Rail Update

Baroness Sugg Excerpts

Monday 5th February 2018 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, with the leave of the House I shall repeat a Statement made by my right honourable friend the Secretary of State for Transport in the other place. The statement is as follows:

“On 10 January, I informed the House that my department was preparing contingency plans for running train services on the east coast main line in the event of the existing franchise failing. Despite delivering significant returns to the taxpayer and having some of the highest passenger satisfaction scores in the country, the lead operator of the franchise, Stagecoach, has been incurring significant losses. In that debate, I promised to return to the House to provide an update Statement on the situation, and I am doing so today.

Since 2015 the franchise has met all its financial commitments to the taxpayer, returning nearly £1 billion to the public purse, but this has come at a substantial cost of nearly £200 million to Stagecoach. I already informed the House that the franchise will in due course run out of money and will not last until 2020. It has now been confirmed the situation is much more urgent. It is now clear that this franchise will be able to continue in its current form for only a matter of months, and no more. Last week, following detailed analysis, my department issued the franchisee with notification that the franchise had breached a key financial covenant.

It is important to be clear with the House—and, indeed, the public—that this will not impact on the railway’s day-to-day operations. The business will continue to operate as usual with no impact on services or staff on the east coast. But it does mean that I will need to put in place in the very near future a successor arrangement to operate this railway and to end the current contract. Given the imminent financial pressure that the existing franchise is under, I am taking action now to protect passengers who depend on these train services and ensure continued value for money for taxpayers. Given the urgency of the situation, I would like to take this opportunity to update the House on my plans.

It is worth remembering that our franchising system as a whole has delivered great benefits to passengers. There has been new private investment totalling £6.4 billion over the past 11 years, and passenger journeys on the rail network have more than doubled. The private sector is paying for new trains across the country. There are those who want this stopped because of a dogma that the state could run the railways better, but we see the fruits of private investment all round the network.

There has been much misinformation about this franchise, so it is worth stressing again at the outset that, because payments to the Government have been subsidised by Stagecoach, the taxpayer has continued to profit financially from this franchise. Passenger satisfaction is high and preparations are well under way to deliver state-of-the-art new trains on this railway.

The problem is very straightforward. Stagecoach got its numbers wrong. It overbid and is now paying a price.

Contrary to widespread speculation and rumour, no deal has been done on this railway and I have not yet made a decision on the successor operator to run the east coast line until the longer-term plans for the integration of track and train can begin in 2020. There is no question of anyone receiving a bailout. Stagecoach will be held to all its contractual obligations in full. As the Brown review said five years ago, this is what you would expect in a competitive franchise system—private businesses risk substantial amounts of their own capital, and if they fail to live up to their stretching targets they lose out, not the taxpayer.

To anyone who thinks that the nearly £200 million that Stagecoach will lose is insignificant, let me put it into some context. The combined profit of every single train operator in the country was only £271 million last year. The loss equates to over 20% of Stagecoach’s total market value. So it is a significant amount of money by any measure, and it should also act as a stark warning to any company tempted to overbid in future. Moreover, the franchising system has been adjusted to further deter over-optimism when bidding.

The priority now is to ensure the continued smooth running of the east coast franchise for its passengers. I have therefore asked my officials to conduct a full appraisal of the options available to the Government to ensure continuity of service until we implement the east coast partnership on the route from 2020. My decision on which option to choose will be made in accordance with the key principles set out in the Statement on how I use my rail franchising powers. This includes: protecting the interests of passengers; preserving the interests of taxpayers by ensuring value for money; and supporting investment and improvement in the railway, including the deployment of the new intercity express trains on the east coast.

In order to inform this decision, the department will assess the extent to which each option performs against these principles. Our value-for-money assessment will be based on a number of criteria, including which option returns most money to the taxpayer, the risks attached to each, and the value of any improvements in passenger services. I will also have regard to the effect of my decision on other franchises. This decision will be taken in a transparent way. The department’s assessment of the options will be published and be properly validated.

At this stage, one of the options is to consider the possibility of Stagecoach continuing to operate services on the east coast under a very strictly designed and short-term arrangement. The current management has a strong record of customer service and to rule out its involvement now would go against the principles that I have outlined above. However, given the circumstances in which the Government are having to step in to protect passengers on this line, I am prepared to consider this option only on the basis that the franchise will be operated on a short-term, not-for-profit basis. The only potential financial reward for Stagecoach would be received at the end of the contract and only in return for clearly specified passenger benefits and improvements being delivered.

The second alternative is that the east coast franchise would be directly operated by the Department for Transport through an operator of last resort. My department will subject this option to the same rigorous assessment to establish whether it will deliver value for money for taxpayers and protect the interests of passengers. This option is very much on the table and will be selected if the assessment I have set out determines that it offers a better deal for passengers and taxpayers than the alternative.

In either scenario, the east coast main line is expected to deliver substantial revenue to the taxpayer. The line will also continue to deliver premium payments to the Government once the east coast partnership is in place from 2020. Let me be absolutely clear: the east coast franchise will deliver a healthy operating profit for taxpayers. It has over the course of this franchise so far, and it will in the future.

There will be those who claim that because Stagecoach overbid, it should be excluded from bidding for future franchises. The legal advice on this is clear. As Stagecoach is meeting its contractual obligations to support the franchise, including with the full parent company support, and because it has operated the services on the east coast successfully, the department has concluded that there are no adequate legal grounds to restrict it from bidding on current and future franchise competitions on this basis. It will be understood that it is my duty to follow that legal advice, and I will therefore do so. But let me be clear: we will keep its eligibility for current and future bids under close scrutiny and constant review.

It is not just me who has encountered this restriction. Following the failure of National Express in 2009, the NAO report on the issue made it clear that the then Government and Secretary of State agreed that the company would not be precluded from bidding for future franchises. Indeed, it went on to win the c2c franchise in subsequent years. It is vital that we continue to focus our attention on delivering benefits for passengers across the network and secure the benefits of privatisation.

So, in addition to the transparent, rigorous process I have set out for the east coast, I am making some additional franchising announcements that will deliver benefits to passengers on the west coast and east Midlands routes. In December 2016, we set out our plans to award the West Coast Partnership—the franchise that will deliver the first passenger services on HS2. In that announcement, we made clear our intentions to agree a short, direct award with the incumbent to allow us the time necessary to design the West Coast Partnership. These negotiations have been completed and we have agreed a direct award with the existing operator, Virgin Trains West Coast. As set out 14 months ago, this is a sensible bridge between the existing contract and the West Coast Partnership, and once that partnership is ready, this direct award will cease to exist.

Let me be clear, the east coast and west coast franchises should not be confused. The west coast franchise has a completely different corporate structure, where Virgin Trains is the majority shareholder, and is meeting all its contractual obligations. Virgin has transformed the west coast from a poorly performing service requiring a subsidy of over £75 million a year to the franchise with one of the highest passenger satisfaction rates, at 91%, and returning over £200 million per year to the taxpayer. This has included introducing trains every 20 minutes between London and Manchester and London and Birmingham, hourly services between London and Scotland, installing wi-fi on all trains, lengthening Pendolinos to 11 carriages to accommodate growing passenger numbers, and introducing a free, at-seat entertainment service.

My decision is also in keeping with the three key principles I set out earlier in protecting passengers, ensuring value for money and supporting investment. I look forward to the release of the invitation to tender for the West Coast Partnership in due course, and I am confident we will see strong competition for this exciting new franchise, which will help transform rail travel in this country through the delivery of the first HS2 services.

We are also transforming the east Midlands franchise in the coming years, with the biggest investment in the Midland main line since it was completed in 1870. Passengers will benefit from more seats, new trains and dramatically reduced journey times from Nottingham and Sheffield to London. Once complete, there will be almost twice as many seats into London St Pancras in the peak compared with today. The next operator will be required to deliver many of these improvements, so I am today setting out the next step of the competition that will award this contract. Abellio, Arriva, Stagecoach and a joint venture between First and Trenitalia have all been shortlisted to run the east Midlands franchise that will deliver these improved services. As I said, the Government have no adequate legal grounds to restrict Stagecoach from bidding. The competition will be run on a fair, transparent basis, including new safeguards against overbidding. Ultimately, the winner will be the firm that offers the best service to passengers and best value to the taxpayer.

In a competitive market, franchises will sometimes fail. When that happens my duty is to protect passengers and taxpayers and ensure continued investment in the railway. Stagecoach has paid the price for failure, as stipulated in its contract. Passengers on the east coast main line can be assured that services will continue as normal. This Government will undertake a transparent appraisal of the options available to ensure that passengers and taxpayers are protected. We remain committed to the success of a private railway. It is vital we remember the benefits that privatisation has brought to our railway over the past 20 years. Passenger numbers have doubled. We have one of the safest railways in Europe. Passenger satisfaction is high across the network, and other countries are now adopting Britain’s model for running the railways. The plans I have set out today will allow the British public to continue to benefit from an ever-improving railway into the future. We have challenges to meet, but we will meet them. I commend the Statement to the House”.

--- Later in debate ---

[Baroness Randerson (LD)]

I start from a rather different position, as I do not believe that the answer lies in renationalisation—but I am sure that the Minister will accept that things are not going well. We have had the fiasco of Southern and we have had Carillion being given more and more contracts, despite the profit warnings. We have had HS2 and the unauthorised payments, and now we have the east coast. The DfT seems to be presiding over a tale of muddle and huge commercial misjudgment.

The Secretary of State in his Statement says that Stagecoach/Virgin overbid. We all knew that it had done so; there was commentary in the commercial press at the time by other operators that this was a hugely overoptimistic bid. Why did the DfT allow that bid to go ahead if it was unrealistic?

The Statement says that,

“the franchise had breached a key financial covenant”.

Can the Minister please explain to us what that is, and why they are stepping in now as opposed to at any other point?

Much is made in the Statement of the £1 billion return to the public purse, but does the Minister accept that the railways are run as a service to passengers and that maybe the DfT is expecting far too great a return to the public purse, and the whole concept on which this is based is unrealistic? The Government are slowly reducing the percentage subsidy to our railways at a time when the railways are expanding and the number of passengers is generally increasing. Does the Minister accept that this is actually unrealistic as a way forward?

I am glad that the Statement includes options for the future and that among them it has the DfT as the operator of last resort. When that happened before, rather a good job was done by the state stepping in, and I urge the Government to do that in the case of Southern. Does the Minister consider that the concept of a franchisee needs to be expanded so that it includes public/private partnership and public sector bodies? Maybe mutual models, which involve staff and passengers, could be allowed to bid as well.

I also want to ask about the knock-on effect on other franchises. It is known that other franchisees are having a tough time. We need only a small hint of further problems in the economy and those franchisees could say, “The Government stepped in this time—why can they not step in and help us?”.

Finally, how is it that there is no adequate legal ground to exclude Stagecoach from further bids at this point? Surely the DfT should be writing the franchises more tightly than this.

[Baroness Sugg]

My Lords, as the Statement set out, our priority is to ensure the continued smooth running of the east coast main line for the passengers who use the service. As the Statement said, it has a 90% passenger satisfaction score, and we are looking at the future options for either direct operation through the DfT or Stagecoach continuing to operate. We will look at each of those options and work out the best solution to match the three principles set out. As the Statement says, it is a profitable line and we want that to continue in future.

On the franchising system and privatisation, the franchises will maintain an element of risk because they are run by private companies, and the success of the franchise is down to how they run the service. I think that the benefits of privatisation have been made clear in the Statement. I could add that, back in the mid-1990s, taxpayers paid out £1.8 billion in subsidies to the operators, and now the operators invest in the railways and pay premiums to the taxpayer—of £763 million last year. We have also seen investment of more than £6 billion from private investment over the last 11 years.

We are continuing to improve and refine the franchising model. Obviously there was an overbidding in this case, and we look at the performances of all franchises closely. In recent franchises, we have looked to take a different approach to the risks and are now moving more clearly towards the offer which will provide the highest-quality service for passengers and away from the highest bidder. The noble Baroness was absolutely right that passengers should be put first.

To address some of the lessons that we have learned from previous franchise evaluations, we have introduced new measures to deter overbidding as well as improving on our financial modelling and stress testing. With this added testing, the department will be able to forecast bids that are likely to default and exclude them in future. We have engaged with the market about those changes and continue to highlight to prospective bidders the more rigorous testing that bids will be subject to on the upcoming franchise competitions.

On the operator of last resort, there will be a team within the Department for Transport, supported by specialist advisers, to maintain continuity of passenger services. As I say, the changes in the rail strategy last year are designed to ensure that we get the best of both public and private sector worlds, and the new model will keep the benefits of privatisation while maintaining vital infrastructure in public hands. We have already begun this process of evolving how we run the railway.

