The Minister of State, Department for Transport (Baroness Kramer) (LD)
My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Infrastructure Bill, has consented to place her interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Motion on Amendments 1 to 5
Baroness Kramer
That this House do agree with the Commons in their Amendments 1 to 5.
“Route strategies
(1) The Secretary of State must from time to time direct a strategic highways company to prepare proposals for the management and development of particular highways in respect of which the company is appointed (“a route strategy”).
(2) A route strategy must relate to such period as the Secretary of State may direct.
(3) The strategic highways company must—
(a) comply with a direction given to it under subsection (1), and
(b) publish the route strategy in such manner as the company considers appropriate.
(4) A direction under subsection (1) must be published by the Secretary of State in such manner as he or she considers appropriate.”
“Periodic reports by the Secretary of State
(1) The Secretary of State must from time to time prepare and publish reports on the manner in which a strategic highways company exercises its functions.
(2) The Secretary of State must lay a report prepared under subsection (1) before Parliament.”
Baroness Kramer
My Lords, in discussing Commons Amendments 1 to 5, I shall also speak to Commons Amendments 24 and 42 to 45. I am very pleased to put forward this group of amendments, which I believe demonstrate the progress made since the Bill was first introduced and that the Government have listened to the views made known in this House and in the other place.
It is clear that we intend the route strategies to be a key building block for the second road investment strategy, which covers the period after 2020-21. The individual route strategies will help ensure that Highways England and the Government of the day are able properly to consider local roads, local transport, our cities and other modes of transport as the RIS is developed. As Highways England carries out the work on the route strategies it will have to work closely with local highway authorities, local economic partnerships, Network Rail and other local and national bodies. Through the statutory direction and guidance set out in the licence, the updated version of which was published on 29 January and attached to my letter of 2 February, which has been placed in the Library—I am sure noble Lords have studied it in depth—we have made it clear how we expect the route strategies to be developed and what they should cover, ensuring that integration and working with others will be a key feature of the process.
To provide even more reassurance, my right honourable friend the Minister in the other place moved Amendment 1, which puts route strategies on the face of the Bill. To quote my right honourable friend:
“The Secretary of State will require a strategic highways company to prepare and publish one or more strategies on the management and development of the highways to which it has been appointed, which will be known as route strategies. The strategies must be published, as must the Secretary of State’s directions to the company, so we have provided that the process will be transparent”.—[Official Report, Commons, 26/1/15; col. 667.]
The arrangements that we have put in place give certainty that the route strategies will be prepared, and recognise the important part that they play in managing and planning for the future of the strategic road network.
Government Amendments 2, 3 and 5 deal with reporting to Parliament. I know that noble Lords have been keen to ensure that there is a transparent process for parliamentary accountability for the company, so I think it is best that I present Amendments 2, 3 and 5 together, as they reflect the full picture of the Government’s intention.
Amendment 5 places a responsibility on Government to report periodically to Parliament on the performance of Highways England. I have described before the combination of governance arrangements that provides choice in how it is applied while retaining levers for Ministers to intervene if the company fails to perform. If necessary, Ministers can intervene through the use of statutory direction and guidance, which must be published, to shape how the company must act or deliver requirements.
In addition, through Amendments 2 and 3 to the monitor provisions, we make it clear that the monitor may report on the effect of direction and guidance given to the company by the Secretary of State, and we insert a specific requirement on the Secretary of State to lay before Parliament any report published by the monitor. These further requirements on the Government to report to Parliament, and to furnish Parliament with the independent assessment of the Highways Monitor on the company’s performance, will make the process even more transparent and provides a very strong way of ensuring that the company delivers.
I turn to Amendment 4. On Report, we briefly discussed the issue of a change in the name of the Office of Rail Regulation name, when the noble Lord, Lord Berkeley, who I see is in his place today, proposed to rename it. On that occasion, I said that we had concerns about the prospect of renaming the ORR in the Bill. However, the principle of ensuring that the ORR has an accurate name remains a sound one. We accept that there is a risk of confusion if its name does not correspond to its functions, though, as I emphasised in previous debates, the ORR is at liberty to use different brand names for these different activities, and always planned to do so.
We have therefore decided to take steps to remedy such a situation. Amendment 4 gives the Government the power to rename the ORR once an appropriate name is agreed. The ORR is in the process of discussing options with stakeholders and staff. As I say, this amendment does not rename the ORR directly because of the complications involved in doing so. Instead, it inserts a new power in the Railways and Transport Safety Act 2003, allowing the Secretary of State to rename it and make the necessary consequential amendments through secondary legislation.
Government Amendments 44 and 45 deal with transferred staff. Noble Lords will recall that on Report I made clear that the transfer of staff from the Highways Agency to Highways England would follow guidance under the Cabinet Office statement of practice, COSOP, and that this follows TUPE principles. I confirm again that the employment terms and conditions of existing Highways Agency staff will not change when they transfer but, in recognition of the assurance that many want on this point, Amendment 44 reaffirms this and, I hope, makes the Government’s intentions clear. I highlight that the Bill already provides protection that a transferring employee can terminate their contract if there is a substantial detrimental change to it after they transfer. This would amount to a constructive dismissal and the employee could bring a claim for unfair dismissal. This reflects regulation 4(9) of the TUPE regulations.
Amendment 45 is brought forward to reflect fully the intention of the TUPE regulations on this point. The amendment means that, where an employee resigns in such circumstances and seeks compensation, the employer is not liable to pay any damages in respect of any unpaid wages that relate to a notice period that the employee has not worked. It does not in any way prevent employees from claiming damages for constructive dismissal in other circumstances. The amendment provides a limited protection for the employer, and reflects regulation 4(10) of the TUPE regulations themselves.
