High Speed 2

Lord Berkeley Excerpts

Thursday 24th October 2013 Lords Chamber

[Lord Berkeley (Lab)]

My Lords, I very much welcome this debate and I welcome the noble Baroness, Lady Kramer, to her new position. I am sure that we will have some interesting debates now and in the future. I declare an interest as chairman of the Rail Freight Group.

I shall start by discussing the issue of capacity. My noble friend Lord Rooker mentioned freight. I shall quote from a paper from the HS2 Action Alliance. With a name like that, I would have thought that they would have been supporting HS2, wanting to make it go faster, but, surprisingly, they do not. It says:

“Improving the existing West Coast Mainline is a more cost effective and risk-free way to meet future rail capacity needs”.

Where are they living? Many noble Lords have spoken about the problems on that line, and I will not repeat what they have said. One of the problems is that if you improve a line, you either dig it up and close it or you extend it sideways into people’s properties. That will have just as much opposition as building a new line—in fact, probably more—because people will want compensation, as they do. Yes, the line is going past their property and has been there a long time, but their property is very valuable. That idea just does not work.

The real problem that I want to mention with regard to capacity, though, is freight. Freight is different from passengers because it runs only if the customers and the train operators want it to and therefore, hopefully, it will make a bit of money. There is no subsidy. The industry has forecast a doubling of demand for rail freight on the west coast main line in 20 years. That is because the type of traffic that goes up that line is mainly containers from retailers. That is what retailers like—noble Lords will have seen some of the supermarkets giving green credentials on a packet of cheese, or whatever they are selling—so they have asked for this. Freight is growing by leaps and bounds; it might treble, for all I know. However, if you want a doubling of traffic in 20 years, that is the equivalent of an extra two trains an hour on the west coast main line. It is full already, as other noble Lords have said, and we are having discussions with Network Rail about how this can be accommodated, particularly when phase one is built and it stops near Tamworth. Still, it is a wonderful challenge to have.

What is the alternative? There are two options. One is that it could go by road. Let us have a motorway through Little Missenden; I am sure that my noble friend Lord Stevenson would not like that. I was brought up in Great Missenden, and I would not like to see a motorway go through there; there is a railway there already, and a horrible road. If freight is not going to go by rail, therefore, it will go by road—or, the other option, it does not go at all. Do we want it not to go at all? What would be the consequences for the economy if it did not?

I reflect that the latest route through the Chilterns is going to affect about 100 properties, whereas in Camden it will affect 2,700. That is why the noble Lord, Lord Bradshaw, and I have come up with our alternative route through Camden that will, we hope, significantly reduce the demand for demolition, perhaps down to nothing at all. I look at HS2 as adding two more tracks to the west coast main line, for reasons of capacity. It is pity that it did not start off being sold that way, but it is indeed for capacity. We need HS2, otherwise the traffic will not go, or we go by road.

I conclude by commenting a little more on my noble friend Lord Snape’s comments about HS1, which I was also involved in. There is a study by Volterra consultants about the economic benefits of HS1, which could therefore apply to HS2. Apart from generating extra rail and car park revenues of £3.4 billion, which we may or may not want, the transport benefits include more than £100 million of congestion relief, an increase in rail revenue of £3.4 billion, while earnings per annum across the study area—Kent—have increased by between £62 million and £360 million due to the commuting facilities. You may not want to commute but perhaps you do. Overall this is estimated at a very significant benefit to the UK of HS1 over 60 years—it is a long-term project—of £17.6 billion. I think this is worth having.

I support the way that this project is going forward. I welcomed it when it was launched by my noble friend Lord Adonis. I welcomed this Government taking it up, and I agree with my noble friend Lord Rooker that it would be unthinkable to cancel it. I would like to see it go to Scotland in some shape or form.

I shall support this project. I want to see the costs come down and I shall work towards that. I think there should be better leadership and communication and I welcome Sir David Higgins to that role. I see no alternative to creating the necessary additional capacity if we want our economy to grow.

Transport: Bus Services

Lord Berkeley Excerpts

Thursday 10th October 2013 Grand Committee

[Lord Berkeley (Lab)]

My Lords, I am grateful for the opportunity to say a few words in the gap. It is extraordinary hearing the noble Lord, Lord Bradshaw, and the noble Baroness, Lady Scott, talk about rural bus services. Where I live in Cornwall, exactly the same thing is happening: buses are being cut. I do not have a car; I have a bicycle, but not everybody who does not have a car can go by bike. The problems are the same in my area.

This also comes back to the debate we had on the Question in the Chamber yesterday about new roads, the problems of resurfacing existing roads, filling in potholes and so on. The Minister who answered for the Government, the noble Lord, Lord Popat, said that local authorities have got a big budget for this. However, the problem is that local authorities’ budgets are being cut all the way round and that applies to the budgets for buses and road surfacing. I do not buy into this continuing mantra, which comes not just from this Government but has been going on for years, that everything central government does is perfect whereas everything done by local authorities is rubbish and should be cut down or given to somebody else because they can do it better. We have a long way to go in this regard and the problem with rural buses is extremely serious.

I also want to refer briefly to bus lanes, particularly in the context of city centres. I do not think that we have discussed them recently, but there has been a lot of debate over the summer, particularly in London, about cyclists being killed by trucks and trucks being required by the mayor to put extra safety equipment in place. I refer particularly to tipper trucks as opposed to articulated lorries. The safety equipment is a good idea and may possibly help to prevent a few accidents. However, the real problem is enforcement. These trucks are allowed into London and I believe that they can be fined £200 a day if they do not have the right equipment fitted. How will the mayor ensure that the enforcement is sufficiently rigorous to make the owners of these trucks comply with the regulations? How will he ensure that bus lanes are kept free for buses, and for cyclists if they are allowed in them?

Pedalling or driving round London, whether in a bus or a car, you see endless examples of cars, vans and trucks being parked in bus lanes when they should not be there. They may be 24/7 bus lanes or they may apply just in the morning and evening rush hours, but illegal parking in them dramatically constrains the reliability of buses. The bus drivers are very good and do their best, but the whole point of bus lanes is to provide greater reliability for passengers, drivers and operators. However, that does not exist. Before we bring in too many more regulations in this area we should have a strong go—government, local authorities, police; whoever’s job it is—at making sure that the existing regulations are properly enforced and are seen to be enforced by the public. I would love to see a car illegally parked in a bus lane have a ruddy great big ticket put on it and be subject to a big fine. The driver would not do that again, but at the moment, most people think, “Well, what’s the point?”. I shall be very interested to hear what our new Minister has to say. I warmly congratulate her on her appointment and I look forward to working and debating with her in the future.

