Transport Committee
Oral evidence: Pre-appointment hearing of Chair of the Civil Aviation Authority, HC 354
Friday 5 June 2020
Ordered by the House of Commons to be published on 5 June 2020.
Members present: Huw Merriman (Chair); Ruth Cadbury; Simon Jupp; Robert Largan; Chris Loder; Karl McCartney; Grahame Morris; Gavin Newlands; Greg Smith; Sam Tarry.
Questions 1 - 38
Witness
I: Sir Stephen Hillier DFC CBE
Witness: Sir Stephen Hillier.
Q1 Chair: This is the Transport Select Committee’s pre-appointment hearing to enable the Committee to question Sir Stephen Hillier, the Secretary of State for Transport’s preferred candidate for the chair of the Civil Aviation Authority, the aviation regulator.
Sir Stephen, welcome.
Sir Stephen Hillier: Chair, ladies and gentlemen, thank you very much indeed for this opportunity to appear in front of the Committee today. I am very much looking forward to our discussion.
You asked me to provide a few words by way of background. From my youngest years, I wanted to be a pilot in the Royal Air Force. I pursued that ambition and joined the Air Training Corps. I got a flying scholarship and my private pilot’s licence. I was licensed by the CAA before I did anything else in my life, at 17 years old. I then joined the Royal Air Force and had an amazing career. I enjoyed every moment of it. It gave me fantastic opportunity, challenge and responsibility. Eventually, I ended up as Chief of the Air Staff and head of the Royal Air Force. I finished that appointment in the middle of last year.
Somebody alerted me to the fact that the Department for Transport was looking for a new chair for the Civil Aviation Authority. I thought that, with my career and lifelong experience of working in aviation in highly regulated environments and leading at a strategic level in complex and demanding positions, I had something to offer as the chair of the Civil Aviation Authority. It is a tremendously important position. I am delighted to have made it this far in the selection process. I am excited about the potential, subject to the Committee’s views, in taking over as the chair of the CAA in the very near future.
Q2 Chair: Thank you, Sir Stephen. As you will be aware, the reason for today is that the Select Committee has a requirement to involve itself in the pre-appointment process. Effectively, we give you another interview on that basis. I will start and colleagues will take over. How well suited do you think you are to this particular role?
Sir Stephen Hillier: There has been an extensive selection and interview process. Others have made that judgment along the way. From my perspective, it is my experience in a highly regulated environment, not just in relation to aviation safety and security but more broadly as well. It is my lifelong involvement in aviation. It is my experience of leading large, complex organisations and chairing boards where difficult long-term and short-term decisions are required. That is my experience. I am looking forward to putting that experience to work in the Civil Aviation Authority.
Q3 Chair: Would you tell us how the process worked? Did you see an advert in the paper? Did someone make you aware of it? How many rounds of interviews did you go through, and who were you interviewed by?
Sir Stephen Hillier: Not long after I had finished as Chief of the Air Staff, perhaps a month or so afterwards, a friend alerted me to the Public Appointments website. I went to the Public Appointments website. I have to say that when I saw “Chair of the Civil Aviation Authority”, given my background, it just felt like, “Wow, this is a great potential opportunity.”
I put in my application about September last year. I do not know what sift process was gone through initially by the headhunters. I then had an interview with them. I believe that went down to a shortlist of six. There was an interview process, but I am not aware of any of the other candidates. From that process of six, it went down to three, and then there was an interview with the Secretary of State. The Secretary of State made a recommendation, and that went to the Prime Minister. I was notified of the Prime Minister’s endorsement of my candidacy on 4 May, a month ago.
Q4 Chair: This is probably more a question for the Secretary of State, but, in as much as you got feedback, why do you think you became his preferred candidate?
Sir Stephen Hillier: As you say, it is difficult for me to make that judgment. I do not know who the other candidates were. I am sure they were excellent and would also have done a great job. I hope that what made me stand out was lifelong experience of aviation, lifelong experience of safety risk management and experience of leading large and complex organisations, including chairing some significant boards. I hope those were the things that made me stand out.
I recognise that along the way no candidate scores 10 out of 10 in every category. I am very much aware that there are areas where I do not have as much experience, and I need to learn and develop. Part of the excitement of the journey I am on will be developing my skills in those areas. I do not believe that there is anything unknowable in them and I am keen to learn in those particular areas. That will be quite a focus in my early months in the appointment.
Chair: You have touched on the knowledge, skills and experience side. We are going to delve a little further.
Q5 Ruth Cadbury: Sir Stephen, you have a distinguished record of service in the RAF and the military. Can you convince us that you have sufficient knowledge of the civil aviation sector and the challenges facing the sector?
Sir Stephen Hillier: As I mentioned earlier, in my introduction, I started off in civil aviation. That was my first flying experience. I progressed to get my private pilot’s licence and did flying after that, so I have been licensed by the CAA and that preceded anything I did with the Royal Air Force.
Moving into my RAF career, the reality is that in military flying you spend a very large proportion of your time either flying in normal airspace open to everybody, or in airways and civil regulated airspace, so I have that experience as well. I have not run an airline, although as the head of the RAF I had an extensive fleet of large wide-bodied passenger-carrying aircraft, which would put me at No. 3 in the country in terms of size of wide-bodied aircraft airlines. In all of that, there was constant interaction with the CAA in operating in that airspace.
I am not claiming that somehow I have direct experience of running an airport or an airline, but there is an ecosystem of air traffic control, aircraft, ground handling and air terminals. There are many similarities across the aviation enterprise, and the complexities of that are very familiar for me. I hope that helps.
Q6 Ruth Cadbury: You have experienced the regulatory framework as a consumer, but now you are going to be running a regulatory authority. You said that you want to develop your knowledge of economic regulation as part of your preparations for joining the CAA. How are you going to go about doing that?
