Civil Aviation Bill

Public Bill Committee, 23 February 2012.

Examination of Witnesses

Roger Gale (Conservative, North Thanet)

We will now hear oral evidence from the Civil Aviation Authority. Good morning, gentlemen, thank you for joining us. Please introduce yourselves for the sake of the record.

Roger Gale (Conservative, North Thanet)

It is good of you to give up your time this morning. Minister.

Theresa Villiers (Conservative, Chipping Barnet)

I would like to echo the Chairman’s words and thank you for coming along.

One of the main improvements I see the Bill delivering is the ability for the Civil Aviation Authority to regulate in real time, rather than being so dependent just on a big exercise on price controls every five years. Perhaps you could explain how that flexibility will help you serve the interests of people using UK airports.

Roger Gale (Conservative, North Thanet)

Mr Osborne, do you want to add to that?

Theresa Villiers (Conservative, Chipping Barnet)

In the Committee’s discussion so far, there has been a focus on some environmental matters. It would be useful to know whether you are confident that the Bill will enable you to authorise and encourage investment by airports in projects designed to mitigate their environmental impact.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

Good morning, gentlemen. May I follow up the Minister’s inquiries on duties? The Bill is broadly welcomed, and it is accepted that your reporting and publishing expectations will mean greater clarity and consistency in information from across the industry. However, do you not think that a statutory duty on environmental matters would strengthen your hand and make airports comply more with best practice? While I am on duties, do you have an opinion on whether, as the airlines in particular have suggested, you should have a secondary duty to look at the airlines, not just a primary duty for the passenger or the consumer?

Fiona Bruce (Conservative, Congleton)

The Bill provides for the transfer of new functions to the CAA, and I am thinking of aviation security compliance in particular. How will the CAA ensure that it has the competence and capacity to carry out those new functions?

Fiona Bruce (Conservative, Congleton)

Can I just probe you a little about how you actually propose to tackle that in practice?

Fiona Bruce (Conservative, Congleton)

Thank you. Just one more question, if I may, Mr Chairman. The CAA is currently both the economic regulator and the aviation safety regulator. It is now to become the security regulator, and concerns have been expressed that there is perhaps a danger of a conflict of interest between your economic and security regulation functions, as proposed. What you do think about that?

Roger Gale (Conservative, North Thanet)

Mr Osborne, do you want to add anything to any of that?

Gavin Shuker (Labour, Luton South)

Just coming back, Mr Haines, you mentioned the licensing regime and that flexibility is helpful in resolving high-profile incidents. You mentioned, for example, the snow at Heathrow in December 2010. As I recall, BAA measured something like 70 different conditions and only breached four during that period. In moving to a more flexible licensing regime, can you outline how that would be more effective for the CAA’s role in sorting out problems such as snow at Heathrow?

Gavin Shuker (Labour, Luton South)

You also have the ability to lay financial penalties when those conditions are breached. Can you outline the nature of those financial penalties for us?

Gavin Shuker (Labour, Luton South)

You mentioned that the penalty could go up to 10% of annual turnover, but the daily rate is only 0.1%. Is that of that day’s turnover?

Gavin Shuker (Labour, Luton South)

So that strikes me—

Gavin Shuker (Labour, Luton South)

So off the top of my head, that is about a third of the daily turnover of an airport’s operation?

Gavin Shuker (Labour, Luton South)

Do you feel that that is a sufficient level of daily fine to be able to give you the powers to enforce the licensing conditions?

Mike Freer (Conservative, Finchley and Golders Green)

There are two areas that I should like you to comment on. First, if we look at dominant airports, and we have been talking about Heathrow and how you could intervene, it seems to be related to their dominance in the UK market. If you are looking to intervene on Heathrow, how would you balance the impact of your intervention on the UK market against Heathrow’s competitors—Paris, Schiphol, Madrid and so on? How do you balance the impact across Europe, not just on the UK market?

Mike Freer (Conservative, Finchley and Golders Green)

I turn to the second point on publication of information. You talked a lot about your primary duties—the end user. My view is that you are able to publish information about the customer experience for about 90% of the customer journey, but when they get to the arrivals hall, there is a black hole of information. How would you feel about your duties being extended to publication of information on the performance of the UK Border Agency on things such as queue times in terminals?

Fiona O'Donnell (Labour, East Lothian)

Good morning, gentlemen. Returning to the duty for providers of air transport services to publish information about their environmental performance, how do you think customers would access that information? What information would be there, and what format would it be in?

Fiona O'Donnell (Labour, East Lothian)

Perhaps I might push you just a bit further. I realise that the consultation needs to take place, but do you think that the accessibility of such information should be the same as with white goods labelling, which you mentioned? Should that information be available before someone chooses to use the service?

Fiona O'Donnell (Labour, East Lothian)

So you could not proceed to booking a flight until you had that information in front of you?

