Bus Services Bill [HL]

Lord Whitty Excerpts

Ping Pong (Hansard): House of Lords
Tuesday 25th April 2017 Lords Chamber

[Baroness Scott of Needham Market (LD)]

My Lords, I thank the Minister for listening to and taking away the concerns I raised with my noble friend Lord Shipley on independent audit. It is an important point. These schemes, however welcome, are potentially extremely expensive. The risk, as always, will fall on local council tax payers and therefore robust independent audit is key. We look forward to seeing the regulations and guidance as they emerge.

[Lord Whitty (Lab)]

My Lords, I remain generally supportive of the thrust of the Bill, but I have been dismayed by some of the measures taken by the Government in the Commons with some of the amendments in this group and others. It is regrettable because during the process of the Bill in this House there has been a high degree of consensus and the Minister has been very helpful in a number of respects. However, in some areas he has been chopped off at the knees by his colleagues steamrolling it through the House of Commons.

I echo what the noble Baroness, Lady Randerson, said on the low emissions provisions. If the Government were concerned about the timescale and the economics, they could have amended the timescale and put in a few qualifications. Instead, they have deleted the requirements in Amendments 2 and 6 that new vehicles should meet new low emissions standards. This is a very poor signal. As the noble Baroness said, it comes a day or two after the Government’s attempt to use the election to defy the previous court injunction that a new air quality strategy should be produced because of the inadequacy of their earlier air quality strategy produced by Defra.

The Government’s record on this is shaky and they are extremely vulnerable. Buses are one of the main diesel-based pollutant vehicles in many of our towns and villages. There was an opportunity to put in the Bill that we would do what a number of local authorities in London and elsewhere are already doing and replace those buses immediately when a new vehicle is brought on with one with high-quality emissions standards. As I said, we could have put in slightly different dates and slightly greater qualifications, but nevertheless that needed to be in the Bill. It undermines the Government’s commitment to do something about air quality on which they have been and will continue to be widely criticised. I regret that and I think the Government will come to regret it too. As was said in this House yesterday by my noble friend Lady Nye, it is a major public health issue. There are provisions for avoiding the purdah prohibitions concerning air quality that were already in the Bill when it reached the Commons. The Government chose, wrongly, to delete those provisions, and I regret that profoundly.

I also regret the deletion or dilution by Amendments 3, 4 and 13 of the provisions we inserted in this House that worker representatives in the bus industry should be clearly consulted on any changes, whether an advanced quality partnership or the new franchising operations. The Minister has continued to make positive noises in that respect, and I appreciated his acceptance of the principle in our earlier proceedings. However, his colleagues seemed to have deleted most of that, which is a mistake. We are talking here, whether the Government like it or not, of a pretty highly unionised sector where by and large there are good relations between the bus companies and their employees. Anything which deletes a continued commitment to those outcomes makes some of these provisions more problematic when they never needed to be. Again, the Government may live to regret that; I hope not. I know that the unions intend to be constructive and by and large welcome the objectives of the Bill, but from a long list of those who are required to be consulted about these changes, the people who are omitted are the ones who actually drive and operate the buses. That seems to me a triumph of ideology over common sense and the Government should not have done it.

The Minister will no doubt be relieved to hear that I intend to intervene only once on this Bill. I have some concerns about the third group of amendments in relation to the reinstatement of the clause which prohibits local authorities from setting up their own companies. That is a restriction on local authority strategic decision-making. I do not intend to belabour that point because we will come on to it in a moment.

I hope that the outcome of the Bill is positive. It is regrettable that these changes have been made by the Government at this relatively late stage because they make it more difficult to achieve what the Minister himself set out as the objectives when he introduced the amendments. Taking the changes together, I hope that in the coming weeks the population will recognise that even in this relatively minor area of legislation the Government have decided, contrary to what was a pretty consensual view in this House, to delete commitments on environmental standards, commitments on the rights to representation of workers, and commitments on flexibility and devolution of powers to local authorities. All of that amounts to an unnecessary and significant reduction in my enthusiasm for what in general is a positive Bill.

[Lord Kennedy of Southwark (Lab)]

My Lords, I intend to speak relatively briefly on this group of amendments. The Opposition have generally supported the overall aims of the Bill. We have welcomed it and see it as an important step towards increasing the number of bus journeys, particularly outside London where there has been a collapse in the number of journeys in recent years. Like the noble Baroness, Lady Randerson, we would have liked the Bill to have gone further, but equally we accept that we have made welcome progress on it; as I say, we support its overall aims. Like other noble Lords, we generally accept the changes on data. The deletion of provisions in respect of emissions is regrettable. Air quality is now a very big issue in terms of people’s health. The number of deaths which can be attributed to poor air quality is something we should all be concerned about and I think that the Government have taken a retrograde step.

My noble friend Lord Whitty mentioned consultation of employees. That is very important and again it is a shame that the Government have largely deleted or watered down the provisions in that regard. Whether the Government like it or not, the bus industry is heavily unionised, which has generally been of benefit to it. The unions work well with the various bus companies and seek to provide a public service. I do not see any benefit in what the Government have done. As my noble friend suggested, I suspect that other forces in the Commons are at work here who do not quite see it that way. What the Government have done is a mistake. I will come on to other things I regret when we consider further amendments.

Brexit: Transport

Lord Whitty Excerpts

Monday 6th February 2017 Lords Chamber

[Lord Whitty (Lab)]

My Lords, the noble Lord, Lord Patten, has a very overoptimistic view of the position. I agree that transport is likely to be one of the sectors least affected by Brexit, but the hope for a positive mood among the politicians of Europe, which was certainly still there after the initial shock two or three months ago, has been sadly disappointed by the way in which the Prime Minister’s definition of the UK’s bargaining position has excluded us from any form of membership of the single market and any form of real participation in the customs union. Both of those seriously affect the transport sector.

I thank the noble Baroness, Lady Randerson, for introducing this interesting debate. She and I are both members of the same sub-committee of the EU Select Committee, which has been looking at trade. When we looked at the options for trade, at that point we still considered partial membership of the single market at least as a potential option, as with at least temporary continued membership of the customs union. We have received evidence from and talked to, formally and informally, representatives of manufacturing and of goods and services, and we are now looking at services in more detail, including transport services. The initial reaction of those industries, after the shock of the referendum vote, was panic, and then they came back with the view, sector by sector, that, “Okay, we are where we are, but we could do a sectoral deal on this front and still retain all the key issues of membership of the single market”. I am afraid the Lancaster House speech, followed by the White Paper and the Statement with the White Paper last week, have cut off that possibility.

As the noble Baroness pointed out, transport has been hugely integrated across Europe for the past 40 years—not totally but to a significant degree. A regulatory structure applies to the whole of European transport, including on issues of safety, ownership, routes and vehicle standards, as has been said. These are all easy to deal with within the single market; they become much less easy outside the single market.

In aviation, there is probably greater scope for doing a bespoke deal than there is for the other sectors. European airspace already extends to some extent beyond the European Union—to Norway, Iceland and some of the Balkan countries—but it is very important that we establish early on in the negotiations that aviation is dealt with as a one-off. Not only does it define the use of European airspace and our access to European airspace, which at the moment also includes issues of establishment and whether UK-owned airlines or UK-domiciled airlines can operate effectively in other countries and within other countries, but it also defines our relationship with the rest of the world, including the open skies agreement with the United States. We need to retain that. That can probably be dealt with in a separate deal. Whether it could be dealt with in a separate deal entirely within a free trade agreement—which appears to be now where we are in terms of narrowing down our options, which we have, unfortunately, done over the past couple of months—is not entirely clear.

If we were to take the jump off the cliff, concluding that no deal is better than a bad deal, and go to WTO standards, we would still probably be able to do a separate deal on aviation, but that would require a lot of negotiation, hard bargaining and recognition of what the key British interests are in terms of retention of routes, slots, airline establishment and so forth. Aviation is somewhat different from the other modes of transport. Its regulatory system is very much an EU responsibility and competence.

I could argue that, if we reverted to control of the rail system with renationalisation of the railways, which I think is still the Labour Party’s policy, that would be more easily achieved outside the EU. It is not completely banned by the fourth railway package that we are currently negotiating, but it would be more difficult were we to remain members of the EU. However, the through routes to which the noble Baroness referred, such as the Eurostar and the large amount of freight that is carried by railways and so forth, all affect the railway sector. That is an essential part of the single market mechanism, and we will be outside the single market mechanism.

In road transport, there are a whole range of regulatory structures involving driver hours, vehicle standards, vignettes and cabotage arrangements and so forth. Drivers are an international workforce, so getting control of migration may limit the degree to which British operators and foreign operators trying to trade import and export from the UK have access to a skilled workforce. Once again, road transport arrangements are a key part of the single market, and we will be outside the single market.

On shipping, a lot of shipping is between ourselves and Europe and there will be arrangements on safety, standards and routes that are part of the single market. But the far more important aspect of the maritime situation is ports. It may be beneficial for the owners of UK private ports, which are by and large privately owned within the UK, to be free of the regulatory structure that exists within Europe, which is largely geared to publicly owned ports. The problem for ports is not ownership or regulation but that, outside of the customs union, we will face all sorts of additional responsibilities on port administration, port space and the cost at the port level. If we are to be outside of the customs union, the movement of people and goods through our ports will be a much more complex issue. It will require space to check, and it will require administration and bureaucracy. Some of it can be subject to electronic arrangements these days, but much of it cannot. In the end, because of the configuration of most UK ports, it will be difficult to extend the time, parking space and so forth which, even under the current arrangements, have been under some considerable strain, as we have seen particularly in Dover, over recent years. The need for additional space, checks and bureaucracy and the delays in shifting goods by road, rail through our ports and through our shipping will significantly increase.

All that is because we have taken a decision in principle that we will move away from the customs union. The ambiguous words in the Lancaster House speech have now been whittled down to mean that any continued co-operation is on administrative arrangements. Desirable as those may be, they will not stop all the pressure on our ports, our roads, our shipping and our rail systems. The narrowing down of the options by the Lancaster House speech has put a greater burden on transport than looked like being the case a few weeks ago.

Bus Services Bill [HL]

Lord Whitty Excerpts

Report: 2nd sitting (Hansard - part one): House of Lords
Monday 24th October 2016 Lords Chamber

Moved by

[Lord Whitty]

22: Clause 4, page 15, line 44, at end insert—
“( ) An award of any new franchise or contract shall not be made on the basis of labour costs estimated by the potential franchisee or contractor assuming labour costs for new employees at less than the labour cost of workers who are covered by TUPE protections in accordance with section 123X transferring to the new franchisee or contractor.”

[Lord Whitty (Lab)]

My Lords, in moving Amendment 22 I shall speak also to the other amendments in this group in my name. I do not intend to speak for long, partly because my voice is giving out and partly because all these amendments reflect one particular dimension of the effect on the workforce of franchising and enhanced partnerships.

Amendment 22 deals with the awarding of franchises. It asks that awards shall not be made to a company solely on the grounds that it intends to pay its future workforce less than the current workforce. Of course, those who are TUPE-ed over when there is a new franchise or enhanced partnership will be covered by TUPE and therefore it will not be possible for them to be paid a lower wage. But it also indicates that there has been the occasional problem in London—where by and large the franchising system has worked well—of a two-tier workforce developing. If the Government are not prepared to accept the wording of these amendments, I would like them to indicate that they recognise that there would be a concern if franchising in particular led to two-tier workforces and the consequent industrial relations and management problems. Amendment 22 deals with the issue upfront by saying that a franchise shall not be judged on the basis of the intention of the potential franchisee to pay a lower rate than to those who are transferred over.

The remaining amendments in the group deal with the situation once the franchise is awarded. Amendment 47 deals with a situation where a franchise is already in place or has just been awarded and those who are TUPE-ed over from the former operator are paid at the previous rate under the TUPE provisions, which are clearly set out in the Bill—I thank the Government for that—but subsequent employees could be paid at a lower rate. That is a recipe for very poor industrial relations and probably other tensions in the way in which the franchisee would operate. Again, it would be helpful if the Government could indicate, at least in guidance, that this is not a desirable outcome of the franchise process.

Amendments 48 and 87 deal with dismissals following the award of an enhanced partnership or a franchise. They provide that there should be no dismissals solely as a result of the award of that franchise, in order to protect individuals over and above the TUPE regulations from unfair dismissal as a direct result of the franchise award. Amendments 41, 42, 81 and 82 simply delete the phrase “at the same time” because some of these consequences may not be immediate. The principle that is already enunciated in the Bill should apply whether or not it happens at exactly the same time as the award of the franchise.

This is a potentially difficult problem which might not normally be dealt with in primary legislation but would be left to the franchising process, but it would be helpful if the Government could indicate that the kind of outcome that we have occasionally seen will not arise when we extend franchising in particular to other parts of the country outside London. I hope that the Minister can say a few warm words about the Government’s intention and reflect it in any guidance that the department gives to those tendering for franchises. With that intention in mind, and underlining that this can be and has been on occasion a difficult situation to deal with post the franchising operation, I beg to move Amendment 22.

[Baroness Randerson (LD)]

My Lords, in my various discussions with bus operators, it has become clear to me that recruiting bus drivers is a complex and localised process. A standard tariff of wages across a large area can attract people in one part of it and be inadequate in another. Certainly, the experience of Transport for London has been along those lines: it is difficult to attract drivers in central London and easier in parts of outer London. That applies also to areas such as Bristol. Therefore, how one deals with the TUPE regulations and the transfer of staff from one company to another is essential to good relations between the workforce and the employer. We on these Benches support the intention of the amendments in the name of the noble Lord, Lord Whitty.

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That said, I note the noble Lord’s suggestion and I will reflect on that to see how we might best restate the importance of TUPE protections and provisions, as he said, within the guidance that accompanies the Bill. I hope, on the basis of the explanation that I have provided and the reassurance that we will see what more we can do with guidance in respect of TUPE provisions, that the noble Lord feels minded to withdraw his amendment.

[Lord Whitty]

My Lords, I thank the Minister for that reply. He started very well and he finished quite well with those assurances that he would look at it further, but in between there were some arguments that did not really address the issue. These amendments are not, in any sense, stopping the Bill being devolutionary, as local authorities will make their own decisions. It is the principles on which they make those decisions that I am concerned with. At the beginning of his remarks, the Minister recognised that there would be a problem with a two-tier workforce, but went on to argue about people being brought in at the same rate as somebody who has additional skills and responsibilities. That is not the intention; if that was implied by my amendment, it was certainly not the intention and a slightly different form of words would make that clear. What I am really saying to the Government is that if they do not wish to put it in the Bill, the Minister’s recognition that there would be problems if a two-tier workforce developed after franchising and that that could be conveyed to the potential franchising authorities, then that, to a large extent, would meet my point.

The Minister referred also to the consultation that will take place with trade unions and representatives of employees. That will help to some extent but there also needs to be some indication to those carrying out the franchising operation that they must bear this in mind, and the way in which the franchise is operated must avoid that outcome of a two-tier workforce. The Minister probably said enough for me not to press the amendments today but I hope that in his further consideration he will see whether there are ways in which his department could convey my anxieties—which I think he shares, in part—about the potential outcome of franchising decisions. In that spirit, I beg leave to withdraw the amendment.