Sir Stephen Hillier: I have already started, by talking to people who are not in the CAA at the moment but have experience of economic regulation with the CAA’s function in that respect. I have started with the 101 of economic regulation: why do we do it, how do we do it and what are we trying to achieve? I have started that process and, subject to the confirmation, as I mentioned earlier, economic regulation is one of the areas where I know I need to grow my experience. There are some fantastic people at the CAA who have that experience, and I am going to spend a lot of time talking to them about that.
That also applies to consumer rights. Clearly, I have experience as a consumer myself. I have experience of looking after large volumes of passengers as, effectively, an airline operator when I was in the RAF. I need to develop that further as well. Those two particular areas are my focus.
As I mentioned before, I think it is entirely learnable. In the way of these things, when you know there is an area in which you do not have much experience, you pay much closer attention to it. You take a very high level of interest. I will undoubtedly be questioning and curious in that area, and that is absolutely what a regulator should be like anyway.
Q7 Ruth Cadbury: During your RAF career, you served on a number of boards relating to defence investment, equipment and infrastructure. What have you learned from that experience that you can bring to this role?
Sir Stephen Hillier: It is a great question. The experience of chairing and running a board is about making sure that you have the right board. What I mean by the right board is the right range of experiences, perspectives and cognitive diversities around the table, and that the board is presented with the right information to make judgments and decisions. That all has to happen in a timely way.
As the chair of the board, it is my responsibility to create the right environment so that we can have the right discussions. It is to be supportive of the executive, the people who are going to implement those decisions, but to have a strong hold to account function to make sure that people do what they say they are going to do. Finally, the board needs to lead the organisation, and to do that it needs to set the right culture, values and standards. What the board does is going to be what the character of the whole organisation is like. I could probably talk for the next half an hour about what I have learned from chairing a board, but those are the headlines.
Q8 Greg Smith: Good morning, Sir Stephen. Thank you for the service you have given our country in the RAF and, indeed, for wanting to continue in civilian public service.
I have worked with quite a lot of people in the past, particularly my local government past, who have transferred from a uniformed service into civilian public service. Most of them said that it was quite a big jump from having a rank, a very strict hierarchy and the ability to give direct orders to someone, to a very different style of working. What thought have you given to the change from a very strict hierarchy to this sort of environment, and how are you preparing perhaps to have to change your style a little bit to lead the organisation?
Sir Stephen Hillier: I understand that is an issue. When I have done leadership presentations through my career, people generally raise that as an issue. Having had nearly 40 years’ experience in the Royal Air Force, my experience was not of an intensely hierarchical organisation. My experience was of an organisation where, yes, we have hierarchy and ranks, and that is part of our ethos and tradition, but as much as we possibly can be, we are interested in the experience, knowledge and skills that the individual can bring. The challenge is how you bring that out to the benefit of the organisation.
That particularly applies in the aviation area. In aviation, we aim to have as flat a hierarchy as possible. Wherever they are in the organisation, if people see something that is not right, we need them to mention it and do something about it. We positively encourage and create that environment.
As an example, when I was Chief of the Air Staff I was determined to stay current on one of the frontline aircraft types—the one that I flew in the past—the Tornado. In order to do that, I had to do a constant series of check rides. Sometimes, the most junior people were doing my checking, even though I was the most senior in the organisation, because we needed to flatten that out. It is about skills and experience rather than hierarchy.
I would also point out, if I may, that as head of the RAF there were nearly 5,000 civil servants working for me and probably the same number in addition to that of directly employed contractors. It is not the case that I am only used to dealing with people in uniform.
The final thing is that orders or direction have their place in any organisation. I was talking to a colleague in the fire service recently. He said, “We have the same.” He said that less than 5% is to do with orders; in other words, “You must do this because there is a safety critical issue or action must be taken now.” More than 95% of the time it is done by persuasion, motivation and encouragement. People do what you want them to do, not because you tell them but because they want to do it. That is the essence of leadership, from my perspective. People who know me and have worked for me would back that up. It is definitely not going to be a case of going into the Civil Aviation Authority, making a complete culture change and it feeling like a military organisation. It would not be appropriate, nor is it me.
Q9 Greg Smith: I think some organisations at times need a bit of a culture change. From what you have seen of the CAA so far, and thinking about some of the leadership style you have just outlined and the skillset you clearly have, do you think that there is an element of your experience from the RAF and the boards you have sat on that the CAA should adopt and should change towards?
Sir Stephen Hillier: That is not really a question I can answer at the moment because I have not engaged below the chair and chief exec level with the Civil Aviation Authority. I will have to take my evidence and see what the organisation looks like.
Looking at it from the outside, nothing I have seen would in any way lead me to question that the Civil Aviation Authority does not fully stand up to its reputation as a world-class aviation regulator. The people in the CAA at the moment are clearly doing an excellent job. My task is to make sure that we continue in the CAA to be a world-class regulator.
What is going to be the biggest challenge is the amount of change that we are now facing. I am sure we will come on to discuss it shortly, but there is an enormous amount of change and reshaping required. That is going to be our test. It is not just, “Can the CAA do what it is doing at the moment?” It is, “What is it going to be able to do in five or 10 years’ time? What does it need to do in those timescales?” My primary role, working with the rest of the board and the chief executive, is to set the direction for the future and ensure that we can get to where we want to go.
Chair: We have touched on your view of the CAA, and that is exactly the area of questioning that Simon Jupp is going to take up.
Q10 Simon Jupp: Good morning, Sir Stephen. Thank you very much for joining us.
In responding to our written questions, you described the Civil Aviation Authority as a strong and effective aerospace regulator. What do you currently see as its key strengths?
