Transport: Remote Island Communities in England

Lord Callanan Excerpts

Thursday 20th July 2017 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)]

My Lords, first, I pay tribute to the noble Lord, Lord Berkeley, for securing this debate on the transport needs of remote island communities in England. I know that he has for many years taken a keen interest in the future of island connectivity—in particular, to his beloved Isles of Scilly. In the presence of so many other admirers of the Isles of Scilly, at this point I should say in confession, in front of the right reverend Prelate the Bishop of Newcastle, that I have never been to the Isles of Scilly but I have been many times to Lindisfarne, the holy island in the north-east but, given the glowing descriptions from many noble Lords, I look forward to the opportunity to visit the Scilly Islands.

Most of the speakers in the debate have concentrated on the Isles of Scilly, except for the right reverend Prelate, who waxed lyrical about the wonderful Holy Island, in Northumberland, which, as I said, I have visited many times. There is indeed a road connection for part of the year, and it is a source of amazement to me—as it will be to other Members from the north-east—that every year there are tales of people’s cars floating off the causeway. I assure your Lordships that it is not possible for the council to put any bigger signs indicating the required crossing times and the consequences if you do not adhere to them. The most amazing thing is that normally, they are not people who speak a foreign language and do not understand English, but people from the local area or other communities in the United Kingdom, who just wilfully ignore the signs and see their car floating away in the distance as the tide comes in. They normally take to the rescue shelter halfway across. There is no legislation against stupidity, I fear.

I take note of the right reverend Prelate’s suggestion of a park-and-ride scheme. I am sure that she will understand that is a matter for the local authorities to determine. I am sure that under its new leadership, Northumberland County Council will look closely at her suggestion. She is fortunate to represent what is in my biased opinion one of the nicest dioceses in the country.

As an island nation, the movement of goods and people by air and sea is vital to the economic well-being of this country—95% of our trade by volume either arrives or departs by sea—but it is equally vital on a smaller scale for internal traffic within our smaller island communities. Indeed, that is the subject at hand. With three operators and around 9 million passenger crossings each year, as the noble Lord, Lord Berkeley, observed, I am not so sure that the Isle of Wight falls into this category. I read with interest the briefing produced by the House Library, which concentrated to a remarkable extent on the Isle of Wight, which no one could argue is a remote island community. However, it shares with other islands the basic fact that it costs more—consumes more resources—per passenger mile to move people by ferry or by air than by road.

The Isles of Scilly are of course by far the most obvious example of our subject for debate today, and most Members have concentrated on them. Perhaps it will help the House if I briefly recap the background to the Isles of Scilly’s services by sea and by air, to build on the excellent introduction provided by the noble Lord, Lord Berkeley.

Passenger and freight ferry services from the mainland to the Isles of Scilly have always been provided commercially without operating subsidy—under Conservative and Labour Governments, as the noble Lord, Lord Rosser, will be aware.

The noble Lord, Lord Greenway, referred to the passenger ship RMV “Scillonian”, as did several noble Lords. It is now 40 years old, although it underwent a substantial refit in 2012. I have heard the various criticisms, but it is also fair to say that it is duly certificated, registered as seaworthy and entirely fit and appropriate for the services which it provides. If it was not, it would not be allowed to provide them.

In recent years the local partners—led by Cornwall Council—known as the Route Partnership put together a funding bid for a new purpose-built passenger and freight vessel to replace the two current vessels, and for significant harbour improvements at Penzance and St Mary’s. The new vessel was to be owned by Cornwall Council and chartered to an operator by competitive tender. The rationale for that proposed arrangement was that the Isles of Scilly Steamship Company could not afford to replace the current passenger vessel when it reached the end of its useful life, and neither could any other operator provide a financially viable service.

The Department for Transport then invited bids for smaller-scale harbour improvements, but declared that as long as passenger services remained in commercial operation, it did not believe that there was a case for an ongoing subsidy. I am sorry to say that that, in essence, remains the Government’s position now.

In the meantime, the Isles of Scilly Steamship Company has also undertaken to replace its year-round cargo ferry, the “Gry Maritha”, having acquired a significantly larger vessel, currently named “Mali Rose”, which could also carry up to six passengers in the winter months, at the master’s discretion. This vessel, I understand, requires substantial refurbishment before it can replace the “Gry Maritha”.

The Isles of Scilly Steamship Company has said that it intends to replace the current passenger vessel, the RMV “Scillonian III”, probably with a new build vessel, but that it believes that the ship can continue operating beyond 2020 if necessary. We await developments on that front, but the vessel appears capable of meeting demand during its months of operation.

Although the Government do not believe that there is a case for an ongoing subsidy, we remain committed to ensuring that services to remote island communities continue. The noble Lord, Lord Cameron, referred to subsidies for freight services. The Government have invested over £6 million towards the £11 million project to improve the quays at St Mary’s, dredge Penzance Harbour and undertake land access improvements to improve the vital sea connection between the Isles of Scilly and the mainland for passengers and freight by opening up both harbours to a wider range of vessels in future. Building on the development work initially undertaken by the Council of the Isles of Scilly and Penzance Town Council, Cornwall Council undertook to act as the lead delivery authority and the works were completed in June 2016.

Scheduled commercial flights to the Isles of Scilly commenced as long ago as 1937. Today, regular flights operate to St Mary’s Airport from Land’s End and Newquay airports, and, seasonally, Exeter Airport. The runway at St Mary’s has recently been resurfaced and Land’s End Airport now has its first tarmac runway. Flights are operated commercially—again by the Isles of Scilly Steamship Company under the Skybus brand—and, like ferry services, have continued to operate free from subsidy. The Isles of Scilly Steamship Company has also invested in additional aircraft and expanded its service following the discontinuation in October 2012 of the British International Helicopters’ Penzance to St Mary’s helicopter service. According to the steamship company, passenger traffic by sea has increased in recent years, from just under 105,000 in 2014 to just under 116,000 in 2016. Air passengers have also increased from just under 91,000 to 95,000 in the same period, although this remains below the 155,000 passengers that were transported in 2011, which was the last full year of the helicopter service.

Transport to remote island communities is a free market and other operators are able to enter that market if they wish. In fact, I am aware of the current proposals—as noble Lords have mentioned—to recommence helicopter services to both St Mary’s and Tresco through the construction of a replacement heliport at Penzance. I understand that planning consent was approved by Cornwall Council in March 2017. However, noble Lords will understand that, because the proceedings are subject to judicial review, I am unable to comment further on that service.

The noble Lords, Lord Berkeley, Lord Cameron and Lord Rosser, and the noble Baroness, Lady Randerson, referred to the issue potentially being referred to the Competition and Markets Authority—I think the noble Lord, Lord Teverson, also mentioned this. Let me set out the position. The relevant legislation is Chapter 2 of the Competition Act 1998, on abuse of a dominant position, and Chapter 3, which covers investigation and enforcement. The CMA has wide discretion to construe a relevant market, which could include more than one transport mode and could extend to a market as modest in scale as the Scilly service—much smaller indeed than the Isle of Wight market, which was previously examined by the CMA’s predecessor, the OFT, and the Competition Commission. However, the CMA also operates formal prioritisation principles, which include the size of the market and the impact of the case. Depending on other workload, it may decide that the complaint about the Scilly services does not have sufficient priority to justify the resources required to investigate a case of this sort. It is a matter for the CMA.

A number of Members raised the issue of the Scottish islands and made comparisons with the services there. The Scottish Government, through Transport Scotland, provide financial assistance to reduce the cost of ferry travel on routes that are considered lifelines for remote island communities, and support a number of air routes to the islands through public service obligations. The Scottish Government are, of course, answerable to Scottish taxpayers for their own funding priorities, but I highlight that it is very difficult to compare the needs and services of groups of islands around the UK, and that the situation in Scotland is very different because the services mostly cannot be operated on a commercial basis. While there is no specific legal impediment in relation to public service obligations for remote island communities in England, at the moment the services to the Isles of Scilly are operated on a commercial basis. If the situation changes in this respect, then of course the matter could be reviewed.

The noble Lords, Lord Berkeley and Lord Rosser, also raised the issue of the abuse of a monopoly—the same company providing both air and sea connections. We do not believe that this, in itself, is sufficient evidence to show abuse; despite the modest capacity of the terminals, it remains open to other providers to provide ferry and/or air services to the Scillies. I would be delighted if the market came to support more than one operator; however, that is not yet happening from either Penzance or elsewhere. The fact that it is not suggests that there is not some huge super-profit being exploited, into which a competitor could easily make inroads. The growth in passenger traffic at least suggests that fares are not prohibitive.

I will answer some of the other questions that noble Lords have raised. The noble Lord, Lord Berkeley—I think—asked about the quality and reliability of the air service. I totally appreciate the annoyance and distress caused to passengers when such events occur, but this is a matter for the interested parties, including the relevant local councils and users, to take up with the operator of the commercial services. Of course, it is for the pilot in command to decide whether to operate a flight in adverse weather conditions. The noble Lord also asked why cheaper air or ferry services cannot be offered for permanent residents. I understand that discounts are already available for permanent residents; further discounts would, again, be a matter for the interested parties to consider, including the operators, users and local councils. So long as EU treaty rules apply, in the first instance it would be for them to produce a draft notification justifying the preferential terms as aid of a social character in a remote region.

