Consideration of Lords Amendments
CAA’s general duty
I beg to move, That this House agrees with Lords amendment 1.
In an increasingly globalised world, air travel is fundamental to the long-term competitiveness of the United Kingdom. However, much of the legislation that governs aviation dates from the 1980s, and it is therefore imperative for the legislative framework to be brought up to date. The Civil Aviation Bill introduces, and makes possible, reform in four key areas: the economic regulation of airports, the legislative framework of the Civil Aviation Authority, the air travel organisers’ licence scheme, and aviation security. The Bill has secured wide support, and we have worked hard to address issues that have raised concern in this House, in another place, or in the industry.
The vast majority of the amendments made since the Bill was last in this House are minor and technical, including Lords amendments 23 to 27, 29 to 36 and 44 to 71. I shall refrain from entering too deeply into the details of those amendments at this stage; suffice it to say that they are predominantly concerned with improving the drafting, clarifying the wording, removing areas of ambiguity, or excluding doubt to ensure that our policy intentions are properly met and delivered in full.
Let me deal briefly with three notable issues on which amendments have been agreed in another place: the imposition of environmental duties on the CAA, the efficiency of the CAA, and the Secretary of State’s powers to make regulations relating to the ATOL scheme.
The environmental impact of aviation has been raised during the Bill’s passage through both Houses, and the Government take it very seriously. In particular, there has been a great deal of focus on giving the CAA additional duties to take account of it. Lords amendments 1 to 4 respond to that concern by giving the CAA a supplementary environmental duty to which it must have regard in performing its airport economic regulation functions. The amendments are intended to make it clear that in conducting those functions, the CAA must have regard to the ability of the regulated airport operator to take reasonable measures to reduce, control or mitigate adverse environmental effects that are generated by the activity of the airport—and aircraft using the airport—to which the licence relates. For example, a reasonable measure could be a cost-effective energy saving investment project, such as the installation of solar-powered lighting in terminal buildings, which would lower the airport’s future energy costs. Environmental issues in this context would include noise, vibration, emissions and the effects of works carried out at the airport. The amendments also provide clarity that reasonable costs of environmental measures undertaken by licence holders may continue to be taken into account in the regulatory settlement, where the measures are in the interests of passengers and owners of cargo and to do with the provision of airport operation services.
We have always been clear that airport operators, whether or not they are subject to economic regulation, should be able to invest in appropriate environmental measures. For example, if an unregulated airport undertakes investment in environmental measures that benefit passengers, the Civil Aviation Authority will be able to look to this and approve a reasonable similar investment in the regulatory settlement at a regulated airport.
The Government do not believe that the absence of an environmental supplementary duty would prevent the CAA from approving environmental investment where that is in passengers’ and cargo owners’ interests. However, following detailed consideration of the matter, the Government decided there is a benefit to making this clear in the Bill. Certainly, the Bill should not be seen as placing a restriction on investment in environmental measures at licensed airports where they benefit passengers and freight owners in the provision of airport operation services.
I am sure departmental officials will have briefed the Minister that we debated at length in Committee whether an environmental duty should be placed on the CAA in respect of the operation of airports. There was a subsequent debate about the suggestion of the Minister’s predecessor, the right hon. Member for Chipping Barnet (Mrs Villiers), that such a measure would apply only to Heathrow. There is therefore a debate to be had about whether the environmental duty should cover all airports, or just Heathrow. Will the Minister confirm that the proposed CAA environmental duty that the Government have accepted will operate across the entire aviation industry?
The hon. Gentleman is right: I have been extremely well briefed by some excellent civil servants, who have had to play catch-up, because I am a Johnny-come-lately to this debate as a result of the events of 4 September this year. I confirm that this duty will apply not just to Heathrow, but also to the other regulated airports of Gatwick and Stansted. I hope that reassures him.
A regulated airport should not be required to spend on environmental measures where a competitive airport would not do so, because that could create market distortions by placing greater burdens on regulated airports than non-regulated airports. Furthermore, not only have the Government sought to address these concerns through their own amendments, but on Report in another place Opposition amendments to the proposed Government amendments strengthening the wording of this duty were also accepted. I hope the House will recognise that as a genuine effort to reach an agreed position on including appropriate environmental considerations in the Bill. We are confident that we have struck the right balance on the environment, and that the CAA will be better placed than ever before to take environmental matters seriously.
