Civil Aviation Bill

Memorandum submitted by Aviation Environment Federation (AEF) (CA 09)

The Civil Aviation Bill and the need for an environmental duty for the CAA


1. Both the Pilling Review and the advisory panel on aviation’s economic regulation called for changes to the CAA’s role and duties, and the Government previously committed to legislative reform in response to both sets of recommendations. The Civil Aviation Bill as it currently stands would put into statute many of the key conclusions of the committee on economic regulation, but fails to reflect two important recommendations from the Pilling Review, namely that the Civil Aviation Act 1982 be amended to clarify that the CAA’s duties should extend to the general public and not just to the ‘aviation community’, and that the CAA should be given ‘a general statutory duty in relation to the environment’.

2. AEF supports these recommendations and believes that the Bill should be amended to ensure that:

· The CAA has a clear mandate to deliver Government policy

· The proposed role for the CAA in providing environmental information is set in the appropriate context

· The focus on the consumer that the B ill would introduce in the CAA’s role as economic regulator is balanced against consideration of impacts on the environment and on local communities

· The CAA’s environmental work is supported with the right regulatory framework so that environmental thinking is mainstreamed

· The groundwork is laid for the possibility of further environmental work being transferred to the CAA in future.

About us

3. The Aviation Environment Federation (AEF) is a policy-focussed NGO addressing the environmental impacts of aviation, including noise, climate change, and air pollution. The organisation was founded in 1975 as a national voice for community groups around the UK’s airports and airfields, and now comprises over a hundred member groups. As many environmental policies applicable to the aviation sector are agreed internationally, alongside our involvement in UK policy, we also work with the European Comm ission and Parliament and w ith the UN, particularly the International Civ il Aviation Organisation (ICAO), where we represent a global coalition of environmental NGOs.

4. AEF has a good working relationship with the CAA. In 201 0 our Director Tim Johnson took part in a high level group commenting on an early draft of the Future Airspace Strategy and, separately, presented to the CAA’s CEO and Directors at workshops examining the CAA’s role and function . We were involved with both the Pilling Review and with the review of the CAA’s role as economic regulator, and responded to subsequent Government consultations.

CAA and environment in the context of economic regulation

5. The recent review of the CAA’s role and function began in 2007 with the Pilling Review and continued in 2008 with the setting up of an advisory panel on economic regulation.

6. One of the key recommendations of the Pilling Review was that the CAA should be given a general statutory duty in relation to the environment, together with a "clear policy framework from Government". Noting that existing legislation refers to a role for the CAA in "securing the sound development of the civil air transport industry of the United Kingdom", Pilling further advised that: "The CAA is responsible for safeguarding the general public interest, which is broader than the aviation community. I recommend that the Department for Transport propose an amendment to the Civil Aviation Act 1982 to remove the current ambiguity." Key recommendations from the panel on economic regulation, meanwhile, were that in its role as economic regulator, the CAA’s primary duty should be towards passengers and that the current regulatory arrangements should be replaced by a licensing regime.

7. In March 2009 the Government published a consultation on Reforming the Framework for the Economic Regulation of UK Airports. While this was intended to respond primarily to recommendations from the panel on economic regulation, it aimed also to take into account Pilling’s recommendations on legislative change. Section 1.4 states:

Of particular relevance here is his conclusion that the CAA’s general statutory remit does not adequately reflect its responsibility for safeguarding the public interest. The Government is developing proposals for future legislation that will, amongst other things, give the CAA a clear focus on actively pursuing consumer-related and environmental objectives whilst at the same time maintaining the strength of its existing focus on securing a high standard of safety.

8. The consultation goes on to argue that the new aim of putting the passenger experience first ‘must be balanced by the effects on the environment and associated impacts on local communities’ (section 1.6) and proposes that alongside a primary duty to the consumer, the CAA should have a ‘subsidiary’ duty to consider impacts on the environment.

9. Community groups at Heathrow, Gatwick and Stansted, the airports currently subject to economic regulation, have argued that this subsidiary duty should be reintroduced to the Bill and give a number of examples of the problems that could be created by introducing a consumer focus for the CAA without this balancing requirement (see paragraphs 15-17).

CAA and a general, high level duty on environment

10. In December 2009, a ‘Decision Document’ in response to this consultation announced a change of heart: any general statutory duty on the CAA to take environmental impacts into account, beyond existing legal requirements, would not apply to its role as economic regulator. At the same time, however, a new consultation was published, titled Regulating Air Transport: consultation on proposals to update the regulatory framework for aviation. This set out the Government’s views on wider CAA reform as proposed in the Pilling Review, including a proposal:

…to modernise the CAA’s regulatory framework to enable the CAA to carry out its regulatory activities in a manner that is fully consistent with protecting the public interest in aviation: focusing on areas where the public could otherwise be vulnerable; safeguarding the interests of consumers and the environment; and maintaining safety, which is of paramount importance. We want to see evolutionary change, improving and modernising what’s already there to reflect changes in the industry and in the approach to regulation.