Amendment 22 withdrawn.

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Moved by

[Lord Whitty]

32: Clause 4, page 17, line 25, at end insert—
“(ca) appropriate representatives of any affected employees,”

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Moved by

[Lord Whitty]

35: Clause 4, page 17, line 31, at end insert—
“( ) In subsection (4)(ca) “appropriate representatives of any affected employees” means—(a) representatives of a recognised trade union, if an independent trade union is recognised by existing operators in the area of the proposed franchising scheme,(b) in any other case, employee representatives appointed or elected by the affected employees who have authority from those employees to receive information and be consulted on their behalf.”

Bus Services Bill [HL]

Lord Whitty Excerpts

Report: 1st sitting: House of Lords
Wednesday 12th October 2016 Lords Chamber

Moved by

[Lord Whitty]

1: Before Clause 1, insert the following new Clause—
“Additional functions of local councils with respect to local bus services in areas other than passenger transport areas
After section 63 of the Transport Act 1985, insert—“63A Additional functions of local councils with respect to local bus services in areas other than passenger transport areas(1) It shall be the duty of the county council in each non-metropolitan county of England to—(a) consult on the needs for local bus services within the county, including by issuing a consultation document,(b) give notice of the consultation mentioned in paragraph (a) in such manner as the council considers appropriate for bringing it to the attention of persons in the county to which it relates,(c) following that consultation, prepare and publish an assessment of the needs for local bus services within the county,(d) demonstrate that the assessment has fully considered and responded to the outcomes of that consultation, and(e) secure such provision of local bus services as the county council considers reasonable and appropriate, to meet the needs identified in the assessment which would not, in its view, otherwise be met.(2) The Secretary of State must issue guidance concerning the preparation of an assessment under this section, and that guidance may, in particular, include guidance about the extent to which the county council must set out—(a) the ways in which it has considered and responded fully to the outcomes of the consultation under subsection (1)(a), and(b) how it will meet the needs for local bus services identified in the assessment.(3) A consultation document issued under subsection (1)(a) relating to an assessment of the needs for local bus services must include—(a) a description of the existing provision of local bus services in the county,(b) a description of any substantial proposed change to the provision of local bus services in the county, and(c) the date by which responses to the consultation must be received.(4) During the consultation under subsection (1)(a), the county council must consult at least—(a) all persons operating local services in the county,(b) all other persons holding a Public Service Vehicle operator’s licence or a community bus permit who may, in the opinion of the county council, be affected by the assessment,(c) a traffic commissioner, and(d) such organisations appearing to the county council to be representative of users of local services, including where appropriate and applicable—(i) parish and town councils,(ii) representatives of persons who are elderly or disabled,(iii) representatives of young people, and(iv) organisations, or types of organisation, specified by the Secretary of State in regulations made by statutory instrument,in accordance with criteria published by the Secretary of State.””

[Lord Whitty (Lab)]

My Lords, I shall also speak to Amendment 113.

In Committee I tabled a similar amendment to Amendment 113 and indicated that it should perhaps come early on. I therefore had the temerity as we approached Report to try to get at least one amendment on overall strategy before Clause 1. I have supported most of the provisions in the Bill and there is a reasonable consensus on most of it. I am very grateful to see a significant number of government amendments, not all of which I completely agree with, but nevertheless the Government have moved generally in that direction.

Two things are still missing from the Bill. One is a requirement on local authorities to ensure that services meet the social and economic needs of their area, and the other is that this needs to be put in a context of a national strategy for bus transport in the same way in which other modes of transport are subject to a national strategy.

The first of my amendments, which I submitted before Clause 1, places the responsibility on local authorities. It requires them to look at the need for transport in their area, how well their bus services are meeting that or whether such services could be reconfigured, and whether not only the scheduled routes but socially provided buses are meeting the various needs of their area. That should be right across the board, not simply for their mayoral areas or areas that decide to take advantage of some of the provisions of this Bill. In particular, this applies to rural areas. All of us who live in or occasionally visit rural areas know that the frequency of buses and effectiveness of coverage of bus routes within those areas is diminishing—the number of buses, take-up, and the level of fares for people who do not have concessionary travel. There is a real problem within many rural areas in England as to whether there is an adequate bus service meeting local needs for employment, education and other social needs.

I suspect that most noble Lords who come from rural areas will be able to cite examples of routes being cut, services diminishing or fares becoming too high for students or people with part-time jobs to undertake those journeys without concessionary fares. In many parts of the country, that hits people’s lifestyle and life prospects, because if you cannot afford to go on a bus to the interviews or training centre your ability to get a job and engage in employment is diminished. There are many parts of otherwise prosperous rural areas where young people in particular are unable to get jobs or travel from their village or small town to a larger, market town where there are better possibilities.

The proposed new clause would require all local authorities to undertake a survey and take measures to meet the needs of their area. I know that there will be objections that this is yet another burden on local authorities, but legally speaking it is not. Ever since a legal decision in the Three Rivers case, there are already requirements on local authorities to undertake such assessments and meet such needs. Therefore, it is not an additional requirement on local authorities—it is making more explicit one that already exists. I hope that, in understanding that, the House or Government will be prepared to accept if not the precise wording of this amendment then the principle of what it is driving at, and recognise that there is a very real problem in a lot of areas. In my apparently relatively prosperous part of North Dorset, on the borders of Wiltshire and Somerset, we are faced with very serious cuts in bus services, which up until a few weeks ago were being denied by the local authorities and the operators. That will hit a number of people in those areas rather badly—and the situation is repeated up and down the country, north, south, east and west, so we should recognise it in this Bill and place the requirement on local authorities. It puts some of the other provisions on the basis of consultation on franchising or advanced partnerships and bus service provision generally back on local authorities.

The second amendment in this group relates to government responsibilities. It is important that in all forms of transport there is a national strategy and that it indicates what government support will be available to various modes of transport. There is a national strategy for railways and aviation, and an overall strategy for transport infrastructure. There is no reason why buses should be the poor relation. We need to ensure that buses have a strategy that local authorities and operators and those who depend on and work in the bus industry know about—and they should know what other forms of funding and support will be available. That would come towards the end of the Bill, but it is right that we should register that responsibility on government at this early stage of Report. I beg to move.

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[Lord Whitty]

My Lords, I am a bit disappointed with a less than promising start to this part of the Bill, but I am sure it will get better.

On Amendment 113, I think that the Minister misunderstands me. It is designed not to introduce top-down instructions and targeted interventions by the Department for Transport but to ensure that local authorities, operators and those who are dependent on bus services understand the overall framework of support, or otherwise, for buses. It is odd that the form of public transport most used by the poorer elements in our society both in towns and in the countryside does not seem to merit a national strategy and a national framework. I am not talking about instructions coming down from Whitehall to county level; I am talking about every county, and indeed every local authority, understanding how the Government see the development of buses. I appreciate that some of the things that the Minister referred to are clear—particularly about improving the environmental effect of buses and so forth—but we need a comprehensive view of how the bus industry is to develop. Therefore, I am sorry that the noble Lord is not prepared to accept Amendment 113.

On Amendment 1, the argument is little more subtle. The Minister is clearly right that the Transport Act 2000 laid down some of these provisions, but the reality—which is not due just to the amendment in 2008—is that a number of local authorities have not observed that requirement. Indeed, there have been a number of cases—at least two, to my knowledge—where local authorities have been found in court not to have carried out that duty. This is an attempt to codify the duty more clearly and to put the new possibilities provided for in the Bill in the context of that responsibility, which lies with all local authorities, not just metropolitan ones.

A lot of rural authorities have carried out consultations but, frankly, some of them have been better than others. A number have been found wanting. Cambridgeshire is one case that the noble Lord is perhaps familiar with, and I would also mention the Three Rivers case. Clearly, the present requirements are not working and I would like to strengthen them.

I was interested in what the noble Baroness, Lady Scott, said about the Wiltshire exercise—I live across the border so I am not one of her constituents in this regard—but I do not believe that that consultation exercise, or certainly its final outcome, is seen as adequate by a number of groups in Wiltshire. On the other hand, I totally agree with her that we need to look at the totality of services and not simply at scheduled bus services. It is important that we optimise the use of resources and of the available forms of transport, whether they are scheduled bus routes, quasi-taxi services, on-demand services, health service providers, education providers or social services providers. All that needs to be taken into account, and in a sense that is partly what the amendment is about. We need a comprehensive approach, and we need to put an obligation on local authorities to take all that into account and to consult widely— and, I hope, wisely—and to come up with a solution.

At the moment, I do not believe that the law is fully working. In view of the Minister’s greater confidence in this regard, I therefore assume that he and his department are trying to ensure that local authorities take this more seriously and that perhaps at least the spirit of the amendment might be achieved by administrative means as well as by the example of a number of legal cases. I therefore do not wish to press the exact wording of this amendment today.

I hope, however, that between now and the final stages of the Bill, the Minister will indicate that some moves have been made by the department, along with the LGA. I apologise that I failed to acknowledge my interest as a vice-president of the LGA, as are two or three other contributors to the debate, but I do not speak for the LGA in this regard because I think that local government needs to take a bigger responsibility here. It would be useful if the Minister could assure us all, before we finish with the Bill and before it goes through the Commons, that he is taking steps to ensure that what is already an obligation is actually delivered by local authorities. In the meantime, I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

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Moved by

[Lord Whitty]

9A: Clause 1, page 5, line 30, at end insert—
“(ca) appropriate representatives of any affected employees,”

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[Lord Whitty]

My Lords, in moving Amendment 9A, I will speak also to Amendments 10, 32 and 35. First, I apologise to the House and the Minister in particular that we have a manuscript amendment here. I thought I had submitted these amendments previously, and it was due to a mix-up between myself and the office. However, the wording is exactly the same as the wording later on which relates to franchising, and it concerns the consultation of employees’ representatives in both the advanced partnership and franchising contexts.

There are some very welcome government amendments relating to consultation with a range of bodies, some of which I spoke about in Committee, particularly representatives of passengers and consumers. Indeed, there is a reference to the Passengers’ Council, which is the proper name for Transport Focus. I welcome the general approach of the Minister in recognising that there were some omissions or a lack of clarity about who was to be consulted on both the advanced partnerships and franchising.

Indeed, in relation to franchising, the Minister has tabled Amendment 29, which, as far as it goes, is very positive. It refers to,

“such persons as appear to the authority or authorities to represent employees of persons falling within paragraph (a)”;

that is, the operators. The Minister has recognised, as he undertook to do in Committee, that there is a need to consult with the representatives of employees in this industry. I would say that that applies to not only franchising but the introduction of advanced partnership schemes, where the employees of existing operators and others affected also need to be taken into account, but, slightly strangely, the Minister has not tabled an amendment in that respect.

I hope to try to reach an accommodation with the Minister in this area but there is an additional issue. My amendments in Committee referred specifically to recognised trade unions. This is a highly unionised sector in many parts of the country. It has had relatively stable industrial relations for many years, and a relatively high proportion of employees in the industry are represented through recognised trade unions. However, there have been one or two instances where other organisations have attempted to represent the workers, legitimately or otherwise, and there have been one or two inter-union disputes over recognition. Therefore, when you refer to a consultation with representatives of employees, where there are recognised trade unions, you should say so. That stops any confusion, whether between unions or other methods of recognition.

Therefore, I have added in both the franchising and advanced partnership contexts an explanatory note which says “appropriate representatives” are either recognised trade unions or representatives who have been properly elected or appointed by the employees so affected. That seems to cover a pretty wide range of recognition, as well as possible alternatives to the trade unions. It is therefore not a direct attempt to enforce trade unionism on people who do not want it but a recognition that trade unions exist and operate very effectively, frequently in very close co-ordination with management and the authorities in these areas. Therefore, the list of consultees needs to include reference to representatives of employees. I am quite happy to accept the Minister’s wording, or something like it, in relation to franchising, but it then needs to go on to say that where there is a recognised trade union, that means a recognised trade union. I therefore have two detailed points of contention but not, I think, two points of dispute.

If the Minister is of a mind to discuss this further between now and the final stages of the Bill, or to accept my amendments, I am sure that we could reach an accommodation. However, it is important to recognise in both contexts within the Bill that it is likely to improve the chances of the new situation—the new schemes in franchising and the new advanced partnerships —operating smoothly and effectively, with the engagement and consent of the employees involved. That seems to me common sense. The Minister has conceded the principle with his own amendments but I would like him to be prepared to go a stage or two further. I beg to move.

[Baroness Randerson]

My Lords, I very much welcome the fact that the Minister has taken on board the need for consultation with employees as well as with the passengers we referred to earlier. However, as the noble Lord, Lord Whitty, has just pointed out, the Bill is uneven from one part of it to another, and something taken for granted in one section is neglected in another. As I said in an earlier debate, it is as if the Bill had been written by several different people who had not got together to make sure that the same terminology was used from one part to another. We in our party—not a party run by the trade unions; far from it—believe in the trade unions. They are an important part of a stable industrial relations picture and it is important that they are referred to, where appropriate, in the Bill.

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[Lord Whitty]

My Lords, I am rather disappointed in the Minister. We are not that far apart: he recognises that the employees of bus companies are an important part of making these schemes operate, whether under advanced partnerships or franchising. I do not really understand the distinction between the two. It may well be that there are less drastic changes in the method of working and the coverage of companies within the advanced partnership. Nevertheless, there are potential changes. It is extraordinary that the Minister’s advice concludes that in the list of consultees under advanced partnerships, which is almost the same in all other respects as the list of consultees under franchising, the one element missing is representatives of employees who are affected by those changes. I do not think that that is logical. If the Minister thinks about it, it is not logical. The two lists of consultees should be pretty much the same. It may be that one group of consultees in one context has less leverage or less effect than the other, but they need to be consulted in both contexts.

I would be prepared to go along with the Minister’s substantive amendment, Amendment 29, in relation to franchising if he also accepted the qualification to that in my Amendment 35, or something very like it, which indicates that where there is a recognised trade union—we are not asking the franchising authority to impose a form of industrial relations on a company that has not already recognised trade unions—it should be consulted and, in other respects, there should be proper representation of workers outside the trade union. That is the best way forward for stable industrial relations. It is the best way forward for having constructive engagement with the workforce in the beneficial changes that we all hope this Bill will deliver. The Minister’s argument is a bit illogical in excluding that from advanced partnership and in not being prepared to go the extra mile in defining what he means in relation to franchising. I shall put in a final plea to the Minister to consider this again, come back to us and have some discussions between now and the final stage, because this is an important matter. I will offer an olive branch in that direction to see whether he is prepared to move a little bit and consult further.

[Lord Ahmad of Wimbledon]

That is an open invitation. I am open between now and any stage to meet any noble Lords, but I have outlined the Government’s position at this time. I assure noble Lords that in reflecting on the contributions in Committee, the Government have carefully considered all elements. I agree with the noble Lord in that I do not think that there is that much difference between us, but I have outlined where we currently stand, and it is for the noble Lord to consider where he stands on the basis of the discussions we have had.

