Sustainable Aviation Fuel Bill (Fourth sitting)

Mike Kane Excerpts

Committee stage
Thursday 17th July 2025 Public Bill Committees

[Mr Paul Kohler (Wimbledon) (LD)]

I beg to move, That the clause be read a Second time.

If we are serious about meeting our climate obligations and economic ambitions, then transparency, accountability and evidence-led policy must be at the heart of the legislation. The ambition of the Bill to build a whole new industry is to be lauded, but it lacks the level of scrutiny that such a large project entails. The Bill sets a framework, but frameworks alone do not produce fuel. Nor do they deliver jobs, attract investment or lower emissions. We must not content ourselves with well-intentioned ambition. After previous broken promises by—I am sorry to say—the Conservatives—to have five plants up and running by now, we have already seen that ambition alone will not deliver what we need.

To truly build the sustainable aviation fuel industry, we must track progress, identify bottlenecks and act on evidence. That is what the new clause provides. It demands a detailed assessment of SAF production levels, uptake by airlines and investment in infrastructure. Further, it requires the Government to consult widely with a full range of stakeholders, widely enough drawn to include employees and unions, as well as producers, suppliers, environmental experts, academics and, importantly, the communities whose lives will be affected, whether by new plants, changes in aviation demand or environmental impact.

The new clause would ensure that Ministers come back to the House not with warm words but with evidence, consultation and a plan. I urge the Minister to accept it in the spirit in which it is offered—constructive, collaborative and committed to making the legislation truly fit for purpose.

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

I thank the hon. Member for the new clause, which seeks to ensure parliamentary scrutiny and that the SAF revenue certainty mechanism will run effectively. I also thank him for saying that I am full of warm words, because I am.

I agree with the hon. Member that it is important to have measures to assess the impact of the Bill and make necessary recommendations; however, significant developments in the SAF industry are unlikely within the first 12 months after the Bill becomes an Act. We are committed to deliver the revenue certainty mechanism as soon as possible, but it is vital that such complex contracts are considered carefully, with time taken to get them right. That will involve negotiations with potential SAF producers.

I reassure the hon. Member that we are committed to transparency in the Bill. We have committed to publishing details of who receives revenue certainty contracts and on what terms. We will also continue to publish annual data on the volume of SAF supplied under the SAF mandate. I hope that he accepts the explanations in the spirit in which they are given and withdraws his new clause.

[Mr Kohler]

I am grateful for the Minister’s flattering and sometimes unctuous words. He makes a good point about 12 months not being sufficient time to give such a report, and I acknowledge the assurances that he has given. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 8

Review of the Potential Conversion of Industrial Sites for Sustainable Aviation Fuel Production

“(1) Within twelve months of the day on which this Act is passed, the Secretary of State must lay before Parliament and publish a report into the merits of converting disused oil refineries and other relevant existing industrial sites into facilities for the production of sustainable aviation fuel.

(2) The report required under subsection (1) must include, but is not limited to—

(a) an assessment of the technical and operational feasibility of such conversions;

(b) an evaluation of the economic viability of such conversions;

(c) the cost effectiveness of such conversions compared to new build production facilities, taking into account—

(i) the ability to use existing infrastructure such as tanks and pipelines;

(ii) the complexities of environmental remediation and site preparation.

(iii) the availability and suitability of a skilled workforce within proximity to such sites.

(d) recommendations for government actions to facilitate and incentivise such conversions, where they are deemed beneficial for enhancing the resilience and increasing the domestic production of sustainable aviation fuel industry.

(3) In preparing the report required under subsection (1), the Secretary of State must consult relevant stakeholders, including, but not limited to—

(a) sustainable aviation fuel producers,

(b) representatives of the oil and gas industry and workforce,

(c) environmental organisations,

(d) local authorities, and

(e) academic experts.

(4) The report must be accompanied by a statement from the Secretary of State on how the findings of the report will be addressed through Government action.”—(Mr Kohler.)

This new clause mandates the Secretary of State to publish a report within twelve months, reviewing the merits of converting disused oil refineries and other industrial sites for Sustainable Aviation Fuel production.

Brought up, and read the First time.

[Greg Smith (Mid Buckinghamshire) (Con)]

New clause 8 has considerable merit. It is always preferable where new industrial facilities are to be built—in this case for the production of sustainable aviation fuel—for those identified sites to have had former brownfield status and former industrial use. I have no argument with that element of the new clause.

The one note of caution I have on the new clause is that many of the existing sites—certainly oil refinery sites—are not necessarily located in the right places currently for certain SAF technologies. That includes the e-fuels and power-to-liquid solutions, which require, as part of the process, electrolysis and the creation of green hydrogen. Of course, if the hydrogen element that goes into making the SAF is not green hydrogen, the whole problem becomes rather academic—we could still make the fuel, but the reality is that it would not be as green as we want it to be. Those SAF production facilities, by definition, would need to be located in places with potential large-scale offshore wind, electricity production or, possibly, nuclear generation.

If we look across the world at such fuel plants that have been created, Porsche, for example, chose the hills of Chile to produce its particular fuel, because it can leverage off the wind power that it can get up there. In our country, Orkney seems to have been a popular site for harnessing the offshore wind technology available up there. While I fully support the principle that underpins the new clause—for many SAF production sites to be on former industrial or oil refinery sites—I simply wish to add the note of caution that they might not be suitable for every application and technology out there.

[Mike Kane]

On new clause 8, the hon. Member for Wimbledon is right to talk about deindustrialisation. Growing up in the 1970s, I saw the impacts of that, particularly on the east side of Manchester, with the chemical and mining industries being wiped out. In this day and age, we are still getting over that in my great city. I reassure him that we are supporting the SAF industry, in part, to grasp this opportunity for deindustrialised areas. Emerging SAF projects are often located on former industrial sites, and I remind the Committee that, if we do this right, our low-carbon fuels industry can support up to 15,000 jobs and £5 billion to the economy by 2050.

I also reassure the hon. Member that work is ongoing across Government on the future of our refineries. We are acting urgently in response to the deeply concerning news of insolvency at Prax Lindsey oil refinery, and have put £200 million into the National Wealth Fund to back investment at Grangemouth. I want that work to continue at pace, and am conscious that specific sites will need to be considered on a case-by-case basis. Commissioning an additional separate report would not be beneficial, and would risk delaying potential investment decisions. Given that, I ask the hon. Member to withdraw the motion.

[Mr Kohler]

I am saddened by the Minister’s response. We cannot just leave it to the invisible hand of the market to make sure that sensible decisions are made regarding old oil refinery sites.

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Regulations

[Mike Kane]

I beg to move amendment 1, in clause 15, page 8, line 7, leave out paragraphs (c) and (d) and insert—

“(c) section 10 (payment of surpluses to levy payers);

(d) section 11(4)(a) (power to amend maximum financial penalty);”.

This amendment switches the order of paragraphs (c) and (d) so that the sections referred to appear in sequential order. It also corrects a cross-reference. The substance is unchanged.

[The Chair]

With this it will be convenient to discuss clauses 15 to 19 stand part.

[Mike Kane]

Clause 15 provides that regulations are to be made by statutory instrument and that they may make different provision for different purposes and supplementary, incidental, transitional or saving provision. As we have already discussed, the regulation-making powers in clauses 1(6), 6(1), 10 and 11(4)(a) are subject to the affirmative procedure. The regulation-making powers in clauses 3(1) and 11(4)(b), which are largely administrative, are subject to the negative procedure; these powers will not alter the fundamental elements of the revenue certainty mechanism.

Clause 16 provides information on how terms that are used throughout the Bill should be interpreted. It should be noted that our intention is for the revenue certainty mechanism only to support SAF production that would be eligible for the SAF mandate. This will be set out in the eligibility criteria during contract allocation.

Clause 17 states that the Bill extends to England and Wales, Scotland and Northern Ireland. Clause 18 sets out when the provisions of the Bill will come into force. We expect all the legislation for a revenue certainty mechanism to be in place by the end of 2026. We will continue to monitor the estimated delivery date and work with industry to deliver an effective revenue certainty mechanism as soon as possible. Clause 19 confirms that the Bill will be named the Sustainable Aviation Fuel Act upon Royal Assent.

Amendment 1 agreed to.

Clause 15, as amended, ordered to stand part of the Bill.

Clauses 16 to 19 ordered to stand part of the Bill.

Question proposed, That the Chair do report the Bill, as amended, to the House.

[Mike Kane]

Thank you, Mr Western, for chairing the Committee. I also thank the Clerks, Hansard Reporters and Doorkeepers for overseeing proceedings. The Committee also benefited from the expertise of our witnesses and those who provided written evidence. As this is a hugely technical Bill and the world is watching us, I pay a massive tribute to the civil servants in my Department who worked on it.

I thank all hon. Members who made this issue a manifesto commitment at the general election. I thank the Opposition for supporting the Bill and for their valuable contributions and insights. I thank the shadow Minister, the hon. Member for Mid Buckinghamshire, the Liberal Democrat spokesman, the hon. Member for Wimbledon, and all other Committee members. I thank them for their expertise and insight, and for the broadly positive, collaborative nature that they brought to the Committee. We all want the SAF industry in this country to grow and succeed so that we secure our world-class aviation sector’s future. I look forward to further engagement with hon. Members on the Bill.

[Greg Smith]

I associate myself with the Minister’s thanks to everyone who has worked so hard on the Bill, particularly the civil servants; I welcomed the ability to discuss the Bill with them in a private briefing before Second Reading. I also thank the Doorkeepers, Hansard and the Clerks for ensuring that the Committee has run smoothly.

It is quite a pleasant experience to engage with a Bill in opposition when there is fundamental agreement on the direction of travel. The other Bill Committee of this Parliament on which I was shadow Minister was for the Employment Rights Bill, where we did not enjoy quite the same level of consensus, but to meet the challenges of decarbonising our aviation industry it is important that this Bill progresses rapidly.

However, I urge the Minister, who has been kind and engaged throughout the process, to continue to reflect on the points that I have raised in Committee and that the shadow Secretary of State, my hon. Friend the Member for Orpington (Gareth Bacon), raised on Second Reading, as well as the many worthy points that the Liberal Democrats have raised. If we can keep going in the spirit of cross-party working and reflect on some of the points about UK intellectual property—making this a UK success story, making the UK a world leader and ensuring that the technologies that emerge genuinely do what they say they will—then I think all of Parliament, not just the Government, can be proud to push the Bill through.

Question put and agreed to.

Bill, as amended, accordingly to be reported.

