Oil and Gas Authority: Remit

Lord Berkeley Excerpts

Thursday 2nd December 2021 Lords Chamber

[Lord Callanan (Con)]

We will go along with our net-zero commitment. I do not know how many times I have to repeat this for the benefit of the Liberal Democrats, but under all of the climate change scenarios, including that towards net zero, we will remain a net importer of oil and gas during that period. The choice that faces us is whether we wish to import them or produce them domestically and gain the tax revenues from that. I really cannot see why this is such a difficult concept for the Liberal Democrats to grasp.

[Lord Berkeley (Lab)]

My Lords, the Minister surely must know that the target of net zero means reduced consumption; whether it is produced in this country or imported, it is still our consumption. How is that compatible with the Oil and Gas Authority’s target of “maximum economic recovery” of oil from the North Sea? Bearing in mind that it takes so long to commission and decommission North Sea oil and gas plants, is it not about time that the Oil and Gas Authority changed its target now to give it time to achieve net-zero carbon when it is due?

[Lord Callanan (Con)]

I actually agree with the first part of the noble Lord’s question that production from the North Sea is on a declining pathway. Our usage is, of course, on a declining pathway as we transition to net zero.

Competition Act 1998 (Coronavirus) (Public Policy Exclusions) (Revocations) Order 2021

Lord Berkeley Excerpts

Monday 1st November 2021 Lords Chamber

Moved by

[Lord Berkeley]

To move that this House regrets that the Competition Act 1998 (Coronavirus) (Public Policy Exclusions) (Revocations) Order 2021 (SI 2021/773), in respect of the Competition Act 1998 (Solent Maritime Crossings) (Coronavirus) (Public Policy Exclusion) Order 2020, (1) removes any COVID-19 related collaboration for lifeline services on the Solent ferry routes, (2) does not provide a greater incentive for operators to compete to the benefit of passengers and freight customers, and (3) does not provide a continuing overview of competition issues by the Competition Commission on these routes.

Relevant document: 9th Report from the Secondary Legislation Scrutiny Committee

[Lord Berkeley (Lab)]

My Lords, I decided to put down this Motion to Regret because it provides an opportunity for us to discuss the role of competition in ferry services. Does it incentivise operators to compete? Can they compete? Is there a role for the competition commission or some other body, because there is also a problem of a lack of transparency? This regulation relates to the competition exclusion for the Isle of Wight ferries during the Covid epidemic. That has now been, quite rightly, removed, but many of us can wonder what the difference is between when the regulation was in force and now, when it is not. I want to address my remarks both to the Isle of Wight services and to the Isles of Scilly services, and I declare an interest, as I live there.

The ferries kept going during the Covid-19 restrictions, thanks to grants from the Government to make up for the lack of passengers. I think they are all very grateful for that. For the ferry routes to these two islands, the total grant was about £10 million, but we do not know which company received it and what it did with it. They were not allowed to compete with each other on the Isle of Wight, while they now are, but I again question what changes have occurred since they were allowed to compete. Does competition, therefore, work in the ferry sector to give customers, passengers and freight a reasonable service at affordable prices? It is quite important for the people who live on these islands. Do they ever really compete, or is something else required to look after the customers’ interests?

We do not know whether the companies make excessive profits, but there is quite a lot of evidence that some of them fail in providing lifeline services for those who need urgent transport, particularly for the NHS. It is true to say that successive Governments have recognised the particular difficulties caused to both businesses and social services, as well as to education services, by barriers imposed on these communities. It is not, perhaps, surprising that schools on the Isle of Wight have long been at the bottom of the league table, with Ofsted constantly imploring improvements. There is no reason why it should be that way, but apparently it is.

Councillor Phil Jordan, who is the Cabinet member for transport on the Isle of Wight Council, has said:

“We have great concerns over the transparency of the operational factors of ferry companies that, in turn, lead to commercial decisions that take little account of the lifeline service the ferry operators provide, or the human cost involved with such commercial decisions.”


There is a lot of evidence that patients going to the mainland for NHS treatment, such as cancer intervention, are given absolutely no priority on some ferries. Quite apart from the costs involved, there is evidence that patients returning from NHS treatment—anaesthetics or invasive cancer treatment, I am told—are not given priority to board ferries. Sometimes, they are refused travel or sent to a later ferry. In other words, as they say colloquially, the sick are being bumped from travel.

The local MP, Bob Seely, has voiced support for a public service order, and the Isle of Wight Council has committed in its corporate plan to achieving a public service order on the Solent ferry operators. We do not know much; perhaps the Minister can tell us where that has got to.

It is the same for the Isles of Scilly. It is a very infrequent ferry service. Loading and baggage handling are, frankly, Victorian. There is no passenger shelter and freight charges are double those of the Scottish equivalent, which are already pretty high. It is good that the council has been awarded £48 million in a levelling-up fund announced by the Chancellor last week for two ferries between Penzance and St Mary’s. The trouble is that this is intended to perpetuate the inefficient, bad services, when they could be run with one ro-ro ship costing half that, about £22 million. I have told them that. The taxpayer is wasting about £19 million. When he responds, can the Minister tell me whether the Government required the council to seek competitive quotes for the new ship and services or ownership of these vessels? Is he happy that this £48 million will perpetuate what I think is an inefficient and expensive monopoly, to the detriment of the islanders—forget about the company?

