Connecting Europe Facility (Revocation) (EU Exit) Regulations 2019

Lord Teverson Excerpts

Monday 20th May 2019 Lords Chamber

[Lord Berkeley (Lab)]

I will not take long talking about this Motion, but it is important that we understand the potential changes to the railway sector if we leave the European Union without an agreement. I declare an interest, because I am still a board member of the European Rail Freight Association.

I very much welcome the commitment in the draft SI for the Government to continue funding the Connecting Europe Facility, which is given in the first page of the Explanatory Memorandum. I am also grateful to the Minister for the short meeting we had this morning to discuss some of these issues. I would be grateful if she could write to me with a list of the projects that are still receiving or are due to receive funding from the Connecting Europe Facility, so we can see how many there are and how long they will go on for. I do not think they will go on for long, but it would be good if they did.

The whole concept of a trans-Europe network, TEN-T and freight corridors has been debated and developed by the Commission over many years to try to get some continuity of funding or specification for operating procedures on the railways—and roads for TEN-T. Railways in the European Union generally are in complete chaos. They have got better, but are still pretty bad. The concept of continuity across frontiers will help customers have certainty of what they can operate on the trains. There has been little take-up on some routes, including a particular one that comes to the UK, but that is as much a problem of attitudes in France to operating anything in France that has not been developed in France.

We have a problem in this country, because these corridors go back long before Brexit was even thought about. I have always detected a reticence in successive Ministers of the Department for Transport to encourage the principle of through-running trains, because they thought they could do things better here. To me, this latest Explanatory Memorandum tries to confirm that policy, whether we stay in—when it will not apply—or leave.

I have a few questions to ask the Minister, if she does not mind, particularly about the content of the Explanatory Memorandum. I note from paragraph 2.3 that some further separate draft instruments will “deal with deficiencies arising”. When will that occur? On paragraph 2.8, we are members of the North Sea-Mediterranean Corridor, and I have been to many of the meetings of this body. It extends beyond London to Glasgow, Edinburgh, Southampton—and we can probably forget about Felixstowe. There is pressure from the European Union and quite rightly so, and remember we are still a member. Getting through services to Glasgow and Edinburgh in particular is important. I see no reason why this should not continue if we leave the EU. My understanding is that Switzerland, which has at least one and maybe one and a half corridors going through it, fully participates in all the discussions about improvements that are needed. I see absolutely no reason why we cannot have the same status as the Swiss. I would be grateful if the Minister would explain whether the Government intend to seek whatever arrangement is needed with the Swiss to achieve that. It is very important, from the customer’s point of view, to see that the Government are enthusiastic about this, even if it does not involve any money, so I hope that they will look at it again.

Paragraph 2.13 contains a very odd statement:

“The extension of the parts of the North Sea Mediterranean RFC in Great Britain made by the CEF are saved by the instrument”.


I do not know what “saved” means in this context. Perhaps the Minister can explain whether it is some old-fashioned meaning of the word or whether it means that it will be “retained”. I hope that it will be retained because it is very important that the Government give the message that these corridors can continue even if we have left the EU, under any circumstances. It is the same problem as the one we debated a couple of months ago about the European Railway Agency. If we leave, we are trying to stay as close as we can to Europe on the air side; and, as we debated earlier today, on the coach side we seem to be trying quite hard to stay with it; but on the railways, as far as I can see, Ministers want to separate us as much as they can from the rest of Europe, particularly in connection with the European Railway Agency. Is it because the “Europe” is in the title of the European Railway Agency? I hope that it is more sensible than that, but you never can tell.

I hope, first, that we never have to use this SI, but also that the Minister can give me some comfort that the UK Government’s policy on these corridors, for freight and the TEN-T, is better than lukewarm, because it has been lukewarm. It would be very good to encourage customers, Network Rail, the Government and the train operators to act positively and support them. They are very important to enable the best possible, environmentally friendly form of transport to continue—I think it covers something like 40% of our exports now. I beg to move.

[Lord Teverson (LD)]

My Lords, I thank the noble Lord, Lord Berkeley, for bringing this statutory instrument to my attention. It is not just about hard rail infrastructure but concerns telecommunications. The programmes of this facility particularly concern the digital economy and connectivity, and the whole area of energy, which is crucial for our development, given the problems we have with the nuclear programme at the moment.

I do not want to depress the noble Lord, Lord Berkeley, by saying that the one glimmer of hope in this SI is not what it seems, but I want to explore the Government’s funding guarantee. As I read it, this goes up only to 2020; I presume it is the end of 2020. We know that the current multiannual financial framework ends in 2020, but we also know that in the European cohesion funding and all other funding programmes, expenditure does not stop at the end of 2020: it is the bids for programmes that stop at the end of 2020. In fact, there are already enough forthcoming calls in 2019 for new projects, and I suspect there will be in 2020; I am sure the Minister has looked at this already. I presume that all those, particularly in hard infrastructure—not just digital, but even in digital development—will go well beyond the 2020 MFF end of programme and the government guarantee.

