Infrastructure Bill [HL] — Second Reading

– in the House of Lords at 3:38 pm on 18th June 2014.

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Moved by Baroness Kramer

That the Bill be read a second time.

Photo of Baroness Kramer Baroness Kramer Minister of State (Department for Transport)

My Lords, it is four years since the general election, when the coalition partners made a pledge to the British people to cut our deficit and get our economy growing once again. I am pleased to say those promises are very evidently being delivered. From the start we were clear that poor infrastructure in our country was among the biggest obstacles to growth.

We set out the most ambitious programme of investment and improvement for generations, investing a record £100 billion in schemes to improve our roads and railways, build affordable homes and boost our internet access. After decades in which successive Governments neglected our infrastructure, we also had to find ways to modernise the delivery of that infrastructure, to overcome administrative hurdles and to accelerate planning. This Bill will establish a new framework to allow stable long-term funding, to get better value for money and relieve unnecessary red tape. It will improve planning processes and allow us to get on with our building programme. It will help us to direct funding towards the best projects, improving returns and creating the right conditions for sustainable growth. It will boost jobs and economic competitiveness across areas such as transport, energy and housing, and it will speed up infrastructure development while ensuring that communities remain involved.

Your Lordships will be aware that the Government have committed more than £24 billion to upgrade England’s strategic road network between 2011 and 2021. We are also investing in maintaining our network, resurfacing 80% by 2021. We want roads to be in top condition to keep traffic running smoothly and are working with industry suppliers to accelerate delivery of road renewal. We are making the biggest investment in roads since the 1970s. Our national road network is being transformed to provide a world-class strategic network, tackling congestion, improving reliability and supporting jobs and growth.

Part 1 of the Bill will turn the Highways Agency into a government-owned company, with the stable, long-term funding needed to plan ahead effectively. We are also introducing in the Bill the framework for a roads investment strategy. The strategy will be agreed by the Government and the new company. It will set out the Government’s longer-term strategic vision for the strategic road network, investment plans and performance criteria, along with the necessary funding, just as happens for the railways. The new delivery model will allow the company to better prioritise its spending in terms of both maintenance requirements and capital demands. This is bound to lead to better asset management than we have now.

These measures are expected to save the taxpayer at least £2.6 billion over the next 10 years and will make the new arm’s-length company more directly responsible for delivery. Performance will be assessed through an independent monitor specialising in roads, based in the Office of Rail Regulation. Road users will also be given a voice through a road user watchdog based in Passenger Focus.

It is vital that we invest in our infrastructure. The Government have made a huge financial commitment to 2021. Now we need to get the best return on that investment, and putting an end to the stop/start nature of managing the supply chain is essential. To give but one example, since the 1950s it has been planned to upgrade the A453 from Nottingham to the M1 to a dual carriageway. Proposals have started and stopped four times in the intervening years as Governments have changed their minds and gone back to the drawing board. It was only in 2012 that the work finally started. It is important that we end stop/start. It is also important that we look after our infrastructure.

Part of looking after our infrastructure is controlling the invasive non-native species that pose serious threats. The cost to the transport sector from invasive non-native species in Great Britain was estimated in 2008 to be about £81 million a year. The total cost to the economy of invasive non-native species is estimated at £1.7 billion per annum. This burden affects agriculture, horticulture and infrastructure.

In contrast to powers available under animal and plant health legislation to combat disease and pests, the nature conservation bodies have no powers to require landowners to act or powers of entry to carry out work themselves in respect of invasive non-native species, and they have to rely on reaching voluntary agreements. While most landowners are willing to enter into voluntary agreements, experience has shown that about 5% are not. The changes included in Part 2 will give powers for Ministers and nature conservation bodies in England and Wales to make species control orders that will require landowners to take action against invasive non-native species or permit the bodies to do so.

Early eradication is key to reducing eradication costs. The cost of eradicating water primrose has been estimated to be £73,000 if we eradicate it at its initial stage but more than £240 million if we allow it to become widespread in Great Britain.

When planning nationally significant infrastructure projects, it was never the aim to make the process burdensome for obtaining further development consents. Part 3 shows the Government’s commitment to increasing the pace of delivery for new developments and to manage our land assets more effectively. The Government are committed to securing investment in new nationally significant infrastructure projects as part of their efforts to rebuild the economy and to create new jobs. We want to speed up the process and get Britain building for our future.

Applications are large and detailed documents—up to 50,000 pages or more. Allowing inspectors to be appointed once the application has been accepted, rather than once it has been publicised, will give inspectors an additional six to eight weeks to become familiar with the issues. In addition, we will allow two inspectors to be appointed as examiners: at present one, three, four and five are allowed but not two. Since the workload is often too much for one inspector but not enough for three, around £200,000 a year can be saved by developers if an examination is conducted with two inspectors rather than three.

Currently, the process for making changes to a development consent order once consent has been granted is lengthy. The process is the same as if a completely new application is being submitted. A simpler process is required but only for very minor changes. This the Bill will now allow.

It is equally important to improve the procedure for discharging planning conditions so that local projects can proceed without unnecessary delay. The Bill introduces a deemed discharge for certain types of planning conditions which will help to ensure that conditions which require the approval of the local planning authority are discharged in a timely manner so that development, including new housing, that has already received planning permission can proceed, providing much needed certainty for applicants as to when decisions can be expected.

The issue of improving the outcomes for applicants around discharge of planning conditions is not new. A key recommendation of Joanna Killian and David Pretty’s comprehensive review of the planning application process in 2008 was that the Government should seek to speed up the process for discharging planning conditions. This included looking to introduce a default approval.

One of the ways in which we can stimulate the economy is by getting better use of public sector land assets by utilising surplus land that the Government own. The Homes and Communities Agency, the HCA, is a non-departmental public body that funds new affordable housing in England. We want to make it easier for the agency to work with local partners to create new affordable homes and thriving neighbourhoods.

The new public sector land programme from 2015-16 will see the transfer of a significant amount of surplus land from government departments and government arm’s-length bodies to the HCA. Land transfers from arm’s-length bodies can be administratively burdensome in terms of time and cost because they cannot be made to the HCA directly; instead the land has to be transferred first to a parent government department. We would like to ensure that in the future these transfers can be made more quickly and with reduced administration, so the Bill allows for a direct transfer to the HCA.

The Bill also corrects what was frankly an oversight in the legislation that set up the Homes and Communities Agency, the Greater London Authority and the mayoral development corporations. At present when these bodies purchase land they, like every other government body, override existing easements. However, unlike every other government body they cannot sell the land with the override in place. This Bill eliminates this anomaly, although it will not be used by bodies such as the Forestry Commission or National Parks, contrary to some recent, wholly unfounded, speculation. This applies only to private rights and not to those that are public.

The purchase and indeed development of property requires good, timely, accurate information. The Bill therefore sets up the framework for the Land Registry to modernise and digitise property searches. It will centralise and digitise local land charge information from the 348 local authorities that currently hold and deliver it. The result will be a far more efficient and cheaper service. The Land Registry will set a standardised national fee and turnaround time in contrast to the existing postcode lottery. Fees currently range between £3 and £96. A single source for improved access to property information will support a more streamlined conveyancing process and improve the ease of registering a property in England and Wales. We want our renewable energy developers to work with local communities, allowing them to share in the benefits of renewable energy infrastructure projects. Part 4 would give communities the right to invest in their local renewable electricity schemes, transforming how they engage in these types of projects. It would give them the opportunity to have a real stake and sense of ownership in projects happening on their doorsteps.

The measures that I have discussed above are on the face of the Bill. In the Queen’s Speech and in other discussions, the Government have however drawn attention to other measures that are not on the face of the Bill at present but may be included by future amendments. These measures have specifically been: enhancing the United Kingdom’s energy independence and security by opening up access to shale and geothermal sites, maximising North Sea resources, and the construction of zero-carbon homes.

A third of UK energy demand is met by gas. If we do not develop shale, by 2025 we expect to be importing close to 70% of the gas that we consume. The Government therefore support the development of our own indigenous energy sources in a safe and sustainable manner. We believe that shale gas and oil and deep geothermal energy may hold huge potential for adding to the UK’s energy sources, helping to improve energy security, create jobs and meet carbon targets. We consider that the existing procedure for gaining underground access to be burdensome and unfit for new methods of drilling. A public consultation on underground access was opened on 23 May and will conclude on 15 August.

Subject to that consultation, future amendments to the Bill would provide companies with access for shale and geothermal extraction 300 metres or more below the surface without requiring individual landowner permission. In return, a payment would be made to the community. As I said, the Government’s consultation on this policy continues until 15 August 2014 and the legislation is entirely dependent on the outcome of that consultation.

I am well aware, however, that some noble Lords are concerned about the potential environmental impact of extraction from shale. The UK has over 50 years’ experience of regulating the onshore oil and gas industry. More than 2,000 wells have been drilled onshore during that time. The Government are confident that the UK oil and gas industry, including shale gas, will continue to be well regulated and any risks, particularly environmental risks, will be effectively mitigated.

The UK oil and gas industry is of national importance; it makes a substantial contribution to the economy, supporting around 450,000 jobs, and had record capital expenditure in 2013 of around £14 billion. Oil and gas will continue to be a vital part of the energy mix as we transition to a low-carbon economy, with indigenous oil and gas production supplying the equivalent of about half the UK’s primary energy demands.

Sir Ian Wood’s independent report in 2014 recommended changes to the recovery and stewardship regime, estimating that full and rapid implementation would deliver at least 3 billion to 4 billion barrels of oil equivalent—more than would otherwise be recovered over the next 20 years. The report, in turn, estimates that this would bring over £200 billion additional value to the UK economy.

The Government accepted Wood’s recommendations in full in February 2014, and plan to introduce measures in the Bill to put the principle of maximising economic recovery of petroleum in the UK into statute. We also intend to introduce a power so that the costs of funding a larger, better-resourced regulator can be paid for by industry rather than by the taxpayer as is currently the case. This legislation is still being developed and will be made available at the earliest opportunity. It is our intention to introduce it before the end of Committee.

The Government have made a public commitment to ensure that new homes in England are zero carbon from 2016 onwards. Emissions from all homes represent over one-quarter of the total annual output of carbon emissions in the United Kingdom. It is crucial that we reduce this. The key consideration for the Government is to ensure that environmental policies are balanced against the need for continued economic growth in the housing sector.

The average bill for heating and lighting an older home is around £1,200 a year. In new homes, the amount would be less, and government changes to the building regulations have already reduced this amount by £200, with a further tightening of regulations having just come into force. New homes will be required to reduce all carbon emissions from energy used to heat and light those homes to zero. There will be a stronger energy-efficiency requirement, met by insulation measures, which may be augmented by on-site renewable energy measures such as solar panels. Where it is not possible to abate all these carbon emissions through energy efficiency measures—for example, through insulation or on-site renewable energy measures such as solar panels—the Government will allow developers to off-set those emissions that represent the difference through “allowable solutions”.

The principle of allowable solutions has been broadly accepted by the development industry as the most cost-effective way of delivering zero-carbon homes. A typical allowable solution measure might be either the retrofit of existing homes, particularly through solid wall insulation, or financial contributions for investment in low-carbon or renewable energy infrastructure. An explanation of how these schemes may work will be available for Committee stage.

In summary, the measures in the Bill will help create a better environment for investment in infrastructure across the transport, energy and land development sectors. The Government firmly believe in making it easier, quicker and simpler to get Britain building for our future. The Bill will help us build a stronger and more competitive economy that creates jobs, and provides families and businesses with better and reliable infrastructure to help us compete in the world.

