill that will result in disbenefits rather than benefits to the aviation industry, the amendment is primarily about the transfer of the costs of security within airports to the passenger. The Government’s justification for transferring security costs to the passenger is that the passenger travelling on an aeroplane is the beneficiary of that security, which is true as far as it goes. That is not a difference between the parties, but I would like to ask two further questions.
First, what are the international comparisons? Although at one level it seems fair to transfer the costs of security to the passenger, are we putting our airports at a disadvantage when compared with European and north American airports, with which we are competing? I understand that the security in many other airports is funded by local or national Government. Will the Minister justify the transfer of such costs to the passenger and explain what it will mean for British airports’ competitiveness? The aviation industry in this country is already disadvantaged by the air passenger duty, which is driving intercontinental passengers toward using Charles de Gaulle airport in particular, and toward other European hubs such as Frankfurt, Copenhagen and Madrid. There are real, worked-out cases of tourists from China choosing to go to Charles de Gaulle rather than to a British airport, because doing so saves a family of five or six several hundred pounds. That disadvantage already exists; does the proposal further disadvantage our aviation industry?
Secondly, what is the basis for the proposal? As I said, the disagreement is not party political, and the general drift of policy in this country has been to transfer charges from the taxpayer to the industry. If one thinks about the security issues surrounding 9/11, however, although the passengers on those aeroplanes would undoubtedly have been the beneficiaries of better security, the other beneficiaries would have been the 3,000 people who were killed in Washington and the twin towers. Although passengers benefit, there is a wider gain for society in general. Will the Minister run through the arguments for why, when there are general benefits to society, those are not looked at, so that the taxpayer could take the burden?
Turning to the detail of the amendment, there is a possible future saving from moving to an outcomes-focused, risk-based security system, which the Government estimate could save as much as 1% of the costs. They say that future costs will be balanced by possible future savings, but that is a weak link, because it is not really defined in the Bill. Although I suspect that most airports and most of the aviation industry would welcome a move to such a security system—it is more sensitive, and is likely to be more effective—the people to whom I have spoken in the industry very much doubt that it will lead to such savings.
People in the aviation industry welcome a flexible approach to security, but they are sceptical, if not cynical, about the process, because of their recent experience of investing in new, flexible technology, which is appreciated by both passengers and security staff. Manchester airport, which is one of the airports that has briefed me about this matter, is concerned that the money invested in Rapiscan Secure 1000 Single Pose backscatter scanners—all 11 of them—will be wasted. Although the Government have strongly said to Europe that the scanners are a good thing, there is still a risk that European regulations will ban that innovative new technology. There is increasing scepticism within the industry about whether it will be allowed the necessary flexibility to benefit fully from the changes because of the impact of European regulations.
Although I am sure the hon. Gentleman knows this already, it might be useful to tell the Committee that although the EU has not yet given permission for such scanners to become part of the primary means of checking security at an EU level, it has not been ruled out. The matter is subject to further consideration by scientific experts, so the battle is by no means lost. The Government continue to believe that the technology being used at Manchester airport is very effective, so we will continue to engage with the EU with a view to ensuring that the technology’s role in the security process is enlarged in future and goes beyond the present pilot studies.
I am grateful for that intervention. Whatever the Opposition’s criticisms of the Government and the Bill might be, this is not one of them. It is recognised that the Government have been very supportive on the issue, but there is still a worry that the European regulations will stop the use of the scanners. However, the Minister’s statement is welcome.
Part of the overall costs of the transfer of security includes an estimate of £1.5 million for a new IT system. I would buy a second glass of dandelion and burdock for somebody if that estimate is right. Under the previous Government and this one, no estimate for computer IT systems has ever been accurate. The estimates are often two, three or four times out—even 1,000% out—so the overall costs will be higher on the basis that IT systems never come in on cost. The people who sell IT systems are clearly much smarter than the civil servants and Ministers who buy them, so they always go over cost and end up in the bottom line of the computer company.