I shall also cover government Amendments 24, 42 and 43, a group of minor and technical amendments which I shall briefly describe. Amendment 24 deals with transitional provisions. I brought forward an amendment in Committee in recognition of concerns raised by the Delegated Powers and Regulatory Reform Committee that the power to modify primary legislation generally should be subject to the affirmative resolution procedure. Amendment 24 addresses a risk we have identified that might cause unremarkable transitional provisions and savings made under Clause 17 in Part 1 of the Bill to be subject to the affirmative resolution procedure on the basis that they modify the effects of primary legislation. This was not our intention. The power would be used to ensure that processes or procedures started by the Highways Agency which are incomplete at the time of transition can be taken forward by Highways England. Transitional provisions are routinely required where functions pass from one body to another and to require a debate under the affirmative procedure for such regulations would be disproportionate.
Lord Davies of Oldham (Lab)
I do not need to add much because my noble friends have emphasised certain weaknesses in the Bill as we are considering it today. That is not for want of trying. Both my noble friends—and I, from the Front Bench—were concerned about the issues that they have just emphasised. My noble friend Lord Whitty was concerned that road safety will not get the prominence in the Bill it surely deserves while my noble friend Lord Berkeley emphasised the significance of the Office of Rail Regulation. We all welcome the fact that there will be the possibility of a change of name as we could not see how the Office of Rail Regulation could intelligently deal with the road sector and operate under its present name. It is going to do so for a while, but at least the Minister has now ensured that there is provision for change at a later stage.
We support the thrust of Amendments 1 to 5, which we were pressing on the Government not so very long ago. We are still concerned that the Bill does not improve significantly the overall British performance with regard to roads, which clearly are a very important part of the national infrastructure. We know that other countries are more successful in establishing infrastructure. Those of us who from time to time are privileged to drive on the continent often appreciate the difference that obtains there. Even the French have begun at last to approximate to British standards of road safety. There was certainly a deficiency in the past. We support the five-year roads investment strategy that is underpinned by the Bill. It sets a long-term transport planning strategy to give the road sector the same certainty that the railways have. However, we have no evidence that justifies the main thrust of the Bill, which is unamended by these amendments, and the Bill is still overwhelmingly concerned to move the roads authority to an arm’s-length position. We were not persuaded of that argument through all the days of Committee and Report and I am not sure that those in the other place were persuaded about that fundamental part.
We are broadly in favour of Amendments 1 to 5. The Minister took a very serious and empathetic approach to explaining how TUPE was to be fulfilled with regard to the Bill. I understand Amendment 44 and could not endorse it more whole-heartedly. However, I am not quite sure what Amendment 45 is doing there and I therefore ask the Minister to spell that out in greater detail.
We are pleased at the progress that has been made. We think it was a long time coming, because we were debating this Bill several months ago and there is not much in these amendments that we had not articulated or advanced in argument at that time without winning too much support. We are pleased with the amendments that are before us and will be supporting them.
Baroness Kramer
My Lords, to clarify, both Amendments 44 and 45 mirror TUPE arrangements. I confess that I am no specialist on TUPE, but I understand from those who are that for the purposes of the transfer of staff from the Highways Agency to Highways England, these amendments simply make it clear that staff will in effect enjoy the same level of protection that is available in the circumstances where TUPE arrangements would normally be in place. This is a reassurance that was asked for and one which has been very gladly given.
In terms of safety, the noble Lord, Lord Whitty, will be aware that there are very few duties on the new strategic highways company, Highways England. One of those duties is to have regard to the safety of users of the highways. That is a strong statement in the Bill. He will be conscious that there is great emphasis on safety in the directions and guidance, and that the road investment strategy has a great focus on safety. Highways England has been set a target of reducing the number of people killed or seriously injured on the network by 40% by 2020. Many of the RIS schemes are specifically focused on safety improvements—for example, improvements to Junction 10 of the M25 to create a freer flowing interchange with the A3 because that junction currently has the highest casualty rates on the network.
Baroness Kramer
That this House do agree with the Commons in their Amendment 6.
“Cycling and Walking Investment Strategies
(1) The Secretary of State may at any time—
(a) set a Cycling and Walking Investment Strategy for England, or
(b) vary a Strategy which has already been set.
(2) A Cycling and Walking Investment Strategy is to relate to such period as the Secretary of State considers appropriate; but a Strategy for a period of more than five years must be reviewed at least once every five years.
(3) A Cycling and Walking Investment Strategy must specify—
(a) objectives to be achieved during the period to which it relates, and
(b) the financial resources to be made available by the Secretary of State for the purpose of achieving those objectives.
(4) The objectives to be achieved may include—
(a) activities to be performed;
(b) results to be achieved;
(c) standards to be met.
(5) Before setting or varying a Cycling and Walking Investment Strategy the Secretary of State must consult such persons as he or she considers appropriate.
(6) In considering whether to vary a Cycling and Walking Investment Strategy the Secretary of State must have regard to the desirability of maintaining certainty and stability in respect of Cycling and Walking Investment Strategies.
(7) A Cycling and Walking Investment Strategy must be published in such manner as the Secretary of State considers appropriate.
(8) Where a Cycling and Walking Investment Strategy has been published the Secretary of State must from time to time lay before Parliament a report on progress towards meeting its objectives.
(9) If a Cycling and Walking Investment Strategy is not currently in place, the Secretary of State must—
(a) lay before Parliament a report explaining why a Strategy has not been set, and
(b) set a Strategy as soon as may be reasonably practicable.”