Photo of Lord Adonis Lord Adonis Shadow Spokesperson (Treasury) 3:56 pm, 18th June 2014

My Lords, I am very grateful to the Minister for explaining the Bill so clearly and lucidly. On this side of the House, I am delighted to be supported on the Front Bench by my noble friend

Lord Davies, who will lead in Committee, and by my noble friends Lady Worthington and Lord McKenzie of Luton.

As the Minister recognised in her opening remarks, we face big infrastructure challenges on transport, on energy and on housing in particular. Although the Bill contains some useful provisions, the position, I suggest to the House, is that we have the big infrastructure needs of the country on the one hand, and this Bill on the other. They are like ships passing in the night, except that the Bill is perhaps more like a dinghy than a ship: it is no match for the high seas and, indeed, parts of it do not even exist. We still do not have the clauses related to fracking, and consultations on that issue and important issues relating to the Land Registry and community electricity are still incomplete—some have not even commenced.

The noble Baroness said, if I noted it down correctly, that this legislation is “still being developed”. If I may say so, that is one of the most remarkable statements I have heard from a Minister while introducing a Bill, which the House would expect to be fully developed at the point of introduction. Instead, we have a major heading, “Fracking”, and a long spiel from the noble Baroness about how this will be vital for the future energy needs of the country, but the following pages are blank. With respect, that is no way to treat Parliament or your Lordships. In the vernacular, the Government are legislating on the hoof—or perhaps I should say on the future hoof, as we do not even know what hoof they are going to be legislating on hereafter.

Still on the big picture, the World Economic Forum recognises infrastructure as one of the 12 pillars of global competitiveness. However, continued weak infrastructure investment has seen Britain’s global rank significantly slip. We are now ranked 28th for the overall quality of infrastructure, compared to 19th in 2006-07, and we are significantly behind our European neighbours, including France, Germany and Spain, with the US far ahead.

That is not to say that there have not been improvements: there have, particularly in rail infrastructure, but there have not been enough. The essential challenge is not to make largely tinkering changes to the law but for the Government to take some big decisions—which the current law does nothing to prevent—on building the new power stations, runways, bridges, roads and, above all, houses that are needed so urgently by the country.

However, we have to scrutinise the Bill before us, so I turn to its main provisions. Part 1 and Schedules 1 to 3 make provision for the appointment of strategic highways companies to manage strategic roads in England, in place of the Highways Agency. The strategic road network represents only 2% of the English road network, yet it carries more than a third of car and van traffic and more than 65% of heavy vehicle traffic so obviously it needs to be well managed. We support giving greater operational freedom to front-line managers but the question is: will the management be better under the proposed company or companies than under the existing Highways Agency? I should be grateful if the noble Baroness could give us some indication of how the very large figure that she mentioned in her speech— £2.6 billion of savings—is actually going to be made up.

The Highways Agency already operates at arm’s length from Ministers. It currently lets its maintenance and construction contracts to the private sector so it is unclear what efficiency gains are being projected in that respect. Its sources of finance depend almost entirely on the state because we have few tolls and fees and no road pricing, and this will continue to be the case under these companies as privatisation has been ruled out—unless of course the noble Baroness wishes to say that there may be future plans for tolls or road pricing. I take it that there are not. In that case, the sources of finance will remain as they are now, which raises the issue of how greater income generation or efficiency will be secured. There are no obvious improvements in the way in which the national and local road networks interact, which is an issue of genuine concern. The key issue is greater certainty over medium-term and long-term funding but there is no need to create a new company to give greater certainty over future funding. The Government could simply announce a detailed five-year settlement for strategic roads in any event.

The noble Baroness’s mention of stop/start was almost as remarkable a statement as, “This legislation is still being developed”. The reason there has been stop/start over the past four years is that the Government stopped and then they started again. They did not have to do that. They could have announced and stuck to a longer-term funding plan, and it is entirely within their prerogative to do so. However, if the simple act of setting up this company constrains the ability of Governments to stop and start in respect of roads investment, it will none the less be worth while. But until we see the detailed five-year settlement for 2015-20 we are not in a position to judge.

On the proposed company, I have four points to make. First, the unhappy experience with the Ministry of Defence government company in the Defence Reform Bill suggests that the success of this model depends on the clarity of the process for selecting the company, the quality of information provided to the company, the scope of services the company is being asked to provide, and how its performance will be measured. Simply setting up a company is no panacea.

Secondly, on the roads investment strategy, the proposal for ring-fencing funding for investment in the roads and a requirement to respond to a high-level output specification in the same way as Network Rail is, as I have said, a good idea in principle, but the legal architecture around it is vague. Where Network Rail is concerned, there is a well trodden process of settlement with the Office of Rail Regulation under the Railways Act regime. There is nothing that comes close to this in respect of roads. It seems to be the Government simply announcing a five-year road settlement. Will the Minister say more about how the settlement will be set in relation to the high-level output specification? Will there be some independent judgment as to whether the resources are sufficient to deliver the high-level output specification? Can she say when we will see the high-level output specification?

Thirdly, on the provisions regarding the Office of Rail Regulation, the proposal is that the ORR’s remit can be stretched to scrutinise the efficiency of the highways companies as well. But the ORR is obviously not sufficiently equipped or experienced to do this at the moment and we need to know how it is rapidly going to become so.

Fourthly, on accountability, Graham Dalton, the chief executive of the Highways Agency, says that these reforms will enable the Highways Agency to “set its own destiny”. That sounds very liberating but what if that destiny, decision by decision, arouses controversy and opposition, as in many cases it will, in respect of road schemes? At the moment, as I know from, to coin a phrase, the scars on my back—the noble Baroness probably has some as well—it is Ministers who mediate when there are controversial issues relating to road schemes, often at quite a detailed level. Stone curlews and their relocation to make it possible to dual the A11 to Norwich is etched on my mind as taking many hours of discussions in my office, and no doubt the noble Baroness can give equivalent examples. At the moment it is Ministers who mediate, and many MPs and Members of your Lordships’ House will, when it comes to controversial issues relating to road schemes and upgrades, want that to continue to be the case.

Under the Bill, there is to be a Passengers’ Council, which is a reform of the existing quango Passenger Focus, but it is hard to see how it will have the credibility and clout that Ministers currently exercise. Furthermore, as I understand it, the Passengers’ Council will be mandated only to promote and protect the interests of users of highways for which the highways company or companies are responsible. The Passengers’ Council will not represent the interests of communities along the road or the natural environment. That is a very important point. Who will represent their interests and take account of them? I should be grateful if the noble Baroness could clarify those issues. There is a lot for us to debate further about the new structure of the Highways Agency.

Moving to other issues, on invasive non-native species, there will be a lot for us to scrutinise in species control orders, the protection of animal welfare and the proposed powers of entry. The House of Commons Environmental Audit Committee has a great deal to say about all that, but obviously we support a proper control regime to effect eradication or control of invasive non-native species where they pose threats to biodiversity, the water environment, economic prosperity or health and welfare.

Turning to planning and land, on major infrastructure projects and the Planning Act, Clause 18 provides that examinations of projects may be conducted by panels of two inspectors. The noble Baroness said that there are large potential savings from that, but as it is to be the lead examiner who decides in cases of disagreement, does that not make the second examiner distinctly second-class? Is that not precisely why it is odd numbers of inspectors—one, three or five—who are appointed at present?

On land, the Bill proposes that the Secretary of State can transfer public land directly to the Homes and Communities Agency and the agency can then dispose of it to developers. We see benefits in having a less bureaucratic, expedited regime for land transfer, but accountability and reasonableness will be important. It is not clear how they are to be provided under the new regime. In particular, is it correct that there will be no need in any circumstances to go through local planning application processes before land is transferred in that way? Is it also the case that the proposed change may allow public rights of way to be extinguished? As the Minister said, concerns have been raised in respect of protected environments and public amenities; for example, the status of forests and land for recreational use. That is a vital issue. I noted what the noble Baroness said about that in her speech. I hope that her assurances are watertight. Otherwise we may need to propose exemptions at a later stage to safeguard vital public interests.

Clauses 23 and 24 on the Land Registry, transferring local land charges from local authorities to the Chief Land Registrar and extending the powers of the Chief Land Registrar raise a whole host of issues, particularly if the Land Registry is to be privatised, as leaked documents suggest. My noble friend Lord McKenzie of Luton will have a lot more to say about that in his speech. Perhaps the noble Baroness can enlighten us as to why a company that returns £100 million a year to the Treasury and is thought to be doing a good job needs to be sold off.

Clauses 19 and 20 propose to simplify the process of making changes to development consent orders and the discharge of conditions attached to planning applications. The Government say that that is due to concerns about delays with planning authorities discharging planning conditions, but obviously there will be concern that that will simply allow developers to ignore planning requirements. I should be grateful if the noble Baroness could tell us what evidence there is to support the notion that it is local planning authorities which are delaying the discharge of conditions at the moment. In her reply or in writing, perhaps she might tell us how many decisions regarding the discharge of planning conditions have been delayed and therefore merit this legislation. Is there any evidence to suggest that it is other statutory consultees who are holding up the process and, as this is all related to housebuilding, can she say what impact this will actually have on the level of housebuilding?

On fracking, we do not have the provisions at the moment, as I said, but the Government have put it up in lights. If the intention is to put shale gas production in line with the coal industry, water and sewerage, all of which have access to underground land, then we welcome this in principle. I endorse the potential gains that the noble Baroness mentioned as being well worth securing if it is possible to develop shale gas in this way. But communities need to be reassured about impacts on the environment, including methane levels, contamination of the water table and seismic shifts.

However, the big and immediate issue on energy, whatever the potential long-term gains from fracking, is the need for new power stations. According to a recent survey by the CBI and KPMG, two-thirds of British companies fear that UK infrastructure will deteriorate over the next five years and their most critical concern is about energy. Britain’s supply of electricity is dangerously close to demand. The safety margin of capacity has been shrinking and now stands well below the 20% necessary to ensure against shocks. Thanks to its antiquity and the demands of environmental legislation, roughly one-fifth of existing generating capacity will drop out of the system over the next decade.

As I said in the debate on the Address a fortnight ago, plans for delivering new gas and nuclear power stations are well behind the curve. Ministers talk about a dozen new nuclear power plants but only two are yet proceeding. As for gas, because of a lack of clarity and confidence in the Government’s capacity mechanism for encouraging new supply, we are facing a situation where existing gas stations may be mothballed with little appetite for new plants. On renewables, to repeat what is becoming a truism, there are two Governments at the moment: DECC, under Ed Davey, is in favour while DCLG, under Eric Pickles, repeatedly turns down applications for extra wind capacity. On all this, the Bill is irrelevant. There is already an Energy Act and what we need now are concrete proposals and consents and viable funding arrangements.

It is the same issue regarding a large part of the transport infrastructure that is required. Where are the plans? It is great that Crossrail 2 and HS2 are proceeding but where are the plans for new airport capacity in the south-east of England? All we have is a commission, which is not due to report for at least another year, because for the entirety of this Parliament the Government have not been able even to form a view, let alone take a decision. I am told that later this year, for the first time in 350 years, Britain will no longer have the world’s largest port or airport. That accolade will pass, symbolically, to Dubai.

It is the same situation year after year with there being no plan in respect of the new lower Thames crossing—vital infrastructure to relieve the Dartford crossing, the most congested short stretch on the entire Highways Agency network. I published three options for the new lower Thames crossing five years ago. Since then, three options have been reduced to two but there still has not been a government decision in respect of those two. It does not need a Highways Agency company to build the new lower Thames crossing; it just needs a Government and a Minister who can take a decision and see it through. The new crossing would be entirely paid for by tolls, so there is no public expenditure implication at all.

