Sustainable Aviation Fuel Bill

Gareth Bacon Excerpts

2nd reading
Wednesday 11th June 2025 Commons Chamber

[Gareth Bacon (Orpington) (Con)]

Let me begin by setting out an unambiguous truth: aviation is vital to the British economy. It is a cornerstone of our national infrastructure, our competitiveness and our connectivity.

When it comes to the impact of aviation on our economy, the figures speak for themselves. Aviation contributes £52 billion to UK GDP, supporting over 960,000 jobs across the country. That includes 341,000 people working directly in aviation—from air traffic controllers to aerospace engineers—350,000 jobs in the supply chain, and another 269,000 supported through consumer spending. Aviation also delivers nearly £8.7 billion in tax revenues, and aerospace manufacturing adds a further £9 billion directly to GDP, plus over £10 billion more when including its supply chains. Some 197 million passengers and 2 million tonnes of freight move through our airports each year. The economic case is therefore unanswerable. In short, we must all support this thriving industry with clear benefits to the country.

The Conservative party has always recognised the strategic importance of aviation, but, unlike the current Government, we understand the damage that can be done with poor policy choices—I regret to say that we have seen plenty of that from the Labour Government over the past year. Alongside their national insurance jobs tax, which is putting pressure on businesses and threatens to leave working people £3,500 a year worse off, Labour’s decision to hike air passenger duty threatens the vitality of this thriving industry. The Office for Budget Responsibility confirms that rises planned by the Chancellor of the Exchequer will raise an extra £555 million in taxes over five years, pushing up the costs for businesses and passengers alike.

In a speech that will have a lot of common ground with the Secretary of State’s speech, I regret to say that Labour’s handling of its professed desire to expand aviation raises more questions than answers. The decision to approve a second terminal at Luton airport, which we support, will be judicially reviewed. The proposal for a second runway at Gatwick has been kicked down the road for surprising reasons, to say the least, and the supposed support for a third runway at Heathrow is no more credible. The Chancellor has promised that the latter proposal will be operational by 2035, with spades in the ground in this Parliament, but that ambition looks very far-fetched, and there are substantial logistical and financial barriers to its construction. So far, the Government have provided no solutions on those points, so we will watch developments in the next few weeks with considerable interest.

It is against that backdrop that we come to the Bill before us. When we entered opposition, we made it clear that we would not oppose the Government just for the sake of it. We made it clear that where the Government’s choices would benefit the country or the economy, we would welcome them. That is why we will not seek to divide the House on this legislation on Second Reading. This Bill is a logical follow-on from the statutory instrument passed in September last year that established the SAF mandate, the first stage of which came into effect in January. Having mandated that airlines will be required to use a specified percentage of SAF—2% this year, rising to 10% in 2030 and 22% in 2040—it is logical to take steps to ensure adequate levels of locally produced fuel.

While the mandate requires the consumption of SAF, it is a new technology, and its production carries a high risk for investors. Encouraging the development of the plants required to produce this fuel is the purpose of this Bill and, to a very large degree, it is a continuation of the policy of the previous Government. In 2023, it was the last Government who committed to an industry-funded revenue certainty mechanism to support UK-based SAF production. In early 2024 we published the detail, with plans for a guaranteed strike price model to give price certainty to SAF producers. I hear the Minister say, “You didn’t do it!” He is completely correct, because unfortunately there was something called a general election that followed shortly after.

As the Secretary of State has outlined, under this model, producers will be topped up when the market price falls below a guaranteed strike price; when the market price rises above, they will pay it back. The system mirrors the successful contracts for difference model in offshore wind, and the economic benefits could be considerable. A cost-benefit analysis produced by the Department for Transport before the general election suggested that the SAF industry could add more than £1.8 billion to the economy and create more than 10,000 jobs in the country, but, more fundamentally, SAF is a product of what we know to work. As the Secretary of State said in her speech, it can be blended with conventional Jet A-1, used in existing aircraft and refuelled at existing airports. The capability exists. The challenge is not scientific; it is economic. That is why the concept of a revenue certainty mechanism was one of the six pillars in the previous Government’s jet zero strategy, and, as the Secretary of State outlined, the introduction of a revenue certainty mechanism has wide support in the aviation industry.

Let me be clear: while we will not oppose the legislation this evening, we will carefully scrutinise it as it progresses through the House. In that spirit, I will put some questions to the Minister, which I hope he will address in his summing up. The first is about passengers. In the press release announcing the Bill, the Government said that the revenue certainty mechanism would keep ticket price changes minimal:

“Keeping fluctuations to £1.50 a year on average.”

The Secretary of State said the same in her speech. Perhaps in his speech the Minister could outline what this figure is based on. Do the Government stand by it? Is it a commitment, or a rough estimate?

The second question is about what type of SAF the Government favour and how it will be produced. While the SAF mandate permits the production and use of hydroprocessed esters and fatty acids SAF in the early years of the mandate, and also contains a small but increasing requirement for power-to-liquid SAF in later years, the bulk of the SAF to be developed and used under the terms of the mandate is second generation SAF, which is to be made from municipal waste, non-edible crops and woody biomass. The UK is a small island, with insufficient spare land to enjoy self-sufficient food security or to grow new forests at scale. Does the Minister think we will be self-sufficient? If not, what proportion of the ingredients necessary for making second generation SAF does the Minister think we will need to import?

