Mr Christopher Chope (Christchurch, Conservative)

I beg to move amendment No. 38, in

page 18, line 10, leave out subsection (1).

Miss Anne Begg (Aberdeen South, Labour)

With this it will be convenient to discuss the following amendments:

No. 39, in

page 18, line 14, leave out subsection (2).

No. 40, in

page 18, line 19, leave out 'level 4' and insert 'level 3'.

No. 41, in

page 18, line 21, leave out 'level 5' and insert 'level 4'.

No. 42, in

page 18, line 22, leave out subsection (4).

No. 43, in

page 18, line 30, leave out 'level 4' and insert 'level 3'.

No. 44, in

page 18, line 31, leave out 'level 5' and insert 'level 4'.

Mr David Wilshire (Spelthorne, Conservative)

On a point of order, Miss Begg. It is slightly unfortunate that Mr. Beard is not in the Chair because, having removed my beard, I was subject to abuse all of yesterday. If anyone wants to be rude, could they get it over with now?

Miss Anne Begg (Aberdeen South, Labour)

That is not a point of order, and it is certainly not a matter for the Chair. I would not dream of making any comment about the hon. Member's lack of hair.

We are moving on to part 4. I had a marathon journey back to Aberdeen after I left the Committee last. It took me 20 hours, but that is another matter. This is traffic management and nothing to do with hair or a bit of snow.

Mr Christopher Chope (Christchurch, Conservative)

I begin by confirming my view that my hon. Friend the Member for Spelthorne (Mr. Wilshire) is as handsome as ever.

The amendments are concerned with penalties and they respond to putting the cart before the horse. We know that the Government are keen on penalising as many people as possible, so it is worth putting the penalties in context. There is a lot of difference between a penalty on level 4 and one on level 3. Currently, the maximum fine on level 3 is £1,000. The proposals to change it to level 4 with a £2,500 maximum fine, or level 5 with a £5,000 maximum, are significant in anybody's language.

In adducing arguments to support the change, the Government have used the specious justification of inflation. Fines are already covered by inflation because from time to time the maximum fine at particular levels is increased by statutory instrument. That is why we no longer have legislation framed with a maximum fine of £1,000, but a maximum fine on level 3. Inflation is a specious justification for the substantial increase in penalties.

The second argument that the Government advance is that under the New Roads and Street Works Act 1991, little use has been made of the penalty regime, and that the maximum penalties should be increased.

Mr David Wilshire (Spelthorne, Conservative)

I am interested in the point that my hon. Friend makes about the use of existing provisions. Has he been able to establish how much use has been made of them?

Mr Christopher Chope (Christchurch, Conservative)

I tabled a parliamentary question to the Minister and it seems that there is no direct evidence, which is surprising. Before the Government recommend that the maximum fine for an offence should be raised fivefold, which is what some of the proposals envisage, one might imagine that they would do their homework. The best information that they have is provided by the Local Government Association, which shows that little use has been made of the penalties.

Mr David Wilshire (Spelthorne, Conservative)

If my hon. Friend is suggesting that there is no evidence that fines at the existing rates have been used, how is it possible to know that the existing amounts would not be adequate? If the provision is not being used, what is the point of increasing levels of fines?

Mr Christopher Chope (Christchurch, Conservative)

My hon. Friend anticipates my argument, and I hope that the Minister addresses it in responding to the debate.

Sometimes there is evidence that the magistrates, in those few cases where there have been prosecutions, express their view that penalties are inadequate by imposing fines up to—if not at—the maximum level. In this instance, there is no evidence that the fines imposed have been anywhere near the existing maxima, showing that the view of the magistrates is that the existing levels are more than adequate.

The rationale behind the provisions is a proposal to introduce a fixed penalty notice regime. The fixed penalties will be related to the maximum fine that can be imposed by a court. If the existing level of fines continues and fixed penalty notices are introduced, those notices might be set only at the level of about £300. That is pretty small beer as far as many local authorities are concerned. It does not seem small beer to me, but that is the view of local authorities. Those authorities might think it much better if they were able to issue a fixed penalty notice and obtain largesse in excess of £1,000 or £2,000. I suspect that that is the hidden justification, which is why the Government's arguments in relation to the proposal to increase the maximum penalties are so weak.

I challenge the Minister to cite any instance in which a magistrates court has said to an offending

company or organisation when imposing a penalty, ''We take such a grave view of these matters that we will impose the maximum penalty allowed, and we wish that the Houses of Parliament had given us power to levy an even higher penalty.'' I suspect that that has not happened. We know that there are examples where similar things have happened in relation to charges of killing people while under the influence of drink or dangerous drugs.

The Parliamentary Under-Secretary of State for Transport (Mr. David Jamieson) indicated assent.

Mr Christopher Chope (Christchurch, Conservative)

The Minister is acknowledging that. He would accept that that was important and potent evidence when considering whether maximum penalties for such offences should be increased by the House of Commons. I challenge the Government to adduce similar evidence, if it exists, in relation to the maximum penalties imposed by magistrates courts for offences under the 1991 Act.

What does the regulatory impact assessment say about the matter? The RIA, as it relates to this part of the Bill, is voluminous in the extreme, but vacuous as well. There is no clear evidence in the assessment that benefits will flow from the provisions that will outweigh the burdens, and there is a certain amount of speculation related to the issue of deterrence. The best sort of deterrent is surely the knowledge that one is going to be prosecuted. Local authorities, which have the power to prosecute, are choosing not to prosecute at the moment.

A further relevant issue is that normally, if one of these offences is committed, a mass of them will be committed. It has always been possible for magistrates courts to add up the offences and impose a swingeing fine. There is no evidence to suggest that if someone gets on the wrong side of the law with regard to the offences in question, they will not be penalised to an extent that is reasonable, fair and just. By increasing the maximum, the Government are going too far. I challenge the Minister to give a reasonable justification for what is proposed.

Amendment No. 39 would leave out subsection (2), which would substitute level 4 or level 5 for level 3—level 3 is what is in place at the moment. Will the Minister explain the rationale behind raising some of the penalties to level 4 and others to level 5? I remind the Committee that level 4 is a maximum of £2,500 and level 5 a maximum of £5,000, which is five times the maximum for level 3. Amendments Nos. 40 to 44 seek justification for proposed increases from level 3 to level 4 and level 4 to level 5 in subsections (3) and (5). Similar arguments apply.

When we come on to the next group of amendments, we will discuss whether the case has been made for lane rental. The impact of the penalties could well mean that there was a tax on a stealth tax. [Interruption.] I know that the Under-Secretary of State for Transport, the hon. Member for Harrow, East (Mr. McNulty), has been waiting for me to utter the words ''stealth tax'' for the first time. I shall be uttering them quite a lot in the context of this part of

the Bill. There is massive evidence to show that the proposals for lane rental will amount to a stealth tax.

