Civil Aviation Bill

Public Bill Committee, 21 February 2012.

Roger Gale (Conservative, North Thanet)

Good morning, ladies and gentlemen, and welcome. First of all, I give a particular welcome to hon. Members who have not sat on a Public Bill Committee before and to anyone who has not sat in on an evidence session before, because not every Bill has a session such as this. If you have any queries, please ask. We may not know the answers, but we will do our best.

I have a few housekeeping announcements to make. Members may, as long as I am in the Chair—either here or when we come to clause-by-clause consideration—take their jackets off if they wish. I and my fellow Chair will not be calling starred amendments that have not been tabled with adequate notice. Required notice in Public Bill Committee is three working days, so amendments should be tabled by the rise of the House on Monday for consideration on Thursday, and by the rise of the House on Thursday for consideration on Tuesday.

For those who need reminding—that includes me—or who are not used to Public Bill Committees, it might help if I explain how we proceed. First, we will consider the programme motion, which was considered by the Programming Sub-Committee last night. That may or may not prove to be a formality, but half an hour is available for debate if anybody wishes to discuss the programme motion. Assuming that that is carried, we will move to two motions—they are the wrong way round on the amendment paper, but that does not affect the proceedings—to deliberate in private and to publish written evidence. Once we have dealt with all that, we will go into private session, and members of the public will be asked to leave briefly while we discuss precisely how you wish to approach the lines of questioning. After that, we will go into questioning. I hope that that is all fairly straightforward.

Examination of Witnesses

Roger Gale (Conservative, North Thanet)

Good morning, lady and gentlemen. Thank you for joining us. I welcome you and remind you that this evidence session has to end on a guillotine at 11.30, when we will move to the next set of witnesses. From your left to right, I ask you to be kind enough to identify yourselves, please.

Roger Gale (Conservative, North Thanet)

Thank you very much indeed. We have received written evidence from you, but do any of you wish to make a brief opening statement before I open it up to my colleagues for questions?

Roger Gale (Conservative, North Thanet)

Thank you very much indeed for your assistance.

Theresa Villiers (Conservative, Chipping Barnet)

I would be keen to hear about your experience of dealing with the Civil Aviation Authority as a safety regulator. What are your views on the combination of safety and security regulatory functions in the same body? What potential advantages and drawbacks might that involve?

Theresa Villiers (Conservative, Chipping Barnet)

The panel has covered my follow-up question adequately.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

Chairman, I am sure that our guests will have seen that during the debate on Second Reading, quite a few comments were made about environmental duties and whether the CAA should provide for those. Could they comment on that and on the transfer of security costs to airports? I know that we have received submissions, for which we are very grateful, but some oral clarification of, or elaboration on, their different positions might be useful.

Roger Gale (Conservative, North Thanet)

You are nodding, Mr Siddall.

Roger Gale (Conservative, North Thanet)

By all means.

Priti Patel (Conservative, Witham)

We have already heard the word “cost” and about the economic implications for the cost of airports. Do you think the Bill places enough emphasis on the CAA to act as quite an efficient body? That brings into the mix duplication and not reinventing the wheel. Secondly, do you think that can be done within the scope of the Bill while keeping down costs and charges to airports?

Nicholas Dakin (Labour, Scunthorpe)

You seem, from your answers, to be broadly positive about the direction of the Bill. Your concern seems to be about the application or delivery of it rather than the policy direction. Have you any concerns about the policy direction that you want to highlight?

Mike Freer (Conservative, Finchley and Golders Green)

May I ask you about transparency of information? You welcome the Bill, as it puts the customer at the heart of the airport experience, but I would like to hear your views on an element of customer service where the Bill is silent. You whizz the customer through the airports, treating them very well, until they get to immigration. No transparency is proposed on UKBA customer service and I am interested to hear whether you think the Bill should be extended to include transparency on the customer service standards of UKBA at our airports.

John Woodcock (Labour, Barrow and Furness)

I just wanted to press you, Ms Gilthorpe, and anyone else who wants to come in, on what you mean in relation to how a simpler market power test could effectively work, given that this is undoubtedly a complex area that is difficult to negotiate. As a supplementary, could any of you expand on the views that you set out in written evidence on potentially including a secondary duty on the CAA to take account of the interests of airlines, given their special position?

Roger Gale (Conservative, North Thanet)

Emma Gilthorpe. You may touch on the previous issue if you wish.

John Woodcock (Labour, Barrow and Furness)

You say that it could quite easily be made simpler in market power, but how?