Kwasi Kwarteng (Conservative, Spelthorne)

In this whole process, I am concerned about the governance issue, which you may have heard about. It seems odd that you are the only economic regulator that is not subject to the National Audit Office. What are your thoughts about that? Do you feel that that is anomalous? Is it something you might want to change?

Julie Hilling (Labour, Bolton West)

May I just pick up on two areas? First, following on from Ms Bruce’s points about the transfer of security duties, the trade unions expressed a great deal of concern when they came before the Transport Committee about the flight of staff who would choose to stay within the civil service and look for other opportunities, rather than transfer across to the CAA. Is that a concern to you?

Julie Hilling (Labour, Bolton West)

One thing the trade unions raised with us was the issue of pensions. I know we will be talking to the trade unions, but do you see any resolution in that area?

Julie Hilling (Labour, Bolton West)

Thank you. On inter-terminal competition, when do you think transferring terminals would be a good thing to do?

Julie Hilling (Labour, Bolton West)

Therefore, do you think it is good to have it in the Bill?

Nigel Mills (Conservative, Amber Valley)

At the risk of asking you to put the cart before the horse again, how many airports do you think you would need to issue a licence to? Will it just be Heathrow? Do you think that, now Gatwick has been sold, it might not need to be company-regulated? What about the position for Stansted?

Nigel Mills (Conservative, Amber Valley)

Not everything that goes wrong for the passenger is the fault of the airport operator. Quite often it could be the airline that has not got the plane there, or gets the baggage handling completely messed up. Do you have the power to fine the airline directly if it is at fault for causing significant delay, or would you effectively have to fine the operator of the airport and have it pass it on somehow?

John Woodcock (Labour, Barrow and Furness)

May I briefly take you back to security? What level of concern, if any, do you have on the prospect of taking on a risk-based security approach, given that it is a critically important area that has the potential to be highly unpredictable?

John Woodcock (Labour, Barrow and Furness)

That is very helpful. May I ask a brief supplementary? You say that there is a long way to go, and the reason why I raised risk base is that there is a question of whether you could couple the two. Could you transfer only when you have risk base? Is your view, given what you have said about that, that a coupling would not be an effective way to go?

John Woodcock (Labour, Barrow and Furness)

You said in answer to the first question that you are not averse to some kind of environmental obligation, but that we would need to be careful about how it was given to you. How do you think it could work?

Mark Reckless (Conservative, Rochester and Strood)

I have a question for Mr Haines on governance. It is proposed that the CAA be given significantly greater powers. Do you think that, to ensure proper parliamentary oversight of those powers, it would be appropriate for the chairman and/or the chief executive of the CAA to be subject to pre-appointment scrutiny by the Transport Committee?

Seema Malhotra (Labour, Feltham and Heston)

Just building on the discussion around the environmental duty, one issue where the Bill could go further is a potential noise mitigation scheme for local residents and businesses that may be within the airport area—or possibly slightly outside, depending on where the noise impacts were greatest. What is your view on whether some form of compensation scheme could or should be part of the licensing arrangements and regulated as part of the overall changes?

Iain Stewart (Conservative, Milton Keynes South)

First, I draw attention to my entry in the Register of Members’ Financial Interests.

Secondly, I want to return to the discussion about the provision of consumer information, which clause 83 deals with. Last month, the CAA announced the new consumer panel, and you are going to recruit a chairman in the spring. To what extent do you envisage that panel having a role in shaping the type of information provided and the format in which it is presented?

Iain Stewart (Conservative, Milton Keynes South)

In respect of the type of information that consumers would find helpful, the services are provided by different suppliers: some by the airlines, some by the airports and some will relate to ease of access to airports—the whole public transport system nearby. Do you have a view on how you are going to pull all that together in an easily accessible format?

Chris Heaton-Harris (Conservative, Daventry)

I am returning to governance, I am afraid. Regulators occasionally make mistakes. If the people you regulate have an issue, whether individuals or businesses, what routes do they currently have available to them? Given the new powers that this Bill gives you, if there are any new routes out there, what are they—or should there be new routes?

Roger Gale (Conservative, North Thanet)

Do any Committee members have further questions?

Gentlemen, is there anything that you would like to add before we wrap up this morning’s session?

Roger Gale (Conservative, North Thanet)

In that case, if Committee members have no further questions, that brings us to the end of our business this morning.

Mr Haines and Mr Osborne, I thank you very much indeed for helping us out. We are most grateful to you. The Committee will sit again to take evidence at 1pm this afternoon.

Examination of Witness

Roger Gale (Conservative, North Thanet)

We shall now take oral evidence from Passenger Focus. Welcome to the sitting. Would you care to introduce yourself for the benefit of those who cannot see your nameplate?

Roger Gale (Conservative, North Thanet)

Thank you for coming. The Minister will start the questioning.

Theresa Villiers (Conservative, Chipping Barnet)

I would be very interested to hear your thoughts on the appropriateness of moving to a system in which the primary duty on the Civil Aviation Authority is to have regard to the end-user, and on how that compares with your experience in other regulated sectors.

