Strikes (Minimum Service Levels: Passenger Railway Services) Regulations 2023

Lord Davies of Gower Excerpts

Wednesday 6th December 2023 Lords Chamber

Moved by

[Lord Davies of Gower]

That the draft Regulations laid before the House on 7 November be approved.

Relevant document: 3rd Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)

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

My Lords, these draft regulations will be made under the powers conferred by the Trade Union and Labour Relations (Consolidation) Act 1992, as amended by the Strikes (Minimum Service Levels) Act 2023. The regulations will apply across Great Britain, and their purpose is to set minimum service levels for specified services that can apply during strikes affecting passenger rail services.

The minimum service levels are designed to balance the public’s need to make important journeys and the impact of rail strikes on the economy with the ability of rail workers to take strike action. Since 2019, there has not been a single day without either a strike happening on the railways or mandates for strikes outstanding. The result has been many periods of disruptive strike action, with widespread consequences for passengers and the wider economy. This Government want to see an end to this disruptive strike action, but the trade unions continuing to call for it has led to these regulations being necessary.

I acknowledge the amendments to the Motion relating to this instrument. The regret amendment in the name of the noble Lord, Lord Liddle, references the views of the Delegated Powers and Regulatory Reform Committee on the detail of the policy in the Act, the retrospective element of the regulations, the fact that the impact assessment was not published at the time of laying, contractual concerns, and concerns for the ability for workers to take strike action. The fatal amendment in the name of the noble Baroness, Lady Bennett, references concerns around the impact of these regulations on the workforce and about safety, and raises concerns that the Act places undue obligations on trade unions.

In its 3rd Report of Session 2023-24, the Secondary Legislation Scrutiny Committee noted that more information should have been provided to explain the policy decision in the Explanatory Memorandum. The committee also noted that the impact assessment was not published at the time of laying and mentioned the issuance of an initial review notice by the Regulatory Policy Committee. I will address the amendments to the Motion and the Secondary Legislation Scrutiny Committee’s remarks but will turn first to the instrument under consideration today.

The Strikes (Minimum Service Levels) Act 2023 establishes a framework for the making of regulations to set minimum service levels during strikes. The Act provides that for certain sectors, including transport, the relevant Secretary of State may specify, in regulations, the relevant services and the minimum service levels that will apply. These regulations for passenger rail specify three categories of services that minimum service levels apply to, and the associated minimum service levels.

Thecategories are: category A, train operation services; category B, infrastructure services; and category C, light rail services. For category A services, the minimum service level is specified as the

“provision of the train operation services necessary to operate the equivalent of 40% of the timetabled services operating during the strike”.

With regard to category B services, the minimum service level is specified as a list of priority routes to be operated for the specified hours of 6 am to 10 pm during strike action. The priority routes are defined in the regulations and listed in the schedule to the regulations. In addition to the listed priority routes, the minimum service level also applies to any part of the network that is within a five-mile radius of the priority routes and is a loop, siding, or a line that connects the priority routes to freight terminals, stabling facilities, or depots used for rolling stock or for plant, equipment, and machinery used in providing the other infrastructure services. This is to enable trains to travel to and from berthing areas and terminals to the priority routes.

With regard to category C services, the minimum service level is specified as the provision of the train operation services and infrastructure services necessary to operate the equivalent of 40% of the timetabled services during the period of a strike for the relevant light rail system.

I now turn back to the amendments to the Motion in the name of the noble Lord, Lord Liddle, and the noble Baroness, Lady Bennett, and the recent remarks by the Secondary Legislation Scrutiny Committee to which I previously alluded. I regret that the impact assessment was not published at the time of the laying of these regulations. My department has a good track record in the quality of our impact assessments. It was the right decision to revise the impact assessment and allow the committee time to review.

Although I regret that the Regulatory Policy Committee has not yet been able to issue an opinion, it is important that noble Lords can scrutinise the impact assessment in this debate, which is why we have now published the impact assessment. The Act sets out the framework, and it was correct that these regulations set out the policy detail of passenger rail minimum service levels. Each sector being debated today has its own complexities and operates very differently. There is no one size that fits all models.

I now turn to the retrospective provisions. The disruption caused by continuous strike action puts these passenger rail regulations in a different position to other sectors. The Government have therefore taken the step of including retrospective provisions to create certainty for employers that strikes called under mandates secured before the primary legislation received Royal Assent would be in scope. This legislation is not intended to prevent workers from taking strike action. My department launched a consultation on minimum service levels for passenger rail to develop a more detailed understanding of how minimum service levels might impact on staff. This department has at every stage carefully balanced workers’ continued ability to take strike action against the needs of people to make essential journeys by rail. It will be at the discretion of individual employers whether to issue work notices to deliver minimum service levels. There are no plans to compel employers to use these regulations. There is comfort in that the Act includes the safeguard that employers should not identify more persons than are reasonably necessary to deliver the minimum service level.

Finally, I turn to the fatal amendment. Tackling strikes in transport was a 2019 manifesto commitment. As we are seeing now, when the rail trade unions choose to strike, people, including doctors, nurses and teachers, experience disruption in accessing their places of work, schools and vital medical appointments. In some cases, they are unable to travel at all. If the House supports this amendment, it will be voting against protecting passengers from the disproportionate impacts of rail strikes. I beg to move.

[Lord Liddle (Lab)]

My Lords, it is a great honour for me to speak to this Motion. It marks my return to the Labour Front Bench, which I am delighted by.

Alas, I feel a very personal interest in this matter. My father was a Carlisle railway clerk and a long-standing member of the Transport Salaried Staffs’ Association. I was so steeped in Labour and trade union history when I was a student that my thesis was on railway industrial relations.

Growing up, one of the things that I learned about industrial relations, particularly on the railways, was that the right to strike was fundamental but should be used sparingly. Despite employers and employees sharing common interests, there will be conflicts of interest. Collective bargaining to resolve those conflicts will not work unless the unions have the power to strike, even if they rarely use it. That is of fundamental importance.

That power is not absolute. As my noble friend Lord Hendy said in an earlier debate, it is not untrammelled. There must be ballots and regulations on picketing and secondary action. Labour has accepted all that. Our objection to what is being proposed for the railways is that the practical effect of these minimum service levels is to eliminate the right to strike for vast numbers of railway workers—40% by some estimates.

That is correct—you have to think about it for only a second—because if you are to run any trains on the principal parts of the network, you have to keep all the staff in place necessary to keep the network safe and running. Anyone working in a signal box has to be on duty, or in a control room; station staff have to be there, because they play a vital role in ensuring passenger safety; and the permanent way teams have to be there to do their work on maintenance of the track. If that does not happen, you will be running an unsafe railway in an incredibly short time. As my noble friend Lord Coaker said in his remarks about the border staff, this is a wholly disproportionate measure in the case of the railways.

--- Later in debate ---

[Lord Davies of Gower (Con)]

My Lords, I thank the noble Lords who have taken part in this debate for their consideration of these draft regulations. This is about achieving a balance between the rights of trade union members and the public’s expectation of being able to travel to work or, indeed, for any other social reason. At the end of the day, transport is at the heart of our nation’s success.

A number of questions have been asked, which I will try to address as briefly as I possibly can. This Government understand the difficulties imposed on the public by strikes on the passenger rail network. While it is right that workers are able to take strike action, it is a priority for the Government to protect the public and businesses from the disproportionate impact of strikes, including on people’s ability to make important journeys and on their livelihoods.

The careful design of the regulations, based on evidence from the public consultation and further consultation with stakeholders, means that minimum service levels will deliver a considerable improvement in service levels and experience during strikes. The economic damage to businesses and the wider economy would also be limited, and the industry would have the flexibility it needs to ensure that the minimum service levels are deliverable. At every stage of policy development, my department has carefully balanced workers’ ability to take strike action against the needs of people to make important journeys by rail, such as to get to work and to access vital services such as education and healthcare. Ensuring that this intervention is proportionate has been a central and continual consideration. Subject to parliamentary approval, we expect the regulations to come into force before the end of this year. In-scope employers would then be able to use minimum service levels for any strike action after they come into force, should they choose to do so.

I turn to some of the issues raised by the noble Lord, Lord Liddle. The Government firmly believe that the ability to strike is an important part of industrial relations in the UK, rightly protected by law, and understand that an element of disruption is inherent to any strike. But we also need to maintain a reasonable balance with the needs of the public and the impact of strikes on businesses and the wider economy. In cases where work notices are issued by employers, this policy will impact some rail workers’ ability to take strike action. As such, the department has, at every stage, carefully balanced workers’ ability to take strike action against the needs of people to make important journeys by rail.

Evidence provided through consultation and engagement with industry indicates that the proportion of workers needed to deliver the minimum service levels will vary by employer and job role. In critical operational roles, for example, we understand that more than 40% of staff are likely to be required to work to deliver a service level of 40% under the categories A and C of the regulations. The extent of the coverage of priority routes under category B also means that the proportion of infrastructure workers required to deliver the infrastructure minimum service level will vary by geography.

On the safety point raised by the noble Baroness, Lady Bennett, passenger rail employers must comply with safety requirements on the railway. The regulations do not override any existing safety rules or obligations. Moreover, the regulations have been designed to fit within the existing safety frameworks, and the department has consulted with the Office of Rail and Road during development.

Where an employer decides to issue a work notice, the Act requires that the work notice identifies the persons required to work during the strike in order to secure that the levels of service are provided and to specify the work required to be carried out. Employers can identify only persons who are reasonably necessary to provide the minimum levels of service under the regulations in the work notice. We consider that this would include workers who are reasonably necessary to meet legal and contractual obligations relevant to the delivery of the minimum service level, including safety obligations.

It is therefore expected that services delivered on strike days under minimum service levels will be as safe as services delivered on strike days without the use of minimum service levels. Great Britain is a world leader in rail safety. Ensuring high standards of rail safety will always remain a top priority for this Government.

With respect to the issue raised by the noble Lord, Lord Snape, under the parent Act, trade unions must take reasonable steps to ensure that any of their members named on the work notice comply with that notice or the union will lose its legal protection from damages. Workers who take strike action despite being included on a valid work notice will lose their automatic protection from unfair dismissal. It will be for individual employers to determine whether any disciplinary action should be taken against employees for non-compliance with a work notice or legal action against a union that fails to take reasonable steps.

These regulations strike a carefully balanced and proportionate approach to mitigate the impact of strikes on the passenger rail sector for passengers and our economy. The regulations make possible a considerable improvement in the service that can be delivered during rail strikes. This will support passengers to make important journeys, including getting to work and accessing vital services, and will limit negative impacts on the economy. This is proportionately balanced with workers’ ability to take strike action, ensuring that impact is felt when a trade union goes on strike but passengers can still expect a consistent, albeit lower, level of service to be provided.

Therefore, although I am sure we all hope that strike action can be avoided, implementing these regulations will provide a means of addressing the disproportionate impacts that strikes have on the public, communities, businesses and our economy when they take place.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I thank the Minister for answering our questions and for what has been the clearest, least-hedged explanation from the Government—that workers can be sacked under this legislation, which of course contradicts what was said in the other place. I am also pleased with what the Minister had to say about how safety rules override the regulations we are debating. However, I hope that the Government will make that fact very clear and publicise it to workers in the rail industry, who may face difficult situations under extreme pressure due to crowded trains and people seeking to crowd on to them, so that people are aware. I am aware of the hour so I will simply stop at this point and beg leave to withdraw my amendment.