Above all, the Bill barely scratches the surface of the UK’s chronic shortage of housing. The rate of housebuilding is lower than at any time since the 1920s. Less than half the 250,000 new homes a year required are being built nationally and less than a third of the 60,000 required in London. There are estimated to be 150,000 unemployed construction workers, costing the economy up to £2.1 billion a year in unemployment benefits and lost tax revenue. Yet this situation has been getting worse, with 40,000 jobs lost in the construction industry last year. On current projections based on the low rates of housebuilding, employment in construction will still be 11% below its 2008 peak in 2018.

This is an infrastructure problem with huge social consequences. Rapid house price inflation, driven by shortage of supply, is pricing many out of home ownership, with average house prices nationally close to seven times the average income. With home ownership becoming increasingly elusive, many are turning to the private rented sector where the housing stock is often of poor quality and unable to keep up with demand. Almost one in seven people in the UK now rents, including 1.3 million families with children. One-third of these properties fail to meet the decent home standards, and the number of homeless households has risen to more than 50,000 a year. On almost all of this the Bill is silent, yet this is the biggest infrastructure issue that we face as a country.

As for the Government’s national infrastructure plan, I simply note that at the most recent count 355 projects and programmes—that is, 55% of the total of 646 that are in the pipeline—were not under construction or even part of an active programme of investment. So we face big infrastructure challenges. According to the Civil Engineering Contractors Association, a lack of investment in infrastructure is costing the UK around £78 billion a year in lost output. Our total infrastructure stock as a proportion of GDP is less than India, the US, China, Italy, Switzerland, South Africa and Poland. In March 2012 the Prime Minister said:

“I want to set out a vision for this country’s infrastructure in the 21st century; what we need, how we can pay for it and some specific steps that we are going to take”.

We still need that vision today.

Photo of Lord Teverson Lord Teverson Chair, The Arctic Committee 4:16 pm, 18th June 2014

My Lords, I very much welcome the Bill, which starts to lay a foundation for the most important infrastructure skeleton of our country. It deals with certain areas but many other parts of the government programme have already dealt with parts of the infrastructure. For instance, superfast broadband is rolling out very effectively across the country.

I refute what has been said about the power network. Sure, there are challenges there, but the Energy Act is there to fix that problem and decarbonise the electricity generating network in future. In terms of the levy control framework and other financial indicators, it is already over demand. As for renewables, nuclear is moving ahead and that whole area is being tackled quite successfully. The problems of undercapacity in that sector, given the gestation period of investment in the power industry, certainly did not start in 2010; that is absolutely for sure. We have a new and effective infrastructure to ensure that the power industry can meet demand. I am also very pleased to say, although I do not want to move off to this subject too much, that we have a Government who recognise that there are two sides to that equation, which was never recognised before: there is demand as well as supply, and we are starting to move ahead in that area as well.

In rail, obviously there is HS2, but it is often forgotten that we have a rail investment programme that is worth some £38 billion over the next five years beyond that project, as well as Crossrail. In ports, through private sector investment, London Gateway, Felixstowe and Southampton are all going through major developments. Port of Tyne, which I visited not so long ago, is also developing very strongly.

One of the things that the commission has shown so far is that there is no crisis in runways. This is very much talked up by the lobbyists from the airport and runway industry and, although it needs to be sorted for the future, it is not as immediate as we sometimes think it is.

So I very much welcome the Bill within that broader context. I am not sure just how important it is that the Highways Agency is, interestingly, becoming highways companies—not just one but maybe many—but what is important in the Bill is that we start to get down to having programmes that can be planned and relied on over a number of years, which means that the cost of that infrastructure starts to come down. I am sure that my noble friend Lord Bradshaw will be talking much more about this area later in the debate.

I want to move on to some of the energy areas in particular. I think that the provisions that are being brought forward are excellent. The community energy right is a major step forward that should have happened long ago. The Government have taken the community aspects of energy very seriously. That was not the case before. Here we have the ability of local communities to invest in schemes above five megawatts. There is some criticism of that figure, but I think it is about right in terms of scale. They can invest in those schemes and take local benefit in various financial ways. We will discuss them in Committee. That is a major step forward in the community approach to energy projects in this country, where the resistance to renewable energy is not nearly as great as some people in this House would portray. Renewable energy will be much more important if communities are able to invest themselves.

That is true of what we hope will come through in the clauses on fracking, with direct community benefit, which will be important. We need to change the trespass legislation to bring it in line with many other areas. I am tantalised by the fact that there is such a positive reaction to geothermal energy, which is also affected by this change in legislation. In the Queen’s Speech debate, I started to ask what else the Government can do to help us kick-start the technology for geothermal energy and ensure there is that legal change. The Minister quite rightly pointed out that it has great potential for us as a country. I agree that fracking is important for our energy security in the medium term in terms of gas provision. However, in moving towards decarbonisation, gas can be only a transition energy source but it can be an important part of that formula, given the major decline in North Sea oil production.

Low-carbon homes are not in the Bill at present as we are going out to consultation, which seems a good thing to do. This House will have plenty of time to consider those clauses, probably in Committee after the Recess. I am very pleased that the Government are nailing their colours to the mast over zero-carbon homes. One of my great concerns has been that there will be a major erosion of that and that the proposals rightly put forward by the previous Government, and the commitment made by them, would be lost. We know that that will not be the case. There is some sense in the allowable solutions formula, which means that there is some leeway in finding off-site ways to come to a zero-carbon equation. Having said that, in Committee and on Report we will make sure that that is done through strong controls. I would not like to see a method by which developers can find a way around the regulations and the allowable changes get forgotten in the process. That is a risk we must avoid.

My other area of concern is that we are consulting on excluding smaller developments. I am sure this will come through in the consultation, and I hope the Government will reconsider. I do not see the logic of excluding small developments from the definition of zero-carbon homes. There might be some idea that small housebuilders do not or should not have the skills needed to met this level of insulation and energy-saving. That is wrong and creates barriers to those housebuilders. It is nothing to do with red tape, but is just building to the standards that people are supposed to build to. The greatest challenge may be to ensure that current building regulations are enforced, which we often find does not happen enough. That is perhaps the core issue: enforcing existing regulations and legislation.

Smaller developments often take place in rural communities, where energy is more expensive than in urban areas because they are often off the gas grid. By building homes that have lower energy efficiency, we are potentially giving those more rural and isolated communities a double whammy of problems and costs.

Does increasing energy-efficiency regulation add lots to the cost of the product? We have seen in the automotive industry that the opposite has happened. As time has passed, the real cost of vehicles has gone down despite energy efficiency going up quite markedly. I see no reason why that should not be the case for residential homes in the building industry, as has been shown in the rest of Europe. I very much hope that the Government will look at that consultation carefully, and we will look at it further in Committee.

On invasive and non-native species, biodefence and security—as I suppose one would call it—is clearly important for this country. We have seen this with everything from ash dieback disease to foot and mouth and the whole issue of Japanese knotweed, of which there is lots around where I live. This is a key area, and I very much welcome these extra steps to make sure that we keep our biodiversity secure. That is absolutely fundamental to our nation’s future security, and we will obviously be looking at it in detail in Committee.

Photo of Lord Cameron of Dillington Lord Cameron of Dillington Crossbench 4:27 pm, 18th June 2014

My Lords, I declare my interests as a farmer and landowner. This is an interesting Bill and it must have been an interesting conversation deciding what to call it, considering the wide variations in its parts. However, the kernel of the Bill is that the continuous modernisation of our national infrastructure is important to our economy and social well-being. It is an unfortunate fact of modern life in the UK that we are overreliant on our ageing road system and, unless we continue to invest in it, our economy and lifestyle will suffer badly, and in my view is already doing so. In England in particular, we are a very overcrowded nation and without good roads much of our lives can be wasted sitting in jams.

The privatisation of the Highways Agency may result in improved efficiency and better long-term planning, but there is no doubt in my mind that the important bit of Part 1 is the road investment strategy. Without properly planned and increased investment, the rest of Part 1 is a mere shuffling of deck-chairs. We need a constant supply of regular money over many years with the degree of certainty that will encourage constant investment by others: hauliers and other logistic businesses; manufacturers who depend on our roads for the delivery of their goods from regions that desperately need that manufacturing investment; and our tourist industry, which needs the certainty of an easy flow of visitors.

One region which is dear to me, and which desperately needs both manufacturers and tourists but lacks the necessary road links, is the south-west of England. The A303 has for years been stymied by the blockage of Stonehenge, where English Heritage, the National Trust, the Department for Transport and others have been arguing for nearly 30 years as to who has the right to do what and to whom. Meanwhile, the prevailing sentiment seems to have been that it is not worth investing further west until that problem has been solved. I strongly disagree with that sentiment. If you are trying to deal with a blocked drain, which is not a bad metaphor for the A303, then you want to start at the bottom end so that work can be done without being swamped by sewage—or excess traffic in the case of a road. As far as I am aware, all the plans for a continuous dualling of the A303 have already been developed, and now we just need the investment to get on with it. Therefore I hope that the road investment strategy will point us in the right direction in the immediate future. However, of course the Bill makes no commitment as to the availability of funds for the improvement of our road infrastructure.

On Part 2, which deals with the control of invasive non-native species, noble Lords would expect me as a farmer and landowner to be firmly supportive, and I am. For many years I have wished that the UK could take as strong a line on these matters as do the Governments of, say, Australia and New Zealand. Admittedly, their economy is perhaps more dependent on what they grow than ours is. However, they spend a lot of manpower and resources protecting their borders against invasive alien species, and dish out very severe punishments on those who ignore the rules, of course having spent a lot of money in the first place on ensuring that everyone knows them. It would be good to see a few more officious-looking posters at our ports and airports, not to mention sniffer dogs.

Unlike us, Australia and New Zealand also possess what might be described as better natural quarantine borders, but I am pleased to note that the whole issue of invasive alien species has recently had considerable EU interest. It has been calculated that invasive alien species currently cost the EU around €12 billion per annum. The figure for the UK, which the Minister already mentioned, is around £1.7 billion per annum. I therefore urge the Government to continue to work with the prevailing enthusiasm in the EU because undoubtedly, without the co-operation of our neighbours, we cannot hope to win that particular war on our own. There are already some 282 invasive alien species in the UK which we are struggling to control. As we are a seafaring nation, it is important to note that marine ballast water contains some of the greatest dangers to us, and alien marine species such as Japanese wireweed could pose an even greater threat than, say, the land-based Japanese knotweed mentioned by the noble Lord, Lord Teverson. Therefore, my main question to the Government on Part 2 is the same as for Part 1: where will the extra money come from to promote and enforce this new campaign?

In Part 3, the bit that worries me the most is Clause 20. I would love to be told that I am worrying unnecessarily, but rumours abound that the Government intend to discourage the practice of local councils insisting on a percentage of any development being built as affordable housing. When I say “any development”, I refer in particular to the very small developments of the kind you find in rural villages. It is there that affordable housing is most needed to enable local families to stick together and support each other, and where social services find it so difficult to reach. It is there that local families, who have probably been part of the village for generations, find that the ever rising value of freehold houses, combined with new money from the cities, both removes their supply of rented accommodation while putting the freehold accommodation way beyond their means. It is there that affordable housing is socially at its most important, and must under no circumstances be lost in the future mix of rural development. I therefore hope that the Government can alleviate my worries concerning the hidden implications of that clause or of the Bill.

In Part 4, the concept of local community involvement in renewable projects is a good idea. I hope that it will discourage knee-jerk local opposition to renewable schemes and encourage communities to be part of the solution to the problems of our energy industry and its huge effect on climate change. It is right to limit the investment to 5%. If locals were allowed to compulsory purchase a much higher percentage, I can foresee opposition groups using the scheme as a Trojan horse for undermining the projects rather than for supporting or benefiting from them.