[Lord Whitty]

My Lords, I am afraid “currently” does not quite do it for me. With genuine reluctance, because I do not think there is a principle between us here, I want this on the record either way, and therefore, with reluctance, I wish to put this to the House.

--- Later in debate ---

Moved by

[Lord Whitty]

10A: Clause 1, page 5, line 35, at end insert—
“(3A) In subsection (3)(ca) “appropriate representatives of any affected employees” means—(a) representatives of a recognised trade union, if an independent trade union is recognised by existing operators in the area of the proposed advanced quality partnership scheme;(b) in any other case, employee representatives appointed or elected by the affected employees who have authority from those employees to receive information and be consulted on their behalf.”

Bus Services Bill [HL]

Lord Whitty Excerpts

Wednesday 20th July 2016 Lords Chamber

[Lord Berkeley]

My Lords, Amendment 123A would insert a new clause, “Passenger representation”, which tries to give bus passengers the same information—and credibility of information—that rail passengers get through Transport Focus, whose responsibility has recently been widened to include information about roads. This goes a bit wider than that, however, because local transport authorities need to set up mechanisms whereby passengers who are affected or who might use services can have credible information about proposed or actual services, as they have for rail services, and about reliability, quality and what happens when something goes wrong—as we discussed on today’s first Question.

It does not really matter who provides the services, whether it is a franchise, partnership or something else, but it is important. This could be done nationally, through Transport Focus or Bus Users UK, or locally, with co-ordination by a national body. Either way, there is a need for something like this and to have a requirement for it in the Bill. I beg to move.

[Lord Whitty (Lab)]

My Lords, I rise to support the principle of the amendment that my noble friend Lord Berkeley has just moved. We have had debates about inserting references to passenger representation at various points in the consultations on the Bill. My noble friend’s amendment seeks to state this as a general principle so that, in effect, there would be in every area some form of passenger representation to cover the involvement of passengers in the development and continued operation of the franchise, partnership or contract. Further, passenger representation should be part of the general decision-making process as we go forward, not simply in the original consultation.

In addition, my noble friend’s amendment refers to a complaints system. It is vital that there should be within this industry a system for complaints to be rapidly dealt with by the operator and, if necessary, the transport authority. To do that, there needs to be an effective passenger body. It could be a national body or a combination of a local body and Transport Focus nationally. On earlier parts of the Bill, the Minister very gratifyingly showed some encouragement to those of us who were arguing for engagement of passenger representation. I hope that in his reply the Minister can tell us, or at least give a general indication—tonight if possible but certainly before we get to Report—how the Government will bring forward amendments on Report to reflect that commitment to passenger representation and the ability of such organisations to deal with complaints with bus operators. It would be very useful if we all received a letter before Report setting out all the points at which this would be reflected in the Bill.

[Lord Kennedy of Southwark]

Amendment 123A, moved by my noble friend Lord Berkeley, is one that I am delighted to support. As I have said, the Bill is about improving bus services for passengers. Ensuring that the voice of passengers is heard is central to that aim and that is why this amendment is so important. It requires the transport authority to set out how users will be involved in monitoring and evaluating the scheme, and it sets up a complaints process with a body named to review complaints.

Only by having a mechanism for effective passenger input to deal with complaints and other issues can the transport authority have the information that it needs to plan for better services, deal with unforeseen problems and make things better for the future. I hope the noble Lord, Lord Ahmad, can give a positive response to this short debate, or we may return to the matter on Report.

--- Later in debate ---

[Baroness Randerson]

My Lords, my name is attached to this amendment and I strongly support the purpose behind it. As the noble Lord, Lord Kennedy, has made quite clear, there are more than a dozen council-owned bus services in Britain. Many of them are at the very top of their game; they are some of the very best bus services in Britain.

This is a nasty, mean-minded little clause. It is totally at odds, as the noble Lord has just said, with the rest of the Bill, which is supposed to be devolving power to local authorities. It is supposed to be seeking the best possible arrangements for running bus services. For the last 30 years, since competition came to bus services, local authorities have been allowed to keep the power to set up bus companies. Why is it thought necessary to take that power away now, when they have had it in parallel with deregulation for all these years? In practice, in the last 30 years, local authorities have not rushed to set up bus companies—rather the reverse. Judging by past experience, we in this House are probably setting bus policy for the next 30 years, so the Bill needs to be robust and to have the imagination to cater for circumstances that might arise in decades to come.

It is true that in the current financial circumstances, local authorities could not afford to set up bus companies. But it is not beyond credibility that, in order to save rural services at some point in the future, when local authority finances are less tight, a local authority may decide that it needs to lease a small fleet of minibuses to provide a rural service. That is a perfectly credible scenario. This clause would prevent it doing so, even in partnership with a local operator.

What about the operator who is about to go out of business and could be saved by the local authority buying a stake in the business or buying it, and therefore saving the bus service that is so valuable to the community? Clause 21 is not devolution; it is reverse devolution. It is perverse and plainly a ridiculous limitation on local authority powers. It seems to me to be totally unprovoked as I can think of no example of a local authority in recent years attempting irresponsibly to set up a bus company. So I urge the Minister: please listen to the strength of feeling here today. It is not worth the trouble to keep this in the Bill. The Government should just allow local authorities the discretion they deserve to be able to provide a decent bus service.

[Lord Whitty]

My Lords, most has already been said by my colleagues on the Front Bench. This clause sticks out like a sore thumb and goes against the rest of the Bill and any commitment to localism. It undermines the rest of the Bill, which essentially gives local authorities a range of options in how to optimise the bus services in their area—urban and rural. There are many circumstances in which the provision, in partnership or directly, of a municipally owned bus fleet could play a part. If that is closed off by keeping this clause in the Bill, we will be undermining the consensus behind most of its provisions. The Minister ought to take this back to his colleagues because it will be an issue of contention in the Bill’s later stages, and is already an area of extreme contention with many local authorities and bus operators around the country. It would be wise to listen to the Committee—to speakers on this side, at any rate—and withdraw the clause, preferably before Report.

[Earl Attlee]

My Lords, I very much support the inclusion of Clause 21 in the Bill, so I cannot support the noble Lord, Lord Kennedy, and the noble Baroness in seeking its removal.

Municipal bus companies—to be honest, there are only a few—served a very useful purpose prior to the deregulation of the market. Among those remaining in existence, there are indeed some great operators. Reading Buses and Nottingham City Transport, for example, consistently provide excellent services and win award after award. I hope that I am not doing others a disservice by not specifically mentioning their hard work and achievements. I agree with some of the compliments paid to these operators by the noble Baroness, Lady Randerson.

I know that the mood music surrounding this clause has caused some concerns about the future existence of the remaining local authority-owned companies. This is simply extremely unhelpful and unfortunate. I hope that my noble friend the Minister will state very firmly that those existing companies have nothing to fear and that he will be able to reassure them and the Committee that there is nothing in this Bill that threatens their existence.

The noble Lord, Lord Kennedy, asked, “What is wrong?”. In the case of a local authority looking to go down the franchise route, the authority invites a bid for the contract. Its own company submits a bid—it would be rather odd if it did not. Preparing bids is an expensive and time-consuming business. So who has paid for the local authority-owned company to bid? Yes, the local authority that owns it. Would the local authority award the contract to the company it owns? You bet it would. Otherwise it would put its own company out of business. To me this all smells of state aid.

So again we are back to fairness and level playing fields. Allowing a franchise authority to create its own company, which would then bid and win that franchise, almost by the back door, is simply wrong. My counsel is that Clause 21 should stand part of the Bill.

--- Later in debate ---

Moved by

[Lord Whitty]

128: Before Clause 22, insert the following new Clause—
“National strategy
The Secretary of State must, within 12 months of the day on which this Act is passed, issue a national strategy for local bus services setting out the objectives, targets and funding provisions for rural, urban and inter-urban local bus services over the next 10 years.”

[Lord Whitty]

My Lords, Amendment 128 calls for a strategy for the bus sector to be part of the Bill. It is fairly short and to the point. My noble friend Lord Berkeley has tabled a couple of rather more comprehensive amendments which express the same objective.

When I first thought of this amendment, I thought of tabling it before Clause 1. I may have to reflect on that after this short debate. The Bill is quite technical and procedural, changing contractual arrangements and introducing new technology such as ticketing systems and so forth. What it fails to do is give a clear indication of the strategy for the bus sector in terms of raising usage, extending buses in much-neglected rural areas, the nature and quality of buses, and their environmental impact. We need a strategy. We need the Government to come forward with a bus strategy that makes sense of the Bill in a broader dimension.

We can come back to this on Report. Obviously, we are nearing the end of today’s proceedings so I will not speak at length but it seems a missed opportunity not to require the Secretary of State to come up with an overarching strategy that would convince people that we are really serious about modernising, extending and making more environmentally attractive our bus services throughout England. I beg to move Amendment 128 here, at the obscure back end of the Bill, but the Minister may encourage me to put it right at the front of the Bill because that is really where it should go.

[Lord Berkeley]

My Lords, I support my noble friend’s Amendment 128 and will speak very briefly to my two amendments. Several of us spoke about this at Second Reading. I agree with my noble friend that the bus sector needs a strategy. After all, rail passengers have a strategy. Rail freight is having one soon, I am told. There is a roads strategy. There are strategies to do with most things in transport, except buses. I really think it is time for it and I will certainly support my noble friend if he puts a nice amendment down as Clause 0.

[Lord Ahmad of Wimbledon]

My Lords, I am not sure you can have a Clause 0, can you? I bow to the wide expertise around the Committee. You can certainly get “zero” fizzy drinks or whatever but let us not open up that debate. I am grateful for the courteous manner in which the amendments were introduced. This group relates to proposals to introduce requirements to produce new national strategies for bus services, and looks to place requirements on local authorities to increase the number of passengers using bus services.

I have said before—indeed, it is a sentiment shared across the Committee—that we want to see more people using buses. Perhaps the recent influx into the Chamber is reflective of that sentiment among noble Lords. Of course, I agree with the intention behind Amendment 129 in the name of the noble Lord, Lord Berkeley. Buses help people get around and should be an integral part of any public transport system. Public transport works best where it is considered holistically, with bus services integrated with cycling infrastructure, trains and trams, or in the form of park and ride facilities. I agree that authorities considering any of the new tools in the Bill should be looking to improve their local bus services and to encourage more people to use public transport.

However, I am concerned that this amendment may bring unintended consequences; for example, a local authority may introduce a new tram system and may look to increase the overall number of journeys made using public transport but the proportion of journeys made by bus may decrease. It may be more sensible, therefore, to encourage authorities to address the issue of increasing the number of public transport journeys rather than just journeys made using bus services. I trust that this gives the noble Lord sufficient reassurance of the seriousness with which I intend to consider the aims of Amendment 129, and hope he will agree not to move it.

Amendments 128 and 130 would require the Secretary of State to develop and issue a national bus strategy and a bus services investment strategy for England. As I have said in previous Committee debates, devolution is an important theme, which has informed the development of the Bill. The Bill is all about providing authorities with new tools to enable them to improve their local services in the way that best suits their area. It is not about imposing particular models.

Central government has a valuable role to play in setting the wider agenda through policy initiatives such as the low-emission bus scheme and our total transport pilots, which I mentioned in the previous group of amendments, but I do not think that centrally determined strategies for local bus services would help authorities address particular issues relevant to them and their area. As such, it does not seem sensible for central government to set national strategies when it is local authorities and bus operators working together that will be designing services and setting standards locally.

Additionally, I have previously explained that my department helps support local bus services outside London by paying some £250 million per year of the BSOG. As I said in the previous group of amendments, we are already reviewing the BSOG system, with the aim of ensuring that funding is targeted where it is most needed. It is through that work that we should establish and set out central government’s priorities and objectives for the funding provided. I trust this gives the noble Lords, Lord Whitty and Lord Berkeley, sufficient reassurance to withdraw and not move their amendments.

[Lord Whitty]

My Lords, I am a bit disappointed by the Minister’s response. Yes, the Bill is about providing new options for local authorities—apart from the one that Clause 21 closes off—and allowing devolution of decisions to meet local circumstances. But local authorities and operators need to operate within a framework. The Bill gives bits of that framework but we need a clear understanding of where buses fit within the overall transport system, as the Minister is implying. Therefore, the interface between buses and other forms of public transport is very important and buses need to be seen as part of that.

It is difficult for a local authority looking at changing the way in which it deals with operators and provides services to do so without some understanding of what the overall intention of the Government is going to be. The point about funding is crucial to this. Although I broadly agreed with the noble Baroness, Lady Randerson, earlier about the complete nonsense of funding bus services through BSOG, I think we should go wider than that and look at the totality of support we give to buses and place that within an overall strategy. The Minister seems to be putting it the other way round, saying that he will be looking at the funding situation, but the funding situation needs to reflect the strategy rather than the other way round. Local authorities need to operate within that strategy and with the support that the funding would give for their decisions.

I am a bit disappointed. I suspect that my noble friend and I will have a bit of a conflab between now and Report to see how we pursue this further. I think we will pursue it further but for the moment, I withdraw the amendment.

Amendment 128 withdrawn.

Infrastructure Bill [HL]

Lord Whitty Excerpts

Monday 9th February 2015 Lords Chamber

[Lord Berkeley (Lab)]

My Lords, I welcome many of these amendments. There is a sense of déjà vu about today because we spent many hours debating this. I recall amendments put down by several of my noble friends and noble Lords on the Liberal Democrat Benches proposing many of the changes now coming back from the Government. It is great that they have taken so much of our advice. I welcome it. Let us hope that this is a precedent for many future changes.

I am pleased that Amendment 1 starts to provide a link between Parliament, Government and the SHCs because that is very important. We talked about that. It may not be what we wanted but it is a start to getting there. I am also pleased that we have an amendment that says that the ORR can give advice to the Secretary of State on the effect of its guidance. That is good. I hope that the ORR will feel able to give advice on many more things than that. I am also pleased that the Secretary of State must lay a report before Parliament on this—it is all obvious but it needs to be said—and it is important that this happens and happens regularly.

Would it not have been much easier to have changed the name of the ORR during the passage of the Bill rather than with all these amendments? However, I do not really mind and it does not really matter. That is fine. It is a shame that we have not been able to persuade the Government that the ORR, in addition to its work monitoring the SHC, should have powers to take action and require efficiencies as it is able to do for Network Rail. I hope that that will come one day as the ORR will have the capability to do that and it is a logical thing to do. It would be much better for an independent regulator to do it than to try to have the Secretary of State do it. We saw some problems with that with regard to the railways last summer. I also hope that in future we may be able to persuade whoever wins and becomes the Government after May that it will be useful to have the ORR responsible for road safety on the highways network as well. We did not quite get that far, but we are getting there.

Finally, I did not understand what the noble Baroness said about Amendment 45. It rather seems that if the staff of the Highways Agency do not feel that they will be properly reimbursed in whatever changes come they will be told, “That’s tough. You’re not going to get any compensation”.

