Civil Aviation Bill

Public Bill Committee, 1 March 2012.

Linda Riordan (Labour, Halifax)

When it adjourned on Tuesday, the Committee was considering clause 9. I indicated at the time that I was happy for hon. Members to address related issues arising from clauses 10 to 12, and I therefore expect the debates on those clauses to be short.

Clause 9 - Operators of areas

Jim Fitzpatrick (Labour, Poplar and Limehouse)

Thank you, Mrs Riordan, and welcome back. As you said, when we finished on Tuesday we had begun a discussion on clause 9, and you helpfully allowed the debate to cover clauses 10 to 12. My hon. Friend the Member for Blackley and Broughton, who opened the debate, described them as “sneaky clauses”. I am not sure how sneaky they are, but his comments and those of my hon. Friend the Member for Bolton West certainly raised some interesting and significant points. I will not quote extensively from their speeches, because we were all there and I do not want to provoke the hon. Member for Amber Valley, who might be tempted to comment if I did.

My hon. Friend the Member for Blackley and Broughton raised some important and fundamental questions. He asked where the proposals came from and why they are in the Bill. He asked about the potential of secondary legislation for such an important initiative and about the efficient operation of airports, particularly in Manchester, in respect of the clauses. He also asked about costs, flexibility and the duplication of bureaucracy.

I will cover those points in a moment, but I also want to add two of my own: investor confidence and the gold-plating of legislation, of which we hear quite a lot from the Government side of the House, and sometimes rightly so. None the less, the regulations are being brought in by the Government—apologies to the hon. Member for Cambridge; I meant “by the coalition”—and they therefore warrant further examination.

As my hon. Friend the Member for Blackley and Broughton said, it is unclear where the regulations have come from. No one in the evidence sessions came forward demanding that they be introduced because of the urgent need for the break-up of British airports or for terminal operations to be broken down into different ownerships. Why are the regulations being brought forward? Where is the demand coming from? Notwithstanding that there has been no domestic request, it was mentioned in the evidence sessions and by my hon. Friend on Tuesday that the one international example is JFK in New York, which is regarded as quite inefficient and expensive and does not set a standard that we would want our airports to follow.

On secondary legislation, we are discussing a potentially significant change in how airports are operated and run in the UK. In future, it may well be that the proposals would be appropriate were the market to change and were there to be an appetite for them within the aviation industry. However, for the Department at this point to produce regulations that say that, if that happens at some point in the future the proposals could be introduced by secondary legislation, seems somewhat superficial. It would be interesting to hear the Minister’s comments, because one would expect a full consultation and the Government and the Civil Aviation Authority to have to go through hoops to determine that it was appropriate. Secondary legislation does not appear to be an appropriate vehicle.

On efficiency, my hon. Friend the Member for Bolton West, in particular, raised the question of capacity at the different terminals at Manchester and the ability for incoming aircraft to be switched between terminals, which could be more difficult if those terminals were operated by different companies. There would certainly need to be an element of capacity headroom at each terminal, if that were the case.

There is an interesting and lengthy article on Heathrow in today’s Financial Times. I recommend it to colleagues who have not seen it, as it gives a good international comparison between the operation of Heathrow and other airports. It demonstrates that, with Heathrow operating at 97% capacity, the ability to accommodate any hiccup in operation—whether fog, snow or whatever—has a massive knock-on effect on the efficient operation of the airport. There is a comparison with our European competitors and the additional runway capacity, mentioned by my hon. Friend the Member for Blackley and Broughton on Tuesday, that has been built in the past few decades. It makes particular reference to Doha, Abu Dhabi and Dubai.

Dubai, with its efficient six-runway operation in direct competition to northern Europe, is saying to India, China or Australia, “Fly here to go to the States. There is no need to go to northern Europe. If you want to come to northern Europe, why would you want to come to Heathrow, with its potential delays?” My hon. Friend the Member for Bolton West articulated the capacity issues at Manchester and the ability to move between terminals because there is a single airport owner. If we break down the terminals, the potential for the flexibility seen at Manchester is brought into sharp focus.

My hon. Friend the Member for Blackley and Broughton raised the question of costs and the significant implications for investment for airports with regard to the transfer of ownership. My hon. Friend the Member for Bolton West raised questions of the duplication of bureaucracy. I cannot say that I was entirely comfortable with her description of some professional workers as “bean counters”; perhaps that was not the most complimentary way to describe some significant and highly regarded professionals. However, I take her point about the kind of operation that we want at our airports. Do we want an efficient operation, with maximum capacity and usefulness, or do we want in the short term to create a climate in which people can work out the transfer of ownership into different companies? In that instance, she made a valid point about the bureaucracy required to take the matter further.

I have two further brief points to make: one on investor confidence and the other on the gold-plating of regulations. I cannot remember whether the invitation to a number of us to attend the topping-out ceremony at terminal 2 at Heathrow was for yesterday or next Wednesday. It is certainly happening about now. My hon. Friend the Member for Blackley and Broughton referred to the cost of terminal 5 at Heathrow, which took 20 years to get through the planning inquiry and into operation. Terminal 3 in Beijing, China, took four and a half years. There was significant investment; my hon. Friend the Member for Blackley and Broughton struggled to remember how many billions. I defer to the quote from his contribution, but we are talking about billions.

I am not a business man; colleagues know that. However, suppose a business person or company was looking to make that significant investment of billions of pounds, and someone said, “We are just about to pass regulations to say that at some point in future not only will we be able to strip you of that asset and the return on your investment, but we can do it through secondary legislation, and your ability to influence the outcome of the decision by the regulator or Government will be extremely limited.”

As I said earlier, that might not mean that the regulations would not be appropriate at some point in future, but to implement them through secondary legislation, at a time when we are struggling with capacity and looking at how to get investment into the aviation sector, looks like a disincentive to international companies when it comes to investing in terminals at our airports.

My hon. Friend the Member for Blackley and Broughton, whom the Minister correctly commended for his experience of the sector—my hon. Friend was chairman of Manchester Airports Group—clearly has a better grasp of these issues than I do.

Nicholas Dakin (Labour, Scunthorpe)

My hon. Friend is spelling things out clearly. I am concerned by his comment that, perversely, this might not only create a disincentive when it comes to investing in airport development, but subsequently put the UK in a non-competitive position compared with other European or global players in the aviation market.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

My hon. Friend makes an important point. The Government are struggling with their growth strategy because of international conditions and a whole range of things.

Theresa Villiers (Conservative, Chipping Barnet)

The shadow Minister is adamant in his disapproval of the possible introduction of inter-terminal competition, so why did the Government of whom he was a member decide that it was appropriate to vest that power, which is based on the Enterprise Act 2002 that they enacted, in the Competition Commission?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I am happy to accept that we made mistakes in government—happy even to go so far as to say that, until my hon. Friends raised their opposition to these clauses on Tuesday, we were agnostic on this issue. One of the benefits of a two-day gap between Tuesday’s sitting and this morning’s sitting is the lobbying, discussions, re-reading of speeches and consideration of issues that it has allowed, because, to be honest, we were not going to oppose the clauses, for the reasons set out by the right hon. Lady.

Having listened to my hon. Friend the Member for Blackley and Broughton, and having further considered the issues, I think he has a very good argument. Obviously, we are keen to listen to the Minister’s argument that the clauses are appropriate, but we are inclined to support our hon. Friend in voting against them because we do not think that they are appropriate at this time.

Nigel Mills (Conservative, Amber Valley)

I follow the hon. Gentleman’s argument, but I do not think the clauses enable the Civil Aviation Authority to force inter-terminal competition. The clauses merely introduce a regime to address such competition if it happens, either because an operator chooses it or because the Competition Commission forces it. That view is supported by paragraph 53 of the Select Committee report. Does he not think it sensible that, if, say, Ryanair bought a terminal at East Midlands airport and ran it itself, we would have a framework if it needed to be regulated, rather than having to pass new rules pretty quickly to manage such airports?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I shall come to the gold-plating issue in a moment, but the hon. Gentleman raises a fair point that is central to the questions we are asking. At some point such regulation might be sensible, but why are we doing it now? Where is the demand? Why are the Government asking for it now? We do not think it is necessarily appropriate at the moment.

As I said earlier, we are talking about introducing regulation when there is criticism from both sides of the House that Governments sometimes gold-plate legislation. The Government are introducing additional regulation in case someone thinks it appropriate or wants to go down this track in future. We do not believe an argument has been made for the introduction of the regulations set out in the clauses.

My hon. Friends from the north-west have effectively and articulately explained why they believe the regulations to be wholly inappropriate. They have clearly had a strong look at this from the perspective of Manchester Airports Group, but, equally, nobody else in the British aviation industry has come forward to say that such regulation is appropriate. The question is, why are we gold-plating the regulations at this time?

Nigel Mills (Conservative, Amber Valley)

The hon. Gentleman will have closely read the record of Tuesday’s debates, and he will have read a lot of talk about the need to ensure that the regulations are future-proof and can handle any situation in the coming decades. Is it not sensible to include regulations that address a scenario that might happen, but probably will not happen, so that we do not need to come back and re-legislate?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

“Future-proofing” is a much more generous term than gold-plating—I will give the hon. Gentleman that. But basically we are future-proofing against an eventuality that might not happen. Going back to the earlier point about the potential disincentive for people looking for a long-term return to invest in UK airports if something might happen in the future to strip them of the asset, I am not sure that that is good business. There are much more competent colleagues on the Government side of the room, with much better experience of business than I have, who can tell me whether they think that is a disincentive or not. Certainly, as a lay person, I do not think it encourages people to invest in the UK economy if at some time in the future, the regulator might think this is a good idea and the Government can push it through in secondary legislation. For something as significant as this, secondary legislation is not an appropriate vehicle.

Theresa Villiers (Conservative, Chipping Barnet)

I want to reassure the shadow Minister by clarifying that nothing in the Bill would give the Secretary of State power to introduce secondary legislation to break up the ownership of airports or introduce inter-terminal competition. The power to introduce intra-airport or inter-terminal competition is already vested in the Competition Commission under the Enterprise Act 2002. It is simply wrong to keep talking to the Committee about secondary legislation when there are no powers to introduce such secondary legislation in the Bill.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I stand corrected by the Minister. Obviously, these concerns were being raised and that was the interpretation of the regulations we have looked at. We feel that that is an accurate interpretation. The Minister’s reassurance is welcome and we look forward to hearing her explain how those protections are there. I will finish by briefly quoting my hon. Friend the Member for Blackley and Broughton:

“This is a particularly ill-thought-out proposal. I do not know where it came from. There is not a problem; if there were a problem, this would not be the solution.”––[Official Report, Civil Aviation Public Bill Committee, 28 February 2012; c. 163.]

We agree with him.

Theresa Villiers (Conservative, Chipping Barnet)

I am grateful to the shadow Minister for his contribution and to all hon. Members who raised points on this important issue. First, I will correct something that I said on the first day of the Committee. I mentioned Gatwick Express. It is not currently part of Gatwick airport’s regulatory asset base. Decisions about whether investments in Gatwick station improvements made by the airport should be included in the RAB will continue on a similar basis as at present. That includes the current proposals for Gatwick contributing £7.6 million to Network Rail’s £53 million project to extend the station concourse and construct a seventh platform. The CAA, as part of its next price review for Gatwick, will decide whether this goes into the RAB.