[Lord Adonis (Lab)]

My Lords, there is a huge amount of waffle in the Statement that the noble Baroness has just repeated. But I shall cut through it: Chris Grayling, the Secretary of State, is undertaking another unjustified bailout of Virgin and Stagecoach at the expense of taxpayers. I would like to ask the noble Baroness a few questions about this bailout. First, will she confirm that Virgin has been awarded its new contract for the west coast main line without any competition whatever? Secondly, will she confirm that Stagecoach is being allowed to bid for the next three franchises despite walking away from the east coast main line? Thirdly, will she confirm that Mr Grayling appears, astonishingly, to be prepared to allow Stagecoach to continue operating the east coast line despite walking away from it, and that he has not ruled this out, although he is putting in place legal procedures that look to me to be the prelude to re-awarding it the contract? Fourthly—this affects my tenure in the office of Secretary of State personally—will she confirm that it is quite wrong to say that National Express was not banned by me from bidding for future contracts in 2009? It was banned. The incoming Conservative Government in 2010 lifted that ban, which is a fundamentally different point. I believe that that was a mistake and that it has prepared the way for the problems that we face today.

Finally, will the noble Baroness confirm that the reason for these disgraceful bailouts which we have seen from Mr Grayling is because he simply is not prepared to contemplate putting his duty above ideology and substituting for failing private companies a state company? This is not a matter of being left-wing or right-wing; it is a matter of him performing his duties as Secretary of State for Transport, which he is declining to do because, as we heard in the Statement, he wants to make a whole set of cheap points about “private good, public bad”, which I think demean his office and are costing the taxpayer very dearly indeed.

[Baroness Sugg]

I will attempt to answer the questions the noble Lord raises. If I do not manage to answer all of them, I will certainly follow up in writing.

I am afraid that we do not recognise the bailout accusation. As I said, Stagecoach will be held to all its contractual obligations in full. It has returned nearly £1 billion to the taxpayer and resulted in a nearly £200 million loss to the parent company. On the west coast line, it was a direct award and no other bidder was involved. As we stated in December 2016, we set out the plans to award the West Coast Partnership with that direct award. It is a short-term award and there was no other bidder involved. It was put in place before the new West Coast Partnership was awarded. On whether Stagecoach was allowed to bid for continued franchises, as we said, it will bid for the new east Midlands franchise. We are keeping the legal advice on that under review, and we will see what happens in the coming months, but as things stand Stagecoach is bidding for future franchises. The Secretary of State quoted the 2009 NAO report. I will send the noble Lord a copy.

[Lord Adonis]

It is not correct for the noble Baroness to say that National Express was not banned from bidding. It was banned from bidding.

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[Lord Shutt of Greetland (LD)]

My Lords, there is a conflict in the Statement between what it is stated in paragraph 7:

“The business will continue to operate … with no impact on services or staff on the East Coast”,


and what is stated in paragraph 18:

“I have … asked my officials to conduct a full appraisal of the options available to the Government to ensure continuity of service”,


until the fresh start in 2020.

The noble Baroness may well recall that I tabled a Written Question last week, which she kindly answered on 1 February. I had had a look at the press release that was put out by Stagecoach when it got the franchise in the first place. It said that it would give us direct services from Middlesbrough to London, two-hourly direct weekday services between Bradford, Harrogate, Lincoln and London, and a new direct peak-time service between Huddersfield and London, to be established by May 2019. The noble Baroness answered that the Government:

“expect to provide additional services between Lincoln, Harrogate, Bradford and London from May 2019. It remains our intention to deliver additional services to Middlesbrough and Huddersfield”.

She does not say when. She continued:

“Virgin Trains East Coast has contingent rights to run services from London to Middlesbrough from May 2020 and firm rights from May 2021”.


I do not know how strong they will be now. I do not know when all this brewed up, but does she still stand by these services commencing in May 2019 that she signed off on 1 February?

[Baroness Sugg]

I thank the noble Lord for his question. On the issue of making sure that we get the decision right for passengers, as the Statement said, protecting the interests of passengers is the first principle which we look at and we will be looking at the comparison between the two on that basis. I have a copy of the reply to the noble Lord’s Question as I thought that he might bring it up; he helpfully read it out. We absolutely expect to meet those commitments. Whatever decision the Secretary of State makes on the running of the franchise up to 2019, whoever gets it will inherit those. Again, with the new partnership in 2020, they will be expected to deliver that.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I for one am rather relieved and reassured that the Government are stepping in before the situation adversely affects passengers. This is not a bailout if Stagecoach is losing £200 million. However, I am delighted to hear that this line makes a net contribution to taxpayers. It is a line well known to many in your Lordships’ House. However, I would be most grateful if my noble friend the Minister could give further details on how the Government will maintain the current high levels of customer satisfaction on this line.

[Baroness Sugg]

As I pointed out, there is a high level of passenger satisfaction on this line and we aim to continue to keep that. I reassure noble Lords that there will be no impact on the running of the trains and the services will continue. Tickets are valid as normal. The Secretary of State has today set out the options being considered for the future. We are working to ensure that passengers continue to receive the service they expect.

[Lord Berkeley (Lab)]

My Lords, I detect a certain amount of ducking and diving in this very long Statement. I congratulate the Minister on keeping a straight face on some of it. However, the role of Network Rail is not mentioned at all. My understanding from several sources is that Stagecoach’s contract was based on Network Rail undertaking a large number of enhancements on the east coast main line so that Stagecoach could run more trains, and, presumably, get more revenue. This has not happened because, apparently, Network Rail has run out of money. Surely the answer is to give Network Rail the money to do that and not blame Stagecoach for everything that has gone wrong, as I think that most of the blame lies within the department and its own infrastructure manager, Network Rail. Perhaps the Minister would like to comment.

[Baroness Sugg]

My Lords, I agree that there is no simple reason why the franchise has failed; there are a number of reasons. The east coast has not performed as expected. It can be attributed to external factors which were not predicted. For example, the decrease in petrol prices resulted in increased competition. On the enhancements, from the start of this franchise to date all the infrastructure upgrades planned for the east coast have been delivered. Further upgrades for the route are planned but were not due to be completed by this stage. It is clear that Network Rail’s overall performance has not been satisfactory in recent years and we need a change within the business to deliver a more customer-focused policy. Network Rail has committed to transformation and an efficiency programme of change. That will see it judged on the performance it delivers for passengers in partnership with train operators. We continue to push Network Rail to devolve to ensure that there is one route managing director directly accountable to passengers.

[Lord Beith (LD)]

My Lords, the noble Baroness says that on a franchising system such as this operators will sometimes fail; I think those were her words. This is three times on the same route. I fancy that if GNER had been allowed to exit its contract on a basis as favourable as Stagecoach has been allowed to, with the possibility of rebidding, it might not have left the line in the first place, which would have been helpful as it was probably the best of the operators that we have had. But each time we are told, “Oh, the department is refining its system. It is all going to be better next time”. Given the three failures, is there really a system in place which can judge bids at all?

[Baroness Sugg]

My Lords, on the failure of franchises, the Statement quoted the Brown review, which identified that it is neither sensible nor realistic to design franchise structures that seek to completely eliminate the risk of default. At the time, the department carried out an assessment to ensure that the bid was realistic and in the best interests of taxpayers and passengers. However, Stagecoach rightly took a degree of risk with its assumptions. I do not recognise the noble Lord’s view that this has been a favourable exit for Stagecoach. As I said, we are holding it to its obligations, and this has cost it dearly. It has lost almost £200 million running the service—a big sum for a company which is worth less than £1 billion.

[Lord Snape (Lab)]

Does the Minister accept that, contrary to what my noble friend said earlier, she did not keep a straight face while reading the Statement and grinned on a couple of occasions? This was entirely to her credit because she must know, in her heart, that the Statement is absolutely preposterous. This House is being asked to believe that the franchising system on the east and west coast has been perfect, yet a Statement is being made that both are being scrapped. The Minister said that there are no other bidders for the west coast, but no one has been asked to bid for it. If the late Brian Rix were still alive, he could have a Whitehall farce about the whole franchising business. Does the Minister accept that the Government have not come out of this business with any credit, either on the east or on the west coast? Can she confirm that whoever bids for the Midland main line will not be running electric trains to the great cities of Leicester, Nottingham and Derby but to the town of Corby, which until recently was not even on the railway map? That is not a railway project; it is lunacy.

[Baroness Sugg]

My Lords, I apologise if I did not keep a straight face throughout the Statement. I was a little distracted by the noise from the Benches on the other side. On bidders for the west coast and east coast, the noble Lord is absolutely right that there was a direct award for the west coast and we are considering the options for the east coast. Those are both short-term plans and in 2020 we will be opening them up to further bids. We look forward to receiving them to deliver what the passengers need.

[Baroness Neville-Rolfe (Con)]

My Lords, it seems to me that there is the past and there is the future, and I know that there has been a lot of agonising in the department on the future of franchising. Will my noble friend summarise the improvements to the franchising process that the Government are planning, including Network Rail’s role, to avoid the kind of problems that have been identified in relation to National Express, Stagecoach and so on? Can we look forward?

[Baroness Sugg]

My Lords, I would absolutely love to look forward. As I set out, we are making improvements within the department. There was, obviously, a problem; the franchises failed and we are learning those lessons. We are introducing measures to deter overbidding and looking at our financial modelling and stress testing. We hope that, with this added testing, we will be able to forecast and exclude bids which are likely to default. We are continuously improving our risk-assessment process to reduce the likelihood of overbidding in the future. As I said, we are working with Network Rail to ensure that it devolves its services and performs better in future.

[Lord Judd (Lab)]

My Lords, I declare an interest as a regular passenger on Virgin west coast, a not infrequent user of east coast and someone who, from time to time, has to make use of the services from St Pancras. What has been sadly lacking in these exchanges is a tribute to the staff: the train drivers, train staff, platform staff, clerks and people operating the signal system, without whom the railways simply would not operate. We are blessed with an incredibly committed and, on the whole, cheerful staff who make sure the railways are a success. Do all these shenanigans, uncertainty and financial confusion give them the kind of support and structure they deserve? They are about serving the nation, not making profits. In that sense, will the Minister please accept that we have heard enough about the private sector being the right way to deliver public services? Look at the prisons, the probation service, and now the railways. Where is the practical, pragmatic evidence that what the Government claim is true, as distinct from ideological fulfilment?

[Baroness Sugg]

I am pleased that the noble Lord’s experience of staff on the trains is positive. He is absolutely right to say that they are committed. When we are making decisions about future franchises, we are also trying to provide consistency and structure for them, so that they have the security of knowing that the services will continue. I am afraid that I do not agree with the noble Lord on privatisation. I have spoken before about the amount of investment it has brought in. Passenger numbers have doubled; we have one of the highest satisfaction levels and safest networks in Europe. New trains would not have been delivered without private investment from rail franchising. Some 7,000 new carriages will be introduced to the rail network between now and 2021.

[Lord Liddle (Lab)]

My Lords, I share the interests of my noble friend Lord Judd as a regular traveller on Virgin trains and agree with his kind remarks about the staff. I seek a point of clarification from the Minister about what she said in the Statement and in answer to questions. Is she saying that the Secretary of State has no legal power to ban Stagecoach from seeking to operate this franchise in future? Is it being seriously suggested that if Stagecoach tried to take the Government to court, because it was not allowed to bid, a judge would uphold its right, given the way it has let down the taxpayer in this instance?

[Baroness Sugg]

My Lords, as Stagecoach is meeting its contractual obligations to support the franchise, including full parent-company support, and because it has operated the services on the east coast, there are indeed no adequate legal grounds to restrict it from bidding in future franchise competitions. That is the current situation: we will continue to look at it as the months progress and we look at future franchises.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, the Minister in the other place set out some admirable principles that should be observed: protecting the interests of passengers; preserving the interests of taxpayers by ensuring value for money; and supporting investment and improvement. Looking to the future, the Minister has indicated a possibility that the current east coast franchise may stay with Stagecoach, under a very strictly designed and short-term arrangement. Will she spell out with more clarity what that involves? Unless there is some easement on the money side, the three principles which the Minister has set out cannot be met and there must be some give on at least one of them. What is likely to happen if we do go down that avenue?

--- Later in debate ---

[Baroness Sugg]

My Lords, if Stagecoach continues to run the service and it is decided that this would be the best option for taxpayers and passengers, then that would be on a not-for-profit basis. By operating a not-for-profit service, VTEC would only receive a performance-related payment at the end of the contract, assuming that it met the stretch target set out by the department. That would ensure that VTEC would be wholly focused and incentivised to achieve excellent performance and would, consequently, provide a better experience for passengers over the life of a contract, but would not receive any moneys unless those targets were reached.

Open Skies Agreement (Membership) Bill [HL]

Baroness Sugg Excerpts

2nd reading (Hansard): House of Lords
Friday 26th January 2018 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, I add my thanks to the noble Baroness, Lady Randerson, for raising the important issue of our future air services relationship with the United States, and I am most grateful to all noble Lords who have participated in this debate. I agree with the noble Lord, Lord Snape, that it is a pleasure to discuss aviation, a sector that is a great UK success story.

We have the largest aviation network in Europe and the third largest globally. Our airlines carry 144 million passengers and more than 1 million tonnes of cargo annually; and as the noble Baroness, Lady Randerson, said, the sector contributes some £52 billion annually to our GDP. It supports almost 1 million jobs in our country and is a key facilitator of exports, carrying goods worth £116 billion between the UK and non-EU countries. It is a reflection of our great trading economy that we have such an extensive global network of air services and we are determined that it will continue after Brexit.

