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House of Commons Hansard
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General Committees
17 October 2018

Delegated Legislation Committee

Draft Merchant Shipping (Monitoring, Reporting and Verification of Carbon Dioxide Emissions) (Amendment) (EU Exit) Regulations 2018

The Committee consisted of the following Members:

Chair: Mr Clive Betts

† Afolami, Bim (Hitchin and Harpenden) (Con)

† Brown, Alan (Kilmarnock and Loudoun) (SNP)

Coffey, Ann (Stockport) (Lab)

† Cooper, Rosie (West Lancashire) (Lab)

Creasy, Stella (Walthamstow) (Lab/Co-op)

† Donelan, Michelle (Chippenham) (Con)

† Foxcroft, Vicky (Lewisham, Deptford) (Lab)

† George, Ruth (High Peak) (Lab)

† Ghani, Ms Nusrat (Parliamentary Under-Secretary of State for Transport)

† Heald, Sir Oliver (North East Hertfordshire) (Con)

Huq, Dr Rupa (Ealing Central and Acton) (Lab)

† Jayawardena, Mr Ranil (North East Hampshire) (Con)

† Kerr, Stephen (Stirling) (Con)

† Metcalfe, Stephen (South Basildon and East Thurrock) (Con)

† Pursglove, Tom (Corby) (Con)

† Spelman, Dame Caroline (Second Church Estates Commissioner)

† Turner, Karl (Kingston upon Hull East) (Lab)

Laura-Jane Tiley, Zoe Grunewald, Committee Clerks

† attended the Committee

Sixth Delegated Legislation Committee

Wednesday 17 October 2018

[Mr Clive Betts in the Chair]

Draft Merchant Shipping (Monitoring, Reporting and Verification of Carbon Dioxide Emissions) (Amendment) (EU Exit) Regulations 2018

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I beg to move,

That the Committee has considered the draft Merchant Shipping (Monitoring, Reporting and Verification of Carbon Dioxide Emissions) (Amendment) (EU Exit) Regulations 2018.

It is a pleasure to serve under your chairmanship, Mr Betts. We are debating regulations that will amend EU regulation 2015/757 on the monitoring, reporting and verification of carbon dioxide emissions from maritime transport. The effective monitoring and reporting of carbon dioxide is an important step on the road to achieving a more environmentally sustainable shipping sector. We expect that the emissions data gathered will help the international community to develop more effective measures to reduce greenhouse gas emissions from ships. The EU regulation established rules for monitoring, reporting and verifying CO2 emissions from ships above 5,000 tonnes that make voyages that start or finish in a port in an EU member state. The EU regulation has direct effect in UK law.

Shipping companies have already prepared monitoring plans and have been collecting data since 1 January 2018. Ships within scope are required to carry a valid document of compliance from 30 June 2019. The EU regulation applies only to ships visiting ports that are under the jurisdiction of an EU member state. It would therefore cease to have effect when the UK leaves the European Union. The changes made in the regulations are therefore necessary to ensure that the monitoring, reporting and verification requirements of the EU regulation continue to apply to ships serving UK ports. If the UK failed to correct the EU regulation, ships that call at EU ports would still need to report under the EU system. However, those trading between the UK and non-EU ports would not need to report. That would create an uneven playing field between companies, and the evidence on greenhouse gas emissions would be weakened.

The UK is a strong supporter of global action to tackle climate change. In April this year, we helped lead the high ambition coalition to secure agreement at the International Maritime Organisation on an initial strategy on greenhouse gas emissions. That includes an historic first emission reduction target for ships of at least 50% by 2050, which is an important step forward in tackling emissions from international shipping—the last major sector not to have an emissions reduction plan. The International Maritime Organisation has also produced its own system for monitoring CO2 emissions from ships. Its data collection system has a similar objective to the EU MRV regime, but will be effective from 1 January 2019, a year later than the European system. Robust information on emissions from ships is important when taking action to reduce such emissions, and that is what the EU regulation aims to provide. If we did not ensure that the regulation continues to have effect, we would be weakening the evidence base on which the development of effective and appropriate measures depends.