On CAA efficiency, we agree with industry stakeholders that it is important to hold the CAA to account. There are a number of provisions in existing legislation that require the CAA to carry out its activities efficiently. Lords amendment 22 inserts a new clause that will provide for greater transparency and accountability in the CAA’s efficiency measures. Section 21(3) of the Civil Aviation Act 1982 already requires the Secretary of State to lay before each House of Parliament a copy of the CAA’s annual report on its performance and its functions in that accounting year. If Lords amendment 22 is accepted, in future this annual report laid in each House will include an efficiency statement by the CAA and an assessment by the independent auditors of that efficiency statement. The provisions will give the CAA a further incentive to secure value for money and to be as efficient as possible in performing its functions. I am pleased to say that the amendment was welcomed in the other place, where the Opposition commended it, saying:
“This is an excellent proposal, which will guarantee that the efficiency of the CAA will be subject to scrutiny”.—[Official Report, House of Lords, 7 November 2012; Vol. 740, c. 1062.]
I hope that the new clause will enjoy a similar level of support in this House.
Lords amendments 17 to 20 provide the Secretary of State with further powers to close down potential ways around the ATOL scheme. The Secretary of State already has the power to regulate businesses that make available flight accommodation and, under clause 94 of the Bill as introduced, will have the power to regulate businesses acting as an agent for the consumer. However, after the Bill was introduced, the Government and the CAA found possible loopholes that needed to be addressed in further powers.
The first loophole concerns a potential business model whereby a business argues that it is neither making available flight accommodation nor acting for the consumer but is instead merely facilitating making available flight accommodation. That business could then argue that it is not in the scope of either the existing ATOL regulation-making power or those in the Bill as introduced. Lords amendments 17 and 18 address that loophole by giving the Secretary of State powers to include businesses that facilitate making available flight accommodation in the ATOL scheme.
Secondly, amendments 19 and 20 give further necessary clarity to the regulation-making power in instances where goods and services sold alongside flights, such as accommodation or car hire, can be protected under the ATOL scheme. By closing potential avoidance approaches, those four amendments will help the Government meet our stated objectives of providing greater clarity for consumers about what holidays and flights are included in the ATOL scheme as well as a more consistent regulatory framework for businesses.
I have dealt with the main substantive issues covered by the Lords amendments. The remaining amendments, as I alluded to, are the majority and are technical and drafting amendments that clarify issues so that there is no shadow of a doubt about the Bill’s intentions.
Like the Minister, we welcome the Bill and the Lords amendments. We supported much of the Bill in Committee and continue to do so today. This is my first opportunity to welcome the new Minister of State to his position and to face him across the Dispatch Box, so I wish him well in his new role. It is probably good to be meeting on relatively friendly terms on our first outing.
We are very pleased that the Government have accepted a number of amendments. In the other place, the noble Earl Attlee said:
“The noble Lord, Lord Davies of Oldham, is very insistent and persuasive. He is clearly convinced that his amendments will improve the Bill. My Bill team manager will probably kill me, but I can accept”.—[Official Report, House of Lords, 7 November 2012; Vol. 740, c. 1003.]
Clearly, I need to take advice and lessons from my noble Friend on how to be insistent and persuasive, because we tabled those amendments, a number of which were accepted in the other place, in Committee and raised the subject again on Third Reading. We were spectacularly unsuccessful in persuading the Government to accept a single amendment, so we obviously need to speak closely to our colleagues in the other place to see how they were able to secure agreement.
I am grateful to my hon. Friend for his understanding of the difficulties that the coalition sometimes has, and I am sure coalition Members are also grateful for that empathy.
I will not speak for long. I know that there is an important debate on autism to follow, and that a number of colleagues want to get in on this brief debate. I refer specifically to amendments 1 to 4 and 22, which cover the environmental issues and the CAA duty of efficiency. It is disappointing that the eloquent Lord Davies was unconvincing on the issue of emissions, especially as the European Union emission trading scheme has folded. We had a discussion in Committee about emission targets. In his closing remarks the Minister might want to comment on where we go on that. Aviation emission targets were a matter of some concern, but the amendments in the other place were not accepted. There is also nothing on passenger welfare, which we pressed in a number of ways.
