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

Lord Harper Excerpts

Committee stage
Thursday 18th June 2026 Grand Committee

[Viscount Goschen (Con)]

My Lords, I start by repeating my interest, which I declared on Tuesday, as a current pilot, aircraft owner and operator. On Tuesday, we had a good debate around general aviation, when my noble friend Lord Kirkhope and others took pains to explain the benefits not only to the economy, through the contribution that GA makes, but the broader aviation ecosystem, as it were, particularly in pilot training. Anything that is done to reduce opportunities for pilot training in the UK will have an easy to define effect, which will be the export of pilot training to Europe, where some countries have a different regime and much better weather, the United States and elsewhere. We have to regulate and legislate carefully; the law of unintended consequences is very active in this field.

Access to airspace is critical to the operation of general aviation. I refer to and support my noble friend Lord Kirkhope’s Amendment 65 in both of the thrusts that it seeks to take forward. First, it would protect the importance of GA when it comes to decisions being made around airspace design. It would be easy for the interests of general aviation to be minimised or not taken fully into account, and once decisions are taken it is very difficult for them to be reversed. Yes, much of the country is open, class G airspace, but there are real pinch points and that situation is likely to become exacerbated, rather than made any easier. One example would be around the area of Farnborough, which is close to the London airspace around Heathrow and so forth. I therefore plead for the interests of GA to be considered properly in the design, or redesign, of airspace.

Like my noble friend Lord Kirkhope, I recognise the technological advantages of change that is coming so rapidly. It is difficult for us now to be able to consider what life is going to be like in five years’ time. We support all the advantages that can come from that, including the safety advantages. When I was training as a pilot, one of the biggest concerns was getting lost. It took up quite a lot of my time thinking where one was, particularly in less than perfect weather. Nowadays, with GPS systems, you know precisely where you are at all times. That has taken away one of the excuses, but the safety benefits are extraordinary, and they will continue to come, as the noble Lord, Lord Tunnicliffe, said. I flew an aircraft with a big orange button on the front. If you pushed the button, the aircraft could land itself should the pilot become incapacitated. It was way beyond my knowledge and expertise, and I would not be allowed anywhere near such a machine now. The point is that that technology exists today.

The reasonable points that my noble friend made around charges were not special pleading in any sense. He is saying that the charging regime has to be proportionate; it really is as simple as that. There have been issues in the past. I took pains in my remarks on Tuesday to pay tribute to the CAA, but sometimes the cost, for example, in giving approval to small general aviation airfields that are regulated as full airfields can be disproportionate. It is a system that would suit a much bigger airfield and the result is that the airfield in question is no longer regulated, because it is much easier to move to a deregulated situation. However, that has implications for training and what can be done in such a field. What we are saying is this: be cautious and careful, and take into account the advice and interests of what really is the grass roots of aviation, which has been a major part of our success as a nation in the broader aviation industry.

Amendment 62, from the noble Lord, Lord Tunnicliffe, is on the importance of hearing the professional pilot’s voice. I would be very surprised if any consultation did not take into account the views of those who know what they are talking about on large-scale commercial aviation. Exactly how that should be done and the mechanism for it I will leave to others to decide and opine on, but the noble Lord gave a powerful voice to BALPA, as we heard on Tuesday.

In recollecting the discussions around BALPA, I remember our late and much missed colleague Lord Clinton-Davis, who was a powerful advocate for BALPA. I spent many happy hours at the Dispatch Box with him as opposition spokesman in this field, and indeed he was earlier a Minister.

This has been a balanced debate and we very much look forward to the Minister’s response.

[Lord Harper (Con)]

My Lords, I repeat my declaration of interest that I made on Tuesday as the non-exec chair of RVL Aviation.

I will say a word or two about the amendment from the noble Lord, Lord Grayling, and strongly support what he and the noble Baroness, Lady Bray, said. I wanted to ask the Minister to flesh out a bit the answer to the question that I asked at Second Reading. There are already consultation processes, as the noble Baroness, Lady Bray, mentioned. There is no specific one for the exercise of the direction power. I am keen that, if there are extra processes, they fit well together; we do not want one set of consultations at one stage and then, if the Minister decides to do some direction, another set. When the Minister responds and, I suspect, urges the noble Lord, Lord Grayling, not to press his amendment, I would welcome a clear exposition of how the current position works, how it would dovetail with any use of the power of direction that Ministers are taking in Clause 4, how they would expect to use it and how that would fit with the existing consultation mechanism. I am keen that we do not invent another consultation mechanism.

If that power of direction is taken and is used—although the Explanatory Notes say that they do not expect the Government to use it very much, as it is a backstop power—it is almost certainly going to be used in difficult or controversial circumstances, because it would not be needed otherwise. That is the position set out in the Explanatory Notes. It would be helpful to understand how that end-to-end process works. It may be that the Minister should come forward with an amendment on Report that sets out how the power would be used and consulted on, or at least how it will dovetail with existing consultation mechanisms. I am not clear about how that would currently work.

Finally, I back up the remarks made by the noble Lord, Lord Kirkhope, and the noble Viscount, Lord Goschen, about the charging mechanism. I want to set out some of the views from the International Air Transport Association. IATA strongly supports, as I do, and welcomes the Government’s intention to do airspace modernisation but has concerns about the charging regime. It thinks that the drafting is too broad and ambiguous, and risks undermining the international charging principles that exist.

