National Infrastructure Commission: Baseline Report

Baroness Neville-Rolfe Excerpts

Thursday 2nd December 2021 Grand Committee

[Baroness Neville-Rolfe (Con)]

My Lords, I am grateful to my colleague, the noble Lord, Lord Berkeley, for initiating this debate. The rules of politics and this House mean that I cannot formally call him a friend, but we have often found ourselves singing from similar hymn sheets in debates such as this. In particular, we focus on the central importance of rational economic decision-making in national life—we have certainly had some debates on HS2. We also sit on the same committee, where I am hugely grateful to him for the contribution he makes, as well as on the APPG on Infrastructure.

Adequate—preferably good—infrastructure is vital if an economy is to be able to operate effectively. Infrastructure in this sense includes communication, such as roads, rail, telephones and broadband, and utilities such as gas, electricity and water, which last covers both the necessity of adequate and pure supply and the risk of floods and drought. Some might say that adequate housing is another vital component of national infrastructure—here I should declare an interest as I am chair of your Lordships’ Built Environment Committee and we are currently conducting an inquiry into housing. But we do not need to split hairs. We all recognise that some entities constitute something reasonably described as infrastructure because they are required if economic ventures are to work. The Victorians —for whom I have a lot of admiration on the infra- structure side—understood that very well.

It is welcome that the importance of infrastructure has been recognised by the establishment of the National Infrastructure Commission, whose report we are considering today. It is under the leadership of Sir John Armitt, a very worthy chair—I know that because we served together at John Laing Construction when we were building Sizewell B in the 1990s. We might, in passing, wonder why it took so long to establish such an important body as the National Infrastructure Commission.

One answer to that question lies in a particular characteristic of infrastructure which separates it from other economic matters. In matters of infrastructure, a significant degree of national planning is necessary and desirable. In many cases, planning is not desirable; in most economic decisions the best course is to let those with ideas seek to put them into effect. If they are right then they will benefit substantially and so, by Adam Smith’s invisible hand, will the rest of us, to a lesser extent. The concept of Ministers and civil servants trying to decide what will succeed in the marketplace has rightly come to be regarded with derision. However, when it comes to, say, investment in train tracks or the electricity grid—or flooding and water resilience, in the circumstances of 2021—this is insufficient, as I think the noble Lord has explained very clearly, so a significant degree of planning is required.

For some of those contributing to today’s debate, all this theory might seem unnecessary. I say to them that they are wrong. Capitalism is the most effective method of economic advance ever discovered. Why has China become so rich? Because it has abandoned—in economic matters—the notions of communism and adopted, in a surprisingly pure form, those of capitalism. The shame is that it has limited its adoption of western ways to economic matters.

I come to the report before us. It is worthy, which is exactly what it ought to be. I have some quibbles. Thinking in terms of centuries or even decades, as we are bound to do on infrastructure, I do not think the emphasis on climate change will age entirely well. There are other challenges and of course innovation and changing weather patterns could alter matters by the time we get to the second half of the century, but we must certainly be more efficient and more careful in the use of our nation’s and the world’s resources in myriad different ways. It is wholly appropriate to assess matters in this long-term way and to look at both digital and physical aspects, as the report does so well. I welcome the report and the opportunity to debate longer-term infrastructure challenges, which is unusual but very important.

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[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, it is a great pleasure to follow my noble friend Lady Randerson, and I congratulate the noble Lord, Lord Berkeley, on securing this debate and on his excellent introduction. This is an extremely wide subject of great importance to be covered in just a one-hour debate, but we have had some excellent contributions from all sides. The noble Lord, Lord Berkeley, mentioned road and rail connectivity, and the noble Baroness, Lady Neville-Rolfe, understands the national infrastructure network across the board and spoke eloquently.

Given the breadth of the baseline report, I shall concentrate on the areas within my spokesperson’s role—wastewater management and flooding. I declare my interest as a vice-president of the LGA. Before I do that, I will just mention the issue of access to gigabit-capable broadband. The increase of coverage to 85% connection across the UK is to be welcomed, and the target of 95% connection by 2026 sounds excellent. However, this masks the dark areas of the country where there is no connection and where this is unlikely to be remedied by 2026.

