Transport Act 2000 (Air Traffic Services Licence Modification Appeals) (Prescribed Aerodromes) Regulations 2022
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Baroness Vere of Norbiton
That the Grand Committee do consider the Transport Act 2000 (Air Traffic Services Licence Modification Appeals) (Prescribed Aerodromes) Regulations 2022.
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 Transport Act 2000. The regulations set out which airports may appeal licence modification decisions made by the Civil Aviation Authority, or CAA, in respect of the en-route air traffic services licence granted under Section 6 of the Transport Act 2000. In essence, this instrument will ensure that the aerodromes likely to be materially affected by a decision to modify a licence condition are able to appeal those decisions.
Air traffic management services in the UK fall into two categories. The first are terminal air navigation services provided at individual airports. They support arrivals, departures, and planes in the vicinity of the airport typically up to an altitude of 7,000 feet. This is a competitive market, with airports procuring these services from a number of possible organisations or providing their own. The second are for planes outside of these areas, such as planes at cruising altitude, or planes being guided to gateways where they can be handed over to terminal control services of airports. These services are delivered by a monopoly provider, regulated under the en-route air traffic licence.
The Air Traffic Management and Unmanned Aircraft Act 2021—the ATMUA Act—updated the Transport Act 2000 to give the CAA a more effective power to modify the conditions of air traffic services licences. Currently, the only licence which has been granted is held by NATS (En Route) plc, also known as NERL, to provide certain air traffic services in the United Kingdom. Under the previous framework, the CAA could only modify the conditions of this licence with consent from the licence holder or via a determination by the Competition and Markets Authority.
To modernise the licensing framework, alongside the powers to modify the licence conditions the Act also introduced a new appeal process into the Transport Act 2000, which gives appeal rights in respect of licence modifications to three parties. The first is NERL, the licence holder; the second is the owner or operator of an aircraft whose interests are materially affected by the decision; and/or an owner or manager of a “prescribed aerodrome” whose interests are materially affected by the decision. Should any of these parties wish to appeal the decision to modify a licence condition, they could appeal to the CMA on one of more of the following grounds, namely: that the decision was based on an error of fact; that the decision was wrong in law; and/or that an error was made in the exercise of a discretion. For the relevant aerodromes to be able to appeal licence modification decisions, they must be prescribed in secondary legislation, which is what this draft instrument seeks to do.
Turning to the content of the SI, the CAA can modify the conditions set out within NERL’s licence. A licence condition relates to operational matters, such as the requirements which the licence holder must meet to maximise safety and efficiency, and includes conditions relating to control of charges—the prices that users of NERL’s services pay for the services that they receive. To modify a licence condition, the CAA first must publish a notice in relation to the proposed modification. It must state that it is proposing to modify the licence and set out what the modification is, the reasons for it and its effect. It must then give a reasonable period for NERL and the other relevant stakeholders to make representations. The Department for Transport consulted on this policy in 2017. Stakeholders were broadly supportive of the policy and no aerodromes at the time requested additional appeal rights.
As the licence conditions include control of charges for the London approach service, the Government have decided that airport operators whose interests could be materially affected by the decision to modify a licence condition are likely to be airports receiving the London approach service from the licence holder, and that these aerodromes should be able to appeal these decisions on the grounds of fairness. The London approach service consists of the control and sequencing of flights between the licence holder’s en-route service, which will be quite high up, and which operationally include holding stacks, and the tower service at London airports, which is quite low down, and which is provided at each airport by an air navigation service provider under contract with the airport operator. Airports currently receiving the London approach service from NERL are Heathrow, Gatwick, Stansted, Luton and London City, and these regulations enable those airports to appeal. These regulations have been drafted in such a way as to ensure that in the future, should another aerodrome become part of the London approach service from NERL under its licence, it too will be able to appeal modifications to licence conditions.
This instrument will ensure that the aerodromes likely to be materially affected by a decision to modify a licence condition can appeal those decisions. It is as simple as that. I beg to move.
Baroness Foster of Oxton (Con)
My Lords, I thank my noble friend for the Explanatory Memorandum and the information she just gave us. There are two areas highlighted by the Explanatory Memorandum that are hugely important, which are the failures with computer systems and with NERL. But I want to raise another, which I hope has been fully rectified now. I was the rapporteur in the European Parliament in 2015 on the safe use of civil RPASs or drones, so I will reflect on what happened a couple of years ago, because this is a growing industry and we need to make sure we keep our eye on the ball.