Mr David Wilshire (Spelthorne, Conservative)

Does my hon. Friend agree that even increasing the fines is a stealth tax? If magistrates impose only 60 per cent. of the maximum for level 3, and go on imposing 60 per cent. of the maximum for levels 4 and 5, they will be taxing people more and putting more money into the Revenue.

Mr Christopher Chope (Christchurch, Conservative)

Yes. My hon. Friend is right. At the moment, prosecutions are brought only when they are reasonable and magistrates can adjudicate, but under this part of the Bill there is a proposal to introduce fixed penalty notices, the yield from which will be able to go direct to local authorities, if the Treasury agrees with the proposals. That would be a specific stealth tax, and a new and additional burden on utility companies and those who are doing their best to improve the infrastructure of our country—for example, by extending broadband and telecommunications services to those who do not already enjoy the benefits that they bring. A host of organisations are intent on improving the quality of the infrastructure in run-down inner-city areas. Under the proposals, they will suffer an additional burden because of the penalty regime. I hope that the Minister will think again about the matter, that he will seriously consider the purpose of increasing the maxima in the way that is suggested, and that he will admit that the justification given for increasing the levels from level 3 to levels 4 or 5 is specious and indefensible.

Mr David Wilshire (Spelthorne, Conservative)

My hon. Friend has raised a number of questions.

Mr Tony McNulty (Parliamentary Under-Secretary, Department for Transport; Harrow East, Labour)

Not that many, really.

Mr David Wilshire (Spelthorne, Conservative)

There will be a number of questions by the time I have finished because I have another load that need to be answered by the Minister. I want to ask him to produce some information to justify resisting the amendments, which I presume he will resist.

Let us start with the question of what is happening at the moment as far as the offences are concerned. How many prosecutions have been undertaken under existing legislation? Also, how many people or businesses have been prosecuted? Let us pluck a figure from the air. If 1,000 prosecutions have been undertaken and that means 1,000 different people, there may be justification for doing something. If the figure is 1,000 prosecutions and only six companies or people have been the cause, one could ask a separate group of questions.

The first thing we need to know is the current situation, because it is from the answer to that that we will find the only possible justification for an increase, except as a means of raising revenue. If the Minister cannot produce evidence of what is happening at the moment, one cannot avoid the conclusion that this is another stealth tax, being slipped in through the courts in the hope that nobody notices.

Mr Christopher Chope (Christchurch, Conservative)

What would my hon. Friend say if he were told that there have been fewer than 200 prosecutions in 10 years under part 3 of the 1991

Act, with an average fine of £400? Would he think that supported our argument, or that of the Government?

Mr David Wilshire (Spelthorne, Conservative)

I sincerely hope that those figures are wrong, because if they are right, they torpedo the Minister's case. For heaven's sake, if we are looking at only 20 prosecutions a year, what on earth are we doing? If it is only that sort of number, the argument about traffic management collapses, because either there is insufficient enforcement—the Minister might like to claim that—or there is nothing to enforce. If there is nothing to enforce, why are we wasting Parliament's time, if not so that the Government can attempt, by means of a stealth tax, to get more money into their coffers in the hope that the public will not notice?

The other thing that the Minister needs to tell us about the current situation—my hon. Friend touched on this when he stated that the magistrates are not imposing the maximum penalty—is the level of fine. We need to know that, as well as the number of prosecutions there have been and the number of people or firms who have been prosecuted. Perhaps the Minister will tell us that magistrates tend to impose a fine of 50 per cent. of £1,000, though it sounded more like 40 per cent. from the figures produced by my hon. Friend the Member for Christchurch (Mr. Chope).

Mr Andrew Miller (Ellesmere Port & Neston, Labour)

I recommend to the hon. Gentleman that he reads the guidelines set out by the Lord Chancellor. He will find that the basis on which magistrates impose fines is a matter of guidance, so the arbitrary figures that he is inventing are totally irrelevant to his case.

Mr David Wilshire (Spelthorne, Conservative)

No, they are not. I will most certainly accept the hon. Gentleman's advice. No doubt he will lend me his copy of the guidelines and point to the important parts. [Interruption.] I could ask my barrister son for help, perhaps.

Whether the level of the fine arises from the whim of the magistrates on a Tuesday morning or the Lord Chancellor's guidelines does not matter. It appears at the moment, from what my hon. Friend the Member for Christchurch said, that the level is 40 per cent. of the maximum. That is where the hon. Member for Ellesmere Port and Neston (Mr. Miller) torpedoes his own attempt to stop my train of thought. If the guidelines say that 40 to 50 per cent. of the maximum is the norm, it will have occurred to someone in the Treasury that yanking up the maximum to £5,000, and making 40 to 50 per cent. the guideline for that new maximum, would, lo and behold, produce five times as much money, as a stealth tax, from following the Lord Chancellor's guidelines. That does not really get us very far. If that is how the guidelines work, the higher the maximum, the greater the income, the bigger the stealth tax, and the more money taken out of society to be wasted by the Government. Those are the questions that the Minister has to answer about the existing situation.

Why are the increases necessary? I can only speculate as to what the Minister will say, but I suspect I will not be far short. He will say that the provision is necessary to stop offences. If the figures he produces are similar to 200 cases in 10 years, however,

it will do a fat lot of good in terms of traffic management. I assume that it is appropriate to discuss the details of the offences under schedule 1, or else the two issues will be rolled together, so I will stay away from some of the absurdities that I think lurk within schedule 1 until we get to it.

The general principle of introducing higher penalties can be sensibly justified in a way that the public will accept only if a demonstrable problem is created by people doing the things listed in schedule 1 and causing unnecessary and unjustifiable obstructions to traffic. The Minister must show that that is so. Unless he can shoot down the figure of 200 in 10 years, I shall take some persuading. If he cannot show a link between higher penalties and a reduction in the number of offences, he has only one argument—that this is a stealth tax to increase income. If there is no problem of traffic management, what is the justification of fines five times higher than at present?

Mr Andrew Miller (Ellesmere Port & Neston, Labour)

Does the hon. Gentleman not accept that, whatever the offence, the larger the penalty, the greater the deterrent effect?

Mr David Wilshire (Spelthorne, Conservative)

Of course I accept that, but given all problems on our roads, if there are only 20 people a year to deter, deterring 20 offences over the United Kingdom will achieve nothing except the raising of more money for the Treasury, and for the Government to waste, under another stealth tax. I agree that if there were 20,000 offences a year and people were putting two fingers up to the small fine that they were getting and saying to themselves, ''I am only going to be fined £400, and I shall save £600 by ignoring the regulations'', people would be quids in, and there would be thousands of offences because it would be cheaper to act in that way. However, if my hon. Friend the Member for Christchurch is right and the figure is 20 a year, that is nonsense.