Remote rural areas, especially in the national parks and deep rural hamlets, suffer from poor or no connectivity. The numbers affected are small but should not be overlooked. They will be the children struggling to do the homework that their friends in towns are easily able to complete, and the farmers trying to fill in the innumerable Defra forms. We have seen in recent days how storms can so easily bring down power lines and, again, deep rural areas are the last to be reconnected. As there is no government rural strategy, and various Ministers have repeatedly stressed that one will not be forthcoming, I make a plea for these areas not to be forgotten in the gigabit connection programme.

I turn to flood resilience and wastewater. During the passage of the Environment Act, flood resilience and waste were debated fully. Communities up and down the country have been flooded more than once. The misery that flood-water brings is truly heartbreaking; the slime and smell caused by overflowing sewage systems is difficult to describe if you have not experienced it yourself. It can destroy a lifetime’s possessions, many having emotional ties. The Government are due to invest £5.6 billion over the next six years to reduce the risk of flooding. Is the Minister able to tell us where this money is likely to be invested and the areas of the country that will benefit from this investment? I expect it to be in areas where the most difference can be made for businesses and homes, but this is likely to leave some smaller communities still at risk.

Despite recognition of climate change and the effects of building on flood plains and tarmacking over green fields, local authorities still build houses in areas where doing so will increase the risk of flooding. The noble Lord, Lord Berkeley, mentioned this. Inadequate attention is often given to how surface-water drainage will be tackled through properly engineered SUDS. Urgent attention needs to be given to how surface-water management is dealt with to prevent increasing the risk of flooding. Can the Minister give reassurance on this aspect?

Also during the passage of the Environment Act, and twice this week during Oral Questions, the issue of raw sewage being discharged by water companies has been raised. Due to the excellent work of the noble Duke, the Duke of Wellington, the Government have given commitments that water companies will in future have to be stringent in how they operate. There will be heavy fines for companies that discharge wastewater and sewage into our lakes and waterways. However, the ability to fine water companies has been in place for a while and has not deterred them. Investment in their infrastructure is long overdue, but it seems that shareholder dividends loom larger on their agenda than the Environment Agency fines. Can the Minister say exactly what conversations have taken place with water companies about improving their infrastructure to prevent future sewage spillages?

I turn now to waste, a great passion of mine. I first became aware of how important it was to reduce waste as a county councillor, when the landfill tax was introduced. This tax concentrated the minds of councillors and officers immediately, as it rose year on year. Much has been done on the recycling front during the intervening years, with many councils having doorstep collections of recyclable materials. However, many of these recyclable collections are not processed in the way the householder imagines they would be but sent for incineration. Although this can and should be through a waste-to-energy plant, supplying electricity locally, this is often not the case. Councils that ask their residents to separate their recyclable waste and collect it through a single-pass vehicle with different compartments for glass, aluminium foil, cans, paper, cardboard and plastic have much higher rates of true recycling.

[Baroness Neville-Rolfe (Con)]

Does my noble friend agree that we urgently need a single system for every council across the country to make this important change in recycling rates?

[Baroness Bakewell of Hardington Mandeville (LD)]

I do indeed, and I am coming to that.

Each of these items can be dealt with in its own way and recycled into reusable articles, thus helping a circular economy. When I lived in Somerset, this system had been up and running for a long time. In Walthamstow, where I rent a flat, all recyclables are in one bin and much of what goes in is not currently recyclable. I know the Government are keen for this system to be rolled out countrywide. Wales has such a system, which has operated for some time, and has the second-highest recycling rate in Europe and, obviously, the highest in Great Britain. Can the Minister give an indication of when the rollout of doorstep separated recyclable waste collections will take place?

My noble friend Lady Randerson spoke passionately about transport and congestion. Reducing emissions and congestion will improve productivity. I welcome the NIC report. Much has been achieved but, goodness me, there is still an awful lot left to do.

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[Viscount Younger of Leckie (Con)]

I agree with the noble Lord that it is part of the problem. I suspect that he may be referring to the air passenger duty and other matters. I shall write separately to him on that important matter, because I think it is fair to say that there is a balance to be struck between allowing people to travel and being sure that our aeroplane sector is fit for purpose in terms of achieving our climate change goals. I think that was probably the gist behind his question.

On flooding, we recognise that action is needed to improve surface water management as flood risk increases, so we have commissioned the NIC to conduct a study into the management of surface water flooding in England, including the role of nature-based solutions. In addition, the Government have updated their partnership funding arrangements, enabling more surface water schemes now to be delivered via their £5.2 billion investment programme.

