Infrastructure Bill [HL]
Lord Whitty Excerpts(11 years ago)
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Lord Whitty
“(3) The company designated under this section is called the Strategic Highways Company.
(4) The designated Strategic Highways Company shall not cease to be wholly owned by the Secretary of State unless by Act of Parliament.”
Lord Whitty (Lab)
My Lords, I apologise to the Minister and the Committee that I was not here for the previous bit; I am afraid that I am boxing and coxing with the Chamber at the moment, and have probably already offended the rules of the House by nipping out during the Minister’s reply to move this amendment. Some of this amendment is relevant to what noble Lords have just been discussing on the previous amendment. Indeed, the first part of my amendment is a consequence of trying to clarify that we are talking about only one company and not several. That confuses people, particularly in local Government, who anticipate a degree of regional structures down the line. I know that the Minister will have cleared up some of that.
My second point relates to the issue of privatisation, of which the Minister was speaking when I came into the Room. Clause 1(3) of the Bill as it stands is branded as the way in which privatisation is prevented by the Bill; namely, that the designation would terminate if the company were sold or otherwise disposed of. To me, that seems a funny way of doing it. You will have a company which employs all the people who are at the moment employed by the Highways Agency. If it were somehow to be bought, all its duties would be removed. Surely it is far easier to give some parliamentary control over this process. If we are moving to a hived-off company, structured under the Companies Act but owned wholly by the state, and if it is the intention of the Government to keep it that way, why do we not state baldly in the Bill that it cannot be privatised except by primary legislation? That is what is proposed in the second part of my amendment. It may not be ideal, but it is a good deal better and clearer than what is in the Bill.
There are clearly worries. The first thought of most people when they heard that the Government were going down the road of hiving off the Highways Agency was, “This is the first step to privatisation”. There was alarm at that. There might have been in some quarters—but not ones that I have come across—some joy at the prospect, particularly were it to be related to road pricing, which in principle I do not oppose but is politically rather difficult for any of us to support, particularly a few months off an election. It is easier to assert the will of Parliament and say, “This is not privatisation. If there is any prospect of that changing, you will need a new Act of Parliament”. That is what my amendment proposes. I beg to move.
Lord Berkeley
I support my noble friend’s amendment. I am glad that he is here, because I am not sure that any other of us could have moved it. He did it very well. I want to compare this situation with what is happening to Network Rail, of which I declare an interest as being a member.
I have just come from a meeting with Network Rail where we have been told what is going to happen by 1 September, when it comes under government ownership. That sounds as if it is going to be quite easy, apart from changing all the memoranda and articles and allowing the Secretary of State or the accounting officer in a department to make certain appointments and control things. However, that is being done without much, if any, parliamentary scrutiny, because I do not think that anybody is particularly worried about it. Network Rail has been in the private sector up to now, but it has had £4 billion or so a year from public funds. It has managed to work and not cause trouble; otherwise, this would probably have happened sooner. However, there still have to be changes. I worry about it going in the other direction. As my noble friend Lord Whitty said, the consequences need some public debate, because there might be many more people who are worried about it, not least the people who work for the new company while it is government owned. It is reasonable to have some parliamentary scrutiny of a change. Therefore, I support the amendment in his name.
Baroness Kramer
My Lords, I will indeed enjoy responding to this amendment. It would seem from the speeches I have heard that our purposes are the same. The question is: whose language does it better? In this case, I go with the language in the Bill, which is rather more efficient in that it does not require an Act of Parliament to, as it were, “gut” the highways authority should it cease to be owned by the Secretary of State; it just does it. Obviously, if such a thing were to happen, we would put in place a transitional process to bring the staff back over; those kinds of things would only be sensible. The language in the Bill achieves what the noble Lord, Lord Whitty, intends but does it rather more effectively than the subsections he has designed. Let us go for quick action and ensure that we have the maximum strength, which we have in the Bill. I therefore ask that the amendment be withdrawn.
Lord Whitty
Well, my Lords, I am not totally convinced by the Minister and I suspect that casual readers of the Bill would also be a bit puzzled by the way that this is put. I fully accept the assurances on the Government’s intentions but the wording could be clearer—it probably could be clearer than mine. We need to understand that were there ever to be any change of ownership, Parliament would have a say, which is the key point of my amendment. However, I take what the Minister says as being the Government’s position. The substance of the matter is not in dispute. Perhaps her officials could look at the wording again at some point so that Parliament is written into that process somewhere.
Baroness Neville-Rolfe (Con)
My Lords, I regret that I was not able to speak at Second Reading, owing to other commitments. I associate myself with the noble Lord’s question about costs in relation to the new company.
I also have another question: will this new company be able to raise money in a way that the Highways Agency is not currently able to do? That would of course potentially enable important infrastructure investments to go ahead even in times of stringency. I also associate myself with the comments about the A303, having lived off the A303 all my life and having seen probably 50 years’ worth of proposals for Stonehenge—none of which has so far come to fruition.
Lord Whitty
My Lords, I support the proposal that Clause 1 should not stand part of the Bill, as it queries whether the clause—which is the whole proposition here—is sufficiently coherent and clear as to what it intends to do. As a Roads Minister, I was responsible for at least one of the proposals for the A303 and remember that we talked to everybody in the community, including several different sets of druids, and told them that the Stonehenge tunnel would be built. However, as I said at Second Reading, no sod has yet been turned and all they have done is close one road.
I understand the Government’s intention to create a steadier position through having a slightly more arm’s-length relationship, but this is half-baked. It is neither fish nor fowl. This will be a company that is wholly owned by the Government and which—to address the point that has just been made—cannot raise its own money. The Minister has made that clear to me, both in writing and in person. I thought the main advantage of having the hive-off would be that the body could raise its own funds, even if subject to broader controls from the Treasury, but the Minister makes it clear in her letter that its situation will be no different to the current one of the Highways Agency. That seems to undermine the main advantage of establishing an arm’s-length body. The Government’s proposal incurs all the costs, all the confusion and all this great legislation in the Bill and all the schedules attached to it, but it does not, of itself, provide the funding, the strategic intent or the independence from Government and, crucially, from the Treasury. It will not avoid what has been a stop-go process for the past 30 years.
If the Government were proposing a new corporation that was properly set up and run and which, although still owned by the Government, had its own structural basis and accountability, as well as the ability to finance its activities in various different ways, I could see that there would be a significant advantage. With this halfway house, which is not even a halfway house, I see very few advantages. Therefore, I think that the Government would be more sensible to leave the Highways Agency where it is, give the agency more money and give that over a longer period of time—if that is the Government’s priority—and, if necessary, think up a fuller, clearer, more comprehensive proposition for what kind of highways organisation we need in this land. The answer to that might well be in the territory that my noble friend Lord Davies referred to, because what we perhaps actually need is a transport infrastructure company rather than one that deals with simply 2% of our roads.
If we were to do that, we could start to deliver the investment required for a genuinely integrated transport policy, whereas the Bill, as I am afraid I have said before, seems to be about changing the names on the doors without changing much else.
Lord Berkeley
My Lords, I would just like to ask the Minister where this figure of a £2.6 billion saving comes from. The two organisations Network Rail and the new strategic highways company will be quite similar, but one difference between them, which we will come on to in later amendments, relates to the role of the Office of Rail Regulation. Over the past 10 years, the Office of Rail Regulation has required Network Rail to make savings of about 60% of its turnover. That is quite a big saving, which has been achieved, while keeping the service going and the quality improving, because the regulator has very strong powers. If the savings are not made, or if the resulting performance of the network is bad, the regulator can fine Network Rail, as I believe it is planning to do next week.
The problem here is that the rail regulator will not have such powers over the highways authority but will simply monitor. You can sit monitoring things all your life, but you cannot incentivise or require an organisation to make the changes that it should. I am sure that there are changes to be made. I am sure that significant percentage savings could be made over quite short periods. On whether those would be the same as in the case of Network Rail, they probably could be, because Network Rail started off as a nationalised industry, which was probably pretty inefficient to some people. Although the Highways Agency has improved over the years, there is probably a long way further to go. However, unless we can get the ORR to have the same powers not just to monitor but to control and enforce cost reductions, I am not quite sure where we are with this.
Listening to other noble Lords, I am beginning to think that the only benefit from this that I have heard is the idea—which the Minister has, of course, denied—that the Bill is about getting the Highways Agency ready for privatisation.
Lord Whitty
“( ) The Strategic Highways Company shall be responsible for the construction, improvement and maintenance of the strategic highways network for which it is the authority; and for the management of safety of that network, the development of traffic management and speed control systems on that network and for meeting objectives for reduction of emissions of greenhouse gases, pollution of water run-off, air quality and other environmental objectives and for engagement with private and commercial road users and with local communities.
( ) The Strategic Highways Company shall have responsibility for research and development in the fields of road construction and maintenance, traffic and safety controls and telemetric information on its network, and in so doing, the strategic highways company may contract to or enter partnership with other organisations.”
Lord Whitty
My Lords, Schedule 1 is 26 pages long. It is devoted almost entirely to inserting in the Highways Act the name of the company rather than the Secretary of State, or vice versa, and a lot of other administrative matters relating to assets, contracts and so forth. What it does not do—and I think it should—is to describe the responsibilities of the company and the scope of its activities, to which my next amendment relates.
This amendment is a shot at describing what I think will be the responsibilities of the company. This is Committee stage and, therefore, I hope that the department might accept the principle and draft a better description. However, essentially, somewhere in the Bill—I would prefer it to be in the body of the Bill rather than in a schedule, but the schedule is where the detail on the new company is spelt out at the moment—it should state what the functions and responsibilities of the company are.
The amendment refers to the obvious things: the construction, the maintenance and the improvement of the road system; traffic management for that system; and safety for that network. When I mention safety, on which I have amendments later on, I should inform the Committee that, since Second Reading, I have acquired an interest in this area in that I am now the chair, taking over from my noble friend Lord Dubs, of the Road Safety Foundation. Some noble Lords may recall that safety was a significant element when I was Roads Minister. Certainly, it is underplayed in this Bill and should be an important part of it, as are traffic management, speed controls, and so forth.
There is also the environmental dimension. There are problems about the construction and operation of roads. Somewhere in this Bill we need to say more clearly that the company, and not the Secretary of State any more, is now responsible for the environmental impact of the roads which are run by the Highways Agency. That includes the level of emissions which traffic management creates and whether that is going down and making a contribution to our carbon saving. It includes also the level of air pollution, which is largely proportionate to congestion and which, again, the Highways Agency network should be making a contribution to, as well as other things which are not perhaps so obvious, such as the run-off of water from highways, which has a significant effect on water systems—we have just passed a Water Act in which the quality of water is an important issue, including that of groundwater. Although most new schemes provide some better storage and diversion of water, from a lot of the old roads it still goes back into the ground or into the water system.
The amendment also refers to another responsibility, which is for research and development. I think that I am right in saying that the Highways Agency has its own R&D budget, but the Department for Transport also has a roads research budget. Is the whole of R&D on roads now to be the responsibility of this new company, which would probably be quite sensible? The Bill needs to be clear that the R&D on roads, traffic and the impact of roads is one of its responsibilities. A final dimension of the responsibilities that I am suggesting is the necessity to engage with road users and local communities, and the ability to enter into contracts with other providers. We will come later on to issues of co-operation with local authorities, and so forth. A key responsibility will be relations with road users themselves.
This amendment is my shot at this issue. I suspect that there could be a better one—but it is rather odd that a whole new nationalised infrastructure corporation should be established without the primary legislation saying anywhere what its responsibilities are. Therefore, I beg to move.
Lord Berkeley
My Lords, I support my noble friend in his Amendment 4, and I shall speak to the other amendments in this group. On Amendment 4, he is absolutely right. The strategic highways company needs to have responsibility for all the things that he has put in the amendment. I remind the Committee that there is very strong evidence that a month or two before the Olympics, when the air pollution on one or two of the trunk roads in London was reaching Chinese levels, the solution by the Mayor was to cover the monitoring points with plastic bags, which of course reduced the level of pollution inside the plastic bags but did not much help anybody else. But this needs to be done by the strategic highways company, and I would suggest that it needs to be supervised by somebody. That may be a role for the Office of Rail Regulation, or whatever it is to be called in future, because these are very important points.
My noble friend is right in his comment about research, but there needs to be some research into non-trunk roads, which are a very large part of the road network. I hope that that can be taken into account as well.
Amendments 6 and 7 relate to the 20 pages of consequential amendments to which my noble friend referred. It relates to something that may have got lost in the search for consequential amendments—the Environmental Protection Act 1990 and the question of which body is responsible for collecting litter on different roads. These two amendments are designed to make sure that the strategic highways do not get left out of the wrapping up; otherwise, we will see them covered in litter from head to foot.
I shall not read out all the parts of my amendment, because everybody can read them, and it probably would not make much sense anyway—unless you put a wet towel on your head.
Finally, my noble friend did not mention Amendment 61, which follows on from Amendment 4 and is to do with the transfer of additional functions to the strategic highways company in Clause 13(2). It covers highways and planning, but I agree that it should cover road safety as well, because that is a terribly important part of it. We will talk about safety comparisons later, but it would be good to see road safety in there, or something like it.
Baroness Kramer
There was a Written Ministerial Statement when the documents were published, so I hope that some people have found them through that route.
Let me just provide slightly more detail. We intend to share draft documents such as the framework document later in the autumn, so as the Bill progresses we will be publishing them in draft form. The point that I was making is that you cannot go to final form until you know absolutely everything. It would be presumptuous for us to go to final form before the Bill had been concluded.
Lord Whitty
My Lords, many of us probably share some of the frustrations of the noble Lord, Lord Jenkin, as there were a whole batch of documents there before Second Reading. Basically, those were the White Papers or quasi-White Papers from the past year or so—they were about an inch thick. I have seen the documents, but the document to which the noble Lord, Lord Jenkin, referred was not one of those. Although I have seen that document, I am not sure how I got it. More importantly for the Minister’s answer, I have not seen the draft licence. I do not know whether other noble Lords on the Committee have seen the draft licence. If she is relying on that to explain why we do not need my amendment and the amendments of other noble Lords in this group, I am afraid that I am in the dark on that.
There is a point of principle relating to the licence. In other regulated structures, the licence is issued by the regulator. In some cases, what the licence should cover is specified in primary legislation, while in other cases it is not. In this case, the Secretary of State will issue the licence because, as my noble friend Lord Berkeley said earlier, the ORR’s role is as monitor not as regulator. We will come back to that. It is a responsibility of the Secretary of State, and therefore it ought to be clear in the legislation what should be covered in that licence. If the licence is the means for achieving the aims, that is fair enough, but we need to know what the scope of the licence will be, at least in broad terms. Preferably, that should be in the Bill.