Sir Stephen Hillier: I believe I said that it was the aviation regulator. I think there is a difference we might need to discuss between aviation and aerospace in terms of responsibilities. I think it is a strong and effective regulator. It has a world-class reputation, based primarily on the skills and talents in the organisation. Others come to us to look at the model that we operate in the UK and seek to emulate it.
It is based on the quality of the people. It is based on how we are conceived as an organisation. The CAA is conceived as an independent safety regulator accountable to Parliament, but that independence is an important part of doing its function as well.
Q11 Simon Jupp: On that basis, what do you perceive as its current weaknesses?
Sir Stephen Hillier: It would be wrong of me to try to identify weaknesses at the moment, looking from the outside. I don’t know the organisation.
Q12 Simon Jupp: You must have perceptions of something you think could be done better.
Sir Stephen Hillier: There are perceptions that you can read on social media and in other places, but for me to comment at the moment and say, “Here is a weakness in the CAA that I will go into to address” would be inappropriate. I do not have the knowledge. There is the perception that people might have of the organisation, and then there is the reality.
I suspect you are about to ask me, “What do you hear those perceptions as?” There is always a difficult role for a regulator to play. If a regulator keeps everybody happy, perhaps we are not doing a thorough enough job. There are always going to be people who are unhappy with the outcome of the decisions made by the regulator. I do not seek unhappy people, but equally it happens in the way of things.
To mitigate that risk of unhappiness is how the CAA goes about its work. It is not just the regulatory framework; it is how we apply the regulatory framework. I believe it needs to be as open and transparent as possible. We need to be clear about the evidence that we are looking at. We need to be clear that we have gathered our understanding by speaking to as many relevant stakeholders as possible. Either the evidence will directly take us somewhere or, based on the evidence, we will have to make judgments. We need to be clear about what we did to make a judgment.
At the end of it, not everybody may be happy with the outcome, but I hope that they will understand and see that we have arrived at the outcome in a rational and auditable way.
Q13 Simon Jupp: When you were researching the role, you must have seen the public’s perception and the perception the industry perhaps had of the regulator. Are there any particular perceptions you are keen to squash quickly, if appointed?
Sir Stephen Hillier: I may have just touched on it. Perceptions are often to do with how you are judged to do your business, and how open and transparent you are. Do people understand the rationality of the outcome you have arrived at? Related to that is how you gather your evidence from stakeholders. Do people feel that they have been included in the process? That is something I will want to look at early on, because it is vital to our reputation as an organisation. How do we do our engagement? How do we build our understanding? What is the public’s perception of the CAA? What is the public’s knowledge of the CAA, and what might we do about that?
Throughout all of that I do not want it to be a remote regulator. I want it to be an engaged, assisting and enabling regulator—one that helps to develop and promote the aviation sector but does it in a way that is consistent with its statutory function of providing a safe aviation environment in the United Kingdom.
Q14 Simon Jupp: Do you think that public perception of the authority will be under intense scrutiny in the next 12 months, given the scale of the challenges the industry faces?
Sir Stephen Hillier: I do. In addition to the safety functions, we have a clear role to look after consumers in every respect. Consumers in civil aviation are feeling pretty bruised at the moment in a number of cases. Across the civil aviation industry, in general aviation as well, people are looking to how we are going to recover from where we are at the moment.
People are also interested in how we take responsibility for our regulation back from EASA. People are looking at how we recover in an environmentally sustainable way. There is a whole range of things on which people, with good justification, will look to the CAA and say, “You need to provide some leadership here.” That will be in conjunction with the Department for Transport and will not in any way interfere with our basic safety responsibilities. We have a leadership role and people will be looking to us to perform that role.
Simon Jupp: Thank you, and good luck if appointed.
Chair: We are going to continue with the theme of how you would perform in the role of chair, Sir Stephen.
Q15 Grahame Morris: Good morning, Sir Stephen. I would like to follow up some of the answers you gave earlier to my colleagues, Simon Jupp and Ruth Cadbury, about your independence when you are following the role of chair of the CAA as an independent regulator. Could you give the Committee some examples from your previous roles where you have had to demonstrate independence, both from politicians and from commercial pressures?
Sir Stephen Hillier: Yes, certainly. Let me start by saying that I have a very specific example in mind, but I need to be a little bit generic in my description of it because there are some particular sensitive issues.
In a previous role, before I was Chief of the Air Staff, I spent four years in the centre of the Ministry of Defence. Part of my responsibilities there was as a senior responsible owner for a major programme. By major, I mean an initial investment of about £12 billion and for the capability to be in service for decades to come. It was a national project.
When I took over as a senior responsible owner in 2012, I set parameters for when we would deliver the capability to operational service, to performance, cost and time. I was judged at the time as being quite conservative, but in the history of the programme I felt that was appropriate.
A couple of years later, I was informed that there was very high-level political intent to declare a higher level of ambition when the capability came into service than I was currently planning for. I said that that was not possible. It went back and forward for a while, with some quite scratchy conversations, and eventually I said that, if that high level of ambition was imposed on the programme, I would have to declare the entire programme red because it would not be delivered to performance, cost and time. I was accountable to Parliament for the delivery of the programme.
That went away, fortunately, and I am delighted to say that the capability is coming into service as a result of a tremendous amount of hard work by thousands of people. That capability will come into service exactly on the schedule set in 2012. That is an example. It was political pressure because it was an increased ambition for those reasons. I maintained my independence and said, “I cannot agree to this.” Let me pause there. I can offer other examples.
Q16 Grahame Morris: Thank you. I know it is difficult when you are giving generic examples. I want to come back to a particular example. In these circumstances, have you given any thought as to how, as chair of the Civil Aviation Authority, you might bring some new thinking on how you are going to work to protect and enhance the Civil Aviation Authority’s independence?
