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Grand Committee

Volume 738: debated on Monday 9 July 2012

Grand Committee

Monday, 9 July 2012.

Arrangement of Business


My Lords, if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and will resume after 10 minutes.

Civil Aviation Bill

Committee (4th Day)

Relevant documents: 4th Report from the Delegated Powers Committee.

Clause 96 : Non-executive members of CAA

Amendment 64

Moved by

64: Clause 96, page 59, line 32, leave out paragraph (b)

My Lords, the purpose of these amendments is to stop the Bill from apparently removing the Treasury’s oversight on non-executive pay at the Civil Aviation Authority, which was provided for in the 1982 Act that established the CAA. Under the Bill’s proposals, decisions on pay, allowances, pensions or gratuities will be determined solely by the Secretary of State for Transport.

Following recent failures to take action over excessive pay until forced into it by political and public pressure, as with RBS and Network Rail where the Secretary of State for Transport initially denied that she could do anything about the level of bonus payments to top executives, there should not be any weakening of oversight on remuneration payments. At this time of increased and justified public concern about levels of pay and bonuses, it is hardly appropriate for the Government to be seeking to remove a layer of checks and balances on the setting of CAA non-executive board members’ pay.

The CAA non-executive members were paid varying amounts up to some £77,000 in 2010-11. Non-executive board members are not there simply to make up the numbers or to add a veneer of outside independence and challenge. They are there as critical friends to challenge and question the senior executives on both the policies that they are pursuing and the policies that they are not, including accounting and financial policies, and to ensure that appropriate corporate governance arrangements are not only in place but are being properly implemented and applied.

Under the Bill, the CAA non-executive members will also determine the terms and conditions on which the chief executive is to be employed and who should be appointed. Other executive members are to be appointed by the chief executive with the approval of the chair and at least one other non-executive member who also will have to approve the terms and conditions under which other executives are employed. The role and importance of the CAA non-executive members is further enhanced not just by the more influential role that the CAA will have but also by the fact that the Secretary of State and the chief executive must exercise their powers to secure that, as far as practicable, the number of non-executive members exceeds the number of executive members.

So at a time when there is increasing concern about remuneration packages and bonuses; at a time when CAA non-executives will be involved in the major senior executive appointments and their terms and conditions; at the same time as the role of the Civil Aviation Authority is being increased; and at the same time as the importance of non-executives is being increased by there being a requirement in this Bill for the number of non-executives to exceed the number of executive members, the Government decide that this is the appropriate time to remove the oversight that the Treasury has on non-executive pay at the CAA. The Treasury can provide a degree of impartiality over decisions on the remuneration of Department for Transport appointees, as well as having knowledge of what remuneration levels are for non-executive members appointed through other departments of state. The Government’s logic does not add up. I beg to move.

My Lords, I am grateful for the explanation given by the noble Lord, Lord Rosser, and I hope that I can clarify the Government’s position on these probing amendments. In the current political environment and with the public interest in these matters, I can quite understand why the noble Lord has tabled them.

There are several reasons why I cannot support all these amendments, to which I will come shortly. By way of background, the changes introduced by the Bill that these amendments seek to overturn complete a series of governance reforms recommended by Sir Joseph Pilling following his 2008 strategic review of the Civil Aviation Authority. Sir Joseph’s conclusion was that the involvement of two government departments in remuneration decisions was unnecessary. He said:

“In evidence to the review the Treasury explained that the CAA was the only regulator it looked at in this way … The statutory requirement for the Treasury to approve the Civil Aviation’s members’ remuneration and pensions is an anomaly. I recommend that the Department for Transport seek to amend the legislation so that the responsibility lies solely with the Secretary of State”.

He also asked the Department for Transport to consider the approach of some other UK regulatory bodies where the board appoints executive directors without ministerial involvement. The previous Government accepted those recommendations and consulted on the proposals reflected in the Bill. The Government agree with Sir Joseph’s conclusions that the oversight of the Treasury is an anomaly that adds no value. The Committee should note that there is no equivalent requirement for any comparable regulatory body, so Clause 96 implements an important aspect of the Pilling report. It would remove Treasury involvement in approving the remuneration of non-executive members. Removing Treasury oversight will also remove unnecessary government duplication; there is no need for two government departments to be concerned with CAA board remuneration. It will also reduce unnecessary delays in the appointment of non-executive members of the CAA.

There is nothing so special and different about the CAA board appointments that they alone of all regulatory appointments require the approval of two government departments. The Secretary of State will continue to be responsible for appointing non-executive directors and determining their remuneration. They are part-time posts that currently pay under £25,000 with some small additions, where applicable, for extra work. I note that the noble Lord, Lord Rosser, suggested that some were paid £75,000. They are not in a CAA pension or bonus scheme. It is therefore quite unnecessary for the Treasury to undertake the administrative burden of checking the decisions of the Secretary of State. I hope that that provides the Committee with the reassurance required and that the noble Lord will consider withdrawing his amendment.

Obviously, it is my intention to withdraw the amendment, but before doing so perhaps I may ask the noble Earl whether he said that the posts would receive less than £25,000. Is he saying that that was the case in the financial year 2010-11 for which we appear to have the figures?

The non-executive directors are currently paid between £22,000 and £25,000 and are not eligible for pensions or bonuses, although they can receive extra payments for extra days of work. I hope that that helps the noble Lord.

I note with interest the Minister’s response. Either the figures that I have are incorrect or an awful lot of extra work is undertaken, but obviously I can look at that. The key part of the Minister’s argument is that no other regulatory bodies have Treasury and appropriate department involvement. The Minister has been clear on that. I shall certainly want to reflect on his response, but I beg leave to withdraw the amendment.

Amendment 64 withdrawn.

Amendments 65 and 66 not moved.

Clause 96 agreed.

Clauses 97 to 99 agreed.

Schedule 14 agreed.

Amendment 67

Moved by

67: Before Clause 100, insert the following new Clause—

“Accounts and audit

(1) Section 15 of the Civil Aviation Act 1982 (accounts and audit) is amended as follows—

(a) in subsection (1), for paragraph (c) substitute—“(c) to send copies of the statement of accounts to the Secretary of State and the Comptroller and Auditor General before the end of the November following the accounting year to which the statement relates.”;(b) in subsection (2), for paragraph (a) substitute—“(a) the National Audit Office shall examine, certify and report on each statement of accounts received under subsection (1) and shall lay copies of the statement of accounts and of its report thereon before each House of Parliament.”(2) In the National Audit Act 1983, Schedule 4 (Nationalised Industries and Other Public Authorities) Part 1, leave out “Civil Aviation Authority.””

The amendments in this group provide, first, for a new clause that would give the National Audit Office oversight of the Civil Aviation Authority’s accounts. It would also place on the Civil Aviation Authority a general duty of efficiency in the use of its financial resources. It is not clear why the Government have not already included those provisions in the Bill. There are significant changes in the role of the Civil Aviation Authority under the Bill in relation to aviation security functions transferred from the Department for Transport and the economic regulation of airports. The Civil Aviation Authority is likely to become a more influential and important body as a result.

Other regulatory bodies, including economic regulators which are also industry funded, are subject to National Audit Office oversight. They include Ofgem, Ofwat and Ofcom. The Office of Rail Regulation is also subject to National Audit Office oversight, and the ORR is likewise funded from within the industry. As we know, the Civil Aviation Authority is funded from the aviation industry and also receives a limited amount of money from the taxpayer. It is not, however, subject to National Audit Office oversight, although it is generally recognised that the Comptroller and Auditor-General and his staff at the National Audit Office do a highly effective job.

The activities of the regulators to which I have just referred and which are subject to NAO oversight do not involve significant public funds, but they lead to costs being incurred by the providers of essential or strategic services which are likely to be passed to consumers, which justifies NAO involvement. That is particularly the case where the need for active economic regulation has arisen from the process of privatisation, and it is therefore only right that there should likewise be National Audit Office oversight of the Civil Aviation Authority’s accounts, as provided for in the amendment. The House of Commons Transport Select Committee in its report also called on the Government to explain why the Civil Aviation Authority is apparently unique among industry regulators in being outside the remit of the National Audit Office.

The second amendment gives the Civil Aviation Authority a general duty of efficiency in the use of its financial resources. A number of those giving evidence to the House of Commons Transport Select Committee suggested that the CAA did not always operate in the most efficient way possible. For example, in its written evidence, British Airways stated that no measures to encourage efficiency had been included in the Bill and that it considered that the Civil Aviation Authority had scope to make significant improvements in efficiency in certain areas. It argued that the CAA should have a duty to operate efficiently.

In order to keep costs for airlines and passengers, as well as the taxpayer, as low as possible, it is essential that the CAA adopts efficient ways of working and modern technology where appropriate, as higher costs for airlines arising from CAA charges and any inefficient use of its financial resources have the potential to damage major UK airports’ competitiveness with alternative competing hubs. The Transport Select Committee, having taken evidence, recommended that an explicit efficiency duty for the Civil Aviation Authority should be inserted in the Bill. It is clear that it was unimpressed with arguments that other parts in the Bill already provided that explicit efficiency duty for the CAA.

I hope that the Minister will be able to give a sympathetic and helpful response to the amendments and I beg to move Amendment 67.

I share the concern expressed by my noble friend Lord Rosser about leaving the CAA out of National Audit Office oversight. I have never understood the argument for that. It is very unusual, if not unique, for such an organisation to be left outside the remit of the NAO, and the case for its inclusion is strong. At the very least, I would like the Government to explain why; I do not understand it. The argument about efficiency follows from that, but the one that worries me most is raised by Amendment 67, which I support. I have not yet heard any argument why the CAA should be outside the remit of the NAO, because almost any other body of this type would be included. I should like an explanation for that.

My Lords, while the noble Lord, Lord Rosser, makes an interesting case for Amendment 67, I am somewhat neutral on the matter, and look forward to hearing the Minister’s reply. I must say that I am a good deal less enthusiastic about Amendment 68; general, somewhat ill defined duties such as those contained in that amendment are best left out of legislation, and I hope that the noble Lord will not press it.

My Lords, I fully agree with noble Lords on the need for the CAA to be efficient in carrying out its functions. Identical amendments to the ones now tabled by the noble Lord, Lord Rosser, were also tabled in the Commons both in Committee and on Report, and were defeated in Divisions.

I shall speak first to Amendment 67 on introducing a role for the National Audit Office. In Commons Committee the Minister announced a strengthening, outside the Bill, of the scrutiny to which the CAA is subject. Having considered this issue further myself, I remain unconvinced that there are compelling reasons to believe that NAO scrutiny of the CAA would deliver a different result from the current and new mechanisms by which the CAA’s functions are already audited and scrutinised. Moreover, the CAA is overwhelmingly funded by the aviation industry. Parliament recognised this in removing the NAO’s role from the CAA and certain other bodies in 1984. The issue was considered by Sir Joseph Pilling, in his 2008 strategic review of the CAA, who concluded that there was no need for NAO involvement. The recommendation was subsequently accepted by Ministers under the previous Government, and I have yet to be convinced that they were wrong.

It is true that other industry-funded regulators come under the scrutiny of the NAO but, unlike the CAA, they are generally either non-ministerial government departments or rely on government funding for a significant proportion of their income. The CAA’s situation is very different from regulators such as the Office of Rail Regulation. Although the ORR is funded by industry licences, it is distinct because of the high level of public funding that the rail industry receives.

I reiterate the strength of the scrutiny mechanisms already in place with the CAA. As was said on Report, the Secretary of State appoints the CAA’s external auditors. She presents the CAA’s accounts to Parliament by placing the annual report statement in the Library of the House of Commons; she is involved in the development of the corporate plan; with the Treasury’s consent, she approves the CAA’s borrowing and sets its required rate on return on capital; and she will continue to approve the remuneration of the chair and non-executive members of the CAA board. In addition, the CAA consults on its charges and fees. Clause 100 makes such consultation an explicit requirement. I therefore currently see no reasons why the NAO should audit the CAA, and ask the noble Lord to withdraw that amendment.