The Bill highlights the desirability of a continued relationship with the United States—the noble Baroness is right that air services between the UK and US are of great importance to our economy. Some 20 million passengers a year fly between the two countries for business, tourism and to visit friends and family. That is second only to the number of passengers to Spain, which is our most popular overseas destination. Regular services to and from the US are available on more than 60 different airport pairings and new direct scheduled services start regularly. Air services between the UK and US help support more than £85 billion of trade between the two countries. This dynamic market is a global example of the benefits of competition and choice in air services. Of course, consumers benefit from competitive fares and a breadth of choice and we want this to continue after we have left the European Union.

As the noble Baroness pointed out, the current governing arrangement for UK-US air services is the EU-US Air Transport Agreement, often referred to as the EU-US open skies agreement. This agreement, dating back to 2007, lifted many restrictions that featured in earlier bilateral agreements and has removed all restrictions on direct flights. It also provides for code sharing, allowing, for instance, UK airlines to market services on US partner airline networks using their own flight codes. It is a multilateral agreement between the EU and its member states on one hand, and the United States on the other, with Iceland and Norway having joined the agreement as parties in their own right in 2010. This liberal market access and the competitive environment benefit passengers in terms of choice, connectivity and value for money. Passengers can fly directly to more than 20 US airports from a variety of points in the UK and can connect to virtually anywhere in the US.

A study last year reported savings of more than £200 per passenger compared with ticket prices before the agreement was signed. We aim to preserve this access after we leave the European Union, ensuring that the aviation industry and, of course, passengers continue to benefit. In preparing to exit the EU we have listened very closely to the aviation industry on both sides of the Atlantic. It has been clear in explaining the need for early certainty about the operating landscape. As has been pointed out in this debate, airlines sell tickets up to a year in advance and decisions on the deployment of capital and other resources also need to be taken well in advance to plan and grow routes. We have two overarching aims for future UK-US air arrangements. The first is to transition the liberal market access arrangements currently available under the EU-US agreement. The second is to provide the industry with the certainty it has asked for as soon as we possibly can.

Having set out the Government’s position I turn to the terms of the noble Baroness’s Bill. The Bill requires Ministers to,

“have regard to the desirability of continuing to participate”

in the EU-US Air Transport Agreement. As I and other noble Lords have mentioned, Iceland and Norway have both acceded to the terms of the EU-US Air Transport Agreement as states in their own right. I believe that the aim of the Bill is for Ministers to consider the UK acceding to the agreement in the same way. As I said earlier, we recognise that the aviation industry needs early reassurance about the terms under which UK-US air services will operate after we leave the EU. The noble Lord, Lord Paddick, is right to say that to do nothing is not an option. When we leave the EU, the EU-US agreement will no longer be legally operable for us; it would need to be amended to enable our continuing participation. This would require the unanimous agreement of all parties to it—that is, the European Union, each of the 27 other member states, Iceland, Norway and the United States. Such unanimous agreement would, of course, take time.

The Government believe that the quickest, simplest and clearest way to provide the early certainty so needed by the aviation sector is by concluding a new, bilateral arrangement with the US that will apply as soon as the EU-US open skies agreement ceases to apply to the UK. That is exactly what we are working towards. Department for Transport officials have already undertaken three rounds of informal discussions with their US counterparts on our future bilateral arrangements. A further round of discussions will take place with the US in the coming weeks. There is broad consensus on the outcomes we wish to reach. Both sides understand that preservation of the current liberal market access arrangements should be the starting point and that industry needs to be confident about what it can or cannot do in good time. These discussions are going well and I hope that this goes some way towards reassuring noble Lords concerned about our relationship.

I take this opportunity to highlight that the Government do not rule out participation in the EU-US Air Transport Agreement at some point in the future. The UK could apply to become a party to the agreement as a state in our own right if that offered the optimum solution for the circumstances of the time. However, as I say, the consent of all other parties to the agreement would be required and that would take time, so the Government believe that the best option to provide early certainty is a new, bilateral agreement with the United States.

I turn to some questions raised by noble Lords. The noble Baroness, Lady Randerson, raised the issue of third countries. Where market access is currently determined by EU-negotiated arrangements we are working with those countries, including Canada, to ensure that the new, bilateral arrangements will be in place well before we leave the EU. I hope to provide further updates on these soon. Of course, we already have bilateral air services agreements with 111 countries, which will continue as we leave the EU.

The noble Lord, Lord Snape, correctly highlighted many details of the EU-US deal. We do not propose to open these in discussions with the US at the moment. For example, cabotage within the US will not be up for discussion. Our aim is to replicate the current arrangements as they stand, as soon as possible, so as to provide certainty to industry. I quite agree with the noble Lord that we cannot simply say that it will be all right on the night.

[Lord Purvis of Tweed]

We have partial clarity from the Minister that the UK will seek a bilateral agreement with the United States and then, in due course, there will have to be a bilateral relationship with the European Union. When does the Minister believe that that will be required to be ratified by this Parliament to offer the security for the industry that she says is desperately needed? Can she offer clarity that, in discussions with the United States on this bilateral agreement that the Government seek to intend, part of that agreement will be that UK safety will be regulated by the European Aviation Safety Agency?

[Baroness Sugg]

I shall come to EASA, but that will not be included in the UK-US bilateral agreement that is being discussed; that will be a separate negotiation and conversation with the European Union. On the timing of ratification, I am afraid that I shall have to get back to the noble Lord, but the aim is that this will be in place well before we leave the European Union, to provide certainty.

The noble Lord, Lord Paddick, and the noble Baroness, Lady Hayter, asked about customer protection. The UK has always been a leader when it comes to providing protection for holidaymakers, and we want that to continue to be the case whether we are inside or outside the European Union. The consumer protections based within the EU will be retained through the European Union (Withdrawal) Bill, so that British consumers will be able to rely on the same rights as they have now after we leave the EU. The absolute aim is to provide consistency with what they currently have.

The noble Lord, Lord Purvis, raised EASA. We are working closely with industry on this and, of course, we are very aware of all its views and what is needed for the sector. Again, we desire a speedy agreement on this. We are representing those views very clearly in our conversation with the EU, and will continue to keep the sector updated as negotiations progress. There is a precedent for non-EU states to be part of EASA; Switzerland and Norway are, for example. We continue to examine the possibility and suitability of such an arrangement.

On the CJEU, the Government have been clear that the UK will no longer be subject to direct CJEU jurisdiction after we have left the EU. There are models—

[Baroness Hayter of Kentish Town]

Given that that is not quite the case, in that EU citizens will have some access to the ECJ for eight years, perhaps the Minister could accept that it has not been completely ruled out, as much as it had before.

[Baroness Sugg]

In the case of EASA and the CJEU, there is an example where non-EU countries are able to participate in EASA without the direct jurisdiction of the CJEU. It is a co-operative arrangement, and that is exactly what we are looking to replicate.

The noble Baroness, Lady Hayter, and others mentioned the Commission paper. I have seen the presentation, which looks like an opening position from the Commission, drafted with its own interpretation of the UK position. It is clearly designed to be thought provoking and to ensure that member states focus on aviation issues. The paper sets out a number of options but also makes it clear that, in the unlikely event of a no deal, there will be contingency measures to ensure traffic rights and safety. As many noble Lords acknowledged, we have no WTO fallback on aviation, so it is encouraging that aviation is one of only two sectors that have been considered by the Commission in such close detail. We are pleased that the EU considers aviation to be such a priority—we feel that, too—and we look forward to conversations progressing.

I agree with many points raised by noble Lords this afternoon. We all want to continue open and liberal access to our skies after we leave the European Union, and we have all explained why this access is so important. I hope that I have provided some assurance that that is exactly what we are working towards—although I imagine that the noble Lord, Lord McNally, would categorise it as vague promises of better things to come. I apologise if that is the case. We will ensure that we keep your Lordships updated as negotiations progress. I also confirm that I was in no way offended by the noble Lord reading back my own words to me—but I am very interested to know what his job was in the circus.

The noble Baroness, Lady Randerson, has helped to highlight the importance of the UK-US air services relationship and the vitality of the current market. This relationship and vitality are things that we intend to preserve and to build on. However, the Government believe that the Bill is not necessary. It requires us to do something that we are already doing: to have regard to the desirability of continuing to participate in the EU-US Air Transport Agreement. We do not believe that we need another law on the statute book in this respect.

Laser Misuse (Vehicles) Bill [HL]

Baroness Sugg Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 23rd January 2018 Lords Chamber

[Lord Tunnicliffe (Lab)]

My Lords, I have to announce that Her Majesty’s loyal Opposition do not have a firm position on this amendment, but I hope the Minister is listening to this debate and will come forward with pretty concrete assurances that the law is clear, or with an appropriate amendment.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, I understand noble Lords’ intentions in tabling these amendments, as they quite rightly want to ensure that the wording in this legislation is as strong as possible and does not include any loopholes. The amendments aim to capture all the different type of laser products that could be used to dazzle or distract the person in control of a vehicle, and indeed even some products which may not exist yet.

The Bill does use the term “laser beam”, but I can assure noble Lords that the Bill is not limited to any particular type of laser and that all variants of laser should be captured by this. Following the helpful contributions of the noble and gallant Lord, Lord Craig, at Second Reading, I sought further expert clarification on the definition of a laser, including from the Department for Transport’s chief scientific adviser. All types of lasers emit focused beams. Therefore, despite the varying properties that different types of lasers will have, all will still produce a beam, and it is this beam that will dazzle or distract the person in control of the vehicle.

The term “laser” would cover the pulse and burst laser products that the noble and gallant Lord referred to. These products still emit a laser beam, just of a shorter duration. Short-duration laser beams can be very intense and transmit as much power in the pulse as a lower-power continuous laser, so I agree it is important that these are included in the Bill. We expect the courts to interpret “laser” with this wide definition.

--- Later in debate ---

[Lord Monks (Lab)]

My Lords, first, I declare my interest as president of the British Airline Pilots Association. I want to speak briefly to Amendment 14 which, as the noble Baroness, Lady Randerson, said, overlaps with others in the group. On all sides of the House, we are trying to protect not just pilots and the drivers of vehicles but those who control traffic, especially those in control towers at airports. Laser pointers can be a very offensive weapon and their dangerous use should be regarded as rather similar to waving around a gun or other offensive weapon. None of us is under any illusion; the Bill will not be easy to enforce, but it needs to send a strong message about what is acceptable and what is not. I think that it does that but I hope that we can tweak it a bit so that it strengthens that message. The amendments are all designed to add weight to the Bill’s central message on that score.

The noble Baroness, Lady Randerson, spoke about air traffic control, and I will not repeat what I hope were her persuasive points for the Minister to consider. I would just add that such is the range of modern laser pointers that they can reach control towers in controlled areas remote from perimeter fences. Controllers at some distance could be affected by dazzle and distraction in the same way as pilots. As we know, and as has been said, their role is crucial in scanning the airport. Those of us who have had the privilege of joining them in their control rooms have seen that they look physically as well as at the screens; they look at the ground as well as up in the air. They check for obstructions and any hazards that might impede landings, in particular, but check other movements as well.

As such, it is incumbent on us to try to ensure that they are protected as much as possible from thoughtless or malicious laser use. We are coming close to zero tolerance when it comes to laser users flashing them about when people are moving vehicles and aeroplanes.

[Baroness Sugg]

My Lords, I will first speak on the amendments which propose removing the need to dazzle or distract from the offence. The principal focus of the Bill is to protect transport operators and the general public. While this amendment seeks to help to address the problem, the Government believe that it goes further than is appropriate. The Government aim to be proportionate when we create new criminal offences and we do not want to penalise behaviour that does not present a risk to transport safety. The offence we are creating would specifically address the risk of harm as a result of shining a laser which dazzles or distracts, or is likely to dazzle or distract, a person physically operating a vehicle.

These amendments would go further than that by criminalising activity where there is no risk of harm. The proposed offence would cover shining or directing a laser when it is,

“likely to dazzle or distract”.

This will mean that prosecutors will not necessarily need to prove that the shining of a laser actually dazzled or distracted the person in control of the vehicle, only that it was likely to and therefore potentially risked public safety.

The question was raised about how difficult it would be for the prosecution to show that the person in control of the vehicle was dazzled or distracted. In most cases, we would expect evidence to be available from the person who had control of the vehicle that they were dazzled or distracted. A statement directly from the victim would be strong evidence on this point. On that basis, the Government are not convinced that removing the need to demonstrate that a person has been dazzled or distracted would be proportionate to capture the type of activity we want to deter.

Moving on to the amendments seeking to make it an offence to shine a laser at traffic control installations, I am grateful to all noble Lords who have spoken on this amendment, which clearly has a lot of support on all sides of the House. The Bill has been drafted to deal with the safety risks faced when a laser distracts or dazzles the person in control of a vehicle and therefore does not currently include non-vehicles such as traffic control installations. When we look at laser attacks in aviation, the vast majority of incidents reported are targeting aircraft—1,200 in the last year alone—whereas the number of reported attacks on air traffic control towers averages out at around three per year. That said, air traffic control personnel have an important responsibility in controlling and monitoring the movement of aircraft taking off, landing and manoeuvring on the ground, so I recognise that a laser attack on a person carrying out those duties clearly presents safety concerns and could endanger aircraft.