As well as amending the EU regulation, the instrument makes a number of other changes, mainly technical and operational in nature, to ensure that the system continues to work. Those changes are to Commission implementing regulation 2016/1927 on templates for monitoring plans, emissions reports and documents of compliance, and the Merchant Shipping (Monitoring, Reporting and Verification of Carbon Dioxide Emissions) and the Port State Control (Amendment) Regulations 2017. The latter regulations provide an enforcement mechanism for the EU regulation in the United Kingdom.

In addition to ensuring that the same regulatory requirements continue to apply to UK-registered ships, the amendments ensure that UK regulators are able to enforce those standards against foreign vessels in UK waters, including EU vessels. The amendments replace references to “an EEA state” with references to “the United Kingdom” to ensure that legislative requirements continue to apply within the UK when it is no longer a member state; amend the certificate of compliance to include a reference to a certificate of compliance issued by an EU member state; repeal a provision about the expulsion order; and amend Commission implementing regulation 2016/1927, which provides ship owners with the templates needed for their monitoring plans and emissions reports, and the template for the documents of compliance that is used by the verifier.

The regulations before the Committee are intended to ensure that all ships visiting UK ports are subject to the same reporting requirements and that the UK continues to play its part in international action on greenhouse gas emissions from shipping. They are fully supported by the Government, and I commend them to the Committee.

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It is always an absolute pleasure to serve under your chairmanship, Mr Betts. The Opposition are entirely supportive of the regulations, but I would be grateful if the Minster could answer some questions. They are particularly technical, so I do not expect answers today; I hope that the Minister can put them in writing.

First, paragraph 5 of article 21 of EU regulation 2015/757 calls for a regular two-year assessment of

“the maritime transport sector’s overall impact on the global climate…through…emissions or effects.”

The Government propose to remove that, which would leave the existing schedule in the 2017 regulations for reporting or reviewing every five years in the shipping industry. The 2017 regulations also require the first review to be undertaken by 2022. I would be grateful if the Minister could confirm whether the Government are adhering to the original schedule, or is it being extended to 2023 in the new regulations?

Secondly, in reference to paragraph 3 of article 22 of EU regulation 2016/1927, the Government propose to omit the words following “Regulation”. That could undermine the subsequent agreements at the IMO about the targets for reductions in greenhouse gas and CO2 emissions from shipping. In April, the IMO agreed an initial strategy for carbon reductions from shipping by 2050. That includes a target for the shipping industry to reduce total annual greenhouse gas emissions by at least 50%, compared with 2008 levels, by 2050. This amendment appears to undermine the monitoring, reporting and verification regime that the UK will have in place to oversee the industry’s progress in meeting future internationally agreed greenhouse gas and CO2 reduction targets. Can the Minister provide clarification on that in due course?

Regulation 4 refers to Thetis monitoring, reporting and verification. Can the Minister clarify what the implications are for the Maritime and Coastguard Agency of the UK’s sole responsibility for monitoring, reporting and verification of international shipping’s carbon emissions in UK ports?

I look forward to the Minister’s answers in due course.

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It is a pleasure to serve under your chairmanship, Mr Betts. I have just a few comments. As the Minister said, collaborative working with other countries is the only way we will reduce carbon emissions worldwide; we certainly welcome those comments and that sentiment. Replicating the regulation shows how important the EU has been in bringing countries to the fore and particularly the UK. We well remember that the UK was deemed the “dirty man of Europe”. It was European regulations that forced previous UK Governments to start to clean up their act.

I do not have technical questions in the manner of those asked by the hon. Member for Kingston upon Hull East, but given that this statutory instrument is supposed to be part of preparations for Brexit and particularly no deal, which would come into effect in March, how many other statutory instruments are estimated to be required from the Minister’s Department to facilitate no deal and allow progress to continue and the UK to function on the day after Brexit? How much consultation has been undertaken on this SI, and has consideration been given to improving even further the environmental regulations?

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I thank members of the Committee for an interesting debate. It has been notable for me as the first affirmative debate with which my Department has been involved in respect of an EU exit regulation.

It is clear that the Committee recognises the importance of monitoring CO2 emissions from ships. There might be some debate about which system is best—the European or the international regime—but there should be no dispute about the need to control CO2 emissions if we are to meet the IMO’s target of reducing emissions from ships by at least 50% by 2050.

