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House of Lords Hansard
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Aviation Safety (Amendment etc.) (EU Exit) Regulations 2019
12 March 2019
Volume 796

Considered in Grand Committee

Moved by

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That the Grand Committee do consider the Aviation Safety (Amendment etc.) (EU Exit) Regulations 2019.

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My Lords, this draft instrument will be made using powers in the European Union (Withdrawal) Act 2018 and will be needed if the UK leaves the European Union in March without a deal.

The draft instrument corrects five principal EU regulations related to aviation safety, together with a number of Commission implementing regulations made under them. The draft instrument also makes some corrections to domestic legislation which establishes offences and penalties relating to the EU legislation. The most important of these is EU Regulation 2018/1139 —more commonly known as the EASA basic regulation —which establishes a comprehensive regulatory framework for aviation safety in the EU. In particular, it provides for the continued establishment of the European Aviation Safety Agency and the adoption by the European Commission of implementing regulations on aviation safety. These implementing regulations also ensure the EU member states can meet their obligations under the Convention on International Civil Aviation—the Chicago convention.

The implementing regulations each deal with a specific aspect of aviation safety regulation, including: the design, construction, maintenance and operation of aircraft; the licensing of flight crew, maintenance engineers and air traffic controllers; the provision of air traffic management and air navigation services; the design and operation of aerodromes. The other principal regulations are: Regulation 3922/91, on technical harmonisation, which has largely been replaced by the EASA basic regulation—but provisions on flight and duty time limitations still apply to the crews of aeroplanes undertaking air taxi, emergency medical service and single pilot commercial air transport operations; Regulation 2111/2005, which establishes the list of air operators banned from operating to the EU on safety grounds; Regulation 996/2010, which sets requirements for the investigation of air accidents and incidents; and, finally, Regulation 376/2014, which establishes requirements for civil aviation occurrence reporting.

Many of the corrections we are considering today are to clarify that the retained legislation only applies to the UK. For example, references to “the territory to which the treaties apply” are replaced with “the UK”, and references to “the competent authority” are replaced with references to “the CAA”. Other amendments relate to the relationship between member states. For example, requirements on the mutual recognition of licences are deleted, as are requirements on co-operation and the sharing of information.

The draft instrument also reassigns functions that currently fall to EU bodies. The majority of regulatory functions required under the EU regulations are currently undertaken by the competent authorities of member states. These include: licensing pilots, air traffic controllers and maintenance engineers; and certifying the airworthiness of individual aircraft. However, EASA is responsible for a number of functions, including: preparing proposals for new technical requirements and for amendments to existing technical requirements; approving organisations that design aircraft and aircraft engines as well as certifying the design of aircraft and engines types. The CAA will take on these functions, with the exception of those related to management of the EU safety regulatory system, which will be corrected so as to no longer apply. While design certification has formally sat with EASA since 2008, it is not a capability that the CAA has totally relinquished, and we are confident that the CAA will be able both to meet the needs of industry and to fulfil the UK’s international obligation as the “state of design”. The CAA is implementing contingency plans to ensure that it will be able to undertake the new functions effectively from exit day in the event of no deal.

The European Commission also has a number of functions under the EU regulations. Most notably, it has the power to adopt regulations, to adopt or amend technical requirements, to impose operating bans on airlines which do not meet international safety standards and make limited specified amendments to the principal EU regulations. All of these legislative functions will be assigned to the Secretary of State.

The powers to amend the retained principal EU regulations are very limited and are designed to ensure that the regulatory system can adapt to technical developments and changes to the international standards adopted by the International Civil Aviation Organisation—ICAO. Most notably, the Secretary of State may amend the annexes to the retained principal EU regulations, particularly the ones to the EASA basic regulation. The annexes contain the high-level safety objectives which are implemented through the technical requirements. This power is exercised through regulations subject to the negative resolution procedure.