Theresa Villiers (Conservative, Chipping Barnet)

That is very welcome. The CAA is reforming its approach to consumer matters with its proposed new consumer panel. Part of its remit will involve research on what passengers want. Do you have any thoughts that you could express to us as a result of your experience on these matters? I ask that because of course passenger-focused research has proved extremely useful in other sectors of the transport industry.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

One aspect of the Bill is the suggestion of having inter-terminal competition in future. Have you had a chance to look at that, and do you think it would be appropriate in the UK, given that it is not expected to be relevant at this point in time? We have been told that it has been incorporated into the Bill so that in the future the CAA will not have to come back to Parliament if it does become appropriate.

Secondly, there is a clear difference of opinion between airports and airlines about airlines having a secondary duty. The CAA was very strong this morning in its view that there should be a secondary duty. Is that something you have had a chance to look at?

Mike Freer (Conservative, Finchley and Golders Green)

Mr Smith, you welcomed the Bill, particularly because it puts the user at the heart. The publication of information provision seems to stop at the arrivals hall, which is a fairly big part of the customer experience. Do you have a view on whether the provisions on the publication of information—on, say, queuing times—should be extended to include the UK Border Agency operation at the arrivals hall?

Gavin Shuker (Labour, Luton South)

Mr Smith, thanks for coming in today. Thinking about your experience in research, particularly in the rail industry, passengers will report general levels of satisfaction for different reasons—they could be related to the rail company, to Network Rail, the Office of the Rail Regulator. Various people are involved in that. Translating that into the airline experience, how easy do you think the CAA will find it to look through that information and correctly discern where problems lie? Various people are involved in that. Translating that into the airline experience, how easy do you think the CAA will find it to look through that information and correctly discern where problems lie? As we know, there are airlines, airports and the UK Border Agency, for example. How difficult is it, when you get the raw information, to divide up whose responsibility problems are?

Gavin Shuker (Labour, Luton South)

In terms of the Bill, as you understand it, giving those powers to the CAA, do you see the CAA having any problems in being able to enforce its will on different parts of the industry?

Nigel Mills (Conservative, Amber Valley)

One of the issues passengers have with airports and airlines is that you get a headline price for your flight, but by the time you have paid baggage charges, seat charges, trolley fees and, heaven forbid, use-of-toilet fees, and you have been corralled through a duty-free shop where people try to flog you drink and cigarettes, you feel the system has milked you from every angle. In terms of the information passengers need, do you think airports should be made, in the way that airlines now are, to publish all the different charges they will try to sneak in from when passengers get someone to drop them off by car and they finally get on the plane?

Nigel Mills (Conservative, Amber Valley)

On that topic, one thing that must give passengers some comfort is that if an airline—especially a charter airline—goes bust on them, they will get flown back or they will get a refund. It is not easy for many passengers to work out what is actually covered by the ATOL regime, or similar regimes, and what is not. Do you think the extensions the Bill proposes to such regimes will help passengers understand when they are protected and when not?

John Woodcock (Labour, Barrow and Furness)

Can I just pick you up on what you said about the more information the better? Give me your views if you can about simplicity and clarity. Can there not be a danger of confusion with too much information? Do you have any insight in relation to that into the environmental information that is to be published, and whether it should be in a particular form? I do not know how much you have looked at it so far.

Henry Smith (Conservative, Crawley)

Following on from Mr Woodcock’s question, I agree with your assessment that as much information as possible is important. With specific regard to environmental data, which the CAA will have a duty to publish under the Bill, do you think that will really affect passenger choice as to which airport they use? Or is this just an additional piece of information? Will it change travel habits in any real sense?

Fiona O'Donnell (Labour, East Lothian)

Could I press you further on that? We discussed the same question this morning and compared the way that white goods are given energy-efficiency ratings. Do you think part of the reason why the public do not really engage with environmental issues when it comes to transport has to do with the way the information is presented to them?

John Woodcock (Labour, Barrow and Furness)

To follow on from that, why do you think it is a good thing that the lack of competition means that there should be a higher level of information? If you are profoundly sceptical as to whether it will change behaviour, why would you put those reporting requirements on?

John Woodcock (Labour, Barrow and Furness)

So I probably was not clear enough in my initial question, when I was actually talking about environmental information. What value do you think it would have?

Pat Glass (Labour, North West Durham)

Mr Smith, you have probably answered my question. How far do you think people make green choices on the basis of the information that they have? Before I came into Parliament, I worked for a company and every time I made a journey or had a ticket, they wrote on that ticket the impact of the journey, so something was said. If I went by rail, they would tell me what the impact would be—and the same in respect of going by air or driving. That had a profound effect on me and my choices. People make better choices if they have the right information.

Gavin Shuker (Labour, Luton South)

I am afraid, Mr Smith, that I am going to draw on you and your experience of data in this situation. An issue that came up earlier was that there are obviously a number of things that individual airports will monitor. I gave the example of Heathrow, where, during the period of snow and disruption in 2010, they hit some 90% or 95% of their own targets, but missed on the one big target, which is running an airport successfully.