Indeed, even more basically—without wanting to repeat myself, and although this is probably a criticism of legislation more broadly—we are setting up a new organisation here in legislation which has references to pre-existing powers and pre-existing responsibilities. If, in a year or two’s time, anyone wants to know what the basis is of the strategic highways company, there will be no point in their looking at this Bill, or Act as it will then be. Surely, the function of legislation is to make clear, first to Parliament and then to the cognoscenti afterwards, what the role of any new institution that Parliament sets up really is. In my mind, that means that it should specify at least in broad terms the responsibilities and scope of the new publicly owned organisation set up by Parliament. All my amendment suggests is that we should put something in the Bill.
Lord Whitty
Lord Whitty
My Lords, I am sorry, but this is something else that I think should be in the Bill. It does sort of follow from the clear statement by the Government that we will have only one strategic highways company, in which case it should surely be made clear that the scope of its activities covers what are currently Highways Agency roads in England. At the moment, that is not clear—and I think that I am right in saying that it is also not necessarily the case. Tolled roads will remain the responsibility of the Secretary of State, and some of those tolled roads, such as the road that I still call the Birmingham North Relief Road—the tolled M6—come under the general jurisdiction of the Highways Agency, although the company that runs the tolled M6 operates it and, of course, collects the tolls for it. So the exact jurisdiction of the company needs to be made clear. That is not to say that all the roads that are currently under the remit of the Highways Agency should always remain so. One can alter that later.
There may be some local roads that should be transferred into the company and there may be some roads in the margins of the Highways Agency’s slightly odd portfolio that should really be local roads, in the general demarcation between the two. Ministers and the Secretary of State would still have the possibility of changing those roads but it should be clear that this Act is shifting what are currently Highways Agency roads into the new company—full stop. That is what my amendments in this group provide for, with Amendment 9 saying that it is “the whole of England” and Amendment 10 saying that, in the first instance, they will be Highways Agency roads. I beg to move.
Lord Davies of Oldham
My Lords, I support my noble friend’s amendments, and shall speak to the two amendments in my name. Amendment 11 is a probing amendment; I want to know where Wales fits in. It is the only reference to Wales that I have seen in the Bill and I would be grateful if the Minister could make it clear where Wales fits into any possible consultation process with regard to the authority.
Amendment 12 is pretty self-explanatory on the necessity of consulting with local highways authorities in the areas that they cover on the structure of the organisation, the appointment of a representative of local highways authorities as a non-executive director of the board, and other matters decided by the Secretary of State. It is clear that for consultation to be remotely effective there has to be some representation of the local highways authorities.
As the Minister is all too well aware—the Committee need not dwell on this point for any length of time—important though the motorways and trunk roads of England are, local authorities still carry most of the traffic and, of course, are responsible for the majority of the roads. It is not conceivable for a scheme for a road of such significance to be developed and work to be done on it without the local highways authorities being involved. We are all well aware that if there is the most minor interruption on some of our motorways and other major roads, cascades of traffic fall upon the local roads. Those local roads bear the brunt not just of the difficulties of that day but of the ongoing costs as a consequence of excessive use of them; they are often not designed for the volume of traffic that is diverted on to them.
I am sure that the Minister will be at pains to emphasise that nothing will be done without consultation with the local highways authorities. My amendments seek to make that explicit in the Bill.
Baroness Kramer
My Lords, before I begin, I have now had confirmation that the documents that we have been discussing were deposited in the Library, so we hope that they will be available in that form for those who prefer not to have to wade their way through the websites. I understand how frustrating websites can be, and the Library is always such an excellent source.
Amendments 9, 10, 11 and 12 cover a range of issues. We have always been clear that there can be one company or more than one company, and we discussed that issue extensively earlier, so I will instead focus on the other issues raised in this grouping. The appointment of the SHC will make it clear which roads will transfer to the new company. As we previously stated when we consulted, and in response to that consultation, there will be no change in arrangements for those roads that currently fall under a concession agreement.
In answer to the noble Lord, Lord Davies of Oldham, the Secretary of State currently has residual responsibility for some roads on Welsh territory—not all were devolved—but these are in relation only to the Severn crossing. The current policy intention is that these roads should legally remain the Secretary of State’s responsibility, and we do not anticipate including these highways in the first appointment of a strategic highways company. However, the clause allows highways within Wales to be included in a company’s appointment if its area of responsibility is adjacent to Wales. Given that these are current responsibilities of the Secretary of State, it is easy to see that in future it might be considered appropriate to provide that a strategic highways company should be entrusted with all the Secretary of State’s highways authority functions, so we are providing for the flexibility to do that in this Bill. To do otherwise would risk the possibility that the Secretary of State would need to retain a small amount of executive competence to act as a highways authority for a few roads in Wales, which, frankly, would be both disproportionate and inefficient. To be clear, the power to appoint the company as a highway authority can be exercised only in respect of roads for which the Secretary of State is the highways authority immediately beforehand. This power could therefore not be used to give the company a wider role in respect of highways in Wales.
The strategic highways company will be a highways authority and it will be required to co-operate with other traffic authorities under the Traffic Management Act 2004, keeping traffic moving under the provisions of the network management duty. There will also be a duty in the licence—again, I recommend that draft document, which will, I hope, be more easily available—to co-operate and consult with local authorities in the planning and management of their networks. There are important, ongoing obligations on the company that will help ensure that, in the years ahead, co-ordination and co-operation between highways authorities increases the benefit to road users generally.
The Department for Transport has already consulted on these proposals, and local highways authorities gave their views during that process, as did other interested parties. At this point, further consultation would simply delay the implementation of measures on which there has already been extensive consultation. In the light of that, these amendments are unnecessary. Under those circumstances, I ask the noble Lord to withdraw his amendment.
Lord Whitty
My Lords, I apologise for missing my cue. The department needs to think a little about how this is presented. The points raised in these amendments need to be addressed somewhere in the Bill. There is currently no core to what this organisation is about, in terms of its range of assets, function and responsibilities. That may be in the document to which the noble Lord, Lord Jenkin, referred, and of which we may see a draft before we complete proceedings on the Bill, but it needs to be in the Bill. The department needs to rethink this a bit. We are not talking about several pages; we are probably talking about two clauses. Will the Minister at least ask the department to look again at that and the related points raised in the debate on the earlier amendments? I withdraw my amendment.
Baroness Neville-Rolfe
My Lords, I agree with the point made by the noble Lord, Lord Berkeley, about cross-modal being an important issue. There is a later amendment on the need for co-operation, on which I am sure we will agree. I have some concerns about the notion of duty in that context, because duties impose rights and that can lead to problems. I am also not sure that rail is necessarily the model for road. I always think that when you are looking at a regulatory framework, judgments need to be made in respect of the sector that you are looking at. You need to be careful that they work for that sector, and circumstances are different.
That leads me to my main point. I am always concerned about perverse effects. The clause that is the subject of Amendment 13 could have some quite perverse effects, particularly if it were introduced in this form. Duties, effectively, are like legislation and will give rights, and rights can then generate judicial review, and you could have arguments about whether particular things are sustainable or not. You could then make this process a lot more complicated and expensive, and it would not produce the better agency that is the purpose of the Bill. Will my noble friend comment on this aspect of the proposed amendment?
Lord Whitty
My Lords, I have tabled Amendment 40 in this group on precisely the subject of the duty to co-operate. This very much builds on the Localism Act, under which local authorities have a duty to co-operate with each other. I understand that part of the department’s argument on this will be that the new company—the present Highways Agency—is already a traffic authority and a highway authority and is therefore covered by the Localism Act’s provisions. I am not sure whether that is entirely clear. If it is, then some of the objections that the noble Baroness, Lady Neville-Rolfe, referred to would have to apply to the Localism Act as well. If that is the case, can we somehow cross-refer to it?
The Highways Agency has only 2.4% of the road mileage of the country. All of its roads create traffic for the local network and all of the local network piles out on to the motorway at various points. Sometimes the most congested areas of the motorway are congested largely because it is being used as a local road by people for just two exits. There is an important need for the Highways Agency and the traffic authorities to co-operate and that needs to be reflected in the Bill.
However, in view of the environmental and safety aspects, there is also a need to co-operate with the safety authorities and with the Environment Agency, which is concerned with emissions, air pollution, water run-off and so forth. The HSE’s duties on the roads will relate only to employee drivers, but it does have some, and there must therefore be a cross-over.
We have briefly mentioned the interface with Wales. Obviously, at the far end of the network there is interface with Scotland as well, and there needs to be some co-operation with the devolved Administrations. I also referred to the police and traffic commissioners because, in practice, a lot of the traffic management of the Highways Agency is conducted by the police. Therefore, the police should have at least some mention here, although I am not entirely clear whether the duty to co-operate under the Localism Act actually covers police authorities as well. In one sense, even if it does, we should cross-refer to it.
Lord Davies of Oldham
My Lords, I want to reinforce the points that have already been made in terms of some definitions of obligations and duties as far as the company is concerned. Amendment 15 would ensure that the road investment strategy outlines its social, economic and environmental objectives. The Government’s draft national policy statement, published recently, sets out the policy against which the Secretary of State will make decisions on applications for development consent for nationally significant infrastructure projects. The application should include guidance on mitigating environmental and social impacts and plans to enhance environmental benefits—objectives to which I am sure we would all subscribe.
However, the Bill references merely the strategic highways company’s “objectives”, without giving the new company a clear direction on how the road investment strategy will aim to ensure that its activities are carried out with the intention to provide benefits to society, the economy and the environment. For example, the strategy should incorporate an estimate of the impact on UK carbon emissions of building more roads infrastructure. It is inconceivable that we would have a perspective on such construction without having some assessment of the issue of emissions. It surrounds all aspects of aviation at present and it cannot be anything but an important issue, as far as the public are concerned, for roads.
Lord Whitty
Lord Whitty
We now come on to the strategy and, by implication, the money. The Government have commendably said that they want a steady strategy that is going to last some time, with an allocation of resources against it. That in itself is highly desirable, but it is not so dramatically different from the various road programmes that have existed in the past and have been subject to sudden change, as the Minister said, mainly because of changes to financial arrangements but also because of planning delays and technical problems with the projects when they go beyond the initial feasibility study.
The national infrastructure plan, which has a lot of roads in it, broken down on a regional basis, is presumably going to be built on and represented as the strategic highways plan, and there will be a five-year programme of money attached to it. My Amendment 14 attempts to ensure that that five-year view is reflected in the Bill. The Government have made quite a lot of the five-year thing, but although I have not read every word of Schedule 3, I do not see it in the Bill. There are arguments as to whether five years is enough, given that it takes that long even to get anywhere near starting, but the five-year funding has been an important plank of the Government’s selling of this project, and I think that it should appear somewhere in the Bill.
My wording may not be quite right, but I think that it should be a rolling five-year programme, so that in year 3 you are still looking five years ahead. You would add to it, and you would add the financial commitment related to it at that point. My wording does not exactly say that, but that is what I am after. If the department can find better wording, that is so much the better. However, we should at least write into the Bill the embedding of a minimum five-year view and that it should be on a rolling basis and have money attached. Otherwise, a lot of the rationale for this whole exercise disappears. That is what Amendment 14 is about. The Government have made a start with the designation of projects within the national infrastructure programme and can turn that into a highways strategy, and the Chancellor has made the commitment for these five years.
The Government seem slightly naive in their confidence that the Treasury will never revisit this because it is now an arm’s-length company. The past 50 years have seen cuts to the money that has gone to private companies, to nationalised corporations and to local authorities. The fact that they are arm’s length from government has not stopped the Treasury deciding at particular points to change what it had previously—in effect—promised. So far nobody has managed to sue the Chancellor for that; I doubt whether it will be any different under this new arrangement. That may be a bit cynical. As the Minister said, it would be more embarrassing to do that, but my experience of Treasury Ministers and Treasury officials over the past few decades does not indicate that they are easily embarrassed. Indeed, interfering with other departments’ clear priorities is the way that the Treasury works, rightly or wrongly. Therefore, the benefits of having an allocation for five years can be exaggerated. Nevertheless, it is a desirable aim, and it is desirable that we know for those five years what projects are there and what stage they are at. Since it is a rolling programme, moving from feasibility study to planning, to precise engineering design, to the start of digging and through to actual completion of the road, it is desirable that it should appear in a five-year perspective. Before we finish the Bill, I hope that a form of words can be adopted that makes sure that that is reflected in the Act. If it provides a bit of embarrassment to future Treasury Ministers, so much the better, and so much easier will future Transport Ministers find their relations with the Treasury.
My Amendment 16 raises the broader issue of strategy. We have an infrastructure strategy but not a specific transport strategy. It needs to be made clear how the roads strategy, or highways strategy, fits in with the broader transport strategy—rail, ports and airports in particular. The whole logistical structure and the balance within it in terms of our economy, what pressure is put on the transport system and what the regional balance and stress points are, need to be reflected in all modes and, indeed, different corridors need to be judged on a multimodal basis. If they are not, simply having a sacrosanct—or near-sacrosanct—roads strategy will deal only with part of the problem. My Amendment 16 relates to putting the roads strategy into that broader context. I beg to move.
Lord Jenkin of Roding (Con)
My Lords, it is my impression that this road investment strategy, and the commitments made to it by the Government, is perhaps the aspect of this Bill that has been most welcomed by industry, commerce and, indeed, all those who depend on transport for their operation. I have just been rereading what the CBI said about this, and it attaches enormous importance to the stability that the roads investment strategy is intended to bring.
It will be a long time before those of us who lived through it forget what happened in 1997 when the Deputy Prime Minister at the time, the noble Lord, Lord Prescott, decided that roads were much less important than a lot of other things and there was a massive stop to almost the entire road investment at the time. That is the memory that I have and the impression that the noble Lord gave at the time, and that memory will take a long time to disperse. The Bill, particularly this clause and the policy that lies behind it, has been greeted with huge enthusiasm.
The Treasury has ultimate responsibility for managing the economy as a whole. I can speak as perhaps the only former Treasury Minister in the Room, having spent four years as Financial Secretary and then Chief Secretary to the Treasury in the 1970s. One is always aware that at the back of any policy there has to be Treasury approval. In the interests of the economy as a whole the Treasury has to be able to say to a department, “I’m very sorry, we can’t afford that”. Here, though, the combination of the strategic highways company, the roads investment strategy and the commitments that the coalition Government have given on this must to some extent make a Treasury Minister think extremely carefully about how far it would be right to interfere with this—that would be a major decision.
Of course, these things often happen when there is a change of Government. What industry is looking for here, as we heard in the debate in the Chamber today from a number of speakers, is common ground between the major parties so that there are not massive changes of policy on matters of this sort, which have such a devastating effect on manufacturing industry—which is what we were discussing then.