I will now take a moment to respond to the comments of the hon. Members for Kingston upon Hull East and for Kilmarnock and Loudoun. I am grateful to be allowed to write in detail about the technical questions posed, but I will briefly cover some of the issues. On article 22, the omission of the words in paragraph 3 is not intended to preclude full compliance under IMO requirements. I am happy to give that assurance in writing.

On the valid point about the schedule of monitoring and reviewing, we are committed to reviewing every five years, but that does not preclude us from undertaking an earlier review. If the Commission reviews the regulations, we will review our regulations also. It is important to note that when we gained our historic agreement at the IMO for the minus 50%, we were one of the countries to lead the high ambition coalition, so there is a huge responsibility on us to get it absolutely right.

The MRV regime is already well established, and ships travelling between the UK and EU ports would need to comply with the EU regime whatever the UK does after we leave the EU. In order to minimise the burden on shipowners and maintain clarity, the Government want to retain the existing MRV regime. That will ensure that the same regulatory requirements continue to apply to UK-registered ships and that the UK is able to enforce the standards against foreign vessels in UK waters.

Ideally, we would like to see the alignment of both the European and international CO2 monitoring systems. The European Commission is currently reviewing the MRV to consider how to further align the two systems. We expect it to publish its draft proposals before the end of this year. Whatever the outcome might be, our aim is to make sure that our regime is effective and minimises the burden on shipowners post-Brexit.

On the point about how many EU exit SIs we have in the Department, we have approximately 66, and for maritime 13. I look forward to seeing everyone in this room in the near future.

Question put and agreed to.

Committee rose.

Draft Armed Forces (Terms of Service) (Amendments Relating to Flexible Working) Regulations 2018

The Committee consisted of the following Members:

Chair: Andrew Rosindell

† Docherty, Leo (Aldershot) (Con)

† Docherty-Hughes, Martin (West Dunbartonshire) (SNP)

† Duguid, David (Banff and Buchan) (Con)

† Ellwood, Mr Tobias (Parliamentary Under-Secretary of State for Defence)

† Fabricant, Michael (Lichfield) (Con)

† Gaffney, Hugh (Coatbridge, Chryston and Bellshill) (Lab)

† Harrison, Trudy (Copeland) (Con)

† Hoare, Simon (North Dorset) (Con)

† Jenkyns, Andrea (Morley and Outwood) (Con)

† Jones, Andrew (Harrogate and Knaresborough) (Con)

† Jones, Gerald (Merthyr Tydfil and Rhymney) (Lab)

† Kinnock, Stephen (Aberavon) (Lab)

† Morton, Wendy (Aldridge-Brownhills) (Con)

Nandy, Lisa (Wigan) (Lab)

† Smith, Jeff (Manchester, Withington) (Lab)

Snell, Gareth (Stoke-on-Trent Central) (Lab/Co-op)

† Twist, Liz (Blaydon) (Lab)

Jack Dent, Committee Clerk

† attended the Committee

Seventh Delegated Legislation Committee

Wednesday 17 October 2018

[Andrew Rosindell in the Chair]

Draft Armed Forces (Terms of Service) (Amendments Relating to Flexible Working) Regulations 2018

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I beg to move,

That the Committee has considered the draft Armed Forces (Terms of Service) (Amendments Relating to Flexible Working) Regulations 2018.

It is a pleasure to work under your chairmanship this afternoon, Mr Rosindell. I am impressed by the tier-1 calibre of MPs who have decided to join us to discuss this draft statutory instrument, which we have an hour and a half to debate in full.

I know that colleagues will have read the terms of service regulations, which are core to what we are discussing. The draft statutory instrument will make consequential changes to those regulations for regular personnel in the Royal Navy, the Royal Marines, the Army and the Royal Air Force. The changes are necessary to enable the Ministry of Defence to operate and manage part-time and restricted separation service, described collectively as flexible service, from 1 April 2019.

Hon. Members will recall that in February this year the Armed Forces (Flexible Working) Act 2018 became law, an historic common-sense step that will help to modernise the terms of engagement that we offer our people in the future.

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Will the Minister give way?

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So early in proceedings—I would be delighted.