We have two monopolies to the Isle of Wight and one to Scilly, providing what the Government seem to agree are lifeline services. There is not much monitoring going on as to whether these are effective. You have to ask what customers can do when these services are seen to be failing. You can ask the carrier, but it will say that it is not interested. You can ask the Department for Transport—we do not have a Transport Minister responding tonight, so let us say the Government—which will say that these are commercial services that they cannot influence. Customers may then ask what the remedies are if companies are seen to fail. After all, rail services are tightly controlled, as are many bus services, and there is generally competition for air travel in most places. Where is the community bit? What about affordability, service quality and frequency, for the NHS and other emergency services?

I will give the House a couple of examples. In Scotland, something called a road equivalent tariff is generally applied on fares and charges. To Islay, this is 29 pence per mile, while to Scilly it is £1.62 per mile, which is five times higher. For the Isle of Wight, on the Southampton to Cowes route, it is 96 pence per mile, which is three times higher. The train fares in the UK are very similar, between 10 pence and 30 pence per mile. As I said, the freight charges to Scilly are double those to Islay. This is not good for the economy. Unlike rail, the ferry fares are not regulated. There is no transparency about the ferry company costs, what might be a reasonable profit or the use of the Covid-related grant. What can people do? Should they ask the carrier or the department?

It is interesting that, over 10 years ago now in 2009, the OFT undertook a market study into the Isle of Wight services and the lack of transparency of their operations. Three operators wrote to the OFT offering increased transparency. One of them, Red Funnel, offered to publish clear information on performance, price per passenger, costs, capacity utilisation, customer satisfaction, reliability, punctuality and market growth. In spite of these commitments, which you might call solemn and binding, 12 years later, none of this has been done by Red Funnel or any of the other operators.

The same applies for the Isles of Scilly. It is a monopoly and there is no such information. There seems to be no pressure on operators to reduce costs or improve services. Where does the pressure come from? It could come from competition or from a government agency. After all, the Government control rail fares.

I do not think that the competition on the Isle of Wight works properly and, as I said, on the Isles of Scilly, the council has refused to commit to put the operations in the levelling-up fund bid out to competitive tender. Why? This failure of competition and governance is clearly having an adverse effect on the economy. Scotland recognises this, but in England I think the Government hope it is all going to go away.

I would like to hear the Minister’s response to the proposal that there needs to be some kind of regulatory oversight to make sure that the companies behave and provide the lifeline services to which they have committed themselves. It is a light touch role but could be done. We have the Office of Rail and Road for the railways and part of the road network; perhaps the remit of that could be expanded to cover ferry services. Maybe it is time for the CMA to be given a remit to examine these issues afresh and, most importantly, keep them under regular surveillance. In conclusion, I believe that some urgent action is required to make competition work for the benefit of consumers. I beg to move.

[Baroness Randerson (LD)]

My Lords, I start by thanking the noble Lord, Lord Berkeley, for tabling this Motion to Regret. I agree with almost everything he said. Of course, there are contrasting models in operation for ferry services around the UK, from market-based models to very much more subsidised models. Those complaining about the Solent services often look to other services for comparison, but the problem is that no two islands are really the same. People are searching for a model which provides the guarantee of service that the isolation of many UK islands requires but also an incentive for efficiency.

To look at a comparison of the islands, let us take Lewis off the west coast of Scotland as an example. Lewis is 130 miles off the mainland. It is about 350 miles from Edinburgh and about 600 miles from London. In contrast, the Isle of Wight is only 14 miles from Portsmouth and there is a ferry service which takes only 45 minutes. There is no regular air service, but there does not need to be one because of the short distances. The Isles of Scilly, whose service I know relatively well, are 35 miles off the coast. There is a sea crossing which is only for those with strong nerves and a strong stomach. It takes nearly three hours on what is a very elderly boat. I was therefore delighted to hear that there is funding to help deal with this situation. In reality, people go backwards and forwards to the Isle of Wight on a daily basis as commuters. You are not a daily commuter on a regular basis on the “Scillonian”, but of course people do go back and forth in a day to take up medical appointments. The vast majority of medical services are provided on the mainland.

We need a nuanced approach. Even in good times, islanders in general across the UK complain about their connectivity. There is, and rightly so, an emphasis on the importance of lifeline services. The SI to which this Motion to Regret relates suspended some elements of the Competition Act in relation to the Solent ferry services. There are three companies involved—one hovercraft service and two ferry services—so there is an element of competition. However, of course, during the pandemic they were apparently down to 10% of the normal passenger numbers and obviously it was not commercially viable. Yet it was obvious that essential services had to continue—freight as well as lifeline services—in terms of life-saving services.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, I thank all those who have contributed to the debate. I especially thank the noble Lord, Lord Bassam, who came along to discuss the subject I thought we were coming here to debate: the revocation of the SI.

As I listened to the speeches of the noble Lord, Lord Berkeley, and the noble Baroness, Lady Randerson, I thought there was a sense of déjà vu about them, and of course there was. Perhaps the noble Lord and the noble Baroness will remember that we actually discussed this subject in 2017, when I had the privilege of being a transport Minister: we had a take note debate on remote island communities in England. I hope the noble Lord refreshed his speech before he made it again; I have not looked it up to see whether he has made the same one. So we have been here before and discussed the topic, and I gently suggest to the noble Lord that if he wants to have a debate about ferry services and their role in transport policy, perhaps he might want to go through the channels that would secure that properly rather than trying to shoehorn it into a debate on competition policy and the revocation of a particular SI. I will be very happy to explain to him the subject of his regret Motion—that is, why we revoked the SI. If other noble Lords are not interested in that, at least the noble Lord, Lord Bassam, will be.