Merchant Shipping (Counting and Registration of Persons on board Passenger Ships) (Amendment) Regulations 2023

Lord Davies of Gower Excerpts

Monday 4th December 2023 Lords Chamber

[Lord Tunnicliffe (Lab)]

My Lords, often described as the lifeboat of the UK economy, the merchant shipping industry plays a pivotal role in ensuring the smooth running of people’s day-to-day lives, aiding the transition of goods and ships while supporting over 180,000 jobs in the UK, according to the Centre for Economics and Business Research. On the global scale, the industry facilitates the economy through the wider supply chain, supporting the running of 680,000 jobs.

According to the Office for National Statistics, looking solely at shipping, the sector contributed £6 billion to the economy in 2020, accounting for 19% of the transport industry. I am pleased to share my support for the merchant shipping industry and the introduction of the necessary regulations, which have been long awaited. This instrument will update and modernise the 2021 regulations, implementing corrections in the light of mistakes existing in the earlier legislation. Further, it postpones the deadline for all ships in UK waters to report data on the persons on board by two years.

Subsequently, from 2025, UK-flagged passenger ships, wherever they are located, and passenger ships within UK waters, will have to use an electronic method to report information regarding passengers on board. Search and rescue authorities will then quickly have access to essential information needed in the event of an emergency. This will reduce the loss of, and the risk to, lives at sea.

I therefore empathise with and support my noble friend’s Motion. Indeed, these highly significant regulations are welcome and long overdue. Further, I understand his concerns relating to the inadequate protection for passengers travelling on non-passenger ships. I am pleased that the House has the opportunity to discuss these protections today.

I would like the Minister to provide clarity on three central concerns. First, how did the Government learn of the mistakes in the 2021 regulations and what would be the consequences if they were not corrected? Secondly, given the postponement, how have the Government calculated that there will be no safety risk? Is the Minister not concerned that prolonging its implementation will only prolong the safety risk? Finally, given that the Explanatory Memorandum notes that the consultation on these changes received only seven responses, can the Minister explain the consultation process a little more? Is he satisfied that the results are credible, given how few responses were received?

To support the UK’s global position as a great trading nation, as well as a healthy and thriving economy, is to support the merchant shipping industry. I am positive that this instrument will play a vital role in the future of the industry by strengthening safety protections, and I therefore welcome its laying before the House.

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

My Lords, I thank noble Lords for their consideration of these regulations. I will try to respond to the specific points raised. I must confess that I find this quite a technical issue and subject matter. Where I cannot answer questions this evening, I undertake to write on specific points to noble Lords.

The Motion mentions the delay in the introduction of these regulations. They are not part of the maritime backlog and are therefore not late in that context. The regulations were made in 2021 and implemented the latest EU directive on persons data obligations, including a deadline for the electronic reporting of data, and placed additional restrictions on exemption powers. We have progressed the changes requested by the Joint Committee on Statutory Instruments in the 2021 regulations with much urgency. However, for reasons of efficiency, we have used this legislative vehicle to also take forward some post EU exit opportunities, which do not reduce safety standards and go some way to relieving the pressures on operators—namely, a postponement on electronic reporting obligations and the addition of flexibility to the exemption provisions. This allows the Secretary of State, through the Maritime and Coastguard Agency, more discretion to implement the regulations pragmatically.

The noble Lord, Lord Berkeley, raised some interesting issues. He questioned why the person-counting obligations do not also apply to non-passenger vessels. Non-passenger vessels that normally carry only crew are accounted for by their operators, who hold all the necessary detail required for an emergency search-and-rescue operation. The few ships that routinely carry passengers but carry fewer than 13—and therefore are not defined as passenger ships—are generally much smaller, and the application of these obligations would be disproportionate for these small vessels. This approach is the recognised one in the international maritime community.

Disabled Air Passengers

Lord Davies of Gower Excerpts

Monday 4th December 2023 Lords Chamber

[Baroness Brinton]

To ask His Majesty’s Government what steps they are taking to ensure disabled air passengers are able to travel safely and with their equipment, including wheelchairs.

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

My Lords, the Government are clear that everyone should be able to travel by air safely and with dignity, and they are committed to working with industry and the Civil Aviation Authority to achieve this. The department is committed to reforms that will help protect all passengers, including disabled passengers, and has ongoing engagement with industry and consumer stakeholders to identify ways to continue to improve aviation accessibility.

[Baroness Brinton (LD) [V]]

I thank the Minister for his reply, but, as the noble Baroness, Lady Grey-Thompson, and I pointed out in a debate in Grand Committee last month, many disabled air travellers face repeated problems whenever they fly, including airline ground managers and pilots at airports making personal decisions about equipment, including wheelchairs, and refusing access to a plane, even if their decision does not follow IATA guidance. Will the Minister agree to a meeting with me, the noble Baroness, Lady Grey-Thompson, the Civil Aviation Authority and IATA to discuss how this can be remedied?

--- Later in debate ---

[Lord Davies of Gower (Con)]

I am grateful to the noble Baroness for her Question and congratulate her on the debate that we had last week. I know that my predecessor hosted a round table on aviation accessibility on 28 June this year. The round table was well attended by disability experts and people with lived experiences, and of course staff training was one of the issues that came up. There was a clear indication of issues with the quality of disability awareness training for staff. So, yes, I would be very happy to meet the noble Baroness.

[Lord Tunnicliffe (Lab)]

My Lords, the Government have previously referred to a range of legislative reforms when parliamentary time allows to support disabled air passengers. Will these be introduced before the next general election? If the Minister cannot give that assurance, does that represent the priority that the Government give to this issue?

[Lord Davies of Gower (Con)]

I thank the noble Lord for his question, but I am afraid that I cannot give an answer to that as I stand here. It is above my pay grade to decide what the legislative business will be for the rest of this year.

[Baroness Randerson (LD)]

My Lords, some airports have a much worse record than others. Unfortunately, Heathrow Airport has a poor record, going back over a long period. That is a matter of particular concern because it is our largest airport and it is likely to give the UK a poor reputation abroad. What are the Government doing to ensure that all UK airports come up to a much better standard? Some of them are already delivering—but far from all of them.

[Lord Davies of Gower (Con)]

The Department for Transport has released a new training module on handling powered wheelchairs, for example; it forms part of the department’s training programme. The CAA is responsible for enforcing UK legislation on aviation accessibility and takes action where needed—but I take the noble Baroness’s point about Heathrow in particular.

[Lord Sterling of Plaistow (Con)]

My Lords, over many years I have been very involved with the disabled and cruise liners. Following on from what the noble Baroness just said, some airports are better than others. However, in practice, the real problem is people working together. The cruise operators with which I am involved have a special unit that works together with airports in every conceivable way to help passengers, including those who may board their ships as well. The key part is what the noble Baroness mentioned just now: somebody in the airport must have the final authority—that is, not needing to seek authority—on how to bring together the various items that people need. I do not think that that necessarily means government support but, in practice, I suggest that we are on the way there now.

[Lord Davies of Gower (Con)]

At the round table hosted by my noble friend Lady Vere, there was a clear indication that there were issues with the quality of disability awareness training for staff. Anecdotal evidence suggested that staff were not aware of how to provide appropriate assistance to people with different needs, including non-visible disabilities. So there is much to do; I fully appreciate that.

[Lord Griffiths of Burry Port (Lab)]

My Lords, in view of the answer we just heard to my noble friend Lord Tunnicliffe, will the Minister, recognising that an answer to that question might be above his grade, give an undertaking to my noble friend to at least accommodate the question and go back to the person at whose grade it is, in order to see whether some kind of meeting with the noble Lord, Lord Tunnicliffe, could take place?

[Lord Davies of Gower (Con)]

I am afraid that business in the House is not within my capability.

[Lord Wigley (PC)]

My Lords, does the Minister accept that, 42 years ago, when I introduced what became the Disabled Persons Act 1981, this issue arose and we were assured that there were other ways of sorting it out and that it did not need legislation? What is the problem that has taken 40 years and more to resolve? Surely successive Governments must take this issue more seriously and get it done.

[Lord Davies of Gower (Con)]

With great respect to the noble Lord, I think this Government do take it seriously. The department certainly takes it seriously; I take it seriously. Within my ministerial role, I have responsibility for disabilities within the maritime sector, and I take that very seriously—and I know that my colleagues in the Department for Transport do.

[Baroness Finlay of Llandaff (CB)]

My Lords, I am grateful to the Minister for pointing out that not all disabilities are visible. The use of the sunflower lanyard can be useful, but some people feel that it is stigmatising to wear such a lanyard. Is there a date fixed for a follow-up to that round table discussion? Has there been a request to airport authorities to report, at such a meeting, an audit they have undertaken of the different aspects of disability, which might also include access to toileting for people in some of the larger airports?

[Lord Davies of Gower (Con)]

I thank the noble Baroness for that question. I am not aware of a date as I stand here, but I will inquire into it and write to the noble Baroness.

[Lord Kamall (Con)]

My Lords, in answer to previous questions, my noble friend the Minister referred to a meeting that our noble friend Lady Vere had with the industry and others. Can he tell us whether concrete steps were agreed at that meeting, and what they were? If he does not have the answer now, maybe he could write to me.

[Lord Davies of Gower (Con)]

I can tell my noble friend that the discussions highlighted inconsistencies in the way passengers can provide the information to the industry that is needed to get appropriate assistance. It was also noted that the information the passenger has provided is not always accurately recorded and might not be shared with all operators—for example, the airlines, the airport and the assistance provider. Of course, this results in passengers having to provide the information several times during the journey, which can be intimidating or cause anxiety. I know that this, in particular, was an issue that was raised at that time.

[Lord Addington (LD)]

My Lords, I have been following this subject for almost as long as the noble Lord, Lord Wigley. All Governments have failed to bring the people responsible together, so that a person in a wheelchair cannot rely on a coherent transition through the process. Surely it is time that this House, and possibly the rest of Parliament, got together, banged together the heads of those running airports and airlines and told them that it is unacceptable?

[Lord Davies of Gower (Con)]

I absolutely agree with the noble Lord and suggest that that is under way as a result of the round table of the noble Baroness, Lady Vere.

[Lord Haselhurst (Con)]

My Lords, might it not be particularly helpful to draw the airframe manufacturers into this discussion as soon as possible? They surely could set a standard that should then be led by all their customers.

[Lord Davies of Gower (Con)]

My noble friend makes a very good point. I know that that is under way with some aircraft manufacturers, particularly in terms of toilets on board aircraft and the ability of people in wheelchairs to access those toilets.

Battery and Hydrogen-powered Aircraft

Lord Davies of Gower Excerpts

Thursday 30th November 2023 Lords Chamber

[Baroness Scott of Needham Market]

To ask His Majesty’s Government what progress they have made towards achieving their aspiration to have battery and hydrogen-powered aircraft connecting different parts of the United Kingdom.

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

My Lords, zero-emission flight is one measure in the Government’s jet zero strategy to deliver net-zero UK aviation by 2050. The development of hydrogen and battery electric aircraft is technically challenging, and the Government are supporting the necessary innovation in the UK to overcome these barriers. Between 2013 and 2030, industry and government will invest over £5 billion to develop transformational aircraft technology and will continue to collaborate closely to drive progress through the Jet Zero Council.

[Baroness Scott of Needham Market (LD)]

I thank the Minister for that reply. Are the Government giving any consideration to using public service obligation flights as a test bed for these new technologies, given that they are essential services that are also short and domestic?

[Lord Davies of Gower (Con)]

The DfT has published a jet zero strategy setting out the Government’s approach to delivering net-zero UK aviation by 2050. The strategy anticipates that a range of measures, including sustainable aviation fuels, zero-emission flights, carbon market measures and greater efficiencies in aircraft, airports and airspace will be require in tandem to achieve net zero by 2050.