Baroness Kramer
My Lords, in moving Amendment 6, I will speak also to Amendments 26 and 35. The Government are committed to cycling and walking, and making these the natural choice for shorter journeys. Government spending on cycling overall since 2010 has more than doubled compared with the last four years of the previous Administration: £374 million has been committed between 2011 and 2015. Spend on cycling is currently around £6 per person each year across England, and more than £10 per person in London and our eight cycling ambition cities. Furthermore, in November, the Deputy Prime Minister announced a further £114 million for the cycling ambition cities and, through the roads investment strategy, a further £100 million between 2015 and 2021 for additional cycle provision on the strategic road network.
As I am sure the House is aware, in October we published our draft Cycling Delivery Plan. This is a 10-year strategy on how we plan to increase cycling and walking across England. This plan illustrates this Government’s long-term commitment to cycling and walking and it is in that spirit that the Government have laid this amendment which provides a duty on the Secretary of State to have a cycling and walking investment strategy for England.
Each such strategy will be set for a given period, and must specify objectives to be achieved and the financial resources which will be made available for that purpose. Furthermore, the Secretary of State will be required to report to Parliament on progress on achieving those objectives, and—where a strategy applies for a period longer than five years—ensure that it is reviewed at least once every five years.
We have also provided that the Secretary of State must consult when setting or varying a strategy, and must bear in mind the desirability for certainty and stability when considering whether to make a variation to a strategy which has been set. This amendment provides a legislative framework for an investment strategy. We also intend shortly to respond to the consultation on the draft Cycling Delivery Plan, published by this Government last year.
Lord Davies of Oldham
My Lords, I join the two noble Lords who have just spoken in very much welcoming these amendments. Throughout the passage of this Bill there has been very consistent pressure from the cycling organisations. They have established their case against a background, which we are all too aware of, where cycling is still too dangerous a pursuit in certain parts of the country, particularly in our great cities.
I always think of Lord Dormand, who was in this House for a number of years. When he was in the Commons, he used to cycle from Westminster to the National Executive Committee meetings at Walworth Road. That meant a journey around Parliament Square, the roundabout at the far end of Westminster Bridge, and Elephant and Castle. I thought that it was the most dangerous journey in the world as a cyclist, which is why, every week he threatened to do the journey, I sought to dissuade him. He always made the journey and always lived to tell the tale.
However, subsequently there has been an increasing number of cycling accidents, if not on trunk roads, often on large roundabouts, which are difficult to negotiate with a very slow vehicle such as a bicycle as you go past a number of exits from which other vehicles will make definitive and often rapid moves. We have a lot to do to make cycling safer, but I am pleased that the Government have been persuaded of the case that the cycling organisations, the general public and we on these Benches have pushed as hard as we could. We are delighted with the outcome that the Minister has described.
Baroness Kramer
My Lords, I join others in this House in saying that I am personally delighted with these amendments. As your Lordships’ House will be aware, when the Bill started here, there was slight frustration because the Cycling Delivery Plan was out to public consultation and we were somewhat limited in what we could do in those circumstances. That consultation has been completed, the Government will shortly give their response to it and the strategy itself will follow in due course. The plan is for all of England, not just the trunk roads, and it is anticipated that there will be a great deal of work with local authorities, local enterprise partnerships and all the other stakeholders as this progresses. This is another good example of co-operative working, across Benches and across both Houses.
Motion agreed.
Motion on Amendments 7 to 11
Baroness Kramer
That this House do agree with the Commons in their Amendments 7 to 11.
(c) a person who for the time being exercises powers of management or control over the land.”
“NOTE. The common name or names given in the first column of this Schedule are included by way of guidance only; in the event of any dispute or proceedings, the common name or names shall not be taken into account.”
Baroness Kramer
My Lords, I shall begin with Amendment 7. As originally drafted, the definition of an “owner” of land in the Bill referred to a person who is entitled to dispose of the fee simple of the land or a person in possession under a lease. However, it was brought to our attention that this definition does not include owners of “inalienable land”, which is land that cannot be disposed of due to legal restrictions. This would mean that owners of certain land, which may include trustees, would be unable to enter into species control agreements or be made subject to species control orders, even though they may be the only or most appropriate persons with an interest in the land concerned. Amendment 7 resolves this anomaly by extending the definition of an “owner” beyond freeholders and leaseholders to persons who may exercise powers of management or control over the land.
Amendment 8 ensures that the environmental authority provides a clear statement to an owner that it considers that they have complied with all the requirements of a species control agreement. This “Notice of compliance” will provide certainty to an owner that an agreement is no longer in effect. We made a similar amendment on Report in respect of species control orders. On reflection, we now consider that this requirement should also extend to agreements.
Amendments 9 and 11 clarify that should doubt ever arise in a dispute or legal proceedings, the scientific name of a species listed in Parts 1A or 1B of Schedule 9 to the Wildlife and Countryside Act 1981 is determinative rather than its common name. The wording introduced by these amendments is consistent with that which already appears in the existing Schedule 9 and other schedules to the 1981 Act.
Lord Deben (Con)
Before my noble friend leaves that point, I ask what arrangements are going to be made in relation to Wales and why it is done in this way.
Baroness Kramer
I will address my noble friend’s point in a moment if I may. We intend to commence Clauses 21 and 22 shortly after Royal Assent to provide legal certainty that licences are still required for the release of beavers into the wild. Now, these matters are devolved and I understand that Welsh Ministers are currently considering whether to make a similar amendment in relation to beavers in Wales.
The Earl of Caithness (Con)
Could my noble friend confirm that “a person” in new paragraph 5, which she is amending, is also a trust and a limited company?
Lord Davies of Oldham
I apologise to the House because I am going to make a very technical and limited statement. We very much approve of this group of amendments but we have one concern, which has been articulated by those who know a great deal more about beavers than I know about anything. Consequently, we listened to their advice with the greatest care. It has come from a number of well intentioned sources—by “well intentioned” I mean those who want to ensure that our environment and natural life flourish. We are concerned about the welfare of species.
