Civil Aviation Bill
The Committee consisted of the following Members:
Sarah Thatcher, Judith Boyce, Committee Clerks
† attended the Committee
The Chair: Good morning, ladies and gentlemen. I have been asked whether there will be a clause stand part debate. I cannot yet determine that but, as always, I am prepared to accommodate a broad-ranging debate on the amendments on the understanding that there will not then be a clause stand part debate.
‘, including services and facilities in relation to immigration control’.
‘(d) waiting times for users of air transport services at immigration control at a civil airport.’.
‘(d) the time taken for users of air transport services to complete the check-in and security processes on an outbound journey and the immigration control and baggage reclaim processes on an inbound journey.’.
‘“immigration control” has the same meaning as in Part 6 of the Nationality, Immigration and Asylum Act 2002.’.
The amendments are all aimed at pushing the Minister to comment, and I suspect that I will not press them to a vote. They would close a gap in the information that is already published, or will be published as a result of the clause, on what passengers can expect to experience when departing from and, in particular, when arriving back at an airport, especially in relation to how long they can expect to wait to have their passport checked.
It is important to say that I am not attempting to have a go at the staff of the UK Border Agency who have to check passports. The main aim of all of us is to ensure that every person arriving in this country has their passport and other documentation properly checked.
Airports can take measures to help the UKBA ensure that queues are as short as possible. Is the passenger control area in the best place and is it the right size and shape? Are the queuing facilities sensible, and are there enough electronic gates, at which people do not require someone to scan their passport? Could the airport invest in extra electronic gates to try to reduce the queues?
Dr Julian Huppert (Cambridge) (LD): The hon. Gentleman is making an important point about people’s major experience of airports. He is right to say that the problem is partly about the location, but does he accept that it also relates to the number of staff available? I recently returned from a visit with the Home Affairs Committee during peak hours to find only seven of the large number of booths in operation. One of the staff, who work incredibly hard, said to me, “It’s the Home Office’s decision to just not have enough people around.” Does the hon. Gentleman agree that, whatever the infrastructure, we also need enough people?
Nigel Mills: That is exactly right. We need enough people at the right time, based on the demand from flights that are scheduled to land. It is worth saying that there is a role for airports in that. If they share with the UKBA the details of flight times, the numbers of passengers on all planes and where those planes are flying from, that will help it to plan its resourcing more efficiently. It could ensure that it had the right number of staff at peak times, when it knew that it would need to carry out much more detailed and time-consuming checks, and that staff were not standing around waiting for planes that did not arrive. There is a need for management, and I suspect that our airports are much better than the UKBA at deploying their staff so that they have the right number of staff to manage the number of passengers there are at any given time. If the data and the stacking models were shared, we would end up in a better position.
It is important to get that right, because the Vine investigation into why border security checks were suspended showed that queues accounted for 234 of the 463 occasions when checks were suspended and that insufficient staff accounted for 75 of those occasions. If we aggregate those figures, we see that there were insufficient staff to cope with the number of passengers, and the vast majority of times we had to weaken border controls were due to the pressure of the number of passengers. If we can get it right, not only will we improve the overall passenger experience, we will probably improve border security.
Mark Reckless (Rochester and Strood) (Con): I not sure I agree that we had to weaken our border security. A choice was made about it. Is not such information already available to the UK Border Agency, an integral
Nigel Mills: I am grateful for my hon. Friend’s intervention. We would certainly expect that such action would be a relatively straightforward, statistical exercise in most cases, given the amount of passport details and so on that passengers now have to provide before they board the plane. As a result, such information about who will be arriving, where from and how long the flight is likely to take is correct the majority of the time. Some freedom of information requests published on queue queues for 2008-09 showed that generally, month by month and by region, the average wait time was only 10 minutes. Unfortunately, when such a process goes wrong, it can go spectacularly wrong. Those data showed queues of two and a half hours or more—2 hours 50 minutes in the north region was the worst that I read about.
Mike Freer (Finchley and Golders Green) (Con): Is my hon. Friend aware that airlines provide to the UKBA passenger numbers four weeks out, 48 hours out and 24 hours out so that airport immigration controls know exactly how many passengers are arriving by the hour? One issue is not only staff numbers, but rostering that means that there is a quiet terminal and a busy terminal. UKBA seems incapable of having flexible rostering and moving around resources to meet demand.
Nigel Mills: I agree with my hon. Friend. I referred earlier to the UKBA deploying its resources more effectively to ensure that the right number of staff are present when airports are busy, not quiet. That might create a better situation without needing to use huge amounts of expert resource. We just have to accept that sometimes matters will go wrong, flights will be delayed and a problem will arise somewhere, and twice as many flights will be landing at the same time than was anticipated. In those circumstances, if the problem for the delay were explained, most passengers would be reasonable and accept that a problem had occurred outside the airport’s control.
Clearly, the clause is designed to apply not to the UKBA’s functions but to when the Civil Aviation Authority should arrange for the publication of certain information that would be useful to passengers. My contention is that, of all the information that would be useful to passengers, the most useful would be about the elements of the journey that I cannot fix for myself and the airlines cannot fix. To take a journey by plane 10 or 15 years ago, I would have to queue up to check in and to check in my bag in at the airport, and go through security. If I fly now, I can choose to check in online and avoid the queue. I can choose not to take a bag and avoid that queue. About the only two issues I cannot avoid on a flight are the security process on the way out and the passport control process, perhaps on the way out but certainly on the way back in.
Jim Shannon (Strangford) (DUP): As part of improving the experience for passengers at airports, does the hon. Gentleman agree that there should be some flexibility for those with bad health conditions? I am talking not only about a disabled person in a wheelchair or on sticks, but those who have a colostomy bag, a prosthetic limb or a metal bar in their back. Those are examples of
Nigel Mills: I agree with all the hon. Gentleman said. We want airports to innovate and to find ways to improve the passenger experience all round, especially for those who have more difficulty than others engaging in it.
However, the amendments are on a slightly different subject, and the two matters that I cannot manage in respect of my journey are the security check and the passport control on the return journey. The publication of information about which airports are better at such services will help me to choose which one to travel from.
Living in the midlands, I have a choice when I take holidays. In the summer, I can drive to Heathrow and get a direct flight, or fly from Birmingham and change at Amsterdam or Paris. Frankly, I make such a choice based on the journey time and the price. When thinking about my journey time, I should be working out how long it will take me to get out of the airport after I have arrived, because that might make a fundamental difference to the equation. If I know that at Heathrow it takes me an hour, whereas at Birmingham it takes 15 minutes, that will make a material change to my journey times. That is what I am trying to tease out: how to give passengers all the information they need about how long it is going to take to get through all the things they have to do at the airport.
Looking at what will be published, we see that we will get information about how long it takes to reclaim baggage. I think that is squarely included in clause 83 and in the publication of information requirements in the CAA indicative licence for Heathrow. It is handy to know how long it will take to get back my bags, and it is great that some airports already publish those data by airline so that I know which are quick and which slow. The only problem is that, if it takes 15 minutes for my bags to get through but I am stuck in a queue at passport control for an hour, it makes no difference how long my bags take. That is not going to delay my journey. Equally, if I steam through passport control in five minutes and my bags take an hour, the passport control time did not matter.
What matters is how long it takes me from when the plane reaches the gate to when I am free to leave the airport and get on my way home or to a day’s work. That point should not be understated, as it is someone’s first experience of Britain. They walk off the plane wanting to do business, generate money and create jobs. The last thing anyone wants is to have to walk through a long, dingy corridor and stand in a queue for an hour. By the time someone has got through that, they will be wondering what sort of country they are trying to invest in. It is important to get this right so that people coming here to do business have the best experience possible.
The reason for my amendments is to get the information that the passenger wants: how much time they need after arrival at the airport; how long they can expect to queue to get through check-in and security; and how long, on the way back, it will take between the landing time on their ticket and when they are free to leave the airport. When do they need to book their hire car, get
On its website, the UKBA advises that it might take up to 45 minutes to get through passport control. As a target, aim or aspiration that is not great. If we want an average of 10 minutes, a target of 45 minutes is not much of a stretch. I would like to see each airport publish on a regular basis the average queue time to get through passport control for the previous month—10 minutes, for example. If something had gone wrong, they could say that the average time was 10 minutes but the longest was two hours and the reason was, for example, a strike or air traffic control issues over France that meant 30 planes arriving when there would normally be only five. That would enable passengers to understand that generally it takes 10 minutes, but it might go wrong and has gone wrong twice in the past year at that airport. They could then make their arrangements on that basis.
An issue raised in our evidence sessions was that we cannot use the Bill as a way to bind UKBA into publishing information. That is a separate matter. What we can do is try to get the airports to publish the data. They know how long it takes a passenger from landing at the gate to getting through all the processes. When I was in Hong Kong recently, I was presented with a plastic card containing a chip that I had to return when I had gone through passport control. That was the airport’s way of knowing how long it took me to get through the process. There is no reason why airports here could not use a similar process to check how long it takes to complete.