IATA is also concerned—a concern shared by the noble Lords, Lord Kirkhope and Lord Moylan—about replacing the words

“operators or owners of aircraft”

with the undefined “persons”. It thinks that that significantly expands the pool of liable entities and breaks the link with service provision. It understands the need for flexibility for future entrants but think there should be a narrower definition that encompasses those but is not as broad as the one that exists.

IATA is also concerned about revised Section 75(7), which allows charges to be levied on the basis that services are merely

“available for use or benefit”,

irrespective of the actual use. That represents a fundamental shift away from usage-based charging, which is the agreed international regime.

IATA has a number of concerns, not about the principle of what the Government are doing. It recognises that there will be new users and technologies, and the need to change how charging is done, but there are some accepted principles about the user paying for these things. As the noble Lord, Lord Kirkhope, and the noble Viscount, Lord Goschen, said, that should be done proportionately, but it is not sufficiently backed up by the broad wording in the Bill as currently set out.

It would be helpful if the Minister could say what the thinking was behind the drafting; whether the Government agree with IATA’s views about whether the Bill is in accordance with existing principles; and whether the Bill would be improved by a tighter definition that absolutely encompassed new technologies such as drones and other potential things in the future but was not so broad, and explicitly reintroduced the link between the usage of airspace and the charging, rather than simply the theoretical benefit. The Bill would be improved if those changes were made, and I look forward to the Minister setting out the Government’s thinking about how its wording was arrived at.

[Lord Empey (UUP)]

My Lords, there are some positive amendments in this group. Amendments 60 and 61 are trying to get to the same place. If there are new arrangements for the management of airspace, that is code for motorways in the sky. But it also means that if there are new routes or a material intensification of a route, it is only right and proper that local people are consulted about it, because it can have a significant material impact on their lives.

Where perhaps the noble Lord, Lord Grayling, has the essence of the matter is that he specified a time. We could argue about whether 28 days is right, but the fundamental principle that he is pointing out is that consultations can be endless and open-ended and never reach a decision. Something needs to be put in to tie it down, provided consultees have adequate notice and there is an understanding. It is a bit like neighbourhood notification and planning applications. There are specific groups of people who need to be approached about this: the people over whom these aircraft will be flying, and those affected by other intensification activities, whether traffic or whatever. The amendment of the noble Lord, Lord Grayling, gets to the essence of this. Whether we settle on a specific number of days is another matter, but the principle has to be established.

I agree with the principle of the amendment of the noble Lord, Lord Tunnicliffe, but I also accept that it would be inappropriate to specify a particular trade union, because they may change. There are pilots represented by other unions and some represented by none. That could change over time. If you specify the union in your legislation, that would be awkward. As the noble Lord said, we can find a form of words but the principle is the same. However technology may change, having air traffic controllers in the frame for that is common sense. These are the people who, day to day, have to do it. Also, as has been made clear, computer systems break down. We had a long debate on Tuesday over NATS and the breakdown there. The noble Lord is right. Pilots earn their money when the systems do not work, which is a regular occurrence.

By and large, there are some positive amendments in this group. However, I say to the noble Lord, Lord Tunnicliffe, that I would not specify a particular trade union. Other than that, I support these amendments. There are some positive ones.

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Finally in this group I have Amendment 102A. I am not part of this team, but I have been told that an airfield advisory team established some time ago with experts from all parts of the industry suddenly appears to have been cancelled or closed. I hope that my noble friend will say that, as part of the comprehensive consultation that we will have to have in the next few months, this airfield advisory team, with all the experts in the industry, will be re-established. I beg to move.

[Lord Harper (Con)]

My Lords, I support Amendment 102A, also supported by the noble Lord, Lord Davies of Gower, who is unfortunately not able to be with us today. He was here for day one in Committee, and he wanted me to place on record his support for this amendment.

As the noble Lord, Lord Berkeley, has set out, the airfield advisory team is something that existed and has recently been disbanded. It would be helpful for the Minister to confirm that that is indeed the case, give the reasons for disbanding it, and say whether, in the light of the amendment, he would reconsider that decision. My understanding is that it was a useful forum for the CAA and the Department for Transport to engage with airfield operators to discuss relevant issues, and for them to communicate with those operators, but, perhaps more importantly, for airfield operators to feed back their concerns and ask questions of the regulator and the department.

Unless there was a very good reason for getting rid of it, having those forums for users of the services provided seems a very good thing. My understanding is that the airfield operators would very much welcome that advisory team being re-established. I would be pleased to hear what the Minister has to say.

[Viscount Goschen (Con)]

My Lords, I support the noble Lord, Lord Berkeley, in this group of amendments.

We are fortunate to have air ambulance services operating in the United Kingdom. It is important to stress that these are typically not government-provided services; they are supported by charitable organisations and others. When one needs the service, one needs it very much indeed—that is probably the best way of putting it. The speed of response, particularly in rural Devon where I live—the air ambulance is based in a field that I am very familiar with—means that it is a tremendous service. It is able to get around the county swiftly and provide much needed services for people who have been involved in serious road or agricultural accidents, have been carried out to sea, or whatever.

I was concerned to hear, as the noble Lord stated, that the industry had concerns about the rules and regulations and procedures under which they operate, and felt they could be enhanced. From my own anecdotal experience of hearing from the air ambulance service, I know it is always given priority, formally and informally, by other users and by ATCs. I am concerned and surprised that there are such problems, and I look forward to the Minister responding. On whether those requirements should be written into the Bill, I am not going to fall into the trap, much criticised earlier in our proceedings, of doing the Minister’s job for him. We will let him do some heavy lifting on that.

