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Grand Committee

Thursday, 3 July 2014.

Infrastructure Bill [HL]

Infrastructure Bill [HL] 2nd Report from the Delegated Powers Committee

Committee (1st Day)

2 pm

Relevant document: 2nd Report from the Delegated Powers Committee

The Deputy Chairman of Committees (Lord Bichard) (CB): My Lords, welcome to the Grand Committee on the Infrastructure Bill.

Clause 1: Appointment of strategic highways companies

Amendment 1

Moved by Lord Davies of Oldham

1: Clause 1, page 1, line 5, leave out “one or more companies” and insert “a company”

Lord Davies of Oldham (Lab): My Lords, we start on quite a fundamental point, on which even the Minister on occasions has not been too secure in the position that she has adopted. When I was asked last night to prepare a short summation of this part of the Bill for wider circulation, I wanted to get things as accurate as I conceivably could, but I found myself wrestling with whether I was referring to one company or companies. Every time that I used the word “companies”, it looked singularly ill placed with the surrounding arguments as far as the Bill is concerned. Therefore, Amendment 1 asks the Minister to clarify what is, after all, a pretty fundamental point, and we would not want to continue our deliberations without having cleared it up.

At Second Reading, the Minister certainly said:

“Yes, it is the Government’s intention to set up just one company. It is standard template language in legislation, I understand, to create the option of further entities. It has no sinister meaning at all behind it. The intention is for a single company, but of course the lawyers always think about what-ifs in the most extraordinary way”—

she did not sound too convinced by the argument herself. However, she went on:

“I guess we did not really kick back against that but, yes, it is one company”.—[

Official Report

, 18/6/14; col. 896.]

I congratulate her on putting up a pretty stout defence of her position, but even in that stout defence there is a certain ambivalence, as there is in the Bill. That is why Amendment 5 in my name would remove a provision from Schedule 1 that makes rules for when two different strategic highways companies interact, which certainly suggests that the Government are planning for more than one strategic highways company.

It looks a fairly limited argument to say, “The lawyers guard against every development and therefore we may need more than one”. The debate about the Bill will be coloured very significantly indeed if we

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must take on board the fact that there may be two strategic highways companies. To make the most obvious point, we will want to know how they will interact, and we have amendments down that relate to that. If the Minister is able to clarify the issue and state that, as it is the Government’s intention to establish just one company, she will look at the Bill again to ensure that it is framed in that way, I am quite sure that that would set a lot of minds at rest and make for a much more straightforward discussion.

I assure the Minister that whether there is one or more than one strategic highways company has quite a conditional effect upon the legislation. Our concern is not just about one passing fancy of the lawyers but about something that may be of real substance. Some of my more prophetic colleagues say, “Why don’t you come to terms with the fact that this is all about setting up the strategic highways authority for privatisation? Of course, you will want more than one, and this will neatly fit in with privatisation plans in the not-so-distant future”. Well, I am not a cynical person and I accept what the Government put in the Bill at face value.

It is on that basis that I move this amendment, which would delete “one or more companies” and insert “a company”. In addition, as I said, Amendment 5 would delete sub-paragraph (3) in Schedule 1, which suggests that the existence of more than one potential strategic highways company is not a legal oddity caused by standard drafting—lawyers always make life so much more interesting for us all when they turn to drafting—but a scenario actively envisaged by the drafters of the Bill. It clearly makes provision for what should happen in the event that one strategic highways company should wish to build a bridge connecting to another. One and one still make two and therefore this problem could arise only if there is more than one strategic highways company.

There is understandable concern that the Government are considering a model where the SHC might be franchised out in some not-too-distant future. If that is the intention, it reinforces our many concerns about this measure, but I venture to suggest that this concern is as great as any. Therefore, I ask for reassurance from the Minister that, when I next write about the Bill and try to communicate intelligently with a wider audience, I am able to refer to one company in the singular the whole time and make some coherent sense out of this measure. I beg to move.

Lord Berkeley (Lab): My Lords, I support my noble friend’s amendment because there are already precedents for having a multiple infrastructure. One is the M6 toll road. I believe that the company running it was given a 90-year lease to maintain and operate it and charge whatever it liked as tolls for the next 90 years, or whatever it was. If, in the future, there is a plan for road tolling, as appears more likely with this Bill—I certainly welcome that and will be talking about it in later amendments—whatever tolling the Government of the day propose, the M6 toll road will not be part of it. Whether that will increase or decrease its traffic, I do not have a clue; it depends on what the charges are. It is a particularly bad example because most of the freight goes on the existing road and damages it quite dramatically—the noble Lord, Lord Bradshaw, has an

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amendment down on road damage—but this is just one example of what can happen if there is no co-ordination over the whole country.

A second example is that, just after the last election, there were various plans and threats from the then Secretary of State that Network Rail would be broken up into other regions or zones because it was not performing properly. The idea presumably was that there would be competition between those zones for quality, capacity and charging, and for anything else that you come across. Luckily, that did not go ahead. I declare an interest as chairman of the Rail Freight Group. The idea of having a different charge for whichever way you go between A and B would be just ridiculous; the business would not work.

The problem here is that, as the Bill stands, you could have more than one infrastructure company. Wales might well choose to be different. I do not think Scotland is part of this legislation, so the charges will be different there. Then there will be all the arguments about doing one thing one way and then leaving the rest of it and coming along and doing something else that is slightly different. There would also be the interfaces and the knock-on and consequential effects, which might be quite serious. I think that my noble friend is quite right in tabling this amendment and speaking so eloquently in favour of it. I do not know why we need more than one infrastructure company to run the trunk roads—there are not that many of them, actually—and why we cannot leave it as a singular company.

The Minister of State, Department for Transport (Baroness Kramer) (LD): My Lords, as the noble Lord, Lord Davies of Oldham, said, I have emphasised before that we have no current plans for multiple strategic highways companies. This is not a sinister issue. We recognise that at some point there may be further companies, but the purpose of that might be, to give a good example, if one wanted a more regional structure for the equivalent of the strategic highways company. As noble Lords know, this Government are committed to devolution, so that is not something beyond the bounds of the imagination, but it is not anything currently contemplated. Our focus at the moment is a single highways company; there is nothing more sinister.

I also point out that one reason why I referred to the lawyers is that in this Bill we have sought clarity. The noble Lord will know from the number of Bills with which he has been associated over the years that it is quite common that a single phrase covers the plural. In fact, from the lawyers, I have this:

“Words in the singular include the plural, and words in the plural include the singular”.

It has been common practice in many Bills to allow for the fact that there may be more than one; it has simply been less explicit than we have been in this document. We thought that for the purposes of plain English this approach would be wise. There is no sinister context to any of this. We simply want to ensure sufficient flexibility for a future Government, so that if they decided that more than one company would be beneficial they would not have to go back and start legislation from

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scratch. In saying that, I am effectively responding to Amendments 1, 2 and 8, as well as Amendment 5, which as the noble Lord, Lord Davies of Oldham, said, is consequential to the other amendments.

I want to pick up on some of the issues mentioned by the noble Lords, Lord Davies and Lord Berkeley—that this is somehow some sinister mechanism for achieving privatisation. Nothing could be further from the reality of this Bill. The SHA is owned solely by the Secretary of State; if he were to cease to own it, it would lose all of its powers. There can be no way in which this company can be privatised. If the Secretary of State were to cease to be its owner, effectively it would cease to have any functions, powers or anything else. It would take a separate Act of Parliament to create a privatised entity. Everyone should be clear on that point.

The noble Lord, Lord Berkeley, raised the possibility that this could be some mechanism that in some way affected tolling, or future tolling. I point out to him that specifically under this legislation, where we have existing toll trunk roads, such as at Dartford, the Severn crossing and the M6 toll, these concessions remain in the same relationship to the Secretary of State as they currently have. They do not develop a new relationship under the auspices of the strategic highways company. We expect the concessionaires will continue to exercise their existing rights and discharge their current obligations. Tolls and congestion charges would therefore be set by a combination of public authorities such as the UK Government, devolved Administrations and local authorities, as is the case today under existing contractual mechanisms. I hope that with those assurances the noble Lord will feel able to withdraw the amendment.

2.15 pm

Lord Davies of Oldham: My Lords, I cannot pretend that the second version is any better than the first as regards convincing us on this matter. The Minister will know that there is a great deal in the Bill about the relationship between this strategic authority and the national rail network. We will emphasise that later on, because we think that there is great merit in ensuring that plans are put before the travelling public that show some co-ordination of thought between the railway and the major road network. I therefore find it a little difficult to think of the road network being regionalised. We are talking about trunk roads and motorways; at this stage we are not talking about local roads, although we all recognise that they comprise by far the greatest carriers of traffic. We are talking about the strategic network and we will seek to emphasise the virtues, which we hope the Government will see, of close co-ordination between two major bodies of the nation: rail and road.

The noble Baroness dangles before us the prospect of fragmentation of this company, challenging though it is to set up and significant as it is bound to be as regards road development. We are at one with the Government on the necessity of continuity of policy on infrastructure and in the belief that we should therefore create the mechanisms that offer that continuity, so we applaud the part of the Bill that does that. It is not usual for the Opposition to put down congratulatory

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amendments, but the noble Baroness will be well aware that in Second Reading speeches we all had many positive things to say about the ambition of improving our infrastructure planning. However, the insertion into the Bill of this doubt and this possibility complicates matters significantly. I must say to the noble Baroness that I hear what she says; she has obviously thought about it a great deal and has convinced herself. She has not as yet convinced me, but I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Amendment 2 not moved.

Amendment 3

Moved by Lord Whitty

3: Clause 1, page 1, line 10, leave out subsections (3) and (4) and insert—

“(3) The company designated under this section is called the Strategic Highways Company.

(4) The designated Strategic Highways Company shall not cease to be wholly owned by the Secretary of State unless by Act of Parliament.”

Lord Whitty (Lab): My Lords, I apologise to the Minister and the Committee that I was not here for the previous bit; I am afraid that I am boxing and coxing with the Chamber at the moment, and have probably already offended the rules of the House by nipping out during the Minister’s reply to move this amendment. Some of this amendment is relevant to what noble Lords have just been discussing on the previous amendment. Indeed, the first part of my amendment is a consequence of trying to clarify that we are talking about only one company and not several. That confuses people, particularly in local Government, who anticipate a degree of regional structures down the line. I know that the Minister will have cleared up some of that.

My second point relates to the issue of privatisation, of which the Minister was speaking when I came into the Room. Clause 1(3) of the Bill as it stands is branded as the way in which privatisation is prevented by the Bill; namely, that the designation would terminate if the company were sold or otherwise disposed of. To me, that seems a funny way of doing it. You will have a company which employs all the people who are at the moment employed by the Highways Agency. If it were somehow to be bought, all its duties would be removed. Surely it is far easier to give some parliamentary control over this process. If we are moving to a hived-off company, structured under the Companies Act but owned wholly by the state, and if it is the intention of the Government to keep it that way, why do we not state baldly in the Bill that it cannot be privatised except by primary legislation? That is what is proposed in the second part of my amendment. It may not be ideal, but it is a good deal better and clearer than what is in the Bill.

There are clearly worries. The first thought of most people when they heard that the Government were going down the road of hiving off the Highways Agency was, “This is the first step to privatisation”.

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There was alarm at that. There might have been in some quarters—but not ones that I have come across—some joy at the prospect, particularly were it to be related to road pricing, which in principle I do not oppose but is politically rather difficult for any of us to support, particularly a few months off an election. It is easier to assert the will of Parliament and say, “This is not privatisation. If there is any prospect of that changing, you will need a new Act of Parliament”. That is what my amendment proposes. I beg to move.

Lord Berkeley: I support my noble friend’s amendment. I am glad that he is here, because I am not sure that any other of us could have moved it. He did it very well. I want to compare this situation with what is happening to Network Rail, of which I declare an interest as being a member.

I have just come from a meeting with Network Rail where we have been told what is going to happen by 1 September, when it comes under government ownership. That sounds as if it is going to be quite easy, apart from changing all the memoranda and articles and allowing the Secretary of State or the accounting officer in a department to make certain appointments and control things. However, that is being done without much, if any, parliamentary scrutiny, because I do not think that anybody is particularly worried about it. Network Rail has been in the private sector up to now, but it has had £4 billion or so a year from public funds. It has managed to work and not cause trouble; otherwise, this would probably have happened sooner. However, there still have to be changes. I worry about it going in the other direction. As my noble friend Lord Whitty said, the consequences need some public debate, because there might be many more people who are worried about it, not least the people who work for the new company while it is government owned. It is reasonable to have some parliamentary scrutiny of a change. Therefore, I support the amendment in his name.

Lord Davies of Oldham: My Lords, I imagine that the Minister will have little difficulty in responding to this amendment. She is obviously going to continue to deny that privatisation is anywhere on the horizon as far as the Government are concerned—so that is one defence. Secondly, I hope that she recognises that there would need to be significant parliamentary action if privatisation of a significant company such as this were carried out. I am therefore anticipating the Minister quite enjoying responding to this amendment, which I am glad my noble friend has aired.

Baroness Kramer: My Lords, I will indeed enjoy responding to this amendment. It would seem from the speeches I have heard that our purposes are the same. The question is: whose language does it better? In this case, I go with the language in the Bill, which is rather more efficient in that it does not require an Act of Parliament to, as it were, “gut” the highways authority should it cease to be owned by the Secretary of State; it just does it. Obviously, if such a thing were to happen, we would put in place a transitional process to bring the staff back over; those kinds of things would only be sensible. The language in the Bill achieves

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what the noble Lord, Lord Whitty, intends but does it rather more effectively than the subsections he has designed. Let us go for quick action and ensure that we have the maximum strength, which we have in the Bill. I therefore ask that the amendment be withdrawn.

Lord Whitty: Well, my Lords, I am not totally convinced by the Minister and I suspect that casual readers of the Bill would also be a bit puzzled by the way that this is put. I fully accept the assurances on the Government’s intentions but the wording could be clearer—it probably could be clearer than mine. We need to understand that were there ever to be any change of ownership, Parliament would have a say, which is the key point of my amendment. However, I take what the Minister says as being the Government’s position. The substance of the matter is not in dispute. Perhaps her officials could look at the wording again at some point so that Parliament is written into that process somewhere.