I am not trying to impose a duty for publication on the UKBA; I think the airports could do it and they may want to get involved. An airport trying to compete and show that it gave the best passenger experience would be able to say that its passengers were generally free of its processes within half an hour, while at the nearby airport it took 45 minutes to an hour. It could say that things never go wrong; a certain process might have taken 10 minutes every month for the past year, whereas at other airports it might go wrong five times a month. That would be material information that helped us all to choose on the basis of journey time.
We are interested in the amendments of the hon. Member for Amber Valley, and we raised the issue of the publication of data when we moved amendments 18, 19 and 20 to clause 18. The hon. Gentleman intervened at that point and raised this very matter, demonstrating his interest. The Minister responded that clause 83 would be the appropriate place to debate the issue. Indeed, in response to my hon. Friend the Member for Luton South last week, the Minister went further and said:
This is that excitement, and here we are. I can only apologise if some of my hon. Friends have not made it—apparently, something even more exciting is happening at the Select Committee on Transport, but they will be with us in a short while. I am grateful to the hon. Member for Amber Valley for raising the issue.
Last week, the Minister mentioned the UKBA in response to questions about contact with Ministers in different Departments. She said that, following discussions about transparency that were raised on Second Reading, the Minister for Immigration
“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.”––[Official Report, Civil Aviation Public Bill Committee, 1 March 2012; c. 206.]
The Government clearly intend to do their best in that area, and they are keen to move forward with the information available to passengers, so the amendments are wholly appropriate. As the hon. Member for Amber Valley has said, waiting times are an important element of the passenger experience.
The Minister has mentioned the indicative licence that has been produced for Heathrow, and within that licence are elements of information that it is required to publish. Last week, the Minister said that, because the Crown is exempt from the Bill, the UKBA’s performance would not be included. I suspect that that is the biggest obstacle to the proposal’s being incorporated. However, there is nothing to stop the Government from saying that the proposal should have been included in the Bill or elsewhere.
Prior to the start of this Bill Committee, I asked the Minister about new technology and how it impacts on the performance of the UKBA. I will be grateful for an update at some point on how eye scanners and so on will feed in to the improvement in performance; as I and hon. Members on both sides have mentioned, the performance of immigration and the UKBA has raised questions. That is not to criticise the diligence or the professionalism of the staff, who are our front line; the issue is about policy, security and staffing, which was mentioned by the hon. Member for Cambridge in his intervention.
It would be ironic if, through what the Government are doing and from the information that the CAA collates and publishes, the passenger experience at airports improved, only to be compromised by the UKBA letting down passengers because, being excluded from the exercise, it is not under the same pressure to demonstrate better performance in efficiently dealing with passengers. We have said that it is appropriate that airports collect the data on behalf of the CAA because they are perfectly placed to do that. As the hon. Gentleman said, the proposal may place more pressure on airports to co-operate more with the UKBA to ensure improved performance, because of the facilities, the arrangements and the geography at airports.
We support the hon. Gentleman’s amendments and what he is trying to do. We are keen to support the Minister in her efforts with ministerial colleagues in other Departments—the Home Office and elsewhere—to include the performance of the UKBA in the data published by the CAA as a requirement of clauses 83 and 84. We are also keen to listen to the Minister’s response to her hon. Friend.
Chris Heaton-Harris (Daventry) (Con): I rise to talk about cargo, another aspect of the clause. In a previous life, I was a Member of the European Parliament and a rapporteur for the e-customs system, which, I guess, businesses are beginning to suffer from; like any decent piece of European legislation, it adds a new layer of interesting bureaucracy and hassle. I got to know the cargo industry well and have stayed in contact with it. The trade body for the sector, the Association of International Courier and Express Services, has concerns about the inclusion of cargo in clause 83.
From the evidence given, we know that the sector as a whole is broadly supportive of the Bill and wants to work closely with the Government and the CAA to ensure that the security aspects are implemented as effectively as possible. However, it is concerned that cargo consumers and passengers are treated almost in the same way and that certain CAA powers on information and services that are simply not appropriate to the sector have been incorporated.
The express industry is extremely competitive and the vast majority of services are business-to-business rather than business-to-consumer. The customers are highly sophisticated purchasers of the services that the industry provides and they ask for lots of information, as they require it directly from the business with which they have contracted. The businesses operate in a highly fragmented market and if they do not maintain excellent service, customers simply move their accounts to a provider that gives them a better service. The industry therefore believes that the provision of information to the CAA to benefit the consumers of express services is unnecessary, and extending competition law would be more appropriate for the sector.
As far as the industry understands it, the Department for Transport and the CAA have collected no evidence to suggest that there is any major customer dissatisfaction in the sector or general demand for additional information. The industry certainly supports the Government’s “red tape challenge”, but wonders whether the provision collides with that. It likes the principle that every additional regulatory burden must be costed and justified, but based on that standard, it does not believe that it is appropriate for clause 83 to extend to the sector the requirements on information for the benefit of users of air transport services.
AICES members also worry that the additional protections in the clause are not generally needed, because a lot of enabling provisions already exist for Ofcom to intervene under the Postal Services Act 2011. As a result of the third postal services directive 2008, the 2011 Act gave Ofcom powers to impose customer complaints and redress systems on the express sector should existing provision not prove adequate. Ofcom has accepted that existing provision by many AICES members is sufficient to comply with the directive and the 2011 Act, but the enabling provision under section 51 of that Act still exists and could go further. Subsection (3)(d) and (e) state:
“the information…is to be made available by postal operators to users of their services about service standards and about the rights of those users, and…anything else appearing to OFCOM to be necessary to secure effective protection for those users.”
Officials at the Departments for Transport and for Business, Innovation and Skills have acknowledged to the industry that the provisions and section 55 of the 2011 Act could create a regulatory overlap between the CAA and Ofcom. There has been an assurance that there will be a memorandum of understanding to ensure that there is no undue burden, but the industry believes that regulatory overlap will be created, which is inconsistent with the general aim to deregulate.
The express industry is concerned about the CAA’s regulatory remit in relation to its service standards, which might be based on a fundamental misconception of the business sector. Consumers do not use the industry because they want to transport their package by air; they want the package transported by any means that will get it to a particular place by a particular time and to be able to track and trace it throughout the journey. The industry guarantees mode of transport or route only in rare circumstances. Generally, it prefers to transport by air for speed and reliability, but it will use trucks, ferries, bicycles, mopeds and even people on foot if those options are cheaper and possible given the time commitment. For example, the industry might use several methods to transport a package from England to France on a Friday for a Monday delivery, without using air. In the unlikely event that customers were dissatisfied, they would not turn to the CAA for assistance; it would not be the logical organisation for them to go to. Customer confusion might be created in the sector, given the existing legislative provision for Ofcom to rule on such matters.
I hope that the Minister can allay the concerns of this important UK industry. It is very important for my constituency, where DHL employs almost 4,000 people, making it the largest employer there. Many people are employed by other freight-forwarding services. I would appreciate the Minister’s comments.
Iain Stewart (Milton Keynes South) (Con): I am grateful for the opportunity to make a few comments about the amendments tabled by my hon. Friend the Member for Amber Valley. If it is permissible at this point, I shall make some more general observations about the clause.
I have a lot of sympathy with the aims behind my hon. Friend’s amendments. The performance of border checks is a key contributor to the passenger experience. However, I take a different view about how best to include such provisions in the mix. It is not necessary to specify that information on check-in and security processes should be included in the Bill. In my reading, subsection (1) is sufficiently general to capture all aspects of what contributes to the passenger experience. If we start specifying individual points, we might end up in a mess, because we might leave off other information that contributes to the passenger experience. I am not minded to support the amendments, but I agree about the importance of providing information.
Nigel Mills: One of the questions I wanted answered in tabling the amendments, particularly amendment 29, was whether the UK Border Agency’s functions count as either an airport service or facility; they do not feel much like a service or fall into a natural definition of a facility. Perhaps when the debate is concluded, we will
Iain Stewart: I understand my hon. Friend’s concerns. I will defer to the Minister on what constitutes a service or facility. My reading of the clause is that it would be included, because subsection (1) is sufficiently widely drafted to include all such aspects that contribute to an airport’s operation.
Let us put the point into context. There are many different aspects of air travel and airport operation that contribute to the passenger experience. There is obviously the cost of a flight, the punctuality of flights, the speed of getting through border control and baggage handling. There is also, at each terminal, the distance that a passenger has to walk to get to a gate.
We have probably all experienced being at an airport where the gate is such a distance from the check-in that we think that we have already walked halfway to our destination. There are the facilities at the airport for families and for business people as well. Local authorities have a role in the ease of access to airports.
There are all sorts of different facilities that contribute to the passenger experience, and different passengers will have different needs. A business passenger will want to whizz through as quickly as possible. That will be different from a family going on holiday with children, who have a low boredom threshold and require some facilities to keep them entertained.
Different organisations have a role to play in all those services—the airlines, the airport, the UKBA and the local authority. To start specifying all those individually in the Bill may be overly prescriptive; I raised that point on Second Reading and in our evidence sessions earlier. The new consumer panel of the Civil Aviation Authority will have an important role in guiding what information is presented and in what format.
