Automated and Electric Vehicles Bill (Seventh sitting)

Oliver Letwin Excerpts

Committee Debate: 7th sitting: House of Commons
Thursday 16th November 2017 Public Bill Committees

[The Minister for Transport Legislation and Maritime (Mr John Hayes)]

The shadow Minister once again does credit to the Committee by insisting that these matters should be carefully considered not just now but as they develop. He is right that this is a developing technology, and the whole Committee recognises the Government’s attempt to do sufficient, but not too much—that is to say, sufficient to create the certainty that will allow the development of the insurance framework, but not so much that we constrain those developments. It is right, of course, that we continue to bring these matters to the attention of the House, which is essentially what the new clause would do. He argues rightly that we need to ensure that the purpose of the legislation is being fulfilled. It is as simple as that.

I risk repeating myself—I know that many rather enjoy the repetition of my arguments; I am not one of them—but I drew the Committee’s attention to the Small Business, Enterprise and Employment Act 2015, which specifically makes provision to review secondary legislation in which the requisite provisions are made. It confers that duty on Ministers. There is some advantage to be gained from that. None the less, I have made it clear during the course of our consideration that I am not in any way ill disposed to other means by which we can continue to consider these matters. It is important that we recognise that, in a rapidly changing field, further consideration may be efficacious. On that basis, I hope the hon. Member for Kingston upon Hull East will withdraw his new clause.

Talking of sufficiency, I do not feel that that is quite sufficient an argument. I want to talk a little bit about how we envisage the system working, which might offer further reassurance to the hon. Gentleman and other Committee members. The international standards by which these vehicles will be approved for safe sale and use are still being considered, as I said previously, by the United Nations Economic Commission for Europe, in which the UK plays a leading role. Those standards will form the basis of the type approval process. That means that nothing will be sold or used on our roads that does not meet those standards, and it is vital that standards are agreed internationally, for obvious reasons: the nature of the automotive industry and of the vehicles’ use means that it must be done in that way.

The Government take the view that it is not appropriate at this early stage to set criteria that are too precise or to constrain the identification process until we know what those standards are. We certainly need to maintain sufficient flexibility to ensure that all vehicles relevant to the clause can quickly be identified and included on the list that the Secretary of State is missioned to draw up in clause 1.

[Sir Oliver Letwin (West Dorset) (Con)]

rose—

[Mr Hayes]

I see my right hon. Friend indicating that he wants to intervene. I know that whatever he says will add value to our consideration, so I happily give way.

[Sir Oliver Letwin]

Can my right hon. Friend confirm that, as he says in the first of the three letters he has helpfully written to the Committee, it will be high on the Government’s agenda that the type approval process will be used as the means for ensuring the cyber-security of the vehicles, in addition to their safety? Can he also confirm that he is confident that the international negotiations will result in a type approval system that covers security as well as safety?

[Mr Hayes]

Yes. That was debated at some length when we last met. My right hon. Friend is right that because of the character of the software we use to make these vehicles work, data and cyber-security become ever more significant. My letter addresses this, as he helpfully reminded the Committee, but I can confirm that the discussions we are having have at their heart all the considerations to which he has drawn the Committee’s attention.

We will continue to engage with the Driver and Vehicle Licensing Agency and other stakeholders to ensure that the system works effectively once in place. In addition, we have produced a detailed impact assessment that looks at potential direct economic impacts on the insurance industry. Hon. Members will remember that we rehearsed the effect that this will have on insurance premiums and the industry as a whole in oral evidence. The industry is already preparing for those effects, because it knows that the shape and character of the insurance industry will alter as a result of all this. Indeed, one of the UK’s major insurers has stated that it expects insurance premiums to become cheaper because automated vehicles will be safer. That view was echoed by the Bank of England, which reported in March this year that the safety benefits from automated vehicles could see insurance premiums become more than 20% cheaper by 2040.

As part of this regulatory programme, we will continue to work with the industry to ensure that, as the new insurance framework is implemented, we still meet our intended policy objectives. I therefore hope I have made it clear that we entirely agree with the hon. Member for Kingston upon Hull East that these matters need to be considered now and in the future, and I have no doubt that there will be a need for the House to be involved in that process. With those assurances, I hope the hon. Gentleman might see fit to withdraw the new clause.

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[Alan Brown]

I beg to move, That the clause be read a Second time.

The Minister’s comments on new clause 13 almost make mine on new clause 14 superfluous, because some of the matters that I will raise can be incorporated as he outlined. New clause 14 returns to the theme of assessment and understanding of the impact of uptake on the energy network. We know that spikes in electricity usage are predicted while vehicles are being charged, but there is a huge variation among analysts’ predictions of how big peak surges could be. It all depends on when electric vehicles are plugged in and charged. We heard in evidence from the National Grid that it does not think the surge will be as large as predicted by many other analysts, who say that it will completely overwhelm the network.