--- Later in debate ---

[Lord Tunnicliffe]

My Lords, I do not have much to say, but I thought I had to say something. I was quite surprised that the Government had decided to define “vehicle” in the Bill. I believe there is a good working definition of the word in law, which would have included horse-drawn vehicles. I had a little chuckle when I came to submarines, because I have some problem envisaging how you could dazzle one, but I suppose it could be possible. I say put the horses in as well.

[Baroness Sugg]

My Lords, I greatly appreciate the noble and gallant Lord’s intention to ensure that the Bill is as strong and all-encompassing as possible. The reason horse-drawn vehicles are not covered in the Bill is that it is designed to legislate in areas where we have already seen a real danger to public safety, and to date we have not seen evidence that laser incidents are a problem for that particular mode of transport.

The department works closely with organisations such as the British Horse Society to improve road safety, and I am not aware of this issue being raised as a concern or any reported laser incidents involving horse-drawn vehicles. Of course, anyone who did cause injury by shining a laser at the person in control of a horse-drawn vehicle could be prosecuted for offences against the person such as actual or grievous bodily harm.

The noble and gallant Lord raised an interesting point about someone attempting to dazzle or distract the driver of the state coach with the monarch on board. This is, of course, a matter that we take very seriously and as a result have discussed it with the head of the Metropolitan Police’s royalty and specialist protection command, who has also consulted with Her Majesty’s Household, specifically those individuals with responsibility for Her Majesty’s horses. The police have assessed that the likelihood of such an attack is low and, in terms of the impact of such an attack, Her Majesty’s horses are trained to be comfortable with a number of surprising events. These would include sudden loud noises, smoke and light flashes and they are often blinkered when drawing a carriage. The relative speeds are very low and the carriage drivers are, of course, highly trained. Having reviewed this issue the police have advised me that, as both the likelihood and impact of such an incident are considered low, this is not an area that requires legislation.

As I have said previously, when creating criminal offences it is important that this is done proportionately. Based on the evidence of risk to transport safety seen to date, particularly the advice from the police, the Government do not believe that including horse-drawn vehicles in this offence would be proportionate. However, I have listened to the points made by the noble and gallant Lord, Lord Craig, and the noble Lord, Lord Tunnicliffe, and will take them away and consider this further.

[Lord Tunnicliffe]

Further to that argument, how many incidents of dazzled submarines does the Minister have on record?

--- Later in debate ---

[Baroness Sugg]

The noble Lord makes a valid point. I do not believe there are any such instances, but if there are I will certainly write to him with that information. That is a very good point. As I say, I will take it back and consider it. We should return to this at a later stage. With that, I ask the noble and gallant Lord to withdraw his amendment.

[Lord Craig of Radley]

My Lords, I thank those who have spoken in this very short debate. I listened, obviously, to what the Minister had to say. I am still a little uneasy about the argument that, because this has not happened, therefore we do not need to worry about it. Pedal cyclists are already covered by the Bill. I wonder how many attacks on pedal cyclists have taken place to justify including them in the Bill. Having said that, I again thank everybody who has spoken and the Minister, and beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Sugg]

My Lords, I am again very grateful for the experience and expertise of the noble and gallant Lord, Lord Craig of Radley, in this area. Once again, he has raised a salient point through this amendment.

In the Bill we have sought to capture those persons who are in control of the vehicle, and, in the case of aircraft, we have said that this will be pilots. The Bill specifically refers to pilots “monitoring the controlling” of aircraft to capture co-pilots, who defence lawyers could argue are not controlling the aircraft but who none the less should be covered by the offence because of the important role they play in the safe flying of aircraft. In some cases, members of the flight crew may have a safety-critical role and control of the aircraft but would not be classified as pilots. As I have said, the intention of the Bill is to cover all persons who have control of the vehicle.

I understand there are a number of instances where the non-pilot members of the flight crew could have some control of the vehicle, such as flight engineers or, as the noble and gallant Lord, Lord Craig, highlighted, winch operators on search and rescue helicopters. If these members of the flight crew were dazzled or distracted by a laser beam, it is highly likely that the pilot would be too. I understand that the current wording in the Bill could cause some ambiguity and a possible loophole, so I will ask the Bill team to look carefully at ways in which this can be clarified.

I thank the noble and gallant Lord for raising this issue. I hope that he is assured that it is something we will look at carefully and that he will agree to withdraw his amendment at this stage.

[Lord Craig of Radley]

Obviously, I am grateful to the Minister. I thank her very much indeed and look forward to the further work she will produce on that. I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Tunnicliffe]

My Lords, I also hope that the Minister will take this away. One worrying point is somewhere deep in various bits of aviation law: a flight is defined as when the wheels of an aircraft first turn. We are envisaging a possible situation where a laser is used immediately before the wheels turn, and the aircraft could then end up in a dangerous situation. The Government therefore have to look at this concern in some depth, and I hope that they will bring something back to us on Report.

[Baroness Sugg]

My Lords, the Government’s intention in the Bill is to cover both when a vehicle is in motion and when it is stationary if the vehicle is about to travel. There would be a safety risk in both cases if the person in control were to be dazzled or distracted.

A journey is intended to start when the vehicle is ready to commence travel. It includes taxiing in the case of aircraft, and for all vehicles will cover any temporary stops along the way, such as stops at a train station, bus stop or traffic lights, or when waiting to take off. It is also intended to capture journeys of any length and to include a journey that returns to the same place at which it began.

I appreciate the points that have been made and what the amendment is aiming to clarify. It is our intention that if the aircraft is about to travel or has not finished shutting down after coming to a stop, this should be covered, as there could still be a risk to transport safety. The Government believe that saying that all periods should be covered, including when a person occupies the vehicle, potentially goes too wide, as that person could be in the vehicle for a long time before the journey commenced or after it finished, when there would not be a risk to transport safety.

At Second Reading the noble Lord, Lord Berkeley of Knighton, highlighted the definition of “journey”, which can be found in the international aviation treaty—the Tokyo Convention. It states that an aircraft is in flight from the moment when all its external doors are closed following embarkation until the moment when any such door is opened for disembarkation. We intend the Bill to cover that definition, but I accept the questions raised in relation to the current wording and will ask the drafters to look at this matter carefully.

A point was made about journeys—including training flights, which were mentioned by my noble friend Lord Trefgarne—which start in one place and return to that same place. It is absolutely our intention that these types of journeys will be covered by the Bill but, again, I will look at the options for making sure that that is clearer.

I hope that I have been able to clarify our intention when the word “journey” is used but, as I said, we will look at this further to ensure that there is no ambiguity in the interpretation. On that basis, I hope that the noble and gallant Lord will withdraw his amendment at this stage.

[Lord Craig of Radley]

I thank the noble Baroness and others who have spoken in this short debate. Of course, I am very happy to wait until Report to see what she comes up with. Meanwhile, I beg leave to withdraw my amendment.

--- Later in debate ---

[Lord Tunnicliffe]

While I have some sympathy with the general direction of the amendment, it touches on a massive subject—the extent to which parents are responsible for the criminal activities of their children. I worry about such a difficult concept being part of this Bill. If there is a problem here, I hope the Government will take this issue away, look at the generality of the relationship between parents and the criminal behaviour of their children and solve it in a wider context than this Bill. I await further discussion on Report before we take a final view.

[Baroness Sugg]

My Lords, parents are not held directly responsible for the criminal acts of their children and I am not aware of any circumstances in our criminal law in which an adult who knowingly or recklessly permits a child or young person to commit an offence is itself an offence.

Punishments such as the local child curfew or a child safety order can be given to children under the age of criminal responsibility who break the law. The order means that a child can be placed under the supervision of a social worker or a youth offending team worker to ensure that the child receives protection and support and is prevented from repeating the offence. Children between 10 and 17 can be arrested and taken to court if they commit a crime, although they are treated differently from adults.

Parents and guardians can be held responsible if their child repeatedly gets into trouble or if the parent does not take reasonable steps to control their behaviour. They could be asked to attend a parenting programme, sign a parenting contract or be given a parenting order by a court. A breach of a parenting order is a criminal offence and can result in a fine of up to £1,000 or community service.

On education, the Government are working on a programme of education which will include a specific programme for schools to target young people and to educate them on the dangers of lasers.

The Government’s view is that the current youth justice system is sufficient to deal with this issue and it would not be appropriate to make an exception to the usual practice. I hope the noble Lord will withdraw his amendment.

[Lord Monks]

My Lords, I draw attention to the term,

“the person knowingly or recklessly permits a child or young person”.

That is a high hurdle. It is not visiting the sins of the child on the parents but specifying the faults committed by the person who provides the laser. However, in the circumstances, I am certainly prepared to withdraw the amendment.

--- Later in debate ---

[Lord Tunnicliffe]

My Lords, we broadly support the amendment. We will congratulate ourselves after Report and Third Reading, having used very little parliamentary time, on having a narrow Bill that addresses a particular problem, but the real issue is enforcement. Will this law be effectively enforced? We have a crisis in policing in this country. There are some 20,000 fewer officers than in 2010. One has no idea where in the police’s priorities this particular piece of law will fall.

The beauty of having a report after a year is that it will have to include information about how enforcement has gone. That can do nothing but good. There is a general rule of management that what gets measured gets done. The fact that police forces would know that Parliament will be looking at the result of this law and the extent to which it has been enforced would be an important incentive to make it work.

[Baroness Sugg]

My Lords, the Government keep safety across all modes of transport under constant review and, along with industry, are always looking at ways in which we can mitigate risks to safety. The risk posed by the misuse of lasers is no exception. I assure the noble Baroness, Lady Randerson, that we will continue to work with the police, regulators and other stakeholders, including the UK Laser Working Group, to monitor the number of instances of a person shining or directing a laser beam at a vehicle and look at what other steps can be taken, including raising public awareness and using evolving technology, to mitigate the impact that a laser attack has on a person in control of vehicles.

In addition to what we are proposing in the Bill, the Department for Business, Energy and Industrial Strategy has announced new measures to tackle the sale of unsafe laser pointers, which I hope will reduce the number of instances of laser misuse on transport. Much of this will be a matter for the newly created Office for Product Safety and Standards to consider. Announced on Sunday, it will be a national body to further enhance the UK’s product safety system and provide support at a local level. I have already mentioned the education programme. We believe that the very introduction of the Bill will raise awareness of the dangers that lasers pose. The noble Baroness points out that the Bill’s scope is very narrow. That is indeed the case. As I said, BEIS has recently published its response to its call for evidence. The new Office for Product Safety and Standards should help.

We will follow the usual post-legislative scrutiny guidance and submit a memorandum, published as a Command Paper, to the House of Commons Transport Select Committee within five years after Royal Assent. The memorandum will include a preliminary assessment of how the Act has worked in practice. The one year that the noble Baroness proposes in her amendment may not be enough time to properly assess the full impact of a new criminal offence and the other measures I have mentioned. As I said, we will of course be keeping this under constant review. I hope that my reassurances will satisfy the noble Baroness and that she will withdraw her amendment.

[Baroness Randerson]

I thank the Minister for that. For the sake of clarity for the noble Lord, Lord Trefgarne, I thought I had indicated—possibly it is because I am trying to use as few words as possible today—that I understand entirely why my proposed amendments were ruled out of order. It is because the Bill is very narrowly drafted. However, I did discuss the issue in order to see whether it is possible to have this discussion in some other way. I was reassured to hear that the Minister is consulting widely on the issues associated with the Bill, as well as by the creation of the Office for Product Safety and Standards and the five-year review. I am satisfied that she has taken on board and will continue to take on board the issues I have raised and with that I am content to withdraw my amendment.

Transport for the North

Baroness Sugg Excerpts

Thursday 18th January 2018 Lords Chamber

[Lord Greaves]

To ask Her Majesty's Government what support they are providing in relation to Transport for the North’s draft Strategic Transport Plan, published on 16 January.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, Transport for the North’s draft strategic transport plan is an important step forward towards the north setting out its vision and priorities for transport with one voice. We have committed up to £260 million for TfN to establish itself as England’s first statutory sub-national transport body, to develop the business case for Northern Powerhouse Rail, and to implement smart ticketing across the north of England. We are providing substantial technical support at official level.

[Lord Greaves (LD)]

My Lords, the strategic transport plan for the north covers the whole of the north of England, and that is a good thing. However, it is based on the seven or eight largest cities in the north of England and has very little to say about what I would call the areas at the edges and the places in between, particularly smaller towns and rural areas. Does the Minister agree that if all the proposals that are put forward and implied in this document were to be carried out, the cost at today’s prices would certainly be more than £100 billion? Does the Government’s enthusiasm for this imply that their previous policy that such schemes were really considered only if they were in London or the south-east has now been changed?

[Baroness Sugg]

My Lords, I am not sure that that was the previous government policy. The strategy which has been set out is out for consultation, and Transport for the North will be speaking to people across the north to develop and finalise it. We will see the final plan in the summer and respond to it then. On the noble Lord’s point about it focusing on specific cities, it actually suggests strategic development corridors that cover the whole of the north and the central Pennines area, which I know will interest the noble Lord. I encourage everybody to contribute to that consultation.

