Sustainable Aviation Fuel Bill

Lord Grayling Excerpts

Report stage
Tuesday 10th February 2026 Lords Chamber

[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

My Lords, I thank all noble Lords for their extensive engagement between Committee and Report. Amendments 1, 2 and 4 in my name will ensure that the Secretary of State can enter into revenue certainty contracts only where the supported SAF is produced at a facility in the United Kingdom. This will provide the industry with a clear signal of support. I hope that this measure reassures noble Lords that I have considered the contents of the amendments tabled in Committee by the noble Baroness, Lady Pidgeon, the noble Earl, Lord Russell, and the noble Lord, Lord Grayling. I thank noble Lords for their constructive engagement in reaching this position. I urge noble Lords to support the inclusion of these amendments in the Bill. I beg to move.

[Lord Grayling (Con)]

My Lords, I apologise to the Minister and the House that I was unable to be here in Committee because of a family crisis. I am very glad to be here today and to welcome these amendments. I have no intention of moving my own amendment since the Minister has addressed my concerns. The important thing was to ensure that nobody could game the system: that we knew that we were supporting UK manufacturing and not somebody playing a fast one on us by shipping mostly complete fuel to our country, polishing it up a bit and claiming it was British. The Minister has done that with these amendments and I very much welcome them. I am grateful to him and I support them.

[Earl Russell (LD)]

My Lords, I am pleased to see the noble Lord, Lord Grayling, back in his place. On behalf of these Benches, I also thank the Minister and the Government for bringing forward these amendments. These important issues were raised in Committee. The Government have listened to the concerns that were raised and we welcome the amendments that have been brought forward. We are grateful that the Government have listened and we are delighted to accept them.

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[Lord Ravensdale (CB)]

My Lords, I remind noble Lords of my interest as a chief engineer working for AtkinsRéalis. For my Amendment 7 in this group, I have simply retabled my amendment from Committee. As a brief reminder, we have targets in the SAF mandate —coming back to what noble Lord, Lord Moylan, said about power to liquid—and an escalating percentage of sustainable aviation fuel needs to be power to liquid. That is clearly set out in the SAF mandate. This amendment is trying to ensure coherence between the SAF mandate and the projects given support under the revenue certainty mechanism.

This comes back to what the Minister set out about support for UK production. The percentages in the SAF mandate could simply be met by importing power to liquid fuel, so it is important that we set out the ambition for the industry to meet in producing all that fuel, which is already legally required under the SAF mandate, in the UK, aligning that with the earlier government amendments. I recognise that setting this out in the Bill may be going too far, but I would welcome the Minister’s comments on how this could be set out in the allocation framework documents to give industry that steer on power to liquid fuel and the expectations for producing it in the UK.

My Amendments 14 and 16 are similar to those I tabled in Committee, and I thank the noble Lord, Lord Moylan, for signing them. I reflected on the Minister’s responses at that point, but I did not hear any compelling reasons why HEFA sustainable aviation fuel products should be included in the scope of the Bill. As the noble Lord, Lord Moylan, said, my amendment and his Amendment 15 are very similar and aim at the same thing. Mine deals more with the base product, using established definitions, and his encompasses the totality of HEFA products.

I welcomed meetings with the Minister’s team of officials. The outcome was that the main rationale for retaining HEFA in the Bill is that that recognises that this is a fast-developing market and it is important to retain that flexibility in primary legislation. I accept that, but I still find it hard to imagine a scenario where the Government want to subsidise HEFA using the revenue certainty mechanism. The whole point of the legislation is to help pump-prime those new industries, not to support the well-established industries that we have to provide HEFA fuel.

The Government are taking broader powers than they need under the legislation, so there is a risk that, as we go forward, subsidies could be given outside that intent. However, I hope that the Minister will be able to say something substantive about this in his remarks, on the exclusion of HEFA, and I look forward to hearing what he has to say in that regard.

[Lord Grayling (Con)]

My Lords, I rise briefly to speak in support of the amendments from the noble Lord, Lord Ravensdale, on crops, and to share many of the concerns raised about HEFA. I declare my interests on the register as an adviser to AtkinsRéalis—there are a lot of us here today.

My concerns are that, first, I do not believe that we should be using crops to make fuel. In a world that does not have enough food and where biodiversity is under threat, where deforestation is happening in areas of the world that provide extra land for agriculture, I do not think that there is any justification for growing food and turning it into fuel. I ask the Minister please to exclude crops. The United States is permitting them, and the European Union is not, and I think that we should fall on the side of avoiding the use of agricultural crops. Agricultural waste is a different thing —the residue from crops, such as straw and corn husks. Agricultural waste is one thing, but actual crops is another, and we should not be using them.

On HEFA, we are where we are, but we have to exercise extreme care, because the truth is that there is not enough used cooking oil in the world to fill the supposed need for that used cooking oil. All too often, the suspicion is that somebody is dumping a chicken wing into a tub of virgin palm oil and saying that it is HEFA—so HEFA is something that we need to move away from as quickly as possible. In any case, we depend on imports from the Far East for it, which may not be sustainable going forwards. Our focus should really be on biowaste and municipal waste and on the technologies that offer a really good path for the future —but let us not use crops and let us be extremely careful with what we do with HEFA. I have a lot of sympathy with what my noble friend Lord Moylan and the noble Lord, Lord Ravensdale, have said. It is far from clear that this is a genuine product that has the full potential to do what is necessary.

[Lord Harper (Con)]

My Lords, before I start, I draw attention to my entry in the register as non-exec chair of RVL Aviation, which is in the aviation sector but not involved in the production of sustainable aviation fuel.

I strongly support this move to make sure that we do not include food crops. I have one caveat, which I raised in Committee, and I wonder whether the Minister can update the House. My noble friend Lord Grayling drew attention to the different position that the United States has taken about including food crops. My starting point, as his, is that we should not include food crops. The only caveat that I raised in Committee was that if, in doing so, that enabled us to ensure that the United States continued to support the development of sustainable aviation fuel, given the importance of the United States in the international aviation sector, there might be a case for that. I would be interested to know whether the Minister can update your Lordships on any discussions that have taken place with the United States. If it is not necessary to do that, I strongly support the amendments that are there to make sure that we rule out food crops because, as my noble friend Lord Grayling said, using land to grow crops for food is what we should be doing, and we have seen, in the renewable energy sector, what can happen when you have policy that then drives behaviours that you had not intended, which have outcomes that are environmentally not welcome.

The second point that I raise is that I support the amendments to rule out the use of the revenue certainty mechanism for subsidising HEFA. As my noble friend Lord Grayling said, it is important that we move away from that and develop the new technologies, as my noble friend Lord Moylan said from the Front Bench. The danger of allowing subsidy of things that we are trying to get rid of is that you never get rid of them; any subsidy that there is should be used for the development of new technologies and processes. That is the rationale for having a subsidy regime in the first place. Setting that framework is very welcome.

My final point is on power-to-liquid technology. My noble friend Lord Moylan set out his view that that technology is probably not yet at a point where this Bill would be of any use. My starting position and his is that you have to justify carefully the need for subsidy, so it would not be a bad thing, if that technology is some way away from development, to force the Government to come back to Parliament to rejustify subsidy for power-to-liquid. That would be very welcome. If the Minister can update the House that providing subsidy to develop the technology and get it into production would have a much nearer-term outcome than my noble friend suggested, I might think again. However, in the scenario that my noble friend Lord Moylan set out, his amendments would be very sensible and helpful in testing the Government and forcing them to put on record the state of that technology.

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Moved by

[Lord Grayling]

8: Clause 6, page 4, line 19, after “contracts” insert “in respect of sustainable aviation fuel manufactured in the United Kingdom”
Member’s explanatory statement
This amendment seeks to ensure that the levy is raised for the purposes of manufacturing sustainable aviation fuel in the United Kingdom. Connected with another amendment in the name of Lord Grayling, it seeks to prevent the government from diverting the levy funds to other broader aviation or climate-related policies.

