I may be missing something but
(a) it seems highly anomalous to propose mandatory transponders below Stansted's CAS when they're not mandatory in the CAS above or inside it. What this will mean if implemented is that non-transponding aircraft will be prohibited from the Stansted CTR. Assuming the same logic is applied round other CTRs it will achieve by the back door what the Mode S proposals have so far failed to achieve.
(b) this proposal seems to be saying that the long-standing policy of deemed separation between IFR traffic inside a CTA and unknown primary-only traffic (apparently) beneath is inadequate and should be abandoned. But there has been no discussion of this as a general principle. Mandatory transponders would mainly address the risk of vertical infringement of a CTA from below. But the figures in the consultation document show that they have no idea whether this is a significant risk. 78.5% of Stansted infringements were by transponder-equipped aircraft but it gives no breakdown of how many of those were vertical infringements. The infringement stats probably do understate vertical infringements by primary-onlies (since you don't know unless it causes an airprox) but the only way to gauge how much they're under-reported is by looking at the proportion of infringements by Mode C equipped a/c that were vertical infringements. Without those data the proposal looks very weak on justifying evidence.
NS