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20 Oct 2009 : Column 626

Amendment 152AL withdrawn.

Amendments 152AM to 152ANA not moved.

Amendment 152AP

Moved by Lord Rosser

152AP: Clause 77, page 97, line 28, at end insert-

"( ) In relation to security measures to be taken by a person within subsection (4)(b)("C"), the plan may also specify-

(a) that any other relevant person is to make payments in respect of the costs reasonably incurred by C in connection with the security measures, and

(b) the amount of those payments or the manner in which that amount is to be assessed, and

(c) where such payments are to be made by the manager of the aerodrome, the manner in which such payments may be reimbursed to the manager of the aerodrome by any persons within subsection (4)(c) to (e)."

Lord Rosser: My Lords, one of the objectives of the Bill is to introduce a level playing field for the payment of airport policing. Currently, nine United Kingdom airports-the larger ones-pay for airport policing twice, first through a direct contribution and then through business rates, while the smaller airports contribute through business rates and the provision of onsite facilities. The effect of the Bill is to put the smaller airports in the same position as the larger ones as regards payment for policing. At present, the smaller airports make no direct contribution to their local police force for policing at the airport in question, and the local police force bears the cost itself.

During the passage of this Bill through the other place, assurances were given that the police would not be able to specify the levels of airport policing they considered appropriate without fully explaining and justifying to the airport authorities the costs involved. That assurance was certainly needed since the costs of airport policing are not insignificant. For example, at Manchester airport they run to some £9 million a year. Since policing costs are part and parcel of the costs of running an airport, it does not seem unreasonable that an airport authority should be able to recoup the costs of airport policing from airport users or that those other airport users should be required to make payments direct to the police. However, the wording of the Bill does not even give airports the backing to seek to pass on policing costs to airlines and others who benefit from the policing provision despite the Explanatory Notes to the Bill rather suggesting that airport security plans could provide for other stakeholders to make payments in respect of delivery by the police of a security measure. If there is no wording in the Bill to acknowledge that airports can seek to pass on such additional costs, many smaller airports will almost certainly struggle both to pay and to pass on the costs. This is the issue that my amendments seek to address.

Figures with which I have been provided show that, based on policing costs of 80p per departing passenger, the impact on the airport's bottom line at a time when the industry is already under pressure is likely to be 15 per cent, 72 per cent and 29 per cent of existing profit for 2007-08 for East Midlands, Bournemouth and Humberside airports respectively unless the policing

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charges they will now have to pay directly to their local police forces are passed on to airport users. The Government's own impact assessment acknowledged that some airports could become loss-making as a result of the proposed change in arrangements for the payment for airport policing by the smaller airports. It would be helpful if my noble friend could confirm that the Government recognise the serious impact that the proposed changes to airport policing payments could have on the financial position of smaller, non-designated airports that currently do not make a direct payment to their local police force for airport policing.

While there will be a dispute resolution mechanism that ultimately ends up with the Secretary of State, to which my noble friend has already referred, this may well not lead to satisfactory solutions since the policing of an airport will be based on decisions related to assessments of threats and the resources needed to deal with them, and be unrelated to the commercial viability of the airport, which is a key issue for the airport operator. That is why I do not share the Minister's confidence in the dispute resolution procedure, which he expressed during our debate on the previous group of amendments.

A further concern of airport operators is that the levels of policing at the smaller, currently non-designated airports, will subtly but steadily increase following the passage of the Bill and the transfer of policing costs from the local police to the airport operator. Such concerns from the point of view of the airport operators would be diminished if they had some backing in the wording of the Bill for seeking to pass on costs to users, and there is already a precedent for giving airports such powers in the European directive on passengers with reduced mobility, as additional costs can be passed on to the airlines.

I have already referred to the concerns of airport operators that the levels of policing at the smaller, non-designated airports will steadily increase following the passage of the Bill, an issue raised a few minutes ago by my noble friend Lord Berkeley. Indeed, there are concerns that it is already happening. Since the beginning of the year, two officers have been positioned at one of the smaller airports affected by the Bill whereas previously the only presence was the Special Branch and an armed response vehicle during increased security threat levels. There is now involvement by the police in traffic management on the terminal frontage roadway, car park patrols and increased access airside to investigate alleged thefts from airport shops.