However, bearing in mind that many of these renewable projects take place in remote and semi-remote parts of the country, not a great deal of local money is available for investments of this sort—as I have already explained when referring to rural housing issues. Therefore I am not sure that this part is going to be much more than just an idea, unless the Government set up some sort of funding arrangements to assist local groups to achieve the investment they seek. Renewable schemes are by their very nature highly capital-intensive and a £5 million project would not be a very big scheme. However, the quarter-of-a-million-pound investment, which represents 5% of that, would be way beyond the means of most rural communities, which struggle to find even £5,000 to repair their village hall or church. Maybe the Government could help to get the message across to the banks that community loans for these purposes should be relatively risk free and do not necessarily need outside collateral. Maybe the Government could underwrite a percentage of the loan involved.

In Part 5, the great unstated provision, we are led to believe, is that of changing the law of trespass to allow for fracking. On the whole, I would go along with the rumoured proposals. I cannot believe that I, as a landowner, should have rights over my land down to the centre of the earth, where presumably I would meet the rights of some Australian landowner coming the other way. There must be a limit to the depth of my ownership and some 500 metres below sea level would seem amply fair to me.

However, as a supporter of fracking, I just say that surely one of the objectives must be to get the locals on side. Taking Part 4 as a model, would it not be a good idea to offer a 5% share issue in a fracking project to a local community? What is good for the goose might also be good for the gander.

Generally, I welcome the Bill and look forward to discussions on the wide-ranging various bits of it in Committee.

Photo of The Bishop of Derby The Bishop of Derby Bishop 4:35 pm, 18th June 2014

My Lords, I, too, welcome the Infrastructure Bill and its joined-up thinking. A number of noble Lords have looked across the whole Bill and the large scale of it, but I shall look at only a specific area—that of community energy—and ask the Minister about how the Government can deliver on that.

The aim is to help communities play a key role in reducing carbon emissions and increasing energy security. The principle is that of partnership, to increase the reach and scale of community energy. The method is ownership or purchasing a stake in commercially developed projects. My question is: how realistic is that kind of strategy? “Community” is a slippery word and is largely in disarray at the moment. It is not as though there are communities out there organised and ready to make a financial investment. “Community” still remains the domain of the amateur, the interested person—hardly good material for commercial investment. I suggest that we probably need an incremental approach if we are to get widespread support for this vital policy on energy and get communities organised to participate appropriately. I think the appeal immediately for financial arrangements is probably premature, as the noble Lord, Lord Cameron of Dillington, just hinted.

I want to share with noble Lords a little case study to show how we need to build a base of popular support and participation around the energy issue so that people understand it, engage with it and can be drawn into making possibly financial and other investments. I want to tell a little story about a parish, in the diocese of Derby where I am privileged to work, called Melbourne. Melbourne parish church is a grade 1 listed building of Norman foundation. One could not have a more precious building as an icon in the community. After a long and tortuous path, the parish has just got permission for a solar microgeneration system—that is, panels on the roof to most of us. Noble Lords can imagine the debate this has caused locally and the consciousness raising about “Why do that to a Norman building?”. The point is that, now the parish church is part of the Melbourne area transition scheme, people have got interested. They all started saying that this was not relevant or useful; they now see the point, they support the church taking a lead and they are willing to invest and support the church. They are beginning to engage in the energy agenda across the whole community. Unless we do that careful, encouraging work of participation and consciousness raising, we will find it very hard to get the community investment that the Bill looks to.

That applies not just in a lovely market town such as Melbourne. I could take noble Lords to St Barnabas in inner Derby or the church of St John’s in Mickleover, which is in the suburbs, or the Peak District village of Old Brampton. In all those places, similar projects are being pursued. That is because a church and other iconic places do not just represent people’s hopes and fears in their hearts, souls and spirits, but represent an opportunity to engage creatively with the world in which we live and our care for the planet.

I invite the Minister to consider in her reply whether we need to think of some intermediate strategy before we come to this appeal for the community to invest—as I think communities should be encouraged to do—and whether we need to encourage churches and other iconic places to step into the debate and facilitate an engagement with the issues, with what problems might arise and with what the benefits might be. We need to get people in their own backyards to understand, participate in and support this kind of culture change, without which our whole aspiration to deal with climate change issues will fall very far short. I invite the Minister to comment on the need for an incremental strategy using iconic places and processes to effect a culture change that might give some energy to the strategy proposed in the Bill.

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative 4:40 pm, 18th June 2014

My Lords, in response to the right reverend Prelate, I intend to say a few words about the community energy scheme towards the end of my speech. There is a great deal of evidence already of communities investing in a variety of different ways. This is not something wholly new; it is a question of what the Bill intends to build on—and I shall have something to say about that.

I very much welcomed the initial remark of the noble Lord, Lord Adonis, who said that he was going to support the Bill. It is just as well that he said that, because the rest of his speech made it perfectly clear that he was totally disgusted with the entire Bill—that it did not do what it said it did, that it was a blank sheet and that it did not have any guarantees, or anything. I refer to three of the points that the noble Lord made. He talked about the need for generating capacity and asked where it was. Is he not aware that the European Union is currently considering an application for state aid approval for the Hinkley Point nuclear power station? Until that is forthcoming—and everyone is very confident that it will be—I think that EDF has done a huge amount already, but of course it cannot take its final investment decision. I think that he might have made some reference to that.

The noble Lord talked about the strategic highways companies and asked where their accountability was.

Does he not remember that his own Government set up a national strategic planning authority, which was going to be the final arbiter of major strategic planning decisions? It was this Government who had to change that to make the Secretary of State finally accountable, because then the Secretary of State is accountable to Parliament. Of course, the Secretary of State will be, as the sole shareholder in the companies, wholly accountable to Parliament for what these companies do.

Finally, on the question of shale gas, he said that there was a totally blank sheet. He has obviously not read the consultation paper published last May, which sets out a great many details of exactly what the Government want to do, provided that the consultation shows that there is sufficient approval for it. So I was rather disappointed by the noble Lord’s speech. I hope that I am not disclosing secrets, but when we discussed this matter some years ago he told me that the duty of an Opposition was to oppose. I said, “Well, you can’t oppose the high speed rail—you started it all”. Well, we will wait and see.

On the fracking clauses, I was not alone in believing that we would see those clauses in this Bill. Noble Lords will remember that I mentioned this in my speech on the second day of the Queen’s Speech debate. In a somewhat jocular account of the Government’s legislative programme, the House Magazine said that this was going to be called the “drill, baby, drill” Bill. Well, it will be. I am grateful to my noble friend for the letter that she sent me yesterday which said that the House will have an opportunity to consider those clauses once the consultation was complete and the Government could be sure that they would have sufficient support for them. That is one way of doing it. We want to get ahead with this—that is why the Bill has been introduced—and it is perfectly possible, with the notice that has been given, to have the clauses dealt with as they were.

I turn to what is in the Bill before us. I have already made one point on the question of the highways companies. My instinctive reaction is to support these clauses. I am sure that executive companies which are free from direct daily interference by Ministers and departments can operate more efficiently and effectively than if they remain agencies of the department. I am not an expert on roads and I will listen to the arguments with interest.

I have had some experience of the planning system. While I have sympathy with some of the points that have been made to us by the Local Government Association, I was very surprised to read its statement:

“The planning system is not a barrier to economic growth”.

You could have fooled me. That is certainly not the view we have heard consistently from the business community, which has to try to work with the present system. Of course, it recognises that there have been substantial improvements in recent years but it is looking for more to be done to ease the way.

Indeed, some of the blame for this situation rests with the local authorities themselves. I should declare an interest as a vice-president of the Local Government Association. For years local authorities have had the power to draw up local plans but few of them have so far succeeded in doing that. That is one of the barriers which the system faces and I look forward to hearing more about it in the debates to come.

I wish to make three specific points on Part 3. I have given notice to my noble friend on the Front Bench of my question relating to the Homes and Communities Agency and what should happen in London. The powers of that agency in London already belong to the Greater London Authority. It seems to me quite unnecessary that properties in London should be subject to the same provisions in the Bill as apply to the rest of the country. The noble Baroness, Lady Valentine, sends her apologies for not being able to be with us today and asked me to raise this point. Of course, both the mayor and London First warmly welcome the Government’s determination to reduce the hassle and bureaucracy of the present system for getting dormant publicly owned land transferred to firms for development. This is particularly true of housing. In London there is a great need for more brownfield sites on which to build homes. However, Clause 21 gives this power to the Homes and Communities Agency. That seems to me quite wrong. Why can the mayor not be given an overarching remit to assess, in conjunction with all parts of the public sector in London, what public landholdings are surplus above a certain threshold, and be given the firm and clear responsibility for bringing them forward for development? After all, he is the elected body and it seems to me that he should be able to do that. I have no doubt that amendments will be tabled on that issue.

My second point concerns Clause 22 and easements and other constraints. At present the law provides that the disposer of land has to retain an interest in it. I cannot believe that that is what is intended here. If public land is to be sold for development, why should the seller retain an interest in it? I hope that my noble friend will give me an assurance on that point.

The expansion of the Land Registry to take in local functions relating to land needs to be examined closely. I listened to the arguments made by my noble friend, who came close to convincing me that this is the most appropriate course. I have read quite a lot about it. I was interested that the Government’s response to the consultation acknowledged that,

“many of the responses were not supportive of the proposals”.

However, I have been told that the responses to the proposals were almost wholly negative and included opposition from the Local Government Association, other local authorities, the Law Society, the Council of Mortgage Lenders, the Information Commissioner, the personal search industry and other stakeholders. I can well understand that the national Land Registry wants to increase its powers and services, but more will need to be done if one is going to convince all those important groups that this is, in fact, the important thing to do. I am certainly open to persuasion but the Government need to do more. I suspect that we shall have some arguments in Committee.

Before I sit down, I should like to follow the right reverend Prelate and say a few words about Part 4, which, with Schedule 5, provides for a community electricity right—a power to require by law developers to offer a stake in onshore renewable electricity projects for sale to local communities. I can certainly understand—indeed, it would be welcome—if local communities can share in the benefits of such development; that can and does reduce opposition. That seems to be an important measure. It would give people, as the right reverend Prelate said, a feeling of involvement and participation, and that is right. The evidence shows that, in fact, a great deal of this is already going on across the country—voluntary measures are being taken in a variety of ways and are not constrained by any of the details that would have to be put into a statutory power. I have re-read the summary of DECC’s report,

Community Energy Strategy

, which referred to a community energy task force. It was planned to report to the Secretary of State by the summer of this year—here we are, half way through June, and we have not yet had the report—and for there to be a “review” next year. Yet, here we are, legislating for a proposal to establish a statutory power to compel developers to sell a stake in their developments. On this I should like to make two points.

First, virtually all the details under this proposal and schedule will have to be set out in secondary legislation. We are familiar with dealing with that in energy legislation, given that we had it in spades in relation to the Energy Bill, but a huge amount of these proposals will need to be dealt with in regulations. I hope that the Government can today give us an assurance that we will not debate this part of the Bill until we at least have a clearer indication of what is going to be in the regulations, perhaps in draft form or something of that sort.

My second and, I promise, final point is: why do we need to make this compulsory? It is happening already on a wide scale across the country. The Renewable Energy Association has told me that a statutory power, even as a back-stop, is not going to make the task of its members any easier in securing voluntary agreements. I therefore ask my noble friend: why cannot this process simply be allowed to continue? The answer will be that some developers may resist and, therefore, the power will be there as a back-stop. There needs to be a power, as the Government say, just in case it may be needed. Ministers may say—as they do—that they do not want to have to use this power, and that they would much rather that the process continues to be voluntary. I have sufficient experience of this, however, and if departments are given a power to do something, sooner or later they do it. My mantra for that phenomenon goes back many years. If a department can do something then sooner or later it will. If Ministers want to continue with the voluntary arrangements, which the industry certainly wants—it does not want a statutory arrangement—why can we not just leave it at that? This is something that needs to be looked at very carefully in Committee.

