National Infrastructure Commission: Baseline Report
Debate between Lord Berkeley and Viscount Younger of Leckie
Viscount Younger of Leckie (Con)
My Lords, I congratulate the noble Lord, Lord Berkeley, for securing this debate. He is known with great respect throughout the House for his pursuit of certain causes célèbres, including matters relating to transport to the Isles of Scilly. I also know he is a long-standing advocate for the benefits of infrastructure and his speech indicated his clear focus on all the key issues, many of which I will be attempting to touch on this afternoon.
The Government recognise the transformative possibilities of infrastructure benefit here. That is why we have committed £130 billion to economic infrastructure since the publication of the National Infrastructure Strategy last year. However, it is fair to say that in past decades and under past Governments, the UK’s infrastructure has been plagued by stop-start public funding and policy uncertainty that has conspired to undermine private investment. In 2015, to help resolve these issues, the Government established the National Infrastructure Commission—which I will refer to as the NIC—to provide independent, expert advice. My noble friend Lady Neville-Rolfe was right to ask why it took so long. I hope to reassure the noble Lord, Lord Tunnicliffe, that the Government have a robust approach to infrastructure. We are focused not merely on capital spending but on long-term infrastructure planning, improving project delivery and supporting private investment. I will try to touch on those points as I go through my remarks.
I remind your Lordships of the crucial role of the NIC’s first national infrastructure assessment. Published in 2018, it set out a recommended long-term strategy for the country’s infrastructure over the next 30 years. That work directly underpinned our National Infrastructure Strategy, which we published last year. Alongside the strategy, the Government published their formal response to the commission’s 2018 recommendations, partially or fully endorsing the vast majority. Already those recommendations are becoming reality. For example, earlier this year we launched the UK Infrastructure Bank in Leeds, which is expected to unlock more than £40 billion-worth of infrastructure investment. Just over a month ago, the UKIB made its first investment with a £107 million loan to Tees Valley Combined Authority. Only yesterday we announced its first private sector investment, in subsidy-free solar energy.
I turn to the baseline report for the Second National Infrastructure Assessment, which is of course the main subject for today’s debate. The report highlights some areas where the Government have made significant progress, so let us start with that. First, on the delivery of gigabit-capable broadband, I mention briefly that, only yesterday, my flat was upgraded to full-fibre broadband, and the speed is much faster—that is just a bit of self-indulgence. The report draws attention to the fact that coverage is now at over 62% compared to just 10% in November 2019. The noble Baroness, Lady Bakewell of Hardington Mandeville, mentioned that rural broadband connectivity is lagging behind. The Government recognise the importance of gigabit-capable connectivity to people across all areas, but particularly in rural parts. We have committed £5 billion to support gigabit-capable coverage in the hardest-to-reach-areas where possible, so that is an ongoing programme and the noble Baroness raised a good point.
Secondly, on the transition to renewable forms of energy, the report points out that the share of electricity generated from renewable sources has grown from less than 10% in 2010 to almost 40% in 2019.
Thirdly, on our ambition for electric vehicles, the report mentions the Government’s pledge to end the sale of new petrol and diesel cars and vans in 2030, with all new vehicles required to be 100% zero emission from 2035. The noble Baroness, Lady Randerson, stated that there was not enough funding for buses along the same theme. I reassure her that £3 billion of new funding over this Parliament will be dedicated, to double the amount given since the 2015 spending review levels. The £525 million for zero-emission buses in this Parliament is in addition to wider support, including a green uplift in the bus services operator grant, and £1.2 billion of dedicated bus transformation funding.
The noble Baroness, Lady Randerson, also suggested that more needs to be done on long-range charging and charger ratios. The Government are making significant investments in electric vehicle charging, including £1.3 billion at the spending review 2020. That includes funding for a rapid changing fund to reduce people’s anxieties around long-range charging by rolling out thousands of rapid charges across our strategic road network. The UK has more rapid chargers per 100 miles than any country in Europe, according to a report. However, of course the noble Baroness is right to make that point, and there is always more to be done there—we all know that as drivers on our roads.
Fourthly, on drought resilience, which was raised. The report underlines that we have endorsed the commission’s recommendation that we increase drought resilience to reflect a one-in-500-year event.
Another positive aspect of the report is the NIC’s social research, which was raised by the noble Lord, Lord Berkeley. Understandably, people will always call for more and better infrastructure. However, this research shows growing public confidence that infra- structure will meet people’s needs over the next 30 years—this is perhaps excepting the views on net zero raised by the noble Lord. I will need to check back on that.
Of course, we recognise that the report also highlights some concerns, including nine key challenges on which the NIC will focus in its second national infrastructure assessment. I want to focus my remarks around three important elements of these, again raised during this short debate: net zero, flooding and transport.
First, although net zero was mentioned in rather positive terms by the noble Lord, Lord Berkeley, we recognise the report’s concerns about our journey to net zero, including in respect of decarbonising our electricity system and heating. That is why we have recently published our net-zero strategy, setting out how we plan to achieve our 2050 goals, in particular by leveraging up to £90 billion of private investment in green infrastructure by 2050.
The Government have also published the Heat and Buildings Strategy, which lays out our vision for a sustainable and affordable transition to a low-carbon heating sector. We are providing £3.9 billion over the spending review period for heat and buildings decarbonisation, including £1.8 billion for low-income households and £450 million for the new boiler upgrade scheme, which financially incentivises home owners to install heat pumps.
We have also provided significant funding to decarbonise transport. This includes confirming £6.1 billion at the spending review to support the policies and strategy in the transport decarbonisation plan. We have invested £620 million in the transition to EVs, building on the £1.9 billion committed at the previous spending review.
The noble Lord, Lord Berkeley, and my noble friend Lady Neville-Rolfe stated that there was no road map for net zero and that the UK was not reducing emissions fast enough. I note those two points. In response, I would say that the UK reduced emissions faster than any other country in the G20 between 1990 and 2019. The UK reduced its greenhouse emissions by 44% compared to just 5% for the G7 as a whole. In June 2019, the UK became the first major economy to legislate for an end of contribution to climate change by 2050. As I mentioned earlier, the recently-published net zero strategy sets out a clear pathway to reach net zero and level up the UK by supporting up 190,000 jobs in the mid-2020s and up to 440,000 jobs in the 2030s.