11. The consultation did not make clear that this role should not apply to the CAA’s economic regulatory function, the two strands of the work on updating the CAA appearing to have bifurcated.

The draft Civil Aviation Bill and environment

12. Prior to the publication of the Bill that is currently before Parliament, a press release was issued announcing that the Bill would include a duty to have regard to the environment and local communities. In fact, no such duty – whether applying to the CAA’s role as economic regulator, to its other statutory roles, or both – is included. The press release was, the Government states, issued in error. While the Bill would put into statute many of the key conclusions of the panel on the economic regulation of UK airports, in other words, it omits all reference to the key recommendations of the Pilling Review. In fact, it is so emphatic that consumers’ needs should be paramount in decisions concerning economic regulation that note 28 of the commentary states that:

The primary duty refers specifically to the interests of users of air transport services in respect of airport operation services: it does not empower the CAA to take into account whatever general interests these persons might have in other capacities (for example as a local resident).

13. Section 81 of the Bill would, however, create two new environmental functions for the CAA:

(i) A requirement to publish information about the environmental effects of UK aviation, and

(ii) An option to publish best practice guidance for the aviation industry on how to limit environmental effects

Is the Civil Aviation Bill the right vehicle for addressing the CAA’s role with respect to the environment?

14. The reason for the Bill omitting reference to a wider environmental duty is, the Government has stated, that legislation concerning economic regulation is not the appropriate context for it. Introducing an environmental duty that applied only at airports designated for economic regulation would, meanwhile, have a distortive effect on competition, it claims. AEF disagrees.

15. The changes to be introduced with respect to economic regulation, particularly the new primary duty to passengers, need to be balanced with duties to the environment and to local communities. More background on this is provided in a briefing by Airportwatch which focuses on the need for an environmental duty for the CAA in its role as economic regulator (at Heathrow, Gatwick and Stansted). Without such a duty, it points out, the CAA may lose some of its current flexibility over the kind of airport expenditure that is permitted to be included in an airport’s ‘Regulated Asset Base’.

16. At present the CAA is able to make a judgement as to whether this can include expenditure on environmental or community measures that are not strictly required by law but which an airport has agreed to deliver, for example in the context of a section 106 agreement, or informal negotiation. Inclusion in the Regulated Asset Base allows airports to recover costs of such measures through their charges; without this protection, they could become unaffordable. Measures such as BAA’s Property Market Support Bond, designed to mitigate blight for homeowners threatened by proposals for new runways at Heathrow and Stansted, or the provision by Gatwick Airport of mobile noise monitors to help resolve local disputes, could in future be under threat.

17. The inclusion of duties to the public and to the environment in the context of economic regulation would act only as a counterbalance to the new proposed duty to consumers. We see no reason why it would create any more competitive distortion than is necessarily generated by the fact that only three airports are subject to economic regulation (Heathrow, Gatwick and Stansted).

18. While it is true that the majority the Bill deals with economic regulation, sections 76 to 99 all concern other provisions.

19. It has been nearly four years since Sir Joseph Pilling published his report on CAA reform, and the Government has previously committed to taking forward its proposals on duties towards the public and the environment through legislative reform, prompting the CAA itself to prepare for change. Aviation bills arise rarely. AEF believes that now is the time to bring the CAA up to date in terms of its legislative framework on environment.

Benefits of the introduction of duties for the CAA to take into account community and environmental impacts

The CAA needs a clear mandate to deliver Government policy

20. Environmental considerations, including greenhouse gas emissions, noise and air pollution, are increasingly significant in Government policy generally and will, the Government has stated, be at the heart of the new aviation strategy. The CAA itself is very aware of this policy shift, as well as the specific proposals over recent years in relation to its own remit in this respect (see paragraphs 4-10), and has now begun to actively consider environmental policy. While this is something we welcome, we are concerned that at present a lack of guidance from central Government is resulting in the CAA making statements on environmental policy that seek actively to influence rather than to respond to Government policy. The CAA’s recent ‘insight notes’ Aviation Policy for the Future and Aviation Policy for the Consumer, come very close to actively opposing Government policy with respect to airport capacity in the South East. The third ‘insight note’, meanwhile, on environment, avoids the high level question of whether increased airport capacity would cause environmental damage but explicitly recommends against the imposition of a cap on UK aviation emissions – a policy of the last Government on which the Coalition has yet to take a position.