Graham Stringer (Labour, Blackley and Broughton)

We had a debate on clauses 1 and 2 about how the CAA may change its regulatory asset base. The Minister quite reasonably said that that was up to the CAA. However, can she provide the Committee with any information about how the process of determining a regulatory asset base will change if the Bill becomes law?

Theresa Villiers (Conservative, Chipping Barnet)

In many ways, the process will be fairly similar but the job of the CAA will be made easier and the transparency, clarity and certainty for the industry will be improved because the criteria will be based on the primary duty for which there is widespread support, rather the four, sometimes conflicting, duties in the current system.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I seek clarification on what the Minister said about Gatwick Express not being part of Gatwick’s RAB. That is extremely helpful. Gatwick is engaged with the Department in respect of the future franchise which runs all the way to Brighton at the moment. That is one of the complaints. As I mentioned on Tuesday, additional international links have recently been built from Vietnam, Hong Kong and China, and passengers coming off these aircraft regularly get to the platforms and find the trains are already very busy. Not being able to get a seat when they travel into London, with all their baggage, is not the best way for international visitors to be welcomed.

Henry Smith (Conservative, Crawley)

Will the hon. Gentleman give way?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I am intervening on the Minister, and the Chair would probably not allow a secondary intervention, or even a supplementary intervention.

I know I am asking the Minister to crystal-ball gaze, and I certainly do not want to compromise the negotiations, but given that the franchise for the line is up for renewal next year and discussions are already taking place, would one option be a separate franchise for Gatwick to become an RAB—in line with the question from my hon. Friend the Member for Blackley and Broughton—rather than being part of an extended franchise down to the south coast?

Theresa Villiers (Conservative, Chipping Barnet)

I fear I would incur the wrath of the Chair if I were to talk in detail about the refranchising process for the services covered by the Gatwick Express. I reassure the shadow Minister, however, that in the decisions we take on the rail franchise that serves Gatwick airport, we will always have in mind the importance of high-quality surface access to airports. It would not be appropriate for me to prejudge the decisions on the refranchising process, because they can be taken only after a consultation. We will of course be engaging not only with Gatwick and the businesses that use it, but with all the customers who are served along the line.

Henry Smith (Conservative, Crawley)

Was it not under the previous Government and the Office of the Rail Regulator that the dedicated Gatwick Express service ended and became fragmented? We need to bear in mind that the Gatwick Express has been reduced as a dedicated airport service because of the Department for Transport’s actions under the previous Government.

Theresa Villiers (Conservative, Chipping Barnet)

Changes were made in relation to the Gatwick Express a few years ago, but I still believe it is a very high-quality service. We have to appreciate that there are different interests to balance here. It is important to ensure that we have high-quality surface access to one of our most important international airports, but that line also serves some heavily used commuter services, so we need to take into account the interests of both.

Jim Fitzpatrick rose—

Theresa Villiers (Conservative, Chipping Barnet)

I fear we may be slightly straying from the subject of clause 9.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I apologise for another intervention, Mrs Riordan, and I hope we are not straying from the clause. I accept that we are talking about future franchising but, as my hon. Friend the Member for Blackley and Broughton just mentioned, we discussed the RAB under clauses 1 and 2. The Minister’s helpful clarification regarding how that relates to the Gatwick Express has prompted my questions. Given that it is potentially a regulatory asset base for Gatwick airport but that the franchise is due for renegotiation next year, can the Minister give us an assurance that when the CAA’s new powers are introduced, which might not happen fully until 2014, it will be possible to amend or adjust the RAB, and that the franchise may be affected as a result of the Bill’s help for Gatwick and for international passengers?

Theresa Villiers (Conservative, Chipping Barnet)

As I sought to reassure the Committee on the first day, the Government firmly believe that a primary duty to protect the interests of end users can embrace authorisation of investment in surface access. It would not be appropriate for me to try to prejudge the CAA’s decision about the proposed investment at Gatwick station, but the Government are on record as emphasising the importance of good-quality public transport access to our airports. That is one of the reasons why Thameslink will deliver important improvements to access at Gatwick; it is why Crossrail and HS2 in the future will deliver important improvements at Heathrow; and it is why the upgrade of the London underground will further enhance and improve access to Heathrow.

If I may, I will return to clause 9, which ensures that there is no dual regulation over an airport area, so that two or more persons do not require a licence in respect of the same area. Picking up on one or two of the points made on day one of our deliberations, my hon. Friend the Member for Amber Valley asked how the measures will apply if a group of companies own multiple airports in a market area and, in particular, where one wants to test whether the combined effect of the ownership leads to dominance or market control, whereas ownership of an individual airport perhaps would not. Clause 6(3) contains provisions that address corporate group structures. It allows the CAA, in conducting test A of the market power test, to aggregate the operator with others.

My hon. Friend the Member for Finchley and Golders Green asked whether the reference in clause 9(1) to “all of the area” means the perimeter of the airport or all of the operational areas within an airport. Subsection (1) refers to the airport area for which the person in question has overall management responsibility—that is, the area for which they are the operator according to the criteria set out in clauses 9 and 10.

The shadow Minister and the hon. Members for Blackley and Broughton and for Bolton West spoke extensively about their concerns over the possible future move to inter-terminal competition. In truth, there needs to be a means to determine who the operator is for the purposes of economic regulation, even in the absence of inter-terminal competition. The need to determine who has overall control is relevant, whether one is talking about the whole of the airport with substantial market power or only part of an airport. We would still need the clause, therefore, even in the absence of any prospect of or attempt at future-proofing for intra-airport competition.

Given the steer that was given by the Chair, I am happy to respond to the wider points. Reference to inter-terminal competition is a useful shorthand, but intra-airport competition is a slightly broader concept. There are various forms of competition within a single airport, but for shorthand purposes I will tend to refer to inter-terminal competition as it is possibly the leading variant of that form of regulatory activity. The hon. Members for Blackley and Broughton and for Bolton West expressed concerns about the cost impact of such an approach, and the shadow Minister followed that by expressing his concerns about the impact on future investment in our airports.

I reiterate that nothing in the Bill mandates the introduction of inter-terminal competition or any other form of competition within a single airport. All we seek to do is to enable the framework for economic regulation to deal with that scenario if it were to occur. I recall that the shadow Minister said twice this morning that it might be appropriate for that to happen in future. If he himself acknowledges that we cannot rule out that possibility, it makes sense and is cost-effective to ensure that the regulatory system we adopt is future-proofed and able to deal with that scenario, should a decision be made in future to move in that direction. That could, in theory, occur if an operator chose to separate the ownership and operation of parts of its airport or, as I said, if a market investigation by the Competition Commission concluded that divestment should take place to enable inter-terminal competition.

As I made clear, neither the clause nor the Bill introduces any powers for the Government to introduce intra-airport competition. Such powers are already vested in the Competition Commission by the Enterprise Act 2002, which the previous Government adopted. Is it likely that that would happen in practice?

Graham Stringer (Labour, Blackley and Broughton)

The Minister is being very clear so far, but will she clarify whether an order to introduce competition between terminals would be made by the Competition Commission or the Government?

Theresa Villiers (Conservative, Chipping Barnet)

The Competition Commission has that power, so the Bill does not give the Government the power to introduce such secondary legislation; it is the Competition Commission that is able to order divestment.

The Competition Commission considered introducing competition as part of its investigation into BAA in 2009. As we know, that option was rejected, but the Competition Commission has expressed the view that it would be useful for the regulatory system to be able to deal with the option of inter-terminal competition, should the need arise in future. It is indeed the case that certain airlines support it.

The hon. Members for Bolton West and for Blackley and Broughton expressed anxiety about the potential impact on Manchester airport. The reality is that Manchester airport is not regulated under the existing rules. There is no indication that that will change under the new rules, and as nothing in the Bill mandates the introduction of inter-terminal competition, perhaps I can reassure the hon. Members that this is not an imminent threat coming round the corner to hit Manchester airport. It is not correct to say that the clause—or indeed, clauses 10 or 11—introduce a dramatic new cost burden. As I said, the Government believe that the Bill would deliver a net reduction in cost to industry, with a present value of about £150 million over 20 years.

Simply ensuring that the legislation can cope with a different variant of regulation in future is not an attempt to gold-plate it; we want to make it flexible and able to adapt to the changing circumstances of the aviation market. I emphasise that before the Competition Commission could take the step of requiring such competition, it would have to undertake a detailed economic analysis, which I expect would include an assessment of the cost impact of such a change.

I also agree with a number of comments suggesting that challenging practical issues might arise if a proposal were made to introduce inter-terminal competition to the UK, and that is one reason, no doubt, why the Competition Commission decided that that was not appropriate when it looked at the matter in 2009. The hon. Member for Blackley and Broughton has referred to some of those issues, including the challenges associated with the duration of the planning process for new terminals.

We cannot predict with certainty what the appropriate regulatory solutions will be over the 20-plus years, at least, that we expect the legislation to last. It therefore makes sense to keep our options open on inter-terminal competition, in case the Competition Commission, in future, comes to the view that it is the best way to deal with economic regulation in the airport sector.

Julie Hilling (Labour, Bolton West)

Will the Minister give way?

Theresa Villiers (Conservative, Chipping Barnet)

Certainly, although I was about to sit down.

Julie Hilling (Labour, Bolton West)

I am still not clear about something. If the Minister is saying that the Competition Commission can order inter-terminal competition to be introduced and it is already a possibility, why does it need to be in the Bill?

Theresa Villiers (Conservative, Chipping Barnet)

If the Competition Commission thought it appropriate for such competition to happen, and we had failed to include the potential for it in the Bill, we would have to come back to Parliament for primary legislation to adapt the regulatory framework so that it was able to deal in an efficient way with the Competition Commission’s decision.

Julie Hilling (Labour, Bolton West)

I am just seeking clarity, and I thank the Minister for giving way again. I am confused because although, on one hand, she is saying that the Competition Commission can introduce inter-terminal competition, she is also saying that the Competition Commission cannot, because the matter would have to come back to Parliament first. I am not clear whether the Competition Commission can do it at the moment, because she seems to be indicating that it cannot.

Theresa Villiers (Conservative, Chipping Barnet)

It has the power to order a divestment to facilitate inter-terminal competition. However, to ensure that the regulatory system worked effectively, we would need to adapt the general system of economic regulation so that it could cope with the changes required by the Competition Commission.

Linda Riordan (Labour, Halifax)

The question is that the clause—

Graham Stringer (Labour, Blackley and Broughton)

May I respond to the Minister’s points, Mrs Riordan?

Linda Riordan (Labour, Halifax)

You may not.

Clause 12 - Advance determinations

Nigel Mills (Conservative, Amber Valley)

I will try to be brief. My only comment is about the following:

“The CAA may make a market power determination…based entirely or partly on circumstances that have not arisen at the time the determination is made.”