I will finish on a point to which will shall return later in the Bill’s passage, probably on Report: security for passengers travelling on package tours. When there is all-party support for a Bill—there was no Division on the Bill’s Second Reading—we should be more wary than ever. We should learn the lessons of the Dangerous Dogs Act 1991 and the child protection agency, both of which went through without any opposition, but both of which were disastrous in their own way. The more I get into the skeleton of this Bill, the more confused I find the detail of where the interests of the passenger and the airlines lie, and the more confused it is on whether there will be extra costs to the industry, and whether it represents an increase or decrease in regulation. It is also confused on whether it will make our aviation industry—one of our best and most competitive industries, although it is already under attack from the constraints on the runway system in the south-east and air passenger duty—less competitive and, therefore, less able to create jobs and support the British economy.
It is a pleasure to see you back in the Chair, Sir Roger. Amendment 76 complements and bolsters that tabled by my hon. Friend the Member for Blackley and Broughton. I hope that I can also complement the excellent points he made.
Together, the amendments would ensure that there would be greater parliamentary scrutiny in the event of a significant shift in aviation security due to the proposed move away from a “direct and inspect” security regime to the catchily titled outcomes-focused, risk-based approach. Let me summarise briefly what the risk-based approach would mean. Under the new regime, rather than directing specific measures that airports must undertake to maintain security, Ministers would specify a number of key risks that need to be mitigated. Airports would then be responsible for undertaking their own risk assessment and analysis of their local vulnerabilities, and then for designing and implementing appropriate mitigating measures.
The Government have chosen to deal with this issue separately from the transfer of responsibility for security from the Department to the Civil Aviation Authority. There has been a separate consultation on the proposed move to a risk-based approach, and there is nothing in the Bill that refers to the major change I have just set out, which we think is an inappropriate omission.
First, as the Minister acknowledged in evidence to the Transport Committee, although on the face of it the moves are separate, there is a clear link between them; they could be “complementary”, as she put it. The oral evidence given to the Transport Committee has highlighted the industry’s belief that the move to a risk-based regime would be an important follow-on from the transfer to the CAA.
We also note that, during pre-legislative scrutiny, the Select Committee found support among airlines and airports for adopting a risk-based regime, which is significant. However, comments made so far suggest that they attach importance to it not primarily because it would enhance security, although some make that case, but because they see it as the only significant way in which they could reduce the cost burden that they will suddenly take on in the event that the responsibility for the function is transferred from the Department to the regulatory body.
I quote from the evidence given by Mr Andrew Haines, the chief executive of the CAA, during the Transport Committee’s pre-legislative scrutiny. He said:
“I think there is an industry nervousness that they may get the transfer to the CAA without the benefit of that regime”— the outcomes-focused, risk-based regime. He went on to say:
“That is something we want to work with industry and the Department for Transport to nail. It is certainly outstanding work.”
The Transport Committee has focused on the cost burden and recommended that the move to a risk-based approach should be speeded up by way of minimising that burden. We have considered that and heard the evidence presented to this Committee, and our instinct is to take a different view—I note that the amendment tabled by my hon. Friend the Member for Blackley and Broughton proposes that the two be separated out. We think that a credible case has been made that a simultaneous transfer of the function to the CAA and an immediate take-up of a risk-based approach could create unnecessary strain.
I was reflecting on the quote from Mr Andrew Haines, which finished with the phrase “outstanding work”. In that context, he meant not amazing work, but work remaining to be completed.
That is a very good point. I can only assume that Mr Haines meant “outstanding” in the sense of “yet to be completed”. I have seen no evidence thus far that anyone has thought that the work was particularly outstanding in the other sense.
Our instinct is to take a different approach from the Transport Committee’s. We think that unnecessary strain could be created. More importantly, however, although we should always seek to minimise unnecessary costs on industry and taxpayers due to unnecessary regulation—and, importantly, unnecessary inconvenience for passengers, who naturally seek to travel without disruption—the driver for change in such a fundamentally important area as aviation security must never be cost or convenience. Such a change must enhance the UK’s security regime rather than potentially undermine it.
The evidence given so far creates at least the suspicion that a commitment to reduce cost rather than enhance security could be the primary driver of the move. That suspicion has so far been heightened, rather than diminished, by the Government’s statements on the matter. As an example, let me read, as my hon. Friend the Member for Blackley and Broughton did, from the aviation security brief that the Department’s Civil Aviation Bill team e-mailed yesterday to Committee members, for which I thank them. Page 3 of the four-page brief reads:
“Charging the industry for the regulation of aviation security aligns with the vast majority of other forms of regulation, including CAA’s regulation of aviation safety. The aviation industry already meets the costs of providing security (close to £lbn), and the cost of regulation (£4.8m)”.
