asked Her Majesty's Government:

What action they are taking to respond to the findings of the Nichols report, Review of Highways Agency's Major Roads Programme.

My Lords, in a Statement made in the other place on 14 March 2007, the Government fully accepted the recommendations of the Nichols review. A copy of that Statement was placed in the Library of the House. The Department for Transport and the Highways Agency have now set up a dedicated team to implement the recommendations as a priority.

My Lords, I am grateful to my noble friend for that Answer. He will be aware that the Nichols report states that the cost estimates of Highways Agency schemes have gone up by 25 per cent in 18 months. Does he agree that that is a worse escalation than took place in the worst days of Railtrack, which caused the Government of the day to put a moratorium on investment? Would my noble friend consider putting a moratorium on road investment until the Nichols team has got going and satisfied him that the costs are under control?

My Lords, we are extremely grateful to Mr Nichols for his work. There were problems in early scheme development, which is why the review was set up. We now have a team to deliver the Nichols review recommendations as a priority, and we anticipate that the majority of them will be implemented by the end of the financial year. For those reasons, it would be very ill-advised to order a moratorium on spending.

My Lords, following on from the question put by the noble Lord, Lord Berkeley, I too would not want to see a moratorium on investment in road improvements. I am concerned that, because of the tremendous escalation in costs revealed by Nichols, road schemes might not be started or will be cancelled. Can the Minister assure us that planned road schemes will continue according to the current programme?

My Lords, that is indeed the case. Since 2001, 45 major schemes have been completed, 21 schemes are under construction and the Highways Agency's current programme comprises 67 schemes each worth over £5 million. We are cracking on with important road improvements.

My Lords, has not the Nichols report been supplemented by a further report from the National Audit Office showing that the costs of a number of road schemes are now completely out of control? The worst example is probably the A3 improvement at Hindhead, which is now running at 247 per cent over the original estimate. Bearing in mind that my noble friend's department has cancelled very good tramway and light-rail schemes in places such as Leeds, Liverpool and south Hampshire, is it not time that we had a proper value-for-money study of road schemes against public transport?

My Lords, the department is extremely conscious of its obligation to secure value for money. For both road and public transport schemes, we require that a cost increase be subject to a reappraisal to ensure that the scheme still offers value for money at the higher cost. Many road schemes retain high value for money despite cost increases. Tram schemes are in much the same position where lower cost alternatives are available.

My Lords, the Government's method for reducing the demand for roads is by introducing road pricing. Where are they on their plans to trial road pricing? Under any such trials, how will they ensure that the personal privacy of drivers, in terms of where they have been driving, is protected?

My Lords, I am not able to supply the detail for which the noble Lord asks today. We are looking at road pricing; it has been a constant theme in policy development in recent years. Like everyone else, we value and respect people's personal privacy.

My Lords, are comparisons being made between the cost-effectiveness of further investment in widening roads and that of further investment in the railways? On the east coast, a great deal has been invested in roads to help in transporting containers from east-coast ports to the north and so on, but we are not investing in railways, which could take a lot of that heavy transport. Is the cost-effectiveness of investment in roads being compared to that of rail investment within a single budget?

My Lords, I do not like to say it, but that is a simplistic way of looking at things. We must look at each scheme to ensure that it secures value for money. I understand the road-versus-rail argument, but in a complex modern economy we require both. That is why we invest heavily in rail and road networks.

My Lords, are the Government aware that the Luxembourg and French Governments have just announced a new freight line from Perpignan to Luxembourg which will also take juggernaut lorries? Why do we not do that here?

My Lords, that interesting development is to be applauded. I am sure that we would all like to see more freight going on to the railway network, and we have ensured that since we have been in government. In the past 10 years—my noble friend Lord Berkeley can probably confirm the figure—freight on rail has increased by some 60 per cent.

My Lords, the Minister said that the Government would look at road pricing. Will he give an assurance that they will look at it and then discard it?

My Lords, the noble Earl is entitled to his view, but I always think it is unwise to jump to early conclusions.

My Lords, perhaps I can help my noble friend by saying that there has been a 60 per cent increase in rail freight. I declare an interest as chairman of the Rail Freight Group. In response to my noble friend Lord Faulkner's question about the Hindhead bypass cost escalation, the Minister said that any project in which there had been a serious cost escalation would be subject to a review. Has there been a recent review of that project to determine whether it still offers value for money?

My Lords, under the general rubric I issued on that point earlier, it will have been subject to a review. I shall check that with the department and inform my noble friend in writing.