Similarly, on Amendment 102A, I am not familiar with the precise detail but it is clearly important that the CAA takes fully into account all the voices and interests of those with a great deal of expertise in small airport operation. Again, whether that needs to be written into the Bill or not is something that we can consider later. If the noble Lord succeeds in achieving his objective of easier access to the Scilly Isles, no doubt he will be carried shoulder-high by his fellow islanders.

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I understand the complications, but the fundamental principle is fairly straightforward. The Minister may be in a position to tell me that the Secretary of State has the powers that he needs. If that is not the case, I will certainly wish to come back to this on Report because it is a fundamental issue and I think it is easily solved. I do not anticipate any need for any interventions at the moment or in the foreseeable future. The rotations are pretty good and they are obviously there because the airlines feel that they are making a profit. We are not talking about subsidies here. It is access, not subsidy, that is the issue.

[Lord Harper (Con)]

My Lords, I will primarily speak to my Amendment 73, which was suggested by IATA. I tabled it because I read it and thought it raised some important issues on which I want to test the Government’s thinking.

When I was Secretary of State, this process worked very smoothly and, as my noble friend Lord Grayling said, this is largely a commercial exercise. Slots have economic value. They are allocated independent of government and that usually works very well. There are circumstances, as the Minister set out at Second Reading, where there are challenges to how the system works because of outside circumstances. The Government then step in and make some changes which work in the interests of consumers and the industry.

It is also the case that the slot co-ordinator, Airport Coordination Limited, a private company, exercises a considerable amount of power and influence. At airports with a constrained supply of slots, that gives it significant economic power. At the moment, it does not have any regulatory oversight. It is effectively exercising what could be argued to be a quasi-regulatory function, but there is no formal oversight.

The amendment I have tabled is quite narrow but would bring the co-ordinator under the oversight of the CAA, which would give it the ability to scrutinise decisions and its governance. It would, importantly, preserve the independence of the UK slot co-ordinator, which is important and required by our international agreements. It would also introduce a proportionate independent mechanism to challenge decisions. At the moment, if anybody wants to challenge a decision, they have to go through a judicial review process, which is very costly, time-consuming and almost never happens. If you had CAA oversight, it would mean that either the airlines or the department could refer decisions to the CAA and have them looked at independently. It is important that the Government do not have the power to do that, but we should have some sort of process in place.

What I seek from the Minister is the Government’s view on whether the system works well at the moment. Do the Government believe the slot co-ordinator, effectively, has powers which should be better regulated or are they perfectly content with the system as currently set up? Do the Government think it need any changes? I thought the amendment was a useful way of testing the Government’s view. I was therefore very happy to table it and to make the case for it. I look forward to the Minister setting out the Government’s position when he responds to this group.

[Lord Holmes of Richmond (Con)]

My Lords, I am delighted to follow my noble friend Lord Harper. I intend to speak to Amendments 74 and 75 in my name. It would be only slightly reductive to say it is all about the slots. In many ways, this part of the Bill is the very heart of the industry.

To that end, it would seem to make sense, under Amendment 74, to have greater clarity and transparency for all those who should be involved, should be concerned and should have a role in this. They would have that clarity through such a system as set out in Amendment 74. Again, I accept the specificities around blockchain and DLT and would insert mid speech a criteria-based approach so that other technologies which could achieve this aim are equally beneficial to the purpose of the amendment.

Amendment 75 moves that on somewhat to test how much the Government would wish not to overly interfere with slot allocation but, where all things remained equal, they would want other provisions to be brought in. In Amendment 75, I cite the example of environmental concerns, but the principle would work equally well for regional connectivity being higher up the agenda or other issues the Government may wish to push through. As has been rightly set out by my noble friend Lord Grayling, this is largely a commercial matter and there is a market but, like all good markets, that does not mean there is no role for government in it.

It is clear that the Government need to get the right level for that role and not overstep, but it is critical because in many ways the essence of that element of the industry is all about the slots. I am interested to hear where the Minister believes that line should be drawn and whether there is potential to bring other factors to bear, which would fit very well with some of the Government’s other key objectives, such as environmental issues, growth, the nations and regions, and connectivity. I look forward to the Minister’s response.

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[Baroness Pidgeon (LD)]

My Lords, in moving this amendment, I shall also speak to Amendment 105 in the name of my noble friend Lady Grender, to which I have added my name. Amendments 69 and 105 address what is, for me, the key issue with the Bill: whether the powers could be used to facilitate airport expansion and, if so, on what terms. Amendment 69 would require the Secretary of State to consult affected communities, complete an environmental impact assessment and complete a noise impact assessment before making any regulations that facilitate expansion. Amendment 105 would go further by prohibiting the use of the powers in the Bill for that purpose altogether.

All the communities that are most directly affected by airport expansion—those living under flight paths, those experiencing noise, air quality and traffic impacts and those with a general disturbance from planes flying over them quite some distance from airports—have consistently found themselves presented with fait accompli decisions rather than meaningful consultation. Amendment 69 would, at a minimum, require such consultation, environmental assessment and noise assessment to precede any regulatory action that facilitates expansion. That is not a high bar; it is basic good governance. Although I heard what the Minister said to us in our debate on an earlier group, we believe that this amendment is very much needed, so that it is clearly spelled out.