However, this is a good step forward. We enjoyed the debates in Committee, on Report and at Third Reading and it was obviously a good use of parliamentary time. It is very nice to think that the Government have accepted many of the principles of what we proposed.

[Lord Whitty (Lab)]

My Lords, I echo quite a lot of what my noble friend said. We have moved in the direction of a report to Parliament and the role of the Secretary of State vis-à-vis the strategic highways company. I accept, I think, although like my noble friend I find the wording a bit peculiar, that that reinforces the application of the equivalent TUPE in relation to the staff of the Highways Agency.

The one point I am disappointed by, which my noble friend also mentioned, was that neither the Commons nor the Government have seen fit to strengthen the reference to road safety in the terms of the duties of the new company. It is a very weak form of obligation. It is slightly stronger than it was originally. The road investment strategy says that the Secretary of State must “have regard in particular” to the effect of the strategy on the safety of users. Later on it says that the company should “have regard”—no longer “in particular” —to the effect of the exercise of those functions on the safety of users. The phrase “have regard to” is the weakest form of legislative obligation. I had hoped that during the passage of the Bill we would strengthen that wording so that it would be an objective of the company and of the investment strategy to improve the performance on road safety. We have not got that and we are now at quite a late stage during the passage of the Bill but I hope that the Government will keep that under review as we go forward and the company is created. I do need to point out that I am a chair of the Road Safety Foundation. The anxiety that safety should be part of the DNA of the new body is broader than just among those who have any vested interests and certainly I would have thought that the Government could have moved further. However, on the rest of it, I thank the Minister for having moved a bit in our direction.

[Lord Davies of Oldham (Lab)]

I do not need to add much because my noble friends have emphasised certain weaknesses in the Bill as we are considering it today. That is not for want of trying. Both my noble friends—and I, from the Front Bench—were concerned about the issues that they have just emphasised. My noble friend Lord Whitty was concerned that road safety will not get the prominence in the Bill it surely deserves while my noble friend Lord Berkeley emphasised the significance of the Office of Rail Regulation. We all welcome the fact that there will be the possibility of a change of name as we could not see how the Office of Rail Regulation could intelligently deal with the road sector and operate under its present name. It is going to do so for a while, but at least the Minister has now ensured that there is provision for change at a later stage.

We support the thrust of Amendments 1 to 5, which we were pressing on the Government not so very long ago. We are still concerned that the Bill does not improve significantly the overall British performance with regard to roads, which clearly are a very important part of the national infrastructure. We know that other countries are more successful in establishing infrastructure. Those of us who from time to time are privileged to drive on the continent often appreciate the difference that obtains there. Even the French have begun at last to approximate to British standards of road safety. There was certainly a deficiency in the past. We support the five-year roads investment strategy that is underpinned by the Bill. It sets a long-term transport planning strategy to give the road sector the same certainty that the railways have. However, we have no evidence that justifies the main thrust of the Bill, which is unamended by these amendments, and the Bill is still overwhelmingly concerned to move the roads authority to an arm’s-length position. We were not persuaded of that argument through all the days of Committee and Report and I am not sure that those in the other place were persuaded about that fundamental part.

We are broadly in favour of Amendments 1 to 5. The Minister took a very serious and empathetic approach to explaining how TUPE was to be fulfilled with regard to the Bill. I understand Amendment 44 and could not endorse it more whole-heartedly. However, I am not quite sure what Amendment 45 is doing there and I therefore ask the Minister to spell that out in greater detail.

We are pleased at the progress that has been made. We think it was a long time coming, because we were debating this Bill several months ago and there is not much in these amendments that we had not articulated or advanced in argument at that time without winning too much support. We are pleased with the amendments that are before us and will be supporting them.

Infrastructure Bill [HL]

Lord Whitty Excerpts

Monday 3rd November 2014 Lords Chamber

Moved by

[Lord Whitty]

1: Before Clause 1, insert the following new Clause—
“Duties of the Secretary of State
Duties of the Secretary of State shall include—(a) drawing up and granting of a licence to a strategic highways company as provided for in section 1, but this duty may be delegated to the Office of Rail Regulation,(b) drawing up and presenting from time to time, and at least every five years, to Parliament for approval a Roads Investment Strategy as provided for in section 3,(c) issuing from time to time directions and guidance under section 4 both to the Office of Rail Regulation and to the licensed strategic highways company,(d) reporting periodically to Parliament on the performance of the strategic highways network.”

[Lord Whitty (Lab)]

My Lords, In moving Amendment 1, I will also speak to the other amendments in my name in this group and comment on some of the others too.

I had hoped that after a lengthy discussion in Committee the Government would have come up with their own draft to address the deficiencies of this part of the Bill, and to clarify the relationship between and responsibilities of the Secretary of State and the various bodies covered by it. Regrettably they have failed to do so. However, they have produced a lot of new documents, many of which are very informative. I thank the Minister for that and for the various briefing sessions that she and her officials have held since that date. However, I have to tell her that, in relation to the issues I am about to raise they have, if anything, confused the situation.

For the benefit of newcomers to this debate, this part of the Bill is intended to place roads investment in a new context by creating a road investment strategy for England and by hiving off the Highways Agency into rather more arm’s-length companies—the strategic highways companies. I very much approve of the first aim but I am not at all sure that the second aim concerning the companies is right.

Noble Lords who are long in the tooth will remember that, going back a bit, I was a roads Minister. It is a pretty dreadful job and is always subject to representations by Members of Parliament and others on which roads should take priority, how much more should be spent and so forth. I would welcome a consistent road investment plan with a strategic direction sustained over a number of years as part of a wider sustainable transport policy. The key point for the Government appears to be that the road investment strategy in the Bill will be somehow free from short-term changes, albeit that some of the documentation that the Minister has provided us with, including the draft licence to which I shall return, says that the Secretary of State can vary the strategy at any time, and, of course, the Treasury still decides the funding—so good luck with that.

In principle, I support the road investment strategy but am unclear why it is absolutely necessary for it to be delivered by new strategic highways companies, and why a corporatised Highways Agency would do the job so much better than the present system of delivery, especially since the Government seem to have denied themselves ways of making a company more effective than the Highways Agency. I do not particularly support all these issues but the Government have clearly said that this is not a stage towards privatisation. Indeed, the Bill makes that clear, and I agree. However, they have also said that the company cannot raise its own capital, with which I disagree as that could smooth out any predations by the Chancellor. The Government also say that it is not allowed to engage in anything approaching road charging, although I note that that part is not yet included in the draft licence to which I referred, so watch that space.

Therefore, the benefits of having a separate company are a little unclear. Nevertheless, I recognise that there could be significant advantages in establishing a company, such as coherence of approach, an ability to engage in contractual innovations and possibly less direct pressure from MPs and other vested interests, although I am sure that the Minister will not be entirely free of that. Such a company could develop a long-term strategy on road safety, to which I will return on later amendments, and on issues such as telemetrics in traffic control, traffic management, road design and meeting environmental standards. However, it will deliver only if that company is itself set in a coherent institutional framework, which is normally the case for any large state-owned company. We need clarity of accountability, including the accountability of Parliament. Regrettably, the Bill does not provide for that.

The Bill refers to the possible appointment of a number of companies as strategic highways companies. The Government have made it clear that they are in reality talking about only one company. However, the Bill talks about the possibility of more than one. When questioned, the Minister and officials rather darkly referred to legal advice from counsel, even though it is clearly contrary to the policy and intention of the Government to have more than one company involved. Amendments 3 to 7 in this group, the first of which is mine, seek to ensure that the Bill makes the intention absolutely clear, and therefore we will be able to judge the Government against that.

More profoundly in the long term, the operation of a new set-up has a lack of clarity about the relationship between the Secretary of State, the company and the monitor or regulator. There is going to be an enhanced Office of Rail Regulation, in which presumably some changes will be made, and there is the matter of accountability to Parliament. The Bill refers to appointment of a company, but during the proceedings in Committee, the Minister, on many occasions, when questioned about the relationship between the Secretary of State and the company, referred us to the licence, which was then already in its sixth draft, and is now a lot longer at 35 pages.

--- Later in debate ---

[Lord Whitty]

My Lords, I thank the Minister very much for dealing with these issues so comprehensively. We all share the frustration of the noble Lord, Lord Jenkin, but we recognise the efforts which the Minister and her officials have put in to keeping us informed. The problem is that so much relies on what is in the draft licence and it is confusing for many of us if that document is constantly changing as we are going through this Bill. If the noble Lord, Lord Jenkin, has expressed displeasure, the powers that be should be trembling in their shoes and take notice.

The first bit of good news is that the Minister very clearly indicated that the Government have no plans to appoint more than one company and that, whatever it says in the Bill, she was prepared to come forward—I think she said at Third Reading—on the issue of a separate vote of Parliament being required if more than one company were to be appointed in the future. That would go some way to clarifying the position. I still do not totally understand why it is expressed in this way, given the Government’s clear intention in any case. However, I thank the Minister as it partly deals with an issue which is troubling a number of people. The present view is that a single English road network company would be the most effective way of delivering improved roads and transport systems. If a subsequent Government decided that it should be regionalised, a whole lot of other issues then arise. A parliamentary brake on them doing that at least goes some way to meeting that point and I thank the Minister for that.

I am partially reassured by what the Minister said on parliamentary accountability, but I am still not clear whether that means that the Secretary of State can be asked in Parliament about the same range of things that he or she can currently be asked about. In other words, is there any change? That important issue will undoubtedly be raised by MPs of all parties when the Bill reaches the Commons.

The central issue of why my noble friends and I felt we had to raise the whole context in which the company was being set up, and the relationship between it and the Secretary of State, is the use of the term “licence” and the use of the content of the licence to explain everything about how the Government intend to conduct the new structure. I think that the Minister came as close as she dared in saying, “Well maybe we should never have called it a licence in the first place”. I think that if she took that further step, we could all sit down and applaud. However, it is very confusing because the Bill refers to “appointment”, which in some cases is the granting of a licence. Therefore, although it is a single state company and not a commercial company in the normal sense, and although there are examples of licences being given to state-owned companies, I think that using the term “licence” in one place and “appointment” in another without describing the process through which the Minister has to go or how the regulator is to enforce the terms of that licence is wrong.

--- Later in debate ---

[Lord Berkeley]

I shall be brief in speaking to this group of amendments because we have discussed at some length the licence for the strategic highways company. My Amendment 9 is a provision similar to what Network Rail now has. I was interested in the Minister’s comment that it is a licence for a commercial model and that the strategic highways company is not going to be commercial. I do not know whether Network Rail was ever commercial in her definition of the word, but it certainly is not now and I notice that the Government have not tried to change the licence to reflect any alteration. Perhaps she has a quick view on that. The draft licence that we received on 3 November was certainly an improvement on the previous version, for which I am very grateful.

The only other thing I wish to comment on in this group is my Amendment 17, which is to do with the duties of the strategic highways company. Whether they should go in a licence or in some other document, I do not know, but the draft licence from the Department for Transport is a licence to build roads, to take into account environmental concerns and to do it reasonably efficiently. Given experience of legislation over the years, there is a need to have in the Bill, for preference, or in a licence, if it must be that way, a wider role and wider responsibilities for this company to go cross-modal. That includes looking at road and rail—I declare an interest as chairman of the Rail Freight Group—passenger as well as freight, efficiencies, travel choices, developments in sustainable locations, as sustainability is very important in all this, and different modes to secure the economic, social and environmental gains jointly and severally. I do not think that these are in the draft licence at the moment. If the Minister would look at this again and see whether some—preferably all—these issues could go into a licence, I would be much happier that the strategic highways company was going to be part of a wider transport and environmental structure, taking into account the needs of customers, the environmental needs, roads, railways and developments in local transport. With that short introduction, I beg to move.

[Lord Whitty]

My Lords, I have Amendment 10 in this group. Again, as in the previous debate, my noble friend Lord Berkeley has put his finger on another lacuna in the Bill. Nowhere does the Bill spell out the functions and duties of the proposed strategic highways company. There is a whole schedule, 26 pages long, which largely consists of adding,

“or a strategic highways company”,

but does not actually say what that company should do. I find this extraordinary and not consistent with earlier circumstances in which we have set up public bodies or corporations to do a particular job, some of which are still doing it, where there was clarity in the legislation as to those functions. Those functions have to be economic, social and environmental these days. The Government should at least consider making sure, at later stages, that the Bill spells out the central duties of the companies. I hope that the Minister will take that away.

[Baroness Kramer]

My Lords, again we have a wide range of amendments in this group. I shall focus on the issues that have been raised by the noble Lords, Lord Berkeley and Lord Whitty. We derive from these amendments that they see advantage in the company being issued with a licence: we covered that discussion a few minutes ago. I want to be clear that safety and other duties are being transferred to the company by virtue of its appointment as the highways authority for the strategic road network. These, together with essential environmental duties in existing legislation, will apply to the company. I also make it clear that the new company will be bound by the network management duty in the Traffic Management Act 2004, a duty which would be difficult to perform without co-operating with other local highways authorities.

Sustainable travel, though, is a different kettle of fish. It is an issue of wider transport strategy and policy, which is a matter for the Secretary of State to determine. However, many issues raised in these amendments that may not currently be covered in legislation to the extent proposed—for example, sustainable development, engaging communities or conducting research and development—will be the subject of binding statutory directions and guidance, which is the long title that we have given the licence issued to the company by the Secretary of State. I am sure that noble Lords will have looked at the recently published drafts.

I have the advantage of a marked-up copy, so I can see how extensively all those issues have now been written into the licence, in very significant detail. For example, on the environment the licence holder must:

“Seek to minimise carbon emissions and other greenhouse gases from its operations; adapt to operate its network in a changing climate; and, where relevant, assist the Government in meeting its wider greenhouse gas emission reduction targets and climate change commitments”.

We can see, in each area, that there is very substantial language. On safety, there is language focusing in great detail on these issues, so that they are deeply embedded, as there is, in other places, on collaboration. So it is there in the licence, or, as we are calling it now, the statutory directions and guidance. To me, it is crucial that they are in that document because, of all the documents, it would be the living document that most impacted the company on a regular basis. We want to make sure that those issues are to the fore and centre, right in the eyeline of the new strategic highways company. Directions issued by the Government have legal force and, together with the independent scrutiny of the monitor, which is there to enforce, will ensure that the company is accountable for what it does.

In listening to your Lordships, I understand that there would be a measure of comfort in echoing some of these key issues in the Bill. To me, it is important that they are in the licence because that is where they will drive behaviour and the enforcement capacity is genuinely there. I can see an argument for making sure that these issues are being given the attention that noble Lords wish, particularly for public reassurance. Two stand out—road safety and the environment—as well as co-operation. I can therefore make a commitment to your Lordships that I could come back before Third Reading with an amendment that would impose those provisions as high-level duties on the company in respect of these fundamental matters. As I say, my personal view is that they are where they need to be to have effect but, if it will provide reassurance to the public in general and your Lordships in particular that they are being sufficiently recognised, this is the way in which to tackle them with a great deal more detail, direction and energy within the content of the statutory directions. We could work a way to put those three high-level duties into the Bill.

