Civil Aviation (Consumer Protection and Regulatory Reform) Bill [HL]

Baroness Foster of Oxton Excerpts

Committee stage
Thursday 18th June 2026 Grand Committee

[Baroness Foster of Oxton (Con)]

My Lords, I should like to make a couple of observations on the amendments tabled by colleagues. First, it is clear that slots are a very complex and sophisticated trading system, the value of which, as my noble friend Lord Empey mentioned, will certainly be like the value of a company. I go back to the comment about European Union regulation. I was involved in the initial European Union regulation more than 20 years ago, and the revision about 10 years later. I can say with great certainty that even the European Commission did not have any involvement in the designation of slot use. That was completely a no-no, and that was absolutely right.

This brings me then to the possible role of the Secretary of State. Slot allocation is a neutral, independent activity, handled by the slot co-ordinator without due influence of government, airlines and airports, and long may that remain—if it ain’t broke, we do not need to fix it. My view is that Secretary of State should not be at liberty to decide on slot allocation outcomes, whether temporary, during periods of crisis, or during normal times. There is no evidence that our slot co-ordinators, certainly in the United Kingdom, have ever been unduly influenced and made the wrong decisions, so I think we should continue to have that confidence in their role. It is recognised both Europe-wide and more internationally, because Heathrow as a hub is an extremely important airport.

I would like to touch on a comment from the noble Lord, Lord Holmes. His amendment talks about the environment and a possible link to an environmental allocation. I do not believe that is the right way forward at all. It is the wrong tool to ensure the sector’s sustainability targets can be met. In any event, the actual co-ordinators can already choose an air carrier due to their environmental credentials. However, this is not and should not be their primary decision.

I finally reflect on what we complied with in the United Kingdom, and still do, even though we are not members of the European Union. Regulation 598/2014 introduced noise-related operating restrictions at EU airports, which broadened that out to environment as well. It was called the balanced approach and repealed a directive from some years before.

--- Later in debate ---

[Earl Russell (LD)]

My Lord, I shall speak to Amendment 114, standing in the name of the noble Baroness, Lady Bennett of Manor Castle. She is unable to attend the Committee today. I will speak to both her amendments, this one and one in a later group. I am mindful of what the Companion says on these matters, so, just to be clear, these are my words and not hers.

This amendment seeks to insert a new clause imposing a climate duty on the Civil Aviation Authority and the Secretary of State. It would require the CAA, when exercising its functions under the Bill, to have regard to the target established by Section 1 of the Climate Change Act 2008, the carbon budgets established under the Act and the need to reduce greenhouse gas emissions from civil aviation. It would also require the Secretary of State to have regard to emissions reductions when exercising powers under the Bill, to refrain from using those powers for the purposes of airport capacity expansion and to use them in pursuit of a strategy aimed at reducing airport capacity.

The case for the amendment is reasonably straightforward. Aviation is one of the hardest sectors to decarbonise, but difficulty is not an argument for inaction. It is precisely because aviation is hard to abate that we need clear legislative direction now rather than later. Without it, the CAA risks operating in a policy vacuum, exercising its functions under this Bill, particularly new functions, with no statutory obligation to consider our national carbon budgets or our commitments under the Climate Change Act, specifically in relation to new powers. I argue that that is not a sustainable position; it warrants examination and perhaps further clarity. The duty the amendment would impose is well known and deliberately light-touch. To “have regard to” is not a command. It would not stand in the way of other duties that the CEA continues to have in carrying out its functions. It would simply require that, when those functions are exercised, it has one eye on the statutory climate framework that Parliament has already enacted.

It would be curious indeed if the Bill to modernise our regulatory aviation framework contained no reference whatever to our climate obligations. I should be transparent with the Committee that my Amendment 107 in a later group pursues similar goals in perhaps a slightly different way. I guess my motivations are similar to those of the noble Baroness, Lady Bennett.

The CAA, particularly with its new powers, must be benchmarked against our national climate commitments. This and my future amendment both call for some form of reporting on that process. An annual account of the environmental efforts of the CAA’s functions and of its compliance with the climate duty is essential for meaningful future parliamentary scrutiny. Aviation’s contributions to emissions cannot be indefinitely treated as an afterthought in legislation. I hope the Minister recognises the constructive spirit in which the noble Baroness’s amendment is advanced, and I look forward to the Government’s response.

