Highways (Financing) Bill (First sitting)

Greg Smith Excerpts

Thursday 29th October 2026 Public Bill Committees

[The Chair]

I call the shadow Minister.

[Greg Smith (Mid Buckinghamshire) (Con)]

Q It is a pleasure to serve under your chairmanship, Ms Lewell. Good morning, gentlemen.

On one level the Bill, particularly on Second Reading and in other narratives that have come out since it was first published, seems to be presented as answering the question: how do you solve a problem like the lower Thames crossing? But it equally has a lot of other provisions—perhaps it is due to badly drafted clauses or perhaps it is deliberate—that seem to allow tolling and road pricing to extend further than the lower Thames crossing. Is that something your organisations are concerned about, and do you feel enough focus has been given to parts of Bill related to everything other than the lower Thames crossing—to the general motorists in this country?

Edmund King: Obviously if you look at the need for the lower Thames crossing—the congestion and the environmental issues currently at Dartford—it is easy to see that some alternative solution is needed. But, as you rightly say, this Bill is not just about the lower Thames crossing; it could allow that finance model with other schemes. It might have been easier if it was concentrated on the lower Thames crossing because then you could have brought in more restrictions and safeguards on tolls for motorists.

As the Bill stands, on the one hand you have the Office of Rail and Road as the regulator for it, and then you have drivers who are the consumers, whether they are individual motorists or heavy goods vehicle drivers. To some extent, there might be a conflict between those two. The ORR has to ensure that the licensee makes money from it so it can be viable, but at the same time, it regulates tolls for the drivers. You could argue that there might be a conflict in that at times.

When we looked at similar schemes before—I did a paper on road miles with an economist, which looked at the broader issue of road pricing—one thing we called for was an independent body to oversee tolling and ensure it is fair. I certainly think that the responsibility of the ORR when it comes to tolls could be strengthened and given more independence within the Bill.

Steve Gooding: Clearly, the Committee will want to look very closely at clause 3, which I think is the key thing here. Yes, we looked at it and wondered whether this was a way of creating a framework that could then be applied to the existing road network and the existing motorway network. Clearly, the provisions relate to the trunk roads—the National Highways roads.

I think the way clause 3 is drafted tightens that down to where capacity is being added, but we want the Committee to look at how much capacity is being added in order to make that a valid use of the powers in the Bill. Is it simply, for example, playing tunes with the speed limits or maybe adding a lane? What is it? In those circumstances, would we really be contemplating transferring sections of the existing national road network over to a private company? I do not think that is the intention, but the intention is not always the actuality.

[Greg Smith]

Q That is very helpful. I want to dig a bit deeper on that because I think the part of clause 3 that you are referring to is where it says:

“A licence may also provide for the holder of the licence to secure the maintenance, operation or improvement of any other highway”.

Is it the view of your organisation and members that people would expect that to be about an entirely new road or perhaps a dualled road where there is currently a single carriageway, rather than making what many might consider a relatively minor improvement, such as—I do not know whether this is an improvement—adding smart motorway cameras?

Steve Gooding: Our understanding of it, and this is why I think the Committee will want to make sure this is clear, is that the subsections of clause 3 relate back to each other. It is not relatively minor maintenance of itself that would enable the licence to be awarded. In our reading of it, it has to be linked back to enhancement and capacity—but perhaps the Minister will want to make that clearer.

[Greg Smith]

Q Lastly, where a new scheme is being proposed under the provisions of this Bill, is enough thought being given to other nearby existing roads and to those who rely those nearby roads—businesses, homeowners, people who live there, schools, hospitals and so on—and are they being properly consulted on this? Too often in this world, the new, shiny thing gets all the attention without due regard to existing infrastructure. Do you feel that that has been adequately explored?

Edmund King: You can say that in relation to the lower Thames crossing, because in that part you know the two elements—one is the current Dartford crossing; one is the new crossing—and you can look in that area. But if you look at the Bill more generally, it is very difficult to say because we do not know where it will be applied. Clause 3(1)(a) does say

“construction of a highway specified in the licence”,

but we obviously do not know where that highway is or what the competing interests are with housing, the economy, routes and so on. In terms of this Bill, it is difficult to say unless a concrete scheme is being considered.

