Air Traffic Management and Unmanned Aircraft Act 2021 (Airspace Change Directions) (Determination of Turnover for Penalties) Regulations 2022

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Air Traffic Management and Unmanned Aircraft Act 2021 (Airspace Change Directions) (Determination of Turnover for Penalties) Regulations 2022.

My Lords, these draft regulations will be made under the powers conferred by the Air Traffic Management and Unmanned Aircraft Act 2021, which I will abbreviate as “ATMUA”.

Part 1 of ATMUA grants the Secretary of State powers to direct a person involved in airspace change to progress or co-operate in an airspace change proposal, or ACP, where doing so would assist in the delivery of the CAA’s airspace modernisation strategy. These powers are delegable to the Civil Aviation Authority, or CAA, as I have already mentioned. These powers will help deliver quicker, quieter, and cleaner journeys for the benefit of those who use UK airspace and are affected by its use. If the directed party does not comply with a direction, the CAA can issue them with a contravention notice, which may be followed by an enforcement order. If that enforcement order is contravened, this may result in a financial penalty consisting of a fixed amount, not exceeding 10% of the person’s turnover and/or a daily amount not exceeding 0.1% of the person’s turnover. A person’s “turnover” is to be determined in accordance with regulations made by the Secretary of State, which is the draft instrument being considered by the Committee today.

Airspace has to be managed so it can be used safely and efficiently. ACPs can include proposals to, for example, amend airport flight paths or change the classification of particular airspace. In 2018, the CAA published its Airspace Modernisation Strategy, which set out the ends, ways and means of modernising airspace. The CAA is currently consulting on a refresh of its strategy, and I encourage those with an interest to put forward their views. The programme of airspace modernisation is under way, and includes the wholesale redesign of the UK’s airspace to unlock the benefits of modernisation. It is being delivered by the aviation industry, with support from the Department for Transport and the CAA, which provide joint leadership and oversight of governance as co-sponsors of the programme.

Airspace change usually relies on individual sponsors, airports and air navigation service providers, or ANSPs, to bring forward their own proposals and choose when, if and how, they progress them. Previously, when a sponsor declined to participate in an ACP on a voluntary basis, neither the department nor the CAA had the powers to ensure co-operation and co-ordination. This meant that one sponsor could hold up another or several others, thereby delaying the modernisation programme and the benefits associated with it.

With the recent passing of ATMUA, the Secretary of State will have the power to direct progression or co-operation in an ACP, once Part 1 of ATMUA comes fully into force. Where there are difficulties for a sponsor to overcome, the CAA will seek to help it in finding solutions—for example, in terms of resources. Our intention is that the direction-making powers will be a last resort and will only be issued where they can be practicably carried out. Before any direction is made, consultation would take place as required by ATMUA. These regulations are required to ensure that the legislative framework can operate as intended, and therefore their commencement will be aligned with Part 1 of ATMUA, so far as that is not already in force.

I am grateful to be able to contribute to the debate on this statutory instrument, and I shall be very brief. I note that this is the first use of the power in paragraph 12 of Schedule 2 to the Act, and I simply want to ask my noble friend a couple of questions.

First, could my noble friend give some examples as to why it is felt necessary to bring this forward now, since this is the first use of the power in the Act? Equally, I listened carefully to what she said, and she said that the power would be used only in extremis, but I am not clear how the rate of fine will actually be applied. She talked about it being proportionate, but proportionate to what? Who will decide what that proportionality is? Crucially, what will be the appeal process for any fine that is imposed?

My real concern is about the relationship with the Ministry of Defence, and I would be grateful if my noble friend could outline that relationship. Clearly, the MoD operates a number of airfields across the United Kingdom, most of which happen to be out of the main flight paths in Lincolnshire, but of course some are not—such as RAF Northolt in London. As the CAA moves forward with the Airspace Modernisation Strategy, can she outline what the relationship with the MoD will be in the implementation of that strategy? Crucially, what will be the resolution process if there is a disagreement with the MoD about the implementation of that modernisation strategy?

My Lords, I welcome very much this SI today. By way of background, I have had the privilege of reading the CAA publication Airspace Modernisation Strategy, and I have had the chance to look at the Airspace Change Organising Group’s work so far. From my background as a former pilot in the RAF who takes an interest in aviation, my stance is that I certainly do not accept the view put forward as a result of COP 26 that aviation is in decline mode; I think that aviation is absolutely fundamental to the future success of our country and our economy. I welcome enormously the work that the CAA is doing alongside the department involved, because it is absolutely vital for our exports trade and for internal trade that we use to the maximum possible the airspace that is available.

Having said that, I have just a couple of short questions. One of our previous problems, particularly with unmanned aircraft—in other words, drones—was that people claimed that there was not proper awareness, the publicity was not adequate and somehow or other they had missed out on this, that and the other. Given the nature of these penalties, which are absolutely justifiable, we need to take particular care to ensure that there is proper publicity in depth and to check, by way of research, that people are aware of the changes being made.

