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The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, infrastructure?

Lord Haskel: My Lords, I shall deal with infrastructure in a moment. Manufacturers fear that no new orders will be placed before 1997 at the earliest by which time the rolling stock supply industry will have disappeared. Even orders for basic track components are falling away—and this at a time when there is widespread concern about the state of the infrastructure and obvious arrears of maintenance. All that has grave implications for safety. How long can we carry on with the imposition of speed limits when maintenance is overdue? For too many years we have been satisfied with mediocrity on the railways.

The suspicion that the Government are not interested in investment in the railways is fuelled by their lack of interest even in schemes to get heavy goods vehicles off the road and to transport goods more efficiently to the European Union by rail, via the Channel Tunnel. The noble Lord, Lord Elibank, spoke about that in explaining the need to make better use of our existing network.

Perhaps I may give an example. Currently, three-quarters of the unit load traffic between Britain and the Continent is carried on semi-trailers by road. Common on the Continent is the service whereby the semi-trailers are loaded on to rail wagons known as "piggybacks". The major part of the journey is then done by rail. That has the effect of taking a lot of heavy traffic off the roads. Bridges and tunnels are generally

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lower and narrower in Britain than on the Continent and station platforms are closer to the tracks. The generally accepted view is that piggyback would be impossible in Britain.

However, with the support of DG7, under the pilot actions on combined transport programme, a study was carried out to see whether the service could be extended from the Channel Tunnel through the major industrial areas to Scotland. I have the report here. On the steering committee were local authorities, Eurotunnel, French Railways, British Rail and various transport organisations. I do not see the name "Department of Transport".

The study shows that adapting bridges and tunnels so that standard four-metre high road trailers can be carried on special rail wagons from Scotland to the Channel Tunnel should cost less than £100 million. That has the potential to take 400,000 long-distance lorry journeys off the road. Perhaps I may put that into context; it is about half the cost of widening the 12 kilometres of the M.25 motorway between junctions 12 and 15, which the Government were seriously studying.

I am sure that the project would not have been ignored by the Government if they had had a coherent transport framework covering all forms of transport and not favouring roads to the detriment of rail. It is their strategy of standing back that has resulted in the lack of investment. Many noble Lords have called on the Government to create a consensus but there is no framework in which that consensus can take place.

While the Government stand back, all that we shall have is vested interests shouting at each other. The one which shouts loudest wins. That is no way to encourage a strategic approach to the needs of industry for a transport infrastructure. The Government must accept that they have the major role of setting up the framework within which the strategic consensus can be reached. Perhaps the Minister will tell the House whether his department has any plans because industry must plan for the long term even though his department is unwilling to do so.

Investment in transport infrastructure is a long-term business and requires an act of faith. We on these Benches understand that. Since the mid-1980s we have had plans to seek a broad consensus on transport. More than two years ago we announced plans to enter into joint public and private financing arrangements to invest in the long-term improvement of our transport infrastructure to help make our industry become more competitive. Last week Tony Blair reiterated our commitment to that by stating that,

    "the railways should be retained as a proper integrated public service".

6.55 p.m.

Lord Bruce of Donington: My Lords, I thank my noble friend Lord Ewing for raising this most important issue and, from my point of view, for setting it within its European context, in which I have an interest.

Your Lordships may have read an excellent feature in last Sunday's Observer in which the thoughts of Commissioner Kinnock were set out in detail. You will

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have noted that the whole spirit of my right honourable friend's approach to the matter was one of obtaining a consultative consensus before taking any premature action along any particular line. That is well in accord with the method of thinking that your Lordships might consider appropriate in respect of a problem of this kind. All manufacturing life depends essentially upon movement; upon moving goods and services from one place to another.

Commissioner Kinnock put forward proposals for the investment of approximately £300 billion in the European network during the next 15 years. It would be idle to suppose that we in this country will not be required to contribute an appropriate share. But one thing is absolutely certain: that the money when expended, whether by means of investment or grant, must be kept under far stricter control both in regard to the total and the apportionment between countries.

There is an overriding problem. All economists and most politicians on all sides appear to assume—and probably assume correctly—that economic activity will expand considerably, if at sustainable levels, during the next few years. Everyone talks of expansion. Doubtless we shall make our own limited—to avoid controversy—and sustainable contribution towards this. But undoubtedly it will need more movement of goods not only within the country but to and from this country.

Therefore, whatever strains we have talked about today—and there have been many notable contributions on that matter—one can safely assume that the stresses will increase rather than decrease and that the refurbishment of the infrastructure and its extension must take account not only of existing production but perhaps of future expanded production. Those are extremely important factors.

