My Lords, I shall speak also to Amendments 13 to 16, 20 to 22, 24 to 25, 27, 30 to 51, 59 and 65 to 66. I am grateful to the noble Lord, Lord Davies of Oldham, for agreeing to have one group of minor and technical amendments. I can assure your Lordships that all these amendments are all minor and technical. Their overarching purpose is to provide clarity to the existing drafting and to ensure that the drafting fully meets the policy intentions. The amendments are a result of detailed consideration of the Bill since we last met before the Summer Recess in Grand Committee.
The amendments cover various provisions in the Bill and I will cover each of the areas in turn. I apologise in advance for the length of the forthcoming speech, which will take at least 15 minutes. I assure your Lordships that I will be as brief as possible; however, it is important that I properly explain the need for the amendments and how they work.
To begin with, I shall address a series of minor and technical amendments which concern airport economic regulation. I begin with Amendments 12 to 16. Amendment 12 is to Clause 9(5) and makes it clearer that the reference to determinations in this subsection is only to operator determinations made by the CAA under Clause 10. This has always been its purpose and intended effect.
Amendment 13 to Clause 12 concerns advance market power determinations and is intended to clarify the effects of their publication on other existing determinations. As currently drafted, it is not entirely clear in the Bill whether the previous market power determination would cease to have effect in accordance with Clause 7(9) and (10) following an advance determination. This amendment therefore makes it clear that the previous market power determination will continue to have effect until those future specified circumstances set out in the advance determination have in fact occurred.
Your Lordships may be wondering how that amendment fits into Clause 12, as it appears to add a paragraph lettered (b) to subsection (7), where there is no existing paragraph lettered (a). The text following the word “arise” in Clause 12(5) will commence with a paragraph lettered (a) in the next version of the Bill. The Public Bill Office advises that this change can be made only by way of a silent amendment.
These three amendments are designed to ensure that if there is an appeal against a market power determination and that market power determination is suspended or set aside, there are clear arrangements to manage any consequences arising from the decisions
made by the CAT—the Competition Appeals Tribunal—during the appeals process. These amendments establish a default position that, on a market power determination being suspended or set aside, the previous market power determination—if there is one—takes effect again or continues to have effect, unless the CAT orders otherwise. These five amendments concerning determinations seek to improve clarity in the Bill on the purpose and effect of these provisions.
Next, I turn to Amendments 20 and 21 to Clause 22 and Schedule 2, which concern financial arrangements licence conditions. To avoid confusion, I wish to make it clear that these amendments are entirely separate from amendments which were carefully considered in Committee, of which the practical effects would have been to shut out airlines’ right of repeal in respect of any licence condition containing an exception related to financial arrangements. I was very clear in the Committee on 2 July that the Government were, and remain,
“of the opinion that the broad rights of appeal”,
in the Bill,
“provide an effective means of improving the accountability of key regulatory decisions”
and enable,
“the interests of airport operators and materially affected airlines to be taken into account”—[Official Report, 2/7/12; col. GC269.]
in the licence process. The Government have taken the decision that amendment to the Bill in respect of airline rights of appeal is not needed and we will not be considering the matter further.
Turning to the effect of these amendments, Amendment 21 to Schedule 2 is a technical amendment to ensure that the drafting meets the policy intention that automatic suspension provisions will apply in all circumstances where the appeal of a “relevant financial arrangements condition” may otherwise prove nugatory by cutting across existing financial arrangements in place before the Bill comes into force. The current drafting at paragraphs 6 and 7 of Schedule 2 provides for the automatic suspension of relevant financial arrangements conditions when they are appealed under Clause 24, on the conditions of new licences, or Clause 25, on the modification of licence conditions. The amendment provides for a third set of circumstances when automatic suspension will apply.
I next wish to speak to Amendments 22, 24, 25 and 27, which are to Clauses 66, 67 and 68. These amendments seek to provide a partial description of what “servicing of aircraft” means when it is used in the definition of “airport”, “core area” and “airport operation services” at, respectively, Clauses 66, 5 and 68. This accords with the Government’s policy intent and puts beyond doubt whether certain structures comprise part of the airport on the face of legislation.
