Roads: Young Drivers

Lord Bradshaw Excerpts

Monday 12th January 2015 Lords Chamber

[Baroness Kramer]

We have extensive programmes on issues around drink driving, and I am sure your Lordships are aware of those campaigns. We have a very good safety record in this country, frankly, but we can never be complacent about that. As I say, the focus of the work is now on what we can do with telematics, which now enable us to tackle this problem in a much more targeted way. Research is under way so that we will be able to do that effectively.

[Lord Bradshaw (LD)]

My Lords, I concentrated on road safety for many years when I was a member of the Thames Valley Police Authority. The injuries which young men suffer—often at night, usually driving too fast, usually driving in wet conditions—are horrendous, and they are horrendously expensive. I wonder whether, instead of a Green Paper, the Minister would consider some legislation to make things like provisional licences a reality rather than something which people refer to every few years and then forget about.

[Baroness Kramer]

My Lords, it is crucial that we use research and research-based evidence to design effective programmes. As noble Lords will know, there are many different examples around the world, but under its current system, which we are obviously seeking to improve, the UK actually scores very well on international measures.

Transport: Shared Space Crossings

Lord Bradshaw Excerpts

Thursday 8th January 2015 Lords Chamber

[Baroness Kramer]

I would be very happy to try to encourage enforcement. That is obviously part of the programme which should be in place.

[Lord Bradshaw (LD)]

I rather agree with the Minister that local authorities are best placed to deal with these matters, but one change that the Government could make would be to ensure that all bicycles had a bell on them. That measure could be very cheap, and it would be very effective in preventing accidents between all sorts of people.

[Baroness Kramer]

My Lords, it is true that very often there is a tension between cyclists and pedestrians of various kinds. I do not have a good answer for him, but I will investigate and write.

Railways: Pacer Trains

Lord Bradshaw Excerpts

Tuesday 9th December 2014 Lords Chamber

[Baroness Kramer]

My Lords, your Lordships will be aware that this is a pretty small delay. You will also be aware that there was a great response to the consultation for this line. It was entirely right of the Government to take the time necessary to work through a lot of very thoughtful responses and to make sure that the invitation to tender achieves the best possible outcome for passengers.

[Lord Bradshaw (LD)]

My Lords—

[Lord Clark of Windermere (Lab)]

My Lords—

[The Lord Privy Seal (Baroness Stowell of Beeston) (Con)]

My Lords, it is the turn of the Liberal Democrats.

[Lord Bradshaw]

My Lords, will the Minister take notice of what has been happening in Scotland? When the new franchise was introduced, 30 new train sets were ordered immediately on that day from Hitachi. If she looks at the terms and conditions, she will see that these trains have been leased with the support of the Scottish Government—which is not what usually happens here—and they have done an extremely good deal, far better than has been achieved by Whitehall. Is it not the case that local control, be it in Scotland or London, produces far better results than are now produced in Whitehall?

[Baroness Kramer]

My Lords, this Government are very committed to devolution. The noble Lord will know that, with the Northern and TransPennine franchises, we have been working very closely with Rail North so that it creates a process by which a transfer can be made to Rail North to become, as it were, the specifier and monitor of franchises over time. However, it is a capability that is extremely demanding, as the noble Lord will know, and the evolutionary process of doing this hand in hand with areas that are interested in taking this responsibility to make sure that they develop the capability has to be the right way to go.

Infrastructure Bill [HL]

Lord Bradshaw Excerpts

Monday 3rd November 2014 Lords Chamber

[Lord Berkeley (Lab)]

My Lords, I support my noble friend and will briefly speak to some of the amendments in this group, namely Amendments 2, 2B, 5, 6, 6A, 7 and 7A. I will not repeat all that my noble friend has said, because the various amendments that we have tabled between us provide the basis for the proper link between primary legislation and the licence, which, as my noble friend said, is so lacking in the Bill.

I started off by looking at the relevant clauses of the Railways Act 1993 and the Railways Act 2005, which we discussed in Committee and in some helpful meetings with the Minister and officials, for which I am grateful. It was remarkably easy, at this comparatively high level, to cross out “rail” and put in “road”; they are very similar. If, as my noble friend said, we are to have a company that looks after the strategic roads in a way that is similar to what Network Rail became in September by becoming fully government-owned, it would seem logical that the legislation under which this happens would be similar.

I will not go through all the amendments in detail; my noble friend has done that very well. However, I have two questions for the Minister when she comes to reply. First, under the Bill, will it still be possible for Members of Parliament and of this House to table Written Questions and ask questions of Ministers, as we currently can with the Highways Agency? Noble Lords will know that we cannot do that for Network Rail, because if you table a question about it the answer comes back, “Write to the chief executive”. I am sure one gets good answers from the chief executive, but one does not see the answers that other noble Lords get to the questions that they ask the chief executive. I hope that the same thing will not happen with the strategic highways company and that we will still be able to table questions about its operations and the company generally, and to get a proper Written Answer or be able to have an Oral Question or debate on it as the circumstances demand.

I also hope that when Network Rail becomes subject to the Freedom of Information Act on 1 April next year, that situation will apply to it. Clearly, we would not want to ask whether a motorway sign or signal had been moved; that would be a ridiculous waste of ministerial time. On the other hand, there are many things that it would be useful to ask such questions about for the purposes of parliamentary scrutiny.

My second question for the Minister concerns my Amendment 7A which relates to Section 48 of the Health and Safety at Work etc. Act 1974. This exempts Crown-owned companies, or officers or companies of the Crown, from being taken to court by the Health and Safety Executive if it believes that they have contravened the Act. I know that the Highways Agency itself is exempt, being a Crown agency. It would be nice to know whether any change was planned in this relationship, and therefore the exemption, when the strategic highways company comes into existence. I believe that Network Rail does not have an exemption, because the Health and Safety Executive, through the Office of Rail Regulation, has taken action against it on several occasions. There should be a balance between the two and as much transparency as possible. I am very much looking forward to what the Minister has to say in response and fully support the amendments of my noble friend.

[Lord Bradshaw (LD)]

I shall say just three things. The Government are mistaken. The Office of Rail Regulation should, under that title, oversee roads as well. In spite of all the arguments, if it were signalled, it could change its name at some future date. It could be planned for and there would not be a lot of expense. It would be much more understandable to motorists and everybody else who the regulator was, whether it was a railway regulator or a transport regulator.

I also endorse the points made by the noble Lord, Lord Berkeley, about safety. One thing that the Office of Rail Regulation has done is to drive up safety standards on the railways. Although the Government keep saying the safety standards on the roads are the best in Europe, these are really quite deplorable, as we see with the continued deaths of cyclists in London, for example.

Lastly—I know I am reaching for the moon here—would it not be better to be honest and say that we have to adopt road pricing some time and, to make it acceptable, to say that the money raised from it would be used for roads and motoring purposes? If you explain what the money is for, people are much more likely to embrace the idea. A recent opinion poll in one of the national papers showed that people were against raising taxes, but if they were specifically asked whether they would pay more tax to improve the health service, they said yes. The same applies to road pricing.

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[Lord Judd (Lab)]

My Lords, I spend a great deal of my time on the west coast line. All I can say is that when for one reason or other I use the east coast, I look at it with some envy. It is a very successful operation. I cannot believe that this is happening for any reason other than ideological commitment. That is a daft way to run an essential national public service. Pragmatism is the order of the day.

My noble friend Lord Berkeley referred to what is happening with Eurostar. I find it extraordinarily irresponsible that a railway system of that kind, which is so basic to the strength of our economy and well-being—the European market, whether we are in the Common Market or not, is so crucial to our economic success—should be handed away from public accountability and control. That is a basic lifeline. Of course this is happening in other industries as well. When I read of the Chinese coming in on certain strategic areas, I begin to wonder where on earth our economic policies tie up with our strategic analysis of the world in which we live.

The great thing to remember—my noble friend Lord Berkeley referred to this too—is that when public companies on the European mainland take the opportunity to provide public services in this country, they do so in a context in which in their own countries this is not seen as an ideological test of purity but a matter of pragmatism: what makes sense to be practically and pragmatically in the public sector and what makes sense in the private sector. In that context, they have been highly successful.