Sustainable Aviation Fuel Bill (Third sitting)

Mike Kane Excerpts

Committee stage
Thursday 17th July 2025 Public Bill Committees

[Greg Smith]

It is a pleasure to serve under your chairmanship, Mr Western. As I have throughout the passage of the Bill, I draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests—I am taking a safety-first approach here—and the donation from Nemesis of synthetic road fuel for a constituency surgery tour last year. That is not relevant to sustainable aviation fuel, but I want to be entirely transparent about it, as I have been throughout the passage of the Bill.

Before I speak to amendment 3, a broad comment about all the amendments I will speak to today is that, fundamentally the Opposition are not a million miles from the Government on the Bill. However, as I am sure you expect us to do, Mr Western, it is our job as His Majesty’s loyal Opposition to kick the tyres and ensure that the Bill is as strong and workable as it can be. We share the ambition to decarbonise aviation and ensure that everybody still can fly for pleasure or business, and that businesses can move goods around the world using air freight.

It is in that spirit that I tabled amendment 3, which aims to ensure that the producers that come forward for the various contracts consider the full breadth of the sustainable aviation fuel technologies available. On Tuesday, we heard oral evidence from manufacturers of wholly synthetic, waste-derived and feedstock-derived sustainable aviation fuels. It is important to look at the panoply of fuels in relation to the long-term environmental impact and the practicalities of producing them today.

As I said on Second Reading, my big fear, which led to my tabling the amendment, is that industries might be stood up only to be turned off again in 10 or 20 years, as the technology becomes redundant. For example, in the oral evidence session on Tuesday we almost had a debate about the possible pitfall of there not being a waste supply to create waste-derived sustainable aviation fuel. Many local authorities up and down the land, my own in Buckinghamshire included, are tied up in 10, 20 or even 30-year financial obligations to, for example, the financing of energy for waste incinerators, which in some parts of the country are connected to heat networks. It may therefore not be possible for councils to say simply, “No, we want to move our waste to a equally productive but different form.” Those contracts exist.

The point of the amendment is to ensure that we look through that very clear lens to see which of the technologies available for producing sustainable aviation fuel will have the longevity of supply and relative environmental impact in the long term. From the evidence we heard the other day, it is clear that some technologies are at a different point of development from others, but none is actually that far away.

For example, the evidence we heard from Zero Petroleum was that it is ready to scale a wholly synthetic production facility right now. Of course, that does not happen overnight—it takes some considerable time to build any facility—but the scalability is able to happen right now. The Government should reflect on that point and should not look just at the technologies that are available right here, right now. I would argue that, too often in this country, we look for alignment with the technology that is available today, when that which is only hours, days, weeks or months away may well be better and worth waiting for.

That is the point of the amendment: ensuring that we get this right for the long term, so that we have a supply of sustainable and, I hope, synthetic—entirely man-made from air and water—fuels available for this country, so that we have the liquid hydrocarbons there, available for purchase, using the price mechanism which sits at the heart of the Bill to get production going, so that our aviation sector can continue to flourish and be available for all that wish to use it.

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

It is a pleasure to serve under your chairmanship, Mr Western. We often discuss our bicycles and their technology, but today we have to talk about the revenue certainty mechanism, which I am glad we are doing.

The RCM is part of the Government’s agenda to decarbonise aviation in the United Kingdom. I will address the amendment moved by the hon. Member for Mid Buckinghamshire, but first I put on the record my thanks to him and other Opposition parties for their general support for what we are trying to do in the Bill.

This Government back synthetic power-to-liquid SAF, which is why we have introduced a separate power-to-liquid sub-obligation, the SAF mandate. We have a separate power-to-liquid pot in the advanced fuel fund, which we are funding up to £63 million. Any RCM contracts awarded will be on the basis of the design phase of the project, including technological pathway and feedstock designation. I hope that answers the hon. Member’s worries about redundancy, because the process will evolve.

Making changes to feedstock requirements or fuel type after contracts are awarded would be extremely challenging for producers. Instead, during our contract allocation process, it is for the Government to decide on the right mix of SAF that will be supported under the revenue certainty mechanism. Given that, I ask the hon. Member to withdraw the amendment.

The clause allows the Secretary of State to direct the counterparty to enter into a revenue certainty contract with a SAF producer. The Secretary of State will decide who gets revenue certainty contracts through an allocation process. Making the leap from lab to commercial scale is difficult for SAF producers—we heard that in the evidence sessions on Tuesday. Commercial plants typically cost £600 million to £2 billion, so they need to attract a lot of investment, yet first-of-a-kind plants often struggle to get investment because there is no clear, predictable market price for SAF. The revenue certainty mechanism will address that.

Under the revenue certainty mechanism a SAF producer will enter into a private law contract with a Government-backed counterparty that sets a strike price for SAF. If the producer sells SAF for less than the strike price, the counterparty will pay the difference. If the producer sells it for more than the strike price, it will pay the counterparty. This follows the example of similar schemes in the renewables sector, which showed that a private law contract with a Government-backed counterparty is a rock-solid commitment that will drive investment into projects.

As we heard in our evidence sessions on Tuesday, British SAF producers are ready. They have the tech and the innovation; they just need the final piece of support from the Government to take off. That is why SAF producers, airlines, environmental groups and investors back these measures.

A Government-backed counterparty will enter into the contracts rather than the Secretary of State, because investors value the day-to-day independence of a Government-owned private company and its insulation from political change. The counterparty will also have expertise in contract administration. This follows the model of contracts for difference schemes in other renewables sectors, where the Low Carbon Contracts Company, a Government-owned body, enters into the contracts, rather than the Secretary of State for Energy Security and Net Zero.

When we consulted on how the revenue certainty mechanism should be administered, stakeholders strongly supported having a counterparty. The clause ensures that the Secretary of State can exercise control over how and on what terms the counterparty enters into the revenue certainty contracts. This is consistent with the approach for similar schemes. The Government will set eligibility and assessment criteria for the competition to allocate contracts, which will focus on ensuring value for money, maximising the benefits of UK SAF production, and supporting viable projects. Any restrictions on our ability to decide which projects to allocate contracts to would affect those objectives and jeopardise the whole scheme.

The allocation process and the terms of the contract will need to be consistent with the requirements of the Subsidy Control Act 2022, which makes sure there is oversight of the mechanism by the Competition and Markets Authority through the mandatory referral process. The oversight will ensure that the objectives of the revenue certainty mechanism address the subsidy control principles set out in that Act. This includes ensuring that the scheme addresses an identified market failure, that any funding provided is proportionate to achieve that objective, and that any distortions of competition, investment or trade are minimised effectively.

Clause 2 provides that producers must be notified of a direction made under clause 1 that affects them. This provides transparency and ensures that producers are aware of any directions towards them. It also gives the Secretary of State powers to revoke a direction and its effect, which protects the Government from entering into a contract where a producer has not met the criteria defined during the allocation process due to unexpected circumstances. We need to ensure that the taxpayer and the sector are protected, and this clause ensures that we can remove ourselves from the contract negotiation process if any issues arise.

Clause 3 enables the Secretary of State to make regulations requiring the counterparty to maintain a register and publish the revenue certainty contracts, subject to any necessary redactions. This will ensure transparency by keeping a register of successful applicants and information on specific agreements, and make it clear which SAF producers have received contracts and on what terms. We will also continue to publish information on the volume of SAF supplied under the SAF mandate. These publication requirements will balance transparency and the commercial and confidential nature of contracts and negotiations. We believe that any stronger requirements to publish information may make producers reluctant to enter into negotiations or affect our ability to ensure value for money.

[Greg Smith]

I accept many of the arguments that the Minister has put forward. I note he acknowledged that, off the back of the evidence sessions on Tuesday, all the current technologies are ready. That is a really important point for the Committee and the whole House to reflect upon as the Bill progresses. There has been something of a narrative from the usual vested interests in the country suggesting that one technology or another is not in the right state to be able to move forward, or to produce sustainable aviation fuel at the scale we need as a country. It is very welcome that the Minister acknowledged in his remarks that the technologies are already to scale, whether the fuel is HEFA-derived, waste-derived or entirely synthetic following the Fischer-Tropsch process at large.

--- Later in debate ---

Question proposed, That the clause stand part of the Bill.

[Mike Kane]

Clause 4 enables the Secretary of State to designate a counterparty for the revenue certainty mechanism. It also sets out that the counterparty must be a company wholly owned by the Government. There are several reasons for doing that. First, a Government-owned counterparty will be highly creditworthy, meaning that producers will find it easier to get cheaper financing, so their costs will be lower and the SAF they produce cheaper.

Secondly, the counterparty will have day-to-day operational independence, giving investors confidence that the scheme will not be changed or dismantled. This approach follows similar schemes for renewable electricity generation and for hydrogen production and carbon capture. For those reasons, the Low Carbon Contracts Company, a Government-owned private company, acts as the counterparty. The LCCC has significant expertise in delivering similar contracts, and we have worked closely with it when developing the Bill.

The clause also states that the Government-owned counterparty must consent to being designated. In practice, it is very unlikely that the designated counterparty would fail to provide or withdraw its consent, but it is important that there is a theoretical exit option, as the Government cannot force a private entity to undertake actions that may be to its detriment.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clause 5

Transfer schemes

Question proposed, That the clause stand part of the Bill.

[Mike Kane]

Clause 5 enables the Secretary of State to make the scheme transferring the property rights or liability of a company whose designation has been revoked to the new designated counterparty. The power might be needed if it is no longer appropriate for the designated counterparty to continue its current role. The clause will give the Secretary of State the power to act quickly to avoid any disruption to the revenue certainty mechanism, including to existing revenue certainty contracts or negotiations.

Question put and agreed to.

Clause 5 accordingly ordered to stand part of the Bill.

Clause 6

Levy on suppliers

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Clauses 7 to 9 stand part.

New clause 2—Review of Sustainable Aviation Fuel Levy Impact—

“(1) The Secretary of State must, within twelve months starting on the day on which Regulations are made under section 6 of this Act, publish and lay before Parliament a report which reviews the impact of those Regulations on the sustainable aviation fuel industry in the UK.

(2) The report under subsection (1) must include, but is not limited to—

(a) an assessment of the impact of the levy on—

(i) demand for sustainable aviation fuel (‘SAF’) in the United Kingdom, with particular regard to whether the levy has increased production of and demand for SAF in such a way as meets SAF Mandate obligations; and

(ii) demand and production of UK produced SAF compared to non-domestic production;

(b) an analysis of any beneficial impact of Regulations made under section 6 of this Act as opposed to projections of benefits of using alternative revenue streams to fund the revenue certainty mechanism, including but not limited to, aviation industry contributions to the UK Emissions Trading Scheme; and

(c) recommendations for any further actions or policy adjustments that may be required based on the findings of the review.