The noble Lord, Lord Cameron, raised the issue of the Scottish islands—I think I have responded already to that question—and asked about an air discount scheme. The air discount scheme for flights within Scotland is of course a matter for the Scottish Government. The scheme is not applicable to air routes in Scotland supported by public service obligations. Any exemption applied for in respect of air routes to the Isles of Scilly would have to be eligible for this type of aid under European Union state aid guidelines.

The noble Lord, Lord Bradshaw, raised the issue of the current train franchise and sleeper service from London. The current Great Western franchise is due to be replaced by April 2020 and officials have begun engaging with interested parties to identify potential priorities for the route franchise. I will ensure that the noble Lord’s points about the sleeper service are considered as part of the franchise replacement process. In addition, train services to Penzance are being substantially upgraded. A new £360 million fleet of bi-mode intercity express trains will replace the older high-speed trains on the London route, bringing journey time savings. Local services to Plymouth are being upgraded to two trains an hour, enabled by Network Rail’s re-signalling work. We particularly welcome the substantial contributions being made by Cornwall Council and the Cornwall and Isles of Scilly local enterprise partnership to the modernisation of the Night Riviera sleeper trains and improvements to stations in Cornwall and London for sleeper passengers.

The noble Baroness, Lady Randerson, made a very good point about the provision of emergency medical evacuations. Where commercial transport is not suitable or available, there are arrangements in place to evacuate patients who require emergency treatment using either Cornwall Air Ambulance or search and rescue services, both of which are based at Cornwall Airport Newquay.

The term “lifeline” is often used to describe vital transport connections between mainland and island communities. Although this term carries no formal or legal status, the Government recognise the importance of passenger and freight services to remote island communities in England, and that is why we remain committed to ensuring that these continue. My officials have met delegations on a number of occasions to discuss transportation to and from island communities such as the Isles of Scilly, and I assure noble Lords who have spoken in the debate that they remain available to do so in the future.

[Lord Rosser]

My Lords, is it the Government’s view that the present air and sea services to the Isles of Scilly, including the current fares and charges, are having a dampening effect on the economy of the Isles of Scilly?

[Lord Callanan]

As I said earlier, passenger traffic is increasing. The services continue to be operated on a commercial basis. I accept the points noble Lords have made about the desirability of increased connections—of course, everybody would like increased connections and better services to their communities—but there is no evidence of a detrimental effect on the community.

Transport: North East of England

Lord Callanan Excerpts

Thursday 20th July 2017 Lords Chamber

[Baroness Quin]

To ask Her Majesty’s Government what are their priorities for transport investment in the North East of England over the next two years.

[The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)]

My Lords, the Government’s priority is to create a more reliable and less congested transport network that works for users, builds a stronger, more balanced economy, enhances competitiveness and supports housing growth. These priorities, along with advice from Transport for the North, will inform the Government’s decisions on investment in the national networks. At a local level, we expect local authorities and local enterprise partnerships to use devolved funds to deliver local plans that help their communities to prosper.

[Baroness Quin (Lab)]

My Lords, I congratulate the Minister on his appointment. When we were candidates on opposing sides in Gateshead in 1992, I do not imagine that we thought we would be facing each other across the red Benches of this House. Given the additional infrastructure investment in Northern Ireland, and given that it will be years, if ever, before HS2 benefits Tyneside and the north-east, I urge the Minister to bring forward, not delay, badly needed transport schemes in our region. In particular, I urge him to bring forward A1 dualling before 2020 and to bring in vital rail improvements, such as the Ashington to Newcastle rail line, to help travel-to-work areas in the region.

--- Later in debate ---

[Lord Callanan]

I thank the noble Baroness for her question. We both use all of these transport routes ourselves. In the election in 1992 she did considerably better than I did in votes cast. The day that Gateshead becomes a Conservative seat I suspect is still, sadly, a long time away. She makes some important points. She asked, first, about the A1. As she is aware, work on the A1 north of Ellingham schemes are due to start in 2018. Construction of the scheme to dual the A1 between Morpeth and Ellingham is due to start in 2019-20. Phase 2 of the Tyne and Wear Metro reinvigoration programme is currently being supported with a capital grant of £317 million. We are currently in discussions with Nexus regarding its proposals for new rolling stock for the Metro on the Ashington to Newcastle line. I am aware that this is a priority of Northumberland County Council and we are currently in discussions with it about the best method of achieving it.

[Lord Palmer (CB)]

I welcome very much the mention of the A1, but for the past 40 years successive Governments have agreed that the remaining 61% of the undualled A1 ought to dualled. Why has that not happened?

[Lord Callanan]

As someone who travels on it regularly, I can assure the noble Lord that I share his frustration. This Government have the largest programme of transport investment since Victorian times. Clearly, money is always difficult, but as I said, we are starting on the programme. I know that the Member of Parliament for Berwick-upon-Tweed is definitely on the case—particularly on my case—and is making this point with great vigour. We will get on with it as quickly as possible.

[Baroness Jenkin of Kennington (Con)]

My Lords, can my noble friend tell the House what is being done to encourage more women to become train drivers and whether there is a gender pay gap between men and women train drivers?

[Lord Callanan]

I do not think there is a gender pay gap, particularly on the railways, between men and women—the problem is just quantity. Currently 95% of train drivers are men. Women can do the job perfectly well and, given the state of industrial relations and the problems on the railways, I hope that we get many more sensible, pragmatic women train drivers. They might see the benefits of the current 24% pay rise that is being offered and want to get on with doing the job that men, in some cases, sadly, do not.

[Lord Beith (LD)]

My Lords, the coalition Government committed substantial funds to the Highways Agency for schemes, including dualling a considerable part of the A1 north of Morpeth. Can the Minister give me a specific assurance that that is not one of the nine schemes that the Highways Agency is now reviewing and may not go ahead? Otherwise, can he be quite firm in the promise that the work will begin in 2018?

--- Later in debate ---

[Lord Callanan]

I know that the noble Lord takes a close interest in this matter as a former Member of Parliament for Berwick-upon-Tweed. I can give an assurance that the work that I outlined will start in 2018-19.

[The Lord Bishop of Newcastle]

My Lords, the proposed expansion of the Tyne and Wear Metro by the North East Combined Authority will provide very important greater access for rural towns and villages and opportunities for local rail integration. How will the Government support the North East Combined Authority to make this planned extension a reality? I will be grateful to hear from the Minister.

[Lord Callanan]

As I mentioned in my earlier answer to the noble Baroness, Lady Quin, we are currently in discussions with Nexus regarding its proposals for new rolling stock. DfT and Treasury officials continue to work with Nexus to understand the business case for the replacement of the current fleet and to explore all funding options. As I have also mentioned, we are currently supporting the Metro with a capital grant of £317 million. The local growth fund is providing £2.5 million for the refurbishment of the Metro stop at Newcastle Central Station and the operational costs are supported by a revenue grant of £203 million over the nine years. I am aware that there are proposals to expand the Metro and I can confirm that officials from my department are in discussions with Nexus officials to see how this can best be accomplished.

[Lord Anderson of Swansea (Lab)]

My Lords—

--- Later in debate ---

[Lord Anderson of Swansea]

My Lords, we in south-west Wales are not concerned about the confirmation of new lines but about the apparent abandonment of a major electrification project from Cardiff to Swansea. There has been a series of body blows to Swansea of late, including the long delays in the lagoon. Can the Government confirm that they have not written off south-west Wales? Do they believe that life ends at Cardiff?

[Lord Callanan]

My Lords, of course we have not written off south-west Wales. As I said, we have the largest programme of transport investment since Victorian times. As regards the particular scheme he mentioned, we are looking at all the possible options. New technology now enables bimodal trains to operate which could allow for a seamless transition from diesel to electric. I am aware that many parts of the country actually do not want overhead electric gantries despoiling landscapes; and in many cases, there is no appreciable increase or improvement in service by electrification. However, we will continue to look at all the options.

High Speed 2: Electronic Document Deposits

Lord Callanan Excerpts

Monday 17th July 2017 Lords Chamber

Moved by

[Lord Callanan]

That, in respect of any bill relating to High Speed 2 that is read the first time in Session 2017-19, whether before or after the passing of this motion, and to which the standing orders relating to private business are found by the Examiners of Petitions for Private Bills to apply, it shall be sufficient compliance with:

(a) any requirement under those standing orders for a document to be deposited or delivered at, or sent to, an office of a government department, body or person if it is deposited or delivered at, sent to or otherwise made accessible at that office in electronic form;

(b) any requirement under those standing orders for a document to be deposited with an officer if it is deposited with or delivered, sent or otherwise made accessible to that officer in electronic form;

(c) any requirement under those standing orders for a document to be made available for inspection at a prescribed office, or to permit a document to be inspected, if it is made available for inspection at that office, or is permitted to be inspected, in electronic form;

(d) the requirement under Standing Order 27(7) or 36(3) relating to private business to permit a person to make copies of a document or extracts from it, if there is provided to that person, on request and within a reasonable time, copies of so much of it as the person may reasonably require and such copies may, if the person so agrees, be provided in electronic form;

(e) the requirement under Standing Order 27(7) relating to private business for a memorial to be made on every document deposited under that Standing Order, if the memorial is made on a separate document;

(f) any requirement under Standing Order 4A(1), 27A(5) or 83A(8) relating to private business to make a document available for sale at prescribed offices, if it is made available for sale at an office in London;

that this Order shall not affect any requirement under those standing orders to deposit any document at, or deliver any document to, the Office of the Clerk of the Parliaments;

that any reference in those standing orders to a document which is deposited, lodged, delivered or sent under those standing orders includes a reference to a document which is so deposited, delivered or sent in electronic form;

that any reference to a document in this order includes a reference to any bill, plan, section, book of reference, ordnance map, environmental or other statement or estimate.

