Queen’s Speech
Lord Adonis Excerpts(10 years, 5 months ago)
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Lord Adonis (Lab)
My Lords, it is a great pleasure to follow the noble Lord, Lord Deighton, and to pay tribute to him for his sterling work over the past year in promoting HS2. Six weeks ago, the House of Commons carried the Second Reading of the HS2 Bill by the colossal margin of 452 votes to 41. HS2 is vital to transforming transport capacity and connectivity between London and the major cities of the Midlands and the north. The Bill will proceed in this Session with our support.
However, if HS2 is the “Flying Scotsman” of the new Session, the rest of the Queen’s Speech barely merits “Thomas the Tank Engine”. Starting with the economy, the gracious Speech tells us:
“An updated Charter for Budget Responsibility will … ensure that … governments spend taxpayers’ money responsibly”.
I assume that this means that the Chancellor will be updating his fiscal rules of 2010 and proclaiming them as a charter. However, since the Chancellor is not on target to meet either of his 2010 rules by 2015 as intended, because of the weakness of the economy for most of the four years since he became Chancellor, it is hard to see why the public should have more confidence in any new set of rules just because they are dressed up as a charter.
As for the proposed legislation to cut bureaucracy and promote access to finance for small businesses, we welcome any measures to deal with late payments in particular—although the public sector is itself often the culprit. However, the Government have spent the past four years announcing one initiative after another on access to finance, mostly to little effect: remember Project Merlin? The House will not be holding its breath. The plain fact is that, as the Bank of England’s latest Trends in Lending report said in April, lending to all businesses is still falling, with small and medium-sized enterprises hit worst.
The Queen’s Speech also promises yet another Bill to reform the planning regime and to promote infrastructure, even as the ink is barely dry on the previous Growth and Infrastructure Act—intended, yes, to reform the planning regime and to promote infrastructure. “Déjà vu all over again”, as someone once said.
The House will therefore want to focus not so much on the measures in the Queen’s Speech as on the economic fundamentals. Thankfully, the economy is at last reviving. We all welcome the recent improvements in employment and output, and the fact that inflationary pressure remains low. However, before we hear too much about an economic plan that is working, the best gloss that can be put on Britain’s relative economic performance is that, at last, we are in catch-up mode. Unlike the US, Germany, France, Canada and Japan, the UK’s GDP is still below its 2008 peak—out of the G7, only Italy has a worse record. As the Office for National Statistics says in its latest analysis,
“UK real GDP fell by 7.2% … and the subsequent economic recovery has been one of the slowest in the G7 … and in UK economic history”.
Nor has economic growth been accompanied by any pick-up in productivity, the key determinant of long-term prosperity. Productivity growth in the UK since 2007 has been lower than in all other member countries of the G7, including Italy. This underlying productivity weakness partly explains why average real incomes have been languishing for so long and why wage growth has been so weak.
Exports remain especially weak. The current account deficit stands at 5.5% of GDP, the highest level since records began in 1955. Over the past two years, the UK’s exports have been flat, and the Government are not remotely on track to meet their target of doubling exports to £1 trillion by 2020.
As for employment—made much of by the noble Lord—the top-line employment figures tell only part of the story. For instance, 1.4 million people are working part-time because they are unable to find full-time employment. As the Bank of England notes, this very high number of people reporting that they would like to work longer hours points to considerable underemployment. The rise in claimed self-employment, which accounts for more than half the increase in total employment reported since last summer, also suggests that millions simply cannot find permanent jobs and are looking for other ways to make ends meet.
Youth unemployment remains especially high. At 19%, the UK’s youth unemployment rate is higher than that of Italy, Denmark, France, the Netherlands, Austria and Germany. We are failing the next generation —a lost generation of young people with poor skills and no work, and little hope for the future.
The truth is that Britain is growing but the foundations are weak, the young are especially disadvantaged and a good deal of today’s growth is being driven by consumer debt and a surge in house prices. This partly also explains why growth is so regionally imbalanced, concentrated on London and the south, while the Midlands and the north do less well. Tellingly, 21 of the 25 worst performing retail centres in the country are in the north, the Midlands and Wales, while 22 of the 25 best performing are south of the Watford Gap.
Household consumption and private housing investment, fuelled by the housing price surge in London and the south-east, represented fully 60% of GDP growth last year, while net trade and business investment, essential for driving innovation and high-value jobs, remain worryingly low. A critical issue is the failure to build new homes on anything like the scale that the country needs. The rate of housebuilding is lower than at any time since the 1920s. Barely half of the 200,000 new homes a year that are required are being built nationally, and less than a third of the 60,000 a year needed in London.
Where are the policies to deal with these fundamental weaknesses, to improve youth skills, to transform vocational education, to accelerate investment and to dramatically improve the rate of housebuilding? To tackle youth unemployment, we need more apprenticeships and more work opportunities for young people, yet the number of apprenticeships for under-19s is still below its 2010 level—a figure disguised by the Government lumping all apprenticeship numbers into one total, when most of the growth under this headline number is for those already in employment in their mid or late 20s. Even in the public sector, apprenticeship numbers are pitiful and too little is changing too slowly. The Civil Service used to have no Whitehall-wide apprenticeship scheme whatever. Now it has just started but for a mere 100 apprentices when there should be thousands.
The Government’s Youth Contract, billed by the Deputy Prime Minister as the big answer to youth unemployment when it was launched two and a half years ago, has massively underachieved. The policy was for 160,000 wage incentives for employers taking on long-term unemployed young people. There were also to be 250,000 unpaid work experience places. Two and a half years later, a mere 4,000 young people have been placed with an employer for six months with full government support; that is just 2.5% of the way to 160,000. Furthermore, a recent employers’ survey revealed that 81% of the jobs advertised under the Youth Contract would have been offered anyway. As for the 250,000 work experience placements, fewer than half have in fact been created.
It is a similarly worrying story on housebuilding. Why is the rate of housebuilding so low? It is because of a serious construction skills shortage, private sector land-banking and the unwillingness or sheer inability of the public sector in its various guises, from local government to the MoD and the NHS, to get building on its own land. There have also been some nimby councils but others want to do more but do not have the powers. The Government have done far too little to tackle these problems. For example, three years ago the Prime Minister told us that he wanted to see new garden cities. So far only one has been announced, in Ebbsfleet, which already had planning permission for 10,000 homes.
To drive improvements in skills, housing and infrastructure, the Government should be following the advice of the noble Lord, Lord Heseltine, and empowering England’s cities and localities by radically devolving budgets and powers to local authorities and to local enterprise partnerships, overcoming what Vince Cable called the Maoist abolition of the regional development agencies in 2010. Instead, only a fraction of the Heseltine devolution has taken place, mostly dependent on complex and protracted individual city deal negotiations, which is far from the rocket boost required.
It is a similar story of half measures or no measures in respect of energy and infrastructure. The average dual gas and electricity bill is now at a record £1,353, up from £819 in 2009. Over the four years to October 2013, gas prices increased by 21% and electricity prices by 25%. The Office for National Statistics estimates that the share of household income going on essentials has risen by 10% since 2003, which is a huge burden on family budgets. The lack of an effective energy market is part of the explanation. That is not just our contention: since Ed Miliband put this issue up in lights, it has become the Government’s and the regulator’s contention too.
In February, Ed Davey asked the big six energy companies to review their pricing. He also asked Ofgem to think radically and even consider breaking up the big six if they had been overcharging. In March, Ofgem reported back that it found evidence of both collusion and overcharging, evidence of “possible tacit coordination” between energy companies that includes a,
“strong alignment of pricing announcements, in both timing and extent”,
and evidence that the big six have seen increasing profits that do not appear to reflect increasing efficiency, a possible sign of lack of competition. A Competition and Markets Authority investigation is now under way, but nothing is being done in this Queen’s Speech to freeze or reduce energy prices while that happens and we will not get any action on competition until after the election. As for energy infrastructure and new supply, according to a recent survey by the CBI and KPMG, two-thirds of British companies fear that UK infrastructure will deteriorate over the next five years, and their concerns are most critical on energy.