[Lord Grayling (Con)]

My Lords, I will speak to a series of amendments that I tabled. I have given the Minister advance notice, and I hope he is going to be able to reassure me on them. I will take them in turn.

Amendment 8 is simply to try to avoid the Government pulling a fast one, raising money from air passengers and spending it on something completely unrelated. I am looking for a cast-iron, on-the-record assurance from the Minister that that cannot happen under the terms of the Bill. We know that on occasions government departments try to slip things under the counter, and I am simply seeking absolute assurance that that will not happen in this case. Amendment 9 basically seeks to achieve the same thing.

Amendment 10 addresses what is still the crucial operational point for this legislation: where and how do you actually apply the levy? The Minister knows that I have had serious misgivings, as have many people, about the plan to try to apply a mechanism that relates to market share in the previous year, to do it the year after and the rest, which I think would be completely unworkable and, of course, distorts the market if you have new entrants or people leaving the market.

The one thing we do not want to do is to end up undermining the existing producers of aviation fuel, which are carrying an extra cost. We do not want to have them closing and going elsewhere because we have not got this right. I remain persuaded that the way to do this is to levy a charge at or around the time of delivery—the time at which it is delivered from the refinery or the terminal to the airline. I appreciate that it may be something you do one month in arrears, looking at the previous monthly invoice accordingly. I do not have a problem with that, but I have a problem with anything looser than that.

I am looking to the Minister to explain tonight how this is going to work. I know the Government are still working on all the details, but we cannot have some abstruse mechanism that tries to refer back years in the past. We need something current and relevant that reflects changes in the marketplace and applies the costs in a timely way to those producing the fuel, so that there is no distortion of the marketplace.

Amendments 17 and 18 are really about the timing of the legislation. We know that we are maybe four or five years away, I hope slightly less, from the first significant SAF plant being operational in this country. We cannot have a situation where the levy starts to be applied now and is just piling up in the background with nothing to spend it on. I am looking for an explanation from the Minister as to exactly how the commencement of this legislation will work. I have proposed in these amendments that it should be six months before the first manufacturing facility comes on stream—the Minister may have an alternative suggestion—but we cannot have a situation where commencement is imminent but the operation of the Bill is years away. Again, I am looking for assurance and explanation from the Minister on this, so that we know we are not charging air passengers today for something that is years in the future. I beg to move.

[Lord Moylan (Con)]

My Lords, I have Amendment 11 in this group, which substantially coincides with Amendment 10 in the name of my noble friend Lord Grayling. I will just take a minute to explain, in my perhaps rather more simple terms, what mischief these amendments seek to address. I gave some idea of the mechanism when we spoke on the last group. It will work like this: contracts will be entered into by a counterparty and a fixed price will be guaranteed under a contract for the difference. That means that if the prices are below a certain price, the counterparty will collect money by way of the levy, and if they are the other way around, it will pay out to ensure that the producer receives a fixed price. We know that economically, ultimately, the levy will be paid by the passenger on the flight, but who is going to be charged the levy?

The Government have decided—we are not disputing this—that the levy should be charged at the highest point in the supply chain, which is the producers of standard aviation fuel, essentially kerosene. They have to mix in the SAF to the required amount, whichever type of SAF it is, and they should be the ones that will pay the levy if a levy is required—that is, if prices are such that a levy has to be paid. We do not object to them being the levy payers, but how is the levy calculated and then applied to them?

The Government’s proposal is that the levy should be calculated a year in arrears and then applied to them as a charge which they have to pay in arrears at that point according to the market share that they had in that year. That is all very well, you might say, and very convenient from the Government’s point of view, because at that point they know exactly how much they have to charge, so there will be no difficulty and no question of having the wrong charge paid and having to make up bits later, or of the counterparty being out of funds by a penny. They will know exactly by the end of the year what should be charged and they will distribute it to the producers according to their market share during that year, which will also be known by that point.

The difficulty for the producers is that they will not know during the year in which they are selling the fuel what they should be charging the airlines to cover the cost of the levy. It is accepted that they should charge the airlines, because that is the way it trickles down to the passenger. They will not know during the year how much levy they are going to have to pay at the end of the year, so they will not know how much they should be charging per litre of fuel that they sell.

They would prefer, as it is easier for them and avoids this complexity, if they were told a price per litre which they should charge. The charge of the levy in addition to the base kerosene fuel could even be apparent on their invoices. Of course, if the Government were to do that, it would expose the counterparty to some financial risk—I see that—because they would have to work on the basis of estimates. They would have to estimate the prices during that period and therefore would be exposed to some financial risk. I imagine that, behind the Minister, there is a middle-ranking official in the Treasury saying, “You cannot take any financial risk that will fall upon the Government or any entity associated with the Government”.

What the Government are proposing is fundamentally unworkable, because the only way the producers can handle this is to protect themselves by overcharging. They will overcharge to compensate themselves for the levy, and so the transparency of the levy travelling through the chain of command, so to speak, down to the ticket payer will be obscured. The producers leave one in no doubt when one speaks to them that this is the only mechanism they will have. There is a real point of workability about the Bill which has not been addressed.

I imagine the Minister will respond by saying, “Oh, but we are having a consultation”. This is a futile protest, but I want to raise this point of protest as I have the opportunity: would it not have been better if the Government had done the consultation and then brought forward the legislation? Why is it that we have to have the legislation before we know the results of the consultation with the industry, so that we do not actually know what is workable? I suspect the Minister will say that, but I am afraid it is not satisfactory that we are asked to pass this legislation with that important question of workability still outstanding. I may be wrong, and it may be that the Government can explain that it is perfectly workable, but nobody has been able as yet to establish what that workable solution is.

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[Lord Hendy of Richmond Hill (Lab)]

My Lords, I thank noble Lords for this debate. Amendments 8 and 9, tabled by the noble Lord, Lord Grayling, seek to address how funds from the levy are used. I am happy to reassure the noble Lord from the Dispatch Box that money raised through the levy will be used only to support eligible SAF plants in the United Kingdom, and that that is already set out in the Bill.

Clause 6 restricts the costs incurred by the counterparty under the revenue certainty contracts and in carrying out its functions under the Bill. Under this clause, the levy funds will be used only to meet the cost of the revenue certainty mechanism scheme. It is important that the counterparty is able to recover its costs, which include the cost of administering the contracts, the levy and the payment of surpluses.

Amendment 10 intends to ensure that there is a specific mandatory point at which the supplier becomes liable to pay the levy. The Government agree with the intention of the amendment but believe that it is unnecessary because Clause 6(7) already provides that a person becomes liable to pay the levy at the same point when they become liable to an obligation under the SAF mandate.

On how individual levy contributions are calculated, it is important that the Bill provides sufficient flexibility to ensure that final levy design decisions deliver our design principles, including simplicity, solvency, affordability and fairness. The Government are currently reviewing responses to their recent consultation on the detailed design of the levy and engaging with stakeholders to deliver these objectives. I remind noble Lords that the regulations made under Clause 6(1), to set out how the levy will work, will be subject to scrutiny under the affirmative procedure, which will give Parliament the opportunity to continue to consider the approach.

Amendments 17 and 18, tabled by the noble Lord, Lord Grayling, seek to prevent the levy being imposed until a domestic sustainable aviation fuel producer is approaching readiness to receive payments under the Act. I reassure the noble Lord that the purpose of the levy, as set out in Clause 6, is to meet the costs of payments made by the counterparty to SAF producers and to cover the counterparty’s administrative costs. The costs of payments under RCM contracts will be insured only once eligible SAF is being produced and sold by producers who have entered into RCM contracts, which is the outcome sought by these amendments.

The Government are currently reviewing responses to their recent consultation on levy design. Some stakeholders have expressed a desire to build up a reserve fund prior to the first producer payments, which could help smooth out the costs of the scheme and help manage risks of underforecasting required payments. As the Government consider their response to the consultation, it is important that the Bill retains a degree of flexibility around levy design, which will be set out via secondary legislation and will be subject to parliamentary scrutiny.