Amendments 35 to 51 seek to amend the transitional arrangements for airport economic regulation found at Part 1 of Schedule 10 to ensure that our policy intentions for these arrangements are more clearly expressed. First, Amendment 38 clarifies the circumstances in which the Secretary of State can revoke an order under the Airports Act 1986, designating an airport for price control during the interim period. The interim period is that between the commencement of the
provisions on economic regulation under Part 1 of the Bill, including Schedule 10, and the expiry of current price controls on 31 March 2014. This amendment ensures that where an appeal is made against a market power determination during the interim period, the procedure for the Secretary of State to revoke an existing designation order is consistent with the appeals process under the Bill.
The remaining amendments, specifically Amendments 35 to 37 and Amendments 39 to 51, seek to clarify another transitional issue regarding the deeming provision set out at paragraph 2(2) of Schedule 10. The deeming provision is transitional and determines that the main operators of the three currently designated airports are deemed to have met the market power test and are thus subject to economic regulation when the Bill is commenced. The existing drafting of this deeming provision does not fully meet our policy aims because, on reflection, it is drawn too widely and captures more than just the main airport operator at each designated airport.
As currently drafted, the provisions would require every other operator, such as the fuel companies, at each designated airport to have a licence unless a negative market power determination is completed for each of those other operators at the designated airports. This would be an unnecessary and unduly onerous exercise. These amendments ensure the deeming provision applies solely to the main airport operators at the designated airports only and makes other necessary consequential changes. They are the operators which are subject to economic regulation under the current regime; namely, Heathrow Airport Limited, Gatwick Airport Limited and Stansted Airport Limited. I hope your Lordships are reassured that all these amendments regarding airport economic regulation are minor and technical in nature. I thank your Lordships for your patience with these important but minor and technical amendments.
I now move away from airport economic regulation, and I am pleased to speak to Amendments 30 to 34, which are tabled as a response to the recommendation in the Delegated Powers and Regulatory Reform Committee’s 4th Report of Session 2012–13. I am glad to say that the Civil Aviation Bill attracted only one suggested change from the committee. Because Part 4 of the Airports Act 1986 will be repealed as a consequence of this Bill, Schedule 8 makes amendments to preserve the current threshold for the purposes of continuing to determine which airports qualify for statutory undertaker status for planning law purposes. Subsection (11) of paragraph 2 of Schedule 8 would have enabled the Secretary of State to increase the £1 million threshold for statutory undertaker status in case it is needed for inflation or other, currently unforeseen, policy reasons. This would have been subject to the negative resolution procedure for secondary legislation. Your Lordships’ committee recommended that the Government clarify the circumstances in which this provision should be used to increase the threshold and the appropriate parliamentary procedure for making the necessary secondary legislation.
Your Lordships’ committee’s report was published on 21 June, five working days before Grand Committee began. There was, therefore, little time for the Government
to consider the report and bring forward an amendment in time for consideration in Grand Committee. I am therefore very grateful that the noble Lord, Lord Rosser, was able to table an amendment that was intended as a response to the committee’s report. It ensured that we were able to debate the report and his amendment during Grand Committee. The noble Lord withdrew his amendment following my assurances that I intended to bring forward an amendment for Report. The amendments I have tabled are modelled on the solution that the noble Lord, Lord Rosser, offered. His idea was to have the Bill state that in the case that the increase was for inflation, the order should be subject to the negative procedure, and in the case that it was for any other reason, it should be subject to the affirmative procedure. In order to put this into effect, it has been necessary to table these five amendments.
I now turn to Amendment 59. This amendment will preserve the effect of the Tribunals, Courts and Enforcement Act 2007 (Consequential Amendments) Order 2012, which came into force on 1 October 2012 and which your Lordships debated in Grand Committee on 18 July. The order amended primary and secondary legislation which already provided for individuals to be disqualified or removed from office in the event of bankruptcy so as to extend the power to disqualify a person or remove them from office was extended to include a person in respect of whom a debt relief order has been made. The amendment to Clause 96(6) would preserve the effect of the 2007 order by adding to this paragraph the new ground for the Secretary of State to remove from office a non-executive member of the CAA who is subject to a debt relief order under Part 7 of the Insolvency Act 1986.
Finally, I will speak to Amendments 65 and 66. The only purpose of these amendments is to close a gap that has been identified in the provisions in Clause 109. Amendments 65 and 66, if accepted, would mean that both the power to make regulations and the restriction on that power will both come into force on Royal Assent.
I thank the House for its patience, and once again assure it that these amendments are all minor and technical in nature. I beg to move.
5.30 pm