Other than that, I just ask my noble friend, because I do not quite understand, why, according to paragraph 7.4,

“Public consultation on some of the airspace change proposals is likely to commence in 2022.”

From reading the material I referred to, it is a package in toto, so I am not quite sure how you can regulate just a section of the airspace—unless it is felt that you can do Scotland, Wales or Northern Ireland separately. I am not quite clear why it should be just “some”, as opposed to a complete package. I look forward to my noble friend’s responses.

My Lords, I welcome this regulation. On first reading, I thought that it was a bit of a sledge-hammer to crack a nut, but when you start reading the Aerospace Modernisation Strategy—127 pages of it—you can see why it is necessary. I question whether the strategy will not need some amendment as a result of Brexit, but I shall come on to that.

I have one interesting suggestion, which relates to paragraphs 2.1 and 2.2 of the Explanatory Memorandum on the regulations. It seems to me that, having cancelled EGNOS—which I shall come on to—the Government could be seen to be contravening the notice in those paragraphs. Could the CAA instruct the Government to reintroduce EGNOS or face a fine of 10% of the Government’s turnover? That is a pretty stupid question, but it is a consequence of the way it is written. I hope we will never get to that, and I am sure we will not. My interest in EGNOS is that I live on the Isles of Scilly and spent three days waiting to fly out after Christmas, because it was a bit foggy and there are no ships, so we rely on aeroplanes. I think that some of the Scottish islands are in a similar position.

I have been following EGNOS over the years, which, as we all know, is a satellite-based system that is a great deal cheaper than the ILS that they have in Heathrow, Gatwick and other places. Originally, the Government were enthusiastic about EGNOS, and I understand that the Secretary of State wrote to the CAA just after he became Transport Secretary to direct it to prioritise the airspace change proposals necessary to put EGNOS in place. Sadly, of course, in May last year, it was cancelled, and the Secretary of State confirmed that the Government could not agree terms with the EU for continuing to use EGNOS, saying:

“I recognise that it nonetheless remains a disappointing outcome.”

I certainly agree with him there.

It is extraordinary, really, that a decision such as that is based on value for money. I ask the Minister, when she comes to respond, on what basis the Government calculate the cost and benefit of having airports—particularly in remote, lifeline situations—that do not have the latest navigation aid because it has been cancelled. There is no other solution at the moment; the answer is that you just do not fly. I am not particularly asking the Minister to answer this today; I gave her notice that I was going to make some comments about this.

I would like to know what the ongoing cost of continuing with EGNOS would be. If the Government insist that it cannot continue, what are the alternatives, especially for small, lifeline airports? It is no good putting in a Heathrow-style ILS; that would be ridiculous. How long would it take to develop and install these? I was told that, if it needed a new satellite system—I do not know why we should have to have a new satellite system for just one very small piece of air traffic control —it might take 10 years, which is a very long time without proper transport.

Thirdly, will the Government compensate those airports, airlines and others that followed the Secretary of State’s encouragement to develop EGNOS and were suddenly told in June, “Sorry, you can dump that; you can’t use it”?

I hope the Government can find a solution to this—and fast. To help take things forward, will the Minister agree to set up a meeting for interested Peers such as the noble Lord, Lord Davies, the noble Baroness, Lady Foster, and any other noble Lord who is interested —maybe the noble Baroness, Lady Randerson, and my noble friend Lord Tunnicliffe—with BEIS and the Department for Transport to see what the situation is at the moment and how it can best be revolved in future?

My Lords, I follow up that final comment by saying that the noble Lord, Lord Berkeley, has raised some important issues, and I would really appreciate being copied into any correspondence that flows from his comments. Indeed, I would like to be invited to any meetings that the Minister chooses to hold.

Although this SI is evidently very technical, it allows us a useful opportunity to ask some important questions, as noble Lords already have, about the progress of airspace modernisation and its implications. This legislation flows from a policy implemented at a time when our skies were busy and there was an expectation of further expansion.

I want to make clear that it is obvious to me that airspace modernisation is a good and vital thing. It is very important environmentally, but it comes in the “Good but difficult” category because, once you develop new air corridors for an airport, you are concentrating flights over one set of people, who, not surprisingly, will be unhappy at that, whereas all the other people who no longer have those flights going over them are relieved that that is the case. It is balancing upsetting one set of people against pleasing others.

Of course, there is also the balance between the benefits to one airport and another, which has sparked this SI. That issue is probably most acute in the south-east of England, but it can and does occur in other parts of the country.

