Infrastructure Bill [HL]

Debate between Lord Whitty and Lord Bradshaw

Tuesday 8th July 2014 Grand Committee

[Lord Bradshaw (LD)]

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

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

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

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

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

[Lord Whitty]

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

--- Later in debate ---

[Lord Whitty]

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

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

[Lord Bradshaw]

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

[Lord Whitty]

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

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

Infrastructure Bill [HL]

Debate between Lord Whitty and Lord Bradshaw

Thursday 3rd July 2014 Grand Committee

[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.

Public Bodies Bill [HL]

Debate between Lord Whitty and Lord Bradshaw

Wednesday 9th March 2011 Lords Chamber

[Lord Whitty]

My Lords, my noble friend did not realise that I had arrived from the airport to move the amendment. I, too, am grateful to the Minister and I congratulate him. This is the first time that a Minister in this Government has added their name to an amendment of mine on any piece of legislation. What I am about to say should not undermine my gratitude. However, I have to ask two questions.

First, where does this leave Passenger Focus, because it achieved the distinction of appearing under three different schedules to the Bill and it remains in Schedule 3, which we agreed at an earlier stage? The piece of paper given to us for our debate on Monday, had we reached the amendment then, indicated that a much reduced role is envisaged for Passenger Focus. The document states that it would concentrate on its,

“core role of protecting consumers”,

that there was “scope for significant savings”, and that the body would be working under a “significantly reduced budget”. The reference to the core role is slightly sinister, because it implies that the organisation will focus on the complaints function and therefore act in processing and improving that function, but that it will not be allowed to be more critical of the train or bus companies and, more particularly, the department’s overall transport policy as regards the rail or bus network. If that is the intention, it will neuter Passenger Focus considerably. I should like the noble Earl, Lord Attlee, who I assume will reply, to provide reassurance on that front.

My second question is on a wider front. The various existing consumer bodies are being dealt with differentially under this legislation. Some are to be abolished, some are to be merged, some are to have their functions transferred and some, given the abolition of Schedule 7, will be retained—presumably in their present form. Passenger Focus will be retained in a modified form. The Government’s original intent, for which I had some regard, was to rationalise the whole structure of consumer representation. Instead of that, the danger is that they will leave a bigger hotchpotch than the aggregate of previous legislation on consumer matters and weaken the statutory base of a number of consumer bodies.

As the Committee knows, I have an interest as a past chair of Consumer Focus. On the one hand, it appears that that body will be abolished, while on the other hand the Government say that they will transfer the functions to Citizens Advice. It was BIS’s original view that other bodies, including Passenger Focus and the Consumer Council for Water, should also be transferred to Citizens Advice. Whether or not that was a good idea, at least it was coherent. It seems now that we will end up on the consumer front with greater incoherence than the Government inherited and were determined to do something about. Not only is regulation likely to be more incoherent, but it is also likely to be substantially weaker, with fewer resources. Therefore, although I very much appreciate the Government’s support for the amendment, I have serious misgivings about their specific and general intentions as regards consumer protection.

[Lord Bradshaw]

My Lords, I support what the noble Lord, Lord Whitty, said. There is certainly scope for economy. I did not agree with the previous Government’s decision to transfer protection of bus and coach passengers to the Rail Passengers’ Council. However, the work of the council is concentrated mainly on issues such as punctuality. It has produced extremely good reports on things that irritate users such as huge queues at booking offices and the way in which ticket machines baffle many users and often do not work. These issues are important to people and I cannot think who will regulate them for less money. Transferring the functions to the Office of Rail Regulation, which is full of lawyers, will raise the cost of doing this work.

I will say one further thing in defence of Passenger Focus. It has developed a system of statistical analysis by which it can take very little in the way of raw information and turn it into statistically robust results. I am all in favour of economy, but I am also in favour of having a body to look after the interests of passengers that is functional and that rests on a secure base. I and most passengers would regret anything that abolished this body.

[Earl Attlee]

My Lords, I was surprised when the noble Lord, Lord Whitty, did not move his amendment, so it is a great pleasure for me to respond to him. He and I have debated together over many years. He has accepted some of my amendments and taken others away. It is a great pleasure to continue our debate, albeit with our roles reversed.

The noble Lord’s amendment seeks to remove Passenger Focus from Schedule 5 to the Bill. The appearance in the Bill of Passenger Focus does not reflect the view that the interests of passengers are unimportant. We are clear that passengers are the only reason why we run a public transport system. This was reflected in the public bodies review, which concluded that Passenger Focus should be retained but substantially reformed to focus on the core role of protecting passengers, thereby allowing a reduction in the cost to the taxpayer.

Noble Lords may see this as a first step towards cutting the budget of Passenger Focus to the point where it is no longer capable of being an effective voice for passengers. I reassure them that this is not the case. We fully accept the need for a powerful and effective passenger advocate. This is reinforced by EU provisions that require us to have a properly independent complaints body to which rail passengers can turn. Passenger Focus plays that role.

The noble Lord, Lord Whitty, asked whether this was not simply an opportunity to weaken and abolish a body that has been critical of the Government in the past. The answer is no. We want to maintain an effective passenger advocate because that is the best way of ensuring that transport operators are held properly to account. This is an effective opportunity to ensure that that role is performed in a robust and cost-effective way.

The Government had originally listed Passenger Focus in Schedule 5 to enable possible changes to its functions. Further work and our discussions with Passenger Focus have clarified that we can significantly reduce the cost to the taxpayer without recourse to legislative change through Schedule 5. For example, efficiencies can be derived by reducing the scope of Passenger Focus’s research and survey work. My noble friend Lord Taylor has added his name to Amendment 98 on that basis to support the removal of Passenger Focus from Schedule 5, which we hope will be welcomed by the Committee. However, the governance changes that we intend require its inclusion in Schedule 3, so we cannot support Amendment 75, which the noble Lord, Lord Whitty, was unable to move on Monday. Amendment 160A, which would remove Passenger Focus from Schedule 7, is effectively redundant in the light of the Government’s decision to remove Schedule 7 from the Bill.

I hope that I have been able to reassure the Committee and the noble Lord that we are not planning to leave passengers without proper protection and I hope that the Committee will accept Amendment 98.