In this group are Amendments 22 and 24, which relate to setting the road investment strategy and removing subsection (6), which may provide an element of confusion. However, given that it has not been raised, I will not pursue the matter but would be glad to explain to anyone why we think that those amendments miss the point.

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Moved by

[Lord Whitty]

15: Clause 2, page 2, line 25, at end insert—
“( ) The strategic highways company shall be responsible for the road safety performance of the network and the improvement of the network’s road infrastructure safety rating, which shall be overseen by the Office of Rail Regulation.”

[Lord Whitty]

My Lords, I shall speak also to the other amendments standing in my name in this group. In doing so, I need to declare a non-pecuniary interest as the chair of the Road Safety Foundation, which today—if I may make a quick advertisement—published a couple of reports on making road safety pay and the state of British roads. I commend them to the Minister, as I am sure that she will learn from them, and perhaps she would pass on my thanks to her colleague, Robert Goodwill, for attending their launch.

Although some good work on road safety is being done in the department and despite the slightly more encouraging words in response to the previous group of amendments, the problem is that safety does not feature in the Bill. However, the creation of a strategic highways company ought to provide an opportunity for a step change in road safety on the strategic network.

It is often said—and rightly so—that our motorways and most, although not all, of our trunk roads are very safe. In relative terms that is true and it is certainly true in terms of passenger miles. However, it is also true that, because of the intensity of traffic on the motorway system in particular and the severity of the incidents that occur, the number of accidents constitutes nearly 40% of all those killed or seriously injured on our roads. The foundation has calculated that that costs the economy of the country the equivalent of £0.7 billion a year in terms of Highways Agency roads alone. The number of dead and seriously injured on the roads exceeds the total number of people killed in all workplaces in the country in a year. That is a very important fact and it is one that the new highways company is going to have to face up to.

There are essentially four elements of road safety improvement: driver behaviour, vehicle design, traffic management and road design. The last two are clearly the responsibility of the strategic highways company, and so they should be. They also influence behaviour and can interact with the better design of cars. The Highways Agency needs to carry over into the new company the responsibilities that it already has for road safety but it needs to give them an additional boost by making it clear that one of the objectives of investing in roads—in design engineering, in traffic management, in the telemetrics that it deploys and in the design of protection barriers and so forth—needs to be maximising improvements in road safety. That is not clear in the Bill.

As I said, there is a big opportunity to make a step change here, but the step change and the need to make this clear also have a down side. If, as I have just said, a single, quasi-independent, separately incorporated company is responsible—on its premises and with its assets—for more deaths than every workplace in the land, there are issues of liability and litigation to be faced up to. In the Bill, the responsibility for that should clearly rest with the company but there needs to be some oversight of it. As with the ORR, which plays a very important role in enforcing rail safety, the monitor/regulator on the road side needs to enforce the safety requirements on the company.

It is also true that all other businesses where safety is an issue are covered by the Health and Safety at Work etc. Act, as my noble friend Lord Berkeley said earlier. If the new company is not a Crown company, the exemption does not apply. It is therefore even more crucial that the issue of safety is written and embedded in everything that the company does, and that is reflected in the Bill.

The Minister referred to high-level duties for the company, which she could perhaps at a later stage write into the Bill. That would include, in the context in which she made those remarks, references to safety. Not only does safety investment need to be seen as part of every investment decision, but the investments have to be right, because the rate of return on safety investment is much higher than that on other road improvements in many cases.

My amendments are fourfold. The key amendment, Amendment 15, would put the responsibility for safety clearly and squarely on the company. Amendment 20 would ensure that the standards being set by the Government for the company to perform to include road safety and the setting of effective benchmarks and targets. Amendment 23 would ensure that safety projects for investment in the road investment strategy are appraised on their own merits and not just subsumed into larger projects. My noble friend Lord Berkeley will speak to Amendment 44, which deals with the safety role of the regulator. Amendment 50, in my name, would include road safety in the functions explicitly to be transferred to the strategic highways company. That combination of amendments should achieve the high-level duties to which the Minister referred.

The Government have at least taken some note of the discussion on road safety issues in Committee. They have brought forward Amendment 19 in this group, which refers not to the central role of road safety in the operation of the company but to the investment strategy—not directly to the company itself. It states that the Secretary of State must,

“have regard, in particular, to the effect of the Strategy on … the environment, and … the safety of users of highways”.

The phrase “have regard to” is probably the meekest legislative obligation that could be written into the Bill. This is repeated in Part 5.9 of the draft licence, which states that the licence holder,

“must have due regard to the need to protect and improve the safety of the network as a whole”.

It then goes into a bit more detail, which sounds slightly firmer, but the phrase “have due regard to” makes it sound as if safety issues are not an objective of the strategy but a constraint on the strategy. It needs to be clearly written and embedded in the decision-making of the body all the way through. Some things that the Minister said and some things reflected in the draft licence suggest that that is the Government’s intention, but that needs to be clear in the Bill. Amendment 15, leaving aside the others, would make it clear so that none could gainsay it.

It would be sensible for the House and the Government to accept that road safety is a big issue in our strategic network and will continue to be so. There is an opportunity for the new company, with a coherent, consistent and inviolate road investment strategy, to give due priority to road safety in a much more substantial way. The phrase “have regard to” is very weak; my amendment is much stronger. If the Minister is not prepared to accept it, I hope that the House—or Parliament, at some stage, will accept that formulation. I beg to move.

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Given all the issues that I have raised and the agreement we have that additional duties will go into the Bill, giving us both belt and braces, particularly around safety, environment and co-operation, I very much hope that the Government’s amendments will be accepted and that your Lordships will feel comfortable not pressing the other amendments in the group.

[Lord Whitty]

My Lords, I shall not reply on the wider issues of the role of the monitor, in which debate on this group has become engaged. I will concentrate simply on the issue of road safety. The Minister, who I thought in her response to the previous group was moving in my direction, has greatly disappointed me in her reply to this one. That belies the good work that her department is doing and has done for many years on road safety and the opportunity that the new company would have to improve it.

I am also sorry that I am falling out with the noble Lord, Lord Jenkin, on the issue of liability. The point I am making is that in certain aspects of road safety—design of roads, traffic management, use of telemetrics and speed controls, information and signing—there is a vital role to be played by the highways authorities, in particular one with the resources, level of responsibility and intensity of traffic which the strategic highways company will have.

[Lord Jenkin of Roding]

I do not disagree with a single word of what the noble Lord has just said about what should be the responsibilities of the strategic highways company. My fear earlier was that he was extending it to matters which are really the responsibility of other bodies.

[Lord Whitty]

My Lords, in all areas of safety and liability, there may be contributions by many factors. Frequently there is contribution to negligence by people in other areas. That may apply to drivers as well, but there are some firm responsibilities on those who are responsible for the design, management and control of the roads. That area of improvement in road safety has been the least developed until relatively recently. The improvements which have been made have been made largely as a result of general improvements to the roads rather than by a focus on road safety improvements, except on a few issues.

As I said, the creation of the company gives us the opportunity of a step change in delivery of road safety on our strategic network. That means giving as clear a signal as possible that this is indeed, to use the Minister’s words earlier, a high duty on the new company. That needs to be expressed unambiguously in the Bill. The words “have due regard to” safety are neither belt nor braces. It is not an objective of the company; nor is it embedding and inculcating that through everything that the company does. If we want to do that, we need to write safety large in the responsibility of the company. If the Minister goes back to her previous remarks about looking at higher duties to be written into the Bill, leaving aside all the other amendments in the group, her adoption of my Amendment 15 would achieve just that. As she has made it clear that she is not prepared to accept it, to try to ensure that road safety is a major function of the new organisation, I need to test the opinion of the House.

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Moved by

[Lord Whitty]

16: Clause 2, page 2, line 25, at end insert—
“( ) Before establishing a strategic highways company, the Secretary of State must consult all highways authorities in the area specified under subsection (1)(a) responsible for roads in that area other than the roads specified under subsection (1)(b), and this consultation must cover—
(a) the structure of the new organisation,(b) the appointment of at least one non-executive director representing those authorities to the board of the new company, and(c) any other matter which the Secretary of State deems relevant.”

[Lord Whitty]

My Lords, Amendment 16 is about the relationship between the new company and the other highways authorities—essentially the local authorities. It is clear that for the effective operation of the new strategic highways company there will need to be close co-operation with those authorities. I should declare an interest, again non-pecuniary, as a vice-president of the LGA, which supports this amendment. Highways authorities feel that they have not been effectively consulted hitherto. Although they do not oppose the Government’s proposal in the Bill, they consider that Ministers should discuss with them how the company will operate as there will need to be co-operation between the strategic highways company and highways authorities on traffic management and new road schemes. The structure of the new organisation needs to be broadly agreed. There also needs to be some representation on the board of the new structure of those authorities that manage and oversee the other roads in England.

The amendment provides for consultation on the structure of the new company and the appointment of a local authority non-executive director on the board. That would be the minimum that we would need to see for a good and effective co-operative arrangement between the new company and the other highways and traffic authorities. I hope that the Government will accept the amendment. I beg to move.

[Lord Davies of Oldham]

My Lords, I should like to speak briefly in support of this amendment, to which I have lent my name. The Government list the “major challenges” facing the strategic road network: stop-start funding, underinvestment, inefficiencies and growing pressure from congestion. If these challenges are so severe, why are more than 90% of our people fairly happy with the condition of the strategic road network and only 30% happy with the condition of local roads?

On the evidence that the DfT is citing to justify its obsession with strategic roads, figure 1 in the summary of reform states that spending on major projects fell sharply in the 1990s and has remained low since, while overall traffic has risen. The figure completely ignores the previous Labour Government’s investment in local roads and tackling traffic in our towns and cities. That is where congestion is obviously most frequently experienced. We spent more than £4.5 billion annually on local roads between 2005 and 2010. That was cut by one-third for 2011-12 by the present coalition Administration. If the DfT wants to talk only about strategic roads, we suggest that it compares the spending on strategic roads with the amount of traffic on them.

Ministers continue to stress that their reforms will deliver a world-class roads network, but throughout the extensive documents that they have published there remains scant mention of the major challenges for local roads, which face a pothole epidemic. Any Member of Parliament will tell you that the transport problem in his area is bound to be represented by potholes in roads. The potholes do not just cause damage to vehicles but affect the pace at which they can travel.

The Government claim that they will deliver more reliable journeys, reduced congestion and less delay and disruption. However, they cannot be listening to local government, which is warning that the new two-tier road system threatens to speed up vehicles travelling significant distances but will lead to greater delays on local roads. I have no doubt that the Minister will say that the department has committed unprecedented funding for local road maintenance—£9.8 billion over the next Parliament and £975 million a year to councils. However, both those figures represent a real decline and more than one-third of the money will be topsliced for the Challenge Fund dreamt up by the department, which means that local authorities spend time and, of course, scarce money on bidding rather than actually fixing the roads.

There is no point in building a world-class strategic road network if 98% of local roads that people use every day are clogged with congestion or are falling apart. That is why this amendment seeks to ensure that the Bill gets the strategic and local road networks working better together and makes a real and tangible difference to tackling congestion. That is why we want to see local representation on the strategic highways company board, which will ensure that the company delivers and complies with its obligations. Local authorities must be actively involved in the creation of the strategic road network.

This issue is of the greatest importance. I understand entirely, of course, why the Bill concentrates on the strategic network but it must not ignore the needs of local road networks. They have to be recognised in the Bill as partners in ensuring that journeys are carried out in the most effective way.

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[Baroness Kramer]

My Lords, I am delighted that the noble Lord, Lord Davies, appreciates that we are pouring unprecedented amounts of money into the local road network and that a significant amount of it is allocated on a competitive basis, as it were, to make sure that the projects which yield the most improvements get priority. I thank my noble friend Lord Jenkin for making the case so clearly as that enables me to shorten my remarks.

The noble Lords, Lord Whitty and Lord Davies, have proposed amendments—the amendments also stand in the name of the noble Lord, Lord McKenzie—which suggest that local highways authorities are involved with setting up the strategic highways company, that these bodies are consulted when setting the road investment strategy, and that the strategy accounts for potential impacts on local and other networks. I fully accept that these are well intentioned amendments but I contend that they are not needed.

Let me be clear: we want the company to work closely with other highway and traffic authorities to achieve the objectives determined by the Secretary of State. Without close co-operation, both the company and the local highways authorities would not be able to deliver their network management duty as set out in the Traffic Management Act 2004. However, it is important to recognise that the company will not be responsible for the management of local authority roads, and local authorities would be furious if it attempted to do so.

We consulted publicly in October 2013 on the proposals to create the new company and the future governance arrangements, taking into account the views of local highway authorities in our response. That response, published on 30 April this year, formed the foundation of the proposed legislation. It is hard to see what value an additional consultation would bring.

With regard to board representation, we are creating a limited company with a fully functioning board to guide and hold the company’s executive to account. Therefore, involving local authorities in the detailed running of the company would undermine that effective management and oversight of the company and the strengthened arrangements that we intend to put in place.

Our analysis of investment proposals for the strategy will necessarily account for overall transport impacts due to the close links between the strategic road network and other networks, including local highways. Requiring the strategy to include a detailed analysis of the impact on the condition or overall funding arrangements for local roads, or other networks, is unnecessary. Much of this work is already required, while some of the more detailed implications would be a burden and risk causing confusion by making central government take action on issues which are within the purview of local government to deal with. We are very conscious of devolution issues in this regard. Requiring us to consider the condition of the strategic road network as part of setting the strategy is unnecessary because we have considered the state of the network. We reached the decision to invest more money in maintenance and renewals at the last spending round

I turn to the issue of consultation. Given that we have tabled a set of amendments which require consultation to take place as part of setting and varying the strategy, and combined with the requirements on co-operation and the fact that the company would be fully engaged with local highways authorities, there is no need to specify that the company must consult them. It is already embedded.

I hope I have been clear. I have reflected on the amendments about the involvement of local highways authorities in the running of the company and the road investment strategy. I believe that the objectives of the amendments are achieved already within the Bill and the accompanying documents. I hope very much that the noble Lord, Lord Whitty, will feel able to withdraw his amendment.

[Lord Whitty]

My Lords, I think, whatever the realities and wherever they are reflected, they are not reflected in the Bill. The local authorities themselves have drawn this to our attention and no doubt to the Government’s attention, which is why they are supporting most of these amendments. The reality is that most journeys on the strategic network start and finish on the local network. Any new schemes, any maintenance, any accidents, any new traffic management systems on the strategic network have an impact on the local network.

For those reasons, very good co-operation is needed. I am glad that there is a reference, to which the noble Lord, Lord Jenkin, referred, in the draft licence. I am glad that the Minister recognises the need for such co-operation. I would, of course, be more impressed by its being in the licence, if the licence was reflected in the main part of the Bill, and therefore had some at least indirect legislative recognition. The key issue here is co-operation and understanding between the new company and the local highways authorities.

