High Speed 2 (Economic Affairs Committee Report)

Lord Berkeley Excerpts

Thursday 23rd January 2020 Lords Chamber

[Lord Adonis]

My Lords, this is 330 miles-worth of line. If it could all be put in place in one phase, that would be great. However, setting up a project of that size all in one phase would carry huge risks. Again, I hesitate to keep pointing this out to the House, but all of this has been considered: whether there should be one phase of HS2 with 330 miles of line or whether it should be divided.

I want to make a final point—

[Lord Berkeley (Lab)]

My Lords—

[Lord Adonis]

My noble friend will be speaking in a few minutes, so he can make his point in his own speech.

The Mayor of the West Midlands is a Conservative, and a man who I hold in high regard as a former managing director of John Lewis. He has a very strong sense of the economic imperatives driving his great county. He has written to your Lordships, and these are the concluding words of his letter:

“So far the promise of the new high-speed rail link alone has had a transformational impact on the Midlands. Inward investment is increasing, evidenced by the 43% increase in the number of jobs created in 2017/18. On top of this, HS2 has the potential to add £14 billion to the West Midlands economy and support 100,000 jobs in the region. No other planned infrastructure project can come close to that, and if the government is serious about ‘levelling up’ the UK’s regions then HS2 is the place to start.”


I agree with him. HS2 is the place to start, so let us not pull the whole thing up by the roots again and end up doubling or trebling the cost.

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[Lord Berkeley (Lab)]

My Lords, I am grateful to the noble Lord, Lord Forsyth, for his excellent report, with most of which I agree, and for today’s debate. I was particularly interested in one of its recommendations about the north being a priority. The noble Lord, Lord Howell, has repeated that.

I recall having a discussion with my noble friend Lord Adonis when this was all starting. I said, “We should start this in the north.” He said, “Maybe, but we can’t because the cost-benefit analysis shows it should start in the south.” I still think we should have started in the north and that the CBA is a load of—well, not fit for purpose. Anyway, we are where we are.

I spoke about my dissenting report two weeks ago in the Queen’s Speech debate on 9 January—the reference is col. 178; I will not repeat what I said there.

I emphasise that I am neither for nor against HS2 but I am against the cost, which I think is unnecessarily high. I also do not believe that it delivers what it says on the tin. I do not think it helps people to commute to work in the centres of Birmingham, Manchester, Leeds and Sheffield any better from the towns and villages outside. Although it would get the managing directors and us politicians to London more quickly, which is more important for the economy? I suggest that it is the commuters. It is my recommendation that something like £25 billion needs to be spent on upgrading local commuter lines, including many lines that noble Lords have spoken about today, and then we can see whether or not we want HS2 as well.

One of my main concerns is the capital cost, which, as noble Lords have said, is over £100 billion. Add on inflation and the costs of trains, and we are getting near to £125 billion. My noble friend Lord Adonis said that Parliament approved this project, but it did so in the 2013-14 Session on the basis of an estimate of expense for phase 1 of £19,390,000,000. It is now £54 billion. I suggest that Parliament should have been given an opportunity to approve the figures or not before it was too late. It is not quite too late yet but it very nearly is.

My other big gripe is, as the noble Lord, Lord Howard of Rising, mentioned, the number of trains that have been used to plan HS2, which is 18 trains an hour in each direction. I checked as part of the review where else in the world any high-speed line ran 18 trains an hour, and the answer was: nowhere. Thirteen or 14 was the absolute maximum. I will leave China aside because I think we could spend quite a lot of time talking about China.

Two issues flow from this. One is that the service has been sold to the destinations on the basis that they will get so many trains an hour, and if they cannot run 18 then they will not get so many trains. Who will lose out? We do not know. Of course, that dramatically helps the cost-benefit analysis. Assuming that all trains are running full—as other noble Lords have said, that seems to be part of the deal—improves the CBA no end. I wonder whether that has been done on purpose to help to get through the Treasury Green Book rules. I hope that I am not right on that, but there has been a lot of secrecy in this project. The noble Baroness, Lady Kramer, mentioned whistleblowers, and I have come across a few myself. All this secrecy is not a good way to run a project. On that issue, I end up wondering whether the company is a fit and proper one to take the project forward; even if it does go forward, it does not have to go with that company. That is something that we will probably need to look at.

As I said, the trouble with HS2 is that in addition it needs the connections, electrification, frequency and capacity of other lines in the northern powerhouse area and beyond and in the Midlands, east-west in particular. It needs four-tracking so that fast trains can overtake slow trains and so on. Obviously it needs electrification. I have a list of projects that we are checking with Network Rail, and which I hope we can make available quite soon, of what needs to be done to improve the commuter services into these major centres. The major centres are actually doing quite well economically; it is the towns outside that need help.

The other issue is that the work on some of these things could start quite soon if the Government authorised the money. This is nothing to do with HS2, which has to go through the hybrid Bill process and so on. I am talking about things like having two more platforms at Manchester Piccadilly for through trains so that there are not jams there. There are 400 electric coaches sitting in sidings at the moment because the Government cancelled the electrification projects. People might be able to get on the train, but they are not doing it because they do not work. There need to be longer platforms at Leeds. I give just a few examples. There are a lot more. There are some oven-ready projects which could really help people in the region get a better service.

