Airports Slot Allocation (Alleviation of Usage Requirements) (No. 3) Regulations 2022

Baroness Vere of Norbiton Excerpts

Wednesday 26th October 2022 Lords Chamber

Moved by

[Baroness Vere of Norbiton]

That the draft Regulations laid before the House on 20 July be approved. Considered in Grand Committee on 25 October.

Relevant document: 11th Report from the Secondary Legislation Scrutiny Committee

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

My Lords, I beg to move the Motion standing in my name on the Order Paper.

[Lord Trefgarne (Con)]

My Lords, with your Lordships’ permission, may I ask the Minister whether these restrictions mean that the need for slots for most aircraft also applies to the very smallest aircraft operating through Heathrow and Gatwick, for which this is sometimes regarded as an excessive restriction?

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[Baroness Vere of Norbiton (Con)]

I thank my noble friend for raising the issue of small aircraft. I know he has a great interest in the matter. I will have to write to him about whether it applies to private jets and other small aircraft. The instrument that we debated in Grand Committee very much covered the slots held by the large commercial airlines.

[Viscount Stansgate (Lab)]

My Lords, before the House agrees these regulations, will the Minister tell us whether the Government expect limits to be placed on the number of passengers able to use Heathrow over Christmas?

[Baroness Vere of Norbiton (Con)]

We are aware that the current passenger cap at Heathrow of 100,000 passengers will be removed very shortly—indeed, I think it is this weekend. I believe that no decision has been taken on the Christmas period. However, significant numbers of staff have been recruited by Heathrow, so on balance I expect that it will not return, but that would be an operational decision for Heathrow.

Motion agreed.

Airports Slot Allocation (Alleviation of Usage Requirements) (No. 3) Regulations 2022

Baroness Vere of Norbiton Excerpts

Tuesday 25th October 2022 Grand Committee

Moved by

[Baroness Vere of Norbiton]

That the Grand Committee do consider the Airports Slot Allocation (Alleviation of Usage Requirements) (No. 3) Regulations 2022.

Relevant document: 11th Report from the Secondary Legislation Scrutiny Committee

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

My Lords, these draft regulations will be made under powers conferred by the Air Traffic Management and Unmanned Aircraft Act 2021, or ATMUA. Following our departure from the European Union, this legislation created a more flexible set of powers for Ministers to implement alleviation measures related to the impacts of Covid, subject to a vote in both Houses. This allows the Government to adopt a bespoke approach to best support the recovery of the aviation sector. Ordinarily, airlines must operate their airport slots 80% of the time to retain the right to them the following year. This is known at the 80:20 rule, or the “use it or lose it” rule. This encourages efficient use of scarce airport capacity.

This summer, we saw a promising recovery in passenger demand. It is welcome that so many people have been able to travel on business, visit family and friends or travel abroad for a much-deserved break. However, demand remains below pre-Covid levels, and this recovery has not been without its challenges. It is well known that the sector struggled to ramp up operations. This caused some disruption at airports in early summer, which abated as the summer progressed, supported by swift action from the Government.

We have designed a package of measures for the winter 2022 season that aims to balance the recovery of the sector with enabling airlines to plan deliverable schedules. When the pandemic struck, the 80:20 rule was fully waived to avoid environmentally damaging and financially costly flights with few or no passengers. We then offered generous alleviations for four seasons while travel restrictions remained and demand was uncertain. Last summer, we implemented a 70% usage ratio, reflecting the more positive outlook in demand. We provided additional alleviation during the summer season in response to the high levels of disruption at airports arising from the continuing impact of Covid-19.

As required by ATMUA, we have determined that there is a continued reduction in demand, which is likely to persist, and we consider further alleviation measures justified for the winter 2022 season, which runs from 30 October 2022 to 25 March 2023. On 20 July we therefore published this draft statutory instrument, setting out the package of measures we propose. This package was developed following consultation with industry and careful consideration of the responses.

The draft instrument being considered applies to England, Scotland and Wales. Aerodromes are a devolved matter in relation to Northern Ireland and, as there are currently no slot co-ordinated airports in Northern Ireland, the Northern Ireland Executive agreed that it was not necessary for the powers in the Act to extend to or apply in relation to Northern Ireland.

In this instrument, the Government have focused measures on encouraging the ongoing recovery in flight traffic while protecting connectivity to destinations where restrictions remain in place and minimising the risk of disruption at airports while the sector recovers. This includes retaining the 70:30 usage requirement, but the regulations also include a justified non-use provision, which provides alleviation for airlines flying in restricted markets.

For this winter, we have expanded the list of Covid-19 restrictions that airlines may use to justify not using slots if they severely reduce demand for the route or, indeed, its viability to include pre-departure testing requirements. Restrictions covered also include flight bans and quarantine or self-isolation requirements applied at either end of any particular route. As was the case for the summer 2022 season, this will apply whether or not the restrictions could reasonably have been foreseen to ensure that we are protecting carriers and markets with long-term restrictions in place.

There will be a three-week recovery period during which the justified non-use might still apply following the end of Covid-19 restrictions. We will also allow early application for justified non-use. By this, I mean where an official government announcement about the duration of restrictions gives rise to a reasonable expectation that they will still be in place on the date of operation of the slots. The carrier will then still be able to apply for justified non-use, otherwise it would have to reapply every three weeks. This allows earlier hand-back of slots so that other carriers can use them. It also removes some of the administrative burden.

In the winter 2021 season we allowed full series hand-back, whereby an airline could retain rights to a series of slots for the following year if it returned the series to the slot co-ordinator before the start of the season. For this winter season, we have included a more limited measure that allows the carriers to claim alleviation for up to 10% of their slots at any airport if they returned them to the slots co-ordinator for reallocation between 1 and 7 September this year.

All this is so that the aviation sector can plan its schedules and make sure that they are deliverable. We are currently considering whether further alleviation is likely to be justified and I will certainly listen very carefully to what noble Lords have to say. I beg to move.

[Baroness Randerson (LD)]

My Lords, I thank the Minister for her comments. Slot alleviation has become routine in the last couple of years. I have always accepted it as an important aspect of ensuring that we do not have unnecessary flights. “Half full” would be an overstatement; “almost empty” would be more accurate during Covid. However, I have got to the point where I question whether it is justified any longer in the current terms that the noble Baroness presents.

The Explanatory Note refers to an expansion of the list of reasons for slot alleviation, but that expansion is still in terms of Covid. Paragraph 7.2 of the Explanatory Memorandum refers to demand being at or around 80% to 85% of 2019 levels during May to July. Does the Minister now have access to figures for August and September?

The irony is that the reduction in demand over the summer was significantly affected by the cancellation of flights because airports instructed airlines not to fly, not because of Covid but because they did not have the ground-handling capacity. That happened at both Gatwick and Heathrow. The impact was, of course, to reduce the number of flights, but it also suppressed demand beyond those who thought that they had booked flights. I am sure we all know people who found that their flights were cancelled or deferred, and people who simply gave up trying to fly abroad as a result of the congestion at airports. There was suppressed demand over the summer, so the alleviation of slot rules could be said to be no longer appropriate for those reasons. It is time the Government reconsidered it, because it distorts the market.

Finally, I point out that there is no impact assessment for this. The grounds given for this are that it is for less than 12 months, but this has actually been going on for years, as the Minister pointed out in her explanation. I draw the Committee’s attention to the 12th report of the Secondary Legislation Scrutiny Committee, Losing Impact: Why the Government’s Impact Assessment System Is Failing Parliament and the Public. At this stage, now that we appear to be through the immediate emergencies of Covid, it is important that the Government restore the standards they once had in legislation, in terms of impact assessments.

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[Baroness Vere of Norbiton (Con)]

My Lords, I am very grateful to all noble Lords who have taken part in this short debate. I will start with the point raised by the noble Lord, Lord Tunnicliffe, about how we got to where we are. There is not a formula per se, but obviously consultation with the industry and other stakeholders was incredibly important. We also looked at detailed data on flights.

It is quite interesting speaking to airlines; I was speaking to one yesterday. They might say, “We’re back up to 100% and are doing brilliantly, thank you for asking”, because they fly the European routes, which have been open for a very long time and where the demand is back. However, we know that there is wide variation in the number of routes that can be flown at the moment. Some of the long-haul routes are still not open, particularly those to China, for example, and Japan has only recently opened up. In aggregate, the picture is looking much better for the airlines, but there are still some places that cannot be flown to, which, to my mind, means that maintaining 70:30 for at least the winter season is the right decision.

The noble Lord went on to ask whether we will be doing it in future. I am not sure; that is what we are doing right at this moment. I take heed of his words that we have to be very careful with slots. We must look at the things we have in our armoury. This 70:30 slot alleviation is potentially a very large hammer to crack a nut. We would potentially look again at justified non-use. Once we and other areas of the world are further out of the pandemic, what does justified non-use look like? It seems to me that it could be a better thing to use, because you want to try to protect some airlines from factors beyond their control. I cannot say where we will go in future. Do I think it will look exactly like this? I do not think so, but I am content with where we are at the moment and where we have got to in the proposals that we have set out.

The noble Baroness, Lady Randerson, talked about demand being suppressed. Obviously, we have quite a lot of data on why demand is being suppressed. There is still a reluctance from some to come back to the skies, because of Covid. They do not particularly want to travel just yet. I agree with her that this summer did not do the aviation sector any favours: I have made the point to many people in the sector that there is a job of work to do on public perception. The sector should make sure that going on holiday, for example, is not a chore but a delight. Airports and travelling should be a delight; you want to join your airline going off to Corfu, or wherever, with the bar fully stocked and everything working. I am focusing on working with the industry on getting the industry working—not only airlines and the airports but third-party suppliers—and then making sure that we somehow get across to the travelling public that some of those terrible Daily Mail front pages from the beginning of last summer are no longer the case at all.

The noble Baroness expressed some doubt over whether the alleviation is needed for the winter season; I think I have managed to explain the Government’s position on that. The pandemic is quite far away in our rear view mirror but not in other parts of the world, some of which are the very valuable long-haul destinations. One would not necessarily want to disrupt the slots for them at this time.

I take the noble Baroness’s point about the impact assessment, although the Government stand by our position that it is for six months. Obviously, we put as much information as we possibly could in the impact assessment.

The noble Lord, Lord Berkeley, is right about London Heathrow; it is proposing that the passenger cap comes off at the end of October. I warmly welcome that. Heathrow, like many other airports, is very reliant on third-party suppliers and, as the noble Lord knows, the Government are undertaking a review of ground handling. That is one of the unseen parts of the entire system and if it breaks down, everyone gets very cross because their luggage does not arrive—and quite rightly so. They blame the airline, the airline has contracted the ground handlers and the ground handlers do not really see the anger of the passengers, so there is a bit of work to be done there.

The noble Lord also brought up the question of alleviation at the other end. I had the same question. However, I am reassured—and airlines have not raised this with us—that different alleviation measures in different countries have not caused a problem, so that is not necessarily an issue we need to worry about.

Are we concerned if airlines consolidate at London Heathrow? Yes, I am, actually. I do not want airlines to consolidate at Heathrow unless they have no alternative. If they have slots at other airports, I should very much like them to stay in those other airports. The Government are very much committed to regional airports.