It is clear that local police forces regard themselves as providing services around airports that meet more than the needs of the airport operator. Last July, a circular from Leicestershire constabulary invited people to meet the East Midlands airport neighbourhood team for a consultation event comprising three one-hour meetings at different locations in the airport. The meetings were open to everyone and were billed as a chance to tell your neighbourhood team about the issues that might be of concern and to have your say about policing in the area. A further letter from that police force referred to addressing matters of concern to all sections of our "community" and said that an issue the airport police intended to address was careless

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and inconsiderate driving and in that regard the need to ensure the safety of all who use the airport. That may all be fine, but it is not related to airport security in the accepted sense, and there must be a suspicion that a desire to expand the service by the police to include community policing may not be unrelated to the provisions of this Bill, which will result in the costs being borne by the airport operator rather than by, in this case, the Leicestershire force.

There is a feeling, despite what the Minister has said, that if the police can pass on the costs to airport operators, they will simply gold-plate their provision. That appears to be starting to happen already and we ought to face up to the issue. The Special Branch, the UK Border Agency and customs are funded centrally, so to that extent airport operators are already paying for airport security. Some of the smaller airport operators are querying exactly why a permanent police presence is necessary since the Special Branch and the UK Border Agency are available, and the police could be called as and when necessary, as is the norm outside the airport.

This is an important issue for smaller airports. Times are already difficult and additional costs for smaller airports will simply make it harder for them to compete with the larger ones. In reality, they cannot pass the costs on since airport operators have existing contracts in place with airport users that do not provide for such costs to be paid, because the airport operator currently does not have to pay the costs of policing directly. If there is to be a police presence at an airport from the local force-it is a monopoly supplier and the Government have again said no to tendering-then every other company on the airport site will benefit from the police presence, but the contracts with them cannot be renegotiated unless those other companies on the airport voluntarily agree to do so. My amendment would not compel other companies to renegotiate with airport operators, of course, but they would strengthen the stance of operators in seeking to get agreement on renegotiation if they wanted to go down that road, and also in seeking to recoup such costs when it comes to the renewal of the contracts or the negotiation of new contracts.

I hope that my noble friend will feel able to accept my amendment. The changes this Bill makes to paying for airport policing have serious implications for the viability of our smaller, non-designated airports. There needs to be a clear acknowledgement in the wording of the Bill that these additional costs can be shared by all airport users and not be left to be borne by the airport operator. More than soothing words claiming that everything will be all right on the night are needed in response. I hope that the Minister can address the concerns I have raised in a meaningful way. I beg to move.

7 pm

Lord Bradshaw: I support the noble Lord, Lord Rosser, because he has approached the issue from the other end. Many airports cannot stand these charges- Ryanair has just given notice that it is leaving Manchester-and they and the people who use them operate on very narrow margins; there is not a thick crust that people can take a slice of without killing the

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business. I urge the Minister, in spite of his words to me, to take this matter away, give it a radical review and try to bring out something more sensible.

Baroness Neville-Jones: My Lords, we agree with the sentiments that have just been expressed. There are four amendments standing in my name in this group. Amendments 152APA and 152BEA would allow the airport operator to share the policing costs with airport users, including aircraft operators and anyone who carries out business in the aerodrome. Some airports will have very few such people and I am as concerned as other noble Lords about the ability of smaller airports, which will now be in a different regime, to bear the costs that are likely to be imposed upon them.

My first question is: will airports be obliged to bear all the costs? Would it not be fair and right, where there are other users of the airport who benefit from the policing, to permit them to pass on some of those costs? Obviously that would have to be done in a regulated manner. The second question is: are the charges necessary and reasonable and how will they be controlled? We are in a situation where the regime which is about to be put in place does not provide internal control mechanisms of the kind we ought to have and in which we could have confidence. The airport operators who have made representations are concerned that, despite the existence of the risk advisory group and the security executive group, in practice the level of policing is likely to be dictated by the relevant chief officer of police. The Minister has given assurances, to which I attach great importance, that that will not in practice be the case and that this will be a truly regulated system.