Lord Berkeley (Lab)
On progress on greenhouse gases and zero emissions, where does the into-the-UK part of international aviation come in this? At the moment, I get the impression that it is dumped and seen as not part of our problem. It is part of our problem.
Viscount Younger of Leckie (Con)
I agree with the noble Lord that it is part of the problem. I suspect that he may be referring to the air passenger duty and other matters. I shall write separately to him on that important matter, because I think it is fair to say that there is a balance to be struck between allowing people to travel and being sure that our aeroplane sector is fit for purpose in terms of achieving our climate change goals. I think that was probably the gist behind his question.
On flooding, we recognise that action is needed to improve surface water management as flood risk increases, so we have commissioned the NIC to conduct a study into the management of surface water flooding in England, including the role of nature-based solutions. In addition, the Government have updated their partnership funding arrangements, enabling more surface water schemes now to be delivered via their £5.2 billion investment programme.
Finally, I turn to urban connectivity, as part of the wider transport issues that I mentioned earlier. We recognise the challenges in respect to this highlighted by the report. That is why in the Budget we committed £5.7 billion over five years for London-style integrated transport settlements that will transform local networks in eight English city regions, and we have announced £1.2 billion over the spending review period for bus transformation deals.
The noble Lord, Lord Berkeley, asked whether the Government should consider the challenges and costs of delivering major infrastructure projects. He is quite right to highlight this. That is why the Chancellor set up Project SPEED to ensure that spending decisions are informed by deliverability concerns.
Moving quickly to next steps—with the Committee’s indulgence, I will go on beyond my time, but not too far—our work to create an infrastructure revolution is a remarkable cross-government effort. The Government have an established process for formally responding to the NIC’s recommendations. Once it has published the second national infrastructure assessment in the second half of 2023, we will respond as soon as practicable, although, as I have shown today, we are already engaging on these issues.
The noble Baroness, Lady Bakewell of Hardington Mandeville, asked about flood defences and where the £5.6 billion is being invested. Funding is distributed consistently across the country to wherever the risk is greatest and the benefits are highest. Defra published its flood and coastal erosion risk management investment plan in July 2021, as she may know. It provides an indicative regional breakdown of spend, including between £620 million and £750 million of investment in the north-west and £680 million to £830 million in Yorkshire and the Humber.
The noble Lord, Lord Tunnicliffe, asked about funding and urban connectivity. The Government have provided £4 billion of additional emergency funding to support TfL through the pandemic to address urban congestion. We have announced £5.7 billion to support transport networks.
I will conclude with a few ad lib-type remarks, as I want to pick up on an interesting point made by the noble Lord, Lord Berkeley, about our reflection on going to Waitrose to pick up a box of matches. We should be sure, as part of this debate on the NIC, of the vision we are looking at. This is probably not government policy, but we should look ahead—probably not too far—at how we might get our box of matches. Surely we would order a drone, which would deliver it to us. Or, if we were going to go to Waitrose, we would talk to our watch and ask a car—not our car but any driverless car—to come to our door. We would then get into the car with a coffee and a newspaper, be driven to Waitrose to buy our box of matches and then be driven back. The car would then disappear into the ether. We would then take our box of matches—perhaps rather cynically, I wonder what it might be for. Perhaps it is to light your fire in the drawing room, which adversely affects CO2, so maybe we should not go there. Anyway, the serious point is that we need to think quite positively about the changes that will definitely come to the way that we live. The noble Lord, Lord Berkeley, spoke about society and our way of life. He makes an extremely good point.
To conclude, this is an extraordinary moment—
Ajax Programme
Debate between Lord Berkeley and Viscount Younger of Leckie
Viscount Younger of Leckie (Con)
My noble friend makes a very good point. Perhaps I can add to what he was saying: this project represents the biggest single order for a UK armoured vehicle for over 20 years. Incidentally, the project supports approximately 4,100 jobs across more than 230 UK suppliers. It is now in its production and support phases, with the Army having taken formal delivery of the first Ares capability drop 1 vehicles in July 2020. However, it is more than that, as my noble friend said. This is a new and larger vehicle. It is modular and, over a predicted 30-year lifespan, it will be capable of being built on. It will be the backbone of the future digitised modern force, with unparalleled protection levels, incorporating hard-won lessons from recent conflict in Afghanistan and Iraq. Perhaps that adds to the complexity of this matter. I reassure the House again that these outstanding issues need to be addressed.
Lord Berkeley (Lab) [V]
My Lords, I also welcome my noble friend Lord Coaker to the Front Bench. His initial question today indicates his enormous expertise.
I am surprised that we have got this far with this new development. We have seen the new report, apparently from the independent Infrastructure and Projects Authority, which says that this vehicle cannot reverse— perhaps we do not need to any more—fire on the move or go more than 20 miles an hour, and that the soldiers are limited to an hour and a half inside it because of the noise. What use is that on a battlefield? Will they put up a white flag and change staff before they continue?
I remind the House that the IPA has said that the delivery of the project “appears to be unachievable”. That is rather different from what the Minister has just told the House, which is that there are no plans to delay and that we will go on with it and, presumably, continue with the order of 580 tanks, which will all be deployed this year. Is it not time that we cancelled the whole thing and saved the Government, the taxpayer and ourselves several billion pounds of taxpayers’ money?
Viscount Younger of Leckie (Con)
I need to put the noble Lord right on a number of points. First, on the IPA report, I remind the House that this came out as a result of a leak, and a full inspection is going on as to how that leak came out. On the speed restriction, I reassure the noble Lord that Ajax is capable and will be capable of speeds of up to 70 kph, but an initial limitation of 30 kph was introduced as a control measure for newly qualified Household Cavalry Regiment crews. That is in line with what I said earlier about this being the demonstration phase of this enormous project. On the rear step, the vehicle is capable of reversing over a vertical 0.75-metre step. Following some initial issues, this was restricted, again for the same reasons. Similarly, on the noble Lord’s point about firing on the move, the vehicle can and does fire on the move. The MoD has yet to certify the platform to perform this, which is also in line with what I said earlier. I reassure the House again that this major project is on track and will be delivered on time.