I thank the noble Lord, Lord Teverson, for his concern for my welfare and my brief. I can tell the noble Lord that I will be travelling up to COP. In fact, I suppose I should be grateful to the noble Lord, Lord Berkeley, for detaining me in the House today; looking at some of the transport issues that have occurred to people travelling up to COP in the last two days, maybe I was better off staying here after all. I will be going for the buildings day next week.

To respond to the subject of the debate—I will come to some of the points made by the noble Lord, Lord Berkeley, later—last year, in response to the unprecedented challenge posed by the coronavirus pandemic, the Government responded with unprecedented rapidity to support businesses and people, and to enable a co-ordinated response to coronavirus. As part of the Government’s action, six public policy exclusion orders were made. These orders were intended to disapply elements of UK competition law temporarily in order to help businesses co-ordinate specific activities in certain sectors, and to support lifeline services during a period of disruption related to coronavirus. The Solent maritime crossings order was one such measure.

As the noble Lord is no doubt aware, more than 140,000 people live on the Isle of Wight. Residents rely on essential lifeline services to get access to medical supplies and essential healthcare or to facilitate the journeys of NHS staff, emergency services and other key workers. These services are all supported by ferry operators—I think there are currently three—without which residents would be isolated and with limited resources.

In response to the outbreak, and at the request of the local MP, the Government acted swiftly and suspended competition law temporarily for the Solent ferry operators to ensure that they could co-operate to continue to provide essential transportation despite the effects of lockdown. The order permitted three kinds of agreements between the Solent crossing operators to co-ordinate during the period of disruption: the use of timetables, the routes operated by any Solent operator, and the deployment of labour or facilities.

Of course, such measures are usually prohibited by competition law as in normal times co-ordination of this sort can lead to higher prices, less choice and lower quality of service for consumers. However, given the exceptional circumstances, it was not clear that any of the companies would be able to maintain a service without co-operation, and that therefore, without this order, lifeline services may well have ceased. The measure was therefore an important part of a wider support package to safeguard the vital transport links to the mainland.

In response to the questions from the noble Lord, Lord Berkeley, and the noble Baroness, Lady Randerson, I can tell the House that the Government also made available £22.4 million-worth of funding for the Isle of Wight and the Isles of Scilly between April 2020 and April 2021.

Operating together, the Solent maritime crossings order and the financial support scheme enabled the maintenance of lifeline connections to the Isle of Wight. Key services were retained despite temporarily not being economical to run. The Solent ferry operators were altogether able to transport passengers and passenger vehicles representing nearly 50% and 64% of their pre-pandemic baseline. They also saw an increase of 23% in the transportation of commercial vehicles. Without the temporary suspension of competition law and the funding provided, services would likely have stopped running, thus creating significant issues for islanders during the pandemic.

Under the Competition Act, exclusion orders may be applied only to situations where there are exceptional and compelling reasons of public policy. The Solent maritime crossings order was intended to address the effects of coronavirus on the Isle of Wight’s transport system. We were clear when making the order that it would remain in place only until the Secretary of State determined that there was no longer a significant disruption or a threat of significant disruption to the operation of Solent crossings.

I reassure the noble Lord, Lord Bassam, that the Government’s decision to revoke the order was made following consultation with the Isle of Wight Council and the ferry operators and with the confidence that the ferry operators were financially secure enough to return to normal services. The response strategy reopened the economy and, with the lifting of restrictions and the vaccine deployment, measures such as the Solent maritime crossings order became unnecessary.

The noble Lord, Lord Berkeley, also asked why the revocations SI does not provide a continuing review of competition issues by the Competition and Markets Authority on these routes. The CMA, as the UK’s independent competition authority, continues to be responsible for monitoring markets and enforcing competition law across the economy. Now that the Solent ferry crossings are back under competition law, they are indeed back under the auspices of the CMA. The CMA has significant powers and expertise to investigate markets and anti-competitive behaviour and to take remedial action where necessary. Complaints of anti-competitive behaviour can be made directly to the CMA. As the noble Lord knows, the Government do not determine which cases the CMA decides to act on.

I will add a note about the wider use of competition law exclusion orders. They have proven to be an effective instrument to provide a safety net—and at times more considerable security and support—to industries which need to collaborate in order to address exceptional circumstances. However, it is not a power that should be or can be used without careful consideration. The Government have recently made use of the instrument again. We temporarily exempted companies operating in the oil industry from the Competition Act for the purpose of sharing information and optimising fuel supply in the event of disruption. Earlier this month, the Secretary of State also announced a temporary exemption for parts of the CO₂ industry to help provide further security of CO₂ supplies and businesses. Finally, we have agreed to make an exclusion order for Premier League broadcasting rights to provide stability for the football pyramid, including for grass-roots football, women’s football and lower league clubs.

In each case, the use of exclusion orders was a proportionate and limited measure informed by the Government’s engagement with industry and intended to give companies a bit of breathing space to resolve the wider issues. However, we should be clear that business practices that undermine or restrict competition in markets are a threat to consumer interests, productivity and the wider economy. Suspending competition law longer than necessary could be harmful to consumers and to the economy and the Government will continue to use such measures only where necessary and appropriate.

The Solent maritime crossings order and all the other public policy exclusion orders revoked in July fulfilled their purpose. That there is no longer a need for this order is a testament to the success of the road map and the effectiveness of the Government’s response to Covid-19.

