Oral evidence: Scrutiny of the draft Heathrow Expansion National Policy Statement, HC 482

Oral evidence, 21 October 2026.

Witnesses

Keir Mather MP, Hannah Newell, Martin Gilmour and Tim Johnson.

Chair

Welcome to this morning’s evidence session. This is the seventh and final oral session in our scrutiny of the Government’s draft Heathrow expansion national policy statement. I would like to welcome Toby Perkins MP, who is joining us as a guest from the Environmental Audit Committee, which he chairs. Could I please ask our witnesses to introduce themselves, starting with the Minister?

Keir Mather

Good morning, Chair. My name is Keir Mather, and I am the Aviation Minister at the Department for Transport.

Tim Johnson

Tim Johnson. I am the consumers and markets director at the Civil Aviation Authority.

Hannah Newell

Good morning. I am Hannah Newell, director for Heathrow expansion at the Department for Transport.

Martin Gilmour

Morning. I am Martin Gilmour, deputy director for Heathrow expansion at the Department for Transport.

Chair

Thank you very much, and welcome. The draft Heathrow expansion NPS opens with the statement that “The Government is committed to harnessing the opportunities Heathrow expansion creates” and the second chapter is devoted to demonstrating what is termed a “clear need” for this development. However, the Secretary of State has reportedly said that the Prime Minister is “open-minded”. Is the Government as committed to this policy as it was in June?

Keir Mather

Thank you, Chair. May I very briefly—I remember your encouragement for me to focus on brevity—thank all the members of the Committee for your continued scrutiny of the HENPS? I look forward to considering the recommendations that you put forward alongside the more than 27,000 responses that we have had through the consultation. You are of course right to say, Chair, that the Prime Minister has emphasised the importance of the consultation process and of considering the views of different voices. We have been clear throughout the national policy statement review that we are going to carefully consider the views that we receive through the consultation alongside this Committee’s recommendations before we set out the next steps in relation to the HENPS. As Aviation Minister, I of course realise that any decision that relates to a third runway at Heathrow will be absolutely consequential for the UK economy more broadly, but it is obviously normal for a new Prime Minister to want to look at the detail of what is a very large privately financed project. At the same, I fundamentally recognise that air connectivity plays an incredibly important role. Heathrow airport, as our international hub airport, plays a critical role within that. The needs case of the HENPS sets out the potential benefits of expanding Heathrow, and that they are significant, but ultimately the Government also have the four tests that would need to be met in order to facilitate expansion. That is exactly where we are in the process.

Chair

The Prime Minister has said that he thinks this is principally “a matter for London and Londoners.” How will that be factored into the Department’s analysis of the consultation?

Keir Mather

I think the Prime Minister was rightly reflecting on the fact that community impacts that might arise from any planning decision in relation to Heathrow expansion would be especially felt by communities in London. I would hazard a guess that a significant portion of the consultation responses will be from affected parties in London, whether that be local residents or local businesses. That is why the HENPS itself puts a very strong focus on mitigating community impact and placemaking. The four tests have an especial impact in a London context. That is also why we sought the views of affected communities throughout the process. I went to Heathrow myself and met with the community groups most affected. I think the Prime Minister was speaking to the fact that this is a decision of enormous consequence for London. At the same time, it is important to reflect on the fact that the Prime Minister also recognised the central importance of Heathrow to UK economic growth and resilience, and its status as an international hub airport in contest with the likes of Charles de Gaulle and Schiphol. I think those two things can be true at the same time. Of course, this is a matter for London and it is of enormous consequence to London; at the same time, this is a national question and we have had a range of national answers to it through the consultation.

Chair

I think your Department’s own figures say that 900,000 people will experience more noise with expansion than without. Obviously, some of those are outside London, particularly to the west. If the decision will be primarily for Londoners, could the Mayor of London have a veto?

Keir Mather

No, that is not the case. The Mayor of London has been—

Chair

Okay, fine.

Keir Mather

I can go into that if you would like; otherwise, I will keep shtum.

Chair

Given what the Prime Minister said, if this is a project that is supposedly to benefit the whole of the UK economy, as you have just suggested, why should the decision be primarily for London?

Keir Mather

It is not a case of it being primarily for London. It especially relates to London because of the community impacts I spoke about, but also, as you say, compliance with the four tests, including the ones about specific local impacts of air pollution and noise, and the economic and job creation benefits that could accrue from an expanded Heathrow airport. In terms of the mayor’s role, he has submitted a representation through the consultation. He can have involvement in the DCO process, particularly through the examination phase. In terms of what the mayor is responsible for, any potential promoter of Heathrow expansion would have to work extremely closely with TfL, which the Mayor of London chairs. There are many ways in which the views of the Mayor of London, and of TfL especially, will be incredibly consequential to how any process around Heathrow expansion might unfold.

Chair

Thank you. We will move on to aviation policy.

Dr Arthur

On “for London and Londoners” first, Keir, how will that manifest itself democratically? There is a vote planned, isn’t there? Is it just going to be for London MPs? Surely, MPs from Hull and Edinburgh should let our London colleagues make the decision if it is for London and Londoners.

Keir Mather

I can certainly allay your concerns on that point. Any vote on designation on a revised HENPS would require a vote in Parliament, which of course everybody would be fully entitled to vote in, and I would encourage them to take part.

Dr Arthur

So not just London MPs. Okay.

Keir Mather

No, certainly not.

Dr Arthur

In an ideal world, we would be considering this proposal within the context of an up-to-date aviation framework for the UK. The current framework we have in the UK dates back to 2013, which was pre-covid, and our understanding of the climate emergency was different back then as well. Should updating the policy framework for aviation in the UK not have been the starting point before looking at Heathrow? Surely Heathrow has to fit into an up-to-date policy framework.

Keir Mather

Hannah and Martin can speak to the especial reasons why Heathrow expansion needs a designated process through its own policy statement. I do not agree with the broader thrust of the question, about the fact that Heathrow expansion is being considered in a context where we do not have a general strategy for how aviation policy in the country is conducted.

Dr Arthur

Where can I find that strategy?

Keir Mather

I think you can see it in the actions of the Government. We are facilitating—

Dr Arthur

So it is in the clouds somewhere; I have to piece it together myself. There is not a document?

Keir Mather

It is not in one document, but it is in statute, for example. We have passed the SAF mandate and created the RCM, which is a world-leading way in which to pursue sustainable aviation fuel. We have consented expansion at Luton and Gatwick. We are doing some of the everyday fixes that the Prime Minister talked about around aviation policy to make the travelling experience better for passengers. We are pursuing a lot of work through the Department on aviation decarbonisation, and we are reviewing the jet zero strategy. That principle of facilitating growth in our aviation sector, but doing it in a way that meets the UK’s legally binding carbon commitments and making sure that all the ancillary benefits of jobs growth, reindustrialisation and pushing more power out into local communities, which the Prime Minister has talked about, are facilitated through our aviation policy, does constitute an aviation strategy. It is a fair challenge to say that it is not contained in one document. I recall that when the Secretary of State gave evidence to this Committee—I think it was almost a year ago—she said that if there is a call from the sector to produce a consolidated strategy for aviation, that is certainly something that she will consider. In the meantime, we are advancing those priorities through a lot of different avenues.

Hannah Newell

The only thing that I would add to what the Minister said is that Heathrow is a nationally significant piece of infrastructure, so it is subject to the Planning Act 2008. That is why we need a national policy statement to take forward any expansion. The previous airports national policy statement only applied to Heathrow, and one of the reasons why we have renamed the HENPS for this post review is to clarify that it only applies at Heathrow. In terms of capacity elsewhere, that is subject to the making best use framework, a policy framework that was introduced in 2018. Since that was put out, we have seen applications come forward, some of which the Minister has mentioned. That is where that sits in the aviation strategy ecosystem that the Minister explained.

Dr Arthur

Some people who live next to other airports and already feel the impact of noise, air pollution and all those things are a bit befuddled that we are spending so much time on this airport when they are living next to one that causes them just as much discomfort, inconvenience and so on. They wonder why, as a Committee, we are looking at Heathrow but not their airport, whether it is Gatwick or elsewhere. It feels like we are missing something, because this is a national policy statement and was a chance to look at all aviation as a system in the UK—I know it is bigger than just the UK. Instead, in a national policy statement, we are just looking at one airport. It is not even just a London policy statement, going back to this “London and Londoners” thing.

Hannah Newell

In the consultation, we asked whether we should review that making best use framework—should it be updated, and if we were to update it, what should it cover?—recognising that that applies to the airports outside of London and the south-east.

Keir Mather

It is a fair challenge to ask how we are working across the piece, and you are right to say that there is all this attention on Heathrow airport, and if you live near Edinburgh airport or Glasgow airport, for example, and have concerns about air and noise pollution, you might wonder what the Government are doing in that space. I would say that a lot of the ancillary policy questions that affect Heathrow expansion are national, and we are advancing work on them. If you take airspace modernisation and the refresh of CAP 1616, which is going to allow for quieter, more efficient journeys that will hopefully reduce noise for local communities, there is an impact of that. The fact of the matter is, though, that at the same time, Heathrow airport has been operating at almost 95% capacity for, I think, two decades now, and the rest of the London airport system, I believe, is scheduled to be at full capacity by the mid-2040s. This is a pressing question for us to consider on a national basis because of Heathrow’s value not only as our international hub airport and the resilience that gives, including to airports like Edinburgh that facilitate connections in for longer-haul connectivity, but because of the enormous amount of air freight that is moved through Heathrow—I think that 24% of the value of imported goods to the United Kingdom move through that single airport. So it is of national consequence, but you are right to say that our aviation policy needs to serve the whole United Kingdom.

Dr Arthur

Yes, but a lot of that value is gold that goes backwards and forwards—it is an interesting area, but I do not understand why we have to do that quite so much. In terms of airspace modernisation, I do not speak for Edinburgh, but they would say that the focus on Heathrow is delaying the modernisation of airspace right across the UK because it is soaking up all that capacity. You touched on modelling of air passenger numbers up to 2040. One of the challenges is that we do not have a long-term predictor of demand for air travel, particularly beyond 2050. Is that a concern, when we look at the economic benefits of this?

Hannah Newell

You are right that the model runs to about 2054. That runs for one year of the airport being at full capacity once all the capacity is increased. In the economic appraisal we extrapolated those benefits out to a full 60-year appraisal period, and that is in line—

Dr Arthur

But Heathrow said last week that it might not reach full capacity until 2059, so we are getting pushed further into that really uncertain period.

Hannah Newell

I understand. What I would say is that that is in line with the standard approach that is taken in transport appraisal. Obviously, the model is an ongoing focus for the Department. We continue work on it to keep it up to date, but that is the approach that we have taken for the HENPS.

Dr Arthur

Do you think that standard is good enough for this project, though?

Hannah Newell

We have conducted the economic appraisal—

Dr Arthur

Because in all sorts of ways it is getting special treatment, isn’t it?