There are no ghost flights—or fewer than 1% in the second quarter of 2022, and they were not caused by slot rules. Because the alleviations have been in place for so long now, the system has managed to adjust to them. All being well, in future, we will have no ghost flights.

I have had quite a lot of deep dives into slots and slot reform, something the Government said we would look at in Flightpath to the Future. It is hugely complicated: there is the balance between wanting the industry to invest for the long term, competition and not, as the noble Lord, Lord Tunnicliffe, pointed out, upsetting the apple cart by doing things that have unintended consequences. We will be looking at that very carefully.

Finally, the noble Lord, Lord Jones, spoke about Cardiff. I am pleased to say that although the regulations cover Wales, Cardiff is not an airport with co-ordinated slots. It is not quite busy enough for there not to be enough slots. We now have to get more airlines flying into Cardiff, then it will have co-ordinated slots and any regulations will cover it. For the time being, however, it has enough slots to go around. I commend the regulations to the Committee.

Motion agreed.

Great British Railways

Baroness Vere of Norbiton Excerpts

Tuesday 25th October 2022 Lords Chamber

[Lord Tunnicliffe (Lab)]

My Lords, we have universal agreement that the railways are in a chaotic mess. Great British Railways was supposed to be the answer. Why is it being delayed? Particularly, why has progress on the rail network enhancement pipeline been stalled, and when will the location of the Great British Railways headquarters be announced—or is this to be delayed indefinitely?

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

My Lords, the challenges facing our nation’s railways were very clearly set out—some years ago now—in the Plan for Rail. These challenges have been exacerbated by subsequent events, namely Covid, macroeconomic headwinds, and some challenges with industrial relations.

The Government remain committed to modernising our railways and transforming the industry. At its heart will be a focus on passengers. The consultation on Great British Railways and other reforms closed on 4 August. We had 2,500 very good responses. We will be working through that feedback to help us shape the way forward with Great British Railways.

The Government have invested and will continue to invest billions of pounds. On the RNEP specifically, we know that the use of the railways has changed. There has been a shift away from commuting and towards leisure. Where we invest taxpayers’ money must reflect that. We are looking at the RNEP and will have it published shortly.

Finally, I am hoping that there will be an announcement shortly on the location of the Great British Railways headquarters.

[Baroness Randerson (LD)]

My Lords, the state of our railways is a national embarrassment. Yet the withdrawal of this Bill is evidence that the Government are not prioritising them. Meanwhile, the tables of the Royal Gallery are littered with Bills that reflect the extremes of Conservative ideology and are of no practical use or value to ordinary, hard-pressed citizens. Will the Minister take the opportunity presented by a new Prime Minister this week to press the case again for the inclusion of this Bill in his new list of priorities? While she has his ear, will she press him to ensure that railway fares do not go up in line with inflation next year, as this would be a bitter blow to commuters?

[Baroness Vere of Norbiton (Con)]

My Lords, I cannot agree that those Bills are no good to anybody. I think that the Energy Prices Bill will be warmly welcomed by consumers across the country.

Some legislation is needed for rail reform. However, it should also be noted that we can deliver an enormous amount of what we have promised without legislation. These are things such as workforce reform, increasing competition within the system, improving the ticketing system, starting local partnerships, and, most importantly, the long-term strategy for rail. This will set out the 30-year vision that will be taken forward by Great British Railways. We are making good progress and will bring the legislation forward as parliamentary time allows.

[Lord Mackenzie of Framwellgate (Non-Afl)]

My Lords, for years I have used the east coast main line, at present run by LNER. Will the Minister join me in congratulating LNER on improving services? It is very efficient now after the pandemic—which was a difficult period, obviously, but it is back to optimum efficiency. A lot of it is due to the pleasant nature of, and service provided by, the staff, and, of course, an improved menu. LNER is of course run by the Department for Transport. Does this not provide fairly solid evidence and clear proof that a railway can operate efficiently while publicly owned?

[Baroness Vere of Norbiton (Con)]

I agree with the noble Lord that staff are absolutely key. We have some very hard-working staff across the system. We need to ensure that those staff are in place to serve passengers where they are absolutely needed. It is the case there are some very outdated workforce practices within the railway system, which need to be upgraded so that we can offer a modern, seven day a week service. However, I say to the noble Lord that it is about simplification of the system, not nationalisation.

[Lord Palmer (CB)]

My Lords, I have been travelling up and down the east coast main line for 71 years, and I would like to place on record how incredibly helpful, polite and nice all the staff are, whether it be actually in Scotland or in England. They deserve a serious clap on the back.

[Baroness Vere of Norbiton (Con)]

I completely agree with the noble Lord.

[Lord Young of Cookham (Con)]

My Lords, further to my noble friend’s reply, while understanding the reason for postponing the legislation, can she confirm that it will not stop worthwhile reform, such as simplifying ticketing, introducing more e-tickets, replacing diesel trains on branch lines with battery electric trains and other steps such as providing more real-time information about trains?

[Baroness Vere of Norbiton (Con)]

I can absolutely assure my noble friend that the Government are hard at work with the train operating companies, Network Rail and everybody in the railway industry to make sure that as much progress that can be made is being made. For example, the accessibility audit of all railway stations is now well under way and should yield really good results for accessibility in the future.

[Lord Wigley (PC)]

My Lords, the Minister will be aware from previous questions of the considerable concern about the service between Euston and Holyhead. Members of all parties in another place have raised it on a number of occasions. Given the seriousness of the position, which is that what used to be eight through trains a day is now down to one, what is the Minister doing about this? She has recognised the problem. Has she taken any action?

[Baroness Vere of Norbiton (Con)]

Yes, I do recognise the problem. We absolutely have taken action. We have daily meetings with the train operating company. It has put together a recovery plan, which has been reviewed by the ORR and Network Rail’s programme management office. There will be a very significant step change in the timetable in December, because 100 newly trained train drivers are going to be fully deployed by December. So early December will be the next change in the timetable, and we expect significant improvements to services to Wales and elsewhere at that time.

[Baroness Taylor of Bolton (Lab)]

Today there are 44 cancellations on the TransPennine Express. What do the Government intend to do about that?

[Baroness Vere of Norbiton (Con)]

I am aware that the TransPennine Express is suffering a significant number of cancellations at the moment. The Government are working very closely with the train operating company. There are many factors which are contributing to those cancellations, but I agree that they are unacceptable. We are working closely with the train operating company to resolve them where we can.

[Lord McLoughlin (Con)]

My Lords, I declare my interest as chairman of Transport for the North. A number of people find the announcement of the delay in the Bill very disappointing, as the Williams report was commissioned in 2018 and reported in 2021. Will my noble friend confirm that the work that is already being done at the department will carry on at pace? There is a guiding mind at the moment for the railways; it is the Treasury. Can we get away from the fact as soon as possible that the only guiding mind at the moment is the Treasury, not the Department for Transport?

[Baroness Vere of Norbiton (Con)]

My noble friend will be aware that the guiding mind for the railways now is the Great British Railways transition team, which is focusing on all the reforms that we want to put in place. I accept that there will be some disappointment about the delay to the Bill. However, as I have previously outlined, it does not mean that work in the department has slowed down at all. We have a very energetic rail Minister, and I know that he will be taking forward these things at pace.

[Baroness Brinton (LD)]

My Lords, the Minister referred two or three times to accessibility during her responses. While the new passenger assistance app is extremely helpful, it still does not have any functionality to buy tickets. When booking assistance, I have to actually book a seat that I cannot use when I buy my ticket elsewhere. When will this be resolved? All disabled groups ask for it to happen with the app.

[Baroness Vere of Norbiton (Con)]

I am very grateful to the noble Baroness for raising that with me. I will take that back to the department. I know that there is a significant amount of work going on in relation to how online ticketing works. Clearly, it has to work with the accessibility app, and I will make sure that we take that up and see what we can do.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, the noble Lord, Lord Young, made some very good suggestions today—although he is one of the guilty men responsible for the privatisation of the railways, which has caused most of the trouble. The Minister gave replies today that were very similar to replies that she gave to the noble Lord, Lord Young, and others weeks ago and months ago, and yet nothing is happening. When are we going to get away from the position that she says something here, but nothing actually happens on the ground? Will she and her colleagues go out and actually travel on the trains for once?

[Baroness Vere of Norbiton (Con)]

I will do that if the noble Lord stops pointing at me. The reality is that an enormous amount has actually happened. It takes time to put these things in place. There are two main issues when it comes to Avanti, for example. The first is the massive shortage of fully trained drivers, which was exacerbated by the need to stop training during the Covid period. As I mentioned, 100 drivers have now come through the system. However, the number one thing that would really help to restore services on Avanti is better co-operation from the trade unions.

Doncaster Sheffield Airport

Baroness Vere of Norbiton Excerpts

Tuesday 25th October 2022 Lords Chamber

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

The Government have had several—actually 13—ministerial-level meetings since towards the end of July. The Transport Secretary, for example, met Mayor Oliver Coppard from SYMCA on 22 September and Mayor Jones from Doncaster County Council. She has also spoken to Peel Group twice. I have spoken to Peel Group, to 2Excel, to the noble and learned Lord, Lord Falconer, who I see is in his place, and to local MPs. The reality is that my officials are in constant contact with all the relevant parties. If I feel that I can help further, I certainly will. On using the Civil Contingencies Act, we looked very closely at it, and it has a very high bar. I should note to noble Lords that, despite all the emergencies we have had in this country since the Act was passed 20-odd years ago, Part 2 of that Act has never been used: no emergency has managed to reach that high bar. We did look at it and we have challenged ourselves to ensure that the contingency plan is in place. Those tenants who will be leaving DSA are robust, and therefore their contracts can continue.

[Baroness Randerson (LD)]

My Lords, many local airports have been in trouble since Covid. However, this airport is of great strategic significance. It has one of the longest runways in the UK, it is the home of the national coastguard operations, and it is the base for the National Police Air Service. This is, therefore, of very great national significance, not a little local difficulty. Will the Minister therefore undertake to treat this as a problem of national significance, and does she agree that the Government need to provide tangible support—not just warm words—for local representatives?

[Baroness Vere of Norbiton (Con)]

The Government do not own or operate airports; local authorities and devolved Administrations do—for example, Manchester, Birmingham, Luton and Teesside. We very much feel that, if there is a local solution to be had, it will come from local knowledge, from those local authorities. For reassurance, I have spoken to 2Excel about its contingency plans, which wrote to the former Prime Minister setting out that it would be able to continue with its work, and the Home Office is content that the NPAS will also be able to continue its work. While we are deeply disappointed by Peel’s decision, I have strongly urged the group to engage with all interested parties should a commercial solution be available.

[Lord Falconer of Thoroton (Lab)]

My Lords, the National Police Air Service’s entire fixed-wing aircraft fleet is based at Doncaster Sheffield Airport. The fixed-wing element of the UK’s life-saving search and rescue service is based at Doncaster Sheffield Airport. The Maritime and Coastguard Agency has aircraft on-call there 24 hours a day, seven days a week, 365 days a year. Peel will close the airport within two or three weeks from today. The consequence is that 2Excel will move all of these and the engineering facilities to what it describes as “boltholes” spread across the United Kingdom. What assessment has the Department for Transport made of the extent to which services will be disrupted or degraded permanently as a result? What effect will that have on the risk to life, particularly as we go into the winter? What steps is the Department for Transport taking to ensure that there is no danger to life in those circumstances?

