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There needs to be a longer and more detailed policy debate before the implementation of any changes. The focus of the NATA Refresh is on modelling for major road investment. This may be at the expense of other policies and schemes which could meet national and local objectives in a more cost-effective way. We need to be clear about the policy and scheme alternatives that we want to assess before defining the new approach to appraisal. NATA is powerful guidance and needs to be carefully considered before it is implemented.

I share the concerns of other noble Lords. I return to the A12 in Essex, which is an important road—an artery through the whole of the eastern region of East Anglia; that, too, has to bid for regional funding and, like the A1, it will never get it. There has to be a way of assessing which roads are of national importance and which are of local importance; the regional pot is never going to be big enough. This issue needs not only a new approach but a total refresh on how we allocate capital funding.

I am not a great advocate of keeping more and more people on the roads. I support, as do others, the provision of more trains, particularly high-speed trains, but the country has to move. We have to realise the roads are there and there has to be investment in what we have got. I know I am making a political point but, in the past 10 years, the average investment in road improvements has been around £4 billion a year; in the previous nine years, the average investment was around £6 billion a year. These figures come from the Library. However, the gap grows. The total value now from vehicle excise duty plus the fuel tax is something like £30 billion a year. I know these are difficult times to talk about realigning expenditure, but there is a continuing gap between what is paid in tax and what is spent. Perhaps the Minister will comment on that.

Again, I thank the noble Lord, Lord Bradshaw, for bringing forward this important debate. I am sure we will debate these issues further as time goes on.

8.22 pm

The Minister of State, Department for Transport (Lord Adonis): My Lords, the House is indebted to the noble Lord, Lord Bradshaw, for initiating this debate on the new approach to the appraisal of major highways and other transport projects. I am grateful to him for his kind personal remarks.

He mentioned the City of Oxford and schemes in Oxfordshire, an area I know well. Twenty years ago I was an Oxford City councillor and was an ardent proponent not only of park and ride, which he mentioned, but I also drew up a blueprint for a rapid transit light

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rail scheme around the City of Oxford. I now realise that that scheme would not stand a cat’s chance in hell of getting through the NATA process but it seemed a sensible scheme at the time.

As the noble Lord said, a point reinforced by the noble Earl, Lord Mar and Kellie, and the noble Lord, Lord Hanningfield, it is very important that NATA is regarded, to quote the noble Earl, as a guide and a comparator and not an inflexible substitute for common sense and good judgment. That is indeed the case. As we stated clearly when NATA was established 10 years ago:

“The new approach cannot decide whether any particular proposal will go ahead; that will be for statutory processes. But it is intended that greater clarity will assist these processes and inform consultation, debate and decision making”.

That is precisely the concern that the noble Lord, Lord Bradshaw, mentioned in his opening remarks when he said that he was a political economist, not an econometrician, and he believed that good political judgment was often as important as playing a numbers game in reaching decisions on the value of particular projects. As I say, the new approach to appraisal is not a substitute for judgment; it is an aid to judgment. I state that very clearly.

While I know a good deal about park and ride in Oxford, I know progressively less about the other issues that were raised. I am not an expert on the A12 but I can tell the noble Lord, Lord Hanningfield, that my department is considering the recent reports of his A12 commission chaired by Sir David Rowlands, a former Permanent Secretary in my department. I am glad to say that the Highways Agency supplied the noble Lord’s panel with much information and assistance. Many of the interventions suggested by the panel are, I am told, already under consideration or in the pipeline and the Highways Agency is already working closely with Essex County Council on the short to medium-term interventions that may assist the A12. I am sure the noble Lord will also consider bidding to the region for support from the regional allocations pot. I will consider further the remarks that he made and come back to him.

Similarly with the case of the A1 north of Newcastle, I shall simply note the remarks of the noble Baroness, Lady Maddock, and the noble Lord, Lord Walton, and reply to them in writing. They made a number of serious points about both the traffic hazards and the effects on the local population and the local economy. It is right that I should consider what they have said and reply to them.

However, on the specific issue of the classification of the A1 north of Newcastle as a regional road rather than as a part of the national network, the reason for this is that the traffic flows are significantly lower than the threshold for national classification. That is why it is for the region to decide whether or not to include A1 north of Newcastle schemes in its recommendations to the Government in any future review of spending. The criteria for a national route include an annual average daily traffic flow of 60,000 vehicles.