Rail Disruption: Social and Economic Impacts
Debate between Lord Berkeley and Viscount Younger of Leckie(3 years, 7 months ago)
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Lord Berkeley (Lab) [V]
My Lords, I am grateful to the noble Baroness, Lady Randerson, for asking this Question. I understand from the technical press that 86 out of 93 of these affected trains have either a failure of the yaw dampers, which connect the bogie to the body shell—they are quite important parts—or the lifting points, with cracks of up to one foot long. On the routes affected this clearly means that there are very few, if any, trains. These are trains designed and procured by the Government—
Viscount Younger of Leckie (Con)
I am sorry to interrupt the noble Lord, but could he keep his question succinct?
Late Payments
Debate between Lord Berkeley and Viscount Younger of Leckie
Lord Berkeley (Lab)
My Lords, this is an old problem and your Lordships have been debating it for years. As I read it, the Government’s latest paper is a clear improvement, but while I welcome the fact that five businesses have been removed from the code and 12 are being suspended, that is a very small number as compared with the problems that other businesses have faced. I assume, although perhaps the Minister can confirm this, that the five removed businesses and 12 suspended ones are very large concerns. If they are not, someone has lost track of the large ones which I think are causing many of the problems.
The code needs to be enforced, as mentioned by other noble Lords. Have the Government considered the rather more nuclear option, which may be necessary, of ensuring that companies which are removed from the code are also removed from the tender list for major government contracts for a certain period of time? That would make them sit up and think, because they would lose business. I know that that would need to be worked out and monitored carefully, but it would affect their bottom line. Being named as having been removed from the code may well simply be shrugged off. I will be interested to hear the Minister’s response.
Viscount Younger of Leckie
To answer the second question, it is the case—although I do not have the figures here—that if a company on a public contract does not pay on time, it will be removed from further contracts; that is already there. He asked me to point out names; I do not have the full list here. As for naming and shaming, he will know that Holland & Barrett and G4S are in the public domain as having been thoroughly reprimanded for their poor payment practices. I also know that some companies, before being named, have realised that they were on the brink of going the wrong side of the line, as it were, and have voluntarily taken action. We believe that this is working and that the voluntary approach is right.
Bus Services Bill [HL]
Debate between Lord Berkeley and Viscount Younger of Leckie(8 years, 5 months ago)
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Lord Berkeley
My Lords, I am very grateful for the Minister’s explanation. This is another occasion when I am slightly concerned that the Minister has answered my amendment before I have spoken to it, but that is the way we have it here. In this case I do not complain; I shall read what he said very carefully and I suspect it will be fine. I do not propose to move my amendment.
Housing and Planning Bill
Debate between Lord Berkeley and Viscount Younger of Leckie
Lord Berkeley (Lab)
My Lords, I will speak to Amendment 84D, which has been put in this group. I have no problem with that. In my research for what I shall say, I also discovered quite a lot of involvement of the noble Lord, Lord Young, from a long time ago, which I shall come to in a few minutes.
The purpose of the amendment is to bring the tenants of the Duchy of Cornwall in line with other tenants of other landlords and their rights to buy. First, it repeals Section 33(2)(c) of the Leasehold Reform Act 1967. Secondly, it repeals Section 94(11)(c) of the Leasehold Reform, Housing and Urban Development Act 1993, concerning Crown land. I could read out the relevant clauses, but I expect noble Lords can understand what they are all about and if they want to read them, they can.
The amendment is also part of a Private Member’s Bill that I put in for the ballot last May. It did not come very high, so I thought it would be useful to raise the subject today, because it is relevant. The purpose is to examine the exemptions and immunities from certain Acts of Parliament which do not extend to the Duchy of Cornwall. Individuals who hold leases from the Duchy do not, unlike other persons who hold leases from private estates, have the right to enfranchisement. The purpose of the amendment is to give them the same rights as if they were leaseholders in England and Wales.
The first thing to discuss is whether the Duchy is a private estate or not. There has been an awful lot of debate about this. The Government, in many Written Answers over the years, have said that it is a private estate. On 9 June 2009, Bridget Prentice MP said:
“In general terms, the Duchies of Cornwall and Lancaster are private estates in that they belong to the heir apparent and the monarch respectively in their private capacities”.—[Official Report, Commons, 9/6/09; col. 528W.]
In a Written Answer to Andrew George MP, on the same date, Harriet Harman said:
“The Duchy of Cornwall is a private estate that funds the public, charitable and private activities of the Prince Of Wales, the Duchess of Cornwall, Prince William and Prince Harry”.—[Official Report, Commons, 9/6/09; col. 528W.]
There seems to be little debate about that. In a case brought by Michael Bruton on the Helford river, which I think is still being debated in a tribunal, having been to the European Court of Justice and back, the argument was that the Duchy of Cornwall did not have to do an environmental impact assessment on an SSSI over installing cages in which to grow oysters because it was a private estate. Michael Bruton argued that it was a public estate and the case has still not been resolved. While all this is going on, a large number of tenants are not able to buy their own houses, in contrast to those who are tenants of somebody else.
I will now give some examples from the island of St Mary’s in the Isles of Scilly, which I think apply elsewhere. They go back to the origins of the 1967 Leasehold Reform Act, which said that the Crown was exempt from this particular clause, but a voluntary undertaking was given to Parliament through a Written Answer by Mr Fred Willey, who was Secretary of State for Land and Resources, in 1967. My noble friend probably remembers that. The Answer does not mention the Duchy of Cornwall but refers to Crown leases. It stated that the Crown authorities will agree to enfranchisement,
“except that enfranchisement will be refused where the house is of special architectural or historic interest … or adjoins such houses and is important in safeguarding them and their surroundings”.—[Official Report, Commons, 31/6/1967; col. 42W.]