In my report, I offered alternatives to bits of HS2. We certainly need the bits of HS2 in the north, but Network Rail has done some work to see whether upgrading the existing lines from London and many of the lines that go across in those areas could be achieved more quickly and more cheaply. What is interesting is that the number of passengers that it calculates could be added to the services to London are not that different from what HS2 plans to provide. With HS2, it is 170,000 passengers per working day and, with Network Rail, 144,000. I appreciate that there will be possessions and everything, but the costs are probably about half of HS2 .

Ministers will have to make a choice, as many other noble Lords have said. To me, the choice is about building HS2 at a cost of £106 billion, plus the other things, making £140 billion, plus the local improvements which have to be done whichever route you go down, making it, say, £160 billion. You could save money by not going to Euston, as other noble Lords have said. Alternatively, you could build the northern parts of HS2 around Manchester, Leeds, Preston and Sheffield, and integrate this with Network Rail’s improvement. That would probably cost about half of that. You might save somewhere between £50 billion and £80 billion by doing that. Is HS2 worth it to go that bit faster? That is the question we have to ask Ministers.

It is easy to have a high-speed line. You sign one bit of paper and it goes ahead. All these other things that need doing to improve the local commuter services will have to go through the Department for Transport’s grinding mill to get approval, which is a sort of four-stage process. You probably spend more on consultants than you do on building the thing. It takes years. We have to get a commitment from Ministers to do that, whether HS2 goes ahead in its entirety or not. That is something that we should reflect on very carefully, because that is where the need is greatest. I shall very much enjoy hearing other noble Lords speak and hearing what the Minister has to say at the end.

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[Lord Hunt of Kings Heath]

My Lords, I am delighted to take part in this debate. I will be looking at this from a West Midlands perspective but I should perhaps declare myself as a friend of Euston station—not, I hasten to reassure the noble Lord, Lord Kerr, that I think it is architecturally of any merit whatever; it is just that I have a flat very close to it. I confess that I thought that the WC1 postcode signified that I lived in central London, which I think is where Euston station is.

[Lord Berkeley]

Come on.

[Lord Hunt of Kings Heath]

It depends where you look at it from.

We have heard from the noble Lord, Lord Framlingham, who has certainly been consistent over the years. He talked about despair, but I want to reflect to him the despair that would be felt in the West Midlands if HS2 were cancelled. It would have an absolutely devastating impact on our economic well-being. We are very vulnerable. With Brexit, the motor car industry is hugely vulnerable. Cancelling HS2 at the same time as there is economic uncertainty would be devastating for a region that, over the last two years, has grown more than any other apart from London.

My noble friend and the noble Lord’s committee have produced some very salient points about the HS2 budget and the appraisal system. There is no getting away from that. The question is: is that enough to cancel HS2 as a whole? To be fair to both noble Lords, that is not what they are saying. They are raising issues that need to be answered, and that is fair.

The noble Lord’s committee also focused on the north. It focused on the railway connections and referred to the 90 minutes that it takes to travel the 75 miles between Liverpool and Leeds. I do not dissent at all from what the committee has said about issues in the north, but I am disappointed that so little attention was given to similar issues in the Midlands. For instance, it takes 57 minutes to travel to Leicester from Birmingham, which are 46 miles apart, while the 51-mile trip to Nottingham takes 76 minutes. There is a large flow of people and work but it could be much, much bigger. There is no question but that road congestion—journeys take ages by road—and the very poor railway connections are impeding the development of a Midlands-type economy.

[Lord Berkeley]

I am grateful to my noble friend for giving way. How does HS2 improve the railway journey time between Birmingham and Leicester? It does not go anywhere near Leicester.

[Lord Hunt of Kings Heath]

My Lords, I am not a railway expert but I do know a little about railway maps. The point I was going to make is that this is part of an appalling railway system in the West Midlands—something with which I know my noble friend agrees. We have a local service operator called West Midlands Trains. Its record of 44.8% of services arriving on time between October and November last year is a symptom of our hugely overcrowded and cancelled trains. That is a feature of commuting life in the West Midlands. Part of the reason why we need HS2 is that our line is absolutely chock-a-block. Creating extra capacity is essential. I know that my noble friend does not disagree with that because it is what he said in his minority report.

Let us turn to the comments made by a number of noble Lords, which are, essentially: “If you cancel HS2, don’t worry because the money will be available, we can sort out the capacity issues both in the north and in the Midlands, and all our troubles will go away.” My noble friend’s report is very interesting because he took the trouble to look at what the alternatives might be. For instance, I do not believe that we could deal with the capacity issue in the West Midlands without four-tracking the line from Rugby to Wolverhampton, but that would be hugely disruptive. I do not know how many bridges there are; I suspect my noble friend knows—

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[Lord Berkeley]

No.

[Lord Hunt of Kings Heath]

But there are quite a lot. There is a lot of housing, the NEC, the airport—a host of difficulties for four-tracking. But if you do not four-track, you will not solve our major congestion problem.

The other option pointed out by my noble friend is the Chiltern line, a good line which many of us use when going to a different part of London. As he says, it would have to be four-tracked in certain places and would need to be electrified. My noble friend is doubtful about my railway geography, but the one thing I do know is that a lot of the Chiltern line goes through Buckinghamshire. Can you imagine what would happen if the Government announced that the alternative to increase capacity is four-tracking and electrifying the Chiltern line? All noble Lords who come from Buckinghamshire would rise in protest. The Chiltern line is saturated—

HS2: Cost

Lord Berkeley Excerpts

Wednesday 24th July 2019 Lords Chamber

Asked by

[Lord Berkeley]

To ask Her Majesty’s Government, further to reports that the cost of the High Speed 2 rail project will not be delivered within its current budget, what steps they are taking to ensure that the costs of that project remain within its budget.