Mr Christopher Chope (Christchurch, Conservative)

If I am right that there are only 20 offences a year, then since schedule 1 contains 22 offences, each offence is on average being prosecuted slightly less than once each year. Does that not make even more of a mockery of this matter?

Mr David Wilshire (Spelthorne, Conservative)

That is right. I am beginning to convince myself, if not the Committee, that the figure of 200 is about right. An Opposition contributor to a Committee such as this who bandies about a figure of 200 sets himself up as a hostage to fortune. If I had offered an absurdly low figure, the Minister could not have contained himself. He would have been on his feet by now saying that I was talking rubbish: he will say it anyway in due course. I am handing him a hostage to fortune. I am basing my argument on the figure being about 200. The fact that he stays in his seat convinces me that it might even be less than 200 and he is too embarrassed to leap up and give us the real figures.

My hon. Friend is right. If we seek to change the law because of a couple of hundred offences over 10 years—20 a year—there cannot be any other explanation than a stealth tax.

Mr Tony McNulty (Parliamentary Under-Secretary, Department for Transport; Harrow East, Labour)

It is a pleasure to be under your stewardship again, Miss Begg. I apologise on behalf of the Under-Secretary of State for Transport, my hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson), and myself for your horrendous train journey. I would like to say that my hon. Friend is the Minister responsible for aviation, but he is not, and one of the two of us is. I will say no more.

I also welcome, although I am sure that it defies parliamentary protocol, the younger brother of the hon. Member for Spelthorne and ask him to give our regards to the hon. Gentleman, who I am sure is back in Spelthorne celebrating, with his constituents, the share of £9.6 million that Spelthorne was awarded yesterday under the liveability fund.

Mr David Wilshire (Spelthorne, Conservative)

Will the Minister accept that, whether I am me or my brother, I am here under false pretences, because the real Member of Parliament for Staines is Ali G.

Mr Tony McNulty (Parliamentary Under-Secretary, Department for Transport; Harrow East, Labour)

I suppose the response to that is ''Let's big it up for Ali'', but I shall not go down that route.

None the less, whether it is the hon. Member for Spelthorne or his brother who is here this morning, we have been given, to our great pleasure, his usual circularity of an argument that would be hilarious if it were not so tedious. The only point of substance here is whether the levels of fine—the maximums—should be increased. On the one hand, Spelthorne and Christchurch—it sounds like a dodgy firm of solicitors—said that that should be resisted because it is all a stealth tax. I will return to that point momentarily. On the other hand, are local authorities, utilities and other interested parties, including the Department for Transport, who sat down in a working group and agreed that the levels should be increased in the manner proposed in the clause. Against us, we have the perverse libertarian wing of the Conservative party that apparently thinks that being fined for breaking the law is a stealth tax. I do not understand that at all. Raised against them, apparently posing as turkeys voting for Christmas, are the very utilities that they purport, in their libertarian gusto, to defend.

Mr David Wilshire (Spelthorne, Conservative)

Is the Minister asking us to accept the argument that if outside bodies—some elected, but most not—full of officials and bureaucrats decide that something is a good idea, Parliament should not even consider it but just rubber stamp it?

Mr Tony McNulty (Parliamentary Under-Secretary, Department for Transport; Harrow East, Labour)

No. I am asking the hon. Gentleman to take cognisance of the people whom he purports to defend—the utilities—who, by their own lights, have been part of the working group. They fully adhere not only to the increases in the maximum levels in the clause but to the split between what should be increased to level 4 and what to level 5. The people most directly involved—the local authorities and the utilities—stand full square behind the clause.

Mr David Wilshire (Spelthorne, Conservative)

Is the Minister asking us to believe that a group of people have beaten a path to his door saying, ''Please fine us more next year, because we think that it is a good idea''?

Mr Tony McNulty (Parliamentary Under-Secretary, Department for Transport; Harrow East, Labour)

We have gone from circularity to fatuity. That is not the point at all. The utilities do not want to pay a pretty penny in fines. Local authorities and central Government do not want to collect any money off them. The fine regime is set principally to deter and to encourage good practice, although it palpably has not done that in the 12 years since the last Act. As I have said before, my hon. Friends and I would be happy if local authorities never accrued a single penny of fines. That would mean street works being done in the manner that they should be done, efficiently and with minimal disruption. That, simply, is the point.

Where do we disagree? We disagree on the level of fines. It is not for me to leap up and defend the Government's position on the points that the hon. Member for Spelthorne makes. He thinks that he has alighted on a key point by saying that he has been told that there have been only 200 prosecutions in the last 10 years. Is that true? If he cared to read the regulatory impact assessment, he would see that it clearly says that there have been about 200 prosecutions in the last 10 years. If he goes on to read materials and evidence from the Local Government Association, among others, he will see that it says that the key reason why there have been so few prosecutions is that it costs more to prosecute under the fine regime than it does to collect the fine.

I stand full square behind the point about there being only 200 prosecutions, but I say that therein lies the problem. I do not reach the perverse conclusion that because there have been only 200 over 10 years, I should make pretty little jokes about 22 offences and only 20 prosecutions, which is not even one per offence. That is more fatuity. That is a reason why there should be a review of the system, and the utilities agree.

Mr Christopher Chope (Christchurch, Conservative)

Will the Minister explain why the Government have not collected any statistics relating to prosecutions under this important piece of legislation? Will he confirm a point that the regulatory impact assessment is far from clear about? It says:

''Figures produced by the Local Government Association suggest that there have been fewer than 200 prosecutions''.

The figures may even suggest that there have been fewer than 150 or 100. We do not have the details.

Mr Tony McNulty (Parliamentary Under-Secretary, Department for Transport; Harrow East, Labour)

If the regulatory impact assessment says 200, it means that there have been about 200. It is for the local authorities to carry out prosecutions and for the courts to deal with them. It is appropriate that we stand behind that figure. If we had research departments crawling over everything that local authorities and other agencies did, the hon. Gentleman would be on his feet saying, ''This is exactly the sort of Government bureaucracy that we need to get rid of'', and that we should not put up with it anymore.

Let me turn to some other points that we need to scotch, as they might give us a flavour of today's events. We are told that increasing the maximums of a fine regime is all about Government largesse and that prosecuting and fining people for transgressing the law

is in some way a stealth tax. That is precisely the perverse libertarianism that I just do not understand. If people transgress the law, they should be punished according to whatever the law of the land is at the time. Part 4 purports simply to draw together many things in the legislative framework of the principal Act of 1991 and put them in the context, first, of an effective fine regime, fully agreed to and signed up to by the utilities, that will act as a deterrent, and, secondly, of a statutory requirement on local authorities to pursue their network management duty. Those two elements are palpably absent from the current regime under the 1991 Act.

