Space Industry (Indemnities) Bill

Lord Hendy of Richmond Hill Excerpts

3rd reading
Friday 12th December 2025 Lords Chamber

[Lord Moylan (Con)]

My Lords, this is the second Bill this week that, in effect, transfers risk or cost away from private investors to the taxpayer or the fare payer, to help put Britain on the path to industrial success in the future. I say to the Minister, who supports the Bill, that this is a long way from the days of the railways, when private money without government support and without any transfer of risk—and sometimes with private investors losing their funds—built our great railway network. However, it turns out that this is necessary for our success in space and so we support the Bill and congratulate my noble friend Lady Anelay of St Johns on bringing it forward and to a successful conclusion. Like her, I thank not only the Minister for his friendly and open engagement but his civil servants, who have been supportive in this process.

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

My Lords, I thank all noble Lords for their contributions to and support for the Bill. I offer particular thanks to the noble Baroness, Lady Anelay, for steering the Bill through this House and to John Grady for bringing forward this short but important Bill in the other place.

The Government recognise that the question of liability and insurance is of utmost concern to the space sector, given the value that the industry places on having legislative certainty on this matter and the concerns that it has raised about the use of the word “may” in Section 12(2) of the Space Industry Act. I am therefore grateful to the noble Baroness for the Bill, which, by amending Section 12(2), will meet a key request from the sector.

Bill passed.

Sustainable Aviation Fuel Bill

Lord Hendy of Richmond Hill Excerpts

Committee stage
Wednesday 10th December 2025 Lords Chamber

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

My Lords, I thank noble Lords for this group of amendments. Amendments 1 and 6 would require the Secretary of State to enter into at least one revenue certainty contract with a SAF producer that is using power-to-liquid technology. The Government recognise the potential that power-to-liquid fuel may have. These fuels will have high greenhouse gas emissions reduction potential, with a low risk of environmental issues such as land use change.

However, adopting these amendments would limit the Government’s allocation flexibility by setting criteria in advance, which could ultimately reduce value for money in the contracts agreed. It is important that the allocation strategy is able to reflect different technologies as they develop. The Government will establish a fair and transparent process to assess each project’s key costs, benefits and risks. This process will be developed over the coming months and will involve consultation with stakeholders.

The decisions on contract allocation will be determined during the contract allocation process. The noble Lord, Lord Moylan, is right that we do not want perpetual subsidy, but we have to establish over time the opportunity for different technologies to develop.

The noble Lord, Lord Moylan, is right in his remarks about contract lengths; there is no humiliation there at all. The length of contracts is not set out in the Bill, and the amendments other than his Amendment 2 would extend the time in which the contracts could be entered into, not the length of the contracts themselves. We are engaging a range of stakeholders on contract length because it obviously makes sense to talk to the market about that. No final decisions have yet been made.

Contracts issued under similar schemes are generally for a period of 10 to 15 years, which reflects a standard debt repayment period. Limiting the contract to 10 years may not be sufficient to attract the investment necessary to construct these plants, and I contend that it is premature to decide the contract length until the market has advised what it would need to construct the plants that would make the fuel.

The Bill allows the Secretary of State crucial flexibility to adjust any standard contract length in between allocation rounds in the light of emerging market evidence. It also preserves optionality for the potential needs of emerging pathways—for example, nuclear-derived SAF. The addition of a no-fault break clause would, of course, undermine the certainty provided by the contract and seriously risks losing the investor confidence that the Bill aims to increase.

In respect of the point made by the noble Lord, Lord Harper, the learning from the energy market is that the contracts need to be long enough to secure the investment that we are talking about. The noble Baroness, Lady Pidgeon, asked what the right contract length is. I think we have to establish that by talking to the market, so it is premature to determine it now.

On the contrary, Amendment 3 seeks to extend the time in which revenue certainty contracts can be allocated from 10 years to 20 years. The purpose of the Bill is to kick-start the industry in this country. The revenue certainty mechanism is intended to be a time-limited measure and to stimulate the early market. Once investors have confidence in the market price and the first-of-a-kind technology has proved itself at commercial scale—to the point made by the noble Lord, Lord Moylan—the mechanism should no longer be needed.

The Government contend that Amendment 3 is not the right way to go. However, if the Government find in due course that it is necessary to extend the provision, Clause 1(8) will allow the Secretary of State to extend the period by which contracts can be allocated in five-year increments by making regulations by the affirmative resolution, so that Parliament can take a view about the applicability of that extension at the time that it is proposed.

Amendment 5 from the noble Lord, Lord Ravensdale, seeks to include a contract allocation framework in the Bill. The Government will need to carefully consider and work with industry on the specifics of contract allocation. This will ensure that there will be a fair and transparent allocation process that evaluates the key costs, benefits and risks of each project. This will be developed over the coming months and will be rightly subject to consultation with stakeholders. The amendment as it stands would reduce the Government’s leverage in negotiations by setting criteria in advance and limit the ability to secure the best value for money in the contract signed.

The noble Lord, Lord Ravensdale, referred to the Energy Act 2023. The allocation framework was included in the Energy Act 2013 and the Energy Act 2023 to ensure that the Secretary of State could effectively regulate the activities of an allocation body where one is appointed under that legislation. In this Bill, the Secretary of State will carry out the allocation process, so it is not necessary to set out an allocation framework to govern the activities of an allocation body.

I hope that my explanations have answered the concerns and that noble Lords feel able not to press their amendments.

[Lord Ravensdale (CB)]

The Minister’s response to Amendment 6 is appreciated, but there is a risk that if the amount of third generation SAF or power-to-liquid that needs to be produced is not set out, then the Bill would not, in effect, align with the SAF mandates, which have clear percentages on power-to-liquid fuel requirements. Does he accept that there is a bit of a gap between this legislation and delivering the SAF mandates, in that one does not support the other?

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lord for his intervention. If he is willing, I will take that point away and contemplate it further.

[Lord Ravensdale (CB)]

I thank the Minister. This has been an excellent short debate and the noble Lord, Lord Moylan, and the Minister, certainly provided the clarity on contract length that we were missing. I was pleased to hear that the allocation process will be fleshed out through a consultation. For now, I beg leave to withdraw my amendment.

--- Later in debate ---

[Lord Ravensdale (CB)]

My Lords, I rise briefly to support Amendment 18, to which I have added my name, and the other amendment in this group. As has been said, it is important for the Government to consider setting out the definitions in the amendments of what manufacture means and how it is going to be supported in making sure that this is all UK-based. As the noble Lord, Lord Harper, said, that is the point of the Bill.

[Lord Hendy of Richmond Hill (Lab)]

I join the noble Earl, Lord Russell, in sending the noble Lord, Lord Grayling, our good wishes for him and his family. I congratulate the noble Earl on his recent nomination for a life peerage. That is an odd sentence to say, but there you go. The noble Baroness, Lady Jones, has got lucky by signing this amendment, as she will shortly hear.

The revenue certainty mechanism is intended to support only eligible SAF plants in the UK, and this will be ensured through the allocation process. This Government are committed to supporting the UK SAF sector through our advanced fuels fund, which is supporting projects across the UK, and through the revenue certainty mechanism. The UK SAF sector will create jobs and growth opportunities in the UK, help secure a supply of SAF for UK airlines and enhance energy security.

On Amendment 4, SAF projects that use imported precursors still offer significant economic benefits to the UK because of the investment needed to construct them and the employment that they would provide. I fully recognise the strong points made by noble Lords this evening around UK production being in the Bill, and I will seriously consider this point ahead of the next stage of the Bill. I will invite noble Lords who have spoken tonight—or rather those who tabled the amendments—to meet me and my officials ahead of the next stage. I therefore invite the noble Lord to withdraw the amendment.

[Lord Moylan (Con)]

My Lords, I beg leave to withdraw Amendment 4 in the name of my noble friend Lord Grayling.

--- Later in debate ---

[Earl Russell (LD)]

My Lords, my Amendment 10 and my consequential Amendment 12 are in this group. This amendment to Clause 6 would replace subsection (3) with a requirement for a standardised levy on aviation fuel, uniform across suppliers, publicly displayed on invoices and expressed in pence per litre.

At the outset I want to make two quick points. First, on these Benches we support this Bill and the principle of the revenue certainty mechanism. Our concern is in relation not to the levy but the method of its deployment and use. As drafted, our worry and the worry of industry is that it is not clear and, in some cases, it creates burdens and frictions in this process for industry, which it would be useful to find a way to avoid. Secondly, my amendment comes from conversations I have had with Valero Energy, one of the UK’s major aviation fuel suppliers. I have no connection with the company. It came to me after the amendment from the noble Lord, Lord Moylan, was tabled. It believes that the proposed text that I have tabled here offers the most effective remedy to the Bill’s flaws.

Having said that, I support the noble Lord’s amendment, and my amendment is very similar. I do not want to repeat the arguments that have already been made here, but I will just reinforce a couple of them. Industry is concerned about this. It feels that it creates fiction, is an inefficient way of doing these things and could slow down investment in the market. It will discourage new entrants, and suppliers will have difficulty planning as they will not have certainty and will need to settle bills at later dates. The department says that this is administratively simple. It might be for government, but industry feels that the opposite is the case and that disincentive is enough that some companies are thinking about the levels of investment they want to make. That, I know, is an outcome that we do not want and the Government do not want either.

I am extremely grateful to the Minister and his officials for having a quick meeting with us. I am fully aware that consultations on this matter are ongoing and was greatly reassured by the conversations we had with Ministers. I know that officials are working extremely hard to find a way forward. I am hopeful that between now and Report, with this amendment, a government amendment or some fresh thinking, these issues can be looked at again. This is genuinely to help make sure that the Bill works not just for the Government but for industry and does so in a way that does not create unnecessary friction.

I turn to the other amendments in this group. We are generally supportive of Amendments 7 to 9 tabled by the noble Lord, Lord Grayling, and would be interested in the Minister’s response to them.

However, we have concerns with Amendments 24 and 26, which were spoken to by the noble Lord, Lord Harper. As he said, they would include a sunrise clause in the Bill. These are very large investments that we seek these companies to make in large and substantial plant in this country. I do not think that I would make that level of investment with such conditions attached. I would worry that delaying the payments will create uncertainty and fear for those who want to invest in the jobs and growth we need in this country. It could create a downward, damaging spiral for the investment we need.

However, there may be a need for the Government to have a bit of a further think about how the early days of the levy will operate, and how to talk about reporting back on those processes of early investment—we have already discussed reporting—to show that investment is happening and is on track. That could show that that investment is being monitored and going towards the end process that we all want, with the plants being set up and running, and producing the fuel.

Before I sit down, I point out that we support the Government’s own amendments that have been tabled. If the Minister could just give an update in relation to Scotland, we would welcome that.