Railways: East Anglia Network

Lord Berkeley Excerpts

Thursday 10th October 2013 Grand Committee

[Lord Berkeley (Lab)]

I am very grateful to the noble Baroness for achieving this debate. For me, the East Anglia rail network is one of the most important parts of the network in our country. I declare an interest as chairman of the Rail Freight Group. I will not talk just about freight but about Sizewell, which is in the region. Most speakers have commented on the lack of sufficient track on most of the network. Most places are two-track, except the Felixstowe branch which is a single track. As the noble Baroness has said, Felixstowe is a very successful port.

In spite of that—I say “in spite of”, although there is an hourly passenger service on the Felixstowe branch—Felixstowe is achieving 30 trains in each direction on the single track, which is a credit to the port, Network Rail and others. The noble Baroness mentioned the chord that allows the trains to go straight from Felixstowe to Peterborough and Nuneaton without reversing. I call it the bacon factory chord which is a much nicer name. It will make a great difference to the volume.

It is a lovely challenge to have all the jobs at Felixstowe but the intermodal traffic by rail is forecast to at least double, probably more, in 20 years. Whether it will go to Felixstowe, London Gateway or Southampton is a matter for debate. I know that the port will work very hard to get a good market share of that. A new rail freight terminal has just opened at Felixstowe. I do not know whether any noble Lords went to the opening. I could not go myself but I was told that it was very good. However, there Felixstowe is, connected to a single track, which needs to be doubled quickly. It is not a difficult job as it goes mostly through fields. A lot of improvements have already been done to the bacon factory chord, Ipswich, Nuneaton through Peterborough. The gauge has been enhanced to take the nine-foot six-inch boxes on standard wagons and the signalling is being improved. A few other things also need doing.

The next stage is to have the line electrified. Around six months to a year ago, the Government announced an electric spine from Southampton, which will be very useful for freight and which we all welcome. However, there should also be an electric spine from Felixstowe, which would improve the capacity. It would obviously reduce the emissions that there are from the diesel trains. It would also enable more freight trains from Felixstowe to the Midlands and the north-west to avoid going along the North London Line in London. Our colleagues in London are not very happy about having all those freight trains. It is rather odd to have freight trains going through virtually the centre of a major capital city. That suggestion would help a great deal.

Electrification needs to be on the agenda in a firm programme, whereby the train operators will invest in the electric locos necessary. It is really good news that in the past month Direct Rail Services announced the order for the first new electric locomotives probably for 25 years. The beauty of them is that they also have a diesel donkey engine in them so that they can do the last mile into terminals. It needs doing, and it needs doing properly and planning in advance. For me, freight is a very important part of the East Anglia region. I am sure that those who are keen to see better passenger services will be pleased that more freight in the future will probably go a different way rather than through London.

As regards Sizewell, a big nuclear power station will probably go ahead and will employ a large number of people. I have been talking to EDF, the developer, about whether it could try to avoid too much damage to the local roads in Suffolk and the area by making more use of the railways. I know there has been an improvement in Beccles, which is good but it probably needs double tracking, where there is none, from Woodbridge or somewhere around there.

There are two reasons for doing this. One is to get the workers to work. Why cannot they go by bus or car? Of course they can, but in a great big traffic jam, which would be very bad for all the other users. Why could there not be a bit of a link? It would be the old, original link to Aldeburgh, extended into the Sizewell site to run passenger services for the workers—the commuters, if you like—from Ipswich or wherever. I see that as a big Section 106 improvement, which I hope the local authorities will push for. I think they will.

The second reason for making more use of the railways is, of course, to try to stop too many deliveries coming by road. This was done very successfully in the construction of terminal 5, and it was done reasonably successfully for the Stratford Olympics. All the bulk materials can come and go—they can go by sea as well now. In the construction of terminal 5, when it came to bringing things such as desks, basins and all the smaller things that you would not necessarily bring by rail, there was a series of consolidation centres around the country, wherever was convenient for the manufacturing or supply. The contractors called up for what they wanted the day before, and the goods were sent down by train overnight. It just needed a rail terminal in the area.

The combination of passenger and freight benefits for Sizewell and for the residents who live around there would be immense. I hope the Government will encourage EDF to look at that very positively when it comes to the planning process, and make it all part of a Section 106 agreement. Again, I am very pleased to welcome the new Minister to this debate and I look forward to what she has to say.

--- Later in debate ---

[Lord Marlesford (Con)]

My Lords, I am grateful for the chance to say a few words in the gap. When I was a schoolboy after the war, living in Suffolk, we had a wonderful stopping service. It was a direct line between Liverpool Street and Lowestoft. I would get out at Wickham Market and change to a little steam train that went to Framlingham. I would get out at Marlesford. Sometimes I was allowed to stand on the footplate, and I would be met by my mother with a pony and cart at Marlesford station.

My next real experience of rail was that for five years I was on the board of British Rail Anglia. It was the worst commercial experience I have ever had; it was so frustrating. The quality of the management was just not there—and the key is management. There has been talk about producing good franchises. When considering who you should give a franchise to, it is necessary to look at the management and the targets that they are prepared to set themselves. Let them be judged by those targets. Interview the management. We all know that if you are in the advertising world and you decide to hire an advertising agent, you do not just see the agency, you see the person who is going to handle the account, so insist on that. It is a matter of buying a good franchise by doing it properly, and that has not been done.

In the old days when you had the wonderful non-stop service from London to Ipswich and Norwich, you could guarantee an hour between London and Ipswich. Now, however, it is different. One of the things that I had as a non-executive on the board was a first-class free ticket to wherever I wanted to go, but I virtually never used it on my own line if a journey was time-sensitive. As has been said, reliability is crucial. Trains are about reliability. You cannot blame someone else when you are in a car, but you jolly well can when you are on a train. That is another factor which should be properly taken into account.

The noble Lord, Lord Berkeley, was absolutely right to say that something has to be done about Felixstowe. We should have a new target for the amount of freight that is carried; I think that it is only about 20% at present.

[Lord Berkeley]

I think it is about 30% now. It is one of the best in the country.

[Lord Marlesford]

Well, it wants to have a new long-term target, maybe 50%, and in my view let us forget about HS2.

I shall end on a positive note because I am allowed only two or three minutes in which to speak. At least the difficult communications that we have to East Anglia have kept Norfolk and Suffolk the very beautiful counties that they are, and I proudly declare an interest as president of Suffolk Preservation Society.

Railways: Crossrail

Lord Berkeley Excerpts

Wednesday 5th June 2013 Lords Chamber

[Earl Attlee]

My Lords, I am grateful for the support of my noble friend for the SMEs and other businesses supporting the Crossrail project. A lot of them are involved, and, in addition, many of them are based far outside London and the south-east. Transport for London will be responsible for Crossrail services. It is procuring a private sector Crossrail train operator concession, using a model similar to London Overground. Operations will start in May 2015.

The current opening strategy is split into five phases, beginning with Liverpool Street to Shenfield in May 2015. In December 2018, services will start through the main Crossrail tunnel between Paddington and Abbey Wood. Full services will open in December 2019.