My hon. Friend has adeptly set out the provisos around the accuracy of those calculations.
The brief continues by stating that those costs are “a small addition” that—and this is the important point—
“could be neutralised by efficiency savings from the overall reform package.”
That overall reform package is not specified in the brief. The Minister might want to clarify this, but I assume that it is a move towards an impending risk-based regime. Greater parliamentary scrutiny, which is the intention behind the amendment, could more effectively put the case to the test and allow Ministers to set out the strength of their argument on the grounds of security, rather than cost saving.
Let us remember that this country’s aviation security regime has worked since the horror and tragedy of Lockerbie. It has stood up to a series of credible threats and determined attacks from those who seek to undermine—through terror and destruction—our country, our values, and our way of life. Several of those threats, such as explosive devices concealed in shoes, liquids and underwear, were exposed at the time they occurred, and we know that some go unreported by necessity. The Government’s consultation document setting out the case for a move to a risk-based approach acknowledges:
“The UK is recognised internationally as having one of the most effective aviation security regimes in the world.”
As we look for more effective ways of doing things, and for where we can rightly address unnecessary costs and passengers’ continuing and frequent concerns about delays and queues arising from security procedures, we must set the bar high and require Ministers to set out the case properly, so the Government can be held accountable for their decisions. We should consider that there have been several dissenting voices, as the Committee has heard, regarding the suitability of a risk-based approach. Central to that approach will be variation in security procedures between and within airports. In oral evidence to the Committee, the trade union side representative pointed out that the terrorist threat to aviation is fundamentally different in nature from the question of safety, because those who seek to disrupt, maim and kill users of air transport—as well as innocent victims on the ground, as we have tragically seen—are constantly testing our defences. That is why Ministers, and ultimately Parliament, need as great a level of confidence as possible in the risk assessments that individual airports will undertake.
Ministers can of course draw attention to procedures that they believe are overly prescriptive, and I hope the Minister will set out some examples of those on which the case must ultimately be predicated. When removing a uniform approach to security, we must not permit airports to develop a soft underbelly whereby defences are lowered because they self-assess their risk as being low. The risk of terrorists exploiting a small regional airport may be lower than for a major hub, but it is not non-existent. Fundamentally, we have to be able to have confidence in any move away from a uniform approach. Someone intent on doing us harm will continually probe for weaknesses in the system. From bitter experience, we know that Britain has been and remains a nation at heightened risk of terrorist attack. There can be no grounds for complacency.
Employing the aviation industry to provide security functions should, in theory, at least, ensure a co-ordination with other aspects of airport operation that benefits passengers and airlines. Where uniform prescription from central Government on how security standards should be met is genuinely unnecessary, we should not seek to maintain such prescription.
In their impact assessment, Ministers have argued that a move to a risk-based regime is consistent with the principles of better regulation. We stand fully behind the drive to improve and, where possible, lessen regulation. The Minister will know that in government, we enhanced the authority and capacity of the Better Regulation Executive and pioneered new thinking. I had something to do with that in my previous life as an adviser to the Chancellor of the Duchy of Lancaster, briefly, in 2005, when the Cabinet Office housed the Better Regulation Executive. [Interruption.] The Minister says that, but imagine our delight on finding that, on moving from the Department for Work and Pensions in 2007 to the newly created Department for Business, Enterprise and Regulatory Reform—as it was called in the heady early days of the premiership of my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown)—we once again had responsibility for better regulation and the fine civil servants in the Better Regulation Executive.
As the Minister will accept, however, the principles of better regulation do not automatically lead to establishing a risk-based regime instead of uniform cover. Perhaps she can tell us about the experience of other high-risk areas that have adopted risk-based regimes, such as counter-terrorism, which is overseen by the Home Office.