My concern is about the meaning of “circumstances”. Under the Competition Act 1998, we normally look at

“agreements, decisions or concerted practices”

that might infringe the usual competition rules. There is clearly a legal document or something tangible for the regulator to look at and say it might cause a future problem and needs to be regulated to prevent abuse. Here we have “circumstances”, which could mean anything—the regulator could hear a rumour on the street and decide that that counted as a circumstance that required starting the regulatory process.

I can see a scenario where “Boris island” airport is built and has such market power that it needs to be regulated before it starts operating. I can see the argument about why we should not wait until the abuse actually exists before starting the process. However, the word “circumstances” is very imprecise.

Mark Reckless (Conservative, Rochester and Strood)

My hon. Friend suggests, extraordinarily, that, were “Boris island” built, it could have such market power that the regulator would have to step in and prevent abuse of the market. Does that not imply that airlines would be rushing to use “Boris island”? In reality, they are opposed to its being built and want to stay at Heathrow.

Nigel Mills (Conservative, Amber Valley)

I am grateful for that. I was trying not to come up with a realistic example, but to think of one situation at the moment where there might be a significantly powerful airport that does not yet exist, and where there might be a need for a power to regulate a situation that does not yet exist. I was trying to be helpful.

I suppose it is possible that a huge number of airlines could leave and go to Luton, giving Luton a power that it does not yet have—in the package holiday market or similar situation—that would mean that the regulator would have to act in advance. Even in that situation, however, legal agreements would be in place that could be triggered when airlines were going to move.

Will the Minister explain exactly what she means by “circumstances” and exactly how the CAA could justify an advance determination without there being some abuse?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

The hon. Gentleman raises an interesting point on the definition of “circumstances”, and I must confess that it escaped me. Forgive me if he has mentioned this, but the clause also states that the CAA

“may make a market power determination… based entirely or partly on circumstances that have not arisen”.

If the circumstances have not arisen, how can the CAA anticipate what the circumstances might be? Subsection (2) states that the CAA “must specify the circumstances”, which have not arisen, and subsection (3) states that the CAA “may make a determination”. Is the hon. Gentleman also asking for clarity on those aspects?

Nigel Mills (Conservative, Amber Valley)

That is a fair comment. I was referring to the Competition Act 1998, where the phrase

“agreements, decisions or concerted practices”

appears. If some legal agreement meant an airport suddenly having a power that it did not previously have, there would be a need to regulate. The hon. Gentleman is right that “circumstances” is so broad that it could mean things that do not yet exist, because it is an advance power. Yet there are no legal documents that actually bring those into force. It is hard to understand exactly what would be regulated in this situation. Will the Minister clarify what “circumstances” means? Might there be a better way of defining when the power can be used?

Theresa Villiers (Conservative, Chipping Barnet)

I am grateful to my hon. Friend. Before responding, I should mention that I welcome the fact that the clauses that we have just agreed to were adopted with consensus.

The goal of clause 12 is to give operators and prospective owners greater certainty about whether and when they would require a licence to levy charges and whether they are likely to come within the economic regulatory system. That is why the clause empowers the CAA to make market power determinations and operator determinations in advance.

As with much of the rest of the Bill, a key goal of clause 12 is to try to retain as much flexibility for the independent expert regulator as possible. That is the golden thread that runs not only through the Bill, but through best practice across the regulatory sector in the UK.

It would not be appropriate for me to seek, through the representations that I make to the Committee, to narrow down the scope of the CAA’s discretion in the future. However, the best practical example of where the clause may be useful is when someone is contemplating buying an airport. It is important that the CAA has the option of considering determinations in advance of the relevant circumstances occurring. Someone seeking to purchase an airport may seek an advance determination to establish whether they would be subject to economic regulation if they went ahead with the purchase.

Under subsection (3), the power to make an advance determination may be used only if the CAA is satisfied that the specified circumstances are likely to arise. I hope that gives my hon. Friend the Member for Amber Valley some reassurance that wholly speculative advance determinations are shut out. We have found a pragmatic way, through how the clause has been drafted, to enable the CAA to look at such determinations in advance, but without opening the door to a flood of multiple and vexatious requests for determinations about particular airports. Under subsections (5) and (6), the advance determination does not take effect until the circumstances described in the determination arise.

The CAA is empowered by subsection (4) not to publish a notice of an advance determination, or the supporting reasons, if the circumstances have not yet arisen and doing so would involve disclosing commercially sensitive information. That essentially disapplies the publication obligation on the CAA, to enable it to deal with requests confidentially where, for example, disclosure might be sensitive. A number of circumstances could be imagined in which that might be the case, such as where an application is triggered by the pending purchase of an airport.

Clause 15 - Granting licence

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I beg to move amendment 17, in clause 15, page 11, line 3, at end insert—

‘(c) include an impact assessment by the CAA for the licence conditions imposed on the airport.’.

This should not take long as it is a simple and straightforward probing amendment in line with the Transport Committee report. The amendment calls for an impact assessment of how licence conditions will affect airports.

On Tuesday, when he was articulating his advocacy of a free-market solution for airports, which appeared to those Government Members who engaged with him to be a possible way forward, my hon. Friend the Member for Blackley and Broughton raised the question of whether the Bill adds regulatory burden to the aviation industry, rather than removing such burdens.

BAA raised some points on the draft licence:

“The draft licence as it stands is extremely vague…and so is open to wide interpretation and thus uncertainty.”

The indicative licence on the CAA’s website looked very clear to me. The second page reads “page left intentionally blank”. The page is deliberately blank—it is not a mistake—and there is nothing to be missed. The cost formula for the price controls outlined on page 9 states that:

“Where: Mis the maximum average…yield per passenger…M=£13.134(1+(Bt/100)) – (TRIGGERt/Qt) – Kt”.

That is absolutely clear; I do not understand how BAA could possibly fail to understand that 49-page document. However, I do not want to sound too flippant.

My hon. Friend the Member for Blackley and Broughton raised the question of the regulatory burden, about which the Transport Committee has misgivings. In her response to a previous discussion at column 154 of the Official Report, the Minister gave a clear assessment that economic regulation will save the industry some £150 million. Given that the Transport Committee recommended that the Bill include a CAA impact assessment of the licence conditions imposed on airports, with this probing amendment I ask the Minister to address the Transport Committee’s recommendation so that we may make a judgment.

Pat Glass (Labour, North West Durham)

Like my hon. Friend, I want to raise whether the Bill has a correct balance of regulation on airports, which are a vital source of jobs and growth. I have looked at the Transport Committee’s recommendations, and I note that BAA Airports and Gatwick Airport Ltd both touched on those recommendations. As my hon. Friend said, BAA highlighted the risk that the draft licence conditions could add significant regulatory burden and cost to its operation. It told the Transport Committee:

“The draft licence as it stands is extremely vague, obliging the licensee to operate an ‘efficient and reliable airport’. While unobjectionable as an idea, it is not useful as a legal obligation because it is unclear what, specifically, it means and so is open to wide interpretation and thus uncertainty.”

Gatwick Airport stated:

“The operational resilience licence condition could be taken to imply that the regulator should have oversight of all parties at an airport, using the vehicle of the airport operator's licence to do so. We believe that care needs to be taken to ensure that it is properly drafted.”

The Transport Committee said:

“We welcome the intention to improve the financial and operational performance of airports. There is a risk, however, that licence conditions, and their associated costs to airports, may not be proportionate to the benefits delivered to the users of air transport services. We recommend that the bill be amended to require the CAA to provide impact assessments for the licence conditions imposed on airports.”

We can see why, with the best of intentions, the CAA may well require gold-plated provision, which ultimately would not greatly benefit passengers but would have a negative impact through costs.

Will the Minister explain precisely what she means as regards the draft licence conditions, as the wording is unclear and risks confusion in its interpretation by airports and thus a vastly different application? There does not seem to be a clear, coherent framework, and we know from bitter experience that law that is not absolutely clear is ultimately good only for lawyers.

How does the Minister think the licence conditions will impact on airports? What does she see as the risks of imposing such licence conditions on airports? How does she think airports will handle the changes to the licence conditions while remaining competitive and not impacting negatively on passengers through costs? Without an impact assessment, is it possible to understand fully the possible consequences of the proposed regulation?

Theresa Villiers (Conservative, Chipping Barnet)

I welcome the contributions made by the shadow Minister and the hon. Member for North West Durham. They are both correct in that it is extremely important that we ensure that the economic regulatory framework proposed in the Bill is proportionate and takes proper account of its cost impact on the airport and aviation sector. As the shadow Minister mentioned, yesterday I reported to the Committee the Government’s assessment of the overall impact of the Bill as a whole and that is, as I have said, a net reduction of £150 million net present value over 20 years. That includes a reduction in costs, as a result of economic regulation, of £160 million, but because of various other provisions in the Bill there are some additional costs in relation to security. So the net figure is £150 million. It is a reduction following on from the assessment that the Government have done on this matter.

That is an important starting point. I would also completely agree with what has been said; it is important that the CAA conducts high quality and proper analysis before making its decisions on licence conditions. The Government fully agree with that sentiment. I hope I can reassure both hon. Members that that kind of analysis is already required by the Bill. The provision proposed by the Transport Committee, while understandable, is not necessary.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I am grateful to the Minister. She has given us the reassurance that we were seeking. The Minister has reiterated the figure I cited—an £150 million overall saving in economic regulation to the industry. The amendment is specifically about airports and the impact of the licence elements. We would not challenge the fact that there is an overall reduction in the assessment, but is it proportionate to all the different elements of the industry?

Roger Gale (Conservative, North Thanet)

Before we start, members of the Committee will notice that a number of clauses do not have tabled amendments. I propose to move through those clauses fairly swiftly; I shall call the number of the clause, and Members should indicate if they wish to debate any item under any clause. I shall move the previous clauses formally, and then stop so that the debate can take place. I will explain that again later, but that will be the process. In that way, we may facilitate the debate and reach the issues that members of the Committee wish to discuss.

When the Committee adjourned this morning, the Minister was about to respond to an intervention by the hon. Member for Poplar and Limehouse.

Theresa Villiers (Conservative, Chipping Barnet)

It is a pleasure to see you back in the Chair, Sir Roger. Before the Committee adjourned, the shadow Minister asked me for a breakdown of the savings delivered by the Bill. We will get the opportunity to look at that matter in more detail, for example when we discuss aviation security. There may be some redistribution of costs following the Bill, and although some of the savings will be experienced by regulated airports, some additional costs might be felt across the sector. That is the case for information, which we will no doubt discuss in some depth, and for security, which we will also consider under the relevant clauses.

The Bill will involve some additional costs because it transfers regulatory responsibility for security from the Department for Transport to the Civil Aviation Authority, which is funded by industry. As we discussed during the evidence session, the Bill is accompanied by our ongoing work to move to an outcome-focused, risk-based security regime, which we expect to be better and more efficient, and to provide the possibility for reduced costs in the delivery of security—costs that are currently borne by airports.