John Woodcock (Labour, Barrow and Furness)

So the issue is complex, but you would not put it on the face of the Bill?

John Woodcock (Labour, Barrow and Furness)

What is the secondary duty for airlines?

Roger Gale (Conservative, North Thanet)

Would the customer representative like to comment? Mr Harrison.

John Woodcock (Labour, Barrow and Furness)

Both of you so far have suggested, “It is just a given that we will serve the airlines, because it is in our interests to do so.” Could you not make the same case about the primacy of customers: “We do not accept that that stands for the primacy of customers, so why should we for airlines as a secondary duty underneath the primacy of customers?”

Fiona Bruce (Conservative, Congleton)

That leads neatly to my question. Could you comment on the implications of the extension of the ATOL scheme, as proposed in the Bill, from your perspective?

Jim Shannon (DUP, Strangford)

As you can probably tell from my accent, I represent an area—Northern Ireland—where we have two regional airports and other smaller ones as well. I am keen to get your thoughts on how this legislative change will affect the regional airports, particularly Belfast International and Belfast City.

Kwasi Kwarteng (Conservative, Spelthorne)

During the Second Reading debate, I was particularly interested in the provision for oversight of the CAA. What are your thoughts about that—particularly the fact that the CAA will not be subject to the National Audit Office?

Seema Malhotra (Labour, Feltham and Heston)

Do you have any particular concerns about the licence framework and the processes outlined for applying for or modifying licence conditions?

Nigel Mills (Conservative, Amber Valley)

A lot of the Bill is about licensing the airports with market dominance. Can the panel just give me their views on how many airports need to have that licence going forward? Now that BAA has lost Gatwick and may be losing Stansted, would it only be Heathrow that would ever be subject to this? Is that what you would like to see?

Fiona O'Donnell (Labour, East Lothian)

There is concern in Scotland about fewer airlines flying, especially domestic flights, and about there being less choice and competition for passengers. Do you think that the proposal for the CAA to have concurrent powers with the Competition Commission will in any way improve choice and competition for passengers?

Roger Gale (Conservative, North Thanet)

In winding up this session and leading in to the next, the Minister would like to put a couple of environmental questions to you.

Theresa Villiers (Conservative, Chipping Barnet)

This question is addressed to Ms Gilthorpe and Mr Hanks, as representatives of airports that are currently regulated. Would you agree that under the Bill, as drafted, you continue to be able to invest in measures that are focused on improving the environmental performance of the airport, even in the absence of a specific supplementary duty on environmental matters?

Theresa Villiers (Conservative, Chipping Barnet)

I have a second question on supplementary duties. I think that you have all indicated that you do not see a need for a supplementary duty on the CAA to look specifically at the concerns of airlines, so could you give examples of where the interests of airlines and passengers might conflict in a way that would reinforce the need to concentrate the CAA’s focus on passengers as its primary duty?

Roger Gale (Conservative, North Thanet)

Mr Siddall and Mr Hanks, do you have any final observations?

Roger Gale (Conservative, North Thanet)

Thank you very much indeed. In closing this session, Ms Gilthorpe, Mr Hanks, Mr Harrison and Mr Siddall, I thank you for your attendance and for the benefit of your opinions and information. The Committee is indebted to you.

Roger Gale (Conservative, North Thanet)

Good morning, lady and gentlemen. We are short of one witness, who we hope may join us later. Would you be kind enough, starting with Ms Hewitt, to identify yourselves, please?

Roger Gale (Conservative, North Thanet)

Thank you for joining us.

Theresa Villiers (Conservative, Chipping Barnet)

I would like to ask a question of all three panellists and to thank them for taking part today. How do you think the CAA could most effectively use the Bill’s information powers to promote environmental objectives and to ensure that passengers and consumers have a better understanding of the carbon impacts of their travel choices?

Roger Gale (Conservative, North Thanet)

Mr Kennedy, thank you for joining us. My notes tell me that you are the chief executive of the Committee on Climate Change. If I may, I will ask the Minister to put her question again to you, in case you wish to respond.

Theresa Villiers (Conservative, Chipping Barnet)

My question was whether you had any suggestions on how the CAA might use the Bill’s information powers to ensure that passengers have a better understanding of the carbon impacts of their travel choices and to further environmental objectives generally.