Legislation on fracking is proposed in the Queen’s Speech which, the Government say, would put shale gas production in line with the coal industry, water and sewerage, all of which have access to underground land. We welcome that in principle, provided that communities are reassured about impacts on the environment, including contamination of the water table, but the critical issue is that a fifth of the UK’s power-generating capacity will close over the next decade, but plans for delivering new gas and nuclear power stations are well behind the curve. Ministers talk about a dozen new nuclear power plants, but only two are as yet proceeding. As for gas, because of a lack of clarity and confidence in the Government’s capacity mechanism for encouraging new supply, we face a situation where existing gas stations may be mothballed but there is little appetite for new plants. On renewables, there appear to be two separate Governments: Ed Davey’s DECC is in favour while Eric Pickles’s DCLG repeatedly turns down applications for extra capacity.
The story on housing and energy applies to transport, too. Although a few welcome projects, such as Crossrail, Thameslink and HS2, are proceeding—mostly, I should note, inherited from the previous Government—there are too many plans without delivery, the biggest plan of all being the constantly relaunched national infrastructure plan, which is a catalogue of everything on the infrastructure drawing board, only a fraction of which is actually being taken forward
In one vital area of economic importance, extra airport capacity in the south-east of England, there is not even a plan, just a commission, which is not due to report for another year, because for the entirety of this Parliament, the Government have not even been able to form a view, let alone to take a decision. It is the same with the new lower Thames crossing—vital infrastructure to relieve the M25 Dartford crossing, the most congested short stretch of road on the entire trunk network. The previous Government published three options for the new crossing five years ago. Since then, the coalition Government have merely reduced the three options to two so there still is no plan, let alone a decision. Yet a new crossing would be entirely paid for by the private sector through tolls.
The Government’s non-delivery is summed up by the extraordinary saga of the A14. The upgrade of the A14—a vital growth corridor from the east coast ports to the Midlands—was shovel-ready in 2010. One of the first acts of the coalition Government was to cancel it, along with a string of other major transport schemes. Two years later, in 2012, Ministers tried to resuscitate the A14 as a toll road with magic money. That scheme collapsed and last year, finally, the Government said that the A14 would go ahead on its original plan. So a vital major trunk scheme, which might have been finished by now, is not even remotely close to starting. A very large number of the schemes that the Minister mentioned in his remarks from the road plan of last year are simply the resuscitation of schemes that were cancelled in 2010.
As a country, we face huge challenges. At last there is growth but far more needs to be done to tackle youth unemployment and underemployment, and to construct the homes, infrastructure and energy and transport systems that Britain needs to thrive. Where the legislation in the Queen’s Speech addresses these problems, we will give it our support but the imperative is for a bold and ambitious Government—and for that, the general election cannot come soon enough.
High Speed Rail (Preparation) Bill
Lord Adonis Excerpts(11 years ago)
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Lord Adonis (Lab)
My Lords, this is my first opportunity in the House to congratulate the noble Baroness, Lady Kramer, on her appointment as Transport Minister. I do so very warmly.
The previous Government started work on what became HS2 five years ago. In March 2010 we published the Command Paper that set out the case for HS2, together with the detailed route plan from London to Birmingham and the outline plan to extend the line from Birmingham to Manchester, Derby, Nottingham, Sheffield and Leeds, linking to the existing main lines to Liverpool, Newcastle, Glasgow and Edinburgh. HS2 transforms connections between London and the major cities of the Midlands and the north in the spirit of the great Victorian pioneers who built the main lines from the 1830s—starting with Robert Stephenson’s London & Birmingham Railway—upon which we still depend today.
It was always clear to me that without cross-party agreement and a fixity of national purpose to rise above short-term party politics, HS2 would never happen. HS2 through to Manchester and Leeds is a 20-year project. The golden rule of high-speed rail is that while everyone wants the stations, no one wants the line. From the outset of planning HS2, I therefore consulted with the Conservatives and the Liberal Democrats, and the Cabinet agreed to publish the Command Paper in 2010 only on the basis of their support. I am glad to say that the coalition Government have maintained this cross-party approach and very largely stuck to the 2010 plan for HS2. We may disagree on other areas of transport policy—for example, I am proud that East Coast is doing such a good job for the public as a state company and believe that it ought to be allowed to continue as such—but on HS2 I acknowledge the constructive role played by the Prime Minister, the Secretary of State and other Ministers in keeping this a national project, not a party project. This approach is fully reciprocated by my right honourable friend the Leader of the Opposition.
I also applaud the decision to appoint Sir David Higgins as chair of HS2. The biggest infrastructure project in Europe needs the best infrastructure manager available. Sir David Higgins, fresh from delivering the 2012 Olympics on time and on budget, is the very best. As with all major infrastructure projects, HS2 has experienced some teething problems. Sir David must get a firm grip on management and costs at HS2, including the recent increase in the total projected cost from £32 billion to £42 billion—an increase largely due to a sudden, and in my view hard to justify, decision by the Treasury to impose an extra £6 billion of contingency reserve on the project, taking the contingency reserve alone to £14 billion. HS2 cannot be “at any price” and this represents a 50% contingency on the costed design of £28 billion. We look to Sir David to review these costs and to stress-test the figures with some urgency. I was glad to hear what the noble Baroness said about that. I know that Sir David will also take to heart the good advice on project costs and management from the noble Lord, Lord Heseltine, in his excellent lecture on HS2 to the Royal Town Planning Institute last week.
I will say a few things about the history of HS2. There have been claims that the 2010 Command Paper was not a thorough analysis, that I and others were kidnapped by rail fanatics who bamboozled us into mortgaging the Exchequer simply to cut half an hour off the journey time from London to Birmingham, and that the whole project has had to be relaunched on the basis of capacity rather than speed. None of this is correct. Capacity is and always has been the central argument for HS2. The 2010 Command Paper could not have been clearer. It set out the previous Government’s intention to proceed with HS2 in these words:
“The Government’s assessment is that over the next 20 to 30 years the UK will require a step-change in transport capacity between its largest and most productive conurbations, both facilitating and responding to long-term economic growth … alongside such additional capacity”—
I stress those words—
“there are real benefits for the economy and for passengers from improving journey times and hence the connectivity of the UK”.
So, capacity first, with speed and connectivity significant additional benefits. That was the argument for HS2 in 2010, it is the argument in 2013 and, if we see this through, it will be the argument on its completion in 2033—and no doubt on HS2’s centenary in 2133—because capacity is the fundamental problem, solved for a generation and more by HS2. It is a problem that, if not solved, will mean that in just 10 years’ time we will have to start closing the north-south intercity railway to new business, which would be a betrayal of the future prosperity of this country, given that HS2 connects the five principal cities and conurbations of the UK.
The facts on capacity are compelling. Long-distance rail demand has doubled in the past 16 years alone; the trend growth rate is 5% a year, consistently ahead of economic growth, as other modes of intercity transport such as motorways and domestic aviation become saturated or simply unavailable, and as railway services steadily improve.
Furthermore, HS2 does not just meet rising demand for intercity travel; by freeing up substantial capacity on the existing lines, it also provides a huge capacity boost for freight trains and for commuter and regional passenger services. Rail freight volumes have increased by more than 50% in the past 20 years and continue to grow fast. Moving freight from road to rail is a national imperative, placing a special pressure on the west coast main line, which gets most of the relief from the additional capacity of HS2 since 43% of all rail freight movements in the country use it to get from the ports to the nation’s major goods distribution centres in the Midlands.