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

My Lords, we do not comment on speculation. However, we will publish an updated business case by the end of 2019 based on the latest assessment of costs and schedule. We are clear that the project has a funding envelope set in 2015, and HS2 Ltd is in ongoing discussions with its suppliers.

[Lord Berkeley (Lab)]

I am grateful to the Minister. It is hardly speculation: in a letter, the new chair of HS2 says that the capital cost is likely to exceed £86 billion, not the £54 billion that the Minister spoke of. This has been confirmed by up to a dozen senior HS2 staff, who are tweeting—some of them have been sacked for their sins—that this figure is correct. This has been going on for three years. It is inconceivable that Ministers did not know about it, even before the HS2 phase 1 Bill received Royal Assent. I suggest that the Ministers have misled Parliament by not giving this new, higher figure that they have known about for three or four years.

[Baroness Vere of Norbiton]

My Lords, the new chairman of HS2 has been in place for just over six months. He is undertaking a review of the costs and providing ongoing advice to government. This advice is not news; it is ongoing. We are working with him as he looks at all his supply chains to encourage him to ensure that the costs are appropriate. Various cost control actions are being undertaken at the moment regarding value engineering and challenging standards, and it is only right that they be given the opportunity to succeed. They also involve optimising commercial models with partnerships and challenging the requirements of the system.

Road Safety

Lord Berkeley Excerpts

Tuesday 23rd July 2019 Lords Chamber

[Baroness Vere of Norbiton]

I thank the noble Lord for that question. Indeed, it was my pleasure to visit the AAIB last Friday and it truly is a world leader in air accident investigation. Turning to road accident investigation, there are many things that the Government are doing. For example, we have committed £480,000 to road collision investigation work which is being undertaken by the RAC Foundation. This will look at the causation of accidents, which has changed significantly in recent years, and it will provide insights on investigations but also interventions.

[Lord Berkeley (Lab)]

My Lords, we have an Office of Rail and Road and it is responsible for rail safety. Seven passengers died on the railways last year, compared with 1,770 people who died on the roads, as my noble friend has said. Is it not time that the Government extended the remit of the ORR to cover road safety?

[Baroness Vere of Norbiton]

The Government are not minded to do that at the current time. We believe that the current system is working well. There have been improvements in road safety. The UK is the second best in the EU in terms of road safety. We have done well. Fatalities have fallen by 39% in 10 years, but I recognise that there is more to be done and that is why we have done this road safety statement.

Buses: Rural Services

Lord Berkeley Excerpts

Tuesday 16th July 2019 Lords Chamber

[Baroness Vere of Norbiton]

We operate things differently in England than they do in Scotland. But I stand by what I said earlier in that funding from central government is available. Local authorities can of course also access council tax, business rates and other local income. However, at the end of the day, it is about using money more effectively, not just throwing more money at it.

[Lord Berkeley (Lab)]

My Lords, is the Minister aware that, in Switzerland, villagers in any village with more than 600 people have a statutory right to have a bus or train service at least once an hour? Should we not look at that example here?

[Baroness Vere of Norbiton]

My Lords, we operate things differently than they do in Switzerland. The Swiss may decide that that is best for their local communities, and it is up to any local authority in England to do the same if it thinks it is cost-effective for its local taxpayers.

Railways: South-eastern Franchise

Lord Berkeley Excerpts

Thursday 4th July 2019 Lords Chamber

Asked by

[Lord Berkeley]

To ask Her Majesty's Government what estimate they have made of the cost to the new South Eastern franchise arising from any increase in track access charges proposed by HS1 to the Office of Rail and Road.

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

My Lords, the periodic review process that will determine the new track access charges for HS1 from April 2020 is ongoing and is the responsibility of the independent rail regulator, the Office of Rail and Road. In line with the published draft franchise agreement, the operator of the new south-eastern franchise will be held harmless to any regulated track access charges proposed by HS1 and agreed by the ORR, following regulatory scrutiny.

[Lord Berkeley (Lab)]

I am grateful to the Minister for that Answer, but she will be aware that HS1 has applied for increases in track access charges of 25% for domestic south-eastern trains, of 40% for Eurostar services and of 75% for the freight that has to use that line. Will the Minister remind the ORR of its duties under the 1993 Railways Act and subsequent legislation, and I quote,

“to promote the use of the railway network in Great Britain for the carriage of passengers and goods”,

and,

“to protect the interests of users”?

I suggest to her that for the regulator to allow such increases will dramatically harm passengers in the south-east by increasing fares. Is it not better to protect the passengers, rather than to line the pockets of the pension funds, including the Korean pension fund, which now owns that piece of track?

[Baroness Vere of Norbiton]

I thank the noble Lord for his observations. As he well knows, this process is ongoing, so any increases are not yet confirmed. But my department expects the independent regulator, the Office of Rail and Road, to provide a robust and rigorous challenge to HS1’s proposals, as part of the review process. I am aware that this process has been going on for 18 months and is continuing.

Bus Services

Lord Berkeley Excerpts

Tuesday 4th June 2019 Lords Chamber

[Baroness Vere of Norbiton]

I have some good news for the noble Baroness. More than 50% of people use the bus twice or more a year but young people aged 17 to 20 use buses at a much higher rate—nearly 70%. I also point out that 71 of 89 travel concession areas already offer discounted fares to young people through the operators. Other discounts are available from local authorities and, of course, it is up to them to offer discounts in their areas.