[Lord Geddes (Con)]

Will my noble friend update the House on the progress being made on the improvements to the A1 between Newcastle and Berwick?

[Baroness Sugg]

My Lords, the strategic road between London and Newcastle will be upgraded to a full motorway by the end of the year, but I am aware that there are still issues north of Newcastle on the way up to Scotland. As I mentioned before, one of the strategic development corridors includes the east coast of Scotland and will be looking at exactly this project. I am aware that it may be some months before we see the final plan, and I will certainly see if we can take action quicker.

[Lord Blunkett (Lab)]

My Lords, I have no intention of storming out of your Lordships’ House, but I share my noble friend Lord Prescott’s concern that strategic plans that have no chance of being implemented mislead people in the north of England into believing that something is about to happen. If the linked rail and road across the Pennines linking Hull, Sheffield, Leeds, Bradford and Newcastle is to become a reality, it will take real government investment. Will the Minister speak to the beleaguered Transport Secretary about turning mythology into reality?

[Baroness Sugg]

I am grateful to the noble Lord for his continued presence, unlike the noble Lord, Lord Prescott, who was not able to stay for the full launch of the plan. We have worked carefully with people from across the north on ensuring that we get the right balance of powers here, and we are looking forward to seeing the plan. The Secretary of State has ultimate accountability to Parliament, and with his statutory role, it is right that he makes the final decisions. We will be considering that project carefully, and we will be ready to make the investment.

[Lord Whitby (Con)]

My Lords, the Midlands is the largest economic area outside London. It attracts more inward investment and creates more start-up businesses than anywhere in the United Kingdom outside the capital. Its companies export to 178 countries worldwide, and it is still the only region in the United Kingdom with a trading surplus with China. In order to capitalise on and build on this robust achievement and complement the Government’s growth agenda, will the Minister say whether Midlands Connect can benefit from devolution arrangements similar to those of Transport for the North?

[Baroness Sugg]

Yes, my Lords. We fully intend to create more statutory transport bodies, and I welcome the work of Midlands Connect in bringing together local authorities and partners, including Highways England, HS2 and Network Rail. My noble friend rightly points out the potential of the Midlands. We look forward to seeing the proposal for Midlands Connect, and we hope that it will become England’s second statutory transport body.

[Lord Shutt of Greetland (LD)]

My Lords, this document is very ambitious and there are some very expensive proposals. However, within it, Transport for the North talks about some of the precursors, including the Great North Rail Project—the trans-Pennine route upgrade—and indicates that it would like to see a firm commitment about that upgrade and electrification in early 2018. That is where we have now arrived. Can the Minister give that commitment?

[Baroness Sugg]

My Lords, we are absolutely committed to improving journeys on the trans-Pennine route, bringing in the state-of-the-art trains, longer carriages and more frequent services that the passengers would like. We want to go further and are planning to spend £3 billion to upgrade the key routes between Manchester, Leeds and York to give passengers those better, faster and more reliable journeys.

[Lord Tunnicliffe (Lab)]

My Lords, I thank the noble Lord, Lord Greaves, for this Question because it has caused me to look at the document. You have to get to page 86 before it says anything about money:

“TfN’s status as a pan-regional organisation, with a range of stakeholders but limited fiscal powers, means that a bespoke but credible funding and financing framework will be required. A substantial element of funding will come from central Government budgets.”


Is the Secretary of State going to buy into this plan and that substantial element of funding?

[Baroness Sugg]

My Lords, absolutely—we are waiting to see the final plan which we will then of course consider. If the initial funding settlement for TfN does not include the funding for transport projects, it will be allocated separately from central government funds.

Brexit: Aviation Safety Regime

Baroness Sugg Excerpts

Wednesday 17th January 2018 Lords Chamber

[Lord Chidgey (LD)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and I declare an interest as a companion of the Royal Aeronautical Society.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, we have a very close and constructive relationship with the Federal Aviation Administration and have been working with them since early last year on arrangements to replace the EU-US bilateral aviation safety agreement when the UK leaves the European Union. We are working to ensure that as far as possible, existing arrangements for the recognition of safety certification between the UK and US continue to apply.

[Lord Chidgey]

I thank the Minister for that comforting reply but I wish to stress some points. We should not forget that the UK aerospace industry is a global leader, after the US, with a turnover of more than £32 billion. We have led the development of international safety regulations, under the European Aviation Safety Agency, EASA, and they are fully compliant with the American Federal Aviation Administration. If, on Brexit, we leave EASA, all bets will be off unless we negotiate continued membership of the agency. The alternative, which has been mentioned, of creating a whole new system is not supported by the Civil Aviation Authority, the aerospace industry, the maintenance facilities or the airlines. These are hugely important issues. The Government are on notice. Will they commit, therefore, to establishing a working group with the industry to maintain the regulatory alignment and ease the concerns of EASA?

[Baroness Sugg]

My Lords, we work closely with the aerospace industry and are very aware of their views on both what is needed for the sector and the desire for a speedy agreement. We will be representing these views in our negotiations with the EU and will continue to keep the sector updated as negotiations progress. There is a precedent for non-EU states such as Switzerland and Norway to participate in the EASA system and we continue to examine the suitability of such an arrangement. We have been clear that we seek a close and collaborative relationship with the EU on a range of issues, including aviation safety.

[Lord Trefgarne (Con)]

My Lords, before we were taken into the present European arrangements, principally by the noble Lord, Lord Kinnock, a number of years ago when he was Transport Commissioner, were not the Civil Aviation Authority, supported by the Air Registration Board, the finest airworthiness organisations in the world? Can that situation not now be restored?

[Baroness Sugg]

My Lords, the CAA is still one of the finest aerospace organisations in the world. It is highly regarded, not just in Europe but around the world for its expertise in safety regulation. As part of the EASA system, the CAA has been the specialist regulator for aviation safety and issues certificates and approvals. The competence to issue such safety certificates will stay as we leave the EU: none the less, the CAA is making prudent preparations for whatever scenario we are in.

[Lord Kinnock (Lab)]

My Lords, does the Minister recognise that if the UK does not remain a member of the European Aviation Safety Agency or establish an equivalent recognised regulatory UK agency by the end of March next year, UK aviation operators and manufacturers will not be able to fly in the airspace or sell in the markets of the United States of America? This was confirmed by Mr Michael Huerta, head of the Federal Aviation Administration. Does she accept the view of Mr Andrew Haines, chief executive, as she will know, of the UK Civil Aviation Authority, which is worthy of the praise she has just offered, that:

“I’m yet to meet anyone of substance that supports that approach”,


of withdrawal from the European Aviation Safety Agency? Does she agree that only continuing membership of EASA will prevent huge cost, disruption and damage to UK operators, manufacturers and passengers?

[Baroness Sugg]

My Lords, of course we are aware of the important relationship we have with the USA regarding our aerospace industry. Last year we exported more than £2 billion-worth of aerospace products to the USA and imported £4.5 billion-worth. As I said, we are fully aware of the industry’s views on this and we will be presenting those as we go forward in our negotiations. I should also mention that Administrator Huerta made it clear that from his standpoint, we can make any scenario that might be negotiated work, and we are working very closely with the Americans.

[Lord McInnes of Kilwinning (Con)]

My Lords, as my noble friend may be aware, there is a very significant aerospace industrial hub at Prestwick in Ayrshire, based around BAE Systems’ work on existing aircraft and Spirit AeroSystems’ work on the Airbus wings. Both these companies rely heavily on the American industrial supply chain. What are the Government going to do to support jobs and business at these two Scottish companies?

[Baroness Sugg]

My noble friend is absolutely right. The UK has been very successful in securing a leading supply chain role globally, particularly with Airbus. The industry supports 128,000 direct jobs and 153,000 indirect jobs across the country. Of course, we must do all we can to ensure that we protect these jobs, and the industry. Globally integrated supply chains are mutually beneficial to us and our import and export partners, and it is in all our interests to ensure that trade continues.

[Baroness Randerson (LD)]

Does the Minister accept that the creation of any additional regulatory barrier or dual regulations would undermine UK competitiveness, as well as the continuous improvement in safety? Does she agree that continued membership of EASA is by far the simplest way of achieving this?

[Baroness Sugg]

My Lords, I agree that we need to keep regulation as low as possible. Continued membership of EASA is a possibility and we are actively considering it. The UK has a proud record in the aerospace sector and a number of distinct advantages, and will continue to do so after we leave the European Union.

[Lord Tunnicliffe (Lab)]

My Lords, when Mr Michael Huerta, the outgoing boss of the Federal Aviation Administration, visited in December, he had a sense of urgency. He said:

“We need to know by next month because if we do not have a clear picture it leaves us little choice but to embrace a much more costly strategy of working on multiple potential scenarios”.


“Next month” is January, and he was implying that the FAA needs to know by the end of this month what we are going to do. What answer did he get at that meeting? If he did not get a straightforward answer, when will his successor get one?

[Baroness Sugg]

My Lords, regardless of our future relationship with EASA, there will be an aviation safety agreement in place between the UK and the USA. The precise form and exact terms of that agreement will of course be influenced by our relationship with EASA. As I said, we are working with the FAA. We are updating our technical annexes to the 1995 UK-US aviation safety agreement, which predates and has a wider scope than the EU-level agreement, and will continue to do so. We look forward to welcoming the new boss of the FAA in the coming months and having constructive meetings with him.

Rail Franchises: Govia Thameslink

Baroness Sugg Excerpts

Tuesday 16th January 2018 Lords Chamber

[Baroness Randerson]

To ask Her Majesty’s Government what action they are taking to ensure improvements in the performance of rail franchises run by Govia Thameslink Railway.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, passengers on this route have not had the level of service they expect or deserve, and we are sorry to them for the disruption that has been caused. We are working closely with Govia Thameslink Railway and Network Rail to deliver a better service to passengers through a range of actions. We have invested £300 million for Network Rail to improve infrastructure resilience, and agreed a £13.4 million package with GTR to pay for key passenger improvements.

[Baroness Randerson (LD)]

Last week’s NAO report is a woeful catalogue of government errors, including the failure to assess the impact of potential industrial action, the failure to ensure enough drivers and a contract structure with no incentive to avoid strike action. The £13.4 million financial settlement the Minister just mentioned is judged by the NAO to remove the incentive for Govia Thameslink to improve. In the light of that judgment, can the Minister explain how and why things will now improve? Can she promise us that passengers’ interests will be put absolutely at the centre in future franchises?

[Baroness Sugg]

My Lords, we broadly accept the recommendations of the NAO report. We accept we have made mistakes and are learning lessons. I assure the noble Baroness that we will put passengers at the forefront in our future franchising decisions. We are listening to passengers and acting on what they tell us. We are opening public consultations as part of the franchising process and will use the responses to inform our decisions.

[Lord Berkeley (Lab)]

My Lords, could the Minister explain one thing in the National Audit Office report? It said that the timetable that the Department for Transport agreed could not, according to Network Rail, be operated and that it was trying to put too many trains on the line. I understand there is the same problem on the east coast main line, which is why things have gone wrong there. When will the Government look at the timetables, with Network Rail, before they let franchises?

[Baroness Sugg]

My Lords, the department did take National Rail’s views on feasibility into account. As part of the evaluation of the bids for this franchise, and indeed all franchises, we look at National Rail’s concerns. It had concerns about all of the bidders’ timetables propositions in this instance, although Govia’s proposition had a lower risk rating than other bidders. Network Rail said that the proposed timetable needed more development at the beginning of the franchise, and we agreed with that. The Thameslink timetable was some years off, and the project, as the noble Lord knows, was a complex one. We always accepted that more work would need to be done, and we have been working with Network Rail to finalise the timetable. I agree with the noble Lord that we need to work more closely with Network Rail to make sure that the timetables can be delivered in the future.

[Lord Clark of Windermere (Lab)]

My Lords, in light of the Carillion fiasco that we are facing now, it seems to me that the Government changed their strategy in the last round of franchises, in that they encouraged a smaller number of companies, with subsidiary companies running the actual franchises, as highlighted in the NAO report, whereas Govia Thameslink covers a number of companies. It also applies to Arriva in the north. We had a situation with the Lakes line where there were no trains over five years old, whereas with Northern Rail there are no trains under 30 years old.

[Baroness Sugg]

My Lords, we are investing heavily in rolling stock, and passengers in the north will see new trains rolled out across all the lines. We have set out changes in our rail strategy on how we will approach rail franchises to ensure that we get the best of both worlds. The new model will keep the benefits of privatisation while maintaining vital infrastructure in public hands and preparing our railways to meet the challenges of the future. This large franchise was designed to deliver Thameslink. We are actively looking at the size of that franchise and expect in future to split it up into smaller franchises that can better deliver what passengers need.

[Lord Vinson (Con)]

My Lords, all over the world railways run at a loss, largely to do with the fact that track maintenance costs are inherently high and very difficult to manage. High Speed 2, if it is ever built, will run at an enormous loss. Does the Minister agree that, without the profit motive, any nationalised railway would run at even greater losses?

[Baroness Sugg]

I agree with my noble friend. The privatisation of passenger services has helped to transform our railways, with private sector competition delivering innovation and private investment. As I said, the changes in the rail strategy that we have announced will improve the franchising process.