[Lord Hendy of Richmond Hill (Lab)]

I thank all noble Lords for the brief debate on this group of amendments.

Amendments 7, 8, 9, 24 and 26 seek to address how funds from the levy are used. I first reassure noble Lords that moneys raised through the levy will be used only to support eligible SAF plants in the United Kingdom. The purpose of Clause 6 is to provide a power to place a levy on aviation fuel suppliers to meet the costs of payments made by the counterparty to SAF producers and to cover the counterparty’s administrative costs.

Clause 6 restricts the costs incurred by the counterparty in carrying out its functions under the Bill and, under this clause, the levy funds will be used only to meet the costs of the RCM scheme. The majority of the costs will be incurred only once SAF is being produced and sold by producers who have entered into RCM contracts. It is important that the counterparty be able to recover its costs, which include the costs of administering the contracts, the levy and the payment of surpluses. I hope noble Lords will agree that the counterparty should be self-sustainable.

Amendment 9 intends to ensure that there is a specific mandatory point at which the supplier becomes liable to pay the levy. However, the Government’s view is that it is unnecessary, because the Bill already provides that a person becomes liable to pay the levy at the same point when they become liable to an obligation under the SAF mandate. This aligns the levy to the point at which aviation fuel is eligible for certification under the SAF mandate. The Government think that this simplifies the process for fuel suppliers. I remind noble Lords that the regulations made under Clause 6(1) to set out how the levy will work will be subject to scrutiny under the affirmative procedure, which will give Parliament the opportunity to continue to consider the approach.

On Amendments 10, 11 and 12, as has been noted this evening, we are currently consulting on the detailed design of the levy, including the length of time—it certainly will not be years—which will help inform the drafting of levy regulations. The current levy design consultation will conclude on 8 January 2026, which is of course before any levy regulations are laid in Parliament. Final decisions on the levy design will be informed by this consultation and, to be clear, the Bill as drafted does not specify a particular mechanism and allows the Secretary of State to consider a range of options for calculating the levy paid by individual companies.

To reassure the Committee, the Government are alive to the potential impacts of different levy designs. We are working closely with stakeholders to develop a levy design and engage with them regularly to understand their concerns. We recognise industry’s desire for certainty and transparency. We are looking to design the levy in a way that ensures this, while also ensuring fairness and affordability for the consumer. We recognise that the levy must be dynamic and responsive to the changing market, while also ensuring that the counterparty has funds to make payments under the scheme.

The Government are clear that the levy will not be used to generate unnecessary funds and will raise only sufficient moneys to cover the counterparty’s costs under the revenue certainty scheme. While final decisions will be informed by the open consultation, we are exploring options that deliver this. Many of the proposals and options set out in that consultation could help provide greater certainty and transparency. As I have said, the secondary legislation will be laid by affirmative procedure, allowing both Houses to scrutinise its contents.

In addition, as a consequence of the short debate we have just had, I commit to noble Lords that I will brief them before then on what the levy is and how we currently believe it will work. That is in advance of the consultation closing and the noble Earl, Lord Russell, is right: it will have closed by Report. I think we will then be clearer on how it will work. I hope that I have provided sufficient reassurance on these points for noble Lords not to press their amendments.

--- Later in debate ---

Moved by

[Lord Hendy of Richmond Hill]

13: Clause 6, page 4, line 38, leave out subsection (7)
Member's explanatory statement
This leaves out the duty to consult about levy regulations under clause 6 since I am proposing a new clause that brings together (and extends) consultation requirements under the Bill. See my new clause to be inserted before clause 15.

--- Later in debate ---

[Baroness Pidgeon (LD)]

My Lords, this stand part notice is interesting, and the point made by the noble Lord, Lord Moylan, explains why it is tabled. It seems to be almost wrecking the Bill if you are trying to remove the mechanism. The purpose of this Committee is to look at the concerns and issues, and to try to find the best system in this complex area. I will be interested to hear the Minister’s response to this, because our view is that it is important to keep the mechanism in the Bill. Clearly, a committee has expressed some concerns, and it will be useful to hear from the Minister.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, I also congratulate the noble Lord, Lord Addington, on his forthcoming appointment as a life Peer.

The noble Lord, Lord Moylan, raises the correspondence from the Constitution Committee. I did in fact reply; the copy of my reply does not have a date on it, but I did reply because it has been reprinted. A full reply was sent to the Constitution Committee, and it referred to what we were just talking about—the current levy design consultation, concluding on 8 January 2026. As the noble Baroness, Lady Pidgeon, says, without a levy we would not be able to deliver the revenue certainty mechanism. We continue to work closely with industry on the details of the levy’s operation. The current levy design consultation will conclude on 8 January 2026, before any levy regulations will be laid in Parliament. Final decisions on the levy design will be informed by this consultation.

It is appropriate that the levy provisions are set out in regulations made by the Secretary of State, so that there is flexibility to respond to changes in the sector. Flexibility is required so that the levy is set at the appropriate level to ensure that the RCM can be delivered effectively and the counterparty’s costs are recovered. The Government have set out the potential costs and benefits that may arise from the RCM scheme, including the levy and the cost-benefit analysis published in May 2025. The Government will actively monitor and control scheme costs, including through the setting of strike prices and by controlling the scale and number of contracts awarded. I assure noble Lords that the regulation under this clause will be subject to the affirmative procedure, so there will be further opportunities for scrutiny as to how this power is used.

We have engaged with the Constitution Committee; I now have the date of my letter, which was sent on 17 November. Following this debate, I will ensure that copies of both the Constitution Committee’s letter to me and my reply are sent to all noble Lords who participate in this debate.

Clause 6, as amended, agreed.

--- Later in debate ---

Moved by

[Lord Hendy of Richmond Hill]

14: Clause 10, page 6, line 13, leave out subsection (4)
Member’s explanatory statement
This leaves out the duty to consult about regulations under clause 10 since I am proposing a new clause that brings together (and extends) consultation requirements under the Bill. See my new clause to be inserted before clause 15.

--- Later in debate ---

[Lord Hendy of Richmond Hill (Lab)]

My Lords, the Government contend that Amendments 15 and 16 are unnecessary as they duplicate measures that already exist in the SAF mandate.

There are existing statutory powers in Sections 124 to 132 of the Energy Act 2004 that enable the Secretary of State to amend obligations under the SAF mandate, subject to consultation with those affected and scrutiny by Parliament. Maintaining certainty throughout each obligation period is vital so that suppliers can properly prepare to meet their requirements. It is essential that those impacted by any changes to the mandate are given the chance to be involved and have adequate time to adapt, especially considering the early stage of the sector. This would need to be taken into account when considering any amendments to the obligations under the SAF mandate. The Government already publish annual SAF figures, with a comprehensive report for each year typically released in the winter following the reporting year. A formal review of the SAF mandate legislation is required, with the initial review scheduled to occur by 2030.

The Government also consider Amendment 17 to be unnecessary. Many airlines already publicly disclose information on their decarbonisation initiatives, and we will continue to encourage them to do so. The Government will publish data on the supply of SAF under the mandate, including information on the proportion of SAF relative to the total aviation fuel supply.

In answer to the point made by the noble Lord, Lord Harper, about an update on plants in the UK, I will certainly write to noble Lords who have taken part in this debate on where we have currently got to. I apologise to the noble Lord for not having included that in my previous letter.

On Amendment 19A, I certainly recognise the concern of the noble Baroness, Lady Jones, about land use and deforestation. However, the amendment duplicates existing measures in the SAF mandate. SAF supplied under the SAF mandate cannot be derived from crops and must adhere to strict sustainability criteria. Sustainability criteria in the RCM will align with the criteria in the SAF mandate. The SAF mandate already makes provision for the publication of detailed statistics on the supply of SAF, including feedstock, country of origin and carbon and sustainability data.

We will continue to review the evidence and update the eligibility and sustainability criteria on a regular basis. In line with this commitment, this Government recently published a consultation on the development of a common biomass sustainability framework, which includes proposals for strengthening existing biomass sustainability criteria, including those for woody biomass, in line with the latest evidence. The SAF mandate will be subject to regular reviews to help ensure that it is delivering on sustainability outcomes, with the initial review scheduled to occur by 2030. I hope my explanations are sufficient for the noble Earl to withdraw his amendment.

--- Later in debate ---

[Baroness Pidgeon (LD)]

My Lords, I shall talk about Amendment 19 and the impact on airline tickets, which I think is really important. At Second Reading, a number of noble Lords raised the impact on passengers, and it goes to the whole theme of our discussion this evening, which has been about transparency at every level of the Bill.

We should talk, maybe outside the Chamber, about what sort of comprehensive report we could produce on the impact of this legislation, whether that is the direct impact on the passenger, through the price of their ticket, or in all these other areas we have been discussing today. There is a cost as we transition to the greater use of SAF through the revenue certainty mechanism, and it is really important that passengers and the whole industry understand the true cost of the Bill, so I will be interested in the Minister’s response to the points that have been raised.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, the Government want to ensure that flying will remain affordable for UK holidaymakers and travellers while supporting a United Kingdom sustainable aviation fuel industry. A report on the impact of the Act on ticket prices within a year of its enactment would be premature. Costs need to be negotiated and signed, plants built and SAF produced and sold before any real impact on ticket prices can be measured, but the Government can control costs by controlling how many contracts are issued.

I cannot tell the noble Lord, Lord Berkeley, what the effect on ticket prices from other countries producing this will be, but the Government’s cost-benefit analysis of the revenue certainty mechanism, which noble Lords have referred to, published in May this year, will remain the best estimate of the Act’s impact on passenger air fares over the next period, pending the mechanism working and SAF being produced in some volumes here. The Government take reporting to Parliament seriously. Where appropriate to undertake it, we can present an assessment of costs and benefits reflecting the latest available evidence, but that evidence is not there yet.

Amendments 23 and 25 would require the Government to publish an assessment on the UK’s comparative advantage in the production of SAF. The Government believe that this would be counterproductive and would delay the good progress that we have made for decarbonising the aviation industry through the SAF mandate and the advanced fuels fund. The Government and other noble Lords, including someone on the same side as the noble Lord, Lord Moylan, are certainly more confident about the ability of UK industry to produce SAF than the noble Lord. The points from the noble Lord, Lord Harper, about security of supply are germane here.

The SAF industry has been calling for support to overcome the investment barriers. This Bill will help to drive our missions to kick-start economic growth and make Britain a clean energy superpower, delivering the Government’s manifesto commitment to secure the UK aviation industry’s long-term future. The Bill is a crucial step to establish a SAF industry in the United Kingdom and to drive investment, growth and jobs. I hope that the noble Lord is persuaded to withdraw his amendment.