Do you think that a light-touch form of regulation that does not look at information in individual silos is better, more generally, and would you ask the CAA to adopt that?

Roger Gale (Conservative, North Thanet)

Nigel Mills, last question.

Nigel Mills (Conservative, Amber Valley)

Two questions, Chair, if I am allowed.

Roger Gale (Conservative, North Thanet)

Last two questions.

Nigel Mills (Conservative, Amber Valley)

I always associate Passenger Focus with the rail industry. Do you currently have a role in the air industry and do you think that you should have? Would you like to have such a role?

Nigel Mills (Conservative, Amber Valley)

I presume what you see from your rail passenger surveys, or parts of them, is complaints about how much it costs to buy food or drink on long train journeys or even at stations. For most rail passengers, you pretty much have a choice: you can bring it from home or it might only be a short journey. For a lot of air passengers, they are not legally allowed to take any drinks through security, so if you have a long flight, you are pretty captive in terms of whatever they want to charge. Do you think there is some need for regulation on the level of charges for passengers once they are in that captive place?

Roger Gale (Conservative, North Thanet)

On that note, Mr Smith, if you choose to go away and do some work and send it to the Committee, I sure it would be welcome. I thank you very much indeed for taking the trouble to come this afternoon and for giving us the benefit of your opinions. You are most kind.

Examination of Witnesses

Roger Gale (Conservative, North Thanet)

Good afternoon, gentlemen. Thank you for joining us. Would you like to identify yourselves, please?

Theresa Villiers (Conservative, Chipping Barnet)

I would like to start with a very general question about your thoughts on the potential advantages of combining security and safety functions in the same regulator, and how best we can ensure a smooth transition between responsibilities from the DFT to the CAA in relation to the security functions in the Bill.

Theresa Villiers (Conservative, Chipping Barnet)

I want to come back on one point. I am keen to hear whether you could expand on your concerns about safety being squeezed out, because, obviously, there are other sectors where economic regulation and safety are combined—in the rail industry, for example. I draw reassurance from the fact that the CAA’s reputation as a safety regulator is almost unparalleled in the world. The CAA is one of the world’s leading safety regulators and is highly successful. I am not convinced that an additional responsibility will compromise that very strong track record, so it would be useful if you could expand on why you think it might.

Henry Smith (Conservative, Crawley)

The Bill talks about the possibility of inter-terminal competition within an airport. I would be grateful for your views on whether that would be an advantage for passengers, or whether it will cause problems.

John Woodcock (Labour, Barrow and Furness)

That leads into my question, actually. One proposal that has been put to the Minister is that you would not have a transfer until you had that risk-based approach to security. Can you expand a little more about what you think that would mean in practice, and the implications that could flow from it?

John Woodcock (Labour, Barrow and Furness)

Why do you not accept the Civil Aviation Authority’s claim, which is that a similar risk-based approach is working okay in the safety arena?

John Woodcock (Labour, Barrow and Furness)

Can you expand on that?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

Both your submissions correctly focus on the impacts on your members, which is entirely logical. Having had a chance to look at the Bill, do you or your members have any views on, or welcome, its other aspects? Mr McAuslan, from my time at the Department for Transport, I remember your statistic about 58% of pilots going through security and feeling more stressed by the time they reach the plane. Will you expand on why pilots feel that going through routine security gives them additional difficulty and causes greater stress?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

Do you have any general views on the Bill now that you have had a chance to look at it, given that you are a professional in the industry with great experience?

Julie Hilling (Labour, Bolton West)

I want to pick up on a particular area of concern that I raised this morning. When you gave evidence to the Transport Committee, you talked about the risk of losing expertise in security. In your evidence today, you have referred to potential secondments, rather than total transfers of staff. Does that happen anywhere else in the civil service in relation to other bodies? Do people ever remain employed by the civil service while being managed by another body, with the cost head then going to that other body, too?

Gavin Shuker (Labour, Luton South)

I want to pick up on some of the uncertainty that the legislative changes create for the industry. Mr Moloney, you are obviously concerned about your members. Do you have an expectation that by changing these different roles, some of your members will lose their jobs?

Gavin Shuker (Labour, Luton South)

Obviously, there is a shift from the public purse on to the industry in terms of the cost of these reforms. Does that add to any sense of uncertainty? Do you feel that the industry itself might put a downward pressure on the amount of money it gives which perhaps the Government might not?

Mike Freer (Conservative, Finchley and Golders Green)

The budget airlines would counter that by saying that their record on passenger safety is better than some of the more established airlines’, even though they have driven down costs considerably. Is it always true that purely a downward pressure on costs leads to a weakening on passenger safety?

Roger Gale (Conservative, North Thanet)

Any further questions. No? In that case, that brings us to the end of the session. Thank you very much for joining us this afternoon, Mr McAuslan and Mr Moloney. We are grateful to you.

