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Bob Spink (Castle Point) (Con): I am grateful to you, Mr. Speaker, and to the Minister for giving me permission to make a brief contribution. I congratulate my hon. Friend the Member for Aldershot (Mr. Howarth) on securing this niche but important debate and for the measured and eloquent way in which he has presented his case.
Businesses often find that general aviation is helpful to them in operating effectively, especially if they have a number of sites around the country or abroad. Senior managers need to get around those sites, and their time is valuable; they need to move quickly, as do sales executives. The proposal, and its associated increased cost to general industry, could cause some of those businesses no longer to use aircraft to get around and that would damage business in general as well as the general aviation business in particular. So there is a wider issue to consider. I ask the Minister to look again at the regulatory impact assessment and make sure that one is conducted fully and properly on the CAA proposals so that business in general and the general aviation industry are not damaged.
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Lembit Öpik (Montgomeryshire) (LD): I, too, thank the hon. Member for Aldershot (Mr. Howarth) for initiating this debate and I thank the Minister for her forbearance in putting up with three speeches when she expected one. I assure the Minister that I do not expect her to respond to my comments this evening, but I thank her for the willingness that she expressed last night to meet those of us who share an interest in the matter perhaps together with some experts from the general aviation sector.
The hon. Member for Aldershot is right about the danger that the potential charges represent to general aviation, which amounts to a multibillion pound industry. As he said, it is the airlines that benefit when individuals invest tens of thousands of pounds in themselves to become commercial pilots. There is a little-advertised, little- celebrated, but important general aviation sector in this country, which brings people together, as the hon. Member for Castle Point (Bob Spink) correctly pointed out. It has been used by party leaders for many years to get them from one part of the country to another.
I hope that the Minister will take on board two things when we have a meeting at her convenience. One is the concerns about charging, which the hon. Member for Aldershot rightly raised. The other element is one to which I alluded last night and will briefly repeat. It relates to safety requirements and homogenising the various qualifications and maintenance requirements. I am thinking of concerns about N-registeredin other words, US-registeredaircraft in comparison with G-registeredUK-registeredaircraft which are used for general aviation in this country. I shall be tabling some parliamentary questions to see whether there is evidence to show that the more stringent requirements in the United Kingdom have a beneficial or perhaps negative effect on this country's safety record.
More than anything, what we are seeing tonight is the beginning of a voice for general aviation which has been silent for too long. Together with the hon. Member for Aldershot, we are doing our best to create an informal parliamentary aviators' club, not for our own best interests but to look after general aviation. I thank the Minister for her willingness to listen to these discussions, and I am sure that they will bear positive fruit for all sides.
The Parliamentary Under-Secretary of State for Transport (Ms Karen Buck):
I congratulate the hon. Member for Aldershot (Mr. Howarth) on securing this debate. I recognise his expertise in this area, and the passion and enthusiasm of the hon. Member for Montgomeryshire (Lembit Öpik) as well, which is evident in the sector generally. I also recognise the sector's importance in entertainmentair displays and so onand in encouraging young people to take an interest in aviation, as well as in the role that it can play in supporting training in the commercial sector. That case is well made.I welcome the opportunity to set out
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my views on some of the issues raised tonight, some of which I hope will help to explain the position and possibly to reassure the hon. Member for Aldershot, although I fear that we will not be able to agree on every point.
First, I want to emphasise the fact that the context for the changes is to keep safety as the No. 1 priority. The skies of the United Kingdom are a safe place to fly, and the Civil Aviation Authority, as the UK's safety regulator, is charged with ensuring that they remain that way. We want all the users of our skieswhether commercial operators, participants in air shows or recreational flyersto have the confidence that they can go about their activities in safety. As the hon. Gentleman recognised, the CAA has a very good record over many years of ensuring that they can do so.