Hannah Newell

We have done it in line with standard transport appraisal guidance. We have used the peer reviewer that I know the Committee has seen previously to look at the work that we have done and the work that Frontier have done, and I think it is as it needs to be for the purposes of the HENPS.

Dr Arthur

Keir, overall, how compelling do you think the economic case is for expansion?

Keir Mather

It is worth saying that the research that has already been conducted shows that if expansion does proceed it can create economic growth right across the country. It is obviously right to acknowledge that the economic case is less when compared with the 2018 ANPS. We can talk about the range of factors as to why that is the case, such as planning increases at other UK airports and reduction in the number of business passengers. However, separate analysis carried out by the Department for Transport shows that the cumulative benefits of the scheme could create between £39 billion and £52 billion-worth of benefits for UK passengers and the wider economy, and a lot of that growth can be centred on areas outside of London and the south-east of England. I think it was Dr Laird who said in the evidence that he provided to you that that is still high in terms of rate of return for a mature economy that is already very well connected. In terms of meeting the expectation that Heathrow is critical to economic growth, but also that the benefits of that growth are accrued across the United Kingdom, the case for it is there, but I also will not say to the Committee that it compares in the same way as it did in 2018, because it does not.

Chair

By a factor of 10.

Keir Mather

I also reflect on the fact that it is about economic growth, but also economic resilience. It is about the comparative disadvantage of having not expanded the airport compared with where we are now with the capacity constraints that we might see. Through that air freight piece, but also through the question of international connectivity through a hub airport, I think it is critically important that we reflect on what the resilience impacts may or may not be of not expanding Heathrow airport in that context. Whereas other countries have moved far ahead to cement their status with their international hub airports, whether that be in France, Germany or Turkey, we are in a position where Heathrow is at 95% capacity, and we need to think about those broader questions in that context. It is a resilience question as much as it is a growth question.

Dr Arthur

But Heathrow choose to operate at 95%. They could operate at 80% if they wanted to. That is just where they are. This comes back to a point that we have talked about previously: how much capacity do you think we should reserve for resilience? I am going to stop the Chair quoting the point she often quotes, that we just need an extra runway with no extra flights to give us the resilience we need at the airport. How much capacity should we reserve at the airport just for resilience—or should we use 95% of capacity again?

Keir Mather

It is a good question. We need to facilitate Heathrow expansion so that we can build resilience in—

Dr Arthur

They are going to want to use all the capacity, aren’t they?

Keir Mather

That would be the argument. Resilience is critically important. The argument that you would make in the context of expansion is that facilitating growth in a sustainable way through a phased approach could be the way in which that expansion happens. There is also a broad piece around making the existing footprint of the airport work better, perhaps through terminal modernisation. The HENPS reflects the fact that if expansion goes ahead, it will need to be facilitated in a phased way through an increase in those things that facilitate resilience, whether that be surface access schemes or terminal expansion or how you get passengers through the airport. I am not sure if I am landing exactly on what your question is, but that resilience has to be baked in across the process.

Dr Arthur

That is fine; I know it is not easy.

Chair

Can I pick up a couple of points? First, on the aviation strategy, or lack of, you talked about environmental groups and communities near other airports, but the concern about the lack of an aviation strategy that we heard was principally from people in the aviation sector themselves. For instance, where is the strategy for the place of aviation in facilitating freight or domestic connectivity? On domestic connectivity, we found a lot of support for the idea of getting more flights from the regions to Heathrow, but nothing on the mechanism of how that would happen—apologies, because this may come up in later questions. On economic growth around the country, your own Department’s figures showed that a lot of the growth around Heathrow and west London would be at the cost of some of our UK regions. Many of the regional airports are not in great financial shape and are worried about losing business. They are very reticent about going on the record, but they are not coming four-square behind Heathrow airport’s expansion this time around like they were eight years ago.

Keir Mather

Those are all fair challenges. From the perspective of regional aviation, there are a number of regional airports that are behind Heathrow expansion because of the greater benefit that it could accrue to them by facilitating connectivity to that hub airport. Hannah may want to speak in a moment about what the HENPS specifically includes to facilitate growth in regional aviation. You are right to say that, in some of the modelling, forecasted long-haul connectivity does decrease at certain airports. In a lot of the Prime Minister’s comments, he reflected on the fact that regional aviation is central to the success of our aviation sector in the UK, and that we need to reflect on that as we go through this process. I recently met with the trade organisation representing small airports, and they set out some of those same concerns about connectivity to airports and the fact that the cost stack is increasing due to international and domestic factors, which make the cost of doing business challenging for them. They raised air freight in that context. We know the impact that East Midlands airport and a number of other airports have on our freight resilience and connectivity. If there is a consistent call for an air freight strategy or a way in which we look in one consolidated way at aviation strategy across the United Kingdom, I would be very keen to hear those calls from the sector. In the meantime, we will carry on working through all the policy questions that we deal with on a daily basis, but it is my responsibility to serve the best interests of UK aviation. If the Committee wishes to reflect on how we could go further through the HENPS, whether in relation to making best use or those broader questions, we would be very glad to hear that feedback.

Chair

Are you suggesting that it might have been better to have the aviation strategy put in place before the proposal for a runway 3 at Heathrow?

Keir Mather

No, that is not quite what I am suggesting. Whether it is in aviation decarbonisation through the creation of a framework to facilitate SAF production in the UK or consenting to airport expansion at Gatwick, Luton or London City, the Government are getting on with the job of supporting UK aviation. The question remains, however. If there is a call for a strategy that addresses all these questions in the round, that is an appeal I would be very keen to hear, because we want to be as responsive as possible in meeting the needs of the sector.

Daniel Francis

Minister, your own Department’s analysis, even now that it is updated, has a negative net present value for Heathrow expansion. Why do you think expansion is a good idea if society does not benefit from it overall?

Keir Mather

It is a very fair challenge. I think I set out in my previous answer to Scott how some of those economic benefits accrue in ways that have perhaps not been reflected in some of the analysis that we have seen, in terms of Heathrow expansion potentially generating tens of billions of pounds of economic value, and that value being accrued in areas outside of London and the south-east of England. You are also right to challenge me on the net present value. I would say that that does not account for all the anticipated impacts and benefits that Heathrow expansion could bring. That is why the Department commissioned that extra analysis from Frontier Economics, which looked at key impacts that sit outside of the NPV calculation. It found positive GDP benefits in all modelled scenarios and indicated that those benefits could support growth across the country. It is also worth saying that freight benefits that could result from an expanded Heathrow are not fully included in any of the appraisal or modelling undertaken. In 2024, that represented £216 billion-worth of imports and exports to and from the United Kingdom. There are ways in which the NPV does not account for the entire potential benefit of an expanded Heathrow, but it is a fair challenge to raise. I do not know if we want to add anything else on that front.

Hannah Newell

The only thing I would add to what the Minister has said is that in providing an application for development consent, any promoter would have to demonstrate that their application met the economic growth test, which would also seek to address that. The work we have done at this stage—the economic appraisal and the spatial computable general equilibrium modelling by Frontier—looked at the scheme level and the case for the HENPS. At application stage the promoter would have to demonstrate that what it was doing met all those requirements.

Daniel Francis

The difficulty for us as a Committee is that we started this process six weeks ago with one set of figures. A supplementary piece of evidence has now been given to us with a different set of figures. Even that supplementary written evidence accepts that the revision will mean that further results will be presented in chapters 9 and 10, on the technology development scenario and the scenarios and sensitivities analysis, but those results are not yet available—the Government will produce them in due course. Combined with that, we have the issues around the welfare analysis in the HEAR, and the GDP comes from the Frontier model. Why did we not try to look at those in a combined way and combine some of those aspects? The difficulty we currently have is with the level of information that we have and that not being combined. What is the rationale behind that and how do you propose to bring it forward?

Hannah Newell

In terms of the technical issue, I know that the Committee has had a letter from my colleague at the Department. That was about the modelling at Gatwick and a scenario that the modelling produced, and which had not previously been seen, regarding the constraint on runway and terminal capacity. Because of that, the HEAR did not capture all the ensuing, expected passenger benefits. We have now corrected that and written to the Committee with an update on it. The punchline is that that will increase the benefits from expansion but not our overall conclusions. Regarding whether we can combine the work of the S-CGE modelling and the economic case, as I said they look at slightly different things. The S-CGE modelling looks at the impact of an intervention such as expansion on the wider economy—at what business, investment and trade opportunities arise. The economic case does the pure benefits versus costs: how do you stack them up? We are looking at whether we can bring those two together and combine them in the way that you have suggested. That is a complicated process because it involves the risk of double counting, so we want to do it in the most analytically robust way. We are working on that and hope to provide an update on it alongside the final HENPS.

Daniel Francis

I hear what you say on the written evidence, but on the two aspects I referred to, the supplementary piece of written evidence, HEN0088, “Updated figures will be published alongside the Government’s consultation response.” So you are accepting that this will continue to move and we will receive those after we have made our comments on that. In the inquiry we have heard about potential economic and business benefits, and particularly about losing the international competitiveness of having a hub airport. I think there are some compelling arguments on that point, but we have struggled to find figures. Do you have figures that you can produce to us on that aspect?

Hannah Newell

On which aspect, sorry?

Daniel Francis

We have heard consistently that, other than growth, one issue is the competitiveness with Schiphol and Charles de Gaulle, but no one has really been able to produce any figures to evidence that. Do you plan to produce figures in due course about why we would lose our competitiveness as a hub airport if we do not have a third runway?

Hannah Newell

I think the way that that manifests itself in the work of the economic appraisal report—the HEAR—is in what we forecast to happen in terms of capacity and where we expect that capacity go. Underpinning the work of the appraisal report are assumptions made about traffic that routes through Heathrow and otherwise would not have done so, or traffic that routes through other airports. I think that is how that is addressed through the economic appraisal report. Martin, do you agree?

Martin Gilmour

Yes, that is correct.

Daniel Francis

Lastly, chapter 2 of the HENPS talks about the potential economic and strategic benefits of Heathrow expansion but not the environmental and welfare costs. Why does it not comment on those and what is your position on that?

Hannah Newell

As in, why is the NPV not included in the HENPS?

Daniel Francis

Yes.

Hannah Newell

The reason is that we see the HENPS and the HEAR as two documents that sit alongside each other. There is lots of information in the HEAR. What we sought to do in the HENPS is the planning framework, so it summarises the strategic case and the needs argument. The HEAR should be seen alongside it. In the HENPS we also set out elements like the economic growth test and the other tests that we would expect any application to meet.

Daniel Francis

Is that the same reason why the NPS does not set out the net present value?

Martin Gilmour

What we tried to do is use the existing ANPS and update it for ease of comparison. The figures in the HENPS use the same figures for comparison as the ANPS, rather than introduce new ones, but as Hannah said, those figures are in supplementary documentation, setting out the whole case for the NPV and what is included. Obviously, those environmental disbenefits do form part of the NPV, and they are set out line by line in that supplementary documentation.