I personally favour—and I find myself cheered to realise that the majority of public opinion seems to be in that direction—a completely publicly owned rail system within this country because it is so crucial to our economy and every other matter. I also think it has a good deal to do with the morale of those working on it. If they feel they are actually providing a public service, and get a professional pride from providing a public service rather that simply providing profits, that has an impact and some significance.

If we are not to have that in the Bill—I hope we may have it at some stage—then it seems that this is a very effective damage limitation exercise. Nobody could accuse it of being doctrinaire politics because it accepts that the private sector will be there; it just says, is it not sensible? If the opportunity occurs, it makes pragmatic good sense and there is a rational way to undertake it, the public sector should be running part of the railway system. It would be a very good test of the comparative merits of both. I find the present situation ridiculous and I am alarmed that this kind of oversimplified thinking can dictate policy on something as vital to our economy as this.

[Lord Bradshaw]

My Lords, I ask the Minister to consider what will happen if the bids received under the franchise competition actually give less money—or are worth less to the taxpayer—than the present east coast trains. If the bids are lower than that being achieved by the present operator, that really does sound like the economics of the madhouse. Those who are bidding have the sword of Damocles hanging over them, because open access operators are allowed access to the track at a much lower price than the franchised operator. It appears that the open access operators are massing for an attack on the east coast line.

Lastly, I recommend to the Minister an article in Passenger Transport, a rather specialist magazine. There is a good two-page article about customer service and its effect on staff morale and how the present franchising system does not allow operators to go strong on customer service. If they do so, they risk losing the next bid because customer service, among other things, cannot be put into a financial evaluation.

[Lord Adonis (Lab)]

Does the noble Lord agree that it is the height of nonsense to allow the state operators of France, the Netherlands and Germany to bid for franchises in this country, but not the existing public operator of the east coast line?

[Lord Bradshaw]

It amazes me that we as a country permit so many foreigners to run our water industry, our gas industry and our electricity industry. They are vital basic services and I think it is rather foolish to leave them in the hands of foreign operators. We have seen what has happened with prices for water, for example, which have gone through the roof. I am sure that in the public sector, such increases would not have been allowed.

[Lord Stoddart of Swindon (Ind Lab)]

My Lords, I have intervened on this Bill only once, and I probably will not do so again, but I support the amendment. I do so as someone who, first, has worked on the railways—a very long time ago, I have to say: in the late 1940s, when I worked for the Southern Railway. I became not expert but knowledgeable about lock and block signalling, which has now of course been overtaken by electronic signalling.

I also represented Swindon, which was a great railway town. In those days, I spent most of my time trying to save the railway workshops, which were highly efficient and had a good history, from being closed by British Rail. When we talk about public ownership, people appear to believe that we want to go back to British Rail. There are all sorts of ways in which you can introduce public ownership, which have been mentioned. As the noble Lord, Lord Bradshaw, and others have pointed out, we allow foreign nationalised industries to take over our industries, but we will not allow our public services to take them over.

I was very interested to listen to the Chancellor of the Exchequer talking about city regions. There is every reason why, if we are to have city regions, we should allow them, or conglomerates of city regions, to be able to bid for a rail franchise. After all, they are there to serve their electors and probably know better than any railway company what their electors want. Local government has a great history of providing public services. Our water services would not be what they are but for local government and the power given to it under the Local Government Act 1888.

That applies to transport as well. So many local authorities have a background in and knowledge of transport. Up and down the country they are providing high-quality local transport. These things really ought to be considered by the Government: there is room for public enterprise within the railways. The railways should be allowed to bid for franchises; it is not a question of undercutting but of providing decent services at reasonable cost and perhaps more cheaply than is provided by the private companies.

I was pleased to see this amendment on the Marshalled List. I well remember opposing, from those Benches—I do not know whether I was doing so from the Front Bench at the time—the privatisation of the railways as a result, of course, of a European directive, which said that the infrastructure should be separated from the operation of the services themselves. If this simple and easy amendment is put to the vote, I hope that the Minister will accept it. It does not commit the Government to anything other than considering giving public authorities the opportunity to think about franchises in what, after all, are our railway services.

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[Baroness Kramer]

I will address that point. However, I want to set the context for the discussion because sometimes there is a great deal of confusion around it.

[Lord Bradshaw]

I am sorry to interrupt the noble Baroness but the new rolling stock that is to be included in the east coast franchise is something that every bidder will have to take into account in the bid that they make. If passengers do not think that the rolling stock, which has been virtually designed in Marsham Street, is set at a reasonable price, that will indicate that a bad decision was made over here. There is no doubt whatever that if the present east coast line company runs the franchise with the new trains its returns will go up, but perhaps by only as much as the extra trains will cost. The extra trains are a burden. It is a fallacy to say that the present east coast operator would be worse than any other because the £600 million has not been invested in the track and many other operators have not invested in new rolling stock. They wait for the rolling stock companies to do it and consider that investment in the track and stations is a matter for Network Rail. Therefore, I think that the Minister’s argument is a bit faulty.

[Baroness Kramer]

I am sorry but, as the noble Lord, Lord Bradshaw, will know, these things will be built into the charges. Of course, the addition of new equipment completely changes the profile as it has to be paid for and that money comes from only two places—the fare box or the taxpayer. As I say, that completely changes the profile and I think that many noble Lords will be aware of that reality.

As regards franchising, I agree that the demands we are placing on franchisees to upgrade equipment are far more significant than has been the case in the past. I think the noble Lord, Lord Bradshaw, said that customer service was not rolled into the franchise. I can tell him that it is now and that a significant number of issues concern customer service. We are building on that because the customer absolutely has to be at the centre of the railway industry. It is true that this has not been done historically and that franchises have been engineering-driven, but that is changing dramatically. The noble Lord will start to see the impact of that coming through with the new franchises.

We are also undertaking a complete technical upgrade as we move from an early 20th century railway to a fully 21st century railway. A digital electronic railway will make huge demands on franchise providers in all kinds of ways. This is a very exciting time. There was a question about British companies’ engagement in the railway. We have some of the most innovative companies now—I speak regularly to the supply chains—who are engaged in this cutting-edge research and cutting-edge supply, which will completely change the nature of the trains running on the track. We are coming much closer to engaging with aerospace technology and other areas. Do not think of the railways as an old, staid industry any more. It is a driving, cutting-edge industry, and that change has to come through for us to meet passengers’ demands. I could go on a great deal longer, but I will come back, because you can tell I am an enthusiast about getting these changes driven all the way through.

One of the questions is, “Why don’t we set up a company and let it bid against the others?”. Let us think about that process. If we are to have any other bidders, they have to know that there is a level playing field and that absolutely no advantage is given to the public bidder. This point was, I think, raised earlier. You may be able to set up enough Chinese walls for us to say that we believe this is being done with integrity, but we would have to convince every other bidder. Think about how the railways are financed. That makes it extremely difficult. Would we be providing government-sourced money to our own public company? Obviously, the private companies go out into the capital markets. Or would it be going out into the capital markets and therefore, in a sense, be as far distant from us as virtually any company that we already describe as being a franchisee?

We would have to be absolutely certain that our assumptions on profit, tax, cost and capital in no way advantaged the public body, or we would lose every other bidder on every bid. If we go back and think carefully about what we would have to set up, we would have to set up the company in order to do this. The salaries alone would, I think, be eye-watering.

Railways: East Coast Rail Franchise

Lord Bradshaw Excerpts

Tuesday 28th October 2014 Lords Chamber

[Baroness Kramer]

My Lords, noble Lords will be aware that Directly Operated Railways that took over the running of the east coast service after the failure of the previous franchise was always anticipated to be temporary; I am sure that the noble Lord, Lord Adonis, will confirm that. It has done an excellent job; I would not wish to understate that. It is important that the Government have the capacity to step in when something happens within a franchise that makes that necessary. Now, however, we need very significant new investment; there needs to be a long-term partner taking this franchise forward, so it is right to go into the franchising process. I would be glad to address questions on whether we should have our own franchising entity, but I do not want to take too long on a single answer.

[Lord Bradshaw (LD)]

My Lords, will the Minister think about the fact that this franchise has failed twice and that the present competition is very uncertain because of the threat of open access operation to whomever the franchise is let? If any of the franchise bidders bid less than what the taxpayer gets from Directly Operated Railways, will the Government allow the latter organisation to continue to run the railway?