Sir Stephen Hillier: Again, I need to caveat that by my level of knowledge of the organisation. In the conversations I have had so far, I have not heard anyone suggest to me a view that the independence of the CAA is currently under threat. I have consistently been assured that everybody recognises that the CAA has a statutory function and is accountable to Parliament for safety in aviation in the United Kingdom. That is the basis for the independence of the CAA.
How does that translate on a day-to-day basis? I am sure this is the case in the organisation at the moment, but how I would approach it is that I would not go around on a day-to-day basis constantly saying, “I am independent.” You have to work with others, from Government, the general aviation and civil aviation sectors, the airline industry and internationally.
My way of working with others is based on a very measured and understanding approach, where we are clear when we are using evidence and judgment along the way. When there are issues of debate and differences of opinion, I am not out there seeking a confrontation with people. We are out to have a discussion and to persuade people that this is the way we go. Everybody knows that ultimately in the back pocket of the CAA is its statutory function, and sometimes we have to say no. I would have no difficulty saying no if the situation arose, but I would not want that to be a routine way of working because that is not how you fulfil the role of assisting and enabling the civil aviation sector.
Q17 Grahame Morris: Thank you for your answer, Sir Stephen, but I want to try to be a little more specific. Obviously, I am not trying to set the scene for you to have a row with Government Ministers on your appointment, if it is confirmed, but in terms of challenge to Ministers or their decisions I am thinking back to a recent event when the Transport Committee was involved in doing an inquiry in relation to offshore helicopter safety. You may recall that 33 offshore workers and crew lost their lives in accidents in the North sea when Super Puma helicopters were transporting workers to installations in the North sea.
There were, and are, concerns that the CAA was being influenced by financial and commercial pressures in respect of its response to those tragedies. The Select Committee came out with some specific recommendations, particularly in relation to the need for a full and independent public inquiry looking at, for example, the commercial pressures on helicopter safety. The Committee at the time said that the inquiry should also look at the effectiveness of the CAA in carrying out its role.
I want to press you in terms of inclusivity. You touched a little earlier on being independent and recognising the role of the CAA as the regulator. Would you accept how important it is, particularly in relation to offshore helicopter safety, to be involved with trade unions in discussions on formulating decisions?
Sir Stephen Hillier: I know of the tragic accidents with the Super Pumas, I do not know the detail of the investigation, so it is hard for me to comment on the detail. I am aware of that tragedy.
My response to that would be twofold. First, the primary responsibility for running safe operation lies with those providing the service. That is their responsibility. It is not the CAA’s responsibility. The CAA’s responsibility is to set the regulatory framework and to assure itself that operators are working within that framework. The primary responsibility has to be on those providing the service.
In terms of the CAA’s oversight, I do not know the specifics of the situation and it would be wrong for me to comment on what the CAA may or may not have done in those circumstances. What I will say is that I would be completely open to scrutiny of the CAA’s role. Inherent in the aviation sector is that when tragic accidents happen we need to be open and transparent, understand what happened, learn the lessons and adapt. I cannot comment on the specifics of that particular accident, but in any accident, were there to be a question mark over the role that the CAA may have played, we would be as open as we possibly could be. If we needed to change, we would learn the lessons and change. That is the CAA’s culture, I am absolutely certain. It is also the culture across the entire aviation enterprise.
Q18 Grahame Morris: I have one more supplementary in relation to the specific issue of safety regulation and independence. In the Government’s Aviation 2050 strategy, despite the loss of life in the North sea and 65 people being rescued from the North sea, there was no mention of helicopter safety. In your role, would you be willing to be robust and say to Ministers that that was an omission? Would you ensure that your role is truly robust in those circumstances?
Sir Stephen Hillier: I enjoy working with people, but I have no difficulty in being robust. I think my credibility is based on the fact that I work with people as much as possible, and when I say no, or have to be robust, they respect that because they have built that confidence in me.
In relation to particular issues with helicopter safety, I would need to see the evidence. I cannot make a judgment on the basis that I have not seen the evidence. Where does it take us? What is the best thing for us to do? By us, I mean not just the CAA but across the aviation enterprise. What is the best thing for us to do in order to better safeguard safety in the future? In any accident or loss of life, something has not gone as it should have. We need to investigate that thoroughly and take the appropriate action.
The second part of your initial question was about the involvement of the trade unions. I do not know at the moment, because I am not part of the organisation, what role the trade unions play in the consultative process. I have a reasonable amount of experience of being entirely open and inclusive with trade unions from my previous appointments. I see that as part of the entire system of engagement and understanding viewpoints.
The CAA already has things like a consumer panel. I will be taking a very close look at those sorts of mechanisms. The last thing I want is a detached regulator. I want the regulator to be engaged and to understand. In order to understand, it has to do good communications. It needs to engage with all the right stakeholders and understand a complete cross-section of views and opinions before it makes a decision.
Similarly, those decisions need to be open, transparent and communicated properly. The reasoning needs to be explained as well because, as I mentioned earlier to Mr Jupp, it is not the case that we are going to keep everybody happy all the time. It would be lovely if we could do that, but, if we are to do our job properly, we will sometimes have to take tough decisions that will not please everybody.
Q19 Grahame Morris: I appreciate that. I am sure those responses are duly noted.
This seems to me to be a massive job. The job description says two days a week. Do you think you will be able to fit all of that into two days a week? How will you balance your other commitments in fulfilling your role as chair?
Sir Stephen Hillier: Needless to say, Mr Morris, I have been looking at that, because the environment has changed markedly since I applied. Will it be possible within two days? It is a yes and no answer. Yes, inasmuch as I am very conscious that the CAA has a chief executive, and there is an executive to run the organisation. My role is to chair the board and to provide everything that goes with that. It is not going to help the chief executive if the chair is there on a constant basis. That would not be a good model to run. In a way, I need to make sure that I do not do more than those two days.
