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Lord Berkeley: Before my noble friend sits down, both he and the noble Lord, Lord Brabazon, mentioned Railtrack. My perception of Railtrack's compensation regime is that it works very well. The train operators and Railtrack have a system of compensating each other if there is a delay. Railtrack is penalised by the regulator if it causes too many delays. If one train operator causes another to be delayed, there is a kind of clearing house.

Railtrack has responsibility for safety in the same manner as NATS. Whereas I believe that Amendment No. 31 goes much too far, I wonder whether there is a case for looking at some kind of system for compensating those airlines which are delayed by what

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I shall call "equipment failure"--we have had a few of those recently--I am referring to the inability of NATS to provide for the capacity to which it is contracted. That is a much narrower definition than that proposed in Amendment No. 31. On the basis of how the matter works on the railways, would the Minister consider it worth looking at in a little more detail?

Lord McIntosh of Haringey: I take responsibility for referring to Railtrack. I do not believe that the noble Lord, Lord Brabazon, did, which was very wise on his part. I was interested to hear what the noble Lord, Lord Berkeley, said about Railtrack and our ability to allocate responsibility for delays. The system has been operating for some years, but we are talking here about something which we have to introduce. Our argument is that the system has to settle down.

I suggest to the noble Lord, Lord Berkeley, that there is a fundamental difference in the relationship between Railtrack and the train operating companies from that between NATS and the airlines. The difference is that NATS has to accept any traffic that comes into United Kingdom airspace even if it cannot be anticipated. Therefore, in order to preserve the paramount requirement for safety, it has to accept additional traffic which may cause delays. I do not believe that that is the case with Railtrack because my understanding is that it is in a position to agree with the train operating companies what traffic there should be on the rails.

Lord Berkeley: My noble friend is mainly right. I was not suggesting that NATS should somehow have to compensate airlines when they are delayed by too much traffic. However, I suggested that it might be useful if it had an incentive not to have a major computer failure, such that it reduced normal capacity by 100 per cent or 50 per cent because of its own equipment failure.

Lord McIntosh of Haringey: From such a transport expert as my noble friend Lord Berkeley, "mainly right" will do quite well for me. The issues that he has raised can be discussed by the stakeholder council.

Lord Brabazon of Tara: I am grateful for the Minister's response. I am also grateful for the intervention of the noble Lord, Lord Berkeley. The Minister clearly did not listen to my speech as closely as he does normally. I mentioned Railtrack, which was very foolish, as the noble Lord said. However, there is a comparison to be made because both are providers of infrastructure: in the one case, aircraft use it, and, in the other, trains. I am encouraged by the Minister's response to my Amendment No. 34 on the subject of consultation. I hope that that is right and that the stakeholder council will be a live issue and not just a waste of time, if I may put it that way.

Nothing in my amendments is intended in any way to affect the overriding requirement to put safety as the top priority. I take the noble Lord's point that NATS

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is liable to receive air traffic coming into United Kingdom airspace. But there are problems where it could be accused of not having maintained its equipment sufficiently well and where it could be responsible for causing delays through its own fault and not through over-demand, if I may put it that way.

Lord McIntosh of Haringey: Surely, those would be delays which would apply to a number of airlines over a period of time. They are the overall delays to which I referred and which can be dealt with by the conditions in the licence. The amendment proposes compensation for individual delays, which is a different thing.

Lord Brabazon of Tara : I was going to say that I was also pleased with what the noble Lord said about the draft licence conditions. I shall read with care what the noble Lord said. I may wish to come back to this matter at the next stage. I hope that when everything goes through it all works well. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 32 and 33 not moved.]

Clause 7 agreed to.

Clause 8 [Duties of licence holders]:

[Amendments Nos. 34 and 35 not moved.]

Clause 8 agreed to.

Clause 9 agreed to.

Clause 10 [Breach of duties or conditions]:

[Amendment No. 36 not moved.]

Clause 10 agreed to.

Clause 11 [Modification by agreement]:

[Amendment No. 37 not moved.]

8.30 p.m.

Lord Brabazon of Tara moved Amendment No. 38:

    Page 7, line 26, leave out subsection (4).

The noble Lord said: In moving Amendment No. 38 I shall speak also to Amendments Nos. 40 to 47, 49 and 50.

This group of amendments deals with modification of licences. Subsection (4) of Clause 11 enables the Secretary of State to overrule a decision of the CAA to modify a licence with the consent of the licence holder. Amendment No. 38 seeks to remove that power. The CAA has been entrusted with the power to modify licences and should be left to get on with it without interference from the Secretary of State. The CAA is best placed to judge properly the matters in issue without being swayed by what may be irrelevant political considerations.

The interests of the public are already protected in law by the requirement that the CAA complies with its duties as set out in Clause 2. Compliance with a direction of the Secretary of State may put the CAA in conflict with its duties as it sees them under Clause 2, which would be a completely untenable position for the CAA. If the Secretary of State has good reason to

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resist the modification, he can make representations which the CAA is obliged to consider under subsection (2)(d) and to which the CAA will no doubt give considerable weight. This is sufficient protection for the Secretary of State without his having to take this arbitrary and unwarranted power.