In other pieces of legislation a duty to co-operate has appeared in the Bill, not in any subordinate legislation or subordinate documents. I think there is a strong case for that to be included here. On the structure of the company, I understand the Government’s reluctance to specify who should be on the board, but if the board of the new company does not include somebody who understands the role of local highways authorities, whether or not that is prescribed in the legislation—

[Baroness Kramer]

My Lords, I will not be able to speak again on this amendment. I may not have been very clear but when I talked about the issues I would bring back to put as duties, co-operation was one of the three, along with environment and road safety.

[Lord Whitty]

My Lords, I appreciate that aspect of it. I hope, therefore, that what the noble Baroness comes forward with at a later stage meets the general requirement of co-operation. I was commenting also on the structure of the company, and I understand the reluctance to specify that in the Bill, but some engagement between the governance of the new company and local highways authorities is needed, and that objective was reflected in this amendment.

I sincerely hope that the Government’s amendment on co-operation does the job to the satisfaction of the local highways authorities and that the reality is that the relationship between the new company and the local highways authorities is better than the relationship of the Highways Agency has sometimes been and indeed better than what the department’s relationship with local authorities has sometimes been, despite the amount of money, to which both Front Benches have referred, which is now going to local highway schemes.

I will withdraw this amendment at this stage and look forward to the Government’s proposition later. I beg leave to withdraw the amendment.

Amendment 16 withdrawn.

Infrastructure Bill [HL]

Lord Whitty Excerpts

Tuesday 14th October 2014 Grand Committee

[Lord Whitty (Lab)]

My Lords, I have an amendment in this group, Amendment 95ZBH, to go with Amendment 95ZBG. Those noble Lords who are familiar with the proceedings of the Energy Bill and the Water Bill will know that my proposition here has appeared before your Lordships in a different guise in both those proceedings. I am reasonably convinced that shale gas and shale oil should be part of our energy mix. I am somewhat sceptical about the exaggerated claims of the transformational effect of having a supply of shale gas within the UK on our total energy mix, but that is for the future.

I do not wish to impede the proper exploration or delivery of shale gas and oil. However, the Government have to recognise that some reassurance is required. It is not simply about campaigns and nimbyism and general antagonism towards shale gas and fracking; it is a very realistic, logical and understandable apprehension of what impact could result from widespread use of this technology. As I say, I do not wish to impede it, except in certain respects, to which I shall come later. However, I implore the Government to recognise that, if they are to give the go ahead to widespread use of drilling, both exploratory and delivery, of shale and oil through fracking, the public need reassurance about the risks. Secondly, they need reassurance that the proper regulation covers them which, by and large, the Government have managed to assure me is there. Thirdly, I am less reassured about the degree to which the enforcement of those regulations can be guaranteed by the various bodies, particularly the Environment Agency, local authorities and the HSE. At the moment, the resources available to those bodies are being squeezed rather than the opposite. While I have faith in those organisations—and both the noble Baroness, Lady Young, and myself have had some experience of the Environment Agency—they have the ability to do it but not currently the staffing or resources to deal with widespread use of fracking and drilling. Therefore, we need reassuring on the level of resources as well as the rigorousness of enforcement.

The final thing on which we need reassurance concerns the public’s general apprehension that, despite the fact that we have good regulation and that in general the regulations will be enforced, there could be some breach, disasters or unforeseen effects from a major new technology—and a very costly one locally and potentially more widely. History teaches us that we have had previous experience of this. In many ways we know the great benefits which were brought about by the development of the coal industry and, most of us would argue, the nuclear industry, but they have also caused serious risks and serious damage to our environment. No provision was made in the early days of the coal industry—why would it be?—or indeed the early days of the nuclear industry for the contingencies of clear-up of the waste and other damage which might be caused. If we are moving to a new phase of technology, we should begin to make provision for ensuring that the industry that is licensed to undertake shale fracking and drilling has the wherewithal to meet any potential disastrous outcome.

My previous amendments to the earlier legislation on energy and water were slightly more complicated than this, so I have tried to make it a bit simpler and also to give the Government some flexibility. The Government could do this in a number of ways. They could require as a condition of the licence that a contingency fund is established by an individual fund or they could require that an individual firm donates to a nationwide or region-wide fund. My amendments therefore leave that with the Secretary of State and the form of the regulations entirely with the Secretary of State, but a contingency fund for that liability needs to be established in one way or another. I think that my amendment makes that principle clear. The Government may not be prepared to accept the precise wording but an indication that in principle they understand and accept that argument would be welcome.

Again looking back somewhat historically, I say two other things. First, the Government make a lot of the fact that this is nothing new—that we have had onshore wells in the UK for decades. I know that in my adopted county of Dorset there is a significant amount of onshore oil drilling. However, it is also a fact, which I was not aware of until relatively recently, that over the last 100 years licences have been given for onshore drilling mainly in England at more than 2,000 wells. For 53% of those wells, most of which were defunct years ago, the ownership is unclear. That means that the liability is unclear and it also means that if at some stage it is found that some damage has been done, we will not know who is liable.

Switching to looking forward, if we are now giving licences to drill to a number of different organisations, some of which are relatively small companies, we need to have the reassurance that in the future—and it may be decades in the future—they will have the wherewithal to meet the costs of clearing up that damage. That is what my amendment seeks to achieve. As I said, I am not wedded to the wording. I can make it much more complex again if the Government insist or they could make it much more complex themselves, but I would like an indication of support in principle for my amendment.

While I am on my feet, I express support for the amendment of the noble Lord, Lord Jenkin, and the reference to heat, albeit that it is not entirely clear why it is necessary and why the Scottish dimension is different from that of everybody else, but certainly heat from geothermal needs to be referred to in the same context as power.

Secondly, in general I support the overall approach of the amendment in the name of the noble Baroness, Lady Young. Surely, at least in relation to national parks, it must be clear that there should not be any above-ground drilling. At the very least, I hope that the Government will be prepared to accept that. A wider range of sites, which I would also like to be protected, is designated in the noble Baroness’s amendment. However, it is pretty clear that the population, whatever their views on fracking and drilling in general, do not want any intrusions into our national parks.

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Tabled by

[Lord Whitty]

95ZBH: Line 13, at end insert—
“(c) make provision for any contingency fund prescribed by the Secretary of State under subsection (3A).“(3A) Regulations shall enable the Secretary of State to require the establishment of one or more contingency funds either by a single energy undertaking, or by a number of energy undertakings or by all undertakings engaged in the on-shore gas and oil industry, and such a contingency fund shall be available to meet the cost of unforeseen damage to the environment or economic damage to any person or persons arising from the operation of oil or onshore gas activity.”

[Lord Whitty]

My Lords, I am not entirely convinced by what the Minister said. Indeed, her reference to the need for an industry scheme for potential compensation where it is unclear where the liability lies shows that there is an issue here. I would be grateful if between now and Report the Minister could let us have some more information on that and on the bond scheme to which she referred, because I am still broadly of the opinion that this needs to be underwritten by legislation. Subject to that, I shall not move the amendment.

Amendment 95ZBH (to Amendment 95ZBG) not moved.

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[Lord Borwick]

My Lords, I entire agree with the noble Baroness when she says that the task is to increase people’s confidence in this process of fracking, but I am absolutely certain that the 12-month baseline suggested here is not the right solution, because of the work done by the British Geological Survey mentioned by my noble friend Lord Jenkin. I understand that it was published on Monday 6 October as an interim study and found in its conclusions that background methane in aquifers is generally low and that the majority of sites that it has studied over time have shown little change in the methane levels. That suggests that a risk-based approach should be taken, rather than monitoring in every individual site proposed.

On the second amendment in this group, Amendment 95ZBN, the danger I see is the composition and amount of fracturing fluid cannot necessarily be told immediately at the beginning of the planning process. If this amendment was passed, if it was decided to change the chemical make-up of the fracturing fluid, the whole planning process would have to be gone through again —and, if it turned out that a greater quantity was needed than originally proposed, it would be necessary to go through the planning process again. Given that that process is in danger of taking many months or years to go through, a small geological change that increases the amount of fracking fluid that is required might delay the process right in the middle and make the situation more dangerous than it would otherwise have been. All this is being looked at by the Environment Agency and, with its rules, we should increase the confidence of people in the work that is being done on the regulation of fracking by that agency.

[Lord Whitty]

My Lords, I want to underline one point under Amendment 95ZBN, which will be tedious because it was raised during the course of the passage of the Water Bill, on the role of water companies. I understand the exasperation of my noble friend Lord Young and the noble Lord, Lord Borwick, who referred in similar terms earlier to scares being raised about shale gas, and their not necessarily being very scientifically based. However, I do not think that Thames Water or Severn Trent Water fall into the category of scaremongering green organisations. They really ought to be brought into this process, because the biggest anxiety is about the effects on the water system and giving the water companies a statutory consultee role would help to reassure a number of people about the effect of fracking operations on the water supply. I therefore hope that proposed new subsection (3) in that amendment is adopted by the Government.

[Baroness Verma]

My Lords, again, I am extremely grateful for the measured way in which this debate is taking place and for the very eloquent way in which noble Lords have presented their arguments, whether supporting what the Government are doing or raising amendments to show concerns. I welcome the spirit behind the amendments, which are aimed at ensuring that environmental safety is fully protected throughout the shale gas extraction process and reassuring the public that that is the case. My noble friend Lord Borwick said that to enable trust we need to ensure that the regulators are presenting a trustworthy way in which to approach the regulatory system.

We have among the most trusted regulators in the world. The commitments the regulators—the Environment Agency and so forth—have undertaken has allowed the debate to become much more measured.

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[Lord Teverson]

My Lords, when I saw this amendment, I thought that it looked remarkably familiar. It took me back to the trauma of four years of the Energy Bill, and the White Papers before it. However, I am actually very pleased to see it because it was an important principle of an amendment that we tabled at the time. To explain this a little more from where I stand, this is one of the areas where white is black and black is white in coal terms. Making coal plants far better for the world in their nitrous and sulphur emissions, which we all want, means that they can escape the rundown that is caused by the European directives that mean that these coal stations have to go. The way in which the emission performance standards were written into the Energy Bill means, effectively, that they have a free life up to about 2044, or something like that—if you can keep them going—when we can change the emissions performance standards and they lose their grandfather rights. That is the issue.

I have not gone into this matter in the great detail that the noble Baroness, Lady Worthington, has, but I can see that there are ways by which being able to participate in the capacity mechanism gives enough financial stability for the energy companies to take on the investment that would enable them to comply with the large plant combustion directive and its successors and so continue to be high carbon emitters in this economy for many years to come. That has to be a bad thing. I will not go all the way through the arguments that we had in previous debates but, clearly, it is bad in terms of emissions. Coal is not good in that regard. I am not absolutely against coal being part of the capacity mechanism. I would prefer it if it was not, but I do not think that it is absolutely fundamental. What worries me is that, by investing to comply with European directives, we then have them for a long time into the future, which we would not otherwise. That is bad, but, at a time when an argument has emanated from the Treasury wishing gas to be particularly strong, it works against gas investment as well. That is investment that the Government has rightly said is important for medium-term fuel strategy and clearly is half the level of carbon emissions.

Without going through all the arguments again, this sort of amendment gives a double win for the Government on greater incentives for gas investment in the medium term and on meeting its carbon targets more certainly as time goes on. I hope that the Minister and her colleagues will find a way to realise those objectives, which are from both sides of the coalition, by looking at this very carefully.

[Lord Whitty]

My Lords, I support the amendment and my noble friend. The arguments she made during the Energy Bill have come to pass—I do not think that Bill lasted for four years, as the noble Lord, Lord Teverson, said, but it felt like it. The reality is that while in America the arrival of shale gas has driven out coal, to the benefit of carbon emissions—this links back to previous debates—it has also had the knock-on effect that the world price of coal has gone down. Therefore, the economics of coal in the rest of the world now look much more attractive. The economics of continuing to run coal-fired stations look dramatically more attractive.

A number of things were not clear during the debate on the Energy Bill and when it passed, including the exact way in which the capacity mechanism would work and who would be eligible. Some of that has become clearer with the regulations that have gone through. We now know which plants are being put in as a capacity mechanism; it includes some pretty old coal plants. Plants that companies such as EDF gave a clear indication, seven or eight years ago, would close about two or three years from now are now being rolled forward. The way to square that would have been for the performance standard to apply to old coal as it does to new coal plants, but it does not.

While the noble Lord, Lord Jenkin, is right that we encourage all plants to fit this abatement of sulphur et cetera, we have not applied the new emission standard in the Energy Act to all this old coal plant. As I understand it, the purport of the amendment is to ensure that they will be treated in the same way as new plants. That would change the economics of coal.

The other thing that has changed since the debate on the Energy Bill is that it was assumed at that time by some of the modellers that, as was originally intended, there would be a ratcheting up of the carbon price floor. That would also have altered the relative price of keeping on old coal, to the detriment of the coal industry. Of course, within a few weeks of the Energy Bill receiving Royal Assent, the Chancellor announced that we are no longer going to ratchet up the carbon price floor. Leaving aside the principled arguments about the use of a carbon price floor, the effect of that is that the economics do not look the same as they did when we were discussing that Bill. Clearly they were expressed as looking that way by the Government. As the noble Lord, Lord Teverson, said, it could mean that old coal plant could be running for decades as a result of the emissions performance standards not fully applying and the abolition of the carbon floor price ratcheting up.

The amendment is intended to ensure that that is not the case. As the noble Lord, Lord Teverson, has said, the immediate effect is to make our energy supply more dependent on old coal and less attractive to investment in new gas. Therefore, the higher the level of old coal that qualifies under the capacity mechanism, the less investment there will be in new, efficient gas generation.

In all terms, the economics have been made more difficult. The environmental cost of carbon emissions could be substantial. I therefore hope that the Government at least understand part of that argument and recognise that they have to do something along the lines my noble friend is arguing in support of these amendments.

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If the amendment were adopted, it would increase the transparency of all these activities to a pretty dramatic extent. It would be a real benefit for consumers to see that these six industries are acting in their interests while making sure that the company has the right structure to undertake its work. Therefore, I congratulate the noble Lord, Lord Jenkin, and fully support his amendment.

[Lord Whitty]

My Lords, as a former consumer champion, I am fully in support of what the noble Lord, Lord Jenkin, is trying to do here and, in particular, I see the sense in putting it in the hands of the Treasury. The Treasury is the only government department, with the occasional exception of No. 10, which can ensure that individual departments do not go off at a tangent. The problem is not only the multiplicity of regulators but that each of them rests within a culture of a different department. The consumer function, insofar as it is reflected in Whitehall, is a very minor function of the business department’s responsibilities. It is only the Treasury that can insist that regulators and departments really look after the interests of consumers.

Whether the Government follow through the amendment of the noble Lord, Lord Jenkin, or the NAO’s report, this is something that needs doing, and therefore I hope that we get a positive response.

[Lord Davies of Oldham]

My Lords, I, too, congratulate the noble Lord, Lord Jenkin, on putting forward a very useful amendment. However, as he indicated, in terms of the level of expertise available among staff currently devoted to aspects of this kind of work in the Treasury and the fact that we would also need some legislation, the whole proposal will produce enormously beneficial results but not next year, nor probably after that. It would take some time before we had the full range of expertise indicated in the noble Lord’s amendment.