The flip side of that argument is that the scale of the issues that now face the civil aviation sector is of an order of magnitude greater than when I first applied for the appointment. That leads me to suspect that it may well take more of my time. How I execute the function is for me to work through. I have career-long experience of working the hours necessary to get the job done, and I will apply myself in that way to this one as well.
Chair: Sir Stephen, we are now going to look at some of your priorities.
Q20 Sam Tarry: Good morning, Sir Stephen. It is fantastic of you to join us. You have a four-year term. Thinking ahead, what do you anticipate will be your main priorities as chair over the course of that term?
Sir Stephen Hillier: There are three principal priorities for me, looking at the organisation from the outside at the moment. The first priority is that I want to ensure that the CAA continues to be a world-class aviation regulator; that it continues to enjoy the trust and confidence of Government, the public, airlines and aviation internationally; and that it continues to fulfil its primary duty, which is to protect the safety of those who fly and those who are on the ground underneath platforms that are flying. That is my first priority.
The second priority is to deal with the rapidly changing environment that we are in at the moment. Clearly, the most pressing part of that is Covid restart and recovery, but the broader issue is how we generate greater resilience in the aviation sector. How does it withstand shocks like that?
We need to return from EASA to national regulation by the end of this year. We need to be able to deal with environmental issues, and not be distracted from that as we do Covid recovery. We need to deal with rapidly changing technology. We need to deal with increasing exploitation of unmanned systems, drones and the space environment. We need to deal with rising consumer expectations. There is a whole range of changes, and I need to make sure that the CAA has the capabilities, the agility and the adaptability to be able to function in that environment.
The third priority concerns the people in the CAA. In order to deliver the two earlier priorities, I need to make sure that we continue to have outstanding people who have the skills, experience and capabilities to deliver all of that, recognising that this is not a standstill situation. Major change is on its way. That also speaks to the CAA itself. I need to ensure that we have the structures, the organisations and the processes to deal with Nos. 1 and 2 in the priority list.
Those are the three headline priorities that I will take into the role if I am confirmed in the appointment. I am very conscious that when I arrive at the CAA I will tell everybody that those are my three buckets of priorities, but I will need to listen, understand and adjust as necessary in the light of the evidence I gather there.
Q21 Sam Tarry: Can I follow up one aspect of that? The industry is going to be changing, probably quite dramatically, not just because of the Covid crisis but because of meeting ambitious greenhouse gas reduction targets. In the past, between 2011 and 2014, the CAA had compiled different data on emissions, air quality, waste, water, and so on, but that was abandoned because they could not get like-for-like data. Most of the airlines report in different ways depending on what they think is appropriate.
Given the amount of greenhouse gas that is produced in the aviation sector, and the ambitious targets set by the Government, do you think that perhaps we need to find a standardised way of reporting, with that being more of a function in the rest of the regulatory framework that the CAA oversees?
Sir Stephen Hillier: I am not familiar with the particular piece of work that you described, which I think you said continued to 2014. Overall, how do we provide a coherent framework around the entire enterprise that assists in achieving the set target of net zero emissions by 2050? I see the need for an all-encompassing framework, and I believe that the CAA will have a vital role to play in that. There is an enormous number of stakeholders involved, so this is not me going out on some sort of land grab. I absolutely see the need for a coherent strategy.
In a way, that is particularly sharpened by the recovery from Covid. It would be wrong for me to describe it as an opportunity, but when we are at about 10% of normal civil aviation traffic it allows us to consider, when we go from that 10% back up to the 100% level, which is clearly going to take us some time, how we do it so that it both restarts the industry in the way that we all want, with all of the benefits associated with that, and puts us on the right track to guarantee that we can achieve the targets that have already been set.
Q22 Chris Loder: Good morning, Sir Stephen. Thank you for taking the time to come to speak to us. I have a few questions.
First, I want to ask your opinion in regard to the CCA. Do you believe it is adequately delivering today?
Sir Stephen Hillier: Sorry? The CAA. You said the CCA.
Chris Loder: The CAA.
Sir Stephen Hillier: I believe that it is delivering at the moment. Its primary role is to protect the safety of people who fly and people who are on the ground. I believe it does that effectively and efficiently.
It is in the nature of the enterprise that you should never be satisfied. Anybody who says that they are satisfied about how we do safety perhaps does not have their eye on the ball enough. We must constantly look for ways of getting better and providing better safety. If you look at the trajectory over decades, that is absolutely what is being delivered. Against its primary role, I believe that the CAA is doing a good job, but I know that the people in the CAA would also say, “Yes, but we always need to try and get better.”
Q23 Chris Loder: Do you think the CAA will need to adapt how it operates, particularly post Covid? I am thinking specifically with regard to the regulatory framework.
Sir Stephen Hillier: What do you have in mind particularly in relation to the regulatory framework? I could give a generic answer, which is that we are willing to adapt, but I would rather it be more specific.
Q24 Chris Loder: The regulatory framework, particularly when it comes to allocating capacity, is going to be of increasing importance over the coming months, not least because we are seeing airlines considerably reducing the number of flights. Some airlines have pulled out of some airports—for example, Virgin at Gatwick—while clearly the regulatory framework says that certain airlines can hold on to certain landing slots, when they are publicly declaring they are not going to use that airport anymore. Those are the thoughts I am having in terms of the regulatory framework.
Sir Stephen Hillier: Thank you. What is important in all of that is that we are talking about a range of regulatory frameworks, and not all of them are owned by the CAA. We need to be clear in our own minds—everybody is working on this—who has the responsibility, and who has the capability to discharge those responsibilities. I need to be careful that I am not encroaching on the responsibility of others.