Henry Smith (Conservative, Crawley)

What is the view of the panel about the culpability of airports when it comes to ground transportation, which obviously can be a significant aspect of air pollution around airports but is not necessarily in the control of individual airport operators?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

We have just had the airport operators in and obviously they were strongly opposed to an environmental duty being introduced as part of the Bill. You are saying very similar things in welcoming the information requirements in the Bill on environmental matters, but the AEF’s briefing paper says that you support a statutory duty being introduced. Could you elaborate a little more on the strength of feeling on that aspect?

Roger Gale (Conservative, North Thanet)

I am anxious to make sure that Back Benchers are heard, but do you want to come back on that point, Minister?

Theresa Villiers (Conservative, Chipping Barnet)

Of course there is a consensus that we need to take very seriously the carbon impact of aviation. When it comes to measures to address that impact, however, is it not sensible to apply them in an even-handed and fair way across the airport sector rather than singling out particular environmental measures for airports that happen to have substantial market power and happen to be subject to economic regulation? Why should we link environmental measures specifically to economic regulation rather than looking across the board at the environmental impact of all airports when deciding to how to respond to climate change and other environmental matters?

Kwasi Kwarteng (Conservative, Spelthorne)

I wanted to pick up on a point you made. Where do you think there would be conflicts of interest between passengers and the wider public? I am not saying that there will not be, but I would be interested to hear where you think that might be the case.

Roger Gale (Conservative, North Thanet)

The airport operators that were asked to give evidence earlier were offered the opportunity to comment on the conditions that the CAA might impose on dominant airports and/or others. Does any of you have a view on the differential between what are described as dominant airports and other, smaller airports?

Roger Gale (Conservative, North Thanet)

Yes.

Roger Gale (Conservative, North Thanet)

I am trying to offer you the opportunity, if it is not a contradiction in terms, to bang your environmental drum. You have the ears of the Committee, so bang away.

John Woodcock (Labour, Barrow and Furness)

I was interested in what you said earlier, Mr Gorman, although I think this was implied in other people’s answers, about the reporting requirements. You said the information was already out there and that it was a case of putting it in a particular place. Can you expand on that? Are there specific additional requirements regarding the collection of information that you would see as necessary for reporting, or are we seriously talking about there being no additional burden at all?

John Woodcock (Labour, Barrow and Furness)

So the one thing you would see as good about voluntary reporting requirements is that you would probably not see an increase in the level of reporting that they would need to do, but that this would level the playing field for those who did not?

Jim Shannon (DUP, Strangford)

As I mentioned earlier in the scenario and example that I gave, aviation travel is much cheaper and the benefits for the economy are important. We need aviation contacts with China and Brazil so that we can take advantage of the economic pluses that come out of that.

At the same time, we have the environmental needs; I think specifically of Belfast City airport. It needs to expand. It needs to give flight opportunities and travel and at the same time a very vociferous group of people who live close by have a concern. Can the balance be struck? There was mention earlier of beating the drum. A Northern Ireland man can beat a drum probably better than anybody. But how would that work? Can we get a balance? Can we ensure that the airports can expand and bring the economic boost that comes with it and at the same time address the concerns of local people who clearly have issues to be addressed?

Nicholas Dakin (Labour, Scunthorpe)

We have understandably focused on general duties, licensing and publication of information, and those issues have been covered pretty thoroughly in your answers. Do you have any other areas of concern with the Bill as it is framed? The answer may well be no, which is quite a helpful answer.

Theresa Villiers (Conservative, Chipping Barnet)

Will you accept that under the current system, without an explicit environmental duty, the CAA has the ability to approve spending by regulated airports that is focused on environmental protection, whether that is noise or other environmental impacts? Under the current rules, it is clear that the CAA can take into account environmental matters, even in the absence of the sort of explicit duty that you would like in the new rules.

Theresa Villiers (Conservative, Chipping Barnet)

But is it not in the passengers’ interest that an airport acts responsibly? Surely that is why airports that are not regulated regularly invest in environmental mitigation measures without being forced to do so by any regulatory system.

John Woodcock (Labour, Barrow and Furness)

As a follow-up to that, there is clearly a question of who should enforce or oversee an environmental duty—the CAA or otherwise—but, on the wider question that was suggested before, is it not a bit naive to suggest simply that the airlines will naturally take into account their wider environmental obligations? If that were the case across the board, could we not just simply do away with environmental legislation?

Roger Gale (Conservative, North Thanet)

Any final thoughts? No? Thank you very much indeed. Ms Hewitt, Mr Johnson, Mr Gorman, Mr Kennedy—we are indebted to you. Thank you for taking the time and trouble to come this morning.