Relatedly, the HEFA cap comes into force incrementally from 2027, despite there currently being no domestic production of second generation SAF in the UK and low levels of second generation SAF produced globally, removing the opportunity to source mandated volumes through imports. This risks making the costs of hitting SAF mandate targets very high indeed, because suppliers will soon be forced to buy out of their mandate obligations—a significant cost that will be passed on to the airlines and, ultimately, to passengers without delivering any decarbonisation benefit at all. Will the Government consider revising the timelines for phasing out HEFA SAF to bring them more in line with the timescales for domestic second generation SAF production, in order to minimise the costs for passengers?

The next area of interest is planning. The plants in which the Government are seeking to encourage investment will be large, and—as the Minister no doubt knows—large developments tend to attract a lot of local opposition, often leading to planning inquiries, judicial reviews, vast expense and years of delay before any construction work begins. If this does not change, the revenue certainty mechanism may not be sufficient to attract investors, so what will the Government do to minimise delays in the planning process?

I turn now to timescales. When will the first contracts be awarded under the RCM? Will there be a timetable for reaching full mandate compliance? As my right hon. Friend the Member for Goole and Pocklington (David Davis)—who is no longer in his place—touched on, the issue of the strike price is critical to the success of the proposal. What criteria will be used to set the strike price? Will the methodology be published, and will there be regular reviews? Finally, will the Government commit to regular reporting to Parliament on industry take-up, production capacity and cost trajectory, to ensure that they remain accountable for the Bill over time?

The importance of this Bill is clear. Backing UK production of sustainable aviation fuel is necessary if we are to meet our net zero goals without undermining the competitiveness of the aviation sector. However, let me be clear: as the Bill moves through the House, we will continue to look closely at the detail and press for changes where necessary, where improvements can be made to ensure that the scheme delivers on its promise.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Chair of the Transport Committee.

Bus Services (No. 2) Bill [Lords]

Gareth Bacon Excerpts

2nd reading
Monday 2nd June 2025 Commons Chamber

[Gareth Bacon (Orpington) (Con)]

Buses are the most popular form of public transport in the country, carrying passengers on twice as many journeys as trains and serving thousands more stops nationwide. As the Secretary of State said in her opening remarks, from the centre of London to the remotest areas, they can get teenagers to school, allow pensioners to visit friends and connect people to jobs that they would not otherwise be able to take. They keep town centres alive, connect our communities and ensure that those with mobility issues, as well as the most vulnerable, can get around.

[Peter Swallow (Bracknell) (Lab)]

Will the hon. Gentleman give way?

[Gareth Bacon]

It is a little bit early, but I will give way.

[Peter Swallow]

I thank the hon. Gentleman for giving way. I was just curious why, if buses are so popular and important, as he rightly says, so few of his Back-Bench colleagues are lining up to speak in this important debate?

[Gareth Bacon]

It is because there is no Division later. It is not because nobody cares, but because there is not going to be a Division.

The previous Conservative Government recognised just how vital local bus services are to keeping communities connected. From 2020 to when we left office last summer, the previous Government committed £4.5 billion to support and enhance bus services, including more than £2 billion to help local authorities implement their bus service improvement plans. Perhaps most importantly, we also introduced the £2 bus fare cap.

[Wendy Morton]

Just to be absolutely clear, there are Conservative Members who wanted to ask questions of the Transport Secretary, but she seemed a little unwilling. On the specific point of fares and affordability, can my hon. Friend help to ensure that passengers, whom the Bill should focus on, see value for money from this Bill? In the west midlands, Mayor Parker, under his plan to take back control of our buses, is actually taking money from our pockets and increasing fares by 8.6%?

[Gareth Bacon]

Yes, indeed. We are very interested in doing that, which is why we inserted a purpose clause in the other place to ensure that the key focus of this Bill is solely on passengers.

By maintaining the £2 bus fare cap, we ensured that bus travel remained affordable and accessible to as many people as possible, while helping families manage the cost of living. We have voiced deep concerns in both this Chamber and the other place about the impact, particularly on the most vulnerable, of Labour’s decision to scrap the £2 cap and raise it to £3. Make no mistake: this is bad for those in work, who will be £3,500 worse off because of this Government’s jobs tax, and bad for pensioners, who have seen their winter fuel payments cut and their energy bills rise, despite repeated promises from Labour to cut their energy costs by £300.

[Mr Richard Holden (Basildon and Billericay) (Con)]

One of the things that feels so pernicious about scrapping the national “Get around for £2” bus fare cap is that, while certain parts of the country that were given long-term settlements under the last Government—sometimes of up to five years—have been able to maintain the cap, large parts of the country have not been able to do so. Does that not go to show that the last Government were prepared to work with people from all political parties, but this feels particularly pernicious because it is really targeted at areas that have not traditionally been Labour-supporting?

[Gareth Bacon]

As always, my right hon. Friend gets to the heart of the matter, and I have to say that I agree with him.

I would like to make one thing abundantly clear from the outset: we do not oppose franchising in principle. When implemented properly, franchising can be a powerful mechanism for improving services, addressing local transport challenges and delivering the quality services that passengers rightly demand and expect.

[Anna Dixon (Shipley) (Lab)]

Will the hon. Gentleman give way?

[Gareth Bacon]

I will make a bit of progress.

However, the Bill in its original form does not do that. The Secretary of State has acknowledged, and I agree, that the Bill does not mandate franchising everywhere, and that is a sensible step, but the Bill does not prioritise passengers, and nothing in it guarantees an improvement in service standards. The truth is that this Bill appears to be driven by political nostalgia. It is in many ways a thinly veiled attempt to recreate the municipal model of the pre-1986 era, without fully considering the financial and operational realities of today.

