Infrastructure Bill [HL]

Debate between Lord Whitty and Baroness Kramer

Monday 3rd November 2014 Lords Chamber

[Lord Whitty]

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

“or a strategic highways company”,

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

[Baroness Kramer]

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

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

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

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

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

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

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

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[Baroness Kramer]

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

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

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

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

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

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

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

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

[Lord Whitty]

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

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

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

[Baroness Kramer]

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

[Lord Whitty]

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

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

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

Infrastructure Bill [HL]

Debate between Lord Whitty and Baroness Kramer

Tuesday 8th July 2014 Grand Committee

[Lord Whitty (Lab)]

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

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

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

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

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

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

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[Lord Whitty]

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

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

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

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

[Baroness Kramer]

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

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

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

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

[Lord Whitty]

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

[Baroness Kramer]

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

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[Lord Whitty]

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

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

[Baroness Kramer]

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

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

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

[Lord Whitty]

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

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[Lord Whitty]

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

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

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

[Baroness Kramer]

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

[Lord Whitty]

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

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

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[Lord Whitty]

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

[Baroness Kramer]

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

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

[Lord Whitty]

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

Infrastructure Bill [HL]

Debate between Lord Whitty and Baroness Kramer

Thursday 3rd July 2014 Grand Committee

[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.

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[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.

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[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

Localism Bill

Debate between Lord Whitty and Baroness Kramer

Monday 12th September 2011 Lords Chamber

[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.

Postal Services Bill

Debate between Lord Whitty and Baroness Kramer

Tuesday 24th May 2011 Lords Chamber

[Baroness Kramer]

My Lords, in my defence, although I continue to think that the Government do not have a very good track record in valuing companies that they put forward for sale, I did not think that the Floor of this House would be any more effective in coming to an appropriate valuation either. Therefore, I support the Government in this instance.

[Lord Whitty]

My Lords, I support this amendment. The Government have to recognise that despite the hours which this House and another place have spent on this Bill and the very protracted proceedings, to which the noble Baroness replied in a very courteous and often very helpful way, the central fact of this piece of legislation, which deals with one of our national institutions and an essential part of our national infrastructure, is that nobody—not the Government, employees, customers, competitors or potential investors —knows what Royal Mail will look like once this legislation is passed. We do not know who the prospective buyers are. We do not know what mechanism the Government are intending to use for the sale, and therefore we do not know who will call the shots in Royal Mail’s future decisions once the privatisation is complete.

In those circumstances it is not entirely surprising that the basis for valuation causes concern. This is what lies behind my noble friend’s amendment. He is right that, historically, assets were sold off at a price that proved to be less than their value. However, in the 1980s, at least it was clear how we were going to sell them, which were going to IPOs and which were to be sold directly to particular bidders. This is not the case here. It is therefore even more important that this great national institution is not passed to an unknown process of sell-off, or to an unknown buyer, without Parliament and the public as a whole being confident about the basis on which that valuation is carried out.

As my noble friend has said, the amendment does not say that we should publish a valuation and therefore undermine the Government’s negotiating position, but it does say that we ought to know the criteria in the Government’s mind on which the valuation is based. This is a fairly minimal requirement. I hope that the Government, who are determined on this course, will at least have the self-confidence to make the public feel confident that this great asset will not be seriously undervalued. I hope that my noble friend’s modest proposal would go some way to achieving that objective if at this late stage the Government were to concede that such a measure should be included in the Bill.

Postal Services Bill

Debate between Lord Whitty and Baroness Kramer

Tuesday 17th May 2011 Lords Chamber

[Lord Whitty]

My Lords, it would be the nature of any investor in any situation to maximise their degree of flexibility—any company investing in any potential asset, particularly one which has so many obligations on it in the public domain, wants to maximise its flexibility. I do not know the investors the Government have in mind—we have not been clear on that; we have not even been clear whether it will be a single investor or an IPO or another arrangement—but my expectation is that it will be one or perhaps one or two in a consortium buying Royal Mail. They would wish to maximise their investment, on that front, as on other fronts. Giving them that flexibility could seriously prejudice the future of a socially, economically and regionally important part of our infrastructure. That is the suspicion that lies, in my view, behind this amendment.

I do not understand the point of the noble Lord, Lord Razzall, about state aid because if you have an agreement of that length in any case, whether it was voluntarily negotiated or imposed by Act of Parliament, state aid may be involved. So either way the possibility of state aid interest arises, and I recognise that that is one of the inhibitions on government. I am afraid that, if the noble Baroness does not accept this amendment or something like it, then she is heightening the suspicion that we are going to fall over backwards to placate a potential investor to the potential detriment of the post office network and those who depend on it.

[Baroness Kramer]

My Lords, I want to come in now on this conversation. The noble Lord, Lord Whitty, talked about an elephant in the room and then dismissed the EU state aid issue. Many Members of this House have been following the debate from the beginning—some have come in perhaps a little later, but many have been engaged from the beginning—and have heard directly from Moya Greene, the current chief executive of Royal Mail, that she would wish for the longest possible agreement that she could achieve within the law for an inter-business relationship with the Post Office. Many will also have heard the same from Paula Vennells, the managing director of the Post Office part of the current Royal Mail Group whom I think we may regard as the chief executive presumptive of the Post Office when it becomes a completely separate entity. They have also heard the Government say, on many occasions, that they would wish for, and would try to achieve, the longest possible agreement that could be done legally.