I do not have a view on whether the CAA should provide a website or some publication to allow passengers to compare performance at different airports or whether the information should just be made available to passengers through an independent publication, such as a “good airport” guide. It would be helpful if the Minister gave a little steer on the breadth of information that she thinks should be included and how regularly it should be updated.
We have to remember that airports are competing not just with other airports, but with other modes of transport. For example, if I want to visit my family in Scotland, I can drive up, take the train up or fly up. If I choose to fly up, I have a choice of five airports within 90 minutes’ drive of where I live. I will evaluate each option on not just the cost of each mode of transport or each flight, but on how pleasant the experience is. Some airports close to me are very good and others are less enticing. I have only found that out by trial and error; I fly frequently enough to be able to make that assessment. For people who travel infrequently, where the flight is part of the holiday experience and they do not have the opportunity to try different airports, it is important that the information that we are discussing is available.
I congratulate my hon. Friend the Member for Amber Valley on raising his point, because it is absolutely correct that such information should be available. However, I have to disagree with him on this amendment, because I do not see the necessity for a list to be specified.
Nigel Mills: Does my hon. Friend share my concern that, although there is a requirement in the indicative licence for Heathrow to publish all manner of information—nearly everything that a passenger could want—the one thing that is left off is the queue to get through passport control? One of the reasons for trying to get a debate on this issue was that that is not specified, although it is something that we—and, I suspect, passengers —want to see.
Iain Stewart: Again, I make the general point that I do not see a need for the amendment within the context of clause 83. I do, however, want to see that information published. My interpretation is that subsection (1) is sufficiently robust to capture that point.
The Minister of State, Department for Transport (Mrs Theresa Villiers): This has been a good debate, and I am grateful to my hon. Friend the Member for Amber Valley for indicating that he is not minded to push the amendment to a vote. I am grateful to all contributors for the constructive and positive tone that they have adopted on an important issue.
Before addressing Members’ points, it is important that I emphasise the importance of clause 83 and the important statutory role it will give the CAA in promoting better public information about the performance of the aviation industry. That is intended to improve choice in the market and address what is essentially an asymmetric information problem. In simple terms, passengers do not always have the information they need to compare the services on offer effectively. So giving consumers more information on the service quality provided by airports and airlines will help to ensure that markets deliver consumer benefits and high-quality services.
I shall deal now with the amendments and the points made by my hon. Friend the Member for Amber Valley. First, on check-in, baggage handling and security queues, I can reassure him that the powers granted in the Bill will certainly enable the CAA to collect information on those aspects of amendment 30. Those issues fall fairly and squarely within the remit of clause 83 as there can be little doubt that they are of concern to passengers. But of course, the main focus of much of the debate is border controls. I have to make a definitional point: during the debates on this Bill we have all tended to refer to UKBA as the relevant agency. For correctness I should mention that from 1 March the UK Border Force was split from the UK Border Agency and became a separate operational command, accountable directly to Ministers.
Whether one calls it the UKBA or the UKBF, I am afraid I cannot accept that it is appropriate to include it in the regulatory arrangements contained in the Bill. The UK Border Force is accountable to Ministers and to Parliament. That is a far more effective and appropriate means to hold it to account than to give the CAA the power to oversee its activities. The Government do not believe that it would be appropriate for the aviation
Of course, where I and my hon. Friend, and others who have expressed a view, are as one is that immigration queues can and do have an impact on the passenger experience. However, the purpose of the performance reporting functions in clause 83 is to correct market failure. There is no market for the provision of immigration control services, and thus systems that are designed to deal with market failure are simply not an appropriate or suitable way to deal with performance issues in relation to the UKBA. We should not let a focus on queuing times make us overlook the importance or the sensitivity of the work of the UKBF. It is, after all, the UK control authority responsible for screening arriving and departing passengers and goods at the border for counter-terrorism, immigration and criminality purposes.
The Government require full travel document checks to be conducted on all persons, including British citizens, arriving at the UK border. Although, of course, the UKBF and the Government take seriously the issues raised by hon. Members about the passenger experience, the security of our borders and the checks that need to be undertaken to protect us from those who would enter our country to do us harm have to be paramount. That said, we have listened carefully to the views expressed on Second Reading and by the Transport Committee in its valuable pre-legislative scrutiny. In the circumstances the Minister for Immigration, my hon. Friend the Member for Ashford (Damian Green) has agreed to review what additional data beyond those currently collected may potentially be published by the Home Office and shared with port operators, as well as with the CAA in its intended new role, to bring greater transparency at an individual airport level while minimising bureaucracy and burdens.
I should also like to assure the Committee and my hon. Friend the Member for Amber Valley that the UKBF fully recognises the importance of working closely with individual airport operators to manage passenger flows effectively while ensuring that control functions are properly discharged. I very much agree with the sentiments that he expressed about how such collaboration can make a real difference in addressing the types of passenger concerns that he and others have outlined. An impressive example of that kind of partnership working between the UKBF and an airport operator is provided by the work done at Gatwick over recent months. I know that the UKBF is interested in seeing whether elements of that approach could be used more widely. Where appropriate, queue data are already shared with port operators and are used to identify bespoke solutions specific to traffic at that port, including the use of automated gates and other biometric checks to help improve passenger flows. That currently happens at Gatwick and Heathrow.
I have already addressed some of the points raised by the hon. Member for Poplar and Limehouse, but he is anxious to hear more about how technology could address queuing times and so on. As a mere Transport Minister, I hesitate to trespass on the Home Office’s turf, but I can give him some information on the progress
E-passport gates are available on arrival at all major UK airports. Such gates provide passengers with a secure self-service alternative to the conventional manual control and do not require pre-enrolment. There are 63 e-passport gates in 15 terminals, and they have been used more than 6 million times. Usage is up 60% since April 2011. A peak of more than 630,000 passengers used the technology across all sites in September 2011. The gates can be found at border controls at the following airports: Birmingham terminal 1; Bristol; Cardiff; East Midlands; Gatwick north and south; London Luton; Manchester terminals 1 and 2; Heathrow terminals 1, 3, 4 and 5; and Stansted.
The UK Border Agency has spent just over £9 million to date on e-passport gates and associated automation infrastructure. The gates can be used by UK or European passengers who have an electronically chipped biometric passport issued since 2006, providing legitimate travellers with an automated, secure route through the border. The gates use facial recognition technology to compare the faces of UK and European economic area passengers with images held on their biometric e-passport. That is in addition to biographical security and watch list checks.
Henry Smith (Crawley) (Con): Returning to the UK from several recent visits, I have been impressed that the e-passport system has had no queues whatsoever, which makes it a significant contributor to speeding up access back into the country for UK and other EEA citizens.
Earlier in the Committee’s deliberations, the shadow Minister specifically asked about iris recognition technology. As I have said, the current focus is on e-gates for people with chipped passports, which use facial recognition technology. It is anticipated that the iris recognition system will be going out of action in due course.
I should also draw attention to another way to improve the efficiency of border checks. The smart zone trial at London Luton tested the use of advanced screening capabilities provided by the e-borders system and the National Border Targeting Centre. That trial is complete, a review has been undertaken and recommendations for the next steps are under consideration. The smart zone system analyses advanced passenger information data to enable the pre-screening of selected low-risk flights carrying predominantly British and EEA passengers, such as returning holidaymakers, who can be processed through a discrete smart zone channel at ports. That has a number of benefits, including transaction times and the redeployment of border force officers to other, higher-risk traffic, while maintaining border security.
Various hon. Members referred to staff hours, and the shadow Minister referred to the work force. The UK Border Agency introduced an annualised working system as part of its modernisation agenda. The new UKBA annual hours working system began on 1 April 2011. AHW allows the UKBA to deploy staff more effectively and flexibly than was previously possible, with immigration officers covering the operation through the flexible
My hon. Friend the Member for Milton Keynes South asked what the new powers are likely to be used for. It is not suitable for me to prejudge how the CAA will use them but, for example, they may cover the additional charges applied by airlines when people book tickets—it is a matter of controversy when the initial ticket price is very low but the end result is higher—and information on passenger waiting times and performance in relation to lost bags and the promptness of baggage delivery on arrival.
I agree with my hon. Friend that the new consumer advice panel, which the CAA will soon set up, will no doubt provide informed and helpful advice on the exercise of the powers. One of the panel’s key roles will be to recruit a chairman and members with real expertise in and experience of consumer protection and advocacy. The CAA is currently engaged in that process, and the new panel’s expertise and experience will prove useful in relation to activities covered by the clause.
Jim Fitzpatrick: Condition 4 in the indicative licence for Heathrow produced by the CAA covers the service quality rebate scheme, which suggests that there is provision for people to receive rebates if they have been let down because performance standards have not met expectations. Confusion might arise if the UKBA, perhaps through the Home Office, provides performance targets and people who feel let down therefore think that they are entitled to a rebate because of the expectations contained in the standards. In reality, however, because they are not part of the CAA licence, those people would not have the opportunity to claim a rebate. Does the Minister think that that might cause confusion?
