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Clauses 54 to 56: Extinguishment of liabilities
51. Clause 54 enables the Secretary of State, with the Treasury's consent, to extinguish the debts to the CAA of a company wholly owned by the CAA. The Secretary of State may direct the CAA to release such a company from its debt to the CAA. He may also, by order, extinguish the CAA's corresponding liability to him in respect of this debt, and the assets of the National Loans Fund would be reduced accordingly by a corresponding amount.
52. Clause 55 provides for the issue, at the direction of the Secretary of State, of new equity or debt securities by the specified companies to the persons set out in subsection (4). The purpose of this clause is to enable the Government to alter the ratio of equity capital to debt of companies in the air traffic service provider group as part of the reorganisation. Clause 56 provides for certain accounting and valuation principles to be applied to securities and debentures issued under clauses 46 or 55.
Clauses 57 to 61: Miscellaneous
53. Clause 57 provides that where a transferor or transferee is required by a transfer scheme to execute an instrument or enter into an agreement, a person in whose favour such an instrument or agreement is made can ensure that obligations created by it are enforceable in the courts. Clause 58 provides that certain specified rights affecting land are not to operate or become exercisable as a result of a transfer of land under a transfer scheme and provides for compensation to be paid (determined, if necessary, by arbitration) to a person whose rights are, as a result, made ineffective. Clause 59 permits the Treasury, or the Secretary of State with the Treasury's consent, to appoint a person to act as its, or his, nominee for the purposes of clauses 46, 47 or 55. A person holding any securities as a nominee of the Treasury or the Secretary of State must hold and deal with them as directed by the Treasury or the Secretary of State.
54. Clause 60 introduces Schedule 6 which contains detailed provisions about transfer schemes, including the identification and allocation of property, rights and liabilities to be transferred, the discharge of functions by parties and transfers by agreement. It also includes provision as to documents of title, foreign property, rights and liabilities, giving certificates as to ownership, restrictions on dealings with land, the construction of agreements and the effect of transfer schemes on legal proceedings and third parties.
55. Clause 61 introduces Schedule 7 which contains provisions regulating the tax treatment of transfers which take place under transfer schemes. The main purpose of the Schedule is to ensure that the reorganisation of business operations and capital structure which takes place prior to the establishment of the public-private partnership will be largely tax neutral.
CHAPTER III: AIR NAVIGATION
Clauses 63 to 68: Air navigation directions
56. Clause 63 allows the Secretary of State to give the CAA duties and powers in connection with air navigation - essentially those functions currently carried out by the Director of Airspace Policy and which are to be transferred to the CAA. Directions will require the CAA among other things to develop and implement a policy for the use of airspace which meets, so far as practicable, the needs of all users; to promote and facilitate the continued operation of an integrated air traffic service provision; to establish a consultative forum inter alia for the reconciliation of civil and military interests in airspace use; and to meet relevant objectives, for example in relation to the environment.
57. Clause 64 gives further detail as to the content of directions under clause 63(1), such as consultation and provision for referring matters to the Secretary of State or seeking his approval.
58. Clause 65 allows the CAA to require providers of air traffic services to make information available to the CAA for any purpose related to its air navigation functions.
59. Clause 66 details the CAA's general duties when exercising its air navigation functions and specifies how any possible conflict in the application of these provisions is to be resolved. The clause disapplies the CAA's general objectives under section 4 of the 1982 Act from the CAA's performance of its functions under this Chapter. These relate to the provision of air transport services by British airlines and furthering the interests of users of air transport services and are not appropriate here.
60. Clause 67 allows the CAA in connection with its air navigation functions to serve a notice, on a person who provides air traffic services, specifying documents or information to be produced. A person commits an offence if they fail to provide the documents or information without reasonable excuse as defined in subsection (3). Penalties for these offences are set out in subsections (4) and (5). If a person makes default in complying with a notice the CAA may apply to a court for an order requiring the default to be made good. Clause 68 defines terms used for the purposes of this Chapter.
CHAPTER IV: CHARGES FOR AIR TRAFFIC SERVICES
Clauses 69 to 73: Charges
61. Under section 73(1) of the Civil Aviation Act 1982, the Secretary of State currently makes regulations, requiring the payment to him or specified others of amounts calculated by reference to tariffs specified in those regulations. A regulation, once made, is the source of the obligation to pay, in addition to being the means of identifying by and to whom the charges are payable, at what rate and in respect of what airspace.
