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– in the House of Lords at 7:38 pm on 22nd October 2008.

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Photo of Lord Bradshaw Lord Bradshaw Spokesperson in the Lords, Transport 7:38 pm, 22nd October 2008

asked Her Majesty's Government what proposals they have to ensure that the New Approach to Appraisal for major highway projects is in line with other aspects of government policy.

My Lords, I welcome the noble Lord, Lord Adonis, to, I think, his first transport debate in your Lordships' House and I hope that the great successes that he enjoyed in education will now be deployed in this field.

The new approach to transport appraisal and the proposed refresh are based on an uncertain process, which is barely understood by professionals, let alone the public at large. It is almost academic arrogance that allows taxpayers' money to be spent through a process that few in public life, let alone the general public, understand.

On Monday, in a Statement to Parliament, the Prime Minister said:

"Faced with historically high and volatile oil prices, it is more essential than ever before that we act to end our dependency on oil".—[Hansard, Commons, 20/10/08; col. 23.]

My first question to the Minister is: why do we not give a high priority to transport measures which reduce the emissions of greenhouse gases? Can any scheme which includes any net increases in carbon emissions pass any test? Should it not fall at that hurdle, particularly in light of the Prime Minister's reiteration of the message of the Stern report, which showed that weak or delayed action will cost us all more in the years to come, financially and economically? I have read what is said in the refresh and other documents about the new approach to traffic appraisal, particularly about the shadow price of carbon. It seems to underestimate the urgency of the situation.

Is it possible to evaluate in monetary terms issues such as landscape, noise, habitat, severance or road accidents, particularly using convoluted processes, such as revealed preference techniques which involve people answering hypothetical questions about the values that they ascribe to such qualities? The Leitch committee, which inquired into the appraisal of trunk road schemes in the 1970s, came to the conclusion that it was very difficult to make judgments about such qualities, as I have mentioned, and that they were better assessed subjectively and evaluated with common sense, using a decision matrix.

Of course, there are perversities in the present appraisal system, such as counting the savings in fuel used in any scheme as a disbenefit because the Treasury loses tax revenues and VAT as a result of fuel economy. Those perversities need to be eliminated as they discriminate against public transport improvements or even such things as car sharing. Can the Minister promise a change in that ridiculous state of affairs? Does he realise that if a road scheme causes extra fuel to be burnt because of higher speeds, for each extra litre burnt, the scheme is credited with 55p? It gets money when more fuel is burnt.

How robust is time used in the appraisal as a measure of value? I suggest that small time savings are of no value unless they are predictable. Getting home three minutes earlier or reaching the office three minutes earlier is of much less importance than achieving a reliable journey. Even more questionable is the aggregation of small time savings to form a large number which can be advanced as a justification for spending money. If 100,000 motorists a day save 30 seconds—which they can neither predict nor rely on—is it reasonable to give that a high-money value and does such a practice drive out of consideration important strategic links such as the A1 in Northumberland, about which my noble friend Lady Maddock will speak?

Next, there is the question of suppressed demand. For example, you add a fourth lane to a motorway at great expense on the basis of masses of small time savings and find that the space you have created fills up within two or three years and then the financial justification which has been used for the scheme no longer exists. That is made even more acute in a situation where the market—the road space—has no pricing signals which could be used to regulate demand.

I am also interested in why the same methods of appraisal when applied to railways can, after all the money that has been spent on econometric analysis, be so wrong. My noble friend Lord Mar and Kellie will raise some recent examples where forecasts of the business cases for extension of the railway have been very wrong indeed. They use the same econometric methods as those applied to road schemes.

As well as seeking fuel economy from investment—it is difficult to see how that can be achieved without trunk-road pricing—to what extent does the evaluation of transport schemes cater for rising energy costs and possible energy shortages? We might see railway electrification, tramway schemes and facilities to recharge electric cars at major car parks and interchanges as being strategically desirable or even vital at an uncertain future date. That is not likely to be demonstrated by an econometric analysis and huge and very expensive models of trip matrices, which, by their very nature, are obsessed with fine detail but ignore the big strategic issues; for example, whether we need a trunk road along the east coast between England and Scotland. Of course, we will not get hundreds of thousands of people using that, so it scores very low in any assessment.