Mr David Wilshire (Spelthorne, Conservative)

I take the Minister back to his comment that people who break the law should be prosecuted. Can we take that as condemnation of those authorities that have decided not to conduct more than 200 prosecutions in 10 years because they are too expensive? Will he issue instructions that authorities keep to his dictum that they should take action if they find offences?

Mr Tony McNulty (Parliamentary Under-Secretary, Department for Transport; Harrow East, Labour)

No. Instead of doing something as specious as that, I would rather look at the principal Acts if I have the opportunity—happily for me I do, at exactly this moment—and, if there is a problem that can be resolved in a new Bill, correct it and lead towards a regime under which the law, principally in a new road and street works Act or whatever it will be called, is enforceable in proper terms.

We are told that inflation has eaten away at the fine levels and that somehow—it is not adequately explained—they have been increased to take account of that. At the Home Office's behest, under Conservative and Labour Governments, level 3, 4 and 5 fines have not increased since 1991, so the hon. Gentleman's point that fines have somehow kept pace with inflation is wrong—not simply misguided but absolutely, palpably wrong.

Mr Christopher Chope (Christchurch, Conservative)

Will the Minister accept that the Home Office has the power through delegated legislation to increase the maximum penalty for each level of fine? The fact that it has not done so since 1991 is surely an indication that it regards the existing levels as adequate.

Mr Tony McNulty (Parliamentary Under-Secretary, Department for Transport; Harrow East, Labour)

The point of the hon. Member for Spelthorne was that inflation somehow made the fine levels keep pace with the cost of living. That is an error. They have not changed since 1991. The level 3 fine was £1,000 in 1991 and, until we do what we are about to do here today, it is still £1,000. The hon. Gentleman simply got it wrong; it would be nice if he admitted it.

Mr Brian White (North East Milton Keynes, Labour)

Does my hon. Friend the Minister recognise that the very regulations that the hon. Member for Christchurch asks us to use are those that Conservatives keep complaining are red tape?

Mr Tony McNulty (Parliamentary Under-Secretary, Department for Transport; Harrow East, Labour)

Exactly so. It we were to accept the comments of the hon. Members for Spelthorne and for Christchurch, we would have a rather convoluted view that says shame on local authorities for not prosecuting and accruing more of this supposed stealth tax during the past 10 years but shame on the

Government for improving its levels. It would be complimentary, and rather generous, to say that they are all over the place.

The hon. Member for Spelthorne also asked why some fines are moved to level 4 and others to level 5. The working party of local government, utilities and the Department for Transport agreed broadly that fines at level 4 will relate to noticing offences—that is, to a utility not telling a local authority that it is starting work in a street. The offences under level 5 are generally more serious, such as not carrying out works in a safe way, perhaps by not lighting works at night. There is a clear distinction between noticing offences and more serious ones, as outlined in the schedule.

The hon. Gentleman went on to suggest that, because things had not changed and because there has been such a low level of prosecution, there is a problem. It is clear that the only thing that unites everyone from all sides with any interest in the Bill is that there is a problem and it is growing. The number of utilities that have been able to work on our roads for good and benign reasons such as broadband, cable TV and so on has mushroomed since 1981, and we need a deterrence regime in place, agreed with local authorities and utilities, to deter those who might carry out street works inefficiently. Utilities, local government and those most directly involved have signed up to the increases in maximums, so there is no merit in the hon. Gentleman's fatuous, libertarian, stealth tax argument, and if that is the only club in his bag, he is on thin ground.

Mr Christopher Chope (Christchurch, Conservative)

Will the Minister cut the rhetoric and answer a simple question? What does he expect the level of prosecutions to be as a result of the changes proposed in the Bill?

Mr Tony McNulty (Parliamentary Under-Secretary, Department for Transport; Harrow East, Labour)

The hon. Gentleman should have listened to what I have been saying. I said clearly that, not least because of the broad agreement with the parties most interested in the regime we are setting and the further agreement that we hope to reach on consulting fully on the regulations, I would not be disappointed if the level of prosecutions remained roughly as it has been for the past 10 years. That would be a measure of success. The hon. Member for Spelthorne is trying to put in our minds the notion of an explosion of prosecutions to provide another few bob for the Treasury through the back door. Nothing could be further from the case. I hope and pray that the level of prosecutions will remain low, because that would mean that companies were being efficient in dealing with necessary works on our roads. I also hope that, as and when they need to, local authorities will feel confident enough to prosecute, knowing that a regime exists under which, for a change, the cost of prosecution would be far outweighed by what they would accrue from fines. I would be more than happy to come back in a year and say that all the indications are that, at the very most, there are no more than the 15 or 20 annual prosecutions that occur now, but that much more has changed in the efficiency of street works.

Everyone agrees, especially local government and the utilities most directly involved—though not the Conservative Front Bench—that the current fines are no longer appropriate for a deterrence regime, and I hope that anyone with a semblance of commitment to a more efficient regime will see that the clause is more than appropriate. The utilities certainly do, and I urge the hon. Member for Christchurch to withdraw his amendment.

Mr Christopher Chope (Christchurch, Conservative)

I am not convinced by the Minister's bluster. One of his justifications was that local authorities do not prosecute at the moment not because offences are not being committed and there is no desire to deter offences, but because it costs more to prosecute under the existing fine regime than can be accrued from fines. The penalties in this part of the Bill go to the courts, but the cost of prosecution falls on the local authorities, so it is absurd for the Minister to suggest that the cost for local authorities will be less if they prosecute people for offences for which the maximum penalty is greater than at the moment. They will have the same prosecution costs, which may even increase slightly because the maximum fine on a company that is prosecuted will be greater than under the existing regime. How can the Minister justify his assertion that the cost to local authorities of prosecuting will be less under the new regime than under the old one if the issue of fixed penalty notices, which we will discuss later, is excluded?

Page 15 of the regulatory impact assessment says that

''the increased costs which higher maximum fines will impose on undertakers and others are avoidable if they comply with the law.''

I agree with that, but it continues:

''Increased fines should not increase the cost to street authorities of enforcing compliance.''

Why will it not increase the cost of enforcing compliance if, as has been implied, a large number of offences are not being prosecuted?

The Minister's argument is unsatisfactory, and he has not answered the point about inflation. If he thinks that inflation has increased fivefold since 1991, which is the import of his proposals to increase the maximum penalties from level 3 to level 5, and therefore from £1,000 to £5,000, I find it incredible. He has not answered the point that if the Home Office wishes to increase the maximum fines imposable under any different level, it can do so. The fines have been £1,000, £2,500 and £5,000 since 1991 but, for all we know, within a few weeks or months they might be doubled. In doing that, the Government would be admitting to a higher level of inflation than they are prepared to accept, particularly if we consider a pensioner's income, but we will not go into that.