Linda Riordan (Labour, Halifax)

We will now hear oral evidence from Airlock Aviation Ltd and DHL Express UK Ltd. Welcome to our meeting. Will you please introduce yourselves to the Committee?

Theresa Villiers (Conservative, Chipping Barnet)

I echo the Chairman’s thanks to you for coming.

I would like to ask the question that I kicked off with this morning with the airports about views on the potential benefits of transferring responsibility for regulating security from the Department for Transport to the Civil Aviation Authority. What can we do in relation to our complementary efforts at reform to move to an outcomes-focused, risk-based approach to security?

Theresa Villiers (Conservative, Chipping Barnet)

Obviously, the CAA has a very strong safety record in securing very high levels of aviation safety, and it has done so on the basis of a safety management regime not dissimilar to the approach that we are now proposing for security. In terms of bringing the regulatory functions together, do you think that the CAA’s experience in safety might help it to deliver the sort of approach that you would like to see for security?

Theresa Villiers (Conservative, Chipping Barnet)

Your main expertise and the focus of your evidence here is on security, but it would be useful to hear your thoughts on the approach to economic regulation in the Bill generally and whether you feel that it would improve on the current regime for the economic regulation of airports.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

Ms McLaughlin, in the papers that we have received, two points that you have raised about the Bill are about how the arrangements will be applied to foreign airlines and the sanctions for poor management exceeding the costs without impacting the consumer. Could you elaborate on those two points? You said in your answer to the Minister that you are focusing on security as your area of expertise. Do you have any expertise on whether the Bill will have any detrimental effect on freight airlines as opposed to commercial passenger airlines?

Gavin Shuker (Labour, Luton South)

Can I ask about freight? We are aware that freight has been identified as a growing security challenge—as we saw, for example, in the East Midlands airport situation with the printer toner recently. At the heart of the Bill is an idea that we are moving towards outcome-based solutions. Is that a fair description of where the industry is right now? Presumably, politicians will want to get involved when there are high-profile events anyway. Does the Bill change that situation?

Gavin Shuker (Labour, Luton South)

Is there anything on the passenger side that you would like to offer?

Priti Patel (Conservative, Witham)

Building on the last point, we live in an ever-changing world when it comes to security, risks and compliance factors. That is just a fact of life. Do you both have a view on whether the CAA will have the capacity—that is probably the best word to use—to take on any real changes? Dare I say it, if our security situation changes, et cetera—one could argue that that is inevitable because of the world we live in—are we able to move quickly with new compliance, for example?

John Woodcock (Labour, Barrow and Furness)

Your example of garages is really interesting, but, obviously, you are dealing with a very different level of risk. The risk may be minute, but the potential effects are catastrophic. It is a safe assumption that that is what drove the blanket, very tough approach that was adopted in response to clear threats in the past. In light of that, could you give us any more specific examples that you can see of ways in which a risk-based approach can save money? What things are being done now that do not need to be done?

Nigel Mills (Conservative, Amber Valley)

Just to develop those responses, how would you compare the handling of security in Britain with the handling of security elsewhere in the world? Are we more effective but more onerous, or are we worse? How do you see it?

Linda Riordan (Labour, Halifax)

Can those Members wishing to ask questions please indicate that they wish to do so before I bring the Minister back in?

Priti Patel (Conservative, Witham)

I asked this question of the panel of airport operators who came in this morning. As the Bill currently stands, do you feel that the CAA will operate in an efficient manner, keeping down potential costs on airports, and more specifically for you both, cost to passengers and air freight shippers? This morning we kept hearing, interestingly, about costs and implications that the regulations might bring.

Seema Malhotra (Labour, Feltham and Heston)

I want to pick up on another point raised by Airlock Aviation Ltd: the issue of sanctions for poor management, how they might be implemented and how they should exceed the cost of compliance. Could you talk a bit more about that, and also whether there are any specific parts of the Bill, perhaps in relation to the penalties process, that might concern you?

Kwasi Kwarteng (Conservative, Spelthorne)

I am just going to pose a question that I asked in the earlier sitting with regard to the CAA and whether you felt there was enough oversight, particularly as it will not, under the current proposals, be subject to the National Audit Office. Do you have a view on that?

Kwasi Kwarteng (Conservative, Spelthorne)

That’s fair enough.

