Transport Act 2000 (Air Traffic Services) (Prescribed Terms) Regulations 2025

Considered in Grand Committee

16:42:00

Moved by

That the Grand Committee do consider the Transport Act 2000 (Air Traffic Services) (Prescribed Terms) Regulations 2025. Relevant document: 28th Report from the Secondary Legislation Scrutiny Committee

My Lords, the UK’s airspace is a vital piece of our national infrastructure that is essential to economic growth, connectivity and national resilience. Last year, there were more than 2.4 million flights using UK airspace, but despite a significant rise in air traffic demand, the structure of our airspace has remained largely unchanged since the 1950s, when there were around 200,000 flights a year. This means that today’s flight paths remain largely based on a system that relies on a network of outdated ground-based navigation beacons. As a result, aircraft today fly less efficient routes and are unable to take advantage of modern aircraft technology and performance. This leads to increased fuel consumption, a greater risk of delays and, as a result, higher carbon emissions. The National Air Traffic Service—NATS—has estimated that, without modernisation, by 2040 one in five flights could face delays of more than 45 minutes. A plan to fix this has been set out by the Department for Transport and the Civil Aviation Authority—the CAA—in the form of the airspace modernisation strategy. The regulations being considered today are one part of enabling that plan to happen. Modernised airspace will enable greater capacity in the air, improve resilience to disruption and help UK aviation to achieve net-zero greenhouse gas emissions by 2050. The draft regulations will be made under powers conferred by the Transport Act 2000. Under that Act, the Secretary of State may modify prescribed terms in an air traffic services licence. This instrument designates as prescribed any term specifying air traffic services authorised under a licence and any term specifying the area in which those services may be provided. In practice, this will allow the Secretary of State to modify the terms in the air traffic services licence granted to NATS (En Route) plc, known as NERL, in order to create and fund a new UK airspace design service, or UKADS for short. The airspace modernisation strategy is a long-term plan designed to ensure UK airspace remains safe, efficient and capable of meeting future demands. It includes changes to flight paths to enable better use of the UK’s airspace. The approach adopted in the UK until now has seen individual sponsors—usually airports—design and progress their own proposals for airspace change through the CAA’s CAP1616 airspace change process. This approach recognises the crucial role that airports play in airspace design, but also creates fragmentation and delay, particularly when multiple airports have overlapping airspace designs and competing priorities. This is especially an issue around London, which currently has 11 airports in the programme and some of the most complex airspace in the world.

16:45:00

The UKADS, provided by NERL, will therefore be key to the delivery of the strategy. It will act as a single guiding mind to deliver a holistic and modernised airspace design, facilitating quicker, quieter flights with lower emissions for the benefit of those who use and are affected by UK airspace.

Initially, the UKADS will focus on airspace changes around London—the most complex and congested airspace in the UK, and where the benefits of modernisation will be greatest. The UKADS will be charged with delivering a co-ordinated and efficient airspace design for the whole London region. That will include the airspace design that is needed to enable a third runway at Heathrow to be operated, but the UKADS is needed whether there is a third runway or not.

I should add that airspace modernisation is about better managing our airspace, not seeking permission for new flights. The number of flights operating from UK airports, including those facilitated by a new runway, is determined not by modernisation but rather through the planning process.

The UKADS will develop airspace change proposals following the CAA’s CAP1616 airspace change process, as other sponsors of airspace changes do today. This includes requirements to consult those affected by airspace change and consider their views before final decisions are made. The UKADS will work closely with airports, which know and understand their local communities, to do this. One of the advantages that the UKADS can bring is ensuring that information is presented to people clearly and consistently.

The UKADS will be funded through a new UK airspace design charge, which will primarily be paid by commercial airlines, in line with the “user pays” principle. The cost is expected to be small compared with existing charges; ultimately, airlines and consumers could benefit from lower costs overall due to reduced fuel burn. This charge will also enable support for airports outside London as it will finance a UK airspace design support fund. This fund will be available to support the eligible costs of airspace change sponsors which are not within the initial geographic scope of the UKADS. This will help unlock the benefits of modernised airspace across the whole of the UK.

Provided this instrument is approved and comes into force, it will enable a series of important next steps. The Secretary of State will consult on modifications to the terms of NERL’s licence, in accordance with the procedures set out in Section 11A of the Transport Act 2000. The CAA will undertake its own, separate consultation on the changes to the conditions of NERL’s licence, following the statutory requirements laid out in the same section of the Act. The combined result of those changes, if adopted following consultation, will be to authorise and require NERL to provide the UKADS, and enable NERL to charge for doing so.