Baroness Maddock: My Lords, as the Minister said, we should use a little common sense about the figures. I pointed out that two roads go north and because the A1 is so bad some of the traffic goes on the other

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road. If the A1 was dualled, I am sure more traffic would use it. The reason the traffic is not there is because it is so bad that drivers find other ways to go. That is part of the problem. We need to use a little common sense on this issue.

Lord Adonis: My Lords, I said earlier that common sense was an important factor for Ministers and local decision-makers in reaching their decisions and I said that I would come back on it. I am simply giving the figures I have here because it is only right that those reading the debate afterwards should see why it is that the road is at the moment classified as a regional not a national road. This is in no small part due to the traffic flows which, I am informed, on the A1 north of Seaton Burn to Clifton is 34,100 vehicles a day. Traffic flows generally reduce as it goes further north to the extent that the flow from the northern end of the Berwick bypass to the border with Scotland is 10,500 vehicles a day. As I said, the criteria for a national route include an annual average daily traffic flow of 60,000 vehicles. So the figure is not only a short way from the current requirements for it to be part of the national network; it is a long way from them. However, as I said, I will respond to the noble Lord and the noble Baroness more fully when I have had a chance after the debate to study their remarks.

Moving to the issues raised by the noble Lord, Lord Bradshaw, and other noble Lords in the debate, my department’s New Approach to Appraisal Refresh published last November was a consultation document. In response to the consultation, in July we made some specific improvements—for example, taking up the points made by my noble friend Lord Berkeley, we released guidance on how to appraise cycling and walking schemes using the best information we have on the impact of such projects. This includes a new assessment tool of the health benefits of increased physical activity as people cycle or walk. On this aspect, we worked with the World Health Organisation to devise the tool in question. I am not aware that it has a special factor for walking with dogs and I am not sure either of what it has to say about horses, but I shall look at those two specific points, which are clearly of great concern to the noble Lord, Lord Hanningfield. Indeed, his every appearance at the Dispatch Box at the moment is to prosecute the case of the dog lover, which is a very worthwhile cause.

Encouraging transport planners to come forward with proposals which deliver precisely the benefits my noble friend referred to in terms of enhanced health and reductions in obesity will help meet both the challenges of transport and reduce the damaging effects on individuals of less active lifestyles.

The noble Lord, Lord Bradshaw, raised in rapid succession a number of fundamental issues about NATA. I shall in the time remaining to me take as many as I can and will respond in writing to the other points. On greenhouse gas emissions, the noble Lord and my noble friend Lord Berkeley noted the importance of the appraisal of carbon impacts. Some have suggested—as I took the noble Lord to suggest—that proposals increasing carbon should be rejected on that ground alone, although I was not sure whether he was talking about this in the context of an overall reduction

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in carbon that might not apply to each specific project, because many projects would not have that effect. I took it to be his argument that there needs to be some overall view.

It is precisely to enable balanced decisions to take place within an overall context which includes a much higher premium in the future than in the past on reducing emissions that we place a monetary value on the change in emissions so that they can be considered alongside the other impacts. We use the shadow price of carbon provided by the Department of Energy and Climate Change in this valuation. The importance of getting right the balance between climate change and other impacts depends crucially upon the shadow price of carbon. The shadow price captures the damage costs of climate change caused by each additional tonne of greenhouse gas emitted.

The Department of Energy and Climate Change is keeping the value under review. In its next steps on this, it will seek to take more account of the abatement of emissions needed to meet our overall emissions reduction targets. In addition, we will consider whether the shadow price used in transport could take more account of the scale of emission reduction expected to be achieved within transport and the scale of any flexibilities that may exist to trade carbon across sectors. We should be better placed to address these issues in the light of the recommendations on carbon budgets from the Committee on Climate Change due in December of this year and the outcome of negotiations on the EU climate and energy package. We are very alive to the points raised.