On amendments 1 to 4, we spent considerable time in Committee, from column 112 onwards in the Official Report, trying to persuade the Government of the merits of the environmental duties. Fortunately, they have seen some of the light. On amendment 22, at columns 343 and 344, we argued the case, for the aviation industry, that the Civil Aviation Authority should have a duty to operate efficiently.
In response to our requests, the Minister’s predecessor said:
“Sadly, the shadow Minister will think me hard-hearted, because I cannot support new clause 2”.
She went on to say:
“I can only re-emphasise that my understanding and interpretation of the Bill is that it does indeed require the CAA to act in an efficient way.”––[Official Report, Civil Aviation Public Bill Committee, 13 March 2012; c. 343-44.]
Fortunately, it seems that she was wrong, and we welcome the Government’s change of heart.
We welcome the Government amendments on ATOL and the opportunity to debate the subject, and the Government’s intentions, more thoroughly in Westminster Hall on Thursday. As I said, this is essentially a good Bill. It could have been even better, but as a result of the good sense of our noble Friends in the other place, it is at least in better shape now than when it left here, and we support the amendments.
I welcome the Bill and the amendments before us today, particularly amendments 1 to 4, which deal with the protection of the environment. For the Liberal Democrats it is extremely important that a duty of care for the environment is written into the Bill, and the amendments achieve that. This was an issue that my hon. Friend the Member for Cambridge (Dr Huppert) raised on Second Reading and continued to raise as the Bill went through its Commons stages, so I am delighted that the Government have listened to him and to the Liberal Democrats and tabled their own amendments in the Lords.
I hate to disillusion the hon. Gentleman, but we had some good exchanges with his hon. Friend, who managed to wriggle out of supporting any of the environmental duty amendments that we tabled. I would have referred to him in my speech, but I had not given him advance notice and I would not do him the discourtesy. We give credit to the other place for the amendments, not to the hon. Member for Cambridge.
An interesting intervention from the hon. Gentleman. I discussed the Bill with my hon. Friend the Member for Cambridge before today, and I understand that he felt there were some technical deficiencies in the amendments tabled by the hon. Gentleman in Committee. It is important to stress that Liberal Democrats are in government, and we are able to influence the Government because we are part of the Government. It was the Government who tabled the amendments in the Lords. Having spent nine years on the Opposition Benches, I can understand the hon. Gentleman’s frustration. Without civil service advice, it is difficult to get an amendment right. Being on the Government Benches, Liberal Democrats are achieving successes and this is one of them. As a result of our influence, care for the environment is now on the face of the Bill.
The amendments in question are not on the amendment paper today. What we have before us today are the amendments made in the Lords, and I would probably be out of order if I spoke to amendments that have not been tabled. The hon. Gentleman could have tabled amendments to the Lords amendments, but chose not to do so, so we cannot discuss them.
I may be wrong, but I doubt I am. I quoted Earl Attlee accepting amendment 2 and adding:
“My Bill manager will probably kill me”.—[Official Report, House of Lords, 7 November 2012; Vol. 740, c. 1003.]
Amendment 2 was tabled by Lord Davies and accepted by the Government. We tabled that amendment in Committee and on Report. The hon. Member for Cambridge had ample opportunity to table his own amendment, but nothing was forthcoming.
My understanding is that amendment 2 was an amendment to a Government amendment and only worked because it was combined with the Government amendment.
I did not intend to speak for long, Mr Deputy Speaker, but have been waylaid by Opposition Members. I will conclude by saying that the Bill now focuses both on passengers and on the environment. I believe it strikes the right balance and I am pleased to support it today.
Given that the Government have no plans to protect access to the hubs, I would like to ask a question in reference to clause 6. Access to the hubs of Heathrow and Gatwick is important for Belfast City airport and Aldergrove International airport. Ever mindful that air transport is a volatile business, the matter was debated in another place through an amendment tabled by Lord Empey. Referring to a report by Birmingham MEP Philip Bradbourn, the noble Lord said:
“It was drawn up in April this year and, I believe, was passed by the European Parliament in May. The report, ‘considers it essential for regional airports to have access to hubs’.”—[Official Report, House of Lords, 9 November 2012; Vol. 740, c. 1252.]
