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.