(3) When carrying out a review under this section the Secretary of State must consult relevant stakeholders, including but not limited to—

(a) aviation fuel suppliers,

(b) sustainable aviation fuel producers,

(c) airlines,

(d) consumer representatives, and

(e) environmental groups.

(4) In this section, ‘SAF Mandate’ means an obligation imposed on a provider of SAF under the Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024.”

This new clause would require the Secretary of State to carry out a review of the effect of the introduction of the levy; sets out things the review must consider; and stakeholders the Secretary of State must consult during the review.

New clause 6—Review of International Alignment of Sustainable Aviation Fuel Support under this Act with schemes in the ECAA—

“(1) Within twelve months of the day on which this Act is passed, the Secretary of State must publish and lay before Parliament a report detailing the degree to which the levy imposed under section 6 and the revenue certainty mechanism established under this Act aligns with relevant policies and support schemes for sustainable aviation fuel in the European Common Aviation Area (ECAA).

(2) The report required under subsection (1) must include, but is not limited to—

(a) an assessment of the current level of alignment of the levy and the revenue certainty mechanism with ECAA policies and support schemes concerning sustainable aviation fuel; and

(b) recommendations for specific steps or policy adjustments that may be required to increase alignment between aviation in the United Kingdom and the ECAA, where such alignment would be beneficial for the United Kingdom's sustainable aviation fuel industry.”

This new clause requires the Secretary of State to publish a report within twelve months, assessing the alignment of the Sustainable Aviation Fuel levy and revenue certainty mechanism with the European Common Aviation Area.

[Mike Kane]

Clause 6 enables the Secretary of State to introduce, through regulations, 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. We plan to fund the revenue certainty mechanism through a levy on industry because it is right that the costs of decarbonising air travel are 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 reduces administrative burdens, and because aviation fuel suppliers will benefit from the greater volumes and lower prices for SAF that the revenue certainty mechanism will create.

Broadly, if the counterparty has incurred costs in a set period, we will cover those costs by levying aviation fuel suppliers based on their share of the fossil fuel market during that period. We are continuing to work closely with industry on the details of how the levy will operate. This approach is in line with the approach of other contracts-for-difference-style schemes, such as in the renewable electricity sector where there is a levy on electricity suppliers. The clause will also ensure that the counterparty’s obligations and activities in respect to the levy are appropriately regulated. I assure Members that the regulations under this clause will be subject to consultation and the affirmative parliamentary procedure, so there will be further opportunities for scrutiny in this area.

Clause 7 enables the levy regulations to require a person who is liable to pay the levy to provide financial collateral to the counterparty. This acts as a failsafe if there is cause for concern about non-payment. It ensures that if a levied party does not make a payment, the counterparty can take any owed money through the collateral. Without this power, there is a risk that non-payments to the counterparty lead to the Government needing to provide financial assistance to ensure that the counterparty can make payments under the revenue certainty mechanism contracts.

Clause 8 enables the levy regulations to include provisions to ensure that the levy is administered efficiently. It allows the Secretary of State to confer statutory functions on the counterparty, such as collecting levy payments and enforcing regulations. It is vital that the counterparty has the powers and functions it needs to operate efficiently and effectively.

Clause 9 will allow us to make regulations on who will calculate matters relating to the levy, and how—for example, how levy payments should be calculated and who is responsible for doing so. It ensures that calculations are made in an appropriate way by people who are qualified to do so. The regulations made under this clause will be subject to consultation and the affirmative procedure.

[Mr Paul Kohler (Wimbledon) (LD)]

I rise to speak on clause 6 and new clause 6. As we have heard, clause 6 would create a levy on fuel producers. While I do not necessarily believe that to be the wrong approach, as with much of the Bill, the devil will be in the detail that is not available for us to scrutinise here, for obvious reasons. As my hon. Friend the Member for Sutton and Cheam will make clear, there may be unintended consequences if the regulations are not designed correctly.

In my opinion, leaving much of the mechanism to a later date is not necessarily a bad thing—I agree with the flexibility that is being put in place. With a new, emerging technology and industry, ensuring that the Government’s hands are not tied at this early stage is a strength, not a weakness. That notwithstanding, some assurances should be given about how the mechanism will be designed, and how the potential flaws raised in the written evidence received by the Committee will be sidestepped. I point in particular to the written evidence from Valero.

Clause 6(3) implies that the levy will be based on criteria relating to the historical market share of fuel suppliers. That has been raised by those in the industry as potentially having unintended consequences. As I raised yesterday with the Minister, who I am not convinced gave me the clearest of answers, there have been worries that it may allow new market entrants not to pay any levy, as they will not have had a previous market share. Will he commit to ensuring that the levy regulations will account for such obvious loopholes?

It is clear that the challenge of decarbonisation, both in aviation and beyond, is great and will not be solved without collaboration with our closest international partners. I therefore tabled new clause 6, which would require the Government to review the differences between our approach to sustainable aviation fuel and that of our European partners in the European common aviation area. With 71% of international air passengers at UK airports travelling to or from Europe, it seems sensible that we should strive to be in broad alignment with Europe with regard to SAF.

I appreciate that there may be differences: in the case of the early part of our SAF mandate, we are going further and faster than the ECAA, but our European partners may accelerate beyond our thresholds later on. However, we believe it is important to remain mindful of what our partners across Europe are doing in an industry that has international competition at its very heart. The new clause would ensure that the Government are fully aware of differences in policy, and alive to any unintended consequences or differences that the Bill could result in for those in the aviation industry. We think that would be helpful.

I would welcome the Minister’s observations on both the mechanism that we have suggested and the broader issue of alignment with our European partners. This is, of course, a probing clause. Can the Minister assure the Committee that the Government will keep a watching brief on what the ECAA are doing with regard to SAF from here on?

--- Later in debate ---

[Luke Taylor (Sutton and Cheam) (LD)]

I rise very briefly to speak in favour of new clause 2, which I have tabled. Generally, the intent was to provide a check-in and reporting mechanism for the success of the Bill. We are all in favour of its objectives; I think that it is the care, and the attention to understanding how it is progressing, that is needed. I therefore ask the Minister what measures will be taken by the Government to achieve the aims of the new clause. Will that be through the jet zero taskforce, or will there be another mechanism for us to understand and monitor the progress and success of these measures? I would be interested to hear his response on how that might be done.

[Mike Kane]

I thank hon. Members for their contributions. Let me start by addressing the point made by the Opposition spokesperson, the hon. Member for Mid Buckinghamshire, about the overview and ambition of this legislation. We are the first legislature in the world to attempt to create this revenue certainty mechanism. The SAF mandate was a key commitment in our election manifesto last July, and the eyes of the world, as some of our witnesses said the other day, are on us doing this work, because people are following our lead. I therefore want to bake in the competitive advantage of being ahead of the game in this area, and being a world leader in this area too.

[Chris Vince (Harlow) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Western. The Minister talks about all eyes from across the world being on the Bill. I must declare an interest, because I have an international airport on the very edge of my constituency, which obviously serves Harlow and where people from Harlow are employed. It is the industry itself that is really looking at this debate, and it was very clear from Tuesday’s evidence that the industry, particularly airports such as Stansted and Heathrow, are in favour of the Bill and moving it forward as quickly as we can.

[Mike Kane]

My hon. Friend is a doughty campaigner for Stansted airport, which is near his constituency. Stansted is part of Manchester Airports Group Ltd, or MAG, which I know is extraordinarily keen—along with other airports, AirportsUK, airlines and nearly all the other people who gave evidence—that we pass this legislation.

Coming back to the Bill, new clause 2, which was tabled by the hon. Member for Sutton and Cheam, would make it a requirement to carry out a review of the impact of levy regulations on sustainable fuels and the industry in the UK 12 months after they are introduced. The levy regulations will not have a significant impact in the 12 months after they are made. Contract payments will form the majority of levied costs. However, contracts need to be negotiated and signed, plants built, and SAF produced and sold before costs are incurred, which is very unlikely to happen in the first 12 months. Also, review clauses are commonly included in secondary legislation and we do not need separate powers in the Bill to include them in the levy regulations. The levy regulations will be subject to the affirmative procedure, which will allow Members of both Houses to scrutinise them. Given that, I ask the hon. Member for Sutton and Cheam not to press the new clause when we come to it later.

I turn to new clause 6, which was tabled by the hon. Member for Wimbledon. I understand his concerns about the effectiveness of the SAF revenue certainty mechanism and how our policy aligns with the ECAA. I assure him that the UK’s overall SAF framework and requirements have many similarities to those of the EU, generally allowing the same certification schemes to be used, reducing administrative burden and minimising market access barriers. We actively monitor the SAF market including policies elsewhere in the world, just as the world is monitoring this Bill, to ensure that we provide the right level of support to the sector.

As I have said, I am proud that we will be the first country in the world to introduce a dedicated SAF revenue certainty mechanism. Alongside the implementation of the SAF mandate from 1 January 2025, we are leading the way in having clear and effective policies, grounded in legislation, that address the demand and supply of SAF. International Governments and stakeholders frequently point to the UK as an example to emulate, based on our forward-leaning and comprehensive SAF policy framework.

The UK plays a key role in international discourse on SAF and has cultivated strong bilateral relationships on SAF with countries worldwide. The UK promotes co-ordinated international action on aviation emissions through the International Civil Aviation Organisation. Given the active measures that we have in place, I ask the hon. Gentlemen not to press the new clause to a vote.

Question put and agreed to.

Clause 6 accordingly ordered to stand part of the Bill.

Clauses 7 to 9 ordered to stand part of the Bill.

[The Chair]

I remind Members that the order of decisions follows the order in which amendments and new clauses appear on the amendment paper. Therefore, although we have also just debated new clauses 2 and 6, decisions on new clauses are taken after decisions on existing clauses, amendments to those clauses and schedules. There will be an opportunity for a decision on them later.

Clause 10

Payment of surpluses to levy payers

Question proposed, That the clause stand part of the Bill.

[The Chair]

I remind Members to bob if they wish to catch my eye and speak.

[Mike Kane]

Clause 10 enables the Secretary of State to make regulations to ensure that a designated counterparty pays any surplus it collects to the people who have paid the levy. There would be a surplus when a SAF producer sells SAF for above the strike price, and therefore makes payments to the counterparty. In that situation, it is right that the surplus is paid to those who pay the levy. It provides some potential upside to levied parties and will help to balance the flows of payments as the price of SAF fluctuates over time.