[Lord Berkeley]

Will the Minister explain whether there are still plans to have two different signalling systems on this tunnel, one in the tunnel and one on Network Rail on either side? What assurances can he give that the trains will not have to stop at the changeover point? That would not be very good when a two-minute headway frequency is planned for the trains. Is the matter resolved yet?

[Earl Attlee]

My Lords, it is not resolved yet. The noble Lord is quite right that there are two signalling systems. One is needed in the central portion in order to meet the productivity requirements. Engineers are working through the issues of transitioning from one system to another, but the trains will not need to stop in order to transition the system.

Daylight Saving

Lord Berkeley Excerpts

Wednesday 22nd May 2013 Lords Chamber

[Lord Berkeley]

My Lords, taking into account the value of a human life, which I think the department uses in looking at accidents, I calculate that on the noble Earl’s figures the saving would be in the order of £5 billion. He was much vaguer about the economic downsides. Will he explain more about the economic disadvantages of this change?

[Earl Attlee]

My Lords, the noble Lord is quite right: there are serious disadvantages. In the aviation industry, for instance, in the long term it would be positive. However, it would take three years to adapt to the time change, and the aviation industry would need five years’ notice of the change. In addition, it would need another three years if we wanted to go back.

Railways: High Speed 2

Lord Berkeley Excerpts

Tuesday 21st May 2013 Grand Committee

[Lord Berkeley]

My Lords, I congratulate the noble Viscount on securing this debate. It is timely and he has raised some interesting points. Certainly, he made a very good point about compensation. When I worked on the Channel Tunnel, which was an Anglo-French project, we were struck by the difference in the compensation regimes of the two countries. I think that in France people got the valuation of the property plus 10%, plus their moving costs. It was remarkable that very few people complained there, whereas they did in England and they continue to do so. Given the extra time and hassle, and the unfairness that the noble Viscount mentioned, I think that there is a strong argument for improving the package.

The noble Viscount mentioned the link to Heathrow. I believe in a new line to get extra capacity on the railway between London and the West Midlands, the north-west and the north-east. Whether that is via a high-speed passenger line, an ordinary passenger line or a freight line—I declare an interest as the chairman of the Rail Freight Group—more capacity is needed. The traffic is forecast to double in the next 20 years and the existing line certainly cannot cope with that. The Government have chosen the high-speed line.

Personally, I do not have too much of a problem with most of the route. It is interesting that it is still subject to change, as we have seen. I do not think that a spur to Heathrow is particularly sensible. I am sure that passengers going to Heathrow are terribly important, but the volume there compared with the number of passengers going to central London is very small. Probably only one train an hour is justified from, say, Manchester, whereas there will probably be three or four going to central London. They are not going to get to their terminal without changing trains because there are three groups of terminals at Heathrow. Therefore, if they are going to have to change anyway, they might as well change at Old Oak Common—that is my simplistic view on it.

However, what I worry about with the present situation is that we are getting more and more tunnels. We have a new one next to East Midlands Airport, which I think is very good for the logistics industry, we have another one near Ruislip, which I am sure my noble friend Lord Rosser will be pleased about, and we have lots of tunnels or extra lengths through the Chilterns, where there may be more to come or there may not. The extra cost of these tunnels is now probably well over £1 billion, although it may be more than that.

I have two issues to raise relating to the tunnels. The noble Viscount said that they slow down the trains. They do unless you build a tunnel big enough to reduce the air pressure, and that costs more, so there is a balance to be struck there. I do not have a clue what the right balance is but he made some good points.

However, I question whether one needs quite so many tunnels. If you go down and look at the line in Kent, you will see there are not that many tunnels. I spent quite a lot of time working on the side of line when it was being built. There was enormous opposition at the time. I thought that the environmental protection was pretty good—there are some fake tunnels and a real tunnel through the hills. You do not find many people there who now say what a disaster it is. They live with it; they are quite happy with it, and they basically ask what all the fuss was about. Having been brought up in a nice little village called Great Missenden, the one thing that I did not like was the road going through it from Aylesbury and Amersham, which, even 40, 50 or 60 years ago, was a pretty horrible road with lots of traffic. Frankly, building beside it a high-speed railway that was pretty straight, with the right sound barriers, I would have thought was probably just as good or bad as building a long tunnel—but that just happens to be my opinion.

Many noble Lords have talked about, and probably will talk about, the alleged destruction in the Chilterns and elsewhere. I do not know how many houses are going to be affected along the route outside London, but in the Camden area probably 400 houses are going to be affected by the proposed demolition west of Euston station and up at Camden Road. Residents there have just as much right to be considered and looked after as the people who live in leafier areas.

The noble Lord, Lord Bradshaw, and I have come up with an alternative scheme for the London end of High Speed 2 that avoids those two areas of demolition. The idea is instead to construct an underground station linking Euston and St Pancras, next door to where Crossrail 2 might go. That would give a much better passenger throughput to the two stations as well as allowing a proper connection to HS1. It would provide not only for international trains, such as they may be, but for a new east-west Thameslink, which would probably become very popular—new forecasts are coming out quite soon that will support that.

Does the Minister have any views on this “Euston Cross” proposal? We have met representatives of HS2; we have met some Ministers. We have got further work to do, because HS2 Ltd says that it is too expensive—but it would, wouldn’t it?—but if it is going to add £1.5 billion to the budget for tunnels, it should at least look at this scheme. If it is the same price or even a little bit more and has a greater cost-benefit, it should be investigated.

I hope that this scheme goes ahead, with some changes, because if it does not then we will have to start the whole process over again. I hope that HS2 Ltd will engage with more groups and individuals along the route and listen to some of the comments being made, otherwise it will find a very large number of petitions waiting for it when it gets to the Commons and Lords Select Committees, which will cost it a lot of time and a lot of money.

Energy: Biofuels

Lord Berkeley Excerpts

Wednesday 27th March 2013 Lords Chamber

[Earl Attlee]

My Lords, my noble friend asks an important question. The obligation system increases the price of fuel at the pump. It is, in effect, a hidden subsidy, and it works in a very similar way to the renewables obligation for electric power.

[Lord Berkeley]

Is the noble Earl aware that the addition of biofuels to diesel does quite a lot of damage to engines which stand idle for a long time, such as those of boats and agricultural vehicles? Does he have a solution to this or is the answer to buy non-biofuel diesel for certain uses, such as those I have mentioned?

[Earl Attlee]

My Lords, the noble Lord and I discussed this during consideration of the renewable transport fuel obligation order in Grand Committee. I admitted that there are some handling problems in keeping biofuels in tanks for a long time, as the fuel needs to be circulated. I am confident that the appropriate publications, magazines and so on will alert users to the need to circulate the fuel, but the noble Lord makes an important point.

Renewable Transport Fuel Obligations (Amendment) Order 2013

Lord Berkeley Excerpts

Wednesday 27th February 2013 Grand Committee

[Earl Attlee]

My Lords, the Renewable Transport Fuel Obligations (Amendment) Order 2013 will amend the legislation governing the existing renewable transport fuel obligation scheme. The small group of amendments is significant in our efforts to tackle climate change, and complete our transposition of the EU Fuel Quality Directive.