That leads me to clarify another point made by my hon. Friend the Member for Milton Keynes South, who said that clause 1 was relevant to clause 83 in relation to whether the UKBF will be covered by the Bill. Clause 1 concerns economic regulation, and the UKBA and the UKBF are not covered by that clause because clause 77 specifically exempts them from such regulation, but I may have misunderstood his point.
Mrs Villiers: The Government’s position is that the powers in clause 83 do not extend to border controls. It is useful to clarify that the Bill will not apply those powers or the economic regulation powers in clause 1 to border controls, so it is not possible for the kind of remedies set out in the indicative licence to apply to the
Finally—I have trespassed on the patience of the Chair for a long time, but we have had an interesting and important debate—I warmly endorse the comments made by my hon. Friend the Member for Daventry about the importance of the air freight industry for the UK. I am also aware of the fantastic work done by DHL in his area and of how many of his constituents work for it. I therefore agree that it is important for us to use the powers contained in clause 83 proportionately, whether in relation to the freight industry or the passenger airline industry. Safeguards will ensure that the regulatory burden of the clause is kept to a minimum. Clause 92 will require the CAA to consult on and publish a policy statement, and in doing so it must have regard to the principle that the benefits of regulatory activity should outweigh its adverse effects.
I am well aware of my hon. Friend’s long history of fighting unnecessary over-regulation from the European Union, but I am confident that the safeguards in clause 92 will prevent the Bill from imposing unnecessary and disproportionate regulatory burdens on the freight industry. It may be, for example, that in a competitive business-to-business market there is less need to intervene than in the passenger market. No doubt, the CAA, in exercising its powers under clause 83, will need to take the differences between the freight and the passenger markets into account in designing proportionate measures under the clause, potentially with less activity in the freight market than the passenger market, where the information asymmetry may, I acknowledge, be more significant than in a competitive business-to-business freight market.
However, we are deciding on a regulatory framework that we hope will last upwards of 20 years. It is difficult to predict with certainty that there will never be an information asymmetry that needs addressing in the freight market. That is why we would be reluctant to seek to carve out freight from what I see as important powers to assist the appropriate operation of the market.
On regulatory overlap, express couriers are only required by Ofcom to establish a customer complaints handling service in accordance with the EU postal services directive. I do not believe that creates the overlap with clause 83 about which my hon. Friend the Member for Amber Valley is anxious and the industry is concerned. Ofcom does not have general powers to publish information for the benefit of the owners of cargo or for environmental purposes. Ofcom’s information-gathering powers arise only in relation to its own postal services functions. If Ofcom wished to impose any new consumer protection conditions on freight operators, it would have to be satisfied that they were proportionate, non-discriminatory and objectively justifiable. Clearly, regulation imposed by other regulators would be relevant to the test. It would be important for Ofcom to have regard to it.
I hope that provides some reassurance that the powers in clause 83 are designed to be used in a proportionate way, and that the CAA is under duties contained in clause 92 to ensure that the appropriate costs and benefits are taken into account.
The Chair: Order. An objection has been raised. For Members who have not experienced this before, I will explain what happens. The amendment the hon. Gentleman has moved becomes the property of the Committee and is no longer his. If such an objection is raised, I have to put the amendment to the Committee, even though he may wish to withdraw it. That is the process. It releases the hon. Gentleman—Mr Mills, in this case—from any obligation to support his own amendment. That may seems strange but that is how it is.
‘(d) carbon emissions resulting from the use of air transport services to or from a civil airport.’.
‘(d) carbon emissions resulting from domestic flights within the UK or to European Union member states, and a comparison with emissions for an equivalent journey via rail or road transport.’.
Jim Fitzpatrick: I am conscious of your earlier advice, Sir Roger, about our possibly not having a stand part debate. I therefore crave your indulgence in allowing me to make the only point I would make in such a debate, which is that we support clauses 83 and 84. I want to put that on the record simply because we disagree with the Transport Committee. The Committee knows that we would have preferred a statutory environmental duty and a licence requirement for key data, and at least these clauses go some way toward improving the situation for passengers. The Transport Committee said it was concerned that provisions in clauses 83 and 84 granting powers to the CAA to require publication of environmental information are too widely drawn and risk creating bureaucracy and additional costs for the aviation industry, while the benefits are less tangible. Although we have agreed with much of what the Transport Committee said previously, we do not agree with everything it says. This is one of those occasions.
Amendments 69 and 70 cover territory similar to the territory covered when we discussed the need, in our view, for an environmental duty to be included in the Bill. The amendments are about publishing information on carbon emissions and allowing passengers to compare and make choices based on those data. We made that case earlier so I will not go over the same ground again, but these amendments seem in keeping with the Government’s approach to publishing information and allowing—even encouraging—passengers to make the right choice for themselves and the environment.
In discussing the previous group of amendments, the hon. Member for Amber Valley made a point that we heard several times during the evidence sessions: that passengers’ choice of mode of transport and airport is based on convenience and cost, and not necessarily on environmental matters. However, without publishing the data it is much harder for passengers even to consider whether that is an important factor in their decision. Amendment 69 calls for data on the carbon emissions resulting from the use of air transport services to and from a civil airport to be published. Amendment 70 calls for comparable data for European and domestic flights and equivalent coach or road journeys.
We know that the aviation industry is making great strides in becoming “Cleaner, quieter and smarter”, which is the title of the sustainable aviation booklet published this month. We know too that it has made significant strides in fuel efficiency, engine and airframe technology, cleaner engines, biofuels, air traffic movements and better ground handling. It also said that it could do more, and we want to encourage it along those paths. In previous debates we called on the Committee on Climate Change to advise the Government and the industry on how it can improve even more, and these simple, straightforward amendments would go some way toward making it easier for passengers to choose their mode of travel.
Pat Glass (North West Durham) (Lab): These amendments give Tory Members and especially Lib Dem Members the opportunity to live up to the Prime Minister’s aspiration for the coalition to be the greenest Government ever. We all understand the need for a thriving aviation sector to create jobs and growth, and I am acutely aware of that in my part of the country. However, climate change is one of the biggest threats facing the world today, so it is important that any new capacity must go hand in hand with tougher targets to reduce CO
2emissions from aviation to tackle the industry’s contribution to climate change. That is especially important given that we know that aviation journeys are set to increase, so the challenge for the aviation industry will become that much harder to meet.
Amendment 70 would include in the list of information that the CAA has to publish a carbon emissions figure for each journey. That would help passengers to make better journey choices. Members may recall that I spoke about that during the evidence sessions and told the Committee about my experiences of working for a Government Department. Prior to being elected to the House, I worked as a Government adviser on education and I travelled the length and breadth of the country seemingly on a weekly basis, meeting school leaders and
I have taken part in Westminster Hall debates where we have discussed the difficulties of travelling east to west and vice versa by rail in this country—the journeys over the Pennines are a joy. In the past, if I was travelling east-west or west-east, I would go by car. It is much easier to travel north-south by train, whether by the east or west coast main lines, but travelling across the north Pennines, especially in winter, is not easy. After I started to receive information about carbon miles, however, instead of travelling by car from Durham to Liverpool and back again, I would make a little more time to ensure that I could make that journey by rail.
Passengers make choices about modes of travel based on factors such as cost, convenience and timeliness, but at the moment too few passengers have too little information to understand the environmental impact figures of their mode of transport.
Chris Heaton-Harris: There is a dilemma here in that a person who takes a decision to travel by car instead of air does not stop that flight from happening. The timetabled flight still happens and the emissions still occur, so if the person travels by car, they will add to emissions. I am not completely convinced that the hon. Lady’s argument stands up.
Pat Glass: The hon. Gentleman makes a good point, but doing nothing is not good enough. I know that these are long-term decisions, but by investing in HS2 we will move the tipping point for airline journeys in this country. Take the journey between Newcastle and Edinburgh: at the moment, most people will travel by rail if they are going from Newcastle to London, but if they are coming from Edinburgh they will travel by air. One of the by-products of HS2 will be that the tipping point will change. We have seen that happen in places such as France and Spain, where some air journeys simply do not happen anymore because people travel by train.
Jim Fitzpatrick: My hon. Friend is making the very point that I wanted to intervene to make. In the UK, the improved rail travel time from London to Manchester reversed the polarity: formerly, two thirds of people flew and one third went by train, but that changed within a number of years, so that now two thirds travel
Pat Glass: I thank my hon. Friend, who helps make the point very well. If I make fewer journeys and everybody else makes similar changes in their behaviour, it will have, over time, a major impact on carbon emissions.
We know that transport underpins the quality of life and economic prospects of us all. We want to give people and businesses more low carbon choices about when, where and how to travel, or how to transport goods. Giving travellers information about their journey’s impact on carbon emissions enables them to make better choices that lower the impact of their journeys on the environment, which will have a cumulative effect over time. If the Government still believe in nudging consumers, as the Prime Minister has said they do, the proposals are a very good way of giving passengers information that can encourage and nudge them to make better decisions.
I asked about such a measure during the evidence session at the start of the Committee stage. The Aviation Environment Federation told us that that type of information is becoming more common on some of the online booking facilities for business travel operated by travel management companies such as American Express and Carlson Wagonlit Travel, although most of those business tools do not have specific data for each route—they use generic figures. The most commonly used comparison is the information produced by the Department for Environment, Food and Rural Affairs to calculate carbon footprints.