In 1992, during of the passage of what became the 1993 Act, a further Written Statement was made to Parliament, by Sir George Young, as the noble Lord then was, which was materially different from the 1967 Answer. He stated that, regardless of the exemption under the Act, the Crown authorities would agree, subject to specified conditions and exceptions, to the enfranchisement under the same qualifications and terms which applied by virtue of the 1967 Act and the 1993 Act to lessees held from other landlords. The relevant exception affecting the Isles of Scilly states that,
“where the property or area in which it is situated has a long, historic, or particular association with the Crown … the areas referred to in paragraph 3(iii) include the Off Islands within the Isles … the Garrison on St Mary’s and parts of central Dartmoor”.—[Official Report, Commons, 2/11/1992; col. 19WS.]
This indicated that the 1967 test had been materially changed. There appears to have been no consultation about this and no debate in Parliament. Perhaps other noble Lords who were in the House of Commons at the time can correct me on this. It is not even very clear whether Members of Parliament voting on the Bill were aware that there had been a material variation to the Crown undertaking. It is not clear whether it was drawn to the attention of the noble Lord, Lord Young—maybe he will have views or maybe he cannot remember it. For the Crown to claim that it was entitled to refuse enfranchisement, the Crown no longer had to show that the property was of special architectural or historic merit. It now became clear that if it was in an area which had a long historic or particular association with the Crown, that was good enough.
There is an awful lot more in this story, which I will not bore the Committee with now except to say that the situation is rather confused. We can sit or stand here to debate this and say, “It doesn’t really matter because there are many other things going on to do with the Crown and the Duchy which need careful discussion”, but we have to remember that people who have bought a lease are affected by this: if the lease has come from one particular landlord, they cannot buy it, whereas if it has come from another landlord, they can. That is very unfair.
As I think I have demonstrated—there are many other documents that we can use to demonstrate it—the Duchy in this case is a private landlord, so the argument that its tenants should have an exemption from the right to buy seems to me very unfair. We know that leaseholds are a diminishing asset—that is the whole point of them—but just because somebody owns a house on the Isles of Scilly, in Cornwall or somewhere else of no particular architectural merit, why should they be exempt? The only safe way is to remove this exemption, which is why I tabled this amendment.
Viscount Younger of Leckie
That is a possibility, and I will bring that into the considerations that we will undertake prior to Report. I thank the noble Lord for his point. I hope that my noble friend will agree to withdraw his amendment and the noble Lord, Lord Berkeley, will not press his later.
Lord Berkeley
I am very grateful to the Minister for his answer, but in the exception mentioned—when properties are of special architectural or historic interest or adjoin such houses and it is important to safeguard them and their surroundings—the definition of whether a lease could be given up is very wide. Many of the buildings which I believe are the subject of this debate are in fact 1960s houses. They are probably very nice houses but they are not in the same category as the Garrison or the off islands or anything like that. It seems that there is no appeal in this process. The Duchy’s decision is final and that is that—you like it or lump it. Can nothing be done about it?
Viscount Younger of Leckie
I would not put it in quite that way. There are no plans to make changes, but the noble Lord will know that we are talking about properties that are considered to have a long historical association with the Crown. I will investigate further and if I can furnish the noble Lord with more information, I will certainly do so in the form of a letter.
Drones
Debate between Lord Berkeley and Viscount Younger of Leckie
Lord Berkeley (Lab)
My Lords, it was interesting that the Minister said that this is an exciting project. It certainly is an exciting project to keep under review while drones might get into the suction of an air engine when a plane lands at Heathrow. It is nice to know that it is under review, but what can the Government do about catching these drones, short of firing missiles at them?
Viscount Younger of Leckie
Indeed. This is an important issue because the technology is growing at such a pace. We are undertaking a review of how drones will be controlled from a safety perspective, while looking at the opportunities at the same time.
Railways: Trans-Pennine Rail Line
Debate between Lord Berkeley and Viscount Younger of Leckie
Viscount Younger of Leckie (Con)
My Lords, I congratulate the noble Lord, Lord Shutt, on securing this debate on the trans-Pennine rail line. I am very glad that he has pursued the debate, as I detected a slight hesitation in his speech as a result of the so-called “unpause” in September.
This has been a short but useful debate, with many very good contributions. I understand the depth of concern and why the debate was secured. A number of questions were raised—some quite technical from the noble Lord, Lord Rosser—so if I run out of time and am not able to answer them, I pledge to write to the noble Lord and copy in all other noble Lords who have taken part in this debate. I reassure the noble Lord, Lord Scriven, that this is not just warm words from the Government; there is some action. I hope that I will be able to prove that in the next 10 minutes or so.
I start by outlining the wider context of this debate. This Government have recognised that successive Governments have failed to invest adequately in transport both in the north of England and across the wider UK, and have now chosen to invest in transport for the long term. The transformation has already started. I am glad that some noble Lords recognised this in the debate, particularly the noble Lord, Lord Shipley. From March this year, electric trains were introduced on services in the north-west. Manchester Victoria station, once called the worst station in the UK, has been transformed. Train manufacturing has returned to the north-east, with Hitachi’s new £82 million factory in Newton Aycliffe, County Durham. This is creating more than 700 jobs and will support thousands in the UK supply chain.
Noble Lords will be aware that yesterday the Government announced an exciting new development, as was mentioned in the debate. The new northern and trans-Pennine rail franchises will see transformative improvements to passenger rail services in the north over the next decade. Rail journeys across the north will undergo the biggest transformation in decades, with an unprecedented package of improvements that goes far beyond the requirements we set out earlier this year. Together, these operators will oversee a very significant £1.2 billion boost to rail services with brand new, modern trains, more seats, more services and a host of improvements to deliver a modern, 21st-century passenger experience. This will include: the introduction of more than 500 brand new carriages; the removal of the outdated and unpopular Pacer trains from across the north; and space for 40,000 extra passengers at the busiest times.
I turn to the facts surrounding the pause of the trans-Pennine line and, indeed, the essence of this debate. I acknowledge the point made by the noble Lord, Lord Shutt of Greetland, about the doubt over the date of the 2022 upgrade of the trans-Pennine line. It is true that at a Transport Select Committee hearing in March 2015 the Secretary of State for Transport specifically acknowledged the slippage of the trans-Pennine electrification scheme from 2019 into the early 2020s. There is no doubt about that.