Article 7a of the FQD requires suppliers to reduce the greenhouse gas intensity of the fuel they supply by 6% by the end of 2020, against a 2010 baseline. This order would extend the RTFO to cover suppliers of liquid fossil fuel for additional end uses required by the FQD. These end uses are: non-road mobile machinery, including inland waterway vessels that do not normally operate at sea; agricultural and forestry tractors; and recreational craft that do not normally operate at sea.

Suppliers of fuel for end uses covered by the RTFO need to demonstrate that, for a certain proportion of the fossil fuel they supply, greenhouse gas savings are delivered through the supply of sustainable renewable fuels. In addition, the amending order would make express provision for an unpaid civil penalty issued under the RTFO to be recoverable as a civil debt, together with interest at a specified rate. This would enhance the effective enforcement of the RTFO.

It may be useful if I provide a brief overview of the regulatory framework so that the proposed changes can better be understood. We have recently introduced the Motor Fuel (Road Vehicle and Mobile Machinery) Greenhouse Gas Emissions Reporting Regulations 2012, to which these amendments closely relate. The GHG regulations require suppliers to report on the greenhouse gas intensity of the fossil fuels that they supply. The Government must obtain this information to meet our obligations under the FQD but are not able to require it under the RTFO scheme.

Both the RTFO and GHG schemes are administered by the same team at the Department for Transport. The reporting requirements of each align as closely as possible to minimise potential burdens on suppliers. The RTFO obligation is met by redeeming renewable transport fuel certificates. The order would enable suppliers of renewable fuel for additional end uses covered by the FQD to be awarded certificates. These could be sold to obligated suppliers.

As the legislation stands, the obligation would be 5% for 2013-14 and thereafter. The order would adjust this figure to 4.74% from 2013-14 to ensure that the proposed expansion of the RTFO scheme does not at this point result in an increase in the absolute volume of biofuel supplied in the UK. This is necessary because of concerns about the sustainability of some biofuels when emissions from indirect land use change are taken into account. The Commission proposed a directive in October to address ILUC. Until such time as ILUC is resolved, we are not in a position to increase the obligation level on suppliers under the RTFO. We will, however, keep this under review.

In 2011 the Government consulted on the expansion of the RTFO provided by this draft order. Further to that consultation, time was provided for suppliers and end users of gas oil to prepare. The RTFO administrator has also provided advice to suppliers and has consulted on amended RTFO guidance relating to the proposed changes. I commend the order to the Committee.

[Lord Berkeley]

My Lords, this is a very interesting order and quite complicated for some people to understand. I have a few questions for the Minister.

The first question refers to this issue of non-road mobile machinery. The Minister will be aware that a lot of work and debate took place on this issue, which has been around for some time. The Commission, after much persuasion, produced a directive which was published in October or November 2011 and allowed non-road mobile machinery to continue not to comply with stage III B or the equivalent for a period of three years. That would allow the railway industry—I declare an interest as chairman of the Rail Freight Group—to purchase locomotives which did not comply with the new directive. There is a good reason for that: nobody had designed a locomotive that would comply, so it was either no locomotives or ones which did not comply. The industry persuaded the Commission of this and since then, surprisingly maybe, one or two designs have popped up. However, there is still a demand for this. It is now one year and three months since the directive was agreed in Brussels but it has not yet been converted into British law. So, technically, although anybody who buys a locomotive—I think that it also applies to tractors and other things off-road—is compliant with EU legislation, they can be taken to court and fined in this country because the Government have not got round to producing these regulations.

Perhaps the Minister can therefore answer two questions. First, when are we going to see these regulations? I hope the answer will not be “soon”, because in many Governments’ terms “soon” probably means a year’s time, and by that time they will have run out of space.

Secondly, what effect will the new regulation converting the directive into UK law have on this order? It seems to me—I may have got it wrong; I stand to be corrected—that we are implementing what is not a very sensible scheme from the Commission to add biofuel to existing fuel, especially when there is a shortage of crop area and crops around the world, which puts up the cost of fuel. Turning some of those crops into bio seems a bit perverse to me. Certainly the Renewable Energy Association believes that this will be a seriously perverse incentive to investment in renewable fuels and renewable generating capacity. It is talking about the market size being reduced to 30% or 40%, jeopardising investment of £1 billion and putting 3,500 jobs at risk. One can dispute those figures, but what consultation has taken place with the Renewable Energy Association? It is a very respectable organisation.

On Monday I attended a sort of round table with the noble Lord, Lord Deighton, our new Treasury Minister, who was extremely good. It was a Chatham House event so I am not going to say who said what. It was to do with investment and infrastructure, and investment in other things that the Government are so keen on at the moment. We were told, and there was general agreement, that there was not much trouble with finding the funds for investment. The two problems were: first, planning—which is going on in the Chamber at the moment; and secondly, some kind of comfort for the investors that the Government are not going to change their mind and change the ground rules or the buy-in price or whatever during the time when investors are trying to get a return on their capital.

I hope that the Government are going to follow-up this particular regulation with a new debate with the Commission as to what is right and what is wrong for biofuels and whether they should be there at all. Current thinking across many parts of the world has probably overtaken the original idea behind this.

[Lord Bradshaw]

The question that I wish to address to the Minister is slightly different from that of the noble Lord, Lord Berkeley. Making renewable fuels is a very complex and difficult thing, and we know that there is a lot of tension between the use of land for agriculture for producing food, and turning that crop into fuel. The noble Earl will recall that we have had discussions before on the question of recycling used cooking oil. This used to enjoy a margin of 20 pence over the ordinary cost of fossil fuels. The Government, in their wisdom, decided to put an end to this and “generously”—in inverted commas—decided that when this cooking oil is converted into fuel, it should enjoy a premium of two renewable fuel certificates.

I would like to know, since this has been in place, how much we are actually paying in the way of money for transport renewable certificates compared with the 20p which was a very definite sum and caused investors to really work hard at this particular subject. I am of the opinion that two renewable fuel certificates do not equal 20 pence, and I would like to know whether they have ever reached that. The important point is that as well as producing renewable fuels, the producers of renewable energy from cooking oil are doing a very important job in removing it from landfill, or stopping it from being tipped into rivers or drains or whatever they do with it. Unless it is worth while for people to collect and refine it, it will end up not being used and being dumped in some form or another on the landscape.

--- Later in debate ---

[Earl Attlee]

My Lords, I thank all noble Lords who have contributed to this short debate. The noble Lord, Lord Berkeley, talked about non-road mobile machinery, particularly the railway industry and locomotives, and the emissions regulations. I would like to point out that this order deals with the carbon intensity of the fuel. His point is not actually directly relevant, although I had a very interesting discussion with the officials at the Department for Transport who are directly responsible for this issue. It is quite close but not exactly on the subject. I will write in detail to the noble Lord about where we are on the emissions regulations for railway locomotives.