The overall point, as we do the restart and recovery, is whether there is going to be a need for extra capacity and effort devoted to making sure that the regulatory framework that exists at the moment continues to be robust and is applicable for the circumstances we are in. Let me give an example. It is nearly three months since we had large-scale civil air traffic movements. That lack of recency affects air traffic controllers, pilots, cabin crew, aircraft engineers and ground handling. The entire ecosystem of civil aviation is out of practice.
For an aviation background, like any background, lack of recency in a highly complex and demanding thing has to be a concern. The standards have not changed and the regulatory framework has not changed, but the input of things into that framework has changed. We need to make sure that we are doing this in a measured and paced way, such that the safety of the public and consumers is not in any way reduced.
Again, I am not in the organisation at the moment, but I am very much aware that the CAA is part of all the discussions and debates about restart and recovery. I know that will be something they will emphasise in those debates.
Q25 Chris Loder: In your opinion, do you believe that the regulatory framework needs to evolve from this point on, because of the enormously changing environment in which we are working, or do you think the framework we have is reasonably adequate? I suppose that is what I really want to know.
Sir Stephen Hillier: My basic sense is that the aviation safety framework—
Q26 Chris Loder: I am sorry to interrupt; I meant the economic framework.
Sir Stephen Hillier: That is exactly the point I was going to make. I thought that was what was in your mind. The clear issue is in relation to refunds. The consumer’s right is perfectly clear. Consumers are entitled to a refund for a cancelled flight.
I understand how airlines will have difficulty coping with that, not just in terms of the financial impact but in terms of numbers of people. The number of claims for refunds is extraordinary—hundreds or probably thousands of times more than you would normally expect. Meanwhile, they have large numbers of their staff furloughed, so their ability to handle those claims is much lower. Nevertheless, people have a right and the CAA will stand up for those rights.
The challenge, getting to the heart of your question, is this. That framework is there but people are unhappy because of the time taken for resolution. Ultimately, the CAA can take legal action, but it takes an extraordinary length of time, which potentially acts as a deterrent for consumers. The CAA has a clear duty to look after consumers’ interests. Can I see the possibility of the CAA asking for increased regulatory authority in order to ensure that consumers’ rights are protected in this area? I can see that happening, but the timescale for that is one to be developed.
Q27 Chris Loder: I worked for the railways for 20 years before being elected here a few months ago. I am very familiar with a similar sort of regulatory framework, particularly for the CAA, where you have safety and economic regulation. In terms of balancing those two priorities, do you have anything specifically you would like to mention?
Sir Stephen Hillier: The safety of people who fly and the people underneath will always take the highest priority. That is our statutory duty as the CAA. Potentially the biggest challenge, as ever, is on those who are operating—airlines, for example. As I mentioned earlier in this hearing, the primary responsibility lies on them, so we need to make sure that in the safety versus economic balance they are absolutely in the right place.
I do not want that to sound in any way confrontational. That is not my approach. It is entirely in the CAA’s interest, and in everybody’s interest, to have a healthy, vibrant civil aviation and general aviation sector in the United Kingdom. I want the CAA to do everything it can to help enable and assist that, but it will not compromise on its primary objective, which is to protect people’s lives.
Q28 Chris Loder: My colleague Grahame Morris asked you earlier about your two days a week. The role attaches a good salary for two days a week, of £130,000 a year. It is a lot of money. Do you think you are good value for that money?
Sir Stephen Hillier: My response to that is, first, I did not read the salary before I read the job description, so I am interested in the job. Whether I am worth it or not, I will have to leave for others to judge. As I mentioned earlier, it is unlikely that I will only be doing two days a week in the job. I will leave it to others to judge. Perhaps, if I were to be appointed and I am subsequently held to account by this Committee, you will be able to tell me if I am worth it or not.
Q29 Chris Loder: I should be delighted to be able to answer that question for you in six months’ time, should you be appointed. I wish you the very best of luck. I hope that you will come and speak to us in five or six months’ time and tell us how you are finding things. I would certainly greatly appreciate that. Thank you.
Sir Stephen Hillier: Likewise, Chair, I would welcome the opportunity to come back in six months. I am conscious that I have responded to a number of the questions you have rightly asked with, “I do not yet know but I am going to find out.” In six months’ time, I ought to know and I would be very happy for you to hold me to account on that basis.
Chair: Thank you, Sir Stephen. We have always worked very closely with your predecessors, and Dame Deirdre has been before us. We have a particular focus at the moment on aviation. We are determined to look back at it as well when we have more time to reflect. We will no doubt be seeing you, if you are in your role. I should point out—you would be too modest to say so—that your salary is at the exact same salary level as your predecessor. There has not been any uplift.
We want to talk about some key issues for aviation because it is very topical. We are mindful of your point about not yet being in post, but we would be interested in some of your views on that front.
Q30 Robert Largan: Thank you, Sir Stephen, for coming in; thank you for your service as well.
I wanted to ask about the target to be carbon neutral by 2050, but my colleague Sam Tarry has already asked that, and you have given quite a lengthy response. As today is World Environment Day, I would be interested to have your further thoughts on that target and how you think the Civil Aviation Authority should respond to environmental concerns.
Sir Stephen Hillier: I am not sure that there is much I can add at this stage to the earlier answer, apart from underlining that we all know it is a critical issue for the aviation sector. On the targets, 2050 is quite a long way away against a pressing global problem, and we need to get a move on.
It is fair to point out how much progress has already been made, through more efficient aircraft engines and the like. We are making a lot of progress, but that, in large measure, has been offset by the increase, until recently, in demand. It is a difficult thing to work through, but I do not think anybody underestimates the importance of the challenge, the degree of scrutiny that is rightly being applied to it and the need for the aviation sector to respond. Everybody has signed up to those targets.