Amendment 3 withdrawn.

Debate on whether Clause 1 should stand part of the Bill.

Lord Davies of Oldham: My Lords, at Second Reading the Government failed to provide a convincing case for why the strategic highways company needed to be created to achieve the stated aims. As we indicated to the Minister at Second Reading, there is agreement pretty well across the House on the objective of a more coherent planning structure for the crucial part of the infrastructure represented by trunk roads and motorways. But the Minister indicated that because the Highways Agency would be turned into a government-owned company, it would have,

“the stable, long-term funding needed to plan ahead effectively”,

and that the Government were,

“also introducing in the Bill the framework for a roads investment strategy”,

which, of course, we applaud. The Minister went on to say:

“The strategy will be agreed by the Government and the new company. It will set out the Government’s longer-term strategic vision for the strategic road network, investment plans and performance criteria, along with the necessary funding, just as happens for the railways. The new delivery model will allow the company to better prioritise its spending in terms of both maintenance requirements and capital demands. This is bound to lead to better asset management than we have now”.—[Official Report, 18/6/14; col. 838.]

Where is the beef in that statement? What is it about the new delivery model that is superior to what we could achieve with the Highways Agency? What in the structure of the Highways Agency makes it impossible for it to deliver longer-term planning? It may be that it has not done so because of the vicissitudes of funding, for which the Government must take responsibility, but the Minister surely recognises that nothing gets done without Treasury approval. What the present structure of the Highways Agency seems to need is more operational independence from the Treasury. The Treasury needs to be on board with the necessity for longer-term thinking about roads. But why we

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need the creation of a government-owned company to plan spending, I do not know. This is spending that is not in yearly cycles. It does not peak towards one part of the year rather than another. It is not clear that the Bill actually delivers what the Secretary of State has claimed to be among the key benefits. I cannot see why, with serious intent and commitment to long-term planning of infrastructure on the Government’s part, the existing structure cannot be made to work towards those objectives.

2.30 pm

The summary note released by the Minister says that,

“establishing the Agency as a legally-separate company, clearly independent from government, ensures that the relationship between central government and the operator is transparent”.

Will the Minister outline in more detail the extent to which the Secretary of State retains an ability to be involved in and direct the strategic highways company envisaged in the Bill in the course of its running? If the Secretary of State retains the ability to vary the funding and priorities, the benefits of setting up the new company might have been somewhat overstated.

Other ways in which the benefits of the new arrangements could have been overstated involve the tax arrangements of the new company. The Highways Agency is able to claim back over £400 million in tax every year. VAT is not included in the list of relevant taxes that the Treasury can vary with respect to this new company. If the company cannot claim that back, the £4 billion that it would have to pay would appear to somewhat overshadow the Government’s mooted £2.6 billion efficiency pay-off from the new structure. After all, it would not take many years at £400 million-plus a year before we were pretty close to this efficiency claim, which I guess is not meant to be realised the year after next but at some distant time in the future. The Minister must both explain how this new structure compensates for the loss of the VAT receipts and give us rather more detail about where this £2.6 billion figure comes from and the sums which add up to it.

Does the Minister envisage any further costs in the creation of the new company, such as rebranding? To what extent does the Minister envisage these eating into the efficiency gains of the new company? If the rebranding is going to go on, I am quite sure that the Government will not expect a Consignia situation to develop again, in which, after privatisation, a new brand was created for the part of the Post Office that Royal Mail sold off. Nobody knew what Consignia meant. I am quite sure that neither the Government nor those responsible for the company will make the same mistake, but there is an issue over what the brand image of the new company will be. We remain in favour of a model that is able to deal with longer-term planning on roads. It would help the Government to avoid the kind of expensive uncertainty that we have all seen surrounding the A303 in times past and, more recently—although the A303 is recent enough—the A14, which is a source of great discontent.

The National Audit Office has said that funding certainty is not itself sufficient to guarantee delivery; we can all drink to that. However, the Minister has to tell us what gains can be readily identified from this

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new company. Can she tell us whether the department has given any thought to the creation of a national infrastructure commission, which would involve not only roads but the whole basis of infrastructure in this country? After all, the strategic highways company is due, in the fullness of time, to establish relationships with the rail regulator. A national infrastructure commission to consider these issues as a whole would surely point to some more coherent solutions.

It is often said that that the United Kingdom does not shape up too well in international infrastructure league tables. The Australians have Infrastructure Australia and Singapore has its Urban Redevelopment Authority—radical reform along these lines is the best way to secure an end to stop-start funding. We do not need to recreate what we already have as an instrument for the roads, in the shape of the Highways Agency, and I am therefore still not convinced that the main proposition underpinning the Bill, as contained in this first clause, is necessary.

Baroness Neville-Rolfe (Con): My Lords, I regret that I was not able to speak at Second Reading, owing to other commitments. I associate myself with the noble Lord’s question about costs in relation to the new company.

I also have another question: will this new company be able to raise money in a way that the Highways Agency is not currently able to do? That would of course potentially enable important infrastructure investments to go ahead even in times of stringency. I also associate myself with the comments about the A303, having lived off the A303 all my life and having seen probably 50 years’ worth of proposals for Stonehenge—none of which has so far come to fruition.

Lord Whitty: My Lords, I support the proposal that Clause 1 should not stand part of the Bill, as it queries whether the clause—which is the whole proposition here—is sufficiently coherent and clear as to what it intends to do. As a Roads Minister, I was responsible for at least one of the proposals for the A303 and remember that we talked to everybody in the community, including several different sets of druids, and told them that the Stonehenge tunnel would be built. However, as I said at Second Reading, no sod has yet been turned and all they have done is close one road.

I understand the Government’s intention to create a steadier position through having a slightly more arm’s-length relationship, but this is half-baked. It is neither fish nor fowl. This will be a company that is wholly owned by the Government and which—to address the point that has just been made—cannot raise its own money. The Minister has made that clear to me, both in writing and in person. I thought the main advantage of having the hive-off would be that the body could raise its own funds, even if subject to broader controls from the Treasury, but the Minister makes it clear in her letter that its situation will be no different to the current one of the Highways Agency. That seems to undermine the main advantage of establishing an arm’s-length body. The Government’s proposal incurs all the costs, all the confusion and all

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this great legislation in the Bill and all the schedules attached to it, but it does not, of itself, provide the funding, the strategic intent or the independence from Government and, crucially, from the Treasury. It will not avoid what has been a stop-go process for the past 30 years.

If the Government were proposing a new corporation that was properly set up and run and which, although still owned by the Government, had its own structural basis and accountability, as well as the ability to finance its activities in various different ways, I could see that there would be a significant advantage. With this halfway house, which is not even a halfway house, I see very few advantages. Therefore, I think that the Government would be more sensible to leave the Highways Agency where it is, give the agency more money and give that over a longer period of time—if that is the Government’s priority—and, if necessary, think up a fuller, clearer, more comprehensive proposition for what kind of highways organisation we need in this land. The answer to that might well be in the territory that my noble friend Lord Davies referred to, because what we perhaps actually need is a transport infrastructure company rather than one that deals with simply 2% of our roads.

If we were to do that, we could start to deliver the investment required for a genuinely integrated transport policy, whereas the Bill, as I am afraid I have said before, seems to be about changing the names on the doors without changing much else.

Lord Berkeley: My Lords, I would just like to ask the Minister where this figure of a £2.6 billion saving comes from. The two organisations Network Rail and the new strategic highways company will be quite similar, but one difference between them, which we will come on to in later amendments, relates to the role of the Office of Rail Regulation. Over the past 10 years, the Office of Rail Regulation has required Network Rail to make savings of about 60% of its turnover. That is quite a big saving, which has been achieved, while keeping the service going and the quality improving, because the regulator has very strong powers. If the savings are not made, or if the resulting performance of the network is bad, the regulator can fine Network Rail, as I believe it is planning to do next week.

The problem here is that the rail regulator will not have such powers over the highways authority but will simply monitor. You can sit monitoring things all your life, but you cannot incentivise or require an organisation to make the changes that it should. I am sure that there are changes to be made. I am sure that significant percentage savings could be made over quite short periods. On whether those would be the same as in the case of Network Rail, they probably could be, because Network Rail started off as a nationalised industry, which was probably pretty inefficient to some people. Although the Highways Agency has improved over the years, there is probably a long way further to go. However, unless we can get the ORR to have the same powers not just to monitor but to control and enforce cost reductions, I am not quite sure where we are with this.

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Listening to other noble Lords, I am beginning to think that the only benefit from this that I have heard is the idea—which the Minister has, of course, denied—that the Bill is about getting the Highways Agency ready for privatisation.

Lord Teverson (LD): My Lords, perhaps I should declare an interest in that I, too, am a regular user of the A303. When driving down there, one of the greatest moments for me is being able to see Stonehenge, but I know that the fact that I can do so is not necessarily good for the millions of people who go to visit it. More seriously, perhaps I could also declare my interests for the rest of the Committee stage of this Bill. I am a director of Wessex Investors, which would have an interest in the outcome of some of the planning implications of the Bill, although I do not intend to speak on those particularly. Wessex Investors could also potentially have an interest in some of the energy provisions, as it is starting to negotiate with an organisation on an energy project in the south-west. However, I do not think that any of those affect what I am going to talk about.

I, too, shall be interested in hearing answers to the questions on this asked by the noble Lords, Lord Whitty and Lord Davies, but I want to make the point that it is important politically that the Government are saying in the Bill that we have had enough of the stop-start, ad hoc investment plans for roads, and we need to move on to a much more mature and grown-up way of looking at infrastructure in the highways sector. Whether that is absolutely dependent on changing the name and function or legal entity of the Highways Agency, I am not absolutely sure, but I know that the Minister will come back on that when she answers the debate.

However, the good thing is that there is a real intention to start to mirror the situation that applies to rail. My understanding of this is imperfect and the noble Lord, Lord Berkeley, will know far more about it than me, but, as I see it, we have a good example from Network Rail, for which we now have a £38 billion programme over the next five years providing the investment needed to keep this country moving and to move things forward and modernise that network. That seems to be incredibly successful as regards usage and how that has worked over the past decade and into the future. If we can start to replicate that in the way we treat roads in this country, that would be positive.

I am not a great person for advocating huge investment in the strategic road network—apart from for the A303—but that clearly needs to be done in some areas, and on a programmed and predictable basis so that the Government, users and contractors know that it will be rolled out and actually happen rather than be subject to the next budget cut. I therefore welcome that, and hope that the Minister will be able to reply in such a way as to show that this change of the legal status of the Highways Agency will enable that to happen. Clearly, we need to do that.

2.45 pm

While I am on my feet, I congratulate the Minister on recent investment announcements for the rail system in the south-west regarding the maintenance facility in

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Cornwall, the earlier signalling improvements to that line to provide a much better service and, of course—although I do not use it more often than perhaps three or four times a year—allowing the refurbishment of the sleeper service, which is an important economic link for that part of the country.

Lord Berkeley: If I may just respond to the noble Lord, Lord Teverson, let me say that I, too, congratulate the Minister on what has been announced today about the things happening in Cornwall. To go back to the noble Lord’s comment about the long-term finance, I certainly agree with him that if this change enables the longer-term finance that Network Rail has at the moment, it will be a major step forward. I worry that I do not see that in the Bill—maybe I cannot find it, and perhaps the Minister will be able to put me right. However, I worry further, that although Network Rail has it for the next five years, where is the commitment beyond that for the railways? If that does not happen for the railways, it probably will not happen for the roads. I was going to raise this later, but since the noble Lord raised it, let me ask: is there the opportunity to have a discussion before Report committing the financing of this new agency—the Highways Agency and maybe Network Rail—to a five-year programme? If that does not happen, it would need primary legislation to change it. That is probably a bit of a tall order, but it would be interesting to explore.

Baroness Maddock (LD): My Lords, I declare my interests as in the register, although I do not think that any of them have any particular relevance to what we are talking about today.

Following my noble friend Lord Teverson, of course we all have our favourite roads. Many people will be familiar with the A1 north of Newcastle and the issue of dualling it. Therefore, as I have lived with that, having now been married to the MP there for 13 years, I would be grateful to know how the Bill might help or hinder what has been a rather sorry tale of getting quite advanced on the dualling of that road, and then it all going backwards. It is now going forwards again, but I would be grateful for any information my noble friend can give me on that.

Baroness Kramer: My Lords, I will start by referring to two roads. First, the A303 is part of a feasibility study, the details of which should be announced later this year. Secondly, on the issue that was raised about the A1, the noble Baroness is quite right to say that that is advancing. That illustrates exactly some of the problems which we are trying to counter with the work that is going on here. Your Lordships will understand that this clause allows the Secretary of State to appoint a strategic highways company, conferring duties and functions for it to operate as a highways authority. Our aim—I think this is now well understood—is to create a different model to deliver road infrastructure from that which we have now, with a separate legal body from government responsible for our strategic road network, advising government on how it can best achieve its vision for our national network and being responsible for delivering that vision in the most cost effective way. These parts of the Bill are an implementation measure.

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We consider the most effective model to be one where a company is created under the Companies Act 2006. I understand that there are questions about why a separate company is needed, so I will take a moment to set out some of the rationale. We have decades of experience across Administrations of different political complexions showing that the current arrangements have not encouraged a long-term approach to planning infrastructure or to securing funding. The noble Lords, Lord Davies of Oldham and Lord Whitty, asked why we do not do it under the existing structure. I say to them that we have lived with the existing set of arrangements for a very long time and it has not worked in terms of delivering the element of long-term certainty that is needed. Funding has been changed arbitrarily—sometimes at very short notice. I think we all recognise this and we recognise that it comes with high costs in efficiency and the quality of our infrastructure. The noble Lord, Lord Berkeley, underscored how Network Rail, with its more arm’s-length relationship—it calls its funding periods “Control Periods”—has delivered significant increases in the efficiency with which it implements new rail infrastructure, and we want to capture the same for roads.

Some noble Lords have asked what our sources were for the numbers. I refer them to Alan Cook’s A Fresh Start for the Strategic Road Network, published in 2011. There are further, more detailed calculations set out in the impact assessment, which is published on the DfT website. That might be a very good source for people who want to understand more of the nitty-gritty around those numbers. However, I do not think that most people looking closely at this will challenge the underlying reality that, once there is a longer-term framework in which to operate, efficiency is far easier to achieve.