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I am grateful to my right hon. Friend. He might come on to this later, but my only concern with that flexibility is whether it will affect the readiness of the armed forces. I also wonder to what degree other countries have adopted similar practices.

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My hon. Friend is right. I will come on to that in detail, because it goes to the heart of our continuing to have a fighting capability while meeting the needs of modern society and the expectations of those people who join the armed forces in this day and age.

I am grateful that we had a lively and interesting debate in the lead up to Royal Assent in February. I was particularly pleased to note the overwhelming support for the concept of flexible service.

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I had a second part to my question about which other countries, if any, have adopted this practice.

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It is interesting that my hon. Friend mentions that. Australia and New Zealand have different models, and we are sharing our thoughts with other NATO nations. Clearly, this is a recognised step forward in the offering armed forces provide across the world, certainly as regards our allies. I expect a third intervention—but I shall continue.

I also noted during passage of the Act, and certainly during the debate in the House of Lords, that there was an understandable interest in the detail behind the main policy headlines, to examine whether the engine room driving such fundamental changes is fit for purpose. We have worked hard to design a system that will ensure that flexible service operates legally, fairly and efficiently, both for our people and their families who will benefit from the new opportunities and, importantly, for the chain of command who will manage them while continuing to deliver operational capability.

The Government are alive to the desire expressed in this House and the other place to scrutinise the fine detail that will enable flexible service to operate. That is why we have agreed that this important piece of secondary legislation, which we hope to introduce today, should be subject to the affirmative procedure.

Although the changes introduced by the statutory instrument will usher in new, modern opportunities for our people, they are already standard in the wider world of work. We have worked closely with the armed forces to ensure that they are balanced with the need to protect the armed forces’ ability to deliver operational capability—the point made by my hon. Friend. To be clear, that must be a red line for defence. I hope that my statement and our debate will demonstrate how people in the Ministry of Defence have appropriately balanced the overriding need to maintain the operational capability of our armed forces with the need to support those who deliver it, and their families, through opportunities for flexible service.

The regulations enable regular service personnel to serve part time and to restrict the number of days they can be required to serve away from their home base to 35 in any 12-month period. They set out the overall time limits for periods of flexible service and the application process, which is designed to be fair and efficient, enable service personnel to apply voluntarily for flexible service and empower the service to consider applications. However, they do not guarantee that any application will be successful. In addition, they outline the actions required by each party during the application process. Importantly, the process is designed to ensure that service personnel cannot have flexible service terms imposed on them.

There may be occasions when, a flexible service arrangement having been agreed, circumstances require changes to be made to it, either permanently or for a specific period. We have therefore set out the conditions under which a flexible service arrangement may be varied, suspended or terminated. In the interests of national security, we conclude that, in extremis, it is essential for services to be able to recall personnel to their full-time duties immediately, through either permanent termination or temporary suspension of the flexible service arrangement. However, that power will be used only sparingly, and only when a 90-day notice period would have an unacceptable impact. Individuals will also be able to terminate their arrangement with 90 days’ notice, or apply to suspend or vary it.

We want to give service personnel as much certainty as possible about any flexible service arrangement they enter into, because they would not apply if they felt the arrangement was likely to be cancelled without warning or explanation. However, we are clear that that must be balanced with service need above all else. We recognise that service personnel may not always get the outcome they hoped for when applying for flexible service. We therefore judged that it was right and fair to make provision for an appeals process. However, the scope of any appeal will be limited to the serviceperson requesting that the appeals authority reconsiders the decision they are unhappy with. Service personnel will be limited to one appeal against a decision. Outside that process, they will retain normal access to the service complaints system.

Hon. Members will note that the working detail beneath the main headlines I have outlined ensures that we will achieve our main policy aim of being fair and honest with those who work for us. We aim to give people access to new, modern flexible service opportunities, while recognising that we must maintain operational effectiveness, which is paramount.

Approving these changes will send a powerful signal to all our brave, loyal and dedicated armed forces and their families that we are on their side. It will be a major step in the journey towards the introduction of flexible service on 1 April 2019. As well as achieving their primary purpose of making changes to the armed forces terms of service regulations, these regulations will enable the finalisation of important related activities, including: the amendment of subordinate armed forces regulations, such as Queen’s regulations; the publication of a suite of policy guidance material for those who consider applying for flexible service and those who administer it; and the continuation of our comprehensive communications campaign, which will promote and explain flexible service but also manage expectations and not oversell it.