[Lord Berkeley]

The noble Earl is right to say that the NRMM is an emissions regulation rather than a fuel regulation, but is there no link between the two?

[Earl Attlee]

My Lords, I should imagine that technically they are inextricably linked, but the order deals with the RTFO and carbon intensity. The noble Lord is more worried about the emissions regulations on oxides of nitrogen and particulate emissions from railway locomotives. I have to say that some railway locomotives can best be described as filthy.

The noble Lord also questioned whether the ILUC proposals will harm renewable energy investment, and the noble Baroness touched on the same point. We are keeping levels of biofuels the same due to the ongoing ILUC concerns. We are actively negotiating this issue in Europe, and when the ILUC problem is resolved, we will be able—

--- Later in debate ---

[Earl Attlee]

My Lords, I know that the noble Baroness is passionate about this issue and I hope that she will allow me to get on to that very point.

When the ILUC problem is resolved, we will be able to increase the total amount of biofuel we create and process. In response to the point made by the noble Baroness, we are not reducing the total requirement for biofuel. I accept her point about the percentage of the market, which is going down slightly at the moment due to the economic conditions. Clearly, the total amount of biofuel produced will also go down; I accept the point. However, I do not expect the noble Baroness would be happy if, when the market starts to go up, we were to cap the amount of biofuel. If the market goes up, she would like to see more biofuel being produced—and the market will start to recover at some point.

[Lord Berkeley]

That is a fairly rash statement, is it not? The latest figures I have seen show that road traffic movements have gone down over the past four years whereas railway passenger numbers have shot up. Is this a change in government policy? Do they expect road traffic volumes to rise again? Is this all down to economic circumstances? If that is the case, why have rail passenger numbers gone up? Of course, rail passengers are not so directly affected by this. Obviously the Minister can say, “If road traffic goes up”, but it may not.

[Earl Attlee]

Noble Lords opposite know perfectly well that a range of factors affect the demand for transport. Demand for the fuels which propel that transport will fall during a recession, but when we get back to a period of growth, demand for all forms of transport will rise, as will the demand for fuel. That is inevitable. This is not a change in government policy.

--- Later in debate ---

[Lord Berkeley]

My Lords, I am grateful to the noble Earl. He is quite right: there is a problem with biofuels. I believe that people in the boating industry are expressing serious concern about it because people do not always use their boats very often, this stuff sits in the tank for a very long time, goes all funny and does not come out when they are trying to avoid hitting the rocks. That is probably a different version of the story told by the noble Duke, the Duke of Montrose, but there are some serious problems with this issue which I do not think have yet been resolved.

[Earl Attlee]

My Lords, I have spent a lot of time discussing this very issue with my officials. I will be honest: it will be necessary to make sure that the fuel is circulated in the tanks. If fuel has been in your tanks for several years, you will experience problems. However, I would expect boating magazines to write up what needs to be done. Technical advice will be available. I have to be honest and admit that this is an issue, but it is manageable.

The noble Baroness seems to be reluctant to accept my ILUC point. If we just want to look pretty and massively increase the amount of biodiesel that is produced just to look good—that is, increase the obligation level—and get our percentages right so that the graph goes straight to the desired end-state, we could change the rules on tallow and say, “Okay, all grades of tallow are waste and therefore will get double certification”. That would look great, but the only snag is that the better grades of tallow are also used for making soap. Therefore, there would be less high-grade tallow available for making soap, the people making soap would have to find something else with which to make it, and they would go for palm oil. An increased demand for palm oil would result in indirect land use change impacts. We would look wonderful—

Republic of Ireland: Aids to Navigation

Lord Berkeley Excerpts

Monday 25th February 2013 Lords Chamber

Asked By

[Lord Berkeley]

To ask Her Majesty’s Government what progress they have made in discontinuing their funding for the Republic of Ireland’s aids to navigation.

[Earl Attlee]

My Lords, the Department for Transport in the UK and the Department of Transport, Tourism and Sport in Ireland work together to support the Commissioners of Irish Lights’ Republic of Ireland self-funding endeavours. The process remains on course for completion in 2015-16, and in preparation the Commissioners of Irish Lights continues to reduce its headcount and to introduce new operational and commercial initiatives.

[Lord Berkeley]

I thank the Minister for that positive Answer. In fact, it is the first positive answer that the ship-owners who bring their ships into UK ports have had for 90 years, because this has been going on for 90 years. Why successive Governments have failed to make this negotiation in all that time escapes me. I am very grateful to the Minister, but can he confirm that, with or without the Commissioners of Irish Lights sorting out its financial problems, payments from the UK to the Irish Government for these lights will stop in 2015-16?

HGV Road User Levy Bill

Lord Berkeley Excerpts

Thursday 7th February 2013 Lords Chamber

[Lord Berkeley]

My Lords, I am grateful to the Minister for that helpful introduction. It has filled a few holes in my knowledge of the Bill and is a good opportunity to discuss the policy surrounding this.

My first question is: why is this a money Bill? It seems to introduce changes to policy and to methods of collecting charges for road vehicles which probably merit greater scrutiny in your Lordships’ House. Of course, we cannot do that for a money Bill, so perhaps the Minister can explain exactly why it is a money Bill.

In that context, the Minister will know—because I mentioned it in a speech on Monday in Committee on the Growth and Infrastructure Bill—that I think that it would be much better if the Government came up with a consistent policy for tolling, charging, or whatever we like to call it, for vehicles using the Dartford tunnel, the new tunnels, congestion charging in London and other cities, and possibly eventually on the M6 toll road as well, for a start. All of those are effectively distance-based, unlike this one which is basically time-based. I expect that this is meant to avoid any policy intention to widen it to other vehicles; and of course, on that basis, it has to comply with the Eurovignette directive. I believe that the Commission has started to look at a wider charging solution for roads across the EU which is probably designed, as much as anything, to try to reduce the congestion on the most congested parts. However, I would be very pleased to hear the Minister’s explanation for why this is a money Bill.

The Minister explained that this was intended to increase the fairness between UK-registered and continental-registered vehicles, because when continental vehicles come here they do not pay the equivalent of a toll or VED, but when our vehicles go to the continent they have to pay tolls on some roads—most of which I think are distance-based. However, can he explain whether the locally registered trucks in any of the closer member states—on the roads which our own vehicles probably use the most—pay something equivalent to VED which visiting trucks from the UK and elsewhere would not pay? It would be a comfort to know that the balancing on which this Bill is based applies both ways. I am sure that there is an answer to that, but I do not know it.