Steve Gooding: It is within the duties that are being placed on the Secretary of State to consider where these powers will be used: there are duties in relation to having regard to users of the network, for example. It could be made more explicit. After all, we are talking about a national asset here, and if faced with a toll and an alternative, people might well choose the alternative, with negative traffic impacts in the round. That would have to be taken into account.

[The Parliamentary Under-Secretary of State for Transport (Justin Madders)]

Q It is a pleasure to see you in the Chair, Ms Lewell. Thank you to the witnesses for coming in. I will follow up on some of the questions from the shadow Minister, but in terms of the operation of clause 3(1)(c), it refers specifically to the maintenance of the licensed area, which is the part of the highway where capacity is being increased as part of the legislation, so it is not a general maintenance issue across the whole network.

There is a narrative that the Bill is a Trojan horse for widespread road charging. We have made it very clear that the operation of this legislation will be for specific and limited circumstances. Is there something more that we can do or say to reassure you that there is no secret plan to widely use this?

Steve Gooding: I certainly do not think that it is a conscious Trojan horse, if I may say that, but having been involved in similar drafting exercises before, one always wants to destruction test whether something could be used in a way that was not anticipated. When one looks at the proposals for the Dartford crossing and the lower Thames, you are bundling the existing crossing into the package, as it were, that the private sector licensee is going to run. One wonders whether there might be other instances where something will be brought into the ambit of the licence that we will not have been expecting or intending at the point of passing the legislation, for which we might need further tightening of clause 3.

Edmund King: Part of the problem with Governments and tolls is their previous record. If you go back to the original Dartford crossing, the tolls were meant to be removed when the bridge was paid for and certain maintenance was put aside; that occurred in 2003, and subsequent Governments have not removed them. Drivers do remember that Governments have rescinded their promises, so there is that mistrust. Having said that, when we talk to drivers about new infrastructure—and about it being new infrastructure, not existing infrastructure—they are much more open to it being tolled because they can see the benefits in time savings, reducing congestion and so on. Certainly with the lower Thames crossing, they can see the benefits from that.

--- Later in debate ---

[The Chair]

We will now hear oral evidence from Logistics UK, the Road Haulage Association and M6toll. For this session we have until 12.45 pm. Will the witnesses briefly introduce themselves for the record, please?

Ben Garratt: I am Ben Garratt, interim director of policy and communications at Logistics UK.

Michael Whelan: I am Michael Whelan, general manager at M6toll.

Declan Pang: I am Declan Pang, director of policy at the Road Haulage Association.

[Greg Smith]

Q Good afternoon, gentlemen. Can I start with Ben and Declan from the logistics and haulage sectors? There were a lot of questions during the last panel about the overall cost of the lower Thames crossing and any other schemes that might get a licence through the provisions of this Bill. I know from my role as a shadow Minister doing roundtables with Logistics UK and visiting haulage firms in my own constituency that margins are very tight in the sector right now. Equally I get that the juxtaposition of margins is even worse if you are stuck in traffic and cannot get across the Thames or to wherever it is you want to go. Can you comment on where the breaking point is for the sector? If a toll for an HGV, for example, came out too high, there would be a perverse incentive for haulage operators to use existing other routes to avoid that. Is there a risk that we end up building these things too expensive, the toll is too high, and the haulage sector finds itself in a worse position?

Ben Garratt: It is a tricky question. What we know is that the current situation and reliance on the Dartford crossing costs the logistics sector, as well as other users of the crossing, a lot in terms of the congestion that comes from that. The cost of sitting in traffic is estimated at £200 million a year. That is based on the time sitting doing nothing, but does not take into account the wider cost to the logistics sector and supply chains of goods not arriving on time. It is just based on the wasted time of the driver. We also know that reliability, or lack of it, is a cost borne by the sector that is then passed on.

