Justine Greening

The Airport Expansion & Aviation and Maritime Analysis Directorate is responsible for the policies set out in the Airports National Policy Statement (NPS) which was designated on 26 June 2018. The Directorate will lead further work with Heathrow Airport Limited on their plans to deliver the Northwest Runway at Heathrow in accordance with the NPS. However, It will not be involved in decisions on any future applications for development consent, which will be handled by a separate team elsewhere in the Department to ensure propriety.

The Directorate also includes an expert multi-disciplinary analytical division which undertakes modelling and economic and statistical analysis for the Department on aviation and maritime issues. The Aviation Directorate has responsibility for aviation policy more generally, including (for example) airspace modernisation and the proposed Aviation Strategy. Both directorates have regard to where the work of one may affects the other.

The Secretary of State has set out a clear ambition that about 15% of slots made available from a new runway should be used for domestic routes.

The Department’s modelling, which informed the economic case for the proposed Airports National Policy Statement, is primarily intended to inform long-term strategic decision-making. It does not account for specific airport business plans or potential interventions such as Public Service Obligations (PSOs) to protect and enhance domestic connectivity. This is also clearly set out in the Appraisal Report.

Under expansion, this modelling shows an initial increase of domestic flights followed by a steady decline as routes are squeezed out by the same market forces that are squeezing out marginal routes and flights today.

This is why the Government has committed to use this once-in-a-generation opportunity to protect slots for domestic routes at Heathrow. The Government will consider domestic connectivity and how PSOs can be used as part of the Green Paper on the Aviation Strategy which is due to be published towards the end of this year.

The Government welcomes Heathrow Airport Limited’s (HAL’s) pledge to introduce a £10 million Route Development Fund. HAL’s commitment to this fund will provide start-up support for airlines seeking to introduce new domestic routes from an expanded Heathrow Airport. Importantly, this fund will be entirely privately funded with no contribution from the taxpayer.

Government does not have any legal agreements in place with Heathrow on the fund. The proposed Airports National Policy Statement requires HAL to work constructively with its airline customers to protect and strengthen existing routes and it sets a clear expectation that expansion should deliver at least six new routes. This will be assessed as part of any Development Consent Order application.

The Government believes that the Heathrow Northwest Runway scheme can and must be delivered without affecting the UK’s compliance with its air quality obligations, given the measures set out in the Government’s Air Quality Plan. The Government’s view has been informed by its air quality analysis of the Northwest Runway scheme, which was published in October 2017. This does not take into account scheme specific mitigations that any applicant could take forward to address its air quality impact.

The proposed Airports National Policy Statement requires the applicant to consider an extensive range of air quality mitigation measures, potentially including an emissions-based access charge. Development consent will only be granted if the Secretary of State is satisfied that, with mitigations, the scheme will be compliant with legal obligations on air quality.

The Department for Transport has no specific legal agreements in place with Heathrow Airport Ltd (HAL) and its holding company on air pollution in and around Heathrow Airport.

In respect of surface access the Department has a number of legal agreements with HAL relating to Crossrail, HS2 and Heathrow Express:

• A 2015 Contribution Agreement between the Secretary of State and HAL relating to a contribution from Heathrow towards the cost of the Crossrail Project;

• A 2018 Overarching Agreement with HAL and the Heathrow Express Operating Company Ltd (HEOC) about the future of express rail services to Heathrow Airport;

• A 2006 Interface Agreement between the Secretary of State, BAA Ltd (BAA), HAL and the HEOC in relation to the interface between the Crossrail works and the Heathrow Express railway;

• A 2008 Compensation Agreement between the Secretary of State, the HEOC and HAL and BAA and a Deed of Waiver and Agreement between the Secretary of State, Network Rail Infrastructure Limited, HAL and the HEOC in relation to the impacts of works and operations for the purposes of or in connection with the Crossrail works;

• A 2016 Compensation Agreement between the Secretary of State, HEOC and HAL and a Deed of Waiver and Agreement between the Secretary of State, Network Rail Infrastructure Limited, HAL and the HEOC in relation to the impacts of works and operations for the purposes of or in connection with the HS2 works.

