Below is the text of the statement made by Rachel Maclean, the Parliamentary Under-Secretary of State for Transport, in the House of Commons on 10 June 2020.
I beg to move,
That the draft Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2020, which were laid before this House on 5 March, be approved.
It is a great pleasure to debate this statutory instrument. It is my first SI debate on the Floor of the House, and I had my first ever SI debate only yesterday.
This draft instrument 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 hon. Members 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. Although the Government will seek to reach the best outcome for the UK and the EU, it is our duty to make reasonable preparations for all scenarios, including by ensuring that there is a functioning statute book, irrespective of the outcome of the negotiations. To that extent, we have conducted intensive work to ensure that there continues to be a well-functioning legislative and regulatory regime for aviation, including for insurance.
This instrument is made under section 8 of the European Union (Withdrawal) Act 2018. It is subject to the affirmative procedure because it transfers an EU legislative function to a public authority in the UK. This procedure also enables the right level of parliamentary scrutiny for the proposed changes.
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, 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. Elements of the regulation were developed in the aftermath of the 9/11 terrorist attacks in the US. They make provision for exceptional situations where a failure of the insurance market means that carriers are not able to demonstrate that they are adequately insured in respect of all the risks specified in the regulation.
The withdrawal Act will retain regulation 785/2004 in UK law in its entirety at the end of the transition period. The draft regulations we are considering make further changes that are necessary so that the EU regulation continues to function correctly after the end of the transition period. The withdrawal Act will ensure that the same minimum insurance requirements for air carriers and aircraft operators that apply today continue to apply after the transition period.
The Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2018, which were debated in Committee in October 2018, made changes to the retained regulation so that it continues to function correctly after EU exit. The need for this additional statutory instrument arose due to the EU adopting regulation 2019/1243, which amended regulation 785/2004, after the 2018 regulations were made. The purpose of this SI is to fixed further deficiencies introduced by those amendments.
The amendments made by this SI are technical in nature. Regulation 785/2004 includes powers for the Commission to adjust minimum required levels of insurance where international treaties make that necessary. The 2018 regulations converted those powers into powers for the Secretary of State to do the same via regulations. However, since the 2018 regulations were made, the EU’s amendments to regulation 785/2004 have replaced the Commission powers with new versions more closely aligned to the legal framework established by the treaty of Lisbon.
To ensure that UK legislation continues to function correctly after the end of the transition period, these regulations take the same approach used in the 2018 regulations for the previous versions of the Commission powers. They replace them with powers for the Secretary of State to amend the minimum insurance requirements by regulations. That is what the SI is for. In summary, no change in policy is made by these regulations; they make only minor technical and consequential changes to ensure that UK legislation on aviation insurance continues to function effectively after the end of the transition period.
As I said in my opening remarks, we continue to work to achieve a positive future relationship with the EU. However, this instrument is an essential element in ensuring that we have a functioning statute book at the end of the transition period. It makes technical changes to ensure that UK legislation on aviation insurance continues to function. I hope colleagues will join me in supporting the regulations, which I commend to the House.