In relation to the CAA’s role, as I said to Mr Tarry, it is about working out who is going to provide the framework for all of those targets, goals and ambitions to fit into. I am not going to claim that the CAA has ownership of all of that at the moment, but we need to work out who is going to hold the ring; who is going to set the targets across the aviation enterprise; and who is going to do the holding to account along the way.
I am conscious that it sounds a little bit like my previous answers, but I am not sure that I have much more to offer at the moment, except to underline the absolute importance of it. We definitely need to make sure that the recovery from Covid does not distract us from the importance of those targets.
Robert Largan: I appreciate all the answers you have given today. You definitely have a very impressive CV and a lot of experience. I think you will do a fantastic job at the CAA.
Q31 Gavin Newlands: The UK will be leaving EASA at the end of this year, at the end of the transition period. What challenges do you foresee for the Civil Aviation Authority? For example, one challenge could be the fact that the Brexit negotiations have stalled and there is the chance of no deal, so aviation regulation or market access might not be agreed. What challenges do you see?
Sir Stephen Hillier: There are definitely big challenges, for sure. We have been in EASA, and gradually EASA has taken more of our national responsibilities. We have been on that track for decades, and now we are changing. The Government in the UK and the European Union itself have been clear that we will be leaving EASA.
At one level, that represents some degree of risk. How do you mitigate that risk? First, by recognising the capabilities that the CAA already has and the degree to which the CAA has contributed to EASA over the years its knowledge and expertise. On the basis of that, we can have confidence that we will be able to do it.
It is not as if we are starting from a blank sheet of paper. The sheet of paper has EASA written on it at the moment. We are working from that as our baseline, and then on what we need to do to take our national responsibilities, and still have relationships with EASA, ICAO and the like. That is going to take more capacity at the CAA than we had previously, because there were functions that were done Europe-wide. We, the CAA, have been recruiting people to make sure that we have the capacity to do that work and that we have the skills and experience we need.
I have not yet seen the detail of that work. It will be a very high priority for me to see it, if I am confirmed in appointment. From everything that I have seen, and knowing the background, I am confident that we are successfully mitigating any risks that arise.
Q32 Gavin Newlands: You correctly say that EASA has benefited from a fair amount of CAA experience and expertise over the years, but at the end of the year the CAA is going to have to take a significant step up, in both workload and responsibilities. How are you going to ensure that you have all the experienced staff at the end of the year and not sometime after that?
Sir Stephen Hillier: I know that the process is already well under way. Notwithstanding the current recruitment challenges in relation to Covid, a lot of people have already been recruited to do that work.
As to how we make sure that it happens, I need to get into the organisation to see the evidence. I need to recognise that the chief exec has absolutely got that in his sight. I am confident that it will be done through a series of staged progress markers and tests that we will set ourselves, to make sure that we have the capacity to achieve the standards that we need to achieve. We will be doing that throughout the rest of this year so that, when we actually take over the responsibility formally, we can have confidence that we will be in good shape.
It will be an evolving picture. We will need to recruit more people, I am certain. There is always a challenge in getting people with skills and experience, but I come back to the fact that the CAA is good at that sort of activity. We are not starting from scratch. We are building on a vast amount of existing experience and knowledge.
Q33 Gavin Newlands: You mentioned the relationship with EASA. Whatever happens at the end of the year, that is obviously going to be key, as are arrangements with other international organisations. What experience do you have working with counterparts from other countries in an international framework?
Sir Stephen Hillier: A lot of experience is the short answer. In relation to NATO or bilateral relationships, there is an extensive network of military relationships that I have been part of throughout my career. In my previous job, there was a lot of discussion with colleagues in European air forces about what the impact would be of the UK leaving the European Union. Together, we agreed that the basis of the relationship between the air forces in the air environment was not through the EU but through bilateral or multilateral organisations. That is not just in relation to the European Union but around the world as well.
I was in my previous appointment for three years. I visited 41 countries around the world, 18 of them on more than one occasion. I have a decent amount of experience of dealing with international bodies. In case that sounds very military or air force-like, I also have extensive experience in equipment acquisition—in other words, working with major defence companies. The majority of major defence companies are international, and the majority of our acquisition is international, so I was dealing with companies overseas, as well as air forces, and indeed Governments.
Q34 Gavin Newlands: The expansion of the CAA’s responsibilities will take some significant restructuring of the body, some of which will initially be under way under the current leadership. What experience do you have in organisational restructuring? What experience have you gained from your previous roles that would help you to lead that change effectively?
Sir Stephen Hillier: Any decent organisation always has to be in a process of change or transformation to some degree, otherwise you lose your relevance. Perhaps the best example I could give you is in relation to the Ministry of Defence, where, as a result of the 2010 defence review, I worked with a civil service colleague designing a future operating model for how we did military capability planning and financial delegation.
She and I spent a year designing a new way of doing business, which was, essentially, taking it away from a highly centralised Ministry of Defence function and delegating it to the individual services. That went live in early 2013 and it is still the model that defence follows now. It involved the disaggregation of a large number of people, a significant amount of responsibility and probably about £12 billion to £14 billion-worth of annual spend. It was a significant undertaking.
Once that delegation had happened, or as part of that delegation, my civil service colleague and I had to do an internal Ministry of Defence reorganisation in our area to ensure that we had the capabilities to do the balance of investment decisions, the allocation of resources and the setting of targets. Within that delegated model, we had to ensure that we still had a coherence function so that we did not have random bits across defence; we could still be joined together as a whole.
For me, that was a major strategic restructuring and a complete change of philosophy in how we did the business. It was initiated in 2010. I did not initiate it. I worked on it in 2011. I implemented it in 2012-13 and it is still running in 2020. I do not see any prospect for change. I think that was a success and is an example that, hopefully, is helpful to you.