The Government has published a number of reports which have assessed the effect of the Heathrow Northwest Runway Scheme on compliance with air quality limits. Its latest air quality analysis for the scheme was published in October 2017 and demonstrates that, given the measures set out in the latest Air Quality Plan, the scheme would not affect the UK’s compliance with air quality limits. This analysis does not take into account scheme-specific mitigations that any applicant could take forward to address its air quality impact.

The proposed Airports National Policy Statement (NPS) is clear that development consent will only be granted if the Secretary of State is satisfied that, with mitigation, the scheme will be compliant with legal obligations on air quality.

Detailed conditions associated with the construction and operation of the Heathrow Northwest Runway Scheme, including the details of any enforcement or monitoring regime on air quality, would be determined through the planning process, in consultation with local communities and relevant stakeholders.

The case for the Heathrow Northwest Runway scheme does not rely on the monetised benefits accruing to international transfer (I-to-I) passengers. In the Government’s reports, benefits are clearly separated into those accruing to UK, non-UK and I-to-I passengers for all three schemes. This shows that the Northwest Runway scheme delivers greater benefits to UK residents soonest – it is not overtaken until the 2060s – and it does so without including the full economic benefits expected from this scheme. By maintaining the UK’s hub status through attracting I-to-Is, the Northwest Runway scheme delivers the best outcome for the UK’s connectivity, which in turn should deliver the biggest boost for the UK’s economy by facilitating more freight, trade and productivity growth.

In producing its analysis the Government has followed appraisal guidance wherever appropriate in line with standard advice that the guidance should be used proportionately and not prescriptively. While the Government recognises the aim to separate impacts according to whether they accrue to UK or to non-UK residents, this is not always possible. In the case of aviation, it is particularly difficult to disaggregate costs by residency. The Government’s assessment therefore presents all effects to all actors, regardless of residency, to allow a consistent comparison between costs and benefits. The amendment to the Department’s appraisal guidance provides further clarity on how to deal with this issue and is consistent with the Government’s analysis to date.

Slots at Heathrow are currently allocated by the independent slot coordinator Airport Coordination Limited (ACL) in accordance with the EU slot regulations. Government will take action, where appropriate, to secure routes through the use of Public Service Obligations. This includes the ring-fencing of appropriately timed slots.

The Government has no legally contracted agreements in place with Heathrow Airport Limited to enable the ring-fencing of slots but the proposed Airports National Policy Statement sets out an expectation that expansion at Heathrow will deliver an additional six domestic routes and this will be examined as part of any Development Consent Order application. The Secretary of State also has a clear ambition for about 15 per cent of slots made available from a new runway to be used for domestic routes.

Between 2015 and 2017 a) 18 domestic passenger routes and b) 51 international passenger routes have ceased operating at regional airports. These figures are based on scheduled flights departing from regional airports that operate at least weekly. With regard to domestic passenger routes, in the same period 18 routes have been created.

The proposed Airports National Policy Statement sets out an expectation that expansion at Heathrow will deliver an additional six domestic routes. Separately, the Secretary of State has set out a clear ambition that about 15% of slots made available from a new runway will be used for domestic routes.

Ministers and officials have met regularly with Heathrow Airport Limited (HAL) since June 2017 to discuss a wide range of issues relating to the operation of the UK’s largest airport, as well as the potential delivery of its proposed expansion. These meetings are governed by propriety arrangements set out in the Statement of Approach, which is published online:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/653867/engaging-with-stakeholders-statement-of-approach-revised-draft-airports-nps.pdf

The minutes of such meetings include material relating to HAL’s private business operations. The release of this information would be likely to prejudice their commercial interests. Given that the amount of information in question is substantial, redacting and preparing the records for release would have a disproportionate cost.

EU Regulation 1008/2008 sets out that Public Service Obligations (PSOs) can be considered on an airport to airport basis. Where an existing route is already operating to that destination city, a PSO can still be considered, provided the criteria set out in the Regulation are met.

There are currently no legal agreements in place between the Department for Transport and Heathrow Airport Limited to guarantee existing routes between London Heathrow and regional airports.

However, the Secretary of State has a clear ambition for around 15 per cent of slots made available from a new runway to be used for domestic routes. We expect that the majority of these routes will be commercially viable with support from Heathrow Airport Limited.