Many have raised—not today but in various contexts—the importance of maintenance and balancing new-build and maintenance; looking at the whole life of a road; looking at the longer-term life of the asset; and approaching asset management in that way. It is far more possible to do that with a greater certainty of funding. I will just underscore the problems that we face today. Our road infrastructure, to which the noble Lord, Lord Davies, referred, is now rated only 28th in the world by the World Economic Forum—we all know that hinders our competitiveness. I suspect that arguing for the status quo will not allow us to make the changes needed to get the improvements that our economy requires.

We feel that for long-term funding certainty and planning, it is crucial for the Department for Transport to be able to have a transparent and binding relationship with a separate legal entity that will be set out in the road investment strategy. The RIS—if I can use that short term—sets out the Government’s requirements and investment plans and sets the funding to deliver them. If the Highways Agency remained part of the DfT, then in practice it would be much easier to change. Setting up a strategic highways company as a new company, operating under company law with a well established governance and financial framework, will reinforce the clarity and robustness of the relationship.

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The company structures and disciplines will also help support a more commercial approach. We have seen international examples, which are enormously varied, and I have written about them in quite a detailed letter to some Members of your Lordships’ House. For example, in the Netherlands and Sweden, where roads delivery bodies have been given long-term funding certainty and a more independent relationship with transparent requirements, large efficiency savings have been possible. We have all acknowledged that this is not about privatising the roads. This will be a company that has one shareholder, the Secretary of State, and if he ceases to be the shareholder, in effect the company is terminated.

I will try to pick up a couple of the other issues that were raised. We will discuss some of them in more detail as we come to the various amendments targeted on them. My noble friend Lord Teverson talked about echoing the advantages that have come through the Network Rail structure, and that is exactly what I have been describing. I do not think it has to be identical to the Network Rail arrangements. Network Rail came to its current arrangements through the rather strange route of nationalisation, privatisation and part-privatisation. But we can pick up the essentials that seem to be the important levers, and that is what we have been doing.

The noble Lord, Lord Davies of Oldham, seemed to suggest that if we had a national infrastructure commission we would not need any of this. This is really practical, coalface implementation of infrastructure building and maintenance, and it is absolutely crucial. It is not a big strategic sweep—obviously, strategy will be deeply embedded in the road investment strategy—but it is creating the delivery mechanism to make that a reality on the ground.

The noble Lord, Lord Berkeley, asked whether we would have five-year certainty. We will talk in some later amendments about the timeframe for the RIS. At this point I would just say that we have to give a bit of flexibility because we will have a road investment strategy before the company is in place. We can talk about timeframes a bit later.

The noble Lord, Lord Whitty, and the noble Baroness, Lady Neville-Rolfe, raised an issue that, again, I think we will cover in some later amendments, about whether the company could go directly to the financial markets. To do so, it would have to have the permission of the Secretary of State. We have been quite clear that cheaper borrowing is available through the Government. We are therefore not minded to use those mechanisms. We are going to go for the cheapest borrowing. Frankly, in an era when one is trying to bring down government spending on all fronts and watching every penny, that is an entirely appropriate strategy to focus on. It might be possible, with the Secretary of State’s permission, to finance individual road projects directly in the markets but we will be making all those decisions based on the implications for the cost of financing.

The noble Lord, Lord Berkeley, raised the interesting issue of the role that the Office of the Rail Regulator has played, through its enforcement powers, in driving efficiency in the Network Rail system. That is an

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interesting question which we will want to think about and explore. We are determined that efficiency is going to be one of the major outcomes of this project.

Having covered that range of issues, I hope I have provided the reasons why this clause should stand part of the Bill. I hope very much that your Lordships will support its inclusion.

Lord Bradshaw (LD): The Minister made reference to the Swedish experience of financing roads. I have been involved with it. I was involved with the Øresund Bridge between Copenhagen and Malmö, but it was an estuarial crossing and it cut huge distances off both the road and rail networks. There were huge strategic reasons but the money was raised in the market and people pay tolls through quite advanced technology for the use of it. Are there other examples? Some of the Dutch things are going over water. Are there other real roads that have been invested in in that way?

Baroness Kramer: If I may, I will provide my noble friend with more detail in writing. We have provided one letter already, which has been available to a number of your Lordships, that we can happily put in the Library. But if we are not very careful we could get entangled in every road across continental Europe and the different ways in which they have been financed.

It is interesting is that every country you look at does it somewhat differently, sometimes in different political and financial contexts. But what we see as a general current theme is if you can get that transparency and some of that arm’s-length character, and provide certainty of funding, those are the key mechanisms that help drive efficiency, and those are the lessons that we want to learn.

Clause 1 agreed.

Schedule 1: Strategic highways companies: consequential and supplemental amendments

Amendment 4

Moved by Lord Whitty

4: Schedule 1, page 31, line 35, at end insert—

“( ) The Strategic Highways Company shall be responsible for the construction, improvement and maintenance of the strategic highways network for which it is the authority; and for the management of safety of that network, the development of traffic management and speed control systems on that network and for meeting objectives for reduction of emissions of greenhouse gases, pollution of water run-off, air quality and other environmental objectives and for engagement with private and commercial road users and with local communities.

( ) The Strategic Highways Company shall have responsibility for research and development in the fields of road construction and maintenance, traffic and safety controls and telemetric information on its network, and in so doing, the strategic highways company may contract to or enter partnership with other organisations.”

3 pm

Lord Whitty: My Lords, Schedule 1 is 26 pages long. It is devoted almost entirely to inserting in the Highways Act the name of the company rather than

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the Secretary of State, or vice versa, and a lot of other administrative matters relating to assets, contracts and so forth. What it does not do—and I think it should—is to describe the responsibilities of the company and the scope of its activities, to which my next amendment relates.

This amendment is a shot at describing what I think will be the responsibilities of the company. This is Committee stage and, therefore, I hope that the department might accept the principle and draft a better description. However, essentially, somewhere in the Bill—I would prefer it to be in the body of the Bill rather than in a schedule, but the schedule is where the detail on the new company is spelt out at the moment—it should state what the functions and responsibilities of the company are.

The amendment refers to the obvious things: the construction, the maintenance and the improvement of the road system; traffic management for that system; and safety for that network. When I mention safety, on which I have amendments later on, I should inform the Committee that, since Second Reading, I have acquired an interest in this area in that I am now the chair, taking over from my noble friend Lord Dubs, of the Road Safety Foundation. Some noble Lords may recall that safety was a significant element when I was Roads Minister. Certainly, it is underplayed in this Bill and should be an important part of it, as are traffic management, speed controls, and so forth.

There is also the environmental dimension. There are problems about the construction and operation of roads. Somewhere in this Bill we need to say more clearly that the company, and not the Secretary of State any more, is now responsible for the environmental impact of the roads which are run by the Highways Agency. That includes the level of emissions which traffic management creates and whether that is going down and making a contribution to our carbon saving. It includes also the level of air pollution, which is largely proportionate to congestion and which, again, the Highways Agency network should be making a contribution to, as well as other things which are not perhaps so obvious, such as the run-off of water from highways, which has a significant effect on water systems—we have just passed a Water Act in which the quality of water is an important issue, including that of groundwater. Although most new schemes provide some better storage and diversion of water, from a lot of the old roads it still goes back into the ground or into the water system.

The amendment also refers to another responsibility, which is for research and development. I think that I am right in saying that the Highways Agency has its own R&D budget, but the Department for Transport also has a roads research budget. Is the whole of R&D on roads now to be the responsibility of this new company, which would probably be quite sensible? The Bill needs to be clear that the R&D on roads, traffic and the impact of roads is one of its responsibilities. A final dimension of the responsibilities that I am suggesting is the necessity to engage with road users and local communities, and the ability to enter into contracts with other providers. We will come later on

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to issues of co-operation with local authorities, and so forth. A key responsibility will be relations with road users themselves.

This amendment is my shot at this issue. I suspect that there could be a better one—but it is rather odd that a whole new nationalised infrastructure corporation should be established without the primary legislation saying anywhere what its responsibilities are. Therefore, I beg to move.

Lord Berkeley: My Lords, I support my noble friend in his Amendment 4, and I shall speak to the other amendments in this group. On Amendment 4, he is absolutely right. The strategic highways company needs to have responsibility for all the things that he has put in the amendment. I remind the Committee that there is very strong evidence that a month or two before the Olympics, when the air pollution on one or two of the trunk roads in London was reaching Chinese levels, the solution by the Mayor was to cover the monitoring points with plastic bags, which of course reduced the level of pollution inside the plastic bags but did not much help anybody else. But this needs to be done by the strategic highways company, and I would suggest that it needs to be supervised by somebody. That may be a role for the Office of Rail Regulation, or whatever it is to be called in future, because these are very important points.

My noble friend is right in his comment about research, but there needs to be some research into non-trunk roads, which are a very large part of the road network. I hope that that can be taken into account as well.

Amendments 6 and 7 relate to the 20 pages of consequential amendments to which my noble friend referred. It relates to something that may have got lost in the search for consequential amendments—the Environmental Protection Act 1990 and the question of which body is responsible for collecting litter on different roads. These two amendments are designed to make sure that the strategic highways do not get left out of the wrapping up; otherwise, we will see them covered in litter from head to foot.

I shall not read out all the parts of my amendment, because everybody can read them, and it probably would not make much sense anyway—unless you put a wet towel on your head.

Finally, my noble friend did not mention Amendment 61, which follows on from Amendment 4 and is to do with the transfer of additional functions to the strategic highways company in Clause 13(2). It covers highways and planning, but I agree that it should cover road safety as well, because that is a terribly important part of it. We will talk about safety comparisons later, but it would be good to see road safety in there, or something like it.

Lord Bradshaw: The amendment moved by the noble Lord, Lord Whitty, with which I agree, mentions “speed control systems”. We are considering the Deregulation Bill on Monday, which makes specific provision for a lot of the enforcement of speed and other offences to be undertaken by people who go round with pads rather than the modern method of

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using cameras. Will the Minister cover that, or at least take it away and get sorted out the apparent contradictions between those two pieces of legislation?

Lord Davies of Oldham: Well, my Lords, that is a bumper that whistled past the Minster’s ears. It is an interesting little challenge. I have no views on what the noble Lord, Lord Bradshaw, has said, except that I usually consider what he says to have a modicum of very good sense.

I support my noble friends’ amendments. My noble friend Lord Whitty made a persuasive case for the opening amendment. My own amendment would merely establish a consistent theme for us in this legislation: we want to see the Office of Rail Regulation playing a significant role in the road network. It should publish guidance and have powers to require efficient use of the road network. That is what it does for rail. As the noble Baroness will have noted a few moments ago, I was seeking to extol the virtues of a degree of integration between these two critical features of our transport infrastructure. This is one modest step towards that. The Office of Rail Regulation should promote not just efficient spending but efficient management of the road network. It has earned the approval of many of us through its work on the rail system. There is surely merit in it doing so for the road while furthering the prospects of integration between two main features of our transport infrastructure, which will be an abiding theme of the Opposition’s position on the Bill.

Baroness Kramer: My Lords, your Lordships have raised a number of important issues around the powers that are transferred to the new company. The purpose of Schedule 1 is to transfer to a strategic highways company appointed under Clause 1 the statutory duties imposed on, and the powers exercised by, the Secretary of State in his capacity as highway authority. The functions and responsibilities are already expressed in legislation, but they are transferred to the new company on its appointment. These are all the functions that it needs to operate. That may help in understanding why I regard Amendment 4 as an unnecessary addition to the Bill.

Amendment 4 takes us to Clause 13, under which the Secretary of State may transfer additional functions other than an excluded function to a strategic highways company. I think the noble Lord’s purpose was to make road safety functions capable of transfer to the company. We absolutely appreciate the importance of road safety, but we do not require the amendment because, in our view, the only road safety functions which would ever be appropriate to transfer to a strategic highways company would be those which relate to highways. For example, the Secretary of State is responsible for issues which relate to drink driving and the standards that are required of vehicles. In other words, many aspects of road safety are not to do with the highway itself. It would not be appropriate to transfer that range of responsibilities over to the SHC, but only those parts which relate to the highway itself. This is already enabled within the legislation before us.

On a wide range of these issues, I draw your Lordships’ attention to the licence, a draft of which was issued on 23 June and which covers in great detail many of the

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issues which have been raised here. There is always a question of whether you put things in the Bill or in the licence. We are constantly adding to and refining the kinds of actions and responsibilities that we want an entity like the new SHC to carry out. We would lose a lot of our flexibility were we to put this in the Bill rather than use the licence mechanism. With the combination of the transfer of duties already provided and the licence, a wide range of these powers are already covered.

3.15 pm

Amendment 6, in the name of the noble Lord, Lord Berkeley, addresses the issue of litter and extending responsibilities to local authorities. Under the current arrangements, local authorities have responsibility for cleaning up litter on trunk roads—the major A roads—unless such roads have been specifically transferred to the responsibility of the Secretary of State. Responsibility for clearing litter from motorways has been transferred. One of the provisions that I believe the noble Lord is trying to introduce in his amendment would alter the functions of the local authority, for which there would be funding implications. Obviously, part of the money that is transferred to local authorities is provided on the assumption that they will clean up litter. This would require expanding the capacity of the strategic highways company to clean up litter, and most of us think it would be done less effectively if we were to try to do all that, never mind that it would disrupt all kinds of contracts that are in place. We just do not think there is a big gain from making those kinds of changes.

Amendment 7, in the name of the noble Lord, Lord Davies, would change the appropriate national authority to the Office of Rail Regulation. This would remove a role from the Secretary of State which we think it important should remain with the Secretary of State. He has powers under the network management duty to require information from any traffic authority—the noble Lord will understand the SHC is but one of many traffic authorities, so that information can be required from local traffic authorities—and can ultimately take action if any of those traffic authorities are failing to meet their statutory duty. We think that it is crucial that the Secretary of State retain this power and oversight and that it does not seem to be a role that is necessarily appropriate for the ORR.

Working through these various amendments, the underlying concerns are essentially covered, in many ways, or are not necessarily appropriate to the Bill and to the functions as they are envisaged. I hope that gives some comfort to your Lordships and that the noble Lord will feel comfortable withdrawing the amendment.