Whether one needs to have what the amendment suggests at least every five years I would regard as questionable; it seems to add an element of uncertainty that the Bill does not have. There is a five-year review but I am not quite sure why this particular condition would need to be put in. I listened carefully to the noble Lord, Lord Whitty, and I have enormous respect for his expertise in this field because he was a Minister in the Department for Transport, or whatever it was called at the time, but the advantage that has been gained by publishing this policy in this clause of the Bill is that it assures the commercial side of this country that there is now going to be far greater stability in the long term. I am delighted that there is such emphasis on the long-term strategy for infrastructure building so that we can get away from these five-year single-Parliament policy decisions, which might put it risk.
I want to see this aspect of the Bill going through as effectively and swiftly as possible because it is what the country, particularly its commercial elements, have been looking for for a long time. I am going to look at not just this amendment but a number of the others that have been tabled—I was going through them earlier today—to see whether they would interfere with that aspect by raising doubts or putting additional bureaucracy or obstacles in the way of getting the strategy fulfilled. That is what one will need to look at very carefully. At the moment, as far as I can see, most of the Bill achieves what is wanted. I express my doubt about whether Amendment 14 from the noble Lord, Lord Whitty, would improve that; I suspect that it would add an additional obstacle and raise doubts that ought not to be there.
Baroness Kramer
I thank your Lordships. These amendments are fairly well honed around a question to the Government about whether or not they should produce a national strategy to deliver a sustainable transport system and, in doing so, align plans for the rail and strategic road networks. I ask your Lordships to hold back from that, and I will try to explain why. The Government genuinely care about ensuring that different parts of the transport network work together. We think that our overarching transport strategy reflects that. However, we are concerned about trying to get a single document that would articulate all that and yet allow the impact that we want from the kinds of changes that we are introducing today.
The noble Lord, Lord Berkeley, described some of the issues that come from having a fixed term of five years, as rail has. When the road investment strategy comes forward, I expect it to have a term in it. I would not be surprised if that was five years. But it would also be quite reasonable to expect that it might look at funding commitments beyond the end of that period in order to prevent the kind of hiatus problem that we have seen before when projects and programmes come forward.
We are looking for some flexibility around how we handle all this. However, it is far too early days to think about aligning road and rail strategies. They are both complex, and incredibly detailed. We are looking at a new company, which will have to work its way into the actual programmes it has. There may be a point later where we want to draw those two closer together. However, frankly, it would not be appropriate to try to make that part of the framework we have today. Therefore, the documents leave this very flexible, so that one could move in that direction if that seemed to make sense as we get practical experience on the ground of how the strategic highways company works and how it is delivering.
One can see certain problems. The noble Lord, Lord Berkeley, just pointed out to us that sometimes there is a pattern of investment within Network Rail’s five-year period. I would hate to have two aligned periods, one for road and one for rail, which exaggerated that pattern. Therefore, there are a lot of issues about how we would align and bring those programmes together. We need to allow that to arise out of experience rather than to be dictated in these documents at this point in time.
It is absolutely crucial that we achieve certainty of funding, which is the issue that the noble Lord, Lord Whitty, addressed. The noble Lord, Lord Jenkin, had an excellent set of responses to that. Would any Chancellor resist revisiting the issue? Well, it certainly becomes a sight more difficult. The legislation as constructed commits the Secretary of State to comply with the RIS, which includes the financial resources commitments which will be embedded in the RIS. As noble Lords look at the details of the legislation that sets up the RIS, they will see that an attempt to vary it triggers quite a process, including consultation. That is something that forces this to be a transparent and very determined and detailed decision. That is the appropriate way to go about putting on sufficient constraint without undermining what is in the end a democratic process. We cannot completely bind the hands and feet of all future Governments—that would be entirely inappropriate. However, we can drive in this direction where the institutional arrangements underpin and reinforce the idea of consistency and certainty. Frankly, that is what this document achieves rather well.
I therefore ask that we do not at this point try to narrow the scope to specific terms and fixed periods or try to get immediate alignment between road and rail. That is not where we need to be at this point in the process. The experience, as we bring into being the strategic highways company, will help either us or future Governments begin to determine whether there are benefits to be gained by greater alignment in the future.
The noble Lord, Lord Berkeley, asked whether this covers cyclists and walkers. It is absolutely clear in all this that the responsibility of the strategic highways authority is to road users. Again, I hesitate, and ask that we do not put in lists. When I had this discussion, someone chimed up and said, “You’ve got to say motorcycles, electric bikes need to have a separate category, and what about horses?”. We all recognise that “road users” captures everyone who makes use of the road, and frankly, that is a far safer definition than trying to make a list—someone also asked me, “What about Segways?”. I will say only, can we please stay away from the list on this? However, it is clear in my mind, and in the minds of everybody who has ever been connected with the Bill in any way, that cyclists, walkers and pedestrians are absolutely a significant part of the road-user community. I hope that with those assurances the noble Lord will feel able to support the relevant clauses of the Bill and to withdraw his amendment.
Lord Whitty
My Lords, I thank the Minister for that, and I thank other contributors. It is clear that the wording I have in Amendment 14 is not appropriate even for what I was trying to achieve, so obviously I will not be able to press that particular amendment.
However, I am a bit surprised by what the Minister says because the noble Lord, Lord Jenkin, is absolutely right that many in industry, plus companies involved in road construction, have hugely welcomed the announcement that there was to be some stability in funding. What they and I think we heard from Ministers was that there would be a strategy with projects listed in it and a near-guaranteed amount of money, probably for five years and possibly for as long as 10. That would obviously be of great comfort to industry as a whole, in using and depending on the roads, and to those who see their profit in having rather more road building which they could rely on, rather than a stop-start system. I do not think that the Bill reflects what they think they heard.
Clause 3 actually says:
“The Secretary of State may at any time … set a Road Investment Strategy … or … vary a Strategy which has already been set”.
That is not exactly a comfort of certainty and consistency. In fact, it gives carte blanche for the Secretary of State to change it every five minutes. Admittedly, that would be subject to the consultation arrangements to which the Minister referred, which come later on. However, it is not the degree of firmness that people in industry were looking for and thought they had on that. I referred to five years because I thought that is what the Government were saying, but I actually think that the rolling programme is better. It could be for seven years, or whatever, as even in the best of years the average time between deciding to build a road and finishing it is seven years. It is probably a little longer.
Baroness Kramer
I do not want this point to go unchallenged. I say to the noble Lord that I think the industry has heard absolutely correctly, but nobody I know in the industry believes that a Parliament can bind every future Parliament from thereon out and totally remove its democratic right. It would be inappropriate to attempt to do that and, frankly, I do not think it could be done, so it is absolutely crucial that we recognise that the Secretary of State can make a variance. It is not the intention of this Government that they will vary the RIS that they put forward, but I do not see that they can completely bind a future Parliament 100%. That is why the mechanism in place is to set a very transparent course—one could say an obstacle course—for any change or variance, so that it in no way would be done lightly. Perhaps no Government would do it lightly but it would be done with consultation and engagement, and with various steps in place. Industry has widely recognised that that provides it with a very substantial degree of certainty—enough to have the kind of positive responses to which the noble Lord, Lord Jenkin, referred.
Lord Jenkin of Roding
Perhaps I might add to that before the noble Lord, Lord Whitty, resumes. I have in front of me the British Chambers of Commerce brief. I want to read only one sentence from it. It says that,
“the transformation of the Highways Agency into a more flexible body, with five-year investment programmes”,
should offer,
“more certainty to business on key road projects”.
It is not expecting to have complete certainty and for this to be totally fixed over a period because it recognises the reality, as my noble friend has just said, that to some extent it has to reflect what is happening in the rest of the economy. What it welcomes is what it sees as the opportunity of much more certainty than we have had in the past.
Lord Whitty
My Lords, that is very realistic; nevertheless, the way that it has described the situation is more than is actually in the Bill. Some other form of words would give more certainty than the Bill does currently, as past changes show that there is a need for some protection. It may be that the obstacles—if that is how the Minister wants to describe the consultation—are one way of ensuring that it does not get easily changed. The other way is to put the strategy to Parliament and have to report to Parliament if you are going to change it. In some industries or sectors, that is done in certain respects. You have to provide a strategy and, if you change it, there is at least an argument in Parliament. These things change from time to time.
I am sorry to take up the Committee’s time, but I shook my head at the noble Lord, Lord Jenkin, earlier and I need to explain. I became the Roads Minister in 1998. In 1997, the Government inherited a roads programme from quite a good 1996 White Paper of the previous Government, which listed projects but did not list money attached to them. Projects got added in as we approached the 1997 election, by both parties, for reasons I will not go into. We therefore had a programme with far too much in it at the tail-end, and which did not have the right amount of money attached to it. The noble Lord, Lord Prescott, announced that he thought his aim as Transport Secretary was to reduce the number of cars on the road, and he was therefore not going to build roads which simply increased traffic. I know this well because we announced the roads programme in 1998, about four days after I became the Minister, so I take no responsibility for the decisions but I do take responsibility for the presentation. The majority of things which had been in the previous paper were back in, and then there were one or two more and one or two fewer—but they were all costed. A lot of those costings proved to be utterly inaccurate, most of the timings proved to be most inaccurate and one of the projects was indeed the A303 past Stonehenge, and we know what happened to that. Certainty is not easy in this area. We need a bit more certainty than we have here.
Lord Whitty
“( ) The activities, results and standards in subsection (4) shall include improvement of performance in network safety, reductions in carbon emissions, and improvements in environmental objectives as well as issues of traffic volumes, journey times and new and improved roads.
( ) A reduction in the number of accidents and the number killed or seriously injured on the highways network shall be a central objective of the Road Investment Strategy and shall be embedded at the level of design of the system, at the operational level of network management and in assessment of individual capital projects.”
Lord Whitty
All the amendments in this group are mine. This relates to exactly the sort of thing that my noble friend Lord Davies was just referring to. The Highways Agency consists mainly of engineers—quite rightly, and very good engineers many of them are. In the fringes, there are traffic engineers, as well as highways engineers. When you ask them to build into their projects objectives other than those which relate to providing more, quicker or wider roads, there is a bit of barrier, on occasion. Between them, the amendments are an attempt to ensure that when we take decisions on road improvements or new roads, issues of safety and the environment are built into those decisions on the same basis as any improvement in travel time, the number of miles of road which are tarmacked, or whatever.
The Highways Agency contains within it people who take those things seriously, but the natural tendency, particularly when we put the foot on the accelerator of spending on roads, is to get as many roads built as fast as possible and not worry too much about the complications. One big complication has wider implications for the rest of the project: safety. Earlier, I declared my interest as the new chair of the Road Safety Foundation. Every year it produces a map of European standards and the state of Britain’s roads. I have the map here if anyone wants to look at it. Those are standards which have been worked up by various equivalent bodies across Europe. It is right to say that our motorway system, in particular, is one of the safest in the world and is the safest part of the British— English, in this case—road system. That, of course, is calculated on the basis of vehicle miles and comparing them. It is also true to say that 250 people a year are killed on Highways Agency roads every year, and 2,000-plus are killed or seriously injured on those roads. That is a significant safety issue. Just to put it in perspective, more people are killed on Highways Agency roads, which are only 2% of our network—a third of the casualties because of the density of traffic—than the number of people who are killed at work. There are health and safety issues at work, for which we have a whole organisation, the HSE, to ensure that such accidents do not happen or are minimised.
The Government need to have an answer to the question of who is liable for those accidents. There have been big improvements in road safety in the past 20 years. When I was Road Safety Minister we had a 10-year strategy and, by and large, that reduced deaths and serious injuries by about 30% over that period. That improvement has slowed down a bit since 2010, but we are nevertheless one of the best and safest in Europe and the world. However, there are still a significant number of deaths and injuries.
If you try to establish the causes of those accidents, there is an assumption that it is mainly driver error or driver behaviour—and there is some truth in that. Much of the improvement over the past 20 years has been in improved vehicle safety. The Euro NCAP programme has raised certainly new car safety features from what it regarded as 2-star to roughly 4-star—air bags and other aspects of car design—which has had a major impact.
It is also true to say that at least for most groups there has been some improvement in driver behaviour, but there has not necessarily been the same improvement in safety features in the physical design of roads, nor has the improvement been reflected in the objectives of road-building organisations—principally the Highways Agency, but also the local authorities. The reasons for this are partly because it is thought that if you build a better road, safety automatically improves. It does not necessarily do so, and certainly does not improve proportionately. It is partly because the system for appraising new projects—whether they are intersections, main road widening or whatever—includes safety elements that are but a small proportion of the total cost and benefit. Additional safety factors are therefore discouraged by the way in which the projects are appraised.
This group of amendments, which also relate to environmental issues, attempts to write safety issues into different points in the Bill. I imagine that the Minister will not accept the amendments as they stand but I advise her and her colleagues that road safety is underplayed in the Bill. At various points in the Bill, explicit reference to road safety and reducing accidents needs to be reflected, as well as in the licensing conditions and the standards and objectives that the Secretary of State accepts for the new company.
My worry about the transposition in this context is that if a road design issue causes or contributes to the cause of an accident, who is liable? We do not get many legal cases about the state of the roads, and I do not know why. Thirty years ago we did not get many legal cases about the performance of the National Health Service; now we get lots of them. We get quite a few about tripping over the pavement, which is the equivalent responsibility for the local authority. If you have an independent company, the question of liability to potential litigation needs to be taken into account as one of the risk factors. I am not saying that it is a determinant risk factor, but it is something that the Government will have to have an answer to, and at the moment I do not think they do. One way of ensuring that that happens, in terms of licence conditions and the other oversight that the Secretary of State will have to perform, is to write safety in at several points in the Bill.
With regard to the detail of the individual amendments, Amendment 18 relates to the standards that the Secretary of State can set for the company. One of those standards should be a reduction in the number of accidents and the number of people killed, and that should be,
“a central objective of the Road Investment Strategy”.
Amendment 22 makes the point that I was just referring to, that when you appraise schemes, the appraisal for safety benefits or otherwise needs to be a separate assessment and not be lost in the overall assessment, because the return you can get on safety measures is often much higher than the return you get on time-saving and other economic benefits. Amendment 22 also goes into other issues of reducing traffic and so on, which also have high returns. It is the same in the energy sector: saving energy is actually a far greater return than spending money on new power stations, although you have to do both—as you do here. But if you appraise the environmental element separately, the rate of return is significantly greater. Therefore, that should be done as a matter of course.
Likewise, in relation to the strategy in Clause 2, Amendment 33 says that the objectives should relate not just to road-building but to safety issues, and that in relation to guidance due consideration should be given to road safety and environmental outcomes. I would particularly emphasise the road safety dimension.