[Lord Berkeley (Lab)]

My Lords, I am very grateful to all noble Lords who have taken part in this short debate—the noble Baroness, Lady Randerson, the noble Lord, Lord Teverson, and my noble friend Lord Bassam—and of course to the Minister for his response. I do not regret tabling this Motion because, as the Minister said, it is four years since we last debated the order and quite a few things have happened since then, including Covid. I certainly want to put on the record the thanks of people I have spoken to on both islands for the grant the Government gave to keep the services going during Covid—otherwise they would have stopped; they had very little income because there were no passengers.

The noble Lord, Lord Teverson, mentioned that the Covid problems are still here and asked whether it was too soon. I can inform him that twice in the last six months there has been a week’s shortage of meat for people to eat on the Isles of Scilly. Whether that is due to Covid, transport or whatever we can debate.

I agree with the Minister that it is time to have this particular order withdrawn, but the concerns of residents and businesses on these islands will not go away. It is something that will need further thought, but it is good to know that the competition is still around, and that we can talk to the CMA if we want to and see where it goes. Again, I am very grateful to all noble Lords who have spoken in this very short debate and beg leave to withdraw my motion.

Motion withdrawn.

Emissions Trading Scheme: Transport

Lord Berkeley Excerpts

Monday 11th October 2021 Lords Chamber

[Lord Callanan (Con)]

Again, in this matter we are leading with the funds that we have supplied to developing countries and we have promised. The Prime Minister and the joint president at COP are engaged in discussions as we speak, to try and drive up the commitment of developed countries to help lower-developed countries with their aspirations.

[Lord Berkeley (Lab)]

My Lords, air is the most polluting of all modes of transport, and most air transport is excluded from the UK Emissions Trading Scheme because it is international. Will the Minister confirm that he is working hard to bring CORSIA—the Carbon Offsetting and Reduction Scheme for International Aviation—within the scheme and make some positive announcement for COP 26?

[Lord Callanan (Con)]

The noble Lord makes a good point. The ETS already exists for domestic aviation and aviation to the European Economic Area. There is also a separate scheme developed by ICAO, which he referenced. We will need to look at how we implement that in the UK and its interaction with the UK ETS.

Deep Seabed Mining

Lord Berkeley Excerpts

Monday 6th September 2021 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness is quite right: the US is not part of the UNCLOS treaty; a number of other states are also not part of it. Of course we continue to engage with all our friends and partners internationally to encourage them to take part in these initiatives.

[Lord Berkeley (Lab)]

Does the Minister agree that, of the 12 countries on the list of countries that have exploration licences, a large number are clearly very small? They are reportedly relying on major international contractors to do all the work for them, including representing them on the International Seabed Authority. Does he therefore agree that there is a need for more independent technical expertise before this goes any further?

[Lord Callanan (Con)]

We work very closely with the companies based in the UK, including those to which we have issued exploration licences and those conducting R&D. That has produced a tremendous amount of research—something like 70 scientific papers so far—which of course we will seek to draw from. But we need to be responsible. The UK deciding not to take part in this and issuing a moratorium does not of course prevent other countries from doing it.

Office of the Whistleblower Bill [HL]

Lord Berkeley Excerpts

2nd reading
Friday 25th June 2021 Lords Chamber

[Lord Berkeley (Lab) [V]]

My Lords, I too fully support the Bill and congratulate the noble Baroness, Lady Kramer. Noble Lords who have spoken have given many examples of whistleblowing, but the one that has not so far been mentioned is of course the Post Office postmasters. They have suffered as much as anyone, and the noble Lord, Lord Arbuthnot, has been pursuing their cause for years. It is one example where the people in charge get promotions while the people who have suffered lose their careers and pensions, have to spend sometimes millions on fighting, and have family breakdowns and even one or two suicides.

I want to speak briefly about HS2 whistleblowers—yet another case that is sadly still ongoing. People do not whistleblow just for fun. Often they do it because they sincerely believe that what is being done by their bosses, colleagues, government or others is professionally, ethically or morally wrong, as my noble friend Lady Chakrabarti has just told us. One example briefly referred to by the noble Baroness, Lady Kramer, is a friend of mine, Douglas Thornton, a highly qualified professional property and land valuer who was commissioned by HS2 to value all the properties that it would have to buy. He and his colleagues very professionally produced a schedule of everything, which unfortunately showed that HS2’s budget was about half what it should have been.

Rather than the management accepting this, they sacked them and kicked them out of the office, and this is still a problem today because there is not enough money to buy the land or the properties. It is part of the reason why the cost estimates for HS2 are still in the clouds, frankly, with no real back-up or anything else. I have lots of evidence, because Ministers over the years, the Permanent Secretaries and the chief executives of HS2 have either told what I would call lies or misled Parliament by hiding that they knew the true costs. One HS2 employee actually gave evidence to a Select Committee, saying, “If we told Parliament the true cost, they would never give approval.” Where is Parliament on this, keeping an eye on it?

This Bill provides the opportunity to provide much more support for whistleblowers. It needs independence, power, finance and, most of all, the strongest political support by Parliament against an overpowering Administration.

Energy White Paper

Lord Berkeley Excerpts

Wednesday 16th December 2020 Lords Chamber

[Lord Callanan (Con)]

Of course, huge amounts of money have been invested by both the Government and industry in the development of fuel cells, which are required for the use of hydrogen in vehicles. Again, I suspect that we will use a combination of technologies. Clearly, electric vehicles will have a huge role to play but, if fuel cell technology advances and the costs of hydrogen production come down, we will hopefully be able to have more vehicles powered by hydrogen as well.

