Infrastructure Bill [HL]

Lord Oxburgh Excerpts

Wednesday 18th June 2014 Lords Chamber

[Lord Oxburgh (CB)]

My Lords, it is a tough job to follow a speaker as well informed and experienced as the noble Lord, Lord Whitty. Fortunately, I will take a slightly different line. As has been pointed out, the Bill covers a number of interesting and somewhat loosely related topics. The first part deals with roads and establishing a strategic highways company, or companies—I share the puzzlement of the noble Lord, Lord Whitty, over the reference to companies—to implement the roads programme. I have some specific questions on this which I will come to later.

For the moment, I wish to raise how the roads programme was established in the first place and how it will fit into considerations of the broader national infrastructure. Perhaps this will be revealed in the strategic vision promised by the Minister. She also spoke of the very substantial investment being made in infrastructure, which is to be welcomed. Undoubtedly, things have got better. Yet, as the noble Lord, Lord Adonis, pointed out, the evidence suggests that we may not yet be getting these things right. The recent World Economic Forum report on global competitiveness ranked the overall quality of UK infrastructure rather low in the world league, which echoed the conclusion of the CBI report in 2011. I think we can agree that that has to change if the economic recovery, which fortunately is under way at present, is to continue and to be consolidated.

Good infrastructure is what attracts investment and underpins virtually all economic activity. One does not have to go very far in other European countries to be impressed by the seamless integration of air, road and rail services in a way that all too often seems to elude us.

Why should we have a problem? There is a national infrastructure unit within the Treasury, advised by a National Infrastructure Advisory Council that includes external members. A policy paper was published entitled National Infrastructure Plan 2013 that was updated on the website on 31 March 2014. The trouble is that it is not an infrastructure plan: is a list. It enumerates the major road projects that are to go ahead, along with dozens of other local infrastructure projects of many kinds in different parts of the country. We find sections on roads, rail, airports, energy and a host of other important investments. However, each section appears to have been written in isolation by different authors and to a large extent ignores other infrastructural elements.

What we do not find in the plan is any integrated view of national infrastructure as a whole, or indeed any recognition that the different elements of infrastructure should interact with each other. This approach has dogged our recent discussions of major infrastructure projects. In the ongoing discussion of HS2 there has been little mention of how the motorway network might be affected one way or the other if it were built or not built—or, for that matter, whether the HS2 line offers the possibility of a new route for high-speed broadband fibre. These things can go together. Similarly, the discussion of new airport capacity in the south-east has been driven largely by local considerations with the assumption that whatever road or rail connection were needed would simply have to be built.

The national infrastructure plan contains virtually no discussion of policy. For example, in the roads section, I was unable to find any indication at all that any of the projects had taken into account the fact that over the next 30 to 40 years of their lifetime they would certainly have to withstand more extremes of climate than have been usual in the past. Indeed, the Department of Energy and Climate Change is not represented on the National Infrastructure Advisory Committee. In the particular context of road development, for example, there is no discussion of whether it is desirable to have an infrastructure that promotes the movement of more freight by rail. These are important strategic considerations that seem to be completely omitted from our thinking.

The national infrastructure plan is seriously misnamed. It is not a plan, as I pointed out. The enumeration of infrastructure projects planned or in progress in the country as a whole gives no clue as to why the priorities have been decided on or how they might fit together. They give the appearance of priority lists generated by a series of unco-ordinated departmental silos.

At this point, I draw the attention of the House to the work of the London School of Economics Growth Commission on which two of our colleagues, the noble Lords, Lord Browne and Lord Stern, serve. Although the Growth Commission’s remit is wider than infrastructure, it emphasises that proper infrastructure planning is essential for the economy to prosper. Among other recommendations, the commission proposes the establishment of an overarching infrastructure strategy board that will view national infrastructure as a whole.

Infrastructure projects are essentially long-term in both their execution and operation, and need to survive many Parliaments and many Ministers. For that reason, the commission argues that infrastructure planning needs to be removed as far as possible from adversarial party politics and carried forward on the basis of political consensus—and the commission makes suggestions as to how that can be done.

To turn to the specifics of the Bill, the proposed replacement of the Highways Agency with a company or companies wholly owned by government is a central plank. The proposed arrangement offers the possibility of more independence in the day-to-day running of matters relating to national roads and should allow a greater degree of certainty in planning. The expectation is that this will make the funding of road projects easier.

So far, so good, but what does this imply for the planning of road projects? Where will the responsibility lie for deciding how the national road network will evolve and how this will relate to other aspects of infrastructure? How will priorities be decided? The Bill is quite explicit that although the putative company—or companies—may subcontract the implementation of certain aspects of the work, responsibility for those aspects will remain with the company. Does this carry over to the relationship between Ministers and the company? Does the Minister retain full responsibility for the actions of the company or can the company develop and maintain the road network in a way that takes no account of other national priorities? It would be extremely useful to hear the Minister’s views on these questions.

I had not expected or planned to speak on Part 4, but, given that it has been subject to discussion, I will say that the sad thing is that Part 4 is necessary. Until, I think, about three years ago, I was chairman of a very successful onshore wind company, which operated both in mainland Europe and in the UK. Certainly in the UK, before embarking on any project in an area where we had identified a good wind resource, the first thing we did was to go into the local community and, through a variety of local organisations, say, “Look, we think you have a great wind resource here. Would you be interested in developing it in collaboration with us?”. The response was almost invariably positive, which was certainly a matter of expediency to the extent that it enormously facilitated the passage of the proposal through the planning process.

The last project was perhaps the most interesting, when we built a wind farm on the northernmost tip of the island of Skye, well away from the areas that are visited by tourists. We found, to our astonishment, that the local take-up of shares in the company was really significant. I cannot remember, but I think that members of the local community ended up owning three of the windmills themselves. The opening of the park was celebrated by a great ceilidh and the local distillery produced a windmill malt with one of our turbines illustrated on the label. The message is simply to emphasise what the noble Lord, Lord Jenkin, said: that this has been going on for some time and sensible companies should have been doing it. Those that have not would learn a great deal from looking at these lessons. Whether this is a necessary provision, I just do not know.

In conclusion, I shall not address other aspects of the Bill, which introduces a number of measures that I think will be useful, particularly those concerned with invasive species. However, I emphasise again that there are important questions about our overall, global, infrastructure planning in this country. I would like the Minister to tell us whether there is any process by which the component elements of infrastructure are considered together and prioritised in the national interest. My inquiries suggest that this does not happen at the meetings of the Treasury’s Infrastructure Advisory Council. Could it be that our infrastructure plan is not a plan at all but simply the outcome of an interdepartmental free-for-all, to a greater or lesser extent refereed by the Treasury with the sole priority of keeping down spending? If that is the case, our low position in the world infrastructure rankings is easily understood.

I support the Bill because its provisions seem to be generally beneficial but my concern is that we may not be getting value for money from our infrastructure investment because of a lack of articulation between its components.