Examination of Witness

Roger Gale (Conservative, North Thanet)

Good afternoon, Dr Humphreys. Please identify yourself for the record.

Theresa Villiers (Conservative, Chipping Barnet)

I am of course acutely aware that the appeals process has been a matter of strong focus by the airlines. Would you agree that the Bill gives airlines a much more effective appeal right than the judicial review, which is the only option available to you under the current regulatory regime?

Theresa Villiers (Conservative, Chipping Barnet)

That was indeed very useful input, without which we could not have come up with the package that is now in the Bill.

I am sure that the Committee would be interested to hear your views on some of the environmental issues that we have been discussing during our early sittings. Could you explain why your membership does not feel it necessary to include an environmental duty for the CAA in relation to economic regulation?

Roger Gale (Conservative, North Thanet)

Dr Humphreys, you have referred to a document, which you are entitled to do. If you would like to make it available to the Committee, we will ensure that members have sight of it, if that would be helpful to you.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

Dr Humphreys, most people who have sat in that chair over the past day and a half have disagreed with your organisation’s view on a secondary duty in relation to the airlines. You will have heard the arguments why such a duty is not considered necessary in the Bill, and it is not included in the Bill. Would you like to articulate why your organisation still believes that it ought to be?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

You mentioned terminals. I do not see any reference to the proposal for inter-terminal competition in future, mentioned and provided for or dealt with in the Bill. Do you have a view on inter-terminal competition?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

One witness this week also referred to JFK and said it was one of the most expensive airports in the world. I take it that the Virgin terminal was the market leader in efficiency and cost.

Mike Freer (Conservative, Finchley and Golders Green)

Representing the airlines, your clients or your organisation will spend a great deal of money cosseting the passenger for most of their journey. However, for the last, say, 10% of their journey, when they are dumped in the arrivals hall, all that customer experience work can be unravelled. In the Bill, there is a duty on publication of information. Do you have a view on whether that duty should be extended, say, to the customer service operated by UKBA?

Mike Freer (Conservative, Finchley and Golders Green)

You have only just got through passport control.

Mike Freer (Conservative, Finchley and Golders Green)

I didn’t particularly want to open the can of worms about UK border security. I was thinking about the publication of information about queue times and maybe even staffing levels. Do you think that would be a helpful step?

Julie Hilling (Labour, Bolton West)

I wonder whether you can help me; I am trying to be clear about what the Bill does or does not do. In your evidence, you said:

“These failings have resulted in excessive price increases and poor quality service at regulated airports.”

Could you help me by identifying the failings that did that?

Julie Hilling (Labour, Bolton West)

Do you think the Bill will resolve those issues?

Julie Hilling (Labour, Bolton West)

But if you remain outside that, will that still be effective?

Julie Hilling (Labour, Bolton West)

The bit that you have been saying about the secondary duty.

Julie Hilling (Labour, Bolton West)

I am just trying to get my head around whether you think that that would still happen if you are not part of the secondary duty. Why is this Bill going to solve the problems?

Roger Gale (Conservative, North Thanet)

Any further questions?

John Woodcock (Labour, Barrow and Furness)

Can you give any examples of ways in which you think that consumers could be ultimately helped by giving airlines a secondary duty? You stated it, but I wonder if—

John Woodcock (Labour, Barrow and Furness)

You mentioned decisions on baggage handling, for example.

John Woodcock (Labour, Barrow and Furness)

Do you think that consumers currently understand whether they are financially protected in the event of collapse?

John Woodcock (Labour, Barrow and Furness)

Yes.

John Woodcock (Labour, Barrow and Furness)

That gives you the freedom to tell us what you personally think.

Nigel Mills (Conservative, Amber Valley)

You will be aware that some smaller airports have concerns about some of the additional costs that the Bill will provide. They will struggle to pass them on to the airlines. Do you have any comments about that concern? Do you think it really will be a problem?

Nigel Mills (Conservative, Amber Valley)

Yes. As a second question, how many UK airports do your members think need economic regulation?

Nigel Mills (Conservative, Amber Valley)

Even after Stansted is sold by BAA?

Nigel Mills (Conservative, Amber Valley)

One final question, if I may, Mr Chairman. Most of us would agree that competition has driven many more routes from many more airports than I can remember there being 10 or 15 years ago. There is a concern that some of the regional routes into Heathrow may be under threat, especially following a recent change of ownership. Do you have any thoughts on whether there is any need for the Government to be involved in ensuring that links from, say, Belfast and Scotland into Heathrow, are maintained going forward?

Seema Malhotra (Labour, Feltham and Heston)

If I understood you correctly, you were fairly clear at the beginning of your evidence that there should not be any further environmental duties in the Bill. Do you think there needs to be anything in there that recognises the impact, of noise particularly, on local residents around an airport?

Seema Malhotra (Labour, Feltham and Heston)

Could you elaborate on those?