Amendment 11, tabled by the noble Lord, Lord Moylan, intends to introduce a standardised rate for the levy. We are currently reviewing responses to our recent consultation on the detailed design of the levy and continue to engage with stakeholders to help inform the drafting of levy regulations. Within the consultation, we sought views on the publication of a forecast levy rate, expressed in pence per litre, which could help provide greater transparency for the supply chain.

The Bill as drafted does not specify a particular mechanism and allows the Secretary of State to consider a range of options for calculating the levy paid by individual companies. It is important that the Bill retains a degree of flexibility around levy design, which will be set out via secondary legislation and will be subject to parliamentary scrutiny. Therefore, I do not consider the amendment to be necessary.

To reassure noble Lords, the Government are live to the potential impacts of different levy designs and recognise industry’s desire for certainty and transparency, while ensuring fairness and affordability for the consumer. We recognise that the levy must be dynamic and responsive to the changing market, while ensuring that the counterparty has funds to make payments under the scheme. But, to be clear, this levy will not be used to generate unnecessary funds and will raise sufficient money to cover only the counterparty’s costs under the revenue certainty scheme.

Although final decisions will be informed by the consultation, we are exploring options that deliver this and many of the proposals, and options set out in that consultation could help provide greater certainty and transparency. As I have said, the levy regulations will be subject to the affirmative procedure, which will allow further parliamentary scrutiny. I hope noble Lords will note the steps the Government have taken in the levy design and that they therefore will not press their amendments.

[Lord Grayling (Con)]

My Lords, I am grateful to the Minister for a detailed explanation of the situation. I am greatly reassured by what he said. What matters in all this is that we provide the right balance. This is something the airlines are calling for, but we do not want it to unduly penalise fare payers, and to end up with disinvestment in conventional aviation fuel. I am reassured by much of what the Minister said, but I am looking to him and his colleagues to ensure over the coming months that that balance is properly found, so that we do not end up with legislation that has unintended consequences.

The Minister made a point about the reserve. I proposed six months because I believe it essential to have a short period of reserve building, but it must be short—it cannot be year after year. That was the point of my amendment. I am reassured by what he said, and I shall watch with interest what the Government do, but in the meantime, I beg leave to withdraw my amendment.

Amendment 8 withdrawn.

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That does not seem to me a very joined-up approach. On the one hand, the Liberal Democrats are arguing that my noble friend Lord Moylan’s quite modest amendment—to have transparent information in a very consumer-friendly way about the impact on ticket prices—is very difficult to do and very complicated, but, on the other hand, a Liberal Democrat colleague is suggesting a much more expansive form of reporting and proposing that the Government should do that. Perhaps there has been a lack of joined-up communication on the Liberal Democrat Front Bench. I am really confused, given the two diametrically opposed positions they have taken on the Bill, which is not welcome, because I think that, just as we are, they are broadly in favour of having more sustainable aviation. It is odd that they have taken two diametrically opposed positions on two different amendments in two subsequent groups on the Bill. I fear, therefore, that I will not be able to support the amendment if the noble Baroness presses it to a Division and seeks to test the opinion of the House.

[Lord Grayling (Con)]

My Lords, I rise both to support what my noble friend Lord Harper has just said and to add a caveat. I have great respect for the noble Baroness, Lady Pidgeon, and I find we agree on a lot of things, but it worries me more broadly—and this is not specifically just about this amendment—that when one passes an amendment like this, one creates huge bureaucratic demand. If we look at the practicality of what will be needed, as my noble friend Lord Harper has just described, we are talking about putting together, in effect, an inspectorate, because that is what this would entail—an inspectorate to talk to airlines, an inspectorate to talk to producers, and an inspectorate to have a pretty close watch on the flow of feedstuffs, the supply chain of feedstuffs and the sourcing of feedstuffs.

What we are looking to achieve here is to build a UK industry so that we do not simply end up buying SAF from abroad. The truth is, right now, the limited amount of SAFs used in this country are coming from United States and potentially elsewhere. We do not want that to happen; therefore, we want to create as investor-friendly an environment as possible in the United Kingdom. That is what this Bill is all about. It is what the purpose of the revenue certainty mechanism is, and I am very glad that the principle behind the Bill has attracted cross-party support. To try to put together now a mini-inspectorate—and maybe not that “mini” an inspectorate—to look at all the things covered by this amendment would cost taxpayers’ money and push up the cost of the revenue certainty mechanism.

We talked earlier about how the funds would be used. Certainly, the funds would be eligible to be used for the monitoring of all this, so that is an extra cost on the revenue certainty mechanism and an extra cost ultimately therefore to airline passengers. It is an extra level of complexity for investors, putting a whole range of bureaucratic requirements on them. And, of course, for government, it opens the doors to judicial review. Very often, a broad-ranging amendment that seeks reports and clarifications ends up in the courts, being used by somebody who has a particular point to prove against government. It opens the door to too much activity within the courts and not enough freedom for government to get on with the job. That would be a negative step for the legislation, given that we all want this to happen, want it to work well and want the investment to flow in the country. To create a monitoring mechanism on this scale would not in any way be the right thing to do.

As my noble friend Lord Harper rightly pointed out, simply monitoring the impact on the cost of an airline ticket is one thing, but covering the range and dimensions of activity in this amendment would create too much extra cost and too much complexity and it risks being a deterrent to investment in the UK. So, with apologies to the noble Baroness, I cannot support her amendment.

[Lord Moylan (Con)]

My Lords, perhaps I may welcome the noble Baroness, Lady Pidgeon, to this debate. She is much missed. Normally, when there is legislative matter that calls the noble Lord, Lord Hendy of Richmond Hill, to the Dispatch Box, there is a well-established team that assembles opposite him, consisting of me in my humble capacity and the noble Baroness. It has been a puzzle to me in the course of this afternoon why she appears to have been elbowed aside by the dour but noble Earl, Lord Russell, whose mantra appears to be “Mr No” throughout, whereas now that the noble Baroness, Lady Pidgeon, has landed, if I may say that, at this very late stage in the debate, we find that she is here with her customary positivity and proposals for something useful that the Government might do.

The noble Baroness’s proposal is that the Government might usefully produce a report which tells us what the effects of this measure in front of us are. It would not be an easy report to assemble, and I am sure the Minister will explain its impossibility. It would, however, be no less easy for the Government to produce the report I was asking for, to say what the effect would be on ticket prices, but, as my noble friend Lord Harper so clearly explained, that was ruled out completely by Mr No sitting at the other end of the Bench. It has been most entertaining and instructive this afternoon listening to what the Liberal Democrats have had to say, but we are now in a position where splits within the Liberal Democrats are apparent. I say this to offer some consolation to noble colleagues on the other side of the Chamber to know that it is not only the Labour Party that is riven by dissension and uncertainty about the future and that these qualities can be found among the Liberal Democrats as well. I am delighted—

Nationalised Passenger Rail Services

Lord Grayling Excerpts

Monday 2nd February 2026 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

I travelled this morning and it was pretty good.

[Lord Grayling (Con)]

My Lords, I have asked the Minister a couple of times about transition payments made during the renationalisation process by the Government to the private operators, and the way that happened previously when franchises changed hands. Is he yet in a position to tell us—this is nearly 12 months later, so he really ought to be—how much money has actually been paid in transition payments to the private operators so far?

[Lord Hendy of Richmond Hill (Lab)]

I should have foreseen that the noble Lord would ask that question. I will have to write to him because I knew he would ask it, but I forgot to research the answer.

Buses: Safety and Security

Lord Grayling Excerpts

Thursday 8th January 2026 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

I refer my noble friend to the Road Safety Strategy that has just been published—the first for many years—which sets out a whole variety of actions to be taken with vehicles, drivers, pedestrians, other road users and infrastructure, which he refers to, in order to reduce deaths and serious injuries on the roads. Nevertheless, travelling by bus is a very safe mode of travel.

[Lord Grayling (Con)]

My Lords, given the current weather conditions, buses on icy roads are obviously an issue. Does the Minister know whether we mandate bus companies to have winter tyres on buses? If we do not, should we do so?