62. A similar system of charging and charge recovery is to be retained under the public-private partnership but the CAA, as part of its responsibilities as the economic regulator, will in future specify the charges in a published notice. Clause 69(3) imposes a duty to pay the specified charges. The CAA will continue to have statutory powers to detain and sell aircraft in respect of unpaid charges.
63. Clause 69 allows for the CAA to specify the charges payable for air traffic services and to stipulate conditions in relation to the payment of those specified charges. Clause 70 places a duty on the CAA to publish notices containing the charges specified under clause 69 and any stipulation to those charges and similarly to publish notice of any amendment to, or revocation of, those specifications or stipulations. The CAA is obliged to exercise its powers under this clause in the manner it thinks best calculated to take account of international agreements to which the UK is party.
64. Clause 71 allows the CAA to specify different charges in respect of different descriptions of chargeable air traffic services, aircraft or circumstances of their use. The clause also requires the CAA to take account of tariffs approved or likely to be approved under international agreements when specifying the charges.
65. Clause 72 establishes the liability to pay charges required to be paid under clause 69(3). The liability arises regardless of the place of registration of the aircraft, its location and from where the service is provided. This clause also provides that clause 69 charges are recoverable in the UK and that a court in any part of the UK has jurisdiction to hear a claim. Clause 73 defines chargeable air traffic services for the purposes of this Chapter and, as well as providing for the Secretary of State to amend the definition by order, allows a designation of aerodromes whereby air traffic services provided on behalf of the owner or manager thereof are not to be accepted from the definition of "chargeable air traffic services".
Clauses 74 to 77: Miscellaneous
66. Clause 74 provides a power for the Secretary of State to make regulations in order to facilitate the assessment and collection of air traffic charges payable under clause 69. The regulations may require records of aircraft movements to be kept by operators or owners of aircraft and aerodromes and to be produced on request. These requirements may be imposed regardless of whether or not an aircraft is registered in the UK, is in the UK when the service is provided, or whether or not the relevant services are provided from a place in the UK.
67. Clause 75 provides that a person commits an offence if he fails to comply with regulations made under clause 74, including where he gives false information. A person also commits an offence if he is in possession of information obtained under the regulations and he discloses it other than in the ways described in subsection (2). Penalties for these offences are set out in subsections (5) and (6) and range from a fine not exceeding the statutory maximum to both a fine and imprisonment of up to two years.
68. Clause 76 provides that the Secretary of State may make regulations containing provisions which authorise the detention of, or the sale of detained, aircraft. Where there is default in paying a charge payable under clause 69, regulations can provide for the detention and sale of any aircraft in respect of which the charge was incurred or any aircraft operated by the defaulter. Where there is default in complying with a requirement imposed by regulations under clause 74, regulations can provide for the detention and sale of any aircraft by the defaulter. Clause 77 contains definitions of Eurocontrol and an aerodrome for the purpose of this Chapter.
CHAPTER V: COMPETITION
Clauses 78 to 82: Competition
69. These clauses give the CAA, as economic regulator, concurrent powers with the Director General of Fair Trading ("the DGFT") under competition legislation in relation to the supply of air traffic services. This is consistent with the powers granted to other utility regulators (telecoms, gas, electricity, water and railway services). Clause 78 contains definitions. Clause 79 empowers the CAA to exercise concurrently the listed functions exercised by the DGFT under the Fair Trading Act 1973 (so far as they relate to monopoly situations in relation to the supply of air traffic services) and the Competition Act 1998 (so far as they relate to agreements or conduct relating to the supply of air traffic services). Clause 80 requires the CAA to have regard to its general duties under this Bill when exercising concurrent functions under the Fair Trading Act 1973 and disapplies its general duties under section 4 of the Civil Aviation Act 1982. Clause 81 allows the CAA to have regard to its general duties under this Bill when exercising concurrent functions under the Competition Act 1998.
70. Clause 82 creates procedures for the exercise of concurrent powers by the CAA and DGFT. This is to avoid duplication of regulatory activity. These procedures are also designed to ensure that any action is taken by the most appropriate authority. If the CAA makes a reference to the Competition Commission it must help the Commission with its investigations by providing any relevant information that it has in its possession.