[Lord Bradshaw (LD)]

Would the Minister go back to the answer to the previous question that she was asked? The splitting of this franchise into two is probably not a good idea. I worked on the original Thameslink franchise, and the idea was to connect north and south London under one management with one railway. Any splitting of the franchise would waste money on management and undermine the productivity of train crews. I ask her to think very carefully about what she has just said.

[Baroness Sugg]

I reassure the noble Lord that we will be considering this very carefully. I will certainly feed his comments back to our new Rail Minister.

[Lord Tunnicliffe (Lab)]

Does the Minister accept that it is the duty of the Department for Transport to assure itself that bidders are capable of delivering? If the answer is yes, why has it failed on so many occasions?

[Baroness Sugg]

I agree with the noble Lord that it is indeed the DfT’s responsibility to ensure that bidders can deliver. As I say, we have looked carefully at the NAO report and will be learning lessons from it. There are a number of reasons why passengers have suffered disruption on Southern, such as infrastructure works and the process of introducing new trains. However, I want to be clear that the main cause of the widespread disruption in this case was union action. We have seen an unprecedented 39 days of strikes by the RMT, which have directly led to the terrible time that passengers have experienced. Until the RMT calls off its strikes, passengers will continue to suffer.

Pollution: Vehicle Emissions

Baroness Sugg Excerpts

Monday 15th January 2018 Lords Chamber

[Baroness Rawlings]

To ask Her Majesty’s Government what steps they are taking to reduce levels of pollution caused by vehicle emissions in London and other larger cities.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, we have committed £3.5 billion for air quality and cleaner transport, including investment to support the uptake of ultra-low emission vehicles and to reduce bus emissions. We are implementing tougher real driving emissions tests and helping local authorities to tackle pollution hotspots. We work closely with the mayor, who is responsible for air quality in London, and we will publish our plans for the pathway to zero-emission road vehicles and a new clean air strategy later this year.

[Baroness Rawlings (Con)]

My Lords, I thank the Minister for her encouraging Answer, but why is pollution still so bad? According to King’s College London, 9,400 people die a year and thousands more suffer lung diseases caused by traffic congestion. Average speed has slowed down from 12 miles per hour to seven miles per hour, which is hardly progress. Does the Minister agree that disastrous traffic management is causing not only pollution but mental stress and loss to, for and of business? Perhaps despite their worthiness, there is a need for better qualified planners on TfL and local councils. Will Her Majesty’s Government, who are ultimately responsible, encourage the new Minister, Jo Johnson, to put a black cab driver, who would understand traffic problems, on the board as his brother Boris did years ago?

[Baroness Sugg]

My Lords, air pollution poses the biggest environmental threat to public health, and it is a particular threat to the elderly, the young and those with existing health issues. My noble friend makes a very sensible proposal to have a black cab driver, an expert in roads and routes, on the TfL board. I will certainly pass that suggestion on to the new Minister for London. I know he is looking forward to working closely with the mayor on many issues, including how to tackle air quality.

[Lord Snape (Lab)]

My Lords, does the Minister feel that pollution in London and our major cities is being improved or made worse by the Government’s decision to freeze fuel duty for the past seven years, while public transport fares in London, as in other major cities, have increased during that period by between 15% and 50%?

[Baroness Sugg]

My Lords, many drivers obviously welcome the freeze in fuel duty, but we have seen an increase in cars on the roads. Air quality has improved significantly, but there is increasing evidence of impacts on public health. We are investing in vehicle retrofitting, ultra-low emission vehicles, cycling and walking and are implementing tougher real driving emissions tests. Later this year, we will publish our clean air strategy to outline how we can tackle air pollution more widely.

[Lord Cormack (Con)]

My Lords, will my noble friend herself meet with some black cab drivers? If she does, will she listen very carefully to what they say has been the result of reducing the lanes on our major roads in London, caused very largely by the creation of cycle lanes?

[Baroness Sugg]

My Lords, I would be happy to meet some black cab drivers with my noble friend. The construction of bike lanes and bus lanes and the pedestrianisation of many roads has reduced the available space. Of course, cycle lanes are welcome in order to protect cyclists and encourage cycling. I understand that they have increased congestion, but we want to encourage people to cycle.

[Baroness Howe of Idlicote (CB)]

My Lords, is the Minister certain that all vehicles pay a sufficiently high road tax when driving in large cities? Is this tax geared to the size of the vehicle involved?

[Baroness Sugg]

My Lords, vehicle excise duty was reformed on 1 April 2017 in order to make it fairer to motorists, to strengthen the incentives to buy the cleanest cars and to ensure that those who can afford a premium vehicle pay more. To encourage manufacturers to bring the next generation of diesels to the market quicker, we have introduced a temporary levy on diesel cars.

[Baroness Randerson (LD)]

My Lords, the Government are being sued for the third time over the failure of their plans to tackle the air quality issue as fast as possible. The current plan requires no action in 45 of the local authorities that have identified illegal levels of air pollution. Does the Minister accept that every local authority with air pollution problems should be required to take urgent action to reduce the pollution caused by traffic?

[Baroness Sugg]

I agree that every local authority must do what it can to reduce pollution caused by traffic. The noble Baroness is right that although we meet the vast majority of targets, we are one of 17 EU member states that are not meeting the nitrogen dioxide limits. The main reason for that is the lower than expected reduction in emissions from diesel vehicles. We have a plan for tackling the roadside nitrogen dioxide concentrations, which we published last year, and have issued directives to 28 local authorities outside London. They are already drawing on the £255 million fund which we have made available to try to bring improvements as quickly as possible.

[Lord Winston (Lab)]

My Lords, to come back to the question not only of taxi drivers but of all motor traffic, the reduction of lanes which traffic can travel down means that more cars are taking longer journeys than ever before at slower speeds. The evidence is of course that the internal combustion engine is less efficient and pollutes more at slow speeds, particularly when it is idling. Can the Minister give us government figures on the evidence of pollution being greater before bike lanes are introduced than afterwards? This is an important issue in the future planning of our cities.

[Baroness Sugg]

I am afraid I do not have those figures to hand but I will certainly see if they are available and write to the noble Lord. On combustion engines, we have committed to support the uptake of low-emission vehicles and are investing in alternative fuels. We have also introduced a clean air fund to target areas which need that help.

Local Congestion: Investment

Baroness Sugg Excerpts

Wednesday 10th January 2018 Lords Chamber

[Baroness Neville-Rolfe]

To ask Her Majesty’s Government what assessment they have made of the impact of investments in local roads on traffic congestion and productivity in local areas.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, as set out in last year’s Transport Investment Strategy, our investment seeks to reduce congestion, raise productivity and support new housing. We estimate from investment appraisals that local major road schemes approved by the department since 2012 will produce an average of £4.50 return for every £1 invested. The department’s evaluations found that local major schemes have been successful in delivering reductions in congestion, often leading to better access to employment and local businesses.

[Baroness Neville-Rolfe (Con)]

I thank the Minister. I am glad about the investment in motorways, bypasses and some of the other things to which she refers, but do we deal adequately with local congestion, which is hitting productivity and increasing air pollution and is frustrating for those of us sitting in traffic jams? Is she aware that the challenge fund rules under which smaller councils apply for capital are costly and a bureaucratic deterrent to spending the money that the Government have rightly made available for local roads?

[Baroness Sugg]

My noble friend raises an important point, and I know that she met recently with the Roads Ministers to discuss this. We have been investing heavily in motorways and it is right that we concentrate spending where it is needed most, but we know that other important roads have long gone underfunded. That is why we are consulting on introducing a major road network from 2020. That will provide a share of the national roads fund to invest in bypasses and road widening to help improve congestion. My noble friend also raised the point of the complexity of these processes. There are many different schemes available for additional funding to local authorities—which, of course, is welcome—but they can be complex. In last year’s Transport Investment Strategy, we committed to providing targeted support to local authorities to help develop their bidding and delivery capability in order to ensure that they get the appropriate funding.

[Lord Watts (Lab)]

My Lords, the Government are quite rightly pleased about the investment in motorways and I think we would all agree with that, but the cuts in local government have meant there have been massive cuts in local road expenditure. Are the Government going to do what they normally do—create a crisis and then claim credit when they do something about it?

[Baroness Sugg]

My Lords, much of the funding for local roads is paid directly to local authorities through the direct transport funding and the local growth fund. However, we recognise that local authorities do not always have enough money to tackle the large projects which are needed to improve productivity and reduce congestion. That is why we have a number of schemes to help local authorities pay for those, such as the major road network that I have just mentioned, the pinch-point scheme and the national productivity investment fund.

[Lord Spicer (Con)]

My Lords, ever since Quintin Hogg, as he then was, went north in his flat cap, money has poured into the north-east. At the same time, the north-east has remained one of the poorest areas in this country. Is there a question involved there somewhere?

[Baroness Sugg]

I am sorry: I missed the question. Perhaps my noble friend could repeat it.

[Baroness Randerson (LD)]

My Lords, there is a virtually permanent traffic jam on the A49 in Hereford. This is a vital route between north and south Wales and into the Midlands. Thousands of Hereford residents, as a result of the traffic jam, suffer dangerously poor air quality from the permanent congestion. Hereford Council has a well-worked out plan, which would involve regeneration, for a bypass. Does the Minister agree that this should be a top priority for the funding that the Government have offered for local councils?

[Baroness Sugg]

My Lords, I agree absolutely that the funding we are making available should address exactly the problem raised by the noble Baroness. As I have said, the major road network would fit that requirement.

[Lord Stern of Brentford (CB)]

My Lords, does the Minister agree that dealing with congestion is not always best done through tarmac? There are tremendous opportunities in design, digital management, road pricing and public transport.

[Baroness Sugg]

My Lords, I agree that there are many different ways in which we can tackle congestion, including bypasses, link roads, road widening and, as the noble Lord says, new smart technology could help in this.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I do not understand why the Government do not have any sort of plan for traffic reduction. Every time you build a road, you actually encourage traffic and create more air pollution and more congestion. Why not reduce traffic?

[Baroness Sugg]

We are looking to reduce congestion, but obviously people still need to travel and to drive to work. More than 17 million people use the roads to commute to work, and I think that we should encourage that.

[Lord Rosser (Lab)]

My Lords, the Centre for Cities, a think tank focused on the economic benefits and development of cities, has recently questioned the effectiveness of investment in roads as a catalyst for local economic development in the light of the evaluations that have been undertaken. It suggests that the evidence is far from conclusive and comments that other ways of investing money to reduce congestion could be more effective. Can the Minister say what evaluations of the impact of investment in local roads the Government are relying on to show that such investment does represent value for money in terms of reducing congestion and increasing productivity in local areas, as compared with other ways of investing the money to achieve the same objective? Will the Government make those evaluations, on which presumably they rely, publicly available, if they have not already done so?

[Baroness Sugg]

My Lords, I mentioned in my Answer to the original Question that the average is a return of £4.50 for every £1 invested. Our last evaluation, back in 2014, looked at how the investment we are making benefits the economy. We are carrying out a new study that will be available later this year to ensure that we are spending money wisely.

[Baroness Wheatcroft (Con)]

My Lords, one of the main causes of traffic congestion in towns seems to be when roads are dug up. Can my noble friend the Minister comment on the success of efforts to get the utilities to co-ordinate their digging-up-the-roads efforts?

[Baroness Sugg]

I agree with my noble friend. I believe that around 2.5 million roadworks are carried out in England each year, which cost the economy around £4 billion. My noble friend has rightly raised the lane rental schemes which we have been trialling. They have encouraged the utilities to work together at weekends and in the evenings in order to reduce roadworks and therefore congestion. The schemes have been successful and we have seen congestion in London and Kent cut by around a half. At the end of last year we announced that these schemes will continue after the trial period, and we are consulting on extending the scheme nationwide to spread their benefits to the rest of the country. We will publish our response on that in the next few months.

Laser Misuse (Vehicles) Bill [HL]

Baroness Sugg Excerpts

2nd reading (Hansard): House of Lords
Tuesday 9th January 2018 Lords Chamber

Moved by

[Baroness Sugg]

That the Bill be now read a second time.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, our transport sector continues to play a vital role in our economy and daily lives. Last year, UK airlines flew more than 1.2 million flights carrying nearly 154 million passengers. More than 37 million vehicles were licensed for use on the roads in Great Britain. Rail passenger journeys have more than doubled in the last 20 years, with 1.7 billion journeys in the last year, while over 60 million passengers travelled by sea. We rely on all modes of transport for economic growth and to go about our day-to-day lives. It is important that whatever the mode of transport, passengers and staff are safe. We can be proud of the safety culture across our transport sector in recent years but we cannot be complacent. Safety and security must be our top priority.

The Government are determined to protect pilots, captains, drivers and their passengers. We will take action against those who threaten safety. That is why we are bringing forward a new law, strengthening the rules against those who shine lasers at aircraft while for the first time making it an offence to shine a laser at cars, trains and ships. This important legislation was originally proposed as part of last year’s Vehicle Technology and Aviation Bill, but that Bill fell when Parliament was dissolved ahead of the general election. We committed to reintroducing this measure and that is what we are doing.