[Baroness Kramer]

My Lords, the franchise process is in train. The award will come in February, so I obviously cannot comment on the competitors’ offers at this time. That would be entirely improper. It is certainly true that DOR returned profits to the Government—not to the department. It is also important to understand that it has not had the demands that are placed on many franchises in the level of investment required. We will have new equipment coming on to the line and new rolling stock, too. That will mean significant new burdens and we have many greater requirements now in terms of customer service so there is a need for significant investment. That is why a new player needs to come in at this time. It is obviously open to any Government to own companies and use them in various ways. This country used to have an airports industry and ran steel mills and car companies. However, we have found that the franchising system has offered us excellence. Train-operating companies have delivered very good service at very good prices. We have seen the response to that from passengers who have doubled in number in the past 20 years.

Vehicles: Heavy Goods Vehicles

Lord Bradshaw Excerpts

Tuesday 8th July 2014 Lords Chamber

[Baroness Kramer]

I will be delighted to follow up with any gaps. The noble Lord will be aware that an important task force in London, the new Industrial HGV Task Force, which is made up of eight officers from VOSA and eight from the Metropolitan Police, was launched in September 2013. That has been extremely effective in increasing enforcement. The task force is running a whole series of exercises. Between 1 October and 27 June, it stopped 2,798 vehicles: 764 were compliant—about 27%;—1,232 prohibitions were issued; 724 fixed-penalty notices were issued; and 35 vehicles were seized. Somewhere here, if I can find it, I have more general information; I will write to the noble Lord with that.

[Lord Bradshaw (LD)]

Can the Minister tell the House whether she has information about how many people have been killed or seriously injured by drivers who were driving outside the limits, and whether for the latest year—if figures are available—she has any evidence of what happens to such drivers?

[Baroness Kramer]

Accidents that involve HGVs have been falling for the past five years, although slowly. In 2013, there were 6,524 reported accidents, of which 270 were fatal. That has fallen by 8% since 2009. Where evidence exists to show that an HGV driver is at fault, he is reported for prosecution. We do not hold the numbers of those prosecuted and the results of those prosecutions, but we will refer that to the Home Office to see whether it has further detail.

Infrastructure Bill [HL]

Lord Bradshaw Excerpts

Tuesday 8th July 2014 Grand Committee

Moved by

[Lord Bradshaw]

34: Clause 5, page 3, line 32, leave out “Secretary of State” and insert “Office of Rail Regulation”

[Lord Bradshaw (LD)]

This brings us to another clause and concerns the payment of fines, to which reference was just made by the noble Lord, Lord Davies of Oldham.

The clause refers to the “Secretary of State” in successive subsections, and I believe that that might be wrong. One of the advantages of the Office of Rail Regulation is that it is independent from the Government. It is the Office of Rail Regulation that sets fines for Network Rail when it does not comply with the official standards that the regulator has approved. It may be a question of semantics, and it may be relevant to ask whether the ORR should not become the “Office of Transport Regulation” to stop comments such as those we heard this afternoon of something being done to roads by the rail lobby. I totally disagree with what was said, but to stop this bickering between both sides it might be better to make it the office of transport regulation.

There is a process with the railway. As it approaches the control period, which is a five-yearly period, the industry says what it would like. The Government then say how much money is available and the regulator decides how much an efficient undertaker—Network Rail in that case—needs to carry out the job that it has to do.

The Office of Rail Regulation has just issued a fine to Network Rail because Network Rail has failed to live up to the punctuality targets that had been set for it by the regulator. The money from the fine—this is very interesting—is going to be spent on providing wi-fi access for railway commuters; it is not going back into the maw of the Treasury. I believe that this might be behind the wording in Clause 5 saying that the fine will be levied by the regulator. If it is the intention that the fines will go towards the benefit of the user—in this case, the motorist or people running lorries—it needs to be carefully thought through how that will be achieved. I fully applaud the principle, but in order to get satisfactory separation from the Secretary of State it would be much better if the Bill said “the regulator” or “the Office of Rail Regulation”, whichever was the case.

I am not in any way denigrating the work done by the Office of Rail Regulation; in my view it is one of the most effective regulators, although perhaps it does not have to meet a very high standard when you think of Ofgem, Ofwat and Of-everything else—some of them are doing a very poor job. The ORR has driven up standards in the industry quite considerably, and it is a safety regulator as well. If the Minister can give me reasons why the alterations to the wording that I have suggested cannot be agreed, will she give me a view as to whether it would not be better to change the title of the Office of Rail Regulation to something like the office of transport regulation? I beg to move.

[Lord Whitty]

My Lords, I agree with much of what the noble Lord, Lord Bradshaw, has said, but of course the problem with the Bill is that under the Government’s current proposals the Office of Rail Regulation—perhaps with a better name—will be not a regulator but simply a monitor. There is no equivalence between the ORR’s relationship to the railways and what is currently proposed. We will come to one of my amendments later on that would allow some degree of regulation of quality, standards, the performance of the road network and road safety. At the moment, though, that is not what the Government envisage, and I would hope that the Minister would explain why. As the noble Lord has indicated, equivalence in our strategic network would appear to be common sense.

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[Baroness Kramer]

What we are doing now is basically setting up implementation vehicles. That is the purpose of this language. The content of the road investment strategy will undoubtedly lead to performance criteria. It is very hard to set performance standards without that document in front of us, and obviously we hope to see it some time in the autumn. I think that we have to pass the hurdle of having a road investment strategy before we can sensibly ask a Secretary of State to set those standards.

I am being reminded that it is very likely that breaches of the licence conditions would be the kind of standards used by the Secretary of State. It is possible that he might set standards so that there is a penalty, for example, for the failure to control costs or to achieve delivery. Quite a range of performance standards might be selected but I think that we are rather too early in the process, without having the RIS, to put sensible names to them.

[Lord Bradshaw]

I thank the noble Baroness for that reply. I do not see the difference between the SHC and Network Rail in that they both derive their funding principally from the Secretary of State. I know that train companies pay track access charges but so do lorries and motorists—only they are not called track access charges. The Minister makes the point that people do not pay, but in fact, in the same way that season ticket holders pay once a year for their journeys, people pay once a year for their licence and probably once a week for their petrol, so they are paying customers. I do not see the difference there. When you talk about competition between operators on the railways, except in the freight sector there is precious little real competition for people to choose which train company they use on a day-to-day basis.

I am glad to hear the Minister say that the title might change. I also hasten to say that the Office of Rail Regulation does a very good job in holding Network Rail to account. I am rather sad to hear that we are going to see how the monitor role works and how the strategic highways agency works—that sounds to me like a bit of a kick into the long grass, rather than a radical experiment.

Lastly, the Minister has also passed to me today—thank you—a letter about the experience in other countries. I have read it. What comes out of it is the fact that people who use longer funding periods of up to 15 years achieve savings of 15% or more. I think that that only underlines the need for long-term thinking in getting away from this very short-term funding, which in both cases far outweighs the life of any Government or series of Governments.

I will beg leave to withdraw the amendment but, in this case, I intend to raise the issue again on Report.

Amendment 34 withdrawn.

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[Lord Whitty]

No, my Lords, I am saying that the policy has to be decided by the Secretary of State. I would query if the Secretary of State always has to be involved in deciding whether or not we are going to put another two miles on a particular road junction because that could probably be devolved further down the line, but leaving that aside, the Secretary of State sets the policy and the Treasury gives him the taxpayers’ contribution to that policy. However, an expanded ORR would see that it was carried out on both the rail side and on the road side, in corridors in both modes, and with interconnections between them at various key points on the strategic network. One of the things that is sadly lacking in our transport system is intermodal transfer. I would actually include access to ports and airports within that too, if we were doing a comprehensive job.

I thought that the whole point of hiving off the Highways Agency and giving responsibility for its regulation to the ORR was a move in that direction, but the Minister seems to be unravelling all that and saying, “We don’t need any of that. That is far too many steps too far. Railways are completely different from roads. We have to consider them in two different frameworks”. I would have thought that in terms of efficiency of return on taxpayers’ contributions, you would have to look at them together. There are different levels of policymaking and delivery, but this is actually an opportunity for increasing the degree of integration and of comprehensiveness, and therefore for increasing the return to the taxpayer and the transport user of expenditure on this area.