These amendments may not be the most appropriate place, but before the Bill leaves this House it would be sensible for the Government and the department to find the appropriate place to put, in lights, “road safety responsibilities of the new company”. If we let it leave this House without that being clear—in several different places, I suggest—there will be a tendency for the company to at least downgrade those and for the accountability of the company to be weaker because they have not been spelt out in the Bill.
These are quite important issues. Sometimes those who are keen on having new roads regard safety issues as a constraint rather than an objective of road design. We need to ensure they are an objective both at the individual project level and in the overall strategy. I beg to move.
Lord Berkeley
My Lords, I support my noble friend. He has raised some very interesting challenges. I do not think that safety gets taken into account nearly enough in the design of roads. In my earlier life, I designed quite a few of them.
It might be interesting to compare how the roads have developed and how the railways have developed. There were some horrendous accidents on the railways in Victorian times, starting off with a Member of Parliament who got crushed by one of the first trains because he was standing too close to it, or something. That led to the introduction of the Railway Inspectorate, whose job it was to ensure that the railways were safe, bringing in things such as brakes, which are quite useful. Things have moved on a bit since then. The Railway Inspectorate was originally staffed by retired Army officers, but more recently it has moved to the Office of Rail Regulation, which is the right place for it. I think that it does a very good job. We will be talking about some of the issues around that when we discuss a later amendment.
It seems to me a good idea to look at whether the ORR in its expanded role could take on some road safety issues. At present, the Highways Agency does that, and, in the absence of any other instructions, the new body will probably hold much the same views as that agency—namely, the desire to increase speeds so that people can get to their destinations faster and to increase capacity by having more roads. The strategy is designed round the concept of “a minute saved”. My noble friend is an expert on this. He may well be right that that body takes safety into account to some extent, but I am not sure that it does. It could certainly do so to a far greater extent.
The Office of Rail Regulation could be given responsibility for many of the safety issues that my noble friend raised, which cover a multitude of sins, and could be given a duty to look at the potential for modal shift. We talk about road to rail very frequently, but there is the issue of road to bicycle. As we have seen in London, road to bicycle is concerned largely with safety issues. A terrible number of cyclists have been killed in London in the past year or two. TfL talks about redesigning roundabouts but one of the key issues, which must be obvious to most people, is that if you give cyclists space, they are less likely to get run over. If the road traffic speed is set at 20 miles an hour, it is a great deal safer than 30 miles an hour, and you will get more people cycling and fewer people trying to drive. It would also reduce emissions and do all the other good things that we have been talking about. This is to do with modal shift. The journey time issue is equally important, whether you travel by bike, train, car or bus. Therefore, my noble friend’s amendments deserve careful consideration. I will discuss with him in more detail whether the Office of Rail Regulation should be involved in some of these issues. I think that body is capable of it as it has very capable people. Unlike the Highways Agency, it can stand back and take a different view and, if it does not like what is going on, it should be able to enforce and encourage change. These are important amendments and I look forward to further discussion on them.
Baroness Kramer
All I can say to the noble Lord, Lord Berkeley, on this, is that we have certainly moved on from that, have we not? That is one of the problems that happens when you try to put too much into primary legislation—we become more demanding as the years go by, not less demanding. It is important that we reflect that more demanding approach in the way we manage our network.
Lord Whitty
My Lords, I am exceptionally disappointed by that reply, because it did not address the issue. I will confine my remarks to safety, but there are other issues as well.
I imagine that any member of the public who wants to know what the objectives of the new company would be would expect to have it written in the Bill that road safety improvements are one of those objectives. It is no good telling us that it is in the licence or that maybe it is in the guidance—the Bill should specify what issues should be covered by the licence, and what areas the guidance is appropriate for. The issue of safety is underrated in the appraisal system. That is not to say that it is not there, but that because a safety measure costs a lot less than building a whole new road or even a rather short one, it gets lost in the total balance of benefits. If you looked at the safety expenditure you would probably get a rate of return considerably higher than the millions of pounds spent on improvement in the speed and travel time, which therefore improves or extends the road itself. I was just trying to say that we should look at those separately before we take the decision.
The other advice I would give to the Minister is that this is quite a potent issue out there. A lot of organisations and people are interested in road safety. If it were known that we were promoting a Bill without any significant reference to road safety as the basis for establishing an entirely new system of delivering our roads, they might well take that amiss. All I am saying is that, during the subsequent stages, there will be significant public interest in this area, even though there might not be that much public interest in most of the minutiae of the Bill.
Clearly, I am not saying that the Highways Agency should be responsible for anything more than the physical safety of the structure of the road and the safety provisions on the management of that road, whether that is signage, markings, telemetrics, or whatever, which contribute to safety. The agency is responsible for that; all the rest of it—vehicle design, driver behaviour, and so on—is the Secretary of State’s responsibility. However, there are areas where the builder and operator of the road must be responsible. As regards our strategies on road safety, that has been underemphasised hitherto. It is an important thing. In certain other countries, including some of the countries to which the Minister made reference as models—Denmark, Holland and Sweden—it is much clearer that they are building safety requirements in the slightly arms-length companies they have.
We will definitely return to this issue. I hope that the Minister and her officials retire and find some way of reflecting this discussion in the Bill before we come to Report. If not, I can promise the Committee that I will return to it. In the mean time, however, I beg leave to withdraw the amendment.
Lord Davies of Oldham
My Lords, Amendments 20 and 21 in my name are designed to encourage proper scrutiny of the road investment strategy that will be set by the Government. The impact assessment makes clear the potential effect of the operation of the new organisation on the public:
“Corporatising the HA will provide it with a greater commercial focus, but there is a risk that it might take decisions that have negative consequences for the public. We would not expect a company at arm’s length to make identical decisions to a minister, who is expected to take into account a wider range of impacts and views and is then held democratically accountable for them”.
Exactly. That is why it is enormously important that this body, which is to be established with increased powers, is made fully accountable.
The road investment strategy is likely to last five years and will involve the spending of a huge amount of public money. As the Minister said at Second Reading, the Government committed more than £24 billion to upgrade Britain’s strategic road network between 2011 and 2021. The strategic road network, as the Committee knows, carries a third of all car and van traffic and 65% of heavy goods traffic. It is therefore vital that business, trade bodies and campaigning organisations can make their views known during the consultation process. It is also vital that the public can make their views known, both directly through the consultation and indirectly through their elected representatives. If it is a vital part of the Government’s plans to secure stability and enable long-term planning, then it is also essential that this process is transparent, open and accountable. Otherwise, it will never gain the public confidence that it needs to operate successfully. I beg to move.
Lord Whitty
My Lords, I have an amendment in this group. I agree entirely with my noble friend Lord Davies on how we get to the investment strategy. My amendment is at the end of this group, and it is about Parliament’s oversight of the process. We always ought to consider how Parliament both approves and monitors bodies and documents which are referred to in legislation.
I am proposing that, before the first strategy is implemented, it should be subject to a report of a Joint Committee of both Houses. I suspect that our colleagues in the House of Commons will say that it should be a DfT Select Committee. Nevertheless, some form of parliamentary accountability is necessary. It is nowhere in the Bill, and it should be. It should be a regular process; I am saying every five years because that is the period to which the money and strategy initially relate. Certainly, a regular review of the roads investment strategy ought to be built in at parliamentary level. That will complement the consultations that are required at the beginning of the process in my noble friend Lord Davies’s amendments.
Lord Berkeley
My Lords, I have two amendments in this group. Amendment 26 is more about who should be consulted. I expect the Minister will say that she does not like lists and therefore we should not have them, but as my two noble friends have said, it is very important that the Secretary of State should consult organisations that are affected, including,
“Network Rail … local transport authorities … combined authorities … statutory environmental bodies”,
and anyone else that the Secretary of State thinks is important. It is very important that this should happen. If it is going to happen, that is fine, but it is very important that it does.
With regard to Amendment 31, on Part 2 of Schedule 2—“Varying a road investment strategy”—it seems more appropriate to make use of the Planning Act 2008 provisions and apply them to the road investment strategy as if it was a national policy statement. My amendment would bring it all together in a national policy statement structure rather than the one in the Bill. I do not think I need to explain it any further. I look forward to the Minister’s comments.
Baroness Kramer
The point that underpins all this is that Ministers, rather than Parliament, have traditionally made decisions on infrastructure funding, and we are not seeking to overturn that. It would be rather unprecedented for the Government to put forward a funding and investment plan for debate. If that were to become the underlying principle, it would have a sweeping impact on many different aspects of government, so we are not proposing that. We also, frankly, recognise that it would slow down what is already not a brief process. We want to get to the point of getting infrastructure out into the ground.
For example, the rail investment strategy can be issued by the Government without being laid before the House and debated. That does not prevent Parliament from holding the Government and the rail sector to account, and that is the model that we are following here. We are behaving consistently with how these issues are already handled in government—we are not overturning that, other than to the extent of putting in a requirement for consultation should there be a variance in the RIS. As I said, that is because it has that sort of exception, or potential downside, of undermining the framework of long-term funding certainty that we are trying to create. I assure noble Lords that there will be extensive stakeholder engagement around the RIS. Indeed, the RIS will typically be built from the route strategies up, and there is extensive consultation at the route-strategy level. There is a place for consultation in all this, and the arrangements as a whole are very satisfactory for that purpose.
One of the amendments in the name of the noble Lord, Lord Berkeley, lists a number of stakeholders that would have to be consulted during the preparation of the RIS. He is right about lists tending to be a problem for me. The practical reality is that the stakeholders know who they are and the Government know who the stakeholders are. There is constant engagement, and it is a fairly fluid group, so there would be no great advantage to including a list of them.
I want to make sure that I cover the full range of issues. The noble Lord, Lord Whitty, suggested that Parliament should report on this. He said that he was not sure his amendment achieved what he intended, but we read it as requiring that Parliament approve each proposal in Part 1 of the Bill before it could come into force, and that Part 1 must be reviewed every five years. We are debating the Bill now, and I am sure his specific intent was not to require it to be reviewed as soon as it was enacted. We may just have some confusion around that issue. Perhaps he was trying to suggest that the RIS should be reviewed by Parliament—that is my understanding from the comments that he made.
Lord Whitty
Just for clarification, when I wrote the amendment I meant Part 1, but I am afraid that I spoke as if I meant the strategy. I am happy not to pursue the issue at this point.
Baroness Kramer
I appreciate the noble Lord’s comments. We feel that there is a substantial mechanism for engagement in this process. I take on board the concerns that have been expressed today but I think that we have probably got it about right. On that basis, we ask that the noble Lord considers withdrawing his amendment.
Lord Bradshaw
I shall add some comments to those just made by the noble Viscount, Lord Hanworth. The Government have a very major problem stalking up on them—namely, the lack of tax revenue that they will get from motoring. People are buying cars that are free of revenue tax and of fuel tax—or rather they pay very much less. Therefore, the flow of revenue that the Government are expecting to receive from fuel duty or vehicle excise duty is going to decline quite rapidly.
We are talking about the future of the highways network and we will have to find some other means of financing it. We are talking about the long term, but people are quick to pick up on ways of avoiding tax legitimately. I therefore believe, despite what the noble Viscount, Lord Hanworth, said, that the technology is available to charge people to use roads. How you do it and who sets the toll will be matters for future consideration, and what the noble Viscount said about this is important.
You also have the problem of people diverting away from the tolled road on to secondary or non-Highways Agency roads. Again, the technology exists to prevent most of this, and modern logistics companies cannot afford to send lorries around circuitous routes because drivers’ hours regulations, if properly enforced, mean that most of them programme their drivers to get the maximum out of the 10 and a half hours for which they are allowed to drive. If these people take more circuitous routes to avoid paying tolls, they will therefore bust the drivers’ hours regulations in almost every case.
I am going to speak about this later, but there are a number of strategic issues—one of which is how we pay for the use of roads—which have to be faced, not by the immediate Government who have brought this legislation forward but by successive Governments of whatever colour. They will have to find a method of financing a road network with declining revenues from the present system of taxation.
Lord Whitty
My Lords, I have slipped an amendment into this group as well. In a sense, it deals with the same problem—the ability of the new company to raise money on the markets—from the other end.
The reality is that the Treasury will never provide quite enough money out of general taxation to build roads. My noble friend Lord Hanworth and the noble Lord, Lord Bradshaw, have focused on road charging as one way of getting that income. Who would be accountable for that? The Government have said that they do not currently intend for there to be any road charging. Strategically, in the long-term, they may have to revisit that. It is therefore quite important that if, down the line, they do so, the Secretary of State would be able to limit or control the charges which could be raised on those roads; I believe that was the primary purpose of my noble friend Lord Hanworth’s amendment. The French example, with which I am familiar, shows the dangers of not doing so.
That could be done by a Government-owned company as much as it could be done by the private sector, although the temptation may be a bit different. Either way, if the company cannot raise money through charging and it cannot raise money by going to the market to borrow, the pressure on allocation for the strategic investment programme and the Treasury will be acute down the line.
As I have said before, when this proposition was made I thought that one of its advantages might be that the company could raise its own money against future income of one sort or another—capital gains and so forth. Apparently, that is not to be the case. That is a severe limitation on the flexibility of the company and the degree to which it is genuinely independent. Clearly, its access may ultimately be controlled by the Secretary of State. The amendment recognises that, in that it is about the Secretary of State setting the terms on which the company could go to the market. That could include going for public loans or literally going to the market—issuing bonds and getting a return on them, which is, of course, how we built the railways. If you do not have that flexibility, the arguments down the line about how much this year and next year is in the Treasury’s gift and the question of what alternatives need to be considered will always be there, however firmly you might have set the strategy and the expenditure attached to that strategy at the beginning. This would give some flexibility, with a bit of control by the Secretary of State.
Infrastructure Bill [HL]
Lord Whitty Excerpts(11 years ago)
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Lord Whitty (Lab)
My Lords, one might ask why we need another piece of legislation, given that we had an infrastructure and planning Bill only a couple of years ago and a national infrastructure plan only last year. The Bill reads as though it consists of things that were left out of those previous government initiatives, or were thought of or seen as problems since. It is a bit of a hotchpotch of a Bill. Luckily for me, I am interested in quite a lot of the hotches and potches, even though they are disparate. That might not be good news for the Minister. I am also interested in some rather more primary questions, such as what counts as infrastructure. For example, housing sometimes counts as infrastructure, but it is not included in the infrastructure plan. More esoterically, improving energy efficiency in buildings, which is a major challenge and would give huge returns on our energy policy, does not count as infrastructure and is therefore not judged on the same basis as major infrastructure projects.