On Amendment 68, regarding efficiency, in practice the CAA is already subject to conditions and obligations that ensure that it is efficient. As announced by the Minister in the Commons, from 2013 onwards the Government will include in their annual accounts direction a requirement for the CAA to include an efficiency statement in its annual report. This would be subject to validation by the CAA’s external auditors, and the Secretary of State for Transport will approve the terms of reference for that work. The efficiency statement is likely to include a summary of value-for-money audits and post-project completion reviews, developments in processes and technology and a report on the remuneration and deployment of staff. The external auditors’ published statement in the annual report would contain a summary of their findings on the efficiency statement in the interests of transparency. Industry representatives on the CAA’s finance advisory group would be given an opportunity to discuss the statement before and after the external auditors had completed their activity. This establishes an annual process of scrutiny, with transparency to the industry and to Parliament, to which the Secretary of State will continue to present the CAA’s accounts.

During the past nine years, the CAA has reduced its workforce by 15%. It employed 1,057 full-time equivalents in 2003 and had reduced that number to 870 in March 2012. The CAA’s strategic plan contains the objective:

“To ensure that the CAA is an efficient and effective organisation which meets Better Regulation principles and gives value for money”.

Clause 1(3) and (4) and Clauses 83 and 84 already build in proportionality safeguards. The CAA is also required to follow the good regulation principles in the Legislative and Regulatory Reform Act 2006 and the statutory regulator’s compliance code requires that regulators,

“should be accountable for the efficiency and effectiveness of their activities, while remaining independent in the decisions they take”.

I am aware that this is very important to airlines represented by the British Air Transport Association.

I will continue to reflect on the matter and consider what further reassurances can be given to your Lordships on Report. In light of that, I hope that, at the appropriate point, the noble Lord, Lord Rosser, will consider withdrawing his amendment.

Amendment 67 is still puzzling me, because the Minister’s argument seems to be that, because the airlines fund the CAA so heavily, there is a relatively small contribution from the taxpayer and, for that reason, the NAO need not be involved. I do not have the figures with me, but I do not think that the contribution from the taxpayer is so small as to be really insignificant. If we are saying that a public body such as this can be excluded from the NAO audit simply because it receives a fairly small amount of public money, that logic could be extended to almost any other public body of this type.

To use the Minister’s argument, if in time the railway industry was able to pay rather more for the Office of Rail Regulation, as one would hope, one would no longer need to have that looked at by the National Audit Office. The Minister seems to saying that this is purely a ministerial discretion issue; that is, “We will simply look at it. If the amount of taxpayers’ money is small enough, we won’t bother to put it under the NAO”—I do not use “won’t bother” in a dismissive sense; I mean that the Government will not bother to have the NAO look at it. However, there will come a point when we want the NAO to look it. Can the Government indicate what the trigger would be? Are we talking about £1 million or £5 million? What amount would suddenly trigger the Government saying that the CAA would be put under the National Audit Office? Alternatively, to use my example of the Office of Rail Regulation, if the railway industry suddenly started paying for most of it, would we say, “Well, they’ve reached this point. Therefore, we will no longer put it under the National Audit Office.”? I am not quite clear about what the policy is.

My Lords, noble Lords have advanced various arguments as to why the CAA should be audited by the NAO, but the Committee has not convinced me that the CAA would become any more efficient if we went down that route. If noble Lords want to make any progress with their argument, they will have to convince me that it would give a better outcome.

The noble Lord’s implied question was how much of the CAA’s budget comes from public funds. It is only 6%.

My Lords, I am afraid that I will have to write to the noble Lord on the CAA’s budget. As ever, I will give Members of the Committee a comprehensive answer to any of their more technical questions.

In writing that letter, can the Minister also give the relevant comparable figures for the other regulatory bodies to which we have referred—Ofgem, Ofwat, Ofcom and the ORR—and which are also funded in part by their industries? If the Minister’s argument on this issue is that the figure for the Civil Aviation Authority is particularly low in either percentage or actual terms when compared with other regulators, which are also partly funded from within their own industries, perhaps in sending that letter he could provide the comparable figures so that we can have a look at them.

I would comment only that while the Minister says that it is up to us to show the case for why a current arrangement should continue, there is to be a changed Civil Aviation Authority under the Bill. We are not talking about that authority as it is now but about one with enhanced powers and influence. I would have thought that the onus lay with the Minister to show us why the arrangements for the CAA should be different from those for other regulators, rather than the context in which he put it: of seeking to say that we have to make the case. It is the Minister who has failed to make the case, frankly, but I will leave it until we receive the letter from him with the information that he has said he will provide.

I am still not clear which clauses the Minister is saying provide the general duty of efficiency. I see a reference in Clause 1(3), to which I think the Minister referred, to the CAA having,

“regard to … the need to promote economy and efficiency on the part of each holder of a licence”,

for example, but that does not relate to the CAA’s efficiency. I can find references, which I think the Minister used, to activities being,

“transparent, accountable, proportionate and consistent”,

but those do not necessarily refer to being efficient or efficiency so I do not know what the noble Earl’s argument is. Which clauses is he saying cover the general duty of efficiency? My understanding is that this is not some unique clause that we are proposing to put in, as one can find examples of it applying elsewhere. Once again, why is the Minister saying that it should not apply to the CAA when, from what I have heard from him and from my understanding of the Bill, I cannot see such a clear reference as he can to a general duty of efficiency in any other clauses at present? I wonder if he can assist with that.

On Amendment 68, the noble Lord’s points are well made. I said that I will continue to reflect on the matter and consider what further reassurances can be given at Report. My reason for saying that is that the noble Lord has put his point very well.

I am grateful to the Minister. I heard him say that the first time round, but I am grateful to him for having reconfirmed that he is looking at this matter. I appreciate that he has not given any commitments. While I would not want to suggest that when the noble Earl says he is looking at a matter he is not doing it seriously, if I say that he is looking at it seriously I hope he does not take that in the wrong spirit and infer that I think he sometimes does not. However, in view of what the noble Earl has said, I beg leave to withdraw the amendment.

Amendment 67 withdrawn.

Amendments 68 and 69 not moved.

Amendment 69A

Moved by

69A: Before Clause 100, insert the following new Clause—

“Duty to promote innovation

In carrying out its functions, the CAA must, where possible and appropriate, have regard to the need to promote innovation in the civil aviation industry.”

My Lords, this is a probing amendment with a proposed new clause because we could not think where else to put it in the Bill. It raises a very important topic, to which I hope the Minister will respond in his customary constructive fashion by assuring the Committee that the Government have thought through this issue and, in so far as the Bill can assist in tackling it, are already doing so—unless by some remarkable occurrence, and in the unlikely expectation, the Minister accepts my proposed new clause.

We have proposed this new clause in Amendment 69A in order to probe the Government and to have a debate about one of the most significant challenges facing the aviation industry in the future and the need for the CAA to play its part. It is clear that the whole concept of the Bill is to establish a new position for the CAA and to update the provisions governing it, but one of the great challenges for the aviation industry is obvious, and that is that the British Government have subscribed to very significant and challenging carbon targets for the years leading up to 2050. We believe that aviation emissions must be included in these targets. Aviation emissions are already subject to carbon caps as a result of being included in the EU emissions trading directive, but I want to broaden the debate to consider the obligations of the industry against the whole background of carbon emissions.

In order to reduce emissions in the industry and to serve the needs of businesses and members of the public who wish to fly it is clear that there needs to be innovation in the construction of aircraft, so that we can meet what we all appreciate is a very significant demand for air travel, which no Member of the Committee expects to reduce significantly in the future. We all know the hopes that are expressed about developments such as high-speed rail—that they will lead to a reduction in short-haul flying—but that may not do much more than mitigate the increase that is likely to occur as people, in due course, want to spend their income on travel.

As for the industry, even if high-speed rail plays a part in replacing short-haul flights, nothing can take the place of long and medium-range flights. Only aircraft can provide that kind of travel in the timescale needed. We are all aware that the vast majority of vessels that carry passengers do so without regard to time: they are predominately cruise ships used for leisure, so the time constraint is not so acute. It must be several decades since the last passenger went on a vessel over a long distance to conduct business, except for those exceptional people who will never fly. The way to get about over long distances, clearly, is by air and not by sea.

Of course, the aviation industry has a major future. Another great innovation which I am sure others will bring to the Minister’s attention, if I do not, is the increase in global communications, the sophistication of conference facilities and so on. It leads to the potential obviation of people having to travel for business if they can conduct it just as well through effective long-range communication. I have to say that I participated in one of the first such ventures, which consisted of a link between the United Kingdom, Japan and the United States. Whenever Japan could hear the United States it could not hear Britain; and whenever Britain could hear Japan it could not hear the United States. The United States did not succeed in hearing anybody. It was a difficult exercise but I am talking about several decades ago. We all know how sophisticated human communication can be now. One dimension of the financial anxieties that we all have is the extraordinary speed within which very complex, staggeringly high-value financial communications are effected in fractions of a second. But conferencing of that kind will always have its limitations and people will still need to travel for face-to-face meetings.

There is a challenge to the industry. If the demand is there and the industry is the only way of meeting that demand, it has to have severe targets to reduce carbon emissions, which must mean that new aircraft engine designs and fuels will play an increasingly important part. This might seem a long way from the CAA but it sits on the European Aviation Safety Agency and has a role to play in implementing UK policy on the performance of aircraft. I would not decry the innovations that are already being introduced. Thomsons Airways, for example, operated passenger flights using a B757 aircraft that was filled with a 50% blend of EASA-specification bio-derived jet fuel. It went from Birmingham to Lanzarotte in the Canary Isles and was satisfactory. The bio component was derived from waste cooking oil. Owing to differences in the manufacture and supply process of these fuels compared with normal refining production, care was required to ensure that the fuel delivered to the aircraft was traceable and fit for use. That was ensured in this trial. Further use of biofuel is planned by this airline as wider availability of bio-derived jet fuel permits. That flight was overseen by the CAA’s flight operations inspectorate.

Biofuels are only one option. There are also likely to be developments in the use of fuel cells and hybrid electric engines. The motorcar may have blazed an interesting trail—a reduced carbon trail, I hasten to add. The car industry has done that and aircraft engines may follow. On this important issue of the development of aircraft engines, I want the Minister to say that the Bill will ensure that the CAA will play its full role in innovation. We know the great emphasis that has been placed on quiet aircraft and are aware that heavier and bigger aircraft are quieter than lighter and smaller aircraft were in the past. This is an issue beyond quietness; it is about the whole future of the development of carbon emissions.

The CAA is also the economic regulator of NATS. It has already been proven that significant improvements can be made by air traffic control to increase the efficiency of the aviation sector. Innovations in technology can allow much more efficient flight paths to be taken and other improvements such as continuous rather than stepped descents. If we can use our airspace more intelligently through technological developments so that aircraft have continuous descent approaches, therefore using a much smoother glide path and much less fuel than with the traditional stepped approach, that will be of great benefit in reducing aircraft emissions. NATS has its role to play as well.

The Minister was kind enough, before we began the Bill, to give us the opportunity to meet several informed individuals, specialists, to tell us what possibilities exist in the area. I just want the Minister to confirm that the Bill guarantees that the CAA and NATS can play their full part in technological improvements so that we can still meet the demand for aviation and ensure that the industry has a thriving future while meeting the necessary carbon targets which the Minister has embraced. I beg to move.

I am rather seduced by the amendment of the noble Lord, Lord Davies, which produces a duty to promote innovation. I very much welcome the brief from the director of airspace policy, Mark Swan, on innovation, as referred to by the noble Lord, Lord Davies, on continuous climb, and so on. Of course, that falls far short of innovation in general and business aviation. You have only to compare the UK to the US to see that we are lagging far behind. We are only a small aviation sector in general and business aviation compared to America and we need a champion to push such things.