As noble Lords will be aware, on 25 June the Secretary of State announced that important parts of Network Rail’s programme for improving Britain’s railways were costing more and taking longer than planned to deliver. Sir Peter Hendy, who has a proven record of delivering on major transport challenges, was appointed as the new chair of Network Rail. The Secretary of State asked him to replan the whole of Network Rail’s improvement programme for England and Wales. Part of that announcement was that the scheme to electrify the trans-Pennine rail line connecting Manchester to Leeds and York via Huddersfield would be paused. Pausing the trans-Pennine electrification scheme did not mean that the Government’s commitment to delivering the project had faltered or stopped. I hope that I can reassure the noble Lord, Lord Rosser, to that extent.
In fact, the pause gave Sir Peter the opportunity to develop a better plan for this important route—what we are now calling the trans-Pennine route upgrade. On 30 September, work on the trans-Pennine scheme officially resumed. On 25 November, Sir Peter published his more robust plan for the Network Rail enhancement programme, to ensure that every part of Britain benefits from a growing economy. The noble Lord, Lord Berkeley, raised the importance of freight, which has not been mentioned much in this debate. This plan recognises the importance of the strategic freight network.
Let me be clear that the previous plan for the trans-Pennine line changed only the power supply of trains; it did not include the track work required to make journeys faster or for more frequent trains. The new plan for the full route upgrade will by 2022 make journeys faster, taking up to 15 minutes off today’s journey time between Manchester and York, right across to the east; permit more frequent fast trains—up to six fast trains an hour with limited stops between Manchester and Leeds; reduce crowding by allowing longer trains to run; and improve performance.
The original plan offered poor value for money. It included only electrification of the existing track, which brought limited benefits to passengers. The passenger benefits secured by the new upgrade proposal are expected to make the scheme medium to high value for money. During my briefing I asked in depth what was meant by “value for money”—about which many noble Lords will have more experience than me—but rather than go into that now I am more than happy to write to noble Lords with the information.
The next step in developing the new plan for the trans-Pennine route upgrade is the detailed design and planning of the works over the next two years. We are pushing on with works on the ground this coming January to improve the Calder Valley route from Manchester to Leeds via Rochdale and Bradford. These improvements will initially allow the Calder Valley to be used as a diversionary route for trans-Pennine services normally using the route via Huddersfield while it is closed for major work to enable the six tunnels along the route to accommodate the overhead electric wires. This includes the three-mile long Standedge tunnel, the fifth longest tunnel in the UK, with which I am sure noble Lords are familiar.
Noble Lords will no doubt be aware of the northern powerhouse. Our aim is to rebalance the decades-old north/south divide. Much has been said about this in the House over the past few months. Transforming transport connectivity across the north is integral to this ambition. The noble Lords, Lord Shutt, Lord Scriven and Lord Berkeley, raised the importance of connectivity. Connectivity, as I think I mentioned earlier, is at the heart of the northern powerhouse: joining the major cities of the north to bring together an economic powerhouse to rival London and rebalance the economy. There will be massive investment in rail capacity, delivering 500 new trains of all types—diesel, bi-mode and electric—space, as was mentioned earlier, for 40,000 more passengers, greater frequency and more services. The new franchise is just the start of that. This will start to deliver services to the north and needs to be allowed to be built upon by our plans for the northern powerhouse rail, previously called HS3.
We are working closely with Transport for the North, Network Rail and HS2 Ltd to develop our rail plans for the 2020s and beyond. Noble Lords might not be surprised to learn that we now like to call this the northern powerhouse rail network—there is probably an acronym for that. We have also commissioned HS2 Ltd to look at options for improvements to rail travel to Scotland, which we will consider next year.
I would like to address some of the questions raised. The noble Lord, Lord Shipley, acknowledged that we have the elements of a plan for transport in the north but need to do much more work. He is absolutely right. In the Autumn Statement, the Government announced £10 million a year for the life of this Parliament to fund the new Transport for the North organisation. It is tasked with producing a comprehensive northern transport strategy.
The noble Lord, Lord Shutt, talked about what was recently said about HS3 and asked what the Government’s position is. The Government have, jointly with Transport for the North, set out their vision for the transformation of the east-west rail connections across the Pennines. As I mentioned earlier, we now call this the northern powerhouse rail network. With Transport for the North, we have commissioned Network Rail to examine how we can deliver a 30-minute journey time between Manchester, Leeds and Sheffield, with links onward to Hull, Newcastle, Liverpool and, importantly, Manchester Airport. We will publish the findings of this work early next year.
The noble Lords, Lord Shutt and Lord Scriven, mentioned the electrification of the Calder Valley line and the south trans-Pennine route. The electrification of the Calder Valley line has been identified as a potential scheme by the electrification task force for the control period starting in 2019. Network Rail is currently considering the recommendations and will publish its electrification strategy in the next year for funding consideration by the Government after 2019.
The noble Lord, Lord Shutt, raised the issue of the design of the Leeds HS2 station. The Government have asked Sir David Higgins to look at the options for Leeds and its links to Leeds city station, and to find a scheme that will stand the test of time.
The noble Lord, Lord Shipley, asked what the Y aspect of HS2 would look like. The Government and Transport for the North are working very closely with Network Rail and HS2 Ltd to address these very questions.
The noble Lord, Lord Rosser, asked whether, had the National Infrastructure Commission existed before the election, the poor planning of the project—as he put it—would have been avoided. However, he will know only too well that his ex-colleague, the noble Lord, Lord Adonis, has been asked to chair the National Infrastructure Commission, with a clear remit to advise on the priorities for transport and, indeed, other infrastructure investment.
I hope that I have made it clear during the debate that this Government are both ambitious and practical about improving transport in the north of England. This is supported by yesterday’s announcement of a comprehensive plan for the railways in the north. I hope I have got it across that we have taken decisive action to ensure the trans-Pennine line electrification goes ahead with a better plan than before. Rail passengers will have a better service that will do far more to support the northern powerhouse economy.