As I recollect, between 19 and 21 December 2018, there were drone sightings at Gatwick. Regrettably, 140,000 passengers and 1,000 flights were affected. This was the biggest closure since the 2010 volcanic eruption in Iceland and, I have to say, the way it was handled became quite farcical. The airport spokesman said they could not do much about it, because there was no counter-drone technology when, actually, there was, albeit it was not at Gatwick then. It also ended with two people being arrested and, fortunately, released and paid compensation. It was not exactly a good look for the UK.
In addition, we must also realise the challenge of geo-fencing in the civil drones sector. This is particularly difficult for airfields, due to their geographical size. For example, Gatwick or Heathrow—a large airport—covers several square miles, but just in their infrastructure and to their boundaries or the end of the runways. That does not include the miles of airspace above, where an aircraft can be at risk either on ascent or descent. We know this is a huge challenge.
Nevertheless, the cost of the investigation was £800,000 and it had to include the police, military and the RAF in particular. The good news that followed was that Gatwick and others installed counter-drone technology in 2019, which is now available across all the appropriate airports in the United Kingdom.
We have a world-class civil aviation industry and reputation, which I am sure all noble Lords agree we must maintain. I ask my noble friend to give me the reassurance that the CAA, which is an excellent regulatory body, will continue to have clear and detailed oversight of this area to maintain our high standards, certainly in this growing industry.
The final point I raise, which will be covered by two other noble Lords so I will not cover it in too much detail, is regarding EGNOS. I was again a rapporteur in the European Parliament on GNSS, so I have a serious interest in the systems we require to make sure our airfields are well-equipped. Since, by all accounts, EGNOS was stopped last year, a number of our peripheral, small airports have been put in huge difficulty. We have flights either being cancelled or their safety jeopardised, for both passengers and crew. They are hugely reliant on life-saving services coming in, whether to take people to the hospitals on the mainland or for other reasons.
I will finalise on those points, because I think my noble friend is aware of them and has passed them on. We look forward to meeting with the appropriate Minister at some stage, and I thank her very much for taking these points on board.
Lord Rosser (Lab)
I start by saying that I will probably end up making the shortest speech so far—I hasten to add that that is in no way a criticism of any speeches made, but simply a statement of fact. Like others, I thank the Minister for her explanation of the content and purpose of these regulations. Although I have in front of me a statement on the background and what the regulations do, I will not wade through it; the Minister and others have already outlined that.
I raise one issue only, but say before that that I await with great interest the answers to the questions raised by the noble Baronesses, Lady Foster of Oxton and Lady Randerson, the noble Lord, Lord Davies of Gower, and my noble friend Lord Berkeley. I refer to the statement by Robert Courts MP, which is in the EM:
“The intention of this measure is to ensure that airports which receive an approach control service from the licence holder through its licence are able to appeal decisions relating to modification of licence conditions”.
The EM goes on to say that:
“The number of expected licence modifications over a 20-year period is expected to be between 8 and 16 modifications for major modifications such as price controls, and between 6 and 18 modifications for minor modifications such as procedural changes.”
Like others, I am not sure what workload or otherwise that would generate, so some clarification would be helpful.
I ask that in the context of paragraph 12.4 of the EM, which has already been referred to. It says that:
“In allowing prescribed aerodromes to appeal decisions there is the potential that a greater number of appeals will be launched. However, during the consultation phrase, no aerodromes requested appeal rights, which suggests they may be unlikely to appeal modifications to licence conditions.”
Bearing in mind that the more major modifications may relate to price controls, are there any criteria for changing those price controls? If it is confidently expected that there will be no appeals, presumably, when the changes are made, if they are, they will be relatively limited as far as the prescribed aerodromes are concerned. The Minister has already mentioned which aerodromes those are.
I therefore seek further information about modifications to price controls, the criteria for making them, how frequently they are made—it appears to be fairly infrequent—and whether they have ever proved controversial before in relation to prescribed aerodromes. That is the only point I wish to raise. The subject matter covered by the SI seems straightforward and desirable, but I await the answers to the other issues that were raised with interest.