Let me come to other points raised by the shadow Minister and the hon. Member for North West Durham. As I said in my opening remarks, it is crucial that we look carefully at the cost impact of our proposals, in terms of both economic regulation and the Bill as a whole. It is clear from the CAA’s general duties in clause 1(4) that it must consider the impact of any proposed regulation effected by the new framework. The obligation in clause 1(4) to take a “proportionate” approach requires the CAA to assess the costs and benefits of its decisions in a number of contexts, including the contexts that we are considering in this clause. In effect, the CAA will have to publish an analysis of costs and benefits in setting licence conditions. In clause 15(7)(b), the CAA is required to give

“reasons for the conditions included in the licence”.

The appeals system means that the CAA will need to justify its decision, and it cannot do that without providing evidence that it has conducted an appropriate assessment of costs and benefits that will enable it to comply with its obligations under clause 1(4).

It is not clear from the amendment whether the Opposition wish to impose an obligation on the CAA to publish a cost impact assessment that is as detailed as those that Departments produce for new legislation. A cost impact assessment can mean a range of exercises and analyses. I recognise the value of analysing the costs and benefits of important decisions, and that is one of the reasons why, as I have explained, the Bill would effectively oblige the CAA to publish such an assessment. We should, however, think carefully about the cost of any obligations that we impose on the CAA, and the extent of potential bureaucracy. Ultimately, those costs will be passed on to industry and passengers.

However, even setting aside the better regulation duties in relation to proportionality in clause 1(4), which, as I said, provide protection in relation to the point raised by Opposition Members, the primary duty, which we discussed at length on Tuesday, also provides protection against the sorts of disproportionate cost burdens that hon. Members are concerned about.

The primary duty to passengers helps to provide safeguards on cost impacts, because the Bill requires that all economic regulation decisions taken by the CAA, including the imposition of licence conditions under the provisions that we are considering, must further the interests of users of air transport services in the provision of airport operation services. Of course, where the cost of a proposed licence condition or set of licence conditions is seen to outweigh the benefits that it would confer on end users, it is difficult to see how that could be consistent with the primary duty to further the interests of end users, for which there has been broad support both in this Committee and among the stakeholder community.

Indeed, further protection is provided by clause 15(7)(b), (c) and (d), which require the CAA to publish the reasons for conditions included in the licence, how it has taken into account any representations made to it, and the reasons for any differences from the conditions that were initially proposed, and when doing so the CAA must demonstrate that it is being consistent with its duties, including the proportionality duty in clause 1(4) to which I referred. In effect, therefore, the Bill already requires the CAA to publish some analysis of costs and benefits in relation to its decisions. Against that background, requiring a full impact assessment could be disproportionate.

I hope that I have been able to give hon. Members across the Committee some reassurance that there are already safeguards built into a Bill that, overall, should reduce costs for the aviation sector. I hope that the amendment will be withdrawn.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

Having received that clarification and those assurances from the Minister, I beg to ask leave to withdraw the amendment.

Clause 18 - Licence conditions

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I beg to move amendment 18, in clause 18, page 13, line 13, at end add—

‘(3) A licence must include an obligation on licence holders to procure and publish annual surveys of passenger satisfaction on—

(a) border control services,

(b) baggage handling services, and

(c) arrangements for delays caused by adverse weather’.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss the following: amendment 19, in clause 18, page 13, line 13, at end add—

‘(3) A licence must include provisions requiring the holder of a licence to develop passenger welfare plans.’.

Amendment 20, in clause 18, page 13, line 13, at end add—

‘(3) A licence must include provisions requiring the holder of a licence to provide support for stranded passengers at airports.’.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

Sir Roger, it is a pleasure to see you back in the Chair this afternoon.

Amendments 18 to 20 cover significant issues that we shall raise while obviously acknowledging the contents of clauses 83 onwards, in respect of the need to solicit information and publish it for passengers. These amendments are designed to require the publication of information as part of the licence arrangements.

Amendment 18 suggests that there should be annual passenger surveys, covering passenger experiences at border control, with baggage handling and in dealing with adverse weather conditions, and that these surveys should be published. I know that the Government are opposed to “targets”, but I also know that some Departments have moved to “goals”, and there is clearly a need to measure performance somehow, to determine whether progress is being made.

Gatwick already publishes its own indicators. Our view is that it should be a requirement for all airports to publish indicators. Interestingly, the Gatwick text that I have with me does not seem to cover the immigration element at arrivals, but the information that Gatwick publishes on its website indicates the name of the airline, the handling agent, the time taken for the first bag to come off—whether it is within 20 minutes or not—the time taken for the last bag to come off, and the performance of flights for airlines and handlers. Although the extract from the website indicates that Gatwick publishes quite a degree of information, Kyran Hanks said, when he gave evidence to us last week:

“We have been actively discussing with UKBA the publication of its performance and we now have on our website the performance of UKBA”––[Official Report, Civil Aviation Public Bill Committee, 21 February 2012; c. 9, Q7.]

I do not seem to have that information with me now. Nevertheless, Gatwick is some way down the road with the UK Border Agency, in terms of improving transparency.

I should introduce a slightly cautionary note: obviously, not all airports, airlines and journeys are the same, so we cannot compare somebody flying long haul to Heathrow with somebody arriving at City airport on a European business flight. One will have hand baggage, while the other will have a number of cases, so the times involved will be entirely different. In a strict sense, therefore, comparisons would not necessarily be fair, and consideration would need to be given to the possibility of commercial distortion of the figures by airlines trying to take advantage of a comparison of their profile with that of other airlines.

Amendment 19 would require the development of passenger welfare plans. When the Labour Government experienced problems in 2009-10, they appointed David Quarmby, and I will cover some of his recommendations shortly. Amendment 20 would require the licence holder to provide support for stranded passengers.

In amendment 18, we seek to ensure that we have efficient airports, and that is what the Government want to ensure, too. That means that we need to identify the passenger experience at airports, and to require airports to produce reports. During the evidence sessions, we heard that airports have only minority contact with passengers, so they are not totally responsible for the experience of passengers going through terminals—they are pretty much agents. Putting the onus on airports to compile and produce data would, however, empower them, along with the airlines and UKBA, and I will come back to that later.

Most passengers believe that the airports are in charge, but as Andrew Harrison, who spoke on behalf of the Manchester Airports Group, told us in his evidence, on page 16 of the report,

“When you look at the whole end-to-end journey…we manage only three of the, I think, 13 touch points…and two of those are in car parks and one is in security—the rest is a third party.”––[Official Report, Civil Aviation Public Bill Committee, 21 February 2012; c. 16, Q20.]

I must confess that it was a bit of a surprise to me that airports had so little contact with passengers.

Tom Harris (Labour, Glasgow South)

Has my hon. Friend considered the role of Passenger Focus in all this? I understand that it was set up with the specific remit of looking at railway passengers; there has been some talk of extending its remit to bus passengers, but would it not help to keep down the amount of regulation and bureaucracy if Passenger Focus’s remit were expanded to include air passengers?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

That did cross my mind, and we certainly had a useful exchange on that during the evidence sessions, when we asked Passenger Focus whether it thought it should cover air passengers. There does seem to be a degree of logic in that, given that Passenger Focus covers passengers on other modes of transport. It would seem to have the expertise, experience and professionalism to take on board another mode of transport, which means we would not have to create a whole new dimension. We might come back to that later, but it is certainly a valid question.

There are three elements to the amendments, which cover all the 13 points of contact. On UKBA, we have all heard airlines, airports or constituents complain about delays at immigration, which are sometimes seen to be routine and a matter of course. We have heard that staff numbers are being reduced—perhaps by up to 6,500, with 5,000 coming from UKBA and 1,500 from the UK Border Force. It would be interesting to hear from the Minister what contacts she has had with Home Office colleagues. She referred to such contacts on the Floor of the House, but it would be useful to have an update. I know she is keen to ensure the best possible service for the aviation sector from UKBA, and it would be interesting to hear how her colleagues in the Home Office are responding to her approaches. We will deal with the security clauses in the Bill later, but there is a clear tension between trying to cut costs and to be efficient, and maintaining the front line of our defences and our security at airports, which requires staff members to be in post.

Nigel Mills (Conservative, Amber Valley)

Does the hon. Gentleman share my disappointment at the indicative licence in relation to Heathrow published by the CAA? It requires the airport to publish monthly a load of information on queues at security, but the one thing missing is the border control queue. Would it not be helpful to add that to the list?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

The hon. Gentleman makes the point that we are trying to make in the amendment. I know he and the hon. Member for Finchley and Golders Green raised the question in the evidence sessions. We think it would be helpful, which is why I am keen to find out from the Minister what efforts have been made. She is on record lobbying the Home Office and trying to ensure that the immigration dimension is not the weak link in the chain of passenger experience at airports. The hon. Gentleman makes a valid point and I look forward to the Minister’s response to it, among others.

Seema Malhotra (Labour, Feltham and Heston)

Does my hon. Friend agree that the importance of the issue goes beyond passenger experience to how Britain is perceived? We are trying to grow our trade relationships with other countries, particularly growing economies such as China, India and Brazil.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

My hon. Friend makes an important point that we have covered in Committee over the past few sessions. The issue is about encouraging people to visit the UK, encouraging connectivity and inward investment. The first point of contact for the many important people we invite to the UK is our airport and the last thing we want is to create a negative view on the journey from there to their destination—mainly London, but also other important regional centres.

We all remember the millennium celebrations, when representatives of Fleet street were stranded at Stratford station for four hours, and the impression that created of the Greenwich peninsula and the dome—or the O2,as it is now called. First impressions, as we know, are very difficult to overcome, and hard work is needed to build a positive image. I take my hon. Friend’s point about the first contact for people stepping off the plane. What does the airport look like? What are the attitudes of the staff like? How long will it take to get transport to the relevant destination? That is an important element.

Gavin Shuker (Labour, Luton South)

I commend my hon. Friend on amendment 18. Its beauty is that it does not seek to be prescriptive about what is measured; it seeks only to look at the passenger experience in the three key areas in which it can be negatively impacted.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I am grateful for that generous description. I give credit to the Department and the Minister, because the information required in clauses 83, 84 and 85 is pretty much the information suggested here. The difference between what we are proposing and what the Government have not quite addressed yet is whether there should be a licensed requirement on the airport as regards the CAA and the passenger; it therefore becomes a more important and emphatic dimension to aviation travel. I do not think there is any disagreement between the Government and us about the fact that the intelligence and information would be useful for passengers; the issue is about what level of requirement is needed.

In her response on the immigration dimension, will the Minister cover the experience of eye scanners and the latest technology, and how much of a role that is playing in helping to move passengers through? We see the scanners at airports now and, although there were teething problems as with any new technology, they seem to be working better. How much has been invested in that technology? It would be interesting to hear the Government’s response.

With regard to adverse weather elements, as I mentioned earlier we all know the sad tale of 2009-10 and the appointment of Sir David Quarmby. Sadly, notwithstanding his recommendations, similar problems were found in 2010-11; not all the lessons had been learned or the recommendations applied. How might the Quarmby recommendations provide the framework for the annual survey? He made recommendations about what could be done to ensure that the passenger experience was more pleasurable.

Amendment 19 would require the development of passenger welfare plans. Clearly, contingency arrangements are needed—especially where there may be fault, but also generally where there may not be fault.