[Lord Moylan (Con)]

My Lords, before I go any further, I just return to paragraph 4.23 of the cost-benefit analysis, where I read out something earlier thinking that I understood it, but now I do not think that I understand it at all. Perhaps it is a bit late procedurally for the noble Lord to explain it to me now; he might write to noble Lords. It says that

“the likely impact on ticket prices is between -£1.5 and £1.5, on average, per year”.

What is “per year” doing there? Surely, it is on average per ticket. Why does this say per year? That would assume that maybe you fly once a year. However, if you fly more than once a year, it would not be per year at all; it would still be per ticket, but it would not be per year. Explaining to me what that means would be extremely helpful.

What we wanted to hear—what the public wanted to hear—from the Minister on this particular question was that he put himself and the Government squarely behind £1.50 as the upper estimate of the cost of the measures in this Bill. He did not do that, and we have noticed it. It will get around. On this occasion when he had the chance, he could have said £1.50, as my noble friend Lord Harper said. Of course, it could be a bit more, it could be a bit less, but it is of the order of £1.50. He could have said, “That is what we the Government believe. I, Lord Hendy, on behalf of the Government, am putting myself behind that estimate: £1.50, not £10, not £15, but something of the order of £1.50 is what we are backing”. He did not, and we have noted that. We are not going to let that matter drop.

Concerning comparative advantage, the Minister made what I thought was an uncharacteristically sneering remark, implying that I did not think that Britain was capable of producing SAF. He was trying, I think, to draw a wholly false distinction between my views and the views of my noble friend Lord Harper. Britain can do anything—of course Britain can do anything. Britain can particularly do anything if we throw millions of pounds of subsidy at something. I think back to the day when Britain could produce vans at British Leyland because it was being given very large amounts of subsidy. That was until we found a way of producing cars in this country that did not require those subsidies and we became a leader in car production here under the flag of the Japanese, who invested in order to make a profit, not simply to farm subsidies. It is not a question of whether we can do something.

The whole point of comparative advantage is that you are comparing things. The question is whether this is the best thing we can be doing with the very limited money we have available, or are there other things that would be more productive and would bring greater prosperity to the country? What is the particular advantage we have in relation to this, which means that it is the thing that the Government should be backing?

Doing that does not need to hold up the Bill. It would if it were constructed as a commencement blocker, as it is at the moment, but we could of course all reach agreement around a table on a commitment for the Government to do this within six months of the commencement of the Act. It would not have to hold things up. It is a contrived objection. It is the complete lack of interest in the question on the part of the Government that is so depressing.

Despite those comments, I am grateful to the noble Lords who have contributed, and I beg leave to withdraw Amendment 19.

--- Later in debate ---

Moved by

[Lord Hendy of Richmond Hill]

20: Before Clause 15, insert the following new Clause—
“Duty to consult about regulations(1) Before making regulations under this Act the Secretary of State must consult any persons the Secretary of State considers appropriate.(2) In the case of regulations under section 1, 3, 10 or 11, that must include—(a) the Welsh Ministers,(b) the Scottish Ministers, and(c) the Department for the Economy in Northern Ireland.”Member’s explanatory statement
This requires the Secretary of State, before making regulations under the Bill, to consult any persons the Secretary of State considers appropriate. In the case of regulations under section 1, 3, 10 or 11 (which may contain devolved provision) the devolved authorities must be consulted in addition to anyone else.

--- Later in debate ---

[Earl Russell (LD)]

My Lords, I thank both noble Lords for their amendments; this is one of the really interesting groups. In response to what the noble Lord, Lord Moylan, said about knocking out fuels, I can probably sum up my speech by saying that I am not certain that knocking out fuels is the best thing to do in the transition; we might need to limit the time the revenue certainty mechanism applies to certain fuels. That might be where I am coming from.

Amendment 21 in the name of the noble Lord, Lord Ravensdale, seeks to

“include nuclear-derived power-to-liquid fuels in the scope of sustainable aviation fuels for which Revenue Certainty Contracts can be offered, and remove food crops, using the same definition of ‘relevant crops’ as the Renewable Transport Fuel Obligations Order for surface transport”.

While we recognise and support the ambition behind this amendment—promoting nuclear-derived and more sustainably-derived stuff, thus reducing carbon emissions —we would welcome the Government’s response to the idea of including nuclear-derived power-to-liquid fuels. Our questions relate more to the complete removal of biomass from the revenue certainty mechanism.

I suspect the Minister might say that this technology in relation to the nuclear side is not ready, and we would not disagree. But my question back to the Minister would be: how do the Government plan—if they do indeed plan—to bring these into the revenue certainty mechanism? How will that be done, what is the timescale for doing that, and is it something that can be done by secondary legislation?

We recognise that biomass has some use as a SAF, particularly in the early stages of SAF use. At the same time, we recognise the limitations of biomass as a sustainable fuel and its impact on any use at scale. This amendment raises some fundamental questions about the plans for the revenue certainty mechanism, its role in relation to different technologies for SAF production and how it is best used to advance the aim of zero-carbon flight.

I will be honest: we have some difficult challenges and questions to answer, and this group has certainly raised those. It can certainly be argued, as the noble Lord has done, that crop-based biofuels should not be given long-term support under the revenue certainty mechanism, as production pathways for these fuels are already commercialised at scale, as has been said. It can also be argued that crop-based biofuels offer relatively small CO₂ carbon savings compared with fossil fuels, that they compete with food and can create biodiversity loss in other countries. However, crop-based fuels offer some CO₂ savings when there are very few other options available today at scale.

However, with very few alternatives to reduce carbon emissions from aviation today, the revenue certainty mechanism could also be an important intermediate step in this continuous journey of decarbonisation. So, while we support nuclear derived power-to-liquid, and we share a desire to limit the use of the RCM to support bio crops, this amendment opens some complex policy decisions which need a lot of careful thought. What we are doing here is planning a journey. On that road, we will have different fuels that will jump in and out as we move along it. A lot of the questions that are being asked in this group are around how the Government plan to have those fuels come in and drop out, how that that be done and scrutinised and how the mechanisms will change. The same is true in relation to Amendment 22, on HEFA. The arguments I would make around that are the same.

This is a really important group of amendments, and there is a lot to think about in this space.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, the noble Lord, Lord Moylan, asked some questions in relation to Amendment 19 in his closing remarks. I will write to him and provide a copy to all noble Lords about standing by the cost-benefit analysis on ticket prices and how we can control the cost to passengers by controlling costs through the allocation process. For good measure, I will also clarify the phrase “per year”.

On Amendment 21, I understand the desire of the noble Lord, Lord Ravensdale, to exclude crops from the revenue certainty mechanism. Several other noble Lords also spoke about their concerns on growing crops for purposes other than food at Second Reading. The noble Earl, Lord Russell, just now, was realistic about some of the practicalities of doing so. The sustainability criteria in the revenue certainty mechanism will align with the criteria in the SAF mandate.

As I mentioned before, there will be a call for evidence shortly, focusing on the potential benefits, risks and trade-offs of using crops in SAF production. The scope of the call for evidence will include different types of crops, including feed crops, dedicated energy crops and cover crops. While this call for evidence will neither propose any changes to the SAF mandate nor signal the future direction of the mandate, we would not want to expressly exclude SAF derived from relevant crops from the scope of the RCM if they might be included in the SAF mandate in the future.

We will, of course, continue to engage with industry on these issues. I echo the words of the noble Earl, Lord Russell, that this is developing and things will change over time. We need to understand it, and that call for evidence is part of that process.

The noble Lord, Lord Ravensdale, and the noble Earl, Lord Russell, referred to nuclear eligibility. We will match that in the SAF mandate. We are already supporting nuclear through the advanced fuels fund, which we believe to be right.

Turning to Amendment 22, I agree with the noble Lord, Lord Moylan, that HEFA SAF—I hate these acronyms—has already overcome many of the barriers to investment. For that reason, in our response to the first consultation on RCM, we announced that HEFA SAF projects will be excluded from the first round of contract allocation. I hope what I have said is sufficient to persuade the noble Lord to withdraw his amendment.

[Lord Ravensdale (CB)]

Just to clarify what he said, could the Minister just confirm that nuclear-derived fuels are eligible under the SAF mandate and that they are also eligible under the revenue certainty mechanism, please?

--- Later in debate ---

[Lord Hendy of Richmond Hill (Lab)]

Yes, that is what I meant to say in answer to the noble Lord. I do clarify that.

[Lord Moylan (Con)]

I was hoping that the Minister would simply and explicitly state that the Government do not intend to see the mechanism used to support all the fuels that appear in the Energy Act 2004 that are currently in scope and that he would look to an amendment to eliminate some of those to give assurance that this mechanism is going to be directed at the fuels we have been discussing and not at that broader list. Would he take advantage of this last moment of Committee to give that assurance that he will be happy with such an amendment and contribute to drafting it?

[Lord Hendy of Richmond Hill (Lab)]

In answer to the noble Lord, I will not do that at this stage, but I will consider what he has just said.

[Lord Ravensdale (CB)]

I thank noble Lords for this short debate. In terms of eligibility of crop-based biofuels, as the noble Earl, Lord Russell, said, this is a journey we are going on and, absolutely, crop-based biofuels are part of that journey. The noble Lord, Lord Moylan said, and made the case quite strongly, that we have not heard any rationale for why those fuels should specifically get support under the revenue certainty mechanism, but I look forward to those further conversations. We have had the clarification on nuclear-derived fuels. On that basis, I beg leave to withdraw the amendment.

Unmanned Aircraft (Offences and Consequential Amendments) Regulations 2025

Lord Hendy of Richmond Hill Excerpts

Monday 8th December 2025 Lords Chamber

Moved by

[Lord Hendy of Richmond Hill]

That the draft Regulations laid before the House on 21 October be approved.

Relevant document: 40th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 4 December.

Motion agreed.

Sustainable Aviation Fuel Bill

Lord Hendy of Richmond Hill Excerpts

Monday 8th December 2025 Lords Chamber

Moved by

[Lord Hendy of Richmond Hill]

That the order of commitment of Thursday 20 November committing the bill to a Grand Committee be discharged and that the bill be committed to a Committee of the Whole House; and that if the bill’s Committee stage is not concluded by the rise of the House on Wednesday 10 December, the bill be reported from the Committee of the Whole House in respect of proceedings up to that date; and that, for the remainder of the bill, the bill be committed to a Grand Committee.

Motion agreed.

Unmanned Aircraft (Offences and Consequential Amendments) Regulations 2025

Lord Hendy of Richmond Hill Excerpts

Thursday 4th December 2025 Grand Committee

Moved by

[Lord Hendy of Richmond Hill]

That the Grand Committee do consider the Unmanned Aircraft (Offences and Consequential Amendments) Regulations 2025.