It is also not clear how one infrastructure project is judged against another. I am familiar with roads and flood defence. With roads you can occasionally get—at least in the tail-end of the programme—a net present value cost-benefit ratio of 2:1. For flood defence you are lucky to get a project that returns 7:1, or indeed 13:1. There is no consistency in our approach to infrastructure. There is then, of course, the issue of who pays. By and large, these days it is the consumer, whether in energy prices, road tax or water charges. That method of financing infrastructure is regressive. It tends to be the poorest who make the biggest contribution to and, quite often, the least use of that infrastructure.
I will talk mainly about Part 1. Those of you who have been in this House for some time might recall that for three or four years I was the Roads Minister, which was an interesting job—I am sure the Minister is finding it so. I find the proposals on the Highways Agency interesting and I am not opposed to them. However, I do not believe some of the alleged benefits that are set out in the advocacy of them. It could be constituted as a government-owned company, although I hope we find a better name for it than “GoCo”. I do not object in principle; I would object were this to be a step towards privatisation, but from government statements and the Minister shaking her head earlier today, that is clearly not the objective.
The proposed model has some potential advantages. A company would be freer to enter new forms of contract for road building, road operation, maintenance and so on. In the present climate, it would probably be able to offer salaries for expertise and management that it cannot as part of the Civil Service. It could also probably finance or make use of innovative approaches rather more than an agency closer to the department could. I support such a model, at least tepidly, for those reasons, although, as others have pointed out, there are down sides in a new organisation requiring all the overheads that a relatively lean organisation, as the Highways Agency currently is, does not. I would be in favour of such an entity—“GoCo”, “Highways Agency Plus” or whatever we call it—if the Government were to make more of the need for it to have new methods of managing our motorway system. There are advances in road design, telemetry and traffic control that our system does not make full use of and that an innovative organisation could make more of for benefits of safety, speed control and traffic management, and to improve journey times. Of course—be it whispered—it could also provide the basis for the introduction of variable road-user charging. I do not think that in the long run we will be able to pay for a modern, competitive national road network unless some form of road charging is introduced. However, that is politically toxic and at this stage before a general election nobody on the Front Bench of any party is going to advocate it, but I think that we will return to it.
It is arguable that an arm’s-length company would be better able to carry out that kind of strategic objective. However, what it will not of itself do is deliver the Government’s main point in their documentation—a stable, clearly viable, long-term strategic programme for road building and road maintenance.
Being a Roads Minister is a lightning conductor for everybody who wants their bypass improved, a new junction or the introduction of safety measures and so forth, and that is not going to change. No Secretary of State and no Minister for Roads will avoid all that, however arm’s length we ostensibly push the organisation that is going to deliver it. However, more important than giving Ministers a quiet life is the fact that the change of status does not of itself in any way give certainty of long-term financing.
Going back to the creation of the Highways Agency in 1994 under the previous Conservative Government, pretty much the same benefits were claimed. That Government developed a roads programme and the previous Labour Government developed several roads programmes. However, there were changes in those programmes. One of the A303 routes, which the noble Lord, Lord Cameron, referred to and which I sometimes frustratingly drive past on my way home, was mentioned in 1994 at the time of the creation of the Highways Agency. It was in the last roads programme of the previous Tory Government. It was also in the programme that I announced and it was still in the programme when I left the job. It has subsequently gone. I cannot pinpoint the exact Minister at the moment but this Government certainly did not restart it and not a sod has been turned.
Projects such as that run into all sorts of difficulties. There are changes in local circumstances, different sorts of objections, planning difficulties that are unforeseen and technical difficulties. There were technical difficulties with the A303 tunnelling process. However, at the end of the day the reality is, for one reason or another, that Ministers change their mind, and the main reason they do so is that the Treasury tells them that they cannot have the money.
It is not at all clear how this new structure will alter that situation one iota. Because the Highways Agency is a government-owned company rather than an agency, the Secretary of State will have to argue the toss with the Treasury. It is not clear from the proposition whether this new company will be allowed to raise its own money by going to the market for bonds. I should like a clearer answer on that. There is a reference in Clause 12 to the Secretary of State being able to guarantee various issues, but whether that means guaranteeing—in effect, underwriting—the company going to the market for loan capital is not clear. I should have thought that if that was the Government’s intention, they would have made rather a bigger thing of it. The reality is that the roads programme will never be sufficiently secure, sufficiently long-term or sufficiently constant if it is down to the Secretary of State and the Treasury to sort it out. If some money could be raised as loan capital—I stress “loan capital”—it would be possible to smooth it out a bit, but not otherwise. I do not believe that the Bill gives the power to the company to do that—at least, not on any significant basis.
Therefore, I think there is a danger of there being a false promise to the motoring organisations, the motoring correspondents and Jeremy Clarkson that at last we will have a proper roads programme in this country. I do not think the Bill guarantees that at all. While there may be some advantages in other respects, changing the name on the door does not deliver it. Another issue in relation to the position of the Highways Agency is that the original proposition talked about a single company but this allows for more than one company. I do not understand that. Why would we want more than one company to manage our motorway system? Or are we going to distinguish between the motorways and the trunk roads that the Highways Agency owns? Is it going to be a regional thing, in which case the interface between the new body and local authorities will be quite difficult, or are we going to reclassify and de-trunk or re-trunk roads to create separate companies? I do not see the benefit of even postulating that there is a possibility of having several companies operating in this field.
My noble friend referred to the oversight and engagement bodies. It is not immediately obvious that Passenger Focus is the most appropriate organisation to deal with roads. I am a great admirer of Passenger Focus and I have defended it in this House against the possibility of abolition and against the cuts that unfortunately have been made to its budget. However, it has dealt with fare-paying passengers, not with motorists or hauliers, which are a different proposition. On balance, Passenger Focus probably could take that on but it would not be easy and it would require significant funding to recruit the people capable of doing it.
It is even more bizarre to give the responsibility for monitoring to the Office of Rail Regulation. It has an entirely different franchise system from the road system. It is not just a question of monitoring. If a company is genuinely at arm’s length, it will require heavier regulation than that. There should be a separate regulator. The responsibility should not be added to the already rather difficult task of the Office of Rail Regulation.
While I do not oppose the concept, there are a lot of issues relating to the Highways Agency. I have views on other parts of the Bill, which I shall leave until Committee, although I have copious notes here. As regards the Highways Agency, there is a germ of a good idea but a lot of questions need asking and answering. I hope that we will be clearer by the end of the Bill’s progress through this House.
Renewable Transport Fuel Obligation
Lord Whitty Excerpts(12 years, 6 months ago)
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Earl Attlee
My noble friend is largely right. That is why fuels derived from waste products get two renewable transport fuel certificates, whereas short rotation first generation crops get only one certificate. However, there is a difficulty and the policy needs to be designed so we do not get indirect land use change problems. My honourable friend Mr Norman Baker is working closely with the European Union to get a solution to that problem.
Lord Whitty
I understand this global concern about using what was previously food production land for biofuels. However, when we first proposed the obligation, about 50% of the market was expected to be met from waste using the kind of operation that my noble friend Lord Kennedy is concerned about. There is also the separate problem that British Sugar has planted new land and made a substantial investment. If we renege on or reduce the obligation, it will not bring any return to a major investor in some of our important rural areas.
Employment Tribunals Act 1996 (Tribunal Composition) Order 2012
Lord Whitty Excerpts(13 years, 3 months ago)
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Lord Whitty
My Lords, I support both amendments, but I will concentrate my remarks on the second. In one sense, I apologise to the Minister for repeating some points that I made in the Moses Room. However, I find that his response—in the Moses Room, here today and in correspondence—does not address the issue that I raised. He claims that he is not basing the assertion that the raising of the threshold will increase the propensity to employ on anecdotal evidence. Yet he does not adduce any statistical evidence. The crude evidence is that the last time the threshold was lower, there was an increase in the propensity of employers to employ. That can be dismissed on the basis that it was part of the business cycle, but I am sure that the noble Lord’s department has statisticians who could take out that effect. We have, as the Minister proudly claimed, had some provision on unfair dismissal for 41 years, introduced in the 1971 Act to which those of us who were in trade unions at the time were, in general, opposed. However, the Government of the day thought that some balance was needed in terms of the attack on trade unions that that represented and individual employee rights. Therefore, they rightly inserted the right to claim against unfair dismissal.
Since 1971, either the threshold or the scope of that right has changed five or six times. There are therefore clear points where a change in the legislation could be related to the change in employment patterns. The Minister and his colleagues have failed completely to adduce any of that evidence and present it here today. Instead, they continue to rely on anecdotal evidence. When we were in the Moses Room, I put this down to listening too much to the saloon bars of the Home Counties; we may since have learnt that it may have been raised in the private dining room of No. 10. Either way, it is not statistical evidence. It is anecdotal and it is not proven that that is how employers actually behave. Until the Government prove that, they have not got to base 1 for justifying the macroeconomic effects of these changes.
For Joe Public sitting on the Clapham Omnibus, it is a pretty counterfactual argument to say that the best way of creating jobs is to allow employers to sack people more easily. Some economics is counterfactual, I agree, but without statistical evidence, it is difficult to argue in favour of these changes. That evidence has never been there. In the mid-1990s, there was the famous case of Seymour-Smith and Perez, which went all the way up to the European Court, about indirect discrimination in terms of the higher threshold. I am not arguing that case now, but I am saying that in the course of it, every court at every level, from the High Court right up to the European Court of Justice, accepted that the Government had not proven that, whether or not this was indirect discrimination, there was a bigger good in that more employment had resulted from an upward movement of the threshold. The Court of Appeal said that,
“nothing in the evidence, either factual or opinion … obliges … us to draw the inference that the increase in the threshold period has led to an increase in employment opportunities”.
That was the case 17 years ago. In the intervening 17 years nobody has proven to my satisfaction that the connection is there. The evidence was not there then and it is not there now.
There is a wider context to this, too, as my noble friend Lord Borrie has indicated. This may be the first of many changes in employment law that the Government are bringing forward, and their intention is probably to do so under statutory instruments. I appreciate that it is the convention of the House that we do not vote against statutory instruments, and we are not doing so today. I have a slightly different view, because in the list of government defeats under the previous Government, the first two were against me, so I do not have quite the same compunction as other colleagues. However, if a central tenet of primary legislation is undermined by a series of statutory instruments as the beginning of this series suggests it will be—3 million people taken out of the protection that primary legislation allows—and that continues, we have to look at the way in which the Government are using statutory instruments. I say no more on that.
The other, wider, point, as my noble friend Lord Beecham said, is that we are talking about a vulnerable subset of the population—people who have been employed for a relatively short time, most of whom, regrettably, do not have the protection of trade unions—which is excluded from the basic right not to be unfairly dismissed. This is part and parcel of other legislation which the Ministry of Justice rather than BIS is bringing forward. We have excluded from access to legal aid not only issues of employment but of housing, social security, industrial injuries, for the most part, and industrial diseases—all of which disproportionately affect the most vulnerable elements of our society.
In his opening the remarks, the Minister said that it is vital that the justice system is fair, independent and must not be compromised. I agree—but if you cannot get before a court or a tribunal in the first place, however good and balanced the court and tribunal systems may be, you are being discriminated against. The combination of taking away employee rights in this legislation and taking away access to legal aid in the Bill we regrettably passed last night is a severe restriction of the access to justice.
I fear that those of us who hoped for a relatively liberal Secretary of State at the Ministry of Justice, and a very liberal Minister in this House from that department, will be disappointed. The Ministers’ epitaphs will be that they excluded significant sections of the most discriminated against population from access to justice. That is a bad epitaph for both the parties opposite. I hope that this legislation will not be an additional contribution to that negative effect.
Lord Monks
The difficulty with making changes through statutory instruments is that they convey the impression that the changes being made are minor and of a technical nature. However, these changes are not technical and they are certainly not minor. As the noble Lord, Lord Whitty, said, 3 million people will be taken out of the scope of unfair dismissal legislation and protection. That is a major change which will have a major impact on the British labour market.
Why is this happening? The justification from the Government is that it will aid job creation. Have any employers said, “If you make that change, we will take on more people”? Have they given any undertakings or promises? Of course they have not. This is all in the impressionistic world and it is a matter of conjecture whether anything will change. I do not believe that it will have anything other than the most marginal effect on employers—and I know a lot of employers—but it will have more than a marginal effect on those 3 million workers, or at least some of them. In most jobs—there may be exceptional ones—you do not need more than a year to check whether or not a person is suitable. Probation periods are rarely longer than one year.
Nor is an employer likely to be found guilty of unfair dismissal if a worker does not first achieve and then maintain the required standards of competence or behaviour. Provided that a warning is given, the employer will not make the minor procedural mistakes that the Minister warned about in his moving remarks. I do not mean “moving” in an emotional sense—I wish to make that clear—but in moving the Motion. Bad employers are being given carte blanche for an extra year and the effect will be a rise in insecurity and grave injustice.
Cutting the role of lay members is not a minor issue—this is a step towards a tribunal becoming a full court, with a judge on his own. That will be a daunting prospect for many applicants, which is softened at the moment by the fact there are lay people with some understanding of their world of work. That is not a criticism of judges, for whom I have a lot of time generally, but we will miss a tremendous amount of experience in tribunal hearings because of this change.
As others have said, these may be the first two steps in implementing some of the ideas that are circling around the Beecroft report. We have not seen the report yet, but this venture capitalist has been let loose like a bull in a china shop in the delicate field of employment law. I ask the Minister for an assurance that if any changes are to be made in the future in employment law, they will not be smuggled in through the statutory instrument route but will be a matter for primary legislation so they can have a proper debate and proper exposure in this House.
Localism Bill
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Baroness Kramer
My Lords, I had not intended to speak on this amendment, but I feel that I must reply to the noble Lord, Lord Faulkner of Worcester. Like many here, I have great regard for the individuals at London TravelWatch and the work that they do. However, the very citation from ATOC carries its own message that, of all the groups in London, the train operating companies would prefer the body which they find they can more easily ignore to the one that they must take seriously. That is entirely in character with the functioning of the TOCs and ATOC. It is precisely to have a much bigger impact on behalf of passengers that it makes sense to make this move from TravelWatch, integrating it into the GLA.
I may have misheard the noble Lord, Lord Faulkner, but he seemed to suggest that, if there was that integration into the GLA, there would be a fracturing of the transport voice. Yet the GLA is already holding TfL rigorously to account. I was on the board of Transport for London and I can tell your Lordships which body it was afraid of—it was very much the GLA. It is the ability of that body to pound away on behalf of the passenger that would be gained by this shift, so I support this amendment.
