Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2020

Motion to Approve

Moved by

That the draft Regulations laid before the House on 5 March be approved.

My Lords, these draft regulations will—[Inaudible.]

I am afraid that we cannot hear the Minister well due to the bad connection. Could she turn off her visuals to see whether the connection is any better?

I apologise—[Inaudible.]

Apologies, but due to the bad signal, we will adjourn for five minutes.

Now, where were we? Let us begin. The Motion is in the name of the noble Baroness, Lady Vere of Norbiton. I remind noble Lords that the time limit for this debate is one and a half hours.

My Lords, I apologise for the technical issues. I blame them on the weather.

These draft regulations will be made under the powers conferred by the European Union (Withdrawal) Act 2018 and will be needed at the end of the transition period. As noble Lords are aware, the Government are committed to ensuring that the UK has a functioning statute book at the end of the transition period while we continue to work to achieve a positive future relationship with the EU. We have therefore conducted particularly intensive work to ensure that there continues to be a well-functioning legislative and regulatory regime for aviation, including for insurance.

These regulations are the second in a series to address deficiencies in a recent EU regulation relating to minimum insurance requirements for air carriers and aircraft operators in respect of passengers, baggage, cargo and third parties. I will give noble Lords some background. EU Regulation 785/2004 requires air carriers and aircraft operators to be insured in respect of passengers, baggage, cargo and third parties and against other risks such as acts of war, terrorism, hijacking, acts of sabotage, unlawful seizure of aircraft and civil commotion. The amounts for which carriers and operators are required to be insured are measured in special drawing rights, an international reserve asset created by the International Monetary Fund. The EU regulation also requires air carriers and aircraft operators to demonstrate their compliance with the minimum insurance requirements set out in the regulation.

The withdrawal Act will retain Regulation 785/2004 in UK law in its entirety at the end of the transition period. In practical terms, the same minimum insurance requirements for air carriers and aircraft operators that apply today will continue to apply after the transition period.

My Lords, I am grateful to the Minister. I, too, had problems with my technology.

In the brief time available, I want to acknowledge that this is a narrow and technical statutory instrument—I appreciate that—but it would be remiss of me, in declaring a non-pecuniary interest in the register, if I did not raise issues that are pertinent to the moment. I know that other noble Lords will probably want to contribute on the current difficulties that our people have in relation to insurance arising from the pandemic. It is one of those twists of fate that we are debating regulations relating to insurance covering war, terrorism, sabotage and the like when we are in the middle of a crisis that is affecting the whole of the aviation industry and, catastrophically, airlines and airports.

I ask the Minister, who knows of my interest in this, to write to me if she cannot respond at the end of the debate to my comments about those who are described as “passengers with restricted mobility”. Most people are not aware of the problems that these passengers have with insurance cover for baggage; nor are they aware of the difficulties for those with wheelchairs carrying either dry or wet batteries and those who find that their equipment is severely damaged, whether in catastrophic occurrences as outlined in these regulations or on a day-to-day basis. These difficulties make travelling a virtual nightmare for many people. They involve the interface between the airport and the airline and the contractors for baggage recovery. People often have great difficulty in getting compensation as well as immediate action to facilitate their continuation in travelling. I hope therefore that, although this is technically out of scope, the Minister will recognise—as I know she does—the importance of this issue for literally hundreds of thousands of travellers each year.

My Lords, when we debated the other set of civil aviation regulations yesterday, the Minister assured us that the Civil Aviation Authority was extremely happy with the regulations. Having worked for a public body, I know very well that it is extremely difficult to disagree with whatever the Government want; in fact, if you do so, you run the risk of losing your job.

I am concerned about the effects on the insurance industry, which is a big earner. I want the Minister to assure us that the British insurance industry, which obviously has a considerable interest in this matter, has been properly consulted and has not—as in so many cases—had a change waved in front of it, with the assumption made by government that it agrees.

I realise that these sets of regulations have to be rushed through because of the Government’s timetable, but I want to be assured that the best interests of British industries are being considered in the rush towards a legislative framework. Perhaps the Minister could answer that.

My Lords, I thank my noble friend the Minister for setting out the scope of these regulations, which, if I understand correctly, are a technicality to ensure that the UK rather than the EU is now the legislator. My concerns go wider than that and relate to the compensation levels for disabled passengers and wheelchairs. I endorse absolutely everything the noble Lord, Lord Blunkett, has just said.

Can my noble friend confirm that the EU regs and these UK regs exactly replicate the 1999 Montreal Convention latest compensation levels of 113,100 SDRs, about £90,000, for death and 1,131 SDRs, about £900, for loss of baggage? The EU regs go further and compensate for delay.

However, my noble friend will have been briefed on the scandal in 2016, championed by our noble friend Lord Holmes of Richmond, when Athena Stevens had her £25,000 wheelchair irreparably damaged on a BA flight from London to Glasgow and was offered compensation based on its weight. The Montreal Convention deems wheelchairs to be hold baggage, where the compensation is payable on the weight of the articles, not their value.

I have my battery-operated wheelchairs insured for everything, but the one thing you cannot insure for is air travel, so when the delightful Miami baggage handlers dropped my lightweight aluminium wheelchair costing £2,500, the most I would get—after enormous hassle—would be $300. Air carriers are hiding behind an international convention to avoid paying for damaged mobility equipment vital for disabled people to live their lives independently. As our noble friend Lord Holmes of Richmond said in the Athena Stevens case:

“This unfair policy is trapping disabled people in a cycle of disadvantage, and British air carriers have the moral responsibility to stop applying it to disabled customers’ mobility equipment, as it’s clearly unfit for purpose.”

My Lords, I am grateful to the Minister for introducing these regulations. Previous speakers have identified that there is an awful lot wrong with the whole aviation insurance sector at the moment.

The Minister has said it will not change just because we are leaving the EU, but how does this affect the insurance of airlines, airports and other sectors? Does it depend on where companies are registered or located? It is quite clear that there are very different policies coming out of different member states, as well as other parts of the world. This covers safety standards, baggage, compensation and delays—we have seen a lot of these in the last few months. It does not seem to make much difference where the airline is registered; they can have very different policies.

In addition to asking the Minister for some clarification on this, one has to ask what will happen after the end of this year. These regulations give the Government powers to diverge from the European regulations, and maybe the international ones in the future. It is worth pointing out that in the future the only three main groups in the airline business will be the US, the EU and probably China. I do not think the UK will have much of a look-in, so we will have to follow one of them. If we are to produce yet another set of insurance regulations just to make sure that we are seen to be separate, and insist obdurately on not staying in EASA, there will be a very serious and long-term set of consequences for passengers and the insurance industry, as well as airlines.

Like the noble Lord, Lord Bradshaw, I too do not believe a word when the CAA says it supports this. As he says, if it does not support it, it will be out of a job. We have to hope that the Minister can explain in her response what ability the Government will have to change these regulations in future without any consultation with the industry just because they feel it is a good thing.