[Baroness Boycott (CB)]

My Lords, does the Minister believe that the principle of the polluter pays should apply to aviation, as it does across much of government policy, so that the cost of the emissions trading scheme, as well as the guaranteed prices for producers of sustainable fuels and the cost of an SAF mandate, should be paid by the airlines and, in turn, by the consumers who take the flights? This will not make flights exorbitantly expensive; it will ensure that the people who benefit from such transport bear the costs of it.

[Lord Davies of Gower (Con)]

I thank the noble Baroness for that question. In fairness to the airlines, a number of industry projects within the UK seek to bring hydrogen-propelled aircraft, for example, into commercial service. Airbus has its ZEROe project, through which it intends to bring into commercial service the world’s first zero-emission commercial aircraft by 2035. Launched in 2022, its ZEROe demonstrator project will explore how hydrogen propulsion technology can be configured, and there are many other projects within the industry.

[Lord Kamall (Con)]

My Lords, although hydrogen can be a green fuel, it is important that we focus more on green hydrogen, which is created by electrolysis using renewable energy, rather than blue or grey hydrogen. Can my noble friend tell us about the emphasis on green hydrogen as opposed to other hydrogens in order to meet the net-zero targets?

[Lord Davies of Gower (Con)]

The UK Hydrogen Capability Network Phase 0 Project is a 12-month study funded by the Department for Business and Trade and led by the Aerospace Technology Institute, which builds on the ATI’s FlyZero study key recommendations. It will define the operating model for a group of open-access facilities designed to accelerate the development of liquid hydrogen propulsion aircraft technologies, capabilities and skills in the UK.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, would not this development have lots of incidental advantages? For example, it would make it easier for Peers from all parts of the United Kingdom to get down to Westminster, thus ending the outrage that over half the Members of a House that purports to represent the whole of the United Kingdom are from the south-east of England.

[Lord Davies of Gower (Con)]

I am grateful for the noble Lord’s wisdom, and, as someone who travels from Wales, I appreciate his comments.

[Baroness Randerson (LD)]

My Lords, the Government’s Jet Zero strategy set a target for domestic flights to reach net zero by 2040, but instead there has been a big increase in internal flights taken by private planes and helicopters, and many of those journeys could have been made more quickly by train. Can the Minister tell us what the Government are doing to discourage the use of private internal flights? Perhaps he can also have a word with his right honourable friend the Prime Minister to suggest that he might favour other forms of transport rather than private jets and helicopters.

[Lord Davies of Gower (Con)]

There are security issues for the Prime Minister, which I am sure the noble Baroness will appreciate. It is still a free world and people can choose how they want to travel, and we must remember that although we are anti-emissions, we are not anti-flying. We must reduce emissions from aviation while retaining our ability to fly.

[Lord Watts (Lab)]

My Lords, may I suggest to the Minister that we build a high-speed rail connection to Manchester and then on to Sheffield, which might reduce the number of flights that are needed?

[Lord Davies of Gower (Con)]

A very popular suggestion from the noble Lord, and his point is made.

[Baroness Goldie (Con)]

My Lords, to help the noble Lord, Lord Foulkes, in the attainment of his admirable objectives, can my noble friend the Minister confirm to what extent his department is liaising with the Ministry of Defence, which, through the RAF and Project Monet, is making excellent progress in the pursuit of sustainable fuels?

[Lord Davies of Gower (Con)]

My noble friend is absolutely right. Civil aviation and the Royal Air Force are making combined efforts to reduce emissions with technology.

[Lord Tunnicliffe (Lab)]

My Lords, the Hydrogen in Aviation alliance has indicated that Britain is well placed to become a global hydrogen aviation leader, stimulating the economy and providing 100,000 jobs. The alliance announced that this would require a 10-year funding commitment. History shows that the level of continuity required to achieve an entirely new fuel requires state funding as part of any alliance. How much real government money is being put into this project?

[Lord Davies of Gower (Con)]

The Department for Business and Trade supports research and development in UK aerospace manufacturing through the Aerospace Technology Institute. It is a competitive process through which industry can access match funding from government to develop technologies. The programme is set to run until at least 2030, and as part of the advanced manufacturing plan announcement on 17 November, His Majesty’s Treasury confirmed that £975 million of government funding will be provided as part of a £4.5 billion total package for manufacturing between 2025 and 2030. That is in addition to the £685 million from the Government between 2022 and 2025.

[Lord Fox (LD)]

My Lords, my noble friend made a very good point that I do not think was fully covered by the Minister, regarding the ideal nature of battery-powered planes for internal domestic flights. For that to happen, we need not just the planes but the infrastructure in the airport. What plans are there in the jet zero strategy to ensure that all domestic airports have the infrastructure, such as power and charging facilities, to make this happen?

[Lord Davies of Gower (Con)]

First, the use of battery electric has been proven in small, manned aircraft. However, the weight, plus lack of power density of batteries currently on the market, limits the range and payload of electric aircraft. To support adoption of new aircraft such as hydrogen and battery-powered, the Government have supported research into airport preparedness for handling aircraft through £4.2 million of funding for the zero-emission flight infrastructure project. The findings will be published in March.

[Lord Ranger of Northwood (Con)]

My Lords, the House might be getting used to my personal interest in electric mobility, and I want to build on the point made by the noble Lord, Lord Fox, about landing pads. I am aware of two major international organisations that are progressing and quite advanced in their development of electric aeroplanes to be used for personal mobility—as in air taxis—to help people travel easily and in a sustainable way. It is not airports they are looking for, it is landing pads, which will be less invasive in our environment. Is that something we are looking into? I know that across Europe, sites are being searched for landing areas to be trialled in the testing of these planes.

[Lord Davies of Gower (Con)]

My noble friend makes a very interesting point. I do not have the information in front of me, but I will certainly look at that and write to him.

Automated Vehicles Bill [HL]

Lord Davies of Gower Excerpts

2nd reading
Tuesday 28th November 2023 Lords Chamber

Moved by

[Lord Davies of Gower]

That the Bill be now read a second time.

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

My Lords, on behalf of my noble friend Lady Vere of Norbiton, I beg to move that the Bill be now read a second time. Self-driving vehicles offer an unprecedented opportunity to improve the safety and connectivity of our road network. Unencumbered by fatigue, distraction, frustration or intoxication, and built from the ground up to obey the rules of the road, self-driving vehicles could one day far exceed the standards of even the safest human drivers.

With 88% of road incidents currently involving human error, the potential for these technologies to reduce injury and save lives is plain to see. Self-driving vehicles could also improve connectivity across the country, opening up new options for travel and connecting people to amenities, jobs and education. Indeed, it is those currently at greatest risk of isolation—the elderly, those with disabilities and our rural communities—who could see the greatest benefit from some of these new technologies.

The international self-driving market has vast growth potential. Playing to our strengths in research and innovation, and with a robust regulatory system in place, the UK could capture as much as £42 billion of that market by 2035. Thanks to close collaboration between government, industry and academia over the last decade, we are already well on our way. We have worked with developers to launch trials across the UK, including self-driving bus services in Edinburgh and self-driving heavy goods vehicles in Sunderland. These trials are taking place with safety drivers on board, and they provide proof of concept for a technology that is coming into maturity.

We have also worked to set a clear direction of travel for the sector. We were an early mover, in 2015 launching a code of practice for trialling self-driving vehicles on public roads. In 2018 Parliament passed the Automated and Electric Vehicles Act, ensuring that there is a clear and direct route to compensation for any harm caused by a vehicle when driving itself. In August last year, we published the Connected & Automated Mobility 2025 paper, setting out the Government’s vision for bringing the benefits of self-driving vehicles to the UK.

As the technology continues to mature, and trials look to advance beyond the need for safety drivers, we need to ensure that the UK stays ahead of the curve. We must support the deployment of self-driving vehicles with a comprehensive legal framework, one that can deliver high standards of safety, ensure clear accountability and win the confidence of both the public and the sector. This Bill provides that comprehensive legal framework.

At present, responsibility for safe and legal driving rests solely with the human driver. This is the case even when they employ one of the many advanced driver assistance features currently available on the market, such as adaptive cruise control, automatic parking or automatic emergency braking. When these features advance beyond mere assistance, and truly self-driving technology becomes a reality, it will no longer be reasonable to hold the human driver responsible for the vehicle’s behaviour.

To address this fundamental change, the Bill will, for the first time, provide for corporate entities to assume responsibility for how self-driving vehicles behave, underpinned by a robust framework of safety standards, monitoring and enforcement. This legislation implements the recommendations of a four-year review by the Law Commission of England and Wales and the Scottish Law Commission. Their joint report draws on countless hours of expert legal analysis and three rounds of public consultation yielding hundreds of responses. I am grateful to the commissioners for their work, and for providing such a robust set of foundations for this Bill.

I move on to the main measures of the Bill, beginning with the issue that I know, rightly, will be at the forefront of noble Lords’ minds. Safety will be baked into every facet of this new regime from the very beginning. Only vehicles that meet the self-driving test will be authorised as self-driving. To satisfy this test, they will need to meet rigorous standards and be capable of driving safely and legally without human intervention. The test will be informed by a statement of safety principles, published by government following consultation and setting out the behaviours that self-driving vehicles should be expected to achieve. We intend that these safety principles will be drafted in line with the Government’s safety ambition: that self-driving vehicles should meet an equivalent level of safety to that of a careful and competent human driver. Perhaps regrettably, I should stress that this is in fact a much higher standard than that of the average driver on UK roads.

A new authorisation scheme will supplement the existing vehicle approval process and apply the self- driving test. The scheme will guarantee that there is an authorised self-driving entity, or ASDE, associated with every self-driving feature deployed in vehicles on our roads. The ASDE, likely a corporate entity such as the manufacturer or software developer, will assume responsibility for how the vehicle drives when the self- driving feature is activated. Once authorised, the vehicle and the ASDE will be subject to ongoing safety monitoring under the in-use regulatory scheme. Any safety-critical changes to the self-driving feature will require reauthorisation.

The Bill distinguishes between two types of self-driving features: those that can complete an entire journey in self-driving mode and those that can complete only part of a journey, thus requiring the option of handing back control to a human driver in certain contexts. In the latter case, while the vehicle is driving itself, the driver assumes a new role, which we call the user-in-charge. The Bill shields the user-in-charge from prosecution for offences relating to the driving task. The user-in-charge remains responsible for other elements not relating to the driving task, such as roadworthiness and insurance. Naturally, they are required to resume control if directed to by the vehicle, subject to being given sufficient time to regain awareness.

On no-user-in-charge, or NUIC, some features will allow the vehicle to complete an entire journey without needing the option of handing back to a human. These features will not require a user-in-charge. People in the vehicle, if indeed there are any at all, would all simply be considered passengers while the self-driving vehicle is activated. We refer to these as no-user-in-charge features.

The Bill creates a new legal entity for these circumstances: a licensed no-user-in-charge operator, also known as a NUIC operator. The NUIC operator will be comparable to a fleet operator; responsible for overseeing the vehicle and responding to incidents such as breakdowns. As always, the ASDE retains responsibility for how the vehicle drives.