As for commuter rail, demand has also increased sharply over the past 20 years, particularly into the biggest cities served by HS2—London, Birmingham, Manchester, Sheffield and Leeds—because the big cities are the national dynamos of population and employment growth, and they will continue to be so as the UK’s population increases by a projected 11 million people in the next two decades. Here, again, HS2 is an essential congestion-buster, to the benefit of dozens of towns and cities in and around the major corporations. Coventry, Wakefield, Bradford, Stockport, Leicester, Peterborough, Stevenage, Bedford, St Albans, Cambridge, Milton Keynes—the list of beneficiaries goes on.
The question before Parliament and the country is this: if not HS2, what? Given that we are not going to be building new intercity motorways or encouraging more domestic aviation—nor should we—the only alternative to HS2 for dealing with the capacity crunch is massive further upgrades of the existing Victorian main lines. This would be very expensive and destructive and yield only a fraction of the capacity and other benefits of HS2. You do not need a crystal ball to appreciate this reality. It is only five years since the most recent upgrade of the west coast main line was completed; it cost £9 billion and entailed a decade of constant chronic disruption, at weekends and often on weekdays too, without services or with severe delays and diversions. Upgrading a busy main-line railway is like conducting open-heart surgery on a moving patient—horrendous for all concerned.
The 2010 Command Paper estimated that to achieve two-thirds of the capacity of HS2 by conventional line upgrades, just for London to Birmingham, would cost more in cash terms than HS2. In practice, though, many of those proposed upgrades, like four-tracking the Chiltern line, are simply unattainable. If I was in any doubt about that, I have been seriously disabused by the large number of your Lordships who live in the Chilterns and rightly treasure it, and who have given me freely the benefit of their advice on these matters.
The present Government have since identified a more credible upgrade alternative from London to Birmingham, Manchester and Leeds, which is set out in chapter 6 of the strategic case document that was published last month. The key points about the upgrade alternative are these. First, the upgrade is projected to cost £19 billion. That is nearly half the cost of HS2 but the capacity increase would be less than one-quarter—so half the cost for one-quarter of the capacity.
Secondly, that increase in capacity would be insufficient by the late 2020s even to keep pace with the lower of the growth projections for intercity traffic set out in the Government’s strategic assessments. So in all likelihood we would complete the upgrades of the existing lines, spending £19 billion, only to be faced with the prospect of either carrying out yet more expensive upgrades to the existing main lines or, at that stage in the 2020s, of embarking on HS2. That would be an even more expensive repeat of the situation that we now face in taking forward HS2, having already spent £9 billion on the most recent upgrade of the west coast main line when we might have done better to have started HS2 15 years ago.
Thirdly, the £19 billion price tag for the upgrade alternative does not take into account the chronic disruption of the upgrades in question—the open-heart surgery on the moving patient that I just described. Look at the description of these upgrades and you will see that to undertake them would require, as the Minister said, the equivalent of 14 years of continuous line closures every weekend. Furthermore, the list of projects involved in the £19 billion upgrade alternative, with its 14 years of disruption, is colossal, to say the least: a new 30-mile stretch of tunnel and surface line to get the east coast main line out of King’s Cross, avoiding a series of acute existing bottlenecks including the Welwyn viaduct; the rebuilding of most of the major stations on all three of the main lines going north from Euston, St Pancras and King’s Cross, including those three termini, to accommodate more platforms and longer trains; and four-tracking a lot of two-track sections of line, including in urban areas. The idea that this would be an easy alternative to HS2, let alone a cheap one, is wishful thinking, to put it mildly.
It is true that putting the £19 billion upgrade option through the Treasury’s benefit/cost ratio methodology produces a somewhat, but not much, higher ratio figure than comes out for HS2, but from my experience of major transport projects I would always be cautious about the value of benefit/cost ratios because they involve so many artificial assumptions. The M25, the Victoria line and the Jubilee line extension all had low benefit/cost ratios and faced a deeply hostile Treasury, but which of those do we now think it would be a good idea to close? All three of them have recently been upgraded to deal with congestion.
Much has been made by the critics of HS2 of the value given in the benefit/cost ratio to the benefit of time saved by business travellers, as if they were not able to work on trains. Equally artificial, though, and far more significant in its impact on the BCR for HS2, is the fact that the benefit/cost methodology caps traffic growth projections in 2036, only three years after the opening of HS2, on the grounds that further growth thereafter is too speculative. Do any of your Lordships seriously think that traffic will stop growing in 2036? Brunel did not build the Great Western Railway on the assumption that there would be no traffic growth after 1870—thank goodness, otherwise the GWR would have been built single-track. He might even have been told by a Treasury economist that upgrading the canals offered better value for money. Nor did we build the M25 thinking that traffic would stop growing in 1995, which would have been an equivalent assumption. What is needed here is a dose of common sense plus a grasp of history, which shows that in Britain, with our historic aversion to major infrastructure investment, we have consistently under- estimated the value of better transport links serving our major population and economic centres.
I have a few other points to make. Faster journey times, although not a principal reason for HS2, are a considerable benefit that cannot but be advantageous to the unity of Britain and the strength of its economy. As HS2 proceeds further north, the time savings become steadily greater: an hour off every journey between London and Manchester, Sheffield and Leeds. Journeys will be further shortened by the proposed interchange between HS2 and the new Crossrail line at Old Oak Common, just west of Paddington. This will give an 11-minute connection direct to Heathrow and fast underground trains direct to the West End, the City and Docklands without going via Euston and its congested Victoria and Northern lines. This could be a rare British example of joining up two major traffic infrastructure projects at the point of conception.
The second point is that the notion peddled even by some reputable commentators that bringing northern and Midland cities closer to London will suck the lifeblood out of them is utterly farcical. If it were true that modern transport connections between great economic centres were a negative factor, we should close existing motorways and intercity rail lines because Manchester, Birmingham, Sheffield and Leeds would be better off without them, prospering in splendid isolation.
The third point is that HS2 not only dramatically improves connections between these cities and London but between the cities themselves, as the noble Baroness said. This is a crucial part of the connectivity improvement brought about by HS2. The Victorian railway companies built mostly separate main lines from provincial cities to London, which is why rail links between most of our provincial cities remain terrible. Birmingham and Manchester are only 67 miles apart, yet the rail journey takes one and a half hours. It is 40 minutes by HS2.
Fourthly, while I do not think that just because most other developed countries do things we should follow suit, I believe that when a technology has proved successful elsewhere we should take note. Almost every developed country with an economic geography similar to ours has over the past generation built high-speed rail to link their major cities. Japan started in 1964 with Tokyo to Osaka, about the distance from London to Glasgow. Since then, France, Italy, Germany, Spain, the Netherlands, Belgium, South Korea and Taiwan have all followed suit. China is constructing more high-speed rail than the rest of the world combined, and the United States is building its first line from LA to San Francisco—two major cities also about the same distance apart as London and Glasgow.
In conclusion, I am not aware of a single country that has introduced high-speed rail between its major cities and now thinks it was a mistake. They know that high-speed rail is integral to building a modern economy and a modern society. I believe it will be the same here in Britain, so we should get on with HS2.
Growth and Infrastructure Bill
Lord Adonis Excerpts(11 years, 9 months ago)
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Lord Snape
My Lords, I support my noble friend and the noble Baroness in this amendment. It is something that I personally feel strongly about. I live near Birmingham in the West Midlands and I use the tolled section of the motorway quite frequently on my journeys north. It is a very convenient way of missing the congestion that can be found around spaghetti junction and the Ray Hall viaduct, the elevated section of the M6—until one reaches the toll booths, where we have this medieval concept of queuing to pay, the sort of thing one did with a horse and cart centuries ago. Invariably, I find myself behind someone who has got in the wrong lane, or someone who does not have the right money or cannot find their credit card, and a lot of the time saved by using the toll road is lost as one queues to get through this barrier. Surely there has to be a better way.
As the noble Baroness, Lady Valentine, said, in this day and age it should surely be possible to have a more modern system of collecting revenue for toll roads. It is 25 years since I first went to Singapore. The authorities there managed to collect congestion charges electronically three decades ago in a way that is apparently beyond us on the Midlands motorway. I ask the Minister to bear that in mind.