In the case of non-UK heavy goods vehicles, Clause 4(2) places the liability for paying this levy on the holders of Community licences. I know that “Community licence” is defined in Clause 4(8), but can the Minister explain to the ordinary human being what that means? What is a Community licence? Is it one similar licence which every truck in the entire EU has, or does each member state have a different one? Whoever is going to enforce it will need to be familiar with 26 or so different types of licence if we are not careful. That will be quite difficult. I shall come back to that in a few minutes.

The Minister explained that UK-registered hauliers will be able to obtain their licences under this levy in the usual way, with the VED, on a 12-month or six-month basis. He said that a foreign haulier coming into Dover could buy a licence on the web or on the phone. Presumably there will be a kind of booth at Dover, or something, where you can pay for the licence at the time. If, as I believe, everybody will have to have a sticker with the licence on their windscreen, there is a question about how a haulier going backwards and forwards across Europe will manage to collect his post with the sticker in it. Or will there be a place where he can collect it every time he comes into the UK? Otherwise, it will be a bit of a mess, really.

This morning I got an interesting briefing from the Freight Transport Association, which raised the question of whether these stickers were necessary. That begs the question of how the Government intend for this new levy to be enforced. Window stickers are fine on cars, because traffic wardens go along and look at out-of-date licence stickers, and you then get a nasty message from the DVLA. However, traffic wardens are not going to be much use in enforcing this on trucks, because trucks do not usually park in the streets where traffic wardens operate, thank goodness.

Anyway, in Clause 10 we have a definition of who can stop a vehicle, and that person is called a “stopping officer”. I have never heard of a stopping officer before. Is it a police officer? Who is it? The definition says what his powers are, but how many of these stopping officers will we have in the country? If they are doing it already—which would be something I do not know about—in how many cases a year do they achieve this stopping? I am not convinced that there will be any enforcement at all of this new licence. If it is to be done by number-plate recognition, as the congestion charge is in London, can the Minister explain how that will work with 26 different number plates from 26 different member states plus a few from outside the EU? We get Turkish and other non-EU vehicles here as well. Is a system in place whereby all registered number plates from around Europe and beyond can be registered? And when they are indentified, what will happen to them?

I hope that the Minister can explain how this enforcement system will work. My suspicions are that it will hardly be done at all. UK vehicles will have to do it because they are paying with their VED, but who is going to do it for the foreign ones and where are they going to do it?

Finally, the Minister explained the revenue gain of £18.7 million to £23 million, which is probably worth having. It goes into the bottomless pit of the Treasury, but that is probably all right. Can he tell us the cost of administering this new scheme, both for UK-registered vehicles and foreign ones? In the debate on road-user charging I also said I believed that the cost of administering the road-user charging system in London—which is very good, and at the time it was introduced there was no better technology—is somewhere between 30% and 40% of the revenue gained. However, I think that the cost of some of the new electronic systems on the continent is about 5% of the revenue gained, which of course is much better. Therefore, what will be the cost of administering this scheme? Let us hope that it does not exceed the extra revenue expected.

With those few questions, I look forward to the Minister’s answers and to seeing this legislation implemented.

[Lord Snape]

My Lords, it is a pleasure to follow my noble friend Lord Berkeley on this topic. I well recall nearly 40 years ago when I was first elected to the other place and was told that the most effective political lobby in the United Kingdom was the farmers. I came to realise that in that conclusion they may well have been right. After all, I seem to remember that the farming lobby managed to blame the spread of foot and mouth some time ago basically on Ministers in the Labour Government rather than on their own practices.

Certainly, one lobby that runs the farming lobby very close in its effectiveness is the road haulage lobby. Most of us in your Lordships’ House are old enough to remember the immediate post-war period when heavy goods vehicles—I think this referred to those above seven tonnes, but it was a long time ago so I would not like to put my shirt on it—had to carry a 20 miles an hour plate and were restricted to that maximum speed. Given the number of heavy goods vehicles that appeared on our roads after World War 2—many of the drivers were demobbed from our Armed Forces—that issue was the first campaign that I remember the road hauliers lobby indulging in. It was very successful and it has indulged in many campaigns since, many of which have been successful.

Since the end of World War 2, we have seen heavy lorry weights increase dramatically. I think that the maximum now is 44 tonnes, although the Minister will correct me if I am wrong. It used to be about 12 tonnes, so the industry has done well there. The length of heavy goods vehicles also has increased fairly dramatically over that period. Each and every increase in weight and length has been accompanied by a cry from the road haulage industry that there would be fewer vehicles on the road because they are bigger, longer and heavier, and that once the motorways had been built they would not be much of a nuisance anyway.

This is not strictly speaking a matter for this debate, but I would be interested to know—perhaps the Minister will tell me, or write to me if he does not have the figures now—how many heavy goods vehicles above the 12 tonnes figure mentioned in the Bill are on our roads now compared to, say, a decade or two decades ago. Although it is not a matter for this Bill, it would be interesting to see not only how successful the road haulage lobby has been but how accurate it was in its predictions.

Another of the lobby’s major complaints was about the number of foreign lorries on our roads. Reverting back to my experience in the other place, I chaired for 15 years the West Midlands group of Labour MPs. It was one of my duties—whether it would be considered onerous or not I leave to noble Lords to work out for themselves—to attend meetings of the Sandwell chamber of commerce, which covered my former parliamentary constituency. The chamber of commerce may not have been dominated by the issue, but certainly a strong presence from the road haulage industry raised the same issue more and more often. It questioned the number of foreign heavy goods vehicles on British roads, and how they were filling up on cheap European derv and able to snatch the bread from the mouths of British hauliers by demanding not only the freedom to travel on our roads, which of course they had, but to take loads back to the continent, which rightly should have been the job of British hauliers.

I was a bit cynical and not inclined to believe that entirely, because every time I asked how many of these wicked foreign hauliers were behaving in this manner I did not get an answer. I found it difficult to believe, and I believe that I expressed the rather unpopular view at the chamber of commerce that I could not honestly believe that Mr Norbert Dentressangle, in his brightly covered lorries, was as guilty of undermining the British road haulage industry as the allegation made at the time suggested.

The Minister talks about 1.5 million trips, which I assume refers to round trips. Are we talking about 750,000 heavy goods vehicles that will be covered, at least in theory, by this measure? I should like to know just how many of these wicked foreign hauliers there are. They cannot use the excuse that they are driving around on cheap, continental derv anymore, because I understand it is just as expensive on the continent as it is in the United Kingdom these days.

The Minister went on to say that the maximum price we could charge foreign hauliers on a daily basis was €11. That will make a big dent in the deficit, whether or not the Prime Minister was accurate in his summing up of it. I cannot off the top of my head multiply 750,000 times €11, but while it is not an inconsiderable sum it will not make much of a dent in the road budget, let alone the deficit as a whole. Therefore, is this piece of legislation actually necessary, given the amount of money it is likely to raise?