[Sir Ashley Fox]

The Highbridge bus passenger group in my constituency has raised the issues of Sunday services either not existing or starting so late that people cannot get to work, bus services being put on in the summer during the tourist season but not being available in the winter, and poor connections for rural communities. Does my hon. Friend share my concern that, without additional funding, this bus Bill will not solve those problems?

[Gareth Bacon]

Yes, my hon. Friend is completely correct, and I will come to that a bit later in my speech.

While we do not oppose the franchising of bus services, we do oppose a particular assumption that underlines this legislation, which is that the public sector is the solution to everything. Some local authorities may have the expertise and resources to successfully franchise passenger bus services, but let us be clear that many do not. The very central premise of the Bill—giving every local authority the unchecked power to implement franchising, regardless of its resources or capacity—is not an act of empowerment; it is irresponsible. By removing the need for the Secretary of State to consent to franchising, as required under the previous Conservative Government, this Government are eliminating crucial safeguards.

[Wendy Morton]

Will my hon. Friend give way?

[Gareth Bacon]

With respect to my right hon. Friend, I will not, because I am conscious that lots of Members want to speak.

Those safeguards are designed to ensure that franchising serves the passengers who rely on our bus services and the taxpayers who pay for them. The expertise required to design, manage and operate franchised networks is not readily available in most councils. That is why the Bus Services Act 2017 limited franchising powers to mayoral combined authorities, which are bodies with the scale, resources and democratic mandate to take on such responsibilities.

Crucially, the legislation we enacted to pave the way for mayoral combined authorities to issue franchising models also required those authorities to demonstrate that franchising would deliver genuine benefits for passengers. The removal of that requirement by this Bill is concerning, and it betrays the view held by those on the Government side of the House that the public sector is inherently infallible. Members will not be shocked that I do not share that view, but they do not need to take my word for it.

[Victoria Collins (Harpenden and Berkhamsted) (LD)]

Will the hon. Gentleman give way?

[Gareth Bacon]

I will make some progress and then give way.

Members should take the word of Centre for Cities, which has made it clear that expanding franchising could expose councils to serious financial risks, because after decades of deregulated services, many transport authorities simply lack the skills and capacity to manage a comprehensive bus network, yet would be financially responsible if an undertaking goes wrong.

These are not just hypothetical concerns. The experience in Greater Manchester illustrates just how easily costs can spiral, leaving the taxpayer out of pocket. The Secretary of State will no doubt be aware that initial projections published in Greater Manchester combined authority’s transport revenue budget put the cost of transitioning to a franchised system at £134.5 million for 2024-25. That figure has since ballooned, with ongoing operational costs now forecast to exceed £226 million per year by 2025-26, which is a 68% increase in one year. Over four years, the scheme could cost up to £1 billion—far, far more than anticipated. Moreover, the House will know that the annual level of bus subsidy in London last year amounted to £646 million. Greater London is the most heavily populated and most economically active area in the entire country. It also has the highest level of bus use. Yet even with all those advantages, it requires that level of annual subsidy just to keep the network running.

[Joe Robertson (Isle of Wight East) (Con)]

When my hon. Friend talks about the increased risk smaller local authorities would face through franchising, he could be talking about my local authority, Isle of Wight council. Does he see anything in the Bill that is appealing to small unitary authorities, or is this really just a Bill for bigger metropolitan areas and large towns?

[Gareth Bacon]

The risk of the Bill is that it does not come with substantial funding attached. That is the problem. It is mismanaging the public’s expectations. I expect we will hear from a parade of Labour MPs talking about how it will transform services in their local area. Without the required level of funding, it simply will not.

[Victoria Collins]

It is really important that we stop the vicious cycle. In my area of Harpenden and Berkhamsted, the X5 has been cancelled for commercial reasons. The bus company says it is no longer commercially viable, but that has left people who work in the local hospital saying, “I might have to move house or leave my job.” There are children who now have to wait at school or who cannot get back from school because the bus goes too late. We need to stop the vicious cycle and make sure the funding is there, and this is a good start to help bring buses back to the communities that need them.

[Gareth Bacon]

I refer the hon. Lady to the answer I gave to my hon. Friend the Member for Isle of Wight East (Joe Robertson), which is that without substantial extra levels of funding from the Government, that simply will not happen. Local authorities may have the powers to do it, but they simply will not have the ability.

The Government have talked about the amount of money they are putting into the Bill and the Secretary of State referred to it in her speech, but it is a mere £1 billion, of which £700 million has been earmarked for bus planning documents, not actual services. Less than 30% is being directed toward the delivery of bus services themselves, which will not touch the sides. Giving local authorities the legal power to do something without the money is mere window dressing. If these challenges can emerge in Greater Manchester and Greater London despite all their resources, planning and political leadership, what should we expect elsewhere? The truth is that we do not know, and that highlights the danger at the heart of the Bill.

On a connected vein, through franchising, we may end up extinguishing a number of highly successful private sector businesses, reducing them to operating for a fee and doing what the state instructs them to do in terms of routes, services and fares. Quite aside from losing the expertise that the private sector brings to the network, the Government risk removing any incentive for the private sector to invest in our bus networks, potentially leaving the taxpayer with ever greater burdens.

Despite my various concerns about this legislation, I would like to recognise that the Bill we see before us was greatly improved during its passage through the other place—improvements driven notably but not exclusively by Conservative peers. The purpose clause, which obligates the Secretary of State to consider service performance, quality and accessibility, was a much-needed addition, as was the amendment requiring an assessment of the impact of ending the £2 fare cap. Successful amendments requiring the Secretary of State to review bus services to villages in England, to develop a programme to eliminate serious injury during bus operations, and to require bus operators to record all data regarding assaults and violent behaviour, were all tabled by peers from other political parties to His Majesty’s Opposition and, collectively, they improve the Bill. The latter amendment was tabled by the noble Lord Woodley, a Labour peer and former joint general secretary of the Unite trade union. It was, bizarrely, opposed by Labour peers, but it succeeded with the support of Conservative peers and those of other parties.