One of the important things the police should do in putting together their charges is to provide to the operators-and, indeed, publicly-a detailed breakdown of the resources and the costs to them of the agreement that is going to be put in place, which will have been drafted in response to the airport security plan. If there was such a breakdown, it would serve the purposes of transparency-people could see what the costs were-and enable a standardisation of costs to take place. Then it would be possible to compare what one police force in one airport was charging as compared with another police force in another airport. Although there would be diversity in the security conditions of those airports, it would enable some judgment to be made about the reasonableness and necessity of the costs, and help to create a climate in which policing costs were kept down and the police had an incentive so to do. It will be helpful to hear from the Minister what he thinks of that suggestion as a basis for moving forward. The mood of the Committee is that it is not an entirely satisfactory situation at the moment for providing a framework in which the costs of policing for the security of airports are transparent and reasonable.

Lord Berkeley: My Lords, the three noble Lords who have spoken on this group have made some strong points, but what is missing from the debate is an independent balance between security, the economic case and safety. Of course, safety and security are paramount but no one in the appeal mechanism-which ends up with the Secretary of State-represents the economic side; only the security side is represented. I

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am not expecting my noble friend to answer now-it is a wacky idea I had when I was listening to the other contributions-but I wonder whether the CAA has a role to play in this. It is independent and has an economic regulation role-it happens in other industries-and it could well, in addition to the ideas put forward by my noble friend Lord Rosser, which I fully support, give comfort to the operators if someone was looking at the independent economic regulation along with other matters. I look forward to my noble friend's response.

Lord Harris of Haringey: My Lords, I hope when my noble friend responds to this short debate that he will give a categorical assurance that he will not allow the security of airline passengers and those working at airports to be compromised because of what the airport operators say is their financial situation. I trust that we will be given an assurance that, as my noble friend Lord Berkeley said, security and safety will remain paramount.

Lord Faulkner of Worcester: My Lords, it would be a little churlish of me not to start by thanking my noble friend Lord Harris of Haringey for his extremely helpful and supportive comment at the end of the debate. I congratulate my noble friend Lord Rosser on the eloquence with which he moved Amendment 152AP, and other noble Lords who contributed to the debate.

That amendment and the other amendments collectively seek to enable airport operators to recover the costs of agreed policing services and ensure that others contribute to them. We recognise that the exceptional economic circumstances affecting the global economy have an impact on everyone. However, we also have a system of funding airport policing that is both unfair and out of date. The designation of only nine airports so that they alone pay for their dedicated policing costs is a system that needs to change, and both the industry and the police agree with us. Frankly, it is not right that the taxpayer should fund airport policing costs when the airport operator, as the owner of the property on which a business is run for profit, benefits from the policing services provided there.

The amendments would enable airport operators to recover policing costs from other parties-some airports consider that this would allow them to revisit their existing contracts-but it is an entirely commercial decision for the airport operator as to whether and how they wish to pass the costs of airport policing through to their users. Ministers have carefully considered whether the Government should intervene in commercial relations between airport operators and their customers and have not seen sufficient evidence that such a measure in the Bill is necessary. Indeed, some of these amendments restrict the relevant parties who can reimburse the airport operator to those who operate commercial enterprises at the airport, and exclude other relevant persons with statutory functions at the airport. That, in itself, is recognition of the fact that this is a commercial matter.

This is not a decision that the Government have taken lightly. We have satisfied ourselves that airport operators are able to recover their costs as they renegotiate contracts, as they would do for any other operating costs. We appreciate that this is not always straightforward.

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Airport operators have known that these changes have been coming for three years, though, and the requirement to pay for dedicated policing will not arise until 2011 for the non-designated airports, so there is time for them to make arrangements.

The amendments would also result in confusion over the distinct purpose and functions of airport security plans and police services agreements. The airport security plan may include details of any payments to be made by one relevant person to another, to allow the wider range of security partners to contribute to the cost of a security measure or project from which they benefit. However, this clause deliberately exempts detail about payments to be made by the airport to the police from the plan. This is because these payments should be specified in a police services agreement, as provided for in Schedule 6. The signatories to the agreement will be only the airport operator, the police and the police authority. It would not be appropriate to have an agreement that covered payments to be made by organisations that were not party to that agreement. It would also result in duplication if details for policing services were included in both the plan and the police services agreement. Extensive details about levels of policing services and corresponding airport payments are for the police services agreement, not the airport security plan.