For example, we have very few global positioning satellite approaches. They rely on a satellite, not ground-based, last century technical devices that cost a lot to administer. The answer that we are given at the moment is that it is up to the airports to ask for them, but the truth is that it is very expensive to implement. America has a GPS approach for every airport. They are wonderful. You can have dog legs on them, which means that you can fly around communities, lowering the noise, and do all sorts of things. You can have an instrument approach from both ends of your airport, not just the published plate for an NDB on one end.

More than that, the technology is now available to have WAAS approaches—wide area augmentation systems. These are ground-based devices—I believe that there are two or three in America—that up the accuracy of the GPS signal and allow the approach to be made to the accuracy that we are used to with an ILS—an instrument landing system. Again, it does away with expensive ground-based technology. They are very important. Imagine when you fly into a third world country and rely on maintenance by that country of its instrument landing systems, you are sitting in your seat wondering whether that third world country can carry that out. There is no worry if you are using a satellite-based system run by the US.

I am seduced by the duty to promote innovation but at the same time, if this is implemented or written into the Bill, it should come with a caution: “with due regard to the cost to general and business aviation”. The example is the mode S transponder that was brought in recently, for which the lower end of the industry had great difficulty grasping the need. I believe that it was necessary; there were good examples like being able to fly abroad or into certain air spaces. The industry is now beginning to grasp that and take it on. The transponder was needed but was badly sold to the industry, and it cost each and every plane owner quite a lot of money to implement the new equipment. Once again, I thank the noble Lord for his amendment; I think it is a good one.

I do not wish to delay the Committee for very long because my noble friend Lord Davies and the noble Lord, Lord Rotherwick, have covered a number of the points that I would otherwise have made.

We sometimes think, as the noble Lord has indicated, that this must always involve a cost of some sort to the airlines or other people on the sites. In fact, in the car industry there are some recent examples that might benefit the aviation industry. For example, we have a lower car tax rate, and indeed lower insurance policies, for cars that are fuel-efficient. That policy was brought in by the previous Government but is fully supported by this one. I am not sure that we could not have a policy, or that the CAA could not at least encourage one, where our modern, quieter and more fuel-efficient aircraft could have a different landing charge. Maybe that can already be done, I am not sure.

There are other examples of that type such as the ground operations that are carried out. A number of airports have now got around to doing things like bringing in more environmentally friendly ground operations generally, particularly regarding vehicles. They were a bit slow on the uptake but now they are doing that quite fast. There ought to be awareness of encouraging that—possibly even financially, as I have indicated. I am not talking about government subsidy per se but a recognition that there may be a benefit to bringing in a more efficient system. The examples that the noble Lord, Lord Rotherwick, has just given of being able to fly around the community might be enormously beneficial.

We ought to be quite creative in trying to find ways of encouraging the people who are operating from an airport to carry out their operations in a more environmentally friendly way. That is possible and we ought to look creatively not just at methods that might increase costs but at methods that might also decrease them for some of the operators.

My Lords, being 110 years old, naturally I am resistant to innovation of all kinds, although I hope not in all branches of aviation. None the less, one needs to take care with imposing duties of this kind upon the CAA in this particular area. For example, if it were to be pressed to incorporate a new kind of material in an engine, perhaps to make it quieter, the cost of certifying a new innovation of that kind can be substantial. My noble friend Lord Rotherwick refers to the desirability of introducing GPS approaches in more airports. One has to remember that GPS systems are outside the control of the CAA, the operators and NATS, and in the past have been subject to interference from hostile agencies, which is much to be regretted. I remember an occasion some years ago when the GPS system in the UK collapsed for a couple of days because there was some technical difficulty about which the CAA and NATS knew nothing.

One needs to take a little care about these things. The ground approach facilities, for example, to which my noble friend referred, are under the maintenance and control of the airport authority and therefore, you may say, more reliable, at least when the shortcomings are more readily known. That said, I do not want to stand in the way of these worthwhile innovations, and the advantages of GPS approaches to which my noble friend referred are very real and important, but one needs to take care. The CAA has taken a careful—if that is the right word—approach to the approval of GPS systems. That was right. It is being slowly convinced of their merit, which is right, too, but it did not jump in their direction as hastily as perhaps some others did. I am not standing in the way of innovation, but I ask the Minister to explain how the costs of all this will be met. Some of them may fall on the operators—to their advantage, no doubt, so that is a good thing—but we should take a little care.

My Lords, I am grateful to the noble Lord, Lord Davies of Oldham, for introducing this interesting, probing amendment, because it gives me the opportunity to say something about how innovative the aviation sector in this country already is and the CAA’s role as the regulator. My noble friend Lord Rotherwick spoke about innovation in navigational aids. I look forward to debating his Amendment 73, which will deal with these issues, but his comments were valuable nevertheless. He indirectly illustrated why the CAA should concentrate on regulation.

My view is that market forces should be allowed to drive innovation in industry and the regulator should be responsive to it. This is how things have worked so far between the aviation sector and the CAA. Indeed, just how innovative our aviation sector is is a measure of how well this arrangement has worked.

Let us consider one aspect of the aviation sector, the aerospace industry. Our aerospace industry is the world’s largest outside the USA, with a 17% share of the global market. Its annual turnover is more than £20 billion, and it directly employs more than 100,000 people, supporting a total of 230,000 jobs across the UK economy. Its workforce is highly skilled: 36% of its employees have university degrees or equivalent.

The aviation travel industry is equally innovative. In my opening speech at Second Reading, I paid tribute to this fact, saying:

“In 2010 … UK airports served nearly 400 international destinations. That level of activity is possible because over the past 30 years the aviation industry has changed to meet the needs of the customer. The emergence of low-cost carriers is one example of how the industry has innovated and diversified. There has also been an increase in the number of people travelling by air in this country, from 59 million passengers in 1982 to 211 million in 2010”.—[Official Report, 13/6/12; col. 1364.]

The CAA has its own international consultancy, Civil Aviation Authority International, or CAAi, which is a wholly owned subsidiary of the CAA. It is a leading, globally recognised aviation consultancy company that delivers and promotes best practice in aviation governance and education. CAAi provides technical advisory services across a range of aviation-related activities, environmental consulting, professional training, aviation examination services and certification against internationally recognised quality management standards. CAAi’s work contributes to enhancing safety standards worldwide.

The CAA is also quick to respond to innovation in the aviation industry. I have come across two examples in the past few days. The noble Lord, Lord Sugar, has raised with me the issue of PDAs in the cockpit. The CAA is assisting many UK commercial air transport operators to gain approval for the use of electronic flight bags. An electronic flight bag approval will allow an operator to replace many of its cockpit paper-based processes with an electronic solution such as a laptop or tablet device or with an aircraft manufacturer’s own certificated system. The CAA is working with EASA and ICAO to standardise and simplify the requirements for operational approval of electronic flight bags.

The second example is the CAA’s work on its future airspace strategy, alluded to by the noble Lord, Lord Davies of Oldham. As the noble Lord reminded the Committee, I offered some aviation briefing sessions to Peers shortly before Second Reading. As part of those, the CAA’s Director of Airspace Policy, Mark Swan, gave a presentation on its future airspace strategy. Through the strategy the CAA is modernising how we use our airspace in this country with the aim of achieving a,

“safe, efficient airspace, that has the capacity to meet reasonable demand, balances the needs of all users and mitigates the impact of aviation on the environment”.

Mark Swan explained that this aim depends on the ability to take advantage of technological developments. For example, new communications, navigation and surveillance improve situational awareness of users and controllers; increased navigational accuracy enables closer-spaced routes; and the amount of noise experienced by communities will be reduced as aircraft fly their routes more accurately and consistently. Operators will be able to free route in the upper airspace along the most fuel-efficient track. This is important. The noble Lord, Lord Davies, touched on emissions and the need to tackle them with technology and innovation. The future airspace strategy is an example of how the CAA can facilitate innovation in the civil aviation industry without the need for a new duty.

The noble Lord, Lord Soley, spoke previously about using advanced biofuels in the aviation sector, as did the noble Lord, Lord Davies, today. Today the noble Lord, Lord Soley, talked about quieter aircraft. He will recall that the quota system of regulating noise at Heathrow airport strongly encourages quieter aircraft. Indeed, under the quota system some aircraft cannot fly at all at night. While there are some obvious barriers, the Government believe that sustainable biofuels have a role to play in reducing carbon emissions from transport, particularly in sectors where there are limited alternatives to fossil fuels, such as aviation. The Committee on Climate Change has carried out studies on the potential for biofuels to reduce emissions from UK aviation in the long term. Its latest estimate is that biofuels could supply 10% of jet fuel demand by 2050, suggesting the impact that future innovation might have.

I said that it is my view that market forces, rather than regulators, drive innovation. I believe that the examples I have provided together show that the industry and the CAA have got the balance right.

Does the noble Earl agree that in some cases market forces can have a derogatory effect on the industry? For example, it can lead to cutting corners. I think particularly of my own interest, the cutting of corners in reporting incidents on aeroplanes. Because an aeroplane has to be grounded, it means time out of action and competition within the airline industry is so great that it leads to reluctance on the part of employees to report incidents when they should. This leads to a backwards step as far as innovation is concerned, because, if they did report these things, maybe innovation would lead to improvements in facilities. I hope that the noble Earl sees what I mean.

I entirely agree with the noble Countess that market forces can have an undesirable effect. That is why we need a highly skilled and competent regulator, such as the CAA, to ensure that those undesirable effects of market forces are eliminated as far as possible.

I would like to quote from the Government publication Principles For Economic Regulation:

“The Government will not seek to add objectives, responsibilities or duties to regulators’ remits without detailed consideration of the impact of the addition on the overall framework, and consideration of cross-sector impacts and even then only when it is clear that the addition is the optimal way to achieve the outcome sought”.

I am not convinced that the addition of an innovation duty is,

“the optimal way to achieve the outcome sought”.

For the reasons I have identified, I believe that we are already in a good place with regard to innovation in the aviation industry. There is a risk that giving the CAA an innovation duty would oblige the CAA to meddle in the market and may even restrict the way in which the aviation industry would be able to innovate. This has been an interesting short debate. I can well understand why the noble Lord, Lord Davies of Oldham, has tabled his amendment, but I hope that he will withdraw it at the appropriate point.

There is no appropriate time like the present, so I will withdraw the amendment after I have given a few words of thanks, first, to those Members of the Committee who support the clear need for innovation. I also think that we needed reassurance from the Minister that the Bill provides sufficient powers and incentives to ensure that the limited part that the CAA can play in its role with regard to the industry is played as fully as possible against the very challenging objectives that we all need to meet through change, particularly those in aircraft engine design. However, I was extremely grateful to the noble Lord, Lord Rotherwick, for indicating that there are other aspects of technology that could be of great significance to the industry, to which the Minister also paid due regard.

I accept entirely what my noble friend Lord Soley said about government incentives for the development of new technologies in motor cars, and the licence system is a very effective weapon in those terms. But, as I understand it, neither the vehicles that airports use for towing things around nor their emissions are in any way subject to licence. Therefore, no incentive can be placed on the industry as regards those traction engines for a fresh, new design through the way in which they are licensed. I hope that the Minister has taken on board that we need some imaginative strategies. In fact, he has taken it on board because he is going to tell me about it.

My Lords, the noble Lord has suggested that ground vehicles at airports are not subject to regulations. I expect that I will be writing to him to point out that even non-road vehicles have limits on their emissions. There are complex and quite tough regulations to ensure that any ground vehicle reduces its emissions as much as possible. Even a vehicle that is not an on-road vehicle is still subject to regulations on emissions. I think that my letter will go into that.

I am grateful for that reassurance but it raises an obvious question. Some airports have taken this issue very seriously already but others have not. I therefore ask the Minister not to tell me how these machines can be improved but rather what is the incentive, compulsion or challenge given to those airports which are not improving to ensure that they do so in the future. That is the nub of this issue with regard to emissions on the ground and at airports.