Lord Whitty
My Lords, I hope that the Government’s reservations, to which the noble Lord, Lord Tope, referred, are indeed strong. This needs to be rejected. I do not want to repeat everything that my noble friend Lord Faulkner said but I would go for the fundamental point. The noble Lord, Lord Taylor, since he is a battle-scarred veteran of the Public Bodies Bill, will probably recall my advocacy of separate representation for the consumer interest in publicly provided bodies and in those which are regulated publicly. The Government wisely backed off from including in lists various bodies, including Passenger Focus, which could have been abolished, while for those that they are going to change they have provided an alternative but still independent body, either in another quango or in the third sector. It is a central provision of public services or those that are regarded as public utilities in this country that we have a separate consumer organisation. That applied when we set up the nationalised industries, when we privatised and liberalised those industries and when we passed the Greater London Authority Act to set up that body. It should continue to apply.
I suppose that I should apply two past interests here, both as a consumer champion as chair of Consumer Focus and as the Minister who, as the noble Lord, Lord Tope, will recall, brought the Greater London Authority Bill through this House. He will also recall that it was the second longest non-financial Bill ever—the absolutely longest, the Government of India Bill in 1935, was never implemented. The implementation of the Greater London Authority Act has left some problems but I do not believe that this is one of them.
It is important that we retain the distinction between the provider, and those who oversee the provider, and the consumer interest. The mayor is responsible for the provision and the London authority for overseeing that provision. In that sense, they are not much different from a private sector board as regards their consumers, so I am afraid that it does not impress me that all parties on the Greater London Assembly welcome and support this move. It is no more impressive to me than if there was a unanimous vote on the board of Thames Water to say that it wished to abolish the Consumer Council for Water, or that Michael O’Leary and the board of Ryanair said that they wished to abolish the Air Transport Users Council or—to go back to my past interests—that the boards of British Gas or npower should say that they wished to abolish Consumer Focus and any successor powers.
We must distinguish between the role of a consumer interest representative and those who are providing, or are part of the governance structure of those who provide, a service. Indeed, in London, predecessor bodies to this go back to the private company of London Transport, through the nationalisation process, through the GLC, through the abolition of the GLC, into the establishment of TfL and through to the London authority and the 1999 Bill. That was sensible. London Assembly members may well have reservations about aspects of this and may well feel that some changes need to be made—that might be right—but this clause does not say that, nor does it say that there should be some rationalisation between the London authority and Passenger Focus.
It might be conceivable that the transfer of this body into Passenger Focus was a rational move; I do not personally think so, but it would still provide an independent consumer voice focus. Actually, however, for the reasons that my noble friend points out, London is unique in this response. London is the only city in this country where the vast majority of people go to work by public transport. TfL has responsibilities way beyond the bus and train area—for roads, taxis and so on. As has also been pointed out, people outside London, and therefore with no voice in the election of GLA members, have an interest in this. So there is no principled argument that would call for the abolition of this body. I would be prepared to consider, and I suspect that the Government would be prepared to consider, something less than that, which allowed for easier changes, but the straight abolition of an independent consumer voice in the most complex, most difficult and in many respects most integrated transport system in the whole country would be a seriously retrograde move and I hope that the Minister will soundly reject it.
Localism Bill
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Lord Shipley
My Lords, I shall also speak to Amendment 92. Amendment 91 would insert a new clause to give power to the Secretary of State to lay down in regulations the standards that private sector letting agents and management agents must adhere to. This would enable the Secretary of State, at a later date, to lay down statutory guidance to regulate private letting agents. A similar provision was passed recently in Scottish legislation. As there are currently no regulations governing the conduct of letting agents, such a clause would act as a starting point for a debate on what sort of regulation would be effective.
Both tenant and landlord organisations have long reported problems with private sector letting agencies, including the charging of exorbitant fees, failure to enforce basic health and safety standards in properties and inadequate client money protection provisions. The situation is such that the largest professional body for letting agents in the UK, the Association of Residential Letting Agents, which has been at the forefront of self-regulation, is strongly in favour of statutory regulation to tackle problems in the industry. This amendment is also supported by the British Property Federation, the National Landlords Association and housing charities.
The amendment would allow the Secretary of State, following further consideration and consultation, to specify new standards for the regulation of letting agents. It does not require guidance to be drafted immediately but ensures that the possibility is open, and will act as a starting point for a debate on how best to regulate the sector. There would of course have to be wide consultation on the scope and nature of any regulations, but the Bill is likely to be the best legislative opportunity to make progress on this issue for a significant period.
Around 60 per cent of private landlords use one of the estimated 8,000 letting agents or managing agents in England. However, half these agents do not belong to any of the professional trade bodies. Research has shown that tenant satisfaction levels are lower—reportedly 71 per cent—where the property is managed by an agent than where it is managed by a landlord directly, reported to be 81 per cent. In an online survey of 1,289 tenants who visited the Citizens Advice website over a three-month period, it was found that 73 per cent were dissatisfied with the service provided by their letting agent. Less than one-third of agents willingly provided full written details of their charges to CAB workers when asked. There are particular concerns in relation to letting and management agents having a lack of expertise and firms not having professional indemnity insurance or client money protection.
The current voluntary approach has significant drawbacks, with the worst agents being the least likely to submit to a voluntary scheme. Voluntary regulation, covering only an estimated half of all agents, is unfair, as it creates extra hurdles for the more reputable agents while not doing so for those who are most likely to be responsible for problems. The Association of Residential Letting Agents believes that the quickest and most effective method to eliminate unprofessional, unqualified and unethical agents from the rental market is through statutory provision via this amendment.
There is currently no mandatory licensing scheme for letting agents or landlords in the UK despite 95 per cent of consumers believing that there should be. The Association of Residential Letting Agents introduced a licensing scheme for its members in May 2009 which ensures the highest standards of service for those who use members of the scheme. Its introduction was supported by a wide variety of organisations including Trading Standards, Shelter and the National Landlords Association. The scheme delivers higher standards of service for tenants by ensuring that licensed members abide by the relevant codes of practice and rules of conduct, hold recognised qualifications and are covered by professional indemnity insurance, a recognised client money protection scheme and an independent redress scheme. The licensing scheme has many other facets to improve service, such as ensuring that all members undertake at least 12 hours of continuing professional development each year.
I do not regard this amendment as contentious. It seems eminently sensible because it is simply providing a means whereby statutory legislation can be introduced by giving the power to the Secretary of State to do so at some future date.
Finally, Amendment 92 relates to a slightly different issue but it extends the courts’ discretion to postpone or suspend the execution of possession orders in cases where there is no specific statutory power to do so. The problem is that Section 89 of the Housing Act 1980 severely restricted the power of the courts to suspend the effect of possession orders in cases where the courts had no specific statutory power to do so but had, to that point, relied on their general powers. The effect of this was that no possession order could ordinarily be suspended for longer than two weeks; in cases of exceptional hardship the court could suspend further, but only up to six weeks. The effect of this has been that an evicted tenant and his or her family are only permitted two, or at most six, weeks to find alternative accommodation whatever the circumstances of the family as regards, for example, size, medical or location needs or education.
Even if those restrictions were realistic in 1980, they are now out of date, in view of the continued pressure on the availability of affordable housing, the recent reductions in the provision of housing benefit and the increase in the types of tenancy to which Section 89 applies since it was enacted. To find alternative accommodation within the timescale provided by the 1980 Act is virtually impossible, and has been for some time, yet the courts have no power to order more. This amendment would simply enable a court to exercise greater flexibility in considering the suspension of possession orders and to allow the appropriate length in the circumstances of the case, balancing the hardship to the tenant caused by the eviction against the landlord’s need for the property. I beg to move.
Lord Whitty
My Lords, I support Amendment 92. Those of us who are looking at the housing market recognise that the role of the private rented sector is likely to increase and that there are serious problems with both quality and delivery within that sector. I am sorry I had to be out of the Chamber when Amendment 85, on the accreditation of private landlords, was debated. However, the vast majority of tenants and potential tenants will come across the property via an agent, and, as the noble Lord says, their actual arrangements for rent, repair and general customer service will be with the agent, not directly with the individual landlord. In those circumstances, the role of lettings agencies and management agencies is vital. Therefore, it is important that this Bill provides for some ability to set standards for them. As the noble Lord, Lord Shipley, said, it is very important that the professional trade bodies in that area—the National Landlords Association and the British Property Federation—support a degree of statutory intervention on this front for the very clear reason that good landlords, effective landlords and landlords concerned with service for tenants can get undercut by bodies that do not observe decent standards.
The amendment is permissive on the Minister and clearly will be subject to some assessment of need. However, as the noble Lord says, if we do not provide for some ability to issue regulations in this area, then a whole sector of housing provision will remain unregulated, with the better agents in that area being undermined by the worse. I hope that the Minister can at least give a positive response to this amendment.
Baroness Gardner of Parkes
My Lords, I apologise for my delay in getting back to the Chamber. I had jobs that I simply had to do in the House.
It is important to consider the impact of this in terms of the Delegated Powers and Regulatory Reform Committee, of which I am a member. I wonder whether these are the sort of powers that that committee is very opposed to giving, because they are too wide and would mean that the Government could do pretty well whatever they wanted. I have clear memories of, I believe, the Wilson Government introducing rent controls, which had a disastrous effect. They appeared to work temporarily but were a terrible failure after that. Everyone found that their rents jumped up terribly, which was worse than if they had increased gradually. I have reservations on those two grounds and should like the Minister to take them into consideration.
Localism Bill
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The Earl of Listowel
My Lords, I hesitate to speak, having not taken part in previous work on this Bill, but my noble friend’s amendment and his words bring to mind some research that was brought to my attention some years ago into lone mothers living in isolation with their children, scattered around cities. They were often forced to live a long way from their communities and extended family because there was insufficient housing stock to enable them to be placed closer by. So if my noble friend’s amendment will help local authorities to supply enough housing to ensure that parents—more often than not mothers—bringing up children on their own had easy access to their communities and extended family, I certainly want to support it.
Lord Whitty
My Lords, I also strongly support this amendment. First, if we look retrospectively, had this provision applied from the start of right to buy, much of the pressure on social housing, and by extension on other housing sectors, would not have arisen. I am not saying that it would have completely resolved it, but it would have made a major contribution to stopping us being in the position that we are in.
The second point, which the noble Lord, Lord Best, emphasised, is that it would have enabled a lot of our worst housing stock to develop the manner of mixed tenure, creating a stable, reliable and interactive community instead of the isolation into which some of those estates have fallen.
The other point, also made by my noble friend Lord Beecham, is that I do not understand the economics of this. It would be an asset on the books of part of the public sector. Economically speaking, the deficit relates to the totality of public borrowing. In international opinion, raising money relates to the total deficit on public spending. The fact that it is in the Treasury’s accounts rather than the local authorities’ accounts economically makes no difference. It makes a bit of difference to the credibility of the Chancellor of the Exchequer from time to time, but economically this has always been nonsense and it is nonsense that we should now end. If we are to interpret localism and self-financing of the housing activities of local authorities effectively, surely this anomaly needs to be rectified. I hope, therefore, that at some stage the Government are going to recognise that.
Lord Beecham
My Lords, I welcome the contribution of the noble Lord, Lord Newton, not least because he is only the second Conservative Back-Bencher to speak in seven hours of debate on Report. I dare say we will hear a great deal more from him and, I hope, others as we go forward.
I entirely endorse the remarks that have been made so far by noble Lords, and I share the experience of the noble Lord, Lord Tope, of serving as a local councillor. It is frequently a local councillor’s task to take up tenants’ complaints, as one does, with the relevant housing department or ALMO—many authorities have now transferred their stock—to help people through the council’s complaints procedure and to help them move complaints to the ombudsman. Many of us have done that. I find it rather patronising of those who suggest that it is somehow necessary to reconnect councillors with social housing. Most of us who represent areas with social housing regard that as part of our daily, weekly and monthly routine.
However, there are some additional issues to which I would like to refer briefly. First, as I read the Bill, there need be no nexus between the individual making a complaint and the councillor for the area in which he lives, because the Bill speaks of a member of the housing authority. It could be from one end of Newcastle to the other in my own case. There is no necessary connection between the tenant and the member he approaches, and that is hardly sensible, even if one follows the line of the Government’s thinking on this matter.
Secondly, I presume that under the adjudication by the ombudsman there may be the possibility of an award of compensation. That is not necessarily binding on an authority, but it is pretty indicative and most authorities, though I regret to say not all, comply with those recommendations and make a payment when one is indicated. On the face of it, it would seem that the individual member adjudicating would also have that responsibility. It seems distinctly worrying that there should be implicit pressure on a member not only to make a finding but also, perhaps, to award compensation. That does not seem to be a healthy relationship between an elected councillor or, for that matter, a Member of Parliament, and a constituent.
The third factor that we may have to bear in mind is that there are pending changes in the legal aid and advice system that will effectively strip people of their right to legal aid and advice. In this housing area, whether it be with local authorities, housing associations or other landlords, there is frequently a need for legal advice and support, and one fears that effectively removing that source will be unhelpful to tenants. Frankly, imposing the responsibility on elected members, whether councillors or MPs, is by no means a substitute for such proper advice.
All these factors tend to the same direction, namely that the amendment should be accepted by the Government. There is no huge political issue here. As we have heard, there is no demand for this outside, from tenants, their representatives or anybody else. There is no logical basis for the recommendations and I hope that the Minister will indicate that she will think again about the desirability of this additional superstructure on a system which is working perfectly well.
Lord Whitty
My Lords, my name is on Amendment 68, which provides for a dual system. I do not think anyone is arguing that the tenants or leaseholders should not have the right to call in their councillor, MP or tenant panel. The issue, as has been said, is whether they should also have—from the start, not just when they have already been to their councillor—the ability to go direct to the ombudsman.
I have two points on this. First, it is not only a contradiction to principles of administrative law, it is also a direct contradiction to most consumer practice in the rest of the economy. As the noble Lord, Lord Newton, said, there are numerous ombudsmen. Some were set up by Parliament, such as the financial services and energy ombudsmen, and some are industry-based, dealing with anything from double glazing to property. In none of those cases is there a filter after the initial filter of having to raise the complaint with the provider in the first place, as my noble friend Lady Hollis has said. After that point, there is not a single example where a third party, of whatever description, is required to intervene. That may be discrimination against the English, but it is certainly discrimination against tenants and leaseholders as compared with any other consumer.
Secondly—this ought to be an obvious point, but it has not yet been spelled out in this crude way—there are a lot of reasons why individual tenants and leaseholders may not want to go to their local councillor. They may have fallen out with them, or had a terrible decision from them, or they may be their political opponent. There are also all sorts of reasons why they may not wish to raise the issue through the tenant panel, although I believe that is a good innovation. They may know people on the panel whom they disagree with or they may not approve of earlier decisions made by the panel. It surely should not be for Parliament to say to them that, despite all their reservations and previous experience, they must go through one of these three channels. All three channels are important and should be there, and if they need to be put on the face of the legislation let us do so. But we must not deny the ordinary social housing tenant or leaseholder within social housing provision the right to go direct to the ombudsman. I plead with the Government to drop this absurdity.
