Examination of Witnesses (Questions 228-239)|
18 JANUARY 2006
Chairman: Lady, gentlemen, may I pray
your indulgence while we do some housekeeping. Members of Parliament
having an interest to declare?
Mr Martlew: Member of the Transport &
General Workers and General Municipal Workers.
Clive Efford: Member of the Transport
& General Workers.
Graham Stringer: Member of Amicus and
previously a director and chairman of Manchester Airport plc,
the predecessor of Manchester Airport Group.
Chairman: Gwyneth Dunwoody, ASLEF.
Mrs Ellman: Member of the Transport &
General Workers Union.
Q228 Chairman: Lady and gentlemen,
you are most warmly welcome this afternoon. As you came imagine
this is the first time an in-depth inquiry has been undertaken
into the work of the CAA. We welcome, therefore, your evidence
which will be of enormous benefit to us. May I ask you, first,
to identify yourselves for the record, starting with Mr Jowett,
and then I am going to ask you if you have something to say and
cut you off if you say it!
Mr Jowett: Keith Jowett, Chief
Executive of the Airport Operators Association representing 72
airports across the United Kingdom.
Ms Burns: Rowena Burns, Strategy
Director for the Manchester Airports Group.
Mr Toms: Mike Toms, Planning and
Regulation Director, BAA plc.
Mr Hall: Ian Hall, Operations
Q229 Chairman: I do mean it when
I say is there anything any of you would like to say?
Mr Jowett: I might just state
that although we will be holding our own individual positions,
which I am sure the Committee will wish to explore, we do subscribe
generally to a strong view about the professionalism exhibited
by the CAA over many years. We have some concerns, of course,
about the developments of the future introduced by Europe's increasing
responsibilities in these areas. I am sure those things will come
out during our discussion.
Q230 Chairman: That is helpful, Mr
Jowett. I think Sir Roy has admitted he is not entirely perfect,
perhaps we can accept there are the odd things we can criticise.
Several of you have pointed to the need for a greater degree of
integration and co-ordination between the Department for Transport
and the CAA, mainly in areas of policy development. How serious
is this lack of co-ordination?
Mr Jowett: May we ask Mr Toms
to address that in the first place.
Mr Toms: The issue is an issue
of principle at the moment and how serious it is will become clear
in the next year or so. If I may exemplify the potential nature
of the problem: the Government's Air Transport White Paper, which
was produced after a huge amount of public consultation and a
great deal of analysis, set out one specific policy which is the
policy that Stansted should have a new runway as soon as possible
with a target date of 2012. The CAA has said, quite correctly,
that it is not its duty to implement Government policy and that
its statutory duties may lead it to a different position. If it
was to lead it to a different position on the right date for the
development of Stansted's runway that would create a significant
policy tension for us because we could build the runway to one
date, we could build it to the other but we cannot build it to
Q231 Chairman: Anything else? That
is a major problem but any other aspect of their work which strikes
Mr Toms: That is probably the
most outstanding one, Chairman.
Q232 Chairman: Is it a structural
problem, this lack of co-ordination?
Mr Toms: I think it is a combination
of structure and conduct. If I can exemplify this slightly. The
structural issue is straight forward in as much as the CAA are
under some legislative constraint. It has duties and its duties
do not include the implementation of Government policy. The tension
is built into the system. A bit of tension is not bad in the system
but given that tension exists I think that there is a challenge
for the CAA and Government to find ways to accommodate each other's
policies and find the greatest possible clarity and commonness
of ground so they can give clear policy signals to us. The challenge
is to work the difference as effectively as possible so we can
know where we are.
Q233 Chairman: You are not saying
in effect they do not give you a clear view of a policy, what
you are saying is frequently there are conflicting policies?
Mr Toms: There can be conflicting
Q234 Chairman: Does the Department
take that much notice of the advice that it gets from the CAA,
because that is one of their functions after all?
Mr Toms: I think the Department
does take the advice of the CAA. It is interesting though that
in the build-up to the Air Transport White Paper, in which we
participated a great deal, the CAA was not wholly engaged in the
analytical work which led to the determination of policy. Had
that level of engagement been greater, the scope for common understanding
would have been greater on areas like traffic and market analysis,
Q235 Chairman: Can I ask Manchester
Airport Group: we have heard accusations that it is not possible
for the CAA as a single organisation to reconcile all these conflicting
demands, but particularly in relation to the area of regulation
you have said that you think they have got a good balance. Is
it an easy one or does it require constant review?
Ms Burns: I think it requires
constant review. I would echo Mike Toms' comments in general about
the nature of the tension between the CAA and the DfT. I do not
think it is structural. The CAA's primary duty requires it to
consider how best the needs of airlines and their users can be
promoted through the development of infrastructure and that necessarily
means the CAA needs to take a view about the growth in passenger
demand. It would make every kind of common sense for the CAA and
the DfT to do that in a collaborative fashion.
Q236 Chairman: You are not suggesting,
for example, if its facilities are split up, its regulatory duties
are split up, that would be easier for the CAA?
Ms Burns: No, I think it is a
matter of will more than organisational structure.
Q237 Chairman: Lack of will or direction?
Ms Burns: The dialogue between
the DfT and the CAA on this matter and I think on other issues
could be closer. Could the DfT encourage that more than they do,
I think possibly yes, they could.
Q238 Chairman: You are not suggesting
a single transport regulator?
Ms Burns: No.
Q239 Graham Stringer: Can I ask BAA
whether they believe that the CAA should continue to treat the
three mainland airports as one body to be regulated or whether
they should be economically regulated separately?
Mr Toms: That is a core issue
of policy for the CAA which it will have to determine in the next
regulatory review. I would not want to take the time of this Committee
in trying to have that review now. I want to make one point about
the way in which they approach that issue which is that for around
20 years the Government, the CAA and the Competition Commission
have a common view of how pricing should be done in the South
East, and that was a system view of pricing. That view was the
view which drove the early development of Stansted and the early
development of Stansted creates a competitive basis which has
delivered lower fares and higher choice to passengers. The CAA
changed that policy, despite the preference of the Competition
Commission in 2003. It changed it without any analytical evidence
as to what the consequences of that change would be.