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Will the Minister confirm that it is the Department’s expectation that these changes will improve retention? They will, for example, allow a soldier who may have seen operational service to agree a working structure when he is not required for operational soldiering that allows him to do the school run on a Monday, thereby easing pressure on his domestic life.

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I pay tribute to my hon. Friend for his service. He comes here with experience and he will know from the people that he has worked with that personal circumstances change as people serve in the armed forces. They get married and have kids, and extra pressures arise, which may place additional, personal demands on them. Families federations get the feedback that what would help would be to have this valve to allow a bit of time and give some certainty about what is going to happen over a short period, because something has happened in their life—if they want to study or they have a child, for instance. It will support retention, which is critical for our armed forces.

I can confirm that all the activity I have just outlined, together with the consequential changes to the armed forces pension scheme, the compensation scheme legislation and the changes we need to make to our IT systems to enable flexible service to operate, are all firmly on track for delivery in time for the 1 April 2019 launch.

Hon. Members have already demonstrated their overwhelming support for the concept of flexible service, which I hope will be echoed today. I certainly hope that we can crystallise that support by approving the details that will make flexible service a welcome reality for our armed forces, who are renowned around the world for their professionalism, leadership and discipline. I hope that hon. Members will be satisfied and will be inclined to support this statutory instrument.

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It is a pleasure to serve under your chairmanship, Mr Rosindell. We all owe a huge debt of gratitude to those who serve in our armed forces and that debt should be at the forefront of our minds, with Remembrance Sunday just a few weeks away. The national commemorations will be especially poignant this year, as we mark the centenary of the end of the first world war and of the Armistice in 1918.

As the Minister mentioned, this is the first time we have met in Committee to consider regulations made under the Armed Forces (Flexible Working) Act. The Opposition support the regulations as they essentially implement the core principle of the Act: that personnel should have the right to request flexible working. We supported the Act when it came before the House, because we want our armed forces to have greater control and flexibility over how they serve and we want to enable the forces to draw from the widest possible pool of talent when recruiting servicemen and women.

We all recognise that the complexities of modern life mean managing work and home responsibilities, as has been mentioned. This is even more the case for members of armed forces, who are expected to deploy or relocate at a moment’s notice. The flexibility that the Act affords must be balanced against the overriding priority, which is to retain armed forces that stand ready to defend our country. To that end there are limits on the amounts of flexible working that personnel can undertake. The Minister has set out some of those limits—perhaps he can go further and talk about how they were arrived at.

The regulations enable personnel to apply for flexible service, but as I understand it there is no guarantee that this will be granted. Can the Minister outline what would happen if an application is refused and what process exists for personnel to appeal a decision?

The Minister will recall that during the passage of the Act, we on the Opposition Benches put forward amendments that would compel the Department to publish the number of personnel who are serving part time in the quarterly service personnel statistics and in the biannual diversity statistics. In the other place, the Minister’s colleague, Earl Howe, stated that the Department would use data collected about the number of personnel requesting flexible working, but only internally “for analysis purposes.” Can the Minister set out why this data will not be published in the usual way along with the standard releases of statistics from the Department? Surely this would be a straightforward and cost-free way of assessing how the policy is operating, as the information is collected anyway.

We know that one of the foremost reasons for introducing the Armed Forces (Flexible Working) Act and these regulations was to improve the rates of recruitment and retention. That is certainly a very important aim, given that the number of fully trained personnel continues to fall across each of the services. In fact, the full-time trade-trained strength of the Army has fallen by more than 1,000 since this time last year. The Public Accounts Committee recently reported that the Government’s recruitment plans are

“not sustainable in the long-term.”

In the light of the draft regulations, will the Minister set out how his Department plans to remedy that crisis in recruitment and retention?

The number of personnel serving is measured against the strategic defence and security review targets for 2020—namely, an Army of 82,000, an Air Force of 31,750 and a Royal Marines and Royal Navy numbering 30,450 personnel. Clearly, we are some way from meeting those targets. It is difficult to see how they can be met on the current trajectory, even with the draft regulations. Will the Minister confirm that those targets will not be changed as part of the modernising defence programme?