In conclusion, airspace modernisation is not just a technical upgrade; it is a national strategic necessity to ensure our skies remain safe, sustainable and capable of supporting the UK’s future prosperity and innovation. These regulations will enable the UKADS to deliver the benefits of airspace modernisation and ensure that the UK continues to be a global leader in aviation for decades to come. I hope noble Lords will join me in supporting these regulations. I beg to move.

My Lords, in the new spirit in the House of declarations of interests, I declare mine at the outset. I do so as a private pilot, a former director of Newcastle airport and the author of an investigation into lower airspace, which was brought about at the request of the then Transport Secretary Sir Grant Shapps. It was primarily to do with lower airspace, but it highlighted a number of things. I will not speak for long, but I want to ask the Minister a few questions. I welcome very much what is being proposed, but I wonder to what extent it can be delivered. It is extremely complicated because it deals with a very complicated situation in relation not only to lower airspace but to upper airspace, the whole area of control zones around airports and the historic position of airports themselves as sponsors of changes to airspace. This has always been an area of great concern, particularly to general aviation, which is rather more random in its representation. Unlike the airports—which have their own clear bodies to represent them and the institution—airlines and others, general aviation is a bit more haphazard and therefore in need of protection, if I may put it that way, from government. These proposed changes have enormous implications for those involved in general aviation—and business aviation too—first, by removing individual effort and the sponsors that exist currently, particularly the airports themselves. I hope that there will be sufficient objectivity in the decisions that are taken to maintain GA’s position in any redesign mechanism. There have been concerns over the years that, because of the sponsorship by airports and their own determination to hold on to airspace and control zones for their own commercial benefit as well as—they claim—for safety and security, we have seen a diminution in parts of the country of the convenience and ability of general aviation to operate. The south-east of England is a classic case. I am lucky in that I fly mostly in the north and in Scotland, where we do not have control zones for much of the territory. This makes it a much freer situation for GA, and that is very helpful. I note that there is to be an initial stage—if you like—of these processes, which will concentrate on the London area. I hope, therefore, that the views and feelings of GA will be fully taken into account in the redesign that might take place. Secondly, it seems to me, and one of the criticisms has been, that, “What we have, we hold”, appeared to be the attitude of a lot of those who sponsored airspace controls. Very rarely do people seem to want to give up anything. Changes in technology, which are referred to in the Explanatory Memorandum and have been dramatic over the last few years, seem to suggest that some airports currently have airspace controls that are unnecessary and could be yielded up for use by general aviation, certainly in terms of routing and so on. I would like to know whether there will be sufficient protection for them. Thirdly, on the question of airports, the initial stages of proposals from the airports produced a rather mixed outcome. Some airports appeared to be quick off the mark and willing to take part in a modernisation proposal; others seemed more reluctant. Therefore, I wonder to what extent these proposals will be able to go ahead in a way that produces something comprehensive, rather than, as we currently have, a bit of a mishmash of circumstances. It is awfully important that all these elements are brought together—and with the support of the various people who have been involved so far in sponsoring and directing these events. Will the Minister comment further on that? Finally, on the timescale, we have been doing this for quite a long time. This measure is welcome but we were making progress way back before we had the Covid situation. Unfortunately, things seem to have become rather slow. That is inevitable, I suppose, but I would like to see some kind of clear timescale so that we can bring matters to a head and finalise a comprehensive scheme to which all parties are signed up.

In many ways, it is quite extraordinary that no single organisation in the UK is currently responsible for creating a modern and integrated airspace design. As we have heard, across the country, airspace change proposals are sponsored by individual bodies—usually airports or air navigation service providers—and, in more congested areas, such as London, there are multiple overlapping ACPs, each with a separate sponsor. Aviation law is governed by an international system of rules set by the International Civil Aviation Organization. In many ICAO contracting states there is one entity, usually a public body, responsible for airspace planning and design; that same body is also responsible for air traffic services and air navigation. This clearly makes it much easier to deliver airspace change that benefits the whole state’s airspace than is currently possible in the UK. We therefore welcome this SI, which changes licensing rules to allow a single new UK airspace design service to be created and to oversee both airspace modernisation and changes to use of airspace. We welcome steps to better co-ordinate a disjointed system of managing airspace but, of course, we will hold the Government to account to ensure that modernisation works for all our communities and for our environment. It is important to bring airspace into the 21st century, to deliver flight paths that cut emissions and to ensure that journeys are quicker, quieter and cleaner. However, with any changes there will be winners and losers. The Government must recognise this and work with communities as airspace is modernised—not least in congested areas, such as London. We must also ensure that airspace modernisation reflects the needs of our communities, recognising the impact that noise and air pollution can have on people and on nature. I think in particular of residents in Richmond and other west London boroughs who suffer greatly because of flights relating to Heathrow and are fearful of any changes. I ask the Minister: how do the Government plan to ensure that the new UK airspace design service works openly and transparently with communities that are impacted by aviation, genuinely engages and consults, and is a trusted, independent voice in this area, because there is a lot of suspicion in many communities? Also, will this new organisation be subject to freedom of information legislation?