[Lord Bradshaw]

In the letter that the Minister sent me about practice in Europe, she makes reference to Sweden. Rather underlining the points that the noble Lord, Lord Whitty, has just made, reference is made in the letter to a thing called Trafikverket. The Swedish Government set the long-term aims and provide the funding, and Trafikverket is expected to deliver them. The point is that Trafikverket is located in Borlänge in the north of Sweden in the same offices as Banverket, which looks after and regulates the railways in Sweden. They work together to the same criteria.

[Lord Whitty]

My Lords, perhaps our Swedish colleagues can show us the way, and I bow to the knowledge of the noble Lord, Lord Bradshaw, about the Swedish position. I have read the letter from the noble Baroness about the overseas experience, none of which seems to be entirely congruent with what is being proposed here, but nevertheless it is instructive in this particular instance.

My relatively humble amendment proposes that the two should be considered together, but clearly the Government’s thinking has not yet developed that far and is not reflected to that extent in this Bill. I can only hope that an alternative Government might take it a bit further, if that is the legacy we are bequeathed. For the moment, however, with some regret I will have to accept that the Minister is not going to be persuaded to go down that road, or indeed that railway, tonight.

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[Lord Bradshaw]

My Lords, I support all that the noble Lord opposite has said. I have been here for only 15 years, but I am sure that the noble Lord, Lord Davies of Oldham, will vouch for the fact that I have raised this matter, as has the noble Lord opposite, on countless occasions. I have lost count of the excuses, all of which include the words “next year”. The latest one was the promise around three or four years ago of a quinquennial review. Although it is due, nothing has happened. This is a clear example of confusion and antipathy between two government departments: the Department for Transport, which owns, as it were, the British Transport Police, and the Home Office, which owns the rest of the police force, except in London.

The fact is that this absurd barrier between the areas where the police can and cannot go is not understood and leads to confusion. Almost every night at Reading station I see the constables of the BT police standing by the windows, and on a number of occasions I have seen fights and things happening in their view but they are not able to intervene. To the public, that is absolute nonsense.

I plead with the Minister this time to take the matter away and come back with a satisfactory solution. This is the result of jealousy over jurisdiction in the police service; I cannot think why. I remember going out with a Thames Valley police patrol one day—I was on the police authority for 13 years. We went out of the Thames Valley into Warwickshire, and they told me that they could not actually make an arrest until we had turned round and come back again. This situation is stupid, it is Victorian and it is not in keeping with modern society.

The reason why I believe this matter belongs in the Infrastructure Bill is that, when the public use railway premises, they expect the police to look after the bus stops, the car parks and the cycle racks. Some of those facilities are in private ownership and some in public ownership, but the journey that the person makes is door-to-door. At present it is being expostulated by the Department for Transport that it is doing a great deal for those journeys, but many people who use public transport but feel unsafe when doing so would be much reassured if they knew that the bus stops around railway stations and other facilities were patrolled by officers who were competent to deal with whatever happened to arise. I strongly support the amendment.

[Lord Jenkin of Roding]

My Lords, I have to say that this is the first time that I have heard the argument advanced by the noble Lord, Lord Faulkner of Worcester, and my noble friend Lord Bradshaw. My noble friend Lord Bradshaw told us that he has done this many times before; I have obviously been doing other things at those times. I have listened to both noble Lords with care, and I have to say to the Minister that I think they have made an incontrovertible case. I will listen with very great interest when she replies, but she will require some extremely powerful, cogent and convincing arguments if she does not respond in the way that the noble Lord, Lord Faulkner, has suggested and take this away, perhaps coming back on Report with an amendment that meets what seem to me to be totally absurd anomalies.

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Moved by

[Lord Bradshaw]

64: After Clause 15, insert the following new Clause—
“Review of the road network
(1) Within six months of the passing of this Act, the Secretary of State must commission a body to review the funding and condition of the road network (“the review body”).
(2) The Secretary of State must instruct the review body to consider the following four matters—
(a) whether the heaviest users of the road network, in terms of wear and tear on the roads, congestion and pollution, should contribute a higher proportion than at present of the funding of the road network; and, if so, how;(b) whether the methodology for calculating the axle weights of vehicles, as used in calculating rates of vehicle taxation, should be changed;(c) whether organisations which undertake street works, including statutory undertakers, make an appropriate financial contribution to the remaking of the road surface on completion of the street works, and any necessary remedial work if that remaking is sub-standard; and if not, how the organisations could make an appropriate financial contribution; and(d) whether the part of the road network not under the control of the Highways Agency is in a satisfactory condition; and, if it is not, how it should be brought up to a satisfactory condition.(3) The review body shall report to the Secretary of State and to Parliament within 18 months of the passing of this Act.”

[Lord Bradshaw]

This is the last of the road amendments but it is not the least. There are great problems with our roads and the way that they are run. The amendment simply asks the Government to agree that within six months of the Bill being enacted, the Secretary of State commissions,

“a body to review the funding and condition of the road network”.

This body should consider four things, including,

“whether the heaviest users of the road network, in terms of wear and tear on the roads, congestion and pollution, should contribute a higher proportion than at present of the funding of the road network”.

We keep talking about the railway because that is in our minds at the moment, but people who travel at peak times have to pay higher fares than those who travel at off-peak times. The train operators who use congested parts of the network pay more, and it is time that a more rational way of paying for the road network was developed.

I am also asking that the methodology for calculating the axle weights of vehicles, used in calculating the rates of vehicle taxation should be changed, or re-examined, which might be better. The present methodology is based on experiments that took place in 1958 in America by the American state highways authorities. These experiments consisted of running a properly laden lorry, with a distributed load at 35 mph over perfectly level surfaces, and measuring the deterioration of those surfaces. The authorities came to the conclusion that it was reasonable to use the fourth-power function and the standard axle as a means of calculating load damage. Lorries do not go at 35 mph, they do not have perfectly distributed loads and the road network is not in perfect condition, as it was in 1958 when the Americans conducted the experiments. I suggest that it is perhaps time that we revisited this whole area and looked at the real position, not the theoretical position in the laboratory conditions in which experiments were conducted in America.

My third concern is whether the arrangements for the utilities, which dig up our roads to lay their pipes and cables, include them making an adequate financial contribution to the remaking of the road surface on completion of such street works. Is the remedial work of a suitable standard, and if not, how could those organisations make an appropriate financial contribution? I know that noble Lords will see, as I do, that outside their own homes the entire road is pockmarked by holes which have been dug by the cable companies, water companies, gas companies and so on. Most of the work is not properly finished and often the edges are not adequately sealed, allowing water to get in and break up the road surface, which is the primary cause of potholes. However, it is no good spending money on just filling up those potholes, the problem has to be attacked at its root cause.

My last issue is the question of the other part of the highways network that is not covered by this legislation. It is not in a satisfactory condition. The structural condition of the road is usually pretty terrible, and what is more, it is declining more and more rapidly.

Those are not issues that I expect the present Government to tackle, but they should be working on drawing up the terms of reference of a review that would look into how to address them. I have referred previously to why this is now urgent. The revenue from fuel tax will decline as cars and lorries become more efficient, which means that the Government will face a mountain of expenditure with a declining source of revenue. Moreover, very fuel-efficient cars are not eligible to pay much road tax. I have noticed since I acquired such a car that I am putting around a third of what I had been into the pot for the upkeep of our roads. That is a serious strategic problem and, while I am not expecting any answers, I am expecting some sympathy and a form of commitment that these issues will be taken in hand. I beg to move.

[Lord Berkeley]

My Lords, these are interesting amendments which, as the noble Lord, Lord Bradshaw, has said, cover a wide range of issues. It is definitely time to revisit the issue of damaged roads. Road vehicles are getting heavier and their tyre pressures are higher, but that may be balanced by improved suspension systems, making this a complicated calculation. Of course, higher speed incurs more damage to vehicles of all types. It is reasonable that vehicle excise duty, in the absence of any sort of road user charge, should reflect the different types of damage caused to roads as well as congestion and pollution. We need also to take into account something else which has come to the fore in the past few years. Worsening road surfaces are having a serious effect on cyclists. If the Government want more people to take up cycling, it must be safe for them to do so. A large pothole can cause a cyclist to fall off their bike and hurt themselves, and at night the potholes cannot be seen because they are so deep. It is a serious issue and now would be a very good time to address it.

