§ 3.41 p.m.
§ Lord Trefgarnerose to move, That the draft regulations laid before the House on 18th January be approved.
§ The noble Lord said: My Lords, I beg to move that the Aviation Security Fund Regulations 1982, a draft of which was laid before your Lordships on 18th January 1982, be approved. They have been considered by the Joint Committee on Statutory Instruments, which has not drawn the attention of the House to any particular points.
§ Perhaps I may remind your Lordships that the Aviation Security Fund meets the cost of passenger searching and other airport security measures, and 107 that it is financed by a levy on airports. The fund currently has a large surplus, and the main purpose of the regulations is to reduce the levy rate by 40 pence per passenger, from £1.50 to £1.10, for the period of six months from 1st March until 31st August this year.
§ I should like to touch upon the fund's recent history. Two years ago it was in substantial deficit, and in February 1980 the levy was raised sharply to £1.60 in order to return the fund to balance within a year. That objective was achieved, indeed more than achieved, because a year ago the fund had returned to a positive balance of somewhat over £3 million. Estimates prepared last spring indicated that if the levy were left unchanged at £1.60, the surplus would grow rapidly. The levy was therefore reduced to £1.50 from 1st August last year, and the Government then undertook to consider a further change in the levy rate early in 1982 in the light of fresh estimates. I was the Minister responsible at that time, and I took that decision. Fresh estimates have now shown that if the levy rate were to remain at £1.50, the surplus would reach £7 million by the end of this financial year and would probably persist at this level throughout 1982–83. It is not the intention that the fund should retain such a substantial balance, and the Government have therefore decided to reduce the levy by 40 pence during the coming months in order to run the surplus down to less than £1 million.
§ The greatly improved financial position of the fund reflects both the efforts of the Government in bringing inflation under control and the efforts of those concerned with security in the Department of Trade and in the civil aviation industry to find more efficient and economical means of carrying out necessary security tasks. I would mention in particular the new centralised searching arrangements at Heathrow Terminal 3, and at Gatwick, but less dramatic improvements have also been made elsewhere.
§ If any of your Lordships are interested in further information about the fund's finances, may I refer you to the background paper which has been placed in the Library. It describes factors which have affected the fund's recent results and sets out the latest estimates of income and expenditure up to the end of March 1983.
§ Finally, I would mention that the draft regulations consolidate previous regulations, and apart from reducing the levy rate for six months, they make a number of other changes to them. These comprise several small adjustments to the classes of passengers exempt from levy contributions, an increase in the rate of interest payable on overdue levy contributions, and other very minor changes. My Lords, I beg to move.
§ Moved, That the draft regulations laid before the House on 18th January be approved.—(Lord Trefgarne.)
§ 3.45 p.m.
§ Lord Ponsonby of Shulbrede
My Lords, I should like to thank the noble Lord for introducing the regulations and for reminding your Lordships of the purpose of the fund and its history. The noble Lord pointed, quite rightly, to the reduction in the costs of administering the funds, and obviously your Lordships will be pleased that these economies have been achieved. 108 However, that should give one no reason for complacency. It must be a matter of continuing concern to see that security is handled effectively and that we avoid a situation which does not make the most effective use of the manpower involved. The noble Lord mentioned, again quite rightly, the benefits of centralised searching at Heathrow, but, as I have said, this should not give one a sense of complacency.
It is good to know that there will be some element of stability in the amount of the levy. From August 1982 onwards the amount of the levy will go back to £1.50, and I hope that if there is to be any further change for the 1983 holiday season, notification will be given at the earliest possible opportunity. Last week I attended a conference about tourism, summoned by the Prime Minister of Israel, and British travel agents there made very great play of the fact that their brochures go to the printers earlier each succeeding year, and usually in about July they need to know what their costs are to be for the following season. So I would hope that it will be possible to give at least an indication about nine months in advance of any proposals for change in the forthcoming season. Having said that, I would add that we do not at all dispute the regulations.