When we speak to our members, they tell us that what they want is a reliable transport system so they can factor in how much a job is going to take—how much time, how many drivers and what they should charge for it—and unreliability means it is much harder to do that. As a sector we potentially have more assets than we need to cover the same amount of ground, which is why it is really important for the sector that capacity increases and why we support, therefore, the delivery of the lower Thames crossing.

In terms of a breaking point it is quite tricky because the reason that the sector has a low margin—between 1% and 3%—is because it is a highly competitive sector. It is a feature of the sector rather than something we would say we complain about. It is because there are lots of logistics businesses all competing with each other to deliver the best price. When there are cost pressures on the sector over the medium to long term, it generally keeps that margin where it is, but it results in the overall cost being passed on to the public. Unless it is priced ludicrously, the risk is more about the overall cost being passed on to the public rather than it breaking the operators, as it were.

[Greg Smith]

Q On the inflationary impact of that example, I think on Second Reading there was largely cross-party consensus on the need for the lower Thames crossing. That is not a point on which there is a political divide. Where the Bill opens up wider questions is on the “what else” bit—how many more schemes under this model could come to pass in future? Without wholesale change to other things, such as fuel duty, road fund licence and so on, there will be an inflationary impact if we suddenly end up with lots of schemes used by general motorists as well as the haulage sector. There will be a tipping point, where the inflationary impact—with the pass-on of tolls to customers—becomes high. Do you have any modelling on that?

Ben Garratt: No, we do not. We would say that the inflationary impact is a balance between the direct input costs—paying a toll, fuel duty and taxes—and the indirect costs of congestion. As a sector, we want to keep those two things in balance, but one of the things that we do want is more investment in the transport network—road, rail and beyond—because some real hotspots are causing congestion and therefore passing the cost on. This is one of them, but it is not the only one.

We need to make sure that is in balance. We are not disputing building this particular crossing, but not building things in general has a cost in itself. It is about making sure that this is fair, and therefore about considering the different ways of paying for it. Traditionally, such things have been done under general taxation, which we all pay for, but given the fiscal situation, we as a sector are not against a toll approach, a private finance approach, for this particular crossing.

This crossing is one heavily used by the logistics sector. For us, it is a key part of the trading route between Scotland, the midlands and the north, and Europe; it is not simply an issue for the east of London, Essex and Kent. We want to see it happen and, as a sector, we are prepared to help pay for it. We just want to make sure that the toll takes into account the different vehicles, and that the different toll rates for different vehicles take the sector into account. The toll should not be based just on the weight of vehicle, and wear and tear; we need to take into account the economic value that the logistics sector provides to the rest of the country. Ultimately, we all pay for that in a way that is slightly different from other road users.

[Greg Smith]

Q That is a point I fully understand. Declan, will you add your thoughts and your organisation’s perspective? I will add one rider to the question I asked Ben: the previous Government removing tolls from the Severn bridge was pretty well received by general motorists and the haulage sector. That is where I am coming from—to get an understanding of where the tipping point is.

Declan Pang: The cost and affordability of toll rates is a significant concern for us. As you all know, the majority of those in the haulage sector are small and medium-sized enterprises. Small businesses, many of them microbusinesses, are the major users of the trunk road network, so their interests need to be front and centre of how toll rates are set. At the moment, we also have quite a fragile situation in the haulage sector—a particular rate of mergers and acquisitions, as well as a high rate of insolvencies—and that difficult climate has certainly been exacerbated by higher input costs and fuel costs. That should certainly be considered when the Bill is looked at.

In the Bill itself, we are particularly concerned about the affordability of tolls and the transparency of how those tolls will be set, as well as the wider impact of the financing model. We would very much like MPs to think about and look at how tolls will be calculated, how they might increase over time, and how the ORR, as the regulator, will assess the affordability of tolls, because we do not feel that that is clearly set out, as the Bill stands. Lots of concern is about whether the Government have plans to use the Bill powers to introduce tolls on roads that are currently free. We certainly seek additional assurances on that point from the Minister.