Like others I support the Bill, but I have questions that will need to be answered.

Photo of Lord Whitty Lord Whitty Labour 4:55 pm, 18th June 2014

My Lords, one might ask why we need another piece of legislation, given that we had an infrastructure and planning Bill only a couple of years ago and a national infrastructure plan only last year. The Bill reads as though it consists of things that were left out of those previous government initiatives, or were thought of or seen as problems since. It is a bit of a hotchpotch of a Bill. Luckily for me, I am interested in quite a lot of the hotches and potches, even though they are disparate. That might not be good news for the Minister. I am also interested in some rather more primary questions, such as what counts as infrastructure. For example, housing sometimes counts as infrastructure, but it is not included in the infrastructure plan. More esoterically, improving energy efficiency in buildings, which is a major challenge and would give huge returns on our energy policy, does not count as infrastructure and is therefore not judged on the same basis as major infrastructure projects.

It is also not clear how one infrastructure project is judged against another. I am familiar with roads and flood defence. With roads you can occasionally get—at least in the tail-end of the programme—a net present value cost-benefit ratio of 2:1. For flood defence you are lucky to get a project that returns 7:1, or indeed 13:1. There is no consistency in our approach to infrastructure. There is then, of course, the issue of who pay. By and large, these days it is the consumer, whether in energy prices, road tax or water charges. That method of financing infrastructure is regressive. It tends to be the poorest who make the biggest contribution and, quite often, the least use of that infrastructure.

I will talk mainly about Part 1. Those of you who have been in this House for some time might recall that for three or four years I was the Roads Minister, which was an interesting job—I am sure the Minister is so finding it. I find the proposals on the Highways Agency interesting and I am not opposed to them. However, I do not believe some of the alleged benefits that are set out in the advocacy of them. It could be constituted as a government-owned company, although I hope we find a better name for it than “GoCo”. I do not object in principle; I would object were this to be a step towards privatisation, but from government statements and the Minister shaking her head earlier today, that is clearly not the objective.

The proposed model has some potential advantages. A company would be freer to enter new forms of contract for road building, road operation, maintenance and so on. In the present climate, it would probably be able to offer salaries for expertise and management that it cannot as part of the Civil Service. It could also probably finance or make use of innovative approaches rather more than an agency closer to the department could. I support such a model, at least tepidly, for those reasons, although, as others have pointed out, there are down sides in a new organisation requiring all the overheads that a relatively lean organisation, as the Highways Agency currently is, does not. I would be in favour of such an entity—“GoCo”, “Highways Agency Plus” or whatever we call it—if the Government were to make more of the need for it to have new methods of managing our motorway system. There are advances in road design, telemetry and traffic control that our system does not make full use of and that an innovative organisation could make more of for benefits of safety, speed control and traffic management, and to improve journey times. Of course—be it whispered—it could also provide the basis for the introduction of variable road-user charging. I do not think that in the long run we will be able to pay for a modern, competitive national road network unless some form of road charging is introduced. However, that is politically toxic and at this stage before a general election nobody on the Front Bench of any party is going to advocate it, but I think that we will return to it.

It is arguable that an arm’s-length company would be better able to carry out that kind of strategic objective. However, what it will not of itself do is deliver the Government’s main point in their documentation—a stable, clearly viable, long-term strategic programme for road building and road maintenance.

Being a Roads Minister is a lightning conductor for everybody who wants their bypass improved, a new junction or the introduction of safety measures and so forth, and that is not going to change. No Secretary of State and no Minister for Roads will avoid all that, however arm’s length we ostensibly push the organisation that is going to deliver it. However, more important than giving Ministers a quiet life is the fact that the change of status does not of itself in any way give certainty of long-term financing.

Going back to the creation of the Highways Agency in 1994 under the previous Conservative Government, pretty much the same benefits were claimed. That Government developed a roads programme and the previous Labour Government developed several roads programmes. However, there were changes in those programmes. One of the A303 routes, which the noble Lord, Lord Cameron, referred to and which I sometimes frustratingly drive past on my way home, was mentioned in 1994 at the time of the creation of the Highways Agency. It was in the last roads programme of the previous Tory Government. It was also in the programme that I announced and it was still in the programme when I left the job. It has subsequently gone. I cannot pinpoint the exact Minister at the moment but this Government certainly did not restart it and not a sod has been turned.

Projects such as that run into all sorts of difficulties. There are changes in local circumstances, different sorts of objections, planning difficulties that are unforeseen and technical difficulties. There were technical difficulties with the A303 tunnelling process. However, at the end of the day the reality is, for one reason or another, that Ministers change their mind, and the main reason they do so is that the Treasury tells them that they cannot have the money.

It is not at all clear how this new structure will alter that situation one iota. Because the Highways Agency is a government-owned company rather than an agency, the Secretary of State will have to argue the toss with the Treasury. It is not clear from the proposition whether this new company will be allowed to raise its own money by going to the market for bonds. I should like a clearer answer on that. There is a reference in Clause 12 to the Secretary of State being able to guarantee various issues, but whether that means guaranteeing—in effect, underwriting—the company going to the market for loan capital is not clear. I should have thought that if that was the Government’s intention, they would have made rather a bigger thing of it. The reality is that the roads programme will never be sufficiently secure, sufficiently long-term or sufficiently constant if it is down to the Secretary of State and the Treasury to sort it out. If some money could be raised as loan capital—I stress “loan capital”—it would be possible to smooth it out a bit, but not otherwise. I do not believe that the Bill gives the power to the company to do that—at least, not on any significant basis.

Therefore, I think there is a danger of there being a false promise to the motoring organisations, the motoring correspondents and Jeremy Clarkson that at last we will have a proper roads programme in this country. I do not think the Bill guarantees that at all. While there may be some advantages in other respects, changing the name on the door does not deliver it. Another issue in relation to the position of the Highways Agency is that the original proposition talked about a single company but this allows for more than one company. I do not understand that. Why would we want more than one company to manage our motorway system? Or are we going to distinguish between the motorways and the trunk roads that the Highways Agency owns? Is it going to be a regional thing, in which case the interface between the new body and local authorities will be quite difficult, or are we going to reclassify and de-trunk or re-trunk roads to create separate companies? I do not see the benefit of even postulating that there is a possibility of having several companies operating in this field.

My noble friend referred to the oversight and engagement bodies. It is not immediately obvious that Passenger Focus is the most appropriate organisation to deal with roads. I am a great admirer of Passenger Focus and I have defended it in this House against the possibility of abolition and against the cuts that unfortunately have been made to its budget. However, it has dealt with fare-paying passengers, not with motorists or hauliers, which are a different proposition. On balance, Passenger Focus probably could take that on but it would not be easy and it would require significant funding to recruit the people capable of doing it.

It is even more bizarre to give the responsibility for monitoring to the Office of Rail Regulation. It has an entirely different franchise system from the road system. It is not just a question of monitoring. If a company is genuinely at arm’s length, it will require heavier regulation than that. There should be a separate regulator. The responsibility should not be added to the already rather difficult task of the Office of Rail Regulation.

While I do not oppose the concept, there are a lot of issues relating to the Highways Agency. I have views on other parts of the Bill, which I shall leave until Committee, although I have copious notes here. As regards the Highways Agency, there is a germ of a good idea but a lot of questions need asking and answering. I hope that we will be clearer by the end of the Bill’s progress through this House.

Photo of Lord Oxburgh Lord Oxburgh Crossbench 5:07 pm, 18th June 2014

My Lords, it is a tough job to follow a speaker as well informed and experienced as the noble Lord, Lord Whitty. Fortunately, I will take a slightly different line. As has been pointed out, the Bill covers a number of interesting and somewhat loosely related topics. The first part deals with roads and establishing a strategic highways company, or companies—I share the puzzlement of the noble Lord, Lord Whitty, over the reference to companies—to implement the roads programme. I have some specific questions on this which I will come to later.

For the moment, I wish to raise how the roads programme was established in the first place and how it will fit into considerations of the broader national infrastructure. Perhaps this will be revealed in the strategic vision promised by the Minister. She also spoke of the very substantial investment being made in infrastructure, which is to be welcomed. Undoubtedly, things have got better. Yet, as the noble Lord, Lord Adonis, pointed out, the evidence suggests that we may not yet be getting these things right. The recent World Economic Forum report on global competitiveness ranked the overall quality of UK infrastructure rather low in the world league, which echoed the conclusion of the CBI report in 2011. I think we can agree that that has to change if the economic recovery, which fortunately is under way at present, is to continue and to be consolidated.

Good infrastructure is what attracts investment and underpins virtually all economic activity. One does not have to go very far in other European countries to be impressed by the seamless integration of air, road and rail services in a way that all too often seems to elude us.

Why should we have a problem? There is a national infrastructure unit within the Treasury, advised by a National Infrastructure Advisory Council that includes external members. A policy paper was published entitled National Infrastructure Plan 2013 that was updated on the website on 31 March 2014. The trouble is that it is not an infrastructure plan: is a list. It enumerates the major road projects that are to go ahead, along with dozens of other local infrastructure projects of many kinds in different parts of the country. We find sections on roads, rail, airports, energy and a host of other important investments. However, each section appears to have been written in isolation by different authors and to a large extent ignores other infrastructural elements.

What we do not find in the plan is any integrated view of national infrastructure as a whole, or indeed any recognition that the different elements of infrastructure should interact with each other. This approach has dogged our recent discussions of major infrastructure projects. In the ongoing discussion of HS2 there has been little mention of how the motorway network might be affected one way or the other if it were built or not built—or, for that matter, whether the HS2 line offers the possibility of a new route for high-speed broadband fibre. These things can go together. Similarly, the discussion of new airport capacity in the south-east has been driven largely by local considerations with the assumption that whatever road or rail connection were needed would simply have to be built.

The national infrastructure plan contains virtually no discussion of policy. For example, in the roads section, I was unable to find any indication at all that any of the projects had taken into account the fact that over the next 30 to 40 years of their lifetime they would certainly have to withstand more extremes of climate than have been usual in the past. Indeed, the Department of Energy and Climate Change is not represented on the National Infrastructure Advisory Committee. In the particular context of road development, for example, there is no discussion of whether it is desirable to have an infrastructure that promotes the movement of more freight by rail. These are important strategic considerations that seem to be completely omitted from our thinking.

The national infrastructure plan is seriously misnamed. It is not a plan, as I pointed out. The enumeration of infrastructure projects planned or in progress in the country as a whole gives no clue as to why the priorities have been decided on or how they might fit together. They give the appearance of priority lists generated by a series of unco-ordinated departmental silos.

At this point, I draw the attention of the House to the work of the London School of Economics Growth Commission on which two of our colleagues, the noble Lords, Lord Browne and Lord Stern, serve. Although the Growth Commission’s remit is wider than infrastructure, it emphasises that proper infrastructure planning is essential for the economy to prosper. Among other recommendations, the commission proposes the establishment of an overarching infrastructure strategy board that will view national infrastructure as a whole.

Infrastructure projects are essentially long-term in both their execution and operation, and need to survive many Parliaments and many Ministers. For that reason, the commission argues that infrastructure planning needs to be removed as far as possible from adversarial party politics and carried forward on the basis of political consensus—and the commission makes suggestions as to how that can be done.

To turn to the specifics of the Bill, the proposed replacement of the Highways Agency with a company or companies wholly owned by government is a central plank. The proposed arrangement offers the possibility of more independence in the day-to-day running of matters relating to national roads and should allow a greater degree of certainty in planning. The expectation is that this will make the funding of road projects easier.