In summary, and to conclude, we already have electrified the oldest inter-city railway between Liverpool and Manchester earlier this year; we have a clear view towards a better scheme, the trans-Pennine route upgrade, to be completed by 2022; we have announced the new trans-Pennine and northern rail franchises, with a transformational programme up to the mid-2020s; and we have taken steps, through establishing Transport for the North, for the north itself to set out a clear view of its transport priorities to complement the opening of HS2 to Manchester and Leeds in the early years of the 2030s. As has been acknowledged, this is just the start and there is much work to be done. Our journey has started, and I thank noble Lords for supporting the project so far.
Lord Berkeley
I welcome much of what the noble Viscount said. Five or six fast trains an hour across the Pennines sounds really good for passengers, but you will not have any stopping trains in that pattern unless you have more tracks. Perhaps the noble Viscount could write to us about the extra tracks that will be necessary to accommodate stopping trains and freight.
Carbon Emissions
Debate between Lord Berkeley and Viscount Younger of Leckie
Viscount Younger of Leckie
In taking a holistic view my noble friend makes a good point. Under the UK’s Climate Change Act we are committed to cutting overall emissions by 80% by 2050. This extends the argument beyond housing. Carbon budgets provide the framework to put us on a cost-effective pathway to meeting our legally binding 2050 target.
Lord Berkeley (Lab)
Another manifesto commitment that will effectively increase the amount of carbon is the Government’s commitment to phase out onshore windmills. We can debate why that should be but the proposed planning system will effectively phase them out. Is the Minister aware that it will also reduce the number of jobs in the industry? Is he aware that a company called Mabey in Chepstow announced its closure last week, with the loss of 125 jobs, as a direct result of the fact that no more masts will be manufactured for windmills?
Viscount Younger of Leckie
I do not know about the examples that the noble Lord mentioned, but in relation to windmills, or wind farms, decarbonisation must work for the local communities where infrastructure is built. We remain focused on getting the best deals for bill payers, to make these schemes work better.
Airports Act 1986 (Amendment) Bill [HL]
Debate between Lord Berkeley and Viscount Younger of Leckie
Viscount Younger of Leckie (Con)
My Lords, I offer my congratulations to the noble Lord, Lord Empey, on securing a Second Reading for his Airports Act 1986 (Amendment) Bill. The Bill’s aims are admirable. In essence, it proposes powers for the Secretary of State for Transport to direct airport operators, in the interest of national air infrastructure, to ensure adequate services between the UK’s hub airport, Heathrow, and regional airports.
By way of background, it is important to emphasise that the UK has excellent aviation connectivity. The five airports serving London offer at least weekly direct services to over 360 destinations worldwide, more than Paris, Frankfurt or Amsterdam. We have the third largest aviation network in the world after only the USA and China. Although Dubai International Airport has overtaken Heathrow to become the world’s top airport for international travel, it is still behind Heathrow in overall passenger numbers: some 70.5 million passengers travelled through Dubai’s terminal last year, compared with over 73 million at Heathrow. As has been mentioned today, the UK is also well connected by air domestically, with at least 54 weekly air services between UK cities in 2014, and 13 cities with services to a least one London airport. This includes seven cities with services to Heathrow.
The previous Government’s aviation policy framework sets out the importance of aviation to the UK economy and the Government’s proposals on how aviation can deliver for the UK economy while meeting its environmental obligations, both global and local. It stated that airports are in some ways cities in themselves, creating local jobs and fuelling opportunities for economic rebalancing in their wider region or area. New or more frequent international connections attract business activity, boosting the economy of the region and providing new opportunities and better access to new markets for existing businesses.
The aviation policy framework also recognises that airports in Northern Ireland, Scotland, Wales and the English regions make a vital contribution to local economies, and that air connectivity across the UK—and to the UK’s hub airport, Heathrow—is very important. As the noble Lord, Lord Davies, said, this is particularly so for Northern Ireland, given its geographical circumstances, which means that air connectivity for Northern Ireland is an essential means of ensuring its continued links to the remainder of the UK, and is of course crucial for its developing economy. I therefore acknowledge the noble Lord’s concern that the Government have limited powers—for example, in the public service obligation, to which I shall refer later—to intervene to ensure that regional air connectivity is maintained in an air services market that operates almost entirely on commercial lines. As the noble Lord, Lord Berkeley, succinctly put it, they are largely in private hands.
Ultimately this Government believe that air passengers are best served by a commercial airline market that is able to operate in a competitive environment. This allows airlines to determine the routes that they operate, and from which airports, based on their assessment of routes’ viability. In this context, it remains possible that airlines currently operating domestic air services between Heathrow and the UK’s regional airports could in future decide to reduce or withdraw them and use the relevant Heathrow slots for alternative services.
Noble Lords will know that the International Airlines Group, IAG, owner of British Airways, is in negotiations to acquire Irish airline Aer Lingus. Both British Airways and Aer Lingus operate services on the Belfast-London route, and the negotiations have raised some concerns that the merger may see a rationalisation of services. However, under the proposed acquisition deal, IAG has agreed with the Irish Government to include a number of connectivity commitments on services between Irish airports and Heathrow, as well as between Belfast and Heathrow.
The noble Lord, Lord Empey, has suggested that some form of intervention is necessary to protect such services from commercial market pressures that could see them discontinued not just to and from Northern Ireland but from airports in Scotland and the English regions. However, there is healthy demand for services from airports in Northern Ireland, Scotland and the English regions to London. For Northern Ireland, in 2014 there were nearly 1 million passenger journeys between the two Belfast airports and the five main London airports, of which nearly 350,000 were between Belfast and Heathrow. British Airways and Aer Lingus together operated an average of 59 flights per week between Belfast and Heathrow.
Airline competition is also provided by services that operate from Belfast airports to the other London airports; Belfast City Airport has services to Gatwick and London City airports, in addition to Heathrow. Belfast International Airport hosts services to Gatwick, Luton and Stansted airports. We see this demand as continuing, given that Northern Ireland is a competitive destination in its own right. Noble Lords may be surprised to hear that outside London Northern Ireland is the leading UK region for attracting inward investment. This success has been seen across a range of knowledge-intensive sectors. Belfast in particular is the world’s top destination city for financial services technology investments. This continued success has led to over 800 international companies locating in Northern Ireland, employing in excess of 75,000 people. The level of demand that this generates justifies the daily services that both Belfast airports maintain to London and to other European airport hubs and their connecting networks. Belfast International Airport has existing services to Amsterdam Schiphol and Paris Charles de Gaulle, and just last month Belfast City Airport commenced a service to Schiphol.