Q35 Ruth Cadbury: I represent a constituency that is very much affected by flight operations at Heathrow. For years, we have found that the CAA has not been particularly helpful on issues such as noise and environmental pollution. [Inaudible] safety as well, to do with its remit. It is more limited. I know the CAA’s remit is expanding, but is it enough? A lot of that comes down to what can be seen as a tension between the public sector and public responsibility and the private sector. I wonder how you would navigate that tension between the public and the commercial.
Chair: Ruth, you were breaking up a bit. I think Sir Stephen will have the gist of what you said, but if he has not absolutely answered every part, it will be because he could not hear everything that was said. We will see how we get on.
Sir Stephen Hillier: Thank you, Chair. I am sorry, but I did not catch all of that. I think the gist was how to balance public and private concerns. My honest answer is that there is no template. There is a clear headmark though. That headmark is the CAA’s primary responsibility to protect the public: those who fly and those who are underneath things that fly. I am absolutely clear in my mind that my job, working with the board and the executive, is to discharge that No. 1 responsibility. That is what I am held to account for by Parliament.
I have other responsibilities, along with a whole range of other stakeholders, in promoting, or assisting and enabling, the aviation sector. I do not believe those are incompatible. Every organisation has to have those debates within it, but I come back to the fact that my primary responsibility is to protect the public. If hard decisions ultimately need to be made that may not be popular with the private sector, through the processes I talked about earlier and understanding all the points of view, I know what my primary responsibility is.
I am sorry, I did not get much of the detail behind the question but, hopefully, that gets at what you were asking.
Ruth Cadbury: That is fine, because it was a top level question.
Q36 Chair: Sir Stephen, I am sure that, when you started this process, airport expansion might have been at the top of the list of questions that came up at the interview stage and how we could get more entrants into the airspace. Now, some months on, we are looking at what could be a vastly declining aviation sector, with perhaps no airport expansion and losing more airlines. Perhaps we will struggle with competition and therefore end up seeing higher prices.
There might be a need for a new angle on safety that is all about passenger health safety. Previously, the UK has led the field in global aviation safety. How do you feel now about what you need to do with your organisation versus what you may have thought when you started the job interview process?
Sir Stephen Hillier: It is something I have reflected on quite a lot. The three priorities I outlined earlier continue to exist. I do not see that we are fundamentally going to go away from them. It is about maintaining world-class regulatory standards, being able to change and ensuring that there are the people to make that happen. I do not see that fundamentally changing, but on a lot of issues that sit below that, particularly in relation to change, there has been a lot of movement.
When I look at where that takes us in the long term, I do not think anybody at the moment can accurately forecast how the civil aviation sector is going to recover. Various dates have been put out by various parties, but the honest answer is that nobody knows. There have been challenges in the past; 9/11 would be an example. Although it was not on the same scale, there was a strategic shock to the airline system. It has recovered from that point. That was a past example. What the timeline is for this one we do not yet know.
In relation to what that means for issues like airport capacity, unless we assume that we are now going to adopt a permanently lower level of air transport, we can absolutely see that there is an enduring need to look at airspace and at airport capacity, particularly in the south-east of the country, and work out what our strategy is for the future. The one thing that Covid has resulted in is that, as you rightly pointed out, Chair, the timeline is not as pressing now, because the point of critical capacity is further away from us than it was three or four months ago.
It is very hard to predict where this is going to end up unless we accept that air travel is not going to recover to where it was. I do not accept that. I believe it will recover and grow, but I do not know over what timeline. One of the key challenges is to make sure that we have a sufficiently healthy aviation sector, with enough competition that it can make a recovery and do it in a way that continues to look after consumers’ rights and does not price people out of the market, because then it just becomes a self-fulfilling prophecy.
Q37 Chair: You touched on competition. There is a concern that we could end up in a situation where competition is lessened, meaning that it is harder for new entrants to come into the market with those who have particularly valuable landing slots and the like. Do you commit to using all levers at your disposal in order to build up competition in the aviation sector, should it become reduced in the coming months?
Sir Stephen Hillier: We have a duty, and are answerable to the public, to look after consumers’ interests. They are best served by the right safety environment and by the right competitive environment to give choice. The key part you mentioned is the levers we have at our disposal. I am conscious that there are a number of others who will be keen to work with us on that. With the levers that we have at our disposal in the CAA, that is, for me, a vital part of ensuring that we have a healthy aviation enterprise going forward.
Chair: Karl, do you want to add anything?
Q38 Karl McCartney: Only to say thank you very much indeed, and congratulations, Sir Stephen. We have some mutual friends. I am very pleased for you. This is a bit of a curve-ball question, but is there anything you want to say about your predecessor’s time and what you might have done differently?
Sir Stephen Hillier: Thank you for giving me the opportunity. I think Dame Deirdre has done a fantastic job from everything that I can see. We had occasional interactions when I was Chief of the Air Staff. She has been in the CAA for a number of years, and everybody speaks extremely highly of her and her ability to chair the board. The achievements that she has secured over the last 11 or 12 years are truly impressive.
I am very conscious that I have quite a thing to do to live up to what she has achieved. Inevitably, there will be a new look at things. That is why we change people over—to keep bringing in fresh ideas and fresh perspectives. If I am appointed, once I have a better understanding of the organisation, I will try to take it forward to the next level, and continuously improve the CAA in the way that Dame Deirdre has already done.
Karl McCartney: Thank you, and well done.
Chair: Sir Stephen, thank you so much. That concludes our questioning. I echo what other Members have said. Thank you for attending today under these circumstances. Thank you also for the full answers that you have given to our questions and for all the public service that you have given to date.
Our process means that we report back to the Department for Transport with our views, which we will do forthwith. If everything works all the way through, we will certainly be very keen to get your experiences again once you have your feet under the desk. Thank you, and best wishes.