Chair

I have one question of clarification. I am looking at the detailed figures for your economic case, in appendix B of the letter of 24 September. Table 2 shows the number of displaced passengers versus new passengers, and it shows that if runway 3 goes ahead, up until 2050 the vast majority of new passengers at Heathrow are displaced—in other words, taking a journey to or from Heathrow as opposed to another airport. Is that correct?

Martin Gilmour

It is right that we model the whole system. We do not just look at airports; we look at the movement of different passengers between them. I would have to look at what specific level of displacement versus new passengers is on that, but it is also modelling the cost, so some passengers who can afford to—

Chair

This is just the passengers. It says: “Additional Heathrow passengers with expansion under the central current trends scenario, no cost pass-through case, compared with no expansion.” For example, in 2045 the business share will be 94% displaced and 6% new passengers, and the leisure share—which is the vast majority of Heathrow passengers—will be 87% displaced and 13% new passengers. That suggests that an awful lot of passengers using runway 3 would have otherwise been going in and out of other UK airports.

Martin Gilmour

People want to fly from Heathrow. That places a big demand on it, and people are willing to do that. People’s preferences and choices of where they fly is an important part of the model, and that is why we see a lot of demand at Heathrow. On the specific displacement figures, we would have to come back to you.

Hannah Newell

The other element is that this is as the system fills up over time. By the 2050s, the system is more full, but in the period where the system is less full, you do see more displacement. It is about the longer-term case as well as the medium-term impact.

Chair

I suspect Scott is going to pick up on why passengers make the choices they make.

Dr Arthur

Martin, you made a comment about people wanting to fly from Heathrow. Surely people want to fly from their local airport. There is nothing special about the coffee at Heathrow that makes me want to go via Heathrow. What do you mean when you say that people want to fly from Heathrow? If I live in Edinburgh, surely that fact does not hold true.

Martin Gilmour

What I am saying is that when you provide capacity at Heathrow, it fills up very quickly. Because of the routes, connections and access that it provides, that is a factor, among many other variables, that is accounted for in the model.

Chair

But does that not become circular? If you had an aviation strategy, maybe destinations to and from those other airports would flex depending on what is happening at Heathrow. These decisions are not in isolation from each other.

Keir Mather

They are not in isolation, but this process is happening concurrently with the expansion in capacity at other London airports, which will facilitate greater connectivity from them. We are operating in a context where, by the mid-2040s, London airport capacity will be more full, and Heathrow expansion could be one means of facilitating a greater ability to deal with that in a more resilient way. But that is not to say that that would disadvantage the ability to fly from Gatwick, Luton or wherever else. People also choose to fly from Heathrow because of its connectivity to routes that otherwise are not served by London airports, which is an important factor in the context of this conversation.

Mr Perkins

To explore that a little more, there is an interesting difference in passenger choice between those who are using Heathrow to fly out of the UK and those who are attempting to get in. As someone living in the north, lots of my journeys overseas have been from Heathrow or Gatwick, but that is because that was the only choice available to me. Is there a difference between the choices that UK passengers are forced to make when they are going on their holidays overseas, and the choices of passengers flying into the UK, who might prefer to get to London as their holiday destination? Has there been any assessment of how much this is satisfying the demands of overseas passengers versus UK-based passengers?

Hannah Newell

We may have to come back to you on that one. It goes back to the point that I made, although probably not very well. This is about the system growth over that period, and the growth in demand that we expect to see over that appraisal period. When we look at the breakdown of the model, we see long haul growing out of destinations other than London over that period as well. By the time you get to the 2050s, you are seeing growth elsewhere. To go back to the point, there is a nearer-term impact that I think is what the letter is getting to, but I am very happy to come back on those points in more detail.

Keir Mather

A resounding theme coming from the Committee, which I will be certain to take way and reflect on, is whether we need one approach for looking at some of these questions in the round. I would just say that—quite jealously, as a northern MP—I share your sentiment and I would like to see better long-haul connectivity from the likes of Manchester. They have expansive plans to facilitate that, and the Department for Transport also has a responsibility, alongside considering these questions, to think about how best we can facilitate that. In my view, however, that does not change the overall calculus that Heathrow serves—and will continue to serve—as the UK’s international hub airport, with connectivity to certain parts of the globe that could not otherwise be efficiently or effectively served from other airports. Therefore, we need to think about these specific questions in that context. I would like to see long-haul connectivity increasing at a broader range of airports across the United Kingdom, and I will reflect on how we can do that in a more joined-up way.

Chair

Can I just go back to the previous discussion about costs and benefits? I think one of you said it is likely that some of the benefits have still not been fully captured, but is it not also true that some of the negative effects have not been captured either?

Keir Mather

Well, this consultation process is what allows us to better bottom-out where people feel that those concerns are, and we can develop analysis off the back of it. I guess the NPV and the original growth calculations provided a picture that is dissimilar to what was put forward in 2018. That spurred us to have a conversation within the Department about how we might better capture some of those effects that could not otherwise be captured. We are able to be reactive in that sense and account for challenges that we did not necessarily anticipate. If the Committee believes that there are certain negative externalities to potential expansion that are not being fully captured through the HENPS, that is certainly something that we can look at further and take away.

Chair

Thank you very much.

Steff Aquarone

This novel designation of “critical national growth infrastructure” has been made up to force this through, hasn’t it?

Keir Mather

No. We have very much drawn on an established precedent that exists in other planning frameworks throughout the energy national policy statement. The wording of how it is designated has been changed to reflect the fact that both the needs case and the centrality of Heathrow to questions pertaining to economic growth and resilience are very acute, and that it should be weighed as part of a planning application. It does not change the fact that every aspect of the HENPS goes through a planning process that is legally judged. We have the four tests to facilitate expansion, and if they are not met, expansion could not be facilitated. While CNGI designation reflects the fact that—whether it be through freight connectivity or hub airport connectivity—Heathrow is central to our growth and resilience as UK plc, it does not change the fact that expansion could happen only through an established legal process and with compliance with the four tests.

Steff Aquarone

Okay, but parking some of what you have said, if you are drawing on the designation of critical national infrastructure from elsewhere, might you be able to explain exactly how the four tests would sit in the hierarchy, compared with the designation? Critical national infrastructure essentially says that those four tests are subservient to all but the most deleterious consequences.

Keir Mather

The economic growth test itself—or where any potential scheme is expected to contribute to growth at a national, regional and local level, and plans are expected to maximise opportunities around accruing benefits—is pretty central to the principle of CNGI. The other three, which relate to climate change, noise pollution and air quality, are not optional; they have to be met to facilitate expansion. You can see these things working concurrently together to provide a clear steer from Government to a potential promoter that you need to make sure your scheme meets the UK’s climate responsibilities and does not worsen air quality impact or noise impact compared to the baseline. At the same time, we recognise the fact that the questions surrounding expansion fit into ones that are consequential to national growth.

Steff Aquarone

Okay, but some of our evidence has really challenged what you just said about those four tests still being material in the context of a designation like this. On the point of the economic case being so self-evident, if that is the case, why do you not rely upon the arguments of that test to make the case for the economic consequences? Why does it need a CNGI that has never been seen before in planning terms and is not referenced in legal terms either?

Martin Gilmour

One thing I would add is that there are two stages here. If Parliament decides to approve and designate the HENPS, we are also saying in planning terms that the strategic need and case for expansion has been settled and should not be a matter for debate for the Planning Inspectorate’s part of the DCO examination. We have seen with other DCOs that the need sometimes becomes a key part of the DCO examination. We are signalling with this designation—though we are consulting on it, and it is not decided yet—that the strategic need is settled and the weight the Government place on it is done, and that the DCO process, which will be the next stage in this, should be focusing on compliance with the NPS, the merits or otherwise of the application and the impacts of the mitigations.

Hannah Newell

To address your specific question about the hierarchy, the applicant would still have to demonstrate, before the presumption on the CNGI applied, that they had met the four tests. The four tests come first, and then the CNGI assumption applies.

Martin Gilmour

The four tests are legal requirements. There is still an additional safeguard for exceptional circumstances that impact human health or whatever.

Steff Aquarone

So that is an additional safeguard. A lot of the evidence we received suggests that there is great concern that only those exceptional circumstances would override a presumption in favour. Can you clarify precisely that that is not the case?

Martin Gilmour

Yes.

Hannah Newell

Yes. The four tests apply, and then the presumption applies. The other thing I would say is that—you mentioned that it is a kind of novel designation—it is similar but not the same as the critical national priority infrastructure that is used in the energy NPS. It is similar, but slightly different in the way it applies.

Steff Aquarone

Okay. Notwithstanding questions of legal advice, which I don’t think we need to get into, some of the evidence we have received has questioned whether the HENPS actually demonstrates why it meets this definition. Aside from the cases in the four tests, which I know colleagues will want to ask about because we have some big questions about those, why is there not a standardised national test proving that this designation is appropriate for this project? Martin, you just confirmed that, if it is passed, the DCO process will simply take as a given that it is. Where is that test?

Martin Gilmour

No, I am saying that the DCO process would take it that the need for expansion is settled—

Steff Aquarone

But where is the test that says there is a need for expansion? There is no test that says, “This meets the definition of what we would call critical national growth infrastructure.” It has just been popped in.

Hannah Newell

That is part of the purpose of the consultation. We are asking through the consultation, “Do you agree with the case we have set out? Do you agree with this designation? Give us your views.” We have us obviously received, as the Minister said, nearly 28,000 responses and are going through the work of analysing those, and it will be part of the final HENPS.

Steff Aquarone

Okay. On those exceptional circumstances that clearly include unacceptable risk to human health—I am sure that colleagues will ask questions about this—can you give any examples of circumstances where you expect that the CNGI would actually be outweighed by one of those tests?

Keir Mather

I do not really think it would be appropriate to hypothesise about what a potential application might look like and therefore how it would invalidate something on those specific grounds. The baseline proposition remains the same: they would need to meet the four tests and all the legal requirements around the planning process, and that is something we take incredibly seriously. This relates to a broader question about the Government’s approach to planning policy more broadly. We were having this conversation with Lib Dem colleagues on the Civil Aviation (Consumer Protection and Regulatory Reform) Bill yesterday. We had a really useful debate about their proposals to create a CAA ombudsman to make sure that we have a lens that sits on top of planning decisions that relate to airspace change, where you are putting community impact right at the heart of it. My concern in that regard, which I suppose relates to the CNGI question today, is that the CNGI designation allows you to say that the needs case around expansion has been settled. On that basis, we can have a legal process that allows us to determine whether a decision has been taken in the right way and whether a promoter meets those needs—not to relitigate the baseline question of whether expansion is required or not—if we get to the stage where designation goes ahead. If this is the best thing for the country, on the basis of the consultation and reflecting on the Committee’s recommendations, we need to get on with doing it. That is as much the case with airspace modernisation as it is with Heathrow expansion.