We are now in a very different situation with aviation, so my first question to the Minister is: how have the Government adapted their policies in relation to airspace modernisation, if at all? Have they slowed down the pace of change as a result of the impact of Covid? Whatever emerges as aviation regrows, and I share the view that it inevitably will, there will be a change in pattern in the short and medium term as various parts of the world recover from Covid more rapidly than others. But there will also be a change in pattern of the type of traveller. I venture that business flights will never recover to the level at which they once were. That, of course, spells trouble for any airport that concentrates on a lot of business travellers. They will have to adapt, and I am sure they will, but it means a change in pattern of use and direction for the traffic.

My Lords, I welcome the introduction of these regulations, which help to determine the financial penalties for those who do not comply with airspace modernisation directions. The Minister will recall that during the passage of the Act, these Benches supported the aims of airspace modernisation; we therefore support these regulations, which assist that process. The aviation industry is critical to the UK economy, and it is in everyone’s interests that we redesign UK flight paths to deliver quicker, quieter and cleaner journeys. On this, can the Minister update the Committee more generally on the process of airspace modernisation and the timetable that is currently being worked towards?

On the specific legislation before the Committee, can the Minister explain why this formula for calculating turnover was not included in the original Act? Can she also confirm how the department determined this formula? The instrument has the support of the Opposition, but I would be grateful if the Minister could provide answers to these questions. I would be quite content to receive a letter in response. On my noble friend Lord Berkeley’s issues, I would be grateful to be copied in if there is to be a meeting or correspondence.

That was a surprisingly short speech by the noble Lord, Lord Tunnicliffe, for which I am grateful. I hear his comments about wanting to be included in correspondence on any meetings with the noble Lord, Lord Berkeley, about EGNOS. I also note the comments by the noble Baroness, Lady Randerson, on being included in that.

The noble Lord has raised a very important point and I am therefore pleased to take that forward. As he said, the UK’s participation in the EGNOS programme ended on 25 June 2021 and, since that date, no UK airports other than the three Channel Islands airports have any arrival procedures in place linked to the EGNOS working agreements or should be preparing to use them. The Government continue to assess the impact on the aviation sector of the UK’s withdrawal from the EGNOS programme but have yet to determine whether there needs to be a UK-led EGNOS replacement.

I am very happy for a meeting to be arranged for the noble Lord and others. I will go one better than a meeting with me and ensure that it is with the Aviation Minister, so that he can hear the concerns directly. I will be happy to attend too but he will be more useful than me on the topic, I fear.

I turn to other issues raised by noble Lords in the consideration of the regulations before the Committee—and I am grateful for all contributions. A number were raised around the airspace modernisation programme as a whole. It feels like a little while since we have discussed airspace modernisation, and it is quite good to return to the topic. The Government remain committed to the airspace modernisation programme; we believe that, despite the Covid-19 pandemic and its impact on the aviation industry and air traffic levels, the need to modernise the UK’s airspace design remains clear.

I thank my noble friend Lord Naseby for his positive comments about aviation and the CAA. I agree with him: we want our aviation sector to bounce back, as it is a hugely beneficial sector for our country and our ability to reach out overseas. We are very much focused on taking the airspace modernisation programme forward. As noble Lords will have discussed with me before, it is a complex and long-term challenge, and one that is done in a very deliberate fashion. I think that the noble Baroness, Lady Randerson, called it “good but difficult”. It is exceedingly difficult and we need to go step by step. That is why the decision by the CAA to call for evidence on refreshing the strategy, which as I mentioned in my opening remarks is under way at the moment, is a good thing. We need to ensure that we are headed in the right direction, and engagement with the industry and the wider sector with an interest in this is very important.

I reassure noble Lords that this issue is not going to be swept under the carpet as too difficult, and something that, in the light of the Covid pandemic, we should just not do anyway, because we are very focused on taking it forward. To that extent, we have had conversations with the Treasury and in March 2021 the DfT and HMT agreed a Covid-19-related funding support package of £5.5 million for the FASI programme, to allow the programme to restart. FASI, as I think noble Lords will recall—in fact, I cannot remember what it stands for, and I shall write. But the point is that we wanted it to restart, because a number of the airports and airspace change sponsors were asking what they could do—so we have £5.5 million to make sure that it goes ahead. That means that we can progress that important project. Funds were made available to support the ACPs in the programme, which will assist airports to reach the end of stage 2 of the CAA’s CAP 1616 process—that is, the develop and assess gateway—by the end of 2022.

We continue to engage with the Treasury on a funding request for 2022-23 to allow sponsors to complete stage 2 of the process, and hope to make a decision on that very shortly. We understand that, for some in the aviation sector, finding funding for this may be a challenge—and I thank my officials for telling me that FASI stands for future airspace strategy implementation. Finding funding for this, particularly for smaller airports, is very difficult, and the CAA will work closely with sponsors to make sure that they are able to progress as appropriate. The CAA’s airspace modernisation oversight team is always there to help sponsors work together, to work through problems—because anything that is alluded to in the regulations today about fining people millions of pounds is an absolute last resort.