In addition, the draft instrument also revokes four implementing regulations that set out internal procedures for EASA and which will become redundant after exit day. None of the amendments in this instrument changes any of the technical requirements established by the retained EU regulations. All valid certificates, licences and approvals issued by EASA or by EU/EEA states prior to exit day will remain valid in the UK by virtue of the withdrawal Act. The draft instrument provides that such certificates shall be treated as if they were issued by the CAA. The instrument limits the validity of most such certificates to two years after exit day, after which time CAA-issued certificates will be required. However, certificates related to aircraft design will remain valid indefinitely. The CAA needs to issue the safety certificates to have full oversight of aviation safety in the UK in accordance with the UK’s obligations under the Chicago convention.

The best outcome is for the UK to leave the EU with a deal, and delivering a deal negotiated with the EU remains the Government’s top priority. However, we must make all reasonable plans to prepare for a no-deal scenario. This draft instrument ensures that, in the event of a no-deal exit, legislation on aviation safety continues to work effectively and that the aviation industry has clarity about the regulatory framework in which it would operate in a no-deal scenario. I beg to move.

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My Lords, I am grateful to the noble Baroness for introducing these regulations. It would be good if she could say something further as a result of the Boeing accident a couple of days ago, which brings aviation safety into focus.

I have a couple of questions, and I will use the Explanatory Memorandum as a reference because it is easier. My first question is on paragraph 7.2, “Corrections to domestic subordinate legislation”. She said that most aircraft types are subject to EU technical requirements and that will be changed from “EASA aircraft” and “non-EASA” aircraft to “Part-21” and “non-Part-21”. What is the point of this, and has anybody seriously tried to get associate membership of EASA? I know “European” is in the name, which probably means that it is anathema to some members of the Government, but it would be a lot easier. I will probably bring this up when we debate railways as well. EU technical requirements are well known and well respected. We will have CAA technical requirements if this SI goes through. What happens when they diverge? Is there any mechanism for our side to talk to the European side? It is pretty stupid to have technical requirements for aircraft in this country that will be different—even to a small degree—from those in the European Union. Of course, the same applies vice versa. We tend to think only about the problems in this country, but for our planes to be able to fly on the continent, presumably somebody has to confirm with EASA or the Commission that the technical requirements of our planes fit in with their specifications.

My second question relates to paragraph 7.5 of the Explanatory Memorandum concerning banned operators. Quite a few rather unpleasant cases over the years come to mind. The paragraph refers to the,

“list of aircraft subject to an operating ban in the Community”.

That means that there is a list, which is great, but what process will there be for the UK and the European Union to share that list? It would be pretty stupid to have two lists, and I hope that the Minister can give us some comfort that there will be a mechanism for sharing, as this is a very important issue.

My last question relates to paragraph 7.8, which refers to,

“powers provided for in Single European Sky”.

That is an ambition that has not quite been achieved, although it is some of the way there. Do I understand that it will now be dumped, that there will be a single European sky that does not include the UK and that we will have our own little sky? I look forward to the Minister’s responses.

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My Lords, I thank the Minister for her opening statement. The Ethiopian Airlines crash has been a salutary reminder of the fundamental importance of aviation safety. Sometimes we take it for granted, but it relies on a complex interlocking of the highest standards for design, manufacture and maintenance, stringent standards for the training of flight crew and air traffic controllers, and exacting standards for the design and operation of airports. As aircraft have become more complex—the crash two days ago illustrates this point extremely well—and the skies become more crowded, the importance of international co-operation on the specification and maintenance of these standards has never been greater.

Yet this SI is intended to withdraw us from EASA and hence from access, as of right, to much of that international co-operation. I was very pleased that the Minister confirmed yesterday that the Government want to remain a member of EASA. I have no doubt that the Minister wishes to do so, but it was good to have the reassurance that that was the Government’s position. However, in the present political chaos, we cannot rely on this SI being simply a paper exercise.

Last November, the Second Legislation Scrutiny Committee drew our attention to this SI. It drew attention to the impact on CAA resources and to whether the EU will reciprocate in the recognition of licences, certificates and approvals. The UK will continue to have the same technical requirements and standards on exit day but, as the noble Lord, Lord Berkeley, has just said, there are real questions over future changes and over whether and how we will keep in step with the EU. Next week, we will be looking at maritime SIs, and we are way behind in keeping up with the flow of maritime legislation. I have real concerns that in the aviation sector, where technology moves on really fast, we will not be on the ball in changing our standards as fast as the EU.