The amendments would also allow payments to be made by relevant persons-including those with statutory functions, not just commercial organisations at the airport-directly to the police authority. There is a risk that the commercial organisations would be required not only to make payments to reimburse the airport operator but to make payments to the police authority. It would be ill advised to create an extraordinarily complex process that presupposed that the benefit of dedicated policing could somehow be identified and divided between the parties.

It is a legitimate part of running an airport that there will be associated costs. It remains a commercial decision for airport operators, as it is now for the nine designated airports, how they recover those costs. In turn, it remains open to airlines and others to decide whether and how they recover costs from their users. This is a fair and well established basis for conducting such arrangements. The economic situation is clearly affecting the industry, but it is time to move away from designation towards a fairer system for all in the industry.

Amendment 152AUA, in the name of the noble Lord, Lord Bradshaw, would allow the cost of policing to be raised as a matter of dispute before dedicated policing had even been agreed to be necessary. I can offer reassurance that there is a more appropriate provision in Schedule 6 to raise the cost of policing as a matter of dispute, once the requirement to draw up a police services agreement has been established.

Amendments 152AR and 152BF, in the name of the noble Baroness, seek to ensure that greater transparency is introduced into relations between airport operators and police forces by requiring a breakdown of those costs that make up the elements of a police services agreement. The detail provided to airport operators in the past has not always been adequate.

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Like the noble Baroness, the Government want to ensure that airport operators are clear about what police services they are being charged for. That is exactly what the provisions as drafted already provide for. We have been working with national police representatives, as well as industry, to develop guidance that sets out a clear expectation that costs should be fully explained in billing information. The Bill requires that, when producing police services agreements, our security partners must pay due regard to this guidance.

The Bill itself already ensures that a police services agreement must contain a description of the level of policing to be provided and a description of any corresponding payments. However, if an airport operator is unhappy about the level of cost breakdown detail that the police propose to provide when agreeing a police services agreement, it is open to the operator to require more information from the police, as it would with any other commercial transaction. If that detail is not forthcoming, the operator may ultimately take the issue to dispute. As part of any determination, the Secretary of State would require clarity on precisely what policing services the airport operator had a right to expect in exchange for the payments made.

More than one noble Lord has suggested that the proposals would affect the financial viability of airports-indeed, that we run the risk of putting airlines out of business. The Government do not take that view because the costs of policing at airports generally represent a relatively small fraction of overall operating costs. The evidence provided by the industry suggests an impact of only around 8 per cent, and businesses are free to decide to pass these costs on to customers-through airport charges, for example-if they wish to do so.

Airports operate in a competitive market. The current system of designation places some at unfair disadvantage, and that must be addressed. That is the reason behind this section of the Bill.

My noble friend Lord Harris of Haringey sought an assurance about security remaining paramount; we are, of course, able to give that unreservedly.

7.15 pm

Lord Rosser: My Lords, having listened to that reply, I do not think that the Government are looking at this issue at all from the point of view of the consumer of the policing services for which they are now going to have to pay, probably handsomely-that is, the smaller airports. No one would argue about the importance of safety but, frankly, it should not be used to do more than is necessary. As I said in my contribution, there is evidence that the police are already expanding their role with the number of personnel at some of the smaller airports, no doubt taking into account the change that will come with the Bill and the transfer of the costs of policing.

The objective may be a fairer system for policing but I doubt that the Bill achieves that. The airport operator is being left to bear the brunt without even an acknowledgement in the Bill, which is what my amendment was seeking, that it could seek to pass costs on. I will reflect on what the Minister has said and read the various contributions in Hansard. In the mean time, I beg leave to withdraw Amendment 152AP.

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Baroness Neville-Jones: We on these Benches support the points that the noble Lord has been making. I do not think that anyone in this House disputes that we need a new system-that we need to revise the old system of a minority of airports being designated. There is no difference between us there. Nor is there any difference on the question of the importance of security. That is not inconsistent with trying to devise a regime that ensures that the costs that come with it are necessary and reasonable.

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