16:58:00

Sitting suspended for a Division in the House.

17:06:00

My final question, before I was interrupted by the Division Bell, was: what is the timescale for the development of this new service and its first project tackling the complex London airspace?

My Lords, in general we welcome this statutory instrument. We welcome the prospect of a more rational organisation of airspace—who could do otherwise? However, there are considerable problems and the Minister needs probing on some of them. I am grateful to my noble friend Lady Foster of Oxton, who is not in her place because she is detained on a train that has been diverted and which has delayed her. She would have been here; as noble Lords will know, during her many years in the European Parliament, she worked on all the Single European Sky legislation. She has supplied me with some questions, and some of my speech has been helped by her: I want to acknowledge that, because that has been very useful. The first question has to go to cost. How much extra will the airlines have to pay, over and above their current payments for air traffic control services? They are going to be recharged for this. Is it going to be a smooth sum, or will it be lumpy and go up and down as costs are incurred? The Minister says it will be small and that, indeed, they may save money in the long term, once it is all done. However, there are so many things that the Government say are going to be small and will save you money in the long term, but they never do. So can he be more precise than simply saying “small” and give us a better clue of how much it will be, perhaps as a percentage of what they currently pay? Another question has to do with the timescale for achieving this; here, I refer to the comments of the noble Baroness, Lady Pidgeon. It looks as though it will take years, not simply because of complexity—we grant that the work will be complex—but also, if one looks at page 5 of the Explanatory Notes that accompany the statutory instrument and the number of stages that have to be gone through to achieve a CAA decision on airspace change, it could take many years to do the work. Can the noble Lord give an estimate of how long it might be before, even for the London area, we see these changes brought into effect? Returning to the charges for a moment, will foreign carriers that enter UK airspace be asked to pay towards this? If so, how will they be charged? Then there is the big question of how these changes are going to be integrated with neighbouring airspace and air traffic control arrangements, particularly the Single European Sky arrangements. Do they need to be, perhaps because they are en route? It might be that they are wholly within domestic airspace and that integration is therefore not needed, but some words from the Minister on that when he comes to reply would be helpful. There is another question, about skills. I do not doubt for a moment that many of the people involved in airspace planning in the UK are very skilful, but UK Research and Innovation’s Future Flight Challenge said: “The skills and knowledge needed for the airspace designers for any ACPs associated with enabling new airspace users will likely be different to the airport based changes” to which we are accustomed. Where are the skills going to come from? Can we be guaranteed that we will have the right skills and the right people in place to do this work in a timely fashion? Next, I want to build on some remarks made by my noble friend Lord Kirkhope of Harrogate, who referred to general aviation and smaller airports—he did not refer to smaller airports explicitly, but I shall. With this new all-singing, all-dancing, powerful body that will set these new rules for flights, it will be very easy to ignore the particular needs of smaller airports. I note that, in the consultation so far, there have been some very worried remarks from airports such as Biggin Hill and Farnborough about how their interests are going to be looked after as this work proceeds. Again, some consolation from the Minister would be very helpful. Finally, I come to the public. Any change in flight paths can have a devastating effect on communities that live under those flight paths, particularly if they are close to an airport. The question of public engagement by NERL as it proceeds with this work is going to be crucial to its successful implementation. I would like to hear the noble Lord say that that there will be a plan from the outset for transparent public engagement on the proposed changes, and the possible changes, so that communities, local authorities and their representatives can be fully engaged. He may say that this could make it difficult to get the work done, but my view is that we have a choice: either we tackle this problem early on and hope to deal with it as we proceed, or we proceed in relative silence, with a lack of transparency, and run into a massive problem at the end, a problem that might, in various locations, be so powerful that it results in making the changes politically unimplementable. I would like to hear about the public engagement strategy, because of the powerful effect that these changes might have on local communities; otherwise, if the Government can pull this off, it will take many years and it will improve things, but there is a great danger, in my view, of it all going horribly wrong somewhere along the line.