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[Baroness Vere of Norbiton (Con)]

As the noble and learned Lord will know from when he encouraged me—fairly robustly, I might add—to look at the CCA regarding this issue, we have been in touch with 2Excel. I have spoken to the company myself, and it is fair to say that it feels quite aggrieved at the way it has been treated by Peel. I have to say that I have some sympathy with that. Peel has publicly stated that it will work to minimise disruption to its tenants; I very much hope that it will honour what it has said, rather than leaving it to the courts to wrangle over the leases, which will be brought to an end early. We have spoken to 2Excel and have had written confirmation that the contracts in place for search and rescue for the Maritime and Coastguard Agency will not be impacted. As I said previously, I have also had assurance from the Home Office that NPAS will also be able to function.

[Baroness Bennett of Manor Castle (GP)]

My Lords, associated with Doncaster Sheffield Airport has been a huge amount of public funding of infrastructure such as roads. Are the Government going to make any attempt to recover some of those funds from the Peel Group? We went through the same cycle with what was Sheffield Airport, when a huge amount of public money went in and then Peel Group pulled out. Will the Government ensure that the future use of that infrastructure and, indeed, the airport will support small and medium-sized enterprises, co-operatives and genuine prosperity in the local community?

[Baroness Vere of Norbiton (Con)]

Regarding the infrastructure that was put in around Doncaster Airport, such as roads, I have travelled along a road there, which was fairly new and of incredibly high quality. It was of course put there to support the airport and to enable passengers and workers to get to and from the airport, but it should be said that Peel Group invests for the long term. I do not know what its plans are for the longer-term site at Doncaster Airport, should it eventually no longer be used as an airport. However, it is a prime, very large site in an area with a significant number of people who would have the skills to develop various businesses there. I anticipate that any infrastructure that has been put in would be utilised by whatever takes place at the airport.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, as Members of this House may know, I very seldom, if ever, praise the Scottish Government. However, in the case of Prestwick Airport they have done the right thing and for the right reasons. It seems to be very similar to Doncaster Sheffield Airport. Prestwick has a very long runway, and it has a search and rescue facility—the parallels are amazing. Will the Minister therefore give one clear assurance today: that she and her colleagues will have a word with the Scottish Government and look at what they have done to keep Prestwick Airport? The father of the noble Viscount, Lord Younger, and I did a lot to protect it way back in the 1970s and 1980s. Will the Minister please talk to Ministers in Scotland and see if the United Kingdom Government can follow their example in respect of Doncaster Sheffield Airport?

[Baroness Vere of Norbiton (Con)]

As I said at the outset, it is not unusual for the devolved Administrations or local authorities to take stakes in or have interests in airports, and some of them have been incredibly successful. It is pleasing to see that Prestwick is now successful; there was a time when it was not. Certainly, Manchester and Luton have recovered from the pandemic particularly well. As I said previously, the Government do not own or operate airports and will not be stepping in with UK taxpayers’ money in these circumstances.

[Baroness Pinnock (LD)]

My Lords, can the Minister explain how the closure of Doncaster Sheffield Airport, in an area that desperately needs investment, contributes to the Government’s growth plan?

[Baroness Vere of Norbiton (Con)]

The question is more relevant to regional connectivity, which is absolutely key for growth. As we set out in our 10-year strategic framework for aviation, we are very much focused on regional connectivity. Anybody who knows the geography of the area around Doncaster Sheffield Airport knows that it is not the only airport in the area. Other airports are easily accessible from many of the places around there, so it has quite a limited, unique catchment area, which may have contributed to Peel’s decision that it was not viable in the medium term. I understand that other consultants have looked at it, potentially, for the local authorities and reached the same conclusion.

[Lord Berkeley (Lab)]

My Lords, the Minister mentioned that Doncaster has a very long runway, and my noble friend said that it was like Prestwick’s. Manston in Kent has an equally long runway, or maybe longer, and so does Newquay in Cornwall. Newquay is being used by Virgin to get the first rocket into space, I believe. Do the Government think that long runways are important, or are they quite happy for all these to be sold because we have short take-off and landing and do not need long runways any more?

[Baroness Vere of Norbiton (Con)]

Of course, they do not get sold. These runways are in private hands or the hands of local authorities. I am grateful to the noble Lord for raising the issue of Newquay. It just goes to show what airports can do. By adding a spaceport to the airport, it is broadening its revenues and looking to the future. The Government very much hope that the launch of the Virgin Orbit rocket will take place as soon as possible.

Vehicles: Purchase Price and Running Costs

Baroness Vere of Norbiton Excerpts

Monday 24th October 2022 Lords Chamber

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

My Lords, while the upfront purchase price for electric vehicles remains higher than for their petrol or diesel equivalents, in many cases these vehicles are cheaper to own and run. Generous tax incentives are in place, which, alongside fuel and maintenance savings, reduce the total cost of ownership.

[Baroness Randerson (LD)]

My Lords, the Fair Charge report highlighted the discrepancies in VAT for private and public EV charging. As energy prices rise, the discrepancy becomes even greater in real terms. There is a realistic danger that EVs will be seen as too expensive, although the Government, of course, get a greater income from tax as energy prices have risen. I realise it is difficult for the Minister to know what government policy is likely to be later this week, but will she undertake urgently to press whoever happens to be running the Treasury to reduce VAT on public charge points to 5%, in order to encourage EV take-up among all sections of society?

[Baroness Vere of Norbiton (Con)]

I am very happy to outline what government policy is. As the noble Baroness will know, and as is always the case when taxes are referred to, all taxes are kept under review. It should be stressed that the reduced VAT on domestic supply reduces bills for households by £5 billion a year. Most people do not charge their electric vehicles exclusively at public charge points. However, I accept that that discrepancy exists and, as I said, we keep taxes under review.

[Lord Patel (CB)]

My Lords, does the Minister believe that the UK strategy on battery production is still viable, particularly given the recent media reports related to Britishvolt and the decision to move the production of electric Minis to China from Oxford? Does that show a loss of confidence in the strategy?

[Baroness Vere of Norbiton (Con)]

I do not think it is a loss of confidence in the strategy. The Government’s intention is that the UK remains at the forefront of EV manufacture, innovation and batteries; that is why we have the Faraday fund and the automotive transformation fund. All these elements are really important, but I accept that some companies will come into the market, and some will leave. There will be some flux, but at the moment, we are not concerned.

[Lord Hunt of Kings Heath (Lab)]

My Lords, that sounds like a very laissez-faire attitude. What discussions have the Government had with BMW about this very unfortunate decision?

[Baroness Vere of Norbiton (Con)]

As far as I am aware, the Department for Transport has not had any discussions with BMW about this very unfortunate decision. However, I will inquire with colleagues in BEIS as to whether they have. But, as I say, there are always changes within any particular manufacturing sector. None of us wants the Mini to be produced in China and it may well be that other models come back to the UK.

[Lord Forsyth of Drumlean (Con)]

My Lords, I declare my interest as an owner of an electric Mini and a diesel car. The electric Mini is one of the best cars I have ever had. It costs nothing to run because I charge it from sunlight from my solar panels. What on earth are the Government doing by allowing this icon of British industry to be changed and moved to China?

[Baroness Vere of Norbiton (Con)]

Of course, a lot of the design and innovation that went into the Mini did come from the UK, but the Government are clearly not going to get involved in some decisions by private companies as to where they do their manufacturing. However, we can provide support to companies to make sure that they do manufacture in the UK and that is why we have the automotive transformation fund.

[Baroness Sheehan (LD)]

My Lords, can the Minister reassure the House that the end-life of EV batteries will not be landfill? Also, can she update the House on government support for research into the remanufacturing of EV batteries?

[Baroness Vere of Norbiton (Con)]

It is really important that we understand what happens to batteries throughout their lives. It is the case though that there are 20 million EVs on the world’s roads already and there is no evidence to suggest that their lifespans are any different from those of a petrol or a diesel vehicle. We expect that many EV batteries will have a guarantee of about eight years, or 100,000 miles. As for the end of their lifespan, it is very important that we focus on recycling. Of course, the Government are focused on that, and I will write to the noble Baroness with more information.

[Lord Naseby (Con)]

Is now not a good time for His Majesty’s Government to have a whole look? We have the strategy of 2030 ahead of us, when petrol cars are supposed to disappear, but at this point in time we have a situation where electric cars are hugely expensive; they are not available at a competitive price for ordinary families. Ordinary families living in tower blocks in my former constituency cannot recharge those cars, so is it not time that we had a look at the whole strategy openly and took a little time about it to ensure that we have a policy that is workable in the future, taking into consideration the point added by my noble friend on the Bench below?

[Baroness Vere of Norbiton (Con)]

The price of electric vehicles has fallen dramatically over recent years, and that was helped by the Government providing quite significant grants in the early years to ensure that the prices were lower. There are now 24 models that cost less than £32,000 new—

[Noble Lords]

Oh!

[Baroness Vere of Norbiton (Con)]

If I may finish—because I too would not buy a new car for £32,000—the second-hand market, in my view, is the key to getting widescale acceptance from, and affordable vehicles to, the consuming public. The second-hand market is getting stronger. The biggest suppliers to it are the fleets, and we are working with them to ensure that their models get to the second-hand market.

[Lord Tunnicliffe (Lab)]

My Lords, the transition to electric vehicles is vital to the survival of our society as we know it; the impact of climate change is even worse in many other countries. The report sets out some sensible recommendations to help on the way. Which, if any, of the three or two-plus-two recommendations does the Minister reject, and why?

[Baroness Vere of Norbiton (Con)]

I am afraid that I am not familiar with the recommendations in the report.

[Baroness Meacher (CB)]

My Lords, do the Government have a strategy to deal with financial incentives being given by the Chinese Government to entice British firms to move to China, and if so, what is it?

[Baroness Vere of Norbiton (Con)]

I will have to refer to the relevant department, but it is of course the case that the UK Government also provide support to various companies to invest in the UK and to create jobs here. All countries will have their own strategies, but I will write to the noble Baroness with more information.

[Lord Leigh of Hurley (Con)]

Will my noble friend agree to speak to her colleagues at Defra about the huge shortage of electric charging points on our inland waterways? There is a disproportionate amount of diesel and petrol boats, particularly on the Thames, which are heavily polluting—I declare an interest as an owner of an electric boat—but the reason that there are not more electric boats is simply the paucity of charging stations.

[Baroness Vere of Norbiton (Con)]

My noble friend raises a very important point. The Government are very focused on the decarbonisation of the maritime sector, whether that be inland or on sea, so I will certainly speak to Defra, but I will also write to my noble friend, because I think that there is more that I can say on inland waterways.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, is it not even more important to get people to stop using their cars as much as possible, whether they are electric, diesel or petrol, and go on the train? Is not that even more difficult, as I found this morning, when the 8.30 am and the 9.30 am trains from Edinburgh were cancelled because there were no staff available? The noble Baroness, Lady Ramsay, and the noble Lord, Lord Maxton, are stuck on a train. They were turfed off at Preston and had to catch another train. That is not reliable. What is the Minister doing to get reliability in our long-distance trains?