Lord Jenkin of Roding (Con): My Lords, I am afraid that I was engaged on the Floor of the House for the first part of the Committee’s sitting, taking part in the debate on—

Lord Bradshaw: Manufacturing.

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Lord Jenkin of Roding: Yes, manufacturing, so I may have missed this. The trouble as one gets older is that one forgets things, the most recent things in particular. As I confessed at Second Reading, I am not an expert on road legislation. I make that absolutely clear. I am a fairly regular road user, but that is about as far as it goes. None the less, I have tried to understand the structure of what is going to be set up here. I made my view clear at Second Reading that I thought this arm’s-length body would be an improvement on the Highways Agency, for reasons which I briefly mentioned and which my noble friend, the Minister, has spelt out on several occasions.

However, I am not entirely clear about the relationship between the Secretary of State and the highways company. I am told that there has been no mention, during any of the debates, of what is described in the document published last month by the department, Transforming our Strategic Roads—A Summary. On page 9, there is a very interesting chart which sets out the pattern of what is intended. It refers to a framework document which:

“Defines agreed roles, responsibilities, governance and working arrangements between the SHC and government”.

I listened very carefully to what my noble friend the Minister said in her reply to the noble Lord, Lord Whitty, and I do not think that she mentioned the framework document. Is this something that has been published, or will be published? What form will it take? What statutory authority will it have? I understand completely the articles of association. Indeed, every limited liability company has articles of association; it also has a memorandum of association, which is normally the document where you set out the objectives of what the company is being set up for.

I quite understand that in this case the objectives are going to be transferred by the Secretary of State to the company by various transfer instruments and, probably, secondary legislation. But what is the framework document? It plays quite an important part in the chart here, and I am not entirely clear how it is going to be produced, what status it will have and what parliamentary accountability there will be for it. I would be most grateful if my noble friend could enlighten me. I hope she will forgive me if it is pure ignorance and everybody else knows but I do not, but if she would be kind enough to explain it to the Committee, I would be extremely grateful.

Baroness Kramer: I thank the noble Lord, Lord Jenkin, for that addition to the discussion. What was published last month is the outline for the framework document. The document itself is not yet a finished article but the framework is here, which gives some clarity on exactly how it will function. Looking at it, I think it will be impossible to have a final framework document until we have a final Bill, since what it does is capture the relationship that the Bill will establish once it is an Act.

The outline goes a long way to making that clear. It says that the framework document will state in broad terms the aims and objectives that the Secretary of State will expect the SHC to achieve. It will set out the

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SHC’s legal status and administrative classification. It will list its responsibilities and accountabilities, such as,

“enshrining Managing Public Money and other relevant government guidance”.

It will list the responsibilities for senior roles in the company. It will provide for business planning, performance and monitoring, budgeting procedures, annual reports, and accounts. I could go on but it might be easier to provide any of your Lordships who did not pick this up at one of the earlier gatherings with a copy of the document itself. It will go a long way to clarifying exactly how all the pieces fall together. The document that the noble Lord, Lord Jenkin, has in his hand is meant to try to show how the different pieces and documents all relate to each other. I fully accept that it takes more than a moment to sit down and work out how the various interrelationships work.

However, given that it is only the noble Lord who has raised this issue now, I would say that there is some comfort that the bits do actually fit together, which of course is essential for the successful functioning of the company.

Lord Jenkin of Roding: I am grateful to my noble friend for that reply. I will read very carefully what she has said in Hansard and perhaps try to get hold of the other documents she has mentioned, but it certainly would be very helpful if that document could be circulated. I do not know whether other Members of the Committee have seen it. I see heads being shaken so I am not sure that my noble friend is right when she says that, because nobody else has raised the point, everybody else is completely happy. If that is so, it would be a remarkable example of unanimity but, honestly, I do not think that is so. I think we will need to follow this up.

My noble friend says that this will be implemented after the Bill becomes law; that is, after it has been given Royal Assent and is an Act, in which case, of course, we cannot amend it, except by new legislation. What I need to get clear in my mind is the relationship of these various documents, which are obviously absolutely key to the working of the highways company.

Baroness Kramer: If your Lordships want to look at the document more immediately, it is attached to the Bill on the DfT website. That would be an immediate way to get hold of the document, if we cannot get a printed version of it into your hands at the moment.

Lord Jenkin of Roding: My Lords, I have just retired as president of the Parliamentary and Scientific Committee. At an annual general meeting about three years ago, when we dealt with substantial amendments to our rules, I have to tell you that the officer of the committee who was responsible for preparing the documents got into the most terrible trouble when it was said, “Oh, yes, they are all on the web, and everyone must look at it there”.

The fact of the matter is that one does not look for things there. When the Bill is going through the House, one expects to have the documents available in the Printed Paper Office. There was a reference to a document

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in the letter that my noble friend wrote to me following Second Reading, and I asked the Library to look it up and print it out. I now have that, which is perfectly acceptable—I get very good service from the Library. However, if I may say so with the greatest respect to my noble friend, for the Minister to say that we all ought to have it because it is on the website is not an answer. I regularly use my computer for many hours each day and use the internet and so on, but I really cannot be expected to search through the Department for Transport’s website in case there is another document that I have not come across.

Baroness Kramer: Let me just make a final response to that. There was a WMS when the documents were published, so I hope that some people have had the opportunity to find it.

Lord Jenkin of Roding: There was what?

Baroness Kramer: There was a Written Ministerial Statement when the documents were published, so I hope that some people have found them through that route.

Let me just provide slightly more detail. We intend to share draft documents such as the framework document later in the autumn, so as the Bill progresses we will be publishing them in draft form. The point that I was making is that you cannot go to final form until you know absolutely everything. It would be presumptuous for us to go to final form before the Bill had been concluded.

Lord Whitty: My Lords, many of us probably share some of the frustrations of the noble Lord, Lord Jenkin, as there were a whole batch of documents there before Second Reading. Basically, those were the White Papers or quasi-White Papers from the past year or so—they were about an inch thick. I have seen the documents, but the document to which the noble Lord, Lord Jenkin, referred was not one of those. Although I have seen that document, I am not sure how I got it. More importantly for the Minister’s answer, I have not seen the draft licence. I do not know whether other noble Lords on the Committee have seen the draft licence. If she is relying on that to explain why we do not need my amendment and the amendments of other noble Lords in this group, I am afraid that I am in the dark on that.

There is a point of principle relating to the licence. In other regulated structures, the licence is issued by the regulator. In some cases, what the licence should cover is specified in primary legislation, while in other cases it is not. In this case, the Secretary of State will issue the licence because, as my noble friend Lord Berkeley said earlier, the ORR’s role is as monitor not as regulator. We will come back to that. It is a responsibility of the Secretary of State, and therefore it ought to be clear in the legislation what should be covered in that licence. If the licence is the means for achieving the aims, that is fair enough, but we need to know what the scope of the licence will be, at least in broad terms. Preferably, that should be in the Bill.

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Indeed, even more basically—without wanting to repeat myself, and although this is probably a criticism of legislation more broadly—we are setting up a new organisation here in legislation which has references to pre-existing powers and pre-existing responsibilities. If, in a year or two’s time, anyone wants to know what the basis is of the strategic highways company, there will be no point in their looking at this Bill, or Act as it will then be. Surely, the function of legislation is to make clear, first to Parliament and then to the cognoscenti afterwards, what the role of any new institution that Parliament sets up really is. In my mind, that means that it should specify at least in broad terms the responsibilities and scope of the new publicly owned organisation set up by Parliament. All my amendment suggests is that we should put something in the Bill.

3.30 pm

I apologise for not referring to Amendment 61 directly. The Highways Agency has some road safety responsibilities. They relate primarily to the highway but also to traffic management—which can relate not only to Highways Agency roads but to the interface of its roads with local roads. So it goes a bit beyond the construction of the highway. Given that, I am not expecting all road safety responsibilities to be handed to the new highways company, but Clause 13 refers to,

“any enactment which relates to … highways”,

and “planning”. If my amendment is agreed, “road safety” will be added. Not everything under “highways” goes to the new company and, clearly, not everything that relates to planning goes to the new company. All that I am doing is adding and giving some prominence to road safety, or those aspects of road safety that are relevant to the new company. Therefore, I do not think that the Minister’s objection to that addition is really tenable. My basic point is that somewhere in the Bill the responsibility to the company should be stated. However, I beg leave to withdraw the amendment.

Amendment 4 withdrawn.

Amendments 5 to 7 not moved.

Schedule 1 agreed.

Clause 2: Areas and highways in an appointment

Amendment 8 not moved.

Amendment 9

Moved by Lord Whitty

9: Clause 2, page 2, line 8, leave out from “must” to end of line 12 and insert “cover the whole of England and highways in England for which the company is to be the highways authority”

Lord Whitty: My Lords, I am sorry, but this is something else that I think should be in the Bill. It does sort of follow from the clear statement by the Government that we will have only one strategic highways company, in which case it should surely be made clear that the scope of its activities covers what are currently

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Highways Agency roads in England. At the moment, that is not clear—and I think that I am right in saying that it is also not necessarily the case. Tolled roads will remain the responsibility of the Secretary of State, and some of those tolled roads, such as the road that I still call the Birmingham North Relief Road—the tolled M6—come under the general jurisdiction of the Highways Agency, although the company that runs the tolled M6 operates it and, of course, collects the tolls for it. So the exact jurisdiction of the company needs to be made clear. That is not to say that all the roads that are currently under the remit of the Highways Agency should always remain so. One can alter that later.

There may be some local roads that should be transferred into the company and there may be some roads in the margins of the Highways Agency’s slightly odd portfolio that should really be local roads, in the general demarcation between the two. Ministers and the Secretary of State would still have the possibility of changing those roads but it should be clear that this Act is shifting what are currently Highways Agency roads into the new company—full stop. That is what my amendments in this group provide for, with Amendment 9 saying that it is “the whole of England” and Amendment 10 saying that, in the first instance, they will be Highways Agency roads. I beg to move.

Lord Davies of Oldham: My Lords, I support my noble friend’s amendments, and shall speak to the two amendments in my name. Amendment 11 is a probing amendment; I want to know where Wales fits in. It is the only reference to Wales that I have seen in the Bill and I would be grateful if the Minister could make it clear where Wales fits into any possible consultation process with regard to the authority.

Amendment 12 is pretty self-explanatory on the necessity of consulting with local highways authorities in the areas that they cover on the structure of the organisation, the appointment of a representative of local highways authorities as a non-executive director of the board, and other matters decided by the Secretary of State. It is clear that for consultation to be remotely effective there has to be some representation of the local highways authorities.

As the Minister is all too well aware—the Committee need not dwell on this point for any length of time—important though the motorways and trunk roads of England are, local authorities still carry most of the traffic and, of course, are responsible for the majority of the roads. It is not conceivable for a scheme for a road of such significance to be developed and work to be done on it without the local highways authorities being involved. We are all well aware that if there is the most minor interruption on some of our motorways and other major roads, cascades of traffic fall upon the local roads. Those local roads bear the brunt not just of the difficulties of that day but of the ongoing costs as a consequence of excessive use of them; they are often not designed for the volume of traffic that is diverted on to them.

I am sure that the Minister will be at pains to emphasise that nothing will be done without consultation with the local highways authorities. My amendments seek to make that explicit in the Bill.

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Baroness Kramer: My Lords, before I begin, I have now had confirmation that the documents that we have been discussing were deposited in the Library, so we hope that they will be available in that form for those who prefer not to have to wade their way through the websites. I understand how frustrating websites can be, and the Library is always such an excellent source.

Amendments 9, 10, 11 and 12 cover a range of issues. We have always been clear that there can be one company or more than one company, and we discussed that issue extensively earlier, so I will instead focus on the other issues raised in this grouping. The appointment of the SHC will make it clear which roads will transfer to the new company. As we previously stated when we consulted, and in response to that consultation, there will be no change in arrangements for those roads that currently fall under a concession agreement.

In answer to the noble Lord, Lord Davies of Oldham, the Secretary of State currently has residual responsibility for some roads on Welsh territory—not all were devolved—but these are in relation only to the Severn crossing. The current policy intention is that these roads should legally remain the Secretary of State’s responsibility, and we do not anticipate including these highways in the first appointment of a strategic highways company. However, the clause allows highways within Wales to be included in a company’s appointment if its area of responsibility is adjacent to Wales. Given that these are current responsibilities of the Secretary of State, it is easy to see that in future it might be considered appropriate to provide that a strategic highways company should be entrusted with all the Secretary of State’s highways authority functions, so we are providing for the flexibility to do that in this Bill. To do otherwise would risk the possibility that the Secretary of State would need to retain a small amount of executive competence to act as a highways authority for a few roads in Wales, which, frankly, would be both disproportionate and inefficient. To be clear, the power to appoint the company as a highway authority can be exercised only in respect of roads for which the Secretary of State is the highways authority immediately beforehand. This power could therefore not be used to give the company a wider role in respect of highways in Wales.

The strategic highways company will be a highways authority and it will be required to co-operate with other traffic authorities under the Traffic Management Act 2004, keeping traffic moving under the provisions of the network management duty. There will also be a duty in the licence—again, I recommend that draft document, which will, I hope, be more easily available—to co-operate and consult with local authorities in the planning and management of their networks. There are important, ongoing obligations on the company that will help ensure that, in the years ahead, co-ordination and co-operation between highways authorities increases the benefit to road users generally.

The Department for Transport has already consulted on these proposals, and local highways authorities gave their views during that process, as did other interested parties. At this point, further consultation would simply delay the implementation of measures on which there has already been extensive consultation.

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In the light of that, these amendments are unnecessary. Under those circumstances, I ask the noble Lord to withdraw his amendment.

Lord Whitty: My Lords, I apologise for missing my cue. The department needs to think a little about how this is presented. The points raised in these amendments need to be addressed somewhere in the Bill. There is currently no core to what this organisation is about, in terms of its range of assets, function and responsibilities. That may be in the document to which the noble Lord, Lord Jenkin, referred, and of which we may see a draft before we complete proceedings on the Bill, but it needs to be in the Bill. The department needs to rethink this a bit. We are not talking about several pages; we are probably talking about two clauses. Will the Minister at least ask the department to look again at that and the related points raised in the debate on the earlier amendments? I withdraw my amendment.