Motion agreed.

Electric Car Ownership

Lord Callanan Excerpts

Wednesday 12th July 2017 Lords Chamber

[Baroness Deech]

To ask Her Majesty’s Government what steps they are taking to promote electric car ownership.

[The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)]

My Lords, we have a number of initiatives in place to encourage ownership, and are investing more than £600 million up to 2020 to make the UK a leader in the development, manufacture and use of electric vehicles. We are cutting the up-front costs of purchase with our plug-in car, van and motorcycle grants, and helping meet the costs of installation of charge points in homes, on residential streets and in workplaces right across the UK.

[Baroness Deech (CB)]

I declare my interest as the proud owner of a new all-electric car. May we seek guidance from the Government on this question? Is the future to be all-electric in order to reduce pollution and a reliance on Middle Eastern oil, in which case we need more infrastructure and more points, including right here in the House of Lords car park: or is the future not so good because there are downsides to driving all-electric vehicles—for example, the cost of extra electricity? We need an answer because we do not want to find ourselves with another diesel débâcle—good yesterday but not so good tomorrow.

--- Later in debate ---

[Lord Callanan]

The noble Baroness makes some important points. Of course, a shiny new electric car is useless if there is nowhere to charge it up. However, I am pleased to tell her that we already have over 11,000 public charge points in the UK. We have Europe’s largest network of rapid chargers. In the Autumn Statement last year, the Chancellor announced additional funding of £80 million for charging infrastructure for the period to 2020. Alongside this, Highways England has £15 million to expand the existing rapid charge point network.

[Lord Lea of Crondall (Lab)]

My Lords, is it not a fallacy to say that we are using less oil? Electricity does not come from nowhere. Is it not a fact that until recently in this country electricity was produced roughly 20% from nuclear, 20% from coal, 40% from gas and oil, and 10% and rising from renewables? That is where electricity comes from. The effect that electric cars have on the streets of London is very interesting, but it has nothing to do with the generation of electricity.

[Lord Callanan]

Of course, the noble Lord is correct. The lifecycle CO₂ value of an electric car depends on where the electricity is generated. That is a statement of fact.

[Lord Deben (Con)]

Is my noble friend aware that the report of the Committee on Climate Change makes the point that many more vans are used today because of e-commerce and that many of those vans are very damaging in terms of pollution? Do the Government have a special way of ensuring that emission levels from vans are reduced by making them turn increasingly to electricity, which of course is very sensible for short runs?

[Lord Callanan]

Given his role on the Committee on Climate Change, my noble friend is probably well aware that we have an investment programme to encourage the take-up of electric vans, cars and motorcycles. You can receive a grant to purchase one.

[Baroness Walmsley (LD)]

My Lords, is the Minister aware that in England and Wales there are over 1,000 nursery schools looking after 47,000 young children that are very near main roads with illegal levels of nitrogen dioxide and the small particulates that come from diesel cars? These can not only cause lung disease but have an effect on children’s brain development. So when will the Government start regarding the rollout of electric vehicles as a serious public health matter, not just for now but for the future?

[Lord Callanan]

We have the largest investment programme for electric vehicles in Europe and we are the largest market for electric vehicles in Europe. One in five electric vehicles sold in Europe is manufactured in the UK. We have an extremely ambitious programme. Indeed, it was started under the coalition Government, and I would have thought that the Liberal Democrats would be quite proud of that.

[Lord Rosser (Lab)]

My Lords, I presume that encouraging electric car ownership is a cross-departmental government policy, and the noble Lord is of course answering on behalf of the Government as a whole. What is the Government’s estimate of the impact of the increase in electric car ownership over the next five years and the next 10 years on the tax take from the sale of petrol and diesel fuel, and how will the Government compensate for or make up any reduction in such tax revenues resulting from increasing electric car ownership?

[Lord Callanan]

Noble Lords will probably realise that it is very dangerous for me to speculate on what the Chancellor might do in future Budgets with regard to tax levels.

[Lord Craig of Radley (CB)]

My Lords, is the Minister aware that insuring electric cars appears to be extremely expensive? Certainly my attempts were declined: I could not get insurance, even though I have a complete no-claims bonus—the full length. When I did eventually find an insurer, it was going to cost me £1,500—so I have not got an electric car.

[Lord Callanan]

I think the noble and gallant Lord might find that that was less to do with the car and more to do with his personal circumstances.

[Noble Lords]

Oh!

[Lord Callanan]

I am sure that were he a female driver, it would be much cheaper.

[Lord Campbell-Savours (Lab)]

My Lords, would the Minister confirm that you do not need an expensive, fast-charging point for an electric car? You can charge an electric car with a 13 amp domestic plug and a 3 kilowatt feed.

[Lord Callanan]

That is of course true—it just takes longer.

[Lord Dobbs (Con)]

My Lords, I am truly enthused by my noble friend’s enthusiasm for electric cars. Being an old romantic, when I look 10 or 15 years ahead, I see electric and autonomous vehicles changing the way that we live, transporting people safely and cheaply, taking them from the point they start to where they want to go. Where does HS2 fit in with this?

[Lord Callanan]

In my brief period answering Questions in this House, I have come to marvel at the ability of noble Lords to get off one subject and on to another. HS2 is also an environmentally friendly mode of transport, similar to electric cars.

Space Industry Bill [HL]

Lord Callanan Excerpts

2nd reading (Hansard): House of Lords
Wednesday 12th July 2017 Lords Chamber

Moved by

[Lord Callanan]

That the Bill be now read a second time.

[The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)]

My Lords, the UK space industry is a British success story—a story of invention and innovation, of enterprising spirit and global ambition: from our close collaboration with the European Space Agency, which continues to yield ground-breaking science and discovery, to our globally respected satellite companies leading the small satellite revolution. I know that many noble Lords share my admiration for the UK’s achievements in space and will be keen to contribute to its continued success, which is why I welcome their input into and scrutiny of the Space Industry Bill, a Bill that will boldly go where no Bill has gone before.

Very few people realise how important space is to our everyday lives. Satellites in particular provide many critical services that we all take for granted. Navigation satellites, for example, provide the precision timing needed to enable global financial transactions. They support the safe and efficient use of our seas and skies, and help us all to find our way in unfamiliar surroundings. Weather satellites equip farmers, health workers and the emergency services with the foresight to protect people, property and produce from extreme weather, and provide unique insights into our changing climate. Communication and imaging satellites let us monitor disasters and threats to our national interests, and allow us to watch live news events unfolding anywhere on earth. Indeed, satellites, a specialty of the British space industry, play a crucial role in our economy, supporting more than £250 billion of our GDP, and provide the data to power the future of our digital economy. Noble Lords can see why space has been made part of our critical national infrastructure.

This is how we use space today. Looking to the future, ambitious new plans could require tens of thousands of new small satellites to be launched and serviced. This surge in demand is the result of the declining costs of satellite manufacturing and launch services. What was once possible only at huge public expense is now being pursued commercially by companies such as SpaceX and Rocket Lab, spurred on by the global market for small satellite launch that could be worth £25 billion over the next 20 years. This is not the only opportunity. Sub-orbital flights to the edge of space offer another emerging commercial prospect. Such flights would not only be thrilling for paying customers but could expand the boundaries of human knowledge by giving our world-leading science sector access to the unique environment of microgravity, enabling exciting opportunities for discovery in many branches of science. Empowering our aerospace sector to pursue this opportunity will ensure that future aircraft technology comes by way of British innovation, keeping us at the forefront of aviation as we move into an exciting future of long-distance, high-speed air travel.

We have in front of us opportunities of significant strategic and economic consequence. The UK is well equipped to pursue commercial markets in both small satellite launch and sub-orbital flight. Our northern latitude, abundant coastline, aviation heritage, great engineering capability, thriving space sector and business-friendly environment are all factors which make the UK an attractive destination for these services. In line with our modern industrial strategy, we will strengthen our economy by allowing UK companies to benefit from access to new opportunities and supply chains. The sky will no longer be the limit for our talented scientists, engineers and entrepreneurs, and we will attract the capability, infrastructure and investment needed to prepare for the next 50 years of spaceflight.

For example, British companies like Reaction Engines are developing engine technology which could revolutionise the way we get to and from space, making it easier and cheaper to escape the earth’s atmosphere. If we fail to prepare for these opportunities, the UK risks losing out to early adopters overseas and would not receive the benefits of this British innovation. However, we must move quickly. Experts are forecasting a sharp rise in demand for launch services from 2020 and we are not alone in pursuing this market. The first movers in Europe are likely to gain a significant commercial advantage over those who arrive later.