Although decisions will depend on many factors, giving even general contextual information to the consumer could prove to be cost-effective, and it would be relatively simple for the CAA to construct something based on that, as it is already accepted Government advice. It is clear from my experience that the technology is available and is already being used, so I urge the Government to consider the huge good that could be achieved almost as a by-product of providing such information to passengers. If the CAA is going to provide passengers with information about how long it will take their bags to get from one part of the airport to another, surely information such as this, which can have a real impact on people’s behaviour and ultimately the environment, is much more useful.
Mrs Villiers: I fully agree with the shadow Minister and the hon. Member for North West Durham on the benefits to be gained from giving passengers clearer, better information about the environmental impact of their travel choices, including their carbon impact. Although for various reasons, I cannot support the amendment, I share with them the goal of harnessing consumer power in our efforts to reduce the environmental impacts of aviation.
There are a number of examples of where provision of better information has impacted on consumer behaviour—giving them the nudge, as the hon. Lady mentioned. For example, many people now consider the
I do have a number of concerns about the amendments, though. First, I am concerned that they apply to the wrong clause. The hon. Lady emphasised the importance of giving the CAA the ability to collect information on environmental matters, and the Bill gives the CAA the power to do exactly that, but those powers are contained in clause 84, not clause 83. Clause 83 is designed to enhance choice in the market, where passengers do not always have the information needed to compare the standards of services and facilities on offer, whereas clause 84 covers environmental information. There is a problem with tacking an environmental measure on to provisions on service quality in clause 83.
My second concern is that amendment 70 would require the CAA to publish information that went beyond aviation to other modes of transport. I fully accept that it is useful for the public to have information about the impact of different modes of transport, but I am not convinced that it would be proportionate or appropriate to require the aviation regulator to collect and publish information on rail and road modes of transport, as the amendment would have it do. We have to bear in mind the concerns rightly raised by my hon. Friend the Member for Daventry about ensuring that the cost impact of the provisions in clauses 83 and 83 remains proportionate. The industry has certainly been emphatic about the need to ensure that the Bill’s information provisions do not impose unnecessary or disproportionate burdens. I am not convinced that asking the aviation industry to fund the collection of information on road and rail transport would be proportionate.
A further concern is that the amendment singles out just one aspect of the environmental impact of aviation. The Committee is in no doubt that the local impact of aviation should be taken seriously, but the amendment focuses solely on carbon emissions, and few can doubt that aircraft noise, particularly at night, can have a corrosive impact on quality of life—indeed, earlier in our deliberations, the hon. Member for Feltham and Heston set out a range of concerns about aircraft noise and other local impacts. Also, in specific locations, air quality is also a concern, although I acknowledge that surface transport makes a bigger contribution to that. Clause 84, which relates to the environmental provisions, refers in broad terms to the full range of aviation’s impacts, giving the CAA flexibility.
Pat Glass: I have been listening carefully to the Minister, but I am finding it difficult to reconcile the arguments. If the amendment is to the wrong clause, that is surely just an administrative issue—if it is good, it can just be moved to the right clause. Secondly, the Minister is saying that the amendment would be an additional burden, but if a Department is already doing this and is using generic figures collected from DEFRA, it is not onerous to ask the CAA to do it. It has been said that because the amendment does not cover noise, we should
Mrs Villiers: I am disappointed not to have convinced the hon. Lady yet, but I will expand on why I think that the amendments are inappropriate. The Bill already delivers the goal that the amendments are designed to achieve. Clause 84 refers to the full range of aviation’s environmental impacts, giving the CAA flexibility to decide how information powers can be most effectively deployed. Singling out CO
2emissions, although I acknowledge their importance, would leave the Bill less balanced and indicate that Parliament is less concerned about noise impact than it actually is.
My last point will hopefully provide reassurance for the hon. Lady, even if my previous arguments did not. It is clear that clause 84 enables the CAA to collect information on carbon emissions from UK aviation, and it has been welcomed by a number of stakeholders. Committee members will recall the evidence given by Tim Johnson from the Aviation Environment Federation. He acknowledged that the CAA can play an important role in providing a portal to deliver environmental information, which can be genuinely useful for passengers when they make choices. Flybe, an airline that has promoted the benefits of environmental transparency in reporting for some years, responded to the proposals by stating:
“It will not only give passengers a very clear choice but will incentivise airlines to invest in newer, lower emitting fleet....and we stand ready to work with the Civil Aviation Authority…in making transparent reporting a reality.”
Providing consumers with better information can provide real assistance to our efforts to protect the environment. The information provisions in the clause 84 will provide a valuable means of encouraging the aviation industry to invest in cleaner and quieter planes and to harness consumer pressure to secure environmental goals. I am confident that that clause fully covers the aims of the amendments, and I hope that the hon. Gentleman will consider withdrawing his amendment.
Jim Fitzpatrick: We are very disappointed, particularly as the Minister somewhat teased us when she rose and said that she fully agreed with what I and my hon. Friend the Member for North West Durham said, but then proceeded to try to a do a demolition job on our arguments. I hear what the Minister says about the contrast between clauses 83 and 84, but if we are not successful in persuading the Government to accept the amendment now, we obviously reserve the right to bring it back on Report under clause 84. However, we want to press it to a Division.
My hon. Friend pointed out that our proposals are not burdensome because what they suggest is already being done by Government Departments. They are fully in keeping with what the Government are trying to achieve, and there is not a great deal of difference between the Government and the Opposition. I regret to say, Sir Roger, that I am not prepared to withdraw the amendment.
John Woodcock: I am afraid that you, Sir Roger, and the rest of the Committee may be feeling an acute sense of déjà vu reading the amendments. We debated very similar ones last week on clause 51, but I know that the Committee enjoyed them so much that I thought I would table these. I will be relatively brief.
The motive behind amendments 77 and 78 is similar, although the sums involved are significantly smaller. We want to probe the reasoning behind where the Minister has set the penalty levels. Her explanation of the levels when we discussed clause 51 was not wholly comprehensive or convincing. She may have something similar prepared to read out today that sets out that the sums are comparable to those of other regulatory authorities. I want to give her the opportunity today to expand a little on her reasoning.
The financial penalties available to other regulators are a good place to start in setting CAA penalties, but the final decision needs to take into account the nature of the sector that the regulator is tasked with regulating. The levels of fines should reflect the need for them to be a deterrent to the largest or most profitable players in the field. In aviation, we are dealing with a mixture of
On amendment 79, we want to probe why the Bill will give the Secretary of State the power to undercut the regulatory power of the CAA by cutting the maximum sanctions rather than simply giving it the power to raise them. Again, that was discussed in respect of clause 51. The Minister suggested that an unspecified situation might occur in which the Secretary of State needed to reduce the sanction levels, but she did not elucidate further. Perhaps she might enlighten the Committee by doing so today.
Mrs Villiers: The clause gives the CAA powers to impose penalties on a person who fails to comply with a formal request for information about aviation services under this part of the Bill. As we have heard, the maximum fixed penalty amount under the clause is £50,000, while the daily rate that can be imposed is £5,000. The shadow Minister asked me whether I am content that that provides an appropriate deterrent. I respond in the affirmative, and I assure him that in our deliberations on the content of the Bill, including the clause, we have of course taken into account the various consultations that have been had on the matter. Consultations took place under the previous Government in respect of the Bill overall, and we have also conducted an impact assessment. Both those exercises have provided useful input into our decision-making processes.
As we have heard, subsection (9) allows the Secretary of State to replace the maximum penalty, which could be more or less than at the £50,000 level. Amendment 79 would restrict that provision so that the penalty could only be increased. I have not been convinced by the arguments of the shadow Minister that we should move to that less flexible position and adopt the amendment. It would mean that the Secretary of State could not move the maximum penalty in anything other than an upward direction.
As I said in response to similar amendments that we discussed last week, I acknowledge that if that power were to be exercised, it is more likely than not that the change would be in the upward, not downward, direction. However, I see no justification for introducing the inflexibility contained in the amendment. If, for example, the Secretary of State considered that, given changes in the industry, an increase in the maximum penalty set by her predecessor should be reversed, she would not be able to seek the agreement of Parliament to make that change.
I conclude that the amendments are not necessary for the effective operation of the enforcement of the information notice and, if the Opposition wish to press them to a Division, I shall ask my colleagues to oppose them.
‘(2) For subsection (1) substitute—
(1) The Secretary of State must make regulations setting out a licensing regime for the purposes of regulating provision of accommodation in aircraft.
(1A) A person must not in the United Kingdom make available flight accommodation, either as principal or agent, unless the person meets the condition in subsection (1D) or (1E).
(1B) A person must not in the United Kingdom hold himself or herself out as one who may make flight accommodation available, either as principal or agent or without disclosing the person’s capacity, unless the person meets the condition in subsection (1D) or (1E).