My Lords, I thank all noble Lords for their consideration of these draft regulations. I will now attempt to respond to the specific points raised. I was pleased to hear the noble Lord, Lord Kirkhope of Harrogate, welcome these proposals. He referred to general aviation, as did the noble Lord, Lord Moylan. We recognise the key role of general aviation and the value that it brings, both economically and as a pipeline for people to learn to fly. The UKADS will take account of the needs and views of general aviation as it develops its designs. Of course, London has some of the most complex airspace in the world, and the UKADS will provide the guiding mind to help deliver modernisation in this very complex area.

17:15:00

The noble Lord said that holders of airspace are inclined to keep what they have—“What we have, we hold”. The UK ADS will hold the pen on its designs and will be mandated to design the most efficient and safe airspace possible, following any design priorities that it is given. To do so, it will work closely with airport partners and other stakeholders, including those from the general aviation community, following the CAP1616 process and any other relevant guidance set out by the CAA.

Noble Lords asked about the timescale. The aim is to have the UK ADS operational by this year. Having a single body to deliver airspace design will help deliver this faster and with greater confidence. Indeed, it is intended that, if approved, these regulations will come into effect on 15 August.

The question about timescale was not about when the work would begin; rather, it was, I think, about when it was likely to result in some fruit.

I thank the noble Lord for his intervention. I will write further on what we can say about the projected timescales of conclusion. It is enough to note for now that this work is extraordinarily complex, particularly since we are seeking to address the airspace around London, which is one of the world’s most congested spaces. I will write to all noble Lords on what we currently envisage the timescales of this to be, so far as we can estimate them. I was delighted to hear that the noble Baroness, Lady Pidgeon, also welcomes this statutory instrument. In respect of local communities, which are clearly very important, aircraft noise is a considerable issue in some communities. I should declare my interest in that I live in Richmond, so I am familiar with the circumstances of this—although I have got used to it, as I did when I lived in Hayes and Ealing when I was growing up. The first thing to say is that modernisation is expected to benefit those who use and are affected by UK airspace, including residents living near airports. The UK ADS will progress airspace change proposals through the CAA’s CAP1616 airspace change process, as current sponsors do now. This includes requirements to engage with local communities and to factor in environmental considerations. Airports will continue to play an important role in strengthening community relationships by working in partnership with the UK ADS to deliver consultations and to ensure that local voices are meaningfully represented. The CAA and the department expect, by the September of this year, to consult on a package of changes that will make the process for airspace design decisions more proportionate. People affected by airspace change will continue to have a say and any changes will retain the important principles of a transparent, evidence-based process. Airspace modernisation is expected to result in a further reduction in the average noise levels per flight, as aircraft climbs and descents could become quicker and quieter with route changes that better utilise the capabilities of modern aircraft. Modern technology and navigation systems also make it possible to set much more accurate flight paths, which navigate more accurately around population centres. However, noise impacts will also depend on other factors, such as planning decisions, traffic growth or airline route choices. Airports will still be expected to develop and implement robust noise action plans, which will be subject to oversight and review by my department and the Civil Aviation Authority. The noble Baroness, Lady Pidgeon, asked whether the new body could be subject to freedom of information requirements. It will be a body in private hands, but the Civil Aviation Authority and the Department for Transport will be subject to FoI requests. She, too, asked about the timescale. I have already said that I will write to noble Lords to make an initial foray into that area. On the questions raised by the noble Lord, Lord Moylan, and the nature of the charges, in November 2024, the Civil Aviation Authority set out illustrative costs of approximately £20 million per annum. This is broadly equivalent to approximately 2% of the 2024 UK en-route charges paid by airlines—for illustrative purposes, this is approximately £7 per flight or 5p per passenger. The CAA has taken into account feedback received and is currently consulting on detailed proposals for the new charge, with final charges depending on the chosen regulatory model and actual service costs. The noble Lord asked whether charges will be paid by foreign airlines: they will. They will pay through the existing industry mechanisms, the same as the en-route rate paid for services today. He asked about skills. This is a challenge around the world. UKADS and NERL have skills and facilities in house. We will maintain what we have, and by creating a new guiding mind, we will enable better use of the skills and experience we already have in house. I will write to the noble Lord further about integration with the European system. I believe I have answered all the points that have been raised, but if there are any further points, I shall be happy to write to noble Lords. Without these regulations we will not be able to establish the UK Airspace Design Service and deliver the benefits that airspace modernisation can bring. Those measures will help us deliver fewer delays for passengers and quicker, quieter and cleaner flights over the UK. This will lead straight into the Government’s commitment to innovation, sustainability and economic growth. I hope noble Lords will join me in supporting these measures.

Motion agreed.

Committee adjourned at 5.23 pm.