A number of operators from the UK and further afield have expressed an interest in launching from UK spaceports. They recognise the benefits of setting up shop here, but until now have not had a sufficient legal framework to enable safe and secure operations. This is why we are here today. For several years we have been laying the groundwork for commercial small satellite launches and sub-orbital flight in the UK by understanding what regulation needs to be put in place to enable safe commercial spaceflight in this country; identifying the key characteristics of any potential locations from which commercial spaceflight operations could be safely launched, and the infrastructure and facilities that would be required; and developing an understanding of the complex array of technologies in this emerging market and exploring options and approaches to attract commercial spaceflight operators and investment to deliver Launch UK.

Our thanks must go to all those who have helped to inform, challenge and shape this policy, which has resulted in the Bill before us, which aims to boost the economy, British business, engineering and science by making the UK the most attractive place in Europe for commercial spaceflight. It provides for the creation of a regulatory framework to enable commercial spaceflight activities—both launch to orbit and sub-orbital spaceflight—to be carried out from spaceports in the United Kingdom. It will work alongside the existing Outer Space Act, which was enacted primarily to implement UK obligations under UN space treaties. To date, this has involved licensing of satellites launched from overseas.

The Bill has to be sensitive to the context of the emerging market, which is full of innovation, disruptive technology and rapidly evolving business models. In this context it would be inappropriate and self-defeating to set down in the Bill language that would inflexibly bind the UK’s ability to respond to this market as it emerges. Instead, we seek to be a global exemplar of good regulation by balancing flexibility and foresight with an absolute commitment to safety and best practice. As such, the Bill provides a framework for the development of more detailed rules in secondary legislation, supplemented by guidance and supported by a licensing regime.

I place on record my express and immense appreciation for the pre-legislative scrutiny already carried out on the draft Bill by the Delegated Powers and Regulatory Reform Committee and by the Science and Technology Committee in the other place to strengthen this framework. I know noble Lords will further build on this process with the benefit of their work, for which I am also grateful. Our collegiate approach will continue as we develop secondary legislation, consulting on key issues and providing confidence to investors and insurers that the UK will develop safe, business-friendly regulation in the public interest.

Our space industry extends to and benefits all territories in the United Kingdom, and potential spaceport sites have come forward from all across our union. The Bill extends to all those territories, except for certain provisions not extending to Northern Ireland and Scotland as described in individual clauses.

As I am sure noble Lords will see, the Bill is comprehensive in the measures it puts forward. These include the duties of the regulator, the intention being that space activities will be regulated by the Secretary of State acting through the UK Space Agency, and sub-orbital activities by the Civil Aviation Authority. It also provides for range and range control and the licensing of the range control service provider, operator and spaceport operator, setting out the circumstances in which regulators may grant such licences and where such licences are needed. It refers to informed consent, training, qualifications and medical fitness to ensure safe and effective regulation of persons taking part in spaceflight and associated activities.

The Bill also provides for safety regulations, investigation of accidents and security. In addition, we have offences against the safety of spacecraft, which draw on offences against aircraft and aerodromes in the Aviation Security Act 1982 and the Aviation and Maritime Security Act 1990 respectively. The Bill covers monitoring and enforcement, allowing the regulator to investigate and prosecute offences contained in or made under the Bill.

The Bill regulates liabilities, indemnities and insurance. We have chosen not to bind any operational policy decisions by specifying any cap on liability. The existing Outer Space Act permits only the capping of the operator’s indemnity to the Government and contains no provision concerning the operator’s liability to third parties. We consider that the liability provisions in the Bill are therefore more comprehensive. However, liability capping will be subject to further consultation to ensure that our policy and regulation on capping, and many more measures besides, are in the public interest.

The Space Industry Bill is necessarily broad in scope, but it benefits from the experience and best practice of international launch and our own world-class aviation regulators, resulting in a safe, proportionate and comprehensive enabling framework in one piece of legislation.

In turn, the activities defined in the Bill and its subsequent regulatory framework will benefit many in the UK. Entrepreneurs will benefit from new opportunities to build innovative commercial enterprises off the back of launch services and small satellite data. Local economies will benefit from the creation of spaceport sites, with related jobs and opportunities in construction and hospitality. Our small satellite industry will have direct access to domestic launch capacity, reducing dependence on foreign launch services and enabling growth across the industry. British-based scientists will benefit from increased access to microgravity and investment in institutional capability in launch, spaceflight and related sciences, attracting world-class scientists to the UK. Young people seeking careers in science, technology, engineering and maths will gain new opportunities and greater inspiration from an expanding UK spaceflight industry. The UK as a whole will benefit from access to a strategic small satellite launch capability, contributing to our understanding of the world, the provision of public and commercial services, the delivery of national security and new opportunities for investment and export. 

Half a century ago, the British rocket programme was considered unviable, but as the last rocket had already been built it was given permission to launch. Prospero, the small satellite that it successfully transported into space, was the first and, currently, only satellite to reach orbit on a British launch. Today, we stand at the dawn of a new commercial space age—an age in which we can once more reach for the stars, not at vast public expense or with our being dependent on the hospitality of others, but in the best spirit of British innovation by enabling, attracting and empowering commercial markets for small satellite launch and sub-orbital flight from UK spaceports.

So let us end Prospero’s lonely record. Let us empower our best and brightest to reach higher than they ever have before, inspire the next generation to reach higher still and, in so doing, deliver the benefits that low-cost access to space will bring us all. In this spirit, I welcome scrutiny of and debate on the Bill. I beg to move.

--- Later in debate ---

[Lord Callanan]

My Lords, I thank all noble Lords who have taken part in today’s Second Reading for their, as ever, very informed questions, which they were quite right to ask. The challenge and the debate are welcomed by the Government and will help us strengthen the Bill. I appreciate the broad support that has been shown for the Bill’s ambition. I reiterate the point that I have made to a number of noble Lords, both publicly and privately, that we are looking to co-operate on all sides of the House on this matter with Members from all parties and none. I am always available to discuss aspects of it and I have written to a number of Members to make that point. I thank my right honourable friend the Minister of State at the Department for Transport, who was sitting on the steps of the Throne earlier. I was delighted to see him paying such close attention to our proceedings.

I will try to address many of the points that have been made. I thank the noble Baroness, Lady Bloomfield, for her astute analysis of the UK space industry and her support for the Bill. On the issue that she raised concerning the comparable provisions to those in Section 1 of the Civil Aviation Act 1982 to promote the development of the space industry in the UK, I agree that the Government should recognise the need to promote growth in this sector. The Deregulation Act 2015 provides for a growth study to apply to functions specified by order. Statutory Instrument 2017/267 already lists functions under the Outer Space Act 1986, and we propose to amend this SI to also list functions under the Bill. My noble friend also shares the concerns of a number of other noble Lords—my noble friend Lord Moynihan also mentioned this—about over- regulation of this emerging market. This is a concern we are very alive to, and the Bill establishes a proportionate framework to support growth in this emerging sector while adequately balancing government and operator rights, the safety provisions and other factors dedicated to it. In exercising the powers in the Bill, the Government will ensure proportionality, and we intend to consult fully on all the secondary legislation required to implement these measures.

Engaging with agencies such as ICAO was raised by the noble Lord, Lord Hunt. Through the DfT and the Civil Aviation Authority, the UK has been working as part of a joint ICAO/UNOOSA space learning group better to understand how commercial spaceflight fits in with the global air navigation structure and how regulation will need to adapt to the new industry. ICAO has not yet developed detailed rules on spaceflight.

The noble Lord, Lord Hunt, also raised the issue of the carriage of nuclear materials. We do not intend to permit the carriage of any nuclear materials. Paragraph 3 of Schedule 3 allows for prohibitions and restrictions on this. There may be exceptions regarding everyday appliances such as smoke detectors, which routinely use small quantities of technically radioactive material.

We do not believe that the Bill engages obligations to produce an environmental impact assessment. Environmental impacts are heavily correlated with the type, frequency and location of spaceflight activities. At this stage, it is very difficult to ascertain specific environmental issues. For example, the sensitivities of a site cannot be known until we know the location of the spaceport.

My noble friend Lord Moynihan and the noble Lord, Lord Hunt, raised international agreements, and they were right to do so. We have put in place a number of agreements to enable commercial spaceflight in the UK. The type and nature of these agreements depends largely on the technology used, how and where it is operated and what it is used for. The UK complies with all existing space treaty obligations, and we are working to secure the agreements necessary to enable commercial spaceflight to take place from the UK.

On a point made by the noble Lord, Lord Hunt, I should say that the UK Space Agency’s international partnership programme uses UK R&D to support international development. This supports developing countries to use satellite solutions for problems such as deforestation and disaster relief. My noble friend Lord Moynihan asked about the Government’s support for the development of this emerging market in the UK, and a number of other Members raised a similar point. The UK Space Agency published details of the grant process in February, including our processes for assessing proposals and the criteria we would apply. We have engaged extensively with the parties who submitted funding proposals, to ensure that our process is transparent. The proposals were naturally submitted to the Government in commercial confidence and noble Lords will understand that I cannot disclose details now. However, I can confirm that in line with the process set out in February, the UK Space Agency is currently considering these proposals with independent expert advice, and I expect it will announce the outcome of the process later in the year.