Without any doubt, the biggest challenge is to the aircraft manufacturing industry. As the Minister indicated in his response, we are not negligible players in these terms and already have had one or two interesting innovations in which we have shown ourselves to be world beating. With this amendment, I was merely seeking to get reassurance from the Minister that he took these issues seriously and that the Bill empowers people sufficiently to give their spur to this development in any way that they can, while always bearing in mind the point made by the noble Lord, Lord Trefgarne, that all new technology is more expensive than that which it replaces if it is going to do a more challenging job unless we have real breakthroughs in terms of design, which from time to time in certain areas occur. In the past, the aviation industry has not failed us in that respect, but the challenges ahead are obviously very intensive. With the Minister’s largely constructive reply, I am happy to withdraw the amendment, as this is a timely moment to do so.

Amendment 69A withdrawn.

Clauses 100 and 101 agreed.

Clause 102 : Civil Sanctions

Amendment 70

Moved by

70: Clause 102, page 62, line 8, leave out “, 61”

My Lords, I remind the Committee of my past declared interests. Clause 102 amends the Regulatory Enforcement and Sanctions Act 2008. It amends Schedule 5 to that Act to add the CAA to the list of 27 designated regulators, and amends Schedule 7 to that same Act to add to the list of 45 regulatory provisions contained therein a 46th line regarding Sections 7, 61, 71, 71A and 86 of the Civil Aviation Act 1982. The effect of this is to bring each of those provisions of the Civil Aviation Act within the scope of the order-making powers of the Secretary of State, and the Welsh Ministers in Wales, under Section 36 of RESA. These are subordinated legislation-making powers. It must be assumed that the Government would not take the time of Parliament to vest powers in the Secretary of State that he had no immediate intention of exercising. However, the Bill gives us no clues as to what the effect of these powers may be, so what is it that lurks behind these powers?

Perhaps the Government’s Explanatory Notes to the Bill will lighten the darkness. Yet they do not. In respect of Clause 102, the notes merely say:

“Clause 102 amends Part 3 of RESA 2008 … to add the CAA to the list of designated regulators in Schedule 5 to that Act. This enables an order to be made so as to give the CAA access to a range of civil sanctions provided for by Part 3 of RESA 2008, which could be used in relation to the enforcement of breaches of civil aviation law. These sanctions would sit alongside the existing sanctions available to the CAA and would provide it with an alternative to relying on criminal prosecutions”.

All we have learnt so far is that these would be new sanctions and would sit alongside existing sanctions. If we infer that existing sanctions are inadequate, we must therefore assume that once these new sanctions are in place they will be used to secure some policy objective, presumably an improvement in compliance that cannot be secured through existing powers.

The exercise of new powers will clearly have an impact on those on whom they are exercised and will, presumably, bring a benefit that will exceed the cost of exercising those new powers. Let us look to the Government’s analysis of costs and benefits for this policy, identified in the impact assessment as “Policy Option 2b”. No luck there; it tells us that no monetised benefits have been quantified because they would flow from the implementation of the regulations, so the cost-benefit analysis will be done in support of the regulations. As to non-monetised benefits, page 88 of the document says that the main one,

“is the potential for increased compliance with certain areas of aviation regulation and therefore better protection of passengers and a more level playing field for businesses”.

It says nothing about general and business aviation, and one wonders what the implication will be on that. So we remain in the dark about what these powers are intended to achieve, the market or compliance failings that they are intended to address, the cost of introducing and exercising them and the impact that they might have on those to whom they will be applied. I refer explicitly to the GBA.

Again, we are left unenlightened. It is all very well for the cost-benefit analysis to hide behind the excuse that all will be made clear when regulations are brought forward—I am sure it will all be made clear when the person finds themselves in the dock, but there we are—but that is not good enough. If the powers are to be taken, there must be a reason; and if there is a reason, it should be made clear now so that Parliament can decide whether the powers are needed. No doubt others will scrutinise the impact of the extensions of the powers to include Sections 7, 71, 71A and 86 of the Civil Aviation Act 1982.

My concern, and that of the GBA sector, is about the effect on Section 61 of the Civil Aviation Act. Section 61 is a headline provision covering the Air Navigation Order, which is a huge and complex document of some 500 pages, detailing the thousands of legal requirements for technical and operational matters such as aircraft airworthiness, equipment to be carried, pilot and aircraft licensing, rules of the air and so on. When the Secretary of State exercises his powers under this clause, he will empower the CAA to issue fixed-penalty notices for the alleged breach of the ANO, in the same way as the DVLA does for alleged vehicle offences.

At present UK aviation, especially the GBA sector, operates in what is described as an open reporting safety culture. The vast majority of pilots, aircraft operators and engineers take their legal responsibilities for flight safety and airworthiness very seriously. For example, it is not uncommon to hear pilots telephoning the traffic control tower of an airport to confess and apologise where they believe they may have inadvertently infringed controlled airspace. We have a successful scheme for reporting a near miss, and another for voluntarily reporting general safety occurrences. This valuable safety culture might well be undone under the proposed regime, where it will be possible for the CAA to automatically issue fixed penalties in such cases, where at present it uses its powers of prosecution selectively to achieve a strategic safety outcome.

If the penalties were to be imposed as an administrative commonplace, without a full legal process, that would fundamentally change the relationship between the CAA and pilots, operators and service providers such as engineers, who would fear bias and the use of penalties as a revenue-raising exercise. Moreover, the introduction of fixed-penalty procedures, as against the present prosecution powers, would shift the burden of proof. The recipient of an unexpected penalty notice would be faced with the alternative of paying up, presumably at a reduced charge, which may be provided under Clause 102 if the CAA follows the parking-ticket process, or of challenging the ticket in the courts. By including Section 61 in Clause 102 of the Bill, we run the risk that our open reporting culture might be fatally damaged. This would work against the interests of increased flight safety.

The CAA has adequate penalties and powers of prosecution at its disposal, which it uses wisely and sparingly. No case has been made to the GBA community, and no consultation undertaken, where the evidence to back this change has been laid out. Indeed, we have not heard that the CAA has asked for these powers. Perhaps the Minister could say something about that.

I am deeply concerned about the financial aspects of this. The penalties imposed under this system will flow to the Treasury. Clause 102 allows the Secretary of State to empower the CAA to recover the costs associated with fixed penalty ticket systems. The CAA will begin a new stream of activity, secure in the knowledge that it will be able to recover the costs associated with that activity from those whom it penalises. What controls are there to be over this new enterprise?

The present arrangements in respect of enforcement of the ANO are working well and have the active consent and participation of the aviation community. We should continue to develop that spirit of co-operation which has achieved so much over the years. My amendment, to strike out Section 61 from Clause 102(3), would achieve that.

It seems odd that, with a portfolio of criminal sanctions at its disposal, this Bill seeks to secure an improvement in compliance through the granting of powers to impose civil penalties. I invite my noble friend the Minister to enlighten the Committee on the specific inadequacies in the present system that need to be addressed through these new powers. May we have some examples?

I urge the Minister to reflect carefully on the inclusion of Section 61 in Clause 102. The department has produced no evidence to support the need for it. Its inclusion defies the principles of better regulation and fails even the most elementary application of the principles of evidence-based policy-making. What is it that is not being achieved at present that the inclusion of Section 61 would achieve? I put it to the Committee that Section 61 has been included simply because it could be included and because it makes for a nice tidy bundle of powers.

An unsympathetic observer might conclude that it has been added as a simple and straightforward revenue-raiser, with the CAA issuing spot fines for all procedural oversights and unintended violations without achieving any safety improvement outcomes. It would be of interest to learn from the Minister whether the extension of these powers to other agencies has produced significant compliance benefits. I look forward to his answer. I beg to move.

My Lords, I have a good deal of sympathy for the amendment of my noble friend Lord Rotherwick. Might the Minister be a little clearer on what the process will be for the fixed penalty notices? I am ashamed to tell your Lordships that I am a veteran of the fixed penalty notice system as applied by Transport for London in relation to the congestion charge. I have on a couple of occasions had to appeal against an alleged violation only for my appeals to be dismissed instantly—no doubt, rightly. I discovered that if you insist on appealing and taking your lawyer with you to the tribunal in relation to your Transport for London penalty notice for alleged non-payment of the congestion charge, you are 90% likely to get off, but if you do not take your lawyer with you, you are not. It struck me as a rather shocking revelation. I do not suggest that there is anything wrong in the process, but amateurs who go on their own to appeal or simply send in a letter of appeal to Transport for London are likely to be dismissed out of hand. However, if you turn up on the day with your lawyer, you are likely to have your appeal allowed. I hope that there will be no such vagaries in the system to be employed by the Civil Aviation Authority. Who will hear appeals from fixed penalty notices issued by the Civil Aviation Authority? What will be the expertise of those who hear them? Can I be assured that the system will be a lot better than Transport for London’s?

My Lords, I have only one brief comment to make, one which I never thought I would make in Parliament or elsewhere. Oh the joys of Opposition for the Minister to reply.

My Lords, before turning to the detail of the points made, I must emphasise the importance of the clause that the amendment would alter. My noble friend Lord Trefgarne mentioned the congestion charge. I have been caught by it but I never dared to appeal. I just paid up. That might be because I knew that I was wrong.

The noble Lord talked about the higher success rate if you bring your lawyer. It may be that the appellant brings his lawyer because he is certain that he is right, so not surprisingly he wins his case. The noble Lord also asked about the appeal process. If someone who has been issued a fixed penalty notice is unhappy about that, he can take it to court in exactly the same way as a motorist can take a matter to court—like the McCaffrey case.

I confess that my memory is perhaps slightly hazy but my recollection is that one cannot take Transport for London to court. If one loses the appeal, that is that.

My Lords, the offender will be able to take the matter to an independent appeal tribunal. I will write to the noble Lord with full details of how that system will work.

Clause 102 amends Part 3 of the Regulatory Enforcement and Sanctions Act 2008 to enable the CAA to make use of civil sanctions where it currently relies almost exclusively on criminal prosecutions, which are not always appropriate for technical infringements. The Bill will enable the Secretary of State by order to give the CAA access to a range of civil sanctions provided under Part 3 of the 2008 Act as an alternative to prosecution. We believe that criminal sanctions are disproportionate in relation to some offences, such as minor breaches or offences of an administrative nature.

I do not agree with my noble friend Lord Rotherwick when he suggests that the CAA will be encouraged to issue fixed penalties. The fines will go to the Consolidated Fund, as accepted by my noble friend. I think that he goes a little too far when he suggests that the CAA would abuse its powers and I totally refute the suggestion that these are revenue-raising powers. I was asked for examples. When the commander of an aircraft fails to produce licences for his or her flight crew in a reasonable time when requested to do so by an authorised person, he or she is guilty of a criminal offence and liable to summary conviction and a fine not exceeding level 3 on a standard scale. Should an offender fail to comply with such rules, a fine or civil penalty for breach may be a more appropriate enforcement action than a criminal prosecution, thus ensuring better compliance. I should point out that offenders will not find themselves in the dock because it is a civil penalty. I can assure my noble friends that secondary legislation will be required to grant the CAA these powers. It will be subject to full consultation and impact assessment. Any order will be subject to the affirmative resolution procedure in Parliament.

My noble friend Lord Rotherwick asked about the expected scope of compliance changes. The appropriate time to consider costs and benefits of the power is at secondary legislation stage. It would not be good use of public resources to calculate extensive options for what may not be the impact until Parliament has agreed the powers. In particular, Clause 102 inserts certain provisions of the Civil Aviation Act 1982 to the list of enactments in Schedule 7 to the 2008 Act. That enables the Secretary of State by order to give the CAA access to a range of civil sanctions in relation to offences contained in secondary legislation made under the 1982 Act. The provisions of that Act include Section 61 which enables the Secretary of State to make provision for offences to secure compliance with Air Navigation Orders. Such orders are key to the regulation of air navigation in the UK. I am sure that all noble Lords in the Committee would agree with that. They set wide-ranging rules that the CAA largely polices.