I shall give one or two examples from my own experience of the perversities of the present system. The Minister may recognise these places. Marcham, a village south of Oxford, wanted a bypass. A bypass was designed in a simple loop around the village. The villagers rose up and said, "It will be terribly noisy; it's running past our windows; can't it be pushed further out?". So a second scheme was produced with a road going in a larger arc, which would mean that those travelling round the larger arc would spend more time on the road and, therefore, the scheme was worse and would not be passed. The villagers then asked for a roundabout so that they could get to and from the bypass, but that was turned down because a roundabout would slow down the traffic coming round the bypass and so extend journey times. We are talking about a few seconds in each case, but because of the large number of vehicles using that road, you get the ridiculous result and, of course, Marcham has no bypass.

Another scheme in which I was involved was the Oxford rapid transit express. We had a peripheral park and ride and a very fast guided bus-way into the centre of Oxford. Many drivers would use the park and ride for altruistic reasons, but immediately a driver parks he suffers an interchange penalty on the new approach to traffic appraisal and when he becomes a bus passenger, that same person loses value considerably. If someone drives by car from the park and ride to the centre of Oxford, he is regarded as a thrusting businessman and is given a high value of time, but if he gets on a bus he is regarded as an old lady doing some knitting and gets a very low time value. The situation is so perverse and so wrong. The last stupidity is that because the car driver is not driving into the centre of the city, the Treasury loses tax revenue and VED and, therefore, that is a disbenefit to the scheme as well.

The noble Lord, Lord Berkeley, will no doubt draw attention to the ways in which freight conveyed by rail is treated less than equitably under the system. I have raised many fundamental, philosophical issues, but I was trained as a political economist, not an econometrician. We were taught to use our judgment and common sense and not to rely on theory grounded in an uncertain set of data. I do not expect a detailed response from the Minister tonight, but I hope that he will undertake to consider the issues I have raised before the refresh is concluded. I sincerely believe that there is much money to be saved in his department in regard to consultants and academics, who provide the means of making the system work. I have a feeling that the whole edifice is supported by vested interests and is used by Government to put off decision-making and to ration investment. I hope that next year, in publishing the White Paper Towards a Sustainable Transport System, he will reflect on what I have said.

Photo of Lord Berkeley Lord Berkeley Labour 7:48 pm, 22nd October 2008

My Lords, I am grateful to the noble Lord, Lord Bradshaw, for initiating this debate. It is a very important subject. As he said, it affects virtually every type of transport, or it should do. I shall discuss rail and rail freight. I declare an interest as chairman of the Rail Freight Group. I also want to discuss passengers and walking and cycling. I am sure that the Government's TASTS document will be very welcome when it is published next year. I understand that it may come out for consultation soon, so perhaps my noble friend will give some indication of when we can expect to see it. It sounds as if it will be really important, but it will rely on NATA data, which have to have maximum credibility. I have some worries on that score. The refresh is a great improvement on what has happened before, but there are still one or two concerns. As we all know, if you put rubbish in, you get rubbish out. I am not saying that it is rubbish, but one has to be careful or one ends up with unintended consequences.

The first of the issues that worry me is how climate change is treated. The Stern report clearly set out the need for urgent action to reduce the carbon limits. Unlike other aspects of the current procedure, it is hard to see how carbon reduction can be offset by other costs and benefits because the global atmosphere is not going to cool as a response to faster journey times. The cost of carbon used in the appraisals must also reflect the necessity for an absolute reduction, whatever the traded price might be.

The noble Lord, Lord Bradshaw, mentioned taxation, and I shall give an example of the perverse incentives in the rail freight industry. At the moment, schemes that reduce road congestion must account for lost vehicle excise duty and fuel tax. The weighted average value of the sensitive lorry mile—SLM—calculated by the Strategic Rail Authority, which is still used and which reflects the external economic benefits of the use to rail, was 65.3 pence after taking into account a deduction of 28.9 per cent to reflect the loss to the Treasury of fuel tax and VED. That is a 44 per cent reduction in the SLM value and means that many schemes that should get approval do not. It is wrong that the VED or fuel duty that the Treasury has lost because the truck has not run penalises rail freight. Rail freight is part of the Government's policy and it is much more environmentally friendly. This issue needs to be addressed as we go forward with the NATA scheme.