On the long-haul front, Belfast International Airport has a daily direct flight to Newark, New Jersey, operated by United/Continental airlines. It recently celebrated its 10th year of operation, flying nearly 83,000 passengers. Later this month, Virgin Atlantic will begin operating a seasonal weekly flight to Orlando International Airport. Scotland is also well connected, with 62,000 flights in 2014 between Scottish airports and the five main London airports, carrying nearly 7 million passengers. Of these, around 25,000 flights—that is, 41%—were to and from Heathrow, carrying 3.1 million passengers.
In the broader UK context, the following airports in the English regions currently have air services to Heathrow. For 2014, the last full year of statistics that are available, Manchester had 8,500 flights, Newcastle 4,000, and Leeds-Bradford 1,900. In addition, Newcastle Airport had 500 flights to and from London Stansted and 1,200 to and from Gatwick. Again, the operators of these services have not indicated any intention to withdraw from them.
In the context of these healthy traffic levels on commercially viable and attractive routes, we do not consider that air connectivity between London and these airports is under threat. For the airlines, these domestic air services are important in feeding passengers through to their long-haul services from Heathrow. It is of course open to other airlines to introduce services to compete with incumbent airlines on these routes if they conclude that doing so would provide a commercial return.
Lord Berkeley
The Minister has explained that there are lots of services around the country, which is wonderful, but this Bill is actually about slots at hubs, whether at Heathrow or elsewhere. Is there a precedent anywhere else in Europe for slots being reserved in hub airports for regional services? I suspect there is not because there is no shortage of slots in most other airports. Could the Minister address the issue of slots? If it is peculiar to the UK, which I suspect it is, surely the European Commission should look at this with special favour.
Viscount Younger of Leckie
I do not have any statistics about slots around the European Union, but the noble Lord will be aware that the allocation of slots at EU airports is governed by the European Union and associated UK slot regulations. It is true that Heathrow has more of an issue because, as various noble Lords mentioned, it is at 99% capacity and other airports around Europe are at not such great capacity. Under the regulations, the process of slot allocation at Heathrow, Gatwick and other slot-co-ordinated airports in the UK is undertaken, as the noble Lord will know, by an slot co-ordinator entirely independent of the Government, the CAA or other interested parties. I will write to the noble Lord with details about other airports around the UK.
As I said, it is open to other airlines to introduce services to compete with incumbent airlines on these routes if they conclude that doing so would provide a commercial return. However, introducing provisions for the Government to direct the UK’s internal aviation market to ensure domestic services to a hub airport could set up distortive effects on airline competition and would be contrary to general EU and wider competition principles. Such intervention therefore carries a high risk of a legal challenge to the UK Government being raised with the European Commission by airport operators and airlines as well by the Commission itself. The consequences of a successful challenge would be substantial fines.
Government intervention to direct particular services from a regional airport to a hub airport would require the ring-fencing of specific take-off and landing slots at the hub. As the noble Lord, Lord Empey, understands, the UK’s major airports, including Heathrow and Gatwick, have constrained capacity, which I have just alluded to. They are therefore subject to EU slot regulations transposed into UK law. These regulations govern the allocation, transfer and exchange of slots at congested airports in the UK. Within these regulations there is some limited scope to allow for the ring-fencing of slots at a congested airport to serve a particular route, provided that this meets the criteria for a public service obligation. However, to do this there would need to be an unused slot at the congested airport. In Heathrow’s case, given that 99% of slots are currently used, as I said, it is unlikely that the regulations would enable slots to be ring-fenced.
Public service obligations are also governed by EU regulation and provide some scope to protect regional air services that may become economically unviable. They can be used to protect air services to airports serving a peripheral or development region or on low traffic routes considered vital for a region’s economic and social development. The aviation policy framework made clear that the Government would be inclined to support applications by devolved and regional bodies to establish PSOs that comply with the specific EU law to protect vital air connections between other UK airports and London and help economic and social development in peripheral regions.
The previous Government announced in the 2013 spending round that £20 million would be made available over two years until 2016 to maintain regional air access to London, where there was the probability that an existing air service would be lost, by establishing a PSO on the route. The 2014 Budget increased and extended this support, which means that government can step in where necessary to maintain existing regional air links to London. As the noble Lord, Lord Empey, has mentioned, the Government have already stepped in to secure the Dundee to London Stansted route—not to Heathrow, as a noble Lord mentioned—and more recently the Newquay-London air route, which the noble Lord, Lord Berkeley, mentioned, after its operator announced last year that it would no longer operate the route, and no other airline came forward to take it on commercially.
Cornwall Council provided evidence that the route met the EU PSO requirements and undertook a tendering process to find an airline to operate the route. Subsequently, in October 2014, the previous Government announced a four-year PSO funding deal for three weekday rotations and two weekend rotations between Newquay Airport and London Gatwick airport, providing certainty for the far south-west region. It is worth giving some background, because the Newquay-Gatwick service carried nearly 44,000 passengers in the first five months of operation, exceeding the projected take-up level by almost 10%. Therefore, it would be open to the devolved Governments in Northern Ireland, Scotland and Wales, and local authorities and other organisations in England, to apply to the Secretary of State for Transport to establish a PSO on a particular air route, should they feel that a business and legal case can be made that satisfies the PSO regulation.
There is no other mechanism for the Government to intervene in the allocation of slots at capacity-constrained UK airports. Noble Lords will therefore appreciate that under European and UK law, the potential for ring-fencing slots at Heathrow to protect regional services could be dealt with only by reference to the PSO rules alone. Again, that was raised by the noble Lord, Lord Berkeley.