[Lord Hendy of Richmond Hill (Lab)]

I have never heard of any mandate for winter tyres. The speed at which the weather changes, given the climate change just discussed in this Chamber, would make changing tyres overnight a seriously impractical activity. What is needed when the roads are frosty and temperatures are below freezing is adequate gritting and care by local transport authorities. Ministers in my department in the other place have this week been looking into the adequacy of gritting across the country.

South Western Railway

Lord Grayling Excerpts

Thursday 20th November 2025 Lords Chamber

[Lord Grayling (Con)]

My Lords, a few months ago I asked the Minister about the transition payments that were previously paid when a franchise ended and a new operator came in. He was not at that point able to answer the question about SWR, so I ask him again now, as a few months have passed: have the Government paid any money to FirstGroup as a result of the transition from private to public, and have any further payments been made since the time of the transition?

[Lord Hendy of Richmond Hill (Lab)]

The Government are very reluctant to pay any money to the previous owners, bearing in mind the condition in which the service was left. That discussion is still carrying on, but I am not aware of any money so far being paid and I would not be keen to pay any in the future.

Sustainable Aviation Fuel Bill

Lord Grayling Excerpts

2nd reading
Thursday 20th November 2025 Lords Chamber

[Lord Grayling (Con)]

My Lords, it is a particular pleasure to follow a very well-articulated tribute to the right reverend Prelate, to whom I also offer my congratulations on a very well-made, thoughtful and appropriate maiden speech. He will undoubtedly make a major contribution in this House, and I think all of us welcome him to this place.

I start, ironically, by referring to my entry in the register as an advisor to AtkinsRéalis as well as to Hutchison Ports. It is a particular pleasure for me to speak in this Second Reading debate. Two years ago, I was responsible for an amendment to the then Energy Bill which mandated the Government to set up a revenue support mechanism for sustainable aviation fuel in the UK. I stopped after getting 56 Conservative signatures to the amendment, which proved enough, just about, to finally jolt the Government, particularly the Treasury, into action and starting a process which has brought us to this point today. I am glad that I will be speaking alongside my noble friend Lord Harper, who followed that by playing a significant part in delivering us to the point we are at today. My noble friend is another example of why this is a genuinely bipartisan Bill. There are debates, differences and discussions about the detail, but there has been strong support across all sides for the principles that underlie the Bill today.

I was very pleased at the time that Ministers then recognised that they needed to do something and I am very pleased that Ministers in the current Government have continued the work that we started and have delivered this piece of legislation, which I strongly support, albeit with some caveats and questions which I want to push the Minister on today, in Committee and subsequently. I think there are some things that need to be tightened up and some questions that need to be answered, but the principle is absolutely right.

For me, the reason this all matters is very simple. The aviation industry is under growing pressure over its carbon footprint. Whether you are an opponent or a supporter of net zero is, to my mind, completely irrelevant to this debate. This is actually about the market pressures on the airlines themselves, particularly from a younger generation of potential customer among whom flight shaming has become more visible. The industry has to address those concerns, and we have to help it address those concerns and its impact on the environment.

It is not just about politics, it is actually about what is commercially necessary for what is one of our most important economic sectors. Of course, that is why Virgin Atlantic, Boeing and Rolls-Royce collaborated on the ground-breaking transatlantic pioneering flight using sustainable aviation fuel two years ago. We were on that flight and it was a very unique experience. It is why I know that most of the industry strongly supports this legislation. It is why the last Government brought forward plans for the SAF mandate and why this Government continued to introduce the mandate at the start of this year.

Why then do we need a revenue certainty mechanism of the kind set out in the Bill? Our airlines could just buy SAF from overseas. The initial product being used in this country will almost certainly come principally from the United States. There are two very good reasons why the Bill remains necessary. First, our aviation sector is, as I say, a key part of our economy; it is the strongest sector in Europe, it is fundamental to our regions and to the economy of so many different parts of the country. Do we really just want to import the fuel it needs for the future, or is it better to encourage serious investment here, of the kind that companies such as alfanar are planning for Teesside—a part of the country that clearly wants and needs investment?

Even in a world of free markets, sometimes I really think we need to make sure that we do some important things for ourselves. I think we can have a successful SAF sector in the UK that brings investment and creates jobs, but SAF plants require a very large amount of capital, and investors are always cautious about new markets and developing technologies. The truth is that the first SAF plants in the United States, of which there are just a handful, received investment support from the Biden Administration. The EU is poised to introduce its own revenue certainty mechanism. The Minister was right to say that ours is the first in the world, but it is not going to be the last, so for me it comes down to a straightforward choice: do we want a SAF industry in the UK or do we just have to depend on imports? I do not think we have to. My view is that we need that industry in the UK and I strongly support the Bill as a result.

There is another reason for caution about buying SAF from elsewhere: I think the UK approach is much smarter and much better. In the United States, SAF is being produced primarily from corn. In the EU, SAF will be produced, as we have heard, from what is called HEFA—basically, used cooking oil. I absolutely do not support growing fuel in fields that could be used for growing food. I have long been uneasy about the practice of growing crops for purposes other than food, but I think it is mad to use the space that the world needs to feed itself to grow aviation fuel. The UK is right also to accept for now, I think, that HEFA will be needed for the time being, but we need to understand that it is not going to be there for ever, and it is right that its future use is capped.

There are serious question marks about the availability of HEFA and there is also the suggestion that it is often not really used cooking oil at all but near-virgin oil that has been doctored to create the semblance that it has been used in a kitchen. Of course, much of it comes from the Far East, and SAF mandates are going to spread there too, so there is absolutely no certainty of supply going forward. The UK’s approach, which has been to push quickly towards SAF produced from biowaste, of which we have quite a lot here already, and then in due course from municipal waste, has to be the right one. To me, this really is the nirvana of sustainable aviation fuel: if we can turn our waste—what we put in our black bins each week—into fuel oil, removing the impact of landfill, incineration and the rest, that has to be a good thing.

I have a question for the Minister, and this is the first of the points I want to put to him. There are rumours around that the Government want to allow first-generation SAF from crops here. I really hope that is not true and I ask the Minister to set that to rest by confirming that there are no such plans. We should not be growing agricultural crops to turn into fuel. We have taken a much smarter approach in this country to delivering aviation fuel that has a positive environmental impact. We must not see that compromised in any way.

There are a number of other issues I have with the Bill that I want to put to the Minister. I want to see these issues addressed in the debates ahead, and there is at least one that I am very committed to asking the Government or this House to put in the Bill.

My first concern is about how the levy is applied on conventional aviation fuel manufacturers. I know that the Government’s initial intent was to assign the levy based on the previous year’s market share. I genuinely do not think that approach is viable. It misses out the impact of changes in the composition of the market, which could mean that a new player faces a period without charges and is able to undercut the existing market. The levelling-up process would then come way down the track, after a long period of time when there had been a real price discrepancy between the two and a competitive advantage to the newcomer.

Also, if someone disappears from the market—and we have seen two refineries close in recent times—such a delay will also cause complications for the counterparty. So, the mechanism to apply the levy has got to be immediate. I do not understand why it cannot just be done per barrel of fuel as it leaves the refinery or the terminal. I think the Minister needs to explain to all of us why that cannot happen. I appreciate that that is going to come in the secondary legislation, but we need to understand how it is going to be applied, and it has got to be done in a timely way. It cannot happen way after the event.

I was grateful to the Minister for spending some time with me and allowing his officials to spend some time with me. I know they have thought about this, but I ask him to now put some of the Government’s thinking about this on the record, so we can understand where it is going as we go through the Bill.

My second concern is there has got to be a direct link between the commencement of the levy and the opening of the first SAF plant. We do not realistically expect the first SAF plant in the UK to be operational much before 2030. So, the levy cannot start until close to 2030, otherwise we would be raising money—which passengers are paying more for—and just leaving it sitting in the bank. It is important that there has to be a clear linkage between the arrival of SAF manufacturing in the UK and the application of the levy.