I cannot speak for my hon. Friends, but I am not convinced by the Minister's argument. We may well be arguing about very little; there might not be any prosecutions in the future because there have been so few in the past. However, the proposal has the potential to impose a substantial new stealth tax

upon the utilities, and that would be to everybody's detriment.

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 9.

Mr Christopher Chope (Christchurch, Conservative)

I beg to move amendment No. 51, in

page 18, line 22, leave out 'and 74A(11)'.

Miss Anne Begg (Aberdeen South, Labour)

With this it will be convenient to discuss the following:

New clause 9—Repeal of section 74A of New Road and Street Works Act 1991—

'.Section 74A of the 1991 Act is hereby repealed.'.

Amendment No. 52, in

schedule 12, page 86, line 28, at end insert—

'New Road and Street Works Act 1991 (c.22)Section 74A'.

Mr Christopher Chope (Christchurch, Conservative)

Amendment No. 51 would delete the increase in penalties from level 3 to level 4 in section 74A(11) of the New Road and Street Works Act 1991. New clause 9, which would repeal section 74A of the 1991 Act, and amendment No. 52, which would insert the section in the list of repeals in schedule 12 to the Bill, form the main part of the group of amendments.

The Government incorporated section 74A in the 1991 Act through the Transport Act 2000. Under section 74A, the regime of lane rental was introduced. It has been introduced only experimentally, but the regime has had an adverse effect on the utilities and their customers with substantial additional costs and the continued inefficient execution of street works. That is the main finding of the Halcrow report, which was commissioned by the Government.

Amendment No. 42 and particularly new clause 9 would delete the provisions for lane rental from the Bill, on the basis that the results of the experiment that has been undertaken show that the benefits that the Government think might flow from lane rental do not flow from it. Under the section 74 regime of the 1991 Act, if a road is occupied for longer than is reasonable to carry out necessary works, penalties are imposed. I do not believe that anybody has any quarrel with that regime, because it incorporates an incentive for statutory undertakers and others to carry out road works efficiently and on time. However, instead of that, section 74A introduces a regime whereby people must pay for occupation of the highway, irrespective of whether it is necessary or not. That can happen from day one; in some experimental cases, it has been after three days. There is no dispute that that is an additional charge and, I believe, a severe new stealth tax.

The yield from the tax could be as much as £1 billion a year, which is serious money in anybody's language. It is even greater than the yield from the proposed higher education charges incorporated in the Higher Education Bill that is going through the House at present. The sum of £1 billion is about the same amount of money that Thames Water yesterday announced it would invest over the next five years in addressing the problem of crumbling mains in London, and about the same as that which the Chancellor of the Exchequer takes out of pension funds every year through his pension tax. Only now are people realising the gravity of that stealth tax.

The £1 billion to be taken from the utilities will not be taken from shareholders but from customers, because the regulator has made it clear that he would regard the penalties under the section 74A lane rental regime as unavoidable penalties incurred by the statutory undertakers through no fault of their own, as a direct consequence of having to undertake the work in the first place. In contrast, under section 74, where there is fault on the part of the utilities, they could avoid the charges if they were more efficient. This is a serious issue and, in terms of costs and burdens on the people, it is the biggest in the Bill.

Most fair-minded people must surely accept that occupation of a highway for a reasonable time to carry out work is unavoidable. If we were starting afresh with a new town, it might be possible to use trenchless technology, which is available in quite a lot of countries overseas, but the idea that we should start using trenchless technology to repair the crumbling sewers of London or to deal with the national gas crisis is surely beyond what reasonable men would consider possible.

That is why I am concerned about the proposal to continue the use of lane rental and, as we will see later in the Bill, to expand it into new areas.

The debate gives the Minister a chance to expand on the rather sullen statement included in the written ministerial statement on 20 November, which was slipped out on the morning of the last sitting immediately before prorogation prior to the Queen's Speech and this new Session. You will recall, Miss Begg, that the statement reached the Library at 9.30 am on 20 November and related to the Halcrow report on the experiment that it had been monitoring for lane rental projects in Camden and Middlesbrough, and in London under the auspices of Transport for London. The Minister's statement did not include any reference to his own views on the report. It simply said:

''Regulations under section 74A of the New Road and Street Works Act 1991 allow highway authorities to charge utility companies a daily rate, commonly known as 'lane rental', whenever the latter carry out works in the street. The powers have not, as yet, been activated nationally, but are being tested in pilot schemes in the London Borough of Camden and in Middlesbrough.

The Department for Transport appointed consultants, Halcrow, to monitor the effectiveness of the powers in reducing disruption on the highway.''

That is the essence of the study: if the measures succeed in reducing disruption on the highway, people

will not have much quarrel with it. The Minister went on:

''Halcrow have now produced their first annual report, covering the period March 2002 to February 2003.''—[Official Report, 20 November 2003; Vol. 413, c. WS42.]

That raises a question. The report covers a period up to February 2003, but it did not reach the House of Commons until 20 November 2003. I can only speculate that it did not see the light of day earlier because Government business managers would never have approved the inclusion in the Bill of proposals to extend lane rental if they had known that it was the manifest failure that the report shows it to be. The Minister and his team succeeded in not having to declare that to their colleagues, because the report was not published until 20 November. The study examined whether the lane rental system reduced journey times in Camden or delays in bus journeys in Middlesbrough and found that it did not have the results that people thought it might.

First, it is worth putting into context the amounts being charged under the lane rental system—up to £750 a day in London, £650 a day in Camden, £500 a day in the north-east of England and up to £200 on other routes. The study set out the objectives, one of which is found in Executive Summary ES3.1. It says:

''Halcrow has been asked to monitor the effects of lane rental on disruption levels from street works, and specifically . . .

The extent and duration of street works within each Borough under lane rental . . .

The effect of lane rental on the undertakers' policies and programmes . . .

Additional costs incurred by the undertakers as a result of lane rental including increases from alterations to work programmes''.

Particularly relevant for today's debate is the position of the regulators. That is well summarised in paragraph ES4.2.

As part of its monitoring of the effects of lane rental on the utilities' work programmes, Halcrow held discussions with the Department and the utility regulators Ofwat, Ofgem and Oftel. The regulators indicated that, as a general rule, they would allow the utilities to recover those costs that they can demonstrate as not having been incurred as a result of their inefficiencies. Whereas costs arising from overruns under section 74 of the 1991 Act could be ascribed to inefficiency, lane rental charges are incurred whether the street works are carried out effectively or otherwise. That is why they are a stealth tax.

It is said that the situation for British Telecom is slightly different, because it does not have the power to raise its charges even when faced with unavoidable increases in costs; its costs are capped irrespective, and it is not allowed to pass on the costs arising from lane rental to its customers. The position for BT and Kingston-upon-Hull's four mobile phone operators under the regime laid down by European Union directives is arguably even more parlous than that of the other utilities. It is a serious matter, because charges are passed straight on to customers by all the utilities except British Telecom. BT, however, has to absorb the costs at the expense of other projects.