There are legitimate uses for lasers: as alignment aids in the construction industry, by lecturers and by astronomers who use them to point out stars at night. We are not legislating against the use of laser pointers but instead against their illegitimate use. Lasers can dazzle, distract or blind those in control of a vehicle, with serious and potentially even fatal consequences. The main problems with a laser attack are that it is sudden, very bright and distracting, and it can cause temporary visual disturbance for some time after the attack. In aviation, most events occur either on take-off and landing, or when aircraft such as police helicopters carry out civil safety duties.

Back in 2003, there had never been a reported case of a laser being shone at an aircraft. In 2004, there were six reported cases; by 2008, there were 200 and last year, there were more than 1,200 reported incidents. Thankfully, no aircraft, train or road vehicle in this country has had an accident as a result of these dangerous and senseless acts. But it is all too easy to imagine the potential consequences of a pilot being blinded by a laser while trying to land a passenger jet, or of a train driver being dazzled from a bridge. This is predominantly a problem for aviation but incidents have been reported on other modes of transport. British Transport Police recorded 578 laser incidents on the railways between April 2011 and November 2017. We believe these incidents are underreported, as the recording of laser pointers outside aviation is not mandatory.

It is already an offence under the Air Navigation Order to shine a light at an aircraft to dazzle or distract a pilot, but the maximum penalty is just £2,500 and, as a summary offence, it does not give the police the powers they need to investigate effectively. Alternatively, offenders can be prosecuted under another Air Navigation Order offence of endangering an aircraft, with a maximum prison sentence of five years or a £5,000 fine. However, this poses other difficulties for successful prosecution, as for a police officer on the ground and for the Crown Prosecution Service in court, it is very difficult to prove endangerment of an aircraft, so the power and penalties that come with this offence are not often used.

The Bill will make it an offence if a person shines or directs a laser beam towards a vehicle and the laser dazzles or distracts, or is likely to dazzle or distract, a person with control of the vehicle. It extends to all transport modes, and gives the police the powers needed to investigate and provide penalties that reflect the seriousness of the offence.

The offence will be a triable either way offence, which means that, depending on its seriousness, it can be tried as a summary offence or as an indictable offence. By making it a triable either way offence, it will engage powers for the police under the Police and Criminal Evidence Act 1984 to enter property for the purposes of arrest and to search a property after an arrest. These powers are not currently available for the existing aviation offence under the Air Navigation Order. The maximum fine is unlimited and the maximum prison sentence will be five years.

The measure will extend to the whole United Kingdom. We have been working with the devolved Administrations, which support this new law. The measure included in this Bill is reserved in Scotland and Wales. In Northern Ireland rail and road are devolved matters, but we expect a legislative consent Motion to be brought forward once the Northern Ireland Assembly returns.

While this Bill specifically covers the risk posed by shining a laser at a person in control of a vehicle, the Government have this week announced new measures to tackle the sale of unsafe laser pointers, including strengthening safeguards to stop high-powered lasers entering the country. More than 150 incidents of eye injuries involving laser pointers have been reported since 2013, the vast majority involving children. In many of these cases, neither the children nor their parents have known the danger involved, and the Government will work to raise awareness of the risks associated with laser pointers.

In addition, the Government have pledged additional support to local authority ports and border teams to stop such lasers entering the UK. This includes increasing the resources available to ensure an immediate impact on rogue importers. The Government will also work with manufacturers and retailers to improve laser pointer labelling, to indicate that they must not be pointed at eyes or vehicles and must state the power level of the product.

The measures in the Bill have widespread support from the authorities and the transport industry. BALPA, the airline pilots union, has welcomed its reintroduction, saying that it is good news for transport safety. It has also been welcomed by a number of airlines, airports, the National Police Chiefs’ Council, the National Police Air Service, the Military Aviation Authority, the Maritime and Coastguard Agency, the Rail Delivery Group, Public Health England and the Royal College of Ophthalmologists. We have seen support from across the transport industry, which is often the victim of this senseless crime, from the police, who will enforce the law, and from medical professionals, who understand the real risks laser attacks can pose. All agree that action must be taken. I beg to move.

--- Later in debate ---

[Baroness Sugg]

My Lords, I thank all noble Lords for their contributions today and for their broad support for these measures. I shall aim to answer as many questions as I can. If I am not able to address every issue, I will follow up in writing.

On the types of lasers, we have not defined lasers in the Bill because our legal advice is that the term would be understood and there would not be difficulty in prosecuting based on whether or not a light source was a laser. The offence would cover all forms of lasers, including laser pens, pointers and laser guns; and the term “beam” would cover laser pulses and bursts, as the noble and gallant Lord, Lord Craig, mentioned.

The offence specifically covers lasers rather than any light source because of the risk of inadvertently catching normal and acceptable light sources, such as car headlights, which might dazzle and distract the pilot or the driver of another vehicle. Lasers are the predominant risk. The police have not raised the same concern in relation to other lights, such as strobe lights, as they have with lasers.

The noble and gallant Lord, Lord Craig, asked whether Clause 1(8) should refer to an individual rather than a pilot. We have sought to capture those persons who are in control of the vehicle, and in the case of an aircraft these will be the pilots. We specifically refer to the pilots monitoring the control of the aircraft to capture co-pilots. When a laser beam is shone or directed at an aircraft, the light often tends to refract and fill the cockpit with light, so it is difficult to imagine another member of the crew being dazzled or distracted but not the pilots.

Many noble Lords raised the definition of a journey. Similar concerns were raised during the Committee stage of the then Vehicle Technology and Aviation Bill, which referred to “flights” for aviation rather than “journeys”. We have taken on board those concerns and amended the Bill to ensure that all parts of the journeys are covered. “Journey” will bear its natural meaning. It is intended to start when the vehicle is ready to commence its journey and end when it comes to a final stop at its destination. That includes taxiing in the case of an aircraft and for all vehicles will cover temporary stops along the way such as stops at train stations, bus stops, traffic lights or, indeed, when waiting to take off.

[Lord Berkeley of Knighton (CB)]

For clarification, the Oxford English Dictionary defines “journey” as the act of travelling from one place to another. The point made by several noble Lords, including my noble and gallant friend Lord Craig, and the noble Lords, Lord Balfe and Lord Rosser, is that this is still a little vague in regard to, for example, a flying lesson, which starts in one place and returns to the same place; helicopter pilots, who initially only go up and come back down again; or even a driving lesson, which departs and returns to the same place. Would the Minister comment further on that?

[Baroness Sugg]

I thank the noble Lord for his intervention. Trying to define all the different types of journey which may take place is complicated. As I say, our advice is that “journey” is the best way to describe it, but I will take the noble Lord’s comments away and consider them ahead of the Committee stage.

The noble and gallant Lord, Lord Craig, also mentioned horse-drawn carriages, which I am afraid will not be covered by the Bill. We have not seen any evidence of a problem, so horse-riders will not be covered either. We work closely with the British Horse Society and other organisations but, as I say, they have not raised any safety concerns. However, we will keep the issue under review and perhaps follow it up with them.

We have consulted carefully with the Ministry of Defence on the Bill and indeed with the Military Aviation Authority. The offence will cover both military and civilian vehicles, and the Bill has received support from Ministers in the Ministry of Defence. We will continue to work closely with the MoD and the MAA, some of whose representatives are also members of the UK Laser Working Group, which meets regularly.

On licensing and import controls, as I mentioned in my earlier speech, we have committed to providing additional support for enforcement activities around the import of lasers. We are working to deliver more effective labelling and to promote public awareness. However, after considering the evidence, we do not intend to introduce a licensing regime.

[Baroness Randerson]

What precisely does the Minister mean by “support for local authorities”? That is the key thing. Support can mean providing advice and information or it can be firm, practical help.

[Baroness Sugg]

We are working with local authority ports and borders teams to advise them on prioritising the checking of imports. We have allocated a grant of £100,000, as the noble Lord, Lord Rosser, mentioned, to help them have an immediate and targeted impact. We are also working with online retailers and importers.

[Lord Rosser]

Although I do not want to state the obvious, could I ask the Minister to confirm that the £100,000 is the sum in total across all local authorities? It is not £100,000 for each local authority involved in this activity.

[Baroness Sugg]

Yes, I can confirm that it is a total of £100,000. Perhaps I will get some more detail on exactly what work the department is doing with local authorities to help them deal with this issue.

On the licensing regime, the evidence we gathered in our call for evidence did not indicate that a ban or a licensing regime would have a positive impact on public safety. We believe that introducing legislation to license the supply and purchase of high-powered lasers would not tackle illegal imports that are purchased online or indeed the many people purchasing them while on holiday. We have looked at international examples. Australia and New Zealand have taken legislative action to impose a ban or a strict licensing system, but that did not actually have a positive effect on reducing the number of these laser incidents.

We do not think that we should classify laser pointers as offensive weapons. I understand the point made by the noble Baroness, Lady Randerson, that only a few people use lasers in a legitimate way, but we think that it would penalise them. However, if a pointer is adapted for use to cause injury or if it is intended to be used to do so, it would then be classified as an offensive weapon.

My noble friend Lord Balfe raised the issue of children who commit this offence and the responsibility of their parents. Obviously, children under 10 years of age cannot be charged with committing an offence, but other steps can be taken such as a local child curfew or a child safety order. Of course, children aged between 10 and 17 can be arrested and taken to court. However, I understand the point that my noble friend has made and I will discuss it with my colleagues in the Ministry of Justice.

Air traffic control towers were mentioned by my noble friend Lord Balfe, the noble Baroness, Lady Randerson, and the noble Lord, Lord Rosser. The Bill does not currently cover air traffic control towers, but it is an interesting point. I am aware of a number of incidents where lasers have been shone at fixed installations. Such installations are often located in controlled areas so there is less scope to shine a laser, but we can certainly consider whether air traffic control towers should be included in the Bill.

My noble friend Lord Kirkhope asked about regional air traffic control and how best to deal with these reports, in particular as regards general aviation. The CAA has published a safety notice on laser attacks which provides guidance for air traffic controllers, principally to inform the police immediately and pass on all relevant information. However, obviously I understand that in general aviation the practice is perhaps not as well known as it should be. We will discuss the matter with the CAA.

A number of noble Lords raised the regulation of certain strengths of lasers. It might be helpful to say a few words on the current situation on the classification of lasers in the market. Lasers sold in the UK are classified in accordance with the current British standard on laser safety, which sets out eight classes of laser products. The classification scheme for lasers indicates the potential risks of adverse health effects. The higher the class number, the greater the radiation hazards posed by the laser. Under the General Product Safety Regulations, only laser pointers considered safe for general use should be made available to the public through general sale. The higher classes 3 and 4 are not suitable for sale to consumers. Laser pointers above 1 milliwatt are generally accepted to have limited specialist uses and can be removed from the market. But obviously, as I said, consumers purchase products directly via the internet and while overseas on holiday, which is of course more difficult to control.

My noble friend Lord Balfe and the noble Lord, Lord Rosser, mentioned stop and search and whether the police need these powers. It is worth noting that the police already have the power to stop and search for laser pointers where they have reasonable grounds to suspect that the pointer is intended to cause injury. That is because the laser would then be deemed an offensive weapon. The Government are clear that the power of stop and search, when used correctly, is vital in the fight against crime, but the Home Office is currently conducting a review to achieve greater transparency on this. While this work takes place, it would not be appropriate to consult on extending the power of stop and search to cover lasers, but my department, together with the Home Office, will consider consulting on proposals to apply the power of stop and search to laser pointers as soon as that review is concluded, which I expect to be later this year.

On sentencing, five years is the maximum jail term, as I said, and would be imposed in only the most serious cases, but we believe it is important to have an effective deterrent for these sorts of offences. As I explained, it will be a triable either way offence. It will be up to the courts to decide which court should hear each case, dependent on the seriousness. For a summary offence tried in the magistrates’ court, the maximum imprisonment will be restricted to six months in England and Wales or 12 months when Section 154(1) of the Criminal Justice Act is commenced.

On the point from the noble Lord, Lord Rosser, on where the case would be tried if the offence is done across a border—which, I must admit, is something I had not considered—I imagine it will be where the person holding the laser has his feet placed, as that is where the offence would be committed. I will certainly take that back to clarify. He also asked how many people had been found guilty of committing this offence. In 2016 it was 10 and in 2015 it was 16. I will send the noble Lord the full figures I have available.

The noble Baroness, Lady Randerson, mentioned drones. As I said at the end of November, it is our intention to bring forward drone legislation in the spring of this year. That is still our intention. I understand the importance of the issue and the desire to act quickly on this, but we have decided to separate the treatment of drones from that of lasers as they present different challenges. I look forward to bringing forward drones legislation as quickly as possible.

As the noble Lord, Lord Monks, mentioned, I am lucky enough to have both the president and the vice-president—and, indeed, lowly members—of BALPA in your Lordships’ House, so I want to take this opportunity to thank BALPA for its engagement with my department on this and many other issues that face the aviation sector. I hope that I have addressed all the issues raised. If not, as I said, I will follow them up in writing.