Amendment 9 withdrawn.

Amendments 10 to 12 not moved.

Debate on whether Clause 2 should stand part of the Bill.

Lord Jenkin of Roding: My Lords, I did not give notice of my intention to oppose the question that Clause 2 stand part of the Bill because I had not heard all this debate before.

The Deputy Chairman of Committees (Viscount Simon) (Lab): I am putting the question.

Lord Jenkin of Roding: I am sorry if I was out of order. The point has been made that the Bill incorporates, amends and transfers a great deal of earlier statutes. At some stage, this legislation might be consolidated. I made a study a year or two ago of how this could be done. I had a long—not frustrating, because I learnt a lot—meeting with the chairman of the consolidation committee, a High Court judge. It all depends on whether the department concerned is prepared to put up the cost.

We have occasional consolidation Bills. I was particularly concerned about the consolidation of the Gas and Electricity Acts, which have now become hideously complicated because of the constant amendment of earlier legislation. It was simply said: “Well, if the department in charge of those Acts is prepared to pay for it, the consolidation committee can make sure that the consolidated document is produced”. Is there any chance that the Department for Transport would contemplate this on a matter that obviously affects very large numbers of people over the whole of the administration of this Act? Might it in future contemplate agreeing to pay for consolidation?

3.45 pm

Lord Bates (Con): Normally the convention is that when a noble Lord wants to speak to a particular clause stand part, that should be tabled and on the Order Paper in advance, so that the department can prepare and others can speak if they wish. That was the reason for the confusion at that point.

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Baroness Kramer: I am very happy to attempt to respond to the noble Lord, Lord Jenkin, on this point. To try to work out whether we could do a consolidation Act is above my pay grade. However, what he says brings to mind two issues. First, there is the importance of putting the detail in the licence. Having spent part of my life in business, I know that having a clear operating document with all the essentials in it is a terribly effective way to ensure that you are doing what you need to do. When I look at the level of detail in the draft licence—for example, on the relationship between local authorities and devolved Administrations and the need to take account of local needs, priorities and plans in planning operations and maintenance, et cetera—the licence is a very important document in that whole process. The comments of the noble Lord, Lord Jenkin, underscore the importance of using that document rather than necessarily finding every opportunity to put items in the Bill.

In this case it is essential that we get on with this. It is important that we start to get certainty around the future of investment in infrastructure so that project after project can begin to take place without the stop-start pattern that we have all described. Therefore, while there may be goals for overarching legislation such as consolidation, I hope very much that we will not attempt to interrupt the progress of the Bill and the benefits that it offers. There may be opportunities for such efficiencies in the future, but this is something that can begin to impact what happens on the ground early next year, if we carry it through to its completion.

Lord Jenkin of Roding: My Lords, I entirely accept my noble friend’s explanation on this. It obviously very much depends on the licence, and we shall have to see how it comes out in the end. On that basis, I am most grateful for what she has said.

Clause 2 agreed.

Amendment 13

Moved by Lord Berkeley

13: Before Clause 3, insert the following new Clause—

“Duties of Strategic Highways Company

(1) A strategic highways company has, in relation to areas for which it is appointed, duties to—

(a) plan, monitor and manage highways for which it is the highway authority in order to secure economic, social and environmental gains jointly and severally,

(b) secure the fullest possible use of sustainable modes of transport, including by—

(i) widening travel choices;

(ii) unlocking development in locations that are sustainable or assisting in making them sustainable;

(iii) encouraging highway users to make more efficient use of vehicles by increasing average occupancy and loading rates; and

(iv) working in partnership with operators of passenger transport and freight services, as well as local authorities and those responsible for major trip generators.”

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Lord Berkeley: My Lords, to some extent Amendment 13 follows on from my noble friend Lord Whitty’s Amendment 4 on responsibilities and scope. There is a strong, if not stronger, argument for having in the Bill a clause which sets out the duties of the strategic highways company, because there is already legislation which puts duties on the Secretary of State or the regulator as regards railways. Some noble Lords will recall the Railways Act 2005 and the Railways Act 1993, which was the basis of privatisation. The duties there included promoting,

“improvements in railway service performance … to protect the interests of users of railway services … to promote the use of the railway network in Great Britain for the carriage of passengers and goods”.

I was very pleased to see that goods got in there. The list of duties continues:

“to contribute to the development of an integrated system of transport … contribute to the achievement of sustainable development”.

I could go on reading out Section 4 of that Act. It very much mirrors what has been achieved by successive Governments and rail regulators such as the Office of Rail Regulation in succeeding years through putting those basic principles into effect. This is quite important, and we have the opportunity to put a similar range of duties on the strategic highways company—or companies, however many there are.

Looking at this amendment, it is important that we start to include the cross-modal issues that I and several other noble Lords spoke about at Second Reading. We should look at modes of transport such as highways and railways—probably cycling and walking as well, and maybe other things in the future—on a cross-modal basis, with the duties to secure something like, as I put in the amendment,

“the economic, social and environmental gains jointly and severally”.

I am sure Ministers could come back with a better version, but I hope this is a useful basis for suggesting what the duties of this strategic highways company should be. Unlocking development is important, as is encouraging occupancy and loading rates for passengers and freight and looking at the need to drive, the need to move around and, of course, its sustainability.

We shall be talking about some of these things in later amendments, but it is important for an organisation such as this one to have duties, which should be in the Bill just as they are for the railways. I have tried to mirror what is in the original Railways Act. It has changed over the years and is in a different format now, but the duties are still there, and if we had something like this for the strategic highways company, alongside the responsibilities that my noble friend Lord Whitty talked about, it would make us all feel a lot more comfortable. I beg to move.

Lord Bradshaw: I agree with what the noble Lord, Lord Berkeley, has said, but will add something. You can argue for or against it, but having chosen to go down the route of rail regulation, there is one thing I really would like to be assured about. We know that the motorist—maybe “road user” is the right term—is to be represented by Passenger Focus. That of course covers the railway, bus and tram industries; it has seen incremental growth, and I think the noble Lord, Lord

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Whitty, had a good deal to do with its genesis. With railways, buses, trams and the other things for which it is responsible, it has a right to get information from the regulated party or from the party for which it is responsible. A train or bus company cannot refuse such a request. I would like to be assured that the strategic highways company, too, will not be able to refuse a request for information from Passenger Focus acting in pursuance of its duties to represent road users. I am quite happy that it should represent them, but I do want it not to be treated any differently from the way it is treated in other industries.

Baroness Neville-Rolfe: My Lords, I agree with the point made by the noble Lord, Lord Berkeley, about cross-modal being an important issue. There is a later amendment on the need for co-operation, on which I am sure we will agree. I have some concerns about the notion of duty in that context, because duties impose rights and that can lead to problems. I am also not sure that rail is necessarily the model for road. I always think that when you are looking at a regulatory framework, judgments need to be made in respect of the sector that you are looking at. You need to be careful that they work for that sector, and circumstances are different.

That leads me to my main point. I am always concerned about perverse effects. The clause that is the subject of Amendment 13 could have some quite perverse effects, particularly if it were introduced in this form. Duties, effectively, are like legislation and will give rights, and rights can then generate judicial review, and you could have arguments about whether particular things are sustainable or not. You could then make this process a lot more complicated and expensive, and it would not produce the better agency that is the purpose of the Bill. Will my noble friend comment on this aspect of the proposed amendment?

Lord Whitty: My Lords, I have tabled Amendment 40 in this group on precisely the subject of the duty to co-operate. This very much builds on the Localism Act, under which local authorities have a duty to co-operate with each other. I understand that part of the department’s argument on this will be that the new company—the present Highways Agency—is already a traffic authority and a highway authority and is therefore covered by the Localism Act’s provisions. I am not sure whether that is entirely clear. If it is, then some of the objections that the noble Baroness, Lady Neville-Rolfe, referred to would have to apply to the Localism Act as well. If that is the case, can we somehow cross-refer to it?

The Highways Agency has only 2.4% of the road mileage of the country. All of its roads create traffic for the local network and all of the local network piles out on to the motorway at various points. Sometimes the most congested areas of the motorway are congested largely because it is being used as a local road by people for just two exits. There is an important need for the Highways Agency and the traffic authorities to co-operate and that needs to be reflected in the Bill.

However, in view of the environmental and safety aspects, there is also a need to co-operate with the safety authorities and with the Environment Agency,

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which is concerned with emissions, air pollution, water run-off and so forth. The HSE’s duties on the roads will relate only to employee drivers, but it does have some, and there must therefore be a cross-over.

We have briefly mentioned the interface with Wales. Obviously, at the far end of the network there is interface with Scotland as well, and there needs to be some co-operation with the devolved Administrations. I also referred to the police and traffic commissioners because, in practice, a lot of the traffic management of the Highways Agency is conducted by the police. Therefore, the police should have at least some mention here, although I am not entirely clear whether the duty to co-operate under the Localism Act actually covers police authorities as well. In one sense, even if it does, we should cross-refer to it.

Lord Davies of Oldham: My Lords, I want to reinforce the points that have already been made in terms of some definitions of obligations and duties as far as the company is concerned. Amendment 15 would ensure that the road investment strategy outlines its social, economic and environmental objectives. The Government’s draft national policy statement, published recently, sets out the policy against which the Secretary of State will make decisions on applications for development consent for nationally significant infrastructure projects. The application should include guidance on mitigating environmental and social impacts and plans to enhance environmental benefits—objectives to which I am sure we would all subscribe.

However, the Bill references merely the strategic highways company’s “objectives”, without giving the new company a clear direction on how the road investment strategy will aim to ensure that its activities are carried out with the intention to provide benefits to society, the economy and the environment. For example, the strategy should incorporate an estimate of the impact on UK carbon emissions of building more roads infrastructure. It is inconceivable that we would have a perspective on such construction without having some assessment of the issue of emissions. It surrounds all aspects of aviation at present and it cannot be anything but an important issue, as far as the public are concerned, for roads.

4 pm

The Bill must appropriately recognise the importance of environmental issues and reflect them in the objectives and performance requirements of the company. Existing statutory duties on the environment are largely awareness-raising. They influence process rather than leading to particular outcomes, such as lower emissions. Despite there being a significant air quality problem in the United Kingdom, of which we are all aware, the Highways Agency has not sought to make gains in reducing air pollution. Rather, it seeks to indicate that any possible increase will be mitigated by something which balances it; for example, opening an extra lane but mitigating its impact by keeping down the speed limit on it. That is not a gain; it is just evening things out.

The threat of significant road expansion under the Government’s plans calls for effective environmental regulation—rather more than is provided for in existing

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legislation—and this is the obvious opportunity. The Bill does not contain new requirements for the strategic highways company to improve air quality or to increase cycling or any aspects which may be conducive to improving the environment. The impact assessment identifies a risk that environmental and social goals will not be balanced with economic priorities. The amendment therefore proposes duties as to specific outcomes; for example, on air quality and, as my noble friend Lord Whitty just indicated, on safety. Of course, that is difficult include in primary legislation, and I have no doubt that the Government will say that such matters are best dealt with in licence and performance specification, but I want some assurance that the Government are taking these issues seriously.

Baroness Whitaker (Lab): My Lords, in supporting Amendment 15, first, I apologise for not being able to speak at Second Reading. In the mean time, the Minister was kind enough to answer a Written Question from me on the design criteria to be employed by the successor to the Highways Agency. I declare an interest as an honorary fellow of the RIBA and as president of the South Downs Society—that comes in later.

My noble friends have quite rightly stipulated in Amendment 15 that social, economic and environmental objectives must be explicit. Of course, these cannot be achieved without proper design, but not all highway engineers seem to know that. I ask the Minister to answer on how the crucial role of design can be made explicit. A Written Answer to me, although very helpful, did not go quite as far as that. I should add that, if she cannot give me a good guarantee, I think I ought to pursue the subject on Report.

Why does it matter? The past is one reason. Successive highways schemes have made roads fit for motor vehicles and little else. Highways can improve growth and well-being, if well designed, or they can destroy it through environmental impact, isolating communities from amenities and creating pollution and noise; in short, by not paying proper attention to the total place through which they go.

I would like to draw attention to the latest report, published last month, by the Royal Town Planning Institute, titled Planning Horizons: Thinking Spatially. It states that,

“transport policy is an area where spatiality and the interrelationships with these other issues have often been neglected”.

Those other issues are access to goods, jobs, education, health and other services. I looked at the impact assessment, anticipating that I would see some really interesting quantifications of these admittedly hard to define elements. However, the impact assessment is really quite narrow, and I would urge the Minister to provide a more developed assessment of what impact on national well-being highways can have and how the successor to the Highways Agency is going to achieve this through the use of design, which, as I have said, is really the only way it can be achieved.

Finally, I just want to add that the proposal of my noble friend Lord Whitty for Clause 1(4) to have a completely different agency would enable this kind of approach much more easily. It would not be so much an RIS as a TIS; that is, a transport integrated strategy.

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Baroness Kramer: My Lords, again we have a wide range of amendments. It is fair to say that it is vital that the strategic highways company effectively balances economic, social and environmental factors and outcomes, so I take the point of many of the amendments that have been proposed here. We fully intend to set clear and robust requirements through the company’s licence, and again there is substantial language within the licence document which I hope noble Lords will take the opportunity to look at.

The draft version that was published on 23 June includes a key objective and further conditions for the company to this effect:

“Protect, manage and enhance the environment, including minimising and mitigating the impacts of its network and activities on the environment”.

That is in the context of balancing short-term and long-term needs, along with a list of other objectives under the heading of “Sustainable development”. A lot of the discussion today makes it clear that the living, breathing document of the licence is, quite frankly, a better place for these kinds of factors than the Bill. However, I am always willing to think about these issues.

It is important to stress that the requirements will be supported through specific requirements set out in the road investment strategy process; for example, it will reflect our desire to drive stronger environmental outcomes and sustainable development. Those will be important ways in which the company will be held accountable for its performance. The Government are committed to sustainable travel and are investing heavily in modal balance.