Moreover, I venture to suggest that it is not appropriate only to consider the main networks, to which most consideration has been given, in particular at the European level. Not only the finished product requires speedy export from and import into this country; the raw materials and self-assemblies which make up the finished goods must also be taken into account. In the main, those come from inside the country and do not necessarily need the existing main road and rail networks.

Moreover, there is also the question of the staff and the workers. Not only raw materials but also working people are vital to the process of production and they have to get to their place of work. It is not only a matter of the modernisation and expansion of the infrastructure upon main lines; it is also a matter of the interim part—the local infrastructure and the local means of travel. That has a particular impact on the environmental questions which have been so admirably dealt with in previous speeches in this debate. Not only do air pollution and noise pollution—which are part of the environmental factor—have to be taken into account, but also what we will call the general balance of life in the environment. That should be uncorrupted in the sense of its ordinary balance not being unduly disturbed

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so that people, when they are not at work or when they are going to work, can have a reasonable environment in which to do that. All these are important matters.

I venture to suggest to my noble friend that it is not even safe to consider the matter within its European context. One has to go a little wider than that. One has to consider —this is becoming increasingly evident now—that one of the most likely areas of the expansion of export of manufactures from this country is likely to be to the Pacific Rim itself and to the other developing countries. That gives an added emphasis to the remarks that fell from the lips of my noble friend, Lord Dean of Beswick, when he referred to the deplorable shipping situation in which we find ourselves at the present time.

The Commission's idea of the importance of investment is roughly 60 per cent. rail, 30 per cent. road and 10 per cent. the rest, including air travel and canals. In this latter connection I would venture to draw your Lordships' attention to the fact that up to now, and for the past 20 or 30 years, it has been the practice of manufacturing industry to use the main trunk roads, and to some extent the railways, as their interim store both of raw materials going into their factories and in terms of assemblies and sub-assemblies which go to make up the finished product. Instead of having a build-up within the factory itself, and a consequent extension of the acreage which they occupy, owing to very high interest rates—which are no longer 2 per cent., as they were at one time—and indeed general land values and rentals, it has become cheaper to use the roads as a work-in-progress store rather than establish buffers within the factory walls and build up stocks. Therefore the roads are not only being used for transport purposes; they are being used as a store.

That in itself tends to produce some congestion factors because as congestion builds up the question of delivering straight onto the end of the factory line becomes more difficult and therefore increases the cost. In view of the fact that the build-up time has commenced and a flow of traffic can be ensured continuously, we may well consider whether a far greater use ought not to be made inside the United Kingdom and indeed elsewhere—I have in mind southern France as well—of the canal system. Although such a system is slow and the build-up takes a long time—perhaps 10 or 12 days—once the flow starts and continues, it represents an economy rather than when goods are caught up in congestion on roads or even on rail.

I am asking that we take a broad and general view of this. We have already rejected the fashionable assumption for which the noble Lord, Lord Lawson of Blaby, at one time was responsible, of assuming that manufactured goods really did not matter much any more and that it was the total export effort from the country that really mattered. Quite clearly that is no longer the case. I have no doubt that we will have a formal recantation of the matter in due course, particularly in the light of the Select Committee report of your Lordships' House on employment and overseas trade which has been referred to many times.

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One thing for certain is that the whole matter has to be considered at length and in public very quickly. All these factors ought to be discussed. It is for consideration whether a special Cabinet sub-committee ought not to be formed, comprising senior representatives from the Department of Transport, the DTI, the Treasury, the Department of the Environment and—if I may suggest, in deference to the emphasis given to the matter by the noble Lord, Lord Ewing—also the new Minister for Europe, Mr. Davis. His excellent feature in last week's European may attract a good deal of interest in view of the constructive manner with which he is dealing with the whole question of our relationships with Europe. But certainly we must have a public policy to cover all these matters, and it should be a matter for full public consultation—if necessary taking some time—accompanied eventually by a consultation paper, which can then be discussed free of any comparatively trivial considerations as to the value of further privatisations in any particular field. Let the national interest prevail within its European context and ultimately within its world context.

7.7 p.m.

Lord Ezra: My Lords, I always find it a matter of great interest to listen to what the noble Lord, Lord Bruce of Donington, has to say. I am a little apprehensive when he gets onto his favourite subject of Europe but I must say that on this occasion on the whole I thought he was relatively mild on the subject. Indeed, I even got the impression that he supports the views of his right honourable friend Mr. Kinnock who has set out how he saw the transport policy in the European Community. Perhaps we can discern a little change in that direction.