[Baroness Vere of Norbiton (Con)]

I absolutely agree with the noble Lord. There are some circumstances on our trains where the service is not very good at all. We are working very closely with some of those providers that are not providing the level of service that we want, because the Government’s goal is to provide choice. If people want to be able to use the trains, we have to have trains that actually work. We are very focused on that, and I am sure that the noble Lord will have seen comments from the Secretary of State for Transport regarding how we feel about the services being offered.

Merchant Shipping (High Speed Craft) Regulations 2022

Baroness Vere of Norbiton Excerpts

Monday 17th October 2022 Lords Chamber

Moved by

[Baroness Vere of Norbiton]

That the draft Regulations laid before the House on 4 and 7 July be approved.

Considered in Grand Committee on 11 October.

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

My Lords, I beg to move the two Motions standing in my name on the Order Paper en bloc.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, should the noble Lord not have sought the leave of the House when taking two together?

[Baroness Vere of Norbiton (Con)]

My Lords, indeed, the noble Baroness—not the noble Lord—should have done. With the leave of the House, I beg to move that the two Motions standing in my name on the Order Paper be considered en bloc.

Motions agreed.

Seafarers’ Wages Bill [HL]

Baroness Vere of Norbiton Excerpts

Wednesday 12th October 2022 Grand Committee

[Lord Tunnicliffe (Lab)]

My Lords, the amendments in this group relate to the territorial scope of the Bill and the vessels to which this legislation applies. Seafarers across the board deserve proper compensation for their work and I welcome the opportunity to consider whether the Bill, in its present form, achieves this. To this end, I hope the Minister will clarify that all workers on the vessels listed in these amendments are already covered. When we landlubbers think of seafarers, we often picture those who directly control vessels, but the definition is incredibly wide and covers everyone from cleaners to the administrative staff on board. I hope the Minister comments on the Government’s approach to supporting better wages and conditions for all seafarers.

Amendment 5 in my name is a probing amendment and it is key. It seeks information from the Minister on the state of negotiations, particularly those with France and the Republic of Ireland, on the corridor concept. This Bill, which we support, is one small step towards addressing the issue of seafarers’ terms and conditions.

I respect what my noble friend Lord Berkeley just said but, at the end of the day, if these international conventions have achieved utopia for seamen, I would hate to see hell. Wages seem incredibly, unacceptably low in an international world. Perhaps that is not so true in the wider world, but they seem unacceptably low in Europe. I hope the Government put all possible energy into negotiations with other European states to establish these corridors. It sets a precedent for the worldwide consideration that seafarers deserve a better deal than they are getting.

Amendment 23 would prevent the refusal of harbour access where doing so would break international maritime law. In any situation in which harbour access is refused, in framing the appropriate guidance, a Government must have considered the safety and environmental implications of refusal. It moves to the general view that we must work on the international agreements in parallel and seek to ensure, as does the amendment in the name of the noble Baroness, Lady Scott, that the various conventions not only exist but are universally and even-handedly implemented.

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

My Lords, I am grateful for the careful consideration of this Bill by all noble Lords. I reiterate what I have already said to noble Lords in private sessions: the Government are listening to concerns and will endeavour to answer in full all the questions raised by your Lordships today. I suspect that some will certainly be in writing, and I may well try to develop on some on some of the things I am able to say today so that we have full information as we head towards Report.

I sense that there are slightly differing views around the Committee, where some people want this to go much further and others are very cautious. Of course, both of those views potentially risk the Bill itself. I therefore just want to make sure that everybody has as much information as I can get out, particularly around the Government’s intent with the Bill and why it is drafted as it is. Noble Lords will have heard the previous Secretary of State speak about the nine-point plan many times, which was in response to the P&O decision that was made back in March. We recognise that this Bill is narrow in scope and potentially also in effect, as we cannot legislate outside UK territorial waters. It is none the less an important part of the nine-point plan that this sits hand in glove with the other work that we are doing to improve the welfare of seafarers to make sure that their terms and conditions are as good as they can be.

The amendments in this first group cover territorial scope and international law and I will try to address them in turn. Amendment 1 from the noble Lord, Lord Hendy, seeks to probe the application of the Bill in various circumstances. I completely accept the way that he introduced this and that he had intended some separate amendments that were deemed to be out of scope. It is worth making sure that the different groups of seafarers who he identified in his amendment are indeed covered. To look at it in more detail, on proposed new subsection (1A)(a), seafarers working or ordinarily working in the UK, including UK internal or territorial waters if the vessel is not exercising a right to innocent passage, are already entitled to the national minimum wage. That stems from Section 1(2)(b) of the National Minimum Wage Act 1998 and Article 2 of the National Minimum Wage (Offshore Employment) Order 1999. That change is therefore unnecessary, and I think the noble Lord would agree.

On proposed new subsection (1A)(b), voyages to or from the Crown dependencies would already be in scope of this Bill under the service definition in Clause 1. Of course, I recognise at this point that the UK Government can legislate only in the waters of the UK; therefore, it would be a similar circumstance as one would have, for example, with a journey to France.

On proposed new subsection (1A)(c), under Article 2 of the National Minimum Wage (Offshore Employment) Order 1999, a worker working or ordinarily working in connection with the exploration of the seabed or subsoil or the exploitation of natural resources in the UK sector of the continental shelf is treated as if they are working, or ordinarily work, in the UK. Those workers are therefore already entitled to the national minimum wage, so, again subject to the caveat about UK territorial waters, those workers are covered—ditto those who are working on services to offshore renewable energy installations. Again, I note that some of those may be far away from UK territorial waters. I hope that that reassures the noble Lord.

I note the point raised by the noble Lord, Lord Tunnicliffe, that it is not only the people who are in control of the ship. When I think about this, I do not think about the people in control of the ship but of all the other people on board, who do the really important day-to-day tasks that are sometimes forgotten. I accept that this is about making sure that we cover everybody on board, and I am satisfied that we do.

--- Later in debate ---

[Lord Tunnicliffe (Lab)]

My Lords, this is a useful set of amendments to clarify some of the points. I hope that the Minister will either be able to provide that clarification or, if she wants to worry about the syntax of her reply, supply it in a careful letter.

I have two amendments in this group. Amendment 10 seeks to replace 120 with 52 in Clause 3(3), so I sit alongside my noble friend Lord Berkeley and the noble Baroness, Lady Scott. My noble friend made a persuasive case for 50, as opposed to 52, and I will need considerable persuasion not to press this point on Report, unless the Minister is able to create a very powerful argument that there would be unintended consequences from that.

Amendment 36 seeks, in essence, to stop the effects of the Bill being, in a sense, destroyed by repeated regulations. Surely the Bill’s minimum requirements are in the primary legislation, and the adjustments to them should really be only upwards, not reducing the requirements.

I also join the noble Baroness, Lady Scott, in her concern about the DPRRC’s concerns. In my day, if it produced a recommendation, we used to shake in our boots and recognise that some deal or other had to be made with it because of the authority it carried. Once again, I hope the Government will recognise the authority and wisdom of that committee and accede to its suggestions.

[Baroness Vere of Norbiton (Con)]

My Lords, I am again grateful to noble Lords for sharing their thoughts on this group of amendments. The thrust of the amendments in this group is very much around probing the scope of the Bill in terms of the services and ships to which it applies. As the noble Lord, Lord Tunnicliffe, noted, I will write. I do not think he was implying that my oral replies are not carefully thought through—maybe he was—but the letter will be perfect. Noble Lords should await further information in the letter, but I will try to cover as many points as I can.

I look at this borderline, grey-area conversation that noble Lords are having, and at the back of my mind I keep thinking, “What sort of an operator are you if you will go to a different port in order to drop your frequency down to be just under or over any particular target so that you don’t have to pay your seafarers the national minimum wage equivalent in UK waters?”

[Baroness Randerson (LD)]

P&O?

[Baroness Vere of Norbiton (Con)]

Well, because of that we will come on to why it is so important that the Bill refers to services rather than ships; otherwise, quite frankly, you could do that, and all sorts of very interesting things. I will try to go through some of the amendments and think carefully about how we make sure that we reassure operators and trade associations about what a service is. Indeed, there is a question about what a harbour is. The good thing is that we have a definition of a harbour, in the Harbours Act 1964 and the Harbours Act (Northern Ireland) 1970. That is what a harbour is, so I will put that one to bed.

--- Later in debate ---

[Lord Berkeley (Lab)]

I just want to comment on the Minister’s last statement, which was very helpful. I think she needs to recognise that the maritime industry has probably got very good PR, but some of what goes on on the ships is highly dubious. I have been honorary president of the United Kingdom Maritime Pilots’ Association for about 25 years—heaven knows why so long, it is very nice of them—and I hear stories about what pilots find when they get on the ships. It is not just that the pilot ladder might break, which sadly does happen occasionally, but that there is a language problem within the ships, or that the master sometimes cannot control the crew and that they will do anything to save tuppence ha’penny. So, I appreciate what she is saying, and in a normal business, she is probably right, but in this sector, it may not be the ferry or the short-haul freight services, but we have to recognise that every penny seems to count and usually it is very bad for some of the crew.

[Baroness Vere of Norbiton (Con)]

Of course, the noble Lord has much more experience aboard such vessels than me, and I will take his word about some of the conditions on ships. Indeed, we heard during Covid how what happened on ships was very distressing for some people and extremely disappointing. I take all of that on board but I go back to: I cannot fix the entire world today but what I can fix is what is before the Committee in terms of the scope of this Bill.

The noble Lord, Lord Berkeley, mentioned specific types of services, such as coasters—which apparently take English clay around the coast, et cetera—and cruise ships. This is why it is so important to do this based on the service and its frequency rather than what it is actually providing. Coasters might be caught but if they are doing only domestic work they will be caught anyway because they are in UK waters and they are caught if it is port to port within the UK, but if they are doing a run frequently—say three times a week across to France—they will be caught, and I do not see why they should not be. I have no problem with that. Let us catch them. The people working on such vessels most likely have close ties to the UK and those vessels clearly have close ties to the UK because they dock here so frequently, so it does not matter where the ship is flagged or where the employment contract is. It is the fact that it spends a lot of its time in UK waters and enters UK ports on a very frequent basis. This frequency is important.

I note that two noble Lords have tabled amendments to go down to 52 occasions from 120. We looked at this very carefully during the consultation. My current view—and of course we are going to go away and consider this—is that 52 would catch too many vessels that we did not intend to catch and would be overreach in terms of the current settlement with the international shipping community. Again, we might be entering the sort of territory where the unintended consequences would be quite significant. I go back to the fact that this is a narrow Bill, it has a narrow scope, it does a very specific thing, and I would like it to do that specific thing on services which dock here 120 times a year.

Amendments 7 and 8 refer to this issue of “a harbour”, “the harbour” or “harbours”. We have established what “a harbour” is—so that is done—and we are very clear that the service is to a particular harbour. It is not to “a harbour” within the UK because Calais-Dover is not the same as a service running from Calais to any other harbour. The route is specified. It is the same route, not using the same ships, high frequency to a specific harbour. We think that is quite clear.

The noble Baroness, Lady Randerson, asked for a definition of “close ties”. I do not think I will ever be able to get to that but we have been able to define what a “service” is. Those services have close ties. It is descriptive language to define what these services are, but it is merely that. It is not something that will be legally defined and taken forward.

[Baroness Randerson (LD)]

Do I understand, then, that the Government are unable or unwilling to define “close ties”?