[Lord Berkeley (Lab)]

My Lords, is it not time that the Government recognised that the bus service in London, which is cheap, reliable and effective should be rolled out across the whole country? That means having fares comparable with London ones, rather than about four times more. That is what it needs—money. All this new technology is wonderful but unless there is some money for services around the rest of the country, we are not going to get the changes to emissions and the pollution reductions that the Minister has referred to.

[Baroness Vere of Norbiton]

My Lords, the Government support public sector spending of £2.2 billion on buses—12% more in real terms than under the previous Labour Government. A significant amount of money is going into the buses. There is no one-size-fits-all solution—it cannot happen. For example, within the large conurbations metro mayors can now use the franchising opportunities, and Transport for Greater Manchester will be doing that. In other areas, enhanced partnerships, where the local authority works with the bus operators, work well. In rural areas, there is also an awful lot we can do and the Government are committing funding to help them support their local bus services.

HS2

Lord Berkeley Excerpts

Monday 20th May 2019 Lords Chamber

Asked by

[Lord Berkeley]

To ask Her Majesty’s Government what assumptions were used in the business case for HS2 for (1) the number of passengers, and (2) the average fare, between London and Birmingham.

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

My Lords, the Answer to this Question is in two parts. First, on the number of passengers, the Government estimate that there will be more than 300,000 passengers per day on HS2 services once the full network opens. Secondly, on average fares, the business case assumes fares on HS2 to be the same as the average for comparable services on the existing network. HS2 can bring benefits without charging a premium.

[Lord Berkeley (Lab)]

I am grateful to the Minister for that Answer, because this is the first time we have had an answer on this for about eight years. According to the Midlands Economic Forum, the average yearly household income will be £60,000 for business travellers and £45,000 for leisure travellers at 2010 prices,

“meaning the average commuter using HS2 will be in the top 10% of household incomes”.

That is quite heroic for the West Midlands. It adds:

“At 60% capacity, HS2 are proposing that daily passenger transport movements will be approximately equivalent to 10% of the entire West Midlands regional labour market”.


Can the Minister perhaps give us some more updates on this when we come to debate it more fully? The Government have promised a cost-benefit estimate and a new cost estimate for HS2 phase 1, but only on the day on which the construction contract is allowed to go ahead. We have had lots of critical reports, including an excellent one last week from the House of Lords Economic Affairs Committee chaired by the noble Lord, Lord Forsyth. Is it really acceptable for a Government preaching austerity to go ahead with a project costing £150 billion without parliamentary scrutiny?

[Baroness Vere of Norbiton]

My Lords, there were many questions there; I will perhaps answer a couple of them. On 10% of the West Midlands labour force being on the trains, I do not recognise those figures at all. In any event, when the entire network is built, it will take passengers from all over the country—that is the point of it. On the second point about the business case, works are currently under way and HS2 is reaching agreement with its suppliers in order that a full business case can be published later this year. It is important to understand that a full business case includes costs and benefits, but also—just as importantly—the disruption, or lack thereof, that the construction would have.

Connecting Europe Facility (Revocation) (EU Exit) Regulations 2019

Lord Berkeley Excerpts

Monday 20th May 2019 Lords Chamber

Moved by

[Lord Berkeley]

To move that this House takes note of the Connecting Europe Facility (Revocation) (EU Exit) Regulations 2019 (SI 2019/477).

Relevant document: 21st Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)

[Lord Berkeley (Lab)]

I will not take long talking about this Motion, but it is important that we understand the potential changes to the railway sector if we leave the European Union without an agreement. I declare an interest, because I am still a board member of the European Rail Freight Association.

I very much welcome the commitment in the draft SI for the Government to continue funding the Connecting Europe Facility, which is given in the first page of the Explanatory Memorandum. I am also grateful to the Minister for the short meeting we had this morning to discuss some of these issues. I would be grateful if she could write to me with a list of the projects that are still receiving or are due to receive funding from the Connecting Europe Facility, so we can see how many there are and how long they will go on for. I do not think they will go on for long, but it would be good if they did.

The whole concept of a trans-Europe network, TEN-T and freight corridors has been debated and developed by the Commission over many years to try to get some continuity of funding or specification for operating procedures on the railways—and roads for TEN-T. Railways in the European Union generally are in complete chaos. They have got better, but are still pretty bad. The concept of continuity across frontiers will help customers have certainty of what they can operate on the trains. There has been little take-up on some routes, including a particular one that comes to the UK, but that is as much a problem of attitudes in France to operating anything in France that has not been developed in France.

We have a problem in this country, because these corridors go back long before Brexit was even thought about. I have always detected a reticence in successive Ministers of the Department for Transport to encourage the principle of through-running trains, because they thought they could do things better here. To me, this latest Explanatory Memorandum tries to confirm that policy, whether we stay in—when it will not apply—or leave.

I have a few questions to ask the Minister, if she does not mind, particularly about the content of the Explanatory Memorandum. I note from paragraph 2.3 that some further separate draft instruments will “deal with deficiencies arising”. When will that occur? On paragraph 2.8, we are members of the North Sea-Mediterranean Corridor, and I have been to many of the meetings of this body. It extends beyond London to Glasgow, Edinburgh, Southampton—and we can probably forget about Felixstowe. There is pressure from the European Union and quite rightly so, and remember we are still a member. Getting through services to Glasgow and Edinburgh in particular is important. I see no reason why this should not continue if we leave the EU. My understanding is that Switzerland, which has at least one and maybe one and a half corridors going through it, fully participates in all the discussions about improvements that are needed. I see absolutely no reason why we cannot have the same status as the Swiss. I would be grateful if the Minister would explain whether the Government intend to seek whatever arrangement is needed with the Swiss to achieve that. It is very important, from the customer’s point of view, to see that the Government are enthusiastic about this, even if it does not involve any money, so I hope that they will look at it again.