The clause also allows the Secretary of State to make regulations requiring someone who receives a surplus payment to pass it on to their customers. This is because we expect levied parties to pass on the costs of the levy to their customers, such as airlines and air freight operators, and it is therefore right that any surplus is also passed on.

Question put and agreed to.

Clause 10 accordingly ordered to stand part of the Bill.

Clause 11

Financial penalties

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss the following:

Government amendment 2.

The schedule.

--- Later in debate ---

[Mike Kane]

Clause 11 creates new civil penalties that are necessary to secure the payment of the levy and compliance with regulations. Any penalty will be limited to a maximum of the lesser of £100,000 or 10% of the turnover being penalised. This penalty can be imposed for failing to pay the levy and failing to pass on the benefits of surplus payments to customers in accordance with the regulations under clause 10(1)(b). This penalty is consistent with similar penalties under the SAF mandate. The clause also allows these penalties to be adjusted in line with inflation.

The schedule sets out the procedure for notices, appeals and recovery of penalties. It ensures that anyone who has to pay the penalty will be told why, how much they have to pay, their right to appeal and the deadline for making any payment.

I will also speak to Government amendment 2, which inserts “or Northern Ireland” after “Wales” in the schedule. The amendment will ensure that an unpaid penalty is recoverable in Northern Ireland as if it were payable under an order of the county court, as is the case in England and Wales. The amendment corrects a drafting error and does not reflect a change in policy intention.

[Greg Smith]

I do not have a great deal to say on the provisions, other than that it is always regrettable when Northern Ireland is forgotten and has to be inserted via an amendment.

On the clause, I have no problem with financial penalties for failure to comply with the law, so I am not attacking the clause per se, but what will the appeal mechanism be? When it comes to law that involves financial penalties, a company will often have a legitimate case—force majeure, or whatever it might be—as to why it has been unable to comply with the letter of the law, and it is always important, as a matter of natural justice, for an appeal mechanism to be in place. Does the Minister intend to enable appeals where such financial penalties are given?

[Mike Kane]

I am grateful to the hon. Member. Because this will be a matter between the counterparty and the companies invited to bid, it will be subject to normal contract law, but I am happy to write to him on the matter of appeals more specifically.

Question put and agreed to.

Clause 11 accordingly ordered to stand part of the Bill.

Schedule

Financial penalties for failure to comply with levy regulations

Amendment made: 2, in the schedule, page 10, line 28, after “Wales” insert “or Northern Ireland”.—(Mike Kane.)

This amendment ensures that an unpaid penalty is recoverable in Northern Ireland as if it were payable under an order of the county court, as is the case in England and Wales.

Schedule, as amended, agreed to.

Clause 12

Power to direct designated counterparty

[Greg Smith]

I beg to move amendment 4, in clause 12, page 7, line 12, at end insert—

“(3) A direction given under subsection (1) must include a requirement for the designated counterparty to report on—

(a) the impact of any revenue certainty contract on the fluctuation of the average price to consumers of an airfare over the proceeding 12 month period;

(b) a projection of the expected impact of any revenue certainty contract on the fluctuation of the average price to consumers of an airfare over the following five year period.

(4) A report under paragraph (a) must be made within one year of the date of Royal Assent to this Act and annually thereafter.

(5) The Secretary of State must lay a report made under paragraph (a) before Parliament.”

Amendment 4 focuses on UK IP, which I alluded to earlier. Given that we have been told throughout the passage of the Bill, and the Opposition agree, that we need to underpin domestic sovereign fuel security, there should be a provision in the Bill that gives preference to UK IP and UK producers—not just those that might happen to make the fuel here, but those that are using UK-derived innovation and technology to do so. Of course, we exist in a global marketplace and are often reliant on imports, but it would be regrettable if the Bill enabled the standing-up of industries that are based entirely on foreign-owned technology. That is what the amendment seeks to correct.

[Mike Kane]

I concur with the hon. Member about domestic fuel production, particularly in the uncertain geopolitical world that we face today, but amendment 4—

[Greg Smith]

I spoke to amendment 5—I apologise.

--- Later in debate ---

[Mr Kohler]

I have a brief question. When the Minister talked about the effect of £1.50 either way on airfares, was he talking about the effect of just the levy or the effect of the mandate as well? As we heard on Tuesday, the mandate will have far more of an effect on prices than the levy, given the premium that is likely to be repayable on SAF.

[Mike Kane]

Well done to the hon. Member for Mid Buckinghamshire; he pulled it out of the fire there with the amendments. He is right that we are putting SAF on the statute book. We should have put it on the statute book years ago, which is why it was in our manifesto and we are doing the right thing now. I will address the questions about £1.50 in a moment.

Amendment 4 tabled by the hon. Member would put a requirement on the counterparty to report on the effect of the introduction of the revenue certainty mechanism on air travel prices. Once operating, the revenue certainty mechanism is expected to make minimal changes to fares with an average ticket price, as we have said, decreasing or increasing by up to £1.50 on average per year. I remind him that that is less than a bus fare on Andy Burnham’s Bee Network in Greater Manchester where I live. I would offer to pay it, but it is quite cumulative over time and I do not have that type of resource—I am happy to fund the hon. Member for one year at £1.50 if he so wishes. That figure comes from a DFT analysis.

The costs of the scheme and the impact on ticket prices will be kept under continual review. The Government will also set the approach to the allocation of contracts, the number of contracts awarded and the scale of support they provide. Those controls will help to minimise any potential impacts on airfares. The costs of the scheme will also be reported in the DFT annual report and accounts in the usual way. I therefore ask the hon. Member to withdraw his amendment.

The hon. Member for Wimbledon asked whether the figure refers to the mandate or the revenue certainty mechanism. I assure him that it is just the revenue certainty mechanism.

[Greg Smith]

I am grateful to you for rescuing me, Mr Western, by grouping both amendments in the same debate. I made a mistake, so I put my hands up to that.

I am grateful for the Minister’s response. I will not press the matter to a vote but, as with the earlier amendment, when projections are made I think it is incumbent on the Government to find a way of giving comfort to all the travelling public and all those businesses that use air freight that the provisions of the Bill—I fully accept the comments of the hon. Member for Wimbledon on the wider effects of the mandate—will not produce a much higher cost to them when they go on their holidays or business trips or move goods around the world.

Ahead of Report, will the Minister and his team in the Department look at ways to kick the tyres on those presumptions—in particular given the evidence we heard on Tuesday—and check that they are robust as possible and have the confidence of industry? I would be grateful for that, and we may well return to it on Report. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clause 13 stand part.

[Mike Kane]

The clause gives the Secretary of State the ability to control some of the activities of the designated counterparty through directions. The counterparty will maintain day-to-day independence and the power is limited to the functions conferred on the counterparty under or by virtue of the Bill. However, it is important that the Secretary of State can direct the counterparty on the exercise of its functions to ensure that the revenue certainty mechanism operates effectively and as intended. Any direction by the Secretary of State must also be published to ensure transparency.

Clause 13 requires the counterparty to provide information or advice to the Secretary of State about the revenue certainty mechanism. That ensures that the Secretary of State can get the information and advice needed to understand how the scheme is working in practice, and to ensure that the revenue certainty contracts and levy are working effectively.

Question put and agreed to.

Clause 12 accordingly ordered to stand part of the Bill.

Clause 13 ordered to stand part of the Bill.

Clause 14

Financial assistance for designated counterparty

Question proposed, That the clause stand part of the Bill.

[Mike Kane]

The clause will enable the Secretary of State to provide financial assistance to the counterparty to ensure that it can always meet its liabilities under the revenue certainty contracts. The intention is that the counterparty will be funded through the levy payments from suppliers of aviation fuel in the UK. The power is a back-up to assure SAF producers and investors that the counterparty will always be able to meet its obligations.

Question put and agreed to.

Clause 14 accordingly ordered to stand part of the Bill.

New Clause 1

Black bin waste

“(1) The Secretary of State must, within two months of the passing of this Act, publish and lay before Parliament, guidance on the opportunities available for local authorities in England to support the production of Sustainable Aviation Fuel through the use of black bin waste.

(2) Within six months of the publication of guidance under subsection (1) the Secretary of State may, by regulation, require local authorities in England to prioritise the creation of sustainable fuel in the disposal of their black bin waste unless the local authority deems it to be significantly financially disadvantageous to do so.

(3) Regulations under subsection (2) must define the meaning of ‘significantly financially disadvantageous’ for the purposes of this section.

(4) Regulations made under subsection (2) are subject to the affirmative resolution procedure.”—(Luke Taylor.)

Brought up, and read the First time.

[Luke Taylor]

I beg to move, That the clause be read a Second time.

I move the new clause simply to discuss some of the interesting issues that it raises. In the evidence session on Tuesday, we heard about the opportunities for the diversion of residual municipal waste into the production of second-generation SAF. We have heard from many in Committee this morning about the challenges to do with the incineration of waste and the impact of that on our communities, but a lot of us maintain, or agree, that that is the least worst option. The opportunity here is that there is a slightly less worse option for the disposal of that remaining municipal waste.

New clause 1 aims to give the Minister a bit of a nudge towards examining the opportunities and how the waste hierarchy could reflect how that waste is potentially reused. There are also broader questions not only about the residual waste but about plastics recycling, such as whether there is an opportunity to incorporate changes in the way that plastics recycling is prioritised, and whether it is a suitable feedstuff for SAF. New clause 1 is an opportunity to raise some of those questions, and for the Minister to give some assurances and responses on them.

[Mike Kane]

I think the hon. Member for Sutton and Cheam has a point, in that the public will be interested in how this is made. Advanced-waste SAF, including SAF made from non-recyclable municipal solid waste, is a key part of the SAF industry. We have backed and invested in this kind of SAF in our grant funding programme, the advanced fuels fund, as I mentioned earlier, and we are backing it again in this Bill, providing the revenue certainty that advanced waste-based SAF producers need to attract investment and scale up fast.

The hon. Member’s new clause, however, is not what the SAF producers need, and would place more burdens on our local authorities. There is nothing preventing local authorities from using their municipal solid waste for SAF production if they believe that it provides the best value for money and environmental outcomes. We heard in evidence the other day, when waste actually has a value to it, is it waste any more?

However, municipal waste often needs to be pre-treated and processed before it is used in SAF production. This often means that SAF producers look to buy their waste from processors, rather than from local authorities. We do not believe that access to municipal solid waste is currently a significant barrier for UK SAF production, and it is likely that discussions on the availability of municipal solid waste would happen once a project is close to taking a financial investment decision. I ask the hon. Member to withdraw his new clause.