Baroness Eaton
My Lords, I was delighted that the noble Lord, Lord Whitty, referred more positively to the role of councillors than has been the case elsewhere, except for the noble Lord, Lord Tope. I am very supportive of stock transfer, but I do feel that with these arrangements there has sometimes been a reduction in the ability of councillors to be involved in housing activities in their area.
As we all know, in our role as councillors—and I declare that I am one—we are expected to be community leaders. One of the most important parts of the well-being of a community is how its housing operates and functions on behalf of tenants—the social housing aspect. I firmly believe that it is important that elected members have the opportunity to work closely with tenants. As the noble Lord, Lord Beecham, said, those of us who are active in that area already do not really understand why some people do not agree. It has become less obvious nowadays to tenants of housing associations and ALMOs that councillors really are their first port of call. I very much support the role of the councillors in this activity.
Lord Greaves
I entirely accept that. However, in my experience, not all housing associations are the same and some do this better than others, which is inevitable with any type of organisation. In a sense, if there are housing associations or social landlords that do not do it quite as well as the organisation in which the noble Baroness, Lady Hollis, is involved, that is an even more important reason why tenants should be able to go to the housing ombudsman as easily and quickly as possible.
Like my noble friend, we on these Benches would have preferred that this proposal from the Government was not in this Bill. It seems to go back to a local government ombudsman system that, as noble Lords have said, used to exist in local government but that, frankly, was not necessary and in some cases was harmful. There is no doubt whatever that on some occasions councillors used to find reasons not to pass complaints on or tried to persuade people not to pursue them. I always took the view that unless it was clearly vexatious I would automatically pass it on, even on one occasion when it concerned a complaint against the borough council about a housing matter in which I had been closely involved. I was chairman of the housing committee and I still said, “I will pass it on because it is right and proper that it gets dealt with”.
At Lancashire County Council, on one occasion I made a complaint against the education authority. Shortly after, I went to a reception of important people at county hall in Preston. As soon as I walked in the room, the then education officer came bounding across the room and at the top of his voice tore a strip off me for daring to question the reputation and organisation of that education authority. He then marched back to the other side of the room. I was much younger and a bit more timid than I am now but I still marched after him and, in an equally loud voice, tore a strip off him and told him that he was undermining democracy. In a sense, I should not have had to be there as part of that system. The people involved should have been able to go direct.
Along with other noble Lords, I think, around the Chamber, we have had quite a few discussions with members of the Government, particularly with Grant Shapps, who I believe is in charge of the housing parts of this Bill. We came to the view that we might win the argument but would not win the process of this legislation of removing these parts of the Bill or of putting in an amendment along the lines of that proposed by the noble Lord, Lord Whitty, which I would otherwise strongly support.
To help the Government, in these discussions we are looking for some compromise that at the very least provides a backstop so that, if any of these designated persons are not helpful and try to resist or are just incompetent in passing on a complaint, the tenant can nevertheless go direct to the housing ombudsman. It is a slightly messy process and it is not as good as now, but it can work and at the very least would maintain their right to go direct to make the complaint, even if someone else tries to persuade them otherwise or to block it.
Lord Whitty
My Lords, does not the noble Lord accept that if a tenant has reservations about their circumstances, which may be very personal, it is not just a question of whether if they go to them they may be rebuffed, but that they would be seriously inhibited about going to their councillor or their tenants’ panel, or possibly even their MP, in the first place? We should take that into account.
Localism Bill
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Lord Reay
My Lords, in moving my Amendment 170A, I should like to start by quoting what the Minister, Mr Greg Clark, said in another place at the Report stage of the Bill:
“There is also a case for looking at the fact that the costs of losing appeals can sometimes hang over local authorities. Sometimes the threat of losing an appeal dissuades a local authority from turning down an application that it might want to turn down. We should look at that”.—[Official Report, Commons, 17/5/11; col. 274.]
My only quarrel with that statement is that it is not so much the threat of losing an appeal as the costs of fighting one, whatever the result, that can dissuade a local authority from turning down a planning application that it should turn down and/or might otherwise want to turn down. This is more true today than ever now that local authorities are having to make severe budget cuts.
Following my having taken up that point at Second Reading, my noble friend the Minister kindly wrote to me on the 20th of last month and ended her letter by saying that she hoped to be able to update me shortly with news on,
“how we propose to do that”;
that is, deal with the concerns about appeal costs. I am hoping that she may be able to tell us today what that is.
I have singled out onshore wind farm applications because it is particularly scandalous that it is the subsidies that wind farm developers are promised that place them in a position to outbid local authorities and local action groups. Without those subsidies, the planning applications would never be made in the first place. Just to remind noble Lords, the subsidy takes the form of a promise to take on to the grid for 20 years all the electricity that the wind farm can produce at a price which is currently over twice the market rate. If for some reason the grid cannot accept the electricity, as we have seen happen recently and I am sure we will again, it will still pay for it at the subsidised rate. It is of course the consumer, including the consumer who is being pushed into fuel poverty, who is then charged on his electricity bills with these costs, and who thus pays for the subsidy.
This of course creates the very antithesis of a level playing field. The result is that this is an area where final planning decisions are emphatically not taken by local authorities or local communities. Localism does not rule. It is routine for developers to waste no time in appealing once the local authority has rejected, if it has had the courage to reject, their planning application. In the first place, the developers hope to intimidate the local authority with the threat of a protracted and expensive public inquiry into granting their planning applications. If, nevertheless, the local authority stands up to them, they hope to defeat the local authority at the public inquiry. As developers are invariably able to afford better legal and administrative representation than the local authority, and certainly than the local action groups, they are favourites to win.
The Government are complicit in this unjust process because they maintain the subsidies. The Government also apply immense pressure on the Planning Inspectorate through statements in every conceivable piece of legislation and guidance to help deliver, through its decisions at public inquiries, the Government’s renewable energy targets. In many cases the inspector does give priority to local concerns or to landscape considerations, but it still seems to be the case that in a majority of cases he will give priority to government policy. So by means of the subsidies to renewable energy electricity generators and the pressure on the Planning Inspectorate to deliver the Government’s renewable energy targets, the Government are doing everything in their power to thwart local opponents of onshore wind farm schemes. Yet they still claim to want to devolve decision-making powers in planning matters to local communities. How do they justify that blatant contradiction? I am afraid that it invites the charge of hypocrisy.
Yet it is still the case that the Government have signalled their recognition that the ability of developers to intimidate local planning authorities into granting planning permission because of the costs of going to appeal represents a problem, which is why I hope that my noble friend will say today what the Government propose to do about it. My amendment might result in developers thinking twice about taking local planning authority refusals to appeal. In doing so, it might give some encouragement to local authorities to stick to their guns with the result that more final decisions might be in accordance with the wishes of local communities. Perhaps naively I thought that that was meant to be the main purpose of the Bill. I beg to move.
Lord Whitty
My Lords, I trust that the Government will give no credence to this intervention by the noble Lord, Lord Reay. Government policy for encouraging the development of alternative energy—which is essential to our future—includes onshore wind farms. If he wishes to pursue his opposition to that policy, he should pursue it under energy Bills and the various regulations that are brought before this House under the energy Bills. He may well have done so. However, this is not the appropriate point to do it.
His amendment would do the opposite of what he is suggesting. It would discriminate against developers of wind farms as compared with any other developer, as well as cutting across what has been a cross-party consensual position in terms of encouraging alternative energy, including wind farms. In reality, the number of wind farms that have been rejected on planning grounds is at least equivalent to those that have gone forward and the number on which a decision has been challenged.
I do not want to use the same intemperate language as the noble Lord, Lord Reay, but, in practice, on wind farm applications, the nimbys have generally won. In this, at least, let us recognise that there is an overriding national consideration that this Government, the last Government and all parties in this House have accepted. This is not the point at which to further discriminate against wind farm developers.
Lord Marlesford
In case the House were to think that my noble friend was in a minority of one, I rise to support his amendment strongly. Frankly, the essence of the planning system is that planning decisions should be made on planning grounds. To attempt to distort those decisions is thoroughly undesirable and totally contrary to the whole basis of what was set up by the party of the noble Lord, Lord Whitty, when it was in power in 1948. It was one of the great achievements of the Labour Government—the other being the health service. England would not be the country it is if it had not had that planning system.
My noble friend is talking particularly about wind farms, which is quite relevant because of the element of subsidy. However, very undesirable pressures have been put on planning authorities, for example, by supermarkets, which have proposed to build in quite inappropriate places and have threatened expensive public inquiries and local authorities with damages if they presume not to grant the application. My noble friend Lord Reay is absolutely on to the right idea. I strongly advise the Government to think very carefully before they distort the planning system in this sort of way.
Lord Whitty
“Local housing strategy
(1) All Local Housing Authorities in England must draw up an analysis of housing supply and demand in their areas and this analysis should include all forms of tenure in their area and cover at least the following—
(a) trends in housing supply and demand in the owner occupied, private rented and social housing sectors,(b) trends in housing prices and rents,(c) new developments, new build and conversions,(d) empty properties, and(e) second homes, andthis analysis should be related to broad demographic and employment trends in their areas.(2) On the basis of this analysis each Local Housing Authority in England should draw up a rolling ten year housing strategy for their area.
(3) All measures required of local housing authorities in relation to social housing and homelessness as a result of Chapters 1 to 4 of this Part of the Act shall be required to be undertaken in consistency with the housing strategy required by subsection (2).”
Lord Whitty
My Lords, we now move on to the part of the Bill dealing with housing, social housing particularly, that probably has the most direct and immediate effect on millions of people around this country. Many of the issues we have been discussing so far are, of course, very important, but for most people they will seem somewhat esoteric. For the millions who are in social housing, wish they were in social housing or ought to be in social housing, the issues dealt with by the subsequent clauses in relation to changes in the provisions on tenure, the responsibilities on local authorities, changes in the obligations on local authorities in relation to homelessness and changes in housing revenue will all hit, in one way or another, positively or negatively, many of our fellow citizens. In addition to that, in the welfare Bill which we were supposed to discuss yesterday, there is a major change in the housing benefit provisions which will affect many of the same people.
This part of the Bill is very important for a lot of our fellow citizens. While I do not want to give the usual channels too hard a time, the fact that we are moving at this stage into this section of the Bill—and I suspect we are unlikely to allow all the amendments which are tabled in this section to be debated by 7 o’clock—is a matter of some regret to me. I hope there is still time for the usual channels to discuss that.
However, my attempt in this amendment is to set a background for the discussion on the social housing provisions. We did touch on this issue in part in discussions on planning under an amendment moved by the noble Baroness, Lady Greengross—who is not currently in her place--but I think it is more appropriate to discuss it here. If one just reads straight through this Bill, social housing is dealt with in isolation and in a very bureaucratic, contractual, legal and financial way. The reality is that social housing has to be seen against the background of the housing market as a whole, local authority by local authority.
I declare an interest. I have recently become chair, with a non-pecuniary interest, of a new organisation called Housing Voice, which deals with social housing. The provision of social housing is only one part of the issue. We need to look at the total supply and demand of housing, nationally and area by area, and to relate it to the demands and requirements of the population; the economic demands for employment within the area and travel to work from housing, and the effects of inward and outward migration, because our populations are changing dramatically. Every local authority, in its planning and social housing provisions, must recognise its responsibility to ensure that there is adequate housing for all those who need it, and that as far as possible, supply and demand are reasonably in balance. They must therefore provide housing, in whatever form of tenure, at a price or a rent which is affordable for most people. None of the housing market currently meets those propositions nationally, and in most parts of the country it does not do so locally either.
In the owner-occupied sector, successive Governments have had policies to increase the proportion of people in this type of housing, and some of that has been significantly successful. I do not wish to reverse that, but that fact is that nowadays, it is virtually impossible for young families to get into the owner-occupied market, both in our inner cities and in our rural areas. The latest information is that the average age for getting a first mortgage is 37, and in a few years’ time it is likely to be well over 40. Those of us who were fortunate enough to get on to the homeowning ladder in our twenties do not recognise that picture. Unless one has some support from parents or elsewhere, one cannot get a mortgage if one is much younger than 40 these days. Even for those who do have this support, the deposit required rules it out for many people, and of course advances from building societies and banks in this area have largely reduced as a result of the housing crisis.
Housing for all our population, and particularly for young families, young couples and people who have to move away from their home area for work, is not now available. There are far too many people. The private rented sector is not much of an alternative: in our inner cities, particularly in London, the cost of private renting puts it out of reach for many people. Despite attempts by the previous Government to bring more housing into the private rented sector, particularly for key workers and so forth, the amount of private rented accommodation available, never mind its price, is also far too limited.
In the social housing area itself, we have a situation where there have been cutbacks in the amount provided and 4 million people in England alone are seeking to be included on housing lists. The provisions on social housing, which we shall come to later, need to take this into account. All this relates to the shortage of new housing coming on to the market, whether by new build, conversion or properties coming on to the market in other ways. Yet our society is moving in exactly the opposite direction. We have a degree of atomisation in the form of smaller households, as well as households forming and breaking up. People are living longer and moving around more to seek work or education. All this increases the demand for accommodation. The terrible truth is, though, that at the moment the rate of household formation is running at twice the rate of the provision of new housing. That is a completely unsustainable position nationally, and locally, as we know, conditions are even worse. There is massive overcrowding in many inner city areas, as well as homelessness, since people cannot find accommodation. Moreover, in many rural and suburban areas the housing situation is extremely difficult for young people.
This is an issue not just of social housing, but of the housing market as a whole. The previous Government attempted to do something about it by setting regional targets. By and large that did not work completely, although there were some successes. The present Government have abandoned those targets. In the context of this Bill at least, although I might argue the point elsewhere, I have no objection to that because the amendment is designed to recognise the localism of the issue and to place the responsibility clearly on local authorities to work out their own ambitions and decide the appropriate housing provision for their own populations. This clause therefore attempts to make it clear that it is their responsibility. They need to look at the local population and what is happening in their areas both economically and demographically, and assess the quantity and quality of the available housing for the various different groups. That is localism.
Some may object to the clause because it allegedly imposes an additional duty on local authorities, but in fact this duty is absolutely central to the local authority’s ability to provide for the well-being of their communities. In one sense it states the obvious, but it also puts into context the clauses that follow it. If it is to work, local authorities will need to go through the processes outlined in the amendment. They will need to assess need, economic trends and likely future provision. No doubt there are better ways of drafting this provision, and I am certainly open to that, but somewhere in this Bill it is necessary to have a provision which sets out what local authorities must undertake. It is not prescriptive in terms of the methodology they use or the numbers they put into their assessments for future plans and strategies, nor is it presumptive in terms of the balance between different forms of housing and of tenure. But it does require local authorities to recognise these wider obligations.