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It is good to see you in the Chair, Mr Rosindell. I welcome the draft regulations, and I do not think there will be any disagreement about their approval.

As someone who comes from a forces family—my brother is in the Royal Scots and my nephew has just passed out from the Royal Engineers—I am very aware of how a flexible approach to service can improve not only recruitment but retention, as the hon. Member for Aldershot mentioned. I am also aware of its impact on readiness, which was discussed only a few moments ago.

For those who do not know it, flexible working actually works. One needs to look only across the North sea at the kingdom of Denmark, where it works so well that people find it difficult to leave the armed forces. Not only does Denmark have good recruitment, but the arrangements are so good that people actually want to stay in the armed forces. We have recruitment and retention challenges at the moment, so I am sure everyone welcomes the approach the Minister outlined. We must be clear that it builds on the commitments in the 2015 SDSR, and I hope it is continued in the fast-approaching 2020 SDSR, which is not as far away as everyone thinks.

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I am slightly confused. Although I very much welcome the hon. Gentleman’s positive approach to the draft regulations—I loved his comparison with Denmark, which I know well—I do not see how these changes would work with the Scottish army if Scotland became independent.

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The last time I looked, this was the Parliament of the United Kingdom of Great Britain, which has enough problems with retention and recruitment. One need only come to the meeting of the Select Committee on Defence next door in 10 minutes to find out about the issues with defence recruitment and retention. The Minister himself eloquently discussed those issues in front of that Committee, for which he is to be commended. After independence, I will be more than happy to come and give evidence as a Member of an independent sovereign Parliament at Holyrood.

Before I was sidelined by that diversionary tactic, I was going to say that the draft regulations show a sense of forward thinking from the Minister and his officials. They show how we can make changes to people’s quality of life. In the context of the problems with CarillionAmey, housing and so on, this is one area in which we have stepped forward to recognise that flexible working can improve the lives of service personnel, regardless of gender, and those of their families.

It would be ridiculous for me to say we do not still have far to go. For instance, this is the only state in Europe in which serving personnel do not have a contract. It would also be remiss of me not to say that although this is a great step forward, I hope Ministers and other Members will support my private Member’s Bill on an armed forces representative body, which would allow our armed forces to speak with one strong voice, when it comes to the Floor of the House in November. However, I congratulate the Minister on bringing forward the draft regulations.

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I am grateful for the support from right across the Committee. It is important that our armed forces see Parliament, the Government, the Opposition and so forth all supporting what they do.

I thank the hon. Member for Merthyr Tydfil and Rhymney for his support on the Armed Forces (Flexible Working) Act, and in Committee today. He spoke of the debt of gratitude that we owe to those who are in uniform. I would add to that the debt that we owe to those who are related to those in uniform—the armed forces community. It is this place that votes to send these people into harm’s way. It is important that we look after them. Looking after them does not just mean that we do equipment well or train them well. It means that we address the welfare aspects, including housing. It also means understanding that we should give them the flexibility we are discussing here today.

The hon. Gentleman also recognised, quite rightly, that this year is a significant year as we pay tribute to not just those in the armed forces but the generation that stepped forward 100 years ago to defend our values and helped shape our way of life. We are forever grateful for the huge sacrifice that was made.

He talked about the gene pool of talent that we have to recruit from. It is difficult for the armed forces because there is a certain age profile and a level of fitness that has to be expected, and it is competitive in this day and age. We are all aware of the challenges that we face, which is why we must forever compare ourselves with civilian attractions. A flexible service is one example of our being able to illustrate that what someone does in the armed forces is similar to what they might gain on civvy street.

He talked about the appeals process. I touched on the creation of an appeals authority, which would make sure that we carry out proper scrutiny. We do not expect the take-up to be huge. In Australia, which is operating a similar system, there is about a 1% take-up. We expect between 1,000 and 2,000 people, perhaps, at any one time, to take up this opportunity, which means that it would be prohibitive to provide detailed records. I will promise that when we present the armed forces covenant annual report, we will make clear the progress that has been made and give a full report on the impact of flexible service, including the take-up. That is very important.