Steff Aquarone

I do not want to test the Chair’s patience, but I will continue if she allows me. It is not just airport opponents who are concerned about this designation. Trade bodies have said to us that they want greater clarity about the implications of the designation, including on factors that might carry greater weight because of it. That seems like a reasonable question. Are you saying that, despite the assertion that this is critical national growth infrastructure—that was part of the announcement in the briefing earlier this year—that is in fact subject to feedback and you will be willing to listen to concerns raised about that assumption, which preceded the publication of the HENPS?

Keir Mather

I am saying that we are very glad to hear people’s views on how CNGI designation affects the overall principle of Heathrow expansion and its broader implications for the planning framework. It still sits in the context in those four tests, but we are reflecting on the needs case, as set out in the HENPS, which talks about how those economic benefits accrue from an expanded Heathrow if you meet the four tests. I am not sure I have really answered your question fully there. I don’t know whether there is anything to add.

Hannah Newell

If the question is whether this is part of the consultation, yes, it was proposed as part of the consultation. It will be something to be resolved as part of the final HENPS.

Steff Aquarone

The biggest question is: what is the precedent and what is the test to have arrived at this designation? If it goes ahead unchallenged, it will provide a precedent for future applications to use the phrase, in the same way that there are lots of applications in which CNI is used. Are we likely to see more of these within transport or other infrastructure claims? If the growth case cannot be met, surely that immediately invalidates the classification.

Hannah Newell

I would not want to comment on whether we will see it again, because it will depend on the circumstances. As I said, we looked at other designations, like CNPI in the case of the energy sector, in considering whether there is a case for this designation. It is something that we have included in the consultation.

Steff Aquarone

Minister, if the growth case is not met—we have already argued about whether the growth test should stand on its own or whether it should be pre-presumed by designation—surely that removes the designation, because it is then not critical national growth infrastructure.

Keir Mather

Any Heathrow expansion proposal can go ahead only if it meets the test on economic growth. On that basis, I suppose that the designation in the context of that application would not be proceeding.

Chair

Where did this CNGI idea come from? Was it a Department for Transport initiative, or did it come from MHCLG or the Treasury?

Hannah Newell

It is—Martin will correct me if I am wrong—

Chair

Did it come from the Department for Transport?

Hannah Newell

It is new in this NPS—it has not been introduced previously—but it was developed in consultation with other Departments.

Chair

Developed in consultation—but which Department initiated it?

Hannah Newell

It is part of the national policy statement for Heathrow, so it came out of that process, but it was developed in consultation with other Departments with an interest.

Steff Aquarone

May we ask which Departments? Was it the Treasury or MHCLG?

Hannah Newell

Yes, I think they would both have been part of the conversation.

Martin Gilmour

Yes. Obviously, the Department for Transport led the review. We had seen a similar designation used in other policy statements, so it was right, as part of that review, that we looked at whether Heathrow should or should not have a designation to that effect. Then, as part of a collective agreement for this process, we consulted other Departments.

Chair

Sorry, that is in the context of it being critical national infrastructure. Hannah, you just said that you had been looking at the equivalent in energy to see whether it applied, but where did the G—the growth—come from? Where did this new designation come from?

Keir Mather

I am not sure we are able to say much more, other than that it comes as a result of discussions between Government Departments, and it is then subject to the write-around process to achieve collective agreement, and is therefore the HMG position with DFT holding the pen on HENPS.

Steff Aquarone

Can you share with us the analysis that led to its use, even if you cannot share with us where it originated?

Keir Mather

Shall I take as a commitment that we will take this away and see what we can share with the Committee?

Chair

That would be very helpful, Minister. We look forward to seeing that. Thank you. Back to Scott on financing and affordability.

Dr Arthur

The Government are going to consider the affordability of the scheme. What does that look like?

Keir Mather

The HENPS, as revised, places a much greater emphasis on affordability. Any potential promoter is going to need to set out really clearly what its proposals mean in relation to things like airport charges, airlines, passengers, how they will manage key affordability risks, and how they will focus on efficiency and the financeability of any projects. It is going to need to demonstrate that the charges are no higher than necessary to deliver the requirements of the scheme; that the charges that result are financially sustainable for airlines, freight users and ultimately passengers; and that the levels of charges to passengers are consistent with the scheme delivering the appropriate net benefits that are set out. We have tried to design a framework across the range of potential costs and the benefits that are accrued, as well as over the kind of timeline of what potential expansion could look like in phasing, how a promoter would be required to keep affordability central to its proposals, but also keep costs at a reasonable level.

Dr Arthur

There is no Government money going into this project. It seems like you do not trust them to run their own business.

Keir Mather

No, certainly not. It is just that we exist in a context where Heathrow airport is absolutely critical to the UK economy, freight flow and our broader connectivity with the world. In that context, if expansion goes ahead, we need to make sure that it does so in a way that makes good business sense for the airlines that operate through Heathrow and for the passengers who travel through it.

Dr Arthur

But surely the investors will test out themselves whether or not it makes good business sense?

Keir Mather

It is common through planning policy for major infrastructure projects to ensure that financial risks are mitigated to the greatest extent possible, and that affordability is central to the potential schemes that promoters put forward. It is incumbent upon any UK Government setting a planning policy framework to ensure that those things are central to a promoter’s considerations, especially because we have seen, through evidence given to this Committee, but also in the discussion that we have had today, how the downstream impacts and the flow of decisions that are taken at Heathrow airport affect job creation and business in the local area and how they have greater impacts for London and for the entire United Kingdom. We have a responsibility to think through that lens.

Dr Arthur

Without getting into all the details, because that will come later, I guess the tension is that, if it starts to become unaffordable, you might come under pressure to relax the sound mitigation measures that are funded by the airport, or you might become more relaxed about air quality and all those factors to help to improve affordability. Is that a serious concern? Should I be concerned that local residents might pay the price for improvements to affordability?

Keir Mather

I don’t think you should be concerned, and that is because we are trying to design a scheme today that ensures that affordability is accounted for over the lifetime of the project and that the promoter’s plans are credible. The four tests that apply when a potential scheme is put forward for approval continue to apply during the lifetime of the project’s delivery and in that sense must be abided by. Also, the four tests relate to targets, many of which are legally binding upon the UK Government. I am sure that we will come to greater discussion of the climate test later. Take the climate test: it has to ensure that Heathrow expansion is facilitated in such a way that it ensures that we can remain compliant with our carbon budgets, which are of course legally binding, and that the UK Government meet their net zero 2050 target, which is also a legally binding target. We are trying to create a framework that will ensure that there cannot be slippage around the edges and can meet the concerns that you might have.

Dr Arthur

I guess we will come back to net zero later as well. You are saying that affordability will be assessed through the lifetime of the project, when it is in operation. Is it not a function of the regulator to check affordability, to make sure that Heathrow is not abusing its monopoly position? It is not quite monopoly, but it dominates the aviation market centring around London. Tim—at last, it is your chance to say something!

Tim Johnson

Thank you. The CAA’s job is to look after the interests of consumers—that is, both passengers and freight users. That is set out in the duties and the legislation we operate under. Part of our approach will be to subject any costs for expansion to rigorous scrutiny and efficiency tests and make sure costs passed on to consumers are only those that are efficient and in the interests of consumers. Part of that will be taking into account any planning conditions that are set through the process—we have talked about a number of potential areas there—and that is part of the input to assess whether those costs are efficient. Clearly, we would expect any promoter that receives a DCO through the process set by Parliament and Government to abide by the conditions while delivering the costs and requirements in an efficient way.

Chair

Did you consider including a hard test or a binding requirement for affordability in the HENPS?

Keir Mather

Affordability, in our view, is something that needs to be built in throughout the planning process. It is also highly dependent on the particulars of a scheme that is put forward by a potential promoter. The four tests as they stand allow us to have a macro view of the issues of most consequence in the context of the UK economy and of the UK Government’s unashamed policy focus.

Chair

I have a quick question for Tim on the CAA. You are consulting on developing the regulatory framework for Heathrow airport with the intention of incentivising cost-effective delivery of any improved expansion scheme. Cost-effectiveness would be of great interest to the airlines and other tenants at Heathrow who do not feel that they are getting value for money—you probably know that. Is it important or even possible for the proposed regulatory model to be agreed before the NPS is finalised?

Tim Johnson

We have had an established regulatory framework in place for Heathrow for a number of years. Over the past year, we have been consulting on some potential changes to that framework, because we recognise—given the scale of investment that is needed in both the existing two-runway operation and the context of expansion—that some improvements to the framework could be made. On 9 October, we published our document, setting out those areas or those elements of the framework that we think we could improve on. That includes capital governance—how projects are decided and governed—and how to set an efficient baseline for the costs. We are looking at the benefits of establishing a longer-term framework, which might support an expansion of that nature. We are looking at how we could introduce competition and stronger procurement requirements to help to deliver value for money. We therefore have a programme of work over the next year. We will work with stakeholders on all those changes, which will be subject to further consultation before being implemented.

Chair

I am trying to work out whether that is tinkering around the edges, because RAB—regulated asset base—models are often seen to deliver very poor value for money, particularly in the case of Heathrow, and the investors are completely derisked. Did you look at other models for delivery of this project?

Tim Johnson

We have looked at a range of other models. The RAB-based model has some advantages in that it is well understood by markets. It has been used across multiple regulated sectors over a long period of time, so it is well understood by investors. But we absolutely have accepted the challenge that the regulatory model could work harder, and that is why we are setting out that shortlist of options to strengthen the governance and efficiency incentives in the framework.

Chair

Why did the shortlist of models in your work involve a presumption that Heathrow Airport Ltd would be the chosen promoter?

Tim Johnson

We have not presumed that Heathrow Airport would be the chosen operator model. In particular, Model 7b anticipates the prospect of a promoter other than Heathrow Airport securing a DCO and developing the airport. As the CAA, we have remained neutral to the outcome of any planning process.

Chair

Thank you. We have heard a lot of evidence from airlines concerned about how the expansion plans will affect the charges they will have to pay, so over to Jacob for the next set of questions.

Jacob Collier

Heathrow has the most expensive airline charges in the world, I think, but certainly in the UK. Do we have any clarity on how the expansion plans will affect those airline charges?

Tim Johnson

We are still at an early stage of the process. I am aware that the promoters have made several numbers public. Our view is that there are some important issues of scope of the scheme. Some mitigations that may be required have not yet been settled. If we look at other major infrastructure projects and the lessons learned from them, getting robust cost estimates is possible only once you have resolved those big scope questions. That said, we are very mindful of affordability. We have heard the argument that the airlines have made, and our job will be to ensure that any costs passed on to consumers are efficiently incurred and necessary to secure the benefits of the proposed expansion scheme.