Nigel Mills (Conservative, Amber Valley)

My question is about the survey that the hon. Gentleman wants procured and published. Does he think that it is a good idea for the airport operator to be in charge of that process? Will that not create the feeling that the survey might be somewhat rigged in its favour? A better way to proceed might be if the CAA conducts an independent survey.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

That is an interesting point. Given that clauses 83, 84 and 85 require the information to be collated and published, someone has to do that; if the CAA took it on board, it would have to create the bureaucracy to do it. My hon. Friend the Member for Glasgow South raised Passenger Focus, which does the task in some regards elsewhere.

In some respects, a number of airports are way ahead of the game and have already been publishing the data that the Government suggest are appropriate; that is why I mentioned Gatwick earlier. Making doing so an element of the licence would empower the airports and end their negotiations with the airlines on the service delivery that ought to apply to baggage handling, for example.

If UKBA lets down the rest of the chain, who has power to put it under pressure in negotiations? To a certain extent, it is only the Home Office. I am very keen to listen to the Minister on that point. If there was a licence requirement, perhaps negotiations would be more productive at a local level. If the Home Office and the Department for Transport negotiate at the top level and the airports at a local level, perhaps the requirement will ensure that performance improves. We all know that over time it has not been very efficient.

Some airports already publish data in some instances and some publish data in part. They are on the ground and can see what is happening, so it would probably be easier for them to collate the data than the CAA, because that would need a huge body of people at its national headquarters responsible for collating data at the 30, 40, 50, 70—I do not know how many airports we have—licensed airports. It would seem to be better for the collation to be done locally, but I am happy to listen to the Minister’s view on whether that is appropriate.

Mike Freer (Conservative, Finchley and Golders Green)

My problem with the amendment is that customer satisfaction surveys are simply a snapshot. I would prefer real-time information on the quality of baggage handling and queue times in the arrival hall, which I tried to press the Minister to persuade her colleagues in the Home Office to include. Customer satisfaction surveys are simply a small snapshot of a time and are less useful, so I cannot support the amendment, although I would be grateful for the shadow Minister’s comments on real-time information.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I am disappointed that the hon. Gentleman does not feel able to support the amendment; I thought that I was doing a fairly reasonable job. If he had waited until his right hon. Friend the Minister had responded and was then persuaded, I would understand, but this is before he has even listened to the answers. It seems somewhat premature, but I take his point. In principle, we start from “no”, and if we can persuade hon. Members, that is another matter. I fully understand.

I accept that there are limitations in any retrieval system. We are trying to raise the profile of the passenger experience and create a licence requirement, because we think that the airports are best placed to provide the information. I know that how the airports provide it, its quality and whether it is real-time information are matters of concern to the hon. Gentleman and some of his hon. Friends, so it will be interesting to hear what the Minister says in response to his intervention.

Welfare plans need to be in place and contingency arrangements need to be developed where there may be fault on the part of the airlines, but also generally. Without preparation, planning and contingency arrangements, passenger welfare might well suffer. We have seen that over recent years, and we are all trying to make sure that it does not happen again. The Transport Committee was firm about that in its report “Keeping the UK moving”, which my hon. Friend the Member for Blackley and Broughton has mentioned.

Seema Malhotra (Labour, Feltham and Heston)

To pick up on the discussion about how survey data might be collected and whether data might be collected in other ways through the system, does my hon. Friend agree that without passenger surveys we would lose the opportunity to obtain qualitative as well as quantitative information, which might shed a different light on the passenger experience going through airport services?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

My hon. Friend makes an interesting point, which to a certain extent reinforces the point made by the hon. Member for Finchley and Golders Green about the nature and quality of the information that should be collected and how it should be collected.

We want a licence condition to state that the information must be collected. I suspect that some airports will collect more information than others, but we should have a basic requirement, or floor, of information, so that there is at least a starting point for passengers to look at what they might experience when they arrive at different airports. Having declared a benchmark, we hope that airports would use that information to improve their performance year on year.

Iain Stewart (Conservative, Milton Keynes South)

If licensing provisions in the Bill requiring airports to provide such information are too prescriptive, might they not create difficulties? If an airport wanted to invest in an improvement—such as an overhaul of its baggage-handling system—that would cause a temporary drop in performance standards before a long-term gain was realised. Might overly prescriptive licence terms not dissuade the airport from making that sort of long-term investment?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

The hon. Gentleman makes a reasonable point about the publication of any performance expectations by any company, but I would hope that common sense would prevail. As a passenger, if I looked on the website to find out about an airport’s performance and I saw a cautionary notice that stated, “We are investing £1.5 million in improving our services, and in the meantime our expected baggage-arrival time of 25 minutes may be 35 minutes,” I think I would understand that. The hon. Gentleman makes a fair point, however.

In clauses 83 onwards, the Government state that they want to collect the data, so there is no disagreement between us. The data must be collected and published, and passengers must have the opportunity to examine those data. We do not disagree that someone has to do that job, but we say if it is a licence condition, let the airports do it. They are best equipped to do it; they are already doing it in some instances; they are on the ground, so it is easier for them to do it; and the CAA can monitor it. Regarding concerns about the contemporariness of the data because of particular conditions, websites can be updated regularly to communicate any changes. I do not think there is a huge difference between the Opposition’s view and the Government’s, but the question is whether data collection ought to be a licence requirement.

The last amendment in the group, 20, concerns support for stranded passengers. Some airports raised a side issue with the Opposition, and I am sure with coalition colleagues as well, about the dangers of making support for stranded passengers too prescriptive. Requiring airports to house stranded passengers at the hotel nearest to the airport terminal, which is sometimes the most expensive, might cost airports more than if they were licensed to move passengers to hotels within or around the estate. To be perfectly frank, that is a matter of detail as far as we are concerned. We want passengers to have confidence that they will be protected if they are stranded as a result of being let down by an element of the service they expect. We all know that being stuck at an airport, even as an adult, can be a pretty frustrating experience, and if someone has family members with them there is even more pressure.

Providing support for stranded passengers is in keeping with the thrust of the Bill. Clause 1 states that the primary duty is to the passenger. If being a stranded passenger is not a difficult experience, what is the essence of the primary duty? We therefore think that the amendments are not unreasonable, and that a licensing requirement is the best way to deliver them. We are keen to hear from the Government in due course.

Pat Glass (Labour, North West Durham)

I support the amendments. I hope the Minister will explain how the passenger voice, satisfaction and experience will be taken into account. Airlines have a direct relationship with passengers through purchasing tickets or a tour agency. However, that direct relationship is not always shared between passengers and airports, or between passengers and the CAA. The agendas of passengers and airlines do not always match up. Sometimes there is a conflict, usually in the low-cost airline sector, and some chief executives of low-cost airlines do not always help themselves. However, we need to recognise that the agendas of the passenger and the airline often are in alignment. If the CAA is not to have a secondary duty to take into account the views of airlines, I hope the Minister will tell us how she proposes that that passenger voice be captured and heard.

I want to explore the benefits of the CAA being able to focus licences on the specific experiences of passengers at airports, which amendment 18 would help us to achieve. The Transport Committee considered this issue in detail and urged that specifically structured licences to address key areas of passenger satisfaction, including immigration and baggage handling, be considered. I am sure we are all familiar with the frustration, anger and stress experienced at airports: we arrive at one airport, and our luggage arrives at a different airport; we arrive at an airport and our luggage arrives at the same airport, but at a different time; or we are stuck in a long queue waiting to get through security. I remember having an awful experience at an airport where five flights were about to close and there was one security queue. The tension and anxiety was made worse because I was on my own. Crises are always better when they are shared. [Laughter.] I really could entertain the Committee all afternoon with my personal experiences at airports. The Committee will be glad to know that I will not do that, but many of these issues are best demonstrated through case studies, or by people’s personal experiences. The Minister will understand that in the current economic situation, many families face the dilemma of whether they can afford a holiday, and whether they decide they can or not, they really need one. They save hard all year for a well earned break. They deserve good and improving treatment and a pleasant, not an anxious, experience at airports.

The Government have cut 6,500 staff from the UK Border Agency, with 1,500 going from the border force, including 800 this year. I think we can all remember the ill-tempered debates in the House about the relaxation of security checks at our borders last summer. I not sure that anyone yet knows how many people came into the UK without checks, who they are, or what border controls were ultimately agreed on. The bottom line is that the public expect proper immigration controls to be in place. Passengers expect sufficient staff to prevent the massive delays at airports that damage our image and impact on investment and business competitiveness, but also that we get the balance right. I went through Singapore airport recently. It was not until I was in the departure gate that I realised I had not been checked at all—coat, bag, boots and so on. It may well be that Singapore airport has output-based security now, and looked at me and decided I was not a security threat, but I did not know that. I felt incredibly insecure getting on that plane. We need the right provision in place so that we do not have huge queues and damage our country’s reputation, while ensuring that people know they are safe to fly.

The Bill is right to make the primary duty of the CAA to air transport users, but the Minister needs to explain how passengers will benefit from the Bill. As it stands, it is not specific enough about how that objective will be met. We know that very long delays caused by UKBA checks annoy people. Poor baggage handling annoys and upsets people, but what really hurts is long delays and cancellations due to adverse weather, volcanic ash or other external factors, particularly when they could have been planned for, avoided or handled better. Service recovery is a major area of dissatisfaction. It is important that licences take account of that.

Evidence to the Transport Committee included an Office for National Statistics omnibus survey conducted in February 2010, which revealed that passengers were largely satisfied with their experience at airports but were not equally satisfied with all aspects of service. The areas of least satisfaction—those scoring less than 75%—concerned information provided on what goods can be brought into the country; destinations served by nearest airports; baggage collection; and cost of flights. In its own survey of passenger satisfaction at airports, the CAA discovered that immigration waiting times were also an area of concern. Less than 70% of passengers at London’s three major airports were satisfied with immigration services, meaning that 30% were highly dissatisfied. Only 8% of the passengers surveyed were getting through security checks in less than 20 minutes.

Accordingly, the Transport Committee recommended:

“Where possible, airport licences should be structured so that they address key areas of passenger dissatisfaction. Immigration and baggage handling are two services which are not within the remit of airports but strongly impact on passengers' satisfaction with airports. If the Government is serious about improving the passenger experience at airports, it should consider, in parallel, how to address improving service standards by other airport service providers, such as UKBA and private baggage handling companies.”

How does the Minister plan to use the Bill to tackle these issues? Can she talk us through how she intends to define passenger satisfaction and/or the interests of passengers? How will that be captured and how will she be held to account on this?

I think I have already said this, but it is worth repeating that the regulatory regime governing airports should be reformed, with passengers at its core. The CAA’s primary duty should be to promote the interests of passengers. That was the intention of the legislation when the previous Government drafted it in developing these reforms, and I am pleased that the current Government have accepted this approach. However, how is the CAA to weigh the often differing interests of current versus future air transport users? Can the Minister explain in more detail how the proposed aviation consumer advocate panel will work in practice? In particular, how will it identify, represent and promote the interests of passengers and how will it relate to the regulatory process?