CHAPTER VI: MISCELLANEOUS AND GENERAL
Clauses 83 to 89: Miscellaneous
71. Clauses 83 to 89 deal with the collection and publication of information by the CAA under these provisions, the Secretary of State's general powers to issue directions to the CAA, and control in time of hostilities.
72. Clause 83 provides for the CAA to publish information which it thinks could be useful or appropriate to users or potential users of air traffic services in the UK. Clause 84 requires the CAA to keep the provision of all air traffic services (in the UK and elsewhere) under review, and collect information about them. And in reviewing the provision of services it is to take account of the Secretary of State's directions as to what considerations are to affect priorities under this duty.
73. Clause 85 gives the Secretary of State a general power to direct the CAA as to whether and how it should exercise its various functions under Part I of this Bill.
74. Clause 86 gives the Secretary of State the power to give directions to a wide range of persons engaged in aviation and related activities (including the holder of a licence under Chapter I) in times of severe international tension, great national emergency or actual or imminent hostilities (whether or not there has been a formal declaration of war). These powers are broadly similar to those in the 1982 Act which this Bill repeals. It is an offence to contravene or fail to comply with a direction. Compensation is payable by the Secretary of State for direct injury or loss arising from compliance with a direction. The penalties for committing an offence under this clause range from a fine not exceeding the statutory maximum on summary conviction, to up to two years imprisonment and a fine on conviction on indictment.
75. Clause 87 is a provision that enables the Secretary of State, by order made by statutory instrument (but not subject to Parliamentary procedure), to provide for the taking into possession of and use by or for the purposes of the armed forces of the Crown, any aerodrome, or any aircraft or other things found in or on an aerodrome. This may be done in the event of actual or imminent hostilities or of severe international tension or of great national emergency. The clause allows for flexibility in the choice of action that may be taken at such times. Clause 88 defines expressions used in clauses 86 and 87.
76. Clause 89 introduces Schedule 8 which makes consequential amendments to various Acts.
Clauses 92 to 97: Other general provisions
77. Clause 92 details the rules regarding the service of a document under this Part of the Bill.
78. Clause 93 makes it an offence for a person knowingly to give false information or make a false statement in connection with this Part of the Bill. A person may be subject to a fine not exceeding the statutory maximum on summary conviction, or a fine on indictment for committing an offence under this clause.
79. Clause 94 introduces Schedule 9 which prohibits the disclosure of information gained under this Part of the Bill save with the consent of the person to whom it relates or where otherwise permitted. Disclosure in contravention of the Schedule is an offence. A person who discloses information in contravention of the Schedule is liable to a fine not exceeding the statutory maximum on summary conviction, or a fine on indictment for committing an offence under this clause.
80. Clause 95 enables the Secretary of State to exercise a power to make an order or regulations under Part I of the Act differently in relation to different cases, and makes other provisions in relation to the making of orders, regulations and Orders in Council.
81. Clause 96 requires a person given a direction under this Part of the Bill to comply with it. Directions may be varied or revoked.
82. Clause 97 provides for the extension of specified provisions to the Channel Islands, the Isle of Man or any colony.
PART II: LOCAL TRANSPORT
Clauses 98 to 103: Local Transport Plans and Bus Strategies
83. Clauses 98 to 103 provide a statutory basis for local transport plans and bus strategies in England and Wales outside London. London has its own transport planning system under the Greater London Authority Act 1999 ("the 1999 Act"). Local transport plans already exist in a non-statutory form as the basis for the Department's allocation of capital funds for local transport expenditure, but the Bill puts them on a statutory basis for the first time.
84. Clause 98 and 99 impose a duty on each "local transport authority" (defined in clause 98(4)) as councils of counties and unitary authorities in England, principal councils in Wales and passenger transport authorities ("PTAs"), to formulate transport policies and publish them as a local transport plan. The policies must promote 'safe, integrated, efficient and economic transport' and must have regard in particular to the needs of the elderly and people with mobility problems. They must also provide a framework for, inter alia, the promotion of improvements to bus services under the powers of Part II and the introduction of charging regimes under Part III. Clause 99 further provides that plans must be kept under review and altered if necessary and in any event must last no longer than five years.