[Baroness Vere of Norbiton (Con)]

The Government are very willing to define what these services are and, by implication, those have close ties to the UK. I can probably come up with lots of other clever descriptors to define these sorts of services. A large container ship stopping at the UK once a month does not have close ties to the UK; it is an international container ship, shipping around wheat or whatever it might be shipping. We can think of some other language, but once we have nailed what the service is, where it goes, how frequently it goes and which ships it utilises, then we have defined it. That is it, we are done. That is the definition that works legally because it has hard boundaries and can be fairly well defined, I think.

I absolutely appreciate that Amendment 27 is a probing amendment. We intend to provide guidance to harbour authorities, and that guidance will be consulted on. We can define what the service is but we need to help harbour authorities to fully understand those definitions. We will consult with the industry to make sure that there is absolute clarity. I would not say that the guidance should be put on a statutory footing; that is not entirely necessary in this particular case.

I turn finally to Amendment 37. I have of course seen the DPRRC report. It was published only a few days ago so I beg your Lordships’ leave just to say that, at this stage, we are considering what is in it. We are taking it very seriously; I reassure the noble Lord, Lord Tunnicliffe, that we take all DPRRC reports very seriously. We will publish our response to it before Report so noble Lords will have the opportunity to peruse that. I have no doubt that we will be able to have further conversations about that.

[Lord Tunnicliffe (Lab)]

Will the Minister be answering on Amendment 36?

[Baroness Vere of Norbiton (Con)]

I absolutely shall cover Amendment 36. My apologies, I slightly went off-beam so I thought I had already covered it.

Regarding Amendment 36, the clause as drafted does not allow a Government to amend or reduce the overall extent of services in scope of the Bill. It provides only that regulations may make different provisions for different cases, including for different descriptions of service to which the Bill applies or non-qualifying seafarers. This power cannot be used to amend the Bill and is not intended to be used to alter the scope of the Bill. I slightly thought that I would need to come back to this particular issue to make sure that noble Lords are in agreement as to what we are trying to achieve here. I will give that further consideration.

[Baroness Scott of Needham Market (LD)]

I am grateful to noble Lords for their comments and to the Minister for hers. This set of amendments really comes down to the practicalities of statutory harbour authorities trying to manage this legislation, which, we have to recognise, is taking them into a completely new area of endeavour. They are comfortable with environmental and shipping things but we need to remember that this is new. Uncertainty at this stage about fundamentals, such as ships and services and what close ties are, is quite concerning. I hope that the Minister will ensure as a matter of urgency that the conversations that ought to take place with the harbour authorities will take place fairly soon so that we can clear up some of these issues and put them in a position where they feel a little more comfortable with what they are being asked to do.

With that, I beg leave to withdraw my amendment.

--- Later in debate ---

[Lord Tunnicliffe (Lab)]

My Lords, I will speak on the two amendments in my name in this group, but I commend the other amendments to the Minister’s study, because it is important to achieve clarity on some of these issues.

On Amendment 25, my original involvement with these sorts of issues was in an analogous industry—transport—where I was a shop steward and subsequently an industrial relations manager. In the crew situation, issues with roster patterns and pensions are every bit as important as wages. The way that rosters are handled in particular can have a serious impact on remuneration and a massive impact on quality of life. It is important that there is a proper impact report on these issues, ideally within 90 days.

This leads on to Amendment 26, because this and other issues would be much enhanced if we could develop a proper relationship with the trade unions. The importance of this from the point of view of the trade union movement is exemplified by an appeal—for want of a better term—to the International Labour Organization from the general secretary of Nautilus; the general secretary of the RMT, Mick Lynch; the general secretary of the TUC, Frances O’Grady; the acting general secretary of the European Transport Workers’ Federation; the general secretary of the International Transport Workers’ Federation; and the general secretary of the International Trade Union Confederation. I read those out to emphasise that this is a heavy coalition of the trade union movement. Their appeal is set out in a document that I hope the Minister has seen, which centres on what happened at P&O. It helps one to understand how broad detailing and managing the employment conditions of crew is and how important it is to get a hold of this to make sure that crews are properly looked after, both in their remuneration and conditions of work. I therefore commend Amendment 26 to the Minister.

[Baroness Vere of Norbiton (Con)]

My Lords, this third group of amendments is broadly concerned with the relationship of this Bill to the domestic national minimum wage. The noble Lord, Lord Hendy, has already decided that Amendment 3 is not necessary; I agree with him so, if noble Lords agree, I shall just move on.

Amendment 13, also in the name of the noble Lord, Lord Hendy, relates to the calculation of the national minimum wage equivalence and deductions. We have been clear that this will be covered by regulation and is not for the Bill. This also allows us a little more flexibility decades hence, should changes need to be made. Nevertheless, Section 2(5)(c) of the National Minimum Wage Act 1998 does not prohibit deductions from pay of costs for providing seafarers’ accommodation, food or water, but simply provides for regulations on the matter. We will very much be matching up.

Regulations under the Bill will need to be consistent with the provisions within the Maritime Labour Convention, or MLC, whereby requiring seafarers to meet the cost of food and water is expressly forbidden. We therefore do not need to amend the Bill to account for this. Perhaps the noble Lord might remind the RMT about that, if it feels that seafarers out there are being charged for those things. That is clearly and expressly forbidden.

Regarding deductions for accommodation, under the National Minimum Wage Regulations 2015, employers on domestic services are permitted to apply a reduction of up to £8.70 per day in respect of the provision of living accommodation, without that affecting the assessment of the worker’s pay for national minimum wage purposes. The MLC does not make express provision for reduction for accommodation, and shipping industry practice is not to charge seafarers for accommodation. It is not our intention that operators should be encouraged to make such reductions for accommodation to reduce their overall wage fee, so we will be considering this in the regulations in due course.

--- Later in debate ---

[Lord Tunnicliffe (Lab)]

My Lords, I have a couple of amendments in this group. The first is Amendment 12, which would create a minimum fine of £1 million. Whether that is the right figure, I am not sure, but the real concern is about the size of the owners; I believe that P&O’s owners have made $721 million in the past six months. There is a real risk that, if businesses of this size take an almost doctrinal opposition to the measure—the P&O debacle showed such a doctrinal opposition to reasonable conditions on board ships—a fine that is not substantial becomes just a cost of business. That would be regrettable; I am sure that it is not the Government’s intention but I would value some feedback from the Minister. How does one assure oneself that the fines are sufficiently large to impinge on the decision-making of these companies? There is a concern that good companies do the right thing anyway. The trouble is that we have a very real example in the recent past of one of these companies not doing the right thing; that is what provoked this legislation.

The second area concerns naming the inspector or inspectors. I tabled my amendment here to draw out how the world will know that this is happening. Organisations that have either a principal inspector or someone like that as a named individual are so much clearer as to who will be held to account for appropriate levels of activity. As a minimum, I hope that the Minister will be able to give me a feel for how quickly inspectors will be appointed and how many of them there will be, as well as assure us that there is adequate inspection capability. We know that this whole issue of minimum wage enforcement is pretty difficult in a land situation; at sea, it will be much more difficult to get the details to know whether an offence or the wrong charge has been committed.

With that, I come to the amendments in the name of the noble Baroness, Lady Scott, regarding the Secretary of State having the authority to determine the tariff, which will really be a fine. I think that harbour authorities are about harbours. I can see why they perhaps must be drawn in at one level but when it comes to becoming a policeman, in essence, that is what the state should be doing. I agree with the general thrust that this should be the Secretary of State’s responsibility.

Finally, I hope that the Government will give careful consideration to the amendments addressing the DPRRC’s concerns.

[Baroness Vere of Norbiton (Con)]

My Lords, this fourth and final group of amendments is concerned broadly with incentives, enforcement and compliance. There is a wide range of amendments herein. It has been helpful to have this discussion today.

I will start with Amendment 4, with which the noble Lord, Lord Hendy, seeks to make requesting a national minimum wage equivalent declaration a duty rather than a power that can be used with some discretion. The payment of national minimum wage equivalent would be a condition of port entry and so should be a matter for the harbour authority to decide. Furthermore, by making this a “may” rather than a “must”, we are allowing for flexibility in circumstances where there might be overlapping harbour authorities, for example where a vessel transits through one harbour authority’s area of jurisdiction to call at a port within another harbour authority area of jurisdiction. There may be other circumstances that noble Lords can think of where it is not necessary that this declaration is shared every single time. It should be noted that the Bill provides the Secretary of State with the power to direct harbour authorities to request a declaration, so there are necessary safeguards against harbour authorities not discharging this function properly.

--- Later in debate ---

[Lord Tunnicliffe (Lab)]

The noble Baroness promised to write letters. Will it be a common letter to all of us?

[Baroness Vere of Norbiton (Con)]

Yes. I tend to do one letter addressed to all noble Lords present. A copy will be placed in the Library. It will be lengthy, but it will be set out by topic and cover, with as much detail as I can, things that I have not been able to cover today and any additional information that would be helpful to noble Lords.

[Lord Hendy (Lab)]

My Lords, I am grateful to all noble Lords who have spoken in the debate, and to the noble Baroness for her explanation and response to the points raised in this group of amendments. I am very grateful in particular that she will look again at the Delegated Powers and Regulatory Reform Committee’s recommendations. I should have said earlier that I am a member of that committee.

I wonder whether, having heard the almost unanimous view expressed this afternoon about the effective delegation of authority to harbour authorities, the Government would be prepared to look at that a little further. Having said that, I beg leave to withdraw my amendment.

Merchant Shipping (High Speed Craft) Regulations 2022

Baroness Vere of Norbiton Excerpts

Tuesday 11th October 2022 Grand Committee

Moved by

[Baroness Vere of Norbiton]

That the Grand Committee do consider the Merchant Shipping (High Speed Craft) Regulations 2022.

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

My Lords, these draft regulations relate to the safety of high-speed craft, which are generally all rapid passenger craft but can be cargo craft. They primarily operate domestically in UK waters, although some operate between the UK and the Isle of Man, the Channel Islands and France.

High-speed craft are defined in the International Maritime Organization’s International Code of Safety for High-Speed Craft, SOLAS chapter X. They include some twin-hulled vessels, hydrofoils and air-cushioned vessels such as hovercraft. Examples include the Isle of Wight hovercraft and the Thames Clippers. The definition of a high-speed craft set out in the international documents relates not only to its speed but to its displacement.

These regulations will be made under the safety powers conferred by the Merchant Shipping Act 1995. However, they are subject to the enhanced scrutiny procedures under the European Union (Withdrawal) Act 2018, as they will revoke the Merchant Shipping (High Speed Craft) Regulations 2004, which were made under Section 2(2) of the European Communities Act 1972. That is a long way of explaining why these have an affirmative attachment to them; in and of themselves, they are fairly straightforward and mostly technical. They do not implement any EU obligations.

As I have noted, these high-speed craft regulations replace those from 2004 to implement the most up-to-date requirements of chapter X of the annexe to the International Convention for the Safety of Life at Sea 1974, known as SOLAS, affecting high-speed craft. Chapter X gives effect to the high-speed craft codes of 1994 and 2000, which contain the requirements applying to high-speed craft. As their name suggests, these codes were first agreed internationally by the International Maritime Organization in 1994 and 2000, but they have been updated, most recently in 2020.