A further successful Conservative amendment was passed, mandating a review of the national insurance burden on special educational needs transport, following the increases announced by the Chancellor of the Exchequer. I must say that it is deeply regrettable that Labour peers were whipped to vote against a measure designed solely to protect some of the most vulnerable in our society. In opposing the special educational needs transport amendment in the other place, the Government asserted:

“The Government do not expect the changes to national insurance to have a significant effect on home-to-school travel for children with special educational needs and disabilities, so it would not be proportionate to conduct the assessment that this amendment suggests.”—[Official Report, House of Lords, 26 March 2025; Vol. 844, c. 1756.]

Leaving aside the breathtaking arrogance of that statement, it is directly contradicted by the very providers tasked with delivering these vital services. The chairman of the 24x7 Group, one of the largest operators of SEND transport in the country, has warned that changes to national insurance contributions could significantly raise employment costs, making some contracts unviable. That has the potential to leave thousands of children without access to the transport they rely on to attend school. To oppose even a review of such consequences is not just shortsighted; it speaks to a worrying indifference about the impact of this legislation on vulnerable passengers.

The Opposition were also disappointed that Labour peers voted against introducing a safeguard against repeated franchising assessments for the same geographical area, which risks wasting public resources and creating instability for operators and passengers alike. Similarly, it was disappointing to see Labour peers not support plans to ensure that floating bus stops do not threaten the safety of those who are blind and partially sighted.

Likewise, if improving passenger services is at the heart of the Bill, I fail to understand why Labour peers were whipped to vote against the amendment that would give the Secretary of State the power to intervene when franchised services fail due to poor local management. Does the Secretary of State really believe that passengers should be left stranded simply because a local authority is unable to deliver? I do not believe that to be the case and I look forward to her amending the Bill as it proceeds through the House.

Why did Labour peers vote against those measures? Once again, it would appear that ideology took precedence over passengers. That is why we will push to reinstate these prudent amendments as the Bill proceeds through the House. The Liberal Democrats supported many of the measures in the other place and I sincerely hope they will do the same in this House, for the benefit of passengers.

In conclusion, franchising may well play an important role in improving the bus networks of the future, but the Bill alone will not get us there. That is because the Bill does not prioritise those who matter most: the people who rely on buses every single day to get to work, attend school, reach appointments and stay connected with their communities. While we welcome the positive changes made by peers in the other place and we will not divide the House on Second Reading, we cannot vote for a Bill that lacks basic safeguards, ignores the risks and prioritises ideology over impact. We will therefore seek to improve the Bill as it proceeds through the House. I urge the House to consider not just the political implications of this legislation, but its real-world consequences for the millions who depend on these services every day.

Oral Answers to Questions

Gareth Bacon Excerpts

Thursday 15th May 2025 Commons Chamber

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Secretary of State.

[Gareth Bacon (Orpington) (Con)]

As we approach the summer holidays, we know that many families are looking forward to the opportunity to get away. However, in what may come as concerning news, Labour’s Employment Rights Bill could threaten passengers’ ability to travel without disruption or additional costs. This is because in existing passenger rights legislation, under article 5(1)(c)(i) of Regulation 261, passengers are entitled to compensation if they are informed of cancellations less than two weeks before their flight. The Employment Rights Bill reduces the required notice period for strike action in any industry from 14 days to 10 days, increasing the risk of last-minute cancellations. That could in theory cost airlines tens of millions of pounds, which could in turn lead to higher costs for passengers as airlines pass the expenses on to the travelling public. Does the Minister agree that the Government should maintain the 14-day notice period in aviation, putting the interests of passengers ahead of those of their union friends?

[Mike Kane]

The shadow Secretary of State will forgive me if I have not read that sub-paragraph that trips off the tongue. This Government will always put passengers first. That is why more passengers than ever are flying in our skies and leaving our airports. The Department is fully engaged with the aviation sector at all stages, including on this issue.

--- Later in debate ---

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Secretary of State.

[Gareth Bacon (Orpington) (Con)]

At the last transport questions, on 27 March, in the context of the Secretary of State saying on television that some strikes are “necessary”, I pointed out that the trade unions have welcomed her rail reform plans and said that

“a just transition to nationalisation would mean the levelling up of pay and conditions for rail workers.”

The cost of that to the taxpayer would be considerable. When I asked the Secretary of State whether she would

“consider a strike over harmonising pay and conditions to be a necessary strike”,—[Official Report, 27 March 2025; Vol. 764, c. 1099.]

she avoided answering the question, which was uncharacteristic of her. I will give her another chance now: would that be a necessary strike?

[Heidi Alexander]

The answer I gave to the shadow Secretary of State’s previous question was that if, as an operator of the railway, we felt it was necessary to take a strike on grounds of safety, we would, of course, put the safety of the travelling public first—that will always be the case. On the harmonisation of terms and conditions, we need to bring legislation forward to establish Great British Railways. We will have many discussions with our trade union colleagues in a constructive way while ensuring that we provide value for money for the taxpayer.

Zero Emission Vehicle Mandate

Gareth Bacon Excerpts

Monday 7th April 2025 Commons Chamber

[Gareth Bacon (Orpington) (Con)]

Thank you very much, Mr Speaker. I will not embarrass myself by announcing how old I am, but it is far too old.