Relevant document: 40th Report from the Secondary Legislation Scrutiny Committee

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

My Lords, these draft regulations were laid before the House on 21 October 2025. They set out criminal offences for breaching regulatory requirements relating to the operation of unmanned or uncrewed aircraft systems—referred to henceforth as UAS—which includes drones and model aircraft. These regulations will ensure that the regulatory requirements remain enforceable and that operators and pilots of UAS remain subject to the appropriate penalties where they fail to comply with the regulatory framework.

Noble Lords will wish to know that the draft regulations have been scrutinised by the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee. The Joint Committee on Statutory Instruments did not have any comments on them and the Secondary Legislation Scrutiny Committee had one comment. It asked how awareness and understanding of the regulations will be improved. My department has since responded to this by advising that the Civil Aviation Authority, or CAA, has launched a communications campaign to improve the awareness of the regulations. Activities include emailing all registered drone users—roughly 500,000 operators—promotion via Google advertisements, issuing communication on social media with paid promotion to reach specific audiences, and using other communication channels to spread awareness.

I will provide some background information about these regulations. My department commissioned the Civil Aviation Authority to review the regulatory framework for UAS. It carried out a public consultation for this purpose. The consultation set out proposals to simplify regulation, improve education for users of UAS, improve safety and security, and consider options for support for the sector during the transition to the new regulations. The CAA worked closely with government, industry and law enforcement partners in developing a number of policy recommendations.

Together with the regulatory updates made through the Unmanned Aircraft (Amendment) Regulations 2025, laid in this House on 21 October, this instrument will implement the CAA’s recommendations, supporting a more future-proof, enforceable and robust UAS regulatory regime in the United Kingdom. The draft regulations will revoke and replace existing offences for breaches of the UAS regulatory requirements, ensuring that the offences remain enforceable and facilitating the enforcement of new requirements. The instrument also makes consequential amendments to the Air Traffic Management and Unmanned Aircraft Act 2021 and the Police Act 1997.

The draft regulations set out criminal offences for breaching regulatory requirements relating to the operation of UAS as set out in the Commission Implementing Regulation (EU) 2019/947 on the rules and procedures for the operation of unmanned aircraft, which I will refer to as the “implementing regulation” for short. This is an EU regulation that was directly applicable in the UK prior to exiting the European Union. Following that exit, the regulation was retained in an amended form in the UK and has subsequently been further amended. This now forms part of assimilated law in the United Kingdom.

The implementing regulation is amended by the Unmanned Aircraft (Amendment) Regulations 2025 to update the rules on UAS, simplifying the regulatory regime and ensuring a safe and secure airspace. The implementing regulation establishes a framework for the operation of UAS to ensure that they are used safely and regulated proportionately. In this framework are three risk-based categories of operation: “open”, or low-risk operations; “specific”, or those with a greater level of risk than the open category; and “certified”, or the highest-risk operations. The implementing regulation, among other things, includes requirements for registration and competency testing. It also provides for model aircraft operations in the framework of model aircraft clubs and associations under a bespoke authorisation.

The offences in this instrument largely replicate offences currently set out in the Air Navigation Order 2016, which I will refer to as the ANO 2016 for short. The draft regulations also provide for penalties for these offences, largely replicating the penalty provisions in the ANO 2016. Owing to the amendments made by the Unmanned Aircraft (Amendment) Regulations 2025, it is necessary to revise the offences by removing them from the ANO 2016 and remaking them in this instrument.

These regulations will ensure that the rules for drones and model aircrafts are safer and clearer for current and future use. I commend them to the Grand Committee.

[Lord Moylan (Con)]

My Lords, I am flattered that I am considered such a threat, on my own, to the passage of government legislation that I have to be faced by not only a Minister but two Whips at the same time, in addition to a team of very helpful civil servants at the back.

Broadly speaking, we support these regulations. It is a curiosity both that we support this statutory instrument and that the regulations are made under the negative procedure, so we do not actually see them. However, the criminal offences flowing from the regulations are made under the affirmative process, so we see only part of the process here in front of us today. I am sure that it is correct but it seems slightly curious, because it might have been better for everyone if the whole picture had been presented and we understood both the regulations and the criminal offences that flowed from them as part of one sweep. However, in general, we are in favour of them.

I will take up the point about communicating these very detailed regulations to those who might be caught by them, especially to those who might be caught by the criminal offences that flow from them. The Minister referred to that in his opening remarks. Surely it is the case that drones and unmanned flying things are becoming ever more popular and more widespread—and not only in the leisure sector but, I hope, in the commercial sector, because they have the potential to add great efficiency in the world of logistics, thereby benefiting us all and helping the economy to run more smoothly and prosperously. Therefore, it is terribly important that these regulations are not overly onerous, that it is possible to comply with them without being an expert or having a lawyer at your side everywhere you go, and that they are properly communicated.

Although I hear that the Civil Aviation Authority has written an email to 500,000 people, I hope that the Government do not feel that their responsibility for communicating these regulations and their consequences is discharged simply by that. This is not a responsibility that they can offload on to the CAA and imagine that everything has been done. It is the Government’s responsibility; they are the lawmakers, so to speak, and the enforcers of the law, so they need to make sure that this is being done properly, repeatedly and extensively, so that those who are affected understand it.

The only other point I will make is that this is an amendment to EU-assimilated legislation. It departs from that legislation to some extent, but in a very modest way as I understand it. It is part of a pattern whereby the Government are taking existing EU law and, to a large extent, cutting and pasting it into British law. Not only is that unimaginative but it fails to take advantage of the tremendous opportunities that Brexit has created for our economic growth, including the opportunities we have for freer trade, and so forth, around the world.

I hope that, when the Government come back with similar regulations in similar circumstances in the future, we have that imagination and sense of purpose that shows that we have regulations that work for Britain and not simply for Romania or whatever other country may have been involved in drafting those from which these are essentially derived. Otherwise, with those caveats, we tend to support this statutory instrument.

[Lord Hendy of Richmond Hill (Lab)]

My Lords, I thank the noble Lord for his consideration of these draft regulations. I will respond to the two substantive points he made.

He is absolutely right that this needs to be communicated properly, because the use of drones—both for recreational purposes and, increasingly, for commercial purposes—is becoming very important in the United Kingdom. I draw the noble Lord’s attention to some further details on the consultation in 2023 and 2024, which received 3,500 responses. The respondents included recreational and commercial UAS operators, manufacturers, service providers and aviation sector organisations. We believe that that is a considerable response that shows the interest in the effective and lawful use of drones. The consultation tested support for a broad package of proposals, and the feedback to the consultation formed the basis for the final policy recommendations.

The noble Lord is absolutely right that it is important that drone users are very much aware of the rules and regulations for their use. I said what activity had been carried out by the Government, but, in support of that, I add that the Civil Aviation Authority also updated the drone code and flyer ID test on 22 September this year. The reason was that that was ahead of the peak renewals period for pilots needing to retake the online test. That seems to be a good thing to do because someone taking the online test should be aware of the up-to-date regulations and the penalties for failing to comply with them.

On the alignment with the European Union, I modestly disagree with the noble Lord opposite, because the regulation does diverge from the European Union, but only where it is important to do so—either to improve our national security or to use our limited airspace better. The divergence is there to benefit the UK overall and to support our ambition to lead globally on UAS regulation, while still enabling our British aviation industry to trade internationally with other nations. With that, I commend these regulations to the Grand Committee.

Motion agreed.

Walking, Wheeling and Cycling Paths

Lord Hendy of Richmond Hill Excerpts

Monday 1st December 2025 Lords Chamber

[Baroness Pidgeon]

To ask His Majesty’s Government what support they are providing to increase the number of walking, wheeling and cycling paths across the country.

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

My Lords, in the spending review, the Government allocated £616 million for Active Travel England from 2026 to 2030 to support local authorities to build and maintain walking and cycling infrastructure. Revenue funding details will follow very soon. This is in addition to the almost £300 million for 2025-26 we announced in February, which included £30 million for the Walk Wheel Cycle Trust, formerly Sustrans, to deliver improvements to the national cycle network.

[Baroness Pidgeon (LD)]

I welcome the Minister’s Answer, but can I push him, as part of the Government’s strategy development, to mandate public rights of way for walking, wheeling and cycling alongside new railway lines, as well as improving existing railway active travel routes, transforming more disused railway lines into public rights of way?

[Lord Hendy of Richmond Hill (Lab)]

Local highway authorities are responsible for public rights of way and are required to keep a rights of way improvement plan. Where opportunities exist to bring historical routes into use for walking, wheeling or cycling, local authorities must decide how to integrate them into their active travel networks. The Government have announced their intention to remove the 2031 cut-off date for recording unregistered historic rights of way so that routes can continue to be identified, protected and enjoyed. I think the noble Baroness will know that, in respect of new railway lines and particularly HS2, there are plans to use the line of route for walking and cycling paths.

[Lord Young of Cookham (Con)]

My Lords, in Holland, 55% of cyclists are women. In this country it is less than half that, at 25%, so what are the Government doing to encourage more women to enjoy the benefits of cycling?

[Lord Hendy of Richmond Hill (Lab)]

I hesitate to speak in front of such a well-known cyclist as the noble Lord. The answer to that question is to make cycling both more convenient and safer. There are a whole range of measures, including those set out in my two previous responses, to make cycling a more general feature. Of course, safety is a particular issue, which is why investment is needed in making dedicated cycle paths and in cycling on the highways, which are both important. There are a whole range of measures, many of which will no doubt come up in the next eight minutes, about safety, the Highway Code and all those things, in order to get a much better gender balance in cycling, which the noble Lord is absolutely right to raise.

[Lord Watts (Lab)]

My Lords, while the Minister is on this subject, can he update the House on what action has been taken against cyclists who dangerously ride their bikes around the country, often causing damage to the general public?

[Lord Hendy of Richmond Hill (Lab)]

My noble friend will know that this is not the first time this subject has been raised in this House. A variety of actions need to be taken, including enforcement, which is of course the responsibility of chief police officers. But he will also note that, in the new Crime and Policing Bill, the Government are proposing new provisions intended to tackle the rare instances where a cyclist’s behaviour is so dangerous or careless that it results in the death or serious injury of another road user, and to treat that with the appropriate seriousness, in the same way as any other road user would be treated.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, is there a plan to put in new permitted development rights for cycle, wheel and walking routes? That could be done quite easily by changing existing regulations. Allowing these paths to go ahead is crucial for human health.