EASA has set the highest standards, and we have been a very important member of it. Given the importance of our contribution, it is sad that we are considering this situation today. The CAA has a well-deserved reputation for efficiency and expertise. However, in future it will have to operate within the framework set by the Secretary of State, and not that set by the European Commission. The difference is this: as I pointed out last week, when we were discussing railways, there is an issue about the transparency of the process and the availability of the information for public scrutiny. I was concerned to read in Paragraph 7.4 of the Explanatory Memorandum that:

“Delegated powers in the Basic Regulation are transferred … to the Secretary of State, who will be able to make regulations to adopt new technical requirements or to amend the technical requirements”.

There is no procedure laid down here for consultation and no formal role for the CAA as advisers; and, worse, it is by negative procedure. I have very serious concerns about this, because there may be no public discussion and no public rationale provided by the Secretary of State as to why standards are changing.

I am concerned, too, about the implications of paragraph 7.3(b) in the Explanatory Memorandum, on the recognition of certificates. In future, individuals will need UK certificates if they are to fly or maintain UK-registered aircraft. This again has important resource implications, and I would be pleased if the Minister could give us details of the resource impact on the CAA in providing those certificates.

Paragraph 12.2 of the Explanatory Memorandum refers to additional staff for the CAA. It would be good to know how many additional staff will be needed and what their cost will be. If the Minister has not got that information today, could she write to us?

Paragraph 7.5 says that the UK safety list of banned operators will no longer be laid down in legislation but merely published on the CAA website. There have been serious incidents involving operators and banning, but I am concerned about this change of approach. Why will it not be laid down in legislation in future? Why is it just a notification on a website? Would there be a legal implication if there were to be infringements of a ban, for instance? Again, simply having this on a website lacks transparency and public accountability.

Moving on to the thorny issue of consultation, we have the same formula of words that we have had before—that there has been “regular engagement” with the industry and “long-established stakeholder forums”, and so on. This is absolutely not the same as consultation. It is much less transparent, and we are all aware that there have been issues with the ability of those who have been consulted in these forums—specifically, the limits that have been put on them in terms of what they could say publicly about their views on that consultation, the Government having limited their rights to do this. That is the opposite of a public consultation. If a public consultation had taken place, we would have a report on how many people were opposed to something, how many people supported it and so on, and if that report was not made public, we would have the right to ask for that information. There is no public trail of accountability here.

Moving on to the impact, individuals will need new CAA licences after two years. The committee’s report specified that the CAA will need 59 additional staff, 38 of whom were in post in November. Are they all in post now? What will the annual cost of this system be? Pilot licences issued by the EU must be validated by the CAA before being used outside the UK on a UK-registered aircraft. I note that there will be no charge for this, but last November the Department for Transport was unable to tell the committee how many people would be affected by the requirement for these new licences. Does the Minister now have that information?

As CAA licences will not be recognised in the EU, pilots will need to transfer their licence to another EU state if they wish to operate aircraft registered under the IATA system. Any cost to them will depend on which member state is involved.

I understand the reason for this statutory instrument, and I greatly regret the reason for it, but the system that is being put in place is less transparent, the standards will be less guaranteed and there are significant impacts on individuals working in the aviation industry. I am concerned that there has not been sufficient publicity about this aspect.

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My Lords, I make my usual statement that I deeply regret being here. I think the idea of leaving the European Union without an agreement is absurd. In many ways, this SI and the many SIs I have worked through illustrate just how bad a situation it will be, but assuming that we are leaving, or have to be ready to leave, the EU without an agreement, I have looked at this SI. Its thickness deterred me from reading it, so my comments are based on the Explanatory Memorandum. Having been in the industry, I look forward to the seminar that the Minister is no doubt about to give us on ICAO. She will no doubt explain how this statutory instrument answers many of the questions that have been asked. I am sympathetic to many of them.

I shall restrict myself to two issues. The first is the powers of the Secretary of State. I have dealt with an awful lot of these SIs, and they have the same general characteristic: the stuff that is handled by EU regulators gets handed to UK regulators, and the stuff that is handled by the Commission is transferred to the Treasury. As I understand it, the Treasury is a body in its own right that can make decisions as a body in its own right. In a sense, one would expect the Treasury to be equipped to make those sorts of decisions. Here, paragraph 7.4 of the Explanatory Memorandum states:

“Delegated powers in the Basic Regulation are transferred from the Commission”;

and it ends by introducing a role for Parliament:

“Regulations made by the Secretary of State would be subject to negative resolution procedure”.