Turning to the amendment, as described by my noble friend, it would exclude Section 61 from Schedule 7 to the 2008 Act and thereby deprive the CAA of the use of a range of civil sanctions in relation to offences contained in the Air Navigation Order. This would dilute the intended purpose of Clause 102.

My noble friend Lord Rotherwick asked what the provisions will achieve. The inclusion of Section 61 of the 1982 Act in Schedule 7 to the 2008 Act is important, as it could give the CAA flexibility to use civil sanctions to enforce the provisions of the Air Navigation Order. That would be done only in appropriate cases where the application of criminal penalties was not a proportionate response to the offence which had been committed, particularly in the case of minor administrative breaches. The CAA will not automatically impose fixed monetary policies for breaches of the Air Navigation Order; the CAA will have available a range of civil sanctions under RESA, including fixed monetary penalties, variable monetary penalties, compliance notice and acceptance of enforcement undertakings for imposition. The CAA must publish guidance on the use of such sanctions under a duty to act proportionately under the Legislative and Regulatory Reform Act 2006.

In evidence to the Public Bill Committee on the Civil Aviation Bill in another place, a risk was raised that the inappropriate use of new civil enforcement powers could damage the open flow of information between the industry and the CAA. A recommendation was made that the CAA be required to consult on a formal policy before exercising the new powers. I hope that that will give my noble friend some comfort. I do not agree with any suggestion that the CAA would use the new enforcement powers disproportionately. That is because the Legislative and Regulatory Reform Act 2006 requires regulators to carry out their regulatory functions transparently, accountably, proportionately, consistently, and target them only where action is needed. That includes the CAA, and we are confident that the CAA will abide by those requirements. The Department for Transport intends to consult fully on any secondary legislation which will make civil sanctions available to the CAA in respect of relevant offences and to develop a full impact assessment—a point that I know concerned my noble friend.

For those reasons, I hope that my noble friend will consider withdrawing his amendment.

My Lords, is my noble friend willing to write to me with more detail about the intended appeal processes for the fixed penalty notices? I recognise, as he says, that secondary legislation is likely to be required before these processes come into place, but this is a subject of considerable concern, at least for me. As I explained, the present processes for dealing with appeals against, for example, fixed penalty notices from Transport for London, are unsatisfactory and I hope that they can be improved in respect of whatever the CAA is empowered to do.

My Lords, I will be delighted to write to all Members of the Committee explaining the Government’s intent on that issue.

My Lords, I thank the Minister for his full reply. He went a long way to try to answer all my questions. He still did not answer the question about whether the CAA asked for this.

That helps a lot: I now know who to hold responsible. I must point out that within the limited scope of the Bill, which pays hardly even any lip service to general and business aviation, in the one area where we are mentioned, we find ourselves caught on the stick, the discipline area; there are no carrots around. I know that my noble friend is a very generous Minister and I hope that there will be some carrots, having had the stick first.

I am grateful that he will write to my noble friend Lord Trefgarne about the consultation. In past consultations, general and business aviation has not always been represented. I would be most grateful if my noble friend feels able to go as far as to say that that will be the case this time: that there will be general and business aviation members of the consultation and, most importantly, that we are not treated like commercial pilots. We do not earn our living from our licence, we are private pilots who do our best to abide by the rules.

My Lords, I assure my noble friend that the GBA community will be included in any consultation.

My Lords, I am grateful for the Minister bending over backwards on all my questions. I will read everything with consideration and I hope that we might have the letter before Report stage, which, after all, will be at the end of the summer, in order to make a decision as to whether to come back to this issue again. In the light of that, though, I beg leave to withdraw the amendment.

Amendment 70 withdrawn.

Clause 102 agreed.

Clause 103 agreed.

Clause 104 : Disclosure of medical information

Debate on whether Clause 104 should stand part of the Bill.

My Lords, I must confess that when I read this provision originally it seemed to be a rather extraordinary provision to be included in the Bill. I therefore took the occasion to make some inquiries. First, I declare an interest. For a number of years, I held an aviation medical certificate, which has now lapsed owing to my great age. Throughout the 40-odd years that I held a civil aviation licence, I was dealt with with the utmost consideration and skill by the CAA, and previously by the Ministry of Aviation’s medical authorities, including on two occasions having my licence suspended for medical reasons, entirely correctly and properly, by the then authorities.

My concern is confidentiality. I am and always have been very anxious that medical information held by public authorities, whether it is the CAA or anyone else, should remain properly confidential. I accept that there are provisions in these arrangements to keep confidential the information that is to be released to others, but the civil aviation community, the number of those who hold civil licences and air traffic control licences, is comparatively small. There is a risk that, if the information for some unusual medical conditions is published, it will be possible to identify the persons concerned. If the information on, say, half a dozen or so cases of a particularly obscure medical condition is made available to research agencies, it will be obvious who is the holder of that medical information.

I hope that my noble friend can explain in a little more detail than appears in the Explanatory Memorandum why it is necessary to have this new power. Can he give me the necessary assurances with regard to the absolute confidentiality of the information to be provided?

My Lords, I am pleased to see this clause in the Bill. Some years ago, research was conducted on airline pilots who had been exposed to organophosphates. I am sorry but I have a problem with my voice. It was impossible for the CAA to give any details whatever to the researchers and it caused huge difficulties. This will relieve that difficulty, so I am very pleased to see it.

My Lords, I have great sympathy with my noble friend Lord Trefgarne’s opposition to the clause. I would be very interested to hear what the Minister has to say because I think that my noble friend’s concerns are those of many similar pilots.

My Lords, I would oppose my noble friend Lord Trefgarne’s intention. I believe that Clause 104 should remain part of the Bill. My noble friend said that his pilot’s licence was properly suspended for medical conditions. I currently have the same problem with my HGV licence because my blood pressure is too high—but the Summer Recess is coming soon.

My noble friend was concerned that it might be possible to identify a pilot’s condition because of those small cohorts. It is more likely that medical research would be into large cohorts, such as all pilots with condition X or all class 1 medical certificate holders. Should a smaller cohort be of interest, the data controller would normally look to seek consent first.

There are several reasons to keep the clause part of the Bill, by no means the least of which is that the Government are seeking to enact this change because it was recommended by your Lordships’ Select Committee on Science and Technology in 2007 and this is the first legislative opportunity that successive Governments have had to give effect to your Lordships’ recommendation.

I shall turn to the specific points raised by my noble friend so that I can give him the reassurance that he seeks. First, he has suggested to me—certainly in private; I cannot remember whether he has said this publicly—that the CAA may sell on medical records. I make it very clear that this is not the intention of the legislation and that the CAA has no plans to do this. There is also perhaps the prospect of the CAA requiring even more medical data from pilots and flight crew, because it might be useful for the purposes of later medical research. The CAA cannot ask for more medical information than it needs to consider an application for a medical certificate. The CAA has no intention or wish to ask for extra medical information and no mechanism under which to do so without obtaining individual informed consent. The CAA abides by the data protection principle of keeping the minimal data required for the purpose of medical fitness assessments. If an applicant were asked to provide medical information that appeared to have no relevance to their licence application, it could be expected that they would challenge the need for it.

Clause 104 does not provide the CAA with any further powers to collect medical information. Those powers are already there as part of the CAA’s licensing obligation under the Air Navigation Order. The CAA has no intention to expand the scope of the medical information that it requires of applicants, and this provision would not allow for that. The clause is there solely to permit the CAA to disclose the medical information that it already collects for medical research purposes, subject to the strict safeguards contained in Clause 104(3).

The Committee will note that the CAA does not set out to collect medical data but acquires such data from people wishing to be licensed as pilots, navigators and so on because it has to make a judgment on whether those people are medically fit enough to be licensed. We also think that making this change is a good thing to do. The Civil Aviation Authority receives medical information relating to flight crew and air traffic controllers in the course of its licensing functions. Clause 104 provides for the CAA to be able to disclose this medical information to medical researchers by amending Section 23 of the Civil Aviation Act 1982, subject to the strict safeguards included in the Bill. This information could be used for important medical research into the major functional and incapacitation risks to those individuals—for example, the risks of heart problems. We believe that an increased understanding of the main health risks may in turn lead to an improved understanding of the risk to public safety, which is vital in the aviation industry.

The types of important research envisaged here include the analysis of the electrocardiogram tracings of pilots over an extended period to determine whether small anomalies—that is, differences—seen in the tracings translate to heart problems later in their careers. Given the important benefits of this research, we consider that the provision represents a proportionate response to the legitimate aims pursued. I also remind the Committee that this proposal was supported in public consultation on the Bill, where the vast majority of respondents agreed with making anonymised medical data available for ethically approved research. It is of course vital that in doing this we include strong and effective safeguards to protect individuals’ privacy. The Government are committed to ensuring that medical research will not compromise the rights of individuals to have their confidential medical information protected. I have already answered one of my noble friend’s very good questions, which was about small cohorts.

Individuals’ rights under the Data Protection Act 1998 and Article 8 of the ECHR will be fully respected. The CAA will act as the data controller at all times. We have included strong safeguards in the clause to protect those individuals. First, medical information must be anonymised by the CAA before it is released to medical researchers. Secondly, the disclosure must be for medical research purposes approved by a research ethics committee. Thirdly, the CAA must consider that the research is likely to improve the understanding of health risks to those individuals required to provide medical information to them. Fourthly, the CAA must consider that it would be difficult or expensive to take the steps required by existing legislation to enable disclosure of all the information that is to be disclosed—for example, where the research cohort is particularly large. As the information disclosed by the CAA would be anonymised, any published research would also be in anonymous form. These cumulative safeguards will ensure the appropriate balance between enabling important medical research and protecting privacy rights. I therefore hope that my noble friend will feel able to withdraw his opposition to the clause standing part of the Bill.

My Lords, I am very much persuaded by the arguments that the Minister has put forward. It is important that this information is kept confidential.

I have just one other question to which I suspect my noble friend will not have answer off the cuff, but if he could write to me on it, I would be grateful. Am I not right in thinking that the CAA has access also to medical information on pilots held by the Ministry of Defence? It is important that that information, too, should be kept confidential, but it is also important that the information is available for the researchers if it can be done in a proper way and with proper safeguards. My noble friend may not have that information at his fingertips, but if he could write to me about the MoD position in this matter, I would be greatly obliged.

I can undertake to give what information I can. However, we both know a little bit about the Ministry of Defence and I am not entirely confident that it would have the data that the CAA would have.

Clause 104 agreed.

Clause 105 : Dangerous flying

Debate on whether Clause 105 should stand part of the Bill.

My Lords, again, this is a very small point on which I would be grateful for assistance. Am I not right in thinking that, if we move in some respects from prosecutions under the 1982 Act or some other Act to prosecutions under the Air Navigation Order—we have already talked about fixed penalty notices—the penalties under the ANO are less than those under the civil aviation Acts, including the 1982 Act? Is that one of the intentions of this provision?

My Lords, I shall resist my noble friend Lord Trefgarne’s intention to oppose this clause and I urge that it should remain part of the Bill, with which I am sure my noble friend will agree. Clause 105 repeals Section 81 of the Civil Aviation Act 1982, which creates an offence of dangerous flying where an aircraft is flown in such a manner as to cause unnecessary danger to any person or property. In practice, prosecutions for dangerous flying have invariably been brought by the CAA under successive Air Navigation Orders, currently the Air Navigation Order 2009, rather than under Section 81 of the 1982 Act. I understand that my noble friend’s concern is about the relative penalties under the Act and the order, and I shall come to that matter in a moment.

The 2009 order is used because it sets out what needs to be proved for an offence to have been committed, including recklessness or negligence, more clearly than does Section 81 of the 1982 Act. Any prosecutions of dangerous flying would be carried out under one of the two articles in the Air Navigation Order. The first is Article 137, which provides that:

“A person must not recklessly or negligently act in a manner likely to endanger an aircraft, or any person in an aircraft”.

The second is Article 138, which provides that:

“A person must not recklessly or negligently cause or permit an aircraft to endanger any person or property”.