85. Clause 99(5) and (6) exempt a local transport authority from producing such a plan where before the date when clause 98 comes into force they have already prepared a document in a form and manner equivalent to that required under the Bill for local transport plans. That document is treated as a local plan but it must be replaced no later than 31st March 2006, in England or a date prescribed by the National Assembly for Wales (the "NAW"), in Wales.
86. Clause 100 requires local transport authorities to prepare, as part of their local transport plans, a bus strategy containing policies as to how best to carry out their various functions in order to secure the provision of appropriate bus services in their area. The functions in question are largely contained either in the Bill or in the Transport Acts of 1968 ("the 1968 Act") and 1985 ("the 1985 Act") as amended by the Bill.
87. Clause 99(3) and (4) and clause 101 impose requirements as to consultation during the preparation of plans and bus strategies and as to the publication of plans and strategies and require authorities to make copies available at no more than cost. Clause 102 requires them to have regard both to guidance issued by the Secretary of State or NAW and to the needs of the elderly and people with mobility problems.
88. Clause 103 makes special provision for the duties of local authorities in metropolitan counties, specifying which duties must be discharged jointly by the PTA and the metropolitan district council and which are to be separate responsibilities for each.
Clauses 104 to 112: Bus Services: Quality Partnership schemes
89. Clauses 104 to 112 empower local transport authorities, either alone or jointly, to set up Quality Partnership (QP) schemes as part of the process of implementation of their current bus strategy. A QP scheme entails the authority providing special facilities, and setting standards to be observed by bus operators as a condition of using the facilities. A scheme must implement the bus strategy and be aimed at improving local bus services for the benefit of bus users or at improving the environment. "Local services" are defined in clause 150(3) by reference to the 1985 Act. In essence they are bus services with stopping places less than 15 miles apart (section 2 of the 1985 Act).
90. Similar schemes currently exist as voluntary arrangements in over 100 towns and cities in England and Wales, where local authorities have agreed to exercise their functions (especially as regards traffic management) in particular ways and operators in return have agreed to provide improved bus services with the aim of promoting bus use. The principal difference between these and schemes created under the Bill is that the latter will be enforceable at law.
91. Clause 104 specifies the nature of a QP scheme. The facilities to be provided under a scheme must include facilities (such as bus lanes and shelters) at specific locations along bus routes (or where appropriate prospective bus routes) which bus operators can use; they may include other ancillary facilities also. Information facilities may not be included if the authority has determined that these must be provided throughout their area under clause 128 (which is mentioned at paragraph 108 below). Standards which may be imposed on operators under a statutory QP scheme do not extend to service frequency or timing, since separate provision is made for this by the service subsidy provisions of section 9A of the 1968 Act and section 63 of the 1985 Act and a comprehensive local authority approach to determining timetables is provided for in the separate Quality Contracts clauses (paragraphs 97 to 104 below). The Bill does not prevent authorities and operators from making voluntary arrangements as at present.
92. Clause 104(7) to (9) require QP schemes to be made jointly by the local transport authority and the traffic authority where facilities cannot be provided without the making of a traffic regulation order for a road or roads which the local transport authority is not the traffic authority. Traffic authorities in England and Wales (outside London) are the Secretary of State or NAW in the case of trunk roads and the non-metropolitan county councils and metropolitan district councils in the case of other roads. "Traffic regulation order" is defined in clause 150(1).
93. A scheme may not be made without prior consultation with bodies specified in clause 105, including bus operators, representatives of bus users and other local authorities. Clauses 105 and 106 provide for the making (as proposed or with modifications) and the postponement of schemes. In particular there is provision for excluding certain services from schemes where this is considered appropriate (for example a community bus service acting as a feeder to a main bus route). The Secretary of State or the NAW may issue guidance on QPs and make regulations about detailed matters under clauses 111 and 112.
94. Once a scheme is in operation, it must remain so for at least 5 years (clause 106(2)) and duties are placed:
95. Compliance by the operators will be secured under the existing bus registration system. Paragraphs 10 and 21 of Schedule 11 amend sections 26 and 111 of the 1985 Act to empower traffic commissioners to take enforcement action if an operator is in breach of his duty under clause 108(4). (See also clause 132(1).)