Mike Freer (Conservative, Finchley and Golders Green)

Following up on the, if you like, unforeseen foreseeable, are you saying that if noise became part of the regulatory framework and the environmental package, it could hasten the demise of Heathrow and give further impetus to a new airport in, say, the Thames estuary? I apologise if I have drifted slightly, but I think it is always important, when we discuss tightening up or adding new regulations, that we look at all the potential impacts it might have.

Mike Freer (Conservative, Finchley and Golders Green)

May I follow through on that?

Roger Gale (Conservative, North Thanet)

You can try.

Mike Freer (Conservative, Finchley and Golders Green)

Allowing that there may well be existing rules, and assuming that the CAA starts to flex its muscles on noise abatement and environmental matters, if you follow the logic, surely that might make Heathrow environmentally unsustainable on whatever grounds, which would then hasten the argument for another airport. I am asking not that you agree that we should have another airport, but whether my logic is correct in that it could flow through Heathrow’s becoming environmentally unsustainable.

Julie Hilling (Labour, Bolton West)

I want to pick up on the ATOL stuff. I will have one little try to see whether you can expand on that. What are the reasons for some of your members’ belief that airlines should be brought into ATOL? Why do others think they should not be brought into ATOL?

Julie Hilling (Labour, Bolton West)

Do they justify that on competition grounds? Most of us think that if it looks like a package and feels like a package, it should be a package, although we then discover that, if we are stranded somewhere or parts of our holiday collapse, it is not a package. Can they justify in any way why they feel they should be outside?

Gavin Shuker (Labour, Luton South)

At the moment, the CAA has the ability to enforce fines where there have been contraventions of licences. In BATA’s view, how well do you feel the CAA has done as custodian of that power so far?

Gavin Shuker (Labour, Luton South)

I take that point, and I am also aware that individual airlines will jump up and down and go crazy at periods in which airport operations grind to a halt. What is the best way, in your opinion, in which the CAA can use the powers in the Bill, and those it has more generally, to ensure that airport operators provide the kind of service that end passengers would expect?

Gavin Shuker (Labour, Luton South)

Just to summarise your position, you welcome the provision of financial penalties in the Bill.

Roger Gale (Conservative, North Thanet)

Are there any further questions? Dr Humphreys, is there anything you wish to add?

Roger Gale (Conservative, North Thanet)

In that case, thank you very much. You will not mind my saying that you have skated across some fairly hazardous ice very skilfully indeed.

Roger Gale (Conservative, North Thanet)

Good afternoon. Would you identify yourself please?

Roger Gale (Conservative, North Thanet)

Thank you for joining us, Mr Tanzer.

Theresa Villiers (Conservative, Chipping Barnet)

Would you explain why ABTA is supportive of moves to extend air travel organisers’ licence protection to more holidays and more consumers?

Theresa Villiers (Conservative, Chipping Barnet)

It would be good to hear your thoughts on ABTA’s views about proposals to extend ATOL protection to more holidays, and therefore more consumers.

Theresa Villiers (Conservative, Chipping Barnet)

Yesterday, in the Select Committee on Transport, I was asked, “Why don’t you just ask consumers to get insurance and sort themselves out?” In your view, what would be the downside of a situation that was entirely dependent on consumers seeking out travel insurance to cover themselves, in relation to insolvency of tour operators or other providers of holidays?

Theresa Villiers (Conservative, Chipping Barnet)

Obviously, the Bill’s provisions are particularly focused on giving the Government power to bring airlines in at some point in future, if the appropriate impact assessments and so on indicate that that is the right thing to do. What is ABTA’s view on whether airlines should be part of the ATOL scheme?

John Woodcock (Labour, Barrow and Furness)

Presumably, therefore, you would think that this power should be required in the Bill, and not simply enabled by it, with a decision at some later date.

Nigel Mills (Conservative, Amber Valley)

I agree with the sentiment that what is important is that people booking holidays should clearly know whether they are protected, rather than being in the horrible position where you assume you are but you are not sure.

Do you think this issue is wider than package holidays that involve air flights? Does it not extend to all package holidays, whether you are travelling by coach or something else? I assume you are familiar with Skiing-Europe and the various schools that have issues, which frankly took every reasonable measure to think they were protected by the bonding scheme, only for the insurance company to revoke it. Do you think we should be having a wholesale reform to ensure that all package holidays, whatever the transport that takes you abroad, are properly protected?

Nigel Mills (Conservative, Amber Valley)

Where would you draw the line between what is a package and what is not? If I leave here and go and book a flight on Ryanair, for example, it will offer me an allegedly cheap hotel and car hire at some stage in the booking process.

I might think that I have booked a package if I click that hotel or car hire link, but I suspect that I am just being taken to a new separate non-linked booking with a car hire company or a hotel company. Do you think that all that should be a package, if that is what is happening?

Julie Hilling (Labour, Bolton West)

Why is the scheme currently in deficit? How has that arisen?