[Baroness Kramer (LD)]

My Lords—

[Lord Hendy of Richmond Hill (Lab)]

All too frequently, the noble Baroness, Lady Kramer, wants to answer the questions for me; she is very welcome to. The question about permitted development rights is, I think, a blind alley, but I will take some advice and write to the noble Baroness, Lady Jones, about it. What we are talking about is making this easy and economical to do. My Answer demonstrated that the Government are putting money into this activity for local transport authorities and giving them the opportunity to develop their plans. I will take some advice to see whether the noble Baroness’s suggestion is something that I should write to her about.

[Baroness Hodgson of Abinger (Con)]

My Lords—

[Lord Hampton (CB)]

My Lords, can the Minister update us on the review of floating bus stops, which are truly democratic in that they are lethal for everybody?

[Lord Hendy of Richmond Hill (Lab)]

The noble Lord was active on this subject during the passage of what became the Bus Services Act. I am delighted to tell him that my colleague in the other place, the Minister for Roads and Buses, has now written to every local transport authority in England about floating bus stops. I committed in this House to a pause on the particularly difficult design of those that require passengers to board from or alight directly into a cycle track. My colleague has now written to all local authorities to say that there should be a pause on design while we work with interested parties on a better and more satisfactory design.

[Lord Moylan (Con)]

My Lords, at this time of year, the thoughts of many of us, like those of the noble Lord, Lord Hampton, turn away from active travel and towards the bus. Much cycle infrastructure that has been installed has inhibited bus journeys and contributed to deteriorating journey times. Does the Minister think that the powers on transport to be devolved to local authorities in the English devolution Bill will make this situation better or worse, and why?

[Lord Hendy of Richmond Hill (Lab)]

The noble Lord certainly knows about that, because during his time working for the erstwhile Mayor of London, he and the Mayor of London directed me, as the commissioner of transport, to take out more road space for the benefit of cyclists than probably anybody has ever done in London. It certainly is the case that on some occasions that design has reduced bus service speeds, with a detrimental effect on overall journey times. The answer is to give local transport authorities the powers, the money and the training to do the job correctly. Another thing that has been mentioned here before is the additional money for training for local transport authority officers so that the design of cycle lanes, as part of the general highways network, is a benefit to cyclists without being too much of a detriment to other traffic, especially buses.

[Lord Grocott (Lab)]

Further to the question asked by my noble friend Lord Watts, we all know, and the Minister knows, that if a motorist goes through a red light, there are consequences, whether that is points on the licence, fines or maybe increased insurance costs. Can the Minister remind the House what penalties accrue to cyclists when they go through red lights?

[Lord Hendy of Richmond Hill (Lab)]

The first thing to say is that the Highway Code tells cyclists to behave properly on the road. Enforcement of the Highway Code is up to chief police officers; it is not our job to tell them what to police. When there is enforcement, compliance is much greater—and what we are seeking here is not penalties but compliance. It ought to be safe to cycle and drive, and it ought especially to be safe for pedestrians, particularly those with disabilities, to cross the road when the traffic lights are red.

[Baroness Kramer (LD)]

Can the Minister comment on the fact that the Government’s consultation for the new cycling and walking investment strategy for England does not set any specific targets to increase those modes of transport, and there are no KPIs to make it more inclusive for people with disabilities, for example? Will the Minister ensure that the final strategy addresses those concerns? If it does not, we will not see the action we need.

--- Later in debate ---

[Lord Hendy of Richmond Hill (Lab)]

The noble Baroness is absolutely right that currently there are no targets, but the consultation on the third cycling and walking investment strategy, which started on 3 November and runs till 15 December, is wide-ranging and will inform the next strategy, which runs from 2025 to 2030. As part of that, we will consider what targets need to be established, for precisely the reason that she gives.

[Baroness Hodgson of Abinger (Con)]

My Lords, are there any plans to increase the number of bridle paths as well? The roads are becoming ever more dangerous for horse riders—and I declare my interest as a horse rider.

[Lord Hendy of Richmond Hill (Lab)]

I believe that the responsibility of local highway authorities, so long as the bridle path is a public right of way, means that, as I said in my supplementary answer, they are required to keep a rights of way improvement plan. There is a responsibility on local highway authorities to consider the proper establishment of bridle paths. As I have said before, the Government announced their intention to remove the present 2031 cut-off date for recording unregistered historic rights of way, so I advise the noble Baroness that, if she knows of ones that are well used but not registered as rights of way, now is the time to put that right.

Road Vehicles (Type-Approval) (Amendment) Regulations 2025

Lord Hendy of Richmond Hill Excerpts

Tuesday 25th November 2025 Grand Committee

[Lord Moylan (Con)]

My Lords, there has been such a remarkable degree of unanimity of view on this topic, especially from the voices from Northern Ireland, that I worry that I may start by saying some things that sound a little harsh. The first is that I do not accept the proposition that Northern Ireland voted to remain in the European Union. That question was not on the ballot paper. The question on the ballot paper was whether the UK should remain in the European Union or leave, and the fact that a certain geographical part in this UK-wide vote happened to vote one way or another is merely a fact of historical interest: it has no legal or practical effect. It is like saying that London voted to stay in the European Union. What one means is that the majority of people in London voted for the UK to stay in the European Union. That is perfectly true, but nothing flows from it. To imply or claim that something flows from it in the case of Northern Ireland, I think, is a mistake.

The second thing I want to say is that I rather resent, especially having myself been a staunch supporter of Brexit in 2016 and still being so, the fact that debates such as this are used by certain colleagues, not least the noble Baroness I am following, to continue to claim that everything is the fault of Brexit, and would not it be wonderful if we reversed it all and went back and joined the European Union. There is very little basis for that claim.

I discovered something interesting in the course of this. Like, I suspect, certain other noble Lords who are not great experts on vehicle type approval, I assumed that the Windsor Framework—remember that the Northern Ireland protocol was going to give the best of both worlds to Northern Ireland—meant that the people of Northern Ireland would bask in the luxury of being able to choose between a rich array of vehicles emanating either from Great Britain or from the European Union, as suited them. In fact I discover, and I am going to quote here briefly from the UK Vehicle Certificate Certification Agency, that:

“While EU and UK(NI) type approvals”—


note the plural there—

“follow the same legislative requirements”—

in other words, they have to have the same content—

“they are considered as separate legislative frameworks. The GB type approval scheme is another separate legislative framework”.

So, in fact, for the people of Northern Ireland, having the best of both worlds, in the case of vehicles, means having access to neither world but having access to their own world only. Since manufacturers, as has been explained, are not that keen to manufacture for this relatively small world—this delicious, beautifully shaped and richly endowed but none the less relatively small world of Northern Ireland, choice is running low.

The noble Baroness, Lady Ritchie, explained the difficulty she had in acquiring her car, and I am sure that other stories can be advanced of a similar character. There is nothing, at the moment at least—I would be grateful if the noble Lord could say that this will continue to be the case when these regulations come into effect—to prevent somebody who lives in Northern Ireland going to Britain, buying a car, taking it back, presumably registering it in Northern Ireland, paying its tax in Northern Ireland and so on. So that can happen, but the result, of course, is that the automotive industry in Northern Ireland—that is, the dealerships but also to some extent those parts of the industry that are involved in maintaining cars and doing all those things—will be gutted, because they will not be selling any cars; everyone will be nipping over to Britain to buy a car.

Of course, they could go across to the Republic to buy a car, I presume, but the Republic does not manufacture any cars and they are quite expensive, so Britain is the place to go. But that does not mean that they will necessarily get all the advantages that they would get in buying a car in Britain when there are sales, discounts and so forth, so it is not a satisfactory situation. It is not the best of both worlds—that is the point—and that is what was promised to the people of Northern Ireland. In other words, this is not working for the people of Northern Ireland.

The Government may say that this is not a situation of their making but one they inherited from the previous Government, and that of course is a perfectly fair point. But one of the consequences of being in government is that problems created by other people land on your plate, so it is for the Government to come up with a solution to this, and these instruments do not represent a solution. They are not addressing the problem that exists, so I second those noble Lords from across the Commitee who have asked the Minister to say what the solution is. Everyone has said that this is not the solution, but what is the solution for addressing these real and practical problems that exist in Northern Ireland? We are looking for a practical solution—not an ideological one or one that is to do with whether the EU is a good thing or a bad thing, but a practical solution that means that Northern Ireland can have access to vehicles on at least as good terms as the people of Great Britain. I look forward to hearing what the Minister has to say about that.

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

My Lords, I thank the noble Lord, Lord Dodds, for bringing forward these Motions and all who have contributed to the debate on these statutory instruments, which are very technical and cover a range of subjects that make up a small part of the type approval requirements for road vehicles. The instruments themselves are part of a continuing process to ensure that the regulatory requirements that apply to cars, vans and other road vehicles keep up with the fast pace of technological developments in the automotive industry. In the absence of updates such as these, the type approval requirements would rapidly become out of date and no longer be fit for purpose. Regular updates are necessary both to ensure that new vehicles meet the highest standards for safety, security and environmental performance and to support the introduction of new technologies and features to benefit UK drivers.

The international nature of vehicle production means that most technical regulatory requirements are harmonised around the world. These are developed in the United Nations by experts from countries as far apart as Japan, Australia and South Africa, but also by experts from the United Kingdom and from European Union member states. More than 70% of GB requirements derive from the United Nations requirements. For instance, the statutory instruments we are discussing today applied in Great Britain the UN regulation on automated lane-keeping systems, UN Regulation 157. These are some of the first examples of self-driving systems, and the statutory instruments allow manufacturers to bring these safely to market.

These statutory instruments also recognise another UN regulation concerning anchorages in vehicles—as the noble Lord, Lord Kirkhope of Harrogate, remarked —that allow child restraints to be safely installed. These UN regulations have been adopted across the globe, including the EU, and it makes sense that they should also apply in the United Kingdom. Through the application of these international regulations, UK experts continue to play an important and influential role in setting the regulatory requirements that apply across the United Kingdom.

These amendments will also ensure that a safety system known as eCall continues to work effectively as the mobile signals it relies on switch from the older 2G and 3G standards to the newer 4G and 5G standards. The eCall system works by automatically calling the emergency services in the event of a severe crash, improving response times—especially in single-vehicle accidents in remote areas. In the absence of these amendments, safety would be lowered. My department consulted on these amendments, both publicly and with the devolved Administrations, and the responses showed overwhelming support for the proposals and for the approach to ensuring that GB regulations remain aligned with those in the EU.

[Lord Kirkhope of Harrogate (Con)]

I apologise for interrupting the Minister. I am looking at the Explanatory Memorandum for these regulations. Let me just read out paragraph 5.12, which says:

“Type approval authorities of Governments (‘contracting parties’) that sign up to an internationally agreed specification”—


here, it is referring to the United Nations regulation—

“are permitted to issue approvals to vehicles or components that comply with that regulation. Contracting parties”—

that must include the EU as well as the UK—

“must accept vehicles and components type-approved by another contracting party that is a signatory to the relevant UNECE regulation”.