Airport expansion, at Heathrow in particular, is one of the most contested infrastructure decisions that this country faces. It has planning implications, climate implications and profound implications for communities living under flight paths. Amendment 110 in the name of the noble Lord, Lord Harper, rightly asks for a published assessment of airspace slot and scheduling impact before any decision on a third runway. We think that he makes an important point.

The central question for the Minister is simple: can he give this Committee a clear, unambiguous assurance that nothing at all in the Bill could be used to facilitate airport expansion decisions that have not been subject to full environmental scrutiny, proper community consultation, which goes far further than the exercise we discussed earlier, and meaningful parliamentary oversight? I look forward to his answer with interest and I beg to move.

[Lord Harper (Con)]

My Lords, I will speak to my Amendment 110 and make one or two comments on the amendments that the noble Baroness, Lady Pidgeon, spoke to. Amendment 69 seems perfectly sensible, requiring consultation and so forth. I have more of an issue with Amendment 105. If the processes to determine airport expansion have been complied with, it does not seem sensible to say, “As a result, you can’t use any of the powers in this Act to facilitate that properly taken and consulted-on decision”. While I do not have enormous objection to the noble Baroness’s first amendment, the second one goes a bit too far, so I am half agreeing with her, which is an improvement on where we were last time. I hope that she takes that in the spirit in which it is intended.

My remarks on my own amendment may appear a bit disjointed because I am going to slightly amend them in flight, as it were. Members of the Committee may or may not be aware that, while we have been debating this, the Secretary of State has published a Written Ministerial Statement on the aviation framework, which is specifically to do with Heathrow expansion. I thank the Minister for his courtesy in drawing to my attention, because I have tabled amendments on Heathrow, that the timing of the Written Statement would be during our debate today. I have been through the Statement, but it is quite extensive, so I have done it at speed and might ask things that are covered in it or in some of the attached documentation, which I have not had a chance to study. Given that the noble Baroness, Lady Pidgeon, talked about airport expansion, my amendment might give the Minister a helpful opportunity when he comes to wind up this group of amendments to perhaps set out for the Committee’s benefit one or two of the key points in the Secretary of State’s Written Statement, which I think will interest all noble Lords who are interested in aviation.

My amendment is drafted in such a way as to make sure that it is within scope of the Bill. The purpose of tabling it was to press the Government a bit on the choice that they made, which they set out last November and reiterated in the Written Statement today, to settle on the more expensive of the two options set out: the proposal by Heathrow Airport Ltd for a more ambitious, longer runway with a total price tag of £49 billion. Heathrow Airport has committed that that will be financed entirely privately. Obviously, there will need to be a regulatory funding mechanism for that, but I will not dwell on that now because I have some later amendments, in group 7, which I will touch on at that point, so as not to repeat myself.

I want to understand from the Minister whether the Government are satisfied—I presume that they are, given that they are proceeding in this direction, but I have not seen the underpinning rationale that supports the decision. When she made the decision, the Secretary of State said that the Government’s choice of the more expensive of the two options was “the most credible”, so I would like to understand the Government’s thinking about that.

The Minister and I worked together on HS2 when I was Secretary of State and he was chairman of Network Rail. He knows that infrastructure projects, albeit publicly financed ones, can end up costing rather more money than originally intended. I am worried that this project is now intended to be entirely privately financed. If that does not stick, the Government are very much committed—rightly, in my view—to expanding Heathrow, and I want to make sure that the taxpayer does not at some point end up being on the hook for very significant amounts of public money that they are not currently planning to spend.

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[Lord Empey (UUP)]

My Lords, the noble Lord, Lord Moylan, has conducted a forensic examination of many parts of the Bill, to which I am sure we will return at a later stage.

I shall commence by referring to Amendment 78 from the noble Lord, Lord Tunnicliffe. I agree entirely with the substance and strength of it but I will apply the same remarks to it as I did to a previous amendment he tabled, in that it is not appropriate to specify a particular trade union when it does not necessarily have a monopoly—never mind now; who knows whether it would in future. However, the sentiment is right, and I support it.

I have tabled Amendment 118. Perhaps the Minister could write to me on it before Report. We have here a situation where the CAA is getting a lot of powers and, if I interpreted one part of the Bill correctly, is almost in a position to veto a decision made by the Secretary of State. I might have picked that up wrong, but it seems to be accruing an exceptional amount of power.

One issue—it is a health and safety issue, apart from anything else—is flight-time limitations. A number of years ago, there was a major change to the relevant European directives that apply here, but, of course, flight-time limitations apply not only to airlines that operate or are based in the United Kingdom but to airlines in other jurisdictions that carry UK passengers and use our airspace. That is important. There are international agreements but, with all the changes taking place around who is regulating this area, it would be most helpful if the Minister could write to me before Report clarifying what his department believes the situation to be. This is one of the most difficult issues to deal with because safety is vital. At the same time, there is competition between the desire to have the safest possible environment and airlines pressurising for the maximum amount of efficiency. There is an in-built tension there.