Julie Hilling (Labour, Bolton West)

Could I just clarify—I appreciate that you are saying that you are not 100% certain on this—that your belief is that the deficit is because the fund has had to pay out for currently uncovered repatriations?

Julie Hilling (Labour, Bolton West)

Thank you. I was very surprised to discover when I started to look at all this—I took out my travel insurance and I booked my holiday—that pieces of that would not be covered. Could and should the insurance industry be doing more? Where I am coming from is that people will think that they are insured.

Julie Hilling (Labour, Bolton West)

My understanding is that if people are covered by ATOL, if flight-plus comes in, they will receive a certificate to say that they will be covered. If people are not covered, however, they will not receive anything. Is there anything that you believe could be done to make people aware? It seems to me that part of that is about competition. If you have paid a bit extra for the cover or if you realised that that holiday did not have any cover, you might make some different decisions as well. I just think that people think that they are covered.

Julie Hilling (Labour, Bolton West)

My final question is about the 24 hours. Do your members think that that small window is adequate or should it be longer?

Julie Hilling (Labour, Bolton West)

What if it were a week?

Pat Glass (Labour, North West Durham)

When I travelled here on the tube on Monday, I saw an advert for holiday insurance. It was the usual kind—one skiing trip, annual cover—but it referred to volcano dust. I thought, is this the insurance company jumping on a financial bandwagon? The Bill will extend the scheme, but will people still need to take out that kind of insurance?

John Woodcock (Labour, Barrow and Furness)

The Select Committee advised that passenger welfare plans should be in place to deal with eventualities such as disasters and passengers being stranded. Is that a good idea that has been omitted from the Bill?

Roger Gale (Conservative, North Thanet)

Thank you. Are there any further questions? Mr Tanzer, is there anything that you wish to add?

Roger Gale (Conservative, North Thanet)

Thank you very much for joining us. We are most grateful.

Examination of Witnesses

Roger Gale (Conservative, North Thanet)

Good afternoon. Minister, for the sake of the Official Report, would you like to identify yourself?

Roger Gale (Conservative, North Thanet)

Thank you. Would you care to make a brief opening remark?

Roger Gale (Conservative, North Thanet)

You are quite right. We are running ahead of schedule. If there are any questions that you feel Mr Hatfield needs to answer that others cannot, then we can park those and come back to them when he arrives.

Roger Gale (Conservative, North Thanet)

Perhaps we can start by finding out whether the Opposition agree with you.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

May I begin by apologising for our low numbers this afternoon? It is no disrespect to the Minister at all. I am sure she realises that, but a number of our colleagues have gone to the cycling debate in Westminster Hall which, as a keen cyclist, she may well want to attend herself.

I can confirm that there is a lot of consensus on many aspects of the Bill. I personally had a briefing from the Minister and her officials before these public sessions were organised. I am grateful for that. I know that one or two other colleagues benefited from that opportunity too. My only question for the Minister is this: has she heard anything in the past few two days that has given her pause for thought and if so can we expect some additional Government amendments? She may still be reflecting on some of the things she has heard, but some witnesses may have given her pause for thought and if so does she want to share that with us?

Mike Freer (Conservative, Finchley and Golders Green)

May I suggest an amendment, Minister?

Mike Freer (Conservative, Finchley and Golders Green)

You have heard me raise with numerous witnesses that the scope of the clause on the publication of information should include the performance of UKBA. I appreciate that that is a Home Office function, so I stress that the amendment would need to be carefully worded on publication of information that affects the air passenger user. Basically, BAA, Gatwick and Passenger Focus would support it, and even the CAA and BATA said that they would support that particular provision being extended. Provided we could get the wording correct, what is your view on extending that scope?

Nigel Mills (Conservative, Amber Valley)

May I continue down that line? On the data that the Bill will enable passengers to receive and understand, a key thing that I want to know is how long it will take from the plane reaching the gate to my being able to get on my way home. In many ways, if the UK Border Agency queue is slow, my bags will be waiting for me, but if the border agency queue is fast, I will have to wait for my bags. Will it not be a bit of nonsense to have that information, if I do not have information on the thing that probably delays me the most on my arrival?

Are not the airports the best placed people to know the time it takes from when a plane hits the gate and the doors open to when I am through, clear and able to leave? It would not be a matter of the UKBA having to publish that information; what I want to know as a passenger is the length of time between landing and my being out of the airport. I cannot see any reason why the airports could not collect and publish that data.

Nigel Mills (Conservative, Amber Valley)

My point was that we would require the airport to publish the time it takes from gate to exit. I am not sure that I necessarily want or need to know the components of each particular queue or even the fact that at some airports there is a 20-minute walk from the gate to get to the border agency desk, as there was at terminal 3 at Heathrow this week. It is about requiring the publication of how long it takes to go from the landing time I can see on my ticket to being clear of all the stuff I have to do at the airport. I cannot see that one component being the responsibility of somebody else prevents the publication of that total time.