Turning to Amendment No. 40, Clause 12 enables the CAA to refer anti-competitive behaviour to the Competition Commission if it is damaging to the public interest. Subsection (5) gives the Secretary of State power to put a stop to such reference. This amendment seeks to remove this power from the Secretary of State and to leave such decisions where they belong, in the hands of the CAA. The CAA is best placed to judge whether anti-competitive behaviour damaging to the public interest may be occurring without being swayed by political considerations. There is no legitimate reason to give the Secretary of State power to override such a decision by the CAA. The exercise of such power by the Secretary of State would not only substitute his judgment for that of the CAA but also for that of the Competition Commission, which would be deprived of the opportunity to rule on any issue raised by the CAA.

Genuine competition has a big part to play in delivering cost-effective quality services and there should be no obstacles to ensuring that it operates fully. It would be difficult to find anyone other than the Secretary of State who did not believe that the CAA and the Competition Commission were better able than the Secretary of State to decide such issues, especially when the Secretary of State may not always be in favour of the concept of competition.

Turning briefly to Amendments Nos. 41 and 43, subsection (3)(d) of Clause 14 obliges the CAA to take into account representations made in response to any notice of proposed modifications issued under this subsection. However, such notice follows the relevant report by the Competition Commission, which the CAA is obliged to publish. This amendment seeks to oblige the CAA to take into account any representations made in response to the published report. The purpose of publishing the report under Clause 12 is presumably to enable interested parties to make representations. Any representations made in response to the report should be considered as well as the suggested modifications.

Turning to Amendment No. 42, subsection (2) gives the CAA the right to suggest modifications from those proposed by the Competition Commission following a reference. The amendment seeks to require the CAA to explain why it has proposed changes. If the CAA disagrees with the Competition Commission, it should be obliged to say why in order to ensure that consultation is indeed a meaningful exercise. That is the purpose of that amendment.

Clause 14(5)(b) obliges the CAA to forward representations received to the Competition Commission. There is, however, no obligation on the Competition Commission to take account of such

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representations, as it plainly should. Amendment No. 44 seeks to place a positive obligation on the competition commission to do so.

Subsection (2) of Clause 16 gives the Competition Commission the right to suggest different modifications from those originally proposed by the Competition Commission following a reference. Amendment No. 45 requires the Competition Commission to explain why it has proposed changes. If the Competition Commission has changed its mind as regards modifications, it should be obliged to say why in order to ensure that consultation again is a meaningful exercise.

Amendments Nos. 46 and 47 concern Clause 20, which gives the CAA power to require a licence holder to do just about anything in order to secure compliance with the duty under Clause 8 or a licence condition. It is limited only by what it thinks is needed to secure compliance. The amendments seek to replace the subjective test of what "it thinks is" needed with the objective test of what is "reasonably" needed. The power invested in the CAA is wide-ranging and comprehensive and it should be reasonable--and seen to be reasonable--in exercising it.

Turning to Amendment No. 49, Clause 21(3) of the Bill provides the circumstances in which the CAA must not make a final order or confirm a provisional order against a licence holder. In brief, those circumstances are that the licence holder has taken the steps he has been told to by the CAA to remedy a breach of his licence; the breach in question is trivial; the breach will not affect other interested parties, most importantly the travelling public; or the Secretary of State has applied for an air traffic administration order in relation to the licence holder.

Clause 21(2) gives the CAA discretion to determine whether any of these circumstances exists. However, it then goes on to state that even if it determines that any of the circumstances exist, it may nevertheless go ahead and make a final order or confirm a provisional order. With the exception of Clause 21(3)(d), which deals with the air traffic administration order, this looks a little curious. Why should the CAA be able to make a final order or confirm a provisional order against the licence holder if, for example, it has already determined that the licence holder is doing all he can to remedy a breach? While we can see the arguments to allow the CAA to do this, we feel it would give reassurance to licence holders if it were made clear that the CAA's ability to make a final order or confirm a provisional order, notwithstanding the existence of the conditions in Clause 21(3), was subject to the CAA's overriding policy objectives set out in Clause 2. That is what the amendment seeks to do.

Finally, Amendment No. 50 deals with Clause 22. Subsection (4) provides that the CAA must consider any representations made by a licence holder notified of any modifications to be made to an order. Subsection (5) exempts the CAA from that obligation where the modifications are trivial. This amendment seeks to remove that exemption. What appears trivial to the CAA may not look so trivial to a licence holder.

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If it really is trivial, the licence holder is unlikely to make representations and nothing is lost. But we believe that the licence holder needs the protection of being able to make representations if it considers the matter is not as trivial as the CAA thinks. Members of the Committee will be pleased to know that that was the final amendment in this group. I admit that they are technical amendments. I look forward to the Minister explaining the Government's thinking on this issue. I beg to move.

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