On the timeframe, there is one other thing I would just ask the Minister to consider. At the moment, because there is not an awful lot of SAF capacity anywhere in the world, we must not apply the mandate on a ratchet scale up to 2030 in a way that is detached from the reality of the availability of SAF in the marketplace. I would ask him to keep monitoring the mandate as we go towards 2030 and make sure we are not actually out of kilter with the availability of SAF for the airlines to put in their planes.

The third concern I would ask the Minister to address is there has got to be no legal doubt whatever that the proceeds of the levy will be used only to support investment in the manufacturing of SAF in the UK. There has just got to be a proper safeguard against any other part of Government going, “Oh, there’s some money there. We’ll have that for something else”. It does happen; it has happened in other countries in similar areas. We need that certainty in the Bill.

I think the most important addition to the Bill—and I would ask the Minister to go away and think about this, because it must be in primary legislation, so there is no doubt in the courts going forward—would be to make it absolutely certain that the revenue support mechanism is going to be used only to support the production of SAF in the UK. There has got to be no legal doubt about this and no loopholes whatever.

The Government already know that there are loopholes out there and there are people trying to take advantage of them. The Government have already had to stop one multinational in the hydrogen marketplace from benefiting from UK financial support while planning to produce part of its product in the Middle East. It would be relatively easy for a manufacturer of SAF to import an intermediate fuel into the UK, process it at a SAF plant and claim the benefits the RCM would offer. The legislation has got to be absolutely categoric: that cannot be allowed to happen.

I would like the Bill to say very explicitly that any certified fuel that is a component of SAF has to be manufactured in the UK and that only the feedstock can be imported. Of course, there will be times when we buy biowaste from other European countries—that is perfectly reasonable. But you cannot be allowed to produce a three-quarters-finished fuel that you just adjust, turn into SAF at the end and claim that that should benefit from the revenue support mechanism. I would only countenance the feedstock as being imported, and hopefully, as we see the move towards urban municipal waste and even sewage turned into fuel, even that will not be necessary.

It is really important that we have that in the Bill, because courts do strange things. They interpret laws in different ways, sometimes in ways that those in Parliament do not expect or do not want to be the case. We have got to have absolute certainty on that in primary legislation. I mention this now to the Minister ahead of Committee to give him advance warning that I really want to explore this in detail.

I believe the Bill to be essential to the UK, benefiting from a new industry that we have ourselves mandated as essential to one of our most important and oldest sectors. It makes no sense to tell airlines to buy SAF but then ignore the opportunity to produce it here and let other Governments incentivise their own investments and industries instead.

I am very glad that both the last Government and this one accepted the intent behind that amendment two years ago, and I look forward to seeing the Bill pass into law. Our job in this House is to make sure it leaves no loopholes and then to encourage the Government to get on with the secondary legislation, so that contracts and the constructions can begin as quickly as possible.

Airport Expansion

Lord Grayling Excerpts

Tuesday 11th November 2025 Lords Chamber

[Baroness Pidgeon (LD)]

My Lords—

[Lord Grayling (Con)]

My Lords—

[Lord Swire (Con)]

My Lords—

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[Baroness Boycott (CB)]

My Lords—

[Lord Grayling (Con)]

My Lords—

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[Lord Hendy of Richmond Hill (Lab)]

Well, what can I say to my noble friend, who not only asks this question but gives all the answers as well? I think that will do.

[Lord Grayling (Con)]

My Lords, the Government are absolutely right to be pressing ahead with the expansion of Heathrow Airport; it is long overdue. The Sustainable Aviation Fuel Bill will, I hope, answer some of the questions about the environmental impacts.

However, I am concerned about the debate between a short runway and a long runway. Whatever the outcome in the medium term, may I seek assurance from the Minister that we will at least still go ahead with the DCO for the full plan? If we do not, we are going to end up short-changing ourselves again. In the end, Heathrow needs to expand, and it needs to expand properly. Please ensure that that is what happens.

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lord for that. That is a premature request, because he will know—and maybe the rest of the House does as well—that the two schemes being taken forward are different, and the length of the runway proposed is different. A decision such as the one he suggests ought to be taken as we go forward with one of the two schemes.

Open Access Rail Services

Lord Grayling Excerpts

Wednesday 22nd October 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

My noble friend is correct. Both the east coast and west coast main lines are now heavily constrained, and under the current arrangements the regulator, the Office of Rail and Road, has recently declined most of the additional applications for train paths simply because there is no room. He is also right to suggest that we need to leave room for increased freight operations. There is a general consensus that more railway freight is good for the economy and the environment, and it would be right to leave paths for freight expansion.

In respect of his question about profitability, it was recently reported that FirstGroup’s open access business achieved a 32% operating profit in the 2024-25 financial year. These profits arise because open access operators do not pay the full cost of accessing the track, and nor do they have to meet public service obligations to operate the services that most people need. This allows them to offer reduced fares and provide journeys only between the most profitable locations. Currently, Lumo is the only open access operator that contributes towards fixed costs via an infrastructure cost charge, which leaves taxpayers to fill the shortfalls. The railways Bill will propose to change the arrangements for access and will consider what needs to be done further in respect of charging.

[Lord Grayling (Con)]

My Lords, the Minister just said that the ability to grow open access is constrained by the lack of capacity on the network, yet he says that the Government intend to increase rail freight by 75%. How are both of those true?

[Lord Hendy of Richmond Hill (Lab)]

I am surprised that the noble Lord does not know the answer to that, as one of the many former Secretaries of State for Transport in the Chamber. The answer is that there are protected freight paths on all the main lines that are likely to carry freight, in order that freight operators can respond to short-term demand measures—which they do frequently, changing trains on a daily and weekly basis—and have room for expansion. It is important that they are left to do that. Otherwise, there is no chance of freight expansion and the commercial freight businesses would be damaged.

Planning and Infrastructure Bill

Lord Grayling Excerpts

Committee stage
Thursday 24th July 2025 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, I shall speak also to Amendment 91. My noble friend Lady Liddell is not able to be with us today, so I have taken on the mantle of championing carbon capture, usage and storage. Seeing the noble Lord, Lord Naseby, in his place, I hasten to add that I equally would champion the benefits of hydrogen in the future; he has spent the last year telling the House why it is so important.

CCUS, as it is known, is a technology aimed at capturing carbon dioxide emissions from industrial processes, power plants and other sources. It prevents them entering the atmosphere. The captured CO₂ can be reused in various industrial applications or stored permanently in geological formations deep underground. The CO₂ can then be monitored to make sure it is stored securely.

This is a great opportunity for the UK to lead on technology development, and our resource of the North Sea offers huge potential opportunities to store carbon from other countries in Europe. I am convinced that CCUS is safe. It clearly contributes to a low-carbon society and offers great opportunities for growth in our country.

The UK is home to seven major industrial clusters, which produce 50% of all UK industry emissions. The Government, quite rightly, are supporting development of CCUS in those clusters. Deployment in the first two of those clusters is called track 1. The first two clusters were chosen by a process called phase 1, launched in 2021. They are HyNet, in the north-west of England and north Wales, and the East Coast Cluster in Teesside. In October last year, this Government announced that they had made available £21.7 billion in funding for the first CCUS projects in the UK. Looking at the timescale, I recognise that the last Government were very supportive of CCUS as well.

We are at a pivotal moment. The first carbon capture projects in the UK have reached financial close, and the Government are clearly making strong commitments to support deployment across the industrial heartlands, but progress is at risk from outdated or inconsistent planning rules. At present, the treatment of certain CO₂ infrastructure, especially short spur pipelines and capture plants, is ambiguous under the current system. As an example, projects under 10 miles in length do not fall within the nationally significant infrastructure project regime, despite being essential components of major decarbonisation efforts. There are also legacy legal barriers, such as the requirement for special parliamentary procedures under the Pipe-Lines Act 1962 for compulsory purchase of land related to CO₂ pipelines. This process is not required for other comparable infrastructure and risks introducing unnecessary delay.