One of the principal effects of the Airports Act 1986 (Amendment) Bill is therefore contrary to EU and UK slot regulations, because it would override the strict criteria and process by which European Governments can intervene in route operations. Again, the possibility exists that intervention to ring-fence slots at a hub airport in contravention of an EU obligation could lead to a successful legal challenge.
More generally, I remind noble Lords that a key part of the Government’s approach to aviation is to maintain the UK’s status as a leading global aviation hub as fundamental to our long-term international competitiveness and economic growth. We are also mindful of the need to take full account of the social, environmental and other impacts of any expansions in airport capacity. We therefore look forward to the publication shortly of the final report from the independent Airports Commission. Just to reassure the noble Lord, Lord Davies, it will indeed be published shortly. Once the Airports Commission has published its final report and set out its recommendations, it will be for government to consider the full body of work. We will look carefully at all the evidence and analysis before deciding on an appropriate timetable for a decision on increasing airport capacity.
The noble Lord, Lord Empey, raised the matter of the EU airports package, quoting that it was essential for regional airports to have connectivity to hub airports. The Government are aware of the European Commission’s proposed Better Airports package from 2011 and its slot provisions. Progress stalled in 2012 because of a lack of agreement over other matters. To give the noble Lord some reassurance, should an EU presidency decide to revive the package, the EU would be involved in the negotiations.
In summary, while I understand the noble Lord’s commendable motivations in proposing his Airports Act 1986 (Amendment) Bill, I must conclude, on the basis that its proposals could set up distortive effects on aviation competition and would run counter to EU and UK regulations on allocations of slots at congested airports, that the Government must express their reservations and will not be able to support the Bill into legislation. I know that the noble Lord considers this to be a highly important issue and, as the noble Lord, Lord Davies, said, that he has already undertaken a great deal of hard work at the European level to press for changes that will allow greater member-state intervention in maintaining regional air connectivity. I therefore respect his intentions to pursue the issue further with the European authorities.
Small Business, Enterprise and Employment Bill
Debate between Lord Berkeley and Viscount Younger of Leckie(9 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Viscount Younger of Leckie
I note the noble Lord’s point. I would like to illustrate some of the amounts that these pub companies invest. I mentioned earlier that they invest £200 million across the sector each year. One of the larger pub companies has estimated that, had the MRO been in place without an effective opt-out, the £30 million of capital investment which has taken place in the last 18 months would not have happened.
To illustrate how this investment affects individual businesses, another pub company recently invested £245,000 in one of their pubs in Nantwich in Cheshire. This investment created 10 jobs and took the turnover from £145,000 per annum to £330,000. A similar sum was invested in a pub in Wigan, which again boosted turnover from £250,000 to £345,000 and doubled the number of jobs. These are just two examples to add to the ones given earlier by my noble friend Lord Hodgson, of how tied pub companies invest in their estates every year to the benefit of both parties through the tied contract.
I conclude by saying that I hope the Minister has listened carefully to what I have said about the investment angle for pub companies, while not forgetting that we are talking about the livelihoods of tied tenants as well. That is just as important in terms of being fair.
Lord Berkeley
The noble Viscount, Lord Younger, has given two more examples to add those of the noble Lord, Lord Hodgson, of the happy tenants who have lots of money. He cited one company as investing £30 million in pubs which would not have invested if the MRO had existed. What assumptions is he making about the fair rent that would result from an adjudication under those circumstances? Is he assuming that the rent would stay the same or that it would go up to compensate for the profit that the breweries would no longer be making when they sell beer or soft drinks? The figure of £30 million is pretty meaningless without knowing on what assumptions it is based.
Viscount Younger of Leckie
I take the noble Lord’s point, but I spoke in support of my noble friend Lord Hodgson’s amendments on the grounds that there would be an exemption from the MRO.
Lord Hodgson of Astley Abbotts
The issue is that every company has a target return on capital. If it is to make an investment, it wants to make a return on capital and the company will set a target. The problem is that if you are going to invest your £30 million, you want to know what your return on capital will be. One issue that relates to return on capital is what will be the contractual relationship. Therefore, before you make your investment, you want to know what the end play will be, because that means that you can be assured—if it all goes well; it does not always go well—that you will get that rate of return on capital. That is the background to the figure that my noble friend is giving. Companies want to be certain that they have targets for the return on capital which they need to meet.
Lord Berkeley
I am sorry, my Lords, but I will try just one last time. The rate of return could just as easily be calculated on the basis of the rent that the tenant will be paying once he has been through the process, because that will be fixed and the company will know it. That is the rate of return, whether the company likes it or not.
Viscount Younger of Leckie
Having been listening to my debate, I should conclude. I should answer the question appropriately. The clause is intended to provide an exemption which would allow an unspecified time for agreement to be drawn up because of the perceived investment to be given by the pub company.
Tourism: Chinese Visitors
Debate between Lord Berkeley and Viscount Younger of Leckie
Viscount Younger of Leckie
We must do all that we can to keep visa application costs down, even though research backed by the tourism industry shows that visa costs and indeed the process for applying are not a significant barrier to in-bound Chinese tourists. It is true that the cost of a UK short-term visa is £78. A Schengen visa is less, at £50, although this cost is expected to increase when the biometric capture is included in the near future. A UK visa has biometric capture, which we regard as important for our security. It is worth pointing out that by 2030 China will have 1.4 billion middle-income consumers. There is therefore a great opportunity for us all to capture some of this market in the future.
Lord Berkeley
My Lords, does the Minister agree that comparing the whole of Schengen—more than 20 member states—with one country here and saying that their visa costs are a bit lower is not really the answer? Once one has bought a Schengen visa, one can go around all these states; just one visa is needed. Worse still, to get a visa to come to this country, Chinese people must give up their ID cards for eight weeks, I believe, which is quite serious. Is there not more that the Government could do to rebalance the problems of coming here compared with going to the continent?
Viscount Younger of Leckie
The noble Lord makes a very good point. I can reassure him that much is being done as we debate on this issue. I am not in a position to give any more details than that. However, we are aware that tourism in the UK is the fifth biggest industry and the third highest export earner, generating £115 billion in direct and indirect business for the economy and supporting 200,000 jobs. There is therefore much to bear in mind when we look at streamlining and sorting out the issues.