Perhaps I may test the patience of the Committee for two or three more minutes while I am on this hobby-horse of the Midlands motorway. At the moment it is comparatively lorry-free because the private owners—I understand that Macquarie, the Australian company, is the main shareholder in the Midlands motorway—deliberately, as a matter of policy, price off heavy goods vehicles. Those heavy goods vehicles then use the existing M6 over the elevated section at the Ray Hall viaduct and past spaghetti junction—a section of the M6 that is regularly and expensively under repair because of those very same heavy goods vehicles which, whatever the very effective road lobby says, do not pay their true track costs and do enormous damage.
Thanks to the generosity of the noble Baroness, Lady Thatcher, when she was Prime Minister in the 1980s, Macquarie was given the concession to run the Midlands motorway in perpetuity, and can charge what it likes. The last thing it wants is a non-stop procession of heavy goods vehicles, because that damages its motorway. It is no accident that the bit of motorway infrastructure regularly under repair anywhere in the country is the left-hand lane, because that is the one used by heavy goods vehicles. It is a nonsensical situation in which the British taxpayer has paid literally hundreds of millions of pounds. I know the Ray Hall viaduct quite well; it was in my former constituency of West Bromwich East. When the former Prime Minister John Major talked about the cones hotline he had the Ray Hall viaduct and the spaghetti junction interchange in mind. Miles of it are regularly coned off because of the damage done by heavy goods vehicles, which use that section of the M6 because they are deliberately priced off the Midlands motorway.
There are two matters here that I hope the noble Earl, Lord Attlee, will address. The first is the nonsensical and medieval concept of stopping to pay a toll, having used a road on which I must confess to breaking the speed limit occasionally myself. I have rarely if ever seen a police vehicle on that privately-owned section of motorway, although having said that I have no doubt I can expect to see one in the very near future. The taxpayer had to pay literally hundreds of millions of pounds because of the pricing policy on that section of toll road, which keeps off heavy goods vehicles. Both of those matters are complete nonsense. No one blames the Minister personally, but can he do anything about it?
Lord Adonis
My Lords, I wish my noble friend Lord Snape well in his quest to abolish all medieval practices in this country. I would simply point out that your Lordships may be the first victims of such a policy, so I hope he does not progress too fast.
Lord Snape
If my noble friend will allow me to say so, at least some of us in this House have occasionally sought election.
Lord Adonis
Of course, in medieval times exit was not a permitted right. The issue here is a very simple and straightforward one, on which I hope the noble Lord can give the Committee comfort. It is as simple as whether it is possible to have a tolling regime without having to have toll booths. The reason the issue has come to the fore is the Silvertown tunnel proposal. TfL, quite rightly, does not want to have toll booths, but the legal position is unclear. TfL tells me the issue is whether the New Roads and Street Works Act 1991 or the Greater London Authority Act is the relevant legal basis for tolling. If it is the one, then there is not a need for booths; if it is the other, then there might be. I think we all agree on what the public policy objective is here; we simply need the Government to give us comfort that it can be achieved.
Earl Attlee
My Lords, I am grateful to the noble Lord, Lord Berkeley, for tabling this amendment and for raising this issue in the House. Of course, it is always a pleasure to listen to noble Lords when they get on their hobby-horses. No doubt the noble Lord, Lord Snape, will be here on Thursday afternoon to discuss the HGV Road User Levy Bill that I will propose to the House.
The noble Lord, Lord Berkeley, makes a persuasive case in favour of amending Section 144(3) of the Planning Act 2008 in order to provide greater flexibility for developers wishing to include road charging provisions within the development consent order and to remove unnecessary additional processes and restrictions from the major infrastructure regime. While I cannot comment on the detail of individual cases, I share his commitment to ensuring the delivery of the crucial infrastructure that this country needs to support vital growth and jobs. I also agree with him that it is important that we take the opportunity to ensure that the provisions of the Planning Act 2008 are fit for purpose and are not inadvertently acting as a barrier to growth. This is therefore an area where I am able to consider further the case for an amendment to Section 144(3) of the Planning Act 2008.
On the noble Lord’s point about charges against diplomatic organisations, he will be aware that this is a long-running issue that we have debated many times. The Government pursue these charges vigorously with the organisations concerned. The noble Lord touched on the charging of road users, and of course on Thursday we will debate the HGV Road User Levy Bill, which partially addresses some of these problems.
I am happy to meet all noble Lords to discuss some of the wider issues relating to charging for roads. However, noble Lords will be well aware of the Government’s policy on wider road-user charging. With those reassurances, I hope that the noble Lord will be willing to withdraw his amendment and perhaps return to it on Report.
Lord Adonis
Noble Lords have different views about the precise scope of the special parliamentary procedure, which we have heard expressed in Committee, but it is important that the scope is consistently applied. It is therefore important that the Minister answers the point made by my noble friend Lord Faulkner. Why does Clause 22(5) preserve the application of the SP procedure to proposed compulsory purchase acquisition of National Trust land, which is held inalienably, but not provide equivalent protection for land held in trust for the nation by the Canal & River Trust? Since the land is held for precisely the same purpose in both cases, why should the same legal procedure not apply to both?
Lord Greaves
My Lords, I support the amendments and the stand part debate proposed by the noble Lord, Lord Faulkner, and express some concern about the amendments in the name of the noble Lord, Lord Berkeley.
We are talking about open space. The law relating to open space is quite complex and is nothing like as simple as might be suggested. The problem is that a little bit of this particular Bill intervenes on the law on open space in one or two instances, potentially causing considerable confusion, not least about the definition of “open space”. In Clause 22 is set out the proposal that in some circumstances where it is proposed to develop on and remove open space—it does not refer to commons; the position on commons will remain the same—the special parliamentary procedure will not apply. Those circumstances are when,
“it is strongly in the public interest for the development for which the order grants consent to be capable of being begun sooner than is likely to be possible if the order were to be subject (to any extent) to special parliamentary procedure”.
It is an important bit to read out. The crucial words are,
“it is strongly in the public interest”.
That decision will have to be made by the Secretary of State, which is why what the noble Lord, Lord Faulkner, said about the threat of a relatively large number of delaying judicial reviews is so crucial. What is and is not in the public interest is clearly debatable, and the question of whether the Secretary of State is making a reasonable judgment on what is in the public interest is clearly judicially reviewable. That is the constraint in here which means that it is poor legislation; it is vague and not very clear about what it means. It might mean different things in identical circumstances to different Secretaries of State.
There are other reasons why Clause 22 is undesirable. As the noble Lord said, there have been very few references to or uses of special parliamentary procedure. Once again in this Bill, the Government come forward wanting to do something without providing any clear evidence of why it is necessary. The first thing that the Minister has to try to do is to give us some evidence of why this is necessary in the real world, not of why, in some theoretical future, there might be a problem or two, but evidence that it has been a serious problem in the past. If it has been only in one or two cases, then that does not add up.
The other rather vague and, I believe, judicially reviewable phrase is “long-lived”. These new provisions apply to circumstances in which the removal of the open space is temporary but possibly long-lived. Perhaps the Minister can tell us what “long-lived” means. I suspect that she cannot tell us very precisely because, again, it is a matter of judgment, and it may lead to more delays than even a special parliamentary procedure.
Has the noble Lord, Lord Berkeley, spoken to his amendments? He has not. I thought that perhaps I had been asleep and had missed him when the noble Lord, Lord Adonis, jumped in. I will speak to them, with his permission, and then he can tell me why I am wrong.
Lord Adonis
Lord Adonis
My Lords, I will speak to the six amendments in this group standing in my name. The question before us is what projects should be considered nationally significant and therefore subject to the Planning Act 2008, as amended in this Bill, and therefore subject to a national rather than a local planning consent regime. The 2008 Act permits this change to projects of national significance in respect of infrastructure. Clause 24 extends this to business and commercial schemes.