Section 81(1) of the Civil Aviation Act provides for a fine not exceeding level 4, which is currently a maximum of £2,500, or imprisonment not exceeding six months, or both on summary conviction. There is no provision for conviction on indictment. However, contravention of Articles 137 or 138 of the ANO carries a potentially higher penalty than Section 81 of the Civil Aviation Act. Contravention of Article 137 makes a person liable on summary conviction up to the statutory maximum of £5,000 or on conviction or indictment to a fine and/or imprisonment of up to five years. The penalties for contravention of Article 138 are the same as for Article 137 except that the potential term of imprisonment is up to two years only. I assure my noble friend that the use of the ANO will be no less dissuasive than the use of the Civil Aviation Act in this context.

I can inform the Committee that in the past two years the ANO offences were used in four prosecutions and convictions, and there has never been a prosecution for the Section 81 offence. Accordingly, this clause repeals Section 81 of the 1982 Act as in practice it is redundant. For those reasons, I hope that my noble friend will withdraw his opposition to the clause standing part.

Could the Minister explain what Clause 105(5) means in practice? It refers to,

“power to apply certain provisions to Crown aircraft”.

The Minister will know that we debated transport to the Scilly Isles a week or two ago. I heard that Prince Charles visited there last week with great success. However, there was thick fog and the only plane that was allowed to fly was his. I hope that it was safe— I am sure that it was—but in terms of safety of navigation it is odd that only one plane was allowed to fly. Was everybody else banned or did they not have the right equipment? Maybe this is irrelevant to the clause but what is special about “Crown aircraft”?

It may help if I jump in. I suspect that planes landing in the Scilly Isles were under CAT—Civil Air Transport. In certain situations, a private plane can be landed under VFR when a public plane cannot under IFR. I only suggest that that might be the case

My Lords, if the aircraft was being operated under the terms of the Civil Aviation Act, it is a matter for the CAA to regulate and investigate. It is not a matter for me to comment on. If it was an aircraft of the Ministry of Defence, it is not covered by the Civil Aviation Act.

My Lords, I am grateful to my noble friend for explaining all the penalties. Were I still authorised to fly, I should be very careful not to fly dangerously and fall foul of all the penalties he described.

Clause 105 agreed.

Amendment 71

Moved by

71: After Clause 105, insert the following new Clause—

“Public interest disclosure

(1) The Civil Aviation Act 1982 is amended as follows.

(2) After paragraph (ha) of section 60(3) (functions with respect to health) insert—

“( ) for ensuring that all airline pilots and crew are aware of and are protected by the terms of the Public Interest Disclosure Act 1998.””

My Lords first, I apologise if my voice runs out; I have a problem in that direction. In moving Amendment 71, I shall speak to Amendment 72. I suspect that most noble Lords will be aware of my long-held interest in organophosphates—OPs—and, more particularly, those whose health has been damaged by exposure to OPs. This interest stems from my personal experience.

At Second Reading I spoke of the method by which the air that pilots, airline crew and passengers breathe is drawn in over the very hot engines of an aeroplane on to which oil may have leaked. This oil, manufactured by one company, ExxonMobil, contains an OP—tricresylphosphate, or TCP. This becomes aerosolised when heated to high temperatures, such as when it drips on to a hot engine. I detailed the chemical stages during Committee on the CAA Act 2006, as I am sure the noble Lord, Lord Davies of Oldham, will remember, so I will not do it again.

I know that the Minister will rely on the much criticised Cranfield study which looked at a sample of just 100 flights and found no so-called fume events. What it did find was the presence of TCP in 23% of flights and there were 38 reports of fumes of which the majority were described as “oil” or “oily type” smells. A mandatory occurrence report or defect report was not triggered for a single flight, despite this being a requirement of Commission Regulation (EC) No. 859/2008, which amended No. 3922/91. An “occurrence” is defined in directive 2003/42/EC as,

“an operational interruption, defect, fault or other irregular circumstance that has or may have influenced flight safety and that has not resulted in an accident or serious incident”.

The directive is worth reading because it details occurrences such as fume events. I wonder why these occurrences were so studiously ignored by the Cranfield researchers.

Toyber’s dictum states:

“Absence of evidence is not evidence of absence”.

There are two problems with occurrence reporting. The first is that pilots and crew know that if they report a fume event, their aircraft will have to be grounded at considerable cost to their employer and that, to put it mildly, is likely to be frowned upon. The second problem is that of credibility. Fume events are, by their nature, transient. They can be minor or major, and I know that the Minister has seen film of a major event when you could hardly see down the cabin because of the smoke. There is no standard equipment on board an aircraft to collect or measure toxic fumes, and the human nose is the only available detection system. Engineering tests, unless they very precisely replicate the conditions under which a reported event took place, are very unlikely to produce a fume event. In either case, the reporting officer will be afraid at least to be made to look a fool or at worst to be sacked.

The CAA Act 2006 placed on the Secretary of State and the CAA duties in connection with,

“the health of persons on board aircraft”.

The EU legislation listed in my Amendment 72 also places duties on the competent authority in relation to the health and safety of pilots, crew and passengers on board aircraft. Other EU and international legislation defines the safety of the aircraft, its engines, other mechanical equipment and even the quality of the engine oil to be used. Much of the health and safety legislation that applies to everyone in the UK workplace is defined in health and safety Acts and regulations. The Minister, in a letter to me dated 18 June this year, stated that:

“The operation of aircraft in and over Great Britain is subject to the Health and Safety at Work Act 1974. Consequently, the Control of Substances Hazardous to Health Regulations (COSHH) 2002 (as amended) do apply to aircraft in flight in airspace above Great Britain. However, the Civil Aviation Authority (Working Time) Regulations 2004 (as amended), also impose a duty on employers to ensure adequate health and safety protection of aircraft crew on British-registered aircraft at all times. These regulations cover aircraft in flight and are enforced by the CAA”.

The memorandum of understanding between the CAA and the Health and Safety Executive, which the Minister mentions in his letter, states at paragraph 1.5.3:

“The CAA is responsible for regulating the occupational health and safety of crew members whilst they are on board an aircraft from the time when they board the aircraft, preparatory to flight, to the time they leave the aircraft on completion of the flight. For the purposes of the occupational health and safety reporting and regulatory consideration, the CAA will monitor events occurring in aircraft whilst in operation outside the UK”.

That all sounds very good. However, when the CAA was challenged for failing to enforce the COSHH regulations, Mr Tim Williams, then the CAA health, safety and environmental adviser, wrote on 13 April 2007:

“The CAA’s health and safety enforcement powers are derived from the Civil Aviation (Working Time) Regulations 2004”—

which the Minister has told me—

“in particular Regulation 6 that requires adequate health and safety protection to be provided to crew members. These Regulations neither replicate nor replace those made under the Health and Safety at Work etc Act 1974, which are enforced by the Health and Safety Executive. The Control of Substances Hazardous to Health Regulations 2002 … are derived from the Health and Safety at Work etc Act 1974 and”—

I hope that the Minister will listen to this—

“the CAA has no authority to enforce these Regulations, with enforcement duties falling to the HSE. It is therefore inappropriate for the CAA to investigate any alleged breaches of the COSHH Regulations. The Memorandum of Understanding (MOU) between the HSE and the CAA, and in particular Annex 8, provides further details on the divisions of health and safety responsibilities in aviation. The MOU also sets out how the CAA and HSE will interact to avoid duplication of regulatory effect”.

They might also interact to avoid any regulation in this case.

Mr Williams goes on to say that the CAA is always prepared to investigate where the health and safety of crew members may have been compromised, but states that there is a lack of evidence. Of course, if you do not look, you will not find. There is plenty of evidence going back to the 1950s. If the Minister looks at the PhD thesis of Susan Michaelis, called Health and Flight Safety from Exposure to Contaminated Air in Aircraft, which I gave him last year, he will see in the annexe page upon page of contaminated air reports from May 1985 to August 2006. He will see pages of data which confirm cabin air quality problems in BAe 146s, just one of the aircraft types known to have this problem, and yet no one in government or the CAA seems to have shown any interest in what effect these events have on pilots, aircrew and passengers. I wonder, and am frequently asked, why, after a reported incident, medicals, including blood tests, are not conducted immediately on those likely to have been affected. This would at least establish whether there has been exposure to TCP.

As I said at Second Reading, a small study in Nebraska showed that 50% of passengers on one flight tested positive to TOCP, and a recent survey found that 32% of UK pilots experienced medium to long-term ill health. Forty-four per cent reported short-term effects and 13% were grounded because of fume events.

Researchers at Cranfield and the Institute of Occupational Medicine in Edinburgh express an opinion that the levels of TCP found in aircraft are acceptable, but I do not think that it needs much imagination to realise that levels of absorption and inhalation of toxic chemicals in a normal working environment such as a factory are very different from those in the enclosed, pressurised atmosphere of an aeroplane cabin or cockpit. No safe levels have been established in this case. In any event, there are no acceptable daily exposure levels laid down for the more toxic breakdown products of TCP or for the chemical cocktails produced by heated oil. Incredibly, a CAA investigation into cabin air quality suggested that the average man can safely,

“ingest 7 metric tonnes of pyrolised oil per day for 74 days without effect”.

I wonder on what sound scientific evidence that statement was based.

A long-standing former British Airways cabin crew member, concerned about the health effects that she was seeing among her colleagues, surveyed more than 1,000 crew. Among other things, she identified cancer occurring at 10 times the UK national average. She advised BA management and medical personnel of her findings. Instead of thanking her for her efforts and agreeing to take matters further, they sacked her. Although my Amendment 71 may not be perfectly worded, I hope that the Minister will accept its spirit and either assure me that airline pilots and crew will be supported and encouraged to report events that may have adverse health effects or assist me with wording an acceptable amendment to this effect.

The Minister and the noble Lord, Lord Davies of Oldham, may recall my efforts during the passage of the Civil Aviation Act 2006 to provide a truly independent health and safety and medical facility for pilots and crew. I was concerned that because the CAA was dependent on the aviation industry to fund this provision, there might be some reluctance to put pressure on the airlines to improve working conditions and health and safety grounds.

The ability to enforce COSHH regulations is fundamental to ensuring that cabin air is not contaminated, but on its own admission the CAA has no enforcement powers. This is totally unacceptable. The cockpits and cabins of airplanes are workplaces for pilots and crew. I can think of no other workplace in the UK where employees are so unprotected. I understand that an Air Navigation Order would be necessary to give the CAA this power. I hope that the Minister will agree to Amendment 72 when I move it. In the mean time, I beg to move Amendment 71.

My Lords, I support Amendment 71, as moved by the noble Countess, Lady Mar, and I support her in regard to Amendment 72. I pay tribute to the phenomenal work that she has undertaken over an extended period on conditions associated with organophosphates. I regret that I cannot bring to this Committee the direct experience of flying that other noble colleagues have but, during my incarnation in another place, I have certainly had far too much experience of exposure to organophosphates in other walks of life. Some noble Lords may be aware of the work undertaken by Mrs Enfys Chapman, who was for a time a constituent of mine and had the need to dig into the tragic consequences of OP dips. I had constituents who were chronically affected by organophosphates: two sheep farmers who were almost certainly crippled by the effects of OP sheep dip. A relative of my wife was also afflicted.

For those reasons, I have no doubt whatever that those open to ill health caused by such substances in the course of their work must be protected by law. It is surely our responsibility to ensure that the law is stringent enough, and properly applied, that there is: adequate identification of these cases when they arise; that there is clarity with regard to who has the responsibility for following up; that a statistical analysis is undertaken; and that, where necessary, regulations are tightened to ensure that people in cabins and passengers in aircraft are not put in danger because of the effects of these substances.

