Select Committee on Constitution Minutes of Evidence


Examination of Witnesses (720-735)

WEDNESDAY 11 JUNE 2003

DR HARRY BUSH CB, MISS CHRIS JESNICK AND MR RUPERT BRITTON, CAA

  720. Where precisely is the line drawn between you and the British Airports Authority in the provision of safety facilities in buildings, on the ground, on the runways and so on?
  (Mr Britton) The BAA's airports are technically aerodromes. Each aerodrome needs a public use licence so it is licensed by the CAA for safety purposes. That essentially looks at the physical criteria. Is it safe to be used by aircraft and is the airspace surrounding it safe for use by aircraft? Our safety regulation group deals with that, which is a very separate matter from the economic regulation side.

  721. Safety is one of your key interests, is it not?
  (Mr Britton) Very much so.

  722. Do you impose detailed safety conditions when you license an airport or is it left largely to the operator?
  (Mr Britton) The CAA will impose detailed safety conditions on the aerodrome licence. They are reasonably standard. Certain airports like London City with peculiar characteristics might well have more than others.

  723. On the economic side, you deal with the charges made by airports to the different airlines who use them. Is that correct?
  (Dr Bush) Not precisely, because there are a small number of airports where we regulate the price as a matter of course, which are the three BAA London airports and Manchester. In other cases where airports have a turnover of over £1 million, it is possible for users to complain to us about the charges if they are discriminatory or something like that. In those cases we would investigate but we would look to see how dominant that airport was in its locality. That would be one of the key factors we would look at. One of the developments over the last five to ten years has been a huge growth in competition between airports, as much as there has been between airlines. We rarely get complaints and in general it is quite difficult to prove that the airport is dominant in the locality.

  724. In your memorandum under the heading of "Economic Regulation of Airports" you refer to the allowable capacity on certain routes. Is this a matter which is decided by a European body in so far as it concerns your board? Is it a matter which is decided by you with regard to domestic flights only? It is page two of your memorandum. I wondered who it was who allowed the capacity. It is the first paragraph under "Economic Regulation", the last two lines.
  (Mr Britton) I do not think that is ours.

  725. I am reading the wrong document. This is British Airways. The question remains the same. Are you responsible for allowing the capacity on particular routes?
  (Dr Bush) There will be some routes where there is limited capacity because of what Mr Britton was describing, where you have a bilateral agreement. It may well be that in those cases the CAA will be called upon to adjudicate as to who should get that capacity.

  726. Do you limit or control the amount of flights on any particular route in Britain?
  (Dr Bush) Into Britain, yes.
  (Mr Britton) Outside the European Union the capacity will be regulated by the bilateral air services agreement between the two governments. We might say British Airways can fly to Shanghai and Virgin can fly to Cape Town but whether there is capacity on that route for them to fly is a matter for the respective governments.

  727. What about inter-UK?
  (Mr Britton) Following the liberalisation by the European Union in the early 1990s, there is free access. There is no allocation of routes.

Chairman

  728. Picking up on the earlier discussion about the extent to which you are independent of government, in your submission, paragraph 37, you refer to sponsorship and say that that is recognising that guidance can be issued to you. Is that the guidance that you are required to have regard to—i.e. you read it but then the decision is yours at the end of the day?

  (Mr Britton) Yes. The guidance applies essentially to airspace decisions and we would have to have regard to that guidance.

  729. It is a fairly standard "have regard to" provision?
  (Mr Britton) Yes. The Secretary of State does of course have powers of direction over us in relation to international obligations and national security, but that is separate.

  730. One of the points that comes across in the paper is the particular status you have. You are unusual in relation to other regulators. You have a very specific status. I wondered whether you were fairly content with that status. In other words, if you have the opportunity to change, would you like to see change? Would you like to have a different status or are you content with the way things are presently structured?
  (Ms Jesnick) If we say we are content with how the CAA is structured, it could sound a little complacent. However, the CAA has continually evolved. We used to be a nationalised industry. We are now a public corporation. There was some talk when NATS was privatised that we might be an NDPB. When you look at what an NDPB is, we think that it is potentially more akin to a government department than our current status. We will over time evolve as one cohesive regulator. I think we are quite content with where our status currently sits.

Lord Elton

  731. Can you in a nutshell tell us your function in relation to the allocation of airspace and safety? I am getting a fragmentary picture of your function, for which I apologise, but that must absorb some of your energy, must it not?

  (Mr Britton) The CAA is the airspace regulator. Prior to the separation of NATS in 2001, it was done on a joint civil/military basis. We have a directorate of airspace policy which then was headed up by an MoD officer. On separation of NATS it was integrated into the CAA and the director of airspace policy is now very much a civilian. He deals with the allocation of airspace following consultation with the users. He is also effectively responsible for ensuring the joint and integrated nature of the air traffic service as between the military and the civilian providers. That is very much a CAA function.

  732. Air traffic control is under your regulation?
  (Mr Britton) It is, both safety and economic regulation.

  733. You have some fairly critical safety and economic decisions to make there. We have touched already on appeals but is there a satisfactory appeal system within that one piece of your responsibilities? What happens to complaints?
  (Dr Bush) In relation to economic regulation of air traffic control, the appeal system is the same as other economic regulators. Complaints are a slightly different issue.
  (Mr Britton) There are always complaints. Airspace has a finite capacity. It is shared out on the basis of consultation but someone is always going to be unhappy about their particular share. At the end of the day, a decision has to be made. If we get it absolutely wrong, there is judicial review.
  (Dr Bush) It may be worth adding, in relation to your point about a fragmentary impression, that this comes down to the fact that we are a multipurpose aviation regulator. The glue is aviation and then there are some quite detailed, very distinct functions that come under that. That is why it may look more fragmentary than some others because the unifying element is the subject.

  734. The 40 people are doing this?
  (Dr Bush) The 40 are doing economic regulation. There are 800 or so doing safety. Safety is the core in terms of numbers and purpose.

Chairman

  735. You said that if you get it absolutely wrong there is judicial review. What if you get it wrong but not absolutely? It is either judicial review or nothing, presumably, in terms of challenging your decision?

  (Mr Britton) Certain airspace decisions can be appealed to the members of the CAA. If there are directions about air traffic services we have to consult the Secretary of State. That is a safeguard to people. There is not a final appeal against the director of airspace policy's decisions other than judicial review and he has reserved rights under the Transport Act. He alone must make those decisions.

  Chairman: Thank you very much indeed for helping to explain what is quite a complex structure. You are very different from the other regulators that we have seen. It has been very helpful for our purposes to look at what is sui generis in terms of regulation. We are extremely grateful to you for being with us this afternoon.





 
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