Circumstances arise, be they weather-related or incident-related, in which an airport has to close and crews overshoot their time. We understand the practicalities of flying, but I want clarity on who is setting the rules for the operation of flight crews of not only UK-based airlines but airlines that use UK airspace. Those of us who fly have an investment in ensuring that the right conditions apply. We know that fatigue is a regular cause of accidents and fatalities: it has been well documented in reports, and air crash investigations frequently come up with it as a major issue. So it is important to know precisely where we stand now, given that our rule-making regime is undergoing so many changes and the CAA is accruing so many powers. We had a European arrangement prior to our departure from the European Union. I would be grateful to ensure that we have clarity on who does what and who sets the regulations.

[Lord Harper (Con)]

My Lords, I support my noble friend Lord Moylan in two of his amendments.

On Amendment 76, my noble friend made some very good points about making sure that we have a proper parliamentary process. From a combination of listening to him and looking at the Delegated Powers Committee’s report, I am not against his argument that very technical rule changes should be done by the CAA, but that distinction is not made in the Bill. Clearly, rules that have more impact than that should remain with Ministers—obviously, with the CAA advising them—so that they are made through parliamentary procedure and receive appropriate scrutiny in the House. If there is a backlog of non-technical ones, we can put processes in place, even for a limited period, to deal with it, if that is required. That has happened before: it happened when we were putting through the various changes that were required as a result of Brexit. Both Houses set up processes to deal with the one-off process of changing our legislation. It can be done.

What I want to hear from the Minister is: what powers do the Government intend to give to the CAA, and what powers do they intend to keep for themselves? How will they make a judgment on which powers to make rules it is appropriate for the CAA, which will have no parliamentary oversight, to have? Where Ministers will retain parallel powers, what will they be used for? As far as I can tell, that is not set out anywhere; it would be helpful if it were.

My final point is small but important. My noble friend Lord Moylan’s Amendment 91 deals with the extraordinary idea that, when the Government are issuing guidance to the CAA, the CAA somehow has a veto over whether the Government can issue the guidance. That does not make any sense to me at all. It is clear that, although the CAA rightly has operational independence in its regulatory and safety responsibilities, the Secretary of State sets out its objectives—she did so as recently as 20 April—in the letter that she sends to the chair of the CAA. Ultimately, she has the ability to hire and fire members of the board.

So it is clear who is in charge here. It seems very odd that, with this drafting, the CAA will be able to stop the Government issuing the guidance. I do not understand why that is there. It might simply be a drafting error, in which case the Minister should bring forward an amendment on Report to deal with it. If not, he should give us a clear explanation of what it is there for; I genuinely do not understand it. My noble friend Lord Moylan has done us a service by spotting this and highlighting it to the Committee.

With that, I draw my remarks to a close. I look forward to hearing from the Minister in due course.

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Moved by

[Lord Harper]

84: Clause 8, page 12, line 26, at end insert—
“(g) set out how the CAA will have regard to the seventh carbon budget in exercising its functions under this Act, including any implications for aviation demand and consumer access to air travel.”Member’s explanatory statement
This amendment probes whether the CAA will be required to have regard to the seventh carbon budget in exercising its functions and what that would mean for aviation demand and consumer access to air travel.

[Lord Harper (Con)]

My Lords, let me explain what the amendment would do and the rationale for why I have tabled it. It goes back to the famous document of the noble Lord, Lord Moylan, that will be issued and seeks to add one thing to the list set out in the Bill: for the Secretary of State to set out to the CAA how it will have regard to the seventh carbon budget in exercising its functions, specifically

“any implications for aviation demand and consumer access to air travel”.

The amendment’s purpose, if I am being frank, was to make sure we could discuss this issue, because it is important and connected. A number of noble Lords have talked about the environmental impact of aviation.

Before I get on to my specific questions about the seventh carbon budget, I want to put this in a little context to make sure—although no one in this Committee would do so—that no one outside misrepresents me. I am a strong supporter of decarbonising aviation. I chaired the Jet Zero Council when I was Secretary of State, working with government, industry, airlines, airports, manufacturers, suppliers of fuel, academia and representatives of the Climate Change Committee looking at how we develop technology to ensure that we can continue flying but in a way that has less impact on the environment. As I said in our debate on the Sustainable Aviation Fuel Bill, I had the great pleasure of being on the VS100 Virgin flight to the US, which was the first flight that had 100% sustainable aviation fuel, showing that it was technically possible to deliver that with a significant reduction, in the order of 70% to 80%, in emissions. I am a strong supporter of decarbonising aviation.

I want to flag, though, the real challenge for government and the question of who makes these trade-off decisions. The current position, which I was operating under when I was Secretary of State and which the current Government have no plans to change, is this: with the net-zero target due to be hit in 2050 in statute, and the Climate Change Committee making its reports on carbon budgets, which the Government accept—Parliament will have the chance to vote on the seventh carbon budget shortly—there is a hard stop for the impact of carbon emissions. A clear path is set out by the Government for the technologies that will be needed to make sure we can decarbonise aviation and those are explained by the Climate Change Committee. But what happens if those technologies do not proceed at the pace that we hope and expect they do?

I am a strong supporter of ordinary people being able to continue to fly. The danger, which I will come on to in a minute, is that, if the technology does not go fast enough and the legislative position remains unchanged, the Government will be forced to use what is euphemistically called demand management—that means jacking up the price of flying so that ordinary people cannot fly any more. Wealthy people will continue to be able to do so because they will be able to afford it, but ordinary people will no longer be able to take their reasonably priced holidays and businesspeople will not be able to fly for essential economic activity. Those sorts of trade-off decisions should be made by Ministers, who are democratically accountable, rather than, as would actually happen, judges, when people judicially review decisions and so they would be made in the courts. That is the purpose of the amendment, and I want to test where the Government’s thinking is on that.