We believe that the existing laws are not strong enough, with the police unable properly to investigate and prosecute such incidents. The police lack powers to search the homes of suspects. Even when a conviction is secured, the maximum penalty for dazzling or distraction is only £2,500, and there is no specific law against shining a laser at a ship or at motorists at the wheel. This new offence will act as a deterrent to these dangerous incidents happening in the first place, but if they do occur, the proposals will help the police bring the offenders to justice.

The safety and security of the travelling public must always be a top priority for the Government. With more than 1,000 attacks on aircraft reported each year, as well as those on other modes of transport, we have a duty to act. I ask the House to give the Bill a Second Reading.

Bill read a second time and committed to a Committee of the Whole House.

Connected and Autonomous Vehicles (Science and Technology Report)

Baroness Sugg Excerpts

Wednesday 20th December 2017 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg)]

My Lords, I thank my noble friend Lord Selborne for introducing this debate, and all noble Lords for their contributions. I am grateful to the members of the Science and Technology Committee for their work in producing their report, many of whom we have heard from today. I also acknowledge my noble friend Lord Henley, who has worked closely with my department in responding to the report, and I apologise for the delay in that response. This has been an interesting and thought-provoking debate and a wide range of issues have been raised. I will do my best to answer as many as I can in the time allowed.

As many noble Lords have acknowledged, connected and autonomous vehicles will have a huge impact on transport in this country, and the technology is already well advanced. So of course it is vital that we are prepared for the changes to come. We are on the cusp of a profound shift in the transport system, enabled by technology. That is why we have identified the future of mobility as one of four grand challenges in the industrial strategy.

In the Budget, the Chancellor set out a vision for fully self-driving vehicles to be on our roads by 2021. The Government are also taking forward the Automated and Electric Vehicles Bill to ensure that consumers are protected and insurers are prepared for the introduction of automated vehicles to our roads.

The first recommendation of the committee is to ensure that we do not have too narrow a focus on highly automated private road vehicles, a point raised this evening by many noble Lords. We absolutely agree that work in this field must address a broader market. Although our self-driving car programme has been very successful, we are also working hard to extend the benefits of the technology more widely. One example is a facility in Oxfordshire, Remote Applications in Challenging Environments, which is conducting research and development to explore how to remove people from dangerous environments such as nuclear decommissioning.

As mentioned by the noble Lord, Lord Cameron, in the farming sector the Agricultural Engineering Precision Innovation Centre is researching advanced technologies; projects include looking at the use of robotics for planting, monitoring and harvesting crops. The noble Lord also highlighted the advantages that such technology can bring, both in the UK and abroad. I look forward to researching that and learning more. The noble Lord, Lord Fox, made an interesting point about whether we should focus more on specific industries to see the benefit of that; we will certainly reflect on that.

Automation offers clear opportunities for the aviation and maritime sectors, alongside those offered in road transport. We have already seen some early deployments of automation in those sectors; UK companies are at the forefront of that. As technology develops there, we will work with industry to ensure that we have the right regulatory framework to deal with it. These are just a few examples of the many exciting opportunities beyond self-driving cars—opportunities that will help us to deliver the transformative benefits of connected and autonomous technology to new sectors of the UK economy.

As part of our industrial strategy, we are working with industry to ensure that we have the right level of leadership in emerging sectors. In the recent White Paper, the Government set out a “sector deal” approach; those sectors deals are being developed right now in areas such as artificial intelligence, robotics and autonomous systems. The industrial strategy also outlined the role of an industry-led AI council: to lead collaboration between industry, research organisations and government. Alongside that, there is the Challenge Fund, which established the robotics and AI advisory group. I am pleased to hear my noble friend Lord Selborne welcome the approach on sector deals; I hope this provides more information and gives your Lordships some confidence that we are trying to deal with the cross-cutting nature of industrial collaboration.

Many noble Lords highlighted the importance of investment. Of course, we will continue to provide research and funding to mitigate the inherent risk of market failure in early-stage technology. That is vital to get industry on board and is already having an impact. Both Volvo and Jaguar Land Rover are running high-profile research programmes of around 100 highly automated vehicles here in the UK. By demonstrating our commitment to this emerging industry, we hope that businesses will invest in the UK with confidence.

We are establishing ourselves as a leading market for the testing and deployment of these technologies, and we intend to do all we can to stay in that position. By working closely with industry, we are better positioned to know where we should focus our resources. There are many examples of the work we are doing on this, including the Transport Systems Catapult and Innovate UK, which works with small and medium-sized enterprises in this field.

The Government have an important role to play in funding research. In the Autumn Statement last year, we announced an investment programme of nearly £5 billion over four years to boost the UK’s position as a world leader in science and innovation. The noble Lord, Lord Mair, highlighted the investment in the co-ordination hub, Meridian. I hope that demonstrates that the Government and industry have vital roles to play in delivering the benefits of this technology to the UK. We will support manufacturers and technology developers, large and small, throughout the process. I agree with the noble Lord, Lord Berkeley, that it is key that we get the relationship between government and industry right.

The noble Baroness, Lady Randerson, and other noble Lords raised the important issue of infrastructure. There is a huge challenge ahead of us in making sure that our infrastructure is ready for connected and automotive technology when it is available. Very different systems from those available today will be needed. However, this is an opportunity. We have a number of programmes under way to understand more about what infrastructure is required and how we can profit from that opportunity. We are engaging with all levels of the supply chain to understand what we need; that includes vehicle manufacturers, Highways England and others, covering telecommunications, data and infrastructure. We have specific initiatives in place analysing how connected and autonomous technologies will work on our roads and influence our future. The London to Dover A2/M2 connected corridor will test a variety of communications systems to help us establish how the new technologies will be deployed.

A lot of this infrastructure will also affect local roads, as mentioned by the noble Baroness, Lady Young, and the noble Lord, Lord Fox. We agree with the recommendation in the report that local transport authorities will play an integral role in the success of connected and autonomous vehicles, and that the Government can help to improve learning as the technologies develop. We meet LTAs frequently; we recently initiated a forum for authorities deploying, or interested in deploying, connecting vehicle technologies. I believe the first meeting was in Newcastle a few weeks ago, so that work is ongoing. I hope this demonstrates that we are thinking ahead by ensuring that the infrastructure will be ready when we need it.

[Baroness Young of Old Scone]

When I read the statement from the Government about local transport authorities I was concerned. I envisaged myself in some autonomous vehicle heading from one borough that is keen on the idea and has got ahead of the game to another that is not terribly clued up. It will be interesting to understand what the Minister thinks will happen at the boundary between two local transport authorities that have not quite got themselves aligned.

[Baroness Sugg]

The noble Baroness raises an interesting point and one that we will discuss with them. When there is a different level of interest in different local authorities, there will be that challenge. We are working with them on co-ordination.

Many noble Lords raised the importance of safety, which is of course at the very heart of our approach. Self-driving vehicles, just like any other vehicle today, will have to meet internationally agreed safety standards. Vehicles will not be sold or used in the UK without having met these standards. As noble Lords acknowledged, we expect these vehicles to be safer than current cars, but I very much agree with the noble Lord, Lord Hunt, on the importance of ensuring that the drivers—or users—of these vehicles are tested, as well as the vehicles themselves. We must consider the wider safety impacts.

[Lord Hunt of Chesterton]

More than 90 minutes?

[Baroness Sugg]

We do not yet have a time. Obviously, we need to look at that vigorous testing to ensure drivers are properly capable. We need to look at the wider safety impacts on jaywalkers, on the use of drones and on cyclists.

The issue of standards has been raised by many noble Lords. As is the case for other vehicle safety technologies, we expect standards to be set internationally at the United Nations Economic Commission for Europe. The UK has historically been very influential in those discussions. Indeed, we are chairing many of the relevant committees discussing standards for automated vehicles.

The arrival of automated vehicles will raise important ethical questions about how machines make choices that might impact on human safety. These are incredibly important issues and should be discussed publicly and transparently. The report calls for further government-commissioned social research, a point raised by the noble Baroness, Lady Randerson, and others. We are taking forward a number of actions to help facilitate this discussion. We are investing with industry in public demonstrations of self-driving vehicles to raise awareness and to prompt debate. We have begun a three-year social and behavioural research programme to examine public perceptions of automated vehicle technologies. In the Budget we announced a new centre for data ethics and innovation, which will advise government on the ethical, safe and innovative use of data and artificial intelligence across all sectors, including transport. More research and debate is of course needed in this area, both within the UK and internationally, but I hope noble Lords will agree that, while we do not have all the answers to these issues, it is important that we do not stifle progress so we can make progress on these potentially life-saving innovations.

Pretty much every noble Lord raised the skills agenda. The Government absolutely agree with the conclusion of the committee’s report that skills are a key factor in achieving our objectives. That is recognised in our industrial strategy. The UK is well above the EU average in having access to the specialist skills required to develop and implement this technology, but we need to stay ahead. We will have to keep improving as the digital economy grows. For connected and autonomous vehicles this will require continued focus on a wide range of technical disciplines, from vehicle and infrastructure engineering to digital capabilities. I note the point the noble Baroness, Lady Randerson, made about ensuring we have the right structure in place to recognise the skills.

The industry-led Automotive Council has played a pivotal role in improving skills in the sector, with an increasing emphasis on skills requirements for these vehicles. It has developed and trialled new trailblazer apprentices, targeting areas where there are skills shortages and co-ordinating work with other sectors. Through the transport infrastructure skills strategy we are looking at what skills we should be identifying for the future. It has developed STAT—the Strategic Transport Apprenticeship Taskforce—which has developed the most detailed skills forecasting tool in transport history to understand the skills we will need. That should show us where the gaps will be. It is also encouraging to see universities and industry working together to develop their own initiatives. For example, the University of Warwick will next September launch a master’s programme in smart, connected and autonomous vehicles.

The year 2018 will indeed be the Year of Engineering, as promoted kindly by the noble Lord, Lord Fox. It is a national campaign to increase awareness and understanding among young people, their parents and teachers of what engineers do. I look forward to keeping noble Lords updated throughout the campaign.

So a lot of good work is going on, but I agree with noble Lords and many of those who gave evidence to the committee that we must continue developing our skills strategy to attract the best talent to the industry in future and to keep them in this country.

The report also calls for further government-commissioned economic research on the potential financial implications of connected and autonomous vehicles, which was raised by the noble Lord, Lord Berkeley, among others. We have published a forecast of the core economic impacts of connected and autonomous vehicle technology development and production in the UK. We are conducting analysis to refine the assumptions underpinning our economic forecasts, but it would not be productive to commission an overall cost- benefit analysis of connected and autonomous vehicle technologies at this time. There is not sufficient information to produce a realistic, meaningful or robust indication of all the economic benefits, and costs, of connected and autonomous vehicles.

Many noble Lords raised the important issue of jobs. Of course, the Government recognise that the technologies we are discussing today will have an impact on the labour market. That is why as part of our industrial strategy we are acting to ensure that the UK is well placed to succeed in the economy of the future. This technology will both create and disrupt jobs. That is true of all significant technological changes throughout history. The commercialisation of automated vehicles will create jobs in their development and production, as well as the new services they enable. We want UK businesses and people to be able to capitalise on those opportunities as far as they can. We are in a good position to achieve this as a consequence of our strength in the depth of disciplines that underpin this emerging market.

Alongside this, it is inevitable that some jobs will be disrupted, but what is important is that we are able to adapt. These changes will be tough to predict. Some of the more dramatic changes may not happen for some time. As I said earlier, making specific predictions about the impact on jobs is not possible at this early stage, so I am not able to provide the figures. However, we are ensuring that we are equipping people with the skills they need to compete in the future jobs market. I have already outlined some of the action that government, industry and academia are taking to tackle the issue of skills and the challenge of ensuring that, as this industry grows, so do jobs. As the technology emerges, we will continue to keep this issue under review.

My noble friend Lord Lucas raised an interesting proposal to make use of existing railway lines to help revive the local economy in the south-east and across the country. I understand that officials from my department are making connections with relevant UK companies to help pursue this idea, but I will certainly investigate it further and be very happy to meet my noble friend in the new year to discuss it.

On cybersecurity, we believe that industry must aim to design cybersecurity into connected vehicles. We recently published a set of cybersecurity principles for connected and autonomous vehicles to provide guidance to industry on how to address this issue. The department and the Centre for Connected and Autonomous Vehicles work closely with the National Cyber Security Centre and the Centre for the Protection of National Infrastructure on this issue. We are leading the international debate on the cybersecurity of road vehicles and, as I mentioned, we are chairing a technical working group in the United Nations Economic Commission for Europe, which is developing internationally harmonised requirements on cybersecurity.

This evening’s debate has highlighted not only the challenges posed by the introduction of automated vehicles but the wealth of opportunities that they can bring to the UK. I again thank all noble Lords who have spoken, in particular my noble friend Lord Selborne, for raising this timely topic for debate. I also want to take this opportunity to thank all those who gave their time and expertise to producing such a comprehensive, interesting and thought-provoking report.

We will soon get another chance to debate this topic when the Automated and Electric Vehicles Bill comes to your Lordships’ House next year. That will provide an opportunity to lay the legislative groundwork that ensures the UK is at the forefront of this growing industry for many years to come. I look forward to noble Lords’ contributions then.