Finally, I turn to urban connectivity, as part of the wider transport issues that I mentioned earlier. We recognise the challenges in respect to this highlighted by the report. That is why in the Budget we committed £5.7 billion over five years for London-style integrated transport settlements that will transform local networks in eight English city regions, and we have announced £1.2 billion over the spending review period for bus transformation deals.

The noble Lord, Lord Berkeley, asked whether the Government should consider the challenges and costs of delivering major infrastructure projects. He is quite right to highlight this. That is why the Chancellor set up Project SPEED to ensure that spending decisions are informed by deliverability concerns.

Moving quickly to next steps—with the Committee’s indulgence, I will go on beyond my time, but not too far—our work to create an infrastructure revolution is a remarkable cross-government effort. The Government have an established process for formally responding to the NIC’s recommendations. Once it has published the second national infrastructure assessment in the second half of 2023, we will respond as soon as practicable, although, as I have shown today, we are already engaging on these issues.

The noble Baroness, Lady Bakewell of Hardington Mandeville, asked about flood defences and where the £5.6 billion is being invested. Funding is distributed consistently across the country to wherever the risk is greatest and the benefits are highest. Defra published its flood and coastal erosion risk management investment plan in July 2021, as she may know. It provides an indicative regional breakdown of spend, including between £620 million and £750 million of investment in the north-west and £680 million to £830 million in Yorkshire and the Humber.

The noble Lord, Lord Tunnicliffe, asked about funding and urban connectivity. The Government have provided £4 billion of additional emergency funding to support TfL through the pandemic to address urban congestion. We have announced £5.7 billion to support transport networks.

I will conclude with a few ad lib-type remarks, as I want to pick up on an interesting point made by the noble Lord, Lord Berkeley, about our reflection on going to Waitrose to pick up a box of matches. We should be sure, as part of this debate on the NIC, of the vision we are looking at. This is probably not government policy, but we should look ahead—probably not too far—at how we might get our box of matches. Surely we would order a drone, which would deliver it to us. Or, if we were going to go to Waitrose, we would talk to our watch and ask a car—not our car but any driverless car—to come to our door. We would then get into the car with a coffee and a newspaper, be driven to Waitrose to buy our box of matches and then be driven back. The car would then disappear into the ether. We would then take our box of matches—perhaps rather cynically, I wonder what it might be for. Perhaps it is to light your fire in the drawing room, which adversely affects CO₂, so maybe we should not go there. Anyway, the serious point is that we need to think quite positively about the changes that will definitely come to the way that we live. The noble Lord, Lord Berkeley, spoke about society and our way of life. He makes an extremely good point.

To conclude, this is an extraordinary moment—

[Baroness Neville-Rolfe (Con)]

Before my noble friend sits down, perhaps he would like to exceed his brief again and say something about the longer term. He has answered very well on some of the individual comments raised by Peers this afternoon, but the point I was trying to make is that the National Infrastructure Commission is important because it looks at the longer-term, comprehensive picture, and the need for planning is very important. As a former Treasury Minister, I know that it is not always top of the Treasury’s list.

Perhaps we might discuss on another occasion the excellent point made by the noble Lord, Lord Tunnicliffe, about capital and current expenditure. I remember talking to Education Ministers who had spent lots of capital on schools. Capital was easy, free and glamorous, but running costs were not. The capital did not provide the cheapest possible way of running things, which commercial operators care a lot about. There is a profound point underlying his question, and it would be good if we could come back to that on a future occasion.

[Viscount Younger of Leckie (Con)]

My noble friend makes a very good point, and I hope that I have made it clear that we are thinking big and long. I mentioned 30 years, but perhaps we should look longer than that. One example is HS2. Whether we like it or not, that is an example of long-term planning—now covering four Governments, because I think it goes back to before 2010 as a concept.

That plays in nicely to my concluding remarks. We are perhaps at an extraordinary moment in this country’s history, as we make our way in the world as global Britain and build back better after Covid-19. This Government’s infrastructure revolution will, as the Prime Minister has previously put it, unleash the productive power of every part of this country and allow us to seize these opportunities with both hands. I have no doubt that the advice and guidance of the NIC will be integral to achieving all this and ultimately to helping us reach new levels of success.

Finally, as the noble Lord, Lord Berkeley, and the report put it,

“bold action, stable plans and long term funding”

are the aims. It is just a question of how we get there.