[Mr Speaker]

We have just checked.

[Gareth Bacon]

I thank the Secretary of State—[Interruption.] That was a very helpful intervention by the hon. Gentleman; he is completely right. I thank the Secretary of State for her statement, and for advance sight of it. The announcement by the United States of America that 25% tariffs will be imposed on UK automotive exports has understandably caused significant concern in the automotive sector. Automotive manufacturers now face tariffs of 25% on around £8 billion-worth of car and auto parts exports—a potentially devastating blow for the automotive industry. I assure the Secretary of State that we will support the Government when they do sensible things to reverse the impact on our already fragile economy. In that vein, I am glad that the Government have recommitted to negotiating a better deal with our closest ally and largest single-country trading partner, and I sincerely hope that they are successful in their negotiations.

However, on the substance of the right hon. Lady’s statement, I cannot share her enthusiasm for the rest of Labour’s plans. The reality is that today, Labour is simply trying to clear up the uncertainty that it has contributed to. When the previous Conservative Government reacted to sluggish automotive trade figures by making the pragmatic decision to delay the ban on new diesel and petrol cars from 2030 to 2035, aligning the UK with major global economies such as France, Germany, Sweden and Canada, Labour accused us of undermining the automotive industry. This morning, the Secretary of State criticised the previous Government for chopping and changing, and a consultation put out by Labour claimed that our policies caused “great harm” to the UK’s reputation as a leading nation in the EV transition by moving the goalposts. However, that is precisely what Labour did upon taking office by ideologically reversing the 2035 deadline. The plans announced over the weekend do not place the automotive sector in a better position than it was when we left office, despite some minor adjustments to the zero emission vehicle mandate.

What is more, this announcement will not undo the damage that this Labour Government have already caused. Their introduction of a £25 billion national insurance jobs tax in their first Budget was a major blow to businesses; we have warned for months that this tax will harm industries, and the automotive sector is no exception. The Secretary of State will know that US tariffs on UK car exports are set to cost the automotive sector £1.9 billion. Combined with the Government’s jobs tax—which is predicted by the Office for Budget Responsibility to put 50,000 jobs at risk, and is likely to cost the automotive sector an additional £200 million—that double whammy is going to be very difficult for the sector to absorb.

Indeed, despite today’s announcements, the Society of Motor Manufacturers and Traders has stated that zero emission vehicle mandate targets remain “incredibly challenging”. In its words:

“ZEV Mandate targets are incredibly challenging, especially with a paucity of consumer demand and geopolitical upheaval. Growing EV demand to the levels needed still requires equally bold fiscal incentives…to give motorists full confidence to switch”,

but that is not what the Government are offering. Instead of the “bold changes” that the Prime Minister boasted of at the weekend, what we have is mere tinkering at the edges. Allowing producers of luxury vehicles, such as Aston Martin and McLaren, to be exempt from the 2030 ban on the sale on new internal combustion engine vehicles is welcome, as is the news that all forms of hybrid cars will be available until 2035. However, this does not go anything like far enough. The Government are still proposing to increase the level of tax liability on the value of hybrid company cars by as much as 16%, which could potentially cost individual drivers thousands of pounds each. The reduction in fines for missing EV sales targets from £15,000 to £12,000 per vehicle is nothing to be celebrated—it is like drowning at the depth of 100 metres instead of 120 metres.

Over the past few months, we have heard from numerous businesses that they simply cannot cope with the ZEV mandate. In October, the chief executive officer of Jaguar Land Rover warned that the mandate was causing severe disruption to the new car market. Not long after, Vauxhall announced the closure of its Luton factory, citing the ZEV mandate as a key factor in making that plant economically unviable. More recently, uncertainty has surrounded Plant Oxford, the home of the Mini since 1959. Last year, excluding fleet sales, the fact is that only 10% of private purchases of new vehicles were electric. Far from doing retailers a favour, the Government’s offer to fine them a small amount less for failing to sell a product that consumers demonstrably do not want is a kick in the teeth to the automotive industry.

I must therefore ask the Secretary of State the following questions. With just one in 10 private buyers purchasing an electric vehicle in 2024, why are the Government still trying to force people to buy something for which there is limited consumer demand at present? Is she really pretending that any of the measures announced today were not already in train before the tariffs were announced? Will she commit to reversing the hike in the hybrid company car tax? Does she really think that reducing the fine for each car that fails to comply with EV quotas will be enough to mitigate the impact of tariffs? Does she not believe that, rather than chasing an arbitrary timeline, now is the time for a more gradual transition to electric vehicles, one that would allow the sector to mitigate many of the challenges it is currently facing? Finally, does she recognise that the combined impact of the ZEV mandate, the jobs tax and external tariffs is a perfect storm for the automotive sector, which is facing significant and exacerbated challenges because of the choices her party has made over the past nine months?

[Heidi Alexander]

I also extend my birthday wishes to the shadow Secretary of State. I hope he is grateful for the two birthday presents I have given him: not only a statement but a general debate, so that we can face each other across the Dispatch Box not once but twice today.

It is rich for the shadow Secretary of State to blame uncertainty in the automotive sector on this Government. I can only think that he has some sort of selective amnesia going on, because it was his Government who introduced this policy. They then delayed the phase-out date, tanking EV demand by 15% almost overnight. We had the spectacle of the previous Prime Minister, the right hon. Member for Richmond and Northallerton (Rishi Sunak) standing up to make a speech pushing that date back out to 2035. Almost overnight, we saw those sales tank. The shadow Secretary of State should be explaining to Britain’s car manufacturers why his party faffed about so much, costing them millions and arguably leaving the sector less resilient to the global economic headwinds it now faces.