A number of noble Lords, including the noble Lord, Lord McNally, raised questions around the European Space Agency. The Government’s policy to exit the EU does not affect the UK’s membership of the European Space Agency. The UK has a strong and healthy space economy with an international outlook. We have a long history of collaboration and participation in European space programmes and missions through the European Space Agency. The Government will continue to take an active role in European space programmes, supporting UK industry in its bids to win contracts overseas and developing our national capability to keep the UK competitive in the global market.

The issue of affirmative regulations was also raised by my noble friend Lord Moynihan. We need a proportionate approach for aviation. Section 60 of the Civil Aviation Act enables all aviation safety rules to be made by negative procedure. These safety rules are likely to be amended frequently. We aim to lay statutory instruments in summer 2019, and licences can be issued once these are in force.

The noble Lord, Lord Hunt, raised the issue of range ownership. Our intention is for these to be privately owned. Foreign ownership is not prohibited. A licence cannot be granted of course unless the applicant is a fit and proper person.

My noble friend Lord Dunlop asked me about the number of spaceports. The Bill does not restrict the number of licences that could be issued for spaceports. However, the decisions on licensing would be based on eligibility, alternative criteria requirements and safety standards. I noted his strong advocacy of Scotland, along with that of my noble friend Lord Moynihan—we have a lot of interest from Scotland, particularly given the rural nature of many of its locations. We are working closely with the devolved Administrations, but I hope that my noble friends would not expect an Englishman with Irish roots to adjudicate on this process. My noble friend Lord Dunlop also asked me about ITAR and knowledge transfer. The Bill includes provisions for entering into agreements with other countries, including the provision for knowledge transfer and to ensure that we can meet the ITAR constraints that may be imposed on us by the United States.

The issue of liabilities was raised by a number of noble Lords. We have taken the power in the Bill to cap liabilities. However, we can assure industry of our intention to cap liabilities only in circumstances for which analysis has already been carried out to determine the current liability cap policy under the Outer Space Act 1986, as amended by the Deregulation Act 2015. For other circumstances, we hope to carry out the analysis as quickly as possible to further promulgate our policy decision.

My noble friend Lord Balfe and the noble Lord, Lord Rosser, raised the issue of drones. Your Lordships will be aware that the department completed a consultation on the safe use of drones in the UK in March. We are considering the responses received and developing outcomes on this, and I hope the Government’s position will be released very soon.

My noble friend Lord Suri asked me about consultation. We will discuss the proposed structure of the statutory instruments and how this fits with industry views. We intend to publish a database containing more detail on regulatory functions including spaceflights, on existing international best practice under each of those functions, and on initial assessments of risks associated with each of these functions before and after regulatory activity has taken place. We expect that this will start the conversation on the licensing framework and can inform discussions with insurers about the level of residual risk, and therefore start to gauge the potential appetite for insurers to enter the market.

The noble Lord, Lord Fox, asked me about timetables for launch. I am slightly hesitant on this, but we intend to lay statutory instruments in summer 2019. Once these have entered into force, regulators will be in a position to accept licence applications, which we expect will be processed in roughly 12 to 18 months. Please take that with a slight pinch of salt—these things can change and there are lots of considerations still to go through—but it might help as a rough timetable.

I take the point made by the noble Lord, Lord Rosser, about the policy scoping notes. Please accept my apologies that they came out late, but I wanted to get them issued before we sat down today. I appreciate it is very difficult to read a 94-page document in advance of this debate, but the policy scoping notes are not provided for discussion: they are our initial statement of intention with regard to the use of delegated powers and the need to consult on the use of powers given their importance and impact and the need to carry out analysis and assessment of criteria for determining safe levels of risk, for example. I confirm that it is not currently our intention to take Committee immediately after the holiday break in September. It will be a few weeks after that, subject to the vagaries of the Whips, and not immediately we return after recess.

[Lord Rosser]

I thank the Minister for that comment. It had certainly been my understanding that it was not going to be in September anyway. What is of concern—given the extent of devolved powers, with further information still to come—is if on the first or second day back in October, the Committee stage of the Bill is scheduled. What I meant by breathing space was a breathing space in October before we start Committee.

[Lord Callanan]

I am not in a position to confirm that yet. As soon as I get further information from those who deal with these matters, I will let the noble Lord know. I intend to work as closely as possible with all noble Lords on this; when I have further information, I will share it with him.

On the question of licensing and insurance for mega constellations, space activities are risky in nature and the Government may be required to pay compensation for damage caused as a result of spaceflight and related activities carried out by UK entities or launched from the UK. The insurance requirement is one of the provisions in the Bill to protect the Government and the public by ensuring that there is a resource to meet such claims. We do not believe that small satellites pose the same risks to the space environment. Further work will be undertaken on the insurance requirement for the different activities licensed.

The UK has played a major part in developing the main EU space programmes—Galileo and Copernicus—and space surveillance and tracking, which have supported the rapid growth of the UK space sector and contributed directly to our prosperity and security. It is a global success story, leveraging our best talent to deliver highly innovative products and services every year, and we want that to continue if at all possible.

The noble Lords, Lord Fox and Lord Rosser, asked me about delegated powers. The Bill contains 71 clauses, 12 schedules and 100 delegated powers. This large number of delegated powers—I accept that it is a lot—is required because the commercial spaceflight environment is innovative, highly technical and fast changing. It is important that we have the flexibility given by secondary legislation to adapt to keep pace with this emerging market, as both UK regulators and the space industry develop expertise in this area. The Bill sets out the regulatory framework for a novel, dynamic and diverse industry, accommodating a wide range of different technologies. It aims to provide sufficient certainty and assurance to Parliament, regulators, industry and the general public while simultaneously having the flexibility to allow industry to grow. Early feedback so far from industry is that this flexibility is seen as vital. A rigid approach that offered limited opportunity to keep pace with either the development of spaceflight or the enhanced experience of the regulators would be restrictive for the sector.

The noble Lord, Lord Rosser, asked me about horizontal and vertical launch. He is correct: currently, we expect existing aerodromes to be most interested in conducting horizontal launch activities. I would expect vertical launch activities to be from a mixture of existing aerodromes and new facilities, subject to the strict licensing conditions that we have put in place. The noble Lord, Lord Hunt, asked me about flags of convenience. Responsible operators may be attracted to launch from the UK, but our vigorous approach to safety should deter less responsible persons.

[Lord McNally]

Before the Minister leaves the point about consultation, there is concern in the industry about the machinery by which the players influence regulations as they become firmer and clearer. They want to be sure that they can continue to influence the development of policy, rather than be faced with a fait accompli.

[Lord Callanan]

I can confirm that we are in extensive consultation with industry players. My honourable friend was visiting Surrey Satellites this morning for discussion on various aspects of the Bill and its commercial operations.

I think it was the noble Lord, Lord Rosser, who asked me about international environmental obligations under the Bill. They are covered by duties of the regulator in Clause 2 and under numerous other clauses, including Clause 8. We would not grant a licence if it were inconsistent with our international obligations. We have reviewed the relevant international, environmental treaties and obligations and the national requirements that may apply to spaceflight activities, and have concluded that we do not need any specific new provisions in the Space Industry Bill, but spaceflight activities and spaceports will, of course, have to fully comply with all existing planning and environmental requirements.

In relation to cyber interference, for conventional aviation we keep transport security under constant review, and we will do the same for spaceflight activities. We already work closely with partners across government and industry on restrictions between horizontal and vertical spaceports. I hope that I have responded to most points put by noble Lords, but if not there will perhaps be an opportunity to explore these issues further.

We have covered lots of vital areas and extremely important issues in this debate. Noble Lords were right to focus on issues of safety, environment and growth of the industry. I am sure that we will return to many of these issues in Committee. Once again, I thank all noble Lords for their general warm welcome for the Bill, notwithstanding some of the concerns expressed. As I said earlier, I look forward to working with noble Lords both in and outside the Chamber to ensure that we strengthen the Bill’s provisions as it makes its passage through the House

[Lord Rosser]

Before the noble Lord sits down—I thank him for the responses to the questions raised—if he finds that he has been unable for very good reasons to respond to all the questions raised, and I will not confine this to my questions, can we take it that he will write in response to those questions he has not dealt with?

[Lord Callanan]

Of course. We have a meeting planned for next week anyway, when we can perhaps discuss these issues further. I will be very happy to clarify and give more detail on any of the points we have spoken about. With that, I conclude by asking the House to give the Bill a Second Reading.

Bill read a second time and committed to a Committee of the Whole House.

Railways: Northern England

Lord Callanan Excerpts

Monday 10th July 2017 Lords Chamber

[Lord Greaves]

To ask Her Majesty’s Government what support they are giving to connecting communities and economies in the north of England by the re-opening of railway lines.

[The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)]

My Lords, the Government are investing billions of pounds across the north of England in order better to connect communities and build the northern powerhouse. In the spirit of devolution, it is of course for local enterprise partnerships and local transport authorities to decide whether the reopening of a railway line is the best way to address the economic needs of their area and to secure appropriate funding, including that made available by the Government.