Some parts of the relevant amendments, such as those concerning widening travel choice, relate to matters of national policy which really need to be with the Secretary of State, but a key benefit of the reforms will be to allow the company greater flexibility and autonomy to determine the most efficient and effective ways to deliver the outcomes and other requirements identified by the Government. Those include freedoms on a wide range of issues, including the use of innovative technologies.

The noble Baroness, Lady Whitaker, raised the issue of design, and I think that it is for the strategic highways company, with its longer certainty of funding and an ability to think over a broader period, to carry this out. I do not think that this is something for the Government to mandate in a piece of legislation. It is a level of detail that I do not think the Government can mandate effectively.

We had questions about the impact assessment, which focuses on the change from one model to another and not on a broad impact assessment of highways across the nation. We would expect to see that type of assessment in the road investment strategy, which will be an important document as it comes forward to this House. When we talk about sustainability and carbon emissions, it is essential that the Government are fully committed to meeting their obligations under the Climate Change Act. The transport sector has to play its full part in delivering emissions reductions. The Government have set stretching, legally binding carbon targets which

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will see a 50% reduction in emissions in 2025 compared to 1990 levels. That will be on the path to an 80% reduction by 2050.

Essential environmental protections relating to the management and mitigation of the environmental impacts of existing roads, including on biodiversity and landscape, are covered by existing legislation, and will all apply to the new company as they currently do to the Highways Agency. In the same way, air quality impacts of individual schemes will have to be considered carefully. Already, all major road improvement schemes go through environmental assessment, including a detailed consideration of their air quality impacts. A robust decision-making process exists under either the Highways Act 1980 or the Planning Act 2008. These kinds of factors, which already bear on the Highways Agency, carry over into the life of the strategic highways company. I thought it was be important to stress that point under the headings of the today’s amendments.

Close co-operation with operational partners is not just about adjacent authorities. The noble Lord, Lord Whitty, talked about emergency services, road safety bodies, the Environment Agency and others. Every time a Member of this House stands up to discuss this issue, rightly they add another proposed relationship. That is because there are so many people with whom to co-operate. Under those circumstances, I beg that we try not to put lists in the Bill but that we look very much to the licence as the mechanism with which to achieve that. Again, I refer your Lordships to the licence, which tries to establish the broad range of entities with which the SHC must co-operate under a rubric of operational partners. It would include, but would not be limited to, the emergency services and other transport operators. The list includes local authorities, devolved Administrations, road users and local communities. We are in a constantly changing environment; for example, LEPs were not conceived of five years ago but now play an important role. If we limit ourselves to lists in the Bill we will find ourselves struggling to adapt to the real world that the SHC must and should work with.

I believe I spoke earlier about the changes or the work that is already done under Schedule 1 in establishing, for example, a network management duty, which currently applies to local highways authorities, to be extended to the SHC. I will not try to elaborate on the points that I have made already but I think that people are following the thrust of all this.

My noble friend Lord Bradshaw raised issues about the watchdog, which we will discuss more extensively under Clause 8. Perhaps I may hold back my remarks to when we discuss this more comprehensively. I hope very much that your Lordships will feel that their queries and concerns are satisfied by the family of documents that will be involved in the creation of the SHC and that the noble Lord will feel confident in withdrawing his amendment now that the key points have been addressed.

4.15 pm

Lord Berkeley: I am grateful to all noble Lords who have taken part in this debate and to the Minister for her response. I get the feeling that we are being directed

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towards this lovely, short licence document, or the longer one, as being the answer to everything. It is not clear to me—maybe because I do not understand it—when we will see the longer version, which will have as much detail in it as possible before Royal Assent, and whether we will be able to debate it. If we are not, it is pretty important that there is some reference to a strategy, such as a road investment strategy or, if the Minister prefers, a transport investment strategy, because there is none at the moment.

We do rail one way and roads another—we have debated that very often in the House. They have different criteria; they do not seem to talk to each other, and they have different forecasting methodologies. Is there to be some read-across between how the railways are operated and how it is intended that the strategic roads are operated? It may be that things have moved on since the Railways Act 1993, with the Railways Act 2005 and the high-level output specification used to specify what the railways should do, but there needs to be something in the Bill to set the strategy and perhaps the duties. We can debate whether it is to be the Secretary of State or the regulator, but to just dump all this into a licence that we may or may not see will lose us a big opportunity to consider before we get into the detail not just how roads are built and operated but how they fit into the environment, including the issue of emissions, along with local roads and all the other people that my noble friend Lord Whitty mentioned. I shall reflect on that and come back to it on Report. Perhaps we can have a meeting with the Minister before then, but in the mean time, I beg leave to withdraw the amendment.

Amendment 13 withdrawn.

Clause 3: Road Investment Strategy

Amendment 14

Moved by Lord Whitty

14: Clause 3, page 2, line 34, at end insert “and at least every five years”

Lord Whitty: We now come on to the strategy and, by implication, the money. The Government have commendably said that they want a steady strategy that is going to last some time, with an allocation of resources against it. That in itself is highly desirable, but it is not so dramatically different from the various road programmes that have existed in the past and have been subject to sudden change, as the Minister said, mainly because of changes to financial arrangements but also because of planning delays and technical problems with the projects when they go beyond the initial feasibility study.

The national infrastructure plan, which has a lot of roads in it, broken down on a regional basis, is presumably going to be built on and represented as the strategic highways plan, and there will be a five-year programme of money attached to it. My Amendment 14 attempts to ensure that that five-year view is reflected in the Bill. The Government have made quite a lot of the five-year thing, but although I have not read every

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word of Schedule 3, I do not see it in the Bill. There are arguments as to whether five years is enough, given that it takes that long even to get anywhere near starting, but the five-year funding has been an important plank of the Government’s selling of this project, and I think that it should appear somewhere in the Bill.

My wording may not be quite right, but I think that it should be a rolling five-year programme, so that in year 3 you are still looking five years ahead. You would add to it, and you would add the financial commitment related to it at that point. My wording does not exactly say that, but that is what I am after. If the department can find better wording, that is so much the better. However, we should at least write into the Bill the embedding of a minimum five-year view and that it should be on a rolling basis and have money attached. Otherwise, a lot of the rationale for this whole exercise disappears. That is what Amendment 14 is about. The Government have made a start with the designation of projects within the national infrastructure programme and can turn that into a highways strategy, and the Chancellor has made the commitment for these five years.

The Government seem slightly naive in their confidence that the Treasury will never revisit this because it is now an arm’s-length company. The past 50 years have seen cuts to the money that has gone to private companies, to nationalised corporations and to local authorities. The fact that they are arm’s length from government has not stopped the Treasury deciding at particular points to change what it had previously—in effect—promised. So far nobody has managed to sue the Chancellor for that; I doubt whether it will be any different under this new arrangement. That may be a bit cynical. As the Minister said, it would be more embarrassing to do that, but my experience of Treasury Ministers and Treasury officials over the past few decades does not indicate that they are easily embarrassed. Indeed, interfering with other departments’ clear priorities is the way that the Treasury works, rightly or wrongly. Therefore, the benefits of having an allocation for five years can be exaggerated. Nevertheless, it is a desirable aim, and it is desirable that we know for those five years what projects are there and what stage they are at. Since it is a rolling programme, moving from feasibility study to planning, to precise engineering design, to the start of digging and through to actual completion of the road, it is desirable that it should appear in a five-year perspective. Before we finish the Bill, I hope that a form of words can be adopted that makes sure that that is reflected in the Act. If it provides a bit of embarrassment to future Treasury Ministers, so much the better, and so much easier will future Transport Ministers find their relations with the Treasury.

My Amendment 16 raises the broader issue of strategy. We have an infrastructure strategy but not a specific transport strategy. It needs to be made clear how the roads strategy, or highways strategy, fits in with the broader transport strategy—rail, ports and airports in particular. The whole logistical structure and the balance within it in terms of our economy, what pressure is put on the transport system and what the regional balance and stress points are, need to be

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reflected in all modes and, indeed, different corridors need to be judged on a multimodal basis. If they are not, simply having a sacrosanct—or near-sacrosanct—roads strategy will deal only with part of the problem. My Amendment 16 relates to putting the roads strategy into that broader context. I beg to move.

Lord Jenkin of Roding (Con): My Lords, it is my impression that this road investment strategy, and the commitments made to it by the Government, is perhaps the aspect of this Bill that has been most welcomed by industry, commerce and, indeed, all those who depend on transport for their operation. I have just been rereading what the CBI said about this, and it attaches enormous importance to the stability that the roads investment strategy is intended to bring.

It will be a long time before those of us who lived through it forget what happened in 1997 when the Deputy Prime Minister at the time, the noble Lord, Lord Prescott, decided that roads were much less important than a lot of other things and there was a massive stop to almost the entire road investment at the time. That is the memory that I have and the impression that the noble Lord gave at the time, and that memory will take a long time to disperse. The Bill, particularly this clause and the policy that lies behind it, has been greeted with huge enthusiasm.

The Treasury has ultimate responsibility for managing the economy as a whole. I can speak as perhaps the only former Treasury Minister in the Room, having spent four years as Financial Secretary and then Chief Secretary to the Treasury in the 1970s. One is always aware that at the back of any policy there has to be Treasury approval. In the interests of the economy as a whole the Treasury has to be able to say to a department, “I’m very sorry, we can’t afford that”. Here, though, the combination of the strategic highways company, the roads investment strategy and the commitments that the coalition Government have given on this must to some extent make a Treasury Minister think extremely carefully about how far it would be right to interfere with this—that would be a major decision.

Of course, these things often happen when there is a change of Government. What industry is looking for here, as we heard in the debate in the Chamber today from a number of speakers, is common ground between the major parties so that there are not massive changes of policy on matters of this sort, which have such a devastating effect on manufacturing industry—which is what we were discussing then.

Whether one needs to have what the amendment suggests at least every five years I would regard as questionable; it seems to add an element of uncertainty that the Bill does not have. There is a five-year review but I am not quite sure why this particular condition would need to be put in. I listened carefully to the noble Lord, Lord Whitty, and I have enormous respect for his expertise in this field because he was a Minister in the Department for Transport, or whatever it was called at the time, but the advantage that has been gained by publishing this policy in this clause of the Bill is that it assures the commercial side of this country that there is now going to be far greater

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stability in the long term. I am delighted that there is such emphasis on the long-term strategy for infrastructure building so that we can get away from these five-year single-Parliament policy decisions, which might put it risk.

I want to see this aspect of the Bill going through as effectively and swiftly as possible because it is what the country, particularly its commercial elements, have been looking for for a long time. I am going to look at not just this amendment but a number of the others that have been tabled—I was going through them earlier today—to see whether they would interfere with that aspect by raising doubts or putting additional bureaucracy or obstacles in the way of getting the strategy fulfilled. That is what one will need to look at very carefully. At the moment, as far as I can see, most of the Bill achieves what is wanted. I express my doubt about whether Amendment 14 from the noble Lord, Lord Whitty, would improve that; I suspect that it would add an additional obstacle and raise doubts that ought not to be there.

4.30 pm

Lord Berkeley: My Lords, in discussing the strategies and the length of time, my Amendments 23 and 24 go into more detail but I think they are trying to say the same thing. It is an interesting issue as to whether there should be a five-year period. It is a great deal better than having one year, which is what we used to have, but it may be better still to have a rolling one, if that were possible.

I heard some results from Network Rail this morning. It has a fixed five-year term, as noble Lords will know. I have been given the capital expenditure year by year over the past five-year period. In the first and final years, the expenditure was 50% higher than in the three middle years, which is very difficult to resource up and resource down for the contractors and suppliers dealing with it. I asked the people at Network Rail why, and they said, “Well, the first year we are catching up with what we should have done in the previous control period and did not get round to it, and the last one was because we had a lot more expenditure that we had to finish before the end of the control period”. That is quite normal. That will happen on roads as well as railways; it is much the same. But I know that the feeling at Network Rail is that, if it was possible to have a rolling capital expenditure programme, life would be much easier. I wonder which, if either, would get through the Treasury better and whether it would be possible to have a rolling one rather than a fixed one. That is just an example from Network Rail.

I have one other question for the Minister arising out of these amendments. I hope that the strategies and all the duties and everything else will include the interests of cyclists and pedestrians. People may say that pedestrians should not be on trunk roads and they should use footpaths if the road is high-speed, but it is terribly important that pedestrians and cyclists feel safe and use the roads, which is part of the environmental objectives that I put in my amendment. It would be good to have some confirmation from the Minister that this is all part of the strategic investment plan.

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Baroness Kramer: I thank your Lordships. These amendments are fairly well honed around a question to the Government about whether or not they should produce a national strategy to deliver a sustainable transport system and, in doing so, align plans for the rail and strategic road networks. I ask your Lordships to hold back from that, and I will try to explain why. The Government genuinely care about ensuring that different parts of the transport network work together. We think that our overarching transport strategy reflects that. However, we are concerned about trying to get a single document that would articulate all that and yet allow the impact that we want from the kinds of changes that we are introducing today.

The noble Lord, Lord Berkeley, described some of the issues that come from having a fixed term of five years, as rail has. When the road investment strategy comes forward, I expect it to have a term in it. I would not be surprised if that was five years. But it would also be quite reasonable to expect that it might look at funding commitments beyond the end of that period in order to prevent the kind of hiatus problem that we have seen before when projects and programmes come forward.

We are looking for some flexibility around how we handle all this. However, it is far too early days to think about aligning road and rail strategies. They are both complex, and incredibly detailed. We are looking at a new company, which will have to work its way into the actual programmes it has. There may be a point later where we want to draw those two closer together. However, frankly, it would not be appropriate to try to make that part of the framework we have today. Therefore, the documents leave this very flexible, so that one could move in that direction if that seemed to make sense as we get practical experience on the ground of how the strategic highways company works and how it is delivering.

One can see certain problems. The noble Lord, Lord Berkeley, just pointed out to us that sometimes there is a pattern of investment within Network Rail’s five-year period. I would hate to have two aligned periods, one for road and one for rail, which exaggerated that pattern. Therefore, there are a lot of issues about how we would align and bring those programmes together. We need to allow that to arise out of experience rather than to be dictated in these documents at this point in time.