Our concern is that the European beaver—a native species that has established populations in the UK—has been excluded from the species control order. The classification of the beaver under Part 1B of Schedule 9,
“Animals no longer normally present”,
is regarded as bizarre. It lists them alongside the wild boar, hence our anxiety. It seems strange that, despite European beavers being recognised as a native species to the UK and a natural component of British river systems, they will need a licence from Natural England to continue to exist in the wild.
The Minister will know that we proposed an amendment in Committee, which was supported by a number of NGOs including Friends of the Earth, that the Government’s definition of invasive, non-native species should correspond to the European Union habitats directive, which was adopted in 1992. That will clarify exactly the status of the European beaver. I hope that the Minister can reassure me that that representation is a worthy one and is taken account of by these amendments.
Baroness Kramer
My Lords, I have a number of clarifications, which I hope will satisfy your Lordships. Yes, the definition of owners includes trusts and limited companies. We found that places including, I think, Epping Forest and some National Trust properties would not have been covered. It was important to make that amendment and give that clarification.
On Wales, Welsh Ministers are considering this issue and will make their decision shortly, but your Lordships will know that it will be necessary in that process for the Welsh Government to debate an amended legislative consent Motion, which we await. In the mean time, it is still an offence under Section 14 of the 1981 Act to release a beaver into the wild in Wales, so I do not think there should be concerns about release as a result of the changes that we have made here.
It is important to recognise that where we have species that are formally resident—I know people do not like the phrase, but it describes the situation quite well—it is important that we consider releasing them only under licence. The beaver is perhaps a very good example. First, we do not know for certain that they are Eurasian beavers, although vets will be able to answer that question. More importantly, in continental Europe the species is afflicted with a really very terrible disease—a parasite known as EM. I do not wish to trouble your Lordships, but essentially the beaver is a carrier, and many mammals, including human beings, can be devastated by this parasite, which effectively eats your organs from the inside out. It really is important that this country remains EM free and that the parasite does not get out into the general population of foxes and other creatures, because the consequences would be very undesirable.
There is therefore very widespread agreement that the licensing process is the right approach, and where we reintroduce animals we want them brought in in the right way and to the right place with all the consequences considered. The reason for the delay in testing the beavers is fairly straightforward: they have had young kits which have been nursing, and now that the kits are weaned it is much safer to find the animals and bring them in for testing. We expect that to happen shortly.
I hope with that range of reassurances, your Lordships will be very comfortable supporting the Motion.
Lord McKenzie of Luton (Lab)
My Lords, we can support the creation of a regime for mayoral development orders, which we see as being uncontroversial. We are certainly supportive of proposals that can improve the delivery of new housing in London, and we note that London Councils and the GLA have expressed support for MDOs.
From discussion in Committee in the Commons, it has been confirmed today that such orders have to be initiated by the London boroughs themselves, and a particular benefit will be supporting the development of complex cross-boundary situations. Can the Minister say a little more about the extent to which they might be used within a particular boundary and not on a cross-border basis? It is presumed that we will not get the underpinning regulations by the end of this Parliament, unless the Minister can tell us otherwise. We note that the negative procedure is to be adopted. Perhaps the Minister might say when they are expected to be ready.
On housing numbers for London, what the Minister said in the other place has been confirmed today: there is an annual shortfall in capacity of between 7,000 and 20,000 homes. It was less than clear from the exchanges at the other end the contribution that MDOs might make in addressing that shortfall. I think the proposition was that they might speed things up, but whether they will have broader impact will be interesting to hear.
A further point, for which there was no satisfactory answer, was how MDOs can contribute to more affordable housing. Can the Minister confirm that Section 106 agreements will not operate for MDOs? If that is not the case, how will MDOs impact on the obligation to provide affordable housing? If this is the case, how will it be assured that the provision of affordable housing will be forthcoming, and what is the mechanism? It would be helpful to have clarity on that point. Nothwithstanding that, as I have said, we do not oppose the new clauses and will support them.
Baroness Kramer
My Lords, there is indeed a broad consensus across this range of issues. The noble Lord, Lord McKenzie, asked whether these orders could be used within a local authority rather than just across boundaries. Indeed they can, and of course local development orders are already available to local authorities, but they may wish to tap into the additional capacity and capability that is available in the mayor’s office for particularly complex projects. There may be occasions when that happens, and our expectation is that it will be primarily for the kind of sites that are complex enough to cross boundaries. Obviously, that happens quite often in London. Secondary legislation will appear in due course—a phrase with which I am afraid the House is probably very familiar—but at this point I think we can say with some confidence that that will be in the next Parliament.
I share the noble Lord’s understanding of Section 106, and he will be aware that the voice of local authorities is very powerful on this issue in shaping the kinds of development that they see as appropriate for their communities. It is not the mayor imposing a vision on local authorities, but rather local authorities looking to use the capacity that is on offer from the mayor in order to move developments forward proactively. Its primary purpose in all the discussions with London Councils and others has been to emphasise the importance of accelerating new housing development across the city.
Baroness Kramer
That this House do agree with the Commons in their Amendments 13 and 14.
“Expenditure of Greater London Authority on housing or regeneration
(1) In section 31 of the Greater London Authority Act 1999 (limits of the general power) after subsection (5A) insert—
“(5B) Nothing in subsection (1)(a) above shall be taken to prevent the Authority incurring expenditure in doing anything for the purposes of, or relating to, housing or regeneration.”
(2) The amendment made by subsection (1) applies in relation to expenditure incurred before as well as after the coming into force of this section.”