So far, so good, but what does this imply for the planning of road projects? Where will the responsibility lie for deciding how the national road network will evolve and how this will relate to other aspects of infrastructure? How will priorities be decided? The Bill is quite explicit that although the putative company—or companies—may subcontract the implementation of certain aspects of the work, responsibility for those aspects will remain with the company. Does this carry over to the relationship between Ministers and the company? Does the Minister retain full responsibility for the actions of the company or can the company develop and maintain the road network in a way that takes no account of other national priorities? It would be extremely useful to hear the Minister’s views on these questions.

I had not expected or planned to speak on Part 4, but, given that it has been subject to discussion, I will say that the sad thing is that Part 4 is necessary. Until,

I think, about three years ago, I was chairman of a very successful onshore wind company, which operated both in mainland Europe and in the UK. Certainly in the UK, before embarking on any project in an area where we had identified a good wind resource, the first thing we did was to go into the local community and, through a variety of local organisations, say, “Look, we think you have a great wind resource here. Would you be interested in developing it in collaboration with us?”. The response was almost invariably positive, which was certainly a matter of expediency to the extent that it enormously facilitated the passage of the proposal through the planning process.

The last project was perhaps the most interesting, when we built a wind farm on the northernmost tip of the island of Skye, well away from the areas that are visited by tourists. We found, to our astonishment, that the local take-up of shares in the company was really significant. I cannot remember, but I think that members of the local community ended up owning three of the windmills themselves. The opening of the park was celebrated by a great ceilidh and the local distillery produced a windmill malt with one of our turbines illustrated on the label. The message is simply to emphasise what the noble Lord, Lord Jenkin, said: that this has been going on for some time and sensible companies should have been doing it. Those that have not would learn a great deal from looking at these lessons. Whether this is a necessary provision, I just do not know.

In conclusion, I shall not address other aspects of the Bill, which introduces a number of measures that I think will be useful, particularly those concerned with invasive species. However, I emphasise again that there are important questions about our overall, global, infrastructure planning in this country. I would like the Minister to tell us whether there is any process by which the component elements of infrastructure are considered together and prioritised in the national interest. My inquiries suggest that this does not happen at the meetings of the Treasury’s Infrastructure Advisory Council. Could it be that our infrastructure plan is not a plan at all but simply the outcome of an interdepartmental free-for-all, to a greater or lesser extent refereed by the Treasury with the sole priority of keeping down spending? If that is the case, our low position in the world infrastructure rankings is easily understood.

I support the Bill because its provisions seem to be generally beneficial but my concern is that we may not be getting value for money from our infrastructure investment because of a lack of articulation between its components.

Photo of Lord Berkeley Lord Berkeley Labour 5:19 pm, 18th June 2014

My Lords, I welcome many parts of the Bill, although it does rather seem as if it is sweeping up loose ends before the election. I thought that the Minister did pretty well in her introduction to cover things such as the changes to the Highways Agency; low-carbon homes; shale gas—oil is now low-carbon as well, apparently; planning; non-native species; and the Land Registry. But it is a bit of a curate’s egg. I shall concentrate mainly on Part 1. My noble friend Lord Whitty, from his great experience as a Minister, has outlined some things that I might also have views on, as did the noble Lord, Lord Oxburgh.

Starting with the Highways Agency, I think that there is benefit in moving towards the kind of structure that Network Rail will have after it comes under government ownership on 1 September. Again, it looks rather like putting two things side by side with no read-across between the different types of transport and the need to encourage some modes of transport at the expense of others. As the noble Lord, Lord Oxburgh, said, there is perhaps a silo mentality.

With regard to the new highways companies, as my noble friend Lord Whitty said, how many companies are we going to have? I suspect that this is the start of seeing whether they could actually be privatised—but not in Wales, which seems to be exempt. It will not happen in this legislation but it might happen in the future. The problem, as other noble Lords have said, is where the revenue is going to come from.

My next question concerns the application of the Freedom of Information Act. It seems to me that the company or companies should be subject to FoI, which the Bill requires Passenger Focus to be subject to. It is a bit odd to have Passenger Focus subject to FoI if the companies themselves are not. I have been saying over many years that Network Rail should be subject to FoI as well. We need a bit of consistency here.

It is difficult to talk about governance because we do not know much about it. I believe that the Minister promised us a document before Second Reading but I do not think it has come. It may be that we will get answers to many of the questions that I and other noble Lords will be asking, but we need it as soon as possible and I hope that she can tell us when we can expect it.

I would like the Minister to comment on whether, in the preparation of the road investment strategy, the Government will take account of the Climate Change Act, the national parks Act and various other Acts, such as right-of-way and environmental legislation. If they do, there needs to be some read-across to Network Rail’s process. Will they undertake the same type of consultation on routes as that which underpins the rail investment strategy? It should underpin the road one because one should look at routes in a multidisciplinary way, with road and rail being compared on particular routes. Will that happen?

Other noble Lords have talked about the funding for the new companies. Will it be similar to the HLOS under which Network Rail operates? I wonder how the Minister has come up with a saving of £2.6 billion in 10 years. How will that be checked and monitored? We have the monitor, which I shall come on to later, monitoring various aspects of the companies’ work.

In the case of Network Rail, the Office of Rail Regulation required it to make savings of about 40% of its turnover over a 10-year period, which is a massive saving, and I think it has done very well to achieve it. Will the monitor therefore be required to do the same for the Highways Agency? It would seem reasonable if it did, but that assumes that there will be a five-year funding programme rather than the annual one which my noble friend Lord Whitty suggested will probably happen. I believe that that has happened to the Environment Agency. Most of my party think that the Environment Agency’s revenue has been drastically cut, and I agree. The Government say that it has been increased, but the problem is that it has been changed—I think, for the worse—so we will need some comfort on that as well.

Going on to cross-modal issues and the duties of the strategic highways authority, will a duty be put on it to work with Network Rail and other relevant bodies? We must not forget local and regional transport bodies, as other noble Lords have said. The amount of traffic on the main Highways Agency roads is actually not a high proportion of the total.

Then there is the question of forecasting, which we have raised many times; the noble Lord, Lord Bradshaw, has also raised it. Will we get some consistency of forecasting of traffic between road and rail? Will we have one forecast or a range? Will the regulator, or whatever it is to be called, be expected to assess the modes together along corridors? How will the highways side of it take into account the needs of buses, cycling and walking? The Minister may say, “You don’t walk along trunk roads”. If you do, you need a footpath or a cycle way. Trunk roads are, after all, a means of travelling between different areas, and there is absolutely no reason why there should not be cycle tracks and footpaths along them. There probably should be some beside HS2, if it gets built. Those other modes of transport need to be included in any policy work that the authority and the department undertake. I will be interested to hear what the Minister has to say about that.

Turning to the Passengers’ Council, I find it extraordinary to have a Passengers’ Council looking after roads and their customers. The AA and the RAC do not do a bad job of looking after the customers of roads driving cars or motor bikes, and the Road Haulage Association and the Freight Transport Association do a pretty good job of looking after the interests of their members. They are not funded by the Government. When it comes to railways, the Rail Passengers’ Council is funded by the Government, but who looks after the interests of rail freight? The answer is the Rail Freight Group, in which I declare an interest as chairman, and the Freight Transport Association. I cannot believe that the Government intend to offer us £10 million of subsidy to make us equal to the roads. It seems extraordinary that they think that the passengers who drive up and down the roads need a subsidised organisation to look after their interests, but perhaps I am missing something there. I look forward to what the Minister has to say about that.

My noble friend Lord Whitty rightly mentioned the Office of Rail Regulation looking after roads. First, it needs a new name. Secondly, who will fund it? For the railways, it is funded 50% by Network Rail and 50% by the customers, the passenger and freight operators. Presumably, the companies running the strategic road network will fund half of it for roads and the road users will be asked to fund the rest. Is that a rogue user charge, or how will they do it? Or is it yet another subsidy for the roads? I do not know. For railways, the

Railways Acts put specific duties on the ORR to guide its works. Would it not be useful if there were specific duties on the monitor, or whatever we want to call it, so as to have its duties specified in this legislation?

The next matter is something that I feel quite strongly about. It is not here in the Bill, but it should be. It is to do with level-crossing legislation. Your Lordships may be thinking, “Why is he talking about that now? It is a minor detail”. However, there are 7,000 level crossings in this country, each with its own legislation. As noble Lords will know, Network Rail has recently been quite severely criticised by the Commons Transport Committee and the Lord Chief Justice over various things that have gone wrong. The legislation is incredibly complex and difficult. I am told that you cannot even change a light bulb in a level-crossing light without putting in a special application to the Office of Rail Regulation for each level crossing, because if you do not, Network Rail might be liable. I am also told that there are 8,000 pieces of legislation, so it could be said that this is a really big red tape challenge for the Government.

The Law Commission and the Scottish Law Commission have spent five years considering this and have proposed a Bill to replace all this past legislation with a simple framework within the Health and Safety at Work etc. Act 1974, which would apply to all stakeholders equally. The Law Commission published a draft Bill which is about 50 pages long, and it is a very good Bill. I gave the Minister notice that I was thinking of putting down the whole of that Bill as an amendment, but then I thought better of it. I am sure that she is grateful to me. However, it is something that we ought to talk about. I am very grateful to her for arranging a meeting so that we can all go through it. I think that that will happen next week. It is a wonderful opportunity to simplify things, save an awful lot of money and time and get the responsibility for the different parts of level crossings where it belongs.

I have one final example on this. Network Rail is responsible for everything, which is right up to a point. However, if a local authority and a bus company decide to put a bus stop 20 yards beyond a level crossing, and if the buses all stop there and traffic backs up on the crossing causing an accident, there is absolutely nothing that Network Rail can do about it except to stop the trains. Something needs to be done, and I am looking forward to further discussion about it.

Finally, I have two quick comments. First, on the non-native species in Part 2, can the Minister confirm, to an ignoramus like me, what a species is? Does it include things that fly or those that go on the land? Does it include things that swim or are in the water? She will probably understand why I am asking those questions. It is very important that the legislation cover all those things, so I hope that she can confirm that it will. Secondly, Part 4 is better late than never. I remember that, more than 10 years ago, when I was on the European Select Committee of your Lordships’ House, we visited Denmark to see wind farms on land which had been developed with the support of local communities, which then got cheaper electricity. In our report we asked why that did not happen here.

Okay, it has taken 10 or 15 years, but I am very pleased to see that it is happening. I welcome much of the Bill and am looking forward to some good discussions in Committee.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Conservative 5:33 pm, 18th June 2014

My Lords, the noble Lord, Lord Berkeley, referred to the extremely good work of the Law Commission. It sounds to me as though there is a very valuable piece of legislation that we could pick up to clear away some of the wreckage of prior years.

For my part, I find myself in sympathy with the strategic objectives behind this legislation although, as my noble friend Lord Jenkin of Roding rightly reminded us, much of the detail has yet to be revealed and it will be important that the regulations are published in time for us to have a proper discussion about the detail of the operations of the proposals before us today. My noble friend on the Front Bench gave a persuasive defence of the idea of a strategic authority for our road and motorway network.

Like my noble friend Lord Teverson, I too have struggled with Japanese knotweed, so I understand the importance of dealing with non-native invasive species. Indeed only last week, standing by a trout stream in Wiltshire that I enjoy patronising at this time of year, I was disturbed to find some mink and to see that the water was containing an increasing number of very large Canadian crayfish, which are driving out our native-born crayfish and destroying them, so this seems to be an important and useful part of the Bill. And who can argue with the need to house our population decently?