I am grateful for the Scottish perspective. The hon. Member for West Dunbartonshire talked about his personal experience and those he knows. It reminded me that society is ever distant from those who serve. As we move forward, there is a disconnection from the direct recognition of what our armed forces do. Fewer and fewer of us have a grandfather or father who served and who can remind us of that bravery. That makes it all the more important that we look after our armed forces, and make it an attractive proposition in comparison with the other opportunities open to 18 to 20-year-olds.

The hon. Gentleman also talked about quality of life. I absolutely agree. It should be made very clear that we in this place talk about the professionalism of our armed forces as among the best in the world not because we have fantastic aeroplanes or tanks or ships and so forth or because of their training, but because of the value of individuals—the people—and it is the people we must look after. I would underline, as I like to do, that when someone joins the armed forces community, they never leave. At some point, they may retire and pack their uniform up and slide it over to the quartermaster, but they will remain associated with the armed forces in one form or another, and certainly psychologically, so the more that we can do as they serve and as they move into society as veterans, the better that will be.

The hon. Gentleman touched on housing. I know this has been an issue with Annington Homes and others. We are rationalising the real estate. The armed forces owns 2% to 3% of the land in the UK, and we no longer need that land. We are disposing of that to help with housing. With the reconciliation of bases and hubbing in certain locations, we are spending £4 billion over the next 10 years on that upgrade. The process is slower than I would like it to be, but we have to be patient and try to get the accommodation that is expected for our modern fighting armed forces.

Question put and agreed to.

Committee rose.

Draft Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2018

The Committee consisted of the following Members:

Chair: Graham Stringer

† Cowan, Ronnie (Inverclyde) (SNP)

† Donelan, Michelle (Chippenham) (Con)

Flint, Caroline (Don Valley) (Lab)

† Foxcroft, Vicky (Lewisham, Deptford) (Lab)

† George, Ruth (High Peak) (Lab)

† Heappey, James (Wells) (Con)

† Moore, Damien (Southport) (Con)

† Morris, Anne Marie (Newton Abbot) (Con)

† Norman, Jesse (Parliamentary Under-Secretary of State for Transport)

† Seely, Mr Bob (Isle of Wight) (Con)

† Shah, Naz (Bradford West) (Lab)

Sheerman, Mr Barry (Huddersfield) (Lab/Co-op)

† Tomlinson, Michael (Mid Dorset and North Poole) (Con)

† Turner, Karl (Kingston upon Hull East) (Lab)

† Villiers, Theresa (Chipping Barnet) (Con)

† Watling, Giles (Clacton) (Con)

† Williamson, Chris (Derby North) (Lab)

Nina Foster, Committee Clerk

† attended the Committee

Eighth Delegated Legislation Committee

Wednesday 17 October 2018

[Graham Stringer in the Chair]

Draft Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2018

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I beg to move,

That the Committee has considered the draft Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2018.

It is a pleasure to serve under your chairmanship, Mr Stringer. Following the UK’s decision to leave the European Union in the 2016 referendum, the Government have been working to develop a positive future relationship with the EU. As part of that, the Department for Transport has undertaken a significant amount of work with respect to the withdrawal negotiations themselves and to prepare for the range of potential outcomes from those negotiations. The best outcome is for the UK to leave with a deal, and we have put forward a serious and credible proposal for our future relationship with EU colleagues. However, although we remain confident of securing an agreement this autumn, we must make all reasonable plans to prepare for a no-deal scenario. To that extent, as the Department responsible for aviation, we have conducted particularly intensive work to ensure that there continues to be a functioning legislative and regulatory regime for aviation. The legislation is required only in a scenario in which the UK leaves the EU without a deal or an implementation period.

The European Union (Withdrawal) Act 2018 will retain directly applicable EU legislation in UK law on exit day to provide continuity and certainty to industry and consumers, without prejudice to the outcome of the negotiations. Some amendments to the retained EU legislation are required to ensure that the legislation continues to function effectively once the UK has left the EU. These amendments are technical and limited to what is needed for the legislation to continue to function.

We have the third-largest aviation network in the world after those of the United States and China, so the aviation industry is crucial to the UK’s economy. There are direct flights to more than 370 international destinations in more than 100 countries, and the aviation sector provides at least £22 billion to the UK economy every year. Ensuring that air carriers and aircraft operators are adequately insured is essential for consumers to be able to benefit from an industry that operates safely and effectively.

