Heathrow Third Runway Decision: Supreme Court reinstates the Airports National Policy Statement

Introduction

Following years of litigation, the Supreme Court has decided to overrule the Court of Appeal and reinstate the Airports National Policy Statement (“ANPS”) – the policy document which provides for the expansion of Heathrow Airport by construction of a third runway.

The Supreme Court’s decision turned on the extent to which the Secretary of State had considered – or, rather, failed to consider – the Paris Agreement in its decision to designate the ANPS. The Supreme Court found that the Paris Agreement had been adequately taken into account in the ANPS process through the targets set in the Climate Change Act 2008, and that the Secretary of State’s decision not to have further regard to the Paris Agreement beyond this was not irrational. Further, the Supreme Court emphasised that future developments in law and policy will be considered at the DCO stage.

This decision does not herald the end of the Heathrow Airport debate – despite the reinstatement of the ANPS, with aviation in flux due to climate change and Covid-19, the government’s next steps remain uncertain.

Background

The Heathrow Airport litigation has been ongoing for a number of years. Although the basic idea of expansion of Heathrow Airport has been in the public realm since at least 1990 (when it was recommend by the Runway Capacity Study), the real start of this litigation saga came with the designation of the Airports National Policy Statement (“ANPS”) in June 2018.

The ANPS adopted the recommendation of the Airports Commission that airport expansion in the south-east of England should be achieved through the expansion of Heathrow Airport by way of construction of a new northwest runway and associated infrastructure.

This decision, unsurprisingly, proved controversial and multiple separate judicial review claims were launched by various parties, including local authorities, environmental charities and Heathrow Hub Limited (the promoter of an alternative scheme for Heathrow Airport expansion). These were heard by the Divisional Court together in a “rolled up” hearing that took place over seven days in March 2019, with the competition law case submitted by Heathrow Hub Limited being heard and decided separately.

The Divisional Court rejected all grounds. The competition law decision was appealed by Heathrow Hub Limited, but the appeal was dismissed in its entirety and permission to appeal to the Supreme Court was refused. The High Court’s decision on the planning / environmental grounds was appealed by three of the original claimants: the group of five local authorities (known as the “Hillingdon claimants”); Plan B; and Friends of the Earth. The appeal was partially successful and the Court of Appeal quashed the ANPS. The Court of Appeal’s judgment is discussed in more detail below.

In today’s decision, the Supreme Court has overturned the Court of Appeal’s decision and reinstated the ANPS.

Court of Appeal

In February 2020, the appeal against the Divisional Court decision was heard by the Court of Appeal in R (Plan B Earth and others) v Secretary of State for Transport and others [2020] EWCA Civ 214.

In order to understand the judgment of the Supreme Court, it is necessary to first get to grips with the decision of the Court of Appeal.

The issues facing the Court of Appeal can be narrowed to four categories:

1. the operation of the Habitats Directive (92/43/EEC), in particular whether the Secretary of State breached this Directive by deciding that expansion at Gatwick airport was not an “alternative”;
2. the operation of the SEA Directive (2001/42/EC), including whether the Secretary of State breached this Directive by failing to consider the Paris Agreement;
3. the impact of UK’s commitments on climate change and whether the ANPS was unlawful because the Secretary of State failed to have due regard to these commitments, including the Paris Agreement; and
4. what relief should be granted, if any.

The Court of Appeal rejected the appeal on all Habitats Directive and SEA Directive grounds (save for one, discussed below), but allowed Plan B and Friends of the Earth’s appeal on climate change grounds.

The Court of Appeal’s decision turned primarily on the Secretary of State’s approach to the Paris Agreement.

Planning Act 2008 – Failure to have regard to the Paris Agreement

The Court of Appeal identified one element of the Secretary of State’s decision-making process as being “legally fatal” to the ANPS: that is, the Secretary of State’s failure to consider the Paris Agreement in the preparation of the ANPS meant that the statutory regime for the formulation of a national policy statement, set out in the Planning Act 2008, was not properly complied with.

Section 5(8) of the Planning Act 2008 requires the Secretary of State, when making the decision to designate government policy such as the ANPS, to explain how they have taken into account “government policy relating to the mitigation of, and adaptation to, climate change”, and, implicitly, to take such policy into account. There was no debate as to whether or not the Paris Agreement had been “taken into account” – it was common ground that it had not been. During the decision-making process, the Secretary of State had received legal advice that they were legally obliged not to take the Paris Agreement into account because it did not form an appropriate basis upon which to formulate government policy given (amongst other things) its status as an unincorporated, international treaty with no effect on domestic law.

The Court of Appeal found that the Government’s commitment to the Paris Agreement, evidenced through both the decision to ratify the Agreement and firm Ministerial statements, was clearly part of the “government policy” referred to in the Planning Act 2008. The failure to take it into consideration therefore undermined the entire decision-making process which led to the ANPS.

Section 10(3) of the Planning Act 2008 requires the Secretary of State, in carrying out their functions, to “have regard to the desirability of mitigating and adapting to climate change”. The Court of Appeal agreed with the submissions of PlanB and Friends of the Earth and concluded that the Paris Agreement is “so obviously material that it had to be taken into account” in order to comply with this duty.

Interestingly, the Court of Appeal noted that the obligation to take government policy “into account” or to “have regard” to it does not mean that such policy must be complied with. Rather, the Court of Appeal stated that “the duty in section 5(8) does not even require the executive to conform to its own policy commitments, simply to take them into account and explain how it has done so”, and made similar comments in respect of the section 10(3) requirements. This demonstrates that the Court of Appeal decision was not the victory for climate change that it has subsequently been heralded as by many commentators.