The thrust of my amendments is that Parliament should not give the Secretary of State such wide-ranging powers without defining their extent carefully in the Bill. In the Bill, discretion as to what constitutes national significance is left almost entirely to the Secretary of State. The only substantial limitation is that regulations may not encompass projects that include residential dwellings. My amendments are all probing and I look forward to the Minister’s response to the substantial points underlying each.
Amendment 77ZJ would exclude from the new arrangements sites of special environmental or historic importance. Amendment 77AB would exclude developments that involve surface mineral extraction or quarrying. Such applications arouse especially strong local feeling, and to circumvent local planning entirely for such schemes is bound to give rise to acute concern. Amendments 77AA, 77AC and 77BA would remove the Secretary of State’s discretion to define what is meant by business or commercial and to permit the bypassing of a local authority, because Amendment 77ZA and other amendments in my name specify the definition in the Bill.
Amendment 77ZA seeks to define business and commercial projects of national significance, rather than leaving it entirely to the discretion of the Secretary of State. Under my amendments, these projects could be subject to the national process only if they are in specific areas—largely those set out in annexe A of the Government’s consultation on what should constitute nationally significant infrastructure projects in the business and commercial sphere.
That leads me to the Government’s consultation on those projects. The Government will no doubt respond to my amendment by saying that they have consulted both on categories of development and on thresholds within those categories in terms of the number of square metres that might apply in determining whether a commercial or business development application is of national significance. Last week, the Government published their analysis of the responses. However, they have not yet said how they intend to proceed. A key issue for us in this debate is to know what the Government’s response will be to the consultation that they carried out on types of development and thresholds. I will welcome the Minister’s response to the question of what the Government intend to do in respect of the types of development and thresholds set out in annexe A of the consultation. If the Minister is not able to give me a response now, I would be very grateful if he would write to noble Lords before Report. I beg to move.
Lord Berkeley
My Lords, I will speak to Amendment 78 in this group, which is in my name and that of the noble Lord, Lord Jenkin of Roding. It is yet another attempt to change the definition of what type of project could be included in the extent of the Planning Act. It relates to commercial and business developments that require consent under the national significant infrastructure regime.
The issue that I would like to raise is that of mixed-use schemes that have some housing or retail element. They should be able to take advantage of the regime for nationally significant infrastructure projects. Any retail element is excluded from the proposed list of development types set out in annexe A of the recent CLG consultation on extending the Planning Act regime. I imagine that this could always be reversed if the Government were minded to do so, but the Bill prevents any housing element being included in regulations.
I believe there is a large number of potentially significant business and commercial developments that will have some retail and certainly some housing element in them, even if it is only a caretaker. In theory, if there is just one property in a development, it cannot qualify for going down the nationally significant route. It is important for such developments to be able to include some housing element and to go for the nationally significant approach. An awful lot of time and cost could be saved if this were possible. The original prohibition of housing was well intentioned, and clearly big housing projects are not what the nationally significant definition is for, but it is a problem because if there were just one or two houses in a big development, it would be excluded.
That is what this probing amendment seeks to achieve. I hope that the Minister is willing to look at this again. Perhaps we can discuss whether there is some better wording that could be applied on Report.
Baroness Hanham
I understood that that was what the noble Lord, Lord Greaves, was getting at. I have committed to giving him the summary of the responses and have been told that the Government’s response will come in due course. That does not sound to me as if it will come before Report, but if it does, I will let noble Lords know that it is coming.
Lord Adonis
My Lords, the noble Lord, Lord Greaves, raises a point of some substance. I have read the summary of responses which the noble Baroness very kindly sent to me a short while ago. It is supremely uninformative. Question 3 asks:
“Do you agree with our assessment of the factors that the Secretary of State would need to take into account when considering whether a project is nationally significant?”.
The summary of responses says:
“A number of respondents thought the assessment factors were broadly right whilst others commented that they were not detailed enough or were not supported at all”.
I could go through them, but it is a profound exercise in waffle and does not really help us very much. To be fair to the Government, in annexe A of their consultation paper, they set out both specific types of development and very specific criteria in terms of the square metreage for the thresholds that would need to be met before these projects are deemed to be of national significance. That is crucial in informing our view as to whether we think this clause should proceed without requiring further limitation, although I think there is quite a strong preference for seeking to put provisions in the Bill. It would be extremely helpful if the noble Baroness were able, before Report, to indicate whether the Government stick by their proposals in annexe A or are minded to amend them in any form. If that does not come before Report, we will of course have no chance to assess the Government’s intended course of action before this Bill becomes law.
Baroness Hanham
My instinct would say that if it is there, then the Government are going to introduce it and are probably not going to amend it. If there is any change to that, I will let the noble Lord and the Committee know.
Lord Adonis
“( ) The Secretary of State must publish his reasons for giving a direction under this section.”
Lord Adonis
My Lords, the amendment standing in my name in this group is very simple. It would require the Secretary of State to publish the reason that a planning decision is to be made centrally, including why the application is regarded as nationally significant. This is a simple case of transparency and accountability. If the Secretary of State is to be granted the wide powers contained in this Bill, it is only right that their use should be open to scrutiny case by case. If the local authority is to have its planning role set aside, it seems only fair to tell it why. Just as planning inspectors have to give reasons for their decisions, it seems entirely consistent and transparent that the Secretary of State should have to give reasons for deeming a development proposal to be of national significance. I beg to move.
Baroness Young of Old Scone
My Lords, I rise to speak to Amendments 77A, 77B and 78A, and to the question of whether Clause 24 should stand part of the Bill, which are down in the Marshalled List in my name and that of the noble Lord, Lord Greaves. I am afraid mine will not be quite as swift and simple as the amendment in the name of the noble Lord, Lord Adonis, because I want to give a pretty full exposition of why Clause 24 should be deleted, or at least amended in a way that would remove the extension of the major infrastructure regime to business and commercial projects.
I am afraid that my subtext will be the same as for previous amendments I have put forward: this is another unnecessary clause in an unnecessary Bill. We still lack evidence of substantial numbers of large-scale projects being delayed under the current system. Using DCLG’s own statistics, local authorities are already determining and approving 87% of relevant, large-scale, major applications that might fall within the categories of Clause 24 within one year, which is the same period as the fast-track timetable that DCLG heralded when the Bill was published. Once again, we urge the Minister to present to the House the evidence for substantial delays or other reasons that would justify Clause 24.
The Minister Nick Boles, when briefing Peers, very kindly indicated that there would be only 10 to 20 applications to the Secretary of State each year under Clause 24. Therefore, one could take the view that it is hardly worth legislating for, especially as this is a centralising proposal that flies in the face of the Government’s commitment to localism. The Secretary of State has call-in powers if necessary. Indeed, if local authorities struggle with some of these larger-scale proposals, the Planning Advisory Service is available to support them. What additional benefits does the Minister believe are provided by the provisions in the clause beyond those already available?
Clause 24 is all the more unsatisfactory because of the point already raised by the noble Lords, Lord Adnois and Lord Greaves, about the consultation on how business and commercial developments will be defined in terms of type and scale. It has only just been completed. I, too, have read the summary of responses and, as the noble Lord, Lord Adonis, said, it was not hugely illuminating. Indeed, all the types of development that the consultation proposed would have major local impacts and need to be dealt with by local government. I add my voice to those who already urge the Minister that we see not only the summary of responses, but the Government’s reply and their intentions in terms of the clause, before Report. I ask the Minister to commit to producing the Government response before Report—otherwise we are being asked to buy a pig in a poke.
Of particular concern is that the proposals under Clause 24 also include the extractive industries: deep-mined coal, large onshore gas, oil and other mining and quarrying above certain thresholds. They would be brought within the major infrastructure planning system without robust guarantees that the considerable environmental impacts of these developments can be addressed through the planning system. They are usually dealt with through specific local, national park or county-level policies and procedures governing mineral planning issues. It is also unsatisfactory to propose that deep-mined coal be included in the proposed fast-track process because this seems at odds with the presumption against new coal that is included in the National Planning Policy Framework. It does not say much for commitment to addressing climate change if we regard these types of energy generation as sufficiently important to bypass the normal planning system.