On proposed new paragraphs (2)(c) and (d) in Amendment 64, we are where we are with the undertakers. I suspect that that is one reason why we do not do more with our roads. Constructing trams in cities is so expensive because the private sector undertakers take anybody to the cleaners if they want to build anything. I do not see an easy solution, except that they need to be kept up to the mark and ensure not only that the quality of the reinstatement is good but that the time it takes is kept short. Some emergency potholes and road works are there for weeks.

On new paragraph (d), damage to the roads in the past couple of winters probably reflects the same cause and effect as damage to the rail network: the weather has been very bad. The motorways mostly stayed open, as did the existing high-speed rail link because they have been designed and built in the past 50 years to cope with the current forecast weather conditions and using more modern drainage systems—slopes on cuttings and so on—which are appropriate. Most of the other roads and the classic railway system has suffered from being built 100 or 150 years ago. It is time to look at all that again, and it would be interesting to see the results. I hope that the Minister will look on the amendment with favour.

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[Lord Bradshaw]

I drafted the amendment rather carefully so that it does not commit this Government to doing anything other than choosing a panel of people to look at some problems. If past experience is anything to go by, by the time the panel is assembled and comes to some reasonable conclusions, we are talking about the legislation of the Government not in 2015 but probably in 2020, because that is the speed at which things are done. I plead with the Minister to look very carefully at what I have said. I am not asking the Government to commit themselves to road pricing or to raising VED; I know that this is probably not the time in the parliamentary season to make such suggestions. However, these four problems are major ones. I did not even get on to the problem of the question of appraisal; as the Minister knows, it is absolutely barmy, but I thought that that was a step too far. In the light of what she has said, I shall withdraw my amendment, but the problems will not withdraw themselves; they will steadily get worse. I beg leave to withdraw the amendment.

Amendment 64 withdrawn.

Infrastructure Bill [HL]

Lord Bradshaw Excerpts

Thursday 3rd July 2014 Grand Committee

[Baroness Kramer]

My Lords, I will start by referring to two roads. First, the A303 is part of a feasibility study, the details of which should be announced later this year. Secondly, on the issue that was raised about the A1, the noble Baroness is quite right to say that that is advancing. That illustrates exactly some of the problems which we are trying to counter with the work that is going on here. Your Lordships will understand that this clause allows the Secretary of State to appoint a strategic highways company, conferring duties and functions for it to operate as a highways authority. Our aim—I think this is now well understood—is to create a different model to deliver road infrastructure from that which we have now, with a separate legal body from government responsible for our strategic road network, advising government on how it can best achieve its vision for our national network and being responsible for delivering that vision in the most cost effective way. These parts of the Bill are an implementation measure.

We consider the most effective model to be one where a company is created under the Companies Act 2006. I understand that there are questions about why a separate company is needed, so I will take a moment to set out some of the rationale. We have decades of experience across Administrations of different political complexions showing that the current arrangements have not encouraged a long-term approach to planning infrastructure or to securing funding. The noble Lords, Lord Davies of Oldham and Lord Whitty, asked why we do not do it under the existing structure. I say to them that we have lived with the existing set of arrangements for a very long time and it has not worked in terms of delivering the element of long-term certainty that is needed. Funding has been changed arbitrarily—sometimes at very short notice. I think we all recognise this and we recognise that it comes with high costs in efficiency and the quality of our infrastructure. The noble Lord, Lord Berkeley, underscored how Network Rail, with its more arm’s-length relationship—it calls its funding periods “Control Periods”—has delivered significant increases in the efficiency with which it implements new rail infrastructure, and we want to capture the same for roads.

Some noble Lords have asked what our sources were for the numbers. I refer them to Alan Cook’s A Fresh Start for the Strategic Road Network, published in 2011. There are further, more detailed calculations set out in the impact assessment, which is published on the DfT website. That might be a very good source for people who want to understand more of the nitty-gritty around those numbers. However, I do not think that most people looking closely at this will challenge the underlying reality that, once there is a longer-term framework in which to operate, efficiency is far easier to achieve.

Many have raised—not today but in various contexts—the importance of maintenance and balancing new-build and maintenance; looking at the whole life of a road; looking at the longer-term life of the asset; and approaching asset management in that way. It is far more possible to do that with a greater certainty of funding. I will just underscore the problems that we face today. Our road infrastructure, to which the noble Lord, Lord Davies, referred, is now rated only 28th in the world by the World Economic Forum—we all know that hinders our competitiveness. I suspect that arguing for the status quo will not allow us to make the changes needed to get the improvements that our economy requires.

We feel that for long-term funding certainty and planning, it is crucial for the Department for Transport to be able to have a transparent and binding relationship with a separate legal entity that will be set out in the road investment strategy. The RIS—if I can use that short term—sets out the Government’s requirements and investment plans and sets the funding to deliver them. If the Highways Agency remained part of the DfT, then in practice it would be much easier to change. Setting up a strategic highways company as a new company, operating under company law with a well established governance and financial framework, will reinforce the clarity and robustness of the relationship.

The company structures and disciplines will also help support a more commercial approach. We have seen international examples, which are enormously varied, and I have written about them in quite a detailed letter to some Members of your Lordships’ House. For example, in the Netherlands and Sweden, where roads delivery bodies have been given long-term funding certainty and a more independent relationship with transparent requirements, large efficiency savings have been possible. We have all acknowledged that this is not about privatising the roads. This will be a company that has one shareholder, the Secretary of State, and if he ceases to be the shareholder, in effect the company is terminated.

I will try to pick up a couple of the other issues that were raised. We will discuss some of them in more detail as we come to the various amendments targeted on them. My noble friend Lord Teverson talked about echoing the advantages that have come through the Network Rail structure, and that is exactly what I have been describing. I do not think it has to be identical to the Network Rail arrangements. Network Rail came to its current arrangements through the rather strange route of nationalisation, privatisation and part-privatisation. But we can pick up the essentials that seem to be the important levers, and that is what we have been doing.

The noble Lord, Lord Davies of Oldham, seemed to suggest that if we had a national infrastructure commission we would not need any of this. This is really practical, coalface implementation of infrastructure building and maintenance, and it is absolutely crucial. It is not a big strategic sweep—obviously, strategy will be deeply embedded in the road investment strategy—but it is creating the delivery mechanism to make that a reality on the ground.

The noble Lord, Lord Berkeley, asked whether we would have five-year certainty. We will talk in some later amendments about the timeframe for the RIS. At this point I would just say that we have to give a bit of flexibility because we will have a road investment strategy before the company is in place. We can talk about timeframes a bit later.

The noble Lord, Lord Whitty, and the noble Baroness, Lady Neville-Rolfe, raised an issue that, again, I think we will cover in some later amendments, about whether the company could go directly to the financial markets. To do so, it would have to have the permission of the Secretary of State. We have been quite clear that cheaper borrowing is available through the Government. We are therefore not minded to use those mechanisms. We are going to go for the cheapest borrowing. Frankly, in an era when one is trying to bring down government spending on all fronts and watching every penny, that is an entirely appropriate strategy to focus on. It might be possible, with the Secretary of State’s permission, to finance individual road projects directly in the markets but we will be making all those decisions based on the implications for the cost of financing.

The noble Lord, Lord Berkeley, raised the interesting issue of the role that the Office of the Rail Regulator has played, through its enforcement powers, in driving efficiency in the Network Rail system. That is an interesting question which we will want to think about and explore. We are determined that efficiency is going to be one of the major outcomes of this project.

Having covered that range of issues, I hope I have provided the reasons why this clause should stand part of the Bill. I hope very much that your Lordships will support its inclusion.

[Lord Bradshaw (LD)]

The Minister made reference to the Swedish experience of financing roads. I have been involved with it. I was involved with the Øresund Bridge between Copenhagen and Malmö, but it was an estuarial crossing and it cut huge distances off both the road and rail networks. There were huge strategic reasons but the money was raised in the market and people pay tolls through quite advanced technology for the use of it. Are there other examples? Some of the Dutch things are going over water. Are there other real roads that have been invested in in that way?