He is absolutely right on one thing: of course the country is not prepared to take time over these issues because the consumer is all too well aware that they are bearing the costs of a great deal of interest by the companies. What the companies reflect is what they classically reflect in the private sector—the massive increases in pay for their directors and chief executives since they became independent operators, a significant increase in profit and a whopping price rise for the consumer, who has very little capacity to avoid such price rises.

We know that consumers are meant to move around among the energy companies—we know how easy that is with regard to water, for example, and other areas where the natural monopolies obtain. The noble Lord, Lord Jenkin, has identified what we on this side of the House have emphasised for several years: that the operation of a great deal of these services to the public through such private companies, some of which are natural monopolies, has produced a most distressing situation for people who we all know are seeing nothing in the way of increase in their own resources, with low wage levels, and are meeting ever increasing costs. I therefore strongly support the amendment and congratulate the noble Lord, Lord Jenkin, on making this great effort to produce an outline of what is necessary. However, we will expect the next Government to move more directly even than this proposal.

Infrastructure Bill [HL]

Lord Whitty Excerpts

Thursday 10th July 2014 Grand Committee

[Lord Jenkin of Roding]

When I read this clause and, in particular, studied the Explanatory Notes my instinct was that there seemed to be some sense in this. Where these things are held up for a long period, it frustrates development. Anxieties have been expressed. They have been expressed to me by the Local Government Association. The only point I wish to make to my noble friend is about whether we could have some idea of what an order under this clause would look like when we come back to this on Report. I made this point to my noble friend Lady Kramer about some of the roads legislation we considered earlier in the Bill, and I make it now to my noble friend Lady Stowell. It would be really helpful to the House, as it will be on Report, to have before it the sort of order that would be made under this Bill. This Bill gives a power to make orders. I am not at all sure what those orders would look like.

[Lord Whitty (Lab)]

My name is attached to the clause stand part provision. While I think some of the amendments in the name of my noble friends would improve the situation, I think the Government need to think again on this. The Minister should take advice from the noble Lord, Lord Jenkin, and look more closely at what circumstances and processes the problem that the Government are trying to address needs. As it stands, this is a pretty draconian and open-ended provision. Clearly, for all sorts of reasons there can be delays in the local authority being able to assess whether a condition has been met. The conditions can be quite complex because they are not only in the area of heritage, as my noble friend Lady Andrews has said, but can relate to the natural environment, social implications, traffic implications and so forth. These things are not necessarily easily dealt with, particularly by hard-pressed planning departments. As it stands, the clause would allow the Secretary of State to come to this Parliament the day after the period of the condition lapsed with an order to override the non-decision of the local authority. That seems too harsh. It is important that there is some reserve power for the Secretary of State. I understand why the Government are looking for it, but it should be exercised with discretion. Frankly, this clause gives far too much power to the Secretary of State to interfere in what essentially must be a local decision which understands the complexity of local circumstances. This clause gives no indication of what should trigger the Secretary of State’s intervention and the suspicion must be—I put it at its most extreme, but nevertheless—that a developer who happens to be close to the Minister and is frustrated by the delay tips the Secretary of State off and we have a complete override of our planning process as a result, subject only to the negative procedure of this House and another place. That is too open-ended and I hope that the Government will think again between now and when we come back on this.

I should have declared an interest as a vice-president of the LGA. The LGA has great disquiet about this, and that is shared by a large number of other organisations which are engaged in the planning process. I hope that the Minister will be able to give us something on this and that she will have another look at it before we return.

[Lord Tope]

My Lords, I am reminded that I should probably also declare an interest as a vice-president of the LGA, although I think that that is quite well known by now.

Misgivings have already been expressed this afternoon, and I hope that the Minister will go a long way to reassure all of us on this. I would like to understand better the need for this legislation. I do not know to what extent failure to discharge planning conditions is a problem. What is the evidence of the extent to which there is a problem? I am sure that there must be occasions when local authorities fail to meet the time limit. Very likely, as the noble Baroness said, that is because there has been a huge reduction in the size of planning departments. That was a problem long before the budget cuts started. Too many planning officers were going off to much better paid jobs in the private sector. With the budget cuts, the planning department has been no more exempt from downsizing staff numbers than any other part of a local authority, and that has probably added to it. That may be in part a cause of a problem but I would like to understand the extent to which there is a problem. What evidence is there of the problem that we are trying to solve?

I then come to the question of whether this is the best or the most necessary solution to the problem. I can certainly understand that if there really is a problem—if local authorities are, to any significant extent, simply failing to respond and that is holding up the necessary work—then action needs to be taken. Possibly, in extremis, this is the right action, but let us understand better the extent and cause of the problem that we are dealing with.

A number of questions have already been asked but when the Minister responds perhaps I may seek an answer to another point on the scope of what we are dealing with. Can we be clear that we are talking here about a failure to respond and not a failure to agree? That is quite important because it deals with part of my concern about the extent of the problem. The Minister referred to the very pleasing number of planning consents that are being granted. I have to say that I am much more interested in the number of starts and even more interested in the number of completions rather than the number of consents that are granted, but I hope that it is an indicator that we are moving in the right direction. However, if you ask developers what the delays in implementing planning consents are down to—sometimes they are accused of having land banks and so on, which they all deny—the knee-jerk answer is always “The planning system”, but when you probe a bit more, it is not quite that simple. Therefore, I should like to be reassured that we have evidence that there is a problem here and that we are not just responding to the easy answer that usually comes from developers about the planning system.

As I said, I want to be clear that what we are dealing with here is a lack of response, not a lack of agreement. Part of the concern is that if a developer is not entirely happy with the planning conditions—that is not unknown—that can be used as a means of getting round, wriggling out of or avoiding a consent. I am sure that that is not the intention here but it is something that we all want to ensure is avoided.

There is another thing that I am not clear about. If the Secretary of State gives deemed consent to the discharge of planning conditions but the local authority does not agree with that decision—it may be the local authority’s fault for not responding quickly enough, but one of the reasons for it not responding quickly enough may be that the development is not as straightforward as the developer suggested—can it still use an enforcement order to apply those conditions? Does that happen? I do not know, but I would like to know whether it is still available or if it is also to be taken away. We all have concerns about the detail here, as we always do when more power is given to Secretaries of State. Are we to have secondary legislation that will set out the scope and circumstances of all this? I would assume that we are. If so, when are we likely to be able to see that legislation in draft?

While I do not have quite the strong hostility to this that the Opposition have expressed, I certainly share the misgivings and I wonder whether we are using a sledgehammer to crack a nut that could be better dealt with in a simpler and more straightforward way through discussion, negotiation and agreement—and, frankly, although I never thought I would say it, with more planners.

Infrastructure Bill [HL]

Lord Whitty Excerpts

Tuesday 8th July 2014 Grand Committee

[Lord Jenkin of Roding (Con)]

My Lords, I take this opportunity to thank my noble friend and her private office for the help that we were given after last week’s sitting with the supply of the documents to which she had referred and to which the noble Lord, Lord Berkeley, has also just referred. I am very grateful. I, too, have read them, and the draft licence in particular, with all the caveats surrounding it, which I totally understand, is a very helpful indication. It might have been helpful if I had known about it when we were discussing the purposes of setting up this body and what its objectives would be.

I would have expected a remuneration committee to be the sort of thing to be covered by the articles of association. Indeed, the paper that the Minister has circulated, entitled Strategic Highways Company: Approach to the Articles of Association, makes reference to the,

“Model Articles for a company limited by shares”.

Of course, this company cannot be the same as that because, in a sense, it is rather different with all the shares owned by the Secretary of State. However, I would have expected the whole question of a remuneration committee to be covered by the articles when they are finally drawn up and issued.

It is absolutely within the powers of a board of directors to decide how that is going to operate, but I think that it is not unreasonable that the Secretary of State should keep a very close eye on this issue. Some of the remuneration that has been paid—not only in the private sector, as the noble Lord, Lord Davies, implied, but sometimes also in the public sector—has been a bit absurd and given rise to a good deal of criticism and uneasiness. I should have expected the Secretary of State to want to keep a close eye on what the company is doing. As I understand it, it will primarily be for the articles of association to spell out this sort of thing, and I would be most grateful if my noble friend would be willing to confirm that.

[Lord Whitty (Lab)]

My Lords, I support the amendment because it raises wider issues. Although I do not want to go over much of what was said in our previous sitting, the Minister gave some unsatisfactory answers. Since then, like my noble friend Lord Berkeley, I have read the draft licence agreement, which does not answer most of my points or, indeed, the points regarding this amendment. Before we get to Report, we need to be clear—either through draft articles of association or through some greater management guidance for the proposed, hived-off company—about what the company can and cannot do.

On reading the impact assessment, it appears that the alleged benefits of this hiving-off arise almost entirely from the certainty of funding. They do not seem to arise significantly—the £3.8 billion over 10 years arises almost entirely from the certainty of funding on maintenance and schemes within that timescale. Very little of it seems to arise from better management, novel forms of contracts or technological improvements. If that is the case, all that the Treasury and Secretary of State need to do is ensure that there is firm funding from Parliament. Admittedly, a Parliament lasts only five years, and the aggregate period we are talking about is 10 years; but, nevertheless, the institutional change of itself does not seem to deliver a significant contribution to that alleged net benefit.

The questions on how the company runs its staffing, and how it recruits and pays the management, could have a bearing on that, but it is never explicit. It is certainly not explicit in the documents to which we have referred. The anxiety of the rest of the staff and the PCS union is that, although moving away from the Civil Service may mean that the Government can pay the senior management significantly more—if they are going to go the way of HS2 and pay the 23 senior managers, the chief executive or anyone else, more than the Prime Minister, that will be difficult for anyone to accept politically—the rest of the staff will face greater insecurity, as my noble friend has said, as well as the possibility of changes to all their terms and conditions.

Therefore, for the morale of the existing Highways Agency staff, unless we are explicit about what the advantages of better management and a better situation for the workforce will be, it will be difficult to envisage a wholehearted endorsement of this proposition from the staff. Unless there is a reflection of some improved management in terms of the benefits of the hiving-off, as distinct from the substantial assumptions about what the certainty of funding delivers, the case for going through all this change begins to look a bit thin.

[The Minister of State, Department for Transport (Baroness Kramer) (LD)]

My Lords, let me deal with a couple of issues. I will be talking about fines under the next grouping, so if the noble Lord, Lord Davies of Oldham, will indulge me, I will leave that conversation until that point, so as not to be repetitive. He asked a question about paying VAT. The SHC will not be required to pay VAT, which is exactly the same as for the HA now. That should clear up that issue. To pick up on discussions in the Committee’s previous sitting, he asked about funding certainty and whether that impacts on future flexibility. It must impact on future flexibility, but we have been very clear that we have been making sure that we strike a balance between providing long-term certainty of funding and recognising the democratic right of any new Government to come to different decisions. As the noble Lord will remember, we are making the process highly transparent and consultative, so that any change in the RIS will have to be through a very clear process, which means that it is explicit and all can see what is taking place. I think the noble Lord understands how that balance is being struck.

--- Later in debate ---

[Lord Bradshaw (LD)]

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

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

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

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

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

[Lord Whitty]

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

[Lord Berkeley]

My Lords, I also support these amendments. It is very difficult to see how the Secretary of State can fine himself, which is effectively what will be happening. As we know, that actually would not happen because long before it got to that stage—not that we know how it will get there, because that appears in Clause 5(2) and we have not seen the documents yet—the people running the SHC will get the sack, they will be told to change their policy in order that they comply with the road investment strategy or they will comply with the directions and guidance. So to some extent I think that this clause is a complete waste of time, although it would be nice to see what the Secretary of State said about the circumstances that may require the payment of a fine.

I agree with the noble Lord, Lord Bradshaw, and my noble friend Lord Whitty that we need to debate in more detail why this is not done by an independent regulator. Independence is the answer, and the independent rail regulator has the trust of the industry and, I think, of government; I am not sure about the other regulators, but we are talking about the ORR today. If it had those powers and it could use them, everybody would feel very happy that it had looked at the expenditure, efficiency, safety and everything else to do with the highways and come to an independent conclusion.

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Moved by

[Lord Whitty]

41: Clause 8, page 5, line 24, at end insert—
“( ) In all enactments the Passengers’ Council shall henceforth be renamed the “Passenger and Road Users’ Council”.”

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[Lord Whitty]

My Lords, I will be brief on this amendment because the main discussion of Passenger Focus is in the next group of amendments. My amendment is simply about the name. I prefer my formulation to that of my noble friends Lord Berkeley and Lord Judd, because my amendment makes it clear that it is actually the users—the consumers—of these services who are represented by the council. I think that that point is more ambiguous in the title they are proposing. We need a new name, so I commend my formulation and beg to move.

[Lord Berkeley]

I am going to confuse the Committee because my Amendment 42, which we will come on to shortly, suggests that the name should be the transport infrastructure and services council. However, after I tabled this amendment I had a discussion with the chief executive of the Rail Passengers’ Council, who said that a much better name than anything anyone has suggested before, including the Government, was the transport users’ council. I will just throw that into the ring and see what the Minister and other noble Lords think of it.

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[Lord Whitty]

I think that the Minister has been very clear in her latest remarks, but the point that I would make is that both the legal name and what eventually becomes the brand name have to convey the scope of the body. I do not mind when it happens or whether it is done by primary or secondary legislation—although I would prefer primary legislation—but the legal name at the end of this process must reflect something broader than “Passengers’ Council”. I am happy to leave it to the Minister and her colleagues to work their way through what is, as my noble friend said, quite a long legislative programme before we get to that point—if necessary, leaving it to secondary legislation, but it would be nicer if it were in the Bill. It needs a comprehensive legal title. The Government must then go on to ask the organisation to find out what the best public name—brand name—would be.

If I may reminisce slightly, I was the chair of a quango which had to find a new name—unfortunately, the Government have abolished it now, but there we go. It was the old National Consumer Council, transformed by the 2006 Act. At the first meeting of the governing body, we had to decide what the new name would be. Two possibilities were advocated by my colleagues following a presentation by one of these branding companies—in those days, quangos were allowed to spend a certain amount of money. It came down to whether it should be called “Consumer Matters”—double entendre—or Consumer Focus. As chair, I said that I not like either name. “Consumer Matters” sounded as though it was an entry in a filing system and Consumer Focus sounded like a Lib Dem leaflet. However, noble Lords opposite will be pleased to hear that the majority of my board went for Consumer Focus. We went through a proper branding exercise. It is important to leave that aspect of it to the newly enlarged council.

At the end of this process, I would like the legal name to indicate the real scope and Passengers’ Council does not do that. However, for the moment I withdraw the amendment.

Amendment 41 withdrawn.

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[Lord Berkeley]

My Lords, I do not want to prolong this discussion for much longer, but some of us, in setting out a role for the Passengers’ Council, are trying to ensure that it produces the right data and looks at alternative options before the company goes ahead and develops new roads. With regard to the planning system, I do not believe that the Passengers’ Council should have a role at all, but I believe that it has a role in producing the data to justify—or not—what gets done and to look at alternatives.