Requiring that the adoption of a risk-based regime be approved by Parliament would allow more detailed probing of the claims made by Ministers for that shift, as my hon. Friend the Member for Blackley and Broughton has rightly suggested. The regulatory impact assessment predicts the costs of changing regimes to be extremely limited, particularly for training and database establishment, as my hon. Friend also said. The cost set out in the impact assessment, just £23.7 million over 10 years, allows for a very high estimated net present value for the regime shift. Parliament needs an opportunity to consider the reliability of those figures in light of consultation.
It is worth noting that, while generally supporting the move to a risk-based approach, Virgin Atlantic said that it expected no cost savings to arise in the short or medium term. I hope the Minister can give us some sense of the capacity challenge that could be created in the event that a risk-based system releases considerable savings for the industry by cutting out procedures deemed to be unnecessary.
Proper consideration is needed of the ability of the risk-based system to cope with the necessary response to specific and sudden threats. Take for example the liquid bomb plot uncovered by UK security services in the summer of 2006. The discovery of this credible threat led to Ministers taking the decision to ban liquids, and for a while pretty much all hand luggage, from flights to and from the UK. The consultation is clear that Ministers will retain the ability to take such steps in an emergency if they felt it necessary, and rightly so.
As everyone here will be aware, rapidly scaling up back in 2006 was a difficult process. However, the key question is, would scaling up become significantly more difficult in a future risk-based system, in the event that spare capacity had been pared back to save the industry the money that it is clearly hoped will be saved? Furthermore, if more than 60 airports in the UK are each operating their own security regime, how straightforward will it be to ensure that emergency measures can be adopted with uniformity and rigour in each case? Would extra costs of inspection and enforcement be incurred and how would they be managed?
A question raised by a number of consultees has been how any such system could be effective, given the baseline of uniform protection demanded by European legislation. So far, the Government have made fairly vague noises about wanting to persuade the EU to adopt similar changes in approach so that a risk-based system here in the UK could be more effective. Does the Minister believe that a move domestically would be worth while only if Europe moved in tandem? If not, how would overlaying two different governing principles—one from Europe and a different one from the UK—enhance security, rather than potentially undermine it?
I know we are all in agreement that major changes to aviation security policy cannot and should not be taken lightly. As I said earlier, we note the broad levels of support from airlines and airports for this proposal, but we believe there is a strong case for additional scrutiny of a move to a risk-based system, and that Parliament should have the final say. Cost and the principle of lessening regulation are not by themselves sufficient justifications for what would amount to a very significant reform of aviation security. Before any such switch, the Government should give Parliament and the nation greater confidence that their proposals will make air travel more secure and improve the passenger experience.
Order. The hon. Member for Bolton West asked me whether I intended to allow a stand part debate on this clause, and my immediate reaction was yes. However, in light of the entirely reasonable and completely in order remarks made by the hon. Member for Barrow and Furness, I have now taken a different view. It will be difficult to discuss these amendments, together or separately, without setting the argument in context. For that reason, I have already decided that it is probably better to have a broad-ranging debate on aviation security now—I am therefore giving the Committee notice of that fact—rather than to have a stand part debate at the end, which may prove to be after the event.
I am also going to go a bit further—I may live to regret this—and allow a wide-ranging debate on aviation security. That is in the hope and expectation, because the next several clauses and schedules relate to aviation security, that it may be possible to deal with a number of matters collectively, have a rounded debate and curtail some later debate. I ask for responsible treatment from hon. Members of that view. I will be reasonably lenient about the breadth of contributions now.
I should like the Minister to clarify the outcomes-based security regime. I know that the previous speaker, the hon. Member for Barrow and Furness, outlined the case clearly, but I want to outline an example. Through that example, perhaps the Minister can clarify who will have the last say on security.
Outside of the Bill, the Government have consulted on introducing an outcomes-based approach to security regulation. Currently, airports have to follow very prescriptive processes, which are laid down, step by step, in regulation. Those processes specify, for example, the proportion of passengers whose footwear has to be searched and how it is searched, as the hon. Member for Barrow and Furness said. The operator is obliged to follow the procedure set down in regulation and little discretion can be exercised, according to what I have been told.
Under the new proposals, an airport operator could, for example, decide how many people’s footwear should be searched and determine what equipment might be used for that. The requirement would be, for example, to meet a given outcome to screen footwear in accordance with a minimum standard approved by the Government.