Does the Minister not think that that brings not a solution, perhaps, but something where the Government can act to make sure that there is a benefit to Northern Ireland in this matter?

[Lord Hendy of Richmond Hill (Lab)]

I am grateful to the noble Lord; I will come back to that point, if I may. I am sorry—I have lost my train of thought.

[Lord Kirkhope of Harrogate (Con)]

My apologies.

[Lord Hendy of Richmond Hill (Lab)]

It is okay.

I am mindful of the concerns that have been raised around businesses in Northern Ireland—I will come back to that point in a moment—and the challenges that, as we have heard, they face. It is important that dealers and consumers in Northern Ireland are not restricted in their choice of vehicle brands and models, and have the same choice as those across the rest of the UK. The GB-type approval scheme, which these statutory instruments amend, was designed to support manufacturers to mark vehicles with both an EU and a GB approval; the Government fully expect manufacturers to do so.

The technical requirements in the GB scheme are such that vehicle manufacturers can design and approve a single vehicle for the entire UK market. They do not need to conduct additional testing for the GB market or fit components that differ from those used on vehicles intended for the market in Northern Ireland. The updates to the GB scheme made by these statutory instruments preserve this situation and avoid divergence that could prevent the free movement of new vehicles throughout the UK. The interests of both the UK Government and the European Union are the same: we both want vehicles that are safe, clean and secure. UK and EU officials will continue to work together in UN forums to ensure that the regulations reflect this common aim.

None the less, the Government are aware that there is apprehension among some manufacturers and dealerships regarding the potential for future divergence between Great Britain-type and Northern Ireland-type approval systems. To that end, my department has reassured businesses that they should operate on the basis of an explicit presumption of alignment between the GB and the EU schemes. Again, this reflects the shared objectives of improving vehicle standards and working together to develop common technical regulations; it also demonstrates that this Government are committed to providing certainty and clarity to business by ensuring that the type approval regulations remain up to date while easing administrative burdens and supporting trade. My colleague in another place, then the Minister for Roads, wrote to the Society of Motor Manufacturers and Traders on 25 June specifically to set out both that commitment and our concern that the basis of the presumption should always be that it will be aligned between the GB and the EU schemes.

These statutory instruments reflect this approach by aligning with the EU on eCall, making sure that the GB scheme uses the same test procedures and applies the same UN regulations. The Government fully expect that vehicles will be dual marked wherever possible to ensure that they can be sold across the United Kingdom. Moreover, we monitor developments and have listened to concerns raised by businesses in Northern Ireland, where it appears that legislation might inadvertently create distortions in the marketplace. We continue to safeguard Northern Ireland’s place within the UK internal market; indeed, the Exchequer Secretary to the Treasury announced in July that we intend to legislate for a UK-wide easement in the benefit-in-kind tax applicable to vehicles in order to address concerns that the recent move to a new emissions level, known as Euro 6e, would unfairly affect customers of vehicles that meet the new emissions standards.

--- Later in debate ---

[Lord Moylan (Con)]

The Minister is talking about his conversations with manufacturers to ensure that they offer models that are available in GB and in Northern Ireland. How does he conduct those conversations with manufacturers that are not based in Britain and are not manufacturing in Britain? Do they pay any attention?

[Lord Hendy of Richmond Hill (Lab)]

The answer is that the Society of Motor Manufacturers and Traders represents all manufacturers. Most vehicles are produced in various countries around the world. My understanding, at least, is that they represent all of the manufacturers, wherever they are based. As the noble Lord knows already, I am sure, this is an international market, and it does not suit manufacturers to have many different types of the same vehicle. What we are talking about here are our best efforts to ensure that there are limited types of vehicle; that the types of vehicle that are produced are marketed in as many countries as possible; and, in particular, that the same vehicles are marketed in Great Britain as in Northern Ireland.

I hope that my earlier references to the influence of the United Nations have answered at least some of the questions asked the noble Lord, Lord Kirkhope of Harrogate. He pointed out paragraph 5.12 of the EM, which I will go away and look at. We are all, I think, trying to do the same thing here: have one set of standards deriving from world standards, to which the EU and UK standards ought to be as near as possible simply because these markets are very large. Manufacturers should be trying to make the same thing. What these regulations, among many other regulations, do—and what we must continue to do—is ensure that all of these standards are as consistent and equal as possible, in order to make manufacturers produce their vehicles to the same standard in as many places as possible.

[Lord Moylan (Con)]

I do not want to be unhelpful; I am genuinely trying to be helpful. I will make the point that I tried to make in my earlier remarks. The Minister is missing the point slightly when he talks about standards. It may well be the case that they have the same standards—for example, this widget may be exactly the same as the one in another car—but what is significant here is the legal basis of the certification regime. We have three of them in play. Even if they are all producing exactly the same standards, the certification is the difficulty.

[Lord Hendy of Richmond Hill (Lab)]

I certainly understand the noble Lord’s point. Given that we are working in this area, the best thing that the Government can do is to make sure that whatever rules apply are as easy to comply with as possible. If you have to comply with only one set of rules but the certification is duplicated, that is a very different thing from having to comply with two separate sets of rules.

[Lord Moylan (Con)]

That is the Windsor Framework.

[Lord Hendy of Richmond Hill (Lab)]

I think we are at common cause on that. My understanding is that complying with two sorts of certification with the same rules is not particularly burdensome. The assurances that we are giving to the manufacturers, wherever the vehicles are made, is: if the requirements are in harmonisation, it is a relatively easy process to make sure that the vehicles comply with any certification standards. We will see. The point that the noble Lord, Lord Dodds, raised, which I take completely, is that if the ranges offered are so limited, we have more work to do. That is a perfectly reasonable conclusion that we will seek to look at.

In response to my noble friends Lady Ritchie of Downpatrick and Lord Murphy, the Government are taking great care to ensure that they comply as much as they can. The answer to both is that the Government will respond to the report from the noble Lord, Lord Murphy, by the legal deadline of early January. The Government are doing their best to make sure, by inspection, that the rules that we have set out to apply are the right ones. The first report of the Independent Monitoring Panel concluded that the guarantee was fully met. However, I take the point that that is not the same as the practical implication of what we are debating this afternoon—which is the extent to which vehicle types, and therefore vehicles, are available in Northern Ireland—and our intention is that they always will be. I say to my noble friend Lady Ritchie of Downpatrick that we will work both with the Northern Ireland Office and my own department to do our best to ensure that what we set out to deliver is what is actually there.

The noble Baroness, Lady Hoey, referred to the date of the mandatory phase of GB-type approval as 1 February 2026. I say to her and other noble Lords that we will have more to say on that shortly, and ahead of that deadline, to make sure that the deadline is not a hindrance to these processes and is capable of being adhered to.

The only other thing I have to say to my noble friend Lord Murphy is: happy birthday. That is obviously the right thing to say.

The noble Baroness, Lady Suttie, asked me a variety of questions. It is our intention to continue to align with the European Union rules, simply because this is an international market and we will not get anywhere if our certification requirements are different. We want to make it as easy as possible for the manufacturers and vendors of motor vehicles to sell the maximum number of vehicles of the same description across those markets.

I cannot answer the noble Baroness’s question about oversight in the House of Commons; I do not know whether she expected me to, but I cannot. However, the objective is to ensure that we continue to align fully and that that results in the market in Northern Ireland being no less accessible to manufacturers and the choice for consumers being equal in Northern Ireland and Great Britain.

Lastly, the noble Lord, Lord Moylan, quoted the Vehicle Certification Agency. I will go away and see what it says, but I understand his point about the regimes. My point is that I do not think the requirement for dual certification, if the standards are the same, is particularly onerous, but I take the point that various noble Lords are raising about what is for sale in Northern Ireland. I will go away after this debate and seek both information and advice from the department to see to what extent we can concur with their conclusions about the lack of choice and the lack of sales, and see what else can be done. We will do that in good order before the GB type approval scheme moves to its mandatory phase in February 2026.

I hope I have demonstrated that the reason for these amendments—indeed, the reason why the Government will continue to make amendments such as these—is in order to keep consistency going. I hope I have demonstrated that we are listening to the concerns that have been raised, that we are committed to the continuing refinement of the type approval regulations, and that I will go away and take the points that have been raised by noble Lords very seriously in order that we can make a success of moving the GB type approval scheme to its mandatory phase from February next year so that the market in Northern Ireland is vibrant and the people in it can continue to function.

[Lord Moylan (Con)]

Does the Minster have an answer to my question about there being no inhibition on the people of Northern Ireland purchasing motor vehicles in Great Britain, taking them to Northern Ireland and registering them there as a result of these instruments, and the Government having no plans to inhibit or restrict that?

[Lord Hendy of Richmond Hill (Lab)]

I believe that what the noble Lord says is correct—you can buy a car anywhere in the United Kingdom and use it anywhere in the United Kingdom—but equally I take the point that that is probably not an especially helpful message to motor dealers in Northern Ireland, who probably do not want people to travel to England to buy cars, which would not be good for their business.

That is why the Government are concerned to make sure that that market is as vibrant as possible. I note that the noble Lord, Lord Dodds—I think it was him—said that 17,000 people’s jobs depended on it, so I should take note of that.

[Baroness Ritchie of Downpatrick (Lab)]

Will my noble friend the Minister consider working with Ministers in the Northern Ireland Office with a view to meeting the manufacturers’ association and those involved in car dealerships in Northern Ireland so that he is fully appraised of the whole picture and that he can provide some comfort to them? At the end of the day, that is what they are looking for.

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend for that. I think her proposed remedy is the right one, which is to meet people who know what they are talking about and listen to them. If that is part of the solution here, I am sure that we should do that.

[Lord Dodds of Duncairn (DUP)]

I am grateful to all noble Lords who have contributed to this debate. I think we are all agreed that this is a very serious issue, as the noble Lord, Lord Murphy, said, for people in Northern Ireland. The noble Baroness, Lady Suttie, mentioned constitutional issues. I have sought in this debate to emphasise the practical problems, which are the outworking of some of these wider issues on the constitutional front that in my view are totally unnecessary, but we have to find solutions. I am therefore grateful to the Minister for his reply to this debate and for the tone and content of what he has said, in that he is going to take this away, take it seriously and talk to colleagues and those who matter to try to find solutions. That is what we would love to see happening. Up to now, I do not think there has been enough urgency, if I may say so, as the deadline has crept up and up. I am grateful to the Minister for his commitment. Knowing him and the way in which he operates, I know he will hold fast to that, and that will, I hope, deliver results.