The issue of European state aid rules is absolutely critical. The noble Lord, Lord Whitty, will have looked at the financial condition of Royal Mail Group and will understand that it is urgent that new investment comes in, in a very timely manner, if the group is to be preserved. The Post Office side also needs the injection of £1.34 billion that the Government are committed to putting into it, which would come through this legislation and the new structures. That is what will guarantee its future.

However, all of that would be jeopardised when—one could say “if”, but I suspect that if we go back to the lawyers and ask the Government it would be “when”—the state aid rules were tripped by one of these two amendments. I am rather under the impression that the Government have done everything they can to find language that would not trigger European state aid rules and cannot find it. The language proposed today by the noble Lords, Lord Stevenson and Lord Rogan, trips the European state aid rules. That would mean 24 months of constant wrangling, in which it is impossible to go out and bring in a new investor. All investors require some degree of certainty about what is happening to the organisation they are meant to examine and on which they are meant then to make an offer. It would also mean 24 months of uncertainty for the public. If this was two or three years ago, the luxury of including a clause like this and being resigned to spending two years fighting through state aid issues might have been possible. I suggest that we do not have that luxury at the moment.

We have two key organisations which matter to all our communities. We have people who work for Royal Mail—the regular staff who do incredibly hard work and need certainty about their jobs—and we have communities that rely on the Post Office. If we inject something like 24 months of further uncertainty, and who knows what comes out of the state aid negotiations, we jeopardise everything we have been trying to achieve—for weeks now in this House and in the other place—which is to make sure there is a secure future for the Royal Mail Group and that both the Royal Mail and Post Office parts of it can thrive. I understand that people have suspicions and concerns and will not take government assurances because they do not like to take them and perhaps do not quite believe Moya Greene or do not quite take the word of Paula Vennells. I understand all that, but there is an overriding issue and it has not been addressed by those who moved this amendment. The language triggers state aid provisions—we cannot afford the consequences of having that in the Bill.

Postal Services Bill

Debate between Lord Whitty and Baroness Kramer

Monday 14th March 2011 Lords Chamber

[Lord Whitty]

My Lords, I thank the noble Baroness, particularly for her last few sentences; clearly we may well come back to the matter on Clause 4. However, I did not find the rest of what she said very reassuring.

I am grateful to the noble Baroness for referring to the legal difficulties on the inter-business arrangement. However, there are different legal opinions on it. If it is primarily the Government’s view that an ongoing agreement would run up against both state aid and competition laws, before we complete consideration of the Bill it would be helpful to have an opinion that spells that out in writing. The question asked by the noble Lord, Lord Skelmersdale, is absolutely pertinent to this. If a legally defensible agreement between Royal Mail and Post Office Ltd could not be sustained in law, how can that be compatible with the Government’s very clear—and, frankly, very political and public—commitment to maintaining a post office network of roughly this size? I do not think it is possible to square that circle, which raises deeper alarms than I had when I tabled the amendment. I am certainly not arguing that the inter-business agreement in its present form should last for ever, but both Houses of Parliament will need to be reassured as to which principles of that agreement the Government will see sustained through the ongoing relationship between the two parts of what is currently the Royal Mail Group. I hope that we get greater clarification when we move further into the Bill but, if anything, this short debate has alarmed me more.

I have also been alarmed more on the assets; I am not sure that the Minister alarmed me, but the noble Baroness, Lady Kramer, definitely did. She effectively said, “We can’t set out in the report to Parliament”—the trigger for giving the go-ahead to the Secretary of State—“what assets we are and are not privatising”. In previous privatisations, on occasions there have been huge schedules about that. We do not have such a schedule attached to the Bill, and I do not propose that we do. There may be some obscurities attached to that schedule, in which case some footnotes may be needed.

[Baroness Kramer]

I fear that the noble Lord, Lord Whitty, may have misunderstood me; I obviously was not clear. If I remember correctly, the report comes after the Minister has taken the decision but before the actual disposal. After the fact of the disposal—that is what the noble Lord is now discussing—a clear schedule would be available. However, we are talking about a report to Parliament, which most of this House welcomes, coming at a far earlier stage than is normal.

[Lord Whitty]

But, my Lords, the report to Parliament provided for in Clause 2 is a necessary stage for the Secretary of State to go through before the disposal actually takes place. I agree about the decision in principle; I do not seek to delay that or take things out of sequence, but when Parliament discusses the report it needs to know what is and is not being privatised, at least in broad terms. The reasons for not saying so that the noble Baroness adduced—that we could not do so until we saw the final details of the negotiation—really alarmed me; as I said in my opening speech, there are some pretty good assets here. If a negotiation went on whereby the decision of the putative buyer was rather marginal as to whether it went ahead, and someone said to it, “Okay, we’ll throw in a couple of dozen prime-site Crown post offices in our major city centres. Does that make it any better?”, that would cause all parliamentarians a degree of alarm. Therefore, if the register of assets is dependent on the negotiations, we have something to worry about. I would have thought that the Government ought to know pretty clearly which assets go on one side of the line and which are on the other already, although they may have to sort out one or two things. If it is subject to negotiations, and if any premises that have a faint double usage by the two parts of the business could go into the bundle offered to the incoming investor taking over the Royal Mail side in whole or in part, the viability, the effectiveness and the asset base of the Post Office Ltd side of the business come into question again.

I hope that we return to those issues. I come out of the debate somewhat more alarmed than I went into it.