21. Given that the CAA’s activities are funded entirely through its charges, in order to retain its good reputation, it is particularly important for the organisation to demonstrate impartiality in delivering Government policy, rather than taking the part (or appearing to take the part) of a lobbyist. Its current consultation on its own environmental programme states its intention to ‘promote stretching environmental outcomes’, and to take ‘a more proactive role in shaping the debate around aviation noise and local impacts.’ While the CAA has a role to play in providing evidence and responding to requests from Government, however, we believe that Government, rather than the CAA, should be determining environmental policy. Without clarification of this relationship in the Civil Aviation Bill, we believe that there is a danger that the CAA, recognising the need to engage in environmental debate, may seek to fill the gap by pursuing its own environmental agenda which may not accord with Government objectives.

22. Guidance from the Secretary of State will be required to ensure that the CAA is fully informed both about these objectives, and about the Government’s view on how to balance the proposed duties towards consumers, the public and the environment.

The CAA’s environmental work should be supported with the appropriate regulatory framework to ensure that environmental thinking is mainstreamed

23. The CAA currently engages in a range of environmental activities, including taking account of guidance from the Secretary of State in relation to the environmental impacts of airspace change proposals (as required by the Transport Act 2000), undertaking noise modelling on behalf of the Government, advising the Environment Agency on technical aspects of administering the EU Emissions Trading Scheme, and, as described in paragraphs 14-15, taking into account environmental impacts in the context of economic regulation.

24. Because these individual work programmes are not reflected in any high level objectives, however, environmental considerations appear to be treated by the organisation as an add-on to a more general aim to meet public demand for aviation, leading, for example, to its advocacy for increased airport capacity (see paragraph 20), without fundamental consideration of whether this would enhance or detract from environmental objectives. The Government has previously argued that one advantage of introducing an environmental duty for the CAA would be to ‘mainstream’ environmental thinking within the organisation. We agree.

The proposed role for the CAA in providing environmental information should be set in the context of a wider environmental objective

25. The Bill as it stands does include one proposed new duty in relation to the public, namely that relating to environmental information (see paragraph 12).

26. The CAA is a well-respected source of statistical and technical information, and we would very much welcome the organisation taking a more public-facing role as an information provider, to help inform choice among both consumers and the general public. To provide just one example, AEF is regularly approached by members of the public seeking information on the location of flight paths, often when making house purchase decisions – an issue to which the CAA would be better placed to respond.

27. The CAA’s consultation on its environmental programmes states: ‘As set out in our Strategic Plan, our clear commitment is to protect the interests of the public. This is central to all our work in safety, market regulation, consumer protection, and the impact of aviation on the environment.’ Effective public engagement, however, would require a considerable change of focus and style, since currently, the organisation’s communication takes place largely within industry and government circles. Without a high-level statutory duty towards the public, information provision on environmental impacts is likely to represent such a minor part of the CAA’s work programme that it may not receive the resourcing or attention that it deserves, therefore failing to reach the appropriate audience.

28. To take one example from our own experience, in March 2010 the CAA was given responsibility for the administration of Public Safety Zone policy, which imposes development controls in areas of increased public danger near to the ends of busy runways. Yet community groups trying to access information on how these zones are defined and, therefore, how they might be altered as a result of changes in airport operations, have so far been frustrated.

The focus on the consumer that the Bill would introduce in the context of economic regulation needs to be balanced against consideration of impacts on the environment and on local communities

29. In paragraph 14 we noted that introducing a primary duty towards consumers without counterbalancing duties towards the environment and local communities could restrict the CAA’s flexibility to permit expenditure on environmental measures by airports being recoverable through airline charges. The Bill states that the proposed primary duty to consumers applies only in the context of economic regulation. It seems likely, however, that such a focus would permeate other aspects of the CAA’s operation, and the insight notes recently published by the organisation and indicating its current thinking on how benefits for consumers could be maximised in the context of airport capacity provision appear to reflect this. There is therefore, we believe, a more general argument for the need for additional statutory duties alongside a focus on consumers.

The Bill should lay the groundwork for the possibility of future transfer of responsibility for environmental work to the CAA

30. It is possible, in our view, that Government will look increasingly to CAA to deliver some research or administrative aspects of environmental policy (as with Public Safety Zone policy, mentioned above). To avoid these areas of policy disappearing from public scrutiny, or being addressed by the CAA in a way that is not consistent with Government objectives, it is important that the work be undertaken within a framework of general public interest and with a clearly defined relationship between the CAA and the Government.

General amendments sought to the Civil Aviation Bill

31. An amendment to section 4 of the Civil Aviation Act 1982 to clarify that CAA has a duty to the general public, rather than only to the aviation industry or its consumers, and that environmental impacts are as important a determinant of aviation policy as consumer demand (see paragraph 5).

32. The introduction of a high-level environmental duty for the CAA, requiring it in the course of all its activities to seek opportunities to deliver the Government’s environmental objectives in relation to climate change, noise, air pollution, and public safety, and requiring the Secretary of State to provide appropriate guidance on how to tackle competing objectives.

33. A complementary duty on the CAA to consider impacts on the environment and on local communities when discharging its role as economic regulator.

February 2012

Prepared 22nd February 2012