(1C) A person (“A”) acting as an agent for another person (“B”), in the course of a business carried on by A, must not in the United Kingdom procure flight accommodation on behalf of B unless A meets the condition in subsection (1D).
(1D) A person meets the condition in this subsection if the person—
(a) holds and acts in accordance with a licence issued in pursuance of regulations under this section made by the Secretary of State, or
(b) is exempt from the need to hold such a licence as a result of provision made by or under the regulations.
(1E) A person meets the condition in this subsection if the person—
(a) is the operator of the aircraft on which flight accommodation is made available, and
(b) in making the flight accommodation available is acting as a flight-only provider.
(1F) The regulations under this section may make provision for the purposes of subsection (1E) about when the operator of an aircraft acts as a flight-only provider.”.’.
Julie Hilling: Amendment 83 would bring airlines into the ATOL scheme without the need to wait for secondary legislation. There is no argument that the scheme is badly in need of reform. When it was introduced, 97% of holidays were protected compared with only 50% now, and there is great confusion about who is covered.
Three passengers sitting side by side on the same flight, going to the same hotel and having the same car hire, might all imagine that they would have the same protection, but in reality, they might not. If the first person booked their holiday through a traditional travel agent, it would be fully protected. Providing that the
The situation can be even more confusing: if, for example, someone booked a Virgin flight and a hotel through the Virgin website, they would be unprotected, but if they were transferred through that system into Virgin Holidays, they would have protection.
Even travel agents are confused in some situations. Usually, travel agents act as the agent for the supplier, so I think—I could be wrong, because this is totally confusing—that the travel agent books a package put together by a travel trade supplier. Sometimes, however, the travel agent might put together a package for the holidaymaker, so it then becomes an agent for the consumer. In such cases, the holiday is not covered at all. Research has shown that even travel agents do not know whether they are acting for the consumer or the supplier. If they do not understand whether holidays are covered, how on earth is the person purchasing the holiday to know whether they have ATOL protection?
When we took evidence in the Transport Committee and, I believe, in the Bill Committee, some witnesses said that we did not need to extend protection, because people were protected when they had booked their holidays using a credit card. I do not think I have ever booked a holiday through a credit card, mainly because in doing so, I would be charged extra costs. More and more people are using debit cards. Nevertheless, the witnesses who argued against extending ATOL because people were using credit cards could not provide evidence of how many people would and would not be protected. They recognised, however, that there might be a problem and that some people would be unprotected because they would not be protected through their card.
Insurance is another issue. Responsible travellers get their travel insurance when they book their holiday and ask for details of their insurer when they do so. However, that insurance does not cover airline or travel company failure; only specific insurance does that.
The airlines have asked why they should be brought into the matter, but it is airline failures in the main that have caused people to draw on ATOL funds. Back in 1974, Court Line failed because of problems with the oil crisis and the parent shipping line, which impacted on Clarksons Holidays, and led to the creation of the ATOL scheme.
In 1982, Laker Airways collapsed, taking its subsidiaries, Aerosmith Holidays and Laker Holidays, with it. In 1991, in the midst of the uncertainty of the Gulf war, Air Europe went bust, taking down the International Leisure Group, which included such companies as Intasun; we will all be terribly upset to know that it also took down Club 18-30. At the time, ILG was the UK’s second largest operator.
Best Travel Group, which included Ambassador Airlines, ceased trading in 1994. Since then a number of other airlines have gone bust, including the XL Leisure Group,
The collapse of XL Leisure showed that the ATOL system is no longer fit for purpose. When the CAA began repatriation and refund processes, it became clear that it was possible for two holidaymakers to have booked identical holidays and for one to be fully financially protected and the other to have partial protection or no protection at all. That was seen again with the failure of Goldtrail and Kiss Flights. The XL failure also demonstrated that it was extremely difficult to run an efficient refund scheme, because of the ever-increasing complexity of agents’ paperwork and the difficulty for the CAA in judging whether the claims were valid.
For airlines to argue that they should remain outside ATOL seems wrong—wrong because it is frequently the failure of airlines that draws on the air travel trust fund and they should therefore be paying into it, and wrong because passengers need to be clear when they are covered and when they are not. It is also wrong because if passengers cannot pay for repatriation, someone has to: the fund, another airline or the taxpayer. The airlines have also argued about competition. Again, there should be a level playing field for all people selling holidays. I can understand why an airline does not want to be brought in and wants to pay any extra money out when it has to. However, it just seems only fair that airlines should be brought into the scheme.
We all shop around for our holidays; if I am honest, I chose the last holiday I booked because it was £5 cheaper. We get down to very small margins when we book a holiday. However, the cost of ATOL is £2.50 for each booking, and that should be applied without delay. If we are to have an open and competitive scheme, there should be that level playing field and those taking money out of the fund should be paying into it. That would also put the trust fund back on to a strong financial footing; the fund is in deficit at the moment. That would provide clarity for travellers and it should be done now. I do not understand why we are waiting for secondary legislation when we have a perfect vehicle for primary legislation going through the House now.
I have a little worry that my amendment will not be accepted; I cannot understand why I might feel that. I want to finish with two questions. First, will flight-plus be introduced in April? Secondly, if the Committee does not accept my amendment, when will the secondary legislation be brought in so that airlines are incorporated into the ATOL scheme?
Jim Fitzpatrick: We very much agree with our hon. Friend the Member for Bolton West, whose amendment trumps our amendments 71 and 72. She has made an excellent case for the clause to go further. Everybody supports the ATOL scheme; it is a common-sense scheme, giving protection for passengers and travellers who lose money or are stranded. Amendments 71 and 72 also seek to extend the clause, although I should say that at this point they are probing amendments.
As my hon. Friend said, in 1997 ATOL protection covered 97% of leisure flights but in 2010 that figure was down to 50%. The Minister has announced that the reforms proposed in 2011, which were to come in on 1 January 2012, will now be introduced next month, so my first question is to ask her for an update about whether that is still on schedule. Secondly, the scheme has obviously not kept up with travel industry changes over the years. The air travel trust fund has been in deficit since the 1990s and, notwithstanding the reforms of 2008-09 and the ministerial statement in February 2011, it is still in deficit. Will she update us on where that now stands?
Finally, what is the latest position vis-à-vis the European Commission, given that its current review of the consumer protection directive will impact on the package travel directive? During an earlier debate, the Minister was keen to argue that future-proofing against intra-terminal competition should be provided for in the Bill, so that we do not have to return to primary legislation. My hon. Friend and I are asking a question. The Bill provides an appropriate vehicle for future-proofing in respect of extending the ATOL scheme to airlines, should that be appropriate; the Government might have to comply with a new directive that required it. Surely the Bill would be a simpler way for that to happen, rather than our returning to primary legislation.
We are clear that the clause is a big improvement in providing assurance for the leisure industry and the travelling public. We support it, but we are keen to hear the Minister’s comments about not future-proofing for future requirements.
Pat Glass: I speak in support of the amendments, and I echo what has been said by my hon. Friends the Members for Bolton West and for Poplar and Limehouse. We all agree that it is right to extend the protection given to holidaymakers by the ATOL scheme, which helps to protect people from losing money or being stranded abroad when travel companies fail. We all welcome such provisions.
Holidaymakers and travellers look for the kind of protections that ATOL brings and their value should not be underestimated. Over the past five years, about 100,000 passengers have been repatriated, more than 500,000 have received refunds under the ATOL scheme and more than 100 million holidaymakers have had some level of protection and support from ATOL even over that short period.
That protection is especially important when family incomes are being squeezed, and families have to think about whether they can get the money together to afford a holiday. If the money that they saved for a holiday is lost because they had no protection, that is a good reason to extend the scheme. We all accept the sense of changing and reforming ATOL to meet a changing market.
As we have already heard, the ATOL scheme came into existence in the 1970s, when families booked package holidays in traditional high street travel agencies. However, we have seen major moves away from traditional package holidays towards independent travel, a trend that has been facilitated by the emergence of low-cost, no-frills airlines and the use of the internet. Holidays are often created by consumers buying various component parts
As a result of those changes in our holidaying behaviours, the proportion of holidays with ATOL protection has fallen—97% of all leisure flights in 1997 were ATOL protected, compared with fewer than 50% in 2010. It is therefore right to make changes to ATOL to reflect better today’s holiday markets and, as my hon. Friend the Member for Bolton West said, so that consumers can be clear about whether their holiday is protected.
We have also heard that the current ATOL scheme does not apply to airlines, which are specifically excluded under legislation, despite the fact that airline failures have taken a huge amount out of the fund. The amendment would ensure that the scheme covered all flights by removing the flexibility that the Bill gives the Secretary of State to exempt airlines if they sell flights on a flight-only basis.
“holidays consisting of a flight and accommodation or car hire, where the components are requested within a short period of time. Essentially they look like package holidays, yet do not fall within the legal definition of a package, and so are not currently protected by the ATOL scheme.”
Like many MPs here, I have had constituents in my surgeries who thought they had booked a package holiday, only to find that their package was made up of parts, each of which was supplied by separate companies, and that they were not ultimately covered by ATOL. That appears to be a particular issue with cruises. Someone will think they are booking a holiday that includes a flight and a cruise, but the two things are actually separate components. When something goes wrong, that person is not covered by ATOL.