I referred to the price that has to be paid for each set of works, and it is worth reminding ourselves of how the monthly incidence of such works. In Camden, the report shows that anything between 476 and 673 sets of works are started every month, and that more than half of them are in respect of water. Each month, those works cover anything between 2,907 and 3,192 days, with an average duration of between five and six days. The cost to the water sector in Camden in February 2003, even without having to pay charges for the first three days of works that lasted no longer than that, was more than £46,600.

We are talking about major new burdens for the utilities. Page 12 of the report, on responses to lane rental, showed that it was thought that the utilities might be expected to undertake their works in phases of short duration in order to reduce the likelihood of charges, particularly in Camden, where works of three days or less are not charged. Did that happen? No, it did not. Tables were produced showing little if any change in the phasing of works during the lane rental period, indicating that the utilities had not changed their working practices on street works undertaken in short phases.

Mr Hugh Bayley (York, City of, Labour)

I am most interested in the hon. Gentleman's argument. He talks about the burden placed on public utilities, but does he not recognise that a huge burden will be placed on other businesses if they cannot use the roads efficiently as a result of delays caused by such works? One reason why the utilities have not changed their working practice and completed their works more quickly is because the cost of doing them more quickly would be greater than the charge. The charges may be too low and not, as the hon. Gentleman suggests, too high.

Mr Christopher Chope (Christchurch, Conservative)

I am grateful to the hon. Gentleman for his intervention, because he is probably in line with the prejudices of those who set up the experiment in the first place. I do not know whether he has read the report, but if he has he will have seen that the supposition that he has articulated was not realised in practice. The findings of the consultants show that, contrary to what had been expected, the scope for the utilities to carry out their works more efficiently under section 74A compared with under section 74 was zero. In some cases, there may have been less of an incentive to carry out the works more efficiently than under the existing section 74 regime.

I share the hon. Gentleman's desire to ensure that the occupation of the highway by utilities of all sorts, including the highways authorities' road maintenance departments, is kept to a minimum for all the reasons that he articulates. That burden is the purpose that lies behind section 74, so that penalties flow directly from unreasonably lengthy occupations of the highway.

Mr Hugh Bayley (York, City of, Labour)

I am grateful to the hon. Gentleman for having a genuine debate. However, do we not face a public policy problem in that the beneficiaries of digging a hole in the road are few? The beneficiaries are only the public utilities. However, many people bear the cost. They bear a small cost as each of them has their journey delayed by five or 10 minutes, or even

15 or 20 minutes if there is a serious hold up. If I may use an analogy, it is rather like reforming the common agricultural policy. The number of those who benefit—the farmers—are few but they benefit enormously. The number of people who pay the cost—the average householder who pays about £30 or £40 extra a week in food costs—are many. Do we not have a similar situation here? If the hon. Gentleman does not—

Miss Anne Begg (Aberdeen South, Labour)

Order. The hon. Gentleman is making an intervention rather than a speech.

Mr Christopher Chope (Christchurch, Conservative)

Thank you, Miss Begg. I look forward to hearing the hon. Member for City of York (Hugh Bayley) making his own speech.

The hon. Gentleman is on to an important issue. Under the section 74 regime, where avoidable delay is incurred by the utilities in digging up the road, the costs are borne by businesses, individual householders and motorists who are inconvenienced. The penalty regime that operates under section 74 enables those penalties to be paid to the street works authority as revenue. If that is a local authority, the money will go in to the general coffers from which residents in that area can benefit.

I have no quarrel with section 74 and I am sure that the hon. Gentleman will not either. However, under section 74A the situation is completely different, because the study shows that the work by the utilities has not sped up. They already carry out the work as efficiently as they can because of the pressure of section 74. They have to pay for the mere occupation of the highway for whatever reason. The costs of the occupation of the highway, which could run up to £1 billion a year, will fall on Tom, Dick and Harry, to use the expression that we were using so effectively last week, because of the attitudes of the regulators.

Ironically, in a complete reversal of what the hon. Gentleman has been saying, under section 74A—the section that I hope to remove from the Bill—the burden falls on everybody. The burden of the tax will fall on all the customers of the utilities, ranging from the person who resents the level of water rates or water meter charges to the person who wants to have work carried out on their gas system.

I can illustrate that point. I do not know whether the hon. Gentleman saw the business news on page 42 of The Times of 2 February, but Thames Water has announced that it will pour £1 billion into replacing more than 1,000 miles of crumbling Victorian water mains in central London in the next five years. It says that that is a top priority because in the inner London boroughs, including Islington, Camden, Tower Hamlets, Westminster, Hammersmith and Fulham, and Kensington and Chelsea, there is an urgent need to address the problem of leaking water mains. One third of the water mains network in the capital is more than 150 years old, and more than half is over 100 years old. The regulator controls water charges, and Mr. Sexton, the managing director of Thames Water, is quoted in the report as urging Ministers to consider that the shareholders of his company—now owned by RWE, a German utility giant—should not

have to fund the cost but that the taxpayer should contribute.

Under section 74A, there is no alternative but for the highway to be occupied by the water company to enable the work to be done by its contractors, and for a cost to be imposed on that water company and its contractors of a maximum of £750 per day of occupation of the highway. The hon. Member for City of York said that he thought that that should be increased. However, increasing the cost of occupation of the highway will be an additional burden on Thames Water. It will mean either that it will do less in terms of improving the water infrastructure and addressing the problem of crumbling mains or that it will have to spread the work over a longer period for the same money. What we are considering would prevent that sort of investment by Thames Water being taxed with an additional stealth tax under section 74A. I appreciate the hon. Gentleman's interest, because the matter is critical.

There is a great deal of prejudice against utility companies—whenever they dig up the road it is thought to be unnecessary. However, if we are to improve the infrastructure of our towns and cities, the roads have to be dug up.

Mr Hugh Bayley (York, City of, Labour)

The hon. Gentleman talks about the cost that falls on the utility companies for occupation of the road. That is a real cost. However, he ignores entirely the cost that falls on the public—Tom, Dick and Harry, to use his phrase—if roads are not free to traffic and their journeys are delayed or, if they are cyclists, made more dangerous by such works. Why does he ignore that cost, which falls on the whole of the public?

Mr Christopher Chope (Christchurch, Conservative)

I am not avoiding that cost, although it is probable that fewer people use the roads in their locality than will benefit from improvements in the infrastructure—sewerage that works, mains electricity that does not fail and gas that does not leak and cause explosions and danger to life. The fundamental issue is whether it is necessary to dig up the road in the first place. If it is, then it is important that that digging is properly co-ordinated, that there is proper consultation about when it will take place and that it is done as swiftly and efficiently as possible.