EU regulation 785/2004, on insurance requirements for air carriers and aircraft operators, requires carriers and operators to be insured in respect of passengers, baggage, cargo and third parties and against other risks, such as acts of war, terrorism, hijacking, acts of sabotage, unlawful seizure of aircraft and civil commotion. The amounts for which carriers and operators are required to be insured are measured in special drawing rights—an international reserve asset created by the International Monetary Fund. The EU regulation also requires carriers and operators to demonstrate their compliance with the minimum insurance requirements set out in the regulation.

Elements of the regulation were developed in the aftermath of the 9/11 terrorist attacks in the United States. Those make provision for exceptional situations in which a failure of the insurance market means that carriers are not able to demonstrate that they are adequately insured in respect of all the risks specified in the regulation.

The draft regulations that we are considering make the changes necessary so that the EU regulations, as retained by the withdrawal Act, continue to function correctly after exit day, alongside the domestic Civil Aviation (Insurance) Regulations 2005, which were made to implement the EU regulation. The withdrawal Act will ensure that the same minimum insurance requirements for air carriers and aircraft operators that apply today continue to apply after exit day. That will mean greater clarity for air carriers and aircraft operators regarding the insurance requirements that they must meet irrespective of the outcome of negotiations with the EU. The draft regulations help to ensure that the UK’s regulatory regime after exit continues to make the UK a safe and desirable place for passengers to travel by air.

The changes made by this statutory instrument fall into four categories. The first is those changes that are necessary to reflect the fact that the retained legislation will apply only in the United Kingdom, as opposed to all EU member states. For instance, the SI changes the scope of the retained regulation from

“a Member State to which the Treaty applies”

to “the United Kingdom”. The second type is those changes that are necessary to reflect the fact that EU processes set out in the regulation will not apply to the UK once it has left the EU. For example, the regulation requires member states to submit to the European Commission on request information on the application of the regulation. The SI amends that requirement so that the Secretary of State can request the Civil Aviation Authority to provide that information to him instead of to the European Commission.

The third type of change is to retain flexibility for the UK to adjust the required levels of insurance within the parameters set by the regulation, where such flexibility is currently provided for in the regulation. For instance, article 7 sets out the minimum insurance cover in special drawing rights per accident for aircraft according to mass. The regulation sits alongside requirements contained in multilateral treaties such as the 1999 Montreal convention. The regulation provides that the values in article 7 may be amended where this is required as a result of changes to international treaties. As the EU legislative procedure that enables such amendments will not apply once the UK has left the EU, the SI instead makes provision for the Secretary of State to amend those values by regulations if required as a consequence of changes to international treaties. We are committed to ensuring that these powers are subject to appropriate scrutiny, and have therefore provided that any such regulations made by the Secretary of State must follow the affirmative resolution procedure and be approved by both Houses of Parliament.

Finally, the SI will make two minor technical changes to domestic legislation that implements elements of the EU regulation, to ensure that where such legislation refers to the EU regulation, those references are aligned with the retained EU regulation as amended by the SI.

The SI will be essential to ensure that the EU legislation on insurance requirements for airlines and aircraft operators that will be retained by the withdrawal Act continues to work effectively in the UK from day one of exit. This will provide clarity to the aviation industry, ensuring that the legal requirements that apply in relation to insurance are clear immediately after exit and provide certainty to consumers that air travel in the UK will continue to be desirable and safe.

I hope that colleagues of all parties will join me in supporting the draft regulations. I commend them to the Committee.

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It is always a pleasure to serve under your chairmanship, Mr Stringer. I will keep my remarks very brief. As the Minister has already outlined, the draft regulations will make slight changes to EU regulations as they apply to UK law under the withdrawal Act, relating to specific insurance requirements for air carriers and aircraft operators. They are absolutely necessary, and the Opposition support them.

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I could indulge myself with a substantial discussion of the issues raised, but the hon. Gentleman—my friend on the opposite side of the House—has put his finger firmly on the point, which is that the draft regulations are essential and technical in nature. I am therefore delighted to content myself with inviting colleagues to support them.

Question put and agreed to.

Committee rose.