Jacob Collier

The HENPS says that the charges should be “no higher than necessary” and “financially sustainable”, but if I were an airline that would not give me much confidence that they will be as low as possible, especially given that Heathrow is already the most expensive in the world. When will we see clarity on just how high charges could go?

Tim Johnson

We would expect promoters, when they put their DCO application in, to have developed the scope of the scheme in line with any HENPS agreed by Parliament. Once the scope is settled, we would expect them to come forward with their proposals and to include cost estimates at that point. I think that is when we would have a higher degree of confidence that we knew what the costs could be. That will then be part of the DCO designation process. After that, it will be for the CAA, through the regulatory framework, to ensure that the efficiency incentives and the framework work hard for consumers.

Keir Mather

There is also an important factor of when in the process the questions of what affordability is and what constitutes being “no higher than necessary” apply. That is to do with the specifics of a scheme as they are put forward, but it is also highly dependent on the macro context in which airlines and air passengers are travelling through Heathrow airport. One of the lessons that we have seen—from the covid-19 pandemic through to the disruption in the middle east and its impact on the aviation sector now—is that the ability to absorb potential challenges and costs depends on the health of airlines and on passengers’ capacity to pay, and that changes over time. It is better focused at a moment when you can be more assured of the actual context that airlines and passengers are facing, so that you can say definitively, and in a more prescriptive fashion, exactly what constitutes “no higher than necessary” and what airlines can meet. It must be reflective of the situation that those operators face. I reiterate that we take the financial health and growth of our airline sector incredibly seriously, given everything that the Government have been doing around emergency slot reform and support for airlines in that context, and the civil aviation Bill helping us to be more supportive in the future. That seriousness is hopefully reflected through the HENPS, but it would be through any planning determination as well, when we get to the specifics of the matter.

Jacob Collier

Is there any maximum level of increase that you would be comfortable with? Obviously, it will get to a level where it is not sustainable for airlines. We construct this third runway, which increases airline charges to pay for it, and there will be fewer passengers as a result. We have heard from Cambridge Economic Policy Associates that the charge could rise to £50, beginning in 2035.

Keir Mather

As I have already said, that depends on how the benefits measure against the costs. The ability of airlines and passengers to absorb potential costs is different depending on when you get to an approved application for expansion at Heathrow. I am not in a position today to say, “In x years’ time, when you take a policy proposal and approve or disapprove it, that level of charge will be more or less acceptable.” You must deal with both the economic context in which the planning decision is being taken and the perspective of UK aviation at that moment, as well as the airlines and passengers who use the airport. I do not feel that I am able to go much further at this stage, other than to say that the questions about affordability, financeability and it being done in a proportionate way that allows Heathrow to grow—continuing to serve the UK public, but in a way that is financially sustainable—are embedded throughout the HENPS. That is of serious concern to me and the Government more broadly.

Chair

Does the £50 per passenger that Cambridge Economic Policy Associates told the CAA include the airport share of the surface access? Does it include the potential carbon cost and carbon charges that each passenger will start to pay by then?

Tim Johnson

Those two provisions are not included in that.

Chair

They are not included—so your advice is £50 plus the carbon cost and the surface access charges.

Tim Johnson

That is not our number. We have not—

Chair

It is your consultants’ number, I think.

Tim Johnson

It is a consultants’ number based on some indicative illustrative numbers that the promoters put together, but those two elements are not included in that.

Chair

That is interesting—so it would be even higher. Minister, do you not see this issue as a risk to the whole project?

Keir Mather

It is a risk, absolutely. That is why the HENPS is designed to try to deal with the practicalities of that risk to the greatest extent possible through the affordability provisions built into the system. But there is utility and merit in the existing approach, which is that dealing with the realities of an application when it occurs, in the economic context that airlines are facing, is a better way of doing it than prejudging it through the HENPS at this stage. That might produce a figure that is sustainable now but that—as we have seen from what has happened in aviation across the world over the last six or seven years—might not map into the future. There could be utility in an approach that is more reactive in that regard.

Tim Johnson

At the moment, we have two promoters with different ideas about scope and approach to the scheme to meet the requirements in the HENPS. Those different schemes might offer a different set of benefits and costs. That is another reason not to reach too prematurely for a particular number. As the Minister said, certainly from a CAA perspective, thinking about the lens of what is efficient for consumers and allowing those benefits to be delivered, affordability and cost efficiency will be absolutely key, as will any requirements set through the planning process.

Steff Aquarone

That builds very nicely into my next question. How would delay to construction, cost overrun and those sorts of things affect your assessment of the affordability of this project?

Keir Mather

We are trying to design a project that ensures that contingencies can be effectively dealt with and that you can still have affordability built into it. It is the responsibility of the promoter to put forward a scheme that is sufficiently credible to allow us to have a high level of confidence that the scheme can be delivered in a way that is both cost effective and practically effective in terms of construction. The decision-making authority will look at a scheme on that basis and try, to the greatest extent it can, to ensure that affordability is baked into those considerations ahead of any approval; it may or may not put in conditions that centre on the question of affordability. It is an incredibly important consideration.

Steff Aquarone

The Department is not taking any chances. There is a tender out for a consultant to start to look at the risks and exposure to programme costs and cost overruns. If the Department does not get a clear, reassuring response from that, could its view on HENPS, or HENPS itself, look quite different?

Keir Mather

I suppose I return to the fact that there is a binding test on Heathrow expansion that ensures that it facilitates economic growth. If a project were not financially sustainable, there is a question about what the interplay is between those two factors. Ultimately, however, schemes put forward by promoters have to be credible in terms of financeability, affordability and deliverability.

Steff Aquarone

So the Government could put some money towards it if the case for growth is really strong. That is different from what the Secretary of State said earlier this year about all costs, including access costs, surface access costs and infrastructure costs, being borne by the promoter.

Keir Mather

With respect, that is not exactly what I said. This project will have to be privately financed, and the Government have been very clear about that throughout.

Steff Aquarone

On your previous answer about the economic growth case, can you be clear that that is still the case? If the Department is not satisfied that it would not be exposed to unreasonable costs, and the HENPS proceeds on the current basis, it will still be a matter of record that the Department will not be using taxpayers’ money to fund it.

Keir Mather

This project has to be privately financed—we have been clear on that throughout. I am merely reflecting on the fact that there are two concurrent considerations that have to be factored into any decision on a project: that it meets the economic growth test while being affordable, financeable, deliverable and coherent.

Steff Aquarone

Indeed, but categorically, even if the growth case is fantastic and something emerges from the latest manifestations of that analysis saying, “This has credibility. We should back it,” the taxpayer should not be paying a penny towards it.

Keir Mather

The Secretary of State has been very clear about that. Any proposal for Heathrow expansion will need to be privately financed.

Chair

If building starts and the economic case for passengers to come to pay for it does not happen, who takes the hit?

Keir Mather

That is exactly why we are trying to design a system of economic regulation and a framework for analysis of potential proposals to prevent us approving a scheme that would not be financially sustainable. That is why we are engaging in this process.

Dr Arthur

When witnesses from the Climate Change Committee appeared before this Committee, I think they said that the idea of emissions being dealt with holistically within the wider economy could not be done without the Government investing in other industries, particularly agriculture, to reduce emissions there. Heathrow airport is not going to pay for that, is it? It will be the Government.

Chair

A very quick answer to that please, as we are coming on to climate in a moment.

Keir Mather

Heathrow expansion is factored in, along with a range of other expansion projects, to our modelling for carbon budgets. It constitutes a slice of the pie in carbon budget compliance. That needs to be met, but ultimately, how we meet our overall goals of compliance is through economy-wide measures. Some of those are in the Transport Department, such as the ZEV mandate. Some of them might be the responsibility of other Government Departments.

Dr Arthur

But it will be beyond 2035, so the ZEV mandate will be done. There is very limited scope for finding those emissions, is there not?

Chair

Let us come on to the climate test. We may come back to that.

Alex Mayer

To pass the climate test, the draft HENPS states that any proposed scheme must not “materially impact” the UK’s ability to meet the legally binding carbon budgets. Can you explain what “materially impact” looks like in practice? Are you able to give us any practical example of what might cause a Heathrow expansion scheme to fail the climate test?

Keir Mather

The notion of materiality applies in planning in a subjective context. The question of materiality—of whether the increase in carbon from a proposed scheme, when assessed against the UK’s legally binding carbon budgets, would have a material impact on meeting them—would need to be taken by the decision maker in the context of what that specific proposed scheme’s impacts are on the UK economy. In terms of whether or not a scheme can be approved on the basis of the climate test, but also the broader considerations within the HENPS, the materiality question is of course subjective to the particular proposal, but the framework against which the climate test is judged is tangible, measurable and in statute in the United Kingdom already. That would be our net zero obligations by 2050. It is about carbon budget compliance over time. Although the question of materiality is subjective to a particular proposal, the framework against which it is assessed is measurable, tangible and exists in statute in terms of compliance for the UK Government. Hopefully, that provides a useful framework against which a potential scheme can be judged.

Alex Mayer

How can you fail? It is quite useful for the promoters to understand what constitutes failure. Can you give us a practical example of how any given scheme could fail the climate test?

Keir Mather

If your scheme, when assessed against the UK’s legally binding carbon budgets, creates a material impact on the UK’s not being able to meet them, that is the basis on which you would fail the scheme. Regarding the way in which that flows through into the particulars of a DCO application, you will be expected to mitigate climate impacts, have credible plans about how you do so and have a surface access strategy that has stretching public transport mode share targets. All those things will be taken in the round. I am saying that there is this very firm baseline, measured against the headroom of carbon budget compliance and the net zero target, of whether or not a scheme would meet that test.

Martin Gilmour

The project will have to set out its whole-life carbon assessment. The decision maker will have that data and those figures in front of them when making that judgment.

Alex Mayer

But I think everyone is in agreement that the peak emissions will occur during carbon budget 8, which has not yet been legislated for. As capacity increases at that airport, probably after 2050, we will get to that period of peak emissions. Is there not a danger that there is a blind spot in this—that we are measuring pass or fail too early on in the life of the entire project?

Keir Mather

I wouldn’t argue that for a couple of reasons. First, one of the measures against which we measure compliance with the climate test would be whether it is consistent with our meeting our legal obligation to achieve net zero by 2050, but 2050 is not the cut-off point after which carbon emissions do not factor in consequentially to the overall carbon impact of the scheme. Likewise, through the process, any Heathrow expansion proposal will have to meet expected carbon budget targets. That would include CB8 as well. Those carbon impacts have to be measured over the entire lifespan of the project. Although the climate test has a sort of 2050 hook, it goes further than that. Does anyone want to add anything on that particular question?

Martin Gilmour

All I would say is that even passing the climate test does not mean that you do not have to set out a whole plan for how you are going to mitigate the residual impacts over the lifetime of the scheme. The decision maker still needs to be satisfied that the mitigation package is acceptable as part of the DCO decision-making process.