The facts speak for themselves, as the Minister said. The number of electric vehicles on the road is still at a low point; we will fully understand the impact on the grid only once the uptake of electric vehicles has increased massively. That proof will be really important, and it is important that the Government review how uptake works in practice. What will the increase in peak electricity demand be? What impact will that have on the National Grid? What upgrades will be required? How will that feed into smart grid charging strategies and future energy storage requirements? All those questions need to be taken into account.

New clause 14 sets out a 12-month timescale, but at the predicted rate of uptake of electric vehicles, we will probably still not understand the full impact on the grid of people’s behaviour in that time. The roll-out of electric vehicles may be patchy across the UK, so on reflection I must admit that even 12 months might not be enough. However, I hope that the strategy assessment that the Minister mentioned in his remarks on new clause 13 could also incorporate consideration of this issue, with a commitment to further reviews in future.

[Sir Oliver Letwin]

I am delighted that the Minister is talking to the National Grid and others. I entirely sympathise with the hon. Gentleman’s desire to see a transparent product of those discussions: a continuous published analysis of impacts.

There are two kinds of impact. The hon. Gentleman mentioned the adverse impact on the grid from peak moments early in the morning or late in the evening, and in winter there is a lot of fast charging, which will increase the peak effect. However, I am much more interested in the other kind of impact, which I see as much more serious: the benefits, which many of us have seen for some years, that the National Grid anticipates from peak shaving. Night-time, and indeed daytime, vehicle charging can be switched off at moments indicated as economically advantageous to the car owner by the half-hourly settlement price. It is also highly economically advantageous for the grid to have reduced demand at such moments, avoiding the need for additional power. That would transform the economics of intermittent energy supply, including through renewables, for example solar, which are currently not regarded as having any contribution to capacity. I am very much in favour of new clause 14’s general principle; I am sure the Minister is about to assure us that he will fulfil that principle through regular publications.

[Matt Western]

To emphasise the point and go back to buses, which I mentioned earlier, the scale of the need will be quite significant, say in our town centres, where we may have a bus that will be using these charge points for opportunity charging—an immediate fast charge—drawing 300 kW. If we think about, say, 10 buses in our town centres, we can imagine what sort of requirement would be needed. I add that to the debate.

[Sir Oliver Letwin]

The hon. Gentleman is clearly right that the bus issue is serious. This is not the place for a prolonged discussion about the patterns of charging and so on, but my own instinct is that battery life will have got to the point at which overnight charging will probably mainly suffice for buses. I am also quite optimistic about the ability to have charging en route on the most thickly used routes. Let us leave that aside for the moment. Clearly, we are joined in the view that the Minister will need, through the grid and others, to publish assessments of all kinds of use and storage, including not just cars but buses, taxis and vans, and indeed bicycles, although that is a minor item.

Another issue connected to new clause 14 goes back to the third of the letters that the Minister has helpfully written to the Committee in response to points that I raised earlier about clauses 11 and 12. I am very grateful for the subsequent discussions the Minister has facilitated about that with his officials. I hope he can confirm that he will now look at one specific issue further, which I do not think is wholly handled in the third of his letters. That is the question of ensuring that the vires given by clause 12(1) and (2), for him or the Secretary of State to issue regulations mandating the transfer of data from charge points through to the grid and the distribution network operators, are sufficiently well established by a technical drafting amendment to ensure that they are not challenged successfully in court.

That is obviously vital, because if the spirit of new clause 14 is to be observed and the grid is to be able to publish reasonably reliable forecasts of the pattern of charging and storage provided or demanded by electric vehicles, it needs to be able to use and mine the data from the use and charging of electric vehicles as it evolves. The only way to structure an electricity system is to plan some years ahead. Therefore, we need evolving information to be relayed from an early stage, so that before the load or the opportunity for storage become very big, the pattern is well understood.

To say one further word about that, the Committee must be aware that it is not a marginal point. If those patterns are well understood, the history suggests that one can save in the order of one quarter to one third of the investment costs of the entire electricity supply industry, compared with a situation in which there is chaotic unanticipated demand. The whole system relies on ensuring that one has a capacity margin at peak. If we cannot accurately predict the peak, because we do not understand the configurations of demand and supply on the system, we have to over-provide. We thus end up having bought a lot of heavy metal that is sitting there doing nothing, which is very expensive for the economy. We are talking about fives or 10s of billions of pounds. It is material that that data flow starts, starts early, and starts accurately, without missing anything off, so that the grid can start building a transparent picture that then, as in the hon. Member for Kilmarnock and Loudoun’s new clause 14, is regularly published and updated.

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[Clive Efford (Eltham) (Lab)]

I beg to move, That the clause be read a Second time.