Jim Shannon (DUP, Strangford)

I am just curious to know if you are able to inform me. You had very strict security arrangements here in the United Kingdom and they worked well, but other countries may not do them so well. I was in Kenya and there were no security checks in relation to liquids and so on. I thought that was unusual, but that is just an example. Can you influence security in other countries through your aviation contacts to ensure that they can lift their levels of security? Do those measures have to be done by Governments, or can they be done business-to-business? I am curious to know how we can ensure that security levels increase. Make all the effort here and not elsewhere, and there is a gap.

Nigel Mills (Conservative, Amber Valley)

I am quite attracted by this process-based security checking, rather than checking for holes in fences, as you put it. If you move to that, how do you handle the risk of having a huge queue and airlines moaning that passengers are delayed, and thinking, “Well, we’ll just let a few go through without the random checks and we will stop making them taking their belts and shoes off”? Do you not risk having a process in place that looks perfect on paper, but in practice, under pressure, is overlooked? That is quite hard to check on a process base, rather than a spot check.

Nigel Mills (Conservative, Amber Valley)

My point was not that the process should be different day to day, or that the standards on paper would not be different, but it is that problem of, “We’ve got a queue and people are screaming and moaning, can we relax it a bit because it will get them through?” Is that a risk that you ever see happening, or would that be such complete madness that you do not think any operator would ever behave like that?

Julie Hilling (Labour, Bolton West)

Is there a risk that different processes will be in operation at different airports, and even within airports, if airlines are taking responsibility, confusing the passenger over what they can do and what they cannot do at different airports? If it is outcome-driven and if the inputs are different, would it be that in one place you could take your water through and in another place you could not and so on?

Julie Hilling (Labour, Bolton West)

There are two parts to this. First, is there a risk that, at some airports where the risk is thought to be less, we could have an issue where security was less? At the moment, trans-Atlantic flights are perhaps most at risk, but terrorists will always look for any opportunity, so is there that risk? The other part that goes alongside that is: if it based on profiling and so on, is there more risk that Asian people, for instance, will be targeted more than white people or particular groups of people for that additional surge in security? How do we ensure that it is not discriminatory?

Julie Hilling (Labour, Bolton West)

So, overall, is there not a worry that, if things are outcome-led rather than input-led, there is a potential flaw in the system? Currently, as I understand it, everybody has to have the same input to achieve the result. Going forward, it would be the outcome that is important, but the terrorist only has to get through once.

John Woodcock (Labour, Barrow and Furness)

Following on from Julie Hilling’s point, potential terrorist attacks involve people who are trained to get through systems. If your checks are based on behaviour, how do you avoid an increased risk of people who would always be checked as part of a blanket check being trained not to show risky behaviour so that they can get through?

Theresa Villiers (Conservative, Chipping Barnet)

Just a moment ago, you pretty much took the words out of my mouth. I was about to ask you about the impact of an outcome-focused approach. Obviously, the imperative issue for the Government is that they will not compromise on today’s high levels of security. The reform is about delivering security in a more effective and efficient way. There is a strong case for saying that giving the people who deliver security on the ground more responsibility for how they achieve the outcomes they are set by the regulator could lead to higher levels of security and even more effective means of keeping passengers secure. Do you agree? Do you have any further examples of how we can involve people who actually deliver services on the ground and give them responsibility? That has happened in the area of safety, and it has improved safety levels. Can we expect that to happen with security as well?

Theresa Villiers (Conservative, Chipping Barnet)

One of the complaints about the current system from some airport operators is that it does not enable them to deliver security in as passenger-friendly a way as they would like. It would be useful if you could share with us how you think an outcome-based approach might address that concern about the way the rules work.

Theresa Villiers (Conservative, Chipping Barnet)

Finally, I would like your view on the degree of engagement between the Government and the various sectors of industry, in terms of taking forward the reform in the Bill and the wider outcome-focused reform that we have been talking about.

Gavin Shuker (Labour, Luton South)

Ricky, perhaps you can help me out. At Heathrow and Gatwick, what proportion of flights is freight-related at those dominant airports?

Gavin Shuker (Labour, Luton South)

Okay. Is there tension between the competing needs and capacity, particularly at those dominant airports, and between freight and passenger travel as well?

Gavin Shuker (Labour, Luton South)

Yes.

Gavin Shuker (Labour, Luton South)

One role of the legislation would be to allow the CAA to have more flexible conditions about how it sets prices, for example, at those dominant airports. Does that introduce risk into your business? Is it something that you view fundamentally as a good or bad thing?

Gavin Shuker (Labour, Luton South)

Thank you.

Linda Riordan (Labour, Halifax)

If there are no further questions for the witnesses, that brings us to the end of our business this afternoon.