Written statement to Parliament

Civil Aviation Bill

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Written statement by the Rt Hon Justine Greening MP, Secretary of State for Transport.

The publication of the draft Civil Aviation Bill today marks an important step in this government’s desire to put passengers at the heart of airport operations. The proposals are designed to modernise key elements of the regulatory framework for civil aviation in the UK, to enable the sector to increase its contribution to economic growth without compromising high standards.

Much of our aviation regulation is governed by 1980s legislation and needs to be updated. This draft bill offers a package of reforms to make both regulation and the sanctions which support it flexible, proportionate, targeted and effective. It proposes removing unnecessary regulation and unnecessary intervention by central government. It devolves more responsibility to the independent specialist regulator, the Civil Aviation Authority (CAA), while ensuring that the CAA is accountable and weighs the costs and benefits of its decisions. The draft bill proposes that certain costs of regulating aviation should be moved from general taxation to the aviation industry.

Above all the draft bill puts the consumer first. In the economic regulation of airports with substantial market power the CAA’s primary duty will be to consumers; that is passengers and owners of cargo now and in the future. In addition the bill gives the CAA a role in promoting better public information about airline and airport performance and about the environmental effects of aviation and measures taken to mitigate adverse effects.

Aviation enables people to travel for business, leisure and to visit friends and family; and it enables the rapid movement of goods to and from markets overseas. The government wants to see a successful and competitive aviation industry. We are taking forward the work of the South East Airports Taskforce to improve our major airports within the constraints of existing runways. In the longer term, we have committed to producing a sustainable framework for UK aviation by 2013 which supports economic growth and addresses aviation’s environmental impacts.

The draft bill complements these policies. It is in 3 parts:

  • reforming the framework for airport economic regulation, following my predecessor’s statements to the House on 3 March 2011 and 21 July 2010
  • modernising the framework and functions of the aviation regulator, the CAA - some of these measures stem from the independent strategic review of the CAA by Sir Joseph Pilling in 2008 and a consultation launched by the previous government in 2009
  • transferring certain operational aviation security functions to the CAA as part of wider work to improve aviation security regulation and deliver savings to general taxation; this proposal, mentioned in the July 2011 consultation document ‘Better regulation for aviation security’, would create a single regulator for aviation safety and security; the Secretary of State for Transport would remain responsible for aviation security policy and issuing aviation security directions to the industry

The government has previously announced that legislation to implement airport economic regulation reforms would be introduced early in the next Parliamentary session. An opportunity has now arisen to introduce a Civil Aviation Bill into Parliament near the beginning of 2012. This would help ensure that the CAA does not have to set airport price controls for the 5-year period 2014 to 2019 under the existing system. I therefore intend to take up this opportunity. I still wish however to publish the draft bill today to provide an opportunity, even though the time available is shorter than previously envisaged, for the Transport Committee and stakeholders to consider the proposals before they are introduced into Parliament.

It is possible that the scope of the bill may be extended before it is introduced. One area which could be included is the reform of the Air Travel Organisers’ Licence (ATOL), following the recently finished consultation on measures to protect consumers better in the 21st century holiday market and help create a more level regulatory playing field for businesses.