It is absolutely crucial that we achieve certainty of funding, which is the issue that the noble Lord, Lord Whitty, addressed. The noble Lord, Lord Jenkin, had an excellent set of responses to that. Would any Chancellor resist revisiting the issue? Well, it certainly becomes a sight more difficult. The legislation as constructed commits the Secretary of State to comply with the RIS, which includes the financial resources commitments which will be embedded in the RIS. As noble Lords look at the details of the legislation that sets up the RIS, they will see that an attempt to vary it triggers quite a process, including consultation. That is something that forces this to be a transparent and very determined and detailed decision. That is the appropriate way to go about putting on sufficient constraint without undermining what is in the end a democratic process.

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We cannot completely bind the hands and feet of all future Governments—that would be entirely inappropriate. However, we can drive in this direction where the institutional arrangements underpin and reinforce the idea of consistency and certainty. Frankly, that is what this document achieves rather well.

I therefore ask that we do not at this point try to narrow the scope to specific terms and fixed periods or try to get immediate alignment between road and rail. That is not where we need to be at this point in the process. The experience, as we bring into being the strategic highways company, will help either us or future Governments begin to determine whether there are benefits to be gained by greater alignment in the future.

The noble Lord, Lord Berkeley, asked whether this covers cyclists and walkers. It is absolutely clear in all this that the responsibility of the strategic highways authority is to road users. Again, I hesitate, and ask that we do not put in lists. When I had this discussion, someone chimed up and said, “You’ve got to say motorcycles, electric bikes need to have a separate category, and what about horses?”. We all recognise that “road users” captures everyone who makes use of the road, and frankly, that is a far safer definition than trying to make a list—someone also asked me, “What about Segways?”. I will say only, can we please stay away from the list on this? However, it is clear in my mind, and in the minds of everybody who has ever been connected with the Bill in any way, that cyclists, walkers and pedestrians are absolutely a significant part of the road-user community. I hope that with those assurances the noble Lord will feel able to support the relevant clauses of the Bill and to withdraw his amendment.

Lord Whitty: My Lords, I thank the Minister for that, and I thank other contributors. It is clear that the wording I have in Amendment 14 is not appropriate even for what I was trying to achieve, so obviously I will not be able to press that particular amendment.

However, I am a bit surprised by what the Minister says because the noble Lord, Lord Jenkin, is absolutely right that many in industry, plus companies involved in road construction, have hugely welcomed the announcement that there was to be some stability in funding. What they and I think we heard from Ministers was that there would be a strategy with projects listed in it and a near-guaranteed amount of money, probably for five years and possibly for as long as 10. That would obviously be of great comfort to industry as a whole, in using and depending on the roads, and to those who see their profit in having rather more road building which they could rely on, rather than a stop-start system. I do not think that the Bill reflects what they think they heard.

Clause 3 actually says:

“The Secretary of State may at any time … set a Road Investment Strategy … or … vary a Strategy which has already been set”.

That is not exactly a comfort of certainty and consistency. In fact, it gives carte blanche for the Secretary of State to change it every five minutes. Admittedly, that would be subject to the consultation arrangements to which

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the Minister referred, which come later on. However, it is not the degree of firmness that people in industry were looking for and thought they had on that. I referred to five years because I thought that is what the Government were saying, but I actually think that the rolling programme is better. It could be for seven years, or whatever, as even in the best of years the average time between deciding to build a road and finishing it is seven years. It is probably a little longer.

Baroness Kramer: I do not want this point to go unchallenged. I say to the noble Lord that I think the industry has heard absolutely correctly, but nobody I know in the industry believes that a Parliament can bind every future Parliament from thereon out and totally remove its democratic right. It would be inappropriate to attempt to do that and, frankly, I do not think it could be done, so it is absolutely crucial that we recognise that the Secretary of State can make a variance. It is not the intention of this Government that they will vary the RIS that they put forward, but I do not see that they can completely bind a future Parliament 100%. That is why the mechanism in place is to set a very transparent course—one could say an obstacle course—for any change or variance, so that it in no way would be done lightly. Perhaps no Government would do it lightly but it would be done with consultation and engagement, and with various steps in place. Industry has widely recognised that that provides it with a very substantial degree of certainty—enough to have the kind of positive responses to which the noble Lord, Lord Jenkin, referred.

Lord Jenkin of Roding: Perhaps I might add to that before the noble Lord, Lord Whitty, resumes. I have in front of me the British Chambers of Commerce brief. I want to read only one sentence from it. It says that,

“the transformation of the Highways Agency into a more flexible body, with five-year investment programmes”,

should offer,

“more certainty to business on key road projects”.

It is not expecting to have complete certainty and for this to be totally fixed over a period because it recognises the reality, as my noble friend has just said, that to some extent it has to reflect what is happening in the rest of the economy. What it welcomes is what it sees as the opportunity of much more certainty than we have had in the past.

Lord Whitty: My Lords, that is very realistic; nevertheless, the way that it has described the situation is more than is actually in the Bill. Some other form of words would give more certainty than the Bill does currently, as past changes show that there is a need for some protection. It may be that the obstacles—if that is how the Minister wants to describe the consultation—are one way of ensuring that it does not get easily changed. The other way is to put the strategy to Parliament and have to report to Parliament if you are going to change it. In some industries or sectors, that is done in certain respects. You have to provide a strategy and, if you change it, there is at least an argument in Parliament. These things change from time to time.

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I am sorry to take up the Committee’s time, but I shook my head at the noble Lord, Lord Jenkin, earlier and I need to explain. I became the Roads Minister in 1998. In 1997, the Government inherited a roads programme from quite a good 1996 White Paper of the previous Government, which listed projects but did not list money attached to them. Projects got added in as we approached the 1997 election, by both parties, for reasons I will not go into. We therefore had a programme with far too much in it at the tail-end, and which did not have the right amount of money attached to it. The noble Lord, Lord Prescott, announced that he thought his aim as Transport Secretary was to reduce the number of cars on the road, and he was therefore not going to build roads which simply increased traffic. I know this well because we announced the roads programme in 1998, about four days after I became the Minister, so I take no responsibility for the decisions but I do take responsibility for the presentation. The majority of things which had been in the previous paper were back in, and then there were one or two more and one or two fewer—but they were all costed. A lot of those costings proved to be utterly inaccurate, most of the timings proved to be most inaccurate and one of the projects was indeed the A303 past Stonehenge, and we know what happened to that. Certainty is not easy in this area. We need a bit more certainty than we have here.

4.45 pm

My second point is about relating this to a wider strategy. Amendment 16 says only that,

“the way in which the strategy fits within wider planning”,

should be taken into consideration. It does not say that we should have a totally integrated investment programme, in the way that the Minister seemed to interpret my noble friend Lord Berkeley’s remarks, but that the Secretary of State should at least have to pay attention to it. The way in which the roads programme is therefore presented—probably in a separate document, but nevertheless—must have some wider context. That is all that Amendment 16 would require.

Amendment 14 is clearly not going to run. However, the Minister and her officials should perhaps consider whether they could give a little extra certainty. The department could also consider Amendment 16 further. At this point, however, I beg leave to withdraw the amendment.

Amendment 14 withdrawn.

Amendments 15 and 16 not moved.

Amendment 17

Moved by Lord Davies of Oldham

17: Clause 3, page 3, line 2, at end insert—

“( ) the anticipated impact of the Roads Investment Strategy upon the condition, development and funding of the local roads network and local transport provision,

( ) the anticipated impact of the Roads Investment Strategy on links with other nationally and regionally significant infrastructure projects, including ports and airports, and the impact of projected vehicle emissions on local air quality.”

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Lord Davies of Oldham: My Lords, I am in great danger of running into the same brick wall of a government response as my noble friend Lord Whitty. It was an interesting response: “We are creating a new company; we are setting out a new strategy for roads; we have a five-year programme; and we are talking seriously about infrastructure. Please do not come to us with any suggestions of what considerations such infrastructure developments should take into account”.

My noble friend Lord Whitty tried to analyse the road investment strategy and what that might involve in terms of wider consideration. I will deal with the national networks policy statement, with exactly the same objective. I see no point in the Government arguing that they have got improved machinery but reined-in objectives. In circumstances where wider society is clear that what it wants from our infrastructure is greater integration and greater realisation of the relative impact of public expenditure in one area upon another, I do not see how the Minister can maintain that these things are too burdensome. It is not too burdensome to include in the Bill the possibility, some period further on, that there may be more than one company. It is not too burdensome to have a decade-forward look at certain aspects of the legislation.

With these amendments, we suggest the road investment strategy will need to take account of its impact on local road systems and will need to consider the links between other significant parts of the transport infrastructure, such as ports and airports. If we had not had the built-in five-year delay on the decision regarding an additional runway in the south-east, we would currently be discussing infrastructure in relation to aviation as well as roads. The Minister maintains that there cannot be a case for pressing additional obligations on the strategy. I do not accept that. I do not see why we should not ask, as Amendment 29 does, the Secretary of State to provide the strategic highways company with a survey on the condition of the local and strategic road networks. I do not see why we cannot envisage increased co-operation with Network Rail. I know we cannot flick a switch overnight and deal with such complex issues as if they are givens to immediately act on, but unless we have the objectives then the whole concept of the integration and improvement of infrastructure over a period of time disappears.

I listened very carefully to the Minister’s reply to my noble friend Lord Whitty. I understand what she is driving at, in that we cannot take everything on board at the same time. However, we are not suggesting an enormous increased cost as far as the road investment strategy is concerned; we are suggesting that it should have the perspective to understand what integration and development of the infrastructure is all about. That means that the Government should give serious consideration to this group of amendments, as well as to the previous group, introduced by my noble friend Lord Whitty, which seek to guarantee that our improved investment strategy for infrastructure will take in all the factors that wider society regards as being germane to transport improvement. I beg to move.

Lord Jenkin of Roding: I would like to put a question to the noble Lord, Lord Davies of Oldham, about his amendment. I believe I am right in saying that local

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authorities already have a very effective system for regularly analysing the state of local roads, the investment that needs to be made to bring them up to standard and what it will cost, called the ALARM system. What is wrong with that? If they have that already, why write something more into the Bill? I merely ask the question. Maybe the noble Lord can answer when he winds up at the end of the debate, and perhaps my noble friend might like to comment on that in the course of her reply.

I understand, of course, that different parts of the road structure will have an impact on each other. I would have thought that would be covered by the duties of consulting that my noble friend referred to in relation to earlier amendments. This will be an integral part of the operation of the strategic highways company. There is already a very good system, as I understand it. One sees headlines in the newspapers every year about the state of local roads and what needs to be spent to bring them up to standard. If there is a headline word that has entered into the public consciousness, it is “potholes”.

Baroness Kramer: My Lords, through these amendments, the noble Lord, Lord Davies, and others seek to ensure that the impact of the road investment strategy on the various local road networks and other transport infrastructure is considered. This is an important argument, and I need to be clear that, through the licence, we are requiring the strategic highways company to have an asset management strategy. Understanding the condition of its assets is absolutely key to this.

The condition and performance of the local road network are, as the noble Lord, Lord Jenkin, clearly outlined, matters for the local highway authority. Frankly, we would not wish to include in the Bill a requirement to survey the condition of local roads, because its focus is the strategic road network. We are not anxious to usurp authorities’ powers. I share the assessment of the noble Lord, Lord Jenkin, that the tasks are currently well carried out by local authorities, which, I suspect, would not want to surrender a lot of resources and have the task taken over by a centralised body.

That said, we want this new company to co-operate with its partner road networks. The route strategies, with which I think many of your Lordships will be familiar, are a key source of information in developing the road investment strategy. They provide local authorities and, by extension, local highway authorities with a mechanism to work with the new company and thus ensure that the impact on the local road networks of interventions on the strategic road network is considered. We think that that will be an extremely effective mechanism and it is well provided for in the legislation as it stands.

In addition, as part of the changes elsewhere in the Bill, the company will, as I have said before, become a traffic authority. That is new and means that it will be subject to the network management duty—a legal obligation on all local traffic authorities to ensure, among other things, that traffic flows smoothly from one jurisdiction to another. At present, the Highways Agency is not subject to this requirement, so this will be a new guarantee of co-operation.

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I could start to list the kind of support that we are offering for local roads but, setting aside our significant financial contribution, I also want to make it clear that we are supporting efforts by local authorities to share knowledge and best practice under the highways maintenance efficiency programme, as well as encouraging co-operation and common procurement. There is therefore a gathering momentum to achieve much more co-operation and partnership working, which will continue under the new arrangements.

I talked earlier about aligning road and rail investment strategies, so I will not repeat that. Instead, I shall use this occasion to underscore how much we recognise that there is significant value in Network Rail and the new strategic highways company working together on the kinds of issues that your Lordships have listed. However, we do not think that you need a legislative mechanism to try to prescribe how those two companies should work together. We would find it extraordinary if they chose not to, and I doubt that the Secretary of State would permit them to ignore each other in that way.

It is entirely appropriate that the road investment strategy and the new company’s response to it will have due regard to the national network’s national policy statement—that is a mouthful. However, it would not be appropriate to create a formal link between what is a planning document and what is, in effect, a funding and investment plan. The two documents align but there is not a hierarchy between them.

On that basis, looking through the details of the amendments, we think that the underlying issues that are of concern to your Lordships are already addressed. Therefore, we feel that the amendments are not needed and we hope very much that the noble Lord will feel comfortable in withdrawing the one he has moved.

Lord Davies of Oldham: My Lords, I will back off from my amendment in relation to local authorities out of deference to the representation from the noble Lord, Lord Jenkin, although I should say that I back off for today, because that is not the perspective that we have of certain aspects of the work of local authorities. However, I shall back off if the Minister will take on board the obvious thrust of these amendments: both those in the group we are considering at the moment and those in the previous group, which the noble Lord, Lord Whitty, introduced, are concerned with the fact that the strategy has to take into account broader issues than road provision has done in the past and that it will need to have that written down and enforced. It is all very well for the noble Baroness to say, “Yes, as a matter of course those who are planning the roads will take into account these other factors”. No, they will not. In the past, we have seen that such factors have clearly not been taken into account.

Not the least significant of all those factors, especially for many British people, is the question of increased emissions. We have seen precious little activity, as far as roads are concerned, on emissions. An attempt in the previous group of amendments to introduce that into the categorisation of the work which the new system must take into account was rather brushed aside.