The Committee will be aware that the Climate Change Committee published the Seventh Carbon Budget, which covers the period from 2038 to 2042, on 26 February 2025, which, coincidentally, was my birthday, for completely random reasons. The committee recommended carbon budget 7 and the Government are required to legislate for it by the end of this month. The Climate Change Committee supports the various technologies that are needed to decarbonise aviation; it specifically sets out in the budget that the primary tool in that timeframe is sustainable aviation fuel. A number of Members of this Committee were also involved in the debates on that, so I will not rehearse this at length. There are also other technologies such as the development of hydrogen-powered aircraft for smaller and shorter-haul flights and battery-electric planes. There will also be the necessity, which the Climate Change Committee sets out, to do direct capture of carbon from the atmosphere and then store it. That is how you reach net zero.

The problem is, as I said, that the Government’s current view—it is the view I took when I was Secretary of State and I do not disagree with the Government at the moment—is that the technology the industry is developing will get us on a path to hitting the targets and all will be well and good. But there is risk involved in this process. My view is that Ministers should make the judgments about risk and should balance those things. That is why, while being a very strong supporter of decarbonising aviation, I support the position my party has reached that we should not legislate the net-zero target. If you do that, these decisions—I think my noble friend Lord Moylan talked about the judicial challenge to the Airports National Policy Statement—get challenged and end up being made by judges, not democratically elected and accountable Ministers. In the end, because Ministers are democratically elected, decisions are made by voters.

Given that we are in a position where this is in law, I just want to test the Government’s view. It is set out very clearly in the Explanatory Notes to this Bill, the Minister has said on a number of occasions and it is in the policy statement published today, that the Government support the aviation sector and understand how important it is to economic growth. On a number of occasions, Ministers have made it very clear, rightly, that they support people being able to fly to see family and friends around the world and take holidays, and all those sorts of things, and business. We talked on day 1 of this Committee about the real importance of UK trade and the amount of valuable cargo that is shipped by air, which is particularly important for an island nation such as the United Kingdom.

There are trade-offs here. If the net-zero line is legislated for, it becomes the most important thing, as opposed to one of the things you have to balance. I just want to test Ministers and listen to what they have to say. If the technology does not move quite as quickly as we would hope, are the Government planning to use the demand management measures? To be clear, those are taxes and charges that make aviation more expensive. Are they proposing to give the CAA direction in its regulatory decisions? For example, the CAA has a number of airports that have regulated asset bases and are allowed to pass on a certain amount of charges to consumers. I would not want to see the CAA making aviation and flying more expensive to reduce demand because, inevitably, that would mean that the burden would fall on people who are less well-off, and I do not think that would be reasonable.

I just want to hear from the Minister, when he responds to my amendment and the other amendments in the group, which are obviously on the same theme of the environmental impact on aviation, about where the Government think that these lines should be drawn, given that the Government say that their number one priority is economic growth. If they start slamming the brakes on aviation, they are not going to deliver economic growth and that is not really their number one priority. That is what I am looking forward to hearing from the Minister when he winds up. I beg to move.

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The Government have also acted through taxation. Building on the 50% increase in air passenger duty rates announced at the Autumn Budget in 2024, the Government will extend the higher air passenger duty rate to all private jets over 5.7 tonnes from April 2027. Amendment 115 would instead create a separate regulatory regime for one part of aviation, with wide powers to impose restrictions, charges or prohibitions. Given that most emissions come from commercial aviation, and that private aviation is already within the wider net-zero framework, we do not consider that proportionate. I therefore ask that Amendment 115 is not pressed.

[Lord Harper (Con)]

My Lords, I am mindful of the Whip’s injunctions on timing. Just very briefly then, before I seek leave to withdraw my amendment, my objective was to probe the Government’s policy, and particularly to make sure that aviation remains affordable for ordinary people to be able to use and that its cost does not rise significantly. Given that the Minister has given me a clear commitment to write to me on that specific point or those related points, I am content to seek leave of the Committee to withdraw my amendment.

Amendment 84 withdrawn.

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Moved by

[Lord Harper]

108: After Clause 9, insert the following new Clause—
“Assessment of impact of business rates revaluation on airport services and consumer protection(1) The Secretary of State must, within three months of the day on which this Act is passed, publish an assessment of the impact of the 2026 business rates revaluation on the provision and regulation of airport services and consumer protection measures.(2) The assessment under subsection (1) must include an assessment of the impact of the revaluation on—(a) the cost, quality and resilience of airport services provided to passengers and other users,(b) airports’ ability to meet consumer protection obligations and service standards,(c) airport investment in facilities and infrastructure used for the provision of airport services to consumers,(d) airport expansion and infrastructure development in order to meet regulatory requirements,(e) the financial sustainability of airports and the effects of that on consumers,(e) regional air connectivity, and(f) the regulatory stability of the airport sector.(3) The Secretary of State must lay the assessment before Parliament.”Member’s explanatory statement
This amendment would require the Secretary of State to publish an assessment of the impact of the 2026 business rates revaluation on the provision and regulation of airport services and consumer protection, including its effect on passenger outcomes, service standards, investment, infrastructure, financial sustainability, regional connectivity and regulatory stability.