Baroness Vere of Norbiton (Con)
I am grateful to noble Lords for their contributions today. It has turned into a general debate on air stuff, so noble Lords will not be surprised that I came here with 49 pages of briefing to answer detailed questions on the SI and am therefore unable to answer issues that have been raised that, frankly, are not even close to the scope of what is before noble Lords today.
Noble Lords mentioned EGNOS to me recently. I have confirmed with the office of the Aviation Minister that he is happy to meet with you. All noble Lords with an interest may pop along to that meeting and I hope to get there as well.
My noble friend Lady Foster asked about unmanned aircraft. I am sure she would have appreciated being in the House for the Air Traffic Management and Unmanned Aircraft Bill. We had lots of fun. It took a long time, but we talked a lot about drones and the role of the CAA. I remain reassured that the CAA has a grip on the situation. In that Bill, we gave the police extra powers to ensure that drones are appropriately enforced, where needed. I will try to get a response for my noble friend Lord Davies of Gower about American licences.
I turn to the contents of this SI. The noble Baroness, Lady Randerson, will recall the challenges of getting the Air Traffic Management and Unmanned Aircraft Bill through, which is where these powers very much came from. But it was not necessarily the case that there was a great big gap between that and some of the failures that happened before. There were just two failures, which were obviously both very carefully investigated by the CAA, working very closely with NATS to establish exactly what happened. That work took quite a long time, and we know that, on 25 February last year, for example, following an investigation under the Transport Act 2000, the CAA published its final decision confirming that NERL had contributed some of its statutory and licence duties and obligations in the period January 2019 into 2020 in relation to the provision of sufficient staffing resilience in the London approach service for users of Stansted and Luton airports. In making its findings, the CAA took account of the very difficult circumstances faced by the aviation sector and the significant reduction of air traffic volumes following the Covid-19 pandemic. It strikes me that, prior to those powers being available, the CAA has historically had a firm grip on NATS and its activities, and continues to get very involved wherever there may be failings.
What is under discussion today is actually a very small and narrow element of the world of licences and the provision of air traffic management services. The CAA, as is stated in the Explanatory Memorandum, rarely updates the licence—but it does, and when it does, as I set out in my opening speech, it does it by consultation with everybody who is likely to be affected. Therefore, it is not a surprise to us, and I believe should not be a surprise to the industry either, that we expect appeals to be relatively rare, because an enormous amount of consultation will go on beforehand. We know that people will be able to put forward their views—and I believe that we discussed this during the passage of the ATMUA Bill, now the ATMUA Act, as to the appeals process, how likely the appeals were likely to be, and whether there were resources at the CMA. We went through all those things, and I believe that, when the Bill was passed, we had reached a pretty good assessment about how we felt the appeals process was going to be.
We know that no airports have actually asked for these powers, but the Government have, out of an abundance of caution, given them the ability to appeal, just in case they need to. The reality is that it is only going to be about a modification that is about a change of price, because essentially everything else is not really related to the airports. The airlines and owners of the aircraft have far more beef with it. For the airports, it is really about the hand-off between up there and down here, and the charge for that hand-off that they might want to challenge, but they have never given us any indication that they would do so. The chances of getting an SI passed if they wanted to do so in future is, quite frankly, probably not huge.
That is why we are doing this—just in case they want to. We are not expecting them to do so, and they have given us no indication that they will. But we said that we would do it in the Bill; we felt that it was the fair thing to do, and that is why we are here today. The figures that we put in the EM explain that there may be a 10% increase in the number of appeals. We feel that that may be high, but we have to put something in there. In general, that is why the impact assessment is de minimis, because from this SI there will be almost no impact at all. I have some figures for costs somewhere, and I might put it in a letter afterwards, but our estimated costs are very small.
To that end, we do not see that this SI will cause the CAA to have any resource implications at all. As we know, modifications are fairly infrequent and we expect appeals to be rare. Appeals for this particular thing are possibly like hens’ teeth. I very much hope that it does not have a full-time member of staff on it. However, I will write with information on the number of people who look after NERL licensing. That is a very good challenge and I will find out exactly how big that group is.
I note that the noble Lord, Lord Rosser, made a very short speech; I thank him for being here because I know that he has had an incredibly busy day in the Chamber as well. However, the points he raised about whether there is likely to be an appeal and what has to happen in order for that change to happen have been covered.
I have run out of things to say from the questions that I was asked. As ever, I will look through Hansard and write if necessary.