I welcome the reforms, but I want them extended to cover all flights, and I am not alone in that. As we heard, the Select Committee has recommended on more than one occasion that all flights should be protected. Moreover, there is support from parts of the travel industry. The Association of British Travel Agents supports the idea that all flights should be protected, and it is working on that at the European level. As my hon. Friend the Member for Poplar and Limehouse said, ABTA expects the Commission to announce proposals on airline insolvency in the coming months.
Does the Minister feel that the Bill’s changes to ATOL will provide the best possible cover for holidaymakers and for people travelling on business or to see family members? What consideration did she give to reform options other than the one chosen in the Bill? Why was coverage of all flights ruled out? Would covering all flights not be the clearest form of protection for the customer, regardless of the purpose of their travel? Given that Europe may shortly propose that, and we may soon find ourselves back here looking at new legislation to amend these provisions, it would surely make sense to include such a provision now.
Finally, I want to ask the Minister about timing. Initially, she said that the Government’s reforms would come into force on 1 January 2012, in time for the peak
Mrs Villiers: I am really pleased with the support that the Committee has demonstrated for the clause. It is welcome that this important improvement in consumer protection has managed to generate such a significant level of cross-party support.
As we heard, the ATOL scheme has been successfully protecting holidaymakers from insolvency in the travel trade since the 1970s. Last year, ATOL protected 18.5 million holidays and flights. That included 47,000 passengers who were repatriated by the Civil Aviation Authority when their travel company failed while they were on holiday. A further 146,000 people were given a full refund.
Where it applies, the scheme provides much-valued protection for holidaymakers’ money, allowing them to book with confidence, knowing that their money is protected in the event of an insolvency. However, I agree with the shadow Minister and the hon. Member for North West Durham that we need to modernise ATOL so that it better reflects how holidays are now bought and sold, particularly in the light of the increased use of the internet.
It has become increasingly difficult for consumers to know whether their holiday is a package holiday, and so protected under the ATOL scheme, or whether it is a holiday that resembles a package, but falls outside the legal definition and so does not benefit from full ATOL protection. That gives rise to the sort of problems mentioned in particular by the hon. Member for Bolton West. Those problems have also been highlighted over a period of many years by the Transport Committee.
The Government are taking forward secondary legislation to bring flight-plus holidays sold by travel agents into ATOL. In response to the first of the hon. Lady’s questions, we expect to implement that from 30 April. From 1 October, consumers will also get a standardised ATOL certificate when they buy a protected holiday or flight. We allowed an additional period before the introduction of the formal certificate to give the industry a little more time to prepare. In the interim period between 30 April and 1 October, consumers will still be informed where they are protected by ATOL. It is only until 1 October that they will not get the formal certificate.
These reforms have, as hon. Members have mentioned, been broadly welcomed by many in the travel trade, including the Association of British Travel Agents in its recent evidence to the Committee. Clause 94 allows the reforms to go further, by giving the Secretary of State new powers to make regulations to include holidays
The Government believe that they should have the power to include airline holidays and those arranged on an agent-for-the-consumer basis in the ATOL scheme. The powers could be used to improve clarity further for consumers on the scope of the scheme and to create a more coherent and consistent regulatory framework for businesses. Including airline holidays, packages and flight-plus in the scheme was widely welcomed by many in the travel trade. Although most airlines do not support the change, some do, as Barry Humphreys from the British Air Transport Association acknowledged in his evidence to the Committee in our first week of sittings.
Should the clause become law, I would expect to consult in 2013 on new draft regulations to give effect to the changes, alongside an impact assessment. A decision to proceed would be taken on the basis of the consultation responses and the conclusions of the impact assessment. That process would help us assess the cost impact of such a change. We would also need to consider the extent to which the change would further improve clarity for consumers about the scope of the scheme. We would also look at issues around competitive equality between airlines and the rest of the travel trade and between airlines themselves. That element of the decision-making process is important.
It is for those reasons that I cannot accept the amendment from the hon. Member for Bolton West, although I warmly agree with more or less everything that she said. Requiring the Secretary of State to make new ATOL regulations regardless of the outcome of the consultation or the results of an impact assessment would not be appropriate. It is important that those matters are fully considered before a decision is taken to go ahead with secondary legislation.
The permissive power for the Secretary of State to make ATOL regulations in the Civil Aviation Act 1982 appears to have worked reasonably well over the past 30 years in allowing the scheme to be amended as and when necessary. It would be difficult to bring airlines in directly via primary legislation without potentially having to repeal the existing ATOL secondary legislation and putting everything in a Bill. It would also mean that updating ATOL legislation in the future could be made more difficult, because more of it would be hard-coded into primary legislation. That is why we have stuck with how ATOL is currently delivered, with permissive powers in primary legislation followed up by decisions in secondary legislation.
I cannot see a strong case for moving away from that general approach. We are more likely to be able to respond in a timely and effective way to the concerns expressed by the hon. Member for Bolton West if we stick with the approach that gives the Government powers to do this after appropriate consultations and impact assessments have been carried out and properly considered. I hope the hon. Lady is reassured by the Government’s commitment to consulting on the draft regulations that are to be made under the new power in 2013.
The amendments tabled by the Opposition Front-Bench team would bring all flight-only sales into ATOL. The requirements they seek to impose on airlines are not consistent with section 64 of the Civil Aviation Act 1982
Unless the Opposition are prepared to amend or repeal the European Communities Act 1972, which I suspect they are not, it is not open to Parliament to adopt the amendments, because they would be inconsistent with our obligations under the European Union treaties. That said, the change sought by the amendments is under active consideration at EU level. As the shadow Minister mentioned earlier, the Commission is currently considering the package travel directive, but it is also reviewing various options for providing financial protection to passengers in all flight sales, including those by airlines.
We will carefully consider any proposals made by the Commission on that subject, which we expect later in 2012. We will consider the points raised today in our response to and engagement with the Commission. As part of our engagement with the Commission, and to support it, we expect to seek views from interested stakeholders, including those in the travel trade, airline businesses and consumer groups, on both the airline work and the package travel directive.
If changes were to be made to the flight-only regime, the pros and cons would need to be considered carefully at both EU and domestic level. Consumer confusion is not necessarily as intense for flight-only sales as it is for package-type holidays; that should be acknowledged. It is easier to distinguish between a flight booking and a holiday with a number of components, including a flight, than between a package in a legal sense and other, similar-looking types of holiday. Nevertheless, as I have said, the Government will have in mind the points raised by the Committee as we engage further with the Commission.
The shadow Minister asked for an update on how the deficit affects the ATOL scheme. The existence of a deficit does not in any way jeopardise the payment of refunds from the ATOL scheme to those who are entitled to them, and it is always worth making that clear. The deficit means that, in effect, the taxpayer, in certain circumstances, may be required to meet some of the costs of refunding passengers who fall within the scheme’s scope and whose tour operator has gone bust.
The deficit currently stands at £38 million. We expect the changes to flight-plus proposed in secondary legislation to assist in addressing that deficit, so that, over time, we can move to a position in which the fund becomes financially self-sustaining and no longer requires a Government guarantee from the taxpayer. We hope that may happen within three years, but we are not setting a definite target for the moment. The proposed changes to flight-plus should provide assistance.
Julie Hilling: I am, of course, disappointed that the Minister does not feel able to accept my amendment, but I need to reflect on her reasons for that. I may return to the subject on Report. I urge her to take action as soon as possible to bring airlines into the scheme. I beg to ask leave to withdraw the amendment.
Jim Fitzpatrick: These are simple probing amendments in a somewhat toxic territory, because they raise the question of Treasury scrutiny of bonuses. Clearly, controversy on the subject is raging in a number of different businesses and industries and across the political landscape, so why does the Bill remove Treasury oversight of bonuses? We fully support the clause and the creation of non-executive members of the CAA. The clause updates the Civil Aviation Act 1982 and introduces non-executive directors, who have an important role in the healthy operation of businesses, organisations and companies. It also deals with gender language issues, and replaces “chairman” with “chair”.
The Treasury has oversight of remuneration packages for non-executive directors. It may not wish to, or never have to, interfere in the determinations of the CAA, but it has that oversight should it need to. There was some publicity this morning about remuneration packages in the public sector. An article in The Daily Telegraph compares the Prime Minister’s salary with those of chief executives of local authorities. Some of them are paid almost twice as much as he is; that hardly seems to be appropriate remuneration. Any Prime Minister, given the responsibility of the office, appears to fare poorly compared with others in the public sector, let alone the private sector.
Here we have some kind of handle on, and oversight of, remuneration packages. The Government have been criticised with regard to bonuses given to some in the public and private sectors; the previous Government were criticised too. I assume the Department for Transport will still have some role, but the Treasury should also have a role. The clause eliminates the Treasury’s role in the oversight. Could the Minister explain why she thinks that is an appropriate move in the present climate?