The noble Lord, Lord Bradshaw, also mentioned passenger freight and the value of people. As a fairly frequent cyclist, I am irritated by this. If I sat in a car with a chauffeur, I might be worth £100 a minute, but if I am pedalling my bicycle, I am probably worth £2 a minute because I am not considered important. I am clearly not going anywhere and I am certainly not of any use to anybody else. That is slightly insulting, not just to me but to every other cyclist. The same applies to walking. You can work and you can think when you are walking or bicycling. Some people occasionally use a mobile, which is still not illegal when cycling, although it is rather stupid sometimes. There is a serious problem there.

There is also the problem of reliability and time saving. An example from the freight industry is that it needs not an absolute time saving but absolute certainty of arrival. At the moment, time saving and reliability are treated in the same way, which is wrong. The key is to have certainty of arrival rather than it flexing every time. That should be reflected in the NATA schemes.

The problem with walking and cycling is that they are not given sufficient attention, mainly because there are not enough data on who walks, how fast they go and where and how that fits into an overall journey time. Walking is just as important as going on a train or an aeroplane—no doubt the noble Lord, Lord Hanningfield, will talk about that with his interest in aeroplanes or the lack of them. I have been at a conference on cycling today. How do we take into account that obesity accounts for 18 million sick days in this country? Physical inactivity costs the NHS £10.9 billion a year. Air pollution costs it £20 billion a year. The benefits generated are 3.2 times the cost. How does NATA take that into account?

Finally, I return to roads and railways. The A14 goes from Felixstowe to the Midlands. Twenty-one miles of it are going to be upgraded at the cost of £1.2 billion. Were alternatives considered? The railway goes beside it, and Hutchison Port Holdings has agreed to pay for a large part of the upgrade. That should be taken into account, and I do not believe that it is at the moment. I will be interested to hear what the Minister has to say about the points that I have raised.

Photo of Baroness Maddock Baroness Maddock Liberal Democrat 7:56 pm, 22nd October 2008

My Lords, I thank my noble friend Lord Bradshaw for securing this short debate on major highways projects. I am particularly pleased because whether the Al between Newcastle and Edinburgh is of strategic national importance is currently a hot topic in Northumberland. I suspect that the noble Lord, Lord Walton of Detchant, will add to what I have to say. I declare an interest as a borough councillor in Berwick-upon-Tweed and as the wife of the local MP. The problems related to the nature of the A1—dangerous overtaking, slow-moving trunks of traffic and uncertain journey times—are regularly raised with us in our surgeries and are regularly featured in the local and regional press.

Under successive Governments, money to enable the road to be dualled has not been forthcoming, so large stretches of the A1 between Newcastle and Edinburgh are dangerous single carriageway. In a general election many years ago, a Conservative Minister promised some dualling, but it was not forthcoming. The road from Morpeth to Felton and almost the whole way from Alnwick to Berwick-upon-Tweed, which is about 30 miles, is single carriageway.

In 2005, the classification of the road was downgraded from of strategic national importance to of regional importance. That meant that the costs of any upgrade would have to come from the regional budget. That budget is not really large enough to cover such a large project and other regional needs. At the time of the change—and I have never got to the bottom of this—there was confusion about who was responsible for the money for dualling the A1, and everybody passed the buck. The result was that schemes that had been worked up in those two areas were dropped. The sum of £4.26 million had been spent on preparatory work on the Morpeth to Felton stretch and £1.23 million had been spent on the Adderstone to Belford section, and that scheme was virtually ready to go. The planning and everything had been done. Unfortunately, a head-on collision between a lorry and a car on the dangerous single carriageway at Adderstone recently resulted in the death of a local man.

The downgrading of the classification of this road is astonishing when it is compared with other similar links. For example, the route between Cardiff and Bristol is classed as strategically nationally important. It goes between Wales and England, and I am talking about north-east England and Edinburgh.

The economic divide between the north-east of England and the south of England continues to widen. There is a large gap between incomes in the north-east and Scotland. Income per person north of the border was 95 per cent of the national average in 2006. In the north-east, it was only 81 per cent. Berwick borough has almost the lowest average wage in England. People and politicians across the area believe that it is now imperative that the basic infrastructure is put into place to try to address this divide.