Although not submitted by the appellants, the Court independently addressed the argument that the Secretary of State’s failure to consider the Paris Agreement was of no consequence because the targets and commitments already in place under the Climate Change Act 2008 would be the same as the UK’s commitments under the Paris Agreement. The Court dismissed this argument as mistaken: the implications of the Paris Agreement versus the implications of the Climate Change Act and such other policies are matters which should have been specifically considered and addressed as part of the very exercise that the Planning Act 2008 envisages.

SEA Directive – Duty to consider international law in carrying out a strategic environmental assessment

Similar to the section 5(8) ground above, this SEA Directive ground turned on whether the Paris Agreement should be considered as “relevant” for the purpose of the strategic environmental assessment carried out as part of the ANPS process.

Again, the Secretary of State accepted that they had not considered the Paris Agreement (it was not referred to in the environmental report prepared as part of the SEA process) and, again, the Court found that this failure was an error of law which vitiated the ANPS. Although the Court of Appeal accepted that there was a wide margin of discretion left to the Secretary of State in deciding what is “relevant”, it found that the Paris Agreement was so obviously relevant to the plan or programme under consideration in this case that the failure to consider it undermined the SEA that was carried out.

Supreme Court

On 6 May 2020, the Supreme Court granted permission to Heathrow Airport Ltd to appeal against the Court of Appeal’s ruling. The Supreme Court appeal in R (on the application of Friends of the Earth Ltd and others) (Respondents) v Heathrow Airport Ltd (Appellant) [2020] UKSC 52 was heard virtually over two days, with a decision being handed down on 16 December 2020.

The Supreme Court overruled the Court of Appeal’s decision and reinstated the ANPS. It allowed Heathrow Airport Limited’s appeal on all grounds, summarised as follows:

• in contrast with the Court of Appeal, the Supreme Court stated that the phrase “government policy” in section 5(8) of the Planning Act 2008 should be “given a relatively narrow meaning so that the relevant policies can be readily identified”, and found that the Paris Agreement and ministerial statements about it could not constitute “government policy”. Indeed, at the time that the ANPS was designated, the Government’s approach on how to reach the Paris Agreement targets, and on aviation emissions, was still in the process of development, and there was no “established policy” beyond that already encapsulated in the Climate Change Act 2008;
• the Supreme Court stated that the generally accepted position that the Secretary of State had not, acting on specific legal advice, taken the Paris Agreement into account “masks somewhat the way the Paris Agreement did in fact enter into consideration”. The Supreme Court, again taking the opposite view to that of the Court of Appeal, found that the Paris Agreement had been taken into account insofar as the ANPS ensures that the relevant emissions targets set out in the Climate Change Act 2008, which themselves are capable of being compatible with the Paris Agreement, are complied with in the construction of the Heathrow Airport expansion scheme. Further, the Secretary of State’s decision that this was sufficient, and that the Paris Agreement did not warrant any greater consideration, was, in the view of the Supreme Court, a “rational decision”. The Supreme Court applied this reasoning to both the section 10(3) ground and the SEA Directive ground;
• the Supreme Court found that the Secretary of State did not act irrationally in not attempting to assess post-2050 emissions or non-CO2 emissions because, amongst other things, future emissions targets and future regulation of non-CO2 emissions will be addressed through the DCO process.

Interestingly, in a number of places in the judgment the Supreme Court relied on the ‘safety net’ of the DCO process and the fact that future science and policy will be taken into account at this stage of the consenting process. This view formed the basis of the Supreme Court’s decision not to allow PlanB’s argument on human rights grounds: the Supreme Court found that “any effect on the lives and family life of those affected by the climate change consequences of the NWR Scheme would result not from the designation of the ANPS but from the making of a DCO in relation to the scheme.”

Comment

This might be the end of this particular branch of the Heathrow Airport litigation saga, but it is by no means the last that we will hear on the topic.

Although the competition case was refused permission to appeal to the Supreme Court, the issue of competition at Heathrow Airport remains open. There has been consultation by the CAA on the competition in the delivery of new terminals at Heathrow, and the CAA is in favour of competitive arrangements where they can be shown to be in the interests of consumers.

Climate change coupled with the Covid-19 pandemic means that the aviation industry as a whole is facing unprecedented change and uncertainty. The Supreme Court’s decision is not the answer to Heathrow Airport’s questions: even though the ANPS has been reinstated, the question remains as to whether expansion of Heathrow Airport is still a desirable result, and whether it might nonetheless be advisable to revisit the ANPS. Formal requests for review, such as we have seen in the energy sector, have been submitted under section 6 of the Planning Act 2008, including by PlanB and Heathrow Hub Limited. The question is whether there is political will to act on these and reconsider the ANPS.

The litigation itself, although ultimately unsuccessful, has undoubtedly helped to pave the way for similar challenges of government decision-making. The last couple of years have seen a number of challenges launched on similar grounds, with varying degrees of success: the Good Law Project’s challenge of the Energy National Policy Statements (see our piece here); the challenge to the Drax Power Station DCO (see our piece here); and the Transport Action Network’s challenge to the Road Investment Strategy, to name a few. Despite the Supreme Court’s decision today, it seems likely that this type of litigation activism will continue to grow, and will have major implications for government policy and decision making going forward.