§ Earl Amherst
My Lords, we wish to thank the noble Lord for explaining so clearly the matters under consideration. We are also very glad to hear of something going down, not up, even though it is on only a temporary basis. As I think your Lordships already know, the levy is based on the number of incoming passengers. As your Lordships also know, incoming passengers are not concerned with security. As we all know, it is the outgoing passengers who, together with their hand luggage, are searched. I am told that this method is adopted because it suits the administrative convenience of the British Airports Authority. I am also told that to date the total of incoming passengers and the total of outgoing passengers more or less tally. Therefore, so far as the passenger is concerned—and in the last analysis it is the passenger who pays—it does not seem very much to matter which method is adopted. However, I should like to ask the Minister whether, if in the course of time, the figures vary and there is a considerable, or an appreciable, difference between the number of outgoing passengers and the number of incoming passengers, the matter will he reassessed and possibly the method changed.
§ 3.49 p.m.
§ Lord Boyd-Carpenter
My Lords, it is so rare for an impost of any kind actually to be reduced, even in the short term, that I am sure my noble friend deserves congratulations upon it, even though he is offering the reduction for only six months. However, I hope that in accepting the congratulations my noble friend will not delude himself into thinking they mean that some of us who have always disliked the principle of the levy have been wholly appeased. If my mathematics are right, we are perhaps appeased by only 30 per cent.
I do not want to detain the House on this occasion but it seems quite wrong that the duty of securing the 109 safety of the citizen travelling to and from this country, which it seems to me is basic to the state, should be charged for as a special and additional charge. The country came together under a settled Government because the Government were prepared to give security to their citizens. It is a fundamental duty of Government; and this small charge on a very hard-pressed travel and civil aviation industry seems not only to be quite wrong in principle but also to he a very unfortunate precedent.
So I welcome very much this reduction. I hope my noble friend will say that if, when we come to August, it appears that the fund is still in the solvent condition in which he suggests it is now he will look again at this figure of £1.50 and seek to bring it down. As your Lordships know, particularly as a result of the events of the last weekend, the industry is in a very hard-pressed state and any burden, however relatively and proportionately small, is one that it feels. Any alleviation that my noble friend can give would be of help, and perhaps he can hold out some hope on that.
§ 3.51 p.m.
§ Baroness Burton of Coventry
My Lords, I shall not detain the House long, but there are just three points that I should like to raise before we move on to discussing the actual draft regulations before us today. I sat down when the noble Lord, Lord Boyd-Carpenter, rose to speak at the same time as I did because I am never quite sure of the order of speaking in this House, but I want to follow on what he has said because he and the noble Lord, Lord Hill of Luton, were kind enough to support me some four years ago when we raised the first point that I want to raise today.
I want to protest once more against the principle involved whereby passengers have to pay these security charges. I think it is quite wrong. We do not tax workers at airports, and many air travellers are workers who are going about their business every bit as much as anyone else. We do not tax visitors at airports; and I think it is quite abnormal for persons living in or passing through problem points to be subject to a special tax. Presumably one can only say that it is the policy of this Government and of their predecessors to tax sections of the community which may be at risk—and that seems a very dangerous policy.
Surely it is quite unanswerable that neither the passengers nor the airlines are responsible for creating the security risks at airports, and that they are merely the victims of terrorist attacks. The aim of hijackers and terrorists, I submit, is to bring pressure on Governments. Passengers do not create the need for this service. The threat is directed against the community at large and against Governments in general. I believe it is the function of Government to provide such protection; it is not something that should be bought by individuals.
In March 1978 the noble Lord, Lord Oram, who was replying for the then Government, admitted that none of our partners in the European Economic Community had introduced an aviation security levy along these lines. Replying to what I said in the House on 18th January last the noble Lord, Lord Trefgarne, was good enough to write and to say: 110You correctly reminded the House that no other country in the EEC had a similar system when the United Kingdom security levy was introduced in 1978. This is a fair point, and it is true that no EEC country has yet copied the United Kingdom's system".So they cannot have thought so much of it in the four years since 1978. I must add that the noble Lord, Lord Trefgarne, went on to say that we were not unique in applying our system, but, of course, I was discussing the EEC.
The Minister in another place, on 3rd February, said:The levy finances the aviation security fund, which pays for the cost of passenger searching and other anti-terrorist measures at United Kingdom airports".I suggest to the House that proper security and safety are the direct concern of the Government.