The weakness of our infrastructure is stark. This is particularly true of motorway projects that are among the EU's motorway transport policy priorities. Some of the projects are considered essential for economic development. These include Larne to Belfast in Northern Ireland through to Dublin and Cork in Eire; La Coruña in northern Spain to Porto in Portugal, on to Lisbon and through to Seville in Spain; Hamburg in Germany through to Copenhagen in Denmark and on to Malmö in Sweden; and the port of Felixstowe on the east coast of England through to Stranraer in Scotland.

We have good east and west rail routes to Scotland but only one good road route—the west coast—despite the fact that more freight still goes by road in the UK than by rail. In the north-east of England, we have two poor roads: the A1, which I have described, and the A679, the single carriageway that goes through many small Northumberland villages and takes many of the freight vehicles because, quite frankly, the A1 is so bad and they make a choice about which will be the slowest road. We in Northumberland are in no doubt that, for the economic development of the north-east of England, it is imperative that we have infrastructure of a high standard linking the city regions of Leeds, the Tees valley, Tyne and Wear and Edinburgh.

I understand that proposals for regional funding allocations are about to be considered, and the status of the Al should be revisited as part of this process. There is huge support from businesses and everyone in the north-east for the A1 to be considered a route of strategic national importance throughout its length. Significant investment is needed to bring it up to a good standard. I urge the Minister to look urgently into this matter. It would be even better if he drove up this section of the A1 on a Friday at teatime so that he could see for himself just how poor this important main route is. Foreign tourists cannot believe that this is a main road. Lastly, I urge him to urge the Treasury to make this part of the investment plans that aim to address the present financial crisis.

Photo of Lord Walton of Detchant Lord Walton of Detchant Crossbench 8:02 pm, 22nd October 2008

My Lords, I, too, thank the noble Lord, Lord Bradshaw, for initiating this debate. I am also grateful to the noble Baroness, Lady Maddock, for highlighting the problems of the A1 in north Northumberland.

Thirteen years ago in your Lordships' House, I tabled a Question about the A1 in north Northumberland, pointing out the very high incidence of accidents that in many cases cause death or disability to those involved. I strongly urged the Government to look at the dualling of the whole road between Newcastle and Edinburgh, and the late Lord Jenkins of Hillhead gave me powerful support by saying that it was disgraceful that the principal trunk road joining London and Edinburgh, the two major capitals of the United Kingdom, was still not dualled in north Northumberland and the south of Scotland. The noble Earl, Lord Caithness, who was briefly in the Chamber a few minutes ago, was the then Minister on the Conservative Front Bench. His answer was that six schemes were under serious consideration and he gave an assurance that the Government at the time were committed to dualling the A1 throughout its length.

I have raised this issue on many occasions in the past few years. As the noble Baroness, Lady Maddock, has said, two major schemes came very close to fruition. One was a scheme to tackle the dangerous Mousen bends, the part of the A1 that winds narrowly through part of north Northumberland for about four miles and which locals call the little north lane. It is a dangerous hazard and, as the noble Baroness said, there was an appalling crash recently that closed the road for many hours. A local man was killed, other members of his family in the car were seriously injured and the driver of the foreign lorry involved has been charged with causing death by dangerous driving.

There was full local consultation in 2004. All local people had the opportunity to comment on that scheme, just as they had on the plan for dualling the road between Morpeth and Felton. Again, a local plan was agreed at great expense and a new route was chosen. We were assured by the Government of the time that the start date for the Mousen bends scheme would be 2009, and the start date for dualling the road between Morpeth and Felton would undoubtedly be 2010. In 2005, for reasons that were very obscure and based on inaccurate statistics that suggested that the traffic did not justify this dualling—the evidence was in no way convincing, certainly not to the locals who see the lines of lorries and heavy vehicles that often hold up the traffic and which people often try desperately to pass at great risk, as well as the farm tractors, because it is a very busy area for farming, which sometimes result in a three or four-mile queue of traffic behind them before people can get past—the trunk road between London and Edinburgh road was downgraded from a route of national importance. As the noble Baroness said, we have now been told that the dangerous Mousen bends will not be dualled until 2019. This is disgraceful.

