I shall be brief in my remarks but I would like to spend a few minutes on an aspect of the debate that we unfortunately did not have sufficient opportunity to
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discuss. On Second Reading, we promised to return with a statement on our attitude to the Civil Aviation Authority's proposal for a £1 levy on all air passengers departing from the UK to help us deal with tour operator and airline insolvency. Those amendments were not selected so I placed a written statement before the House setting out our response to the proposals.
Mr. Donohoe: Has the Minister considered the number of airlines in the United States that are under chapter 11 and on the edge of bankruptcy? Swissair has already gone belly up and other European airlines are in the same position. In such cases, what will happen to UK passengers if they are not covered by insurance, which is the present state of play?
Mrs. Dunwoody: My hon. Friend will be aware that there was a failure during the summer. Although it received astonishingly little publicity, there is no doubt that a lot of people were stranded. It happened to be convenient that many people got on other planes. She should seriously consider the fact that airlines can go belly up.
We believe on balance that insurance should only be compulsory in exceptional circumstances. We do not require travellers to take out medical insurance or an E111. Even with car insurance, the legal requirement is limited to third-party liabilities. The Government have already been working with the airline industry to improve consumer information about insurance cover when booking flights. UK airlines have helped us to develop a basic message for passengers.
Ms Buck: I am not sure what the hon. Gentleman means. I cannot see that there is third-party liability; this is a form of compulsory insurance. We weighed up a number of pros and consthe argument was finely balancedand we found no other area of public policy where we would expect people to be insured compulsorily.
On weighing up the pros and cons, how did the Minister weigh up the £100 million of regulatory costs that the CAA's proposal would have saved versus, as far as I can tell, no saving in regulatory costs for the policy of doing nothing that she has adopted?
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Ms Buck: The costs effectively fall on different parts of the industry. In considering the issue, we bore in mind not only the points about consumer protection and insurance, but the fact that the different parts of the industry had very different interests. The tour operators were generally in favour of one approach, and the airlines were generally, with some exceptions, in favour of another. So it is a question of considering all the different players and then making a decision.
My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) referred to the Irish airline, EUjet, which failed this summer. Other low-cost airlines stepped in to help passengers get home. Similarly, when Swissair and Sabena failed, other full-service airlines honoured the homeward tickets of passengers abroad. The Government have been encouraged by the willingness expressed by airlines to ensure that travellers have better information about insurance and by airlines' assurances that they would continue to take voluntary action on repatriation. I will talk further to airlines in the coming weeks to ensure that effective voluntary measures are in place as quickly as possible.
The Government are also asking the CAA to review whether the system of ATOLair travel organisers' licensingbonds could be replaced with a less burdensome means of meeting tour operators' obligations to package holiday-makers under the package travel directive, while replenishing the air travel trust fund following the passage of the Bill. I am also aware that the Transport Committee, which is chaired by my hon. Friend the Member for Crewe and Nantwich, will consider the issue and invite evidence on it during the next few weeks. I am sure that that will give us an opportunity to discuss this in detail.
Rob Marris (Wolverhampton, South-West) (Lab): Does my hon. Friend share my bemusement that the proponents of the scheme seem to suggest that someone who takes a Ryanair flight to Dublin for a stag weekend at a cost of £30 should pay £1 in insurancethe same as someone who is quite rich who goes to the Bahamas first class?
Ms Buck: That was certainly very much one of the considerations that was weighed up. Some advocates of the proposal claimed that it would end a two-tier system; but, on closer examination, it would merely replace one form of two-tier system with another. As I say, the proposal will be considered by the Select Committee, and no doubt, it will be considered further.
We do not deny the environmental impacts of aviation, which have been at the core of the debates on Second Reading and in Committee. We seek to reduce and mitigate those impacts wherever possible, but the Government remain of the view that, wherever possible, local solutions are best for local problems. We believe that airport operators will make appropriate use of the powers the Bill will make available to them to tackle environmental issues at local level. The Government have statutory powers that we can use where the voluntary approach does not suffice, and those powers will be deployed if necessary.
I am extremely grateful. I know that the Government use the expression "local solutions" quite
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frequently, but I am not sure that they know what "local" means. Does "local" mean close to the airport, or does it cover people, such as my constituents, who live 20 to 50 miles from the airport and who are adversely affected by it? At the minute, it does not look as though it means that.
Ms Buck: If my memory serves me, the default position is about 40 km from the central airport, and it can be extended further to 60 km. I believe that "local" is reasonably widely defined, and I hope that that is enough to satisfy the hon. and learned Gentleman that his concerns are covered by the powers in the Bill.
I appreciate hon. Members' concerns regarding the powers by which we control noise at Heathrow, Gatwick and Stansted. That was also the subject of a considerable amount of discussion in Committee. Any future proposals for changes to the noise control regime at Heathrow, Gatwick and Stansted would be subject to public consultation. The next night restrictions regime until 2012 will be based on current legislation and will continue to incorporate a movements limit. Airports' ability to set up noise control measures and impose penalties on aircraft operators will be enshrined in statute, but airports should follow a "balanced approach" when introducing new measures.
The Bill will also transfer the costs of the CAA's aviation health unit from the taxpayer to the aviation industry; a much fairer arrangement because those that benefit from this service will pay for it. Our Bill will sweep away unnecessary restrictions on public airport companies to develop their businesses.