[Lord Berkeley (Lab) [V]]

My Lords, the Minister just said, in response to another question, that nuclear will be clean, cheap, reliable, safe and lower cost. He will be aware that of the three EPR designs for nuclear reactors, one at Hinkley Point, one in Finland and one at Cap de Flamanville in France, the costs of the one at Flamanville have quadrupled since 2007, up to €12.4 billion today, and they do not expect generation to start until 2023. I understand the French Government have said they will not build any more of this type of reactor until they see whether this one works. Would it not be better to go for smaller-scale nuclear generation than continue with a new nuclear power station when we have not even got Hinkley Point anywhere near running?

[Lord Callanan (Con)]

I know the noble Lord is a sceptic as regards large-scale nuclear power; we have said that we will enter negotiations with EDF on the Sizewell C project but it will be subject to full government regulatory and other approval. Of course, value for money will be crucial. In addition, as I said earlier, we will be advancing support for SMRs at the same time.

Trade Bill

Lord Berkeley Excerpts

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Monday 7th December 2020 Lords Chamber

Moved by

[Lord Berkeley]

1: Clause 2, page 2, line 14, at end insert—
“(c) an international treaty or private law convention (including any amendment or protocol thereto) that facilitates trade or the financing thereof.”Member’s explanatory statement
This amendment, and the amendments in the name of Lord Berkeley to page 2, line 23 and page 2, line 33, will enable the ratification of international treaties which have the UK as a signatory and enable trade or the financing thereof.

[Lord Berkeley (Lab) [V]]

My Lords, in moving Amendment 1 I shall also speak to Amendments 4 and 5. The purpose of these amendments is to provide a legal basis for the Government to bring forward a statutory instrument to ratify the Luxembourg Rail Protocol. Noble Lords will probably remember that I spoke about and explained the purpose of this protocol in Committee. Very briefly, I remind the House that the Luxembourg Rail Protocol is a protocol to the Cape Town convention to reduce the risk for creditors, which in turn will reduce the cost of financing for new and current rolling stock.

An Oxera study published this week showed, I think, a saving to the rail sector of about £130 million per year. However, it is particularly important for the British rolling stock manufacturing community looking to develop new markets outside the UK, which I believe is one of the purposes of the Trade Bill. This rail protocol follows an older protocol on aircraft leasing and financing, which I think most people believe has been very successful in financing aircraft.

In Committee, the Minister replied that the Government support the ratification of the protocol. I am very grateful for the support of the noble Lord, Lord Grimstone, and the noble Viscount, Lord Younger, on this. Since they felt it was more appropriate to get the necessary legal basis through the private international law Bill, I agreed that I would not move my amendment. We had discussions with Ministers on the private international law Bill. I am once again grateful to Alex Chalk MP, the Justice Minister, and to the noble and learned Lord, Lord Stewart, for their help in drafting the new amendment to the PIL Bill when it came back to your Lordships’ House for ping-pong. I am grateful to the Ministers for their discussion.

During the debate the noble and learned Lord, Lord Stewart of Dirleton, agreed how important the rail protocol is to the industry but suggested that the application of the protocol was narrower than I might have thought, saying:

“The Government consider this to be an important issue and are thinking about how best to implement the protocol in the United Kingdom. As we discussed last week, we consider that the power in this Bill”—


that is, the PIL Bill—

“is too narrow to fully implement the protocol, although the provisions in applicable law would be within its scope.”—[Official Report, 19/11/20; col. 1574.]

That is very good but all it did was allow half the protocol to be implemented, which noble Lords will probably agree is not a good situation.

The Government appear to support the ratification of this protocol and to consider it important for the rail industry. However, I feel that I have been sent round the houses, from the Trade Bill to the PIL Bill, and now the Ministers have discovered that it will allow only half the protocol to be ratified. I was grateful for further discussions with the noble Lord, Lord Grimstone, by email recently, in which he suggested that

“the Trade Bill should not be expanded beyond essential readiness for trading as an independent country outside the EU.”

I would argue that this protocol would allow the rail sector to do just that. I think it would be very useful if it could be included.

The Minister again suggests that the Trade Bill is not an appropriate vehicle for matters relating to finance and transport, which should be considered elsewhere. If it were a matter of motor manufacture or printing-press manufacture, surely those would be trade issues as well. For motor manufacture, is the Department of Transport involved or is it a trade matter? That question must be resolved. Government lawyers from probably three different departments are dancing around a pinhead. This merry-go-round must stop because it is wasting a lot of government time, as well as Parliament’s.

I have been sent around the houses: transport, trade and justice, and now we are back in trade. I am very pleased to be back in trade this afternoon. Ministers say that they support the protocol to help achieve better trade in railway equipment, so in order to stop this merry-go-round, will the Minister urgently arrange a meeting with myself, the Department of Transport, the Department for International Trade and the Ministry of Justice if necessary? Will he then bring forward an amendment at Third Reading, which I assume and hope would be agreed across government, to enable the Luxembourg Rail Protocol to be ratified? Surely the Government can get their lawyers to agree.

If the Minister could commit to arranging such a meeting with me to resolve these issues and bringing forward an amendment at Third Reading, I would be very content. If not—and I hope it does not go that way—I am minded to seek the opinion of the House, if only to demonstrate the strength of internecine warfare in this Government on an issue that they all support but cannot work out how to deal with. I beg to move.