Mrs Villiers: I am grateful for the shadow Minister’s explanation, and for his indication that these are probing amendments. Let me give some background. The changes introduced by the Bill that the amendments seek to
“The statutory requirement for the Treasury to approve the Civil Aviation Authority members’ remuneration and pensions is an anomaly. I recommend that the Department for Transport seek to amend the legislation so that the responsibility lies solely with the Secretary of State.”
The Government agree with Sir Joseph Pilling’s conclusion that the oversight of the Treasury is not needed. The Committee should note that there is no equivalent requirement in the case of any comparable regulatory body. Now that a full-time chief executive has been appointed, to whom the executive members report, it does not make sense for them to be appointed by the Government, so the clause implements another important aspect of the Pilling report. This is the one element of the Pilling report relating to CAA governance that requires primary legislation.
Removing Treasury oversight will also remove unnecessary Government interference in the affairs of an expert, independent regulator. It will also deal with unnecessary delays in the appointment of executive and non-executive members of the CAA. There is nothing so special or different about CAA board appointments that they alone, of all regulatory appointments, require the approval of two Departments. I hope that I have provided some reassurance to the shadow Minister. Appropriate mechanisms are in place to hold to account the decisions made by the CAA about remuneration, and I do not consider that additional Treasury oversight is needed.
Jim Fitzpatrick: As I said, these are probing amendments, although we feel strongly about the issue, because of its pertinence and significance. We have listened to what the Minister said, and we want to reflect on it, so with the proviso that we might come back to the issue on Report, I beg to ask leave to withdraw the amendment.
‘(a) omit “, after consultation with the Secretary of State,”; and
(b) after paragraph (c), insert—
“(d) provide specifically for charges to be paid to the CAA by providers of air transport using airports regulated by the CAA.”.’.
‘consult the Secretary of State’
‘present the Secretary of State with a representative summary of the consultation conducted under paragraph (a),’.
‘(c) after presenting the summary of the consultation conducted under paragraph (a), consult with the Secretary of State’.
Graham Stringer: This is a relatively straightforward amendment to a clause that amends section 11 of the Civil Aviation Act 1982 to enable the CAA to levy charges on airports, pursuant to the consumer protection measures under the Bill, where there are breaches in the regulations, which is sensible.
I am worried because charges will be imposed on airports on the assumption that it will be easy for the CAA to collect the charges from the airlines. If we think about what is covered—airlines being late and baggage handling going wrong—it is items that are not the direct responsibility of the airport. As is the case with many other provisions in the Bill, the distinction between different parts of the aviation industry is not made clear. The basic thrust of the Bill is to change the focus to passengers, but the mechanisms in the Bill for appeals and comments on such changes still relate to airlines. Similarly, many of the service requirements relating to consumers will be breached not by airports, but primarily by airlines. It would be sensible if the Civil Aviation Authority had the right to charge airlines in those circumstances; that is the essential burden of the amendment.
Jim Fitzpatrick: Amendments 80 to 82 are in different territory to amendment 6, which was tabled by my hon. Friend. They are probing amendments that would result in changes to the consultation that the Civil Aviation Authority must hold regarding charging schemes. Under our proposals, the CAA would have to show the Secretary of State the result of the consultation that, under the Bill, it must carry out with those who are likely to be affected or would have an opinion on the charging scheme. It is very much a matter of interpretation, and one on which we should be grateful for the Minister’s reassurance.
Our interpretation is that the wording of the Bill allows the CAA to carry out the consultation, but not pass on the results of that consultation to the Secretary of State, which would mean that she did not get the information, and that the results could be ignored.
Amendment 82 relates to the minimum period of time in which a charging scheme would come into force after being published. Under the Bill, that period would be cut from 60 to 14 days. We are asking a very pertinent question: 60 days is a significant time—two months—and it is being reduced to only two weeks; why does the Minister think that such a massive reduction can be made?
It does not say that the information has to be shared. We would not want the Secretary of State to be shut out. The amendments are designed to give us reassurance that the Secretary of State will be fully involved.
Julie Hilling: I want to add briefly to the comments of my hon. Friend the Member for Blackley and Broughton, and talk in detail about the implications of the new charges for Manchester airport. They are obviously replicated in all airports, but it is much easier to talk about a specific example.
The regulatory charge for an airport is currently 0.95p—just under a penny. It is going up to 1.26p in April, but additional security charges will add at least another penny. Manchester airport estimates that its costs will go up by something like 216% when the Bill becomes law, which is very difficult. Manchester airport is thriving, but other regional airports are struggling to remain in existence. It is an incredibly competitive market, and they feel unable to put up charges. Whereas regulated airports can put them up through direct charges, things are much harder for regional airports, which are unable to put up charges for fear of losing the flights that they are desperate to attract.
I want to add my voice to those saying how important it is for the CAA to levy the charges directly on airlines, rather than levying charges on airports and expecting airports to claim them back, because the message from airports across the piece is that they feel unable to do that. I add my support to the amendment standing in my name and that of my hon. Friend the Member for Blackley and Broughton.
Mrs Villiers: I am grateful to hon. Members for setting out the concerns that prompted their amendments. Although I cannot support the amendments, I hope that I can reassure the hon. Members and respond to the points made.
Amendment 6, moved by the hon. Member for Blackley and Broughton, has one defect that I should highlight. The words “subsection (1)” should not be deleted because if they were, the clause would read, “In (a) omit” rather than “In subsection (1)(a) omit”, and that would cause problems. That is a technical issue, but turning to the substance of the amendment, it would specifically allow the CAA to provide, in a charging scheme to be made under section 11 of the Civil Aviation Act 1982, that providers of air transport using airports regulated by the CAA pay charges to the CAA. I hope that I can reassure the hon. Gentleman. Section 11(1)(c) of the 1982 Act already allows for such a specification to be made if appropriate in a particular charging scheme. The CAA’s power to make charging schemes relates to all its functions under the 1982 Act and remains a general power.
I turn to the concern about instances in which the CAA’s charges are levied on airports rather than airlines. The CAA does levy charges directly on UK airlines, in particular for safety regulation, which is the biggest
I can provide reassurance on amendments 80 and 81, which would require the CAA to consult the Secretary of State after presenting her with a representative summary of the consultation it had carried out on its proposed charging scheme. That is exactly what the CAA has done for every year that it has prepared a charging scheme. For example, it consulted with its stakeholders on its 2012-13 scheme of charges from 5 October to 21 December 2011. It should also be noted that both Virgin Atlantic and British Airways are represented, through the British Air Transport Association, on the CAA’s finance advisory committee, which meets regularly to provide input and comment on the development of the CAA’s charges schemes. The CAA produced a 26-page, 21,450-word summary of the 50 consultation responses and its own response to them, and presented it to the Secretary of State. The shadow Minister was anxious for reassurance on that. The CAA also published the summary on its website, so that those who had responded to the consultation could be reassured that their comments had been fairly reflected. In addition, the CAA sent substantive responses to the Secretary of State in advance, so that she was fully informed of trends. It has therefore adopted exemplary practice. Under clause 100, it will be subject to a statutory requirement to consult the industry on its charging schemes.
On amendment 82, as we have heard, the clause provides that new charging schemes will come into force no sooner than 14 days after publication, instead of 60 days, as under the present scheme. The amendment reflects concerns expressed in airlines’ written evidence to the Transport Committee. The reduction in the period will provide the CAA with an additional six weeks in which to prepare a scheme for publication, which will enable it to use more up-to-date information so that the scheme can be more closely based on the latest statistics and trends. Hon. Members will appreciate the fullness of the 12-week consultation process that the CAA undertakes. They will also understand that stakeholders have ample opportunity to make their concerns known, and that the Minister responsible will have visibility of the issues involved. I therefore consider 14 days to be an adequate period for the CAA between publication of the scheme and its coming into operation.
The proposal to remove the 60-day delay notice period was supported by both the Pilling report and the Safety Regulation Finance Advisory Committee, which represents a significant proportion of individuals regulated by the CAA Safety Regulation Group. The intention behind the 60-day period was to allow the industry to make representations to the Secretary of State. In practice, such representations have rarely been made, so Ministers have never taken action as a result of them. The appropriate vehicle for representations is the consultation processes, which, as I have assured the Committee, the CAA can and does carry out in relation to these important matters.
Graham Stringer: To restate the Minister’s comments, she is saying that airports will bear the cost of breaches of regulations or service by airlines. As she made the case that the CAA would be unable to recover the costs, it is also likely—not in every case, because, as she says, there are established relationships, and codes can be worked out and arrangements made—that in some cases the airports will not be able to recover the money. They will certainly not be able to do so easily, and they may not be able to at all.
It is a flaw in the clause if one private sector body is made responsible for the flaws, faults and failings of another private sector body. I accept the Minister’s point that there is a technical error in the amendment, and that we are not talking about huge amounts of money. However, there is a failing in what is proposed, and I may want to return to the point on Report. I beg to ask leave to withdraw the amendment.
Power to make consequential and transitional provision
The Chair: Order. It is extremely likely that the Committee will exit this afternoon, under the chairmanship of Mrs Riordan, so I thank everyone very much for the co-operation and courtesy they have shown each other during sittings. I trust that this afternoon’s sitting will run equally smoothly.