The Government will also take action, where appropriate, to secure routes through the use of Public Service Obligations (PSOs). This will include ring fencing appropriately timed slots. Further detail on the Government’s targets and commitments on domestic connectivity will be detailed in a Green Paper on the Aviation Strategy which will be published towards the end of 2018.

As would be the case for any major Government policy, the proposed Airports National Policy Statement, including the content on air quality, has been subject to a number of legal reviews.

Ministers and officials have met regularly with Heathrow Airport Limited (HAL) since 2015 to discuss a wide range of issues relating to the operation of the UK’s largest airport, as well as the potential delivery of its expansion. These meetings are governed by propriety arrangements set out in the Statement of Approach, which is published online:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/653867/engaging-with-stakeholders-statement-of-approach-revised-draft-airports-nps.pdf.

As per the Statement of Approach, Ministers and officials have not discussed the merits of the content of the Airports National Policy Statement with Heathrow Airport Limited.

The Airports National Policy Statement is clear that the Government requires Heathrow Airport Limited to work with its airlines to protect existing routes and deliver at least six new connections. This will be examined as part of any Development Consent Order application.

In parallel, the Government will also take action, where appropriate, to secure routes through the use of Public Service Obligations. This will include the ring-fencing of appropriately timed slots. The Government’s commitments on domestic connectivity will be detailed in a Green Paper on the Aviation Strategy which is due to be published towards the end of this year.

The reason for making this amendment to the proposed Airports National Policy Statement (NPS) is to ensure Chapter 3 of the document, which sets out why the Government has stated its preference for the Heathrow Northwest Runway scheme, is consistent with Chapter 5, which focuses on the potential effects of the scheme, including noise.

The Government has always been clear that should the proposed Airports NPS be designated, consideration of any ban, including timings, would be subject to the International Civil Aviation Organisation’s Balanced Approach to noise management, including consultation with local communities and relevant stakeholders.

The Government would anticipate there to be runway alternation at night. This means that some communities would experience additional periods of noise relief between 23:00 and 07:00, potentially up to eight hours including any ban, subject to consultation with local communities and relevant stakeholders.

The proposed Airports National Policy Statement sets out an expectation that expansion at Heathrow will deliver an additional six domestic routes. Separately, the Secretary of State has set out a clear ambition that about 15% of slots made available from a new runway will be used for domestic routes. The Department expects that the majority of these routes will be commercially viable, as many are today, with support from Heathrow Airport. This support includes discounted charges for domestic passengers, and a £10 million Route Connectivity Fund.

The Government will also take action, where appropriate, to secure routes through the use of Public Service Obligations (PSOs). PSOs provide the opportunity to offer exclusive rights to airlines to operate a route. Where this does not deliver the required level of connectivity, the Government may also offer subsidies to an airline to operate the route, which includes exemption from Air Passenger Duty.

The Government’s approach to domestic connectivity will be set out in a Green Paper on the Aviation Strategy towards the end of this year, and the extent to which subsidies will be required can only be determined subject to market conditions nearer to the time of new capacity becoming operational.

Cornwall County Council are currently running an Invitation to Tender for the Newquay to London Public Service Obligation air service to operate from 28^th October 2018. The Department will consider Cornwall Council’s preferred bid and any request for funding in due course.

The three routes currently under Public Service Obligations (PSOs), were originally flagged using voluntary early warning system. These comprise the Londonderry to London Stansted airport, operated by BMI Regional from May 2017, Dundee to London Stansted airport, operated by Logan Air from June 2014, and Newquay to London Gatwick airport, operated by Flybe from October 2014. No other route has been flagged under the voluntary early warning system.

Ministers have not had any discussions with British Airways on this matter. Whilst officials have discussed this matter with Leeds Bradford airport and British Airways, routes are a commercial agreement between the airport and the airline.

It is for the relevant regional body to make the case for a PSO to the Department, against the criteria set out in the Government’s guidance on protecting regional air access to London, in relation to 1008/2008. The Department has not received representations to this effect.

Of the 11 routes to be supported through the Regional Air Connectivity Fund announced on 2 December 2015, services are still in operation on two routes and continue to receive financial support. These are routes between Newquay and Leeds-Bradford airports and between Norwich and Exeter airports. The Newquay / Leeds Bradford service now operates at a frequency of 4 daily returns per week compared to an original plan of 5 daily returns per week in the summer and 3 daily returns per week in the winter. The Norwich / Exeter service now operates at a frequency of 4 daily returns per week compared to an original plan of 7 daily returns per week in the summer and 4 daily returns per week in the winter.