Lord Empey advanced that view in his amendment, which was not accepted.
I raise the point because on 6 November, Jim Nicholson MEP tabled two amendments to a proposed European regulation. I do not intend to read out the text of amendment 45 in its entirety, but it is about the slot allocation system established in 1993, and states in italics:
“In addition it is important that access to hub airports from regional airports should be maintained where such routes are essential to the economy of that region.”
That amendment was adopted by the European Parliament, as was amendment 178, which, after the provision,
“The coordinator shall set up a pool, which shall contain all the slots. All new slot capacity determined pursuant to Article 3(3) shall be placed in the pool”
“This procedure shall be without prejudice to regional airports connectivity to hub airports. If such connectivity is undermined Member States shall be permitted to intervene.”
After all that lead-in, my question to the Minister is quite simple. Will he assure this House that he will support those amendments, which will protect access to the hubs and give life and continuity to Belfast City and Aldergrove International airports, when they come from Europe to this House?
I rise to speak briefly in this short debate. Amendment 3, which relates to clause 2, refers to
“the need to secure that each holder of a licence… is able to take reasonable measures to reduce, control or mitigate the adverse environmental effects of the airport to which the licence relates”.
I would like to quiz the Minister on the meaning of “environmental effects”, because I am a strong supporter of an estuary airport solution and very much opposed to the idea of a third, or conceivably a fourth, runway at Heathrow.
It seems fairly clear that aviation pollution from Heathrow, if the airport was extended, would compound an already poor state of affairs. There are about 50 early deaths a year as a result of pollution, and the Massachusetts Institute of Technology has calculated that the number could climb to 150 if a third runway is built. We also know that the prevailing winds at Heathrow are south-westerly and that pollution from the airport already spreads over a huge swathe of north London.
Finally, we also know that noise from Heathrow accounts for 95% of all the noise impacting people from London airports and that around 725,000 people live under the flight path and experience noise in excess of 55 dB. If Heathrow is extended, we can expect all those environmental impacts to be exacerbated. Will the Minister indicate whether the rather welcome amendment, which would require adverse environmental effects to be mitigated, will include the list I have just given?
There is not much more to say after that contribution, except that the key issues of noise and emissions pollution are absolutely critical to my constituents and, as the hon. Gentleman said, to a much wider area of the south-east. That is why I welcome the amendments, wherever they were drafted—I think forensics could prove where they come from.
The key issue for my constituents is how the targets will be set, monitored and reported. It would be useful if the Minister clarified what role this House will have in monitoring the implementation of this legislation. In the past we have received the CAA’s annual reports and individual determinations but, given that the legislation represents a significant break, I think that a regular report from the Secretary of State would be extremely useful, even if it was only an annual report. We could then have a full debate on the Floor of the House to monitor issues such as the environmental impact.
It might be helpful at this point if I reassure the hon. Gentleman that, as I said in my introductory remarks, there is and will continue to be an annual report from the CAA, and it will be up to this House to debate it, in a variety of shapes and forms, at any time it wishes.
That is incredibly helpful. I encourage Members to join me in ensuring that we have that annual debate, which we have not had up to now. The legislation places duties not only on the CAA, but on the Secretary of State. Therefore, I think that it is important that we have an annual report from the Secretary of State on the fulfilment of his or her duties that we can debate, because this is a critical piece of legislation for so many of our constituents.
I intend to speak very briefly and not to detain the House for long, because I understand that many hon. Members wish to contribute to the important debate that will follow. I will deal briefly with some of the issues raised by hon. Members because, as those aficionados who attended Second Reading and Committee will know, there has been a thorough debate and considerable engagement between those with differing views and opinions, not least in another place. [Interruption.] I will not get involved in the little squabble between the official Opposition and the hon. Member for Argyll and Bute (Mr Reid).
The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) mentioned the important matter of emissions. I do not want to get into an in-depth debate or to regurgitate what has already been said. On the question of the duty to work with others to meet the UK’s emissions targets, we believe that the Opposition amendments are unnecessary, as was pointed out in Committee and on Report. That is because, as he will accept, this Government and the CAA already take environmental matters very seriously, and the Government’s approach is to ensure that the aviation sector makes a significant and cost-effective contribution towards reducing global emissions. Moreover, the Opposition amendments were technically flawed, although I accept that that could have been remedied during the subsequent procedures in this House. We feel that our general approach, with the way in which we have listened to the arguments and the amendments that have been made, is the right way forward and that it gives the protections whereby the environmental issues will be taken very seriously.