Paragraph 2.13 contains a very odd statement:

“The extension of the parts of the North Sea Mediterranean RFC in Great Britain made by the CEF are saved by the instrument”.


I do not know what “saved” means in this context. Perhaps the Minister can explain whether it is some old-fashioned meaning of the word or whether it means that it will be “retained”. I hope that it will be retained because it is very important that the Government give the message that these corridors can continue even if we have left the EU, under any circumstances. It is the same problem as the one we debated a couple of months ago about the European Railway Agency. If we leave, we are trying to stay as close as we can to Europe on the air side; and, as we debated earlier today, on the coach side we seem to be trying quite hard to stay with it; but on the railways, as far as I can see, Ministers want to separate us as much as they can from the rest of Europe, particularly in connection with the European Railway Agency. Is it because the “Europe” is in the title of the European Railway Agency? I hope that it is more sensible than that, but you never can tell.

I hope, first, that we never have to use this SI, but also that the Minister can give me some comfort that the UK Government’s policy on these corridors, for freight and the TEN-T, is better than lukewarm, because it has been lukewarm. It would be very good to encourage customers, Network Rail, the Government and the train operators to act positively and support them. They are very important to enable the best possible, environmentally friendly form of transport to continue—I think it covers something like 40% of our exports now. I beg to move.

[Lord Teverson (LD)]

My Lords, I thank the noble Lord, Lord Berkeley, for bringing this statutory instrument to my attention. It is not just about hard rail infrastructure but concerns telecommunications. The programmes of this facility particularly concern the digital economy and connectivity, and the whole area of energy, which is crucial for our development, given the problems we have with the nuclear programme at the moment.

I do not want to depress the noble Lord, Lord Berkeley, by saying that the one glimmer of hope in this SI is not what it seems, but I want to explore the Government’s funding guarantee. As I read it, this goes up only to 2020; I presume it is the end of 2020. We know that the current multiannual financial framework ends in 2020, but we also know that in the European cohesion funding and all other funding programmes, expenditure does not stop at the end of 2020: it is the bids for programmes that stop at the end of 2020. In fact, there are already enough forthcoming calls in 2019 for new projects, and I suspect there will be in 2020; I am sure the Minister has looked at this already. I presume that all those, particularly in hard infrastructure—not just digital, but even in digital development—will go well beyond the 2020 MFF end of programme and the government guarantee.

Has the Minister had any feedback from British organisations that are involved in this programme? Are they concerned that, if they bid for this programme now—and I presume they are stopping doing so now—they have no guarantee that there will be any funding after 2020? The EU would continue to fund these usually for two years after the MFF ends, and these programmes can no longer be bid for. I would be very interested to understand how that will work. Indeed, if it is a 2020 guarantee, we are already handicapping UK industry and UK business in terms of our connectivity under the threat of Brexit.

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[Baroness Vere of Norbiton]

Let me keep going and see how we do.

The noble Lord, Lord Rosser, raised the issues of whether the projects will receive the funding, depending on whether the EU decides to give it, and the timing. I am afraid that we do not know because it will depend on future negotiations. I assure the noble Lord that the Government stand behind these payments, which will be made in the circumstances that they are not received from the EU.

The noble Lord, Lord Rosser, also mentioned the present circumstances and the Government’s limited role. The Government have a limited role because it is often private companies making the bid. The Government are not part of the decision process because, as I hope I have already explained clearly, it is clearly set out in the regulations such that the regulations govern the decision process.

The funds that will be paid out, or are guaranteed to stand behind these payments from the EU, are “new money”, to use the terminology. They are not from existing DfT budgets.

The instrument provides the necessary powers for DfT, the Department for Business, Energy and Industrial Strategy and the Department for Culture, Media and Sport to “operationalise” the Government guarantee and make payments in respect of CEF grants if these are not met by the EU in the event of the UK leaving the EU without a withdrawal agreement in place.

[Lord Berkeley]

Following on from the Minister’s commitment to the noble Lord, Lord Teverson, that bids will still be accepted a few years later, will the criteria for awarding funding be retained? I understand that one of the reasons why the government and other member states do not have much involvement in the decision-making is due entirely to the Commission’s view that investment in infrastructure near frontiers tended to be much less than in the middle of a member state. I hope that those criteria will be continued.

[Baroness Vere of Norbiton]

I believe that that is the case. I was just going to come on to bidding, where I believe I will reiterate what I have already confirmed to the noble Lord.

As the noble Lord pointed out, all bids for CEF funding are reviewed against set criteria. If UK organisations submit applications that meet those criteria, the application could be successful. The EU has maintained that, until such time as the UK leaves the EU, it continues to be a member state and therefore enjoys all the rights of a member state, so the EU could very well award funds to UK firms between now and 31 October. One UK organisation was part of a multi-member state project application which was successful in the October 2018 call. The Government have advised UK organisations to continue to bid for EU funding and have committed to providing funding through the government guarantee over the lifetime of the project to those organisations which successfully bid into EU-funded programmes before the end of 2020. I have said that twice and if I am not right, I shall make a correction.