The Committee will be pleased that this is the last of my amendments and my last contribution to the debate. It has been a pleasure to be on the Committee under your chairmanship, Sir Edward; please pass on my regards to Mr Bailey. I also thank the Clerks for their assistance in loaning me a few of their grey cells, from their humungous brains, to draft my ideas for amendments and make them legible; I am very grateful for their assistance.

The Bill attempts to make it easy for an injured party to claim in the event of an accident. That is necessary because we are opening up the insurance industry and disputes in the event of an accident to considerations that have not been part of our road system in the past. That is, we are bringing manufacturers further into the possible area of liability than they have been before, because vehicles will be controlled not by people but by machinery and computer software. Software designers may even be dragged in to these disputes.

As we heard in our evidence sessions, in some circumstances these automated vehicles will be connected and moving in convoy. It is an interesting concept that vehicles moving in convoy will communicate with one another, as is how they will share information and how that information will be used. When we look out of our vehicles, we see the immediate environment around us, but if vehicles are travelling in convoy and communicating with one another, they can see the road ahead exactly as it is seen by the vehicle at the head of the convoy. So, if something is amiss in the first vehicle with the data or the design of the software, or if there is a glitch, that will affect the vehicles further down the line.

When we discussed this issue at our last sitting, the potential hacking of the software was mentioned. If there is hacking, the driver of the vehicle cannot therefore be held responsible—he or she did everything they could to make sure the vehicle was roadworthy—and the manufacturer of the vehicle and the designer of the software may say, “Well, we did everything that was reasonable”. Helpfully, the Minister has written to us to say that in those circumstances the insured person—the person who took the vehicle on the road—is the responsible party.

However, in those circumstances the situation will become more confused and, again, this is an area that the Government need to consider, because who is responsible when we know that the vehicles are not necessarily driving themselves as they are communicating with one another? The assumption in this Bill is that the insurance companies will pay out and it will all be sorted out afterwards, but we know that that is not true.

My daughter had a collision. No one was injured, but her vehicle was damaged. Only when the two insurance companies had sorted out the blame—that is, who had caused the dent in the vehicles—was the claim settled. That took several months, during which time she was driving around in a brand-new damaged vehicle. The insurance company did not pay out straight away, so under circumstances in which consideration of who is responsible could be quite complicated—particularly instances where several vehicles were travelling in convoy—it could take some time for insurance companies to settle who should pay in the first instance. The Bill needs to protect the consumer—both the insured, and the third party, who may be the injured party. We could be creating a situation where no party is paid for some time while those complications are sorted out.

With these automated vehicles, which will be communicating with one another on the road, we are introducing an area that needs further consideration. I am not suggesting for a minute that the Minister should have the answer now—not even on the bit of paper that he may be passed in a few seconds—but I do think that this matter is worth further consideration by the Government, particularly as the Bill progresses through both Houses. We may well come back and look at this complication in more detail at a later date, so that we ensure that we are protecting the consumer—both the insured, and the third party.

[Sir Oliver Letwin]

I want to add one or two words to what the hon. Gentleman says. I do not know whether it is sensible to try to address this in regulations under the Bill, whether it is better to leave it to the courts to settle, or whether some other legislation is necessary, but the hon. Gentleman’s point, although it has its analogue in existing practice, is very serious. Of course there are effectively already convoys on motorways when they are very busy, with somebody at the head of it and, some miles behind, me chugging along in my car. All sorts of complicated things happen, and I am sure that the Minister will be advised to assure the Committee that the courts and insurers already have mechanisms for resolving between them how everything works, and that in principle it makes no difference whether an automated vehicle driving itself or a human-driven vehicle is at the head of the queue.

I see that point entirely, but the difference is that that only happens from time to time on our motorways at the moment. Although it is not at all certain, it is quite likely that motorways will turn into automated, semi-autonomous trains, and that people will basically go onto the motorway and lock into a system which they are then part of, perhaps then travelling hundreds of miles in convoy. The convoys themselves may be hundreds of miles long.

[Sir Greg Knight (East Yorkshire) (Con)]

How boring.

[Sir Oliver Letwin]

My right hon. Friend says how boring; I see life entirely differently. He is of course a driving enthusiast, and has the most magnificent machines to drive. I drive one of the smallest and cheapest cars in the United Kingdom, and hate driving. I cannot think of anything more delicious than being able to lock in and leave the machine to it while I am reading, listening to music, or talking to my wife. I think all of those things are much nicer than driving, but there we are—tastes differ, chacun à son goût.

My point is, whether we like it or not, we are likely to be in that condition in the future. Once that starts being the case on motorways, Governments and Parliaments—regardless of the political colour of the Administration—will be ineluctably driven to mandate those circumstances, because the efficiency with which motorways can be used will multiply by some considerable factor. Therefore, the amount of motorway building that needs to go on, a significant component of total capital expenditure in the UK budget, will reduce by some appreciable factor. We will clearly be driven in that direction if the technology permits, and it may very well do so.