The Bill includes a strict obligation on both these new entities, ASDEs and NUIC operators, to disclose safety data as part of in-use regulation, with criminal penalties for managers if they fail to comply. The Bill also grants powers to investigate incidents and issue regulatory sanctions. We will be able to direct entities to take certain actions to prevent future incidents, to issue compensation to those impacted or to pay fines. The Secretary of State will have unilateral power to suspend or alter any self-driving authorisation rapidly, if necessary to protect public safety. The Bill also contains measures to allow for safety investigations to be undertaken by independent statutory inspectors. These inspectors’ reports will not apportion blame or liability, but instead will make recommendations to improve safety in the sector as a whole. Together, the individual elements of the safety framework—approval, authorisation, in-use regulation, operator licensing and incident investigation—will form a safety feedback loop so that learning and improvement is baked in.

The Bill represents a major step in creating a full legal framework for self-driving vehicles, but it is not the only step. As with any new technology, we must regulate alongside its growth, building in the right checks and balances and the flexibility to respond to new developments and new use cases. The Bill will be followed by consultations and secondary legislation on the core elements that I have outlined. The statement of safety principles will be subject to parliamentary scrutiny, as will the authorisation and approval requirements and the in-use regulation scheme.

All the secondary legislative elements that make up the cohesive whole will be consulted on following Royal Assent, bringing in the views of the public, industry and academia. They will be delivered through secondary legislation or statutory guidance, which can be developed over time and subsequently amended as the technology evolves. Policy scoping notes relating to elements of the secondary legislation programme have been published, and I encourage noble Lords to review them ahead of Committee. I am also happy to arrange in-depth briefings as required.

Before I conclude, I would like to clarify the extent of the Bill. The scope of the Law Commission’s review was

“self-driving regulation in relation to road vehicles”.

Therefore, the Bill does not deal with other forms of self-driving technology, such as drones, aircraft or sea-craft. The Bill will extend to Great Britain. Self-driving vehicles which are authorised under the new regime can be authorised to use their self-driving features only in England, Wales and Scotland. While there is no explicit legal prohibition on their use if they cross the border into Northern Ireland, they would be operating without the clarity of legal responsibility that the Bill will provide. Operation with a safety driver or in conventional, human-driven mode will still be possible.

I conclude by highlighting again the opportunities here, for they are threefold. The first is road safety. Over 1,500 people are killed on our roads each year; each one a tragic loss felt so keenly by friends and family. There is now an opportunity to start to reduce that loss. The Bill is explicit that our safety principles must be framed with a view to improving road safety, and our safety ambition goes beyond this, setting a standard well above that of the average human driver.

The second opportunity is connectivity. Self-driving vehicles could significantly improve the efficiency of passenger and freight traffic on our roads while offering new travel options to those most at risk of isolation.

Finally, there is the economic opportunity. Recent years have seen astonishing leaps forward in the UK’s homegrown self-driving vehicle sector. The Law Commission’s thorough and detailed review of this subject lasted four years. In that same period, the UK self-driving sector generated £475 million of direct investment and created 1,500 new jobs. With the Law Commission’s work as its foundation, this legislation will deliver the vital legal clarity that the UK needs to retain its position at the global vanguard of this new technology. I beg to move.

--- Later in debate ---

[Lord Davies of Gower (Con)]

My Lords, I am grateful to noble Lords for their very thoughtful, indeed fascinating, contributions on the Bill. I will attempt to respond to as many questions and concerns as possible and where I have not been able to, I will certainly follow up in writing.

Let me begin, once again, with safety. The noble Lords, Lord Berkeley and Lord Hampton, my noble friends Lord Holmes of Richmond and Lord Lucas, and others have rightly highlighted the debate about the exact safety standard to which self-driving vehicles should be held. As my noble friend Lord Borwick rightly pointed out, the long-term safety benefits of these vehicles could be truly vast. However, they will not be realised if the public lose confidence early on, or if an unnecessarily high threshold is imposed from the outset. A careful balance must therefore be struck. We believe that the careful and competent driver standard in our safety ambition strikes that balance most appropriately. As I have said, this standard is considerably higher than that of the average driver on UK roads. It is the highest of the three standards on which the Law Commission consulted and the same one to which human drivers are held.

By setting out the statement of safety principles in statutory guidance, informed by this safety ambition, we will be able to raise standards over time as the technology improves or as public expectations change. This approach is in line with the Law Commission’s recommendations. My noble friend Lord Holmes of Richmond asked how and when we would review the safety of self-driving vehicles. The Bill sets out a flexible, future-proof framework that can be adapted and updated in line with technological developments. While we do not believe that it would be appropriate to specify time periods for review in the Bill, we of course recognise the importance of transparency and regular reporting. Clause 38 therefore creates a general monitoring duty, requiring the Secretary of State to publish an annual report on the performance of self-driving vehicles and how this aligns with safety standards.

This leads me to the points made by the noble Lord, Lord Liddle, the noble Earl, Lord Lytton, and the noble Baroness, Lady Randerson, on whether this framework will work in a world with a mix of self-driving and manual vehicles. The Law Commission’s recommendations, accepted by the Government, set out a framework that is designed to work for a mix of traffic where self-driving vehicles will share the road with conventional human drivers and vulnerable road users. Similarly, in response to my noble friend Lord Naseby’s question in this area, self-driving vehicles will need to be able to safely operate using existing infrastructure, and we therefore do not anticipate any immediate changes in current provision or practices. To satisfy the self-driving test, vehicles must drive safely and legally in accordance with road rules and conditions which apply to everyone.

In response to my noble friend Lord Holmes of Richmond asking whether the Government would ban human-driven vehicles if self-driving vehicles were found to be much safer, we reiterate the point that nothing in the Bill seeks to restrict any existing road users exercising their right to use roads or other public places.

The noble Lord, Lord Cameron of Dillington, raised the possibility of jaywalking laws restricting pedestrians from crossing roads except at pedestrian crossings. In response, I point to the law commissions’ analysis that to restrict the freedom of movement of pedestrians due to the insufficiencies in automated vehicle functionalities does not appear justified at this time.

The noble Baronesses, Lady Randerson and Lady Bowles, raised the issue of cybersecurity. Vehicles with automated systems will be subject to detailed technical cybersecurity assessment as part of the well-established type approval process. The DfT co-chairs the UN group that developed the new international regulations for vehicle cybersecurity. Separately, the DfT runs its own cyber safety and assurance programme for self-driving vehicles, working closely with the National Cyber Security Centre, other government departments and our international partners. This has included developing a bespoke cyber training programme for technical staff, supported by the NCSC.

I turn to the pertinent issue of accessibility, as raised by my noble friend Lord Holmes of Richmond and the noble Baronesses, Lady Brinton and Lady Bennett. The granting of self-driving authorisations will be subject to the public sector equality duty, and the Government intend to make equality impact assessments part of the authorisation process. The noble Baroness, Lady Brinton, raised concerns that, by disapplying existing taxi, private hire and bus legislation, important accessibility protections may not apply. Clause 87 requires that automated passenger permits could be granted only with a view to improving the understanding of how these services can be provided and designed for older and disabled passengers. Service providers will also need to report back on lessons learned.

I turn to some of the specifics of how we expect these vehicles to operate. The noble Baronesses, Lady Bowles and Lady Randerson, the noble Lord, Lord Liddle, and others asked about the transition demand, particularly how we will ensure that users are given sufficient time to safely resume control. The Bill requires that transition periods be long enough for the user-in-charge to resume control, including any time required to regain situational awareness and prepare themselves. Transition demands will use a combination of visual, acoustic and haptic warnings. The exact time required will vary significantly by use case and is therefore not set out in the Bill. Authorisation will assess whether a self-driving feature’s transition demand is of sufficient duration and whether it issues appropriate cues given the context. This may also be assessed as part of vehicle type approval.

The noble Baroness, Lady Bowles, and others asked about the interaction between self-driving vehicles and the insurance industry and how we will ensure that insurers have access to appropriate data. Following a road incident, a claimant would notify the insurer. The insurer would need access to data recorded by the vehicle to determine in the first instance how the claim will be handled. The Secretary of State will have the power to create provision in secondary legislation for the vehicle to record and retain data to determine liabilities and ensure that the insurer has access to that data.

The noble Lord, Lord Tunnicliffe, asked how the framework would deal with a breakdown or other incident occurring to a no-user-in-charge vehicle, given that there may be no human present in the vehicle at the time. Every no-user-in-charge vehicle will be overseen by a licensed no-user-in-charge operator. These operators will be responsible for responding to incidents such as breakdowns. We will be able to set detailed conditions as part of the operator licensing, ensuring that they have the right capabilities in place to respond to such incidents.

The noble Lord, Lord Berkeley, asked about issues with self-driving vehicles crossing international borders. Given that domestic regulations on these technologies are still in their infancy, there are as yet no international agreements governing vehicles passing from one jurisdiction to another. We have been engaging with our international partners to develop guidelines on the use of these vehicles and to encourage consistency in domestic approaches.

In the interim, we anticipate that vehicles will be designed to de-activate any self-driving features when outside their intended domain of operation. We would also have the power to require this through authorisation conditions if necessary. Communication about authorisation for the use of self-driving will make it clear that it applies only to Great Britain. We will monitor rules in other countries to determine what messages should be provided for users of authorised vehicles who intend to use them outside Great Britain.

Similarly, my noble friend Lord Moylan and the noble Baroness, Lady Randerson, raised the issue of vehicles passing into Northern Ireland. The core provisions of the Bill do not extend to Northern Ireland, in line with the Road Traffic Act 1988, which extends to Great Britain only. Northern Ireland has its own traffic laws. Accordingly, the authorisation for use of self-driving does not extend to Northern Ireland, and in the absence of specific rules on use there, the vehicle would be treated as conventional and the driver would be liable for its behaviour. Throughout the review, led by the Law Commission, and the development of the Bill, we have kept the Northern Ireland Executive briefed on our plans.

The noble Lords, Lord Tunnicliffe and Lord Liddle, asked about jobs and growth. We believe that the self-driving sector could create more than 38,000 new, well-paid jobs up and down the country by 2035. The UK’s being a leader in self-driving technology will attract inward investment and commercial opportunities, as mentioned by my noble friend Lord Ranger. These new jobs could range from the design and manufacture of vehicles to overseeing safe and secure passenger operations.

Turning briefly to address questions of scope, the noble Lord, Lord Tunnicliffe, mentioned so-called “pavement bots”. The Bill is designed to cover all road vehicles. While the legal definition of roads includes the pavement, the use of vehicles on pavements is limited through the Highway Act 1835. Any future changes to regulations regarding pavement use would need to be balanced with the need to maintain safety and accessibility for other road users. We are funding research to better understand the opportunities and risks associated with this technology.

My noble friend Lord Bourne of Aberystwyth asked about the Government’s plans for industries out of scope of this Bill, such as the aircraft industry. I assure my noble friend that the UK’s strategic vision is to maximise the benefits of automated air and maritime technologies, as well as road technologies. We will publish the Future of Flight action plan, which will set out the strategic direction for the aviation industry, developed through the Future of Flight Industry Group.

On data, the noble Baronesses, Lady Bowles and Lady Brinton, and my noble friend Lord Borwick, correctly pointed out that large quantities of data will be created and used to enable self-driving. Data may need to be shared to ensure that safety is maintained and operations such as insurance continue to function efficiently. However, data must remain properly protected. Self-driving vehicles will be subject to existing data protection laws in the UK. Our proposed Bill does not alter that, so manufacturers and government will have to ensure that data is protected. The Bill allows data to be requested for the monitoring of self-driving vehicle safety and the investigation of incidents. As the noble Baroness mentioned, the Secretary of State may make regulations authorising the sharing with other persons of the information gathered. Those regulations will be subject to consultation and considered in the House. It will be an offence for persons to share data or use it for other purposes unless authorised by those regulations. However, the noble Baroness, Lady Bowles, pointed out the provisions under Clause 42(7) are very wide. We will reflect further on her comments to ensure that the right balance of safety, commercial interests and personal data protection is maintained.