Now I want to move on to another point, and it is one that the noble Earl, Lord Amherst, has raised. It is why this charge is to be levied on incoming passengers. Going back to 1978 I remarked that it seemed to me quite extraordinary to levy this charge at the point of arrival: surely any cost for search and security arises at the point of departure. The other day the noble Earl, Lord Amherst, and I had a conversation in the Library. He said he was going to raise this, and I said, "Yes, we raised it four years ago". He said, "What answer did we get?", and I said, "To the best of my knowledge it was because it was administratively convenient, but 1 will have a look at my files and see what it was". I checked on my files, and at column 998 on 9th March 1978 we were told that this arrangement was because it was administratively convenient.
My noble friend Lord Oram, being helpful as ever, went on to tell us that Clause 2(2)(a) contained a provision which would make it possible for the Secretary of State to levy the contribution by reference to departing passengers if that should ever prove to be more convenient. I do not know whether it is more convenient but it is certainly more sensible, and I wonder whether the noble Lord, Lord Trefgarne, could tell us if that clause is still in being and if it is at all likely that it may be more convenient.
So the first point I raise is one of principle; the second is one, obviously, of administration seeming more important than common sense; and my third one concerns finance. Could the Minister tell the Rouse whether or not it is correct that airlines are including £2 in the price of their fares to cover administration? This seems quite excessive. If I have been misinformed could we be told the actual charge added, and also what the figure will be during the six months when the levy is reduced to £1.10? It surely cannot be £2 on that. The total cost of these security measures is estimated at about £42 million for next year, and obviously security is expensive. I believe that some £6 million will be saved by the proposed reduction for six months. Could the noble Lord, Lord Trefgarne, tell us whether this will be passed on to the travelling public, in what manner and by how much?
Whatever the reasons, the House is being asked to approve a reduction in levy because previous overcharging has resulted in a substantial surplus to the fund. As I have just said, we are discussing some £42 million-worth of public spending; and I should like to ask the noble Lord, Lord Trefgarne, whether he himself accepts that these estimates before us today are based 111 on what he firmly believes to be the proper allowance for increasing costs.
In conclusion, to return to the beginning, the noble Lord, Lord Trefgarne, will remember that when this issue of principle was before the House in 1978 those of us who believed that security was the responsibility of Government lost by only two votes. I remember an ex-Minister, being rushed to the defence, making the emotive but quite irrelevant point that surely passengers would not object to paying for proper security. Obviously, we would all rather pay than risk being hijacked or bombed. That is common sense; but it was not the point I was raising. I should like to think that many of us still believe that the maintenance of general security is not for the individual citizen.
I recall the noble Lord, Lord Boyd-Carpenter, saying at the time that protection of the subject against the Queen's enemies was the reason for which society and the state came into existence. He went on to say that it was because the Crown promised protection that the Crown received allegiance. I mention that point, possibly unnecessarily, so that we might avoid any repetition of any irrelevancies. I was grateful to the noble Lord, Lord Trefgarne, for supplying those of us interested with details of the draft regulations as soon as he possibly could. Obviously, I am glad that the charges are being reduced, but I look forward to hearing the answers to the questions that I have ventured to raise.
§ 4 p.m.
§ Lord Trefgarne
My Lords, I am obliged to your Lordships for the response to this order. The principle of the matter which we are discussing was, as the noble Baroness pointed out, discussed at very considerable length and this legislation recently went through Parliament at the hands—in this House, at least—of the noble Lord, Lord Oram; and I am happy to see him in his place this afternoon.
The aviation industry is not alone in having to bear the costs of its own security. The costs of the British Transport police, for example, arc met out of the transport undertakings' general revenue. The British Transport police responsibilities include the London Underground system, which is one obvious example of an area susceptible of attack by those seeking to apply pressure to Governments. Sports stadia bear their own policing costs, which means that football supporters contribute to the cost of hirine police to protect them from the hooligans among them. Those who benefit from the service provided; namely, those who travel by air—half of whom incidentally are not British citizens or taxpayers—I suggest should pay for the identifiable cost of their own protection. In addition, the constraints on public expenditure are no less now than they were when the fund was set up; and there is no realistic possibility of the cost of aviation security being returned to the taxpayer.
