Select Committee on European Union Forty-Ninth Report


INSURANCE REQUIREMENTS FOR AIR CARRIERS (12423/03)

Letter from the Chairman to Mr John Spellar MP, Minister for Transport, Department for Transport

  Thank you for your Explanatory Memorandum dated 21 October which Sub-Committee B considered at its meeting on 4 November.

  This is clearly an important Regulation that has considerable financial, and possibly legal, implications. We note that you are consulting the industry, and that you have commissioned a regulatory impact assessment (RIA).

  We therefore intend to maintain the Scrutiny reserve on this document until the RIA is submitted, and your Department has come to a decision on the policy that HMG will adopt towards this proposal.

6 November 2002

Letter from John Spellar MP to the Chairman

  In response to your letter dated 6 November, I am pleased to attach a copy of the partial Regulatory Impact Assessment that we have now completed in relation to the above-mentioned proposal.

  It is clear from the assessment that there is not a compelling case for regulating air carriers and aircraft operators in the way proposed by the Commission. Whilst we support the principle of harmonised insurance requirements in Europe, as presently drafted the proposal would impose a considerable financial burden on owners/operators of private aircraft without any corresponding benefits for passengers or third parties.

  The Government therefore plans to resist the proposal when it is discussed at Council Working Group level, but if there should be a consensus in favour of establishing mandatory requirements we would argue strongly for categories of aircraft and levels of insurance that reflect those currently in place in the UK.

11 December 2002

Letter from the Chairman to Mr John Spellar MP

  Thank you for your letter dated 11 December 2002 enclosing a partial regulatory impact assessment (RIA). Sub-Committee B considered this at their meeting on 13 January 2003.

  We have looked at the RIA, and find its conclusions compelling. There is some advantage to be gained in a more equal market, but the determining factor must be the question of costs levied on the smaller companies. We therefore support the position that the Government has adopted, namely to resist the proposal when it is discussed at Council working group level, but should a consensus in favour of establishing mandatory requirements emerge, to argue strongly for categories of aircraft and levels of insurance that reflect those currently in place in the UK. In short, the Government must seek to ensure that the cost of this proposal is kept to a minimum.

  Assuming that this will remain the Government's policy, we are content to lift the Scrutiny reserve.

15 January 2003


 
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