Highways (Financing) Bill (Second sitting)

Shivani Raja Excerpts

Committee stage
Thursday 29th October 2026 Public Bill Committees

[Tristan Osborne]

Q The recent independent regulatory review of the ORR included a section specifically about the Thames crossing. Paragraph 5.58 of that review indicated that there are resource concerns:

“There are, however, likely to be gaps such as those relating to construction phase price controls, project specific

I know you said that you had confidence in that area, but that report was published just last month. Can I get some clarity? Are you saying that the report is not entirely right and that you are confident that the three aspects it raised will be covered going forward?

Will Godfrey: We very much welcome that independent review of the ORR. It is always helpful to have that sort of outside-in look and scrutiny.

On what it describes as gaps, the other point that Dr Richard Judge brought out was that we are not building from scratch, so this is about providing incremental capacity. I think he was right to draw out those areas as ones where you would want to make sure that the gaps have been filled by the time you are past Royal Assent, the first licence has been awarded and you are into the start of the first price control, which is a long way from today. The point I am making is that, from the discussions I have been having with the Department, I am reasonably confident about being able to resource what I would describe as incremental gaps, rather than starting from a blank sheet.

[Shivani Raja (Leicester East) (Con)]

Q It has been really clear today that cost control is a crucial element in the success of this project. Should there be safeguards for motorists within the regulatory framework where, for example, unexpected charges arise or costs are excessive?

Will Godfrey: At the heart of the regulator’s responsibilities would be furthering the interests of current and future users. Those are exactly the kind of considerations that would be at the heart of how you approach the regulation, how you set up the instruments—I am referring specifically to the licence—and how you then hold the company to account against that licence.

For the first control period, in the case of the lower Thames crossing, the licence would be awarded by the Department, so the particular tolling structure and the level of tolls would be set through that competition for the first licence. Thereafter, the way that the ORR operates is that the code that the ORR would be responsible for creating on the approach to tolling arrangements will clearly be important once you are past that first point.

My feeling is that the arrangements necessary to provide protections to end users around, for example, tolling and toll shocks and so on feel about right to me in the enabling legislation. What is really important is what goes into the licence and what we put into the code, and then how the company responds. I hope there will be a virtuous circle, in which there is a clear signal of what is expected, we hold the company to account, it delivers and implements it, and we then take the feedback from the market. I do not know if you were anticipating a different concern, but I will pause there in case I have not answered your question.

[Shivani Raja]

No, that is fine. Do you have anything to add, Mr Palmer?

Matt Palmer: I think it is beyond my scope—National Highways is here as an operator and a constructor. I think Will has probably answered the question properly.

[Mike Reader (Northampton South) (Lab)]

Q Matt, I think you have already answered my first couple of questions: the legal requirement on climate was set in 2022 in the original direct consent order, and the requirement to use alternative fuels to diesel is not a significant cost driver in a scheme of this scale. However, reflecting on a conversation that you and I have had previously, I was wondering about the cost impact, and the impact on the project generally, of delays caused by uncertainty of finance. Would a Bill like this enable future schemes to have certainty of financing arrangements, and therefore get on site and be delivered more quickly? Is that a fair assumption?

Matt Palmer: I think all of us recognise that annualised costs on major projects, especially mega-projects, are very difficult to deal with. They drive perverse cost behaviours, where you are trying to fit into a 12-month window, and the Government are currently moving, with the mega-projects piece, towards more of an envelope-type conversation. This is just another extension of that. You end up with a cost envelope that you are working within, with a driven timeframe that you have to deliver to, which then allows the flexibility to execute at the right time—depending on the weather and so on. It is that flex that you need in order to execute efficiently. If you are constraining yourself on cost to a budget every year, which is common, it does drive cost. This model gives you the flex that allows you to drive an efficient construction project.