Sustainable Aviation Fuel Bill

Lord Hendy of Richmond Hill Excerpts

2nd reading
Thursday 20th November 2025 Lords Chamber

Moved by

[Lord Hendy of Richmond Hill]

That the Bill be now read a second time.

Scottish and Welsh legislative consent sought, Northern Ireland legislative consent granted.

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

My Lords, I am pleased to present the Sustainable Aviation Fuel Bill for Second Reading today. I welcome the right reverend Prelate the Bishop of Chester and congratulate him on his forthcoming maiden speech in your Lordships’ House today. I look forward to hearing his contribution to this important debate, and to his many contributions in the months and years ahead.

If we are to be an outward, confident trading nation that is connected to the world and leading the way on innovation, we must move as fast as we can towards a greener, cleaner future for flying. Domestic transport accounted for 29% of the UK’s greenhouse gas emissions in 2023. Aviation is currently the second largest contributor, and it faces unique barriers to decarbonisation. By 2040 it is set to overtake road vehicle use as transport’s largest emitter. SAF will be key to decarbonisation, a drop-in solution that can be used today in today’s aircraft with today’s infrastructure. SAF also has huge economic benefits for the wider low-carbon fuels industry, potentially supporting up to 15,000 jobs and contributing up to £5 billion to the economy by 2050.

SAF is not the only measure that we are supporting to address emissions in the aviation sector. The Government are supporting the development of more efficient and zero-emission aircraft technologies, and we have announced a further £1 billion of funding for the Aerospace Technology Institute to help to spur green aerospace innovation. The Civil Aviation Authority, supported by my department’s funding, is shaping regulations for zero-emission aircraft through its hydrogen challenge. Alongside that, we are advancing airspace modernisation to enable cleaner, quicker and quieter journeys. The Government are also establishing a UK airspace design service with the Civil Aviation Authority and the National Air Traffic Service, which are working together to launch this by the end of the year.

Turning to aviation fuel, the Government, alongside industry, are working collaboratively to ramp up the UK’s SAF industry. The UK stands at the forefront of global efforts to decarbonise aviation. When this Government came into power, we acted immediately by laying the statutory instrument for the SAF mandate, which came into force on 1 January this year. We have invested £63 million in 17 projects through the Advanced Fuels Fund, which will drive growth, support good jobs and deliver emissions reduction.

The revenue certainty mechanism introduced in the Bill is a scheme designed to support UK SAF production to drive growth and opportunity across the country. It addresses the lack of a clear and predictable market price for SAF, one of the biggest constraints on investment in UK SAF production. The RCM builds on the established precedent of contracts for difference in the renewables sector. Under the RCM, an SAF producer will enter into a private law contract with a government-owned counterparty that sets a guaranteed strike price for SAF. If SAF is sold for under that price, the counterparty will pay the difference to the producer. If SAF is sold above the price, the producer will pay the difference to the counterparty.

It is important to emphasise that no final decisions have been taken on how the strike price will be determined. The RCM contracts must set a strike price that finds a balance between securing the appropriate protection for the producer and its investors and providing value for money for the scheme and the wider sector. This is a new and emerging market. This will be the world’s first SAF RCM, and it will derisk SAF projects by addressing barriers to investment in a nascent market that is using innovative technologies. Like similar schemes in the low-carbon electricity sector, this will help to provide greater certainty of future revenue, help to attract investment in first-of-a-kind SAF plants, and support growth and opportunity across the country.

Turning to the SAF Bill, it has four key areas. First, it will enable the Secretary of State to designate a counterparty that is wholly owned by government. Secondly, the Secretary of State can direct the counterparty to enter into private law contracts with SAF producers, guaranteeing a price for the sale of eligible SAF over a period of time. The mechanism is there to support the development of a first-of-a-kind plant by increasing investor confidence. While first-of-a-kind plants are likely to be more expensive than future plants, supporting them allows future, cheaper plants to get constructed and start producing SAF. The contract allocation process will be designed to maximise competition, with all contracts to be underpinned by robust technical and commercial due diligence to ensure that successful projects represent value for money.

Thirdly, the Bill will enable the Secretary of State to make regulations imposing a levy on suppliers of aviation fuel in the UK, in order to fund the RCM. That will allow the counterparty to collect the levy to cover the costs of issuing payments under contracts that are administering the scheme. It is right that the costs of decarbonising air travel should at least be partially borne by the aviation sector rather than the taxpayer. We are levying aviation fuel suppliers because placing the levy higher up the supply chain spreads costs across the sector, and because aviation fuel suppliers will benefit from the greater volumes and lower prices for SAF that the RCM will create. The RCM will provide support only if SAF is actually being produced. If a project fails, there is no obligation on the Government to provide support. While novel technologies can have high failure rates, we can support multiple technology pathways to minimise risk and strengthen the UK’s project pipeline.

Fourthly, the Bill will enable the Secretary of State to enforce certain provisions imposing financial penalties. The Secretary of State may impose a financial penalty on a person who fails to comply with levy regulations, or with requirements under regulations made to ensure that any paid-out surplus is used to benefit fuel suppliers’ customers.

This is a comprehensive and focused Bill that lays the foundations for a thriving UK SAF industry by delivering investment certainty, cutting emissions and securing the long-term sustainability of the aviation industry. More SAF supply and lower prices are good for the aviation sector and, ultimately, for those who wish to fly. The Bill is an essential part of securing our world-class aviation sector’s future, and we want it to do that sustainably. I look forward to engaging with noble Lords on this legislation. I beg to move.

--- Later in debate ---

[Lord Hendy of Richmond Hill (Lab)]

My Lords, I thank all noble Lords who have engaged in today’s lively debate on the Bill. I have listened with much interest to the excellent points raised across your Lordships’ House, and I will now attempt to answer some of the questions. Of course, we can explore many of the issues in greater detail in Committee. In the meantime, I will follow up as soon as I can on some of the issues that I cannot answer now, but I am grateful for such wide, general cross-party support for this important measure.

First, I should compliment the right reverend Prelate the Bishop of Chester on his maiden speech. He said that sustainability matters; I am so glad that he did, and that he said it in English, because he might have been able to say it in Welsh and I would not have been able to respond. The Government and I are grateful for his support of a vital sustainability measure for air transport, which is essential for the nation’s wealth and defence. The only other thing I should say to the right reverend Prelate at this point is that I am sorry about his train service. I will speak to him separately about the trains to Chester.

As I said, I am grateful for the support of many noble Lords who have spoken. The noble Lord, Lord Davies of Gower, was supportive. The points that he and many others made and the questions he asked were all about making early progress. The Government are pursuing the Bill now, as we did with the SAF mandate, in order to get on and do this, because getting on and doing this is absolutely what we seek achieve. The noble Lord referred to the net effect of this on the price of airfares, as a number of other noble Lords have done. Our best estimate is plus or minus £1.50—we are confident on that—but I am happy to explore that further in Committee. We do not believe it is plus or minus £10. We believe that we have, at least for the moment, explored the cost that would fall on air passengers.

A number of points made by the noble Earl, Lord Russell, were about progress, and this Bill is evidence of the Government making progress. Like other noble Lords, he referred to the point of the first tranche and subsequent tranches. We of course need to move beyond HEFA feedstuffs, which is the point of the further tranches of the revenue support mechanism. The noble Earl also referred to the sustainability of UK plant, which is why the Government have put £63 million into the advanced fuel fund: for the very purpose of ensuring that there are plants in this country which can produce sustainable aviation fuel and that the plants themselves are sustainable.

The noble Lord, Lord Ravensdale, referred to competition in due course. The Bill includes the opportunity for the Secretary of State in due course to run tenders or auctions as a means of developing this market.

The noble Lord, Lord Raval, talked about waste and foodstuffs. We will, as we go through this Bill, have regard to its overall effect on the provision of sustainable aviation fuel.

I am grateful to the noble Lord, Lord Grayling, for his detailed and compelling speech on this subject and for his great interest. He talked about not allowing crops to be made into SAF. We have committed to publishing a call for evidence by the end of this year on the use of crops in the SAF mandate. The aim is to improve the evidence base on crop-based SAF production, following suggestions from some stakeholders that certain types of crops could be used to increase SAF supply without compromising our approach to sustainability. But we will get information provided through that call for evidence, and we will consider what we find out.

The noble Lord, Lord Grayling, referred particularly to the use of data and how the market price is determined. The counterparty will be responsible for determining the market and should do so by using data that suppliers submit to the SAF mandate reporting system. Our live consultation seeks views on whether the assessment period should use volume data from an earlier period, or—since he suggested that is not sensible—uses forecast volume data. We will have more discussion about that in due course, I am sure. He also made a very strong point about the support being used only for production in the United Kingdom. We intend to support only eligible SAF plants in the UK; I am sure we will discuss that further. It is a strong point and I will consider it as we get to Committee.

The noble Lord, Lord Berkeley, talked about cleaner skies and warmer homes. I am aware of the consultation on alternative heating solutions, and we are working with our colleagues in DESNZ to move those forward.

The noble Baroness, Lady Jones, does not agree with this at all. We have discussed the points she was making about aviation before. This is a move towards net zero. We are trying to make aviation more sustainable, as it is not going to stop overnight and is important for the economy of the country. The mandate will save some net additional 54 million tonnes of CO₂. On the noble Baroness’s other point about frequent flyers, last year the Government altered air passenger duty which does have an effect on more frequent flyers.

I am grateful to the noble Lord, Lord Harper. He made some substantial points. The noble Lord referred to a flight that used 100% sustainable aviation fuel; I believe he was a passenger on it. If I may, I will try to respond in detail to the points that the noble Lord made before Committee stage.

The noble Viscount, Lord Trenchard, is perhaps not so supportive, though in the end I think he said he was. But what we are doing is important. We should be trying to move into a market that self-evidently can be a success for British industry, if we approach it properly. Government intervention, as justified by a number of noble Lords this afternoon, is the only way to do it. The noble Viscount is very sceptical of the effect on pricing for passengers; again, I have no doubt that we will discuss this in Committee and afterwards. Of course, he wants safety not to be compromised; none of us does. It is only right to point out that another noble Lord on his Benches was on a flight wholly powered by sustainable aviation fuel and I doubt whether the noble Lord would put himself at risk: I hope he would not. We are absolutely committed to safety. We are also committed to the fuel economy, which he mentioned.

The noble Lord, Lord Ravensdale, referred to nuclear and hydrogen power. The Government have clearly not set their mind against any solution. The significant funding put towards investing in technical solutions and the way in which the SAF process is being developed encourages other solutions and will encourage British industry to look particularly towards these solutions in the longer term. We will, of course, prioritise UK technology. This is the point and it is a good thing to do.