--- Later in debate ---

I have appreciated the opportunity to listen to the views of noble Lords in this debate as well as on the broader issues which I am sure we will return to. I look forward to discussing them in the context of the SI that will come before the House later in the year.

[Lord Berkeley]

I am grateful to the Minister for her response and to all noble Lords who have participated in the debate. We have learned quite a lot and we look forward to discussing these issues again in the future.

Motion agreed.

Transport Act 1985 (Amendment) Regulations 2019

Lord Berkeley Excerpts

Monday 20th May 2019 Lords Chamber

I reiterate my regret that these regulations have been brought forward while the judicial review is still under way. It means that there is a yawning gap on the key issue of the definition of “non-commercial organisations”. However, we are where we are. I will not be pushing this to a vote this evening. My purpose is to seek greater clarity for the sector. I ask the Minister to provide us with assurances: first, that the Government will provide full guidance in the very near future, for example on the application of the 10-mile rule; and secondly, that they will ensure that urgent discussions are held with the transport commissioners to ensure that they cease to apply rules that are directly at variance with the specific interpretation issued by the Minister’s colleague at the Department for Transport. I beg to move.

[Lord Berkeley (Lab)]

My Lords, the noble Baroness outlined the problem with this piece of legislation extremely well. My first question for the Minister is: why are we doing this at all? As the noble Baroness suggested, we might have left the EU on 29 March without any agreement, so it is a bit odd that the Government should be bringing this regulation through your Lordships’ House two months later, still trying to comply with European Union legislation. Since we still do not know whether we will leave, and if so when, presumably another regulation will be coming shortly that will explain how this particular regulation will be amended or removed if we leave—perhaps the Minister can clarify this. Or do the Government think that this regulation is so wonderful that they will want to keep it?

I see nothing wonderful about this at all. As the noble Baroness said, it is just more bureaucracy in a sector which, by definition, cannot afford it—and sometimes cannot even afford to run the bus. I live in a little village in Cornwall which has a community bus once or twice a week. It takes people to the shops, other villages or the hospital and is run by a dedicated team of two drivers. Occasionally they have to put their hands into other people’s pockets for more money to upgrade the bus and so on. It is run on a shoestring. The people whom it carries on the whole cannot afford very much anyway, and here we are adding more bureaucracy—for no point at all that I can see.

If this is being pushed forward by the Government after pressure from the commercial bus operators, I would ask how many of the routes currently run by community services would ever be run commercially. The answer in most cases is that you either have a community bus service—if you are lucky—or no buses at all. Given the reduction in bus services that this Government and the previous one have “achieved”, it is a pretty depressing story. I cannot understand why the Government want to do this at all. I hope the Minister will be able to explain that to the House, as well as what will happen if we leave without an agreement at the end of October or whenever. Will the Government seek to bring in another regulation to remove this SI and go back to where we were?

It may be that the European Commission has been doing good things and requires this to be done, but, frankly, if it was so important, why has it taken until May 2019 to bring this forward? It will be a disaster for the community transport sector. As the noble Baroness suggested, the sooner we get some guidance to interpret what is in here, and a sensible, achievable objective so that the services can continue and maybe even grow, the better. It would be really good if that could happen, so I look forward to the Minister’s response.

[Lord Rosser (Lab)]

My Lords, we support the terms of the regret Motion moved by the noble Baroness, Lady Randerson. These regulations were the subject of a fairly lengthy report from the Secondary Legislation Scrutiny Committee at the beginning of April. The committee drew them to the special attention of the House on the grounds that, given their potential impact on community transport operators, they give rise to issues of public policy likely to be of interest to the House.

As the noble Baroness said, the regulations are being made to align fully, and clarify, the relationship between an EU regulation and the Transport Act 1985. That Act provides for exemptions which allow certain types of organisation to operate passenger transport services on a not-for-profit basis without holding a public service vehicle operator’s licence, following the issue of a permit.

There is also an EU regulation, which I think was implemented in 2011, setting the standards to be applied to public service vehicle licence holders. However, operators are exempt from the EU regulation requirements if they operate exclusively for non-commercial purposes or have a main occupation that is not as a road passenger transport operator, and if they only operate domestically and have a minor impact on the transport market because of short driving distances. The view of the Department for Transport has been that its permit holders automatically meet the “non-commercial” exemption from the EU regulation on the basis that “not-for-profit” equates to “non-commercial”. This has now been challenged on the basis that some organisations operating under the permit system are in fact operating for commercial purposes. At the end of last year, the Bus and Coach Association applied to the High Court for permission to judicially review the Department for Transport’s current position in respect of community transport, and in particular the approach to the non-commercial exemption.

--- Later in debate ---

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

My Lords, I thank the noble Baroness, Lady Randerson, for tabling her regret Motion today. It has given the House the opportunity to scrutinise these regulations in more detail, and also to raise some very important issues. Some issues raised, particularly by the noble Baroness, went into some detail and raised evidence I am not entirely sure my department has seen. I would be very grateful if she could share the evidence with us. Certainly, I will go through Hansard and make sure that if I am unable to cover issues today, I will write to her, and to all noble Lords who have taken part.

The Government always recognise the vital role of community transport in connecting people to their communities, employment, local services and each other. Most community transport operators provide a vital social care service to those who are elderly, isolated or disabled, and we know that particularly in rural areas, community transport services encourage growth and reduce isolation. However, in recent years, concerns have been raised about how the use of community transport permits fits with EU law on operator licensing. It became clear that the current interpretation of “not for profit” equating to “non-commercial” would be challenged, as noted by the noble Lord, Lord Rosser.