If we do not have a provision such as this, which gives the wider context, it could be interpreted that all we are concerned about in this Bill is, in effect, increasing flexibility in the social housing market and reducing the constraints on it by raising rents and eroding security of tenure, excluding from our richer areas people who are paying their rent with housing benefit and, effectively, trying to squeeze out of the existing stock a greater use of social housing. However, even if all that was to work—by and large I am against most of it—it would not solve the problem of the housing shortage across the board. We need to look at our housing supply and new build so as to offer quality and choice to our population. In the absence of a policy from the top down—although I do not dispute that—we need one that is built up local authority by local authority. That should be seen in this Bill and more widely as a central responsibility of the local authority in conjunction with its community. This clause would set the context in which that operates, so I hope that the Government will give at least some consideration, if not to accepting the precise wording of the amendment, to accepting the intention behind it. I beg to move.
Baroness Hanham
My Lords, welcome to the noble Lord, Lord Kennedy. He was sharp, swift and brief—brilliant. We will have more of the noble Lord, if we might. On the amendment of the noble Lord, Lord Whitty, supported by the noble Lord, Lord Shipley, I am once again going to say that we do not need it. While I admire the verve with which the noble Lord, Lord Whitty, has presented his case, there are already statutory provisions.
Local authorities are already under statutory provisions to provide plans for the housing needs of their population and to discharge their housing functions in accordance with their strategic priories as detailed in their housing strategies. Section 13 of the Planning and Compulsory Purchase Act 2004 requires local planning authorities to keep under review matters that are likely to affect the development of their area, including size, composition and distribution of the housing for their population. In addition, planning policy statement 3 and the associated guidance on strategic housing assessment make clear that local authority plans should be informed by a robust evidence base of housing need and demand in its area for market and affordable housing.
Section 87 of the Local Government Act 2003 provides a power for the Secretary of State to require all local housing authorities to have a housing strategy, so the provision is there already. It is well understood that local authorities should be more than clear about the requirements in their area in this regard. The current guidance on local housing strategies in England stresses that the local housing strategy is the local housing authority’s vision for housing in its area. It should set out objectives, targets and policies on how the authority intends to manage and deliver its strategic housing role, and provides an overarching framework against which the authority considers and formulates other policies on more specific housing issues. That is the strength of my argument in saying that we do not need the amendment. However, I understand the concern that lies behind it and behind the comments of the noble Lord, Lord Shipley. We are dramatically underhoused.
The noble Lord, Lord Shipley, has drawn attention to the limited housebuilding that has occurred over a number of years. Last year we had one of the lowest housebuilding programmes since 1923. We are trying to boost housebuilding. We have introduced the new homes bonus and are trying to encourage building through various means such as shared ownership and buy now pay later schemes. There are all sorts of plans to increase housing but you cannot do it overnight; it takes time to develop. However, there is no misunderstanding on the part of this Government that housing and a housing strategy are needed. With the assurance that this amendment is not necessary for the reasons I have given, I hope that the noble Lord will withdraw it.
Lord Whitty
My Lords, I thank the noble Lord, Lord Shipley, and my noble friend Lord Kennedy for their support for the amendment. I also thank the Minister for at least appreciating what lies behind the amendment. I understand that bits and pieces of the requirement for a strategy are in various bits of existing legislation. However, the most coherent expression is to be found in the planning guidance. Indeed, I have sought to gather some of the themes of the planning guidance in one place and to give it statutory backing. The noble Baroness says that the amendment is not necessary. I may return to it but for the moment I accept that. As she rightly says, this is a long-term problem. It has arisen over a long time and will take a long time to resolve. Those of us who are veterans of the housing debate know that I was not particularly supportive of various aspects of the previous Government’s policy in this regard. I have yet to be convinced that the new Government’s policy is likely to deliver more housing, particularly affordable housing for the kind of people I have talked about.
There is a need for a strategic framework here. The Localism Bill, in so far as it redefines the decisions that are to be taken locally, is probably the right place for it. I will consider carefully what the noble Baroness has said. However, at some point in this whole housing policy debate and in the Localism Bill we will have to re-emphasise the fact that the national drivers—in so far as they worked—have largely gone, and that the real driving force in solving what is admittedly a long-term housing problem now rests with our local authorities. If I have at least got that message across and the Government follow it through, I will have achieved something. I have taken 20 minutes over this amendment, for which I apologise. I may return to it at Report, but at this stage I beg leave to withdraw the amendment.
Localism Bill
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Lord Beecham
I hesitate to express a slightly different point of view as a vice-president of the Local Government Association from our esteemed president, but I am not quite as reluctant as he is to see this kind of duty, as proposed by the noble Baroness, Lady Greengross, and my noble friend Lord McKenzie, incorporated into the law, particularly given the state of the housing market in general and the huge unmet demand for housing, particularly affordable housing. It is important that all authorities recognise that there is a need to promote the provision of more accommodation. It is noticeable that since the disappearance of the regional spatial strategy, something like 200,000 houses it is estimated will no longer be built that would have been built had those plans been progressed.
I add one further dimension to the prescription from the noble Lord, Lord Best, for encouraging new building. I entirely agree with him that it is very desirable for private builders and housing associations to help to cater for the needs of an increasingly ageing population and indeed others. To that I would add local authorities themselves. That might be something that they would appreciate. Perhaps as a quid pro quo for having the extra responsibility of drawing up plans for affordable housing, the fact that they might actually be able to provide some themselves might be an additional incentive. I hope that sweetener will persuade the noble Lord, Lord Best, that his qualification might safely be abandoned.
Lord Whitty
My Lords, I support the principles of the amendment proposed by the noble Baroness, Lady Greengross. A whole section of this Bill later on in Part 6 deals with social housing and changes many of the existing arrangements for tenure, what the local authority is obliged to provide and tenants’ rights. Some of them I support and some of them I strongly oppose. However, the whole point of a social housing strategy is that it relates to the totality of the housing need in the area. Unless there is a provision somewhere in this Bill, such as the provision suggested by this and related amendments, dealing with social housing in the abstract is nonsense.
All forms of housing tenure are in crisis. We know that a lot of people who would have got a mortgage by the age of 30 now can no longer get a mortgage until their late 30s or even into their 40s. More and more people are having to rent in the private sector and are being delayed in setting up an independent household. We know that the rate of household formation is growing because of various developments in society, but it is growing at twice the rate of new build housing. We therefore have to have an holistic approach to housing need, area by area. If we are not going to achieve the targets through the regional spatial strategies, which I admit were a bit Stalinist in their approach, we have to ensure that the local authorities themselves take responsibility for looking at housing need in their areas and assessing it against their private sector development plans and the social housing that they and the housing associations in their areas can provide.
Somewhere in this Bill we need to tell local authorities that part of their responsibility from now on must be assessing total housing need against costs, against price and against demographic trends. That is not covered by the 2004 Act in sufficient detail. Given what I would regard as something close to a crisis in the housing market in all forms of tenure, I think it would be appropriate for us to set that out in the Act. Then, when we consider the social housing provisions, we can set them against a requirement for every local authority to assess needs, supply, demand, price, and demographic and employment changes, and to set its social housing targets and provision against that background. Unless we do that, social housing is isolated and is a residual form of housing based on what is already there. It does not relate to the needs of the totality of the community in which local authorities operate. If the Government are prepared to accept the noble Baroness’s amendment here, they need to say that at least somewhere in this Bill, and we need to ensure that local authorities behave accordingly.
Lord Taylor of Holbeach
My Lords, this has been a very useful debate. I do not think that the Committee is very far apart on the essential importance of housing and making housing one of the key ingredients of the planning process. I thank the noble Baroness, Lady Greengross, for the typically intelligent and sensitive way in which she introduced her Amendment 148 and led the group.
The amendments that we are considering include those of the noble Lord, Lord McKenzie, which seek this numerical assessment by a local authority of current and projected housing needs, the balance of affordable housing and proposals for addressing those needs in local development schemes, which are the documents setting out the programme and timetable for producing plans. Also required is the publication of annual reports of the matters reviewed and the changes proposed to implement local plans, and the publication of a review of a range of environmental, social and economic issues specified in the Planning and Compulsory Purchase Act 2004 prior to preparing its local plan. As I said, I do not think that we are a million miles away on the objectives.
Postal Services Bill
Lord Whitty Excerpts(14 years, 2 months ago)
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Lord Whitty
“(i) the minimum contract length for the commercial relationship;(ii) the details of any contractual break period that may be exercised by any party who enters into the commercial relationship;(iii) the total value of the contract to the Post Office company for the services provided under the terms of the commercial relationship for each year that the contract runs”
Lord Whitty
My Lords, I am grateful to the noble Baroness for both tabling the amendment in her name—particularly the new subsection (3A)(a)—and for the additional information that she has given today. I am not sure, however, whether that goes far enough to meet the anxieties.
As noble Lords will be aware, the interbusiness agreement is absolutely essential for the future operation of both the Royal Mail part of the unravelled company and, particularly, for the post office network, which is my concern. It is therefore important that when the Secretary of State reports to Parliament on the basis of the procedure, the terms of the agreement between the two parts of Royal Mail are clear, understood and give a robust and sustainable basis for both parts to continue. It will also, of course, have a significant effect on the value of both parts of the set-up—the value to investors in the Royal Mail part and the value to the taxpayer and the community of the network.
The specifics in my amendment to the government amendment would require part of the report to set down the minimum contract length. I know that the Government have said that they wish it to be the maximum that is legally possible, but we have never had a proper explanation of why they feel that there is a serious legal constraint on the length of the contract. It is therefore important that, at the point at which the contract is concluded and the report comes back to Parliament, the terms of the contract are spelt out and that any legal reasons for those terms are likewise spelt out. In terms of the risk that both parts of the organisation take in their new form, there is the issue of which party and in what circumstances can break that contract.
Baroness Wilcox
My Lords, I rise to respond to the noble Lords, Lord Whitty, Lord Christopher and Lord Young, on my amendment and the other two amendments. In response to the concerns expressed by the noble Lord, Lord Whitty, about the details to be provided in the Clause 2 report, I reiterate some of the sentiments I mentioned earlier. The information that we propose to include in the report includes much of the information that the noble Lord seeks in his Amendment 7. I would hope that the contract’s duration would be for the 10 years that many noble Lords are seeking, but the longest legally permissible duration will depend on other factors, such as volume commitments, which must be commercially negotiated between the companies. Finally, we must not require in Clause 2 the disclosure of information that might inadvertently damage the commercial interests of either business. That would damage the commercial sustainability of the post office network, which I am sure is not the noble Lord’s intention.
The noble Lord, Lord Christopher, raised a number of important points about how the postal service is provided in the Netherlands. I believe that these are consequences of the regulatory framework in the Netherlands, not of the ownership of its postal companies, but we will come to those matters when we debate Part 3 of the Bill, and I hope I will be able to provide him with further reassurance then.
The noble Lord, Lord Young, asked me to clarify what I said about the timing of a new contract between Royal Mail and the Post Office. As I said, negotiations are under way, and we expect a new contract to be ready to be signed by next spring. I hope that with those reassurances the noble Lord feels that he can withdraw his amendment.
Lord Whitty
My Lords, I appreciate that the noble Baroness has gone some considerable way. However, from what she just said it is clear that the information that the Government envisage in the report is on potential investors and the financial viability of both halves. There is a bigger public interest issue here. The post office network, which is so dear to many of our communities, depends on this agreement for one-third of its income. Unless this Bill spells out that part of the report to Parliament will cover something like the details that I have in my amendment, I do not think that the Government will be bound to provide a sufficient report on which Parliament can judge. Therefore, I would like to test the opinion of the House.
Lord Empey
My Lords, I should like to speak briefly. I am sure that the Minister in her response will argue that the amendment is not required because the main purpose of the Bill is to ensure the survival of the universal service obligation. However, the amendment indicates the level of concern in rural and remote areas that somehow, once the service is passed into the hands of the private sector, other things may happen. I hope that the Minister will again attempt to allay those concerns, which I know are real.
I said in my previous remarks in this House that many people regard the Royal Mail as a piece of national infrastructure. It is in that context that people, particularly those in remote areas who are already disadvantaged, fear—perhaps irrationally, but I nevertheless assure the noble Baroness that their fears are genuine—that somehow, despite the intentions of the Bill, things will ultimately change. I hope that that is not the case, but perhaps I may assure her that these concerns are genuine, and I hope that in her response she can give comfort to those of us who have these anxieties.
Lord Whitty
My Lords, I support the amendment in the names of the noble Lords, Lord Rogan and Lord Laird. The Minister will be well aware of my past engagement with Consumer Focus, the statutory body for postal services, which operates as separate entities in Scotland, Northern Ireland and Wales. It has become apparent, when assessing the needs of domestic consumers of postal services and post offices, and also those of small businesses in using those services, that there are somewhat different considerations relating to the firm commitment to the network and the universal service, particularly in rural areas and in those countries.
In Northern Ireland, there are particular issues relating to the north and the south, to An Post, and to getting mail across the sea. While preserving the universal service, the body of the post office and the body of Royal Mail as parts of our United Kingdom national infrastructure, it is important that we recognise that any dilution of the service or differential treatment of the parts of the United Kingdom would be particularly detrimental to those countries. It is therefore important that the devolved Administrations are fully involved in any changes.
Perhaps I may gently say to the noble Baroness that it has been obvious that her department in Whitehall has not always been the best when consulting devolved Administrations on a whole range of issues, including this one. The department is getting better, but acceptance of at least the principle of the amendment would be appreciated and would help the Government’s approach. It would meet the fears of many businesses and individuals in those countries, particularly in rural areas and small towns.
Lord Razzall
My Lords, I was not going to intervene, but because the noble Lord, Lord Low of Dalston, raised the point I made in Committee, we should put on the record that after the noble Baroness looked into this point she wrote to both of us and said that we were actually both right. As the noble Lord indicated, the cost of delivering items of mail in London is more or less the same as the cost in rural areas, and is significantly greater than the cost in other United Kingdom cities. The point that I was trying to make, obviously inelegantly, was that if I was really worried about what would happen I would worry about London. It is not only that the cost of delivery in London is greater, but London is such a huge element in the costs of Royal Mail, which has huge overheads, any third party looking at the overall cost of the Royal Mail—rather than looking at the Orkneys and Shetland—will have to look at the costs in London. It is Hackney that ought to worry, rather than the Orkneys and Shetland. That was the point I was trying to make.