Funding paid or allocated through the Regional Air Connectivity Fund for each financial year from 2013-14 to 2021-22 is shown in the attached table.

Officials will be having initial discussions with Dundee City Council and Transport Scotland before the end of June 2018, in which they will discuss the options available for after the current contract for this route ends in July 2019.

Article 16(9) of Regulation 1008/2008 states that a member state may limit access to a route to one air carrier for a period of up to 4 years, before it must be reviewed. This can be extended to up to 5 years if the route serves an outermost region.

The Department has made no estimate of the pages of new information published.

On 5 June, the Secretary of State laid in Parliament the Airports National Policy Statement (NPS). As required under the Planning Act 2008, this was accompanied by an Appraisal of Sustainability and the Government response to the Transport Committee scrutiny of the draft NPS. The Government has also published “The proposed expansion of Heathrow: a summary” and a non-technical summary of the Appraisal of Sustainability to provide an overview of these documents.

To assist readers, the Government has published change logs of amendments made to the NPS and the Appraisal of Sustainability since published for further consultation on 24 October. In addition we have published: a Habitats Regulations Assessment, an Equality Assessment, and a Health Impact Analysis, each accompanied by change logs listing amendments made since consultation; a report from the Independent consultation advisor on the October consultation; a summary of the responses to the October consultation; the Government’s response to the two public consultations; nine regional fact sheets; the key findings of an external report on Heathrow Airport Limited’s (HAL) delivery plans; an external review of proposed the capacities of HAL's north-west runway and Heathrow Hub Limited’s extended northern runway; and a new Addendum to the “Updated Appraisal Report: Airport Capacity in the South-East”.

The government has not made an estimate. However, Table E1 of Ricardo-AEA Ltd’s report “Heathrow Airport 2013 Air Quality Assessment” commissioned by Heathrow Airport shows that emission rates of nitrogen oxides from airport and non-airport sources declined over the period 2008/9 to 2013. The report is available at http://www.heathrowairwatch.org.uk/reports

The Transport Minister for Aviation met with local authorities from the Heathrow area on 1st November 2016. This was to discuss the process of publicising the proposed Airport National Policy Statement. The Lakeside Energy from Waste plant was raised and the local authorities in attendance were advised we would welcome views as part of any future consultation. No Ministerial meetings have been held between Ministers and local authorities to discuss the potential relocation of Lakeside Energy from Waste facility.

On the 17th February 2017 officials from the Department met with representatives of Lakeside Energy from Waste facility at their request, together with other interested commercial stakeholders to give an overview of the National Policy Statement process.

Discussions relating to expansion have taken place in observance of the principles set out in the government’s published Statement of Approach which prevents the Department from entertaining private representations about the content of draft / revised draft Airports NPS(s) while policy is under development.

https://www.gov.uk/government/publications/statement-of-approach-for-the-revised-draft-airports-national-policy-statement

The revised draft Airports National Policy Statement is clear that any potential scheme at Heathrow must comply with the UK’s civil aviation safety regime, regulated by the Civil Aviation Authority (CAA). A detailed safety assessment will be required as part of the CAA’s airspace change process. This assessment includes the air traffic safety risks associated with the proposed airspace design and whether the level of air traffic control resource and infrastructure is appropriate to support the change safely.

The Airports Commission did however consider safety as part of their analysis. They asked the Health and Safety Laboratory to conduct analysis of the scale of increase in crash risk associated with the three shortlisted schemes. The Health and Safety Laboratory’s report can be found here:

www.gov.uk/government/publications/airports-commission-final-report-operational-efficiency

The Department has made no specific assessment of the number of people living within 10 km of the airport. However, the Department has carried out and published an Appraisal of Sustainability to support the development of the draft Airports National Policy Statement. This assesses the baseline population affected by Heathrow airport in different ways and with respect to a number of different impacts.

As would be the case for any major Government policy, the proposed Airports National Policy Statement, including the content on air quality, has been subject to a number of legal reviews.