[Lord Greaves (LD)]

My Lords, there are ambitious plans for substantial investment in new high-speed railway lines in the north of England, but the Minister will be aware that many towns have been missed off the network. There are missing links that need to be put back in to provide an ordinary service in some of those towns—none more so than the Colne-Skipton link, which can provide not only a local service of benefit to local people in the region but a new strategic east-west route between the west coast and the east coast, particularly for freight. There has been a 20-year campaign for this, with half-promises from government at all levels. Will the Government step in and put some oomph behind this proposal?

[Lord Callanan]

I can see that that position has widespread support. First, I thank the noble Lord for his interest and considerable advocacy on this subject. We also pay tribute to the work of the Skipton-East Lancashire Rail Action Partnership—that well-known group—in raising the profile on the case for reopening this line. Local partners share a desire to improve connectivity across the Pennines. Their recent connectivity report suggested that there may be economic benefits in doing so, and they will be actively involved in the Transport for the North corridor study to consider potential solutions. Through growth deals, we have provided the north of England with almost £3.5 billion of local growth funding, which is supporting local authorities and LEPs to deliver more than 150 local transport schemes.

[Baroness McIntosh of Pickering (Con)]

My Lords, my noble friend will be aware of the North York Moors railway line, of which I have the privilege to be honorary president. The fact that the line was able to access the national rail line to Whitby has opened up tourism, and the number of people visiting the railway has risen phenomenally. Will my noble friend share this with his ministerial colleagues to look favourably on Heritage Lottery Fund grant applications for such lines in the future?

[Lord Callanan]

I am sure there is considerable benefit to the North Yorkshire communities in the reopening and additional service provision on these lines, and I am happy to support my noble friend’s assertion.

[Lord Clark of Windermere (Lab)]

My Lords, the Minister is aware that one of the key facets of the northern powerhouse is rail connectivity. Two years ago, plans were announced by the Government for the electrification of the line from Manchester to Leeds. Reports over the weekend have suggested that those plans have been shelved. Is that correct?

[Lord Callanan]

My Lords, we will be announcing our proposals for that line in due course, but let me just say that we are investing more than £1 billion in the great north rail project, which is transforming rail travel for passengers across the north up to 2019 as part of our over £13 billion investment in rail infrastructure.

[Lord Shutt of Greetland (LD)]

My Lords, opening lines is one thing; opening stations on lines that are already open ought to be considerably easier. There was the line between Halifax and Huddersfield reopening in 2000. A railway station was built in Brighouse, and we were promised one for Elland, but we are still waiting—17 years later. Once the business case has really been made, and expectations have been created, how long does the Minister think that folk should have to wait for this station?

[Lord Callanan]

Clearly, the provision of additional stations on important local lines is vital, but I shall have to write to the noble Lord on the detailed business case for that particular station.

[Lord Dubs (Lab)]

My Lords, no doubt the Minister has a list of all the potential local railways, so may I ask him to look at the case for the Penrith to Keswick line? It is one of the examples of where Beeching vandalised this country, so let us put that right.

[Lord Callanan]

The noble Lord is right: I do have an extensive list. However, I do not see that one on it, but I will write to him on that particular case.

[Lord Faulkner of Worcester (Lab)]

My Lords, I remind the House of my railway interests in the register. The Minister will be struck by the support that exists all over the House for the reopening of rural railway lines. Can I draw his attention to the report by the Association of Train Operating Companies in 2009, which looked at communities with more than 15,000 inhabitants, and at the potential for reopening services where they used to exist? There were 14 lines of the highest priority where there was either an existing freight line or a disused line. No Government have yet acted on that report, so will the Minister now please have a look at it?

[Lord Callanan]

I will certainly have a look at the report, now that the noble Lord has drawn my attention to it.

[Lord Framlingham (Con)]

My Lords, the Minister is well aware of the general feeling in the country that HS2 is a waste of time. Can I urge him to review it urgently because, if common sense prevails and that silly scheme is scrapped, there will be plenty of money for all these very sensible schemes in the north?

[Lord Callanan]

I am, of course, aware of the noble Lord’s passionate opposition to HS2. However, I am afraid that on this one occasion I will have to disagree with him, because I think it is an excellent scheme and we will be going ahead with it.

[Lord Hughes of Woodside (Lab)]

Will the Minister now answer the direct question of my noble friend Lord Clark about the reports in the press? Are they true or not?

[Lord Callanan]

No, they are not true. We are re-evaluating the scheme, but we will be going ahead with it and we will publish our proposals in detail on it in due course.

Southern Rail: Gibb Report

Lord Callanan Excerpts

Tuesday 27th June 2017 Lords Chamber

[Baroness Randerson]

To ask Her Majesty’s Government, in the light of the publication on 22 June of the Gibb report on Southern Rail, what steps they are taking to deliver improvements for passengers.

[The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)]

My Lords, Chris Gibb’s independent report into Southern Rail makes a number of recommendations for the network that we have already been working with industry to deliver. In early January we committed an extra £300 million to improve infrastructure resilience, and we have established a new board to tackle issues ahead of the huge upgrades Thameslink will bring in 2018. However, Chris Gibb found that the main cause of widespread disruption for passengers was trade union action and unusually high levels of sick leave.

[Baroness Randerson (LD)]

My Lords, as the Minister says, the report is now six months old. That is six months of misery for Southern’s passengers. Can the Minister tell us why the Government did not publish this report before the election? He is right to say that there were criticisms of the trade unions. There was also criticism of the Government for accepting a bid with the fewest drivers and a driver shortage from the start. Is the Minister able to assure us that in future there will be sufficient numbers of staff and there will be no further attempts to run this on the cheap?

[Lord Callanan]

There have certainly been no attempts to run the service on the cheap and I do not agree with the noble Baroness that performance over the past six months has been poor. In fact, since strike action has been reduced, Southern Rail’s performance has significantly improved in the past six months. Its public performance measure, which measures performance across train operators, is up by 23 percentage points—from 62% in early December to 85% now. We want and expect that figure to improve further but, as Chris Gibb’s report makes clear, that can happen only if industrial action by the trade unions stops.

[Lord Rosser (Lab)]

In his report, Mr Gibb recommended that the Government should “urgently consider” transferring the East Croydon to Milton Keynes and Great Northern metro services from the problem-ridden GTR franchise to Transport for London in 2018. Mr Gibb also indicated that similar consideration might be given to transferring the inner-London Southern metro services in time for franchise renewal in 2021. The current Secretary of State for Transport previously made it clear that he would not transfer any further rail services to TfL, as that would mean giving control over more routes to a Labour mayor. The Government have now had six months to consider Mr Gibb’s recommendations on transferring more routes to TfL. What is the Government’s response to those recommendations—particularly those relating to 2018—and what are the reasons for the conclusions that the Government have reached on transferring more rail routes to TfL in the light of Mr Gibb’s recommendations?

[Lord Callanan]

Chris Gibb’s report sets out several reasons why Southern Rail faced problems last year, including disruption from infrastructure works, the process of introducing new trains and insufficient numbers of drivers at the start of the franchise. The Secretary of State has now ordered the operator to reduce reliance on overtime, which means that it has started to increase the number of drivers, although that has an 18-month lead time. We decided to proceed with 34 of Chris Gibb’s 38 recommendations, but the transfer of additional lines to TfL was not one that we proceeded with.

[Lord Tebbit (Con)]

My Lords, will my noble friend refrain from giving TfL any more responsibilities until it has cleared up the mess of the roadworks around the Palace of Westminster, which are being conducted in an inconceivably incompetent manner? Will he also consider whether it is really sensible to have the ownership and management of the track and of the trains in separate hands? It did not work in that way in the great days of the LNER, the GWR and the Southern Railway before the Second World War. It would be better to put those aspects back together again; then, we might have sensible management.

[Lord Callanan]

I agree with the first part of my noble friend’s remarks but disagree with the second part.

[Lord Dholakia (LD)]

My Lords, is the Minister aware that London Councils has been negotiating on behalf of the London boroughs to address the impact of the Southern Rail disputes and their implications for the Freedom Pass, which the boroughs contribute to? No information is available about how London councils are to be reimbursed and when the decision will be made. What action is the state taking to ensure that ratepayers are not short-changed? I declare an interest as a Freedom Pass holder.

[Lord Callanan]

I am afraid that I have no information on the subject; I will write to the noble Lord about it.

[Lord Cormack (Con)]

Does my noble friend think that these miserable—I use the word in a complimentary sense—passengers will be consoled by his eloquent advocacy of space travel in his speech yesterday?

[Lord Callanan]

No—I suspect that they will not be.

[Lord Reid of Cardowan (Lab)]

To help the House, will the Minister remind us when and by whom the decision was taken to separate control of the track from control of the trains and to privatise them separately?

[Lord Callanan]

It was taken, as my noble friend reminds me, by the John Major Government. But I see no evidence that the Labour Party policy of renationalising the railways and handing even more power to their friends in ASLEF and the RMT will bring any improvement for passengers whatever. It will enable them to hold the whole country to ransom, rather than just the poor miserable passengers on Southern rail.