I reiterate the gratitude expressed by others to the noble Lord, Lord Ewing, for introducing the debate. I cannot think of anyone better qualified with his great knowledge of transport on the one hand and European affairs on the other. He painted a broad canvas for us which stimulated the wide-ranging and constructive debate that we have had so far. He referred in particular to the call which has been made by Dr. Mawhinney, the Secretary of State for Transport, that we should now engage in a national debate on transport. I fully agree with that. I think that is a very good idea and it is very timely. Unfortunately to engage in a debate of that sort as regards the whole country, you have to have some sort of framework. We cannot just meet casually and start talking about transport. Of course we do our best in this House. If Dr. Mawhinney wanted to pursue the question as regards this House he could see that over a period of years we have debated transport. In fact, we debated the report on transport of the committee of the noble Lord, Lord Elibank, in October.

However, I think Dr. Mawhinney was thinking beyond the confines of your Lordships' House. If we are to launch into a wide-ranging national debate on transport it has to be sparked off by the Government's own views on the subject, setting out the priorities and the options. So we need, as the noble Lord, Lord Ewing, rightly said, a Green Paper. It is worth recalling that the last Government White Paper on the subject of transport

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policy was published in 1977. There have been documents since then dealing with various aspects of transport, but as far as I can tell no document dealing with the whole area of transport policy. So it is about time we had one.

In order to help Mr. Mawhinney in his endeavour, I should like to suggest some of the issues that should be set out in the Green Paper which we might debate. We have been helped in that consideration by the very interesting document issued by the CBI, to which a number of noble Lords have referred. I have here a copy of the document which is entitled Missing Links—Setting National Transport Priorities. It compares transport performance within the UK with that in three of our European neighbours; namely, Germany, France and the Netherlands. The noble Lord, Lord Ewing, the noble Lord, Lord Dean of Beswick, and other noble Lords referred to the report.

Let us have a look at how we compare with those other countries and the issues which arise. I do not do so in any negative, critical way; I am merely trying to suggest what came out of the report and the policies that we ought to be looking at, although some may not apply here.

I should like to identify four issues which seem to me to be relevant to any debate on transport policy. The first is the question of past investment, to which a number of noble Lords have referred. It is unfortunate that when a comparison is made between our transport investment and that of our continental partners, particularly in the case of rail, we show up very badly, indeed dramatically so. The CBI report shows that in the period between 1985 and 1991 expenditure in France was 37 US dollars per capita; in Germany it was 27, in the Netherlands 25 and in the UK it was seven. It seems out of all comparison that we should have as little as 7 dollars per capita compared with expenditure in the region of 20 dollars in the other countries. Therefore, we have to do a great deal to catch up even before we can compete on level terms.

Next, we have to look at the question of a coherent strategy. We often talk about the need for a coherent policy. Can we or can we not have such a policy? Most noble Lords who have spoken in the debate have suggested that we ought to have a go at creating a coherent policy, however difficult that might be.

One must be struck by the way in which those other countries have gone about this. They have not looked at transport in isolation. They have not looked at different modes of transport in isolation. They have tried to bring together their forward views on transport within their overall economic and social objectives, particularly on a regional basis.

For example, in France they have a policy called the Aménagement du Territoire—which, although it is difficult to translate the term, means the development of the country's social and economic resources particularly with regard to the regions. That policy has been developed over a number of years and takes a forward look to the year 2015. They are trying to make sure that the transport network is developed in response to the economic and social needs of the different parts of France so as to arrive at reasonable solutions in that

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period. The sort of problem to which my noble friend Lord Thurso referred in the north of Scotland as a result of the closure of the Dounreay operation would automatically have been taken into account in the development of that policy. We lack a wide-ranging approach of that sort.

In Germany there is also emphasis on the integration of different modes of transport. An interesting aspect in Germany is the development of combined transport terminals, to which they are devoting nearly £2 billion out of state resources.

Next, I should like to talk about our lack of long-term thinking in this matter, which I have already touched on. Most of those other countries are thinking in terms of transport developments integrated with social, economic and regional requirements 15 to 20 years ahead. Should we not be doing the same and beginning to consider the problem in the same way?

Finally, I turn to the question of a consensual approach. A number of noble Lords who have spoken, including the noble Earl, Lord Caithness—whom I am delighted to see here speaking in the debate—emphasised the difficulty of reaching a consensus. The noble Lord, Lord Houghton, in his remarkable address full of his usual vigour, also expressed from his past experience how difficult it is to get agreement. That may be true, but we ought to work at it. The Government ought to set an example with a Green Paper and set out the economic, social, expenditure and environmental issues and then initiate a structured debate over a period of time. That is what those other countries have done.