One could say that there might be safeguards for decisions made under the national infrastructure procedure. National policy statements are the main basis on which nationally significant infrastructure projects on energy, transport, water or waste are decided. These have major advantages in that they are scrutinised by Parliament before being agreed. However, we do not yet know as a result of the consultation process whether Ministers will change their minds about formulating national policy statements for business or commercial schemes. The consultation was on the basis that there would be no national policy statements for these schemes, but I see from the consultation response summary that there has been some pressure to develop further national policy statements in these areas. Can the Minister give the House some clarification on the Government’s position on national policy statements for business and commercial schemes, and could we have that clarification before Report?
Lord Jenkin of Roding
I listened with great care to what my noble friend said on the question of who can make an application to the Secretary of State for an NSIP treatment. I will read very carefully what she said but, having listened, I am still puzzled as to why there is a difference between the existing applications and the new ones for business and commercial. Perhaps I might leave that there. I will read very carefully what she said and decide how we should proceed after that.
Lord Adonis
On the question of proposed types of development and thresholds, on which the noble Baroness, Lady Young, pressed the Minister, I took the Minister to have made a significant statement earlier when she said that if there was to be a notable departure from the proposals set out in annexe A of the consultation document she thought it likely the Government would come forward and tell the House that before we passed this legislation into law. I am sure we will study carefully in Hansard tomorrow what the noble Baroness said but that was quite a significant statement. We look forward to the noble Baroness coming forward and telling noble Lords of the Government’s intentions if they intend to depart from the proposed types of developments and thresholds set out in annexe A.
Unless I missed it, I do not think that the noble Baroness replied to my amendment at all, which would require the Secretary of State to publish the reasons why a planning decision is to be decided centrally, including why the application is regarded as nationally significant. I thought that was a very reasonable and extremely constructive amendment and that she might even be able to accept it.
Lord Greaves
I would like to ask a question that the Minister might want to write to us about in some detail. She mentioned the figure of 13% of, I assume, major applications or perhaps some other kind of big applications that took more than 52 weeks. It would be a help to know whether they were major applications as defined at the moment. That is typical of the very general statistics that the Government give when we ask for evidence. How many of those applications would have gone to be decided at national level under the new system or how many would have been likely to go to that level? How many of the 87% of presumably major applications that were dealt with within 52 weeks would also have gone to national level? If we are expecting only an additional 20 or 25 in the commercial business categories, does that equate to 13% or what does it equate to? Some more detailed figures and statistics on these matters would be extremely helpful. I would also find it extremely helpful to have a list of just five or six applications dealt with in the past year which in future would come to national level, so that I can get my mind round what sort of developments they are and what sort of outcomes there might be.
Baroness Hanham
If I can get what my noble friend requires, I will make sure he and the Committee get that before Report.
Growth and Infrastructure Bill
Lord Adonis Excerpts(11 years, 9 months ago)
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Lord Adonis
“(1A) The Secretary of State shall by regulation introduce statutory guidance specifying how statutory undertakers shall consult with local planning authorities.”
Lord Adonis
My Lords, I shall speak also to Amendment 59B in my name and that of my noble friend Lady Whitaker. We are dealing here with national parks and areas of outstanding natural beauty. The issue is how to get superfast broadband to them. The key point on which we are all agreed is that this needs to happen superfast. No one disputes this. The DCMS consultation paper, published yesterday, states:
“We want to ensure that planning-related barriers to deployment are minimised at a time when upgraded broadband infrastructure is being rolled out to the rural or remote areas where connectivity is needed the most”.
I think that the whole House will agree with that.
The consultation paper published yesterday makes an excellent case for why we need a rapid rollout of superfast broadband. It points out that in the national parks there are more than 22,000 businesses, of which more than 70% are SMEs. In areas of outstanding natural beauty there are more than 61,000 businesses, of which 74% are SMEs. It also points out that there are more than 153,000 homes in the national parks, and more than 467,000 in areas of outstanding natural beauty. The consultation paper states:
“By providing planning certainty, the aim is to encourage operators to invest in new infrastructure to support greater rural connectivity for householders and SME businesses in protected areas, supported by the fact that whereas 84% of urban premises have superfast broadband, the figure drops to just 19% in rural areas”.
However, having set out those figures on why it is important to get superfast broadband into rural areas, including our national parks, as soon as possible, the paper totally fails to make an argument in respect of the planning system to bring this about.
Like other noble Lords, I have spoken to those in charge of our national parks. They tell me that, far from obstructing superfast broadband, they are desperate for it. They see it as absolutely vital to their communities and to their sustainable futures. They have almost invariably given the consents required for the installation of the necessary cabinets and masts through the existing prior notification procedure.
Baroness Hanham
I cannot answer the noble Lord’s question. He probably does not really expect me to answer it here. The consultation process will begin to throw up some of that information if we do not have it. If we do have the information, I shall see that noble Lords receive it.
The second proposal removes the prior approval requirements for broadband cabinets in protected areas. Of course, the cabinets have to be there, otherwise you cannot have broadband. They have to be at certain spaces and there are all sorts of things about broadband cabinets that require them to be placed in a specific location. We are bringing forward Clause 8 to enable us to make these amendments to the communications code through secondary legislation.
Let me be clear that the removal of prior approval will be temporary, as noble Lords have seen in the consultation which sets out a period of five years. By limiting the window to five years, this will also ensure that the operators have an incentive to get on with the rollout of that business and community need.
Lord Adonis
The noble Baroness said that the requirement for prior approval will be removed. However, she still has not told the Committee how that will accelerate the deployment of superfast broadband, given that there appear to be virtually no cases where the prior approval process has held up the deployment of superfast broadband in the national parks and in areas of outstanding natural beauty.
Baroness Hanham
My Lords, I have about another 15 pages in my brief.
Again, referring to the consultation paper, in the national parks, there are more than 22,000 businesses, of which more than 70% are small and medium-sized enterprises, as noble Lords have said. There are more than 153,000 homes and we know that there is a lot of demand for it. The proposed changes are about creating certainty and reducing the time and cost of deployments. Evidence to date from commercial deployment shows that deployment can be held up by planning decisions. In conservation areas where planning permission is currently required for broadband, there is evidence that it has been held up for 27 months by the need for consultation. This has resulted in the new broadband service not being provided in these areas.
Lord Adonis
The noble Baroness referred to conservation areas but did not cite any evidence in respect of national parks.
Baroness Hanham
My Lords, I was citing the reason for the process in conservation areas taking up to two- and-a-half years. Under the measures on which we are consulting, local authorities will still be involved.
Lord Adonis
My Lords, we are very grateful to the noble Baroness for giving us so much detail as to how the reformed regime will work. However, I cannot help but observe that she spoke for 27 minutes but did not give us a single shred of evidence as to why the existing planning regime is halting or delaying the rollout of superfast broadband to the national parks or to areas of outstanding natural beauty. I will ask a direct question: does she have any evidence that she would like to share with the Committee as to how the current planning regime is delaying the rollout of superfast broadband in the national parks or in areas of outstanding natural beauty?
Baroness Hanham
My Lords, first, we need some speed to get this done. As the noble Lord will know, so far there has been very little deployment of broadband in areas of natural beauty and it is estimated that 85% of premises will not be reached by the market unless we can speed things up. This is at least a contribution to speeding up the provision of broadband in the rural areas where, at the moment, it is not very significant.
Lord Adonis
My Lords, that does not meet the point at all. The evidence which the national parks have given to noble Lords shows that 97% of several hundred applications—I think 292 have been made under the pre-notification procedure—have been agreed by the national parks authorities. I am sorry to keep putting this to the noble Baroness but it is a fairly fundamental issue. There has been a large number of applications, and we obviously want a great deal more so that we have a great deal more rollout of superfast broadband in the national parks and areas of outstanding natural beauty. However, almost all those that have been brought forward have been agreed. Does the noble Baroness have any evidence at all that there are cases which the Committee should take into consideration where the planning authorities themselves have been slowing down a rollout of broadband that would otherwise have taken place?