I draw to the Committee’s attention some statistics that are relevant to air crew contamination. The noble Countess has referred to Susan Michaelis who, in a PhD thesis, undertook an extensive health survey of 146 UK BAE pilots. That snapshot showed that: 88% were aware of cabin air contamination; 63% reported symptoms consistent with cabin air contamination, some immediate and some long term; 44% reported immediate short-term effects consistent with cabin air contamination, representing flight safety hazards; and 32% reported medium to long-term effects, again consistent with air cabin contamination and representing a flight safety hazard. Thirteen per cent were chronically impaired and no longer able to fly, which was in fact higher than pilot medical statistics for disqualification globally for all reasons, not just those consistent with air cabin contamination. There is a strong temporal relationship between the adverse effects reported and the contaminated air environment. Those data are the most authoritative that we have and surely should be considered.

I hope that the Minister will accept the amendments but, at the very least, is he willing to accept those figures? If he does not accept them, is he in a position to gainsay the argument? If other figures exist, they should surely come to light. I hope that he can tell the Committee that his department has rigorously examined the evidence put forward by Susan Michaelis in her PhD thesis. At the very least, I hope that the Minister will set up some independent investigation into the reporting system of events that may have adverse health effects on those in aircraft cabins, and clarify who is responsible for applying the regulations. Will he undertake to review the statistical information available, from all sources, to ensure that this issue is most assuredly not swept under the carpet?

My Lords, I congratulate the noble Countess, Lady Mar, and the noble Lord, Lord Wigley, on tabling the amendment. It is most important, and the compelling evidence that we have heard is evidence I have heard about for a long time and, indeed, read in books. If I am right, the aircraft referred to is the one that the royal flight uses and is mainly used for Ministers. If someone said to me that a Minister has faded or gone bonkers, the next question should be: how many times have they flown on the royal flight? We all get into the commercial aeroplanes that we are talking about, so this is something that affects us. Of the Cranfield test, it was suggested—alleged—to me that it was suspect because the aircraft that they had on test were ones given to them by the airlines, not picked at random but, it was alleged, safe aircraft given for tests. One of the unofficial research teams referred to in some books found that, of its swab tests on a range of aircraft, the majority had contamination when the swab tests came off seats.

We have all had the awareness when we come off a plane that we frequently travel on: “Gosh, I was tired on that flight. I’m not normally that tired”. That is a real problem. If the Minister does not accept the amendment, my only advice for noble Lords about planes that take their cabin air, their bleed air, off the engines, off the compressor, is to fly on a Boeing 787, the Dreamliner. It is the first aircraft that does not use the ghastly system that causes the problem; it uses a specialist air system totally independent of the engine.

I hope that the Government will come forward to address this elephant in the room; it affects us all when we go on aircraft.

My Lords, I do not know whether the amendments before us will be the right vehicle, but they draw attention to a problem that definitely exists. As someone with a family member who is a commercial airline pilot, I am very conscious of the risks involved. It is often pointed out that pilots and air crew are at greater risk of receiving higher levels of radiation because they fly without any protection at very high levels for prolonged periods—indeed, throughout their working lives—and that that makes a difference. Here, there is undoubtedly a problem but the solution is not as immediately obvious. For instance, on the point made by the noble Lord, Lord Rotherwick, about the Dreamliner and its new system, many of the huge fleets of existing aircraft have the basic bleed air system so this is not easy to resolve. Mention has been made of the BAe 146, which is a very nice aircraft to fly in and, in particular, to land in, but there have been incidents where aircraft have suffered a large ingress of vapour to the cabin, visible to the passengers. This is not a figment of someone’s imagination; it actually happens. Although it is true to say that pilots on flight decks generally have an independent air supply from that of the people in the main cabin, it is sourced from the same place.

The question is: do we need international action? Let us face it, there are a very small number of aircraft manufacturers in the world and probably an even smaller number of aircraft engine manufacturers. Basically, there needs to be international action by Governments to deal with this issue, whether through an action in this Bill, through action by the Government taken via international organisations or through discussions with the industry. As the Minister pointed out, we are still number two in the world on aerospace, which is a very important industry to this country. I would think that adequate information is bound to be available within the United Kingdom from the manufacturers of engines and aircraft or parts of aircraft generally, and I cannot see any reason why we cannot pursue this issue through that route.

We are in a worldwide competitive market, and no individual airline will be in a position to put its head above the parapet without putting itself out of business. Therefore, we need not only national or European action but international action to deal with this. I guess that we all fly in aircraft that are differently flagged. We could be in an American aircraft, a British aircraft or an aircraft from Abu Dhabi. This is an international issue that needs international action. I do not think that we will resolve it simply by domestic means alone, albeit that we can set an example, and I have no doubt that that is the purpose behind the amendments. I think that the proposers would accept, though, that this needs an international response.

I hope that the Minister will allude to that and say whether he would be prepared to undertake on behalf of the Government to contact our European partners and some of our major manufacturers. We have medical expertise in this country that should be able to identify the significance of the problem. I think that the noble Countess said that you will not find if you do not look, which is a very telling point. Yes, I do not want to see our industry crippled competitively against others but, at the same time, if long-term damage is done to pilots and other air crew as a result of this contamination, that is a matter where we as a Parliament have a duty of care to people in the community who work in that environment, just as the noble Countess identified those people who worked in our agricultural sector and were exposed to vast quantities of contamination.

I recall the time years ago when people said that Sellafield was not a threat in the Irish Sea. We were told that the levels of contamination were perfectly safe. The levels of what people think is safe are now about one-thousandth of what they were 30 years ago. We are all in territory where we know that something is not right but we are not necessarily sure of the solution. There are many examples where substances entering our systems can do long-term damage if people are exposed to them for long periods of time.

I have an open mind on whether this is the right route but I hope that the Minister, on behalf of the Government, at least will address the fundamental and underlying point behind the amendments.

My Lords, I shall contribute briefly because I cannot do justice to this issue. However, I hope that the Minister will do so. I pay tribute to the enormous work of the noble Countess, Lady Mar, in this area. I had the privilege of knowing Nancy Tait who happened to be a constituent when I represented Enfield and first came into the House. For a number of years her concerns about asbestosis were brushed aside on the grounds that the evidence did not match the allegations being made and anxieties being expressed. Everyone else knew that huge potential costs were involved if asbestos had to be stripped out of buildings that were already constructed, to say nothing about not being used again for building. She was right and the doubts of the authorities were eventually overcome. The evidence was produced and we are all healthier because of that, not least our schoolchildren because one of the great uses of asbestos was in schools.

I do not know whether this issue is as significant as that but when the noble Countess, Lady Mar, came to see me when I had responsibility for the department in this House a few years ago, I asked for all the investigations and evidence that the department could make on these issues. I know that a significant amount of work was done. The one thing that I was not prepared to do was to stand before the House on behalf of the Government and reject the noble Countess’s amendments without an assurance that we had explored every dimension.

There was an element in that about which I have not heard any more. I wonder whether the noble Countess can enlighten the Committee. One of the issues was that the airline pilots, through BALPA, did not regard themselves as being excessively threatened by this problem. We all know that they have to protect their livelihoods and they have a vested interest, but equally no one goes to work thinking that they may be engaging in something that will seriously affect their health in the future or even make them dangerous if they fall ill while they are working. That was an important dimension. I do not know whether BALPA’s attitude has changed. There has been no reference to it but it would be germane to the debate.

I think that the noble Lord might agree that being an airline pilot is quite a macho job and you do not admit that you are feeling ill until you have to. We have two pilots here. Some of the people with whom I have contact are ex-BALPA pilots and are now seriously ill—some very seriously ill. While they were members of BALPA and working they did not complain. I mentioned at Second Reading the fear that they have of reporting because of losing their jobs.

We all understand that point. The noble Countess referred to macho jobs. There are lots of tasks that are extremely dangerous and people are prepared to take them on, but a risk to their health of what is involved is a long-running dimension that this manifestation represents.

My point is obvious enough: I was assured several years ago that there was not sufficient substance in the position as established at that stage for action to be taken. The action, of course, will be dramatic. Reference has been made to the fact that the Dreamliner does not use this air system. The Dreamliner is rather an expensive aircraft to produce, as we all know, and it is in open competition with the A380, which uses the old system. We are talking about massive resources being involved. There is no easy switch. If anyone had thought at any stage that everyone’s health could have been safeguarded just with an easy technological change, that would have been done, but we are talking about something so much bigger.

Does the noble Lord accept that maintenance is an issue here? The 146’s oil seals were partly responsible when they corroded, largely due to the chemicals to which they were exposed. Maintenance may not be the solution but it is certainly an issue.

It certainly is; the 146 illustrated that in graphic terms and that is why changes were made. I hope that the Minister is able today to build on experience. After all, the issue has been before the department, thanks to the work of the noble Countess, over a number of years now. I hope that he is able to give the Committee reassurances about this question of health and how it is being monitored. I do not have the slightest doubt that if we are wrong, we would all feel dreadfully culpable because significant warning signals have been sent out, and that is why the issue has to be treated with the utmost seriousness.

Does the noble Lord agree that the first step must be to get authoritative independent evidence, facts and figures on which to base decisions, and that that needs to be looked at rigorously? That is something we could all support because out of that we can then reach reasonable conclusions.

Of course. That is a major exercise and a costly one, and would have to be done with the greatest thoroughness. The department and indeed the Government would have to be convinced that the anxieties were such that they could be allayed only by that approach. It is for the Minister to indicate to us whether he thinks that we are at that stage now; we certainly were not a few years ago.

I have no intention of expecting the airline industry to scrap all its planes immediately and replace them with the Dreamliner. I recognise that that would be hugely expensive. It is just the same story as with asbestos and, in a more minor way, with sheep dip, although the latter problem has been resolved. I am concerned that people are not reporting ill health because they are frightened—frightened of losing their jobs, in one case, or of retribution. If the CAA had the power to enforce COSHH, doing so would make the airline owners maintain their aeroplanes properly— I am grateful to the noble Lord, Lord Empey, for his intervention there—and take notice when there was a complaint. Until we know how many complaints there are, we are not going to be able to solve the problem.

I hear what the noble Countess says, and I heard that case deployed at the time when we met previously on this issue. Overall, though, my experience is that, whatever risks to livelihood, people have the greatest concern about threats to their long-term health and it is therefore not the case that they conceal these issues. The issue with the asbestos problem was not that people were concealing the impact; what was not being substantiated sufficiently was cause and effect, which is exactly the issue here.

My Lords, I am grateful to all noble Lords for their contributions to this debate. On the first amendment tabled by the noble Countess, airline pilots and crew members are already protected in this area by Part IVA of the Employment Rights Act 1996, which was inserted by Sections 1 to 2 of the Public Interest Disclosure Act 1998, both as workers who can make a protected disclosure to their employer and as individuals who can make one to the CAA. The CAA is a prescribed person for the purposes of that Act, which means that it can receive “protected disclosures” or whistleblowing from the civil aviation industry.

As for awareness of these rights, the CAA has a published statement on its website in relation to its whistleblowing policy which makes it clear that it will investigate all complaints in an appropriate manner, endeavouring to maintain confidentiality at all times.

I add for the sake of completeness that, as well as the protection afforded by the Act, the CAA has long established processes in place for incident-reporting and to safeguard confidentiality. The chief of these is the mandatory occurrence reporting scheme established in 1976. Consequently, the noble Countess’s amendment refers to protections already in place and is unnecessary.

The second amendment proposed by the noble Countess is also unnecessary. However, it also has an important and possibly unintended consequence which makes it unacceptable. The amendment would substitute the existing provision in Section 60 of the Civil Aviation Act 1982 with the wording that it proposes. This would be a backward step because it would cause the removal of the power which enables an Air Navigation Order to contain provisions,

“for safeguarding the health of persons on board aircraft”.

That power has already been used.

The duty on the Secretary of State of,

“organising, carrying out and encouraging measures for safeguarding the health of persons on board aircraft”,

now in Section 1(1A) of the 1982 Act, as inserted by Section 8(2) of the Civil Aviation Act 2006, was a widely welcomed reform. The existing Section 60 power is part of delivering that general duty. We do not want to lose that. I suspect that the noble Countess does not want to lose that either, but the effect, perhaps unintentional, of this amendment would be to remove the relevant subsection of Section 60. That is why I regard it as a backward step and why it is opposed by the Government.