The noble Lord, Lord Tunnicliffe, asked about the rationale behind the misleading marketing offences in the Bill. The inclusion of these offences was specifically recommended by the Law Commission, as it felt that the current law would leave some gaps in protection. For example, the Consumer Protection from Unfair Trading Regulations 2008 apply only if a customer makes a transactional decision such as buying a car. This is too narrow and leaves a gap, as the risk of misunderstanding a vehicle’s self-driving capability is not confined to the purchase alone. It could include, for example, borrowing the vehicle from a friend.

As the noble Baroness, Lady Randerson, and other noble Lords have pointed out, it is vital that we build and maintain public consent for this new technology. In 2022 the Department for Transport funded an award-winning and unprecedented study called the Great Self-Driving Exploration. It was explicitly designed to allow people from all walks of life to engage with self-driving vehicles, understand how they might affect their lives, address the existing transport challenges and determine whether it would be a good thing. The learning from this research is being used to develop future engagement plans, which are being developed with trialling organisations, industry, academia and road safety groups, including through the government-led AV-DRiVE group.

The noble Baroness, Lady Randerson, raised the question of how the Government will administer this new framework. We intend that the delivery of these new processes will rest with the Department for Transport’s executive agencies, in line with other existing responsibilities for conventional vehicles. We expect the Vehicle Certification Agency to assume responsibility for the initial authorisation process. The authorisation of self-driving vehicles will, in many cases, use vehicle type approval to support assessments of safety. As the UK’s designated type approval authority, the VCA is well placed to carry out this new function.

We expect the Driver & Vehicle Standards Agency to be responsible for the NUIC operator licensing and enforcement. The DVSA is already responsible for licensing for passenger service vehicles and freight operators, and it has existing powers for stopping and testing vehicles. The in-use regulatory system applies across both authorisation and operator licensing and, as the noble Baroness, Lady Randerson, pointed out, it will require close co-operation between the agencies.

On the question of capacity and capability raised by the noble Lord, Lord Liddle, the roles of the VCA and the DVSA are being developed as part of our ongoing safety assurance programme. We are working with the VCA and external partners to begin to put in place the right skills, facilities and processes to deliver this new regime. That has included developing existing staff and creating new roles to cover critical areas such as cybersecurity, simulation and machine learning; establishing new facilities in Bristol and the Midlands focused on assessing complex electronic systems; and conducting research into potential assessment methodologies. Similarly, the DVSA has established a dedicated team to consider the new processes that may be necessary to support NUIC operator licensing and in-use regulation.

My noble friend Lord Bourne of Aberystwyth asked a question on the budget for the Centre for Connected and Autonomous Vehicles. The centre is a special policy directorate working across the Department for Transport and the Department for Business and Trade. At the last spending review, the CCAV received £100 million covering a three-year period to 2025. Of that funding, £66 million was for research into and development of the commercialisation of the technology, and £34 million was to fund the research and evidence required to develop the regulatory framework, including funding for capability building in the motoring agencies. The work the CCAV does is not just limited to funding.

My noble friend Lord Bourne also asked about what international engagement has taken place. UK officials take part in key international and UN programmes, including the Global Forum for Road Traffic Safety and the World Forum for Harmonization of Vehicle Regulations. As noble Lords would expect, UK officials also regularly engage bilaterally with counterparts in other nations developing legislation and standards in this space.

I am conscious of the time and apologise if I have not been able to address all the questions raised by noble Lords; I stand ready to provide further detailed briefings to noble Lords where required. I will check the record to see what has been missed and will address that in writing. We have heard a healthy mix of views today, and there is general consensus that utmost care and attention will be necessary if we are to build a system that can capture the benefits of self-driving vehicles while winning the confidence of the public, which is absolutely essential. I am therefore extremely grateful for all noble Lords’ insightful contributions, which I look forward to discussing further as we move to Committee.

Bill read a second time.

Birmingham Highways Infrastructure Private Finance Initiative

Lord Davies of Gower Excerpts

Tuesday 28th November 2023 Lords Chamber

[Lord Snape]

To ask His Majesty’s Government when they expect to conclude the review of the 2010 funding agreement for Birmingham City Council’s Highways Infrastructure Private Finance Initiative; and whether they intend to honour the agreement to continue funding the PFI until 2035.

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

My Lords, the Government are currently considering the business case for a revised contract for Birmingham highways maintenance following the failure of Birmingham’s original PFI deal. Highways maintenance is a critical and statutory function for all local authorities and the Government will continue to support them to fulfil this function. A decision is expected imminently.

[Lord Snape (Lab)]

My Lords, while I am grateful for the response and it reflects great credit on the Minister—I congratulate him on his new appointment—this matter has been dragging on for many years. The original contract was signed in 2010. The Department for Transport supported the city council in the removal of the contractor in 2019, but when will the Government approve the full business case and pay up the £50 million a year which they committed to do when the original contract was signed back in 2010?

[Lord Davies of Gower (Con)]

I thank the noble Lord for that supplementary. The Government recognise that the delay in reaching a decision is far from ideal and is causing challenges for the council. I am sure noble Lords will appreciate that this a big investment decision that needs to be looked at thoroughly. The Government want to make sure that they have looked at all options to support Birmingham City Council’s highways maintenance programme.

[Baroness Stuart of Edgbaston (CB)]

My Lords, as a former Birmingham MP for 20 years, I am familiar with the shortcomings of its pavements, potholes and other areas. I stress that if this contract is not renewed, Birmingham will be deprived of some £600 million over the next 12 years for essential repair work, which is important not just to keep the citizens of Birmingham safe but to allow the city to meet its obligations under moving towards net zero.

[Lord Davies of Gower (Con)]

I fully appreciate what the noble Baroness says. As I said, the Government recognise that the delay in reaching this decision is far from ideal. There are several issues around this and clarification has been needed on some aspects, but the Department for Transport money is ring-fenced, so we should be sound in that respect.

[Baroness Randerson (LD)]

My Lords, commissioners were appointed in Birmingham to restore good governance, and good governance usually includes timely decision-making. Does the Minister accept that by leaving this so late, this is poor decision-making that undermines, for instance, initiatives associated with active travel and zero emissions that are necessary to take Birmingham forward in a modern manner?

[Lord Davies of Gower (Con)]

I totally agree with the noble Baroness that it is not ideal—I said that earlier. As I said, this has been bogged down with issues between the contractor and Birmingham City Council. The Government have worked to come up with a solution. That will be announced imminently and, hopefully, we will be able to get under way with a new contract.

[Lord Hunt of Kings Heath (Lab)]

My Lords, with respect, where it has been bogged down is in His Majesty’s Treasury, and it should be a Treasury Minister before us today answering why it is putting in such delay. Does “imminently” mean by the end of November? The Minister will be aware that unless a decision is made by the end of November, the whole thing falls down and the city council is immediately liable for the costs of those who tendered and then the re-tendering process. Can he say that there will be a decision within three days?

[Lord Davies of Gower (Con)]

I can say that “imminently” is as meant in the English dictionary, which means probably about to happen.

[Lord Liddle (Lab)]

Will the Minister urge the Treasury to give some thought to the bigger picture on this question? Here we have Birmingham, one of the largest cities in the country and the centre of a region that is prospering as a result of investment, some of which owes its success to the HS2 decision. It has an activist mayor. We on this side may disagree with his politics, but he has certainly managed to put Birmingham on the map. It is a city region on the verge of first-world rank and status. How would it make any sense for the Treasury to consign the highways of Birmingham city to third-world circumstances?

[Lord Davies of Gower (Con)]

I do not necessarily agree with the latter part of the noble Lord’s comments, but on the first part, I will take his message back to the Treasury.

Vehicle Emissions Trading Schemes Order 2023

Lord Davies of Gower Excerpts

Monday 27th November 2023 Lords Chamber

Moved by

[Lord Davies of Gower]

That the draft Order laid before the House on 16 October be approved.

Relevant document: 1st Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)

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

My Lords, this Order in Council creates regulatory frameworks with the purpose of reducing road transport emissions from new cars and vans in Great Britain and Northern Ireland and supporting the vehicle manufacturing industry in the transition to new zero-emission technologies.

The Government’s cost-benefit analysis projects emissions reductions of 411 million tonnes of carbon dioxide out to 2050 as a result of the instrument. The trajectory they set for the transition to new zero-emission cars and vans out to 2030 is strongly supported by industry and is the most ambitious of its kind in any country in the world. It is in such ambition that there is opportunity. Already, over £6 billion has been invested in UK automotive manufacturing from the likes of Tata, BMW and Stellantis. It is a particular pleasure to congratulate Nissan’s Sunderland plant on its success in securing the fully electric Qashqai and Juke models. Beyond manufacturing, there has been a further £6 billion investment in charging infrastructure from the private sector. This demonstrates beyond all doubt that legislation will provide certainty, and that certainty will deliver investment, growth and jobs.

As noble Lords know, effective consultation is crucial. The Department for Transport, along with the Scottish Government, the Welsh Government and the Department for Infrastructure in the Northern Ireland Executive, has consulted extensively since the UK Government first committed to bringing forward a zero-emission vehicle mandate in 2021 in support of the commitment for all new cars and vans to be 100% zero emission by 2035. For such an impactful policy, a wide range of views had to be taken into account: global multinationals investing billions in net zero, specialist vehicle manufacturers at the cutting edge of new technology, charge point operators tracking demand to inform investment, and the general public who rely on these vehicles for their day-to-day needs.

Industry supports these measures because at every opportunity the Government have sought to engage constructively. This includes not just the UK-based manufacturers—Aston Martin, BMW, Bentley, Ford, Jaguar Land Rover, McLaren, Nissan, Stellantis, Toyota and more—but international manufacturers such as Hyundai, Mazda, Mercedes-Benz, Mitsubishi and Tesla. Across the economy these measures have support. The chief executive of the Society of Motor Manufacturers and Traders called this

“the single most important measure to deliver net zero”.

The chief executive of the AA has said that the measure will

“support investment in ZEVs and associated technologies and industries … and … it will help the UK’s motorists manage the transition”.

Such positivity is down to how the Government have listened to industry. The chief executive of the British Vehicle Rental and Leasing Association said that

“the breathing space afforded by the ZEV Mandate van trajectory changing, car club parameters being adjusted, and commitment to an accessible transition will be welcome”.

The chair of Ford UK welcomed that the ideas and discussions that took place as part of the consultation were so clearly reflected in the final design.

The headline measure of the legislation is the creation of a zero-emission vehicle mandate—a framework designed to guide the transition to zero emissions by setting targets for the sale of new zero-emission cars and vans that increase each year. The ZEV targets start in 2024, at 22% for new cars and 10% for new vans, rising to 80% and 70% in 2030. It is these percentage targets that will give charge point operators the information that they need to invest in charging infrastructure and give vehicle manufacturers certainty on which products and technologies to focus their research and development on for the UK market. While this instrument covers only the period to 2030, subsequent legislation will set out the pathway to achieving the Government’s commitment to 100% zero-emission new car and van sales in 2035, in line with other major global economies including France, Germany, Sweden and Canada.

