Licensed air traffic services: modifying the licence and related appeals

Vehicle Technology and Aviation Bill – in a Public Bill Committee at 10:30 am on 21st March 2017.

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Photo of Richard Burden Richard Burden Shadow Minister (Transport) 10:30 am, 21st March 2017

I beg to move amendment 30, in clause 16, page 11, line 31, at end insert—

“(5) Within five years of this Act receiving Royal Assent, the Secretary of State must conduct a review of the process for appealing against modification of licence conditions.”

This amendment requires the Secretary of State to review the modification appeals process within five years.

I apologise for my tardiness, Mr Gray. My head was still in electric vehicle mode. I was sitting in a car when I should have been boarding the aircraft. I have now got myself on to the runway and am in civil aviation mode for part 3 of the Bill. The amendment would require the Secretary of State to review the appeals process for the licence changes within five years of them taking effect.

There is a great deal of support from industry stakeholders, including the Civil Aviation Authority and NATS, for the modification and modernisation of the licence regime that we are talking about today. During the evidence session, we heard that these proposals are similar to measures in place for Heathrow and Gatwick, and that the changes envisaged by this Bill would be welcome and helpful to both the Civil Aviation Authority as the regulator and NATS as the operator. We Labour Members accept that.

The basis of this amendment and the review we are calling for is that in the evidence session, when I asked the Civil Aviation Authority about the frequency of new appeals, the answer we received was that nobody really knows yet what the impacts of these changes will be. Indeed, in its impact assessment, the Department has forecast between 16 and 36 possible modifications of varying significance relating to issues around price controls, financial resilience and service continuity. It concedes that, in the example of service continuity, historically, there have never been any modifications to the licence. The impact assessment recognises that the assumptions on the number of appeals are highly uncertain in one section, but then notes that changes brought about by the new pan-European single European sky air space reform could lead to a number of major changes for NATS in the coming years. Despite the uncertainty of the impact, the Government’s impact assessment says that there will be a post-implementation plan in the form of a “light touch”—their words—review of the new arrangements after five years and a full review after 10. That is welcome, but nowhere does the Bill reference that commitment.

I want to make it clear that we do not oppose any of the bases that the Government have put forward for the need to make changes to the licence modification regime, but with such uncertainty about what changes they are going to make, how many modifications may be sought and what their impact should be, we think that a scheduled review after a period of time would make rational sense.

In the Committee’s evidence session, the Civil Aviation Authority agreed that it would make sense to review the powers that had been introduced. I would welcome the Government’s looking sympathetically at the amendment and reassuring us that the kind of review that we seek, which the impact assessment assumes will take place anyway, will be taken on board by Ministers.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

We now move to a very different and equally important part of the Bill. The proposal is a relatively small but significant change to the arrangements to which the hon. Gentleman drew our attention. He mentioned the importance of reviewing regulations. Again, we fully agree with that sentiment. It is the practice of the Government to review regulations, and I hope that is reflected in how we develop the regulatory changes that we are making in the Bill. Licence qualifications are not a regular occurrence, and appeals against licence qualifications are rarer still. For example, in the four years since the establishment of a similar review for airport licences, there have been no appeals. It is therefore unlikely that there will be enough appeals in five years to warrant a meaningful review of the process.

I am sympathetic to the idea of a review, but I am not sure that the amendment’s five-year timescale is appropriate. I also think that the scope of the review is defined too narrowly to warrant a meaningful evaluation of the changes to the regulatory regime. I am arguing for a review of a more fundamental kind over a longer period. These changes reflect the broad direction of travel as successive Governments have learned lessons on how best to regulate monopoly industries, to ensure a focus on safety, efficiency and efficacy. Any review that we conduct must consider the effectiveness of the licensing framework as a whole, looking at the impact on its customers and the lessons learned in other sectors. I hope to be able to provide assurance that the framework for regulating our air traffic control provider will be reviewed through such a review process, which will encompass all aspects of the regulatory regime, as appropriate at the time, and not just the appeals process, given what I said about appeals being rare in the past and likely to be so in the future.

The hon. Gentleman is right that we will need to look at this when it is changed. We should do so comprehensively over a meaningful time period. The post-implementation review will be carried out with the corporation review of the entire licensing framework, rather than specific aspects of it. With that assurance, I hope that the hon. Gentleman will withdraw his amendment.

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

The basis of this part of the Bill and the clause that the amendment relates to is uncontentious. At the moment, if the Civil Aviation Authority wishes to review NATS’s licence and there is an objection by NATS, there is a potentially long and complicated process with reference to the Competition and Markets Authority to try to unscramble it. The basis of the clause is right in saying that the Civil Aviation Authority should have much clearer powers to suggest a modification, and NATS should have the right to appeal. It is a simple change and it makes sense. NATS agrees with it and the CAA thinks it is a sensible change. There is not a big difference between the parties in Committee on that.

The issue is that nobody yet knows how many modifications are coming down the line. The Minister said they have been relatively few up until now. There may be relatively few going forward, but the single European sky and other changes ahead of us mean that we simply do not know how many modifications will be necessary. We also do not know what the experience and impact of the appeals process by NATS, and in some circumstances other bodies will be—that prefigures the discussion we will have on the next group of amendments. That is why the impact assessment was clear in saying that there is no clarity, and that we simply do not know how this will work.

The changes appear to be sensible procedurally, but we do not know what the experience of the appeals situation will be. That is why the impact assessment says there should be a light-touch review after five years and a full-scale review after 10. We tabled the amendment to try to get that in the Bill, although the Minister has satisfied me that he is not opposed to a review. There will need to be some discussion about whether the five-year review should be specifically on the appeals or whether it should be broader, and about the difference between a light-touch and a full-scale review. We have put down a marker that something needs to be clear by the time the Bill leaves Parliament and becomes an Act. If there is to be a review, everybody should be clear about what kind of review it will be and who will be responsible for doing it. That is why we tabled the amendment. However, on the basis of the Minister’s assurances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 16 ordered to stand part of the Bill.

Schedule 1