Dr Arthur

I want to talk about non-CO₂ impacts. The scientific consensus is that it is possible to measure those. The Climate Change Committee says that we should measure them and DESNZ have set out a robust approach to doing that, but the HENPS does not require them to be quantified.

Keir Mather

That is a fair challenge. When it comes to non-CO₂ climate impacts, the Department is advancing a lot of work to better understand how these manifest themselves in aviation policy. That factors into our review of the jet zero strategy, which will be underway. You are right that DESNZ has set out a metric by which a multiplier could be applied. The difficulty that we have is that scientific uncertainty still remains over some of these questions and there is debate over what metric is best used to measure these factors. That does not mean that it is something we are not cognisant of or that we do not need to think about how we can best address it through the HENPS; this is one of those ones where, in the context of the recommendations from the CCC, as well as the 27,000 other responses we have had, we will take it away and consider it as part of a consultation. We will have more to say on it in due course, but for the moment I think that is a fair challenge.

Dr Arthur

There is always uncertainty and debate; it is about the extent of it. But realistically, the climate test is meaningless without taking this into account, so really it has to, doesn’t it?

Keir Mather

Please correct me if I am wrong—

Dr Arthur

Hannah looks restless, I have to say.

Keir Mather

I will say this briefly, and then Hannah can correct me if I am wrong. Wherever we are in the HENPS process and any potential application under the DCO process, any application will still have to have account for policy documents, reviews and strategies that emanate from HMG, one of which will be the reviewed jet zero strategy. Non-CO₂ impacts need to have an ongoing application to the way we think about emissions in aviation policy, whether that be through climate-warming impacts of contrails or whatever else, so it will need to have regard to that as we move through this process. Hannah, feel free to come in.

Hannah Newell

Sorry, I was poised. I have two things to add. First, any applicant would have to address those impacts in a qualitative way, given that there is no agreed framework. As the Minister said, if there were an agreed policy at the time of application, they would also have to demonstrate their compliance with that agreed policy. Should progress be made on those frameworks between now and the point of submitting application, they would need to address how they were compliant with that new policy framework. In the absence of that, it is a qualitative assessment, recognising the debate.

Dr Arthur

Is it not a bit bonkers that the two applicants can do their own assessment completely independently and, when it comes to assessment, you are left assessing two pieces of analysis that might be done completely differently by, let’s face it, people who have an interest in the scheme going ahead? Is it not better to just set out clear guidelines and accept there might be some uncertainty in them and use them as part of the climate change test? It does seem a real weakness.

Hannah Newell

It is in recognition of the fact that there is ongoing work—not only in the Department, as the Minister said, through the research that we are doing, but within other Departments with an interest—to establish the right frameworks for these impacts.

Dr Arthur

Is there a timeline for delivery of that?

Martin Gilmour

Just to say, the tests have been designed to be measurable against legal standards and such. Where we do not have a legal standard, it is difficult to incorporate something into that test, as we want the tests to be measurable and quantifiable. That is the reason it is not part of the test.

Dr Arthur

Is there a timeline for that work?

Martin Gilmour

There isn’t a timeline, but there is ongoing research, as the Minister referred to.

Chair

Is there an expectation that it will be done before the DCO, or even before it comes to Parliament? Otherwise, decisions will have to be made on an issue that we know has a significant impact, but we will not quite know the extent of that impact.

Dr Arthur

It does seem incredible that you have commissioned work but do not have a delivery date for it. If I was getting my kitchen fitted, I would have a delivery date, wouldn’t I? I am guessing it is a non-trivial sum of money. Why is there no delivery date?

Keir Mather

As I say, this looks at matters around which there is significant scientific uncertainty. A lot of the research we are doing is in collaboration with external partners from HMG, and a lot of the work takes place on an international level through ICAO. It is a fair challenge to ask for more specificity, so with your permission, Chair, I will take it away and write to you on it. To add another factor, although I would not want to presume what a potential promoter would or would not think about their application, I would have thought that from their perspective, you would rather hedge on the side of having a comprehensive plan to deal with non-CO2 impacts, rather than having one that does not pass muster and you need to retrospectively make a lot better. Perhaps that is a factor, but I obviously could not prejudge what anyone may or may not say.

Dr Arthur

I am sure they are watching—if no one else is, I am sure they are.

Chair

The other uncertainty on non-CO2 emissions from aviation is how a specific airport can mitigate against them. They are there almost by definition of airplanes being in the upper atmosphere.

Keir Mather

It is also about accounting for technological advances in aviation, which has an implication for noise. International studies show technology reducing the noise of large jets by 0.1 dB to 0.2 dB over x many years, and that needs to be factored in, too. You are right to say that they need to plan for that uncertainty.

Alex Mayer

The Secretary of State recently said that Heathrow expansion is compatible with carbon budgets because emissions can be offset holistically elsewhere, but the Climate Change Committee told us that there was not another realistic source in the economy to offset it against. Can you clarify what the Secretary of State meant?

Keir Mather

The Secretary of State was reflecting on the fact that the UK’s climate targets are economy wide, so it is important to look holistically at how emissions are reduced across the whole economy. It is also worth saying that we are dealing with our slice of this challenge through a range of projects that sit across Department for Transport equities. One of those, as we spoke about previously, is the zero-emission vehicle mandate, for which I used to have responsibility. I believe that has the single biggest impact on carbon budget compliance through the Department for Transport. The Secretary of State was reflecting on the fact that we need to take all these challenges, but also opportunities, to facilitate compliance together and holistically. If you look at the CCC advice, I believe that what they set out in their response was that there is a challenge regarding aviation compliance with our carbon budget requirements, and Heathrow expansion forms a constituent part of that. This requires us in the Department for Transport to place greater emphasis on technologies that best facilitate mitigation and removal, such as GGRs, and to carry on with the work we are doing on the SAF mandate and other measures to ensure that we have compliance with carbon budget through aviation policy. The Secretary of State was merely reflecting on the fact that these considerations have to be taken in the round, with all the work the Government is doing to facilitate compliance. Heathrow expansion is a part of that, but it is modelled in terms of our carbon budget compliance.

Alex Mayer

To be clear, you think both that there is flex in other bits of the economy and that there is a need for more engineered removals?

Keir Mather

I believe the CCC said that a credible route to Heathrow expansion would have to have a larger role for GGRs as part of the process, and at present, our aviation policy, in the round, does not meet that requirement—I am happy to be corrected if that is not the case. I would say that it is a fair challenge. Therefore, the work that we are doing through the refresh of the jet zero review and sustainable aviation fuel, along with the work with private sector partners to think about aerospace technology and how we might better increase sustainability and efficiency, plus the way we facilitate airspace modernisation, which will lead to greater efficiencies and saving of carbon emissions in how we manage our antiquated and out-of-date airspace, all need to be taken together to create an aviation picture that facilitates our compliance with carbon budgets—of which Heathrow expansion is a constituent part.

Alex Mayer

Given that we are going to need increased engineered removals, what kind of agreement have you reached with DESNZ about this?

Martin Gilmour

To reiterate what the Minister has said, this is managed across the economy and the Secretary of State for Energy Security and Net Zero is responsible for managing those carbon budgets economy wide. The Heathrow expansion national policy statement has been subject to collective agreement, and we have worked together with them on that. They will work closely with us as part of the jet zero strategy review where that will be considered as well.

Keir Mather

I would add that the Whitehead review and its emphasis on GGRs has materially changed the focus on how we might best collaborate on a cross-Government basis to facilitate greater emphasis on removals. The DFT is advancing work in that space, and we hope to have more to say about it next year.

Alex Mayer

The Climate Change Committee’s existing plan for reaching net zero already relies on removing a considerable amount of CO2 from the atmosphere every year. Do you have complete confidence that that technology is going to be available in time, given the additional extras that we are going to need as well?

Keir Mather

You are right to say that getting the GGR required to facilitate compliance with carbon budgets is a real challenge. It is quite stark, and therefore we need to do everything we can from an HMG perspective to facilitate greater uptake and the development of those markets and the mechanisms by which they can be facilitated. We also cannot be complacent in terms of putting too much stock in one particular technology. That is why we are reviewing the jet zero strategy and modernising our airspace. It is also why we have created a world-leading model for the production of sustainable aviation fuel. The Government are working very collaboratively with the private sector on issues to do with alternative fuels, electronic flight and whatever else. We need a range of levers to pull to ensure compliance. However, you are right to say that GGRs need to make up a larger share than may have been previously thought when we used to discuss these questions in the past. Therefore, the Government need to be very proactive in thinking about how best we can facilitate that.

Alex Mayer

Can you tell us how much engineered CO2 removal is happening right now in the UK?

Keir Mather

No, I do not have that figure to hand, but I will happily go away and find out.

Alex Mayer

Minister, why do you think that Heathrow expansion is the best use of the UK’s finite emissions allowance?

Keir Mather

Forgive me, but I think that is perhaps the wrong way to look at the question. It is not as if we have a cap and need to say, “We will put x amount here and x amount there.” The Secretary of State’s reflection was on the fact that, in terms of both carbon budget compliance and emissions released through wanting to facilitate growth in the economy, we need to make sure that we are balancing all of these factors at once—managing our legal commitments and the moral imperative to reach net zero by 2050—alongside wanting to facilitate growth in every part of the United Kingdom. Those things need to be balanced in the round. Heathrow expansion, if done in the right way, in a way that is compliant with the four tests, could form a way in which we do that. However, the overall question of carbon budget compliance is economy wide and needs to be viewed in that context.

Alex Mayer

If Heathrow expansion makes it harder to meet the UK’s carbon budget, who within Government is responsible for resolving that problem?

Keir Mather

As Martin said, it is ultimately the Secretary of State for Energy Security and Net Zero who has legal responsibility for carbon budget compliance. We hold the pen on the policy framework, which will eventually set out how an expanded Heathrow could go ahead in the context of meeting the four tests and those compliance criteria. It is an unhelpful answer, but we hold the pen on the framework and DESNZ holds the legal responsibility. We work very closely together to ensure that those factors are taken into account.

Jacob Collier

The Climate Change Committee’s advice is that the aviation industry should bear the costs of the decarbonisation measures necessary to fulfil our climate obligations. We touched on the fact that airline charges will increase to pay for the cost of the third runway, but the industry will also have to pay towards decarbonisation. What assessment have you made of the potential implications of that for the affordability of Heathrow expansion?

Keir Mather

I will say only a little on this and then pass over to Hannah and Martin. It is ultimately for the promoter to set out how they are going to build a scheme that is affordable and proportionate for users of the airport, and that includes airlines. Airlines are actually taking forward lots of very positive work in this space to meet decarbonisation obligations as they relate to their business practices as they stand, whether that be working very productively with the Government in terms of compliance with the SAF mandate and design of the RCM, or through their investments in the renewal of their fleets, which lead to carbon efficiencies and savings. They are also taking a collaborative approach to airspace modernisation. We prioritise carbon as one of the main factors that should be judged when thinking about how to modernise our airspace. They are already doing a lot of work in this space. We are of the view that the north star of decarbonisation can bring efficiencies and therefore cost savings for the aviation sector as a whole—I don’t think that that can be discounted, either. But, as I say, ultimately, it is for the promoter to make sure that the affordability of schemes for airport users is at the centre of any application under the HENPS.