Baroness Kramer
My Lords, in discussing these amendments I shall include Amendments 28 and 36. These amendments deal with the Government’s public sector land programme, which has successfully released land for almost 98,000 new homes to date. We fully expect to meet our 100,000 homes target by March this year. Looking ahead to the next Parliament, we have an even more ambitious target, which aims to deliver land for a further 150,000 homes. This programme will be led by the Homes and Communities Agency and the Greater London Authority, and will mean transferring a significant amount of government land into their ownership.
Clause 28 will ensure that future purchasers of land owned by the Homes and Communities Agency, the Greater London Authority and the mayoral development corporations will be able to develop and use land without being affected by easements and other rights and restrictions. Clause 28 will bring the position of purchasers of land from the HCA, the GLA and the MDCs into line with those presently enjoyed by purchasers from local authorities and other public bodies involved in regeneration and development. This in turn will enable us to increase the attractiveness of surplus public sector land to developers, thus ensuring that we can facilitate the development of much needed new homes and support economic growth by removing obstacles to development while achieving best value for the taxpayer.
I want to be clear, however, that where the HCA or the GLA currently retains the freehold in the land and leases that land to developers, the powers to override third-party rights and restrictions are already exercisable on that land under existing legislation. There has to date been a degree of uncertainty on this point, which I understand has resulted in delays to certain developments in London. Amendment 13 seeks to provide an assurance that where the HCA or the GLA retains the freehold of land, the powers to override third-party rights and restrictions in land already apply under existing legislation, and we are happy to provide that clarity.
I turn now to Amendments 14, 28 and 36. Perhaps I may move on to the related matter of the Greater London Authority’s powers to incur expenditure on the transport elements of housing and regeneration projects. This important issue was raised in the other place during Committee and the Government promised to look urgently at the legislative options available to address it. We concluded that it was necessary to make a minor change to the GLA Act 1999 and have therefore made the proposed amendment.
Amendment 14 removes a prohibition in Section 31 of the GLA Act 1999 that prevents the GLA incurring expenditure on anything that may be done by its functional body, Transport for London. We are making this change to the GLA Act because the GLA has said that TfL’s powers are wide-ranging and therefore preclude the GLA from incurring expenditure on anything transport-related when undertaking housing or regeneration projects.
The prohibition excludes the GLA from incurring expenditure on projects that the GLA has been responsible for since 1 April 2012 when it took on the roles, land and contracts of the former London Development Agency and the Homes and Communities Agency in London. Without this amendment, around 50 projects worth over £200 million would have to stop. This includes work which the GLA has been funding with the London borough councils to revitalise high streets, including in Deptford, Bromley and Cricklewood. It also affects new initiatives to deliver new homes such as housing zones and at Barking Riverside.
Amendment 36 allows for the clause to come into effect on the day the Bill receives Royal Assent and that it will apply in relation to expenditure incurred by the GLA before as well as after the coming into force of the new clause. This is because it was clearly the intention of Parliament that the GLA should have equivalent powers to the former London Development Agency and the Homes and Communities Agency, following the Localism Act 2011. Amendment 28 limits the geographical extent to England and Wales.
Making these changes to the GLA Act 1999 is therefore essential to ensure that the GLA can deliver new homes and jobs for London. I beg to move that this House accepts these Commons amendments.
Lord McKenzie of Luton
My Lords, we consider these amendments uncontroversial and are happy to support them. We particularly see the thrust of Amendment 14 and the need to change what is clearly an unintended provision in the 1999 Act. It is indeed perverse if because of the existing powers the GLA is precluded from incurring expenditure on anything transport-related, such as transport-related projects to deliver housing, jobs and growth in London. That cannot be right, which is why we support the amendments.
Baroness Verma
That this House do agree with the Commons in their Amendment 20, do propose Amendment 20B as an amendment thereto, and do propose Amendment 20C as a consequential amendment to the Bill.
“Advice on likely impact of onshore petroleum on the carbon budget
(1) The Secretary of State must from time to time request the Committee on Climate Change to provide advice (in accordance with section 38 of the CCA 2008) on the impact which combustion of, and fugitive emissions from, petroleum got through onshore activity is likely to have on the Secretary of State’s ability to meet the duties imposed by—
(a) section 1 of the CCA 2008 (net UK carbon account target for 2050), and
(b) section 4(1)(b) of the CCA 2008 (UK carbon account not to exceed carbon budget).
(2) As soon as practicable after each reporting period, the Secretary of State must produce a report setting out the conclusions that the Secretary of State has reached after considering the advice provided by the Committee on Climate Change during that reporting period in response to any request made under subsection (1).
(3) The Secretary of State must lay a copy of any such report before Parliament.
(4) In this section—
“CCA 2008” means the Climate Change Act 2008;
“petroleum got through onshore activity” means petroleum got from the strata in which it exists in its natural condition by activity carried out on land in England and Wales (excluding land covered by the sea or any tidal waters);
“petroleum” has the same meaning as in Part 1 of the Petroleum Act 1998 (see section 1 of that Act);
“reporting period” means—
(a) the period ending with 1 April 2016, and
(b) each subsequent period of 5 years.”
Baroness Verma
That this House do disagree with the Commons in their Amendment 21 but do propose Amendments 21B, 21C and 21D in lieu.
“Hydraulic fracturing: necessary conditions
Any hydraulic fracturing activity can not take place:
(a) unless an environmental impact assessment has been carried out;
(b) unless independent inspections are carried out of the integrity of wells used;
(c) unless monitoring has been undertaken on the site over the previous 12 month period;
(d) unless site-by-site measurement, monitoring and public disclosure of existing and future fugitive emissions is carried out;
(e) in land which is located within the boundary of a groundwater source protection zone;
(f) within or under protected areas;
(g) in deep-level land at depths of less than 1,000 metres;
(h) unless planning authorities have considered the cumulative impact of hydraulic fracturing activities in the local area;
(i) unless a provision is made for community benefit schemes to be provided by companies engaged in the extraction of gas and oil rock;
(j) unless residents in the affected area are notified on an individual basis;
(k) unless substances used are subject to approval by the Environment Agency;
(l) unless land is left in a condition required by the planning authority;
and
(m) unless water companies are consulted by the planning authority.”