[Lord Harper (Con)]

My Lords, in moving Amendment 108 in my name, I will also speak to Amendments 116 and 117, also in this group. I am afraid it is my group, I suppose. This seems an appropriate moment, given that it is about economic impacts and competition, to remind the Minister that when on Tuesday my noble friend Lord Moylan and I referred to the Government’s commitment to reduce the administrative burdens on business by 25% during this Parliament, he said he could not furnish us with the details immediately but confirmed that he would come back to us today with whatever information he was able to lay his hands on. Since this is effectively an economic-related matter, I thought I would mention that at the beginning of my remarks, and I hope that when he winds up he can give us what he was able to find. If he was not able to pull it all together comprehensively, if there is more to come, I am sure my noble friend Lord Moylan and I will be content for him to write to us with that further information. I wanted to give the Minister a bit of notice rather than springing it on him at the end.

Amendment 108 is distinct and Amendments 116 and 117 are effectively linked. I will deal with Amendment 108 first. If noble Lords are wondering why I have raised it, it is because part of the Long Title of the Bill is to:

“Make provision for the protection of purchasers and users of air transport and airport services”.


One of those protections is obviously to look at the cost of those services and what services people get. One of the things that is going to drive up the cost of those services is the 2026 business rates revaluation, which has had a particularly significant impact on our airports. Rateable values will increase more than sixfold at some regional airports. To be fair, the Government have put in place transitional relief, but all transitional relief does is delay things. Most airports are going to see their rate bills more than double in the next three years. I do not want to spend too long talking about rates in general, but they are a particularly bad tax because they are not linked to the profitability of a business. They are not like corporation tax, where you pay only if you make a profit. They are a cost that hits your business above the line. Given that the aviation sector in general is not a high-margin business, it is inevitable that the cost of that business rates revaluation is inevitably going to flow through to the customers of airports—that is, the airlines—and they will inevitably have to pass that cost on to consumers.

From the figures that I have managed to lay my fingers on, for example, Manchester Airport is going to see an extra £4.2 million per annum on its business rates bill. That is a significant percentage increase, going up to £18 million. Bristol Airport is going to see an increase of just over £1 million, taking its bill to just over £5 million. Those organisations have explained the consequences. Manchester Airports Group, for example, has said:

“Airports were already some of the highest rates-payers in the country and were prepared to pay significantly more. But increases of more than 100% mean we have to look again at our plans to invest more than £2bn in our airports across the UK over the next five years. It is inevitable air travel will become more expensive”.


I draw attention to that because the Government’s position is that aviation and airport expansion are an essential part of driving economic growth, and they keep telling us that economic growth is their number one priority. It seems to me that having a significant increase in your business rates bill of more than 100% over the next three years in a sector where margins are quite tight is inevitably going to increase the price to consumers, business travellers and those shipping cargo in a way that is not going to drive economic growth but do the opposite.

The purpose of my new clause is to say that the Secretary of State, within three months of the day that this Bill is passed, should publish an assessment—that is all; we are not telling her to change the taxes—of the impact of that business rates revaluation on the provision and regulation of airport services and specifically to look at the cost, the ability of airports to meet their obligations, the investment that airports have available to invest in the facilities and infrastructure, their ability to expand the financial sustainability of airports, the effect on consumers and, an important issue that has come up in this Committee before, regional air connectivity.

All the amendment does is ask the Government to assess the impact of that business rates revaluation on this sector. That seems to me to be a reasonable request. It would also have the benefit that if the amendment were accepted and that assessment was done by the Secretary of State for Transport and it showed that the business rates revaluation had a negative impact on the sector, it would give the Secretary of State the evidence base that she could use to have a good conversation with the Chancellor about changes that might be needed to reduce the burden on the sector. There seems to be no downside to producing that information. It might be a useful tool for the Secretary of State and provide some transparency for business.

The second two amendments that I have tabled, Amendments 116 and 117, are related to the conversations we had earlier about the role of the CAA and the cost of flying. The first is about adding to the CAA’s duties when it is exercising its economic regulation functions. It should have a primary duty to promote effective competition in airport operations, services and infrastructure where that competition can deliver benefits to passengers, airlines and operators. The CAA’s objectives are set out in the letter that the Secretary of State sends to the chair of the CAA. The six priorities for 2026-27 in the letter sent by the Secretary of State to the chair of the CAA on 20 April are growth and innovation, economic regulation, airspace modernisation, decarbonisation, modernising its consumer focus and efficiency, effectiveness and resilience.

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[Lord Hendy of Richmond Hill (Lab)]

I thank your Lordships for the debate on this group regarding economic impacts and competition, and I thank the noble Lord, Lord Harper, in particular for his amendments. I turn first to his amendment on the impact of business rates revaluation. At the Budget, the Valuation Office Agency announced updated property values from the 2026 revaluation. This revaluation is the first since the pandemic to result in significant increases in rateable value for some property, which includes some airports. The Government recognise the impact that these changes can have. We have considered this carefully and have put in place measures to ensure that the effects are manageable. We are delivering a support package worth £4.3 billion over the next three years, including a £3.2 billion transitional relief scheme. That provides more generous support to the largest ratepayers, including airports. It caps increases in airport bills arising from revaluations to just over double by 2028-29, before any supplements and reliefs are applied, preventing the much larger increases they otherwise would have seen.