Another key recommendation of the Transport Committee, following its detailed inquiry into the failure of both Government and the industry adequately to prepare for and respond to the severe winter conditions in December 2010, was that airports should have in place passenger welfare plans. I cannot imagine how anyone would not think that a good idea. The awful experience faced by many passengers, particularly at Heathrow, demonstrated the need for the sector to up its game significantly on passenger welfare.

Henry Smith (Conservative, Crawley)

I am pleased that the hon. Lady singled out Heathrow rather than Gatwick. During last winter’s heavy snowfall, Gatwick airport was closed for only a matter of hours. It was actually the condition of the roads around the airport that prevented people from travelling, so I want to ensure that the record accurately reflects that Gatwick has the capacity to deal with extreme weather conditions.

Pat Glass (Labour, North West Durham)

That is a really good point. It is a question not only of the airport but the access roads.

The Transport Committee recommended that

“airports be required to develop passenger welfare plans and to provide support to stranded passengers during periods of disruption”,

and was

“disappointed that those conditions were not included in the CAA’s draft licence and expect them to be taken into account when the CAA sets licence conditions.”

The lack of a specific requirement to publish passenger welfare plans is a major omission from the legislation, and amendment 19 seeks to address that.

My understanding is that the purpose of amendment 20 is to require the Minister to explain what provisions the Bill contains to provide assistance to passengers left stranded in airports due to severe weather and other disruptive events. The UK’s reputation was damaged by the scenes of thousands of stranded passengers in airports during the severe winter weather of Christmas 2010. As in the aftermath of the volcano eruption, I was contacted by several constituents trying to get back from airlines the vast amounts of money they had been forced to spend while stranded. I am happy to give a direct example that caused huge distress in my family.

My parents would best be described as vulnerable but adventurous—sometimes too adventurous. My father is severely disabled. He could walk the length of the Committee Room with a stick, but we would tire of waiting for him to get there, and he has limited speech. My mother is physically able, but has limited sight. Between them, however, they do very well, and they get to all kinds of places. In June 2010, they went on a wonderful cruise in the Mediterranean. They returned to Barcelona ready to get a flight back to England, but they were caught by the volcanic ash eruption. They were stuck in Barcelona for five days. Apart from family, they were pretty much left to shift for themselves, which they did—they got to a hotel and so on. However, it took well over a year—with some strong family support—to get that money back from the airlines. People should not be left in those situations. It is important that all passengers receive decent service, but it is particularly important that the most vulnerable are not left to fend for themselves, and that they are at least able to recover the costs they are entitled to in reasonable time and without obstruction.

When unforeseen events occur, we see a lack of action, and there is almost paralysis in government. In the winter of 2010, the then Transport Secretary failed to intervene in co-ordinating the availability of snow-clearing equipment and de-icing fluid among airlines, in line with the independent Quarmby report. When he did act, however, it had a direct impact on constituencies such as mine, because he purloined—I think that is the best word—oil and grit from other parts of the country. Local authorities such as mine in Durham, which had properly planned, ordered and paid for salt for their roads, found their stocks being pinched in panic by the Government.

Nicholas Dakin (Labour, Scunthorpe)

A pinch of salt?

Pat Glass (Labour, North West Durham)

Yes, a pinch of salt.

The Bill should put obligations on airports to provide help for stranded passengers in similar situations in the future, and to prevent a repeat of the past. The action taken needs to cover some key factors. The first of those is early, decisive action on whether to cancel services. Knowing sooner rather than later that a flight is going to be cancelled can have a huge impact on passengers, who can at least make arrangements and avoid being stuck at the airport for days on end, enduring a lack of information, food and so on. If they know in advance, passengers can make alternative, more comfortable arrangements.

The second key factor is the supply of de-icing and anti-icing products or road salt. Thirdly, we need to ensure better liaison on the treatment of the relevant public road networks between airports and their local highway authorities. The hon. Member for Crawley made that point: the problem is not always a flight being cancelled, but passengers’ ability even to get to the airport before their flight takes off. Fourthly, improving access to performance statistics for airlines and airports relating to the management of disruption is also important.

If the Minister is not willing to accept the amendments, which are based on the suggestions and recommendations of the Transport Committee, will she explain what provisions will be made to improve the service for passengers in those areas that cause concern both routinely and during times of crisis at airports?

Julie Hilling (Labour, Bolton West)

I want to speak relatively briefly to amendments 19 and 20. As we have heard, the Transport Committee undertook the inquiry, “Keeping the UK moving: The impact on transport of the winter weather in December 2010”. That in-depth report looked at all elements of transport—not only aviation, but the road network and how transport links together—and recommended that passenger welfare should be at the heart of airport operations. It also agreed with the recommendation of the Begg report that Heathrow and other airports should develop welfare plans for passengers during disruption. The report stated:

“If airlines fail to meet their obligations to accommodate stranded passengers, airports should be prepared to step into the breach. We would support measures by which airport operators could reclaim the costs of providing support to stranded passengers from airlines which had not discharged their legal responsibilities and we recommend that the CAA investigate how this can be achieved.”

The Government responded:

“However, the legal responsibility to provide care and assistance to passengers remains that of airlines. It is important that any initiatives to bolster the provision of passenger welfare during periods of disruption, for instance through passenger welfare plans, do not create any uncertainty in this area.”

The Transport Committee welcomed the forthcoming Bill under which, the Government response said:

“The CAA would have a new primary duty that would put the interests of passengers unambiguously at the heart of the regulatory regime.”

It seems to me that the amendments are consistent both with what the Government have said previously about the Bill and with that in-depth report by the Transport Committee.

The reports, particularly the Begg report, on what happened to passengers at Heathrow during the winter disruption of December 2010 make alarming reading, even if one only looks at the headlines: 9,500 people were sleeping in the terminal; passengers were seeking refuge in subways; a lorry carrying blankets for passengers had to turn back on the M25 because the traffic conditions meant that it could not get there; and very few passengers were provided with water or refreshments. It was absolute chaos and confusion.

As the Begg report found:

“Confused and contradictory messages caused incorrect signals to go to airlines, to passengers, and from airlines to passengers”.

Passengers were given laptops to try and rebook their flights—the laptops were around the terminals—but as my hon. Friend the Member for North West Durham has suggested, some passengers clearly do not have the capacity to do that. There was a real lack of care and concern for passengers at that point.

Seema Malhotra (Labour, Feltham and Heston)

Does my hon. Friend agree that passenger welfare plans are important for medical reasons, too? For example, I am thinking particularly of people who are diabetic, who are very time-bound in terms of being able to access medication or needing to eat at certain times. There should be ways in which those needs can be met in the event of disruption.

Julie Hilling (Labour, Bolton West)

I agree absolutely. Some airline travellers are quite capable of sorting things out for themselves—regular travellers, who know how to rebook, where to go and get food, and what to do in such circumstances—but those who have medical needs, who are more vulnerable, or who are less frequent travellers need our support. There clearly needs to be a system in place for those people who need medical support. There must be channels of support for such people at times of disruption.

It is true that we all get those messages—we see them on the television or hear them on the radio—“Do not travel unless your journey is absolutely essential.” Unfortunately, we all believe that our journey is absolutely essential. People set out in their cars and other modes of transport when anyone who thought about it would not do so. Airports therefore face the difficulty of dealing with us when we believe that, even though it is really snowing or there is thick fog, our flight will still take off. Airports have to accommodate the fact that we are not always sensible. Living in a country that does not often have severe weather, we are perhaps slightly more naive about when we can travel and when we should not.

Going back to what happened during the winter problems, particularly at Heathrow—I acknowledge that other airports dealt much better with the weather—it is unacceptable for passengers to have such an experience. Not only is it unacceptable for them, but it is unacceptable for UK plc. Our airports are our gateway to the rest of the world. We need airports with first-world standards, not standards one would expect in a developing country.

There did not seem to be a huge amount of improvement at Heathrow this year. One day when there was a threat of snow, a quarter of the flights were cancelled. The report states that flights should be cancelled and information given in advance if such disruption is feared. Perhaps the Minister has better information than I do and will be able to respond, but four inches of snow were threatened. Given that we are supposed to have had all this great investment in snow clearing and everything else, cancelling a quarter of the flights feels to me like a knee-jerk reaction. I would be interested to hear whether that was the case.

Yes, airlines are responsible for the treatment of passengers, but it is not good enough for the different airports to have separate passenger welfare plans. A passenger needs to know what support they will get at any airport, because it is the airport, not the airline, that will be blamed if there are problems. Whether a passenger has booked with Virgin, bmi, or whoever, they will blame Heathrow, Manchester or Gatwick for their bad experience and lack of support, rather than the airline that should be providing that support. Airports clearly need the power and responsibility to have concerted passenger welfare plans, and the CAA needs the authority to ensure that those plans happen.

Gavin Shuker (Labour, Luton South)

Thank you, Sir Roger, for calling me to speak to this important group of amendments. I intend to stick tightly to the amendments, you will be pleased to hear.

On amendment 18, my hon. Friend the Member for Poplar and Limehouse set out the Opposition Front-Bench position that annual surveys should be included in the Bill, to ensure that all airports have a level playing field and are able to report. The inclusion of such data strikes me as incredibly important.

The hon. Member for Milton Keynes South raised the prospect that publishing such information might be detrimental to airports’ undertaking major works, because it might knock their numbers on border control, baggage handling or arrangements for delays, but that has not been my experience of the rail sector. Passengers are quite able to establish clear lines of demarcation when reading the data. For example, on my service, the Thameslink line, a welcome major upgrade programme is going ahead, thanks to the hard-fought efforts of the previous Government. The key point is that passenger satisfaction figures for the line show that people are able to distinguish between major works and the service provided by the train operating company, the stations and Network Rail.

Iain Stewart (Conservative, Milton Keynes South)

I rise to clarify the point I made. I am not against the provision of the information—I will remark on that when we get to clause 83. My concern—I put it no stronger than that—is that if the licence is over-prescriptive, that might act as a disincentive. I am not against the availability of information.

Gavin Shuker (Labour, Luton South)

I accept those remarks; the hon. Gentleman is very sensible. I would say—this segues into my major point on the amendment—that we already require a strict licensing regime on airports. What the amendment would do is designate areas where we believe additional information is important. In the context of a 120-page Bill on how we govern the licensing of airports and wider issues in aviation, it is not beyond the wit or remit of this Committee or the House to designate areas where additional information is important.

We recognise a degree of market failure. That is why we seek to promote or replicate competition among licensed airports, particularly in areas across the south-east. In that context, the more information that is available, the better. Equally, when the provision of this information is voluntary but not specified in the licensing regime, it puts other airports at a disadvantage to those that publish information. A core way to replicate competition in the sector is to democratise that information and ensure that it is available.

The requirement in amendment 19 on licence holders to develop passenger welfare plans goes to the heart of the passenger experience. We understand that good airports are doing the work anyway. Sometimes they are stimulated into undertaking the work.

Kwasi Kwarteng (Conservative, Spelthorne)

The hon. Gentleman say there is a need for extra provision of information. He also says that good airports are doing that anyway. Does he believe that is a reason to amend the Bill—to require the provision extra information by statute?