The noble Lord also referred to the valuation placed on noise and other negative impacts of developments. One of the main advances we made in 1998 by introducing NATA was to more transparently put the wider impacts of transport alongside the congestion, safety and other transport effects. The appraisal reports give these qualitatively. It is vital, we feel, to make decision-makers aware when a proposal would compromise historic landscapes or adversely affect biodiversity near a scheme, so that these factors are taken into account. Whether the decision-maker judges that there is some absolute value that acts as a threshold for a proposal going ahead is then a step beyond the appraisal process which the decision-maker then needs to make, based on wider factors. In some cases, such as with air quality, there are local standards that act somewhat in this manner.

The extent to which these impacts can be valued has been an area of research for some years. We do place monetary values on noise, and we think this is important if only because it gives designers of a proposal some indication of the mitigation costs that we would expect them to use. But, as I say, decision-makers may take into account a wider range of factors.

I have briefing on other issues raised by the noble Lord and the noble Earl, Lord Mar and Kellie. These include savings in fuel duty being counted as a disbenefit when assessing schemes; the valuation of time, about which the noble Earl had a great deal to say regarding why values are placed on small time savings against large time savings and why different values in some

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contexts are placed on different modes of transport; and rail forecasting. I have used up my time in response to the debate but I will write to all noble Lords who have taken part with specific replies to these issues.

To take up the point of the noble Lord, Lord Hanningfield, this is very much work in progress. The New Approach to Appraisal is, as he said, not so new now—it is 10 years old. We have sought constantly to improve it. The consultation document we published last year sought to update it, not least in response to the Eddington and the Stern reports, but we do not have closed minds about the capacity for further improvements. We will bear in mind the points raised in this debate as we seek to improve it further.

Lord Tunnicliffe: My Lords, I beg to move that the House do now adjourn during pleasure until 8.38 pm.

Moved accordingly, and, on Question, Motion agreed to.

[The sitting was suspended from 8.35 to 8.38 pm.]

Energy Bill

Consideration of amendments on Report resumed.

Clause 51 [Nuclear decommissioning: regulations and guidance]:

Lord Jenkin of Roding moved Amendment No. 8:

8: Clause 51, page 46, line 18, at end insert—

“(c) the way in which the Secretary of State will interpret the phrase “prudent provision” for the purposes of sections 43(4) and 46(7).”

The noble Lord said: My Lords, I hope I can explain this at not too great a length. The nuclear industry has argued that effective rights of appeal should be available in the Bill in relation to Ministers’ decisions to approve, reject or modify funded decommissioning programmes. The Government, however, have declined to provide an appeals machinery because Ministers believe that the industry is already well protected by the availability of judicial review.

On the Planning Bill I took exception to the number of occasions when any appeal to the courts was being left to judicial review, and I consider that it is now a seriously misused procedure. It used to be that only if a decision was made that was so unreasonable that no reasonable man would have made it that the courts would entertain a case for judicial review, but in an interesting chapter in his book about the constitution, Anthony King, professor of history at the University of Essex, has drawn attention to the fact that whereas in 1981 there were 356 non-criminal cases involving judicial review, by 2005, the latest year that he was considering, there were 5,131—an increase over that period of about 14 times. It used to be regarded as a threat hanging over the heads of Ministers; in the debates on the Planning Bill I drew attention to the Civil Service publication called The Judge Over Your Shoulder. However, both in the Planning Bill and here—and this is a good example of it—instead of establishing an appropriate right of appeal within the executive framework that governs these clauses, it is simply being left to the courts.

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The nuclear industry believes that judicial review is a wholly inadequate process for challenging the complex technical and commercial judgments that are likely to characterise Ministers’ decisions about funded decommissioning programmes. This is normally because, as I have explained, judicial review can be used to challenge Ministers’ or regulators’ decisions on fairly limited grounds, such as a clear failure to observe due process, rather than on the actual substance of the decisions that follow full and detailed scrutiny. The powers of a Minister to approve, reject or modify a funded decommissioning programme can be exercised only,

by the site operator in relation to both the technical matters in the programme and the financing of those matters. The concept of “prudent provision” and the assessment of what it means and whether the site operator’s programme satisfies the concept, will clearly be critical elements in the ministerial decision process.

It is upon that issue that the industry’s exposure to risk will be most significant because of the scope for Ministers over a long period to define, and perhaps redefine, the concept of “prudent provision”, perhaps in an upwards-only manner, destabilising what have been Ministers’ long-term intentions—namely, to establish the long-term certainty that is needed to support major nuclear new-build investment. I believe that Ministers recognise this danger and have therefore taken powers under Clause 51 to issue guidance about the content and preparation of funded decommissioning programmes. This guidance has been published, following consultation, and it is helpful in telling operators and the wider industry how Ministers will aim to interpret the concept of prudent provision. However, Clause 51 does not require the guidance to include such assistance.