[Baroness Neville-Rolfe (Con)]

My Lords, I rise primarily to support the noble Lord, Lord Berkeley, as I did in Committee, in his efforts to get the Luxembourg Rail Protocol to the Cape Town Convention implemented in the UK. As we have heard, some steps have been taken, thanks to the good offices of the Minister and of Alex Chalk in the other place, but sadly they have not quite done the trick. I refer to my business interests in the register, including the UK-ASEAN Business Council, and a new role as chair of Crown Agents, which curiously, I find, did a great deal of work on rail and rolling stock during its long history.

I see two advantages to the protocol that was signed by the UK as long ago as 26 February 2016—obviously a very different world then. First, it will reduce the risk to creditors, which in turn will reduce the cost of financing new and current rolling stock—everything from engines to equipment and parts, data and manuals. Whether these are for a new line that is being built or for existing lines, by lowering creditor risk the protocol will assist in lowering the cost of new, more efficient, locomotives and wagons for freight and passenger transport. As the noble Lord, Lord Berkeley, has just said, an Oxera study to be published this week suggests a saving to the rail sector of about £130 million a year. This is quite significant when rail funding is under pressure, and particularly desirable as part of a move to net zero as we seek to combat climate change.

Secondly, it would help British rolling stock manufacturers seeking to develop new markets outside of the UK. There is an urgent need, for example in Africa, for more railway equipment both for urban transport—light rail, metro and trams—and for intercity rolling stock. The markets are there for British exporters, but the Governments and their operating agencies do not have the resources. I am talking about countries such as Namibia, Egypt, Ethiopia, Kenya, Uganda, Zambia and South Africa. The lack of resources has been a major constraint, and in a number of cases, operators have bought Chinese rolling stock instead, even when it is less suitable, because it comes with Chinese state-backed financing.

--- Later in debate ---

[Lord Grimstone of Boscobel (Con)]

My Lords, I turn to Amendments 1, 4 and 5, tabled by the noble Lord, Lord Berkeley. I acknowledge without reservation how much this topic means to him; no one could have worked more assiduously than he has on it.

The amendments before us would expand the scope of the Clause 2 power, creating a power to make regulations implementing private international law conventions as well as agreements that facilitate trade or trade financing. I thank the noble Lord, Lord Berkeley, for his engagement on this matter with DIT, the Department for Transport and the Ministry of Justice in relation to the private international law Bill.

In Committee, the noble Lord outlined that this amendment would allow the UK to implement the provisions of the Luxembourg Rail Protocol; for those who were not present, this protocol relates to the financing of railway rolling stock. Noble Lords will be pleased to know that the Government recognise the competitive advantages of ratifying the Luxembourg Rail Protocol. We have identified the benefits that this could bring to both the UK rail sector and UK financial services. Thus the Government support the ratification of this protocol; the challenge has always been finding an appropriate parliamentary time and a suitable vehicle to implement it, given the very significant pressures on parliamentary time—as your Lordships will be all too aware.

Turning to the appropriateness of this amendment, as we argued in Committee, we believe that the scope of the Trade Bill

“should not expand beyond essential readiness”—[Official Report, 29/9/20; col. GC 40.]

for trading as an independent country outside the European Union. I am afraid that the Trade Bill is not a suitable vehicle to provide powers for the implementation of this agreement. As previously explained, the powers granted by this Bill are limited but vital for the delivery of the UK’s independent trade policy.

In Committee, we argued that technical matters relating to finance and transport should be considered outside the Trade Bill in a way that is suitable to matters related explicitly to finance and transport. I was pleased to see Peers support amendments to the private international law Bill that will help to support the implementation of the Luxembourg Rail Protocol, but it is obviously disappointing that this is not a final solution. I assure your Lordships that the Department for Transport will continue to explore all available options and vehicles to implement the protocol fully.

As I have made clear, the Government fully support the implementation of the Luxembourg Rail Protocol. However, I repeat: we do not believe that this Bill is the appropriate place to achieve this. We will therefore oppose this amendment on this occasion, but I would be happy to work with colleagues across government and facilitate further conversations between the noble Lord, Lord Berkeley, and the Department for Transport to discuss our policy in this sector at greater length and see whether a plan can be put together.

Again, to be clear, we do not believe that this is the appropriate legislation for this amendment and we will not bring forward an amendment to the Trade Bill on this topic at Third Reading. I therefore ask the noble Lord to withdraw his amendment.

[Lord Berkeley (Lab) [V]]

My Lords, I am very grateful to all noble Lords who spoke and to the noble Baronesses, Lady Neville-Rolfe and Lady Kramer, and my noble friend Lord Stevenson for their support. I am grateful to the Minister for his response, courtesy and offer of further support.

We have not moved very far from where we were in Committee and the Minister did not really answer the question about why it is inappropriate for a Trade Bill that is designed to encourage trading when we become a completely independent country at the end of the year to include a text that allows a trade in railway equipment to be ratified. As I said in my earlier remarks, if this had been the motor or printing trades, I am sure that the Department for International Trade would have been only too keen to do it.

The Minister is pushing me in the direction of the Department for Transport. The most useful way of achieving this would be to have an early meeting with Ministers there and the noble Lord, Lord Grimstone—I hope that he would be happy to join us—to see what we can do. It would be good, and it is important, to have this done before the end of the year for the same reason that so much other legislation is needed. I am doubtful about whether the Department for Transport will have a slot in its parliamentary programme, but we will have to see.