[Viscount Goschen (Con)]

My Lords, how optimistic is my noble friend the Minister that passengers on the Southern Rail franchise, even miserable ones such as myself, can expect a decent service over the summer months when, as I understand it, industrial action is planned for later this week and for 10 July by both the RMT and ASLEF?

[Lord Callanan]

I am afraid that the noble Viscount is correct. The unions have announced further industrial action starting from Thursday, so I can give him no consolation. We can spend as much as we like on upgrading infrastructure, providing new trains and taking action over management failings—but if the drivers and conductors fail to turn up for work, there is very little we can do about it.

If I give the House a little information on what offers have been made to ASLEF, perhaps your Lordships might have a little more sympathy. The operator has held 32 days of meetings with ASLEF to try to resolve the dispute since it began in March last year. Three formal offers were made; two deals have been accepted by the ASLEF executive, only to be voted down by the membership. ASLEF has turned down a 23.8% pay rise offer over four years that would have increased a Southern train driver’s basic salary by £12,000 to £60,000 for a four-day, 35-hour week. This would rise to £70,000 with overtime on a fifth day. That is an extremely generous offer. They are being well paid to provide a service to the public; I wish they would get on and deliver that service.

Queen’s Speech

Lord Callanan Excerpts

Monday 26th June 2017 Lords Chamber

[Lord Forsyth of Drumlean]

That an humble Address be presented to Her Majesty as follows:

“Most Gracious Sovereign—We, Your Majesty’s most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament”.

[The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)]

My Lords, it is a privilege and pleasure to open the second day of debate on Her Majesty’s most gracious Speech. I am honoured to be standing before noble Lords just three weeks after taking up my role in the new Government as a Transport Minister. This is always one of the most interesting and wide-ranging debates in the Lords calendar, so I very much look forward to the valuable and informed contributions that I know that many noble Lords will make. On behalf of the whole Chamber, I particularly extend a warm welcome to the noble Lords, Lord Colgrain and Lord Mountevans, who will be giving their maiden speeches today. I also thank my noble friend Lord Prior, who will be winding up the session this evening.

This Queen’s Speech was all about building a stronger, more successful and more resilient Britain: a country with its sights firmly set on the future and on what we can achieve as we build closer links with friends and trading partners around the world; as we deliver a Brexit deal that works for all parts of the United Kingdom; and as we grow and rebalance our economy, working to meet the aspirations of the whole nation. These themes will crop up regularly in our Queen’s Speech debate today, as we debate the Government’s agenda on economic affairs, transport, business, energy, the environment and agriculture.

Let me start with the economy. The fundamentals of the economy are strong. We have a record number of people—almost 32 million—in employment. We have reduced the deficit by almost three-quarters since 2010. After our economy grew 1.8% last year—the second highest in the G7—the Office for Budget Responsibility expects it to grow a further 2% this year.

Our economic success over the past few years has been widely documented, but what perhaps is less well appreciated is how it is benefiting the whole of our country. As the Chancellor made clear in his Mansion House speech last week, inequality is at its lowest in 30 years. The poorest households here have seen their incomes rise by more since 2010 than any other G7 country. That is partly thanks to the introduction of the national living wage, adding £1,400 to the annual income of those in full-time work on minimum salary. It will continue as we increase the national living wage, so that people on the lowest pay see their wages rise as the economy strengthens.

We have been clear that we want to keep taxes as low as possible for ordinary working people. Although we live in changing times, one thing will never change: this Government will always put economic stability first. That is why we are investing £23 billion through the national productivity investment fund in key growth areas, such as research and development and housing. It is why we are helping young people to get the training and development they need to do the high-skilled, high-paid jobs of the future. It is why we are determined to get the best possible Brexit deal for households and for UK companies.

As we leave the EU and adjust to our new position in the world, the resilience, flexibility and dynamism of our economy will be key. New Bills in the Queen’s Speech on trade and customs will help to give us an independent trade policy and a world-leading customs service. As Her Majesty’s most gracious Speech made clear, we will help British businesses sell their products and services abroad and boost exports.

Achieving our economic objectives depends on co-ordinated action across government, and I am proud that transport is playing a much bigger role today in stimulating growth. Transport used to be among the first departments to suffer whenever Governments of the day had to tighten their fiscal belts. While our competitors invested in major infrastructure projects, here in the UK, transport upgrades often fell victim to short-term political concerns. Because we have failed to invest in the long-term fabric of our nation, we have watched as our roads have grown more congested and our railways more overcrowded. But that is changing. No more is Britain seen as short-termist or infrastructure-averse. Since 2010, we have overhauled transport policy, and today we are delivering the capacity and links that we need to grow as we leave the European Union—connecting British companies with fast-growing global markets, creating the highly skilled jobs we need to modernise transport in this country and making the necessary investments to improve journeys for all working people.

Her Majesty’s most gracious Speech also showed how we are taking full advantage of the unique opportunities that new technologies provide. For example, the automated and electric vehicles Bill will help make Britain a global leader in developing and owning self-driving and electric cars. Self-driving vehicles might sound like science fiction, but they are already science fact and will revolutionise the way we travel. They will make roads safer by cutting the risk of human error and reducing insurance premiums. They will change the lives of disabled people with reduced mobility and reduce congestion by making better use of scarce road space. That is why, through this Bill, we are positioning ourselves as one of the first countries to benefit from the development and growth of self-driving vehicles.

It will also help us retain our leadership in electric vehicles. We are already one of the biggest markets for plug-in cars in Europe. So far this year, sales of pure electric cars are up by 36%, with a total of more than 100,000 ultra-low-emission vehicles now on our roads in this country. That is a ringing endorsement of the Government’s funding commitments of more than £2 billion since 2011 to increase ultra-low-emission vehicle uptake and support greener transport.

Our charging infrastructure is one of the most comprehensive in Europe, with more than 11,000 publicly accessible charging points, now including 900 rapid chargers. As the market evolves, however, this number will need to increase. The new Bill will give drivers confidence that there will be somewhere to charge their cars at motorway service areas and large fuel stations right across the country. Common standards will make them easy to use, and ensure that drivers have a wide choice of charging points. One of the main reasons the sales of electric cars are increasing is that buyers can see the charging infrastructure taking shape around them. This Bill will speed up the development of that network.

There is also a revolution happening on the railway. We are making excellent progress with HS2, Britain’s new high-speed rail network. HS2 will be the backbone of the national rail system, connecting our major cities, transforming capacity across the railway, and freeing up space for new commuter services on existing lines. HS2 is not just a new railway; it is an investment in our economic prosperity for the next half century and more. It will be a powerful catalyst for rebalancing our economy, spreading growth that for far too long has been concentrated in London and the south-east.

The new Bill announced last week will give us the powers to build and operate the next stage of the line from the West Midlands to Crewe. It is a crucial section of the project. Not only will it reduce journey times from London to Manchester and Crewe, it will speed up journeys to places such as Liverpool, Preston and Glasgow. With cross-party support and a programme that remains on time and on budget, construction of phase 1 will begin soon. We expect to deposit the new Bill covering the West Midlands to Crewe route in Parliament by the end of this year.

High-speed rail may be the biggest transport scheme of this generation. However, an even bigger revolution is taking place above us—in space. In the new economic space race, Britain is a strong competitor. The space industry Bill announced by Her Majesty last week has a clear purpose: to make Britain the most attractive place in Europe for commercial spaceflight; to put British business, engineering and science at the forefront of space technology; and to offer our world-leading, small satellite companies low-cost, reliable access to space. It will also generate opportunities for tourism.

While I am sure that most noble Lords would probably prefer two weeks on a cruise ship to floating in sub-orbital weightlessness for half an hour, there is in fact lots of demand for space tourism. The UK space industry is already worth £13.7 billion to our economy, and employs more than 38,000 people. This Bill will help us to achieve our goal to grow our share of the global space market to 10% by 2030. We want to be the first country to establish commercial spaceport operations in Europe. However, we need to move quickly to achieve our objectives. That is why this Bill is so important and we expect its First Reading to take place shortly. It will help provide the legislation required for launches and flights from UK spaceports, giving us new powers to license a wide range of commercial craft, including vertically launched rockets, space planes and satellites. Any site that meets the regulatory requirements will be able to apply to become a spaceport. We have already had strong interest from regions across Britain wanting to benefit from this exciting new market.

Finally, my department will also deliver a Bill to improve protection for holidaymakers. This will update the ATOL scheme so that it can keep pace with changes in the online travel market and UK-established companies can sell more easily across EU borders.

Her Majesty’s most gracious Speech also featured a number of important Bills and measures that the Department for Business, Energy and Industrial Strategy will be taking forward. The nuclear safeguards Bill will enable us to implement a domestic safeguards regime when we leave the EU Euratom treaty. This will allow us to meet our international obligations. We are bringing forward proposals to ensure that critical national infrastructure remains protected, so that foreign infrastructure ownership does not undermine our security or essential services.

We will strike the right balance between protecting national security and remaining a global champion of free trade. The Government also want to ensure fairer markets for consumers, so we will publish a Green Paper that will closely examine markets that are not working in the interests of consumers.