Of course, emissions from the remaining new non-zero emission cars and vans must also be considered. That is why the order makes provision for a per-manufacturer carbon dioxide target, based on the manufacturer’s emissions in 2021, that will apply from 2024 until 2030 when the instrument ends. This approach, when taken in conjunction with a ZEV mandate, ensures that average emissions from new non-ZEVs do not increase when compared with 2021 and enables manufacturers to invest in zero-emission technology rather than being forced into delivering small, incremental emissions reductions.

To implement this policy, the Government are creating trading schemes using powers under the Climate Change Act 2008. The Government have taken this approach because it offers the most flexibility to automotive manufacturers—the only group regulated by this legislation—and gives them agency in their technology choices as well as absolute certainty on the milestones on what their investments must deliver for the UK market in the next decade.

The instrument provides incentives to innovation and investment where there is particular social value. Zero-emission special purpose vehicles such as ambulances, armoured vehicles and wheelchair accessible vehicles are eligible to earn bonus credits. Non-zero emission special purpose vehicles are exempt from the regulation so as not to restrict their availability while zero-emission technology develops.

Low-volume manufacturers make an outsized contribution to the automotive industry, nowhere more so than in the UK, where the likes of Bentley, Aston Martin and McLaren lead the world with their research and development. That is why the Government have implemented a small-volume derogation from the ZEV targets, meaning that a manufacturer selling fewer than 2,500 vehicles annually is not subject to the targets and in addition will receive credit for every zero-emission vehicle that they sell.

The Climate Change Act 2008 requires that each devolved legislature passes the order for the trading schemes to apply UK-wide. In the absence of a sitting Northern Ireland Assembly, the trading schemes cannot apply in Northern Ireland. At such time as a sitting Assembly is able to approve the required legislation and chooses to do so, it is the intent of the UK Government, the Scottish Government and the Welsh Government that the order be extended to apply in Northern Ireland. In the interim, Northern Ireland will be covered by an appropriately scaled extension of existing UK-wide new car and van emissions regulations, provided for in part 8 of the order.

The Vehicle Emissions Trading Schemes Order is a critical step on the path to net zero and it is taken with the support and co-operation of the vehicle manufacturing industry, which is a crucial partner in delivering a long-term, sustainable transition to zero-emission vehicles. As the automotive sector undergoes the seismic shift to zero-emission technology, this order ensures that the UK will continue to punch above its weight in the global transition to net zero. I beg to move.

--- Later in debate ---

[Lord Davies of Gower (Con)]

My Lords, I thank all noble Lords for their consideration of this draft Order in Council. I will now respond to the specific points raised where I can, but I assure noble Lords that, where I miss any points raised, I will endeavour to ensure they are answered in writing.

The order creates four trading schemes: the car registration trading scheme, known as CRTS, the car carbon dioxide emissions trading scheme, knowns as CCTS, and equivalents for vans known as VRTS and VCTS. The car schemes, CRTS and CCTS, may interact with one another but not with the van schemes. The van schemes, VRTS and VCTS, may interact with one another but not with the car schemes. The CRTS and VRTS schemes apply the ZEV targets and the CCTS and VCTS schemes apply the carbon dioxide targets. This structure enables manufacturers to pursue multiple routes to compliance with their ZEV and carbon dioxide emissions targets.

Compliance in the trading schemes is tracked using units called allowances and credits. Each of the four trading schemes has its own allowance, and the two trading schemes that enforce the ZEV targets have their own credit. One credit is worth one allowance in the respective trading scheme.

Each year, the administrator of the trading schemes will allocate manufacturers enough allowances in each trading scheme, based on their in-year sales so that, if they meet their targets, they will require no allowances in addition and will be able to sell the excess to other manufacturers, bank it for future use or convert it for use in another scheme. Manufacturers who sell zero-emission special-purpose and wheelchair-accessible vehicles will receive bonus credits in the relevant scheme, as will manufacturers who sell zero-emission vehicles to car clubs.

The instrument provides a range of tools that facilitate different zero-emission vehicle transition strategies. Manufacturers who overcomply with their ZEV targets may bank that overcompliance for use in later years, convert it into compliance for the carbon dioxide targets at an exchange rate or sell it to other manufacturers. Manufacturers whose sales alone are not enough to meet the ZEV targets may borrow from their own future compliance at an interest rate of 3.5%, convert compliance from the carbon dioxide targets at an exchange rate or buy from other manufacturers.

Borrowing and conversion from carbon dioxide targets to ZEV targets are only allowed for the first three years of the schemes, expiring in 2026, and are capped proportionally to a manufacturer’s total car registrations or van registrations. This approach allows manufacturers to choose a path that makes sense for their business without increasing overall carbon dioxide emissions.

Vehicle manufacturers may trade freely among themselves. The only requirements are a short notification to the administrator of the trading schemes and enough units of compliance to fulfil the transaction. The price of trading units of compliance is determined by the market; however, there is effectively a cap on the maximum price per unit due to the final compliance payments to government required if a manufacturer does not meet their target. These are set at £15,000 per car in all years, £9,000 per van in 2024 and £18,000 per van from 2025, and, for the carbon dioxide emissions schemes, £86 per gram of carbon dioxide over the target multiplied by the number of non-zero emission vehicles sold.

The Secretary of State for Transport is responsible for the administration of the schemes for the UK. A specialist team in the Department for Transport is working with devolved Administrations and vehicle manufacturers to prepare for scheme commencement, with the vast majority of administrative obligations on manufacturers not falling before summer 2025. Draft guidance has been circulated to vehicle manufacturers as part of a collaborative process to ensure that they have the documentation they need to support this change. Officials are in regular contact with vehicle manufacturers and will continue to engage closely throughout implementation and operation.

On the point raised by my noble friend Lord Lilley on the environmental impact of zero-emission vehicle manufacturers, a battery electric vehicle, the most common type of zero-emission vehicle, produces only a third of the lifecycle emissions of an equivalent petrol car. They can make the best use of the UK’s renewable energy, which already represents around 40% of UK electricity generation and is set to rise to 100% by 2035.

If, after having the opportunity to make use of banking, borrowing, conversions, derogations, pooling and trading, a manufacturer has not met its target it will be required to make a payment. This is set at £15,000 per car for all years, as I said, and £9,000 per van in 2024, rising to £18,000 from 2025 onwards. The payment for missing the carbon dioxide target will be £86 multiplied by the number of non-zero-emission vehicles registered. These amounts are comparable to comparator schemes in the EU, California and Canada. The payment levels reflect the difference in emissions between a new zero-emission and new non-zero-emission vehicle and will serve as an effective incentive to meet targets.

Further to my answer to my noble friend Lord Lilley on the renewable energy mix and the grid, since 2010 renewables have gone from less than 7% of our electricity supply to 48% in the first quarter of this year. The UK will phase out coal from power generation in 2024 and is accelerating the growth of renewables, such as wind and solar, to meet our net-zero target and decarbonise our electricity system by 2035. We have seen £198 billion of investment into low-carbon energy since 2010 and our global leadership is set to attract another £100 billion by 2030. The very technical points that my noble friend raised perhaps deserve a more technical response than I can provide at the Dispatch Box this evening. On that basis, I will make sure that he gets a fulsome response in writing to his points.

The order contains robust provisions that will enable the Secretary of State for Transport to take action where necessary. There are four enforcement powers: to require information, to question an officer of a company and, as a last resort, to obtain a warrant and enter premises, where the final power—to seize documents—may be used. These powers would be used as a last resort only where all other forms of formal and informal engagement with the manufacturer concerned had been unsuccessful in resolving concerns.

As a result of the trajectory and flexibilities on offer, manufacturers will be able to comply with the requirements of the legislation in 2024 without selling any more ZEVs than they had planned to. Manufacturer commitments to transition to ZEVs by 2030 already amount to more than 67% of the UK car market, with manufacturers such as Ford, Stellantis and Nissan all committed to selling 100% zero-emission new cars and vans by 2030, and all major manufacturers committed to being fully ZEV by 2035. On the point raised by the noble Baroness, Lady Young of Old Scone, when the 2030 end-of-sale date was announced in December 2020, there appeared to be a clear difference in the carbon dioxide emissions performance between some hybrid and plug-in hybrid technologies and normal petrol and diesel cars.

On the point raised by the noble Baroness, Lady Randerson, on wheelchair-accessible vehicles, the Government recognise how important these vehicles are to their users as a vital lifeline that provides freedom and dignity. That is why the order exempts new non-zero-emission wheelchair-accessible vehicles from the requirements. This means that users who continue to need petrol, diesel or hybrid models can continue to access them. The order also applies a bonus credit for any zero-emission wheelchair-accessible vehicles that are registered, recognising the additional manufacturing and value that such a vehicle represents.

The noble Baroness, Lady Randerson, also asked about Northern Ireland regulations. The regulations that apply to Northern Ireland are a scaled-down version of the existing regulations that currently apply UK-wide and will end in Great Britain with the commencement of this order. In broad terms, manufacturers are set individual targets for their average emissions across all the cars or vans that they sell.

I think it was my noble friend Lord Lilley and the noble Baroness, Lady Randerson, who talked about charge-point disparity. On deploying those charge points and geographical disparity, the Government and industry have already supported the installation of over 49,200 publicly available charging devices. The number of local public charge points needed will vary by area and over time, depending on the types of charge point installed, travel patterns and consumer preferences. Setting binding targets at this stage would risk stifling innovative approaches and could lead to the installation of charge points in the wrong place at the wrong time. The Government’s local electric vehicle fund provides over £381 million of funding to all local authorities in England to ensure good coverage of charge points. The funding was allocated to local authorities using a number of set variables, including charge points by population and the level of rurality. The inclusion of the rurality variable means that local authorities in rural areas were allocated additional funding, compared to urban areas.

The noble Baroness, Lady Randerson, mentioned the impact on sales. We consulted on whether we should incentivise certain specifications of vehicles, and responses were overwhelmingly in favour of a simple one vehicle, one credit allowance scheme. Otherwise, we shall keep this under review. In response to the noble Lord, Lord Tunnicliffe, and the Climate Change Committee, the letter was responded to by Minister Norman during his time at the Department for Transport. We can commit to sending the letter to the noble Lord.

As I have outlined, this legislation sets out a clear pathway for the decarbonisation of new cars and vans. It will allow industry and households to plan confidently for the future. The order will establish the strongest targets of their kind in any country globally and will be a crucial catalyst for new investment, new jobs and new technology, which will drive the transition of our economy to net zero.

I hope I have answered some of the questions. I will certainly go through Hansard and see what is outstanding and write to noble Lords. I commend the order to the House.

Motion agreed.

Public Service Obligations in Transport Regulations 2023

Lord Davies of Gower Excerpts

Monday 27th November 2023 Lords Chamber

Moved by

[Lord Davies of Gower]

That the draft Regulations laid before the House on 16 October be approved.

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

My Lords, these draft regulations relate to arrangements to support the effective and efficient provision of transport services to customers, particularly in relation to rail passenger services. It will use the powers provided by the Retained EU Law (Revocation and Reform) Act 2023 to revoke what is called EU Regulation 1370/2007 and replace it with the Public Service Obligations in Transport Regulations 2023. In doing so, we will take advantage of the benefits of Brexit to put in place a regime which is better tailored to the transport sector in Great Britain, supporting the provision of services to customers. This will allow us to retain a flexible regime for contracting public transport services, separate to the mainstream procurement and subsidy regimes. It will provide greater clarity and certainty to industry by retaining the interpretive effects of relevant EU case law and underlying principles where this is in Great Britain’s interest. In addition, it will streamline the existing regime by removing duplicative or unnecessary provisions.