[Luke Taylor]

I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 3

Review of the supply of bioethanol for use in sustainable aviation fuel production

“(1) The Secretary of State must, within six months of the passing of this Act, publish and lay before Parliament a report reviewing measures to encourage the supply of materials for Sustainable Aviation Fuel.

(2) The report under subsection (1) must include—

(a) an assessment of the impact of the closure of bioethanol plants on the ability to encourage overall increases in sustainable aviation fuel production;

(b) options for mitigating any adverse impacts on the availability of supply of sustainable aviation fuel by the closure of bioethanol plants;

(c) recommendations for any necessary Government action to promote a stable supply of bioethanol for Sustainable Aviation Fuel.”—(Mr Kohler.)

This new clause would require the Secretary of State to lay before Parliament a report outlining measures to encourage the supply of materials for SAFs, including considering the impact of bioethanol plant closures on encouragement to increase supply.

Brought up, and read the First time.

[Greg Smith]

I absolutely understand and appreciate where the hon. Gentleman is coming from with this new clause. This topic came up in the oral evidence sessions and on Second Reading.

It is of great concern that the slightly lower tariffs deal done with the United States of America has clearly and materially threatened UK production of bioethanol, which of course has many uses. Many of us on the petrol station forecourt will have seen the curious E5 and E10 labels on the petrol pumps, which is about the ethanol blended with the regular fossil fuel. Our consumption of it as a country is particularly high.

As we are debating the potential future of bioethanol in sustainable aviation fuel production, it is incumbent upon the Government to reflect, within the scope of the Bill, on how much domestic supply there can be. So much of the Bill is underpinned by sovereign capability and fuel security—a point on which the Opposition and I think the Liberal Democrats are equally aligned on; it is so important—and so surely this new clause must also be important to the Government. I ask the Minister to reflect on that when he responds.

[Mike Kane]

I am extraordinarily proud that we have a Prime Minister and a Government who are rebuilding the UK’s reputation across the world once again, building trade deals with our closest partners across the planet, whether that be India, America or the recent agreement with the European Union. That is where Britain should be—leading and involved, not on the fringes as we have been for many years.

We are debating sustainable aviation fuel, but this is also about decarbonising the planes that will fly in our skies for generations to come. That US trade deal is zero tariff on aviation technology, which is a huge deal for this country, making it a world leader again in the future.

However, I am worried for the workers and families who have been affected by the trade deal. Ministers and officials, including the Business and Transport Secretaries, have met the companies consistently during this challenging time—those companies were struggling regardless of the time—to understand their concerns, discuss what action could be taken and to support them, because that is what good Governments do. The Department for Business and Trade is in discussions on requests for support from the UK bioethanol sector. As a responsible Government, there is a series of strict criteria and well-established due diligence processes that we must follow to consider such requests.

While I would like to see a thriving UK bioethanol sector, we would not expect a significant impact on the SAF mandate if there were to be a reduction in that sector’s production. That is because the UK bioethanol plants use crops that are not eligible for the SAF mandate. The SAF mandate, which is the framework for the supply of SAF in the UK, sets targets based on the availability of waste feedstocks rather than crop feedstocks. The SAF mandate is a global scheme and can use fuels from all around the world, providing an opportunity to draw upon a diverse pool of feedstocks.

However, we also want to encourage a UK industry. In January, the Chancellor announced £63 million of funding this year to help grow UK supply of SAF through the advanced fuels fund, which has been further extended in the recent Budget through to 2029-30. The SAF revenue certainty mechanism—the subject of the Bill—will also boost investment in UK SAF production.

Finally, under the SAF mandate, a formal review of the whole scheme has been built into the legislation, with the first review taking place in 2030. That will provide an opportunity to make an assessment on the availability of SAF supply. The above steps demonstrate how many of the recommendations set out in the hon. Member for Wimbledon’s new clause are already being undertaken by the Government. Given that, I ask him to withdraw it.

[Mr Kohler]

I hear what the Minister says, but we think that not enough is being done to protect the bioethanol industry in this country. We will therefore push the new clause to a vote.

Question put, That the clause be read a Second time.

--- Later in debate ---

[Luke Taylor]

I rise briefly to press this question to the Minister: if the Government oppose the new clauses, how are they are going to incorporate their intent? I think they probably agree with the intent but are probably just resistant to their being outlined as they are. I ask the Minister to go into as much detail as he can on whether that will happen through the jet zero taskforce or something else.

[Mike Kane]

I always enjoy listening to the rasping oration of the hon. Member for Wimbledon.

[Greg Smith]

Rasping?

--- Later in debate ---

[Mike Kane]

A latter day Hilaire Belloc, in my humble opinion. However, on this occasion, the hon. Member for Wimbledon will no doubt know that I disagree with him.

Committee members will be aware that SAF is considered to be essential in achieving net zero for aviation medium and long-haul flights, which account for about 80% of CO₂ emissions from aviation. The Government update Parliament and the public regularly on the progress towards net zero targets across the economy, including by laying in Parliament an annual statement of emissions and annual publications of official greenhouse gas emissions statistics. They include granular detail on emissions from all economic sectors, including domestic and international aviation. Furthermore, the Climate Change Committee reports to Parliament each year on progress in reducing emissions, including for transport, and there is a statutory duty on the Government to respond to the points that it raises.

To address the points raised by the hon. Member for Sutton and Cheam, we continue to publish statistics on the volume of SAF supplied each year in the UK and under the SAF mandate. Together, these measures provide a clear picture of progress towards decarbonising aviation, so I would ask the hon. Member for Wimbledon to withdraw his new clause.

[Luke Taylor]

The Minister has spoken about the tonnage from SAF, but the real question is whether statistics and information will be available on the sources of each of those SAF types, so that we can examine how each of the various streams of SAF production are contributing and also understand the net carbon benefit. He has talked about the carbon production from the burning, but we need to see the detail of the SAF streams to understand the benefits and the progress towards decarbonisation in more detail. Is that something the Government might consider?

[Mike Kane]

I do not have the answer in front of me, but I commit to providing the hon. Gentleman with an answer in due course. I thought the point he was making was about whether we are being open and transparent across all sectors in the UK in showing how we are decarbonising the aviation sector. [Interruption.] I do now have the answer. Who knew? The miracle of mobile telephony—it will save writing my signature to him with the electronic pen. The SAF mandate and statistics include details of feedstocks and the origin of the SAF. I hope that answers his question, but if he wants more information—we are all keen on this—I would ask him to please keep in touch.

New clause 5, entitled “Increasing greenhouse gas saving potential of sustainable aviation fuel”, was tabled by the hon. Member for Wimbledon. The SAF mandate is the UK’s key policy to decarbonise jet fuel. It does that by securing demand for SAF, by obligating the supply of an increasing amount of SAF in the overall UK aviation fuel mix. The SAF mandate rewards SAF in proportion to the greenhouse gas savings its achieves. That will encourage SAF developers to improve continuously on their greenhouse gas savings. To ensure that the SAF mandate reflects the latest technological and commercial developments, there will be continuous monitoring of trends and the impacts of the mandate. Formal reviews will be conducted and published at least every five years, with a formal review in 2030. The formal reviews will already include certain elements of the new clause, namely the minimum greenhouse gas savings threshold and the minimum targets for supply of SAF. Following the review, there will be an opportunity to update the legislation as needed.

[Greg Smith]

The central question is whether that review, when it comes, looks at the greenhouse gas savings while the aircraft is in use, or gives a whole-system analysis, from the production and use of the fuel to the benefits of using the by-products, post combustion, to make more fuel. That is an important clarification that we need.

[Mike Kane]

My kingdom for a chemistry degree! I will let the hon. Gentleman know the answer to his question in due course.

To go back to the point, new clause 5 would duplicate the process already embedded in the SAF mandate legislation. I therefore ask the hon. Member for Wimbledon not to press the new clause.

[Mr Kohler]

New clause 4 was of course a probing amendment, and the Minister has satisfied most of us that enough will be done to report on our progress towards net zero. I was less convinced by the Minister’s answer to new clause 5. With or without a chemistry degree, the point is a simple one: SAF is green, but some SAF is greener than other SAF. I am not convinced that the Government are yet embracing that or doing enough to work out which SAF should be pushed because it is the most beneficial to the environment. We will press new clause 5 to a Division, but not new clause 4. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 5

Increasing greenhouse gas saving potential of sustainable aviation fuel

“(1) The Secretary of State must, within six months of the day on which this Act is passed, publish and lay before Parliament a report which sets out a strategy for increasing the greenhouse gas emission saving resulting from the promotion of sustainable aviation fuel production in the United Kingdom.

(2) The report required under subsection (1) must include, but not be limited to—

(a) proposals for incentivising the research and development of Sustainable Aviation Fuels that maximise greenhouse gas emission savings;

(b) an assessment of, and recommendations for increases to, the minimum required greenhouse gas emission reduction in order for a Sustainable Aviation Fuel to be issued a SAF certificate;

(c) an assessment of, and recommendations for increases to, minimum ratios for renewable content in blended sustainable aviation fuels, for the purpose of more quickly reducing greenhouse gas emissions.

(3) Twelve months after the publication of the report required under subsection (1) and within every twelve months thereafter, the Secretary of State must publish a further report which—

(a) sets out progress against the strategy, and

(b) makes any necessary adjustments to the strategy as a result of developments in the sustainable aviation fuel industry.

(4) In this section, “SAF certificate” has the meaning given in article 2 of the Renewable Transport Fuel Obligations (Sustainable Aviation Fuel) Order 2024.”—(Mr Kohler.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

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

Mike Kane Excerpts

Wednesday 9th July 2025 General Committees

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

I beg to move,

That the Cttee has considered the draft Transport Act 2000 (Air Traffic Services) (Prescribed Terms) Regulations 2025.

It is a pleasure to serve under your chairmanship, Sir Jeremy. The UK’s airspace is a vital piece of our national infrastructure that is essential to economic growth, connectivity and national resilience. Last year, there were more than 2.4 million flights using UK airspace, but despite a significant rise in air traffic demand, the structure of our airspace has remained largely unchanged since the 1950s, when there were around 200,000 flights. Today’s flight paths remain largely based on a system that relies on a network of outdated ground-based navigational beacons. As a result, aircraft today fly less efficient routes and are unable to take advantage of modern aircraft technology and performance. If a pilot from the 1950s travelled through time, they would still know the exact routes used today. That has to change. It leads to increased fuel consumption, greater risk of delays and, as a result, higher carbon emissions. Without modernisation, National Air Traffic Services estimates that, by 2040, one in five flights could face delays of more than 45 minutes.

