Civil Aviation Bill

Julie Hilling Excerpts

Monday 30th January 2012 Commons Chamber

[Julie Hilling (Bolton West) (Lab)]

First, I add my voice to those who have expressed concerns about the Bill having been rushed. As a member of the Transport Committee, I was part of the pre-legislative scrutiny process, but as has been said on several occasions, only tomorrow will we have our session on ATOL. The Government therefore have not had the chance to take on our concerns; even more than that, airports have expressed huge concern that they have not had time to consider the proposals and to make recommendations.

Secondly, the Government have missed an opportunity to include environmental measures in the Bill. People living near airports had been hoping for stronger regulation on noise and pollution controls, and I appreciate that the Bill’s purpose is primarily economic regulation, but it has already been widened to include ATOL and security. Aviation Bills do not arrive every day, so this one should have included environmental duties, and I really hope that it will be amended in Committee to include them.

The industry has generally welcomed the Bill, but some proposals have created much consternation. The cost of regulation is certainly a problem for airports such as Manchester. Currently, the regulation charge is 95p for every arriving passenger, but with no consultation the charge is going up in April to £1.26 per passenger. The airport expects that the additional charges for security and enforcement will be another 4p, and, although that does not sound a great deal, it estimates that it will have to find an additional £274,000.

Airports are not in a position to pass on those charges to airlines. The only way of doing so would be to increase landing charges, but because of competition between regional airports, airlines would simply go elsewhere. Airports cannot agree to fix landing charges, as they would fall foul of competition rules. I can understand why the Government believe that the user should pay, but why is the charge being levied only against the airport? Why cannot part of it be levied directly against airlines, and why can it not be phased in to give airports a chance to build it into their budgets?

The Bill also allows an airport to be compelled to hand over a terminal to another operator, but there is no industry demand for that, and it has been said that it is an “idea without merit”. I have been told that the measure has been included just in case in future someone, somewhere decides that it is a good idea, but it would only ever be a good idea if we wanted to increase the employment opportunities for accountants and solicitors.

Currently, the airport operator plans for the whole airport. It has to deal with its neighbours, take account of environmental concerns, work out how to get people to and from the airport, invest in transport infrastructure, invest in improvements to the terminal and so on. What will happen to all that if there is more than one operator? Manchester airport is investing £50 million to bring the Metrolink system to the airport, and it has recently made a large investment in the airport’s railway station. Would that have happened if there were two or more operators at the airport? What if one operator does not want to invest in infrastructure? We have only to look at what happened with rail privatisation: a huge increase in transactional costs and the use of accountants and solicitors, hours and money wasted on deciding who is to blame for any incident and who owes whom money, and a waste of taxpayers’ valuable money.

Transferring an airport terminal to another operator would hugely increase transactional costs, and a great deal of time and money would be wasted on commercial negotiations and agreements. The cost-benefits of one efficient operator would diminish, and one contract and, therefore, good deals with Smiths Group, SSP and the Compass Group and with brands such as Costa Coffee and Burger King would disappear. Bean counters would have to spend time working out how they split things such as car park fees, and each operator would have to have headroom, thereby diminishing overall capacity. The proposal makes no sense, it will not improve the passenger experience and it should be removed from the Bill—or, at the very least, apply only to regulated airports.

I have some concerns about security transferring to the CAA and regulations now being based on an outcome-focused security regime. I accept that it is unnecessary to insist on screening by a certain machine at every airport, but as we know, terrorists only have to be lucky once, and we must ensure that we have no weak links in our airport security. It was also worrying when the trade unions reported to the Transport Committee that many people would not want to transfer from the civil service to the CAA and, therefore, that expertise would be lost.

A major issue was pensions. The Minister of State told the Committee that the CAA and civil service pensions are under review, but will transferring staff be given an equivalent pension? Have Ministers also considered other employment models, such as staff remaining employed as civil servants but seconded to the CAA? Security is not an area where we can take risks, and we must not lose the expertise of current staff, so do the Government have any proposals for retaining them?

ATOL reforms are badly needed, as the hon. Member for Congleton (Fiona Bruce) said just a moment ago, but I am frustrated that the Transport Committee is going to look at the details of such reform only after Second Reading. Most people believe that they are already ATOL-protected when they book a holiday, and that if the operator goes bust someone will get them home or, if they have not yet travelled, refund the cost of their holiday. It is ludicrous that a holiday booked through an airline—a holiday that looks and feels like a package holiday—is not treated as one. I welcome the inclusion of such holidays in the ATOL scheme, and the removal of the distinction between travel agents acting as agents for suppliers and as agents for consumers—a definition so unclear that even travel companies are confused about the distinction. I welcome also the proposal that customers be issued with a certificate to inform them that they are ATOL-protected, but as the legislation will not protect everyone, customers should be issued with a certificate that makes it clear when they are not protected, just as they are issued with one when they are protected.

The time frame for buying components of a holiday in order to qualify for protection is too short, as customers will be protected only if they buy the components within 24 hours. There are situations in which people book flights immediately to ensure that they reserve a seat but agree the rest of the package only later, when the travel agent has sorted out their itinerary. A package is still a package, and therefore the time limit should be longer than 24 hours. In 1997, 97% of all leisure flights were ATOL-protected; now it is less than 50%. This new legislation is timely, but let us use the opportunity to ensure that it protects the maximum number of people.

I look forward to further discussion on the Bill and hope that this time the Government will be open to amendments to improve it.