I conclude by saying that this is an extremely timely debate. We not only have the Secretary of State saying that he wants there to be a national debate, but we have had the opportunity of taking a first look at the subject in the House this afternoon. I very much hope that we shall hear from the noble Viscount, Lord Goschen, when he replies, that the concept of a debate launched by his right honourable friend is a serious proposition from the Government and that they will be taking the necessary steps to enable it to be initiated on the basis of a Green Paper or other document issued by the Government.

7.16 p.m.

Lord Clinton-Davis: My Lords, the House is indebted to my noble friend for having initiated this debate in a very impressive speech. The debate has been unusual in that in many respects there has been a remarkable example of consensuality. We have also heard a variety of different ideas. The noble Earl, Lord Caithness, who recently held ministerial office in the department, pleaded for more consistency on the part of the Government. He was right to do that. The concept of an integrated transport policy has always stuck in his gullet and continues to do so, but in that he seems to be in a very small minority these days.

We also heard a most eloquent plea on the part of my noble friend Lord Houghton about the transport of animals, an issue which concerns him deeply. He has warned us that we shall hear a great deal more from him on that subject. I look forward to that.

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It has been a timely debate because we have been able to focus on the CBI discussion document. I share the views of the noble Lord, Lord Ezra, that it is a very worthwhile document. I do not agree with every element of the points put forward. I believe that some of the remarks about the environment are not helpful. We have also been able to concentrate to some degree on the programme recently announced by Commissioner Neil Kinnock.

The common denominator in those two themes is, as my noble friend Lord Haskel pointed out, that the industries of Europe and the United Kingdom equally need efficient, safe, reliable and integrated transport systems, supported by a far more modern system of infrastructure. That is critical if we are to achieve the benefits of the largest internal market in the world and also expand our trade beyond that market, as my noble friend Lord Bruce pointed out. This is not just a European Union matter.

The interests of our industry and an effective transport system are, of course, inseparable. Our industries across the country need to be able to market and move their products across the European Union and beyond. Our people need to be able to rely on the quickest and most efficient way of transport causing, always, the least environmental damage, as my noble friend Lord Ewing underlined. My noble friend made another important point: that in the development of those policies there needs to be a far greater involvement with the environmental non-governmental organisations.

The purpose of the persuasive CBI document is, of course, to be constructive. In being constructive, it is necessary to underline the faults that have occurred in our own country so that their effects might possibly be mitigated; and we can wherever possible learn from the past and change course. It stresses the need for two important objectives—the strategic objective has been referred to during the course of the debate—recognising that transport is vital in terms of our whole economic effort.

However, it also refers to the need to foster a more consensual policy. I believe that it is worthwhile reporting that Brian Gould, when dealing with transport matters in another place quite some time ago, made precisely that plea on behalf of the Opposition. It was reiterated by my honourable friend, now Deputy Leader of the party. It was not reflected in the issue of rail privatisation. We did not even have the benefit of a Green Paper when a highly controversial policy was put forward. It was not dealt with in the days of the motorway madness of the 1980s.

The criticisms that have been made by the CBI replicate in many ways those which have been made by the Labour Party over a number of years. They are fierce, challenging and deserve serious consideration from the Government.

Of course it is right to say that the picture is not wholly bad. The Government have introduced the idea—it is not before time—of the Private Finance Initiative. It is fair to point out—the Minister must concede it—that that initiative followed the same ideas

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announced by the Labour Party some years before. But we still have a long way to go. Neither party can claim that the results of those considerations are perfect.

The trouble is that there is no real transport policy in this country. The different modes are viewed in isolation, not as being complementary. That is the thrust of successive transport commissioners, including myself, over many years. Vacillation on the part of the Government over the past 15 years has led to appalling delays in the provision of essential infrastructural projects. Britain is undoubtedly left in the slow lane compared with our neighbours—a point made forcefully by the noble Lord, Lord Ezra. We know that the high speed train travels across northern France at 186 miles an hour, whereas in the Kentish countryside the train has to move at an average speed of 50 miles per hour. It is no accident that that has occurred.

The noble Lord referred to the difference in investment in France, Germany, the Netherlands and, indeed, Belgium. Those countries have moved far faster than we have in this country. It has been a deliberate policy on their part. They realised long ago that we pay heavily for congestion on our roads. Some time ago the CBI estimated that the direct cost to our industry, much of it small and local, was of the order of £6 billion a year, to which one has to add the indirect cost of the accidents—the health care for the injured, the fatalities and consequential losses to industry, as well as the heavy environmental costs which such congestion involves. Those countries have given a much higher priority to transport and transport planning than we have done. In this country we do not have a transport policy but a road-building programme—or we did have until a few days ago.