I turn briefly to Amendment 110, in the name of the noble Lord, Lord Harper. I thank him for his half-support, or support for one of our amendments, which is gratefully received. We on these Benches are supportive of his amendment: it is sensible and modest in its proposition. He asked some interesting questions of the Minister on the revisions to the Airports National Policy Statement that have literally just come out, and I would be interested in hearing the answers. We could have completely opposing views on whether we need Heathrow expansion but both accept this amendment. The point is not whether we support expansion but how it is reported and properly assessed. There needs to be a proper framework for doing that, so we are supportive of that.

[Baroness Foster of Oxton (Con)]

My Lords, I will comment briefly on the subject in general. I have long been an advocate for airport expansion, particularly at Heathrow. On that note, I support the Government taking this brave step. Having lived in south-west London and under the odd flight path from time to time, I recognise that there was an airport there long before me and before most people who live in the area. It was unfortunately most regrettable—I now intend to be quite party political—that the fortunes of the Liberal Democrats relied on objecting to every element of expansion at Heathrow, whether for new terminals or runways. Most people would agree that we should have had a third runway more than 30 years ago, when the cost would have been substantially less.

My final point is that, while I fully support the Government pushing ahead with expansion and a third runway, the decision on this particular project, at a cost of £49 billion, with disruption to areas around the M25 and elsewhere, is completely wrong. I see it ending up like some of the other massive infrastructure projects that we have had in rail. I do not believe this is the best way forward. There should be a rethink. Other projects would be less disruptive but have not been fully considered. As a general point, I fully support the Government’s ideals to expand but think that the initial decision is wrong at this time.

[Lord Moylan (Con)]

My Lords, I note the publication, while the Committee has been sitting, of the revisions to the Airports National Policy Statement. Obviously, I have not read it, and I do not imagine that other Members have, apart from the Minister and his close associates.

It is worth saying that that this publication does not take us forward; it takes us back to 2018, when the Airports National Policy Statement was published. It was then taken through the courts. There were some ridiculous objections to it, but it got through the High Court. It fell on one particular objection only at the Court of Appeal, which turned, as I recall, on the question of the definition of the word “policy”—this is how great infrastructure projects proceed in this country. It eventually went to the Supreme Court, which took a different view on the definition of “policy” and finally approved the ANPS. By that stage, of course, it was totally out of date and Covid had intervened, so the work had to be started again by the department. The fruits of that work are what have been published today. As I say, I am not in a position to comment on it. We are back to where we were in 2018 and have made no progress in that period. We will see whether this new ANPS survives the sort of process that the previous one was subjected to and whether we will need a third ANPS a few years down the road.

In relation to these amendments, I unfortunately find myself not entirely able to agree with my Liberal Democrat colleagues on the two in the name of the noble Baroness, Lady Grender. It is not because of the intention, because that is of course important—there should be consultation, an environmental impact assessment and a noise impact assessment if Heathrow is to be expanded—but because I think those things will happen anyway without this amendment. Nor can I honestly say that I support Amendment 105. One cannot create powers for the Government in specific areas of aviation and then say that they cannot be used for one particular purpose within the field of aviation. That makes no sense so, sadly, I am slightly out of sympathy on those two.

I understand the comments about the amendment proposed by the noble Baroness, Lady Bennett of Manor Castle, but, sadly, this time, I do not feel I can pursue that either. There are other amendments relating to the environment later on, not least one in the name of my noble friend Lord Harper, which raise some interesting questions.

I find myself very much in support of the amendment tabled by my noble friend Lord Harper. I sympathise with his remarks about the financial consequences and financial circumstances relating to Heathrow expansion. Perhaps I can give a few figures that will help the Committee put this in some context, and then put a couple of questions to the Minister.

Heathrow is a private company and it is very difficult to know its market valuation, because its shares trade so rarely. There was a trade 13 or 14 years ago, which valued the company at approximately £14 billion. That was roughly the same as the value of the airport’s regulated asset base at the time. There was then a trade approximately two years ago—there was quite a reorganisation of shareholders approximately two years ago—and I understand that the valuation implicit in those trades was that the airport was now worth only £10 billion, roughly. Its value had fallen over that period. Meanwhile, its regulated asset base has gone up to in excess of £20 billion, so the shareholders bought a regulated asset base for half its price.

Of the capital structure of the company, there is a large amount of debt—in fact, more debt than there was some years ago. The amount of equity belonging to the shareholders in the company is therefore probably no more than £2 billion—let us say £3 billion to be generous. Now we hear of a company with £3 billion of shareholder commitment that wishes to embark upon a project costing, conservatively, £49 billion at current estimated prices. This is vaunting ambition at the very least. If it were purely a private company, it would be completely unfinanceable without a huge new infusion of shareholder capital, because no bank will lend £49 billion to a company that has only £3 billion of equity and already has several billion pounds of debt on top of that. It is simply an unfinanceable project.