As the noble Baroness also said, the local campaign now involves not only local authorities in Northumberland, such as Northumberland County Council and Berwick-upon-Tweed Borough Council, but the Scottish Parliament, which has become part of the joint campaign covering not only Northumberland but the south of Scotland. It is absolutely crucial that the Government seriously reappraise the matter and adopt a new approach. This road should be regarded again as a road of strategic national importance and these schemes should at the very least be re-established for an early start because the agreement is there and the plans are there, and it is disgraceful that the plans and schemes have been postponed. I very much hope that the Minister will give us some assurance.

Just a few weeks ago, there was a Question in this House about the future of Berwick-upon-Tweed and whether it should remain part of England or become part of Scotland. I asked about the importance of this English town and dualling the road. The Minister who replied said that the dualling should be given high priority, and I hope that the noble Lord, Lord Adonis, will be able to reassure us.

Photo of The Earl of Mar and Kellie The Earl of Mar and Kellie Spokesperson in the Lords, Transport 8:09 pm, 22nd October 2008

My Lords, it is not just Berwick-upon-Tweed that should secede to Scotland, but probably the whole of the north-east; I say that with tongue in cheek. My noble friend Lord Bradshaw has given us a fine exposé of the new system of evaluating transport projects. I fully accept that we need a scientific and consistent system for assessing the many necessary improvement schemes, and what I believe we should be unhappy about is this: the new system must be used as a guide, but not to make the decision. That must be made by Ministers based on common sense and good judgment. A NATA assessment must not be a secret or black box process. People must be allowed to see the methodology used and to debate their scheme's performance against the criteria. I hope that the Minister will be able to assure us that NATA will be used only as a guide and comparator.

I am unhappy so far with NATA's ability to evaluate projects in less populated areas, as we have just heard. If there is no rural or regional filter, the south-east of England is likely to score very well indeed. I am also unhappy about the issue of the reduction in road fuel VED being regarded as a financial hazard. Surely this must be seen as a positive even if HMRC receives slightly less.

The noble Lord, Lord Berkeley, reminded us that NATA is not just about roads, but about everything else. I much appreciated what he had to say about walking and cycling as ways to deal with obesity and sickness. My noble friend Lady Maddock started the assault on the Treasury with a detailed and interesting history of the A1, explaining why it has more or less been detrunked and why both it and the road through Coldstream are suffering. The noble Lord, Lord Walton, also took us to that area and reminded us that Questions asked 13 years ago can still be asked today. The A1 is a road between two capital cities, and it is ironic that what I regard as the road to the south involves numbers such as 74 and 6. The problem with the A1 is that it does not have the heavy flow of cars which generate the time savings and money to pay for investment. This has to be a strategic decision and not just a scientific one.

While we are thinking about the evaluation of transport projects, I am struck by the unreliable survey material used given that it is based on questionnaires that are often seven or eight years old before construction begins. Although I have probably said it before, in Alloa, three times more people are travelling by train than said in a questionnaire they would. In Ebbw Vale, twice as many people are using trains than was forecast, and growth has probably been constrained by a lack of suitable rolling stock. I hope that Ministers are heartened by such enthusiastic take-up and will come to realise that a disappointing survey made in advance does not provide reliable data on which to decide whether to press ahead. The take-up of train travel by young mums in Alloa, who can get their buggies with their children still in them on to the train without having to fold them up was not measurable eight years ago because most of those young mums were at school and not deemed to be reliable consultees. So I hope that the Minister will be able to view the demand for a railway link to Keswick as a likely success that would benefit the north Lakes and reduce road traffic on the M6, and indeed generally promote happiness among day trippers from the Manchester area. Travel from that city would become much easier with direct trains, as has been shown in Windermere.

To conclude, I look forward to the Minister's response. I hope that he is happy with my noble friend's Question, and I close by saying that it is always good to have a natter about NATA.

Photo of Lord Hanningfield Lord Hanningfield Shadow Minister, Transport 8:14 pm, 22nd October 2008

My Lords, I, too, am grateful to the noble Lord, Lord Bradshaw, for introducing this discussion because it is a worthwhile and important topic. I hope that in his new job the Minister will take a new approach to New Approach in the appraisal of major highway projects because they are so important. No one has talked about horse transport, but the greatest racehorse this year is called New Approach. He won the Derby and the Champion Stakes, so we should be talking about horse transport as well since the horse of the year has that name.