The hon. Member for Poplar and Limehouse mentioned emissions and referred to what has happened in the past week or so with regard to the European dimension. The UK welcomes the Commission’s proposal to, in effect, stop the clock in return for progress on global agreement in the International Civil Aviation Organisation. We think that it is right that we give the United Nations process time to make progress on a global deal, and we look forward to receiving more detail on the substance of its proposal, and sight of the formal legislative proposal, which is due, I believe, later this month. We hope that the constructive atmosphere in which Friday’s international meeting took place can continue and that the UN is able to build on the current momentum to deliver a successful and ambitious outcome next year.
I am grateful to the Minister. In the absence of the European emissions trading scheme and of an international agreement in the ICAO, but with ongoing dialogue, will the Government engage with the Committee on Climate Change to look at aviation and, for that matter, shipping emissions, because they are not incorporated in UK targets although people naturally feel that they are significant?
We will engage wherever necessary to seek to reach solutions that are viable and will achieve the objectives set out, provided that they are the right course of action and the correct way forward.
Let me pick up the points made by the hon. Member for Strangford (Jim Shannon) and my hon. Friend the Member for Bury St Edmunds (Mr Ruffley), because I think that I dealt with the matter raised by the hon. Member for Hayes and Harlington (John McDonnell) in my intervention. [Interruption.] Well, I thought I did; I hope that he will be generous so that we can make progress. As the hon. Member for Strangford and my hon. Friend the Member for Bury St Edmunds will know, the context for dealing with the environmental issues surrounding Heathrow, Gatwick and Stansted, for example, are all fully dealt with in the Bill.
I felt at times that the hon. Member for Strangford was going a little further on to the wider issue of hub airport status. I have to say to him, in the nicest possible way, that that is obviously beyond the scope of this Bill. However, I hope that he will take reassurance from the fact that in order to look at the whole area of the future of aviation policy, to meet our commitments and to protect our position as the significant hub airport presence for western Europe, we have set up, under my right hon. Friend the Secretary of State, the Davies inquiry, which will look across the range at the best way forward on aviation policy, the best way to deal with capacity and connectivity issues—
No, because I really do want to make progress.
The inquiry will report in due course, and it would be extremely foolish of me to try to prejudge or anticipate it, but no doubt the hon. Member for Poplar and Limehouse will, if he so wishes, be prepared to contribute to it by submitting his views on issues that he clearly holds to be very important, as indeed they are.
In conclusion, as the hon. Gentleman has said, this process, which started with the Bill’s Second Reading in January, has involved friendly, vigorous and constructive engagement between the Government and the Opposition. I pay tribute to my predecessor, my right hon. Friend the Member for Chipping Barnet (Mrs Villiers), for the way in which she led on the Bill until the final prize was taken from her grasp and given to me. I also pay tribute to the hon. Gentleman and his colleague the hon. Member for Barrow and Furness (John Woodcock) for their constructive engagement in ensuring a strengthened and even better Bill at the end of the process than it was at the beginning. That is what Parliament is all about—making sure that we get the right answers to the questions posed. I think that the Bill as it was originally drafted was very good but, by listening and engaging, we have been able to strengthen it further, and this short debate has illustrated the co-operative way in which both sides have engaged in the process.
I could not finish without thanking those who are often the unsung heroes of the process of taking a Bill through Committee. Members in this House and the other place do not know their names and rarely see the hard work that they do day in, day out. They are, of course, the civil servants in the Department for Transport and its Bill team. They have worked extremely hard to ensure that our proceedings could go as smoothly as possible and that all the amendments were analysed properly, so that only those that merited it were accepted, even in modified form. I pay tribute to them and to all Members who have contributed so much to the Bill, both in this place and in another place, and I look forward to its becoming law, because it is badly needed to upgrade the existing legislation, which dates back to 1982.
Lords amendment 1 agreed to.
Lords amendments 2 to 7 agreed to.