My noble friend Lord Hanworth is also probably not supportive—not because he does not agree with the general principle but because he somehow thinks, despite all we are doing to be at the forefront of global action, including the £63 million we are putting into the advanced fuels fund, that somehow this is not enough and that there should be some red-blooded approach. I contend that this is a pretty red-blooded approach from the Government. Significant sums of public money have been put into it, and we believe that it is the right thing to do.

The noble Baroness, Lady Bloomfield, referred to the nuclear option. SAF produced using nuclear energy is and will be eligible for the SAF mandate. We have provided funding to support the development of this technology through the grant funding programme of the advanced fuels fund. We are clearly on a journey and I note the noble Baroness’s proposition that it will need longer-term support. Although the Bill is limited to a term of 10 years, the support term is not so limited. I hope the noble Baroness will note that this is one of the reasons why.

The noble Baroness, Lady Pidgeon, made some strong points. As I have said, we are on a journey. In Committee, we can discuss the consistency of the trajectory of that journey with the EU and other countries that have set themselves different targets. Of course, it is not the only measure: zero-emission flying is and could not be just about SAF. To that end, we have talked about airspace modernisation, which is something the noble Baroness knows about. We have looked at funding of up to £2.3 billion over 10 years to extend the Aerospace Technology Institute which was announced in the modern industrial strategy in June to look at low-emission and zero-emission aircraft. We are looking at reducing aviation emissions through schemes such as the UK Emissions Trading Scheme on carbon pricing. We are also seeking to address the non-CO₂ impacts of aviation. The noble Baroness is correct, of course, in looking at everything to do with carbon reduction in flying, not just aircraft fuel and technology but the operations surrounding aircraft. She mentioned the activities in that respect of DHL, which is a major user of aircraft.

Lastly, the noble Lord, Lord Moylan, for whom I have huge respect, appears to see a conspiracy between all the parties here to do something which he does not seem to support, which is to have an industrial policy that gives British industry the chance to develop something new in the world and to develop jobs and processes which will lead to a bigger economy. He is not in the same place as some of his colleagues on his own Benches on that and I think that he is wrong, because this is not only an industrial policy but a step towards net zero. He mentioned power-to-liquid, and we have invested in that in the advanced fuels fund. He asked a couple of very detailed questions about the World Trade Organization, and I would be delighted to write to him with the answers, supposing that I was unable to provide answers from the Dispatch Box just now.

Once again, I thank all noble Lords who participated in the debate today and I welcome the support of the many who spoke in favour of the Bill’s measures. The Bill will kick-start the UK SAF industry, attracting investment and creating jobs. By addressing the market and investment uncertainty in SAF production, it will enable the UK to lead the way to greener aviation. I beg to move.

Bill read a second time and committed to a Grand Committee.

South Western Railway

Lord Hendy of Richmond Hill Excerpts

Thursday 20th November 2025 Lords Chamber

[Lord Strathcarron]

To ask His Majesty’s Government what assessment they have made of the performance of South Western Railway since nationalisation, and whether they have taken account of its performance in their plans to nationalise other railways.

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

My Lords, South Western’s performance before and after public ownership has remained below the standards passengers deserve. We inherited from both the previous Government’s management and the previous owners a very serious driver shortage, and 84 out of 90 new trains sitting in sidings, unused but being paid for from the public purse, for several years. Since May, the number of new trains in service has quadrupled and many more drivers are being recruited. It will take time to fix the poor management of the past, but the new managing director and his team will do just that.

[Lord Strathcarron (Non-Afl)]

I thank the Minister for his reply, and I agree that this has been a disaster for years. However, passenger groups report that since nationalisation, South Western has suffered a 50% increase in cancellations—it is even worse on Monday mornings and Friday afternoons—and delay minutes per hundred miles have risen by 29%. Rakes have often been halved, leaving passengers standing for whole journeys. Meanwhile, if we can understand them, we see that fares have risen faster than inflation. Would the Minister join me on a weekday morning and pay £49 to stand for one hour in a train from Winchester to Waterloo, and see for himself the results of nationalisation before it starts to affect us all?

[Lord Hendy of Richmond Hill (Lab)]

I do not need to join the noble Lord on his service, because I am on my own, from Richmond to Vauxhall. It is true that there are some short forms—the result of both the driver shortage and the failure to put the new trains into service. Those are linked, because it is clear that the previous management did not choose to put the trains into service because they would have had to train the drivers. There are 780 drivers to be trained on those trains, and getting them into service means withdrawing 20, 30 or 40 of them from what they do normally. Meanwhile, the trains that are used are falling to pieces. Those are the old red ones, as anybody who has travelled on them will know, and they are best used in their last journey to the scrapyard in Newport, South Wales. They will be gone by December. It takes time to fix things. They were not being fixed under the previous regime, and they are now.

[Baroness Pidgeon (LD)]

My Lords, I acknowledge that there have been serious infrastructure issues, some natural and some legacy, but that does not take away from the poor service provided on the longer-distance services. When will passengers on South Western services be able to buy a cup of tea on board, and to reserve seats for their journeys, which is what many would consider to be a basic standard?

[Lord Hendy of Richmond Hill (Lab)]

The noble Baroness is referring to the London to Exeter service, which has not been very good in recent months, although the timetable will be reinstated from 29 November. That is because there was a serious problem with soil moisture deficit, as we have had the driest spring since 1836—and that was not due to public ownership. She also refers to the refreshment trolleys. She may know that I have asked the managing director to see what he can do to put back the refreshment trolleys, which were withdrawn some time under previous Governments—after Covid, I think.

[Lord Watts (Lab)]

My Lords, does the Minister agree that this is a failure not of nationalisation but of privatisation, and that we have had 13 years of wrecking the train service, like everything else? Is it not the case that we are clearing up the mess left by the previous Administration?

[Lord Hendy of Richmond Hill (Lab)]

I thank my noble friend, and he is right.

[Lord Grayling (Con)]

My Lords, a few months ago I asked the Minister about the transition payments that were previously paid when a franchise ended and a new operator came in. He was not at that point able to answer the question about SWR, so I ask him again now, as a few months have passed: have the Government paid any money to FirstGroup as a result of the transition from private to public, and have any further payments been made since the time of the transition?

[Lord Hendy of Richmond Hill (Lab)]

The Government are very reluctant to pay any money to the previous owners, bearing in mind the condition in which the service was left. That discussion is still carrying on, but I am not aware of any money so far being paid and I would not be keen to pay any in the future.

[Lord Mackinlay of Richborough (Con)]

My Lords, I am delighted that my noble friend Lord Strathcarron has opened up this debate about privatisation. I have been the first to admit that previous privatisation was on a strange footing, but I notice that on my Southeastern service on the north Kent line, we are getting that back-to-nationalisation Gallic shrug from many of the staff. On the last 20 sectors that I have used over the past three weeks, I think 15 have been delayed. I am using the Delay Repay service, which comes straight out of His Majesty’s Treasury. Whatever one thinks the turnover and the profits of these services are, they are being massively reduced because of the delays. This applies not just to services on the railway; I am also seeing stations under damage and pressure. For instance, the lift has been out of operation for two weeks at Rochester station, which causes me some inconvenience.

[Lord Hendy of Richmond Hill (Lab)]

There was not a question in there but, now that Southeastern is run by a managing director who is responsible for both the operations and the infrastructure, I will get Steve White to talk to the noble Lord, and he can make his complaints in person on Rochester station.

[Lord Stoneham of Droxford (LD)]

My Lords, I declare an interest as a user of South Western, but on the Portsmouth line. I suggest that the noble Lord, Lord Strathcarron, buys a senior railcard. Is not one of the problems with the Government’s policy that they now get blamed for all the problems of the railway companies that they so-called own? The service on my train has been pretty good, except for one incident which I blame the Minister for. Is he confident that South Western will continue to get the investment it needs now that it is under government control?

[Lord Hendy of Richmond Hill (Lab)]

I am confident of that. Indeed, if the noble Lord is a regular user of the Portsmouth line, he will know that the signalling has been replaced in the last three weeks, which demonstrates significant investment in what was an unreliable system. The purpose of the forthcoming Railways Bill is to create Great British Railways so that, for the first time in over 30 years, the railway is run as a holistic whole by people who understand how to run a railway for the benefit of passengers and freight. That is better than the system that I have inherited and have had to work with for many years.

[Lord Spellar (Lab)]

My Lords, have not a lot of the problems with the conditions of the rolling stock arisen from the ludicrous decision to put out the work to the leasing companies, for which it was a massive licence to print money? Certainly, neither passengers nor the Treasury benefited from that.

[Lord Hendy of Richmond Hill (Lab)]

Although it might be possible to agree with my noble friend, on this occasion that is not correct. The old South Western trains have been at the end of their lives for some five years. Indeed, I found when I arrived there an extraordinary plan to spend £25 million trying to resuscitate rusty trains to keep them in service because the new ones have been in the sidings for five years. That is a fault not of the rolling stock companies but of management and the previous Government.

[Lord McLoughlin (Con)]

My Lords, under the system of franchising, should a franchise fail, the Government would have the opportunity to put in an operator of last resort. Who is the operator of last resort now?

[Lord Hendy of Richmond Hill (Lab)]

The noble Lord is familiar with that system; indeed, in his Government’s time, four franchises were already in public ownership as a consequence of that. By and large, they are doing better now than they were under the previous regime. You do not need an operator of last resort if you have management committed to a long-term future of the railway which satisfies passengers and freight.

[Lord Moylan (Con)]

My Lords, my noble friend Lord Strathcarron is a passenger who has a strong voice because he sits in your Lordships’ House. Before the election, the Labour Party promised in its manifesto and its document about rail that it will create a “strong passenger voice” for all passengers. However, now that we can see the Railways Bill, we see that it is a wimpish creature—a revamped TravelWatch—which has no power at all to compel Great British Rail. Would not the Minister just like to admit now that in his vision of a single directing mind for the railways in this country there really is no room for the passenger except as supplicant, never as customer?

[Lord Hendy of Richmond Hill (Lab)]

The noble Lord should read the draft Bill more carefully. If he does, he will find that the rather antiseptically named passengers’ council—it will have a better name than that in practice—will have the right to ask for regulatory action to be taken against Great British Railways if it fails to deal with subjects that the passengers’ council has a view about. I am very happy to meet the noble Lord afterwards and point him to the specific wording of the clauses; no doubt we will debate them in due course.

Merchant Shipping (Marine Equipment) Regulations 2025

Lord Hendy of Richmond Hill Excerpts

Thursday 20th November 2025 Lords Chamber

Moved by

[Lord Hendy of Richmond Hill]

That the draft Regulations laid before the House on 14 October be approved.

Considered in Grand Committee on 19 November.

Motion agreed.