My two focused amendments seek to ensure that CO₂ capture plants and shorter spur pipelines are designated as nationally significant infrastructure projects under the 2008 Act, and to remove the need for special parliamentary procedure under the Pipe-Lines Act where it applies to CCUS infrastructure. These are very limited but important changes. As the spirit of this legislation—despite much of the debate we have seen so far—is about growing our economy and making it easy to develop infrastructure, I very much hope that my noble friend will agree to have a look at this. I beg to move.

[Lord Grayling (Con)]

My Lords, I rise to support the principle of what the noble Lord is suggesting, but with a “but”, which I hope the Minister will give some careful thought to across the summer before we come back to debates in the autumn. The noble Lord, Lord Hunt, is absolutely right that CCUS is extremely important to this country, needs to be progressed expeditiously and provides an important part of how we deal with carbon emissions in the atmosphere, so he is right to bring forward this proposal. My “but” is more broadly related to the range of types of project covered by NSIP. I declare my interests as an adviser to Hutchison Ports and to AtkinsRéalis.

My concern is more about the implications of more and more categories of project being covered by these processes. The issue I want the Minister to address across the summer, before we come to it in Part 3, is that this legislation, when it comes to major projects of this kind, allows developers to simply move ahead, provide compensation to the fund that the Government are setting up and, in effect, clear a site. I strongly believe that the balance of presumption should be that a developer has a duty to examine what is on a site and to take precautionary measures around the biodiversity on that site before they come to take action away from that site. The more we grant permission to those seeking to pursue major projects simply to move away from any environmental responsibilities, the more damage will be done to biodiversity and our environment.

It is not that we do not need change. I was involved very clearly as Secretary of State in the process of taking the expansion of Heathrow Airport through Parliament six years ago, and there were some issues we faced that were nonsensical around the way the habitats directive was applied and which I think defied all realistic common sense. Change is clearly needed, and I accept the principle of what the Government are doing, but I want to see the precautionary principle left in or put back into the legislation, requiring a developer, whether for CCUS or another kind of major project, to look carefully at what is on a site and at how they ameliorate the impacts before they can simply pay money into a fund and wash their hands of what is on the site. My request to the Minister, as he thinks this through across the summer, is to look at what could be done with the legislation to stop the slash-and-burn approach and to leave us with proper safeguards for nature but also to allow us to move ahead with precisely the kind of thing that the noble Lord, Lord Hunt, is rightly saying we need to do.

[Earl Russell (LD)]

My Lords, I rise to speak to both amendments tabled by the noble Lord, Lord Hunt. On these Benches, we broadly support Amendment 51 and we support Amendment 91. Amendment 51 seeks to amend the Planning Act 2008 to clarify that carbon dioxide spur pipelines and carbon capture equipment are eligible for nationally significant infrastructure project designation. Amendment 91 seeks to directly amend the Pipe-Lines Act 1962 to remove the requirement for special parliamentary procedure in cases where a compulsory purchase order is made for a CO₂ pipeline used for carbon capture and storage. Both amendments, in their different ways, seek to make practical changes to help speed up the building and development of carbon capture and storage projects.

The Climate Change Committee was clear that there is no route to net zero without carbon capture and storage. Going forward, we need this technology, particularly for the hard-to-abate industries such as cement and glass, where we have to capture CO₂.

On these Benches, we support carbon capture and storage. It is a key part of our strategy on climate change and to achieve net zero, and we are committed to accelerating the development of such technologies to help further reduce and control our emissions. Indeed, the UK is in a good place for doing this: we have an estimated 78 billion tonnes of CO₂ storage capacity under the seabed in the North Sea from our old oil wells and as part of that declining basin.

I spent a bit of time last night trying to understand the NSIP system around carbon capture and storage. I must admit that I ended up scratching my head a little, because it is not the clearest thing I have ever read, so the noble Lord, Lord Hunt, has definitely picked up on an important issue. Trying to understand which bits of carbon capture and storage are NSIP and which are not is easier said than done, so we recognise the need for clarity around these points.

My only real worry with the amendment is that the landscape, as it exists now for planning, is complicated. I took particular note of the fact that the noble Lord, Lord Hunt, said that it was a spur of pipelines of less than 10 miles in length, but “less than 10 miles in length” is not in the wording of his amendment. I worry a little bit about whether the definitions the noble Lord has put forward will fit with the existing regulations and that complicated landscape.

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One definition of insanity is repeating the same thing over and over and expecting a different outcome. Launching a major programme of infrastructure and expecting people to speak out when things go wrong while the current whistleblowing framework remains unchanged, or just a bit tweaked here or there, is, frankly, insanity indeed. So I ask the Government to listen and either accept my amendment or find other ways to come properly to grips with the need for safe whistleblowing. I beg to move.

[Lord Grayling (Con)]

My Lords, I listened carefully to the noble Baroness’s comments. I was not planning to speak but, given that I was the Secretary of State alongside the Mayor of London when we had the bad news about Crossrail, I thought I would contribute a thought to this discussion.

First, the noble Baroness is right about many of the issues. What happened in 2019 was a combination of head in sand and a lack of understanding of the complexity of the Crossrail project. It was outrageous that the mayor and I discovered only as late as we did that the project was as far off track as it was. That is the reason I set up the Allan Cook review into HS2 that identified the following spring that the project could not be delivered for the budget that was there. I said clearly, “That’s your budget. You have to deliver it for that amount of money—otherwise, there’s a real question over whether it can happen at all”.

Although the noble Baroness makes an important point, equally we have to remember the problem of disaffected employees. How do you deal with a whistleblower who has a separate agenda—somebody who has been dismissed, somebody who is unhappy at work and so forth? I am not convinced that setting up a separate agency is the right way to deal with what she is suggesting, but she is making a salient point. There probably needs to be a much earlier mechanism to raise a danger flag about a project that is not going the way it should, because there is a reluctance to tell truth to power. In these projects there is an optimism bias and always a feeling that, “Well, something will come along to bring it in okay after all”. I suggest to the noble Baroness and to Ministers a possible route for NISTA, the new infrastructure body, to have some form of investigatory role. If somebody says, “This project appears to be going badly wrong” early on, that might be a better way of doing it than setting up a separate body altogether.

The reality is that the mayor and I should never have been in the position we were in of discovering so late in the day about a project that we had been told clearly was on track and was going to open, with the first trains running the following December. The noble Baroness makes a valid point in saying that there should be safeguard mechanisms in the system, but the mechanisms that should exist are probably best handled through the national infrastructure bodies than through a separate organisation in its own right.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am very sympathetic to what the noble Baroness said but, rather like the noble Lord, Lord Grayling, I am not sure that another statutory body is the right way to deal with this. Thinking back to my experience in the NHS, I cannot think of the number because there have been so many whistleblowing initiatives. There have been edicts and circulars, and I think we have some legislation as well. But I think we would find it hard to say that we think the NHS has a culture in which whistleblowers feel confident to come forward; they do not.

The noble Baroness has raised an important question, which I hope the Government will consider. We need to start talking to the leaders of organisations to understand what the issue is in relation to whistleblowers. It is, of course, partly the point that the noble Lord, Lord Grayling, raised; sometimes whistleblowers can be awkward people and therefore have already built up a feeling against them. Sometimes they could be making trouble, but very often they are raising legitimate points.

Part of the problem is the punitive culture for senior managers in much of the public sector. Why do NHS chief execs discourage whistleblowing? It is because we have a punitive culture. The turnover rate of CEOs in the health service is frightening; it is so rapid. Somehow, to deal with whistleblowing, you have to look at a much wider issue of whether we set conditions in which leaders have greater freedom to develop and grow their organisations from the current micromanagement they often come under. We also need a culture in which, if CEOs really do encourage their staff to raise concerns, the system then does not come down.

There is clearly a tension. I am sure that many CEOs know that, in their hospital trusts at some point, there are unsafe services. They know they do not have enough clinical staff. The penalty for admitting it, however, is to have regulatory intervention and managerial intervention from above which basically says, “You get on with it. We are much more concerned about finance and throughput”. Unless we are realistic about why senior management does not encourage whistleblowers, the reality is that any of these kinds of initiatives will not be effective in the end.