96. Clause 109 makes provision for the variation and revocation of QP schemes and clause 110 specifies which authorities are responsible for the making of the variation and the implementation and subsequent variation or revocation of a scheme which has been varied. In the case where the Secretary of State or NAW, as a trunk road authority, jointly responsible for a scheme, wishes to remove scheme facilities from a trunk road, he or it may do so using powers to revoke traffic regulation orders under paragraph 27 of Schedule 9 to the Road Traffic Regulation Act 1984. However, by virtue of an amendment to that paragraph made by paragraph 8 of Schedule 11, this may be done only after consultation with other responsible authorities. A trunk road authority is then relieved of any further responsibilities for those facilities under the scheme (clause 108(3)).
Clauses 113 to 123: Bus Services: Quality Contracts schemes
97. Clauses 113 to 123 enable local transport authorities, either alone or jointly, to make practicable a Quality Contract (QC) scheme, provided that they are satisfied that it is the only way to implement their bus strategy (or strategies) and also that the scheme will implement it (or them) in a way which will deliver best value, i.e. be economic, efficient and effective (clause 113(1)). Under a QC scheme, the authority will determine what local services should be provided in the area concerned (and to what standard) and will let contracts with bus operators granting them exclusive rights to provide services to the authority's specification.
98. Clause 113 defines what a QC scheme is and what a "quality contract" itself is. It imposes an obligation on the authority to keep under review operators' compliance with the obligations imposed on them by QCs.
99. Clauses 114 and 115 require an authority to publicise and consult upon a proposed scheme before submitting it to the Secretary of State or NAW ("the appropriate national authority") for approval, stating the reasons why they want to make the scheme. There is a requirement in particular to consult operators and users' representatives. There is provision, when a scheme has been submitted for approval, for operators affected by it to put objections to the appropriate national authority. That authority may approve the scheme only if satisfied that it is in the public interest (clause 114(4)(b)) and may approve it with modifications after interested persons have been consulted (clause 114(5) and (6)).
100. Clause 116 describes what a scheme must contain and in particular provides that certain services may be excluded from it (subsection (4)) and that it may vary or revoke a QC scheme (subsection (6)). It may not come into operation for at least 21 months after it is made. This is in recognition of the fact that some bus operators currently operating in the area may lose the right to do so, and must be allowed due time to adjust and re-deploy assets. A scheme may not last for more than 10 years. Clause 117 provides that the operation of a scheme may be postponed.
101. Clause 118 provides that once a QC scheme is in operation sections 6 to 9 of the 1985 Act cease to have effect in the relevant area and no local service may be provided in that area except in accordance with a QC. Section 6(2) provides that:-
"no [local] service shall be provided in any traffic area in which there is a stopping place for the service unless -
(a) the prescribed particulars of the service have been registered with the traffic commissioner for that area by the operator .. "
and sections 7 to 9 make supplementary provision. The normal role of the traffic commissioners in monitoring services is therefore excluded and enforcement becomes a matter for the local transport authority in accordance with the terms of their QC - see clause 113(7). (A "traffic area" is an area designated under the provisions of section 3 of the Public Passenger Vehicles Act 1981 and a traffic commissioner is appointed for each area by virtue of section 4 of that Act.)
102. Where a service is excluded from a QC scheme, however, sections 6 to 9 continue to apply to it and the traffic commissioner may take action for breach of any conditions under which the service is excluded (clause 118(2) and (3)).
103. Clause 119 provides for the letting of individual contracts. Tenders must be sought by general invitation no later than 3 months after the making of the scheme and contracts when let may last no more than 5 years. Tenders may only be accepted from licensed operators of public service vehicles or persons holding a community bus permit under section 22 of the 1985 Act (subsection (5)). Clause 120 provides for cases where the normal tender procedure does not apply. Express provision is made for emergencies but the clause may be extended by regulation to cover other cases. Regulations may limit the duration of these emergency contracts so as to ensure that the provisions of clause 118 are not improperly circumvented.
104. Clause 121 makes provision for the variation or revocation of a scheme. There is also a power for the appropriate national authority to make regulations, allowing it to revoke the scheme before it comes into operation in circumstances set out in the regulations (for example, an unexpected collapse of the tender process).
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