The noble Lord, Lord Rosser, also asked, “Why now?”. While the UK remains a full member of the European Union, all the rights and obligations of EU membership remain in force, and for the duration of the withdrawal agreement, we are also bound to implement these rules. The EU has an outstanding case against the UK in respect of them. This SI implements the short distance exemption, which we could not implement after leaving the EU or during the period of the withdrawal agreement without primary legislation. If this SI had not happened, we would not have had this exemption. In the broader context, this issue is coming before your Lordships now because there has been quite a significant amount of consultation around this issue—necessarily, because it is very important indeed. The Government have taken as many steps as they can to provide as much certainty as possible to community transport operators, given the current constraints.

As I have said, the Government recognise the importance of the sector. However, we also need to ensure that where community transport operators compete for contracts with small, family-run commercial operators, competition is fair. That includes considering how operator licensing rules affect both these groups. That is why it is important that we do this: we need a level playing field. At the same time, we must ensure that we exempt those that can be exempted. It is clear that the previous position of a blanket exemption for the sector from EU law is not legally sustainable.

In this context, the Government consulted in 2018 on how to revise the guidance. We wanted community transport operators to understand whether they were exempt from the EU regulation on operator licensing and could carry on using community transport permits or whether they needed to apply for commercial operators’ licences, so they have been aware of this issue for a while. We received almost 500 responses to the consultation and were in contact with 550 stakeholders at stakeholder events. These were people and organisations from across Great Britain. The responses to the consultation highlighted that we have to strike a delicate balance, and we have worked very hard to try to deliver that balance on the feedback that we received. But it must be pointed out that there was no consensus on this issue, which I suppose is where we are today.

My ministerial colleague Jesse Norman MP and officials from the department met members of the Bus and Coach Association during May 2018. Despite this, the association decided to launch a judicial review a few months later. The legal proceedings should eventually result in a definitive judicial interpretation of “exclusively non-commercial”, which will resolve the long-running debate about what it means and provide a way forward on this issue.

[Lord Berkeley]

Would the Minister be able to provide us with some numbers for the consultation? How many community transport operators were there, and how many small commercial ones? How many operators were trying to compete with a community one, and so on? It is easy to run a campaign by the small commercial operators who might run one minibus or coach and say, “We got 300 responses”, while the community people might not have had time to respond. It would be good to have those numbers and if she does not have them tonight, perhaps she could write to me.

[Baroness Vere of Norbiton]

I thank the noble Lord, Lord Berkeley, for asking that question. I will certainly have to write, as I do not have those numbers in front of me, but he makes an important and valid point and I will write to him.

There are three exemptions in EU law which can be used. The Section 19 and Section 22 permits guidance explain how two of them can be applied to the community transport sector. The first is the “main occupation exemption”. The guidance that we published explains how this exemption can be used by organisations whose primary activity is not transport; for example, schools, community groups or local authorities. We believe that this represents around half of the community transport organisations, which will fall into this group.

The second exemption is the short-distance exemption. This allows organisations which have a minor impact on the transport market, due to the short distances they travel, to be exempt. In defining 10 miles as a short distance, as noted by the noble Baroness, Lady Randerson, the Government believed that it was important to consider how these bus services work across the country. What is a short distance in a rural area may be a very long way in a big city, and rural areas are of specific concern when it comes to community transport. Where community transport operators provide bus services in rural areas, they have the flexibility to make the case that a short distance is longer than the automatic 10-mile distance. The noble Baroness noted some discrepancies in the application of the guidance. I would be grateful if she could share the specific pieces of evidence with me, then we will be able to review them and perhaps get to the bottom of what is going on.

Finally, the third exemption relates to the services which are non-commercial. The Government are not able to provide guidance on this exemption, as there is an ongoing judicial review in respect of it. However, as noted by the noble Baroness, Lady Randerson, the Government are clear that it would be premature for any local authority to end or withhold community transport contracts while this legal action is ongoing. The High Court has not yet given us a date for the hearing but we hope that it will be soon. Once the High Court has reached a decision, the Government will revise their guidance to give effect to it.

[Baroness Vere of Norbiton]

Without having seen the evidence, I obviously cannot make that commitment right now but I should imagine that if we can give any further guidance, we will certainly do so.

The Transport Select Committee acknowledged that this uncertainty has already impacted some community transport operators—there has been lots of concern about it in Parliament. There are real costs from uncertainty and implications from doing nothing at all, so the Government are able to provide clarity on two of the three exemptions. Where community transport operators can use either the main or the short-distance exemption, they do not need to wait for a High Court judgment. They can plan for the future and deliver important transport services with confidence.

We recognise that in certain circumstances, according to the impact assessment, there will be an impact on some operators. We believe that 50% of the operators will fall under the main occupation exemption, but there is the extent to which the remaining 50% will be able to take advantage of the new short-distance exemption. We hope that many of them will really consider that option, and that we will therefore be able to reduce the number of operators impacted.

[Lord Berkeley]

Following this exemption and the guidance to the traffic commissioners, surely the Minister is able to commit to advising the traffic commissioners on the two issues that are not subject to a JR to ensure that they understand what is going on. They can always have more guidance later, but they should have the present one now.