[Greg Smith]

Q That is incredibly helpful. Given that the affordability of tolls is so critical to your members, do you believe that there should be a presumption or something even stronger locked into the Bill that, within the bounds of safety and meeting the correct standards, there should be due regard to ensuring that schemes are built as cheaply as possible? For example, the lower Thames crossing is already being made more expensive by banning the use of diesel plant to build it. Should there be a presumption that things should be built, within safety and other due standards, as cheaply as possible?

Declan Pang: Absolutely. The costs of constructing these schemes are essential in terms of reducing the level of tolls. We particularly think that the Bill as drafted is quite open ended in terms of the phrases it uses. As a previous witness said, affordability should be part of it, rather than just “fair and transparent”. We would like to see that included. We are very supportive of Jim Dickson’s amendment on the rates as well. We would like to see more consideration given to affordability for businesses.

Ben Garratt: I agree with everything Declan said. In the assurances space, clause 1 talks about the ORR having regard to economy. That also comes up in other clauses of the Bill. We would like assurances that that includes an understanding that freight and supply chains are a part of “economy”. It is quite a broad term otherwise.

[Greg Smith]

Q That is incredibly helpful. Mr Whelan, you have a niche interest around the M6 toll elements. Do you feel that the Bill delivers for an existing toll road operation? Is there anything you feel is missing from the Bill?

Michael Whelan: Our specific interest in the Bill is part 7, which will enable us to introduce free-flow tolling. At the moment, on the M6 toll, we have barriers where you need to slow down, stop and pay. Part 7 of the Bill is the first step for us to enable free-flow tolling, which will help my freight and logistics friends sitting to either side of me—they will not have to slow down and stop. That has many benefits, including time savings. The M6 toll is a very reliable route compared with the alternatives, so it further increases that reliability through increased time savings. It will also mean reduced carbon dioxide emissions because of less stopping and starting.

[Justin Madders]

Q Good afternoon, gentlemen. It would be quite helpful to hear from Mr Garratt and Mr Pang in a little more detail about the current importance of the area for the whole of the logistics network. In particular, it might be useful for Committee members to hear what the current arrangements are when hazardous items have to go through the tunnel, because that is a big challenge at the moment.

Ben Garratt: The current situation lacks resilience. The sector uses the Dartford crossing, which crosses east of London, as a part of what I describe as a core route for the whole country; it connects Scotland and the north, the midlands, the south-east and Europe on that trading route, particularly in trading across the short straits, which handle more than half of all goods traded between Britain and mainland Europe. It is a really important part of the network to get right and it is currently overloaded. As we know, it is causing significant congestion, which adds costs. As you have noted, that is not simply an even matter of a busy road; it is also the crossing being closed to allow hazardous goods to cross, which everyone else has to wait for. That has a significant impact across the whole network. It is not sustainable.

That also takes into account the assumption that the crossing is broadly open all the time, but things will need repairing over their lifetime. Across the rest of the transport network, there is the structures fund and National Highways is focused on other structures that will need repairing at some point. We have a resilience challenge as well as a costs challenge because of that capacity issue.

Declan Pang: We absolutely need to increase the resilience of that particular route as well as the whole road network. Vehicle miles are increasing and congestion is forecast to increase, so this is a problem we have to get ahead of. That means making sure we can increase trunk road capacity.

--- Later in debate ---

[The Chair]

We will now hear oral evidence from Transport Action Network. We have until 1 pm for this session. Will the witness briefly introduce themselves for the record?

Ralph Smyth: My name is Ralph Smyth and I am here on behalf of Transport Action Network. I have about 15 years’ experience, including influencing the Infrastructure Act 2015 and serving on the National Highways strategic design panel and seeing some of the schemes that we are discussing today, as well as working on road freight decarbonisation projects.