The Minister did not use the phrase “a level playing field”, but he implied that this would balance the differences between British hauliers and their continental counterparts. However, €11 a day does not strike me as a particularly large penalty if one considers that for a heavy goods vehicle to travel 100 miles on a German autobahn, it would pay tolls of between €35 and €46. We throw open the whole road network of the United Kingdom for €11, but if you drive a heavy goods vehicle through Germany it costs €35 to €46.

As I indicated, the Minister said that this mighty measure before your Lordships today would raise the sum of £19 million to £23 million. He might recollect that a few days ago we had a debate about toll roads, and I pointed out that there was a toll road in the West Midlands that was not used much by heavy goods vehicles. I have noticed that Eddie Stobart vehicles do use it, but by and large those are the only heavy lorries that I have ever seen on the toll road. The heavy goods vehicle industry generally uses the M6 motorway, which passes through my former constituency on an elevated section. During my 27 years as the Member of Parliament for West Bromwich East, I calculated that the taxpayer had spent something like £800 million repairing just that one section of the M6 because of the damage done to it largely by heavy goods vehicles. On the department’s own figures, the heaviest heavy goods vehicles do as much damage to Britain’s road network as 30,000 private cars. This great sum of £19 million to £23 million, therefore, might repair one archway of the Ray Hall viaduct in the West Midlands, but it will not make much of a dent in the overall road budget.

I therefore have to say to the Minister, as the wartime sign said, “Is your journey really necessary?” as far as this piece of legislation is concerned. We heard from him that continental hauliers can pay on a day-to-day basis—not something that is open to British hauliers, who pay through VED on an annual basis—so why give them this particular benefit, which will be not shared by their British counterparts? I do not know whether, again, this is a matter for Europe, but why not insist that lorries used in the United Kingdom pay on an annual basis? Then they could come and go as they wished. Why allow them to pay on a one-day, two-day or weekly basis: a privilege denied to their British counterparts? Perhaps the Minister could explain.

Of course the penalties for non co-operation, under this legislation, can only be described as pathetic as well. Is a maximum fine of £200 really going to deter a heavy goods vehicle driver with, perhaps, £30,000 worth of valuable cargo? It is surely not serious that we impose a penalty that is so palpably inadequate. The Minister and the Government ought to look again. Even that penalty is based, as I understand it, on a vehicle limit and the number of axles. Who in this country of ours would be able to tell the vehicle limit or count the number of axles?

That leads me to the point raised by my noble friend Lord Berkeley about enforcement. Is the Minister seriously going to tell your Lordships’ House that there will be proper and adequate enforcement of this legislation? If he is, I do not believe him. Let me refer him to one of this morning’s newspapers. I am sure that the Daily Mail is the Minister’s favourite newspaper. From its optimistic front page to its unbiased sketch writing, I always think of it as a newspaper of value and repute. Today there is a story in the Daily Mail which I cut out as, reading it on the train, I thought: “The Minister will be interested in this one”. It is headed: “Toll of illegal foreign cars on UK roads”. I appreciate that it is not about foreign lorries, but I will come to those in a moment. The story says that:

“Only four out of an estimated 15,000 foreign cars driving illegally on British roads were caught last year. And not one of their drivers was prosecuted”,

the Department for Transport said yesterday. Given that record, it does not inspire me with confidence that our jails will be full of non fine-paying continental lorry drivers. What can the Minister tell us about the likelihood of enforcement under this legislation?

About 15 years ago, the then traffic commissioner for the West Midlands, Mr John Mervyn Pugh, invited me to join him on what he described hopefully as a purge of overloaded vehicles on the M6 motorway, particularly foreign ones. My noble friend asked about an enforcement officer. I presume that that enforcement officer must be from the police, because we were accompanied by three or four police cars. Between Birmingham and Stafford, the police directed heavy goods vehicles off the motorway so that they could be checked.

[Lord Berkeley]

Clause 10 refers not to an enforcement officer but to a “stopping officer”. Perhaps my noble friend would like to comment on that.

[Lord Snape]

Whether stopping or enforcing, my only response is that I guess he would have to be in police uniform. Perhaps I might take your Lordships back 15 years to the enforcement on the M6. I still have the paperwork, which I kept. Out of 14 vehicles that were stopped, only three of which were foreign, six were overloaded. In two of them, the driver had exceeded the permitted number of hours. A couple were borderline, while one was taken off the road immediately because of its lack of roadworthiness. Only 14 vehicles were stopped because, within about 40 minutes, there were no heavy goods vehicles heading north on the M6. This is before the days of mobile phones; it was presumably in the days of CB radio, or whatever it was called.

The problems in enforcing legislation such as this are enormous. The fact is that we do not enforce the existing heavy goods vehicles regulations at the moment. How can we, when the traffic commissioner’s total staff 15 years ago was four to cover the whole of the West Midlands and Wales? Given the Government’s clampdown on the Civil Service, I do not suppose that there are 44 of them these days. I suspect that if those four positions are still in situ, that is about it. Are these the people who are going to enforce this particular legislation? I honestly very much doubt that.

The Minister says that there will be a reduction in vehicle excise duty for UK-based hauliers. I have to ask why. I have a copy here of the report of the Armitage inquiry, Lorries, People and the Environment, from December 1980. Your Lordships will be relieved to know that I have no intention of reading that fairly bulky document, but as I would summarise it it pointed out that the number of heavy goods vehicles on Britain’s roads in those days was possibly more than the road network could cope with. If we have moved on from 1980 to 2013, I repeat the question: how many heavy goods vehicles are there on our roads these days, compared with then?

I hope the Minister does not think that I have been too rude about this legislation but it is palpably inadequate and will not be enforced. I do not think that unenforceable legislation—given the present lack of enforcement, that is the only way this can be described—is at all sensible. It is not actually necessary because, despite the propaganda from the British road haulage industry, I do not see this as the great problem that it outlines. If it is, let the continentals pay exactly the same price as British hauliers pay to drive across Europe. If a Bill is necessary, I am afraid that this is not it.

--- Later in debate ---

[Earl Attlee]

My Lords, that will be done under the powers that were wisely introduced by the previous Administration, who also set the level. I agree that it is at quite a low level and made that very point from the Opposition Benches—I cannot remember whether it was the Front Benches or the Back Benches—at the time we introduced the necessary powers. The key thing is that we will be able to stop the vehicle. That is extremely inconvenient to the operator, and I will have more to say on that point.

The noble Lord, Lord Berkeley, asked me what a stopping officer is. Stopping officers already exist. They are appointed under the powers in the Road Traffic Act 1988, as amended, and are able to stop vehicles in relation to enforcement of vehicle roadworthiness and driver’s hours. Stopping officers are VOSA enforcement officers.

[Lord Berkeley]

I have a question before the Minister leaves that subject. There is presumably a database with every vehicle’s number plate on it. Are stopping officers lurking in every motorway service station or do they pick these things up from cameras above motorways? How are they going to find these lorries that have not paid even before they direct them into somewhere safe to deal with them? If I was a foreign lorry driver and did not want to pay, I would keep off trunk roads and go on the side roads, like many people do in France if they do not want to pay the motorway tolls.