There is a plan to fix this: the airspace modernisation strategy, set out by the Department for Transport and the Civil Aviation Authority, and committed to by the Labour party in its manifesto at the general election. I am grateful to Government and Opposition Members who I know will support the regulations that we are considering today, which are one of the most important ways of enabling the plan for decarbonisation and improved routes to be realised. Modernised airspace will enable greater capacity, improve resilience to disruption, and help UK aviation to achieve net zero greenhouse gas emissions by 2050.

The regulations are made under powers conferred by the Transport Act 2000, for which I thank John Prescott. Under that Act, the Secretary of State may modify and prescribe terms in an air traffic services licence. This instrument designates as “prescribed” any terms specifying air traffic services authorised under a licence, and any terms specifying the area in which those services may be provided. In practice, this will allow the Secretary of State to modify the terms in the air traffic services licence granted to NATS (En Route) Ltd—a public limited company known as NERL—to create and fund a new UK airspace design service, UKADS.

If the regulations are approved and come into force, they will enable a series of important steps to happen. The Secretary of State will consult on modifications to the terms of NERL’s licence, in accordance with the procedures set out in section 11A of the 2000 Act. The CAA will undertake its own separate consultation on the changes to the conditions of the NERL licence, following the statutory requirements laid out in the same section of the Act. The combined results of the changes, if adopted following consultation, will be to authorise and require NERL to provide the UKADS and enable it to charge for doing so.

Airspace modernisation is not just a technical upgrade; it is a national strategic necessity to ensure that our skies remain safe, sustainable and capable of supporting the UK’s future prosperity and innovation. The draft regulations will enable the UKADS to deliver the benefits of airspace modernisation and to ensure that the UK continues to be a global leader in aviation for decades to come. I commend the regulations to the Committee.

--- Later in debate ---

[Mike Kane]

I am grateful to the hon. Member for Orpington for stating the Opposition’s support. UK aviation enjoyed its most successful month in history in April. Over the next 20 years, we are looking at the doubling of numbers in aviation, and freight as well, so modernising our airspace is critical to making sure that there is resilience in the system.

Work was done under the previous Government, and I pay tribute to the former hon. Member for Witney, Robert Courts, for what he did, but Governments become sclerotic and the last Government did not get this measure over the line. I was glad that we committed to do it in our manifesto. What we are doing today by implementing that manifesto commitment and putting it into law will be a huge confidence boost for the aviation industry. When I have spoken to industry representatives, as I do all the time, including this morning, they tell me they have been looking forward to today, because the measure is a statement of commitment and intent.

The hon. Member for Orpington is absolutely right: who knew that flying in a straight line would cut carbon emissions? EasyJet gives the example of the journey from Jersey to Luton airport wherein the aircraft burns a third more fuel because of the path it has to take. Flying in a straight line is better for customers and for the environment, and it will produce fuel savings. He talks about winners and losers, but this measure also allows us to analyse take-offs and landings and varying routes, so we can mitigate impacts on communities. That is key.

The skillset is an essential element of that. Until now, the skills have been dissipated throughout the country. This measure puts the skillset into one place in the UKADS. That means we can concentrate on the most congested skies in the south-east, but it does not stop us doing what we need to do in the Scottish, northern and south-west airspaces. There will be funding to make sure that those other regions benefit, including smaller airports, which the hon. Member asked about. I will also commit to full transparency as we go through the process and get it over the wire to modernise airspace, so that the British aviation set-up has a confident future.

[Mr Paul Kohler (Wimbledon) (LD)]

rose—

--- Later in debate ---

[Mike Kane]

I thank the hon. Member for Wimbledon for his support; we have the whole House behind the measure. I commit to laying out the details of the steps for setting up the service, how much it will cost and what the consultation will be as we go forward over the next few years.

Question put and agreed to.

Space Industry (Indemnities) Bill

Mike Kane Excerpts

3rd reading
Friday 4th July 2025 Commons Chamber

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

I thank my hon. Friend the Member for Glasgow East (John Grady) for promoting this short but important Bill. I wanted to get further into Newcastle United’s Inter-Cities Fairs cup win in 1969, but I do not think today is the day.

I thank all who have contributed to the debate. I thank the hon. Member for Wyre Forest (Mark Garnier) for his chairmanship of the APPG for space. I thank my hon. Friends the Members for Portsmouth North (Amanda Martin), for Northampton South (Mike Reader) and for Crawley (Peter Lamb). I thank the shadow Minister, the hon. Member for Broadland and Fakenham (Jerome Mayhew), for his support as well. He mentioned puns—I attempted a pun in the House the other day, and Mr Speaker reminded me to stick to the day job. I will not try to emulate my hon. Friend the Member for Northampton South.

This industry is so important, and it will be going forward. It has already been said that it contributes £19 billion to the UK economy, and it is already employing 52,000 people right across our land. I am pleased to confirm that the Bill has the Government’s full support. We have economic growth at the heart of our agenda, and we are taking steps to support major infrastructure and to reduce bureaucratic red tape in regulatory frameworks to better support innovation and growth in the UK.

[Phil Brickell (Bolton West) (Lab)]

The Minister talks about economic growth. I recently met a Mongolian lady working at the Satellite Applications Catapult, which exists to grow the UK space sector. We have heard about Buzz Aldrin and Buzz Lightyear—I am afraid I have a pun coming. With that in mind, will the Minister set out in further detail, perhaps at the Dispatch Box now, how he foresees the Bill giving the space sector the rocket boosters it needs to go to infinity and beyond?

[Mike Kane]

Today is 4 July and there will be fireworks across the pond, but we want rocket boosters under our space industry. Most of Europe is landlocked—or I should say space-locked—which provides the UK with a unique opportunity to be a launchpad for satellites produced all around Europe. That is the market that we are going for.

The industry has made it clear that holding unlimited liabilities will have an adverse effect on the UK spaceflight industry. If the Government did not limit a spaceflight operator’s liability, spaceflight companies and investors might move to jurisdictions that have more favourable liability regimes where operator liability is limited, or that provide guarantees to meet all claims or those above the operator’s limit of liability, such as the US or France. For those reasons, we are pleased to support the Bill.

[Madam Deputy Speaker (Caroline Nokes)]

With the leave of the House, I call John Grady to wind up.

Gravesham: River Crossings

Mike Kane Excerpts

Thursday 3rd July 2025 Commons Chamber

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

I thank my hon. Friend the Member for Gravesham (Dr Sullivan) for securing this important Adjournment debate on the impacts of river crossings on her Gravesham constituency. She said that the charter for the river and her town was from 1401—I think it was Henry IV, having taken over from Richard II. The whole Shakespeare play was about rebellion, and I feel rebellion on the Back Benches at the moment because of how important this subject is to both my hon. Friends the Members for Gravesham and for Thurrock (Jen Craft).

My hon. Friend the Member for Gravesham has been a true champion in this field. She has made a number of representations to me, as she has mentioned, and to other ministerial colleagues calling for the reinstatement of the Gravesend-Tilbury ferry services, which ended in March 2024 due to a lack of funding. I appreciate the efforts and passion that my hon. Friend and her sister across the river, my hon. Friend the Member for Thurrock —fearsome sisters, I would say—have displayed in supporting these services, which can provide a quick link between Kent and Essex across the Thames estuary, in particular providing an alternative when there are problems on the Dartford crossing, as has been pointed out. I recognise that the ferry provided a useful link across the estuary and was very popular with regular users. It was particularly useful to those travelling to their respective workplaces, and provided an alternative to car journeys via Dartford.

As my hon. Friend well knows, there are a number of key industries and employment sites in north Kent and south Essex that play an important role in both regional and national economies. We know that the Thames gateway is going to be a massive driver for economic growth in the UK, with both the Amazon plant and CLdN there. We have other ambitions for the estuary in terms of becoming a clean energy superpower and driving growth in the maritime sector.

I thank my hon. Friends for their work with the maritime sector as it affects their constituencies. I am sure that they will acknowledge that ferry services run on a private sector basis to meet commercial demand. Any decisions to provide funding for local ferry services is ultimately a matter for local partners. Where local ferry services form part of local transport options, it is for the local transport authorities to consider such decisions in line with devolution. It is for local authorities to decide their transport priorities and where to allocate budgets.

There have been successful examples of ferry services receiving local funding, including Mersey Ferries in Liverpool and Woolwich Ferry in London, which are both funded and operated by the local transport authority. To support local transport authorities, the Government have been clear on their transport priorities, with capital funding to support local bus services, improvements to active travel and the maintenance of local roads.

[Jen Craft]

On that specific point, my hon. Friend and I have asked in the past whether it would be possible to use some of the bus funding, which has received an uplift, to fund the Tilbury ferry. The answer has been that it would not be possible, because it is not a bus—it is fairly obvious that it is not a bus. Will the Minister perhaps consider reclassifying the Tilbury ferry as a river bus?

[Mike Kane]

No, we cannot use those moneys in that way, but that does not stop us talking in the future with Department officials and the private sector about the river to see what is the art of the possible. Let us hold that in abeyance, and I will say a little more about that at the end of my speech.

The Government are exploring all viable funding options for the lower Thames crossing. That includes private finance options, which would use public seed funding to unlock investment. A road users charge will help finance the lower Thames crossing and reduce the burden on the public purse for major infrastructure projects. The road user charging regime for the lower Thames crossing has not been set, so I urge my hon. Friends to make their representations to the Secretary of State, the Roads Minister and me on this matter as it pertains to their local constituencies.

[Dr Sullivan]

When we consider the private companies and contractors that may come forward, the ask here is whether we could extract a social value—a social good—from the funding for the Tilbury-Gravesend crossing.

[Mike Kane]

I recently met the chief executive of Thames Clippers, which I think owns the pier, and that model has been pursued in other parts of the country, so, again, it is worthy of exploration with me and my officials.

Across the financial period 2025-26, the Department has allocated Kent county council nearly £40 million to support its local highway network, over £23 million to support the improvement of bus services, and £5.7 million to support active travel improvements. That is a significant uplift under this Government. In the same financial period, the Department has allocated Thurrock council nearly £3 million to support its local highway network, £2 million to support the improvement of bus services and over £350,000 to support active travel improvements.

In addition, the Chancellor recently confirmed in the spending review that the £3 bus fare cap, which was expected to finish at the end of the year, will be extended until at least March 2027, benefiting both local authorities. However, there is limited revenue funding for the local authorities, and it will be for them to decide which services to prioritise. I urge all partners in the region and the Members of Parliament who have spoken eloquently here today to work together constructively to find appropriate local transport solutions, including river services. I have asked my officials at the Department for Transport to work closely with local partners to identify any funding opportunities that could become available to help support local plans.