[Greg Smith]

Q Good afternoon. As you look at the totality of the Bill, including the elements around the lower Thames crossing, do you think the Government are joined up enough in looking at where new schemes, be that the lower Thames crossing or anything else that might come to pass, are delivered in respect of the existing infrastructure, local roads and intersections, and, as we just heard from the haulage sector, things like roadside driver welfare facilities? Does the Bill risk bringing nice new shiny things to the strategic road network without the necessary back-up to the existing intersections and roads that the new schemes will rely on?

Ralph Smyth: It is a very good question. I point first to the second national infrastructure assessment, which was published three years ago. That said that by the end of 2026—so where we are now—the Government should publish an integrated strategy for road and rail. If you can see how you are going to improve the rail links and the road links, that would join up better and give confidence about where there should or should not be, for example, a change to the roads.

The other dimension is the local angle. We have heard recently in the media about how mayors might be given more of a say on water, for example, but the Bill goes in the opposite direction. It actually weakens or removes the mayoral input on transport. Transport has been the totemic issue of devolution and, oddly, the Bill removes that. A special new category of highway is created that is not subject to something called the network management duty, which is about joining things up in long-term planning and in short-term operations, such as where there is disruption. My concern is that for some of the schemes talked about, like the lower Thames crossing, it is going to be difficult to attract the private sector to invest without making it easier—for example, without reducing the risk of mayors getting in the way or trying to promote a railway line that would actually abstract some of the traffic.

[Greg Smith]

Q Are you suggesting that those areas of the country that currently have a mayor should be locked into the Bill as key consultees, in planning speak, before anything can go ahead?

Ralph Smyth: I would not want to leave out the rural areas where there are perhaps not mayors.

[Greg Smith]

Absolutely right—do not leave the rural areas out.

Ralph Smyth: Quite. The problem is the bigger context and the discussion about rewiring the state. That is talking about removing consultation, so simply a duty to consult to give your views might not be worth much.

The problem is that it needs to make economic sense for the investors. The M6 toll did not make a profit for 20 years. You are going to have to tilt this, particularly for very big schemes like the LTC, to make it attractive for investors, and that could mean making things less affordable for drivers and there being less involvement for mayors, despite transport being one of their big issues.

[Greg Smith]

Q Looking at the whole national scene, if you take it as read that there is no change to road fund licences, fuel duty and so on as the core funding for the road network, where is the tipping point in terms of the number of additional toll roads across the network that will just make driving unaffordable—for a haulage sector that is using longer routes every day of the week, and for the average motorist that maybe does not travel that far every day but needs to make those journeys to see relatives, go on holiday and so on across the strategic road network?

Ralph Smyth: The tipping point depends on the sector and the type of journey. For discretionary journeys, like seeing a relative, a sudden increase in toll might have an impact quite quickly. If you are commuting and doing the same journey every day or if a haulage firm is doing the same routes, it might take longer for a response to happen. As we are talking about tipping points, I will also talk about climate change, because some figures from the Environment Agency have shown that by 2050—not long after some of these roads might be built—about half the UK transport network will flood regularly. That obviously means a lot of disruption and a lot of increased costs for the operator or owner of the assets. Those things will also affect, given where we are going, our use of roads, railways and everything else.

[Greg Smith]

I am mindful that this is a shorter session, so I will stop there.

[Justin Madders]

Q I will briefly follow up on your comments. Obviously, this Bill is designed to cover the trunk roads network. It is correct, isn’t it, that mayors currently do not have any specific control over those?

Ralph Smyth: That is correct, yes. It is almost like an area that devolution has forgotten. We hear about the importance of roads; we heard about that from the previous witnesses, so it does appear a bit odd that there is not much there. One thing is that currently there is a duty, whether you are a local highway authority—county councils and so on—or the strategic highways authority, which is National Highways at the moment, to co-operate, but this Bill will create a new type of private highway authority and it will not join up. Some of the schemes that have seen funding withdrawn in road investment strategy 3 are very close to urban areas, and if they were funded via this route, that would not be an integrated approach and would be very different from what we are hearing about for the railways, where the Government have talked about the need for a single guiding mind.