Baroness Kramer
“Reimbursement of persons who have met expenses of making electrical connections
(1) The Electricity Act 1989 is amended in accordance with this section.
(2) In section 19 (power to recover expenditure)—
(a) omit subsections (2) and (3);
(b) after subsection (3) insert—
“(3A) Schedule 5B (reimbursement of persons who have met expenses) has effect.”;
(c) in subsection (4), after “this section” insert “and Schedule 5B”.
(3) After Schedule 5A insert—
“SCHEDULE 5B
REIMBURSEMENT OF PERSONS WHO HAVE MET EXPENSES
Power to make regulations
1 (1) The Secretary of State may, by regulations, make provision entitling the relevant electricity distributor to exercise the reimbursement powers in cases where conditions A, B, C and D are met.
(2) Condition A is met if any electric line or electrical plant is provided for the purpose of making a connection (the “first connection”)—
(a) between premises and a distribution system, or
(b) between two distribution systems.
(3) Condition B is met if a payment in respect of first connection expenses is made by one or more of the following persons—
(a) a person requiring the first connection in pursuance of section 16(1);
(b) a person who otherwise causes the first connection to be made (including by means of contractual arrangements).
(4) Condition C is met if any electric line or electric plant provided for the purpose of making the first connection is used for the purpose of making another connection (the “second connection”)—
(a) between premises and a distribution system, or
(b) between two distribution systems.
(5) Condition D is met if the second connection is made within the prescribed period after the first connection was made.
(6) “First connection expenses” are any expenses reasonably incurred by a person in providing any electric line or electric plant for the purpose of making the first connection.
(7) It does not matter whether the first connection, or the second connection, is made by an electricity distributor or a person of another description.
The reimbursement powers
2 (1) The “reimbursement powers” are—
(a) the power to demand a reimbursement payment from—
(i) a person requiring the second connection in pursuance of section 16(1), or
(ii) a person who otherwise causes the second connection to be made (including by means of contractual arrangements); and
(b) the power to apply the reimbursement payment in making such payments as may be appropriate towards reimbursing any persons for any payments they were expenses (whether that requirement arose by virtue of paragraph (a) or otherwise).
(2) A “reimbursement payment” is a payment, of such amount as may be reasonable in all the circumstances, in respect of first connection expenses.
Other provision about regulations under this Schedule
3 (1) The Secretary of State must consult the Authority before making regulations under this Schedule.
(2) Regulations under this Schedule may make provision requiring relevant electricity distributors to exercise a reimbursement power (whether in all cases or in cases provided for in the regulations).
(3) Regulations under this Schedule may make provision for the relevant electricity distributor to establish or estimate the amount of first connection expenses—or an amount of any aspect of those expenses—in cases where that distributor is not the person who made the first connection.
(4) Regulations under sub-paragraph (3) may not require any person to supply the relevant electricity distributor with information about any expenses incurred.
(5) Regulations under sub-paragraph (3) may provide for an estimate of an amount of first connection expenses to be calculated by a relevant electricity distributor by reference only to a combination of—
(a) expenses which that distributor would incur if that distributor were making the connection at the time of the estimate, and
(b) changes in prices since the time when the connection was actually made.
Interpretation
4 (1) In this Schedule—
“first connection” has the meaning given in paragraph 1; “first connection expenses” has the meaning given in paragraph 1;
“reimbursement payment” has the meaning given in paragraph 2;
“reimbursement powers” has the meaning given in paragraph 2;
“relevant electricity distributor”, in relation to the exercise of a reimbursement power, means—
(a) in a case where the first connection was made between premises and a distribution system, the electricity distributor that (at the time of the exercise of the power) operates that distribution system;
(b) in a case where the first connection was made between two distribution systems, the electricity distributor that (at the time of the exercise of the power) operates the distribution system into which the first connection has been, or is expected to be, incorporated.
(2) A reference in this Schedule to a payment in respect of first connection expenses includes a reference to such a payment made in pursuance of section 19(1).”
(4) In section 16 (duty to connect on request), in subsection (4), after “23” insert “and Schedule 5B”.
(5) In section 16A (procedure for requiring a connection), in subsection (5)(b)—
(a) omit “or regulations under section 19(2)”;
(b) after “19(2)” insert “or regulations under Schedule 5B”.
(6) In section 23 (determination of disputes)—
(a) after subsection (1) insert—
“(1ZA) This section also applies to any dispute arising under regulations under Schedule 5B between—
(a) an electricity distributor, and
(b) a person in respect of whom the electricity distributor exercises the reimbursement powers conferred by the regulations.”;
(b) after subsection (1C) insert—
“(1D) No dispute arising under regulations under Schedule 5B may be referred to the Authority after the end of the period of 12 months beginning with the time when the second connection (within the meaning of Schedule 5B) is made.”;
(c) after subsection (2) insert—
“(2A) Where a dispute arising under regulations under Schedule 5B falls to be determined under this section, the Authority may give directions as to the circumstances in which, and the terms on which, an electricity distributor is to make or (as the case may be) to maintain the second connection (within the meaning of Schedule 5B) pending the determination of the dispute.”;
(d) in subsection (4), after “(2)” insert “, (2A)”.”
Baroness Kramer
My Lords, I beg to move that this House agrees with the Commons in their Amendment 22, and will also speak to other amendments in the group, Amendments 30, 39 and 47.