As noble Lords are aware, the New Approach to Appraisal is not new. It was introduced in 1998 and is being refreshed now. There has been a consultation period and, as with other things, it has good and bad parts in it. As I have said, I hope that the Minister will take a chance and give his own view on it in order to bring some clarity to the position because there are some areas of success and some of concern, many of which noble Lords have raised in the debate.

There has been a lot of discussion about the A1 and I accept that there are problems with that road, but we all have our problems. Earlier this year, as the leader of Essex County Council, I launched an inquiry into the A12, the major trunk road through Essex. This was significant for our county because the council was the first ever local authority in the UK to sponsor its own inquiry into a major trunk road. A lot of interesting things came out of the inquiry, and one specific issue was how the appraisal of journey reliability in the NATA guidance is modelled. The data are constructed on the premise that there is a flow of traffic which explains variable delay, but if a road is closed because of an accident, the weather or for any other reason, there is technically no flow on that road. In those circumstances, the NATA software which produces the statistics infills the missing data with the average figures. So if a road has to close a lot, it does not count for much because the data are measured when traffic is flowing. Therefore the A12, which suffers an enormous number of closures through accidents, does not have those closures taken into account by the software. The noble Lord, Lord Whitty, is not his place, but he sat on our inquiry and was quite amazed when he discovered that. I hope that the Minister will look at that sort of issue in the future.

I am told that some of these things are being considered in the new approach in order to capture the value of the transport system and that they might become part of the guidance next year, but I suspect that the Minister does not yet understand these details. Perhaps he will look into them further and comment on how closures and traffic flows are measured when assessing the capacity problems of a road.

The noble Lord, Lord Berkeley, talked about health aspects. We had an interesting debate during Question Time last week about walking and cycling, and I suggested that people should walk more. I do not have time for much exercise, but at least I walk my dog for an hour every single day. Walking is very important and should be encouraged, and I am pleased that health is being taken into account in future calculations.

Noble Lords also mentioned the "eco" element in the appraisal. If we achieve the target of reducing carbon emissions by 80 per cent by 2050, we will have a very green economy. It is therefore very important that transport should contribute towards achieving it. I want to support what the noble Lord, Lord Bradshaw, said: there is a great deal of emphasis on the monetary costs rather than the green, eco-costs. Perhaps the Minister will comment on that.

I am concerned that the consultation process has been rushed and that, despite some "quick win" successes, there are still issues to be addressed. The Local Government Association shares my concerns. The document, Towards a Sustainable Transport System, was published in 2007 and is what has led the Department for Transport towards the NATA refresh.

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

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

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

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

Photo of Lord Adonis Lord Adonis Minister of State, Department for Transport, Minister of State (Department for Transport) 8:22 pm, 22nd October 2008

My Lords, the House is indebted to the noble Lord, Lord Bradshaw, for initiating this debate on the new approach to the appraisal of major highways and other transport projects. I am grateful to him for his kind personal remarks.

He mentioned the City of Oxford and schemes in Oxfordshire, an area I know well. Twenty years ago I was an Oxford City councillor and was an ardent proponent not only of park and ride, which he mentioned, but I also drew up a blueprint for a rapid transit light rail scheme around the City of Oxford. I now realise that that scheme would not stand a cat's chance in hell of getting through the NATA process but it seemed a sensible scheme at the time.

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

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

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

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

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

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

Photo of Baroness Maddock Baroness Maddock Liberal Democrat

My Lords, as the Minister said, we should use a little common sense about the figures. I pointed out that two roads go north and because the A1 is so bad some of the traffic goes on the other road. If the A1 was dualled, I am sure more traffic would use it. The reason the traffic is not there is because it is so bad that drivers find other ways to go. That is part of the problem. We need to use a little common sense on this issue.

Photo of Lord Adonis Lord Adonis Minister of State, Department for Transport, Minister of State (Department for Transport)

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

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

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

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

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

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

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

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

I have briefing on other issues raised by the noble Lord and the noble Earl, Lord Mar and Kellie. These include savings in fuel duty being counted as a disbenefit when assessing schemes; the valuation of time, about which the noble Earl had a great deal to say regarding why values are placed on small time savings against large time savings and why different values in some contexts are placed on different modes of transport; and rail forecasting. I have used up my time in response to the debate but I will write to all noble Lords who have taken part with specific replies to these issues.

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

Photo of Lord Tunnicliffe Lord Tunnicliffe Government Whip, Government Whip

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

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

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