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5 pm

I am afraid that we have a different position on these issues. I know that the Minister’s task is to get this legislation through. I know that it has an important remit, which we all share, so she will get it through. We have clearly indicated that we are not opposed to the Bill, and I speak on behalf of my colleagues elsewhere as well when I say that. But why should we be faced with a situation where the Government says, “This is an important development in the infrastructure of this country and its planning for roads, but please do not bring in additional complicating factors which may make the task more challenging”? We shall keep challenging them on the complicating factors. I beg leave to withdraw the amendment.

Amendment 17 withdrawn.

Amendment 18

Moved by Lord Whitty

18: Clause 3, page 3, line 6, at end insert—

“( ) The activities, results and standards in subsection (4) shall include improvement of performance in network safety, reductions in carbon emissions, and improvements in environmental objectives as well as issues of traffic volumes, journey times and new and improved roads.

( ) A reduction in the number of accidents and the number killed or seriously injured on the highways network shall be a central objective of the Road Investment Strategy and shall be embedded at the level of design of the system, at the operational level of network management and in assessment of individual capital projects.”

Lord Whitty: All the amendments in this group are mine. This relates to exactly the sort of thing that my noble friend Lord Davies was just referring to. The Highways Agency consists mainly of engineers—quite rightly, and very good engineers many of them are. In the fringes, there are traffic engineers, as well as highways engineers. When you ask them to build into their projects objectives other than those which relate to providing more, quicker or wider roads, there is a bit of barrier, on occasion. Between them, the amendments are an attempt to ensure that when we take decisions on road improvements or new roads, issues of safety and the environment are built into those decisions on the same basis as any improvement in travel time, the number of miles of road which are tarmacked, or whatever.

The Highways Agency contains within it people who take those things seriously, but the natural tendency, particularly when we put the foot on the accelerator of spending on roads, is to get as many roads built as fast as possible and not worry too much about the complications. One big complication has wider implications for the rest of the project: safety. Earlier, I declared my interest as the new chair of the Road Safety Foundation. Every year it produces a map of European standards and the state of Britain’s roads. I have the map here if anyone wants to look at it. Those are standards which have been worked up by various equivalent bodies across Europe. It is right to say that our motorway system, in particular, is one of the safest in the world and is the safest part of the British—

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English, in this case—road system. That, of course, is calculated on the basis of vehicle miles and comparing them. It is also true to say that 250 people a year are killed on Highways Agency roads every year, and 2,000-plus are killed or seriously injured on those roads. That is a significant safety issue. Just to put it in perspective, more people are killed on Highways Agency roads, which are only 2% of our network—a third of the casualties because of the density of traffic—than the number of people who are killed at work. There are health and safety issues at work, for which we have a whole organisation, the HSE, to ensure that such accidents do not happen or are minimised.

The Government need to have an answer to the question of who is liable for those accidents. There have been big improvements in road safety in the past 20 years. When I was Road Safety Minister we had a 10-year strategy and, by and large, that reduced deaths and serious injuries by about 30% over that period. That improvement has slowed down a bit since 2010, but we are nevertheless one of the best and safest in Europe and the world. However, there are still a significant number of deaths and injuries.

If you try to establish the causes of those accidents, there is an assumption that it is mainly driver error or driver behaviour—and there is some truth in that. Much of the improvement over the past 20 years has been in improved vehicle safety. The Euro NCAP programme has raised certainly new car safety features from what it regarded as 2-star to roughly 4-star—air bags and other aspects of car design—which has had a major impact.

It is also true to say that at least for most groups there has been some improvement in driver behaviour, but there has not necessarily been the same improvement in safety features in the physical design of roads, nor has the improvement been reflected in the objectives of road-building organisations—principally the Highways Agency, but also the local authorities. The reasons for this are partly because it is thought that if you build a better road, safety automatically improves. It does not necessarily do so, and certainly does not improve proportionately. It is partly because the system for appraising new projects—whether they are intersections, main road widening or whatever—includes safety elements that are but a small proportion of the total cost and benefit. Additional safety factors are therefore discouraged by the way in which the projects are appraised.

This group of amendments, which also relate to environmental issues, attempts to write safety issues into different points in the Bill. I imagine that the Minister will not accept the amendments as they stand but I advise her and her colleagues that road safety is underplayed in the Bill. At various points in the Bill, explicit reference to road safety and reducing accidents needs to be reflected, as well as in the licensing conditions and the standards and objectives that the Secretary of State accepts for the new company.

My worry about the transposition in this context is that if a road design issue causes or contributes to the cause of an accident, who is liable? We do not get many legal cases about the state of the roads, and I do not know why. Thirty years ago we did not get many legal cases about the performance of the National

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Health Service; now we get lots of them. We get quite a few about tripping over the pavement, which is the equivalent responsibility for the local authority. If you have an independent company, the question of liability to potential litigation needs to be taken into account as one of the risk factors. I am not saying that it is a determinant risk factor, but it is something that the Government will have to have an answer to, and at the moment I do not think they do. One way of ensuring that that happens, in terms of licence conditions and the other oversight that the Secretary of State will have to perform, is to write safety in at several points in the Bill.

With regard to the detail of the individual amendments, Amendment 18 relates to the standards that the Secretary of State can set for the company. One of those standards should be a reduction in the number of accidents and the number of people killed, and that should be,

“a central objective of the Road Investment Strategy”.

Amendment 22 makes the point that I was just referring to, that when you appraise schemes, the appraisal for safety benefits or otherwise needs to be a separate assessment and not be lost in the overall assessment, because the return you can get on safety measures is often much higher than the return you get on time-saving and other economic benefits. Amendment 22 also goes into other issues of reducing traffic and so on, which also have high returns. It is the same in the energy sector: saving energy is actually a far greater return than spending money on new power stations, although you have to do both—as you do here. But if you appraise the environmental element separately, the rate of return is significantly greater. Therefore, that should be done as a matter of course.

Likewise, in relation to the strategy in Clause 2, Amendment 33 says that the objectives should relate not just to road-building but to safety issues, and that in relation to guidance due consideration should be given to road safety and environmental outcomes. I would particularly emphasise the road safety dimension.

These amendments may not be the most appropriate place, but before the Bill leaves this House it would be sensible for the Government and the department to find the appropriate place to put, in lights, “road safety responsibilities of the new company”. If we let it leave this House without that being clear—in several different places, I suggest—there will be a tendency for the company to at least downgrade those and for the accountability of the company to be weaker because they have not been spelt out in the Bill.

These are quite important issues. Sometimes those who are keen on having new roads regard safety issues as a constraint rather than an objective of road design. We need to ensure they are an objective both at the individual project level and in the overall strategy. I beg to move.

Lord Berkeley: My Lords, I support my noble friend. He has raised some very interesting challenges. I do not think that safety gets taken into account nearly enough in the design of roads. In my earlier life, I designed quite a few of them.

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It might be interesting to compare how the roads have developed and how the railways have developed. There were some horrendous accidents on the railways in Victorian times, starting off with a Member of Parliament who got crushed by one of the first trains because he was standing too close to it, or something. That led to the introduction of the Railway Inspectorate, whose job it was to ensure that the railways were safe, bringing in things such as brakes, which are quite useful. Things have moved on a bit since then. The Railway Inspectorate was originally staffed by retired Army officers, but more recently it has moved to the Office of Rail Regulation, which is the right place for it. I think that it does a very good job. We will be talking about some of the issues around that when we discuss a later amendment.

It seems to me a good idea to look at whether the ORR in its expanded role could take on some road safety issues. At present, the Highways Agency does that, and, in the absence of any other instructions, the new body will probably hold much the same views as that agency—namely, the desire to increase speeds so that people can get to their destinations faster and to increase capacity by having more roads. The strategy is designed round the concept of “a minute saved”. My noble friend is an expert on this. He may well be right that that body takes safety into account to some extent, but I am not sure that it does. It could certainly do so to a far greater extent.

The Office of Rail Regulation could be given responsibility for many of the safety issues that my noble friend raised, which cover a multitude of sins, and could be given a duty to look at the potential for modal shift. We talk about road to rail very frequently, but there is the issue of road to bicycle. As we have seen in London, road to bicycle is concerned largely with safety issues. A terrible number of cyclists have been killed in London in the past year or two. TfL talks about redesigning roundabouts but one of the key issues, which must be obvious to most people, is that if you give cyclists space, they are less likely to get run over. If the road traffic speed is set at 20 miles an hour, it is a great deal safer than 30 miles an hour, and you will get more people cycling and fewer people trying to drive. It would also reduce emissions and do all the other good things that we have been talking about. This is to do with modal shift. The journey time issue is equally important, whether you travel by bike, train, car or bus. Therefore, my noble friend’s amendments deserve careful consideration. I will discuss with him in more detail whether the Office of Rail Regulation should be involved in some of these issues. I think that body is capable of it as it has very capable people. Unlike the Highways Agency, it can stand back and take a different view and, if it does not like what is going on, it should be able to enforce and encourage change. These are important amendments and I look forward to further discussion on them.

5.15 pm

Lord Davies of Oldham: My Lords, I can be very brief. I fully endorse the statements made by my noble friend Lord Whitty. I once had the privilege of being president of the Royal Society for the Prevention of

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Accidents. That was a year in which I contributed little but learnt a very great deal indeed. I do not think that the consciousness of the need for safety on our roads has increased as much as we might have expected, given the work that has been done by estimable authorities such as RoSPA. Therefore, I hope that the Minister will take these amendments very seriously.

Baroness Kramer: This set of amendments seeks to make the road investment strategy cover several specific areas, including carbon reduction, traffic volumes and environmental performance, and to place safety at its heart—the area where we have had most discussion, which has been fascinating. I reassure the Committee that the Government take all these issues very seriously. It seems to me that where we may differ is on whether or not these important values are enhanced in implementation by including them in the Bill rather than in the road investment strategy and in the licence. I am inclined to believe that the RIS and the licence are the most powerful documents to drive forward the behaviours that we are looking for, so I shall explain the role that those documents play.

We are concerned about ending up with a long list sitting in legislation and describing what the road investment strategy should look at, because, as everyone in this Room knows, there is always the problem of what happens with the item left off the list when that is significant. One can try to say that those that are not named are of equal significance and are equally elevated, and that one is not primary over the other, but that is not always an easy argument to make. I am concerned, particularly since we want this to be a long-lasting document, that there will be issues which we consider to be of equal importance to safety and the environment and that we would be in a difficult situation if we insisted on those additional significant priorities. I am therefore hesitant to go to the face of the Bill. It is helpful to have the information that we have on both the RIS and the licence, and the other documents.

Let me focus on safety, because it is a very important issue to the Government. As the noble Lord, Lord Whitty, said, our roads are pretty much the safest in the world, but we can never be complacent. The strategic highways company will have a responsibility for the safety of the road network, but, as I pointed out previously, there are key safety responsibilities—including driver licensing, training and education, the regulation of driving such as drink-driving and drug-driving policies, enforcement, dangerous and careless driving and, as the noble Lord underscored, the important issue of vehicle standards—that must stay with the Secretary of State and not transfer to the new company. That is to put the broad construct, which would not work effectively if those responsibilities were not kept with the Secretary of State.

As we go through these complex documents, it is worth noting that safety is already embedded in the strategic roads “system”. For example, the Design Manual for Roads and Bridges sets minimum standards for road safety, and safety is covered within the appraisal. The noble Lord, Lord Whitty, asked whether the appraisal formulas were exactly as they should be. That is surely not something that we are going to address in primary legislation; it is a working issue

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that needs to be addressed at a much more practical level. In wide areas of appraisal—I have looked more at financial and cost-benefit appraisal issues—we are constantly trying to update the way in which we look at those issues. I cannot see that it can be driven through primary legislation; it is part of being responsible. The importance of safety is already included in the draft licence and will be a key consideration in the road investment strategy. For example, the RIS will require performance specifications that embed safety issues.

The noble Lord, Lord Whitty, referred to legal liabilities. I think that it is clear that the SHC is responsible for the road but not the driver, but I do not think it would be right for me to try to speculate on legal liability.

Embedded in the amendments are important issues of environmental protection such as climate change and biodiversity. Again, they are well covered within the licence by broader existing legislation. Again, if we are looking at who is responsible for what, a lot of those issues refer to the vehicle fleet, and that must be with government rather than with the new company.

Therefore the view we take is that the issues that are raised are very important, but that they are carefully covered and encompassed by the language we have in both the primary legislation and supporting documents. Therefore once again, amendment is not necessary to achieve the goals which those sponsoring these amendments have in mind.

Lord Berkeley: The noble Baroness mentioned the performance specification. Giving something like the Highways Agency a performance specification means, “Make your road traffic go as fast as possible, make sure that the bikes are miles away, and put up lots of crash barriers so that if people do go off the road, they won’t kill anyone else”. I hope we have moved on—or will move on—from that.

Baroness Kramer: All I can say to the noble Lord, Lord Berkeley, on this, is that we have certainly moved on from that, have we not? That is one of the problems that happens when you try to put too much into primary legislation—we become more demanding as the years go by, not less demanding. It is important that we reflect that more demanding approach in the way we manage our network.

Lord Whitty: My Lords, I am exceptionally disappointed by that reply, because it did not address the issue. I will confine my remarks to safety, but there are other issues as well.

I imagine that any member of the public who wants to know what the objectives of the new company would be would expect to have it written in the Bill that road safety improvements are one of those objectives. It is no good telling us that it is in the licence or that maybe it is in the guidance—the Bill should specify what issues should be covered by the licence, and what areas the guidance is appropriate for. The issue of safety is underrated in the appraisal system. That is not to say that it is not there, but that because a safety measure costs a lot less than building a whole new

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road or even a rather short one, it gets lost in the total balance of benefits. If you looked at the safety expenditure you would probably get a rate of return considerably higher than the millions of pounds spent on improvement in the speed and travel time, which therefore improves or extends the road itself. I was just trying to say that we should look at those separately before we take the decision.

The other advice I would give to the Minister is that this is quite a potent issue out there. A lot of organisations and people are interested in road safety. If it were known that we were promoting a Bill without any significant reference to road safety as the basis for establishing an entirely new system of delivering our roads, they might well take that amiss. All I am saying is that, during the subsequent stages, there will be significant public interest in this area, even though there might not be that much public interest in most of the minutiae of the Bill.