I will start by providing some background information about these regulations. While the UK was a member of the EU, Regulation 1370/2007 created a bespoke procurement and subsidy regime for public service contracts in the transport sector. This was in recognition that such contracts are needed in the general interest of the public and cannot always be operated on an entirely commercial basis. The regulation contains some important exemptions from the complex rules surrounding subsidies and procurement. It recognises the special status of public passenger services as critical national networks. It also provides contracting authorities the freedom to let passenger services contracts more efficiently via simpler competitive processes, and when necessary, via direct award. This flexibility helps to minimise disruption to these important public services.

The intent of the regulation is to encourage competition, and this will remain the default process for the award of passenger services contracts. The regulation recognises, however, that in certain circumstances it will be necessary to award a contract without competition by instead making a direct award to maintain the continuity of essential public services; for example, the contracts which were put in place following the pandemic to secure train services. Discussions with experts from the transport sector have identified opportunities to remove some of the ambiguities and conflicting provisions in the regulation. This will provide greater certainty and clarity to industry and contracting authorities.

I now turn to the detail of the regulations. We are using this opportunity to use our post-Brexit flexibilities to revoke and replace Regulation 1370/2007. This will ensure that a robust and reliable regime for public transport service contracts is maintained, which is independent of the mainstream procurement and subsidy regimes. It will also increase efficiency by removing duplicative or unnecessary provisions and clarifying drafting wherever possible; for example, by defining terms which were previously left undefined in the EU regulation. The instrument will also bring the regime in Great Britain into compliance with the subsidy control chapter of the EU-UK Trade and Cooperation Agreement.

Crucially, this instrument will preserve the current powers to make direct awards of rail contracts, which would otherwise sunset on 25 December 2023, due to a pre-existing sunset clause within Regulation 1370/2007. This means that without this instrument, the Department for Transport, as well as other contracting authorities such as Transport for London, would lose important powers on which we currently rely to award rail franchises. Leaving the EU has given us the opportunity to retain these important powers, and it is in the best interests of the railways in Great Britain that we retain the flexibilities they provide. The private sector has an important role to play to drive innovation and growth and we remain committed to returning to competition for rail contracts as soon as possible; however this instrument recognises that in certain circumstances it will be necessary to award a contract by making a direct award.

Additionally, this instrument will provide greater clarity and assurance to industry by retaining the interpretive effects of EU case law and underlying principles. Under the retained EU law Act, EU case law will no longer be binding on UK courts after 31 December 2023. Relevant EU case law relating to procurement notices and to in-life changes to contracts, which was not codified by the regulation, has been relied on for clarity by authorities and contractors. This case law is therefore being codified by this instrument as it provides helpful clarity. Likewise, EU principles will no longer apply to underpin public service obligation procurements from the year end. The instrument replaces these with principles based on the new mainstream procurement regime for England and Wales, and with principles based on Scottish procurement law for Scotland. Beyond the changes I have outlined, this instrument largely maintains the status quo. This will provide certainty, clarity and confidence to contracting authorities, operators and passengers alike.

This instrument will put in place a regime for the award of public service obligation contracts in the rail, light rail, bus and tram sectors which is tailored to the transport systems in Great Britain, while largely enabling contracting authorities and operators to continue operating as they do now by maintaining the default position of competitively tendering for public service obligation contracts. It will enable the Government to meet their international obligations and will ensure consistency with other domestic legislation, and crucially, it will retain important flexibilities in the way we award contracts, which would not have been possible had we remained a member of the European Union. I commend these regulations to the House.

[Baroness Randerson (LD)]

My Lords, I thank the Minister for his introductory comments. These regulations are one set of many that will undoubtedly be required to amend legislation as we establish British legislation separately from the EU legislative framework. It serves to illustrate how complex this process is going to be, and how much intensive work by officials is being required in order to produce it. It also, by the way, illustrates that the original concept of the REUL Bill was absolute pie in the sky.

This is modelled on the principles of the Procurement Act, which itself had some issues for debate as it went through this House. I noted the difference in the way in which Scotland and Wales are referred to in these regulations, because in Scotland, procurement is stated to be devolved, but not in Wales, where procurement is embraced by the same system as in England.

--- Later in debate ---

[Lord Tunnicliffe (Lab)]

My Lords, I welcome this instrument. The Government are right to permit the making of direct awards for PSO contracts and to ensure that they are able to meet the obligations under the EU-UK Trade and Cooperation Agreement. I have no intention of opposing the regulations.

I had a number of questions, but the Minister has already answered most of them—although I will not go as far as saying that he did so satisfactorily—and at this late hour, I do not intend to repeat them. Along with the answers he will give to the noble Baroness, Lady Randerson, I think that this will be sufficient debate.

[Lord Davies of Gower (Con)]

I thank the noble Baroness and the noble Lord for their consideration of the draft regulations. I will turn to the points raised.

Regulation 1370 provides a bespoke, flexible procurement and subsidy regime for public service contracts, reflecting the fact that they are vital public services and cannot always be operated on an entirely commercial basis. Now that we have left the EU, we are able to preserve essential flexibilities and simplify the regime where possible, giving contracting authorities a strong basis for providing these key public services. Simply revoking the regime altogether would mean allowing to fall away direct award powers which provide government and franchise authorities such as Transport for London with important flexibilities in awarding rail contracts. That would create significant challenges in ensuring the effective operation of public transport services, particularly rail services.

Following privatisation 25 years ago, passenger numbers had more than doubled before the pandemic, rising more quickly than in most of Europe. The private sector has invested billions in new, modern trains and upgrading our stations—investment that would not have happened under nationalisation.

It is the Government’s intention to return to competition as quickly as possible. The intent of regulation 1370 is to encourage competition, so the default process for the award of a passenger services contract is primarily through competition. However, regulation 1370 recognises that, in certain circumstances, it will be necessary to award a contract without competition by instead making a direct award. The powers to award directly are not new but were due to expire under EU legislation. We feel that it is in the best interests of the railways and passengers in Great Britain to retain them, and leaving the EU has given us the flexibility to do so. We have committed to restart the competition for contracts as soon as possible, which will require stable market conditions and sufficient long-term certainty.

Engagement with the proposed amendments to regulation 1370 has been ongoing since early summer 2022. The key amendments to regulation 1370 were publicly consulted on as part of the plan for rail consultation. Stakeholders were generally supportive of the proposed amendments, and the Government response will be published shortly. We have held targeted engagement with key affected stakeholders on the amendments proposed in addition to those publicly consulted on. In addition to face-to-face meetings to talk stakeholders through the additional amendments and our reasoning, we have sent written detail for further consideration, including to rail partners, franchising authorities and bus and light rail stakeholders. The wide engagement enabled the Department for Transport to work closely with stakeholders affected by the instrument and address issues raised; for example, updating the definition of “rail” in line with survey feedback enabled us to achieve a broad consensus on the change.

The noble Baroness, Lady Randerson, raised the point about engagement and consultation carried out with the devolved Administrations. As a result of close engagement, both Scottish and Welsh Ministers have provided agreement to the regulations. My officials met with each of the devolved Administrations covered by this instrument on a regular basis during the formulation of the policy and the drafting of the instrument. We worked closely with the devolved Administrations to address any concerns, including detailed work on the SI with Transport Scotland, with the result that, following ministerial approval to the instrument, Scottish parliamentary agreement was received. I commend the Motion.

Motion agreed.

Rail Fares

Lord Davies of Gower Excerpts

Monday 27th November 2023 Lords Chamber

[Baroness Randerson]

To ask His Majesty’s Government what are their plans to simplify rail fares; and what steps they are taking to increase confidence among passengers that, when they purchase tickets, they will always receive the best value for their requirements.

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

My Lords, the plan for rail proposes the biggest shake-up of rail in a generation. We have already made progress on fares reform, for example, introducing flexible season tickets and delivering on our commitment to extend single-leg pricing to most of LNER’s network. We announced earlier this year that we would deliver pay-as-you-go to 53 more stations in the south-east and, through trailblazer devolution deals, pay-as-you-go pilots in Greater Manchester and the West Midlands.

[Baroness Randerson (LD)]

My Lords, following the fiasco of the Government’s proposed closure of all ticket offices, which was of course resoundingly rejected by the travelling public, we urgently need decisive action to improve rail services. Great British Railways has, it seems, been kicked into the long grass but one aspect, ticketing reforms, to which the Minister’s Answer refers, could be done now throughout the whole network without legislation. The one isolated trial and the Government’s plans simply are not good enough to create the reform that is needed, to restore passengers’ trust and to improve value for money. When do the Government plan to introduce single-leg pricing and the overall reform throughout the whole network?

[Lord Davies of Gower (Con)]

At the Bradshaw address, we committed to expand single-leg pricing to most of LNER’s network, and this went live on 11 June 2023. This delivers simpler, more flexible tickets that are better value. Passengers can now get the best value ticket for their journey, safe in the knowledge that a single ticket will be half the price of a return. Previously, some single tickets on LNER trains, for example, cost almost as much as a return. Single-leg pricing is much simpler, putting the price of a single ticket at around half the cost of the old return ticket.

[Lord Dubs (Lab)]

My Lords, I am interested in the Minister’s comment. Would he care to comment on the following experience? Recently, I booked a standard return ticket on the west coast main line and was told I could not have reserved seats without trading in the tickets and buying two single ones at a cost of £25 more.

[Lord Davies of Gower]

I cannot particularly comment on that one issue, but I am sorry to hear of the noble Lord’s experience and it is certainly something I will take back.

[Lord Ranger of Northwood (Con)]

My Lords, as someone who is infrequent on the rail service, as a Londoner, when I do travel I enjoy the experience. What I have seen over the last few years is increased digitisation and more tickets being purchased online. I think we should welcome that, the ease of fares that are being seen online and the work being done by the train operating companies. Another thing I have noticed is that, as personal experience shows, if there are delays and challenges on the rail network then refunds are being offered quite easily—or advertised, at least, to be offered quite easily. The process itself, though, feels a bit more complex, because I have not yet been able to attain one of those refunds. Will the Government and my noble friend look at how we could automate refunds, to make that better for the user experience?

[Lord Davies of Gower]

My noble friend makes a very good point and, as somebody who has made several applications for refunds online, it is not the simplest of processes. Indeed, for those less acquainted with computers and software, it is even more difficult. I take his point and it is something that, again, I will take back.

[Lord Wigley (PC)]

My Lords, I draw the attention of the Minister to the experience of evening travellers from Euston to north Wales—the Bangor and Holyhead line operated by Avanti services—who, incredibly, might find that there are no through tickets from Euston to Bangor using tickets booked in advance. If, on the same train, a ticket is purchased from Euston to Chester and another from Chester to Bangor, there is availability. Would I be unduly cynical in thinking there is some manipulation going on to try and rationalise the services?

[Lord Davies of Gower (Con)]

I hear what the noble Lord says, and I think that I will take that one back as well.

[Lord Liddle (Lab)]

Does the Minister recognise that as long ago as 2019 the Government accepted that there was chaos in the present rail fare structures about which something had to be done? The answer was to set up Great British Railways, which would have new powers to deal with this question. Given the urgency of getting more passengers back on the railway, given the rise in public subsidy to the railways from £4 billion to £13 billion in four years, why have the Government ducked doing this?

[Lord Davies of Gower (Con)]

Well, again, I will—

[Baroness Smith of Basildon (Lab)]

Take it back?