What do these regulations do? They further improve the safety standard for high-speed craft and will enable the UK to enforce these requirements against UK high-speed craft, wherever they may be in the world, and non-UK high-speed craft when in UK waters. This provides a level playing field for industry. These amendments bring UK legislation up to date and in line with internationally agreed requirements.

The updated requirements of SOLAS chapter X, which these regulations seek to implement, introduce both a new requirement for crew drills on entry to and rescue from enclosed spaces, such as machinery spaces, to be conducted every two months, and the recording of those drills alongside other similar recordings currently kept for fire drills and other life-saving appliance drills. These updated requirements came into force internationally on 1 January 2015.

In addition, the regulations implement two further changes to the codes. First, they introduce updates to the requirements for life-saving appliances relating to rescue boats and life rafts. Secondly, they abolish the current monopoly on satellite service provision to ships, opening the market to any provider meeting the required standards. Both these measures came into force internationally on 1 January 2020.

While many other nations adopt such resolutions into their domestic law immediately, our dualist legal system can lead to delays and a backlog has occurred. We intend to avoid such delays in future by using ambulatory references in our regulations. Indeed, we are using ambulatory references in these regulations to put matters agreed at the IMO into our domestic law.

On the UK flag we have about 30 high-speed craft to which these new regulations apply. There are no foreign-flag high-speed craft operating in UK waters. The 1994 code applies to older vessels and the 2000 code to vessels built or substantially modified in or after 2002.

I believe that is about as much as I can say about these regulations. I have one more thought: they also make amendments to the Merchant Shipping (Fees) Regulations 2018. That is purely to enable fees to be charged for the inspection, survey and certification of these high-speed craft by the Maritime and Coastguard Agency. On that note, I beg to move.

[Lord Greenway (CB)]

My Lords, I am grateful to the Minister for describing these regulations. As she said, under chapter X of the IMO’s SOLAS convention the high-speed craft codes are regularly updated to incorporate advances in safety technology. That is the reason for these regulations.

The changes the Minister outlined are acceptable to the UK shipping industry, as evidenced by the response to the consultation process. The addition of the ambulatory reference provision to keep UK law aligned with IMO obligations is also welcome. As she said, we hope it will speed up the process as this is just another of those maritime SIs that we should have discussed some time ago.

I understand that many of the changes proposed have already been adopted by UK owners, especially by those trading internationally, because it is in their own interests to do so. I believe that some of them would like to have more advance warning of what new changes are being discussed at the IMO so that they have an idea of what might come through the pipeline.

As the Minister said, these high-speed craft come in many shapes and sizes. I have been slightly mystified as to what the size parameters are, because the only thing I have found relates to cubic metres, and I cannot relate cubic metres to a vessel. She mentioned Thames Clippers, so it obviously comes down to a relatively small craft. An upper limit does not really apply, because these craft do not get to enormous sizes.

Another area for high-speed craft, and one that is rapidly increasing, is in the offshore service sector. I looked this up to see what was going on, and I understand that there is already a High-Speed Offshore Service Craft Code. Presumably, those sorts of craft are not included in these regulations. If the Minister and her advisers could help me with a parameter for these regulations, in relation to the vessels they cover, I would be most grateful.

In the offshore sector there is enormously interesting development going on, with the latest things being all-electric craft that fly on foils. Seen from ahead, you wonder how on earth they manage to go about their business, when the ship is high out of the water and there is just a single foil going down into the water. These are exciting prospects and ones that I hope will lead to great commercial success in future. In the mean- time, I welcome the regulations.

--- Later in debate ---

[Lord Tunnicliffe (Lab)]

My Lords, we are looking at the high-speed craft regulations—the high-speed craft code. I assume—I may be corrected—that the code is de facto in two parts. There is presumably a part of the code which relates to construction—I noticed the reference to stability—and clearly there is a part which relates to operation. That is a classic division in international transport; it happens in aviation, and essentially, the international code for the construction of aeroplanes is obeyed more or less by every country to the same standard, which makes life very straightforward. There is a code about operation but clearly, that tends also to be influenced by the domestic philosophies of the airlines and operators concerned. Is my assumption that the code divides into two accurate?

Secondly, to what vessels or craft does the code apply? I discovered the formula—I cannot remember whether it is in the Explanatory Memorandum, the regulations or on Google, but wherever it is, how I would apply it did not entirely leap to my mind. However, as I understand it, it relates to volume and it then manipulates that volume to create a speed, which defines whether a craft is high-speed. If it goes faster than that, it is a high-speed craft, and if it goes slower than that, it is not. However, it means that the image of what a high-speed craft is is not self-evident. I understand that the “Queen Mary 2”, for instance, can achieve 30 knots—it normally goes around the world at about 20 or 22 knots. That sounds quite fast, but I believe it is not a high-speed craft. Equally, smaller vessels—the Minister mentioned smaller vessels which operate domestically—which clearly do not do 30 knots are categorised as high-speed craft.

My next question is on whether we have any in the UK; the noble Baroness has already told us that we do. If my conceptual division is right, clearly, this code would apply to how they are operated. I presume it applies to how they are manufactured. The question then is: do we manufacture any of these vessels in the UK? My sense from my Google exploration is that we do not, although I may have misread that. Are we comfortable that the philosophy behind the code has been applied in the original construction of these vessels?

Finally, the code is different. It says in paragraph 7.3 of the EM—and in the code, which I have looked at only very superficially:

“The HSC Codes take more of a risk-based approach than many maritime standards, which tend to be more prescriptive.”


Indeed, it is the history of transport that most specifications originate from simply building the particular transport facility, be it a train, a boat or an aeroplane, seeing how many of them crash, and from each crash you learn something new and put that in a regulation. You end up with a large amount of prescriptive things, and if you do it enough, you get pretty close to the optimum. Indeed, the high performance of aviation recently has shown that this approach works—sadly, with the notable exception of the 737 Max; it took two horrific accidents for Boeing to take its responsibilities seriously.

The interesting point is that taking a risk-based approach to safety, as opposed to a learning-based approach that creates the prescriptive codes, requires a different philosophical approach by the safety regulators. If the Minister agrees with my division between these two approaches, can she say whether the people who now enforce that code in the UK are equipped and educated to move from the prescriptive way of going about these things, which in a sense is quite challenging but really straightforward—it passes the prescriptive feature: it has the right number of this and that and will break or not break at this level, and so on—into the more judgmental or risk-based way and to apply the code in that flexible way? Have they exercised that sort of discretion in a way that can give us confidence? The problem with the risk-based approach is that until you get a mature group of regulators, it is possible for people to make poor judgments under such a code.

I have no further questions. We will support this code being incorporated, of course. While I deplore the delays, I will forgive the Minister because we have gone on about that enough.

[Baroness Vere of Norbiton (Con)]

I am grateful to all noble Lords who have taken part in today’s short debate, especially the noble Lord, Lord Greenway, for his insight as a relative expert in this area. I will start by trying to help all noble Lords with the definition of a high-speed craft; they may or may not need calculators. A high-speed craft is one

“capable of a maximum speed in metres per second”

equal to or exceeding 3.7 times the one-sixth power of

“the volume of displacement corresponding to the design waterline”

in metres cubed,

“excluding craft the hull of which is supported completely clear above the water surface in non displacement mode by aerodynamic forces generated by ground effect”.

I hope that is helpful.

[Lord Tunnicliffe (Lab)]

I did read that definition, so I am not surprised by it. I really want to know what are typical high-speed crafts and what are not. Am I right that the “Queen Mary 2” is not a high-speed craft but that some smaller craft that do 30 knots are designated as high-speed craft?

[Baroness Vere of Norbiton (Con)]

I will see whether I can get further written clarification of that. My understanding is that a craft knows that it is a high-speed craft, is certified to be such and then falls under these regulations. Clearly, there is a balance between the speed and the displacement. We might come up with a nice little picture of the displacement and the speed, saying whether it is high speed. That might be quite interesting for all noble Lords, as we are unlikely to talk about high-speed craft again any time soon. Let us see how we do.

The other thing I want to cover at the outset is the impact of the delays, as mentioned by the noble Baroness, Lady Randerson. I think the noble Lord, Lord Greenway, said it best; I believe he said that many of these changes are already adopted. During analysis, the UK’s high-speed craft were found to already comply with all the elements of these regulations, which transpose these international safety requirements for high-speed craft from chapter X into domestic law.

There are the two different codes, as noted by the noble Lord, Lord Tunnicliffe. The noble Baroness, Lady Randerson, talked about being drunk at sea and a list of other things. Essentially, everything within those codes comes over to domestic law. I got a little confused at this point, so I will go back to Hansard and check that I have properly covered that issue, which I know was raised by both Front-Benchers.

On the delay in bringing them into domestic law, I hope I have been able to reassure noble Lords that all the UK craft were already doing it. The main benefit of the regulations today is the fact that we will be able to enforce them against foreign and UK craft if they are not. The MCA will certainly do that. The delay for enclosed spaces, et cetera—I am sorry; I cannot read my writing—was seven years; that came into force in 2015. On life-saving appliances and the deregulation of satellite services, there was a two-year delay. But as I say, the requirements were already in place and we are not aware of any incidents relating to vessels that did not put these requirements into place.

The noble Lord, Lord Greenway, asked about high-speed offshore service craft. Indeed, he is absolutely right: there is a completely different set of regulations, which I was going to mention in my opening remarks. I then decided that it would confuse all noble Lords because we would be talking about entirely different vessels which do very important things. I completely appreciate that there is huge innovation going on in that area with electrics and the foils—you only have to look at the America’s Cup vessels to see that they fly. They do not sail anymore; they just fly. It is amazing. But, yes, we are not talking about those vessels, or indeed offshore service craft, today.

I will take the point about advance warning of future changes back to the department to make sure that we have good stakeholder engagement before future changes, either international or domestic, are foisted upon the industry. We want stakeholders to be prepared, and it is obviously really important that we get their feedback as well.

The noble Lord, Lord Tunnicliffe, asked whether we manufacture in the UK. Yes, we do—we manufacture hovercraft, and we also have a number of high-speed craft in development. I suspect that these might relate to some of the more innovative maritime things coming through, some of which are very exciting. Obviously, those craft will take account of these regulations, as would any vessel imported into this country before it can be certified.

Turning to the issue of a risk-based approach, I understand where the noble Lord is coming from. However, the high-speed craft codes of 1994 and 2000 have always taken a risk-based approach, so there is no change in mindset among the regulators here in putting a risk-based approach into place. Unless I have misunderstood the issue he raised, we believe that the MCA already operates in that way.

I have one last comment on our favourite topic: the maritime backlog. I recognise that this is one more brick in the wall, which is very good. This is one of the 13 outstanding statutory instruments, and I am sure noble Lords will join me again later this year as we debate some more. We are making progress. As I always say, I apologise, but we hope to get everything done by the end of 2023, which is what we committed to the Secondary Legislation Scrutiny Committee.

Motion agreed.

Stockton to Darlington Railway Anniversary

Baroness Vere of Norbiton Excerpts

Tuesday 11th October 2022 Lords Chamber

[Lord Faulkner of Worcester (Lab)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and refer to my railway interests as declared in the register.