As my noble friend Lord Stevenson said, there is no point in dividing the House on this because it will not help to achieve the objective that I think we all want; on that basis, I look forward to further meetings but, in the meantime, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Trade Bill

Lord Berkeley Excerpts

Committee stage
Tuesday 13th October 2020 Lords Chamber

[Baroness Bennett of Manor Castle (GP) [V]]

My Lords, I speak to offer the Green group’s support for Amendment 46 and closely associate myself with the remarks of the noble Lords presenting it, particularly the noble Earl, Lord Clancarty, and the noble Baroness, Lady Bull.

I was going to be brief but I really want to respond to what the noble Baroness, Lady Noakes, said. She suggested that the amendment seeks to recreate what was lost. No, it is trying to save what is threatened: the businesses, livelihoods and professional lives of people who have, as the noble Baroness, Lady McIntosh of Pickering, alluded to, spent many years studying—and invested their time, energy and finances—to develop lives that are now under serious threat.

The noble Baroness, Lady Bull, in her useful setting out of the different ways in which the exchange has happened, spoke about where services are an integral component of a good being sold. We think of companies that have offered long-term service contracts for goods sold into the EU and EEA and the difficulties that they might experience in continuing those service contracts unless we have the kind of mobility framework offered here. We are now on a rescue mission.

I do not think anyone else has referred to this in detail but we have to go back to what we will be missing if we do not have the opportunity for EU/EEA citizens to come into the UK under this kind of mobility framework. There is the important area of language studies. Sadly, we have seen some documentation since the vote in 2016 showing that interest in language study, at least in our schools, has actually fallen. If we are to continue to operate in this world, where we are going to have much more complex relationships with other countries in Europe than we do now, we will desperately need those language skills. The reciprocal side of this is of course that Britons have the very valuable skill of being native English speakers that they can take around the continent and beyond.

We need to have quality of language teaching and development of language skills in the UK. Most of the teaching assistants in our schools are native speakers from other parts of Europe. These are crucial issues, so I commend the amendment to the House.

[Lord Berkeley (Lab) [V]]

My Lords, I too support the amendment. It is very important, and noble Lords who have spoken have made some very good arguments in favour of it. As we all know, free movement within the EU has been very important for education, services and other businesses as well as for people getting to know each other. It could easily and should still happen after Brexit, but that needs the Government to support the idea positively and proactively even after we have left.

Transport is of course part of mobility. It must be cheap, reliable and accessible. Although Covid-19 has caused a massive reduction in demand, it is still there and it still needs to be there. However, the situation regarding the Government’s support is still very confusing and uncertain for services and their users. I have been trying to get answers from the Government for several months on how much in loans, guarantees or grants they have given to each of the international transport sectors, by which I mean air, sea, road and rail. I have had two Written Answers saying that that information per sector is commercially confidential. Surprisingly, maybe, I got a letter from the noble Baroness, Lady Vere, this morning saying that providers have many options as to how to find money, but with no comparators.

I can see why the noble Baroness could not see tell me about comparators. If one digs a little deeper, one finds that in the maritime sector—ferries—the Public Accounts Committee recently reported that the Government had written off £85 million for cancelled ferry contracts, which included a settlement with Eurotunnel of £33 million because apparently the Government had forgotten that Eurotunnel took the same kind of traffic that the ferries do. Noble Lords will remember that the Government spent £14 million on a company called Seaborne Freight, which owned a non-existent ferry and whose terms and conditions of carriage on its website appeared to have been copied from an online takeaway.

In the air sector, airlines have had soft loans to keep them alive. The noble Baroness said in a Written Answer that the Government were

“working closely with the aviation sector to support it to ensure there is sufficient capacity”.

They have spent £3 billion on keeping the franchise railways going, and that is good, but for cross-channel rail there is not a penny to ensure sufficient capacity. According to a presentation by the High Speed 1 chief executive Dyan Crowther to the all-party rail group last week, Eurostar has received no government guarantees or support and is likely to reduce the number of trains a day that it operates, possibly to between three and five or even fewer in order to survive. These are of course low-emission services, and I remind Ministers that, according to Eurostar, if all the passengers who took Eurostar in the last few years were to transfer to air, the increase in emissions would be equivalent to 40 new Luton Airports. We love Luton Airport but the emissions from 40 of them is hard to imagine.

Is there a solution? I suggest there are many that the Government ought to adopt. The European Union Council has adopted emergency measures to give member states the opportunity to reduce infrastructure charges to zero for trains. Italy and France are thinking about it, Austria has done it and the UK could do the same; it would be nothing to do with Europe but they could do it for HS1 to reduce the track access charges to just the direct costs. That might cost HS1 about £100 million but let us not forget that the Government made about £2 billion selling HS1 to the private sector, so they could afford to do this through HS1. It would mean that all train operators got the same benefit on that loan.

I hope the Minister can provide some comfort that Eurostar services can survive, providing the availability of a cost-effective and environmentally friendly transport service for those who want to work, live or study for the purpose of trade and goods. It would be a disaster if it were forced to close.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, we all owe a great deal of thanks to the noble Lord, Lord Fox, for his amendment and for the very good speech that he made in support of his arguments. We have read them before but they have not gone away since we discussed them in 2019, and I look forward to seeing how the Minister responds to them. There were also some other very good speeches, particularly—although it is invidious to choose—those of the noble Earl, Lord Clancarty, and the noble Baroness, Lady Bull, who put the case for the creative industries extraordinarily well, with a devastating analysis of the problems that they face.