Since 1981 the French have built three completely new lines for their high speed trains, Italy one and Germany two. In 1993 Spain ordered its first high speed train from Madrid to Seville. We are not beginning to compete at present. Investment in our railways is abysmally low compared with Europe. Indeed, there is more investment in much smaller countries such as the Netherlands and Switzerland. In 1991 France invested six times more, and Germany something like five times more, than we have done.

What we have in this country by way of a policy is, as my noble friend Lord Haskel argued so persuasively, a demented ideology of privatisation. We support the injection of private finance into transport. We were saying so years before the Government thought of it. But, like the CBI, we say—it is an important point—that that should be in the form of new money from private sources and not instead of the public sector contributions. Is that the view of the Government? Since the late 1980s the Government have insisted on private sector finance as a precondition of major investment in public transport. That has led to substantial delays in the construction of vital schemes; and that has led to further losses as regards British industry.

What industry needs is an assurance that the transport network will keep pace with economic growth. It needs a clearer vision for transport provision. It needs to be clear that if, as the Government assert, there is to be a greater use of rail for transport of goods, there are

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sensible policies in place to achieve that aspiration. Those policies do not exist at present. Industry needs to know that our airport planning strategies can be completed rather more quickly because we face fierce competition from Schipol, Charles de Gaulle, and the new Brussels airport. As my noble friend Lord Dean pointed out, industry needs a more viable merchant fleet in place of our sadly neglected and geriatric fleet—all clearly linked to our poor investment policy in shipping where the private sector has been largely left to its own devices.

It is simply not good enough that the United Kingdom ranks in the bottom half of European Union member states in the quality of rail and road infrastructure. It is better placed on air infrastructure and access to ports; but in all four modes the United Kingdom comes off worse than France, Germany or the Netherlands.

I turn from that to the policies emerging from the European Union. Like my noble friend Lord Bruce (perhaps a little unusually but nonetheless pleasing for that) I welcome the priorities that have been announced by Commissioner Kinnock over the past few days on the development of road, rail, sea and inland waterway systems which, as he put it, should be integrated—I emphasise "integrated"—competitive, environmentally sensitive and safe. During the course of this year, his services will be producing a document setting out plans for the creation of a Europe-wide system of air traffic control. That is long overdue, blighted as it has been over the years by the issue of so-called sovereignty. They will be producing a strategy paper to ensure the survival of the rapidly diminishing and ageing European maritime industry with specific proposals coming forward in 1996. They will be producing a new "Citizen's Network" to make transport systems more attractive to the travelling public. There is to be a crackdown against cowboy operations on the roads and sea lanes of Europe; new proposals will be forthcoming to make better use of inland waterways—a crucially important means of transport of goods in many countries of the European Union—and wider use of coastal and short sea shipping, both of which are extremely valuable with regard to environmental protection.

Perhaps most important of all, there is the further development of the trans-European networks whose object is to draw the Continent together by rail, road, air, waterway and telecommunications by the year 2015. In principle, the member states have agreed with that concept. But all the detail, and notably the ways in which the projects are to be funded, remain to be filled in. As Neil Kinnock put it,

    "Transport is critical for economic development, regional advance, and the whole concept of community and the environment. It is central to the creation of wealth and employment and to the reduction of isolation and congestion".

As the noble Lord, Lord Ezra, said, 60 per cent. of the emphasis is on rail projects of one kind or another. Three of the priority projects directly benefit the United Kingdom: the upgrading of the west coast rail line; the high-speed rail link joining the Channel Tunnel to London; and the upgrading of road connections between Felixstowe and Holyhead. All are centrally connected with the development of our links with the European Union.

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So where do the Government stand on those issues? Are they to be a passive onlooker, wary of proceeding unless a precondition for the development of the schemes is the availability of private capital, wholly or substantially? Will they seek to maximise the flow of funds to the United Kingdom while frustrating the overall European Union infrastructure programme, saying that the budget is out of kilter so far as the rest are concerned? Or are they to be a government who will do their level best to bring these bold concepts to fruition? The entire TENs concept is boosted by the fact that my right honourable friend the commissioner chairs the Commission working group of eight commissioners, working on the plans for co-ordinating the efforts of the member states as they begin to undertake their own part of the trans-European network plans.

Of course it will be costly. There needs to be a marriage of public and private sector finance. We should consider the BOT proposals that were dealt with in the speech in the noble Earl, Lord Caithness, the "build, operate and transfer" ideas which are gaining a great deal of currency so far as the public and private sectors are concerned. The European Investment Bank has a vital role. Our minds must not be closed to any sensible means for producing that marriage between the public and private sectors.