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[Lord Moylan (Con)]

My Lords, we come to a series of amendments that relate to transport and the Department for Transport. If I may, I shall begin with a few preliminary remarks. The first is to apologise to noble Lords that I did not speak at Second Reading on the Bill—I was not able to. The second is to thank the Minister and his officials for the engagement and the helpful meetings and briefings that I had in preparation for today. Thirdly, as a class, the amendments relating to the transport section of the Bill are generally very trivial and minor indeed. If this is the Government’s engine for growth, there is not a great deal of puff in it. One of the amendments—I doubt we will discuss it—is so bold as to repeal a redundant clause in the Transport and Works Act. For those of us with a tidy mind, that is not a bad thing to do, but it will hardly shake up the economy. None the less, the Government’s amendments deserve a degree of scrutiny and we shall attempt to do that in the course of the next few hours.

I turn first to amendments relating to Clause 29. As well as moving Amendment 53C standing in my name, I will speak to Amendments 53D, 53E and 53F. I shall also speak to Amendment 53M, which relates to a later clause in the Bill. What these amendments have in common is that they relate to charges. Clause 29 creates a category of legal person known as “prescribed authorities”, which are not named. These prescribed authorities will be able to charge highways authorities for their services, but the services that they will be charging for are not specified either. All this is to follow in regulation. One can hazard a guess that the sort of body that might be a prescribed authority for this purpose might be Natural England or the Environment Agency, or whatever.

My first question, and the purpose of the first few amendments, is to elicit from the noble Lord what these bodies are. The second is to try to establish what range of services they are going to be able to charge for, and whether services that are currently regarded as routine and freely available will now become a charge on highways authorities. I would also like to know whether, in setting the charges, they will be limited by the very common principle among public authorities that charges should be set only so as to cover costs, and that taking one year together with another they do not generate a surplus. Will that be the case in relation to these charges or not, and if not, what limit will be placed on their ability to set those charges?

My final question is a slightly detailed one for those who are involved with local authorities that are also highways authorities. Could the payment of these charges by highways authorities fall upon a parking revenue account and be drawn from a parking revenue account, or would it fall on the general fund? It would be helpful if the Minister could tell us that as well.

Briefly on Amendment 53M, this relates to a clause which allows highways authorities to charge applicants—this is, if you like, a mirror image, or may be to some extent a pass-through clause. It is not objectionable in itself, but there is again the question of whether these charges will be set so as to cover costs and so that a surplus is not generated, taking one year with another. I think it would be very helpful to all noble Lords if the Minister could answer those questions. I beg to move.

[Lord Grayling (Con)]

My Lords, very briefly, I support my noble friend in this probing effort to establish what the intention of the Government is. He is right to highlight the risk that this becomes a revenue-raising mechanism as opposed to a cost-offsetting mechanism. There have been many examples over the years where different public bodies have sought to do that, and he is right to seek clarification.

The one caveat I would add is that there may be some cases where it is right to levy a punitive charge, where there has been a failure on the part of the third-party body that is being charged, but that should be under only very limited circumstances and where there has been a palpable and measurable failure in what that organisation has done; for example, a lane rental that has been put in place to carry out works that have been done inadequately, leading to disruption afterwards. My noble friend is absolutely right to ensure that the Government are clear about whether these measures will allow profits to be made or whether they are simply to offset costs. I look forward to hearing the Minister’s answer.

[Lord Liddle (Lab)]

My Lords, I speak briefly to make an apology. I have Amendment 71 in a later group, but I have to catch an Avanti train to Carlisle—and that, as my noble friend Lord Hendy will know, is a bit of a hazardous process these days. So I probably will not be here for the amendment that I have tabled, but it is relevant to the point about charges, because it is an amendment about trying to liberalise the regime, to enable people who cannot park their electric car off the road to charge from their home across the pavement. That will cut bills for people by a considerable amount. Lots of profit is being made somewhere in the provision of on-street charging systems, and enabling people to charge their car from their own home would be a pro-environment measure in increasing the attractiveness of electric car ownership but also a cost of living measure, to which I hope the department will give consideration. I apologise again if I am not around when this matter is discussed.

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[The Minister of State, Department for Transport (Lord Hendy of Richmond Hill) (Lab)]

My Lords, the first three amendments in this group seek to ensure that the fees charged by the prescribed bodies to highways authorities under the Highways Act 1980 are not excessive, that the level of fees charged does not cause highways authorities financial hardship, and that the regulations detail financial mechanisms and arrangements to support highways authorities in meeting any charges that may be forthcoming under Clause 29. I welcome the noble Lords, Lord Moylan and Lord Grayling, raising points related to the public purse. The ability of organisations to plan and fund resources accordingly is important to the successful implementation of these reform measures.

Clause 29 is an enabling power that allows the Secretary of State in England and Welsh Ministers in Wales to make provision for, through regulations, the charging of fees for services provided to support Highways Act 1980 applications. I underscore that Clause 29 is intended only to allow prescribed bodies to charge fees on a cost-recovery basis. Its implementation, through supporting regulations, will not allow them to make a profit. The ability to recover reasonable costs will support the capacity and capability of specified public bodies. This in turn will encourage timely and high-quality inputs into the process.

As in other infrastructure consenting regimes where cost-recovery principles have been introduced, the regulations will be used to set out that fees may not exceed the costs reasonably incurred in providing the relevant services. The clause states that the regulations may make provision in respect of

“what may, and may not, be taken into account in calculating the amount charged”.

This provides a satisfactory basis on which to achieve the intention of the amendment. As part of stakeholder engagement, the Government will rightly continue to engage to understand the potential financial implications for highways authorities, prior to introducing regulations. The Government believe that, taken together, our commitments to produce statutory guidance alongside the regulations will ensure that the fees charged by prescribed bodies are done only on a cost-recovery basis and will provide appropriate flexibility in the light of changing circumstances to review and adjust fees where necessary and justified.

In respect of transparency, local authorities are already under a duty to maintain a system of internal audit and to appoint external auditors to audit their accounts annually. Government departments and their non-departmental public bodies in England are audited by the National Audit Office on behalf of the Comptroller and Auditor-General. The Welsh Government and their non-departmental public bodies in Wales are audited by Audit Wales on behalf of the Auditor-General for Wales. The department allocates capital funding to local highways authorities so that they can most effectively spend this funding on maintaining and improving their respective networks based upon their local knowledge, circumstances and priorities. It is therefore for the respective highways authorities to determine how best to spend this funding to fulfil their statutory duty under Section 41 of the Highways Act 1980.

Precedent from other regimes with cost-recovery principles directs that the matters identified in the proposed amendments can be satisfactorily addressed through secondary legislation and guidance. In so doing, that will provide suitable flexibility for the operation of a cost-recovery regime in the event of changing circumstances.

The points proposed in the noble Lord’s Amendment 53F are important. It is the intention, as in other transport-consenting regimes with cost recovery, that they will be addressed through secondary legislation. The regulations will, among other things, explain how fees should be calculated and when fees can and cannot be charged, as well as specify which bodies can charge fees.

I turn finally to Amendment 53M. Clause 40 is an enabling power that allows the Secretary of State in England and Welsh Ministers in Wales to make provision through regulations to charge fees for services provided to support Transport and Works Act applications. As in other infrastructure-consenting regimes, where cost-recovery principles have been introduced, the regulations will be used to set out that fees must not exceed the costs reasonably incurred in providing the relevant services. These regulations will detail not only the bodies that will be able to recover fees but the basis on which fees should be calculated. The regulations will also consider circumstances in which fees may or may not be charged and when these fees may be waived or reduced.

Taken together, the Government believe that our commitments to produce statutory guidance alongside regulations will ensure that fees charged by prescribed bodies are done only on a cost-recovery basis and provide appropriate flexibility in the light of changing circumstances to review and adjust fees where necessary and justified.

The noble Lord, Lord Moylan, asked what the prescribed bodies are. I am happy to write to him to set out which bodies the Government have in mind. The sorts of services that might be included are, for example, providing advice on significant adverse effects on the environment and mitigating those effects. The Environment Agency might, for example, provide advice on surface water flood risk from a new highway and how to mitigate it.