Gavin Shuker (Labour, Luton South)

Yes, I do. Frankly, I do not believe that this would place an additional regulatory burden. A licence is already a complex document, subject to deep legal scrutiny, and the process of negotiation with the CAA will take time. I do not believe it is beyond our remit to ask for an additional requirement. Requiring the holder of a licence to develop passenger welfare plans is not only about regulation or securing a level playing field; it is about the common levels of decency we would expect from an airport in a first-world country, as my hon. Friend the Member for Bolton West said. I concede that many airports do this, so let us create a level playing field and ensure that every passenger flying from this country has access to a passenger welfare plan.

Amendment 20 requires licence holders to provide support for passengers stranded at airports. Luton airport is in my constituency and I am proud to use it For me, there is no problem being stranded there, because I can easily walk the three or four miles home—I have done so when the airport has been subject to flooding. For those undertaking the return journey or flying in from Europe on low-cost budget airlines, knowing that that airport has already undertaken the deep work and that it can be held to account for both the quality and the provision of a stranded passenger plan is really important. It is a way we can, in the absence of a broader aviation policy from the Government, at least seek to ensure that our airports are still attractive to travellers coming from abroad.

In summary I believe these are helpful amendments. They do not place an overbearing burden within a structure in which we already ask for a lot of information, expect high standards and require a detailed licensing regime to be put in place. It is within the remit of this Committee to ask for that.

Fiona O'Donnell (Labour, East Lothian)

I am very pleased to have the opportunity today to speak in favour of amendments 18, 19 and 20, especially as I spend more and more time in airports, representing as I do a Scottish constituency. Like others in the room I am a member of the Scottish Affairs Committee; when we visited the Western Isles, we flew from Barra, where even if people jumped up and down on your suitcase, Sir Roger, you would still say you had a wonderful experience because of the incredible surroundings. You walk on to the beach to take off in a plane. Landing was a little trickier, but I will leave that story for after we adjourn today.

I hope that the Minister recognises that the amendments my hon. Friend the Member for Poplar and Limehouse proposes are intended to be helpful. There is a real opportunity to improve the Bill and to improve the experience of passengers. I slightly disagree with my hon. Friend the Member for Luton South in that I do not think this will provide a level playing field, but think it will drive innovation and raise the importance and the profile of passengers’ experiences.

Gavin Shuker (Labour, Luton South)

I am delighted to say that there is no zealot like a convert. My hon. Friend is absolutely right. It will raise the game and it will drive innovation within the industry.

Fiona O'Donnell (Labour, East Lothian)

There we are. It appears we are in absolute agreement after all. I am grateful to my hon. Friend for clarifying that.

The hon. Member for Finchley and Golders Green questioned the value of a snapshot of passengers’ experiences, and I can see the limitations, but I still think the proposed measure has great value because I cannot imagine that many airports would simply do that annual survey. If I were the manager of an airport, I would perhaps want to do a small survey before the annual survey, just to get an indication of what was going on and where the problems would be. I foresee an opportunity in the transport sector. We have national transport awards; perhaps if we had this annual survey, the passenger experience could move up the agenda and airports could be rewarded for their contribution to customer service.

If we had taken that snapshot during the volcanic ash episode, it would have been an extreme picture and perhaps not typical of every passenger’s experience, but I still think the industry could have learned valuable lessons from those most extreme of circumstances. My own experience at the end of last year, flying back up to Edinburgh when we had the gales, was that while travelling out to the airport, it was clear from knowing that one flight was cancelled that all the flights from about 2 that afternoon till the end of the evening would be cancelled, as well. For some reason, though, the airport let us through security and then we were stranded in no man’s land; it was difficult to progress. Communication is certainly a key area where standards could be improved.

Anyone going to A and E or as an out-patient to other hospital services sees a charter. When they were introduced people thought they were meaningless, but it is incredibly empowering for patients. I would like to see airports doing the same—setting out for people the kind of standards that they should expect at the airport.

Pat Glass (Labour, North West Durham)

I do not want to get into the issue of the Bones’ breakfast table, but my parents’ experience meant that they will never fly again. Unfortunately, that has not extended to trains or ferries.

Fiona O'Donnell (Labour, East Lothian)

Such anecdotal evidence is really helpful, and that can be the reality of one bad experience—[ Interruption. ]

Roger Gale (Conservative, North Thanet)

Order. There is a certain amount of chirruping going on. If hon. Members want to chirrup, please do it outside.

Fiona O'Donnell (Labour, East Lothian)

Thank you, Sir Roger. I am grateful for your intervention, and I hope that all Government Members are now paying attention.

I was discussing the possibility of a charter. In all my hours in airports, I have never seen anything telling me about my right to complain and how to complain about the service that I was receiving. That would drive airports to be far more proactive in seeking feedback from passengers and improving their service. I recently travelled on the Heathrow Express, and someone sat beside me and conducted a survey over the course of the journey, which was really helpful. It actually made me focus on my surroundings and the quality of the service. Those surveys are being done because it is valuable information, and it would be of equal value to airports.

Gavin Shuker (Labour, Luton South)

My hon. Friend is being characteristically generous. Does she agree that one particular issue about not specifying in the Bill those criteria that should be measured is that it is difficult to compare a variety of different surveys from different airports, conducted in different ways? To create a true hierarchy, it would be helpful to measure the same thing.

Fiona O'Donnell (Labour, East Lothian)

As ever, my hon. Friend makes a thoughtful and informative contribution to the debate. Many benefits will flow from the proposal. Some of them will not be foreseen today, but the industry will drive them forward.

Nicholas Dakin (Labour, Scunthorpe)

My hon. Friend made the pertinent point that her argument would be valuable to airports, but does she agree that it would also be valuable to UK plc, because the airports are the gateway to the rest of the world?

Fiona O'Donnell (Labour, East Lothian)

Absolutely. Again, that is a helpful contribution. A constituent recently raised with me her embarrassment at what she felt was not the warmest and friendliest welcome when her family, who were visiting Scotland for the first time, were coming through both security and immigration. We want people’s first impression to be that the UK is open for business and welcoming to all, especially given the importance across the UK of the tourism sector, which we certainly want to grow.

I frequently pick up on the inadequacy of signage in airports. When people get off an aeroplane, they are not sure where to go for their bags, to exit, or to access other transport to another airport or into a city centre. I wonder whether that dissatisfaction is ever being captured by the airport. I am sure that a survey would flag that up and I hope that we would then see some improvement. It would certainly have helped me the other day when I inadvertently exited the secure area without picking up my bags and had to go through a long and, to be honest, quite humiliating experience to retrieve my luggage.

I hope that the Minister will see that we have a real opportunity. We may be discussing a minority of passengers, but we are discussing welfare, and the reality is that passengers are sometimes travelling at a time of real stress or crisis. They may be returning home for an ill relative; knowing that they can expect to be treated with dignity and respect in our airports is something of which we could be proud. I urge all hon. Members to seize the opportunity to improve the experience of passengers in all our airports.

Theresa Villiers (Conservative, Chipping Barnet)

We have had a wide-ranging debate, and I welcome the flexibility that you have shown, Sir Roger, in allowing hon. Members to wander far and wide on crucial matters. In fact, it reminds me of my days as an MEP when war stories were frequently exchanged about the nightmares that parliamentarians had during air travel; I sometimes think we spoke of little else in Strasbourg. I am concerned to hear about all the unfortunate personal experiences, particularly that of the parents of the hon. Member for North West Durham.

In a moment, I will come to why the amendments are inappropriate. The belief that issues such as security queues, passenger welfare during disruption and winter resilience are crucial for passengers unites us. Regardless of what degree of detail should go into licence conditions, and I will come on to that in a moment, I hope that we all agree that the licence system itself will be tremendously valuable in enabling the regulatory system to respond more effectively to such issues.

Your entirely expeditious and efficient chairing, Sir Roger, has meant that we have not dwelt on the less contentious clauses, so we have not dwelt on the principle of the introduction of the licence into the airport economic regulatory framework. It is an innovation. It is so important and valuable for passengers because, at the moment, more or less the only practical, viable tool available to the CAA is a five-yearly price cap; beyond that, it has very limited powers to intervene and deal with the sorts of concerns raised today.

The fact that the Bill introduces a licence system, which could conceivably cover a range of the matters raised today, is a crucial reason why I hope that hon. Members on both sides of the Committee will support the Bill. It was a vital part of the work that the previous Government and the current Government have done on the Bill.

I echo and welcome the comments by the hon. Member for Scunthorpe on how important our international gateways are for UK plc and our competitiveness. The Government are determined to make our airports better, and the provision of the licence-based system for economic regulation is a key part of how we will do that. There is a difference of opinion on whether the amendments are the best way to deliver the important goals debated this afternoon, but I take on board the fact that the Transport Committee’s report highlighted such matters. It is particularly important that this Committee has a chance to consider them.

There is no doubt that passengers want efficient baggage handling services when they travel by air and airports to be properly prepared when the cold weather hits. The experience of recent years has demonstrated how vital it is for airports to prepare appropriately for extreme weather conditions, as hon. Members have illustrated this afternoon. It is also clear that the aviation sector as a whole needs effective means of dealing with passenger welfare when extreme weather leads to disruption.

Chris Heaton-Harris (Conservative, Daventry)

Should airports not also need to prepare for passenger welfare in cases of union-led disruption? Given the comments of Mr McCluskey only this week, surely we need to be very wary of that in the coming months.

Theresa Villiers (Conservative, Chipping Barnet)

My hon. Friend makes a good point. It would be hugely irresponsible if the unions chose to disrupt our airports during the Olympics. It would cause catastrophic damage to the reputation of the UK when the eyes of the world will be on us, and I hope that the Labour party will urge its union friends not to undertake such action.

Gavin Shuker On a more consensual point, I am grateful to the Minister, who is very distinguished and has responsibility for railway services. Does she agree that a strength of the current system of monitoring information, particularly in the rail industry, is that the same passenger survey is conducted across all the train operating companies? Does she also agree that we should measure the same things in airlines to get a uniform picture of airports?

Theresa Villiers (Conservative, Chipping Barnet)

The amendments would apply only to airports subject to economic regulations, so would not deliver what the hon. Gentleman wants. The clauses on information provisions later in the Bill may start to address such concerns by enabling the CAA to ask for information, which can be looked at consistently across different airports. He may be getting ahead of himself, because that excitement awaits us next week.

As I have made clear, I can understand and agree with the sentiment behind a lot of what is in the amendments, but I cannot recommend accepting them. I ask my colleagues to vote against the amendments if the Opposition press them. The Bill provides a more effective means to protect passenger interests.

Clause 18 and the licensing regime as a whole will give the CAA the flexibility to tailor licence conditions to the specific circumstances of individual airports that have substantial market power and thus fall within the remit of economic regulation. Such flexibility is an important means of minimising the distortions associated with regulatory intervention and ensuring that action taken by the CAA is targeted and proportionate. “One size fits all” does not necessarily provide the right answer in this sphere, as in others.

Giving the independent regulator flexibility and discretion in deciding the content of licences is the most effective way to protect the interests of present and future passengers, as called for by a number of hon. Members, including the hon. Member for North West Durham. If Parliament chose to accept such amendments and hard-code certain specific points into licences, that would constrain the regulator’s freedom to decide what priority should be afforded to different passenger concerns and what costs should be allowed for the delivery of competing consumer priorities.