Chair

But Minister, Heathrow airport at the moment is way behind on its decarbonisation aspirations, particularly in terms of on-apron activities—it is far more dependent on diesel than other airports around the UK—mainly because it just does not have the grid capacity to deliver sufficient power into the airport now. Although a new cable is coming in 2037, we’re not quite sure where the power for that cable will come from. What confidence do you have that Heathrow airport is actually capable of decarbonising as a two-runway airport, let alone a three-runway airport?

Keir Mather

It is a fair challenge. There are different constituent parts of how they might get to improving their processes. Maybe I can just separate this momentarily from the HENPS process. The airlines that operate at the airport can go after decarbonisation gains as that relates to SAF policy and technological improvements, but ultimately—

Chair

How much SAF is being used in the UK at the moment?

Keir Mather

I don’t have that figure off the top of my head, Chair; I’m sorry.

Chair

We were told zero.

Keir Mather

But we are getting to a stage where SAF production in the UK is starting to become a reality. HEFA SAF is of course used to meet compliance under the SAF mandate. On Heathrow, you are right to raise the challenge that grid connectivity is a major barrier to airport decarbonisation. That is why we work very closely with NESO and Ofgem. The Prime Minister, of course, recently announced that he was going to facilitate the creation of Great British Grid, which will better allow us to have a competitive market to prioritise connectivity. But it is a completely fair challenge to say that there is much further to go. I don’t know whether there is anything to add to that.

Hannah Newell

The only thing that I would add is that, in the course of putting their application forward for expansion at Heathrow, they will have to demonstrate how they will mitigate the carbon impacts at the airport. That would include things like investment in greenhouse gas removals, which we have talked about, and their support for the production and use of SAF, but also how they are decarbonising their own fleet and their own activities at the airport. Those are all things that we would expect them to bring in their application for consent. I appreciate that does not go to the question of the airport as it stands, but in terms of how you are going to do expansion in a way that is consistent with addressing the carbon impact—

Chair

The grid capacity shortage in west London is a well-known phenomenon. Given all the other growth in west London, there will be competition anyway for whatever new grid capacity there may be.

Hannah Newell

That is an issue that Heathrow airport regularly discusses with DESNZ and with NESO colleagues, as the Minister has said.

Mr Perkins

I want to come back to the response that you gave to a question from Alex about responsibility. DESNZ has the legal responsibility for the climate emissions. Can I clarify this? The Secretary of State has suggested that the reduction in emissions can be deferred elsewhere. Is that internal, within the Department, or is she saying, “DESNZ has a legal responsibility; if we carry on with this and there is the emissions damage that the Climate Change Committee suggest, the responsibility will fall outside the Department for Transport for covering the emissions deficit that is now going to be brought forward under Heathrow expansion”?

Keir Mather

Martin can build on this, but each Government Department has a responsibility for meeting its respective shares of carbon budget compliance. I think the Secretary of State’s comments were just that Heathrow expansion is in an economy-wide context of how we meet that challenge.

Mr Perkins

So it is not purely a Department for Transport project in that context?

Keir Mather

Not in the context that the DESNZ Secretary of State has legal oversight of compliance, and the DFT feeds into that process.

Mr Perkins

But the Climate Change Committee has said that there is no way that expansion could be consistent with the UK’s carbon budget and net zero targets, unless there are other mitigations within aviation to reduce that transport. The Climate Change Committee is absolutely clear that she cannot just defer it elsewhere and say this is part of a broader economy. She is going to have do it within this.

Keir Mather

Sorry; I understand what you are saying. You are right to say that the Climate Change Committee’s advice was centred on the fact that when they talked about the viability of Heathrow expansion it was in an overall context of aviation and us not at present having the right suite of measures to be able to meet our carbon budget compliance responsibilities as the Department for Transport. That is true. That is why we are therefore advancing work to refresh the jet zero strategy and advance the other work in SAF and airspace modernisation. So, yes, absolutely. I was just merely reflecting on the fact that when it comes to who is responsible in the UK Government for managing the overall process of compliance—

Mr Perkins

I appreciate that clarification. You made a compelling case about many of the other things that have to happen, but the Climate Change Committee is absolutely clear that, if there is any credibility to the idea that this expansion could happen, consistent with net zero, you would need to legislate for those other matters and make sure that they are locked away and guaranteed before approving the DCO for Heathrow expansion. Will you legislate for all those things before approving the DCO for Heathrow expansion?

Keir Mather

That goes across a range of different measures, some of which are already in statute, but, if we wanted to go further, it would require secondary legislation, if you take an issue like the SAF mandate. Similarly, the conversation on GGRs—

Mr Perkins

Will you do that? That is the question.

Keir Mather

We are currently undertaking a review of the SAF mandate along with stakeholders. I am not in a position today to be able to say what we may or may not do as a result of that, but we are willing to legislate where we feel it is in the best interests of the UK and in the context of meeting those obligations.

Mr Perkins

Okay, because the Climate Change Committee is absolutely unequivocal that you must legislate for Heathrow to be credibly able to be consistent with our legal commitments. It is not just a case of whether it is nice to do; it is saying it is legally a must do.

Keir Mather

We will reflect on what the Climate Change Committee has said through its evidence and respond to it formally as a result of this consultation, but I have certainly taken what you have said on board. Across the piece, irrespective of that, we are advancing lots of work to meet those decarbonisation objectives, many of which you are right to say do need to be put through statute.

Mr Perkins

We have just seen the Government announce today about moving ahead with Jackdaw. That is four years after it was originally announced, because there was a legal challenge. Jackdaw is a tiny knoll in comparison to the mountain of emissions that will come out of Heathrow. Do you not see that, if the Government do not have all their ducks in a row on this, there is no prospect of this happening—it will just get bogged down in the courts? What thought has been given to how likely this is to happen if you do not have in place all these measures before trying to approve the DCO?

Keir Mather

That buttresses the point that was made by the Secretary of State that the question of Heathrow expansion sits in an economy-wide context of carbon emissions. You are also right to say that any questions around expansion have to be taken in the context of the UK’s legally binding climate commitments, and therefore you have to think about the relation of the different pieces of the puzzle of compliance, as it were, and think about it holistically. That is crucial.

Mr Perkins

You are sort of admitting that many of things that will make this environmentally credible are not yet in place. Does it not follow that it is impossible to approve a DCO until those measures that you have referred to are in place? Some of them are going to take quite a bit of work from where we are now.

Keir Mather

The questions around the potential designation of the HENPS, which lead to questions around when a DCO application might be received, considered and then approved, are ones that would happen in subsequent years to where we are currently. We already have a lot of work under our belt in terms of meeting aviation’s share of decarbonisation measures, particularly through the SAF mandate, the creation of the UK airspace design service and the work that we are progressing in that space, but a lot of work needs to be done across the piece to facilitate aviation decarbonisation, and of course Heathrow expansion happens in that context. I am aware of the trade-offs, the difficult balancing act and the challenges, and the Department for Transport, with regard to our ambition of decarbonising aviation, is very determined to meet them. Heathrow expansion exists in that context.

Mr Perkins

You have been speaking about the climate tests as though they are tests for Heathrow, but is the HENPS climate test not essentially a test for Government policy, more than what is within the ability of the developers to manage? Do you see it primarily as a test for Government, or one for the developers?

Keir Mather

The Government have a policy framework for decarbonisation, and the test exists to ensure a proposal that is brought forward meets the framework that the Government have set. It is a test for promoters and a test on the basis by which expansion can happen, but you are right to say that it is in the context of a legal framework that the UK Government have created to meet our own decarbonisation objectives.

Mr Perkins

If the targets for SAF, carbon pricing, route modernisation and so on have not been met, the provisions will not be sustainable. What is the contingency plan, and at what point would the Government intervene if those other measures were not on track?

Keir Mather

In terms of the principle of intervention in the expansion delivery project, I have been quite clear that any Heathrow expansion would have to be privately financed. In our previous conversation, we reflected on the fact that any Heathrow expansion process would have to pay cognisance and due regard to Government policies that were in place when the decision was taken and as the process unfolded. If a potential DCO application were analysed, it would be in the context of where exactly we are with the carbon budget picture and extant UK Government policy around the jet zero framework. We would be in a different place if it were in the future with regard to SAF provision and production in the United Kingdom. You are right to say that decisions would have to be taken in that context and on that basis. In relation to how that links into the tests, that is how a potential planning decision would be approved or denied.

Mr Perkins

Ahead of the publication of the NPS, as you will be aware, the Environmental Audit Committee looked at aviation expansion and climate targets. How did you take into account the recommendations specifically on monitoring and enforcement and carbon pricing when drafting the new NPS?

Keir Mather

I might hand over to Martin on that specific principle. I would just say that the EAC’s recommendations are being factored in as part of the jet zero strategy. We also take carbon pricing considerations in the round in the development of aviation policy. Martin, is there anything you would like to add?

Martin Gilmour

The Minister is correct. We carefully considered the EAC report. The Government responded and referred to the HENPS review in a lot of their responses. I think you can see that we have tried to incorporate some of the recommendations in the draft HENPS by establishing clear air quality noise and climate tests, and then requiring strong mitigation measures. Some of the further measures that are less Heathrow-specific and more across aviation will be addressed in the jet zero strategy review, as the Minister referred to.

Mr Perkins

So we will expect an approval at some point. As we start down the pathway of looking at whether the route modernisation will happen, how much SAF gets used and how successful we are on engineered removals, if it turns out that we are not making the progress that we would like, is there a moment at which the Government will pause the work, even potentially after construction has started, or restrict the amount of aviation that can come in and out of Heathrow? That is, if it turns out you are not on target to put in place some of the measures that, at this stage, you hope you might be able to.

Keir Mather

I suppose a hypothetical decision on whether to approve a DCO application would be made on the best available evidence of the existing picture of carbon budget compliance and whether Heathrow expansion in that context would materially impact our ability to meet our requirements. On that basis, a project would be approved or denied. What it is trying to do is make sure that expansion, once it has begun, can only occur if it can fit within that context and ensure there is not a material impact in terms of non-compliance.

Mr Perkins

But you accept that in the moment you make that decision, some of this will still be about future reductions rather than currently delivered reductions.

Keir Mather

It will have to set out over the whole lifetime of the project how it will deal with and mitigate its carbon impact.

Mr Perkins

That will inevitably involve future reductions, not current reductions, won’t it?