This issue is primarily about how services are going to be dealt with after the transition period ends. As the noble Baroness, Lady Bull, put it, the issues that we face affect all trade but these days most trade in goods is also wrapped into a service that is provided; she quoted the figures for Rolls-Royce, which I think are instrumental. We need to be sure that the arrangements that are made post transition for this area are well founded and will continue. I assume that that means GATT, which will be applying, and its four pillars, which she talked about: the ability to operate in support of trade in-country, in another country, in support of the provision of services to that country and living and working there in order to provide such services as are required for that. These are important issues and we hope that they will get a full response from the Minister.

However, at the heart of the debate, in more ways than one, are the creative industries. We had an impassioned plea for more attention to be paid to the particular needs of the creative industries regarding mobility. That is not inappropriate in itself but it is also quite important to recognise that the creative industries are not having a good time at the moment, not least because of what appears to be a rather standoffish approach being taken by the Government, who question whether jobs in the creative industries are really “viable”. There is the extraordinary advert about looking for your next job when you are a ballet dancer and there is no reason why you should change, suggesting that the right thing to do is to move into cyber.

This is a bad time to raise this issue but it is one that needs to be raised. At the end of the day the creative industries, particularly the performing and visual arts, are about the personal and the sharing of personal experiences. Without people’s movement and engagement, it is difficult to see how those industries can survive, but it is important that they should. The question I want to leave with the Minister is this: will GATT be sufficient to ensure that the creative industries will thrive after the transition period comes to an end?

Trade Bill

Lord Berkeley Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 29th September 2020 Grand Committee

Moved by

[Lord Berkeley]

8: Clause 2, page 2, line 14, at end insert—
“( ) an international treaty or private international law convention (including any amendment or protocol thereto) which facilitates trade or the financing of trade.”Member’s explanatory statement
This amendment, along with another amendment in the name of Lord Berkeley, is intended to enable the Government to ratify the Luxembourg Rail Protocol to the Cape Town Convention to make it easier for the private sector to finance trade in railway rolling stock, from locomotives to passenger and freight wagons to metro trains and trams.

[Lord Berkeley (Lab)]

My Lords, I am grateful for the opportunity to move Amendment 8. I will also speak to Amendment 19 to save the Committee time. This is a small issue compared with many of the ones the Committee will discuss today and in future days, but it is important for the rail sector and the financial sector that is linked to it. The amendment, which is a small addition to Clause 2(2), would enable the Luxembourg Rail Protocol to the Cape Town convention to be ratified.

I will try to explain what this is as quickly as I can. The Cape Town convention is a global treaty which, with the Luxembourg Rail Protocol, will make it easier and cheaper for the private sector to finance all types of railway rolling stock—locomotives, passenger and freight wagons, metro trains and trams, et cetera. It creates a new global system for protecting and prioritising creditor rights in relation to secured financing or leasing of all types of rolling stock. It includes a facility to register security interests in an international registry. It is the first common worldwide system for uniquely identifying rail equipment.

This is nothing particularly new because it has been around in the air sector for many years and there is already a protocol in the Cape Town convention to benefit aircraft. The rail sector protocol has been signed but not yet ratified. I will give the Committee some examples. Aeroplanes obviously move around the globe. Occasionally, they get stolen or people take them to places where creditors cannot get at them. Members may wonder what this has got to do with the railways. When I was first chairman of the Rail Freight Group, about 20 years ago, and getting interested in international rail freight across to the continent through the Channel Tunnel, we came across a number of examples where rail freight wagons went to Italy and but did not come back. Nobody could seem to find them. Italy was different in those days. I do not think it is the case today at all. It was a worry because the people who had financed those wagons lost their assets. I am sure this can happen today in other parts of the world, but I am not going to start giving examples. This protocol is designed to prevent that happening without creditors knowing what has gone on.

--- Later in debate ---

[The Deputy Chairman of Committees (Lord Lexden) (Con)]

My Lords, I have received no requests to speak after the Minister, so I call the noble Lord, Lord Berkeley.

[Lord Berkeley (Lab)]

My Lords, I am very grateful to all noble Lords who contributed to this short debate and for the support they have shown. They all have expertise in this field and it is heartening that we have cross-party support, if I can put it that way. I am also grateful to the Minister for his helpful comments. If it is the Government’s view that they do not want to widen the scope of this Trade Bill, I fully understand that, especially as the Minister appears to have found another solution to take this forward. Clearly we have further work to do when the other Bill comes to your Lordships, assuming there will be some ping-pong involved. We will have to try to convince various legal experts in this House that this is a particularly important thing to allow through in whatever state the Government are proposing when it comes from the other place. I am grateful to all noble Lords who have spoken and to the Minister for his very helpful reply. On that basis, I beg leave to withdraw the amendment.

Amendment 8 withdrawn.

Maritime Industry

Lord Berkeley Excerpts

Thursday 17th September 2020 Lords Chamber

[Lord Berkeley (Lab) [V]]

My Lords, the Minister mentioned that we should wait until the comprehensive spending review to see how much research money would go into this sector, but could he confirm that funding is going into the research and development of low-carbon ferries, which are very important in this country? Will the Government also support the construction of such a ferry at the recently rescued high-tech Appledore Shipyard for the Isles of Scilly to Penzance route, which would then replace the 43 year-old “Scillonian III”?

[Lord Callanan (Con)]

I know the noble Lord takes a close interest in developments on the Isles of Scilly; I have dealt with him in my previous jobs on similar matters. However, as I am sure he is aware, I cannot give specific spending commitments at this stage.