[Baroness Kramer]

If I may, I will provide my noble friend with more detail in writing. We have provided one letter already, which has been available to a number of your Lordships, that we can happily put in the Library. But if we are not very careful we could get entangled in every road across continental Europe and the different ways in which they have been financed.

It is interesting is that every country you look at does it somewhat differently, sometimes in different political and financial contexts. But what we see as a general current theme is if you can get that transparency and some of that arm’s-length character, and provide certainty of funding, those are the key mechanisms that help drive efficiency, and those are the lessons that we want to learn.

--- Later in debate ---

[Lord Berkeley]

My Lords, I support my noble friend in his Amendment 4, and I shall speak to the other amendments in this group. On Amendment 4, he is absolutely right. The strategic highways company needs to have responsibility for all the things that he has put in the amendment. I remind the Committee that there is very strong evidence that a month or two before the Olympics, when the air pollution on one or two of the trunk roads in London was reaching Chinese levels, the solution by the Mayor was to cover the monitoring points with plastic bags, which of course reduced the level of pollution inside the plastic bags but did not much help anybody else. But this needs to be done by the strategic highways company, and I would suggest that it needs to be supervised by somebody. That may be a role for the Office of Rail Regulation, or whatever it is to be called in future, because these are very important points.

My noble friend is right in his comment about research, but there needs to be some research into non-trunk roads, which are a very large part of the road network. I hope that that can be taken into account as well.

Amendments 6 and 7 relate to the 20 pages of consequential amendments to which my noble friend referred. It relates to something that may have got lost in the search for consequential amendments—the Environmental Protection Act 1990 and the question of which body is responsible for collecting litter on different roads. These two amendments are designed to make sure that the strategic highways do not get left out of the wrapping up; otherwise, we will see them covered in litter from head to foot.

I shall not read out all the parts of my amendment, because everybody can read them, and it probably would not make much sense anyway—unless you put a wet towel on your head.

Finally, my noble friend did not mention Amendment 61, which follows on from Amendment 4 and is to do with the transfer of additional functions to the strategic highways company in Clause 13(2). It covers highways and planning, but I agree that it should cover road safety as well, because that is a terribly important part of it. We will talk about safety comparisons later, but it would be good to see road safety in there, or something like it.

[Lord Bradshaw]

The amendment moved by the noble Lord, Lord Whitty, with which I agree, mentions “speed control systems”. We are considering the Deregulation Bill on Monday, which makes specific provision for a lot of the enforcement of speed and other offences to be undertaken by people who go round with pads rather than the modern method of using cameras. Will the Minister cover that, or at least take it away and get sorted out the apparent contradictions between those two pieces of legislation?

[Lord Davies of Oldham]

Well, my Lords, that is a bumper that whistled past the Minster’s ears. It is an interesting little challenge. I have no views on what the noble Lord, Lord Bradshaw, has said, except that I usually consider what he says to have a modicum of very good sense.

I support my noble friends’ amendments. My noble friend Lord Whitty made a persuasive case for the opening amendment. My own amendment would merely establish a consistent theme for us in this legislation: we want to see the Office of Rail Regulation playing a significant role in the road network. It should publish guidance and have powers to require efficient use of the road network. That is what it does for rail. As the noble Baroness will have noted a few moments ago, I was seeking to extol the virtues of a degree of integration between these two critical features of our transport infrastructure. This is one modest step towards that. The Office of Rail Regulation should promote not just efficient spending but efficient management of the road network. It has earned the approval of many of us through its work on the rail system. There is surely merit in it doing so for the road while furthering the prospects of integration between two main features of our transport infrastructure, which will be an abiding theme of the Opposition’s position on the Bill.

--- Later in debate ---

[Lord Jenkin of Roding (Con)]

My Lords, I am afraid that I was engaged on the Floor of the House for the first part of the Committee’s sitting, taking part in the debate on—

[Lord Bradshaw]

Manufacturing.

--- Later in debate ---

[Lord Berkeley]

My Lords, to some extent Amendment 13 follows on from my noble friend Lord Whitty’s Amendment 4 on responsibilities and scope. There is a strong, if not stronger, argument for having in the Bill a clause which sets out the duties of the strategic highways company, because there is already legislation which puts duties on the Secretary of State or the regulator as regards railways. Some noble Lords will recall the Railways Act 2005 and the Railways Act 1993, which was the basis of privatisation. The duties there included promoting,

“improvements in railway service performance … to protect the interests of users of railway services … to promote the use of the railway network in Great Britain for the carriage of passengers and goods”.

I was very pleased to see that goods got in there. The list of duties continues:

“to contribute to the development of an integrated system of transport … contribute to the achievement of sustainable development”.

I could go on reading out Section 4 of that Act. It very much mirrors what has been achieved by successive Governments and rail regulators such as the Office of Rail Regulation in succeeding years through putting those basic principles into effect. This is quite important, and we have the opportunity to put a similar range of duties on the strategic highways company—or companies, however many there are.

Looking at this amendment, it is important that we start to include the cross-modal issues that I and several other noble Lords spoke about at Second Reading. We should look at modes of transport such as highways and railways—probably cycling and walking as well, and maybe other things in the future—on a cross-modal basis, with the duties to secure something like, as I put in the amendment,

“the economic, social and environmental gains jointly and severally”.

I am sure Ministers could come back with a better version, but I hope this is a useful basis for suggesting what the duties of this strategic highways company should be. Unlocking development is important, as is encouraging occupancy and loading rates for passengers and freight and looking at the need to drive, the need to move around and, of course, its sustainability.

We shall be talking about some of these things in later amendments, but it is important for an organisation such as this one to have duties, which should be in the Bill just as they are for the railways. I have tried to mirror what is in the original Railways Act. It has changed over the years and is in a different format now, but the duties are still there, and if we had something like this for the strategic highways company, alongside the responsibilities that my noble friend Lord Whitty talked about, it would make us all feel a lot more comfortable. I beg to move.

[Lord Bradshaw]

I agree with what the noble Lord, Lord Berkeley, has said, but will add something. You can argue for or against it, but having chosen to go down the route of rail regulation, there is one thing I really would like to be assured about. We know that the motorist—maybe “road user” is the right term—is to be represented by Passenger Focus. That of course covers the railway, bus and tram industries; it has seen incremental growth, and I think the noble Lord, Lord Whitty, had a good deal to do with its genesis. With railways, buses, trams and the other things for which it is responsible, it has a right to get information from the regulated party or from the party for which it is responsible. A train or bus company cannot refuse such a request. I would like to be assured that the strategic highways company, too, will not be able to refuse a request for information from Passenger Focus acting in pursuance of its duties to represent road users. I am quite happy that it should represent them, but I do want it not to be treated any differently from the way it is treated in other industries.

[Baroness Neville-Rolfe]

My Lords, I agree with the point made by the noble Lord, Lord Berkeley, about cross-modal being an important issue. There is a later amendment on the need for co-operation, on which I am sure we will agree. I have some concerns about the notion of duty in that context, because duties impose rights and that can lead to problems. I am also not sure that rail is necessarily the model for road. I always think that when you are looking at a regulatory framework, judgments need to be made in respect of the sector that you are looking at. You need to be careful that they work for that sector, and circumstances are different.

That leads me to my main point. I am always concerned about perverse effects. The clause that is the subject of Amendment 13 could have some quite perverse effects, particularly if it were introduced in this form. Duties, effectively, are like legislation and will give rights, and rights can then generate judicial review, and you could have arguments about whether particular things are sustainable or not. You could then make this process a lot more complicated and expensive, and it would not produce the better agency that is the purpose of the Bill. Will my noble friend comment on this aspect of the proposed amendment?

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[Viscount Hanworth (Lab)]

My Lords, in lending my support to my noble friend Lord Davies, I speak to my Amendment 39. It proposes that:

“The power to set a toll or a tariff on a strategic highway may not be delegated to any company or person but must remain the sole prerogative of the Secretary of State”.

We have heard from the Minister that there are no immediate plans for privatising the highways company, which is set to replace the Highways Agency. However, this does not allay our anxieties about the privatisation of our strategic highways network. Nothing that the Government have said will preclude them from asking private contractors to administer parts of the network under concessions. The contractors would derive their income from tolls.