Obtaining a timely and affordable connection to the electricity distribution network is essential for our growth and energy ambitions. It means that customers, including private citizens, renewables generators, house builders and commercial property developers get access to the network either to supply to or to take electricity from the grid when they need to. When seeking a connection, a customer can either use the local monopoly distribution network operator or an independent connection provider. There are around 194 independent connection providers. Over the years, they have gained a growing share of the connections market.
The Government support competition in network connections, as it gives customers greater choice and drives up standards across the board. The Government want to ensure a level playing field for independent connection providers. However, currently the legislation that makes up the second-comer regime potentially places independent connection providers and their customers at a disadvantage. The second-comer regime is based on a power and regulations under the Electricity Act 1989, which allows the recovery of expenses for electricity connections. It is designed to ensure the cost of connecting to the electricity distribution network is shared between different parties.
Specifically, the regime provides that where a customer—the second comer—connects to and benefits from infrastructure paid for by an earlier customer, the second comer can be required to reimburse the earlier party for a proportionate share of the costs. However, independent connection providers are not currently covered by this regime. This reflects the fact that they did not exist in any meaningful number at the time the original legislation was drafted. This means that customers who have their original connection provided by independent connection providers may not be able to recover any costs from the subsequent connecting customers. This in turn can make using an independent connection provider less attractive. This is an anomaly and the proposed amendment will update the power in the Electricity Act to ensure that it reflects the current market in connections by allowing a wider range of connection providers to be included in the second-comer regime. This change will support competition in the energy market and a fairer sharing of costs. To implement the change, subsequent secondary legislation will be required to amend or replace the Electricity (Connection Charges) Regulations 2002.
The new clause after Clause 44, Amendment 22, replaces the existing enabling power in Section 19 of the Electricity Act 1989 to confer on the Secretary of State a power to make regulations that will enable customers of independent connection providers to recover a proportion of the cost of a new connection from customers who subsequently connect to the same infrastructure. The power is included in a new Schedule 5B to the Act, which sets out in some detail the matters to be specified in the regulations. In particular, the regulations will allow for electricity distributors to administer reimbursements and, in some cases, to estimate the cost of connections for that purpose. This new clause also amends the power of the Gas and Electricity Markets Authority to determine disputes relating to connections to bring it into line with the updated second-comer provisions. As before, the Secretary of State is required to consult the Gas and Electricity Markets Authority to make regulations under the power.
Baroness Kramer
That this House do agree with the Commons in their Amendment 23.
“Power to abolish Public Works Loan Commissioners
In the Public Bodies Act 2011, in Schedule 1 (power to abolish: bodies and offices), after “Plant Varieties and Seeds Tribunal.” insert—
“Public Works Loan Commissioners.””
Baroness Kramer
My Lords, I beg to move that this House do agree with the Commons in their Amendment 23. In discussing Amendment 23, I will also include Amendments 34, 40 and 48. The Board of Public Works Loan Commissioners, commonly known as the Public Works Loan Board or PWLB, is a statutory body that dates back to the Public Works Loan Act 1875. It comprises 12 loan commissioners appointed by the Crown to administer making loans to local authorities. The commissioners are independent of government and unpaid by law. Under Section 4 of the National Loans Act 1968, the PWLB currently has a statutory lending limit of £70 billion. The current level of debt amounts to £64 billion. The original role of the loan commissioners was to approve and issue central government loans to certain categories of permitted borrowers. Under the 1875 Act and subsequent legislation, the commissioners have the power to refuse a loan on the basis of lack of security, and to appoint a secretary who can hold security and to whom the powers of the commissioners can be delegated. The commissioners are also required to issue an annual report to Parliament setting out details of loans advanced by the PWLB.
However, since 2004 decisions on borrowing have been fully devolved to local authorities under the prudential regime. As part of the local authorities’ self-regulated regime, local authorities are free to finance capital projects by borrowing without requiring government consent, provided they can afford to service their debts out of their revenues. This means that the decision-making functions of the PWLB commissioners are essentially obsolete. Local authorities are responsible for their own decisions on whether to borrow and how much. Further, the day-to-day operations of providing loans are now carried out by the Debt Management Office—the DMO—which is an executive agency of HM Treasury.
The commissioners’ functions and powers are delegated to the secretary of the PWLB, who is a civil servant at the DMO. The highly regarded prudential regime means there is no scope nowadays for the commissioners to exercise influence or discretion over lending to local authorities. The Government are therefore considering whether to abolish the Public Works Loan Board while ensuring that permitted borrowers, mainly local authorities, will continue to be able to access central government loans in the same way as now.
The purpose of including the PWLB in Schedule 1 to the Public Bodies Act 2011, which is what these amendments achieve, is to confer on the Government the power to make an order under the Public Bodies Act that would abolish the PWLB and transfer its functions to an eligible person, as defined in the Public Bodies Act. Let me assure noble Lords that the abolition of the PWLB, and the succession arrangements, will be subject to proper parliamentary scrutiny under the Public Bodies Act process. This proposal is purely about governance reform. The PWLB abolition will not impact on the prudential regime or local authorities’ existing loans with the PWLB, and local authorities will be able to undertake new borrowing from the successor body, as now, at rates that offer good value for money. Interest rates will continue to be a policy matter for HM Treasury.
Following the commencement of the provisions in this clause, the Government plan to publish a consultation document providing details of their proposals for abolition and succession, as required under the Public Bodies Act. After taking into account responses from the consultation, both Houses will have the opportunity to scrutinise the draft legislation, which will of course be accompanied by the explanatory document, as required by Section 11 of the PBA. Abolition of the PWLB would remove bureaucracy and align the accountability for lending to local authorities with DMO’s existing responsibilities for day-to-day operational management. This is in line with the Government’s wider efficiency and modernisation agenda.