[Lord Whitty]

My Lords, I have tabled two amendments but I want to comment briefly on what has been said. I find myself slightly between the noble Lord, Lord Jenkin, and my noble friend Lord Judd. As Roads Minister for three and a half years in the last days of Swampy, I know what the noble Lord, Lord Jenkin, is talking about. We have to separate out the planning process from the monitoring of the operational process. On the other hand, I agree with my noble friend Lord Judd that when we are talking about users of the road network, we are talking not only about the people who that day happen to be driving a car or a lorry on that network, but also about all the people who depend on that network or whose premises and lives are affected by it. We therefore need to interpret “road user” in the broadest possible sense. Without straying into the planning system, I think that some of what my noble friend said should be reflected in the Bill.

My two amendments deal with different issues. Amendment 47 refers to the setting up a complaints system. One of the most effective jobs of Passenger Focus in relation to rail, and latterly buses, has been in dealing with a complaints system. Its effort has pushed the responsibility for dealing with complaints back on the railway and bus companies. It is there to pick up what those companies failed to do in terms of complaints. Similarly, we have never had the equivalent system in relation to strategic roads. It is important that a complaints system is seen as one of the responsibilities of whatever we eventually call the Passengers’ Council.

My second amendment is a probing amendment, which I will not press. It relates to Clause 8(6), which refers to a relationship between the Passengers’ Council and local authority rights. It says that the new consumer body could have responsibility for matters relating to local authority roads if the local authority asks it to. That is a bit cock-eyed. Either we make it responsible for complaints about all local authority roads, which I do not really want to do, although my amendment would have that effect, or we leave it as the user body for the strategic road network, which would be tidier. After all, complaints about roads for which the local authority is responsible need to be dealt with largely within the local authority context. There is plenty of scope for complaints to local councils about local authority roads.

If some local authorities want the Passengers’ Council to be there for consumers but others do not, there will be confusion. My local road, the A30, in 10 miles goes through Wiltshire, Dorset and Somerset. If only one of those councils agrees that the Passengers’ Council should be the consumer body, we would have to pinpoint exactly where the complaint arose—over a traffic jam, police incident, or whatever—and we would end up with a patchwork of bodies. Some councils would say that the Passengers’ Council was responsible and would shove off all complaints to it, while others would continue to deal with the complaints in their highways departments. Subsection (6) extends the Passengers’ Council’s role into local authority roads, which may be a step too far. My amendment should probably have been worded differently, but I want to hear what the Minister says in her summing up.

[Baroness Kramer]

My Lords, in this set of amendments we are dealing with the watchdog. We will come on to the monitor in the following clause, so I shall try to narrow what I say to the watchdog role and the body that legally today is known as the Passengers’ Council, or whatever name it chooses for the future.

I think that we have made it absolutely clear that the Passengers’ Council, or “Road User Focus”, or whatever name it chooses as its trading name, will deal with the role identified in the Bill. It anticipates having to represent and to be a voice for that very wide range of users that we have described in the past few minutes of our discussion. I believe that the noble Lord, Lord Judd, and others were suggesting that we apply it to non-users and to surrounding communities. We are then back in the territory where it is hard for a group to be a voice for users. That is necessary in the kind of structure that we have here with the SHC. In other parts of the Bill, it is clear that there is an important role for the SHC itself to be working closely with local authorities. That was reinforced in some of the agreements that have been drawn up and were announced on Monday between the Highways Agency and local enterprise partnerships, which will carry over into the role of the SHC. We have all kinds of mechanisms, including a great deal of detail, about how environmental issues will be addressed and how the SHC will relate to local authorities. There will undoubtedly be implications that come out of the RIS.

Therefore, I see the role of watchdog as being very much a voice for the road user. As I read the clauses here, if there were issues such as modal shift, I think that that would be an area that the Passengers’ Council, in whatever guise it has for these services, could, if it chose to do so, explore and advise on, but very much from the perspective of the road user.

The noble Lord, Lord Whitty, asked about complaints. At present, complaints go to the Highways Agency, and our concept is that that will carry on and pass through to the new SHC. When a body acts as the SHC will be doing, it is important that complaints go directly to it. It must hear those complaints, it must be aware of them and it must take them on board. It must not be allowed, as it were, to offload that responsibility to a watchdog. “Road User Focus”, or whatever it is called, will be able to see through to those complaints so that it can access the data and use them in its work. However, I very much want to see the complaints going directly to the SHC because that will be one of the most important ways of ensuring that it provides the service that is needed.

[Lord Whitty]

My Lords, perhaps I may just clarify that. It will certainly be the company’s first responsibility to deal with complaints. In the case of the railways, you complain to South West Trains and, if it fails to deal with your complaint effectively, you can complain to Passenger Focus. It is the equivalent of that that I am looking for.

[Baroness Kramer]

My understanding is that “Road User Focus” will be able to see right through to the complaints to see what they are and whether they are being appropriately handled. At the moment, complaints are not a large issue for the Highways Agency. Of all the letters sent to it last year—I do not have the total number, unfortunately—only 16 needed outside help in resolving them, which represented about 2% of the letters received. So it has a good complaints system in place and a good track record on resolution, and that will pass over to the new company. However, as I said, it is important that the watchdog should be able to see all the way through that process. I am sure that it will choose how it engages with that—it is not constrained by the language in Clause 8.

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Moved by

[Lord Whitty]

43: Clause 8, page 5, line 25, after “must” insert “establish a capacity to”

[Lord Whitty]

My Lords, I shall speak also to Amendment 45. Amendment 43 deals with the role of the Passengers’ Council—however in future designated—and the fact that it had initially dealt solely with railways. There was once a proposal to extend it to air passenger transport, which was dropped, but it has been extended to buses. It has developed expertise in those two areas of public transport. It is now dealing with a much wider user group, even if the Minister is reluctant to go down the route of widening it to the whole community, as proposed by my noble friend Lord Judd. It will have to develop capacity to deal with a whole different user group, and that needs to be reflected here. It is also important that the Government commit to finding a way to finance that extension.

Unusually, when the railways were privatised, the taxpayer paid for the user representative body. That was also extended when its remit was extended to buses. In other industries, consumer bodies have an allocation via the licence fee or otherwise. I do not mind which way the Government fund it, but it seems to me important that it is required in legislation, and that it is done over a reasonably lengthy period—in other words, that the new, broader organisation does not have to wait each year to know what its allocation will be next year. There will need to be an allocation at least every three years either by requiring a payment from the licence fee or whatever else, which would be the equivalent of the situation in water or in energy, or by making an allocation out of general taxation. That requirement should be in the Bill, as should be the Government’s preferred method of funding. That will give the conceived stability to the representatives of road users. I beg to move.

[Baroness Kramer]

My Lords, the noble Lord, Lord Whitty, is absolutely right that Passenger Focus also works on buses, coaches and trams. In my enthusiasm I think I said it focuses on rail, but of course all those passengers are part of its work. However, I point out that all those activities are funded in non-specific terms.

Passenger Focus is given sufficient funds to discharge all its responsibilities and we expect it to do exactly the same for roads. It is not usual for government to make commitments of this kind in statute and we struggle to see why this should be a special case. To assure your Lordships in more practical terms, officials in the department are already making arrangements for a long-term funding settlement. I would expect sufficient funds to be made available for “Road User Focus” to represent road users of all types effectively.

With the assurance that the same kind of approach would be used as we already use for Passenger Focus and that it would be funded by the Government, not by the industry, I ask the noble Lord, Lord Whitty, to withdraw the amendment.

[Lord Whitty]

My Lords, at least we have on the record the assurance that it will be funded—and, one hopes, on a forward-looking basis. I will consider the implications of that but, for the moment, I beg leave to withdraw the amendment.

Amendment 43 withdrawn.

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Moved by

[Lord Whitty]

53: Clause 9, page 6, line 20, at end insert—
“(c) proposing regulations and enforcement powers governing the activities of the Strategic Highways Company”

[Lord Whitty]

My Lords, I shall speak also to Amendment 58 in this group.

The first amendment is to make clear that the ORR, or whatever we end up calling it, will be a regulator as well as simply a monitor. I said earlier that we needed something equivalent to the ORR, which monitors the rail network, to be applied to the road system. There are areas of a strategic road system that need to be regulated. They include safety records—I declare my interest as chair of the Road Safety Foundation. They also include environmental performance in relation to all sorts of things such as carbon emissions, air pollution, water runoff and so on. Someone needs to be regulating specifically the strategic network, which is seen increasingly as a system. It has hitherto been subject to either general regulation or specific regulation by the Department for Transport.

It is important that the new body, as it extends its role into roads, is seen to have as powerful a leverage in that area as the ORR does in rail, to achieve the excellent levels of safety that we have achieved in the railway system in recent years and to ensure that the strategic network continues to make substantial improvements in the safety record on the highways network. If the Government maintain their line that the monitor is not a regulator, then it is not just a question of symmetry between the different modes but a question of the effectiveness of the Government’s role in relation to the strategic transportation system within England. The ORR-plus needs to be given that clear role.

As to my second amendment, I suspect that I shall get from the Minister the same answer that I received in relation to the Passengers’ Council’s funding. It is important, though, to recognise that this situation is unusual. In energy, water and telecoms the money comes from the regulated industry. In her response on the issue of funding for the Passengers’ Council-plus, the Minister said that it would come from the Government. I assume that I am going to get the same answer in relation to the regulator/monitor.

It is important for the Government to recognise that this is unusual, and someone sitting in the Treasury probably realises that. On reflection, I still think that this should probably be a matter for the user organisation, the watchdog, if such a provision were to be written into the legislation. Some future Chancellor, of whatever party, may ask: “Why are we, the taxpayer, paying for this in relation to transport, when in all the other regulated sectors it is the industry that pays for it?”. In the great scheme of things, the Treasury, wearing another hat, regards all this as taxation because it is a mandated levy on the industry, but in terms of the impact on the general expenditure of the Government it is in a different category. It would therefore be useful not only to have on the record the Minister saying that that is how this body will be funded but, for added certainty, to put something like that in the Bill. I beg to move.

[Lord Davies of Oldham]

My Lords, I have amendments grouped with those of my noble friend Lord Whitty, and I agree with a great deal of what he has just said.

Amendment 54 is my chief amendment and is designed to ensure that the monitor focuses not simply on the financial cost of the strategic highways company’s activities—that is, the bill to the taxpayer for the SHC—but on its wider non-monetisation impacts such as landscape, biodiversity and social distribution. We need breadth to the monitor’s analysis of the performance of the company. The text is based on guidance in the Treasury Green Book on appraisal, so I am merely suggesting that where the Treasury thinks that the proper appraisal of an activity should include these features, I want them to be included when considering the SHC.

The other amendment in the group is a minor one about removing all exemptions in documents. We do not see why these powers should be restricted in the documents that are made available, but that is a relatively minor aspect. Amendment 54, however, is of considerable import.

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On that basis, I hope that the noble Lord will feel happy to withdraw his amendment.

[Lord Whitty]

My Lords, I have found this discussion a little bizarre. Earlier, I felt that my noble friend Lord Hanworth—obviously very unusually for him—exaggerated the difference between the ideologies of the Government and of this side, but in fact, taking what the Minister has just said, he was understating the case. We are looking for a more efficient strategic transport system and the Minister is resisting any degree of integration of the different parts of that system, or even the application of the same criteria to the different parts of that system.

These amendments, and my amendment at the beginning, are about expanding the ORR. She is right to say that Ministers set the policy, but it is also the job of the regulator to ensure that that policy is carried out. Whether you call it a regulator or a monitor, that is its job. If we are looking to have the best outcome at the lowest cost, it is the job of the monitor/regulator to ensure that that is what is being achieved, and to do that you have to look at both modes. As far as possible, you have to have the equivalent approach to both modes, given the differences that the Minister rightly outlines in the ways in which the two sides operate.

If, for example, there is a proposition for expenditure on improving the A303—one of my favourite roads, as noble Lords know—and the M5 to the south-west, it is a nonsense to do that in strategic terms without also looking at the capacity of the various routes from London or Bristol to Exeter. If you are looking at the M6, it is daft to look at that without also looking at the west coast main line north of Crewe. If you are looking to make maximum return, from the point of view of a road user, a rail passenger or government expenditure on the rail network, then you ought to be bringing together both aspects. I thought that the Government’s logic in setting up the ORR to cover both aspects was exactly that, but I am now confused.

[Baroness Kramer]

For clarity, is the noble Lord saying that it is his advice to his party that those decisions should be transferred to the ORR rather than remaining with the Secretary of State and the Government of the day?

[Lord Whitty]

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

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

[Lord Bradshaw]

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

[Lord Whitty]

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

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

Amendment 53 withdrawn.

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Moved by

[Lord Whitty]

59: Clause 10, page 7, line 11, at end insert—
“( ) Where a transfer involves staff or obligations and liabilities to staff, either the Transfer of Undertakings provisions shall apply or equivalent provisions will apply.”

[Lord Whitty]

I am sure that the Minister will have no difficulty in accepting Amendment 59 because I think she said in reply to one of the first of our amendments that for any transfer of staff out of the Highways Agency, the DfT remit to civil servants would be covered by TUPE or its equivalent. For reassurance to those who are involved in this, it would be jolly useful if that was reflected in the Bill. I say that because there is some anxiety and different situations have applied in a few—not many—as a consequence of the Public Bodies Act 2011. It should be made clear that that will be the criterion. It would provide a reassurance to the staff and their trade union if it were in the Bill. I beg to move.

[Baroness Kramer]

My Lords, I will resist this being put into the Bill because it will be in the supporting documents. The transfer is an important stage of setting up the strategic highways company. Discussions with staff representatives relating to the transfer of staff have already begun and, subject to the will of Parliament and Royal Assent, it is envisaged that staff will transfer to the new company from 1 April 2015. The Government have already stated that the terms and conditions of employment of those staff who transfer into the company will be protected in accordance with wider Government policy and practice on staff transfers within the public sector through COSOP, under which the Government are expected to apply the principles of TUPE. I can therefore reassure the noble Lord that the terms and conditions of employment of any staff being transferred from the Highways Agency to the new company are protected.

Furthermore, under the Public Service Pensions Act 2013, public service workers who are transferred out of the Civil Service will be able to remain members of the civil service pension scheme. Most Highways Agency staff are in the Principal Civil Service Pension Scheme. I hope that that is sufficient reassurance for noble Lords and I therefore invite the noble Lord, Lord Whitty, to withdraw the amendment.

[Lord Whitty]

My Lords, I thank the Minister for putting that assurance on the record so clearly. I never quite understand why Ministers resist putting such provisions in a Bill. This is a fairly substantial piece of legislation which includes all sorts of things, but the one thing which is to be omitted is an assurance for those people who will be most directly and immediately affected by the changes to the institutional structure. I regret the continuing resistance by Ministers to setting this out in the Bill, but I accept that that is the way things are at the moment. With the Minister’s assurance, I beg leave to withdraw the amendment.

Amendment 59 withdrawn.