Will the Minister let us know whether how that standard is met will be up to the operator? Will she assure this Committee and those outside that security is paramount and cannot be left to a company that might say, “We can get away with a minimum requirement here”? What if the threat outside is higher and it is necessary to have a strict security system in regulation for airports?
The example is footwear, because we can all relate to it. Will the Minister give some indication on who has the last say, the company or the Government? Can the Government suggest to the company, “Here is a regulation that we want you to meet, which we feel is necessary because of the current terrorist threat”? We need clarification on that. Those of us who travel on planes—everyone in this room does, and many outside this room do as well—want to be absolutely secure in our minds that the highest security has been used when we travel on them.
I want to speak on clauses 78 and 79, which cover the transfer of security functions from the Department for Transport to the CAA. The proposed transfer is a significant shift, which did not receive proper pre-legislative consultation and scrutiny, because it was included in the Bill only at a very late stage. I want to ask the Minister a number of questions, which she needs to address because concerns have been raised at a number of levels—not only within industry, but within the Transport Committee. That Committee tells us:
“At the time of the Queen’s Speech, it was not envisaged that the bill would include security measures. Indeed, these did not form part of the DfT’s consultation and industry witnesses told us that they had not been consulted on this aspect of the draft bill. Dr Humphreys…told us that there was a lack of clarity and consultation on the proposed division of responsibilities between the DfT and CAA. There was also concern about the additional costs that the aviation industry would face.”
My hon. Friends have discussed that in detail this morning.
Will the Minister explain the major shift in responsibility? Why has there been insufficient pre-legislative scrutiny? Why was the industry not consulted on the measure? Why now? I want to focus on the most important question, which is how will the change be made without causing major disruption to the system and a security gap for passengers?
Of paramount concern is the potential fragmentation of responsibility between security policy and direction, which will remain with the Secretary of State, and security functions, which will be transferred to the CAA. The measure risks changing a security system that, as we have heard, has worked well since the Lockerbie tragedy, which led to our present arrangements. I have spent most of my career looking at things that work adequately and trying to improve them. I am not against change if it will lead to improvement, but we must consider the provisions’ consequences, some of which will be unintended.
We should not forget how and why we arrived at the present system. We should not move lightly from an approach that has existed as a result of such tragic loss of life, particularly as, according the impact assessment, the clear stated purpose is to
“Reduce the costs to the taxpayer” in line with spending review commitments
“by introducing the user pays principle.”
I am not necessarily against that aim, but it should not be the underlying reason for changing a security system that has served us well for many years.
Although the Government do not propose major changes, they will, for example, pass to the CAA the obligation to
“make arrangements for carrying out that vetting, including… arrangements for renewing and withdrawing clearance”.
In addition, the CAA rather than the Secretary of State must maintain the list of persons approved to provide particular aviation security services. For almost all my career, until I came here, I worked in education, and that list sounds very much like our list 99. I know about and understand the security and sensitivity around list 99; the very idea of transferring responsibilities for maintaining a similar list from the Secretary of State to the CAA is simply unacceptable. Will the Minister explain why she believes that the Department for Transport should no longer bear responsibility for keeping the list? What will be the Secretary of State’s role in reviewing or maintaining it, as the Bill removes all such laws?
Concerns have been raised by staff representatives. Mr Moloney, who represents the Department for Transport trade union side, warned against changing a critical system developed in the aftermath of the Lockerbie bombing, which has proved its effectiveness over the years. He argued that the division between policy operation is not always clear cut, that the division between the two organisations would be a recipe for confusion and delay and that there would be a danger of things falling between two stools.
Again, I bring in my background in children’s services. We know that tragedy and disaster lie in that gap. Where there is confusion and where no one is sure whose job something is—that is where disaster lies. We must ask the Minister strong questions about how the transfer will be implemented. She must set out precisely who will be doing what, and how policy decisions will be implemented, because there is confusion about the matter.
The Minister tried to reassure us that the separation of policy making from operation is not unusual. She cited the example of policing, in which policy is set by the Home Secretary and operational decisions are made by the chief constable. She denied that ministerial accountability for aviation security would be reduced when the Bill is enacted. However, I remain concerned that the provision to transfer aviation security regulations and functions from the Department to the CAA was made at a late stage.