The Government believe these arrangements strike the right balance, reflecting updated property values while ensuring a smooth and manageable adjustment for airports. Looking ahead, however, the Government recognise that businesses with decades-long capital cycles need stability and predictability to deliver capital investment plans. To provide this, the Government published a call for evidence around the receipts and expenditure valuation methodology and its impacts on long-term, high-value investments. This will allow the Government to work constructively with airports and other ratepayers ahead of the 2029 revaluation. I should also note that if an airport, or indeed any business, disagrees with their business rates valuation, they may challenge it with the Valuation Office Agency and, if that fails to produce a satisfactory outcome, the affected party may escalate the case to the independent Valuation Tribunal. As a result, I hope the noble Lord feels able to withdraw this amendment.

I turn to Amendment 116. The Government agree that effective competition, where it can be delivered, plays an important role in improving outcomes for passengers, airlines and the wider sector. The CAA already has a clear statutory role in economic regulation and a duty to further the interests of air passengers, both of which it actively applies. The Civil Aviation Act 2012 provides a well-established framework designed to give the Civil Aviation Authority clear focus on furthering the interests of passengers. The framework ensures that competition is properly considered as a means of furthering those interests, while allowing the regulator to take a balanced and proportionate approach in markets where competition may not always be effective. It is important that the CAA continues to have discretion in how it regulates airports, including by balancing the promotion of competition with other ways to further the interests of consumers where those are more appropriate. Although the CAA’s competition remit is targeted, the Competition and Markets Authority is able to intervene when wider competition issues arise.

We recognise that there are arguments for looking more broadly at the CAA’s role in relation to competition, but so far we have seen no evidence that the current framework is not working effectively, although we will continue to keep it under review. If we consider it necessary, we will, indeed, as the noble Lord, Lord Harper, suggested, add competition to the next letter to the Civil Aviation Authority chair.

Changes in this space could have wide-ranging implications for investment, passenger costs and regulatory independence, so it is important that those impacts are fully considered before any changes are made. Amendment 116 does not address those broader questions, and it risks cutting across a more considered approach. The proposed reporting requirement is unlikely to add significant value, given the CAA’s existing transparency and reporting obligations. For those reasons, I hope the noble Lord feels able not to press his amendment.

Finally, Amendment 117 seeks to enable the CAA to impose pro-competition remedies at Heathrow. As noted, the CAA already has a well-established framework of powers relating to economic competition. These enable it to act where competition is not working effectively. It can impose and enforce licence conditions on dominant airports and has concurrent competition powers alongside the CMA. In short, the tools to act are already in place, and competition consideration is already embedded in the statutory duties.

We note, as the noble Lord did, that the CAA is currently consulting on aspects of the future regulatory framework at Heathrow, including options, as he mentioned, that relate to competition and the delivery of airport infrastructure. In answer to his question, the CAA does not believe it needs further powers if it chooses a more radical option. On his second question, about whether the Government will take a view on the CAA’s choices, I cannot say at the moment, but since the Heathrow expansion national policy statement has been launched, we will no doubt be able to in due course. I have no doubt that the noble Lord is engaging with those processes and, for that reason, we do not believe that this amendment is necessary.

The noble Lord asked on Tuesday about the department’s role in reducing the administrative burden of regulation on business by 25% in this Parliament. I can confirm that the department is working closely with regulators and with the Department for Business and Trade to identify legislative and practical changes to deliver that. We have already made progress: for example, changes to rules for large vehicle licence holders with diabetes, which reduce costs by several million pounds a year; and there are some examples of Civil Aviation Authority initiatives that contribute to a reduction in the administrative burden incurred by businesses, including investment in systems modernisation, the recent update to the Airspace Coordination and Obstacle Management Service, and the general aviation licensing and training simplification programme. I am very happy to write to him further, and I will do so.

[Lord Harper (Con)]

My Lords, I am grateful. On Amendment 108, I am very pleased that the Government are consulting on the process by which business rates revaluations are done for airports, given the necessity for capital expenditure over a significant period. I will look carefully at the results of that consultation. I am sure airports will have been, and are, responding to that consultation to make the arguments that they need to, so that is welcome.

On the extent to which competition should be one of the CAA’s objectives, I accept that the CAA has to balance objectives, and that is very sensible. If it were added to the Secretary of State’s letter, which sets out a range of objectives for the CAA, then the CAA would be able to balance those objectives as it is taking its decisions. I think that that is perfectly appropriate. As I said, all I would ask is that, when Ministers are formulating the next letter, they think about whether an explicit mention of competition is set out as part of one of the economic sections of that letter.

Finally, the Minister has confirmed more explicitly than he was able to at Second Reading that the CAA has all the powers it needs to do any of the options, including the more radical ones. I am sure that, when we no doubt get the opportunity in the House to ask questions about the Heathrow document, whatever it will now be called—

[Lord Hendy of Richmond Hill (Lab)]

It is the Heathrow expansion national policy statement.

[Lord Harper (Con)]

I thank the Minister for that prompt. When we get that opportunity, we can no doubt ask whether the Government will take a view. For very sensible reasons—and I am not trying to be mischievous—I was always very careful to let the CAA get on with their economic regulations, and there is a very strong argument; it is simply that, if the Government are very wedded to delivering the Heathrow third runway, they have to make sure that they are confident that the economic model will finance it. We will no doubt come back to that. With that, I beg leave to withdraw Amendment 108.

Amendment 108 withdrawn.