Unfortunately, as you read the document, it implies that decisions will be made by the Secretary of State himself, as the natural person. Given recent history, I am not sure that Parliament should be that comfortable with the idea of giving decisions to this Secretary of State, as the natural person. I assume it will not work like that. I assume the department and the Secretary of State will set up systems to advise the Secretary of State to analyse the issue and make sure that when we come to examine the regulations—if we choose to, under the negative procedure—the decisions would be backed up by a proper decision-making system, which the Minister will be happy to present to us. I hope we have reassurance on that point. To some extent, that covers one of the points made earlier in this debate.

Reading through the Explanatory Memorandum, I also stumbled across paragraph 7.6, which says:

“Corrections made include … removing provisions dealing with the relationship with and cooperation between EU Member States”.

I know we have had two tragic events recently, but the tremendous improvements made over recent decades in civil aviation safety absolutely depend on worldwide, international co-operation. Therefore, I hope that that paragraph is a technicality and that it will not change the attitude of the British Government to continuing to pursue this strong co-operation through the international bodies. I ask the Minister: what procedures will be put in place and what agreements will be sought to continue to optimise safety through international co-operation?

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My Lords, I thank noble Lords for their consideration of this draft instrument. Before I move on to the SI, I am very happy to give noble Lords an update following the tragic accident in Ethiopia. The UK CAA has been closely monitoring the situation, as has the department. It made an announcement just after lunchtime today that it does not currently have sufficient information from the flight data recorder, so as a precautionary measure, it has issued instructions to stop any commercial passenger flights with that aircraft for any operator arriving, departing or overflying UK airspace. The safety directive will be in place until further notice, and of course the CAA remains in close contact with EASA and industry regulators globally.

It might be helpful to start by reiterating our position on EASA. We seek continued UK participation in EASA. This will help to ensure high levels of safety, as well as facilitating trade between the UK and the EU. We have the second largest aerospace sector in the world and the largest aviation sector in Europe, so it is not in any of our interests not to participate. It is a critical industry and, of course, safety is critical. This SI is not intended to remove us from EASA; that is a consequence of a no-deal Brexit. We want to see continued participation, but it is not just up to us to decide that. We very much hope that the EU will want us to continue participating in EASA. As the noble Baroness said, we have been deeply involved throughout its history. We very much hope that the EU will agree to our continued participation. However, we need this SI to be in place to ensure that we have a contingency plan; that is what this SI gives us. We very much hope that we will agree a deal and see continued participation in EASA. If we are in a no-deal situation, we expect to move into conversations about our future air transport agreement very quickly, which will also cover safety issues.

In response to the noble Baroness, Lady Randerson, who highlighted our response to the SLSC back in December, the mirror image of these regulations is the EU safety regulation. The EU is in the process of adopting the regulation on aviation safety. It will be voted on in the European Parliament tomorrow and at the Council next week. It has already been agreed at the Committee of Permanent Representatives and we expect no issues with its adoption. That EU regulation is ultimately designed to prevent disruption to the EU industry, but it will be beneficial to us as well. It has three strands. First, it will extend the validity of certificates issued by EASA to UK-based design organisations. That extension is initially set at nine months, but the Commission is empowered to extend it if it proves necessary. Secondly, it provides for the continued validity of authorised release certificates for products, parts and appliances, certificates of release to a service issued on completion of maintenance, and airworthiness review certificates issued prior to exit day by organisations approved by the CAA. Finally, it provides that examinations taken at CAA-approved training organisations prior to the entry into force of the regulation will remain valid. We think that the EU’s regulation, as ours, is a sensible contingency measure to have in place for a no-deal exit. It is not a permanent solution, and we very much hope that we agree a deal, and, if we do not, that we are able to negotiate further on safety regulations.