Therefore, bearing in mind that any guidance issued by Ministers under Clause 51 must be laid before Parliament, the industry would be able to accept the Government’s rejection of an appeals option with an easier mind if the clause could make clear that one of the matters that the guidance will be expected explicitly to deal with is how the concept of prudent provision is to be applied to the assessment of funded decommissioning programmes.

This is what my amendment is intended to achieve; that the guidance must contain,

I hope that I have made my case clear. I beg to move.

8.45 pm

Lord Davies of Oldham: My Lords, I am grateful to the noble Lord for the way in which he has moved his amendment, and I will fulfil the promise I made before the dinner break to be somewhat more constructive with regard to this amendment than I was with regard to the previous one.

The noble Lord was kind enough to indicate that we had consulted over the guidance to be issued in relation to Clause 51 and the powers therein. He also fairly expressed the fact that some in the industry are concerned that if there is scope for Ministers to redefine the concept of prudent provision over the long term, we will be likely to see the ratcheting up of the

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requirements in the interests of protecting the taxpayer. They argue that that in turn runs the risk that the existing approach in the Bill would create uncertainty in respect of the long-term planning that is clearly needed to operate a power station. The noble Lord emphasised that in regard to his previous amendment and I fully recognise that we are talking about long-term issues. I also agree that we should seek to avoid uncertainty about the concept of prudent provision.

There is no doubt that the amendment achieves greater clarity for the industry and I accept the basis on which he has moved it. However, we are not too sure about it and perhaps I may explain our anxieties. We are not sure that it is entirely appropriate because it is not for the Secretary of State to set out how we will interpret the meaning of the term in statute. Interpreting terms in statute is the role of the courts and it is not for Ministers to second-guess or usurp the role of the courts in that regard. The guidance sets out to give as much clarity as possible on the meaning of the term, given that it sets out the factors that the Secretary of State may take into account when exercising these powers. They necessarily include the crucial concept of prudent provision.

I accept that the industry wants greater clarity, and that is what the noble Lord seeks in his amendment. However, it would constrain the important flexibilities afforded to the operators and to the Secretary of State which exist under the clauses as they stand. I recognise that the concept of prudent provision, and the assessment of it, is a critical element in the approval and modification process. For the reasons I have indicated, we cannot accept that “prudent provision” should be in the Bill. However, the noble Lord rightly emphasises the importance of striking the right balance between certainty for the operator and the necessary flexibility for the Secretary of State and the operator to fulfil their duties under the Bill. We will therefore look further at the principle behind the amendment, and at the noble Lord’s argument, and we will search for greater clarity. That is also his objective. I promise to bring back a government amendment on Third Reading which I hope will meet those objectives. On that basis, I hope that the noble Lord will feel able to withdraw his amendment.

Lord Jenkin of Roding: My Lords, the Minister has been as good as his word before Dinner, when he said that he would be more forthcoming on this amendment than on the previous one. I am happy to accept his undertaking to bring back an amendment at Third Reading and will be interested to see what it is. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 57 [Offence of supplying false information]:

Lord Jenkin of Roding moved Amendment No. 9:

9: Clause 57, page 49, line 11, leave out “false or misleading information” and insert “information that is false or misleading in a material particular”

The noble Lord said: My Lords, the clause rightly makes it an offence knowingly or recklessly to supply false or misleading information to Ministers in response to any statutory requirement relating to the decommissioning and clean-up of nuclear sites.

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The offence thus created is an absolute offence, with no materiality threshold. This is likely to cause problems of due diligence and practicality in the supply of information, since almost any statement could be held to be misleading in any one of hundreds of immaterial respects.

There is a great deal of precedent for dealing with this problem, which qualifies the offence by being false or misleading in a material particular. These precedents include Sections 117 and 201 of the Enterprise Act 2002, and Sections 119, 350, 501, 795 and 1112 of the Companies Act 2006—I was quite glad not to be involved with that Bill; it was a very long business. There are many others.

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