The shadow Secretary of State claims that this is a moment when we are tinkering at the edges, but nothing could be further from the truth. This is a significant moment for industry. He quotes the SMMT, and I just gently say to him that Mike Hawes, its chief executive, said this morning:

“The government has rightly listened to industry, responded quickly to global dynamics and recognised the intense pressure manufacturers are under.”

The shadow Secretary of State is also right to raise Jaguar Land Rover, which is affected by the imposition of the global tariffs that President Trump announced recently. I point out to the hon. Gentleman that Adrian Mardell, CEO at JLR said:

“We welcomed our announcement of the increased flexibilities in the zero emission vehicle mandate, and the clear commitment from Government to incentivise electric vehicle uptake and invest in infrastructure.”

The shadow Secretary of State also said that consumers do not want to buy electric vehicles. He needs to do his homework; the UK is the third largest market for electric vehicles in the world, after the US and China. It is the largest market in Europe. Last year—[Interruption.] He can chunter as much as he wants. Last year, 382,000 EVs were sold. We have had record figures in February and March this year, where we have seen demand for EVs go up by more than 40% compared with the same month in the previous year.

The shadow Secretary of State claims that we were going to make this announcement anyway. Well, he is right that we have been talking to industry for a number of months, and we were always going to have to do something to clear up the dog’s breakfast of a policy left by his Government. Clearly, the announcement last week about US tariffs on the car industry has made it all the more important that we act with pace and urgency. It is completely right that we have provided the certainty and clarity for which the sector has been calling for years.

The shadow Secretary of State claims we are not going far enough. We are investing £2 billion in an automotive transformation fund, which will ensure we can build the battery gigafactories of the future, support the EV supply chain and ensure that those high-skilled jobs of the future are available in communities across the country. Between now and 2030, we are spending £200 million supporting the roll-out of charge points, backed by £6 billion of private investment. We are spending £120 million on plug-in vehicle grants, giving people who want to purchase a new van up to £2,500 and those wanting to purchase a larger van up to £5,000.

I say to the shadow Secretary of State that this Government are acting where his Government failed. We are giving certainty to businesses, protecting jobs in a critical industry, cutting carbon and fostering a competitive market to benefit consumers.

Oral Answers to Questions

Gareth Bacon Excerpts

Thursday 27th March 2025 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

[Gareth Bacon (Orpington) (Con)]

When the Government handed the ASLEF trade union an eye-watering £9 billion pay agreement in the summer, they promised that it would

“protect passengers from further national strikes”.

Yet recently the Secretary of State said on national television that

“there will be occasions on which strikes will be necessary”.

Will she provide the House with an example of a necessary strike?

[Heidi Alexander]

The hon. Gentleman will know that I have extensive experience from my time in London, where we did take strikes when safety was at risk. That is one direct example that I can give him.

[Gareth Bacon]

The Secretary of State will be aware that in response to her Department’s recent rail consultation, the trade unions welcomed her plan and said that a just transition to nationalisation would mean the levelling up of pay and conditions for rail workers. The cost of that to the taxpayer could be considerable. Would she consider a strike over harmonising pay and conditions to be a necessary strike?

Disruption at Heathrow

Gareth Bacon Excerpts

Monday 24th March 2025 Commons Chamber

[Gareth Bacon (Orpington) (Con)]

I thank the Secretary of State for her statement and for advance sight of it. I join her in extending my gratitude to the firefighters who responded so swiftly to the incident. I extend my sympathies to everybody affected by the disruption and place on record my thanks to all those at Heathrow who worked diligently to ensure that the airport came back on line over the weekend.

The loss of power in the Heathrow area caused significant disruption for thousands of travellers and countless businesses. Heathrow is one of the world’s busiest airports and Europe’s busiest air hub. It was scheduled to handle 1,351 flights, carrying up to 291,000 passengers on Friday. However, as we know, the fire at a nearby electrical substation forced planes to be diverted to other airports, with many long-haul flights returning to their points of departure. The financial cost of the shutdown to the airline industry is expected to total tens of millions of pounds, and there are significant question marks over the airport’s possible vulnerability to further disruption in the future.

Before we discuss the specifics of the incident, I ask the Secretary of State to confirm that she will remain engaged with Heathrow, the airlines and other key stakeholders throughout this period to minimise the impact on passengers and the economy.

I note that the Secretary of State for Energy Security and Net Zero, whom I am pleased to see in his place, has instructed NESO to investigate the incident urgently. It is crucial that NESO’s investigation delivers a clear and objective assessment of the incident’s circumstances and the UK’s broader energy resilience. I ask the Government to keep the House informed as that investigation develops.

I also note that the Secretary of State for Transport will closely monitor Heathrow’s internal investigation into the incident. She is right to do so. Although I trust that she will share any conclusions drawn from the report with the House, may I ask that she provides specific assurance today that she will indeed do so?

Let me focus on the details of the incident, which evidently raises significant concerns about the resilience of Heathrow airport and critical infrastructure in general. On Heathrow’s resilience, important questions arise about why the airport was dependent on a single electrical substation, which proved so vulnerable to such an incident. I understand from media reports and from the Secretary of State’s statement that although two additional substations are capable of powering the airport, doing so would require reconfiguring the power supply structure for all terminals. Does the Secretary of State believe that that set-up is appropriate for the country’s largest airport? Additionally, what assessment has she made of the power supply resilience of other major UK airports?