The noble Lord, Lord Berkeley, raised the issue of the banned airlines list. I agree that this is a very important list to have. On exit day, the UK list will be established and it will mirror the current EU banned list. The list will be published on the CAA’s website, and it will be updated to reflect the imposition of operating bans. Operating bans are imposed by the refusal or revocation on safety grounds of permission for an airline to operate to the UK or by the refusal or revocation of a third-country operator authorisation. As the noble Baroness, Lady Randerson, pointed out, unlike the EU list, the UK list is not contained in legislation because it does not itself impose the bans, but reflects bans that have been imposed by the exercise of statutory powers. We will, of course, aim to keep the UK list consistent with the EU list as far as possible, and the decision on any operating bans will always be based on advice from the CAA.

Sitting suspended for a Division in the House.

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My Lords, before the vote we were discussing the banned airlines list. As I said, we will aim to keep the UK list consistent with the EU list, as far as possible. Those decisions on operating bans will be based on advice from the CAA. The method of enforcing that ban will be the same as it is today: the withdrawal of a permit or operating licence. There may be instances where the UK lists will need to deviate: if we have evidence that an airline does not meet international standards, we may want to prohibit it flying to the UK and add it to the UK list, even if the airline is still permitted to fly to the EU. We are working closely on implementing that list. There may be some resource implications, but we expect to be able to use existing resources within the CAA. As with all these things, we very much hope that we will be able to maintain close co-operation with the EU and maintain the same list.

The noble Lord, Lord Berkeley, raised the issue of the single European sky. We have already discussed the statutory instrument on air traffic management, and we absolutely recognise the need for our air traffic arrangements to remain in line with the rest of Europe. Safe and efficient air traffic management is a priority for us, and we will continue to work with European partners on it.

The new delegated powers were raised by all noble Lords. As I said, the draft instrument gives us delegated powers to make regulations, subject to negative resolution parliamentary procedures. The powers relate to the amendment or adoption of detailed technical requirements, which need to be updated regularly to reflect technical developments, changes to international standards, recommendations arising from accident investigations and so on. As the noble Baroness, Lady Randerson, pointed out, these changes come thick and fast. This reflects existing UK practice, where the technical requirements for aviation safety are contained in secondary legislation made using the negative resolution procedure and the fact that the EU requirements were adopted under Commission implementing regulations.

The draft instrument contains a power for the Secretary of State to amend the essential requirements contained in the annexes to the EASA basic regulation by making regulations subject to the negative power. These very limited powers are designed to ensure that the regulatory system can adapt to technical developments and changes to international standards adopted by the International Civil Aviation Organization to ensure a continued high level of safety. I understand the noble Baroness’s concern about consultation involving the CAA. We will of course always base these decisions on advice from the CAA, but the powers are very limited and relate only to adopting international standards, which we will continue to follow.

On CAA resourcing, the CAA is already responsible for many of the responsibilities, including licensing and oversight of a significant proportion of the UK aviation sector. However, the CAA will be taking on some work from EASA, which requires additional resources. It currently estimates that it will need 53 additional people, which has come down from 59, and 50 of those people are in place. The CAA is content that it is ready, should we leave without a deal. In line with the “user pays” principle, these costs will be funded through charges on industry. New charges arising from the transferred functions will mainly affect UK manufacturers and organisations based in third countries, including EU member states. The CAA will endeavour to keep those charges as low as possible. The CAA estimates that the cost of taking on new functions and responsibilities will be around £3 million for 2019-20 and £3.6 million in 2020-21. As I said, these costs will be recovered by charges to the organisations concerned, whether they are based overseas or in the UK.

On pilot licences, all pilot licences issued by EASA or EU or EEA states prior to exit day will remain valid if they were valid immediately before exit day. The instrument provides that such licences are to be treated as if they were issued by the CAA. However, in order to meet our obligations under the Chicago convention, pilots holding such licences who want to fly UK-registered aircraft will need to obtain the licence validation mentioned by the noble Baroness, Lady Randerson. This will be available free of charge, and the draft instrument limits the validity of licences to a maximum of two years after exit day, after which a CAA-issued licence will be required. A general validation will be issued by the CAA immediately after the SI enters into force. It will be downloadable from the website. I am afraid we still do not know how many people will be affected, as non-UK EASA licence holders are not currently required to notify the CAA when flying UK-registered aircraft. We have set this out in technical notices and we are working very closely with industry to make sure that this information is being given to pilots. We are trying to make the system for getting this licence validation as free and quick as possible.