The noble Baroness, Lady Burton, and the noble Earl, Lord Amherst, posed the question of the levy being raised on incoming passengers. Because the number of incoming passengers is the same as the number of departing passengers and it is still administratively convenient for the majority of airports, however, the power to raise the levy on departing passengers 112 still exists. The Government will be willing to raise the levy on departing passengers should it be found subsequently, in the view of the industry, in particular, that it was more convenient for the majority of the airports. Your Lordships would agree, I think, that it would be very inappropriate to have levy raised on departing passengers at some airports and on arriving passengers at others. But if there is a general wish for this matter to be looked at again, the Government would be willing to do so. For the moment, since the number of arriving passengers and departing passengers is almost precisely identical, the Government see no pressing need to depart from the existing arrangement.
Those were the principal points which were raised by noble Lords this afternoon. I am aware that one or more noble Lords, including the noble Baroness, have reservations about the principle of these arrangements, but they are now quite long established and I hope that your Lordships will forgive me if I do not pursue the arguments further in that particular regard.
§ Baroness Burton of Coventry
My Lords, could the noble Lord comment on the charges made by the airlines to cover the administration of the security charge? I gave him the figure of £2 per passenger. Is that correct?
§ Lord Trefgarne
My Lords, I apologise for not taking up that point. The charge is covered by the airlines differently according to the nature of the flight concerned. On charter flights, I understand that the normal practice is to put the charge directly on to the invoice as an identifiable extra; but in terms of scheduled service tickets, the charge is not separately identified in the fare which the passenger pays.
§ Baroness Burton of Coventry
My Lords, I am not being awkward but I am not asking for anything to be written on the ticket; I am asking, what is the additional charge that the airlines put on the ticket, if you like for their own convenience, before selling them to the customer?
§ Lord Trefgarne
My Lords, if the noble Baroness will contain herself, I am just coming to that point. The charge, as far as charter tickets is concerned, is separately charged to the customer on the invoice and, I presume, relates precisely to the charge as it is imposed on the airline. I have not heard that the charges are something higher than the figure provided for in the regulations. As far as the scheduled services are concerned, I imagine that in the short term the reduction will benefit the airlines because I do not expect air fares to be suddenly reduced by 40 pence from the 1st March.
In the longer term, 1 have no doubt that the reduction in airline operating costs which the lower levy rate will bring will be reflected in the price of tickets. As far as inclusive tours are concerned. as I have said, the customer's final invoice often includes separate charges for airport tax and other related items. In such cases, the customer's bill, I expect, will be 40 pence lower than it otherwise would have been. Again, I am grateful for the reception your noble Lords have given to this order.
§ Baroness Burton of Coventry
My Lords, does the Minister not intend to answer the question I have asked of whether the airlines put a charge, reckoned at around £2, on the cost of the tickets that they sell to their customers?—yes or no?
§ Lord Trefgarne
My Lords, with respect, that is a question which ought to be addressed to the airlines and not to me.
§ Lord Boyd-Carpenter
My Lords, before my noble friend sits down, will he be kind enough to answer the question of mine which he apparently overlooked, as to whether, when we come up to August and when, under this order, the charge will revert to £1.50 and if the fund looks to be reasonably prosperous, he will look again at that figure and see whether it cannot be reduced?
§ Lord Ponsonby of Shulbrede
My Lords, before the noble Lord answers that question—and it is very much in line with what Lord Boyd-Carpenter was saying—I asked whether adequate notice could be given of any revision in the charges.
§ Lord Trefgarne
Certainly, my Lords, It is not the Government's intention that this fund should generate the substantial surplus that it has done in recent years and months. If that situation looked like arising again later in the year we would want to look again at the charge. As for the date on which any changes will be announced, so that the travel organisations, for example, can have prior notice, I take note of the importance of the point which the noble Lord raises. There are difficulties in setting it too far ahead because costs increase and it is not always possible to know precisely how those costs will increase, how numbers of passengers will fluctuate and other related matters. I take note of the point that any increase ought to he announced as far in advance as possible.
On Question, Motion agreed to.