Lord Jenkin of Roding
Before my noble friend responds to that, I wonder whether the noble Lord, Lord Adonis, has taken account of the paragraph in the impact assessment which says:
“We have received reports where multiple sites have had to be surveyed and prior approval applications submitted, only for agreement still not to be reached, and delays in some cases of up to two years. Examples have been provided by BT based on their experience of rolling out broadband over the last two years with delays ranging from 12-27 months”.
It seems to me that that is really quite a serious bar on broadband in these areas
Lord Adonis
My Lords, I am not sure whether the noble Lord was present for my opening speech, but I pointed out that national parks authorities are not aware that any of those cases raised by BT apply to national parks or areas of outstanding natural beauty. The Government say airily that they have received reports but will not actually publish anything. The noble Lord, like me, has been a Secretary of State in the past. It is one thing to declare airily that you have received reports but it is another thing actually to give chapter and verse. No chapter and verse whatever has been given in this debate that there is a real issue that would justify a very major change in the law of the kind that the Government are proposing.
Lord King of Bridgwater
Is there not a serious point in what the noble Lord, Lord Jenkin, has just read out? The noble Lord, Lord Adonis, has quite correctly said that there has now got to be a large expansion of broadband into the rural areas. What the noble Lord, Lord Jenkin, has cited is the experience so far of trying to introduce broadband more widely. Maybe my noble friend is thinking that it is a precautionary principle—that the Government are giving top priority to the expansion of broadband. I think that the point that I tried to make in my comments, that it is important if we are coming back to this on Report that we have a clearer answer on these points about the risks that may arise.
Baroness Hanham
My Lords, I am grateful to the noble Earl. I will make sure that that is considered and give him an answer before next time—as I will with the other matters raised before Report.
Lord Adonis
My Lords, it is always good to try to be constructive. Given the scale of the concern that has been expressed in the Committee and the noble Baroness’s good intentions—as always—to seek to meet legitimate concerns which have been raised, I wonder whether she and the Planning Minister, Nick Boles, would agree to meet the chief executives of the national parks authorities before Report? They could discuss this matter directly and go into the specific issue of how superfast broadband can be rolled out more swiftly and effectively while seeking to preserve the landscape and not subvert the existing planning system.
Baroness Hanham
My Lords, the noble Lord knows that I am always happy to have meetings that are relevant to the legislation. Let me look into what would be sensible and the best way of setting up such meetings before Report. I give him an undertaking that I will do that.
Lord Adonis
I very much welcome that commitment from the noble Baroness. I hope that Mr Boles will also be present at the meeting and that we can make some good progress so that when this matter comes back on Report we do not have to have the same debate yet again.
Lord Adonis
My Lords, on the basis that the Minister is content to meet the chief executives of the national park authorities before Report—
Baroness Hanham
I am content to meet their representatives. If we confine ourselves to chief executives, they may not be able to come in time, but I will certainly meet the organisations.
Lord Adonis
On that basis, my Lords, after an hour and 48 minutes, I beg leave to withdraw the amendment.
Railways: Franchises
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Earl Attlee
My Lords, I would not like to deny that what my noble friend has said is true.
Lord Adonis
My Lords, twice this afternoon, the noble Earl has cited Professor David Begg and his view that the franchise system can easily be rectified. Is the noble Earl aware that Professor David Begg is a non-executive director of First Group, the company to which his department awarded the franchise before it had to be cancelled, and that therefore he is not an entirely independent observer of these events? Does the noble Earl understand what the word “independent” means; it means that one should be apart from the matter that one is reviewing.
How can Sam Laidlaw, for whom I have the highest respect—he is an executive of great integrity—possibly be judged to be independent when he is a non-executive director of the department whose actions are the subject of an inquiry in this case, including the actions of senior civil servants and Ministers who are with him on the board? Does the noble Earl not recognise that the findings of such an inquiry will always be tainted until they are properly and independently conducted and that proper independent review cannot take place under a non-executive director of the very department that has conducted probably the single biggest failure in British public policy since the poll tax?
Earl Attlee
My Lords, I answered the noble Lord’s second point yesterday. On the first point, Professor Begg chaired the Commission for Integrated Transport, which was set up by the party opposite.
Railways: Franchises
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Earl Attlee
My noble friend asks extremely good questions and that is the purpose of the Brown review which will look into the franchising system and report back to us by the end of the year.
Lord Adonis
My Lords, does the noble Earl agree, given the scale of the debacle we have seen on the west coast main line, that the responsibility of senior officials and Ministers should be examined in the forthcoming review? Is he aware that since last Tuesday the only steps that have been taken have been the suspension of three fairly junior officials and the establishment of a review under a member of the DfT’s own board, whose colleagues include all of the senior Ministers and officials of the department? Does the noble Earl agree that this is not a wise proceeding in public policy and it is probably not very moral either?
Earl Attlee
My Lords, I do not agree with the noble Lord. The first step that the Government have taken is to set up two inquiries. The first one, headed up by Sam Laidlaw, will look at exactly what went wrong. If there was ministerial failure, no doubt he will identify that.
Lord Adonis
Sam Laidlaw is a member of the DfT’s own board. Is the noble Earl not aware of that?
Earl Attlee
My Lords, if there is anything wrong with the report, the noble Lord will be able to challenge me in this House on that very point. The first inquiry will look at what went wrong. The second inquiry will look at the wider franchising issues, as I said in response to my noble friend. We should be proud of our civil servants. I certainly feel honoured to be served by them. However, officials are human and can make mistakes, even big ones. Nevertheless, I want to make it perfectly clear that I retain full confidence in my department’s officials and I am more than content to account for their activities in your Lordships’ House.
Britain’s Industrial Base
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Lord Adonis
To ask Her Majesty’s Government what is their assessment of the strength of Britain’s industrial base.
Earl Attlee
My Lords, this is a time-limited debate and the time for all speakers, except for the noble Lord, Lord Adonis, at 10 minutes and my noble friend Lord Marland at 12 minutes, is limited to six minutes. I remind the House that this means that when the clock shows six minutes, it means that the speaker has already reached their permitted time.
Lord Adonis
My Lords, I first congratulate the noble Lord, Lord Marland, on his new post. He earned great respect for his work at DECC, and I know he will do the same at BIS.
I do not think that there is much dispute that Britain’s industrial base is too weak and too narrow. If that were not the case, we probably would not be in a double-dip recession and we would certainly not be in a crisis with 2.6 million unemployed, youth unemployment of more than 1 million and national income still significantly lower than before the 2008 crash. It is taking us longer to get out of this recession even than it did to get out of Great Depression of the 1930s.
Without a stronger industrial base, we face a bleak future, and I think we now all understand the need to be bold and explicit about this. Until recently, the words “industrial strategy” were unmentionable in polite society. They were regarded as a hangover—in all senses—from the disastrous 1970s and British Leyland. However, as Vince Cable put it in his Imperial College speech last month:
“We can have an industrial strategy by default or design. Ignoring this reality is not a policy—it is just negligence”.
He continued, and I agree with this too:
“But just as bad would be to approach all our possible interventions in an ad hoc way, subjecting every policy decision to a short term tactical decision. There is not a serious and successful major company in the world that would proceed in such an unplanned way”.
I agree, but that is precisely how we have been proceeding as a country for a generation, and it has to change.