There is no conflict between what the hon. Gentleman says and what I say. Under the section 74 regime, penalties apply when there is a failure on the part of the utility or its contractor to carry out the work efficiently. Under section 74A, the utility cannot avoid the charge even when the work that is being carried out is essential. That is the issue. The money from that stealth tax will go into the pot of local authorities. It is seen as additional income for local authorities, but at what price? This is basically an additional churning in our economy and additional regulation, bringing disproportionate burdens to bear on particular categories of business and incurring an enormous abortive administrative cost. That all comes out in the report, which I believe the Minister would have preferred us not to see but which is in the pubic arena.

I do not want to take too long, but it is worth reminding the Committee about the effects of what happened in Camden. Some people thought that, because the streets in Camden were separated into premium streets and non-premium streets, the utilities would tend to concentrate their work on the non-premium streets and work even more efficiently on the premium streets where the lane rental charges were higher. Although that was expected, paragraph ES8 states:

''In Camden there has been a decrease in numbers of works in the first period of lane rental over section 74 but the number of phases increases in the second period. In Middlesbrough there appears to have been an overall increase in the number of phases of works in three of the four sections under lane rental. The conclusion is that there has been little change in activity on premium streets compared with section 74.''

Again, what one might have thought would be the consequence turned out not to be established in practice. That is why it was important to have the experiment, which is due to conclude at the end of March. It shows that the conclusions were different from the suppositions made in advance. In the light of the first annual report on the monitoring of lane rental projects, I challenge the Minister to justify retaining the lane rental regime, let alone extending it to other local authority areas and to other modes of activity, as the clause proposes.

Finally, the study's conclusions contain several recommendations. As I said, I expected the Minister to say what he thought about the report's recommendations when he presented it to the House of Commons some eight and a half months after the study period, but he did not. I would be interested to hear whether he has any comment to make about them today.

The most important conclusion is that lane rental is less effective than section 74, and is certainly no more beneficial. Paragraph 5.6.1 on page 53 states:

''The lane rental schemes as they are currently formulated do not identify inefficiencies on the part of the utilities in their occupation of the highway. The Regulators—with the exception of Oftel who are bound by European Directives—have agreed that charges levied under the lane rental schemes can be passed on to the customers of the utilities.''

Surely the case is made for developing section 74, which was introduced into regulations that took effect in, I believe, 2001, and which remains relatively untried. Why cannot we develop section 74 with its sophisticated system of checks and balances and incentives for efficiency, rather than introducing section 74A, which is a thinly disguised stealth tax that could end up burdening all customers of all the utilities with a cost each year of up to £1 billion?

Mr Tony McNulty (Parliamentary Under-Secretary, Department for Transport; Harrow East, Labour)

I congratulate the hon. Member for Christchurch on getting such a debate at this late stage, not least because the clause says nothing about the principle behind section 74A. It merely refers to increasing some of the fines. To get a debate by seeking to repeal section 74A is clever. Indeed, it has been a useful debate. However, I need to make a couple of points.

The charge that I did not want the report to be seen by anyone is also clever—it would have been terribly sophisticated, even for me, to try to ensure that no one

ever saw it by putting it in the Library. After all, no one ever looks there for such publications.

Let us be clear: it is an interim report, compiled only halfway through a two-year pilot scheme. It is not, as could be construed from what the hon. Gentleman said, the definitive report in all its glory. As he suggested, the pilots finish in April, and Halcrow will publish the complete report in the summer. The hon. Gentleman suggests that one year is exactly the same as another in Camden or Middlesbrough—or anywhere else, for that matter—and that that lack of change will be reflected in the report. However, to suggest, as did he did, that we need answers, and we need them now, only eight and a half months after the study, is slightly misleading. The end of the study is a month or so away yet. The report will be published for the whole period.

The hon. Gentleman was right to say that amendment No. 51 followed from the previous group of amendments on the increased level of fines. We have been there; we had that debate on the previous clause.

New clause 9 and amendment No. 52 between them would repeal the lane rental powers of section 74A of the 1991 Act. The hon. Gentleman was right to say that we are almost at the conclusion of the pilots in Middlesbrough and Camden, which have been undertaken under the section 74A powers. They are due to end on 1 April, and Halcrow will report on the full impact of the full two-year pilots in the summer.

One point that vexes some is why we need lane rental powers and permit schemes. Utilities and others are naturally keen to know how lane rental, if it is to be extended, will fit in with the operation of the permit schemes and the parallel powers to charge undertakers whose work overruns. I agree that it is impossible to reach a decision on the future of lane rentals in isolation, given that we will be asking the working party, yet to be set up and on which utilities and local authorities will be represented, to consider how permit schemes should operate and to examine the relationship between the different powers. We will consider the working party's findings and those of the full and final Halcrow report when deciding the future of lane rental.

The notion that the cost will be billions of pounds is not rooted in the regulatory impact assessment, or anywhere else; it is a figure plucked out of the sky by the hon. Member for Christchurch—perhaps with the help of others. I know of no other explanation.

Mr Christopher Chope (Christchurch, Conservative)

If £1 billion is wrong, what is the Minister's estimate of the potential cost to the utilities and their customers of lane rental?

Mr Tony McNulty (Parliamentary Under-Secretary, Department for Transport; Harrow East, Labour)

Given that we are not imposing a national scheme, and that section 74A may or may not be rolled out, depending on the full import of the Halcrow report and how it relates to permit schemes and overcharging, I have no idea at this stage what the cost would be. It will not help the Committee if I pluck a figure out of the sky to scare people because it fits in nicely with some perverse libertarian view on stealth

tax, not least because—unless my memory fails me—in the 2001 general election campaign, the Conservative party line was to be in favour of what is proposed. One would not know that from what we have heard thus far, but time moves on. Perhaps the Conservatives have had an interim report on whether they should now be in favour, and have decided that this far into the Parliament they should not be. One feels that it is too much to ask for consistency, even from the hon. Member for Christchurch.

Mr Christopher Chope (Christchurch, Conservative)

Is the hon. Gentleman referring to the statement made by Lord Peyton of Yeovil in which my noble friend, a distinguished former Minister of Transport, argued in favour of lane rental in principle? I am sure that, like everybody else, he would be interested to see the outcome in practice. The burden of my argument is that, in practice, lane rental is proving to be expensive and counter-productive.

Mr Tony McNulty (Parliamentary Under-Secretary, Department for Transport; Harrow East, Labour)

In practice based on what—the evidence accrued from one year of a two-year pilot? I am not referring to Lord Peyton. I think that I am referring—I shall double-check—to the less-than-noble, in the strictest parliamentary sense and no other, hon. Member for North Essex (Mr. Jenkin). I believe that he was a spokesman of some sort during the Opposition's glorious ''victory'' in 2001.