As we have heard, the CAA has been reviewing the basis of charging for its safety regulation work. Early in 2004, the CAA set up the joint review teamwhich has been mentioned and is made up of representatives from the UK aviation industry, the CAA, and my Departmentto look into the issue. The hon. Gentleman suggested that the CAA listens more carefully to the airlines than to the general aviation sector, yet the joint review team consisted of six industry representatives: two from the major airlines, one from the Aerodrome Operators Association, one from the aircraft industry, one representing National Air Traffic Services and one representing general aviation. I hope that the hon. Gentleman would agree that that demonstrated a proper balance across all the sectors and that it more than fairly represented the general aviation sector, given the size of the group and the costs passed to, and the income generated by, that sector.
Separately, in developing its safety regulation costs and charges over the years, the CAA has relied heavily on the Safety Regulation Finance Advisory Committee, which represents a cross-section of the UK aviation industry. The committee meets the CAA regularly throughout the year. It acts in an advisory capacity and considers all the financial aspects of the safety regulation group's activities. One of its key roles each year is to consider in detail the charges proposals before these are put out to formal consultation with the aviation industry. Although the charges schemes have been generally successful, the CAA's cost recovery mechanisms have not been without their critics.
Mr. Gerald Howarth: I am grateful to the Minister for setting out the role played by the Safety Regulation Finance Advisory Committee. I do not know which members of the general aviation community are represented on that committee. Is she able to tell me? This is an unusual thing: it is a question to which I do not already know the answer.
Ms Buck: I am afraid that the hon. Gentleman has already stretched my knowledge beyond its breaking point. It is possible that inspiration may strike me in the next few minutes. If not, I shall be happy to confirm that information at another point.
The charge of cross-subsidy has been one of the most significant criticisms that have been made. The CAA's proposals cover all key charging schemes operated by the safety regulation group, including the air operators'
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certification, aerodrome and air traffic control licensing, personnel licensing, airworthiness and general aviation. At the core of the proposals is the intention to avoid cross-subsidy within and between the schemes. In the past, bigger airlines and airports have subsidised the smaller ones.
The CAA has aimed to make charges fairer and more closely aligned with the regulatory resources deployed to achieve safety goals. By that means, it hopes to reduce cross-subsidies. That means not that all cross-subsidies will be eliminated, but that there will be a better balance.
It is fair that all parts of the aviation industry should contribute to the air safety regulation required in their sector. Neither the CAA nor the major airlines seek to remove all the cross-subsidies from safety regulation charges. Larger operators will continue to pay more. In that respect, the hon. Member for Aldershot specifically mentioned the costs of £4 million that he said would be transferred to the general aviation sector. The conclusion of the charging review was that the air operators certificate scheme cross-subsidised the other charges schemes and that within that scheme light operators were being subsidised to the sum of about £4 million.
It does not follow, however, that £4 million-worth of costs are being transferred to the general aviation community. I stress that that is not the case. Most of the £4 million relates to air operator certificate holders who operate aircraft for commercial gain, most of whom have an annual turnover ranging between £1 million and £145 million. Those operating aircraft for commercial gain compete with others in the same field and should expect to face a broad equivalence of charge.
Whether an operator is a major flag carrier or an operator at the smaller end of the industry, safety regulation air operator certification charges represent on average 0.3 per cent. of an organisation's turnover. For the general aviation charges scheme, the proposals for the next charging period provide for increases of 8.4 per cent., which results in additional income of just £16,000 spread over all the charge payers. It should be noted that no price increases were applied to the scheme during the last charging period, so this represents an increase of only 4 per cent. a year.
The hon. Gentleman asked about the regulatory impact assessment, as did the hon. Member for Montgomeryshire. The CAA is clear that it did not undertake a formal regulatory impact assessment for three reasons. First, there is no proposed change in regulation. Secondly, there is no proposed change in the CAA's policy on the removal of cross-subsidies. Its policy has always been to eliminate, or at least minimise, cross-subsidies between charge payers. Where cross-subsidies arise, the CAA aims to address them over time in a planned way. Thirdly, an analysis of the cost implications for all operators has been undertaken by the CAA and shared with the industry. The general aviation community is of major concern to the CAA and the impact of its proposals on the smaller operators influenced the long transition periods set out in the consultation document, to which I have already referred.
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