--- Later in debate ---

[Lord Davies of Gower (Con)]

Not on this occasion. My Lords, we are focusing on delivering for passengers and customers by integrating new opportunities, such as, as I said earlier, the recently announced £36 billion of funding for Network North, fares and ticketing reform and improving accessibility, as well as delivering the £44 billion settlement for Network Rail to support the safe and efficient running of the network for customers between 2024 and 2029. Securing a slot for pre-legislative scrutiny of the draft rail reform Bill demonstrates the Government’s real commitment to our railways.

[Lord McLoughlin (Con)]

My Lords, I welcome my noble friend to his post. I have some sympathy with him as far as rail ticketing is concerned, because everybody thinks it should be reformed if it means they get cheaper tickets. The simple fact is that as long as the Treasury has the control that it does over the rail companies, which is greater now than it has ever been, through the department, then we will not make much progress on this matter. When does he expect to see the results of LNER’s experiment? Does he think this can be rolled out more quickly than presently planned?

[Lord Davies of Gower (Con)]

I hope that this can be rolled out as quickly as it possibly can be, but again, I am afraid I cannot give a definitive answer at this point.

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, would the Minister join me in congratulating the RMT trade union on exposing the scale of underclaiming of compensation for delayed and cancelled trains, and the scale of profiteering by apps such as Trainline? Does he agree with the great majority of public opinion that believes it is high time that the public good was put ahead of private profit in respect of ownership of our railways?

[Lord Davies of Gower (Con)]

I thank the noble Baroness for her question. The rail industry is in a difficult financial position. The department has spent in the region of £31 billion of taxpayers’ money. That amounts to about £1,000 per household in 2020-21 and 2021-22, since the pandemic. Reforming the rail network is critical to improve the passenger experience and to ensure the financial and operational sustainability of the railway. The industry has put forward fair and reasonable deals, offering job security and a fair pay rise. Government funding has been secured to facilitate important reforms of the railway. However, agreeing pay increases has to be linked to taking forward these important reforms.

[Lord Geddes (Con)]

Will my noble friend bring his undoubted acumen to bear, in addition to the rail fares, to simplifying buying tickets to park at railway stations, where you virtually need a degree in science to work it out?

[Lord Davies of Gower (Con)]

I must confess, I park my car every week at a station car park to come here and I have not found any difficulty: I walk into the station, buy a ticket and put it on my windscreen. So, I am sorry to hear the noble Lord’s difficulty but, again, I will take that back.

[Lord Purvis of Tweed (LD)]

My Lords, the Minister promises a strategy, but my noble friend’s question was about when the benefits of the LNER trial will be rolled out across the whole network. I do not think customers on the whole of the network would like the Minister simply to hope it will happen. What is the strategic objective of when it will happen?

[Lord Davies of Gower (Con)]

I am not in a position to give that answer at the moment, I am afraid, but when I am, I will certainly let the House know.

[Lord Anderson of Swansea (Lab)]

My Lords, as is well known to the noble Baroness, Lady Randerson, and to the Minister, the trains from Swansea were again late this morning. The first thing I do when I arrive, either in London or in Swansea, is fill in a claim form. Can he take this up, from his new, elevated position, with GWR?

[Lord Davies of Gower (Con)]

My Lords, this is something I can speak of with great experience, as a regular traveller from Swansea to Paddington. The noble Lord is absolutely right. Recent trains have been very late and compensation has been due. I am very aware of that.

Mopeds, Motorcycles and Powered Light Vehicle Industry

Lord Davies of Gower Excerpts

Thursday 23rd November 2023 Grand Committee

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

My Lords, I am pleased to respond to this Question for Short Debate and thank all noble Lords for their thoughtful contributions to the debate before the Grand Committee today. Whether I will be able to answer all noble Lords’ questions in the 12 minutes allocated, I do not know, but I will attempt to respond to as many questions and concerns as possible and, when I am not able to, I will certainly follow up with a letter.

The noble Baroness, Lady Ritchie of Downpatrick, my noble friend Lord Moylan and the noble Viscount, Lord Craigavon, talked about decarbonisation, net zero and the Government’s commitment. We have a legal obligation to meet net zero, and the Government are committed to phasing out the sale of all new non-zero emission road vehicles by 2040. This includes ending the sale of polluting motorcycles and mopeds. The Government are committed to our net-zero ambitions and will continue to drive forward our work to cut emissions. The broad approach is one that is fair, affordable and pragmatic, easing the burdens on the British public.

Following a consultation last year, we are now analysing the responses to our consultation on when to end the sale of new non-zero emission L-category vehicles, including views from the industry, with which we have been engaging. We will respond in due course. Our approach will continue to account for technical and commercial feasibility and ensure that transition is affordable for consumers. The Prime Minister’s announcement pushed back the end-of-sales date for new petrol and diesel cars from 2030 to 2035 by requiring 80% of new cars to be fully ZEV by 2030. The mandate will continue to require the most ambitious regulatory trajectory to 2030 of any country.

The noble Baroness, Lady Ritchie, talked about the end-of-sale dates for non-zero-emission motorbikes and mopeds. We consulted between July and September last year on when to end the sale of new non-zero-emission L-category vehicles, which was supported by a thorough programme of stakeholder engagement with manufacturers and the wider industry. The Government are analysing the responses and taking into consideration the wide range of views expressed. The consultation proposed two separate dates for the end of sale of new non-zero-emission L-category vehicles: 2035 for all L-category vehicles at the latest, and 2030 for L-category vehicles in the L1 L2, L3, L6 and L7 subcategories.

The Government recognise that a one-size-fits-all approach to regulating emissions from road vehicles is not appropriate, as the technology pathway is not as clear for certain segments of the market. However, they will continue to engage with industry and the public to ensure that the final confirmed end-of-sale dates for new non-zero-emission L-category vehicles are feasible from both a technological and a commercial perspective. That includes ensuring that adequate infrastructure for the sector is in place and that the transition is affordable for consumers.

We are now analysing the responses to the consultation on ending the sale of new non-zero-emission L-category vehicles, including evidence provided on this issue, and we will bring forward the government response in due course. Analysis of lifecycle emissions is an important consideration as we accelerate the transition to a zero-emission fleet of road vehicles. While there is no internationally recognised method of measuring lifecycle emissions in any transport sector, the Department for Transport’s energy model, published in 2018, and the externally commissioned lifecycle analysis of UK road vehicles, published in 2021, provide clear assessments of the relative environmental impacts of different road vehicle technologies and fuels in the UK.

The Government will consult on any future regulatory framework to deliver and enforce the end-of-sale dates for non-zero-emission L-category vehicles as appropriate. The Government keep all their regulations under review to ensure that they are fit for purpose and future-proofed. Policies are already in place to support the transition, such as plug-in motorcycle grants, and the Government recently made up to £350,000 of funding available for research and development projects to grow the zero-emission motorcycle supply chain in the UK. However, we appreciate that there are technology and infrastructure considerations for these vehicles as we transition, and we will continue to work with the sector to support and consider how best to overcome demand-side challenges, including the infrastructure needs of zero-emission L-category vehicles.

On the Motor Cycle Industry Association action plan, mentioned by the noble Baroness, Lady Ritchie, the Government are committed to continuing to work with the industry and other stakeholders to ensure that the sector is ready, ahead of decarbonisation. In February 2022, the Motor Cycle Industry Association published Realising the Full Potential of Zero Emission Powered Light Vehicles: A Joint Action Plan for Government and Industry. That was commissioned by the Government as a transport decarbonisation plan commitment and was delivered in partnership with the Motorcycle Industry Association. The document aimed to set out the 10 key actions that the industry believes are needed to support the L-category sector ahead of decarbonisation.

The Government are engaged with the industry to deliver the action plan where appropriate. Zero-emission vehicles offer an opportunity to create jobs, strengthen British industry, cut emissions and keep Britain moving. Phasing out new non-zero-emission L-category vehicles positions the UK as a world leader in L-category decarbonisation, driving innovation and creating a market for zero-emission vehicles.

The noble Lord, Lord Liddle, spoke about a plan for the future, as did the noble Baroness, Lady Ritchie. The Government are pleased with the progress made so far on the action plan and will continue to engage with the sector on it. For example, to address actions 2 and 3 on growing and developing the supply chain, as I said earlier, the Government made up to £350,000 of funding available for research and development projects to grow the zero-emission motorcycle supply chain in the UK.

The department is also working with the recently established powered light vehicle community to address action 9 on creating a formal L-category community. Additionally, the department is currently engaged with the MCIA’s recent licensing review proposals to address action 6, to review minimum testing and licence entitlements for all battery, electric L-category vehicles. We continue to engage with industry to deliver the action plan where appropriate and will continue to do so.

The noble Lords, Lord Berkeley and Lord Foster of Bath, referred to the plan for drivers in as much as it applies to motorcyclists. Like drivers, motorcyclists will benefit from many of the measures in the plan, including around fixing roads faster, better traffic lights, and the right speed limits in the right place. Specifically, in seeking to make better use of bus lanes, we will refresh the technical advice for local authorities to make it clear that they should use their powers to ensure that bus lanes are open to motorcycles, and we will launch a consultation on allowing motorcycles to use bus lanes by default. The plan confirms that, to help riders make the transition to zero-emission vehicles, plug-in vehicle grants continue to be available for motorcycles.

The noble Lord, Lord Foster of Bath, asked a question about lithium batteries. There is no real evidence that electric vehicle fires are more likely to occur than petrol or diesel vehicle fires, and it remains safe to have them in covered car parks. The safety of electric vehicles and their charging is of course of paramount importance to the Government and is kept under regular review. Multiple safety systems are designed into electric vehicles to protect passengers, emergency services personnel and other users from harm. However, the risks are different and need to be understood and controlled. Fire prevention, fire detection and firefighting in electric vehicles is a developing area, and the Government review their guidance and regulations in step with the development of best practice. We continue to work with the fire services, industry and experts from across the UK on this, and before vehicles can be sold or registered in the UK, the manufacturer must supply evidence that the vehicle complies with international approval requirements. For hybrid and electric vehicles, fire and electrical safety is included in this assessment. The department is therefore working with the Office for Product Safety and Standards and other government departments to develop guidance on the safe use of batteries in e-cycles and e-scooters and will publish this at a later date.

The noble Baroness, Lady McIntosh, asked about cycle offences and dangerous cycling. Of course, dangerous cycling puts lives at risk and is completely unacceptable. Like all road users, cyclists are required to comply with road traffic law in the interests of their own safety and that of other road users—that is of course reflected in the Highway Code. If they do not adopt a responsible attitude and if their use of the highway creates an unsafe environment, they may well of course be committing offences, which is a matter for the police to prosecute.

I think I have covered most of the questions that have been asked.

[Baroness Ritchie of Downpatrick (Lab)]

Perhaps the noble Lord might say something about the simplification of the licensing scheme—and I welcome him and the noble Lord, Lord Liddle, to the Front Benches.

[Lord Davies of Gower (Con)]

I will go back to the department and see exactly where we are on that, and I will certainly write to the noble Baroness on it.

[Baroness Randerson (LD)]

Perhaps we might pursue very briefly the issue of fires, as raised by my noble friend Lord Foster. There are lots of statistics on this, and there is a very big difference between the record of electric cars and vans and so on, which have an extremely good record on fires—they are much less likely to burst into flames than, for example, petrol and diesel cars. However, my noble friend was referring to the issue of bikes and mopeds, and so on.

[Lord Davies of Gower (Con)]

I take the noble Baroness’s point and I will write on that issue in respect of motorcycles.

To conclude, the steps that the Government are taking, which I have set out today, provide a package of support for the motorcycle and powered light vehicle industry that will help this sector to contribute to a safe and environmentally sustainable future for road user transport in this country.