The noble Lord, Lord Grayling, referred to punitive charges in certain circumstances. While I sympathise greatly with the idea that all public bodies should behave in a timely and proper manner, I am not entirely sure that punitive charges ought to be set out in an arrangement that seeks just to make the system work better.

[Lord Grayling (Con)]

It may be that this is not the right vehicle for this, but most local authorities do not have the resource to inspect works carried out by utility companies, for example. As a result, the works tend to deteriorate faster than they should do. Putting in place a punitive regime to enable a local authority to apply fines would provide additional resource for extra inspections. That is something that, in hindsight, I wish I had been able to do and which the current Government could do.

[Lord Hendy of Richmond Hill (Lab)]

I thank the noble Lord for his intervention and I am very sympathetic to his point. He is quite right. He and I both know that, on many occasions, reinstatement works are done badly and do not last long. The recovery of inspection charges to find that out is reasonable; punitive charges beyond those levied for work reasonably incurred are probably not reasonable. This may not quite be the vehicle to do it, but I have every sympathy with what the noble Lord is saying. As he probably does, I inspect pavements and roads almost daily and despair at their condition.

I will deal with my noble friend Lord Liddle’s point on Amendment 71 when we get there, even though he will probably be in transit to somewhere else. I will take away the points about run-off water, which were debated by the noble Lord, Lord Whitty, and the noble Baroness, Lady Pinnock, and reflect on the extent to which they are covered by these amendments.

I thank the noble Lord, Lord Moylan, for tabling these amendments and appreciate his interest in these clauses. However, I ask that he withdraws Amendment 53C.

Rail Freight

Lord Grayling Excerpts

Monday 14th July 2025 Lords Chamber

[Lord Hendy of Richmond Hill (Lab)]

The noble Baroness may know that, actually, that is not a new scheme. In respect of rail freight to Europe, the Government clearly have an interest in promoting it. The Channel Tunnel has plenty of spare capacity, as does HS1. In respect of carrying lorries by rail in the UK, that has been tried before. I think it is up to the private sector freight market to develop its own flows, but the Government are there to help with access and access charges in order to get that traffic on the railway.

[Lord Grayling (Con)]

My Lords, I refer to my entry in the register as an adviser to Hutchison Ports. I looked carefully through last week’s announcement. I could not see anything in the Government’s plans that would deal with the bottlenecks in the system that prevent rail freight growth. Can the Minister enlighten us as to when those might be addressed?

[Lord Hendy of Richmond Hill (Lab)]

The noble Lord has, of course, some background in this subject, but the Government in his time were unable to invest significantly in increased access for freight, and the fiscal position has not allowed as much investment in that area as the Government would clearly like in unconstrained circumstances. Nevertheless, there are investments to be made now in the network which have been announced, such as the investments in the TransPennine upgrade and in East West Rail, which will facilitate more rail freight.

Bus Services (No. 2) Bill [HL]

Lord Grayling Excerpts

Committee stage
Tuesday 11th February 2025 Grand Committee

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I signed several amendments of the noble Lord, Lord Holmes, and I would have signed those of the noble Baroness, Lady Brinton, which are very good. I speak as somebody who has always loved floating bus islands, because I have no disabilities—other than not being capable of keeping my views to myself—and there seems to be a degree of real safety for cyclists going past them. But, obviously, since we have been discussing this, I have become very aware that floating bus islands are in some quite dangerous situations and difficult places, and I have now changed my mind—which is a rare thing for me to do.

There are probably three reasons for me to support these amendments. First, as the noble Lord, Lord Holmes, said, everyone benefits when we make things safe—that is absolutely obvious. When you have an increasingly older population, as we do in the UK, that is incredibly important. There is also the question of fairness. I want a fair society; I know we are a long way off it, but it really is something we should aim for constantly. Lastly, I have family with invisible disabilities, and I do not even know how we can help people who have those. But, clearly, as much information as possible, given as often as possible, will be part of that.

Finally, I cannot see anything in these amendments that the Minister would disagree with, so I very much look forward to the Government accepting them all and saying what a good job the Opposition are doing.

[Lord Grayling (Con)]

My Lords, I will pick up on the points my noble friend Lord Moylan made about demand-responsive buses. I acknowledge what the noble Baroness, Lady Brinton, said. The key point of those buses is not that they are for disabled people but that they are a fundamental part of the future of transport in many rural areas. It is enormously important that, as local authorities migrate to a new way of doing things under the terms of the Bill, they encourage the development of demand-responsive buses. The reality is that they are an important way to bridge the gap between many rural communities and local towns, given the absence of public transport. It is important that buses do not develop in a way that excludes those with disabilities. We need to encourage local authorities in this respect.

I agree that currently, demand-responsive buses are significant for the elderly and the disabled, but that is not how it must be in the future. It is important to transition to the new arrangements in a way that does not forget the important role the demand-responsive system will play for disabled people as well. It must be part of local authorities’ responsibilities to be mindful of how that happens. That may involve vehicle standards or other provisions, but demand-responsive buses and disability must go together in the context of a new world where such buses are simply a part of our public transport system.

[Baroness Grey-Thompson (CB)]

I rise to speak strongly in favour of all the amendments of the noble Lord, Lord Holmes, and Amendment 56, to which I have added my name.

We are trying to get to the position where more disabled people can travel by bus. A good bus network has a positive impact on the local community. KPMG and ITS Leeds found that a 10% improvement in local bus service connectivity is associated with a 3.6% reduction in deprivation, leading to measurable improvements in health, skills and income. However, many disabled people have poor experiences of using buses. I have had my own.

On New Year’s Eve, a driver refused to put the ramp down, let everyone else on, and then argued that there was no space for me to get on. We were then left with the potential issue of two people with buggies and I arguing over who was able to use the space. The driver refused to engage with me and tried to split my family up; my daughter is an adult, so, fine. The driver then suggested that we all get off and wait for another bus behind—who knows when? I was having a discussion about all this when an amazing woman with a young child in a buggy who was only going one stop further got off, so that I could get on and take a much longer journey.

A number of people have been in touch with me about problems such as having been refused service, ramps not working or drivers not wanting to pick them up. There is also the issue of where the ramp is positioned when buses stop to enable a safe set-down. London buses seem to be in a much better position than others around the country, with induction loops, audio announcements, LCD display screens and information posts, but people should not have to try to count the number of bus stops in order to get to where they are going. In a survey of blind and visually impaired people using TfL, 65% of blind or partially sighted respondents told the Sight Loss Council that making transport accessible was the most important thing to them.

I am briefly going to cover floating bus stops, because they are a massive issue for all people. They are dangerous at busy times of day. When I get off a bus, once the ramp goes down I have to pull a wheelie so I can control the speed. But often, there is not enough space for my wheelchair to fit at the side of a floating bus stop. On Westminster Bridge, which I cross at least a couple of times a day, on many days I see bikes not stopping and running both sets of red lights, and where the floating bus stop is located. Indeed, this morning I saw a delivery driver riding the wrong way over Westminster Bridge in the bike lane. Those getting off the bus would not even think to look both ways. They were in quite a dangerous position.

I agree, slightly, with noble Baroness, Lady Brinton, about cyclists. The situation is dangerous for them, although I find myself turning into a woman of a certain age, shouting at cyclists who run red lights and cause a lot of problems. We have to take into account that TfL’s own published figures suggest that 60% of cyclists do not obey road rules by giving way to pedestrians at crossings. When you factor this into floating bus stops, you can see why the situation is so dangerous.

Evidence has been collated by the RNIB, which is keen to highlight how dangerous floating bus stops are for blind and partially sighted people. Government research shows that when London’s floating bus stops were designed, blind and partially sighted people were not involved in the street design process. Wheels for Wellbeing is worried about the number of disabled people who, because of that, could be discouraged from using buses. I am going to use a phrase that I normally use for my experiences of travelling by train: I just want the same miserable experience of commuting as everybody else. We are not quite there yet, but making it better for disabled people makes it better for everybody.