With regard to the resilience of our critical national infrastructure, the episode underlines the urgent need to ensure that our critical infrastructure is safeguarded against both accidental incidents and deliberate acts of sabotage by malign actors. Hon. Members will recall that when President Putin launched his illegal invasion of Ukraine, global energy markets faced immense disruption, which posed the most significant threat to European energy security since the 1970s. Despite that upheaval, Britain’s energy prices remained broadly stable, but only because the Government of the day took decisive action to protect businesses and households from price spikes as far as possible. That came at a significant financial cost.

The event at Heathrow reminds us that true energy security depends not only on price stability but on the physical safety of our energy infrastructure. Given the crucial role of airports in our economy, we must remain vigilant. In the light of that, what discussions has the Secretary of State had with the Secretary of State for Energy Security and Net Zero about ensuring that the energy supply to major airports remains secure? What is the timeline for the Kelly review, and will its findings be made publicly available? Will the Secretary of State engage with colleagues across Government Departments to assess and mitigate the risks posed by malicious actors who will undoubtedly have taken note of this weekend’s events? Finally, what specific steps will she take to strengthen the resilience of our critical national infrastructure?

[Heidi Alexander]

I am grateful to the hon. Gentleman for the tone of his comments. I assure him and other Members of this House that I will do everything I can to keep them updated, and I will continue the engagement I have had with Heathrow since the incident first became known to me. I spoke to the chief executive of Heathrow on Friday morning and again today. If my officials can do anything to assist those on the Opposition Front Bench in understanding this very serious issue, I am willing to facilitate any such meetings that the hon. Gentleman wishes to have.

On the internal investigation that the London Heathrow board has commissioned Ruth Kelly to do, as the hon. Gentleman knows, I have asked to see a copy of that report. Assuming that I have the permission of Heathrow to share it more broadly, I am happy to share its contents with him and the House. On his question about whether I am content with and confident about the set-up for airport power supplies, I am not going to become an armchair electrical engineer; I want to see the report that has been commissioned by the airport and the report that my right hon. Friend the Secretary of State for Energy has commissioned from NESO. We are also conducting a resilience review of critical national infrastructure via the Cabinet Office, and I assure the hon. Gentleman that we will look at any and all the issues that this incident raises in those reviews. I spoke with my right hon. Friend the Secretary of State for Energy on Friday evening, and I assure the hon. Gentleman that I will continue to engage across Government on any of the issues that this incident raises.

Oral Answers to Questions

Gareth Bacon Excerpts

Thursday 13th February 2025 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

[Gareth Bacon (Orpington) (Con)]

Heathrow airport is already the largest single-site payer of business rates in the country, paying approximately £124 million annually. To fund the Chancellor’s next spending spree, the Valuation Office Agency is currently revaluating airports in England and Wales, and any significant increase could impact Heathrow’s ability to fund airport expansion and a third runway. Is the Secretary of State aware of the latest estimate of how much Heathrow’s business rates will increase by?

[The Parliamentary Under-Secretary of State for Transport (Mike Kane)]

This was a policy cooked up by the Valuation Office Agency under His Majesty’s Revenue and Customs by the last Government. We have engaged with airports on this matter and asked them to continue to engage with the Valuation Office Agency.

[Gareth Bacon]

I notice that the Minister did not answer my question, so I will assist him. The estimate is that Heathrow’s rates bill will increase fivefold to £600 million annually, putting substantial additional pressure on Heathrow’s finances. In the light of that, will the Minister confirm the long-standing policy that the full cost of a third runway, including related works such as relocating, tunnelling or bridging over the M25, will be fully funded by the private sector and not by the taxpayer?

[Mike Kane]

The airports national policy statement from 2018, which was two Governments ago, made it clear that any proposal—we have not had a proposal come forward—should treat surface access appropriately, and that should be funded by the private sector where possible.

Airport Expansion

Gareth Bacon Excerpts

Tuesday 28th January 2025 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

[Gareth Bacon (Orpington) (Con)]

In recent days we have heard that the Chancellor is about to announce her support for airport expansion at Luton, Gatwick and Heathrow. His Majesty’s Opposition are supportive of airport expansion because we recognise the huge economic benefits that would bring. For Luton and Gatwick, as the Minister has said, planning processes are well under way, but the situation at Heathrow is rather different.

A completed third runway at Heathrow would undoubtedly bring economic benefits, which we would support, but delivering that will not be straightforward because there are major logistical barriers to its construction. Those include, but are not limited to: hundreds of thousands of additional people being brought on to Heathrow’s flightpath; the potential for significant disruption to the M25 and M4, which could harm the economy for years to come; the fact that a large incinerator is in the way and would have to be demolished; and the need to address local concerns about noise and air pollution. The uncertainties do not end there, because to date Heathrow has not applied for a development consent order, and neither has it confirmed that it intends to do so.

That all leaves the Minister with many questions to answer. What assessment has he made of the impact of building a third runway on the M25 and M4, which are two of the busiest motorways in Europe? How certain is he that any proposed plan will have the support of affected communities? What is the estimated cost, and who will pay not just for the runway construction, but for the massive additional work that will need to be done, including, among other things, rerouting motorways, demolishing the incinerator and rebuilding it elsewhere? Perhaps most importantly, what assurances can he provide that there will be an application for a development consent order?

I sincerely hope that the Minister can answer those questions, because if he cannot it will be clear that this is not a serious policy, but rather a panicked and rushed attempt by the Chancellor of the Exchequer to distract attention from the state of the economy, which is currently withering under this floundering Labour Government.