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

My Lords, railways are a product of Britain’s rich history of engineering innovation and the 200-year anniversary is a nationally important moment to mark and to celebrate. The DfT will work with DCMS, other government departments and the whole industry to make this event very special for workers and passengers.

[Lord Faulkner of Worcester (Lab)]

My Lords, I welcome that splendid Answer. What response will the Government give to the submission from Sir Peter Hendy, on behalf of industry, local and national museums, the supply chain, Heritage Railway and education, for government funds to ensure that there will be a memorable series of events in 2025, including the recreation of the opening day journey of Locomotion No. 1 and the creation of a walking and cycling route along the 26 miles of the original line as a permanent legacy?

[Baroness Vere of Norbiton (Con)]

I am grateful to the noble Lord for highlighting some of the tremendous things that we can achieve to celebrate this 200-year anniversary. I am also aware that Sir Peter Hendy is out there with his begging bowl and working his magic. I am sure he is doing exactly what we want him to do, which is bringing together all the interested parties to work with government. This is a huge opportunity to not only celebrate the heritage of our railway network but promote the wider, modern system across the country.

[Lord Naseby (Con)]

My Lords, if we are to celebrate the 200th anniversary properly, do we not need ticket offices up and down the country? Although only 12% of tickets may be sold there at the moment, nevertheless, is my noble friend not aware that a ticket office does far more than sell tickets? They give advice, not least to parents who are going on holiday or with children, and are of course very important to the tourism industry.

--- Later in debate ---

[Baroness Vere of Norbiton (Con)]

My noble friend has sort of answered the question for me. I completely agree that railway staff do far more than sell just tickets, which is why in some circumstances they need to be out and about helping people where they need the help, rather than sitting in a glass box. My noble friend is right that one in eight tickets are currently sold by a ticket office. We know that passenger needs have changed and most people nowadays use the digital system, but we recognise that, in some areas, people want the option to buy a ticket at a ticket office. No final decisions have been taken. We are listening, but we must recognise that passenger needs have changed.

[Lord Wrigglesworth (LD)]

My Lords, having been born in Stockton—a little after 1825—and like my noble friend Lord Rodgers having represented Stockton in the other place for quite a number of years, I have a keen interest, as he has, in the success of these celebrations. I am therefore delighted to hear what the Minister has to say about the support that is being given to all the organisations already involved in preparing for them. However, would not the best and most appropriate way to recognise the wonderful achievements of railways since 1825 be to support the proposals of Northern Powerhouse Rail to upgrade and massively improve connections between the east and the west of the country and thereby achieve the levelling up and economic growth that the Government seek to achieve?

[Baroness Vere of Norbiton (Con)]

The noble Lord will have seen the recent comments from the Prime Minister about Northern Powerhouse Rail. The Department for Transport has taken those comments very seriously indeed and is now doing an enormous amount of work.

[Lord Grocott (Lab)]

As we celebrate our heritage railways and the tremendous achievements of British engineering across the world, does the Minister also acknowledge the importance of the heritage railway sector? There are more than 100 heritage railways in the country and 400 stations, attracting millions of visitors each year. Can I be assured that the Government recognise the importance of this sector to the local economies in which the railways operate and the special needs of the sector, not least in relation to the supply of coal? I should declare an interest as honorary president of the Telford Steam Railway.

[Baroness Vere of Norbiton (Con)]

I am grateful to the noble Lord for reminding us of the coal issue. We will have it at the top of our minds because it is absolutely critical. Heritage railways are a key part of local tourism. They attract people not only locally but internationally. We absolutely recognise the importance of the heritage rail sector; alongside DCMS, DfT works closely to make sure that it is properly promoted.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, the National Railway Museum in York was founded in the year we celebrated the 150th anniversary of the Stockton to Darlington railway. Since 2008, it has included the excellent Locomotion museum at Shildon, which formed a key part of County Durham’s bid to be the UK City of Culture for 2025. As the Government consider the recommendations from Sir Peter Hendy and others, will my noble friend ensure that this museum is supported to play its full role in the celebrations of the 200th anniversary of this great gift to the world from the north-east of England?

[Baroness Vere of Norbiton (Con)]

I thank my noble friend for his question. I pay tribute to his outstanding service as DCMS Minister—he therefore knows an awful lot about the topic of heritage rail. He is right that we are not going to have a full celebration without making sure that all of our railway museums are fully engaged in the process. I completely agree with him that we absolutely need to ensure that railway museums across the country, including the fantastic National Railway Museum in York, are involved in the celebrations.

[Lord Tunnicliffe (Lab)]

My Lords, I am afraid that I agree with the Minister—it is a bad habit these days. That day in 1825 was an historic one. It gave the United Kingdom first-mover advantage in this extremely important industry. It is one of the most important dates in the whole development of the Industrial Revolution, from which we as a society still benefit. I am delighted that the Minister supports the celebration of it. Will she allow in her answer that that support may involve some financial support?

[Baroness Vere of Norbiton (Con)]

I will allow that it may involve some financial support.

[Baroness Randerson (LD)]

My Lords, I hope I can persuade the Minister to go further than that gentle reply. It appears that the Government funded the Unboxed festival—something visited by only around 250,000 people and designated a “festival of Brexit” by Jacob Rees-Mogg—to the tune of £126 million. I think that the festival we are talking about today will be a lot more popular and resonate a great deal more with the public. So can the Minister give us a clearer indication of the size of the Government’s intended financial support?

[Baroness Vere of Norbiton (Con)]

Unfortunately, I am unable to give a clearer indication of the size of any government financial support, principally because the plans are still in development. We know that Sir Peter Hendy is working some up, but of course there will be other plans coming through from DCMS and DfT. As those plans come together, of course the Government will consider financial support.

[Lord West of Spithead (Lab)]

The Minister has articulated very clearly how important the whole heritage scene is, particularly in the railway endeavour. Can I ask her—in her hat as Transport Minister—who is responsible for heritage and historic ships, which are crucially important for our coastal communities?

[Baroness Vere of Norbiton (Con)]

The interesting thing is that heritage railways actually fall under DCMS. The noble Lord asked me about heritage ships. I am afraid I do not know, so I will write.

[Lord McLoughlin (Con)]

My Lords, I declare my interest as chairman of Transport for the North. In working on transport infrastructure and investment, would my noble friend care to take us to 2025, when we will see the completion of the £100 million currently being invested in Darlington railway station. Would she like to pay tribute at this point to Ben Houchen, who managed to bring this project forward and is seeing a significant investment in Darlington railway station now?

[Baroness Vere of Norbiton (Con)]

I completely agree with my noble friend that this Government have been reopening abandoned routes, electrifying lines, investing in high-tech, refurbishing stations and building new tracks and trains, such as the Elizabeth line. That is what we intend to continue to do.

[Lord Berkeley (Lab)]

My Lords, would the Minister like to celebrate 2025 by telling us that we will have Royal Assent for the Great British railway legislation that we are still waiting for? It started as the Williams plan. It then became the Williams/Shapps plan, and presumably now it is going to be the Williams/Trevelyan plan. Might it ever be the Williams/Vere plan if we wait long enough?

[Baroness Vere of Norbiton (Con)]

I do not know—perhaps in my dreams. The Secretary of State is clear that the Government’s commitment to modernising rail and transforming the industry remains. We will of course legislate when parliamentary time allows.

Motor Fuel (Composition and Content) (Amendment) (Northern Ireland) Regulations 2022

Baroness Vere of Norbiton Excerpts

Tuesday 11th October 2022 Grand Committee

Moved by

[Baroness Vere of Norbiton]

That the Grand Committee do consider the Motor Fuel (Composition and Content) (Amendment) (Northern Ireland) Regulations 2022.

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

My Lords, these regulations relate to the introduction of E10 petrol in Northern Ireland. Regulations relating to the introduction of E10 petrol in Great Britain were considered and agreed to by your Lordships’ House in 2021, and I should note that this introduction has been successful, with no significant concerns raised.

E10 petrol contains up to 10% of renewable ethanol, double the amount blended into E5 petrol. Increasing the renewable ethanol content in standard grade petrol across the UK can reduce annual carbon dioxide emissions by 750,000 tonnes a year, helping us to meet our ambitious climate targets. The regulations’ purpose is to introduce E10 as standard petrol in Northern Ireland, while ensuring that the current E5 grade remains available for those who need it. This will bring petrol grades in Northern Ireland in line with those in Great Britain, where E10 was introduced in September 2021. We have completed the notification procedures required under the Northern Ireland protocol, meaning that an introduction in Northern Ireland is now possible.

E10 allows us to cut carbon emissions from cars, motorbikes and other petrol-powered equipment in use on our roads today. This is done by simply increasing the amount of renewable fuel blended into standard petrol. It is one of very few measures available to us which has an immediate impact. E10 is a proven fuel that has been successfully introduced in Great Britain and many nations around the world to deliver carbon savings. Following the introduction of E10 in Great Britain last year, these regulations ensure that consumers are provided with a consistent petrol grade across the UK. It is worth noting that the Republic of Ireland intends to introduce E10 in January 2023.

The UK has a valuable bioethanol industry, which has already benefited from the increased demand created by the introduction of E10 in Great Britain. Following our policy announcement to introduce E10 across the UK, one large facility operator announced that it would recommence production. The domestic bioethanol industry supports high-skilled jobs and improves our energy independence, delivering on a range of government priorities such as growth and energy security.

These production facilities also play an important role in their local economy, employing hundreds of skilled workers directly and supporting thousands of jobs in the wider community. That community includes the agricultural sector, with locally grown, low-grade feed wheat used to produce ethanol. Furthermore, valuable co-products of bioethanol, such as high-protein animal feed and stored carbon dioxide used by the food industry, reduce our reliance on imports, thus increasing our domestic resilience. It is vital to support these industries as we grow our economy and progress towards net zero by 2050.

Introducing E10 is part of a wider set of measures to encourage renewable fuels. Overall, renewable fuel blending is incentivised through the renewable transport fuel obligation, or RTFO, obligating larger fuel suppliers to supply renewable fuels. However, the RTFO does not prescribe how to meet low-carbon fuel supply targets, nor does it require specific fuel blends; it is market driven. It is therefore necessary to introduce the obligation to supply specific fuel blends to remove market barriers. This has been proven to be successful by the introduction of first E5 and then E10 petrol in the UK, as well as B7 diesel.

We have opted for introduction in Northern Ireland in November, as fuel suppliers and retailers have made it clear that an introduction at the same time as or shortly after the change from summer to winter fuel specification is the most efficient way to introduce E10 into the fuel system.

Over 95% of petrol-powered vehicles on the road are compatible with E10 petrol, and this figure is increasing all the time. All new cars manufactured since 2011 are compatible with E10 petrol, and most cars and motorcycles manufactured since the late 1990s are also approved by manufacturers to use E10. However, some older vehicles are not cleared to use E10. That is why this instrument includes provisions to keep the current E5 petrol, which contains up to 5% ethanol, available in high-octane “super” grade.

The same set of derogations and exceptions that apply to the supply of E5 and E10 in Great Britain in case of supply issues or infrastructure constraints will apply in Northern Ireland as well. This means that very small filling stations will be exempt from having to sell E10. Additionally, if supplying petrol with the required minimum ethanol content is not feasible for short periods of time, say due to factors such as technical or supply issues, the Secretary of State for Transport can grant refineries or blending facilities temporary derogations to ensure that fuel supply is not interrupted.