The other part about licences regards holders of UK licences who need to transfer their licences to EASA in order to operate EU-registered aircraft. The CAA is working on that. We opened applications in January. As of 11 March, we have received over 4,500 applications. All applications which were put in at the right time will be completed before exit day.

On consultation and industry engagement, as the noble Baroness pointed out, the Explanatory Memorandum says that we have regular engagement with industry stakeholders. We also work with union representatives; those from BALPA were included in this engagement. The CAA was closely involved in identifying the corrections to EU legislation contained in this instrument. Stakeholders are very supportive of this draft instrument. It would provide continuity through maintaining the current technical standards and requirements. We published a technical notice in September to inform the industry and the public of the actions we are taking, and the CAA website has a microsite dedicated to EU exit, which provides information and advice. The EU and EASA have also published regular updates on the implications of a no-deal Brexit and guidance for those affected.

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On consultation, can the Minister assure me that there will no more use of non-disclosure agreements for this ongoing consultation? That is happening at the moment for whatever reason, but it does not need to be a precedent that carries on after Brexit.

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I agree with the noble Lord. We have used NDAs when commercial issues are at hand, for example on our US agreement. The aviation industry is not silent about Brexit. It has been very clear about its position. It is supportive of this draft instrument, but it is not supportive of no deal or leaving EASA; it is making that very clear and has done for quite some time. I genuinely do not feel that the industry has in any way been restricted by talking about its views on Brexit; it has been very vociferous on that point, and we are very aware of its views, which have influenced our position on EASA membership.

The noble Lord, Lord Tunnicliffe, asked about the removal of provisions dealing with the relationship with and co-operation between member states. As I said previously, our future relationship with EASA is going to be a matter for negotiation. We have been clear on our position. We very much hope that the EU will welcome that. It has been quite frustrating because the CAA has not yet been able to have conversations with EASA because of the position we are in with the negotiations. We stand ready, but we have not been able to do that because a deal has not yet been agreed. We will continue to participate in ECAC and ICAO, as participation in both organisations does not depend on being an EU state. Even in a no-deal scenario, we recognise the importance of co-operation and collaboration with our European and international partners and will continue to do that.

I think I have answered all the questions—

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Can I take us back to the CAA’s 59 new employees? I am delighted to hear that progress has been made. However, it occurs to me—going back to what the noble Baroness said at the beginning of her response—that this SI is for a no-deal scenario, but the CAA has had to recruit for a no-deal scenario that might not happen. I am sure most of us very much hope that it will not happen. What will happen to these staff if there is a deal and good transition arrangements that allow us to continue as members of EASA and dovetailing in? I am not trying to have it both ways; I am not trying to say that they should not have been employed because they might not be needed. It just occurred to me that this is nugatory expenditure, but it might also have an impact on the permanence of people’s employment.

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The noble Baroness makes a very good point. These are difficult decisions. We need to make sure that we have contingency plans and the right people in the right place. On the cost of those people, the DfT gave the CAA £2.7 million from the Treasury to build up contingency. These costs have yet to be transferred to industry, at least. She is quite right that people are being affected. I cannot speak for the CAA and its human resources plan, but it is an excellent employer and I am sure that it will have a good plan. Regardless of whether we get a negotiated agreement, many other aspects will need to be discussed, such as our future relationship following the end of an implementation period. I very much hope that those people will be used and used well. However, I will take up that point with the CAA next time I speak to it.

As I said, we are working towards a negotiated agreement that is supported by Parliament, and we very much hope that that will happen. However, we need to ensure that we are prepared in the event of no deal, and this draft instrument is a key part of the preparations. Aviation safety is a priority for us and, as the noble Baroness said, that has been highlighted by the tragic events over the weekend.

Both the UK and the EU have set out their intentions on safety regulations to ensure that we have the plans we need in place and to ensure that we continue to have a high-level—a world-leading level—of aviation safety, irrespective of the outcome of the negotiations. I beg to move.

Motion agreed.