(2 years, 10 months ago)
Grand CommitteeThat 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.
The draft instrument enables the CAA to enforce directions effectively, when imposing a penalty, by setting out how a person’s turnover is to be calculated. The amount of penalty must in all cases be appropriate and proportionate. These regulations have been drafted to take account of the diverse nature of persons involved in airspace change. Maintaining an appropriate level of penalty for all organisations will deter non-compliance and support ACPs to take place in a co-ordinated manner, which will contribute to a more effective airspace modernisation programme. It will also ensure that, where penalties are imposed, they are both transparent and proportionate.
The department consulted on the enforcement powers within ATMUA in 2018. Respondents, including airlines and airports, were broadly supportive, provided that application is proportionate and used as a last resort. The CAA would, of course, have regard to the requirement of proportionality in using the power to fine, in accordance with its statutory duties and the better regulation agenda.
A person’s turnover is determined with reference to the sum of all amounts received in the course of their business, as shown in their published accounts. If the person has not published accounts, the accounts prepared by that person will be used. Turnover includes loans from public or local authorities, but it excludes capital receipts and loans made by a third party. The annual turnover considered is for the most recent business year, ending on or before the last day of the period specified in the enforcement order for complying with the requirement, the contravention of which is subject to the penalty. Only one year of turnover is used in the calculation.
The use of this 12-month period is in line with the Civil Aviation Act 2012 and Part II of the Transport Act 2000, which both specify calculations based on the “last regulatory year”. We are using the same period here to ensure consistency of regulation across the aviation and wider sectors. Amounts are to be calculated according to generally accepted accounting principles and practices in the UK. Provision is also made for situations where a person does not have 12 months of accounts. The turnover period to be used in determining the level of penalty is decided according to the compliance date for the relevant requirement in the enforcement order.
This instrument is being made so that the Government can ensure effective and proportionate enforcement by the CAA against airspace change sponsors who put the delivery of the airspace modernisation programme at risk. I commend these regulations to the Committee, and I beg to move.
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.
I have had discussions with the noble Baroness, Lady Foster, who played a major part in setting up the Galileo satellite system when she was in the European Parliament. She is very surprised about this decision, which I do not think she knew about. There has been very little comment about it. In April, the noble Lord, Lord Davies of Gower, put down a Written Question, which did not really get much of an answer from Ministers, but they did say that they agreed to cancel EGNOS because
“it was not considered value for money.”
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.
The crucial point of difficulty in the airspace modernisation process is the consultation with residents. The Explanatory Memorandum indicates that this is planned to start in 2022. I would be pleased if the Minister could explain that to us in a little more detail. What proportion of the consultation with the public will take place in 2022? Will just a few pioneer airports do it, or will most of the public consultation take place then?
It will take time for competition to shift, change and adapt to the new patterns. Therefore, I ask the Minister whether it is wise to go ahead to the point where, in extremis, we start fining airports for lack of co-operation when the whole new pattern of competition is still settling down. The aviation industry has had a very tough time. Airports have suffered badly and had relatively little alleviation from the Government. Therefore, anything that adds a burden by fining them for a lack of co-operation could be the last straw for some of them.
I am, of course, attracted to the idea of penalties for non-co-operation being based on the resources and size of the company concerned, but will this take account of the different treatment of airports in the last couple of years? Aviation has not benefited from total alleviation of business rates in England but it has in other parts of the UK, so there has been a patchwork in the way airports have been treated.
Once again, we are in a situation where the CAA is being given additional powers. The Minister used the phrase “in extremis”. What discretion will the CAA have when taking into account the financial difficulties of an airport as a result of airspace modernisation and the implications for its future business?
The EM says that 71 or 72 organisations are affected, yet there is little assessment of the financial impact of this measure. The process of modernising airspace and consulting the public is very expensive; the cost of familiarising yourself with the legislation is really marginal. I am therefore surprised that there is no full impact assessment. I ask the Minister whether perhaps that should be reconsidered. The whole process could, or will, have a significant impact on some individual airports, because modernisation will disadvantage them. That surely needs to be taken into account at this point in time, which is very difficult for those in the aviation industry.
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.
Before the noble Baroness sits down, will she clarify further how much progress the Government expect to be made this year on the public consultation? I ask that because I am very aware that there is pressure on airports and the services that they run at this time, and to expect them to be doing public consultation effectively and efficiently at the same time might be rather too complex.
I am grateful to the noble Baroness. I deliberately swerved that question, yet did not advise her of the fact that I was doing so, because I do not have the answer—it was also raised by my noble friend Lord Naseby—but I will respond precisely on that matter. How the public will be involved, which ACPs are going forward and where, and all those sorts of things, I will put in a letter. I beg to move.