[Mike Kane]

Well, the brass neck! The last Government crashed the economy, sending mortgages through the roof, and called an early election to avoid having to make difficult decisions. Transport policy should be enabling growth as a priority in this country, so that we can bring about the change that the British people voted for. For 14 years we had a Government who had become so sclerotic in aviation, and indeed maritime—that is also part of my brief—that no decisions were brought forward on decarbonising the maritime or aviation sectors, or making the difficult decisions that this country needs to make. As the hon. Member rightly says, there is currently no development consent order before us, and that is for Heathrow or a related party to bring forward.

Draft Airports Slot Allocation (Alleviation of Usage Requirements etc.) Regulations 2025

Gareth Bacon Excerpts

Monday 27th January 2025 General Committees

[Gareth Bacon (Orpington) (Con)]

It is a pleasure to serve under your chairmanship, Ms McVey, and I thank the Minister for his opening statement. The regulation of slot allocation is an important part of maintaining the efficient operation of the UK’s busiest airports, which are often constrained by capacity. The core objective of airport slot co-ordination is to optimise the use of available transport infrastructure, benefiting consumers and industry alike. Airport slots are allocated by independent co-ordinators to airlines for their planned operations, particularly at airports such as London Heathrow, London Gatwick and others, as the Minister outlined, where demand consistently exceeds available capacity.

Historically, the system has adhered to the principles of historical rights and the “use it or lose it” rule. Those principles prioritise airlines based on past usage, requiring them to operate at least 80% of their allocated slots in order to retain them for future use. However, as the Minister said, recent events, particularly the covid-19 pandemic, have exposed vulnerabilities in that framework, which this statutory instrument seeks to address. The Opposition do not intend to oppose the SI or divide the Committee on it—quite the opposite. We support it, because it implements measures proposed by the previous Government’s consultation on airports slot allocation.

As the Minister said, this SI proposes two key changes to the existing rules. Its first provision revises the definition of a new entrant in the context of airports slot allocation. As we heard, the amendment increases the threshold for airlines to qualify as new entrants from those holding fewer than five slots a day to those holding fewer than seven. This change is a significant shift in policy, with the potential to broaden access to congested airports for smaller carriers, thereby encouraging greater competition. The change is intended to make it easier for smaller airlines to obtain slots at busy airports, because the threshold for being considered new has been raised. We hope that it will encourage greater competition by giving smaller airlines a chance to access slots at crowded airports.

The second provision introduces more extensive alleviation measures. These measures, previously temporary, will be made permanent and apply in cases in which airlines cannot meet their slot usage targets because of Government-imposed restrictions. The alleviation provisions state that those restrictions must significantly affect the viability of air travel—for instance, through flight bans, border closures, health crises or severe restrictions on airport operations. The goal of the changes is to make the aviation sector more resilient to unexpected events, such as another pandemic or health crisis.

However, the introduction of permanent alleviation raises questions, particularly about the long-term impact. With the broad discretion given to co-ordinators in determining eligibility, there is a real need for clarity and oversight. I note that in the other place, the noble Lord Hendy of Richmond Hill did not outline how the Government will monitor and assess the effectiveness of the alleviation measures, so I would like to take this opportunity to ask the Minister to reassure the Committee as to how the Government intend to ensure that the alleviation measures are applied judiciously, fairly and consistently.

Oral Answers to Questions

Gareth Bacon Excerpts

Thursday 9th January 2025 Commons Chamber

[Mr Speaker]

I call the shadow Secretary of State.

[Gareth Bacon (Orpington) (Con)]

I was appalled to discover this morning that I have known the Secretary of State for the thick end of two decades. We have had various exchanges in various other fora, but this is our first exchange across the Dispatch Box in this House. I therefore warmly congratulate her on her appointment and welcome her to her place.

The Government promised to deliver more reliable rail services, but over Christmas, what did we see? Chaos, cancellation and delays. The train drivers, having accepted the Government’s no-strings pay deal, chose to turn down overtime shifts, leaving passengers stranded and left in the cold. The Government’s no-strings agreement was supposed to bring stability to the railways, but it did the exact opposite, causing major disruption. Will the Secretary of State admit that the pay deal that they thought would improve reliability in fact only made services worse?

[Heidi Alexander]

I am grateful to the hon. Gentleman for his kind words. I remember those days on the London Councils transport and environment committee. I hope he does not mind my saying that both he and I have a little bit more grey hair since then, which is not necessarily helped by this new job.

On the substance of the hon. Gentleman’s question, I must vehemently disagree with him. The reality is that this Government acted when the previous one refused to do so, to put an end to the industrial action that was blighting our railways. We had a two-year national rail strike that ground down everyone who travelled or worked on the railways, at a cost of £850 million in lost revenue. He might take a lesson from the former Conservative Rail Minister, the former Member for Bexhill and Battle—

--- Later in debate ---

[Mr Speaker]

Order. I say to the Secretary of State gently that I had wanted to welcome her today, but I have to get through a lot of Members. We are on topicals, which are short and punchy. I call the shadow Secretary of State to give us a good example.

[Gareth Bacon]

I note the Secretary of State’s answer, but, in the real world, we know that the Government’s union paymasters will keep pushing for more. Labour’s plans to scrap the minimum service levels will give the unions more power to hold the railways hostage. Does the Secretary of State accept that the Christmas chaos will not be a one-off, and will in fact be the start of an ongoing decline in reliability?

[Heidi Alexander]

We have had decades of chaos on the railways, and railways that simply did not work for people. What is needed is a fundamental reset with the trade unions to deliver improvements for passenger services.