I say to my hon. Friend the Member for Thurrock that I hope one day she will be able to visit the Three Daws public house once again. I thank my hon. Friend the Member for Gravesham for securing this Adjournment debate and for being a doughty champion on this matter in her constituency.

Question put and agreed to.

NATS Technical Failure of August 2023: CAA Report

Mike Kane Excerpts

Tuesday 1st July 2025 Written Statements

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

The Civil Aviation Authority has today published a report on the progress made in relation to the 34 recommendations that were made in the independent review’s final report into the NATS technical IT failure of August 2023.

I would like to express my gratitude to the CAA, NATS, airlines and airports for the progress they have made in responding to the recommendations that were made by the independent panel. Today’s report confirms the positive approach that has been made in responding to the recommendations by all stakeholders.

NATS has delivered its recommendations, with many of these already having been confirmed as completed by the CAA. The CAA expects to have completed validation of all recommendations made to NATS during the summer. Airlines and airports have committed to reviewing their practices for communicating and assisting their passengers during periods of disruption. The CAA is reviewing these plans and will monitor compliance through an extended compliance programme, along with establishing an industry code of conduct. The CAA will continue to hold airlines and airports to account for how they meet their obligations to consumers.

The CAA is making good progress in responding to its recommendations. In particular, it has focused its efforts in response to the panel’s recommendations relating to the expansion of its work on improving industry compliance and the rights of aviation consumers. The CAA will commence a programme of work related to the next price control review period for NATS (NR28), which will directly address a number of the recommendations made by the panel.

My Department remains steadfast in our commitment to delivering on the recommendations that the panel has made for Government, and we will make the required legislative reforms on which this is dependent when parliamentary time allows, to ensure that air passengers have the highest level of protection possible.

The CAA will provide a further report on progress with the recommendations towards the end of the year. The expectation is that most of the recommendations made by the panel will have been validated and completed by the end of 2026.

[HCWS758]

Transport

Mike Kane Excerpts

Monday 30th June 2025 Written Corrections

The following extract is from the Estimates Day debate on 25 June 2025.

[Mike Kane]

We have also announced £185 million through safer roads funds to invest in the 99 most risky A roads, and we have made clear commitments on rail cost base and subsidy.

[Official Report, 25 June 2025; Vol. 769, c. 1208.]

Written correction submitted by the Under-Secretary of State for Transport, the hon. Member for Wythenshawe and Sale East (Mike Kane):

[Mike Kane]

We have also invested £185.8 million through the safer roads fund to improve 99 high-risk A roads, and we have made clear commitments on rail cost base and subsidy.

Oral Answers to Questions

Mike Kane Excerpts

Thursday 26th June 2025 Commons Chamber

[Alison Taylor (Paisley and Renfrewshire North) (Lab)]

7. What steps she is taking to support the aviation sector.

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

We are unlocking growth through the power of aviation by progressing airport planning decisions and driving airspace modernisation, including through the new UK airspace design service. We have also invited proposals for a third runway at Heathrow, which will have benefits across the UK and could result in billions of pounds invested in our economy. To help the sector grow in a sustainable way, we have introduced the sustainable aviation fuel mandate and a Bill for a SAF revenue certainty mechanism.

[Alison Taylor]

Has the Minister had discussions with the Scottish Government on how best to use the substantial increase in the Scottish budget to support the aviation sector? In particular, what do the Government plan to do to make up for the lack of investment in connectivity around Glasgow international airport in my constituency?

[Mike Kane]

My hon. Friend is a champion for Glasgow airport, and as she knows, Scotland needs investment in transport and infrastructure of the kind we are now seeing across England and Wales. The Scottish Government will receive the largest real-terms settlement since devolution began in 1998 as a result of this month’s spending review. I hope this budget increase will be put to good use.

[Ben Maguire (North Cornwall) (LD)]

It was good to see Doncaster regional airport recently attract £30 million from this Government. The public service obligation flight route between Newquay airport and Gatwick is a vital regional connection between Cornwall and the capital, but with the current service ending in July, it is now up for renewal. Will the Minister please meet me as a matter of urgency to ensure that this vital link remains in place?

[Mike Kane]

Public service obligations are vital for connecting the UK economy, and I think we currently have three. I would be more than happy to meet the hon. Member to discuss the one affecting his constituency.

[Brian Leishman (Alloa and Grangemouth) (Lab)]

8. Whether she has had recent discussions with Alexander Dennis Ltd on the potential impact of the proposed closure of its Falkirk and Larbert bus manufacturing sites on her targets for public transport decarbonisation.

--- Later in debate ---

[Daniel Francis (Bexleyheath and Crayford) (Lab)]

T7. I was disappointed to see the findings of yesterday’s Civil Aviation Authority airport accessibility performance report, which outlined that three airports—Edinburgh, London Heathrow and Glasgow Prestwick—received a “needs improvement” rating for accessibility. Can my hon. Friend provide an update on when the aviation accessibility task and finish group’s recommendations will be published, and when the Government will be able to outline how they plan to introduce measures to support disabled people who wish to access air travel?

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

Everyone should be able to travel with dignity and ease, which is why we launched the aviation accessibility task and finish group last year. I expect to be able to provide an update soon, when that group publishes its findings. As my hon. Friend has mentioned, the Civil Aviation Authority’s airport accessibility performance report 2024-25 demonstrates that improvements are still required in some areas.

[Caroline Voaden (South Devon) (LD)]

Devon and Torbay combined county authority will receive just £40 million between 2026 and 2030 in local transport grant funding—less than half the amount awarded to York and North Yorkshire and a fraction of the billions given to the city regions, despite Devon having the longest road network in the country. A large local operator says that just £1 million a year would make a transformational change in Devon, where rural deprivation is well hidden. Will the Minister meet me to discuss the issues facing the bus network in Devon and the Government investment that is needed?

Department for Transport

Mike Kane Excerpts

Wednesday 25th June 2025 Commons Chamber

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

It is a pleasure to see you in the Chair, Mr Deputy Speaker. As you cannot speak from the Chair, may I say what a doughty champion you are for the reopening of Manston airport, in your constituency?

First, I thank my hon. Friends the Members for Brentford and Isleworth (Ruth Cadbury) and for Dunstable and Leighton Buzzard (Alex Mayer) for securing the debate and for the work they have done on the Transport Committee. I am grateful for all Members’ important, interested and varied contributions, and will try to address as many as humanly possible—there were an awful lot of questions in many of them. I know that Members are anxious for news on specific schemes in their local areas, but I will not be able to announce any new decisions today. We will make announcements in due course through the usual processes.

Let me address the comments made by the Transport Committee Chair about how spending is linked to the Department’s strategic objectives. Our spending is wholly orientated towards delivering this Government’s missions and our plan for change. At the heart of our approach is harnessing transport to drive growth, as better transport will connect people and opportunities and ensure that businesses can grow and thrive. That is why we are investing in vital public transport services, repairing our road networks, transforming our railways and providing unprecedented investment for local leaders to invest in their priorities. Five out of the first 10 Bills in this Session were on transport—we did not have five transport Bills in 14 years under the last Government. We are moving at pace.

In the financial year 2025-26 alone, we are delivering £1.6 billion for local road maintenance, £1.3 billion for local transport in our big city regions and over £1 billion for bus services. We are also providing more than £420 million for our smaller cities, towns and rural areas, as has been mentioned today. Our investments will help to drive growth in every part of the country and raise living standards for everyone.

We are supporting the transition to net zero and an economy powered by clean energy, with more than £200 million to accelerate the roll-out of electric vehicle charge points this year. We are investing in active travel infrastructure to improve the health of the nation, with an additional £150 million of investment in cycling and walking infrastructure in this financial year alone. We are supporting bus services and capping fares to connect people to jobs and to boost opportunity. We are also supporting safer streets by making public transport safer—including, most importantly, for women and girls. Across our work, we are making sure that every penny of taxpayers’ money is put to good use, from greater efficiency within the Department to getting to grips with the spiralling costs of HS2 and bringing that project back on track.

Although this debate concerns the estimates for 2025-26, I note that only two weeks ago, the Chancellor set out how our ambitions for the transport sector will last the whole of this Parliament. With the settlement we have received for 2026 onwards, we will deliver increased local transport investment in England’s towns and cities, prioritising funding in the north and the midlands and giving local areas more control over how the money is spent. We will improve everyday journeys across this country and invest in the critical national infrastructure needed to connect our cities and our towns in the long term, enabling economic growth. This will ensure that transport plays its part in delivering the plan for change and a decade of national renewal.

I thank the Chair of the Transport Committee for her speech. She asked me a number of questions about when we will publish the outcome delivery plan. This will be done by all Departments, co-ordinated through the Cabinet Office, later this year. She asked about subsidiarity, and what happens if mayors do not use the money and new powers we have given them on the things that we want to do, citing active travel as an example. Even with subsidiarity, mayors have to deliver against Government outcomes and objectives, and we hope to work with them in a spirit of co-operation to ensure that that is done right.

My hon. Friend asked what our bus reform and £1 billion investment was meant to achieve. We introduced the new £3 fare cap on single bus fares in England outside London, which has had the cap for a long time, ensuring that millions of people have access to affordable fares and better opportunities to both go to college and work and to see friends and family.

With UK SHORE, we have moved fast with the decarbonisation plan, and the research and development funding for this will continue. We have worked internationally with the International Maritime Organisation to reduce greenhouse gas emissions across our planet. We have also announced £185 million through safer roads funds to invest in the 99 most risky A roads, and we have made clear commitments on rail cost base and subsidy.

The right hon. Member for Aldridge-Brownhills (Wendy Morton), the former Rail Minister, is a doughty champion for Aldridge station—well done to her for that. The money was reallocated by the current mayor to cover the costs of schemes implemented by the former mayor that did not have the funding. She also talked about buses; I have already mentioned the £1 billion that we have invested in better buses.

My hon. Friend the Member for Bradford East (Imran Hussain), who cannot be in his seat at the moment, is an astonishing champion for Bradford. May I pay tribute to him and to Councillor Susan Hinchcliffe, the leader of Bradford city council, for their work in this area? The £2.1 billion train line and bus station investment is transformative. Some £35 million of Government money will see an additional five daily services to London, and we will be making announcements in the next few weeks regarding Northern Powerhouse Rail and how important it is to connect the cities of Leeds, Bradford, Manchester and Liverpool.