We need only look across the Channel to see an example of a strategic highways network that is largely under the control of private profit-making agencies. The example is provided by France, where 45% of the motorway network is now operated under commercial concessions, including all the main arteries. This circumstance has been the result of a major sale to private investors of the state’s holdings in autoroute companies, which began in 2005, under the Villepin Government, during the presidency of Jacques Chirac. Initially, the tolls on the roads were set by the French Government, but the private companies have been permitted to make year-on-year increases in the tolls. There is now widespread discontent at their exorbitance and at the excessive profits of the companies, which acquired their assets at knock-down prices. Clearly, the French Government ought to have retained the sole prerogative to set the levels of the tolls.

The only example of a tolled motor road in the UK is the M6 toll road of a mere 27 miles in length, which bypasses the Birmingham conurbation. This is controlled by the Australian company Macquarie, which holds the concession until 2054. In contrast to the French toll roads, this under-used road appears to be a commercial failure. In 2012, the operator, Midland Expressway, claimed to have made a loss of £41 million. I have no way of confirming this figure, which seems to have been exaggerated; there would have been a tax advantage in exaggerating the loss. The recourse of the company was to increase the tolls. This may have increased the company’s revenue, but it would certainly have diminished the traffic on the road, thereby reducing its social utility and increasing the costs of congestion and physical depreciation that are borne by the adjacent M6 freeway.

These circumstances should serve to emphasise a fundamental principle. Road charges need to be set by a central authority with an overarching concern to maximise the utility of the roads. High tariffs should be levied to deter vehicles from travelling on congested roads. High tariffs that deter traffic from using empty roads should be lowered or abolished. It might seem to be redundant to declare such principles at a time when there appear to be no immediate plans to impose additional tolls and tariffs on our roads. However, I believe that such charges are certain to be imposed sooner rather than later.

There are two factors here. The first is the likelihood that this Government, or a future Government, will desire to raise revenue to finance additional construction and maintenance. The second is the availability of new and effective technology that will greatly facilitate road-charging. My concern is that, unless the Government think ahead and resolve to take a strategic oversight of the matter, a piecemeal and dysfunctional system of road-charging will arise that will reproduce the problems that can be clearly discerned in other countries that have already applied tolls and tariffs to their roads.

Finally, whenever private enterprise is charged with undertaking motorway projects, it has been expected to raise the finance for those purposes from the open market. That has certainly been the case for the French toll roads, and it has been the case with our only toll road company, which administers the M6 toll. By going in their own right to the market, the companies have been denied the advantage of the superior creditworthiness of the Government. In consequence, they have had to bear much higher interest rate charges. There should surely be a way of conferring the benefits of the Government’s creditworthiness on all borrowings in favour of investment in social infrastructure, whoever undertakes them.

[Lord Bradshaw]

I shall add some comments to those just made by the noble Viscount, Lord Hanworth. The Government have a very major problem stalking up on them—namely, the lack of tax revenue that they will get from motoring. People are buying cars that are free of revenue tax and of fuel tax—or rather they pay very much less. Therefore, the flow of revenue that the Government are expecting to receive from fuel duty or vehicle excise duty is going to decline quite rapidly.

We are talking about the future of the highways network and we will have to find some other means of financing it. We are talking about the long term, but people are quick to pick up on ways of avoiding tax legitimately. I therefore believe, despite what the noble Viscount, Lord Hanworth, said, that the technology is available to charge people to use roads. How you do it and who sets the toll will be matters for future consideration, and what the noble Viscount said about this is important.

You also have the problem of people diverting away from the tolled road on to secondary or non-Highways Agency roads. Again, the technology exists to prevent most of this, and modern logistics companies cannot afford to send lorries around circuitous routes because drivers’ hours regulations, if properly enforced, mean that most of them programme their drivers to get the maximum out of the 10 and a half hours for which they are allowed to drive. If these people take more circuitous routes to avoid paying tolls, they will therefore bust the drivers’ hours regulations in almost every case.

I am going to speak about this later, but there are a number of strategic issues—one of which is how we pay for the use of roads—which have to be faced, not by the immediate Government who have brought this legislation forward but by successive Governments of whatever colour. They will have to find a method of financing a road network with declining revenues from the present system of taxation.

[Lord Whitty]

My Lords, I have slipped an amendment into this group as well. In a sense, it deals with the same problem—the ability of the new company to raise money on the markets—from the other end.

The reality is that the Treasury will never provide quite enough money out of general taxation to build roads. My noble friend Lord Hanworth and the noble Lord, Lord Bradshaw, have focused on road charging as one way of getting that income. Who would be accountable for that? The Government have said that they do not currently intend for there to be any road charging. Strategically, in the long-term, they may have to revisit that. It is therefore quite important that if, down the line, they do so, the Secretary of State would be able to limit or control the charges which could be raised on those roads; I believe that was the primary purpose of my noble friend Lord Hanworth’s amendment. The French example, with which I am familiar, shows the dangers of not doing so.

That could be done by a Government-owned company as much as it could be done by the private sector, although the temptation may be a bit different. Either way, if the company cannot raise money through charging and it cannot raise money by going to the market to borrow, the pressure on allocation for the strategic investment programme and the Treasury will be acute down the line.

As I have said before, when this proposition was made I thought that one of its advantages might be that the company could raise its own money against future income of one sort or another—capital gains and so forth. Apparently, that is not to be the case. That is a severe limitation on the flexibility of the company and the degree to which it is genuinely independent. Clearly, its access may ultimately be controlled by the Secretary of State. The amendment recognises that, in that it is about the Secretary of State setting the terms on which the company could go to the market. That could include going for public loans or literally going to the market—issuing bonds and getting a return on them, which is, of course, how we built the railways. If you do not have that flexibility, the arguments down the line about how much this year and next year is in the Treasury’s gift and the question of what alternatives need to be considered will always be there, however firmly you might have set the strategy and the expenditure attached to that strategy at the beginning. This would give some flexibility, with a bit of control by the Secretary of State.

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In some ways, the highways company will be treated as if it were local government, because it is a traffic authority as well as a highways authority, just as local government is. Therefore, the issue of how we control local government raising capital applies equally to the new highways company. It may be resolvable only in that wider context. I see no sign, I have to admit, that the Treasury team of the current Opposition is likely to change those long-standing laws, despite my remonstrations with them over the years. But at some point, the logic of having powerful local authorities and powerful independent state-owned companies that are able to raise their own money will dawn even in Great George Street.

[Lord Bradshaw]

I shall build on what the noble Lord, Lord Whitty, has just said. Earlier in the week, noble Lords may have seen a ComRes poll in the Independent newspaper about payment for the National Health Service. The poll suggested that people are prepared to pay more money; it was quite a sizable proportion—51% to 43%, I think. But the condition that they put was that they want the money spent on the health service—and the same applies to highways. It brings up this very old problem about hypothecation, which has to be faced if the health service and the highways system is not to fall into disrepair.

[Lord McFall of Alcluith (Lab)]

My Lords, I support the noble Lord, Lord Whitty, in what he says. The Treasury has been rigid in its application, but there was a great initiative on innovation by the Chancellor in the last Budget, whereby he put £130 billion behind the Help to Buy scheme, which some would call the “help to vote” scheme. That was the Treasury showing real initiative. If the Chancellor can do it for the housing market and show flexibility there, why can we not do it for infrastructure at a time when borrowing is at its lowest ever? If we cannot do it now, we will never be able to do it.

Infrastructure Bill [HL]

Lord Bradshaw Excerpts

Wednesday 18th June 2014 Lords Chamber

[Lord Bradshaw (LD)]

My Lords, I have probably been the victim of more reorganisations than many of your Lordships. All of them have promised large economies and they have always promised a better future, but they have usually resulted in more expenditure and another reorganisation. So the idea that reorganising things is necessarily going to produce a revolution is wrong.

I am also concerned about the idea that this government-owned company will somehow take the influence of the ministry out of the equation. I am confirmed in that by the fact that at Reading station, where huge infrastructure work is being progressed by Network Rail, signs on the wall have just appeared saying “Department for Transport” to show that the ministry is really still in control. It is a sort of sinister creeping of bureaucracy into that company, and I think that the same may be the case with a road company.