We have launched a comprehensive communications campaign involving local radio, roadside posters, social media and information at forecourts. This informs motorists in Northern Ireland of the changes that will be made to petrol this autumn—subject, of course, to the approval of this instrument—and directs vehicle owners to GOV.UK, where there is an online compatibility checker so that people can see whether their car is compatible.

In proposing this statutory instrument, my department has carefully considered a balance of interests, as we did when we introduced E10 petrol in Great Britain. I beg to move.

[Baroness Randerson (LD)]

My Lords, I thank the Minister for her excellent introduction. Obviously, we welcome this statutory instrument. However, I want to use this opportunity to register my concern at the continued lack of an Executive in Northern Ireland. That is an issue that goes well beyond this. The lack of the Executive serves the people of Northern Ireland very badly indeed, condemning them to the slow lane on so many important issues. There is an example in this SI of how they are disadvantaged.

Paragraph 12.6 of the Explanatory Memorandum makes clear that the “added complexity” of supplying 95 octane E5 grade fuel to Northern Ireland while the rest of the UK has moved on to E10 grade has, not surprisingly, meant additional costs to producers. It goes on to make it clear that producers have had to provide

“separate production processes and storage.”

Paragraph 12.3 says that the costs of this have

“already been passed on to motorists in Northern Ireland”,

even though they have not been enjoying the advantages of it. They are paying the price without getting the benefits. Happily, however, this SI brings Northern Ireland in line with the rest of the UK. Presumably the SI includes any useful lessons learned from the Great Britain implementation. Maybe the Minister could tell us whether any specific issues have been incorporated as a result of this.

I have a few questions. The Minister has answered the first one; I was going to refer to the tight timescale. I see that the Government have anticipated that and have launched their information and awareness-raising campaign. There are older vehicles that are incompatible, of course, and there will continue to be supplies of the old grade of fuel for this reason. Classic cars might be the main reason for that, but petrol is not used just for cars. Indeed, the SI refers to its use for equipment. I declare an interest as the owner of what might politely be described as a classic petrol lawnmower. Does the public information campaign cover equipment in general—not just lawnmowers but other equipment—and not just cars? Putting the wrong petrol in can be quite disastrous.

These regulations impose requirements on petrol filling stations to supply certain types of fuel. They impose additional responsibilities on those filling stations, so I use this opportunity to ask the Minister whether the Government will give urgent consideration to requiring them also to provide electric vehicle charging points. They are beginning to do so on certain rare occasions in Great Britain. The faster this happens, the greater we can all reap the environmental advantages of electric vehicles. EVs now encompass 16% of the new car market. Petrol stations are losing their market relatively fast and need to adapt. I think an imposition—with a timescale, of course—would be very useful in ensuring that we make the transition as soon as possible.

Paragraph 7.12 refers to fuel terminals still

“unable to blend … ethanol into their petrol”

and gives them at least two years’ exemption. I am concerned that these still exist. We have known for a long time that this change was coming, so I thought providers would have adapted by now. Can the Minister tell us what percentage of terminals this applies to? Is it just one or two? I notice that apparently there are none identified in Northern Ireland. Are we talking about a big section of the market in the UK, or just one or two outliers?

Finally, the documentation states that most petrol sold in Northern Ireland—which itself represents 3.5% of the total UK market—comes from suppliers who also supply the rest of the UK. I assume that some of the petrol sold in Northern Ireland comes over the border from the Republic, and I would be interested to know what percentage. Are the rules and regulations that now apply in the Republic identical to those being imposed on Northern Ireland, or is there some variation at some point? Obviously, this would have implications in terms of the protocol as well as a practical implication for motorists. Having put forward those questions, I am very pleased to see this measure before us.

[Lord Tunnicliffe (Lab)]

My Lords, I thank the Minister for introducing this SI, which of course we will support. However, having done a little research on this issue, I have ended up with a few questions. First, I think she said that the situation in Northern Ireland and mainland UK will be precisely the same after 1 November. It seems to me that we have E10 and E5, and 97 and 95. As I understand it, in Northern Ireland all the E5 will be 97 and all the E10 will be 95. I should know this from when I fill up my car, but is that the situation in the UK today?

The second area I am interested in, from doing research on that glorious but occasionally seductively dangerous Google, is that there have been questions about whether there is a fuel consumption penalty. Indeed, looking it up on GOV.UK, there is an acknowledgement that there is. The government website suggests that it is 1% or 2%; some motoring magazines have suggested it is rather higher. It would not require much of an increase in overall fuel consumption to arguably negate the advantages of ethanol in the fuel.

If one is unfortunate enough to own one of the 5% of cars which, I think, are not E10 compatible—or perhaps fortunate because they are some of the nicest cars around—it seems that one would have to go to E5 97. My general experience is that 97 is substantially more expensive than E10 95, so it seems to be something of a penalty. Indeed, it might lead some people to use E10 even though they know their vehicle is incompatible. Can the Minister give us some feel for the impact on the engine of consuming incompatible fuel E10 95 instead of the E5 97 that should be used?

GOV.UK explained—it is set out in the EM—that carbon dioxide emissions are reduced by this process. I would be grateful if the Minister could explain the mechanisms by which that is achieved. I have to say that until today I thought petrol was petrol, but when I got on to Google I discovered that it is a gigantic mixture of all sorts of things, and that it varies according to the time of year, and so on. However, it is a hydrocarbon—that is, it takes its energy from releasing hydrogen and carbon from the molecules and creating water and CO₂. That must be as true for ethanol because its chemical formula contains only carbon, hydrogen and oxygen, and, as far as I can tell, all the components of petrol contain carbon, hydrogen and oxygen. I therefore find it difficult to see how the emissions from the vehicle would be different. I can see that there is a difference between fuel which comes from various processing of vegetable matter, which of course captures the CO₂ in its creation and then it goes through a cycle in order to be able to go into a car.

I also discovered with my friend Google that there are worries about some issues such as condensation, and potentially water in fuel as result of that, and about the possibility of degradation of hoses and seals. I wonder to what extent in this introduction those concerns have been taken account of. Otherwise, this is a wonderful idea and I beg to support it.

[Baroness Vere of Norbiton (Con)]

My Lords, I am grateful to the noble Baroness, Lady Randerson, and the noble Lord, Lord Tunnicliffe, for their consideration of the statutory instrument today. I am pleased that they are both able to support it, and they had some very good questions, definitely one of which I had to go and look up after I spoke to the noble Lord, Lord Tunnicliffe, this morning; I am very pleased to have an answer but I will leave it to the end, as it is my piece de resistance.

I turn first to the questions asked by the noble Baroness, Lady Randerson, although this also applies to some of the issues the noble Lord, Lord Tunnicliffe, raised. We have had this fuel in Great Britain now since September 2021 so, if there were any significant concerns, they would have been raised. We are not aware of any. I recognise that some motoring magazines might raise certain questions, but certainly there is no evidence at the moment that there is a significant problem with the introduction. The noble Baroness asked whether we had learned anything from the introduction in Great Britain. One of the key things that we learned was to make sure that we made the introduction when the specification of the fuel changes from summer to winter, so that you get the throughput at the same time as you are trying to flush through the winter grade, in this case, into Northern Ireland. In broad terms, therefore, as regards this introduction, where there are any risks they have been mitigated or we are aware of them, and otherwise I expect a very smooth introduction.

Of course, it is true that this SI was delayed a little by the sad death of Her Majesty the Queen; that is why the communications campaign in Northern Ireland has already started. The noble Baroness spoke about classic cars and indeed classic lawnmowers. We are aware that a number of items of equipment will need to continue to use E5. E5 will remain available, and we will make sure that the communications include guidance for owners to check their manufacturer’s instructions to see whether E5 is suitable. In the vast majority of cases, they can just use E10 and then E5 if it is available. Light aircraft should also be able to continue to use E5. Again, as with the introduction in Great Britain, although we noted it and it was a potential issue, it has not turned out to be the case.

The noble Baroness mentioned EV charging points and I look forward, now that I am back in my role, to speaking with her further about them. I note that we have a new Minister for the Future of Transport, whom I was speaking to only today. I am not saying that the last Minister was slacking at all, but the new Minister has come at it with great new vigour to look through all our plans, to make sure that the funding is going to the places which need it most. We have to fund areas where there is a market failure because there is a significant private sector there that is willing to invest, and we need to make sure that we target those areas—for example, rural areas—where the value-for-money case for the private sector might not be so good, but we absolutely need to get those EV chargers there.

On the percentage of terminals that cannot blend, I can say that bat the moment there are two terminals, which represent less than 5% of total UK petrol production. I am afraid that the point about the percentage of petrol from the Republic is a step too far, but I will write if we have that information. When the Republic introduces E10 in January, that will be consistent across the island of Ireland and within the whole of the UK. There will be consistency for the vast majority of people who are driving compatible cars.

I am afraid that the noble Lord, Lord Tunnicliffe, slightly lost me with his first point about Northern Ireland and the mainland and 95 and 97. I will go back to read it again to make sure that we can respond properly and that we have fully understood his concern about the supply of 95, 97, E5 and E10. He is right to note that there is a penalty in terms of miles per gallon when using blended bioethanol. We think it supplies about 1.7% less energy. As we noted when we did the last SIs, it is probably about the same as driving with the air conditioning on or driving with slightly flat tyres. It is not a game-changing decrease in the energy supplied from the petrol. That impact was of course included in the impact assessment on whether it was a good idea to do this at all. The impact on the consumer is fairly marginal.

I turn to the costs for those who have an incompatible vehicle. As the noble Lord, Lord Tunnicliffe, mentioned, some classic cars cannot run on E10 and would need to continue to use E5, which will continue to be available. I recognise that it might be a little more expensive than the E10 prices one would hope to see. For those who are unwilling to pay for super grade petrol, there are very good second-hand alternatives on the market. Unfortunately, that will probably be the option that they have to pursue.

As for what happens if you put the wrong grade in, whether E10 or E5, if you do it infrequently it is unlikely to damage your vehicle at all. It is not like when you put diesel in your petrol car or vice versa—then you really are in trouble. Your car will be fine and you can just go back to using the right one. Should you put the wrong one in on occasion, it is not going to be too much of a problem.

Then we come to carbon calculations. When I spoke to the noble Lord, Lord Tunnicliffe, this morning, he got me thinking. Of course, he is absolutely right. I had to get my head around this. It is true that when you put bioethanol into petrol, it is combusted and it produces carbon dioxide. However, the point is that the carbon dioxide in that bioethanol is from the short-term carbon cycle. It is from the air and you could probably calculate how many months it has been gone. It is from the air, it goes into feedstuffs, it goes into the vehicle, it comes out of the tailpipe and it returns to the air again. Because it is from the short-term cycle, it is basically a case of taking it out temporarily and putting it back. Using bioethanol is stopping us using that percentage of fossil fuel-based petrol, which comes from stored carbon and is what we do not want to add to the atmosphere. That was a great learning point for me and I am grateful to the noble Lord for raising it. I am going to do a bit more digging to make sure we fully understand that. We know that this is not carbon dioxide free at the tailpipe, but it is a short-term cycle rather than the long-term release of greenhouse gases, which is absolutely what we are trying to reduce in this country. On that basis, I commend the regulations to the Committee.

Motion agreed.