[Wendy Morton]

While the Minister is still talking about rail services, I just want to ask about Aldridge station to be absolutely clear about the situation. When the money for the station was allocated, it was ringfenced. It was his Government who decided to move the money from capital to revenue, so it is simply unfair to blame it all on Andy Street; it is not right.

[Mike Kane]

I thought the former mayor was quite a talented individual and he was succeeded by another talented individual, who has had to make tough choices around funds that were committed but never implemented under the previous Government. Promise after promise was made, but with no delivery whatsoever. None the less, the right hon. Member should carry on campaigning.

The hon. Member for North Norfolk (Steff Aquarone) rightly talked about buses. I have already mentioned the amount of funding that we are putting in there, and the £616 million for active travel, which has been mentioned by a number of Members, on top of the £300 million that was allocated last year. I had a great time last Easter cycling with my wife around the hon. Member’s constituency on Rebellion Way, which is a wonderful piece of Sustrans infrastructure.

[Steff Aquarone]

I thank the Minister for coming to North Norfolk; he is welcome at any time. Having experienced at first hand the reality of rurality in my constituency, does he agree that we need to look at alternative models for rural public transport?

[Mike Kane]

We are giving back control of buses to local authorities—as difficult as it is in some circumstances. It is a £1 billion commitment. People in rural economies need to get about just as much as people in cities and we are committed to making sure that that happens.

Let me turn to my hon. Friend the Member for Monmouthshire (Catherine Fookes). I cannot wait to visit and to ride on the No. 65 bus. She is a doughty campaigner for her constituency. She also talked about two Labour Governments working hand in hand to bring rail investment to Magor and Undy station, and I am glad that she has had correspondence with the Roads Minister on the safety of the M48.

The hon. Member for Didcot and Wantage (Olly Glover) rightly talked about HS2. He highlighted the need to connect our maritime industries on the south coast with the rail network, so that we can take maximum advantage of both maritime and rail to get that freight off our roads.

My hon. Friend the Member for Dartford (Jim Dickson) summed it up when he spoke about the collapse of Galley Hill Road, which I thought was a metaphor for transport under the last Government. We have committed to the Lower Thames Crossing, with an initial investment of £590 million, and we will be making announcements on that in due course. We have also put in £54 million to fix potholes in Kent. The Government are showing that we are committing to the Lower Thames Crossing, with announcements to come, and are fixing the roads, and yet not one Reform Member came to this debate. Let us remind the people of Kent day in, day out about Reform’s lack of commitment to improving their lives compared with what we are doing.

I was with the predecessor of the hon. Member for Surrey Heath (Dr Pinkerton) at the British Ports Association. Do they only elect Scottish Members to the Surrey Heath constituency? I noticed that even some of the mannerisms were the same. The hon. Member made some important points about evidence-based transport systems. I think we are demonstrating that we are not a cultural, woke Government but are looking policy data to drive our decisions about how we best connect this country up. He also talked about road safety. Our manifesto included a commitment to long-term connectivity for transport across the country. That will be coming, so I hope he gets involved in the debate when it comes forward.

The hon. Member for Didcot and Wantage talked about HS2. We have accepted James Stewart’s recommendations about the cost overruns, although the hon. Member was right to highlight them. He also asked about how our railways and maritime industry can work together. Green shipping corridors will be key to the future of shipping, but the grid capacity in our coastal communities is not up to scratch. He knows that and we know that, and that is why we made manifesto commitments on our grid capacity. I note that we have already made announcements about greater European train connectivity, but I understand the point he makes about depot constraints; the Government are looking at that as well.

My hon. Friend the Member for St Austell and Newquay (Noah Law) is a real champion for Cornwall. I was glad that we could announce £4.1 million for Cornwall alone in 2025-26 in addition to the £201 million —which, as he mentions, is four times greater than the last settlement. We hope to see things improve in that wonderful part of the country.

The hon. Member for Wimbledon (Mr Kohler) always astonishes me. He is like some latter-day Hilaire Belloc in his pinstriped suits and polka-dot tie. He was so positive about the Government that I thought he was going to cross the Floor for a second; we will give him time. He mentioned being disappointed about some areas, but we have done more to decarbonise transport this year, more for buses than any Government have done for a generation, and more for active travel in one year than any Government for a generation.

[Mr Kohler]

I thank the Minister for his compliments. Does he accept that Active Travel England will get £100 million less next year, and does he think that is a sensible way to move forward?

[Mike Kane]

Under this Government, Active Travel England gets settlements that go forward. I have to say that I thought the former Member for Uxbridge and South Ruislip—the former Prime Minister—was actually very good in this space, but the announcements he made were then all pared back. Local authorities need to have long-term continuing investment to connect routes and get people walking, wheeling and cycling. My constituents die of type 2 diabetes, hypertension and chronic obstructive pulmonary disease—all things that can be fixed by more of us walking, wheeling and cycling. Active travel is key to the Government’s health mission as well as to our transport mission.



I thank the shadow Minister, the hon. Member for Orpington (Gareth Bacon), for his contribution. He mentioned that the settlements for West Yorkshire, Greater Manchester, Merseyside and the west midlands were similar to those from 2023. Yes, they are, but this Government are delivering on these settlements. We had so many promises from the last Administration, but we are delivering.

We will take no lessons from the Opposition on the costs of Great British Rail, which I think the nation is proud of, given that we were left to clear up the debacle of the overrun costs of HS2—a project that was cut by the previous Prime Minister while he was at the Tory party conference in Manchester. It was the most astonishing decision, and the most astonishing place to announce it. As a proud trade union member, I am glad that the trade unions have come to the table this past year. After years of industrial strife, we are solving the disputes, particularly in the railway industry, and services are beginning to improve.

On long-term investment, I gently remind the shadow Minister that he voted for Prime Minister Liz Truss’s Budget, which left us with a £22 billion black hole. We have been tackling that as well as setting out our ambition for the future. We are fixing the foundations of our transport system to deliver the Government’s priorities. Our funding settlement for 2025-26 enables us to press ahead with reforming our bus and rail services, to get to grips with the maintenance backlog, to empower local leaders to deliver, and to build transformative new routes for the country. The settlement announced earlier this month will build on that; it will drive progress on the Government’s missions, and improve transport for people and businesses across the country.

I thank hon. Members for contributing to the debate. I am grateful for the important work of the Transport Committee, and look forward to continuing to work with it. I commend the estimates to the House.

[Mr Deputy Speaker (Sir Roger Gale)]

I call Ruth Cadbury to wind up.

Space Industry (Indemnities) Bill

Mike Kane Excerpts

Committee stage
Wednesday 18th June 2025 Public Bill Committees

[John Grady]

I do not want to cause some sort of inter-university fight first thing in the morning.

The purpose of the Bill is to help push forward vital investment in the UK’s space sector, which is vital for economic growth and also for the defence of the UK and Scotland. The UK, Scotland and Glasgow have great opportunities in the sector, which already employs more than 52,000 people with 126,000 jobs across the supply chain. It is worth over £18.9 billion to the economy. It is now possible to launch satellites from the UK, and Glasgow, my home city, builds more small satellites than anywhere outside California.

Clause 1 amends two sections of the Space Industry Act 2018 to provide legal certainty that all spaceflight operator licences must include a limit on the amount of an operator’s liability to the Government under section 36 of the Act. Section 36 provides for spaceflight operators to indemnify the Government in certain circumstances and the current risk for spaceflight operators is that claims from the Government exceed the carefully assessed insurance that is put in place by the spaceflight operators, following significant regulatory oversight by the Civil Aviation Authority. The current legislation does not require the Government and the CAA to cap operators’ liability; the Bill changes that, in essence by changing “may” to “must”.

Investors are unwilling to invest in companies that hold unlimited liability. It is not generally possible to insure against an unlimited liability in the space insurance market and there is very limited capacity in this specialist sector. The UK Government have a clear policy that licensees’ liability will be capped, but the issue for investors is that this is set out in a policy document and not in statute. This means that the Government and regulators could change the policy with comparative ease, which could mean that investors would find that they had exposure to unlimited liabilities. That deters future investment.

The issue is causing investors real concern and investors in the space industry have raised it with Government many times. It is a long-standing unresolved issue, on which I believe there is cross-party consensus. All our competitor nations limit liabilities or provide a state guarantee for launch activities of the type that take place from their territory. That puts the UK at serious risk of competitive disadvantage at a time when we are trying to grow the economy and focus on this important sector. The Bill, and these two simple clauses, confront the problem and make the UK, Scotland and, of course, Glasgow a much more attractive place to invest in space.

Clause 2 deals with the extent, commencement and short title of the Bill consistently, as one might expect, with the 2018 Act.

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

It is a pleasure to serve under your chairmanship today, Sir Christopher, and I thank my hon. Friend the Member for Glasgow East for promoting this short but important Bill. He is without doubt a doughty champion for the space industry in his great city of Glasgow.

From the contributions we heard on Second Reading and this morning, we know how beneficial the Bill will be to many businesses in the UK’s thriving space sector, which contributes over £17.5 billion to the UK economy and directly employs more than 48,000 people. I am pleased to confirm that the Bill has the full support of the Government. The Government have economic growth at the heart of their agenda and this speaks directly to that. With 16% of UK GDP depending on satellite services, there is no doubt that the space sector is important to us as a nation, as my hon. Friend pointed out. The Bill, while advocating a minor change to legislation, will provide the sector with the legal certainty it is looking for to boost investor confidence and stimulate further growth in the UK economy.

The UK space sector is bolstered by being a member of the European Space Agency. Britian does better because of that key partnership. In the last quarter of 2024, UK businesses’ net revenues from the ESA were £80 million higher than our contribution. That is a record for any member state. As my hon. Friend pointed out, we now produce more satellites in this country, second only to California in the USA.

The Government recognise the question of liability insurance is of utmost concern. The industry has made clear it that holding unlimited liabilities will have an adverse effect on the UK spaceflight industry. If the Government did not limit a spaceflight operator’s liability, spaceflight companies and investors might move to other jurisdictions with more favourable liability regimes, where operator liability is limited and states provide guarantees to meet all claims or those above the operator’s limit of liability. That is why the Space Industry Act contains powers to limit a spaceflight operator’s liability when carrying out spaceflight activities from the United Kingdom. It is Government policy that the regulator should use those powers and specify a limit on operator liability in the licence.

The Bill is therefore fully consistent with Government policy. Furthermore, it improves the Space Industry Act by meeting a key request from industry to provide legislative certainty that spaceflight operators will not face unlimited liability when operating from the UK. For those reasons, we are pleased to support it.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Bill to be reported, without amendment.