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

Lord Lancaster of Kimbolton Excerpts

Thursday 13th January 2022 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)]

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.

[Lord Lancaster of Kimbolton (Con)]

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?

[Lord Naseby (Con)]

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.