These are not, in my view, to be seen as job creation schemes, although they will undoubtedly have a beneficial effect on job creation. Rather they are medium-term projects designed to enhance the competitiveness of the European Union, including Britain. So far, I regret to say, the Government have displayed little real sense of understanding or involvement in what these schemes mean. The next Government—a Labour government—will.

7.32 p.m.

Viscount Goschen: My Lords, I welcome this debate, initiated by the noble Lord, Lord Ewing of Kirkford, as an important opportunity to discuss the vital importance of transport infrastructure. I also welcome the fact that the noble Lord chose to open his remarks with a quote from my right honourable friend the Secretary of State calling for a wider national transport debate. I believe that that quote, which he put on the record, sets the scene very clearly indeed.

In deciding our transport policy the Government fully recognise the important—I would say vital—contribution of transport infrastructure to industrial competitiveness. But equally we must recognise the profound impact of transport on the environment. Growth in demand for transport services has increased the pressure on our infrastructure and forecasts of future growth in demand present a very serious challenge. Increasing public concern about the wider costs imposed by transport, particularly on the environment, are reflected in the increasing difficulty in getting major transport projects agreed. Our aim is to continue to improve the quality of and range of provision. But we must recognise that there is a balance to be struck between the environmental, economic and social consequences of transport.

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This is not just a matter for the public sector; private finance and expertise is playing an increasing role in the delivery of transport infrastructure. I am very pleased to be able to welcome the remarks of the noble Lord, Lord Clinton-Davis, in support of the private finance initiative. Privatisation has been a major success in the transport sector. The privatisation of transport operations and the private finance initiative have enabled us to speed up progress on major schemes and to provide new services more quickly.

Public transport can play a valuable role in safeguarding the environment and our spending plans for the next few years focus on public transport and more efficient use of the existing road network. For example, we are funding 37 packages of measures proposed by local authorities outside London to encourage public transport and to offer attractive alternatives to car use. However, it is not simply a matter of switching public support from road to rail. Investing in rail, bus, trams and light rail can have a tremendous impact in certain areas, but it is important to say that research and practical experience has demonstrated that improved public transport is not enough in itself to solve the problems of traffic growth.

Over 90 per cent. of surface freight travels by road and we need an efficient trunk road system to enable industry and commerce to deliver the goods and services on which we all depend. The Government have a comprehensive programme in hand to improve these strategic links, focusing on removing congestion and providing urgently needed by-passes.

The level of continued investment is a practical demonstration of our commitment to the road programme and the many benefits it brings. More than £20 billion has been spent on motorways and trunk roads since 1979 and over the next few years public spending on these roads will remain on average higher in real terms than it was in the 1980s. This will also be supplemented by the imaginative use of private finance, such as the development of design, build, finance and operate (DBFO) schemes. We have already invited bids for the first four of these schemes and we are considering the suitability of another four.

However, our concern is not only with the economic benefits of better roads. The major new construction programme was reviewed last year. The prioritised programme that resulted seeks a sensible balance between the different economic and environmental considerations. We are now concentrating resources on making the best use of the existing road network. We know that a congested road network is more than a nuisance to truck operators. It costs them, and their customers, money. It costs businessmen money when they are stuck in traffic jams, which cause tremendous inconvenience to the general public. There are also other problems associated with congestion. It adds to pollution. That is why we are working hard to remove congestion, which can also create problems related to safety and cause pollution blackspots. It is important to make it very clear that the days of making very largescale additions to the network are gone.

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Some people have suggested that the trunk road programme should be halted in the light of the report on transport and the environment by the Royal Commission on Environmental Pollution. We are examining the Royal Commission's arguments and assessing the costs of its proposals. There may indeed be some very hard choices to make.

The Standing Advisory Committee on Trunk Road Assessment's report on traffic generation has led to similar demands. In the light of that report, trunk road schemes will undergo extra assessment in the planning stages to judge whether or not the effect of induced traffic is likely to be significant. There will be a programme of research to improve traffic modelling techniques still further. But I do not believe that there is justification for halting the trunk road programme. The main factor that determines the level of traffic is normal economic growth.

The answer lies in focusing on schemes that assist economic growth, help to conserve the environment and deal with local congestion and accident black spots. It lies also in making much more effective use of the existing trunk road network. It means using ingenuity and the latest techniques and technology, making the most of past investment, and ensuring that environmental effects are kept at acceptable levels.

I believe it to be widely acknowledged that the United Kingdom has a very efficient rail network in comparison with its international counterparts. The Government invest a substantial amount in the railways, and that will continue. One focuses on the investment figures for the railway infrastructure over the past few years. The point has been made from all sides of the House. Investment has been at record levels in recent years. The 1992-93 total of £1.5 billion was the highest in real terms since 1961. Over the past five years over £6 billion of investment in today's prices has taken place. Investment will continue at over £1 billion this year. It is expected to be about £1 billion next year, of which 75 per cent. will be publicly funded.