Roger Gale (Conservative, North Thanet)

Good afternoon, Mr Hatfield. Thank you for joining us. You are not running late; we are ahead of schedule, and the Minister has introduced you in your absence. Thank you for being here.

John Woodcock (Labour, Barrow and Furness)

Minister, you have heard today that even the leadership of the CAA is positive and open-minded about the idea of being subject to value-for-money assessments by the NAO. Do you continue to believe that the CAA should be the only regulator outside of that orbit?

John Woodcock (Labour, Barrow and Furness)

But you recognise that the CAA would be unique among the economic regulators if it were not subject to the NAO? What is the reason for that?

Iain Stewart (Conservative, Milton Keynes South)

Minister, may I return to the publication of consumer information? This morning, I asked Mr Haines from the CAA about the role he envisages for the new consumer panel in determining the type of information that should be published and made available to air passengers. My interpretation of his response is that he regards the consumer panel as just one of several bodies that will shape that information and its role will be rather organic. Are you satisfied with that, or do you think the Bill should be a little more prescriptive in setting the consumer panel’s role?

Simon Wright (Liberal Democrat, Norwich South)

What further specific requirements on the CAA to take environmental factors into account were considered, but ultimately not included in the Bill? Why was that?

Kwasi Kwarteng (Conservative, Spelthorne)

I would like to ask about ATOL, and my question is probably not the one that you think I am going to ask. Were there any discussions in the Department about the possibility of actually getting rid of ATOL altogether?

John Woodcock (Labour, Barrow and Furness)

That sounds like a firm commitment. Is that right? If so, are you prepared to go beyond the enabling power in the Bill and actually write it into the Bill?

John Woodcock (Labour, Barrow and Furness)

Thank you. My final question is on the concerns we have heard today about transferring the security function; do you dismiss those out of hand?

Chris Heaton-Harris (Conservative, Daventry)

It is very good to see you, Minister, because when I spoke in the Second Reading debate, you were doing something else—being fixed after your cycling accident.

Chris Heaton-Harris (Conservative, Daventry)

I suppose that is a half-reasonable excuse for not being there. I want to ask for clarification on the Department’s plans for a more efficient, outcome-based approach to aviation security regulation. The Under-Secretary of State for Transport (Norman Baker), who was on the Floor of the House at the time, kindly wrote back to me. I want to clarify a point, because he said:

“The outcome-focused regime will take several years to be phased in.”

What does phasing-in mean in this circumstance? There is a difference between big and small companies, and how they would be able to work this?

Roger Gale (Conservative, North Thanet)

Mr Mills, are you still interested?

Nigel Mills (Conservative, Amber Valley)

Very much so!

Roger Gale (Conservative, North Thanet)

I kept you waiting; I apologise.

Nigel Mills (Conservative, Amber Valley)

Minister, when we are looking at reforming how ATOL works, I guess you will have heard of the problems many schools have had with Skiing-Europe, which effectively went bust. The way it satisfied the requirements of the package tour directive was by having insurance for financial insolvency. Then, the insurance company promptly decided that it had fraudulently obtained the policy and cancelled it. That meant there was no protection for people who had validly booked a package holiday. Have you considered, when reforming ATOL, whether there was any need to reform how the whole directive is applied, to make it work properly in all situations, as well as just for air transport? Should we just move to a situation where it is all bonded and not insurance-based, or should there be some stronger rules so that insurance companies cannot weasel out in cases where they have not done their checks before accepting the policy?

Nigel Mills (Conservative, Amber Valley)

On a separate topic, one of the issues associated with scarce airport capacity is that what might be the most profitable route for airlines or airports may not be in the best interests of consumers across the country overall. I wonder whether certain slots into Heathrow might be at risk from Scotland or Belfast, following the sale of bmi. Do the Government think there is a need for Government or regulator involvement there, or should it just be left to the market to decide?

Nigel Mills (Conservative, Amber Valley)

Would you like to make any guesses or predictions as to how many airports need to be economically regulated by the CAA when it gets the power? Do you think it will stay at three, or do you think there is some scope for the figure to come down?

Nigel Mills (Conservative, Amber Valley)

But you would be extremely surprised if any more airports became economically regulated in the medium term?

Roger Gale (Conservative, North Thanet)

Any further questions relevant to the Bill?

John Woodcock (Labour, Barrow and Furness)

My question is supremely relevant to the Bill. What do you think of the point, made by BAA this week, that the market power clauses are unnecessarily complex and you could have something simpler in the Bill, with the CAA being given more flexibility to shape the test?

Roger Gale (Conservative, North Thanet)

For the benefit of the record, and because I, too, believe in transparency, I was just being asked whether it was possible to extend the evidence session to bring in the Minister for Immigration, the hon. Member for Ashford (Damian Green) to talk about the work of UKBA in arrival halls. The feeling is that that is outside the scope of the Bill, which is why I said no. There are one or two other issues as well.

Are there any further questions for the Minister? No. At our next sitting we will commence clause by clause consideration of the Bill. I thank you, Minister, and your civil servants, for joining us.