International Road Passenger Transport (Amendment) (Northern Ireland) (EU Exit) Regulations 2019

Lord Berkeley Excerpts

Monday 20th May 2019 Lords Chamber

[Lord Rosser (Lab)]

I thank the Minister for her explanation of the content and purpose of these regulations, which seek to ensure that current access rights for EU bus and coach operators, into and within Northern Ireland, remain in place after our withdrawal from the EU. The Secondary Legislation Scrutiny Committee recommended an upgrade of these regulations to the affirmative procedure.

This SI applies to the access rights of bus and coach operators, which is a transferred matter for Northern Ireland. The EU regulations currently provide reciprocal liberalised market access for regular and occasional coach services between the UK and the European Union. Apparently, reciprocal rights for UK operators in the EU market cannot be guaranteed after a withdrawal from the EU so, as the Minister has said, we will join the Interbus agreement as a contracting party in our own right if we leave the EU without an agreement.

The Interbus agreement is a multilateral agreement between the EU and seven other contracting parties in eastern Europe, which currently allows occasional international coach travel for tours and trips between those parties. As the Minister has said, since the Interbus agreement does not cover scheduled coach services, including those that take passengers to school or work, the European Union has agreed temporary contingency measures to enable operators licensed by the UK to carry passengers between the UK and an EU member state, if the withdrawal agreement is not adopted before we leave the EU. These temporary measures would enable scheduled services delivered by UK operators in the EU to continue until the end of this year. The Interbus agreement does not cover cabotage services, but the temporary agreement with the EU will allow UK operators some cabotage operations in the border regions of Ireland until 30 September of this year, as the Minister has said.

In its report, the Secondary Legislation Scrutiny Committee said that the scope of Interbus is being extended to cover scheduled services, which the Minister confirmed. However, if this extension is not agreed, the Northern Ireland Administration will look to negotiate an extension with the EU or seek to put in place bilateral arrangements with specific countries to secure the access needed to keep UK passenger transport operators moving. That is potentially a little vague about what might happen in the future. The report says that, in respect of cabotage, the Northern Ireland Administration,

“will continue to work … with the European Commission and the Republic of Ireland to ensure that any future UK-EU transport arrangements take into account the unique transport demands on the island of Ireland”.

That could, once again, be regarded as a statement of hope or as something that will definitely be delivered, so I have one or two questions.

What exactly are the extent and scope of the limited cabotage arrangements that will continue until the end of September in the border regions of Ireland? What will the practical impact and consequences be if those arrangements cease to have effect from the end of September? What are the prospects of the Interbus agreement being extended to cover scheduled services before the end of this year? Again, what will the practical impact and consequences be if the agreement is not so extended by the end of this year? Presumably the date of 31 December 2019 does not have the same urgency for the other signatories as it could have for us.

[Lord Berkeley (Lab)]

My Lords I have one question for the Minister, following on from my noble friend’s more detailed questions about what will happen after 31 December 2019. It is all set out in paragraph 7.3 of the Explanatory Memorandum. Apart from asking what happens after 31 December, as my noble friend did, I note that:

“The EU have agreed a legislative measure that will allow UK operators currently running regular and special regular services to the EU to continue doing so until 31 December 2019”.


My question concerns the word “currently”. If an operator wishes to start a new service this year, they will presumably not be allowed to, because they are not doing so currently. If this legislation continues with the same wording, they will not be able to do so in future. That looks to me to be starting to create a kind of monopoly of existing operators, because new ones will not be able to do it unless they are operating currently. I hope that the Minister can put my mind at rest and say that this does not actually mean that no new ones could start and that it is just a quick and easy way of expressing what might happen—but it is a worry, because at the moment any operator should be able to operate across the frontier, and let us hope that that can continue in the future.

[Lord Whitty (Lab)]

My Lords, I draw the Minister’s attention to the report published this very day by the Select Committee sub-committee that I chair on road, rail and maritime transport post Brexit. I will of course allow the noble Baroness a day or two before we get the official government response, but it has a chapter on the Irish dimension, covering not only bus and coach travel but also road haulage and rail.

I will focus on these regulations. Since the Good Friday agreement, and in some cases before the Good Friday agreement, bus operators have operated across the border and have improved the relationship between Northern Ireland and the Republic in a positive way, with people moving for work and for other reasons. The fact that that whole arrangement is now subject to some doubt is a serious problem, which goes well beyond the details of any transport regulations, frankly.

While our report focuses primarily on the possibility of moving to an agreement with the EU, it nevertheless has regard to the possibility of no deal. With no deal, as my noble friend has just underlined, as of Halloween we will be faced with a situation where the present propositions from the European Union will last only between then and New Year’s Eve. That is not a satisfactory position for any mode of transport. In particular, it is not a satisfactory understanding for a mode of transport by which individuals move to their work or families and which they have relied on for a decade or two to operate in a regular way.

I appreciate that my report—our committee’s report; I must not be so egotistical as two members of the committee are sitting here today—raises a number of issues related to Ireland. I hope that the Department for Transport in London is apprised of the situation in Northern Ireland, because there are some serious difficulties there. My noble friend raised the question of the decision to extend the Interbus arrangements to cover scheduled transport. That is unlikely to take place before the end of October—or, indeed, between the end of October and the end of the year. That will place a number of those routes in Ireland in doubt. I hope that the Minister and her department—in conjunction with the appropriate officials in Northern Ireland, since at the moment it does not have a devolved Assembly—will be able to resolve this issue in a way which, at least temporarily and in default of any longer-term agreement, will ensure that such services continue to operate. In the meantime, I commend the totality of my report to the Minister—no doubt her officials are studying it already.