With that background, I shall raise three points with the Government today. The first concerns not how much housing we are going to build or where we are going to build it; rather, the question is what we are going to build. We in this country have an extraordinarily rich and diverse heritage of local architecture, from the dark stone of Yorkshire and the honey-coloured stone of the Cotswolds and Oxford, to the whitewashed cottages of the Celtic fringe and the half-timbered black and white houses of my home county of Shropshire and of Herefordshire. Noble Lords will have their own particular examples of this. I fear that these regional variations are now being swept away in favour of huge estates constructed entirely from six or seven off-plan models of individual houses. If I were to blindfold individual Members of your Lordships’ House, load them into a helicopter, land them in a housing estate and then remove their blindfolds, they would not be able to tell whether they were in Norwich, Redditch, Plymouth or Stockton-on-Tees. I argue that housing constructed in sympathy with the locality, composed of the local style and using local materials increases people’s pride in their community and a sense of belonging and so improves social cohesion.

As I say this, I can feel the officials in the Box preparing a note to send to my noble friend on the Front Bench saying, “Tell the noble Lord there are plenty of other provisions, including one in the Localism Act, which will give local communities the power to insist on specific standards”. However, I am afraid that this has proved to be on the one hand specious and on the other hand ineffective. Faced with a developer that tells the local authority that it can have a standard-plan house at X thousand pounds but a specified one costs X thousand plus 20%, there can be only one answer. The builders will fight tooth and nail to narrow as much as possible the range of houses that they have to offer; it is, after all, in their commercial interests so to do. The Government need to think carefully whether there is sufficient equality of arms between builders and local communities and, if they accept the builders’ argument, whether bland uniformity is the answer or whether we risk creating run-down, featureless, hollow estates 25 years from now.

My second point is, at this time, a non-point because fracking has not so far appeared in the Bill. However, my noble friend on the Front Bench has trailed it extensively so I take this opportunity to urge the Government, as they consider the whole issue of fracking, to consider at the same time the possibility of establishing a sovereign wealth fund for the UK. Noble Lords will be familiar with the concept of such a fund, whereby a country, instead of spending all the proceeds from the exploitation of a precious and finite resource on immediate consumption, puts some proportion aside to benefit future generations. One could argue that this is akin to an everlasting pension fund for UK plc. The noble Lords, Lord Oxburgh and Lord Cameron of Dillington, were fringing on this when they talked about local participation in individual schemes.

Most noble Lords may think about this in terms of the Gulf states but, closer to home, Norway has an extremely successful sovereign wealth fund. As a result, Norwegian government bonds are some of the most sought after and highly rated in the world. A British sovereign wealth fund might not just help the country in the long term; it might also improve our financial stability in the short run. As a nation, we are jolly good at spending but rather less good at saving. As a nation, we have already blown the proceeds of the majority of the first great gift from nature, North Sea oil. The Government need to reflect carefully on whether we should repeat that experience with a second potentially great gift from nature, our gas reserves.

My third and final point is an entirely strategic one and one in which I argue that the Bill is set at the wrong end of the telescope because it makes no reference to how the population level may develop in this country over the next few years. As always when I raise this subject in your Lordships’ House and elsewhere, I begin that this is not a rerun of the argument about immigration or about the racial make-up of our country. I have absolutely no interest in either of those topics, but I have profound interest and concern about the rapid rise in the absolute level of population in this country and how this will affect every single settled member of our population.

The facts, which I used last week, can be simply put. On average, every day the population of this small island increases by 1,250. We are putting a large village or a small town on to the map of Britain every week and are doing so 52 weeks a year. The cumulative impact on our country will be huge. Take the example of housing, the subject of the Bill we are discussing today. Of course we all agree that our settled population should be properly housed. Common decency demands it. The average occupancy rate is 2.4 people per household, down from about 3.1 people 20 years ago. It is unlikely to increase much. It may even fall as people live longer, more people get divorced and more people choose to live alone. If we stick to the 2.4 figure, noble Lords can do the mathematics as well as I can: 1,250 people a day at 2.4 people per dwelling means 520 dwellings per day. There are 24 hours in the day. That requires 22 dwellings per hour, one every three minutes, night and day. This is before we begin to make an effort to improve our existing housing stock. This is just today’s challenge.

One could reasonably ask where all this might end. The mid projection of Government Actuary’s Department and the Office for National Statistics is that by 2054, 40 years from now, the population of England will have increased by 13.1 million people. On the housing metric of 2.4 people per dwelling, that will require us to provide 5.4 million houses. Doing that will present and create political challenges of a very high order.

When we debate the housing crisis and how this Bill may help resolve it, it is fair enough, but we need to remind ourselves that we are addressing the outcome, not the underlying cause, of the challenge in the first place. This is not the time or the place to go further into this complex and difficult area of demographic change, except to say that every area of government will be challenged. Today’s headlines about gaps in the funding of the health service are just another feature. So often, the terminology used in the debate serves to confuse rather than to clarify.

I anticipate that before the end of the debate some noble Lord will raise the example of Thomas Malthus, pointing out that his predictions have proved wrong and so, by analogy, will the predictions that I have given the House today. My answer to that would be to say that indeed Malthus made predictions and indeed they were based on a hypothetical set of circumstances. My remarks are not based on a hypothesis. They are based on reality: 1,250 people are arriving in this country or being born in this country every day. That is a fact. Of all the challenges that the Government face, those of demography have the longest lead times. A nudge on the demographic tiller has no impact today. Its impact is felt in 10, 25 or 50 years. This Bill deals with today’s challenges, but I hope that someone, somewhere, is thinking about the longer-term challenges for our infrastructure and not, like Mr Micawber, hoping that something will turn up. These demographic changes now taking place contain serious implications for all parts of our country and society and the social cohesion and welfare of our nation.

Photo of Baroness Miller of Chilthorne Domer Baroness Miller of Chilthorne Domer Liberal Democrat 5:44 pm, 18th June 2014

My Lords, the Bill offers lots of opportunities and I certainly look forward to hearing more about them. Due to the slightly fragile nature of my voice today, I will cut my points short. However, what I would like my noble friend the Minister to consider concerns the proposed new road company. The Bill suggests that existing environmental duties would apply to the new company. However, we have learnt that whenever there is a major new road scheme, the real difficulty comes when it is faced with environmental issues. The Bill offers us an opportunity to do more than simply apply the existing environmental duties to the new company. We could be requiring the new company to apply much more sophisticated new measures, such as whether or not a new road scheme would dramatically reduce total carbon emissions. This is now as important as whether there is a colony of great crested newts in the road’s path.

I am sure that your Lordships would not expect me to make a case for lesser environmental protection, and I am certainly not doing so. It is a tragedy when a road drives through an ancient woodland or SSSI. However, we must now balance all sorts of things in a much more sophisticated way. Just transferring existing duties is insufficient. I note the interesting suggestion of the noble Lord, Lord Berkeley, about our view of such a road and whether it would incorporate, for example, a cycle path. That is an opportunity that is offered and might add further environmental pluses and carbon reductions. I would be disappointed if we simply transferred duties without using what we now know about carbon emission measurements, for example, to further the balance when we come to look at these things—my noble friend used the word “balance” in the context of housing, but I use it here.

On Part 2, the noble Lord, Lord Berkeley, asked “What species?”. My question is simply: what is “non-native”? I know that some of the NGOs are concerned that things that have been non-native for a long time, like the great bustard, the giant crane and even beavers and all sorts of things that fly and swim, could be caught by this. I do not suppose that anyone is going to say that they are invasive, but defining “non-native” more rigorously would be useful. Otherwise, we could be setting the status quo in law as a one-way system for biodiversity loss: if an animal, insect or any living creature ceases to appear in the wild, it ceases to be native.

Of course, I imagine that Part 2 applies mainly to plants, because that is where we have mainly seen the problem. I praise the Government for tackling the issue of landowners who will not allow measures to be taken on their land; that is positive. I simply echo the comments on ballast waster of the noble Lord, Lord Cameron. Ballast water can import all sorts of things that you would not want to see, including things that damage our very infrastructure, such as our sewerage outlets and drainage systems. It is not so severe in this country, but in some parts of the world various crustaceans have really wrecked the water infrastructure of various cities.

My final point in this short contribution is about how much I agree with the noble Lord, Lord Cameron of Dillington, on affordable housing. I join him in hoping that nothing in the Bill will in any way jeopardise the ability of rural communities and local authorities in rural areas to make an affordable housing requirement.

Photo of Viscount Hanworth Viscount Hanworth Labour 5:50 pm, 18th June 2014

My Lords, I wish to question the Minister about the intentions that underlie the parts of the Infrastructure Bill that relate to our highways. However, at the outset, I will discuss the opinions of economists regarding the rules that should govern our access to highways.

One of the first people to think systematically about the economics of highways was the 19th-century French engineer and economist, Jules Dupuit, who considered the effects of imposing a toll on travellers for their passage over a bridge. He observed that if the toll were fixed with the object of maximising revenues, it would be liable to discourage the use of the bridge, thereby reducing its utility. Therefore, in most cases, the passage should be free.

The manner in which tariffs and tolls can diminish the utility of a capital investment is well illustrated by British experience. The case in point is the M6 toll road, which skirts the Birmingham conurbation and is the one UK example of a tolled motorway. It was opened in 2003 and is operated by Midlands Expressway Ltd—owned by Macquarie—which holds the concession until 2054. By all accounts, the road is underused; as regards HGVs, it appears that the overwhelming majority have chosen to remain on the congested M6 road. As a result, the maintenance costs faced by the Highways Agency for the M6 are disproportionately high.

However, there is a lacuna in Dupuit’s analysis, which concerns the costs of congestion. When road traffic has been slowed through congestion, any vehicle that is added to the stream exacerbates the problem. Not only does it bear its own direct costs, it can also add greatly to the costs of others by worsening the congestion. Those are its externalised costs. If the vehicle could be made to bear its externalised costs as well as its own direct costs, it might be deterred from adding to the congestion. British experience also serves to illustrate that point. There are two other significant cases of direct charges for road use: the bridge at the Dartford crossing and the Severn Bridge, which carries the M4 motorway. The congestion on both bridges is often so severe that it has been argued that a heightened toll should be imposed at the times of day when the bridges become all but impassable.

It must be conceded that, far from being governed by economic logic, the building and the administration of trunk roads and major highways is greatly influenced by social and political ideology. Thus, the autobahns in Germany and the autostrade in Italy, which were built in the period between the two World Wars, were intended to be seen as expressions of the purposiveness of the respective fascist regimes. In Britain there was no such motive and the programme of motorway building began much later, in the late 1950s, when it was overseen by the Conservative Minister of Transport, Ernest Marples.

Very little has been done in recent years to extend or upgrade Britain’s system of trunk roads and highways. The UK road network is one of the most heavily congested among the OECD countries. An OECD report of 2011-12 placed the UK in 26th position for the quality of its roads, which was towards the bottom of the list of developed countries. It has been doubted whether, nowadays, the Department for Transport has the skills to oversee the major investment projects in roads that seem to be required.

In those circumstances, the Government are making their proposals in the Infrastructure Bill to reform the management of our strategic highways. They propose to transform the Highways Agency into a government-owned company that would operate independently of the Department for Transport. The Government propose that the planning horizon of the Highways Company should be lengthened, and have declared an earnest commitment to provide stable long-term funding to support a road investment strategy.

The provisions of the Infrastructure Bill are best described as enabling legislation that will provide the framework for subsequent developments. They give us few indications of what, if anything, might materialise from a new approach to the management of the strategic road network. For further enlightenment, one might look to the document Action for Roads, which was issued by the Department for Transport in July 2013 and is full of hopes and good intentions. However, it needs to be assessed also on what it fails to mention and its major lacunae.

The document extols the new technologies that should enable information on the state of the traffic to be provided to drivers and enable rapid responses to accidents and breakdowns. However, there is barely a mention of road charging and no mention of congestion charging, both of which have been enabled by recent technological advances. That is understandable in view of the unpopularity of such schemes. Indeed, the national road pricing schemes that were promoted by the Labour Government of 1997 to 2010 were abandoned due to public opposition.