Of course, we should consider lane rental in the context of the other powers. We have committed ourselves to a working party not simply to take account of how charging for overstay and permits and lane rental will fit together, but to take full cognizance of the final report from Halcrow. As the hon. Gentleman says, it is important to pilot such things. In that context, we will determine whether we should proceed with the powers in section 74A. That will be done clearly and, as I have said in relation to other items in the Bill, in the context of wider discussions, consultation and a full exposition of the options with the local authorities and utilities that will be on the working group and continuing to look into these matters. They will be the people charged with ensuring that such things are executed efficiently, and it will be for them to determine, once we have set the legislative framework, how to proceed or whether to proceed at all.

I am happy for the hon. Gentleman in that he has introduced the new clause, but it is not appropriate at this stage. We need to look further at whether 74A powers are appropriate or otherwise, and we shall do that in full co-operation with the relevant parties. In that context, I consider that the amendments are otiose to say the least, so I urge the hon. Gentleman—I am sure that he will not—to withdraw them.

Mr Christopher Chope (Christchurch, Conservative)

That is rather a disappointing response.

Mr Tony McNulty (Parliamentary Under-Secretary, Department for Transport; Harrow East, Labour)

Good.

Mr Christopher Chope (Christchurch, Conservative)

The Minister did not explain why the interim report, as he calls it, of Halcrow was not placed in the Library until 20 November. However, he went on to say that the full report, based on evidence up until the completion of the project next month, will be available in the summer—perhaps that should be in

inverted commas. If the full report can be ready by the summer of 2004, can he enlighten us as to how it will be made available to the House of Commons, when it is likely to be presented and what opportunity there will be to discuss its conclusions?

As the Minister knows, the Transport Committee is concerned about section 74A. It has recommended that the Department for Transport should not seek to extend the pilot allowing local authorities to charge utilities a daily rate from the start of work, regardless of whether they overrun. Has the Minister any specific proposals for the involvement of the Select Committee in the conclusions that flow from the Halcrow report? A host of regulations can be introduced under part 4. He keeps saying that the matter will be dealt with quietly between the Government, the Department, the utilities and the local authorities. What role is there for Parliament and for the Transport Committee under its distinguished and knowledgeable Chairman, the hon. Member for Crewe and Nantwich (Mrs. Dunwoody)? Can the Minister give any guarantees, and indicate his thinking in relation to the role of the Select Committee in the further scrutiny of the contentious issue of lane rental charges, if my amendment is not accepted?

This is a significant issue and if I have not been able to impress anything else on the Committee this morning, I hope that it has understood that we are talking about hundreds of millions of pounds of additional burden on industry. The Minister denies that it is up to £1 billion, but that figure is based on an extrapolation of the level of charges already being made in Camden and Middlesbrough, the effect of which will be multiplied by the increase in activity throughout the country that will take place in the coming years.

That will bear on the gas mains replacement programme; the Minister has not stressed that it is an additional burden on individual utilities. The Select Committee drew attention to the programme and said that the programme should have taken greater account of the potential for disruption to the highway. In the end, however, the programme is driven by the need for safety and also by the need to ensure the coherent replacement of existing mains, rather than just to minimise traffic congestion, therefore taking into account other factors. It is clear that under the lane rental system there will be an additional on-cost on the gas mains replacement programme that will have to be paid for by gas customers.

The Minister left us in an unsatisfactory position because he said that the experiment is still continuing. It will end within a month, but he has not given us the latest information; he does not assert that the conclusions of the latter part of the survey are any different from those of the first year of operation. If they were any different, he would have been quick to stress the interim findings. He is unable to be precise about when the Halcrow report will finally be produced, and most seriously of all, he cannot give us an undertaking that its conclusions will be complied with. I suspect that there is a big conflict between the local authorities, pressurising the Minister and his colleagues for additional sources of income on one hand, and a more convenient source of income from

people who dig holes in the road. That is why the proposal is a stealth tax.

As the hon. Member for City of York said, there is a great deal of prejudice against those who dig holes in the road, without much understanding that they have to do so to ensure that our infrastructure works. As a result of that prejudice, they are an ideal target for imposing additional taxes, which have to be passed on to their customers indirectly. It means that the Government can wring their hands and say, ''It's nothing to do with us, guv. Isn't it awful?'', when the cost of the average utility bill will have to increase by what some estimate to be £4 a week.

As a direct result of the proposal, each householder will have to pay an extra £4 a week for the utilities that they use, and, again, the Government will be able to say that it is nothing to do with them. But that is exactly what a good stealth tax is: it is the reverse of traceable, which the Government think is so important in the food chain. That is why people have realised only now, five years later, that the fact that their pensions are worth a lot less than they had expected is due to Chancellor's consistent stealth taxes.

I predict that, unless the Minister gives a specific undertaking, the Government will be unable to resist the pressure to accede to bidding by local authorities to impose the stealth tax in question on the utilities, irrespective of the conclusions of the Halcrow report. I predict that what we are discussing will come to pass, that we shall face the £1 billion a year stealth tax—otherwise known as lane rental—and that our economy will lose competitiveness as a result, leaving the customers and users of our utilities worse off.

Mr Greg Knight (East Yorkshire, Conservative)

The McNulty tax.

Mr Christopher Chope (Christchurch, Conservative)

My right hon. Friend is right—there is a certain ring to the ''McNulty tax''.

As the Minister said, the main part of this debate concerns new clause 9, which I intend to press to a Division, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mr Greg Knight (East Yorkshire, Conservative)

I rise to ask a general question that relates to road works in the widest sense. If the Minister cannot respond immediately, I should grateful for a reply before the Committee finishes its deliberations. I have always been curious about my question, but I am not sure what the answer is, not having worked for a utility company or been an engineer. Is it the case that in all new developments the utility services are not now placed under the carriageway? If not, why not? If so, when was that requirement introduced, and is it mandatory in all developments? Does the Minister share my view that if that requirement is not mandatory, it should be? It is surely cheaper and far less disruptive for the utility companies to do maintenance work by digging up someone's front garden than by digging up the carriageway of a road. In addition, if those working for the utilities do not have vehicles above them,

damage is less likely to be caused. My question is a genuine question. I do not seek to make any party political point; I just wondered what the position was.

Mr Tony McNulty (Parliamentary Under-Secretary, Department for Transport; Harrow East, Labour)

That is an entirely fair point. As Minister with responsibility for planning last year and as Under-Secretary of State for Transport this year, I confess that the answer is not deep in the bowels of my head—if that is not overly mixing metaphors. I undertake to write to the right hon. Gentleman before the Committee has finished its proceedings to let him know the answer.

Question put, That the clause stand part of the Bill:—

The Committee divided: Ayes 8, Noes 4.