These high levels of investment have resulted in major infrastructure improvements. Since 1979 224 stations have been opened or reopened, bringing passenger rail services back to areas which lost them in the cuts of the 1960s. So far £1,500 million in today's prices has been invested to ensure that the infrastructure is in place to run international services through the Channel Tunnel. This includes Waterloo international station that is designed to handle 6,000 passengers an hour. Current infrastructure investment projects include the Heathrow Express rail link, a major programme of resignalling of the London, Tilbury and Southend line to improve punctuality on this low-performing route, and the resignalling of Kent Coast lines as preparation for Channel Tunnel services.

British Rail privatisation and liberalisation will bring considerable benefits to industry and the travelling public. The advantages of privatisation have been demonstrated both in the transport sector and elsewhere. We now want railway customers to take similar advantage of these benefits. Railtrack has responsibility for rail infrastructure, and the privatisation of Railtrack is a key part of the privatisation programme. The

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Government believe that by making Railtrack more accountable to its customers, that is, the train operators, passengers will receive a higher quality service more attuned to their needs.

My noble friend Lord Mountevans asked about the role of the regulator in ensuring that access charges would be used properly for maintenance and renewals. In the access agreements that the regulator will approve, Railtrack will contract with the train operator to provide a specified level of service for a charge which the regulator will also approve. The level of access charges approved will provide sufficient revenue to cover Railtrack's operating costs and fund renewal investment. As a condition of its licence, Railtrack will be required to produce a 10-year investment plan which will also have to be approved by the regulator.

Privatisation will also lead to a more focused and commercial approach to investment as Railtrack is given every incentive to increase substantially its efficiency in the management and operation of its infrastructure. Privatisation will enable Railtrack to explore more widely sources of private finance to fund infrastructure investment schemes, freed from the inevitable constraints of public sector funding. We are committed to continuing to pay subsidy to support socially necessary but loss-making passenger services. In deciding on infrastructure investment priorities, Railtrack will be expected to take commercially-driven decisions based on its ability to secure contributions from train operators and whether it can make a real return on investment.

Private ownership and competition should also reduce operating costs through improved efficiency. We believe that this will be important in helping to attract freight away from road to rail, which is a theme that has run through the debate from all sides of the House. We want to see rail used for as much of the journey as possible. This was very much the sentiment expressed by the noble Viscount, Lord Thurso. Seventy per cent. of the international freight market is located to the north and west of London. The existing international service will keep these loads off the road until they reach their regional terminals. By the end of 1996 that will reduce lorry movements by up to 1 million per year. We are keen to encourage railways to offer new services if they sensibly can. So is the Commission.

The noble Lord, Lord Haskel, raised the issue of piggyback services. We have offered our support to the application of the Piggyback Consortium to research the possibility of providing special wagons and improving the infrastructure to carry lorry semi-trailers by rail. That is a private initiative. It would have been much harder to do in the old public sector railway. The consortium believes that this kind of move will help to get even more freight off the roads and onto the rail network.

I turn to the Channel Tunnel rail link. I believe this to be an excellent example of a project where the public and private sectors can work successfully together. The project will benefit from private sector initiative and management skills. The line would be built sooner than if it had to rely on 100 per cent. public funding. The Government are prepared to make a substantial

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contribution to it and shoulder their fair share of the risks associated with the project. The high level of private sector interest in the project is testimony to the success of the Government's Private Finance Initiative.

I turn to the important issue of air transport. This subject was dealt with by many noble Lords who spoke this evening, notably by my noble friends Lord Caithness and Lord Mountevans. It is important to recognise in this debate—which perhaps has cast a little more gloom than one may otherwise have expected—that air transport is an industry in which the United Kingdom plays a leading role. The quality of our airports makes the United Kingdom a world centre for commerce and tourism. There has been a colossal expansion in air traffic. Air travel has expanded over the past 30 years. The expected growth provides an opportunity for economic benefits as well as environmental challenges. The Government are firmly committed to enabling the development of additional airport capacity where it makes economic, social and environmental sense. The economic benefits to business and industry are clear, as are the increased opportunities for leisure travel.

It has been said this evening that the Government have recently announced their response to the working group on the Runway Capacity to serve the South-East report, known as RUCATSE. RUCATSE's analysis shows a strong case for additional runway capacity in the South-East, but more work is needed to inform decisions on any proposals that operators may bring forward for that additional capacity. I believe that that announcement, making clear that certain options should not be considered but calling for further work, has been widely welcomed as a sensitive and sensible approach to what is an extremely difficult and complex problem. It is one that we must get right for the benefit of the entire country.