Another thing that I would like to touch on is the way that this company is being presented as an analogy to Network Rail. It is not really an analogy. Network Rail has responsibility for the whole of the railway infrastructure as well as safety, whereas this company will have responsibility for the busiest 2% of the road network. However, there is no commitment to deal with the other 98% of the road network.

I am in favour of necessary road building where there is a strategic and a safety case for it, as there is with the A1 north of Newcastle going up into Scotland, as I have said before. However, we have to recognise that the local road network, including a lot of trunk roads, is in a sore condition. It needs substantial structural maintenance. I am not sure how much of the money promised for the proposed new highways company will in fact find its way into capital expenditure, because we have been told that a large part of the network will be resurfaced in the next few years. Most of us think that resurfacing networks is not new building; it is probably catching up following neglect of the past rather than looking to the future.

I very much endorse the point made by the noble Lord, Lord Skidelsky, that it is important to distinguish clearly between capital and revenue. It is also quite reasonable to borrow for proper capital expenditure, which should have a rate of return.

I want to look for a moment at local authorities, whose road expenditure is discretionary. It is expenditure that gets raided whenever schools or other local authority services, such as social services, need more money. I believe that local authorities need proper guidance on how they should repair their highways, and of course they need to be brought within the consultation machinery for any investment strategy. I also believe that the utilities do enormous damage to our highways network. They push their way in, often without regard for the motorist or the lorry driver. They declare states of emergency where I believe that such emergencies do not exist. The sanctions they suffer as a result of overruns and so on are quite ineffective in bringing any discipline. I hope that the Minister will say something about how the utilities can be brought within a reasonable discipline in their access to the highway, because they cause enormous damage.

I am concerned about the justification for new road building or for any roadworks. I believe that the benefits are much wider than the present system tends to show. Millions of small but unpredictable and imperceptible time savings are one of the major inputs to the economic appraisal of our road network. A better way is necessary to probe the economic value of improvements, which might be in housing, employment or land values, rather than the funny money used to justify it now. Is any work being done to bring the present system up to date?

Is the Minister satisfied with the present system of looking at the way in which roads are destroyed by heavy lorries, to which reference has already been made? It was probably about 30 to 40 years ago that it was decided that the damage inflicted by a heavy lorry on a road surface was the fourth power of the axle load. Cars inflict virtually no damage, which is the case with the M6 toll road, and lorries inflict huge damage, which is shown by what goes on on the M6. It is time that that also is revisited so that we are satisfied that we are apportioning the cost of roads fairly between the motorist and the heavy goods vehicle.

I was very pleased to hear the noble Viscount, Lord Hanworth, and the noble Lord, Lord Skidelsky, put in a good work for road pricing. I believe that it is the best way to ration any scarce resource. It has been maligned in the press, which gives the impression that everyone will pay more. Vast numbers of people in rural and far-flung areas will pay very much less. The busy parts of the roads cause the problems, to which a proper pricing policy should be applied. I am a veteran of driving over the bridge from Copenhagen to Malmo and Stockholm, which is financed in that way. It is a painless system which works. People who say that it does not work are wrong.

Finally, I endorse the remarks made by the noble Lord, Lord Berkeley, about level crossings. In my view, the next major railway accident will be on a level crossing. It will probably be followed by a judicial review, which will take another X number of years to come up with the recommendations that the Government already have before them. I ask them to look closely at whether the Bill can be amended in any useful way to deal with that problem.

Queen’s Speech

Lord Bradshaw Excerpts

Thursday 5th June 2014 Lords Chamber

[Lord Bradshaw (LD)]

My Lords, before this debate I contacted two people. I do not know what their political opinions are, but they both run successful SMEs, one in the manufacturing sector with a large proportion of exports of high-value products, and the other in the service sector, whose company has been voted as one of the best companies to work for by its employees. I asked for their opinion of the coalition Government. They both replied in the same way: “We are having good government”. I then asked them what help should be given to SMEs in furthering their businesses. They responded with two points. The first was the need to reform the business rate system, which bears heavily on small businesses, particularly those in the manufacturing sector. The second was that we must not leave Europe. However, we must confront the huge waste of money due to the high salaries and expenses associated with the place, and in echo of the Prime Minister’s words, them being “so bossy”. However, we do not have to leave all this until 2017 or even 2015. We should start arguing for what we want now, because we have a lot of useful suggestions to make.

On the subject of the coalition, I pay tribute to a few of the Ministers in your Lordships’ House. I single out the noble Earl, Lord Howe, and the noble Lords, Lord Taylor of Holbeach and Lord Nash, as three who have been particularly careful over the past couple of years to engage in the most meaningful consultation. They have attended countless meetings and modified a lot of things in the original Bills before they were carried into law. I must say that, in the 10 years I was here under the Labour Government, I rarely got any concession at all. The process among most of the people on these Benches has been to try to work together even though we have different philosophies.

Turning to transport, I am very concerned that we may be moving into an era of “predict and provide”, when we should be turning to smarter management of a lot of the infrastructure we have. However, the most important thing that I want to say is that the state of structural maintenance of our highways is an absolute disgrace. Everybody gets complaints about potholes. Who exercises proper discipline over the quality of repairs carried out by the utilities that constantly dig up our roads? They do not seal the edges of the holes, so that moisture gets in and the next winter we are back where we started.

One of the major problems is the revenue-capital split of the Treasury. There is a point—I have been through all this on the railways—where heavy structural maintenance should be a capital item. Maintenance is something you carry out two or three times a decade, but structural maintenance you carry out once only 20 or 30 years. These are capital items, and we should look very carefully at the way that they are accounted for. We should concentrate our road investment on the really strategic roads, which have often got bad safety records. The Minister will know that the A1 north of Newcastle going up to Scotland is a particularly bad road, and I hope that she may have some good news for us on this

I turn to the electric railway. We are not going to build any more diesel trains—all new trains will be electric. My conversations with the rolling stock companies lead me to the conclusion that they are absolutely willing to take the risk in financing freight locomotives and new passenger electric rolling stock. I plead with the Minister to let the market decide what they offer and to not let officials keep dipping their hands in subjects which they do not understand. This is all about technical issues of mechanical and civil engineering and does not benefit at all from constant interference.

I turn to some of the irritants—the things that the media seize on and use to beat Governments, whether they are a coalition, Labour or whatever. We have heard today from the Rail Regulator that there was a 5.7% increase in rail passenger journeys last year. The railway is growing very fast, but it is held back, mainly by the procrastination of officials over rolling stock. The time has come for us to not raise rail fares at the end of this year. We have huge growth but it enables the media to portray the industry as being very expensive when in fact, except in a few cases, it is actually quite cheap.

People are equally concerned about energy prices, as many Members have said. Bearing in mind that utility companies generally took far too much money out of people’s pockets, I wonder whether we could have a moratorium on energy prices. I am not saying that we should put a cap on energy prices permanently, but I believe that consumers are due some sort of recompense from these companies.

We know that getting appointments with GPs is very urgently at the top of people’s list of irritants. Strong action to deal with this problem will help keep cases out of hospital and help make people more content with the service.

This party very reluctantly agreed to raise higher education fees and we have suffered for it. But the higher education sector has not responded by giving its students a real increase in value for money. Often people get only about three hours a week of lectures and I do not believe that overall the higher education sector has stepped up to the plate at all. It should be increasing its productivity. It is a perfectly reasonable demand.

Turning back to transport, we have to find a way of making young people’s bus fares more affordable. They often cannot afford a car or transport and often live far from their places of work or education. Much could be done to encourage them. I do not know whether my noble friend the Minister has any news for us but I would like to believe that the progress being made in some parts of the country is being replicated in others.

I was at a conference of the bus industry last week and I am quite clear that the partnership that local authorities can bring about with operators is of enormous benefit. I was talking about Oxfordshire. They had to review all their services in west Oxfordshire. The county and the operators got together. They had £3 million of cuts to be made but the industry found, by various manipulations, £2.7 million out of that. So there was a very small reduction, compared to what they began with. I contrast that with the announcement from Northumberland County Council that it is withdrawing free school transport for anybody over 16. That strikes me as a particular contrast between people who work in partnership and people who work against one another.

There is much to do and we on these Benches look forward to a busy and useful Session. I personally refute any suggestion that this is a stale Parliament.