There is also a second objection to this amendment. The matters listed in it are a mixture of UK legislation, European legislation and European Aviation Safety Agency technical specifications. They are already enforced by the appropriate regulators in relation to the protections that they give, including safety, technical integrity of aircraft and working conditions for those in the aviation industry.

The principal enforcement agencies are the Civil Aviation Authority and the Health and Safety Executive, and there is a memorandum of understanding, referred to by the noble Countess, between these two bodies setting out their respective responsibilities for enforcing occupational health and safety in relation to public transport aircraft while on the ground and in the air. It was drawn up by the two organisations with the aim of avoiding duplication of effort in the areas of overlapping mutual interest. There is therefore no need specifically to provide for the enforcement of these in an ANO.

The noble Countess suggested that the CAA was complacent. This is far from being the case. Successive UK Governments have investigated the matter thoroughly. The UK has an excellent safety record in aviation which we would not wish to lose by being complacent. Allegations of ill-health caused by cabin air have not been upheld by research. The main research study, published by Cranfield University in May last year, found no evidence of pollutants occurring in cabin air at levels exceeding available health and safety standards and guidelines.

However, I am well aware that the noble Countess has very strong views about the standards and guidelines. Levels observed in the flights that formed part of the study were comparable to those typically experienced in domestic settings. The department has now formally referred the published research studies to the Committee on Toxicity, the independent adviser to the Government on matters concerning the toxicity of chemicals, for it to consider the matter.

The noble Lord, Lord Davies of Oldham, mentioned BALPA. It is interesting to note that when I had a meeting with BALPA recently concerning the Bill, at no time did it mention cabin air quality. In addition, BALPA supported the Cranfield research and issued a supportive press notice when it was published last year. The noble Countess suggests that pilots are reluctant to raise the issue because of job insecurity. Why, when they retire, do they not suddenly start blowing the whistle loud and clear? They do not.

My Lords, that is precisely what they are doing. The people I have contact with are ex-BALPA pilots and they are now complaining. If the Minister was to go to a meeting of the GCAQE, he would see a lot of ex-BALPA pilots.

What I find odd is that the noble Countess has been raising the issue for some time, but no pilot or any member of cabin crew apart from a very few who are in contact with her has ever approached me on the issue. I have received nothing about it.

The noble Countess also asked me about medical data. The swab test research undertaken by the Institute of Occupational Medicine in Edinburgh found concentrations of organophosphate compounds consistent with previous measurements. I remind the Committee that the main research study published by Cranfield University in May last year found no evidence of pollutants occurring in cabin air at levels exceeding available health and safety standards and guidelines. Levels observed in flights that formed part of the study were comparable to those.

I remind the noble Earl that in none of those aircraft was there a fume event, but they still found TCP in the aircraft.

The noble Countess has made that point before. As a mere parliamentarian, I have to rely on the academic research being conducted in an appropriate manner and subject to peer review. All the published research studies have now been formally referred to the Committee on Toxicity which is, as I said, the independent adviser to the Government. When I first came into the House in 1992, I was rapidly aware of the noble Countess’s work regarding organophosphates and sheep dips.

In answer to a point made by the noble Lord, Lord Wigley, I am sure that the law is being properly applied. The noble Lord asked: how frequent are fume events? Incidence of fume events is extremely low. The most recent figures show that in 2010, there were 207 contaminated air events reported to the CAA mandatory reporting scheme out of 1.12 million passenger and cargo flights by UK carriers. That is 0.018% or less than 1 in 5,000.

Does the noble Earl agree that the Science and Technology Committee found severe underreporting of fume events?

My Lords, I am not sure what would drive underreporting of fume events.

The noble Lord, Lord Davies, talked about his role in this matter and his discussions with the noble Countess some time ago. As I said, the UK has undertaken research where no other country has done so.

My Lords, I am afraid we will have to have a difference of opinion on that matter. In view of what I have said, I hope that the noble Countess will feel able to withdraw her amendment.

Will the Minister kindly address my question about the ability of the CAA to regulate through COSHH? I repeat: the CAA has no authority to enforce the COSHH regulations—this is from the CAA—and it is therefore inappropriate for the CAA to investigate any breaches of the COSHH regulations.

My Lords, in my answer I explained to the Committee that I am certain there is no gap in responsibilities between the HSE and the CAA.

But the HSE has the ability to enforce COSHH regulations. The CAA has no ability to enforce COSHH regulations, on its own admission, and it is important that it should be able to.

Yes, my Lords, but as I explained to the Committee there is a memorandum of understanding, which the noble Countess referred to, to ensure that there is no gap between enforcement by the CAA and the HSE.

I thank the Minister for his response but I find that really inadequate. The facts are there: the Health and Safety Executive has the ability to apply COSHH but the CAA, on its own admission, has not that ability. It is important because engine oils and their effects would come under COSHH. I thank the Minister for addressing my other points and I am also very grateful to the noble Lords, Lord Wigley, Lord Rotherwick, Lord Empey and Lord Davies of Oldham, for their contributions and kind comments, which I found quite embarrassing.

This is an important subject. I highlighted problems with sheep dip and I was told at first that it was perfectly safe. I was proved right on that occasion and I hope that noble Lords will listen to me because there are serious effects. What concerns me perhaps as much as anything is that passengers are never told when there has been a fume event. You might get a lady who is newly pregnant—perhaps she does not know that she is— and whose baby, when it arrives, has either a cognitive problem or a deformity. We know that foetal exposure to tiny amounts of organophosphates can be quite serious.

We really need to be looking at this more thoroughly. I know that when the Cranfield work was done, it was agreed that pilots would not be looked at until it could be established whether these toxic chemicals were in fact arising in airplanes. That work has been done and there has been a lot of criticism of it. I am not too happy about it, personally, because I have seen how such research can be twisted in order to provide the answer required and I mentioned intellectual corruption at Second Reading. I am not going to let go of this. I shall pursue it even beyond this Bill. I realise that it is difficult but the noble Earl will hear more of it. In the mean time, I beg leave to withdraw my amendment.

Amendment 71 withdrawn.

Amendment 72 not moved.

Clause 106 agreed.

Amendment 73

Moved by

73: After Clause 106, insert the following new Clause—

“Automatic direction finding equipment

In paragraph 4 of Schedule 5 to the Air Navigation Order 2009, paragraph (a) of Scale F is repealed.”

My Lords, as an instrument-rated private pilot I have been aware for some time that the carriage of an obsolete radio navigation system is still mandated by the Air Navigation Order. Technology moves on: automatic direction-finding, or ADF, equipment was developed in the middle of the last century and in the last two decades has been overtaken by more modern satellite-based and computer-controlled systems, such as GPS. Indeed, it is possible to purchase wristwatches with better navigational functions than those provided by ADF.

I have to revalidate my IR rating once a year, and to do this I fly in a plane with steam-driven instruments. I apologise to my noble friend Lord Trefgarne, whose plane had nothing but steam-driven instruments. Once a year, using this equipment I have to do an NDB.

The one thing that is interesting about an NDB, apart from the fact that it points roughly in the direction of the beacon that you are trying to track, is that in a thunderstorm it can be reliably trusted to point toward the thunderstorm and not the airport. It can do many other things. One will notice that at Oxford when landing on a one line procedure, as the plane crosses a railway track prior to landing, the needle of the NDB will deviate towards the train running across the track if one is so lucky as to fly over it. In short, it is not a particularly reliable instrument but it has served well over many years. However, there are better systems now.

Ground-based non-directional beacons, NDBs, are rapidly disappearing in the United States. About 100 a year go out and there are virtually none left. The associated automatic direction finding, ADF, equipment, mounted in an aircraft remains a legal requirement for instrument flight in controlled airspace, although some limited exemptions are in place. That absurdity makes some flights in modern aircraft that are not fitted with ADF of dubious legality. It is a grey area, despite having absolutely no implications for the safe and expeditious conduct of those flights, or indeed finding the solution for the navigation.

Noble Lords will be as fearful as many owners and operators of light aircraft that when the Government’s Clause 102 comes in, the CAA may be issuing fixed penalty notices like confetti to those who breach the ANO requirement. I am therefore proposing a simple new clause to repeal the relevant requirement in the Air Navigation Order 2009. I have put this point to the Government in the past and while accepting their suggestions and issuing guidance suggesting alternative navigational aids that might be acceptable as alternatives, the legal requirement remains. I understand that primary legislation is required to bring about the change and put the question beyond doubt. Indeed, that was the real reason I am told that nothing has come forward to date. They have been waiting for primary legislation.

This is the first suitable legislative vehicle to present itself, so I move my new clause confident that it will find favour with my noble friend the Minister. I accept that my drafting may not be up to the requirements of parliamentary counsel and am very happy to take advice from my noble friend who may wish to table a more elegantly drafted new clause on Report. In the mean time, I beg to move.

My Lords, I have some sympathy with my noble friend. He knows that very well. On the other hand, the regulations to which he refers and which he seeks to amend by virtue of this amendment are devised and overseen by considerable experts in this area. It would be a mistake to impose a requirement on the CAA by means of this amendment at this time. These matters should be left to the experts who are within the Civil Aviation Authority and the National Air Traffic Services. They are not all dinosaurs; they are very senior, distinguished, respectable and intelligent people. I am happy to leave it to them and I hope that my noble friend will feel so persuaded.

My Lords, I thank my noble friend Lord Rotherwick for putting forward this amendment. I can appreciate his desire to remove where possible unnecessary regulation and requirements on the aviation industry, which accords with the Government’s intentions on the red tape challenge. My noble friend has rightly drawn the Committee’s attention to whether there continues to be a compelling need for the mandatory carriage of automatic direction finding, ADF, equipment on some aircraft. I did a little research myself: I looked up ADF and it appeared to be Amsterdam Density Functional, which is,

“a Fortran program for calculations on atoms and molecules”.

I thought that that had got nothing to do with aviation and that I had therefore better stick to my notes.

My noble friend has a passion for ensuring that regulation is appropriate and that we take into account technical developments which can often make regulations out of date. The Civil Aviation Authority has advised that it agrees with my noble friend that the existing arrangements are no longer appropriate, given the recent progress in navigational equipment. I am therefore pleased to learn that the industry now benefits from some alleviation in a general exemption issued by the CAA.

I agree with my noble friend Lord Rotherwick that this matter is worthy of further investigation. It is of course an important safety issue and I am sure that the Committee will agree that it needs a proper and thorough safety assessment before we could remove this requirement. A meeting between my noble friend and the Civil Aviation Authority may be the first step to considering how best to proceed, including an assessment of if and when it might be possible to amend the Air Navigation Order. That would be a more suitable approach than through this Bill, as pointed out by my noble friend Lord Trefgarne. If my noble friend agrees, I would be happy to make the necessary arrangements. I note that my diary is already littered with protected dates for such a meeting with my noble friend. Therefore, I hope that my noble friend will withdraw the amendment at the appropriate point.

My Lords, just before my noble friend withdraws his amendment, perhaps I may point out that automatic direction finding equipment operating on the medium wave is very useful when it is not being used for navigational purposes—for example, for listening to the test match. The noble Lord may or may not use that in consideration.

I am very grateful for the kind words of my noble friend the Minister and for his offer, which of course I should like to take up. I do not think that there is more to be said than that. I also thank my noble friend Lord Trefgarne who seems to be a little concerned about my amendment. I hope that his noble Dove, which is now out at grass, and its wonderful array of steam driven instruments were being used for the right reason and that he was not listening to the test match as he was making an instrument approach. I know that he has not been in a cockpit for some time but if he would like to come and see a new cockpit, I would be delighted to take him along, although it might come as a shock. I beg leave to withdraw the amendment.

Amendment 73 withdrawn.

Clauses 107 and 108 agreed.

Clause 109 : Commencement

Amendments 74 and 75 not moved.

Clause 109 agreed.

Clauses 110 to 112 agreed.

Bill reported with amendments.

Committee adjourned at 6.18 pm.