I am conscious that these amendments are so uncontroversial that this may be the last moment that I am on my feet in a discussion on the Infrastructure Bill. I would like to take this opportunity to thank my noble friends Lady Verma and Lord Ahmad, who have been stalwart in leading significant parts of the Bill. I thank your Lordships all across the House. The Bill has involved many different departments; individuals with different specialisation and Peers who have followed different issues have had to co-ordinate and manage across the complexities. They have done so brilliantly. I think we have collectively improved the Bill. It has also involved working closely with the other place. This is also an opportunity for me to say particular thanks to the Bill team, which has had to deal with some of the most extraordinary complexity in managing this whole process. Frankly, I think it has done it brilliantly.
I will of course wish to respond if issues are raised by any other Members of the House, but I did not want to lose the opportunity to say thank you, since I am aware that the amendments I am moving are so technical and uncontroversial that this may be my last time to speak. I beg to move.
Lord McKenzie of Luton
My Lords, I am bound to say that when I saw references to the Public Works Loan Board being abolished a sense of nostalgia swept over me. It took me back to my first finance committee meeting of Luton Borough Council in 1976—noble Lords will remember that in those days if you turned up with a briefcase you were put on the finance committee straight away—and to the regular reports of the borough treasurer thereafter. Little did one realise that we were then in the comparative twilight of the commissioners’ existence.
The most recent Annual Report and Accounts, in describing the functions of the commissioners, says that they derive from legislation of 1875 and 1968, which has been referred to. However, the report also says that the PWLB’s existence can be traced back to 1793. It became established on a permanent basis in 1817. It is asserted that changes over time have made the PWLB less relevant, to the point where it is suggested that its purpose is redundant. As we have heard, its functions and powers have been delegated to the Debt Management Office. A significant development was the prudential borrowing regime introduced under the previous Labour Government, which obviated the need for local authorities to go through a credit approval process. In fact, the prudential borrowing regime has proved to be a major success and has demonstrated that local authorities act responsibly and prudently when it comes to exercising borrowing powers. The proposition is to include the PWLB in Schedule 1 to the Public Bodies Act 2011 so that the Government can use powers under that Act to abolish it and transfer its functions to an eligible person. It seems as though any necessary consultations are to take place under the PBA processes—presumably about “how” to abolish it, not “if”.
My colleagues in another place have already challenged the Government on why the consultation promised last July has not taken place. They have also reasonably sought to clarify what residual functions the PWLB undertakes. The foreword to the 2013-14 Annual Report and Accounts described the functions of the commissioners as being,
“to consider loan applications from local authorities and other prescribed bodies and, where loans are made, to collect the repayments”.
As a practical matter, as we know, these responsibilities have been delegated to the secretary—effectively the accounting officer. The PWLB borrows from the National Loans Fund to fund its loans. All interest and loan repayments are paid over to the National Loans Fund. Commissioners are prepared to lend to an authority up to the available capacity in its prudential borrowing limit.
It seems to us that although the functions have been delegated to others the PWLB’s nominal powers are surely not insignificant. At 31 March 2014 it held loans of approximately £63.7 billion, with corresponding liabilities of the same amount. Its powers to facilitate borrowing and manage loans must be significant, even though delegated. As my honourable friend Roberta Blackman-Woods MP stated in another place, we all,
“want assurance that there is good oversight”—
and transparency—
“of local government borrowing”.—[Official Report, Commons, Infrastructure Bill Committee, 13/1/15 col. 333.]
Perhaps the Minister would take the opportunity to say how she considers that this will be provided under any new arrangements. Having said all that, we certainly will not oppose these amendments.
Baroness Kramer
My Lords, the consultation that will come under the Public Bodies Act is obviously an important step in the process to allow for full discussion of the kinds of issues that the noble Lord, Lord McKenzie, has discussed today. At the moment the commissioners simply meet on an annual basis. They note the loans issued and review the annual report prepared by the officials. I think this House would agree that sometimes it is important to recognise reality and make sure that the formal arrangements match the actuality. We hope that this is a step in that direction.
Lord Davies of Oldham
Before the Minister sits down, perhaps I may just add my congratulations to the Bill team on dealing with a Bill that has been one of the more absurd creations of government in recent history. The Department for Transport has been responsible for invasive species and for fracking. Long after Christmas time—if ever there was a Christmas tree of a Bill, this is it—we got a suggestion that we would have clauses on the Electronic Communications Code. It was once said in the other place, “Take away this bauble”. If that part of the Bill had arrived here, I would have repeated that phrase in relation to the clause. I congratulate the Minister on having piloted the Bill through, but I hope it is not a precedent for how the Government in fixed-term parliaments produce a measure that has everything in it including the kitchen sink.
Baroness Kramer
My Lords, I shall just say in passing that I take comfort in the fact that the work we have done in the Bill is of genuine value. I know that particularly from the transport areas in which I have been engaged. I really appreciate the input that has come from this House but I also think that the Government have taken the leadership in, for example, underpinning future funding of our road strategy. Fracking has an important role to play, but the framework necessary for it has been forwarded by this Bill on a wide range of matters that might have been overlooked. Something as simple as the mayoral development orders will let local authorities use that mayoral capacity to achieve the kind of housing projects that they want very much for their areas and their residents. It may be a complex Bill with many different items in it but I do think that we will be better for it. I thank the House.
Baroness Kramer
That this House do agree with the Commons in their Amendments 24 to 32.
Baroness Kramer
That this House do agree with the Commons in their Amendment 33, and do propose Amendment 33A as an amendment to Amendment 33.
2 ( ) sections 38 to 43 extend to England and Wales only.”
Baroness Kramer
That this House do agree with the Commons in their Amendments 34 to 48.
“( ) Part 5A (Public Works Loan Commissioners) extends to England and Wales, Scotland and Northern Ireland.”