Let me be clear: we are firm believers in the market economy. It is the private sector, operating through a competitive market economy, that has delivered much of the growth that we have seen since 2010, but it is our job to make sure the system is working for the benefit of consumers. In particular, while progress has been made in recent years to improve competition in the energy retail market, it is clear that industry needs to do more. We expect energy suppliers to treat their customers in the same way as other competitive service sectors, so we will act where necessary. This will include bringing forward measures to help tackle unfair practices in the energy market so that energy bills can come down. A smart meters Bill will also help us complete the rollout of smart meters, protecting consumers and leading to £5.7 billion of net benefits to Britain. Smart meters will not just put consumers in control of their energy use, helping them to avoid wasting energy and money, they will end estimated billing and help customers to use smart pre-payment.

As I mentioned, the Queen’s Speech also confirmed the Government’s commitment to increasing the national living wage—specifically, increasing it to 60% of median earnings by 2020, then maintaining it in line with median earnings until the end of this Parliament. The Queen’s Speech also set out the Government’s intention to enhance rights and protections in the modern workplace, informed by Matthew Taylor’s review of modern employment practices.

I turn to the environment and agriculture. Agriculture contributes £8.6 billion to our economy and employs 1.5% of the workforce, so it is important that we support the industry and provide a strong foundation for future growth. The EU’s common agricultural policy, under which we have been operating for the past 44 years, has been an expensive failure. It is a system that provides financial support to millions of farmers across Europe to boost productivity, which accounts for around 40% of the total EU budget at €58 billion a year, and has been widely criticised for creating artificially high food prices throughout the European Union. Leaving the EU presents us with a great opportunity to renew our agriculture policy so that it supports farmers in a targeted and more effective way, while also achieving better value for money for hard-working taxpayers. Our vision is for a productive and competitive UK agriculture sector, supplying products of the highest standard to the domestic market and increasing exports abroad. At the same time, we will improve our environment, so that we can leave a better environment to the next generation than the one we inherited. The agriculture Bill will provide stability and certainty for the farming industry. It will enable the Government to support farmers to produce and sell more great British food, and in a more sustainable way. It will also help us deliver the same cash total fund for farm support until the end of the Parliament.

A fisheries Bill will be introduced to allow us to regain control of the UK’s exclusive economic zone and set UK fishing quotas once we have left the EU. This will provide a basis for us to secure a fairer share of the market, and greater economic benefit from our fish stocks. It will help a new generation of fishermen, as well as preserving and increasing our stocks, and it will support our coastal communities while securing the best possible deal for the UK fishing industry. We will no longer be bound by the common fisheries policy and will become an independent coastal state. But we will, of course, still meet our international obligations and co-operate with other coastal states in the management of our waters.

The gracious Speech sets out a clear direction for the future of Britain: a fairer, more prosperous and self-determining future as we leave the European Union, but also a more global future—one in which we build new relationships and trade agreements around the world, and where the talents and innovation of our own people and businesses can shine. I have set out how our legislative programme will help us meet those ambitions, and now I look forward to hearing contributions from all around your Lordships’ House.

Aviation

Lord Callanan Excerpts

Monday 26th June 2017 Lords Chamber

[Lord Spicer]

To ask Her Majesty’s Government whether they intend to publish a strategy for aviation.

[The Parliamentary Under-Secretary of State, Department for Transport (Lord Callanan) (Con)]

My Lords, the Government are committed to developing a new aviation strategy, and we will set out our proposed approach shortly. This will be an ambitious programme of work and we will consult widely, leading to the publication of an aviation strategy White Paper at the end of 2018.

[Lord Spicer (Con)]

I congratulate my noble friend on his new appointment. Does he think that it will bring out the many Members of this House and of the other place who want above all to know the date by which we will start to build a new runway at Heathrow? That date should, I think, be before Brexit takes off, as it were. Can my noble friend give us his early thoughts on this matter?

[Lord Callanan]

I thank my noble friend for his kind words. The Government remain committed to airport expansion in the south-east of England through our preferred scheme at Heathrow. We must remember that our manifesto contained a commitment to continue the programme of expansion at Heathrow. We are getting on with the job of delivering critical infrastructure in the national interest. A consultation on the draft Airports National Policy Statement closed on 25 May and the department is currently reviewing the tens of thousands of responses received. Once the analysis is completed and the Government have considered the responses, I assure noble Lords that we will set out our next steps.

[Lord Berkeley (Lab)]

Once the strategy is published, will the Minister quote the costs to the public purse of the surface access? My understanding is that those costs for the expansion at Heathrow will be even higher than the cost of the first phase of HS2. Would it not be better to expand our regional airports and to do less in the south-east?

[Lord Callanan]

The costs of the surface access to support the new development at Heathrow, if indeed it proceeds, will be borne by Heathrow Airport itself. Of course we also remain committed to expanding regional airports, a subject dear to my heart, and we will set out our approach in the aviation strategy White Paper that I mentioned earlier.

[Lord Naseby (Con)]

Since aviation policy must cover drones, is the Minister aware that the Government have been consulting for the past two years, while other countries such as the USA have legislated? Is it not time that we actually took some action so that all drones that are either bought or are already around are registered, with strict penalties for those who abuse them?

[Lord Callanan]

My noble friend makes a powerful point. As he says, we are consulting on the issue at the moment. There have been a number of well-publicised incidents of drones causing a hazard both to members of the public and to aircraft, and we will set out appropriate steps shortly.

[Baroness Randerson (LD)]

Given the Government’s repeated failure to come up with a plan to improve air quality that is consistent with EU standards, does the Minister accept that the expansion of Heathrow poses a massive additional challenge for which no satisfactory solution has been provided?

[Lord Callanan]

As the noble Baroness is aware, air quality is a national issue, and we take it extremely seriously. The final plan on air quality is due to be published on 31 July. If the Heathrow Airport decision proceeds, the impact on air quality will be taken fully into account. Moreover, Heathrow Airport has committed to moving passengers from their cars and on to public transport and has recently committed to no overall increase in car movements to and from Heathrow in the event of a third runway proceeding.

[Lord Rosser (Lab)]

I add my welcome to the Minister in his new position and I express my best wishes to his predecessor, the noble Lord, Lord Ahmad of Wimbledon, in his new role. I suspect that he will find himself spending more time inside an aircraft as a Foreign Office Minister than he did as Aviation Minister.

We have had a statement this morning about the financial support the UK Government are prepared to make available to Northern Ireland following discussions between the Conservative Party and the Democratic Unionist Party. It says:

“A detailed consultative report will be commissioned into the impact of VAT and APD—


air passenger duty—

“on tourism in Northern Ireland to recommend how best to build upon the growing success of that sector”.

Are similar consultative reports being commissioned into the impact of air passenger duty on tourism in other parts of the United Kingdom? If not, why not?

[Lord Callanan]

As someone who uses regional airports regularly, the issue of air passenger duty is, of course, high on my agenda. I am sure the noble Lord will understand that, as a Minister only a couple of weeks into his appointment, were I to start rewriting the Chancellor’s Budget proposals at this stage I would not last very long.

[Lord Trefgarne (Con)]

My Lords, when the time comes to repatriate the regulation of civil aviation, will that be vested in a revitalised Civil Aviation Authority, as in the past, or left to the European Aerospace Agency?

[Lord Callanan]

The whole issue of Brexit and how liberalised air transport will go forward will be the subject of negotiation. We want to ensure seamless access to European air transport matters, and I am sure the European aviation industry will want to access UK policy, too.

[Lord West of Spithead (Lab)]

My Lords, talking of aircraft, the Minister will be aware that the aircraft carrier HMS “Queen Elizabeth” is, as we speak, negotiating out of the fitting-out basin in Rosyth. Will he pass his best wishes to the ship’s company of that great ship, which for 50 years will ensure the security of our nation?

[Lord Callanan]

Vast though my responsibilities are, they do not yet include aircraft carriers.

[Lord Popat (Con)]

My Lords, I welcome the fact that the Government’s strategy on new aviation policy is coming very soon, but I guess we are 20 years behind. I say this as the Prime Minister’s trade envoy to Rwanda and Uganda. We recently sold two airplanes to the Rwandan Government, and for the first time, some four weeks ago, there was a direct flight from Kigali to Gatwick. We managed to get only three slots. We wanted seven slots. No slots were available at Heathrow either. Post-Brexit, for us to be a genuinely outward-looking country, we need direct flights and we need more slots. Most African countries, which are a growth area, need flights. The Ugandan Government want one, Tanzania wants one, Zambia wants one, but there are no slots available at Heathrow or Gatwick. Can we speed up the process of the third runway, and maybe even a second runway at Gatwick?

[Lord Callanan]

I take my noble friend’s concerns on board. Many airlines want access to the south-east of England. As we proceed with Brexit, aviation will be a critical component of our engagement with the rest of the world. More people will need to visit this country; more people will need to travel abroad for a new UK sector. Of course, the expansion of Heathrow, if it proceeds, will provide extra slots and we will look at the context of slots at regional airports in the aviation strategy.

[Baroness Ludford (LD)]

My Lords, can the Minister tell us whether Zac Goldsmith will resign his seat if the expansion of Heathrow goes ahead?

[Lord Callanan]

I am sure the noble Baroness will want to ask Zac Goldsmith himself that question.