Keir Mather

True, but I feel that to an extent I am dealing with the hypothetical of the hypothetical: if a decision is granted, and then you have to deal with future changes that come after that decision has been taken. I think what we are trying to do is design a process by which, at the start, you can ensure to the greatest extent possible that Heathrow expansion is compliant under the four tests, with carbon budgets and with our net zero obligations. That is exactly why we are doing this process. The CCC and the EAC have given us very useful contributions about how we might think about that in an economy-wide context, and through the lens of the technological challenges that we face. We are going to very much take that away and consider it as part of any revised HENPS.

Chair

I want to go back to the issue of determining between two promoters, but in the context of carbon emissions. I think you said that the material impacts will be specific to the proposal, but there is surely very little difference in carbon emissions between the two proposals. According to the Climate Change Committee, any third runway at Heathrow generates significant additional carbon emissions, the decisions around which will have to be addressed by the economy and Government as a whole. Is it fair that this is being determined on one or other or both schemes as opposed to Government wide?

Keir Mather

I am going to pass to Hannah on this one, if that is okay, Chair.

Hannah Newell

To come at the question a slightly different way, if two applications come forward, as looks likely, each application would have to be assessed on its own merits and on its own compliance against the HENPS and the requirements set out in the HENPS. It would not be a case of marking them against each other. It would be, “Do they meet the requirement? Do they not meet the requirement?”

Chair

Okay, thank you. If you are done, Toby, we will go to Scott on the schemes and the DCO process.

Dr Arthur

I want to return to the fact that we have a national policy statement that covers only the north-west runway at Heathrow airport. Is there anything in the HENPS that we would normally expect to see at the DCO stage since it is so specific?

Hannah Newell

Is there anything in the HENPS that you would expect to be—

Dr Arthur

At the DCO stage. It is a national policy statement, but it applies only to one asset. Is there anything in it that we would expect to see at the DCO stage, which you have managed to put in just now, because it is so specific?

Hannah Newell

The Heathrow expansion national policy statement, as you say, is a location-specific national policy statement. That is the same as the airports national policy statement, which also applied to the north-west runway scheme at Heathrow. In terms of what we would expect to see at DCO application, that would be about how they intend to deliver that scheme, how any promoter proposes to take forward delivery of that scheme and how they propose to meet the requirements set out—

Dr Arthur

So you do not think you have strayed into that area through the HENPS.

Hannah Newell

No. It is necessarily location specific, because it is about nationally significant infrastructure—the hub airport, of which Heathrow is the one. It got to that point. We build on the work. The airports national policy statement builds on the work of the Airports Commission to get to that scheme. We had a process to check whether that was still the scheme that the HENPS should rely on. The HENPS does focus on that scheme. But in terms of the delivery of that—all of the detailed work around that, all of the mitigations, and the meeting of the tests that we have been discussing in detail today—is over to any promoter to demonstrate at the point at which they submit a DCO application.

Dr Arthur

I guess what I am getting at is whether there are too many specifics in it about how it should look and how it should be. Should that not have been left to a later stage?

Hannah Newell

In terms of the specifics, the national policy statement talks about runway length up to a certain length, about phasing and about the ways in which it can be delivered, but it does leave a lot of flexibility to promoters on how they are delivering that.

Dr Arthur

Heathrow West believes that the HENPS is prejudiced against it towards HAL. Do you have a view on that?

Hannah Newell

It is about the north-west runway; it is not specific to any promoter.

Dr Arthur

So you disagree with it on that. Okay.

Keir Mather

If I can add to that very briefly, the scheme-specific nature of the draft HENPS means that we necessarily need to have a conversation about how Heathrow airport presently exists and how it might change in the future under expansion. Of the potential promoters that have given evidence to this Committee and said that they intend to submit a DCO application, we are actually seeing a lot of productive conversations and quite a healthy debate about how, whether through phasing, conversations about runway length or comparative differences between schemes, you might go about expansion in different ways. It is completely fair if Heathrow West Ltd is raising concerns, and we will certainly listen to those in the context of this consultation. I would say that it has been able to have quite a robust debate about what that should look like and how you could do the scheme in different ways with a phased approach, within the existing envelope of the north-west runway scheme that was used to inform the redesign of the HENPS.

Dr Arthur

Is it healthy, though?

Chair

That is a hypothetical question, Scott. I am conscious of time, and we have a really important issue coming up now, which is surface access.

Daniel Francis

Contrary to previous aspirations, the draft HENPS requires applicants to set out only how they will “minimise” and “manage any additional traffic created”. What level of additional road traffic would be acceptable?

Keir Mather

It is for a promoter to demonstrate how it would minimise the land-side airport-related traffic that comes as a result of expansion. It will have to work very closely with National Highways and other stakeholders with responsibility for the strategic road network, particularly on questions around the M25, and it will have to make sure that its plans are feasible and deliverable. I will be honest and reflect on the fact that there is more work to be done on modelling and analysis so that we can develop a fuller understanding of the implications of expansion for the road network. In the context that we have, asking an applicant to set out how it will set out and manage additional traffic created is the right sort of lens while we get a fuller picture from it about the specifics of the scheme that it would put forward.

Daniel Francis

There are two aspects. First, TfL says that even if you achieved your modal shifts, there would be 60,000 extra road traffic movements per day. Equally, from Heathrow we hear aspirations about huge numbers of extra car parking spaces on site. How does that mirror the aspirations you have just set out, Minister?

Keir Mather

It is a fair question. We would expect any promoter to set out a plan for how it intends to increase car parking at the airport, given the fact that we have stretching public sector mode share targets, but people will still travel to Heathrow airport by car. We had a conversation in the Civil Aviation Bill Committee session yesterday about how particular communities, particularly rural communities, may use a car to access an airport more readily than others. It remains the case that any promoter would have to demonstrate that the significant impact that that might have on congestion, capacity and highway safety is mitigated to an acceptable degree. In that context, we think that we are in a reasonable place in terms of them having to set out stretching targets, and they intersect very closely with those public sector mode share targets. It is in the interests of a potential promoter to think about how it can take capacity off the road and put it on to public transport. That is also in the context of what the Secretary of State said about it being a central concern for her that road traffic impacts are mitigated as part of any potential scheme.

Daniel Francis

I will come back to public transport in a moment, but at Gatwick and Luton, future airport growth has been linked to the surface access objectives. Do you envisage that those objectives for how that would be achieved at Heathrow would form part of the DCO in due course?

Martin Gilmour

That was decided at DCO stage, rather than at the stage we are at now. We cannot prejudge that, but it does set an example of how these things can be secured and done. Without saying specifically, that is what would happen on this one. There is a precedent and an example there for how you can mitigate and control these measures.

Daniel Francis

Lastly, on public transport, I have already referred to Heathrow looking at the additional car parking spaces. What I, and I think the Committee, have struggled with through this process is that, although we have talked a lot about an additional rail link to the south and to the west, we have not understood, particularly from last week’s evidence, who may fund that. Even the airport itself is saying, “We won’t be funding it.” The taxpayer will not be funding it. How do you envisage that that may play out? If we do need those additional public transport links, who would be funding them?

Keir Mather

For any new surface access schemes, such as rail schemes from a variety of destinations, into the airport, the responsibility for financing them rests with the promoter of the scheme. I know that this Committee has taken evidence about whether you might have third-party private provision on some schemes. That is a matter that is best explored through that process. For any potential promoter and development, the financing and implementation of the schemes would likely work closely with organisations like TfL and, once constituted, GBR, but it will ultimately be for the promoter to finance those schemes. Tim, I can turn to you, if you like.

Tim Johnson

The CAA has an established service access policy, which we put in place in 2019, that says that surface access costs, where they are efficiently incurred, could be passed on to consumers where that is commensurate with the benefit to consumers. In the current context, we will be consulting on whether any changes to that policy are appropriate. But in the existing policy—and, I would expect, going forward—that policy will need to take into account any requirements that are set through the planning process. As the Minister said, it is incumbent on promoters to come forward with plans, work with TfL and say what is required. As with all costs associated with expansion that parties would wish to pass on to consumers, it is important that they are justified and efficiently incurred.

Chair

It would not be TfL for the new railway lines that are needed, because they are from the west and the south or south-west. The promoters have accepted that they would be responsible for some of the passenger demand of any additional public transport rail. We know of old that Heathrow is always reluctant to put its hand in the pocket for any public transport infrastructure, although we have it on record that it would be prepared to pay a proportion. But the taxpayer is not going to pay for the rest, and, although there are promoters of schemes, I have not seen a credible proposal on the table. Yet it is deemed essential if, as a Secretary of State says, the M4 and the M25 are not to become car parks. Where is this going to be resolved?

Keir Mather

The question of how specific surface access schemes are financed is very clear. We have made it very clear that they have to be privately—

Chair

You know that part of them will be funded by the airport expansion, but how will the rest be funded? The airport promoters are not prepared to pay 100% of the cost of the new rail infrastructure.

Keir Mather

First of all, those schemes cannot be laid out in a prescriptive way through the HENPS at present, and that is because of phasing over time: you need different passenger demands from different parts of the country over time. We have set out that those schemes have to be privately financed, but the specifics of each potential scheme—I know that you have gathered evidence about third-party private investment, delivery and whatever else—are most appropriately dealt through a DCO application. I am not sure whether there is anything to add on that point.

Chair

Would the DCO application be expected to include adequate surface access to deliver the modal shift as a core part of the DCO?

Keir Mather

Yes.

Chair

Equivalent in terms of conditionality, as is the case at Gatwick and Luton?

Martin Gilmour

I imagine that, to have confidence that they could be delivered, you would use conditions to secure that in some way. We have asked for a surface access strategy that includes a credible plan for how these rail schemes will come forward. While we are not saying that those rail schemes will have to be consented to through that DCO process, for what we put in the HENPS, you would need to see a detailed plan for how it would come forward, who would deliver it and when it is likely to be expected.

Chair

Are you confident that construction and some growth could occur without the new rail lines and without the M25 and M4 grinding to a halt? Are there figures for the impact on the local road system as we move towards runway 3?

Martin Gilmour

That is why we have set mode share targets linked to those uplifts in capacity.

Chair

Has anyone done any modelling on the impact on the road system?

Martin Gilmour

At this stage, we have done high-level indicative modelling that tells us that those mode share targets are the right targets to protect the network, but there is a lot of detailed modelling to be done.

Chair

Are you confident that we are not going to see the road system, from the motorways down to the local roads, grind to a halt?

Keir Mather

The public transport mode share targets are designed to obviate that risk. That is what we are trying to build into the HENPS.

Chair

Even the mode share targets assume growth in construction travel, workforce travel and passenger travel, even before the mode share target is hit.

Keir Mather

But that is the basis upon which the DCO application would be approved. You would have to set out a credible path for meeting those targets in any case before you began, even if phasing meant that X or Y project came online at a different time.

Hannah Newell

And also for managing the impacts of that construction-based traffic, as you mentioned.