Select Committee on European Scrutiny Thirty-Seventh Report


56 Transport security

(27746)

12168/06

COM(06) 431

Commission Report on transport security and its financing

Legal base
Document originated1 August 2006
Deposited in Parliament22 August 2006
DepartmentTransport
Basis of considerationEM of 5 September 2006
Previous Committee ReportNone
To be discussed in CouncilPossibly 12 October 2006
Committee's assessmentPolitically important
Committee's decisionClear

Background

56.1 Since the terrorist attacks of 11 September 2001 there have been a number of Regulations and Directives concerned with transport security. Industry representatives and members of the European Parliament have raised concerns about the costs of these measures on a number of occasions. Some of the legislation has only been agreed with the proviso that the Commission would subsequently carry out a study of security financing.

56.2 In recent years the Commission has produced a number of studies, related to aviation, maritime and ports security, some of which have noted difficulty in obtaining complete or accurate data.

56.3 The European Parliament has put forward a number of amendments to a draft Regulation[140] to amend the framework Civil Aviation Security Regulation, (EC) 2320/2002, which had been agreed to a tight timetable after the September 2001 attacks and was considered to lack clarity and flexibility. The most controversial of the European Parliament amendments concern funding for aviation security provisions. A number of Member States, including the UK, have said that all of the proposals involving state funding are unacceptable and the Commission also opposes these amendments (but it has acknowledged that there are precedents for such provisions). There is a risk that the draft amending Regulation will fall unless the amendments are withdrawn.

The document

56.4 The Commission Report is a more general study of the funding question related to aviation, maritime and port security. The Commission first notes some of the findings of the earlier studies, including that for intra-European travel security taxes and airport charges represent between 1% and 2% of the average fare, that the average investment required for security in a newly built ship ranges between 0.0015% for an 8000 tonne container vessel and 0.0006% for an 110,000 tonne LNG tanker of the total cost and that additional costs for port facilities range between €798,000 for multi-purpose ports and €79,000 for container ports.

56.5 The Commission then identifies three main types of costs to be taken into consideration:

  • those for administering security rules and monitoring compliance;
  • those resulting from applying legislation — broken down into administration costs, fixed costs, such as investment in equipment, operating costs, staff training and wages, and exceptional costs, where threat levels increase and extra measures are introduced (aviation security legislation has no requirement for extra measures for an increase in threat, maritime legislation provides for three levels of threat); and
  • those resulting from terrorist attacks.

56.6 The Report makes no recommendations for state funding of security, but draws out three issues:

  • financing mechanisms for transport security are lacking in transparency;
  • as funding mechanisms vary there may be distortion of competition both within the Community (particularly where more stringent measures are concerned) and internationally (particularly in respect of the US); and
  • state monies used to fund transport security do not constitute state aid — the Commission cites a number of legal precedents involving the use of state monies to meet security costs and concludes that in each instance these can be considered as costs which might properly fall to the public purse.

The Government's view

56.7 The Parliamentary Under-Secretary of State, Department of Transport (Gillian Merron) notes that the Report makes few recommendations and says that it has no significant policy implications. She adds that:

  • there has as yet been no reaction to the Report from members of the European Parliament, but it is clear that the contents are not in line with their demands for a uniform system of state funding (or part funding) across the Community;
  • the conclusions on state aid still leave each Member State free to make its own decisions as to whether public funds should be made available to meet security costs or not, and different States are likely to reach different conclusions one from another and according to circumstances. This would fail to address the key concern of members of the European Parliament for a level playing field, even within Europe;
  • it is not yet clear what effect recent developments in the terrorist threat to aviation will have on the views of members of the European Parliament; and
  • it is highly probable that the changed threat will lead to further security measures being introduced and there have been some renewed calls from industry for state assistance.

Conclusion

56.8 This document, which we clear, usefully summarises the issues in relation to the state funding of legally required transport security measures.




140   (26861) 12588/05: See HC 34-viii (2005-06), para 4 (2 November 2005), HC 34-xv (2005-06), para 2 (18 January 2006), HC 34-xxi (2005-06), para 1 (8 March 2006) and Stg Co Deb, European Standing Committee, 7 March 2006, cols. 3-16. Back


 
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