The amendments would unbalance the licence system, because passengers care about a range of issues. Indeed, various hon. Members have mentioned security, which is not included in the amendments. Some issues for which there may be a pressing case for regulatory intervention at one airport may simply be an irrelevance and an unnecessary additional cost if required at a different airport.

The shadow Minister himself acknowledged that there might be different needs at different airports, and I ask the Committee to recognise that the expert independent regulator is the right body to decide between competing priorities, which is in line with best practice across the regulatory sector and the previous Government’s approach. A prescriptive approach in the Bill, which the amendments would introduce—they require the regulator to do certain things—would likely make it much more difficult for the regulator to adapt its approach—not only between different airports, but to the changing concerns of passengers.

If we were to adopt the amendments, the Bill would oblige the CAA to give greater weight to the factors that it sets out, but other matters might become equally important or much more important to passengers in the upwards of 20 years that we expect the regime to be in operation. The approach set out in the amendments goes against the point, raised throughout our considerations by the hon. Member for Blackley and Broughton, about the need for proportionate regulation.

My hon. Friends the Members for Milton Keynes South and for Finchley and Golders Green have highlighted concerns about the limitations of the snapshots that one might get from passenger surveys. Let me make it clear that the Government take winter resilience seriously. It is important that the Committee does not talk down the efforts that many of our airports are making to address that problem, not least the significant investment at Gatwick, Heathrow and other airports.

I reassure hon. Members that the CAA will use the new flexible licensing powers set out in the Bill to focus on winter resilience and passenger welfare in the event of extreme weather disruption, regardless of whether they are included in the Bill as the amendments propose.

In response to a request for advice from the Secretary of State, the CAA published an indicative licence, to which the shadow Minister has referred, in January to assist Parliament in its scrutiny of the Bill. A copy of the indicative licence is in the House of Commons Library, and at the Department for Transport’s request it includes provisions on winter resilience. Condition 7 requires the licence holder to operate the airport efficiently and to endeavour to minimise detriment to passengers from disruption. Condition 7 also requires the airport to draw up, consult on and gain the CAA’s approval for an annual resilience plan setting out how the airport will secure compliance with its obligations under the condition. The licence holder is also obliged to comply with commitments it has made in its resilience plan.

The CAA sought initial views from industry in drafting the indicative licence. Because Parliament is still considering the Bill, the CAA has not started to consult formally on proposed licence conditions for each airport that will be subject to regulation. If the system proposed in the Bill goes ahead, the CAA will consider the extent to which it is necessary or expedient to include in its licence proposals conditions for operational resilience and other matters, such as passenger welfare or baggage handling. The CAA expects that those conditions will include the taking into account of other obligations on service quality standards, and the success of codes of conduct and voluntary arrangements being adopted by the industry. Such options should be available to the regulator. The regulator may want, via the licence, to opt for compulsion, but there are also lesser means of ensuring that the passenger interest is protected, if the airport adopts a voluntary code that is subsequently approved by the CAA.

The amendments would constrain the CAA’s powers to opt for lighter-touch approaches. Against that background, we believe that putting specific requirements in the Bill concerning matters such as baggage handling and winter resilience might be disproportionate and would place an unnecessary restriction on the CAA’s flexibility to develop proportionate and effective ways to address passenger concerns and adapt to changing passenger concerns over decades to come.

I hope I can give the Committee further reassurance, particularly on clause 1(3)(d), which requires the CAA to have regard to guidance from the Secretary of State on economic regulation. The Bill contains a provision for the issuing of guidance to the CAA, to which it must have regard when making regulatory decisions. We expect high-level policy guidance to include matters relating to resilience conditions, such as winter resilience. That is another way in which the Bill provides, without containing a prescriptive requirement, for such matters to be at the forefront of the CAA’s work.

I now turn to the questions about UKBA. Members who were keen for the licence condition to cover matters relating to UKBA will be disappointed, because clause 77 makes it clear that certain Crown functions are outside the scope of the Bill. The accountability for the actions of UKBA and the UK border force is properly to Ministers and Parliament rather than to the aviation regulator, and every member of the Committee will be aware of the robust exchanges that regularly occur in Parliament concerning the security of our borders. The shadow Minister asked me to relate the discussions I have had with the Home Office. As I said in my evidence to the Committee last week, UKBA contributed usefully to the Government’s task force on south-east airports, and I recently met with the Minister for Immigration, my hon. Friend the Member for Ashford (Damian Green) to discuss the questions about transparency that were raised on Second Reading. As I said in my evidence, he indicated that he was happy to look again at transparency in relation to UKBA, and to consider whether it might be appropriate to publish port-by-port information.

Gavin Shuker (Labour, Luton South)

It might be helpful to correct a misconception. The amendment from my hon. Friend the Member for Poplar and Limehouse mentions border control services. I am aware that at my own local airport of Luton there is a debate about how much space is provided if we seek to expand the airport for border control services. That is not just about UKBA; it is about the broader approach of the airport as well.

Theresa Villiers (Conservative, Chipping Barnet)

The hon. Gentleman is obviously well informed about airport matters, as he represents one of the UK’s leading airports. I welcome his contribution.

It has been a good debate but I cannot propose that my colleagues support the amendment, and I hope the Opposition consider withdrawing it. I can reassure them that the Bill as drafted will give the CAA tools to deal with the sort of problems discussed today that are much more effective than those under the current regime. Therefore, I hope they will support the Bill and the clause they seek to amend.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I am grateful to the Minister for her response. As she said, there is much agreement on elements of the Bill. We agree that the licensing system will improve matters and have a positive impact, and that the CAA’s existing powers are limited. Where we disagree is with her view that our amendment would be too restrictive because it says “must include”. It is not exhaustive and nor is it prescriptive or too limiting. It is very much a question of emphasis, and we think this measure should be part of the licence requirement.

I do accept, however, the point about clause 77 and the Crown dimension—although it is not enough for us to decide to withdraw our amendment. The Bill says that the relevant provision should not apply, and we want to change that. I know that other legislation will have an impact, but to a certain extent we are talking about the principle of the matter.

The Minister says that the CAA expects to deal with the issues we are raising, but does not want them included in the Bill. Again, it is a question of emphasis. She says that the indicative licence does include resilience. If it is in the indicative licence, it is therefore pretty much accepted that it will be part of the licence, even though it is only out for consultation.

The CAA is suggesting that our proposal ought to be part of the licensing system, so it seems to be on side. The Minister says that the CAA will consider other matters once the Bill has been passed. I am sure it will look at this discussion, consider what has been said by hon. Members of all parties and perhaps think that such a measure should be included. Notwithstanding the Crown dimension to UKBA, which may be outwith its remit, it may well take account of what has been said.

The Minister says that the Secretary of State may direct the CAA. However, we think that such a provision should be included in the Bill now, because the primary duty is towards the passenger. In that regard, the Minister has not persuaded us that we should withdraw these amendments.

Graham Stringer (Labour, Blackley and Broughton)

We have not touched on how, through amendment 20, airlines’ current responsibilities for passengers who are stranded would overlap with the future responsibility of airports. I do not understand that and would be grateful if my hon. Friend explained.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

My hon. Friend raises a useful point about amendment 20, which says,

“A licence must include provisions requiring the holder…to provide support for stranded passengers at airports.”

We certainly see that as a matter for dialogue with all those within the airport, because they would have to engage with those providing services there, as well as those providing the customers. As part of a licence requirement, it would need to be demonstrated that the airport was prepared to deal with stranded passengers. We have heard examples of the difficulties passengers get into, which we ourselves are familiar with. It is very much part of the role of the licensing regime to improve the passenger experience.

In conclusion, we want to press the amendment to a vote.

Roger Gale (Conservative, North Thanet)

Let me be absolutely clear. Does the hon. Gentleman wish to press all three amendments?

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I do.

Roger Gale (Conservative, North Thanet)

I am satisfied that the matters arising from clause 18 have been sufficiently debated. I therefore intend to put the question on the clause straight to the Committee.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

On a point of order, Sir Roger. I beg your pardon, but there is one small point on which I would like clarification. I do not seek a debate. I know the Minister may want to speak to the clause, but that is a matter for her. I should like to ask her a minor question on the wording of the clause, which is outside the scope of the amendments.

Roger Gale (Conservative, North Thanet)

With respect, it is not a matter for the Minister; it is a matter for me. The clause has been extremely heavily debated already. However, as the request is from a Front Bencher, I will allow the hon. Gentleman to put his point and the Minister to answer.

Nigel Mills (Conservative, Amber Valley)

On a point of order, Sir Roger.

Roger Gale (Conservative, North Thanet)

No.

Jim Fitzpatrick (Labour, Poplar and Limehouse)

I want to ask the Minister about a brief conversation we had before the sitting. The end of subsection (1)(b) states:

“having regard to the CAA’s duties under section 1.”

She mentioned to me that that applies to the CAA’s general duties under clause 1, but it is not clear whether the wording refers to the general duty in that clause, or to other duties elsewhere in the Bill.

Theresa Villiers (Conservative, Chipping Barnet)

I am grateful to, you, Sir Roger, for allowing a short exchange on clause stand part, but I will not delay the Committee extensively. As you have indicated, we have had a wide-ranging debate. I start by confirming that the reference to “section 1” in clause 18 is to what is currently clause 1, so it refers to the primary duty to end users.

There is one remaining issue on clause 18: as we discussed this morning, the Competition Commission has the power, at present, to order divestment in relation to airports. I want to share with the Committee that it is not, and never has been, the Government’s intention to extend that power to the CAA. We do not intend to give the CAA the power to require divestment of airport facilities. A query has been raised, however, on whether the licensing powers in the clause could, in theory, be used by the CAA to force the divestment of airport facilities, such as a terminal. We are giving careful consideration to that issue, and will continue to do so, but to provide reassurance, I refer the Committee to the better regulation obligations on the CAA in clause 1(4). Those principles oblige the CAA to carry out its regulatory activities in a proportionate way, as we have discussed.

Our strong view is that even if clause 18 could, in theory, be used to order divestment, the Government are not convinced that it would ever be a proportionate, appropriate response for the CAA, having regard to the limits on its role set out in the statutory framework and the scope of its licence-making powers. That is in contrast to the much broader remit of the Competition Commission, which has very wide-ranging powers to assess fundamental structural problems across different markets and conduct far-reaching investigations, including on matters such as divestment.

The Competition Commission’s role, therefore, goes beyond the defined, targeted focus of the CAA’s statutory function. Moreover, even if the CAA saw a case for divestment, the obvious option would be to make a reference to the Competition Commission as the body with the obvious remit to cover a change of such magnitude.

Roger Gale (Conservative, North Thanet)

The question is that clauses 19 to 22 stand part—

Jim Fitzpatrick (Labour, Poplar and Limehouse)

On a point of order, Sir Roger. Unfortunately, we have been taken slightly unawares. We had hoped to secure agreement from the Government, with your indulgence, to conclude at the end of clause 20 today, and to resume on clause 21 on Tuesday morning.

Roger Gale (Conservative, North Thanet)

That is fine.