[Earl Attlee]

My Lords, I plan to address most of the points made by the noble Lord later on. To answer his point about leaving the strategic road network and going on to minor roads: an operator would have difficulties with that because the vehicle would be much less productive, while he would be trying to avoid only a £10 per day charge. I suggest that the extra cost of lowering your average speed by using local roads would simply not be worth it. For cases that go to court, the offence is a level 5, which can incur a fine of up to £5,000.

However, the real deterrent for operators is the inconvenience of being stopped, as well as another inconvenience that I will come to in a moment. VOSA already carries out risk-based stops for a number of different offences, including weight, vehicle defects, and driver hours, among others, and the levy enforcement will simply be added to this regime. I also suggest that when VOSA detects a vehicle that has not paid the levy, that is exactly the same as if the driver had put a big sign on the lorry which says “Stop me, because I’m a problem vehicle”.

I am aware that the British Vehicle Rental and Leasing Association has identified an area for a small potential cost burden to operators, which has been introduced due to the way that the levy is rebated, when compared to how VED is currently and will continue to be rebated. It may be helpful for me to say a few words on this. Currently when a vehicle is delicensed—typically, when it is sold—the previous owner can claim back the outstanding whole months of VED, with the rebate calculation done in twelfths. From the introduction of the levy in April 2014, UK operators will still be able to reclaim VED on the same basis, but the levy can be reclaimed only in tenths. To comply with EU law, and to maximise revenue from monthly charges, the annual rate is set at 10 times the monthly rate. This means that in effect it is discounted when compared with the costs of 12 monthly levy charges.

The decision to offer rebates on the basis of tenths is to prevent foreign hauliers paying for a year, using the vehicle for a month or less on the UK’s roads, and then reclaiming 11 months. The value of the loss incurred by the operator is entirely dependent on when the rebate is claimed.

The legislation before the House is not designed as a precursor to increased charges on businesses or on road users in general. This charge has a very clear, focused objective, and its introduction is entirely separate from the reviews on future road policy which the Department for Transport is currently undertaking.

I will now deal with a few other points. The noble Lord, Lord Berkeley, asked why it is a money Bill, and the noble Lord, Lord Davies of Oldham, very kindly helped me. The Bill only concerns money, and is certified as such by the Speaker of the House of Commons; it is not a matter for the Government.

On the wider points made by the noble Lord, Lord Berkeley, on the methods of tolling, following our debate during the passage of the Growth and Infrastructure Bill I offered a meeting at ministerial level with the noble Lord; I hope that that meeting, which is in hand, will be with me. I have mentioned detection. I was asked about VED in other countries. All EU countries have VED for HGVs, or a local equivalent circulation tax. VED or equivalent is required in the Eurovignette directive, and minimum rates are set. Our new VED rates comply with the minimum rate.

The noble Lord, Lord Berkeley, raised a very important point about whether we should implement a levy on a distance or a time basis. I will say a few words about this important point. The HGV levy is a time-based charge which is both simple and inexpensive to operate. It allows more than nine out of 10 UK operators to be fully compensated through VED reductions. A distance-based scheme has been considered and has some benefits, in that hauliers who use the road network the most would pay the most. That seems, at face value, to be inherently fair. However, in reality it would cost hauliers more and it would not be possible to introduce offsetting measures for UK hauliers, which would mean that they would pay more than they do now. In many cases foreign hauliers would pay less than they would under a time-based scheme.

The introduction of a distance-based scheme has also been discounted as it would be very complex and costly to operate, and would potentially involve the use of a mechanism such as a fuel duty rebate, which is illegal under European law. This has already been tested in Germany. We also believe that the revenues gained from foreign hauliers would not cover the costs of operating this scheme. The Department for Transport looked at options for distance-based charging in 2010 and concluded that in order to fund it the scheme would have to be structured to be revenue-raising, and would therefore have a negative impact on UK hauliers, who would pay most of the charges.

Another difficulty is how to capture the distance-based data. That could be done with a tachograph, but the problem is that the tachograph and the records would have to be inspected by enforcement officers. In addition, the tachograph is in essence a safety device to ensure that drivers do not drive for too long. If we insert an economic effect into it, we would increase the chances that the drivers or the operator would interfere with the operation of the tachograph.

[Lord Berkeley]

I am grateful to the noble Lord. I will not go back over tolling, as we will have a meeting on that, and I am grateful to him. This is a tit-for-tat issue. He very kindly said that other member states also have a VED for domestic-registered trucks; for example, in France. Is there not a risk that those member states might play tit-for-tat and say, “Well, British hauliers going into France will be able to use the roads, with or without the tollings, but they won’t have paid the VED in France, so they’re getting an advantage”? Are we not in danger of getting a tit-for-tat situation across member states?

[Earl Attlee]

My Lords, the situation is, as I said in my opening remarks, that our operators often have to pay motorway tolls that no one pays in the UK, and because of the Eurovignette directive, whatever a foreign country did in terms of a vignette they would be limited to the prevailing limits of what you can charge. It could not, therefore, cost our operators more than €11 a day. At the moment our operators pay tolls to use the European road infrastructure.

The chosen time-based scheme, coupled with reductions to VED, is a simple, effective and targeted way of ensuring that UK hauliers pay no more than they do now. VED cuts are a time-based method of offsetting the charge, which means that they fit well with a time-based system. In addition, we need to remember that, in terms of administration, this scheme will have a negligible burden on UK operators.

I always enjoy listening to the noble Lord, Lord Snape. He asked many questions, and I will answer as many as I can. I have probably answered quite a few already, and of course, I will write to him on some of them. He asked me what type of penalties there will be. As I believe I have said, drivers will be charged £200 at the roadside. Fines can be enforced electronically, and they can be invited to pay by credit or debit cards. The noble Lord, Lord Davies, made the point that with modern systems of doing business it is easy to collect the charges.

The noble Lord, Lord Snape, also asked if, under the directive we have to offer periods that are appropriate for the trip being made. If we offer only six-month or annual levies to foreign drivers we will contravene the European directive. He asked about the number of foreign vehicles and I can tell him that 3.6% of miles driven by HGVs in the UK are by foreign vehicles. For HGVs of 12 tonnes and over, the percentage is higher. The noble Lord, Lord Wigley, asked about revenue in VED. All levies or fines go into the Consolidated Fund, as we discussed. There are no plans for hypothecation, as the noble Lord suggests, but we will ensure that VOSA, as the primary enforcement agency, will have sufficient resources to enforce the scheme.

I am grateful for the helpful interventions from the noble Lord, Lord Davies, and for his support for the Bill. He asked me about cabotage. The Bill does not change the rules on cabotage but it does do a little to level the economic playing field. It is a difficult problem to deal with. I am delighted that the Bill has been so positively received. It has been long called for by industry and others from across the political spectrum, and I am delighted to be taking it through the House.