In my experience, telling stories is more powerful than reciting statistics when painting a big picture. So I want to tell four brief stories. Yesterday, I went out on a boat to see the huge new Statoil wind farm off the Norfolk coast at Sheringham Shoal. When I was not being seasick, I was amazed at the size and scale of the turbines: 88 of them, across a huge stretch of sea, each rotor 350 feet in diameter, generating enough electricity for 220,000 homes. Sheringham Shoal is only the beginning: the plan for nearby Dogger Bank, which I previously knew only from weather forecasts, is for 3,000 of these giant turbines, with construction starting in 2015 if the finance can be put together by the development consortium.
This is green energy in action. By luck of geography, we have a greater opportunity to develop it than any European nation besides Germany and Denmark. It is a huge, growing industry in construction, design and maintenance, yet in industrial terms, we are seriously behind the curve. The Statoil project director told me that barely a fifth of the construction and assembly work for Sheringham Shoal was done by companies located in Britain. The turbines are made by Siemens and imported, and the foundations, the offshore cables, and a good deal of the work installing the turbines is done by overseas companies with little or no physical presence in the UK.
I was told by Statoil that infrastructure is another weakness, in particular the absence of superfast broadband on the Norfolk coast and terrible mobile phone reception. As for the huge Dogger Bank investment, uncertainty over long-term policy for renewable energy is a bigger issue. So we are in the midst of a green energy revolution yet new jobs and investment will be delayed and/or go abroad unless we get our act together as a country. This needs to start, crucially, by ensuring that Siemens builds its proposed £210 million turbine factory in Hull, the fate of which is now uncertain because of Government prevarication on wind energy.
Story two. Last week I visited Airbus at Filton near Bristol, part of the pan-European operation which has made Airbus so brilliant a rival to Boeing with its A320s, 330s, the soon to be 350s and the giant 380s. As well as its success in China, Airbus has taken the competition directly to the United States with a new factory in Alabama. The expertise in designing and making aircraft wings at Filton is second to none, just as the engine technology at next door Rolls-Royce is second to none.
Airbus itself is a fruit of industrial policy which dared not speak its name in the 1980s, when state loans made possible the A320, an investment which has been repaid many times over. Similar state industrial policy is now equally imperative in decisions surrounding the proposed BAE/EADS merger to create a military equivalent of Airbus. The Government cannot just leave it to the market. The Government are the market in this case. The critical requirements are that the UK should be an equal partner, not a subordinate one, and that the UK’s position at the heart of any military equipment consortium should be assured.
We discussed all this at Filton. But just as pressing to Airbus were its skills requirements. Last year the company had 1,500 applicants for 86 apprenticeships. Yet despite this number, it could not recruit enough school-leavers with B grades or better in A-level maths and physics required for its higher level apprenticeships. Partly to tackle this it is sponsoring the proposed Bristol University Technical College which will specialise in engineering for 14 to 18 year-olds, but far broader action is required to supply its skill needs.
It was the same story when I visited Jaguar Land Rover’s state-of-the-art facility at Gaydon near Warwick last month. Again, a brilliant success story both in technology and products, including the new Range Rover. JLR benefits from a deep partnership with the University of Warwick, which my noble friend Lord Bhattacharyya has done so much to forge over so many years. But again, real concerns over skill levels, too small a pool of engineering graduates from which to recruit—JLR told me that by its estimates the UK is producing only half the number of graduate engineers that it needs—and too few would-be apprentices with the right skills.
Another key issue for JLR is its supply chain, too little of which is local or even British. Yet British suppliers are finding it hard, if not impossible, to secure the patient finance they need to expand and the new inward investors likewise. The Society of Motor Manufacturers and Traders published a devastating report in June specifying how the growth of supply chain companies in Britain was being constrained by access to capital and lack of sectoral and regional expertise on the part of the banks.
My fourth story is from my experience as Secretary of State for Transport in the previous Government in awarding contracts for new trains. This is a big potential source of jobs and value to UK plc which will get steadily bigger as rail travel grows and HS2 is constructed in the next decade and beyond. The state is the procurer of these trains. To paraphrase Vince Cable, its contract decisions constitute an industrial strategy by default or by design, and if it is not by design then that is pure negligence. The issue is simple: because of past negligence, 21st century Britain—amazingly—no longer has a domestically owned rail manufacturer. There is only one international company, Bombardier, which even makes trains in Britain. So, as Transport Secretary, I decided to have an industrial policy by design in respect of the £4.5 billion contract to supply the successor trains to the Intercity 125s. To cut a long story short, this is what we did: Hitachi, the most experienced high-speed train manufacturer in the world, now into the seventh series of Japanese bullet trains, won the contract and agreed as part of the deal to build a factory in Newton Aycliffe in County Durham, not far from Nissan, another great Japanese inward investor in transport manufacturing. The present Government stuck with the contract, the factory is being built and there will be more than 700 new jobs.
Now I had hoped that this would be the beginning of a coherent industrial strategy to build up domestic rail manufacturing. Alas, the present Government awarded the next rail contract for the new Thameslink trains to Siemens without securing UK manufacturing. This was serious negligence. If Siemens can build a wind turbine factory in Hull, and can even be persuaded by the Russian government to build a train manufacturing plant in the Urals in order to get state contracts, it ought not to have been beyond the wit and ingenuity of Her Majesty’s Government to have secured a factory in return for the £1.4 billion Thameslink order. The failure to do so was a major failure of public policy which must not be repeated with the forthcoming order for Crossrail trains.
So, my Lords, four stories. What are the lessons for industrial strategy? It is that the fundamental planks of a modern industrial strategy are skills, technology, innovation, procurement, infrastructure, finance, and supply chains. We need a strong and dynamic private sector aided by a strong and dynamic state in all seven of these critical areas. The state needs to act strategically, not tactically. It needs to act overtly, not covertly. In short, we must end the negligence of the past and get real about building an industrial base capable of delivering the jobs and companies that Britain needs for the future.
Railways: High Speed 2
Lord Adonis Excerpts(12 years, 4 months ago)
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Lord Adonis
My Lords, the international rule of high-speed rail is that everyone wants the stations but no one wants the line. England is no exception, and the noble Viscount, Lord Astor, has been honest enough to admit that he certainly does not want the line anywhere near him. He wrote in the Spectator recently:
“I admit I am biased ... I have walked and ridden over the Chilterns all my life”.
I was not biased as the Secretary of State for Transport. The previous Government proposed HS2, and the present Government are carrying it through because it is the best decision for the infrastructure of the country. This is for two reasons. First, it is false to suggest that there is a choice between building HS2 or saving billions of pounds by not doing so. I fear that that is wishful thinking. The real choice is whether to build HS2, to treble inter-city capacity between London, Birmingham, Manchester, Sheffield and Leeds, or instead to carry out successive patch-and-mend upgrades of the four existing main lines from London to the north, ultimately spending more money for less capacity. The cost-benefit analyses show a strong business case for HS2. But it is equally important to consider the alternative. What would need to happen if there were no HS2? On this, Network Rail's assessment is clear:
“Even modest demand growth causes problems and significant rail enhancement is needed … train lengthening beyond 12-cars would have major implications for terminal stations and signalling systems. Further incremental enhancements at key locations may provide some capacity but not enough to be sustainable for the long-term and not where it is most needed”.
There is no need to gaze into the crystal ball. It is only four years since the last upgrade of the west coast main line referred to by the noble Viscount was completed. It cost £10 billion, and that £10 billion did not price the cost of a decade of chronic disruption to passengers as open heart surgery was performed on a Victorian railway operating at capacity.
There is a second compelling argument for HS2. By using 21st century technology, rather than trying to squeeze yet more out of what by the 2030s will be a 200 year-old railway, you get a transformation of capacity, speed, reliability and passenger service all in one. That is why most advanced European and Asian countries, with an economic and physical geography similar to ours, have already built high-speed lines to link their major cities. The claim that London to Birmingham, Manchester and Glasgow are distances too short for high-speed rail is quite unfounded. The world's most successful high-speed lines are between Paris and Lyons, Frankfurt and Hamburg, Tokyo and Osaka, Rome and Milan, distances comparable to those between Britain's major conurbations. Britain is right to be following suit.