During the course of the debate we touched briefly on the subject of regional airports. The noble Lord, Lord Dean of Beswick, mentioned Manchester and the proposal for a second runway. My right honourable friend the Secretary of State for Transport has a quasi-judicial role in this process and it would therefore not be appropriate for me to comment specifically on that proposal.

However, in general we welcome the growth of regional airports and recognise the benefits of liberalising services to and from the regions. Last October my right honourable friend announced the biggest liberalisation of transatlantic air services, allowing all US airlines to have open access to UK regional airports. However, even on the most optimistic assumptions, regional growth will only have a limited effect on demand for additional capacity in the south-east. Smaller airports can also play a valuable role —for example, in serving business aviation.

I turn to ports, which are vital to the health of the United Kingdom economy. Over 90 per cent. of UK overseas trade is carried through UK ports. The Government wish to see a strong ports industry, with our ports competing with one another and with ports overseas on a fair basis.

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In recent years changes to working practices and access to private finance have led to substantial improvements in the efficiency of our ports. We want them to take a fully commercial approach in relation to their operations and developments. For new infrastructure they must shape their plans in the context of our intention to safeguard areas which are environmentally important and to avoid environmental damage. We wish to avoid grant aid, whether from the United Kingdom or Europe, which would distort competition between ports.

On a wider note, much has been made of comparisons with our European partners. Many noble Lords, including the noble Lord, Lord Ezra, drew what I would call a pessimistic comparison and touched on the CBI report. It is worth mentioning that the CBI report showed that in a number of respects the UK performs well compared with other countries. It highlighted the strong performance of the UK civil aviation industry, the high efficiency of our rail network, the substantial recent improvements in the efficiency of our ports and the competitiveness in our distribution and logistic service.

The noble Lord, Lord Ezra, also drew comparisons in terms of investment. However, we must look at efficiency and competitiveness also. Other European governments may give more taxpayers' money to subsidise their railways but British Rail is one of the most efficient, ranking second only to the Netherlands in terms of train kilometres per employee. Therefore, BR is able to run an efficient railway at a much lower cost. For instance, I do not think it is widely known that InterCity has a better reliability and punctuality record than the TGV, the Italian railways and the German railways. It is important to bring out those points to put the situation fully in context.

Let me turn to the European issue. We are fully committed to the principle of the trans-European networks (known as TENs). We believe that they have a substantial role to play in strengthening the internal market and thereby the competitiveness of European business. The Commission's proposals for guidelines in three sectors—telecommunications and energy as well as transport—are now under consideration in Brussels. The current proposals for transport cover road, rail, combined transport, inland waterways, airports, ports and shipping navigation and air traffic control systems. The first part of the proposal deals with the general principles: the objectives, scope and priorities of the network for the selection of projects of common interest.

Those guidelines, when agreed, will designate projects of common interest. But while work has continued on the guidelines, the Christophersen group of personal representatives of heads of state and government, established by the European Council in December 1993, has been working to identify priority projects in transport and energy. In its final report to the Essen European Council in December, the group identified a list of 14 top priority projects in the transport sector. The transport projects were endorsed by the European Council and the member states were asked to make every effort to ensure that the projects were begun during 1996 at the latest. There are four

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projects of UK interest in that top priority list: the proposed new Channel Tunnel Rail Link; the West Coast mainline improvement; the upgrading of the railway link from Larne via Belfast through to the Republic of Ireland; and the Holyhead to Felixstowe road corridor (now referred to as the Ireland-UK-Benelux road link). We are pleased to have secured the inclusion of four important UK projects in the top priority list.

The clearest message that has emerged from the debate this evening is that there are no clear answers to the very complex problems that have been put forward. That is illustrated by the different approaches taken by noble Lords. Different emphases have been placed on road and rail transport, regional links, maritime priorities and so forth. Anyone who believes that there are simple answers to any of those problems cannot have considered the issues fully. The noble Lord, Lord Houghton of Sowerby, told the House that there was not much comfort in having to rely merely on the word "integrated". I believe that he was right to say that.

The Government's aim is to establish an efficient and competitive transport market to serve the interests of the economy and the community, taking due account of safety and environmental issues. We have set out our objectives in our sustainable development strategy; in the White Paper on competitiveness, and in our spending plans for future years. Future growth will present us with some difficult decisions. As has been said, my right honourable friend has called for a wider national debate on transport. Only then can we hope to meet the challenges that face us. I welcome all the contributions that have been made by noble Lords this evening.

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