Has the Minister had any feedback from British organisations that are involved in this programme? Are they concerned that, if they bid for this programme now—and I presume they are stopping doing so now—they have no guarantee that there will be any funding after 2020? The EU would continue to fund these usually for two years after the MFF ends, and these programmes can no longer be bid for. I would be very interested to understand how that will work. Indeed, if it is a 2020 guarantee, we are already handicapping UK industry and UK business in terms of our connectivity under the threat of Brexit.

[Baroness Randerson (LD)]

My Lords, to take up the point just made by my noble friend, this SI is intended to plug any gaps that would occur if we left the EU without a deal. In that situation, it is highly likely that the EU might cease to fund projects that it has already committed to. Crucially, this 2020 date is now remarkably soon, although it might have sounded okay when the Government first dreamed it up at some point last year. Can the Government assure us that the 2020 date will be extended, for the reasons that my noble friend has outlined? That lack of certainty is behind the concerns that have been expressed by the devolved Administrations. If you think about the geography, it is the areas on the edge of the UK that are most concerned in many circumstances. In Wales, Scotland, Northern Ireland, Devon, Cornwall and the north of England, there is, not surprisingly, a lack of confidence that the Government have sufficient commitment to the prosperity of those nations and regions. Their prosperity will be undermined if infrastructure projects of this nature are not taken forward and completed. After all, infrastructure is the key to unlocking prosperity.

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[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)]

I thank all noble Lords who took part in the debate, which has been short but good. I was doing very well, but, unfortunately, I missed that last question, so I will definitely have to write on it, and that will be supplemented by anything else that I am not able to cover this evening.

The SI that we are discussing today, as many noble Lords noted, was prepared to enable the continuation of funding to UK organisations involved in trans-European network projects in the event the UK leaves the EU without a withdrawal agreement in place.

I will give a tiny bit of further background to the statutory instrument. It revokes regulation 1316/2013 on the Connecting Europe Facility—the CEF regulation. The Connecting Europe Facility is an EU funding programme to support the development of trans-European infrastructure networks for transport, energy and telecommunications. The CEF regulation sets out the conditions, methods and procedures for providing for EU funding for projects relating to the three trans-European networks. It also establishes the amounts of funding available for the period of the 2014-2020 multiannual financial framework.

The first question for the Government in considering how to handle this regulation was whether we needed to retain it in UK law. As the CEF regulation deals with internal EU mechanisms, it will be redundant and will serve no purpose as retained EU law under Section 3 of the European Union (Withdrawal) Act 2018. This instrument therefore revokes the CEF regulation, as well as the Commission delegated regulation 2016/1649 which supplements it.

The second question for the Government was how to address the implications for the funding of TENs projects in the UK. It is possible that projects that have been awarded funding from the EU budget will still be due money, which may not be paid, or may not be paid immediately, by the EU in the event of a no-deal exit. In 2016, the Government announced a guarantee that projects in the UK granted EU funding before exit would continue to receive funding from the Exchequer if the EU payments they would have received were not made. This guarantee was extended in July 2018 to cover successful applications for EU funding until the end of 2020. The guarantee ensures that UK organisations such as charities, businesses and universities continue to receive funding over a project’s lifetime if they successfully bid into EU programmes before the end of 2020.

A number of noble Lords asked how much funding we are talking about. The amount for the 2014-20 period is €345 million. I believe that there are 44 live projects—I will happily provide a list of them—23 of which are completed but may not have received their final amounts, 20 of which are in process and one of which will continue after 2020.

That brings me to another important point. As the noble Lord, Lord Teverson, brought up, the guarantee extends to projects that have been successfully bid for before 2020. The funding will then continue; providing that the project has been bid for, it will get the money.

[Lord Teverson]

That is fantastic but not what the Explanatory Memorandum says. It states:

“The powers would also enable the Secretary of State to make similar payments”—


—payments, not successful bids—

“up to 2020”.

I am therefore delighted by the Minister making that statement.

[Baroness Vere of Norbiton]

Let me keep going and see how we do.

The noble Lord, Lord Rosser, raised the issues of whether the projects will receive the funding, depending on whether the EU decides to give it, and the timing. I am afraid that we do not know because it will depend on future negotiations. I assure the noble Lord that the Government stand behind these payments, which will be made in the circumstances that they are not received from the EU.

The noble Lord, Lord Rosser, also mentioned the present circumstances and the Government’s limited role. The Government have a limited role because it is often private companies making the bid. The Government are not part of the decision process because, as I hope I have already explained clearly, it is clearly set out in the regulations such that the regulations govern the decision process.

The funds that will be paid out, or are guaranteed to stand behind these payments from the EU, are “new money”, to use the terminology. They are not from existing DfT budgets.

The instrument provides the necessary powers for DfT, the Department for Business, Energy and Industrial Strategy and the Department for Culture, Media and Sport to “operationalise” the Government guarantee and make payments in respect of CEF grants if these are not met by the EU in the event of the UK leaving the EU without a withdrawal agreement in place.