Here, we can see the effects on the management of our road network of a deep-rooted social ideology. Many of our citizens regard it as their inalienable right to travel freely without let or hindrance on the Queen’s highways. They are barely mindful of the vast resources that are devoted to the maintenance of the highways, or of the great environmental cost that is associated with the exercise of their right to travel freely by road. Notwithstanding those deep-rooted attitudes, the Government should continue to pursue strategies of road pricing and congestion charging with a view to their eventual adoption in the appropriate circumstances. Such pricing mechanisms should be used primarily to ease congestion and with the secondary purpose of raising revenue to finance the development of the highways.

British attitudes to road pricing contrast markedly with those of the French. In France, there are numerous toll roads and those who wish to travel rapidly and for great distances have no alternative but to use them. The French seem to be wholly accepting of that. Another marked contrast between France and the UK is the French acceptance of a privatisation of the highways of a sort that I trust would not be acceptable in this country. Many of the French toll roads have been constructed by and are run by private companies, who have been granted long-term concessions. That is how the French have attempted to overcome the effects of the financial stringency of central Government, which might otherwise have inhibited the development of their national road network.

When faced with enabling legislation, one looks for hidden agendas and undeclared intentions. One can reasonably expect that there are plenty lying behind the Infrastructure Bill. It is remarkable, for example, as other noble Lords have mentioned, that whereas much of the accompanying documentation talks of a unique government-owned strategic highways company, the legislation talks of a plurality of such companies. Can the Minister say what, if anything, lies behind that legislative provision? I also seek an assurance that, notwithstanding the example of the M6 toll road, there is no intention to privatise large parts of our national road network, which would subject the roads to revenue-maximising tolls. In asking that, I observe that there are French consortia that are ready and waiting to take long-term concessions. I see grave disadvantages in ceding the ownership of yet more of our national infrastructure to foreign companies.

Photo of The Earl of Lytton The Earl of Lytton Crossbench 5:58 pm, 18th June 2014

My Lords, I welcome the Bill, though in part I wonder why some of it is necessary. I declare interests as president of the National Association of Local Councils, chairman of the Rights of Way Review Committee, a vice-president of the LGA, a landowner and a practising charter surveyor. I will stop there, as otherwise I shall use up all the time available.

Strategic thinking on infrastructure is at least partly a state of mind, although the collective mind of the state, if I may put it thus, may be rather a different issue if the construct of what we know as a silo mentality persists. In part, that needs to be broken down. I, too, regret that there is not rather more detail on some of what we have before us. That ought to be swiftly rectified, as other noble Lords have said, but it means that my comments are of necessity general rather than on the more specific issues that some noble Lords have concentrated on. A strategic focus on infrastructure is of course extremely welcome, but we have this issue with the prolonged timescales involved in public involvement in planning and environmental debate over infrastructure projects.

As an example of how damaging some of these are, noble Lords should look at the A27 through Sussex, once gazetted as the Folkestone to Honiton trunk road. A professional colleague of mine has bought and resold properties along its route on innumerable occasions, as first one compulsory purchase order acquisition and then the abandonment of the scheme and subsequent disposal of the properties acquired have been rolled out, only to be repeated a few years later. Still there are huge bottle-necks and still there are accidents on inadequate sections of road. The prosperity of several south-coast towns is prejudiced by this inertia. If the Bill affords a better way forward—I look forward to seeing the detail and hope it shows a better way forward—then I am all for it.

I was curious about the strategic highways companies, their total ownership by the Secretary of State, their obligations to adhere to guidance and directions of the Secretary of State and their propensity to be fined by the same Secretary of State if they do not adhere to those. This circularity left me a trifle bemused, so I tried it on my wife, who, incidentally, is Austrian. She immediately referred me to the tale recorded by Baron von Münchhausen about how he saved himself from drowning by pulling himself up by his own hair. Joking apart, assuming there will be fines, I would simply ask: to what purposes would this money be put? Is it simply a process of robbing Peter to pay Paul for the sake of demonstrating some near-commercial aspect, or is it something more important than that?

As other noble Lords have said, infrastructure takes many forms and at community level it is not just about access on to road systems to get householders to work or new housing serviced, but it is also about community assets, health and other facilities, amenity space, cycle and footpath routes, which have already been mentioned, multimodal travel options and, of course, freight, which was mentioned by the noble Lord, Lord Berkeley. Of course, it might help if community entitlement also extended to a stake in the infrastructure itself, but we need a better and more holistic grasp of what infrastructure is and how to procure it—on which we seem to perform poorly—not forgetting the impact on work-travel patterns afforded by improving internet and broadband. I am unsure that the Bill’s proposals match this, but I hope the Minister will be able to reassure me. It is so much more than roads, and if Government are thinking that that is so, then I shall be very pleased.

On Part 2 of the Bill, I want to comment on the proliferation of Japanese knotweed. As a frequent traveller on trains south of London, I notice a good deal of this on railway embankments. It may be that Railtrack will claim it was chucked over by householders the bottom of whose gardens adjoin the embankment, but never mind; there seems to be a lot of it about. While we concentrate on the exotic weeds mentioned in, I believe, Schedule 9 to the Wildlife and Countryside Act 1981, we should not forget our very own home-grown noxious species, ragwort—the nodding yellow heads of which are only now beginning to appear—which is a serious contaminant of grazing land and grass forage.

On planning and land, I would only advocate a fair balance between community, private and national interests in any new arrangements, especially where land is already in some sort of public or amenity use. I hope there will be safeguards built into this.

I cannot help mentioning land registration, as I have a particular interest as chairman of the professional group in the Royal Institution of Chartered Surveyors that deals with title, land registration and things like that. I regard the consolidation as potentially beneficial, but I am concerned that the driving force behind maintaining the asset that is represented by the local register may be lost once the particular synergy with the normal activity of local authorities is removed and there is no longer any financial benefit to them in trying to assist in that maintenance. I wonder whether this will be replicated in the hands of the Land Registry. Otherwise, having a single registry seems to make a lot of sense.

On the subject of the electronic nature of registries, I ask that the Government pay special attention to the apparent ability that exists to generate fraudulent transfer documents, which are available on the web, and the abuse that can be made of the system thereby. This is absolutely not a criticism of HM Land Registry; it is a criticism, if criticism it be, of the lax protocols that surround electronic transfer, registration and certification, particularly when one does not have somebody one actually knows at the other end of the phone or a letter in hard copy—it is all electronically generated and it can all be falsified. It is a reflection, as far as HMLR is concerned, of the information that it is obliged to use in the land registration process.

On fracking, I will only say this as a Sussex resident: the typical yield decline in the output from a fracking well is phenomenally steep. For all the theoretical reserves that exist, typically about 10% or less may be recoverable—maybe that will improve. I do not believe that aquifers are an issue; they operate much nearer the surface than the shale gas and shale oil reserves. However, at the surface one gets roads, tanks, pipes, vehicle tracks and the vehicles themselves that are all associated with this, even after the initial well drillers have all packed up and gone home. These may be acceptable, but I think we need a better understanding of cost-benefit, and some of that goes for much of the rest of the Bill.

Photo of Lord Hunt of Chesterton Lord Hunt of Chesterton Labour 6:07 pm, 18th June 2014

My Lords, like others on this side, I give a half-hearted welcome to the Bill. The opening by the noble Lord, Lord Adonis, put it in the right context. I am surprised that nobody else has mentioned the less than flattering view of Britain’s infrastructure by China’s Prime Minister when he was visiting here and gave us a rather low score. Perhaps, being an outsider, his view was rather more objective than the rose-tinted view from certain Benches here in the House of Lords.

All, I think, agree—road enthusiasts or otherwise—that strategic highways play an enormous role in the economic development of the country. I personally saw the extraordinary development in north Devon once the highway was produced under a previous Tory Government. It was remarkable how that led to economic development. There is no question but that road building is of vital importance. In our crowded island, however, other factors also are extremely important, particularly air pollution. Air pollution, as we now know, is much worse in big cities where a lot of traffic is present. It is particularly bad where motorways intersect. Therefore the planning and design of motorways should be of considerable concern in terms of air pollution.

Most importantly, the UK has benefited from the fact that we do not have massive motorways through the middle of our towns; in particular, not through the middle of London. Some noble Lords will recall going to protest meetings in the 1960s when there was a real possibility that we would have enormous highways right through London; fortunately, we did not. However, there is a threat for this in other big cities. I believe that that is one of the strategic areas.

The other point, made by the noble Baroness, Lady Miller of Chilthorne Domer, is on the question of carbon emissions, which is important in the case of major motorways and part of our impact on the climate. The other effect of motorways is that they can help or hinder water movement. In Malaysia, the motorway that goes into the centre of Kuala Lumpur is generally a road but can also be an enormous drain when there is enormous rainfall. Similarly, we could have road tunnels and cuttings to use our roadways as part of our water infrastructure.

The other point to emphasise, when you go to Germany, is that you should moderate your speed because of the noise. The Germans do not generally moderate their speed, but they do when suburbs tell them about the noise. We have extremely noisy roads, such as the North Circular Road, and those are aspects.

I want to come back to that in a moment, and the role of the private sector. I am surprised about the confidence in this Bill about the private company solution. Who will own the company? Will it be owned by five different banks all around the world? There was an article in one of the Sunday newspapers recently. Thames Water has been owned by many banks, finally ending up with the Macquarie bank in Australia. English people are being told all sorts of undesirable things on water to maintain the very high profit levels of this multiple bank ownership. How are we going to be sure to avoid this kind of thing?

Well run companies, such as we see in France with their motorways, not only run the motorways well but also give extremely good advice to road users. They tell them not to go too fast because it is dangerous and it is adding to carbon emissions. Here, under our Department for Transport control of the motorways, road users are told to go faster—they say, “In 70 minutes you will reach Bristol going at 70 miles an hour”. That is not the right message. The private sector with proper guidance could help, but the transparency that we need of private sector involvement needs to be a great improvement on what we have seen with the massive water companies.

The other feature of roads and road strategy is the question of whether they will continue to be the same. Are we going to have automatically controlled cars and cars and vehicles that are electrically driven? The big question is whether the investment and financial case being put forward for roads is based on current technology. I look forward to hearing the Minister’s view on that, and on who will be responsible for making the strategic technological decisions.

It is very important that there should be an overall strategic view on highways as regards the transport, economic and environmental aspects. That issue was of course reviewed in the Armitt infrastructure report, which put all those things together—things which we are not seeing at all in the Bill as drafted. In his report, which he produced with a number of important advisers, including my noble friend Lord Adonis, it was suggested that roads need to be considered in a broad context, obtaining maximum value. That requires an integrated approach by government. I have mentioned some features, but other important ones include other aspects of transport, such as rail. Surely, many railway journeys to the south-west tip of Cornwall would be much more comfortable for everybody if the car was put on a train and the train went to Penzance—the sort of thing that used to happen and which still happens in

France. Everybody charging down these roads to that tiny peninsula at the end of Britain is a very strange thing to do.

Finally, there is shipping, which is a very important aspect of transportation around the coast of the UK. This was discussed in considerable detail when we had our coastal Bill in 2009-10, and should again be considered in a strategic way.

On other aspects of the Bill, I welcome the speeding up and clarification on land assets and conveyancing. Purchasing and conveyancing in the UK is nothing like as fast as it is in some other countries, and I hope that the efficiencies there will bring benefits. We should take on board the comments made about the possibility of fraud, when you have a highly computerised system. With people not understanding the process, there are dangers.

In Part 4 there is the discussion of indigenous oil and gas, as the Minister rightly emphasised. Will this be a possible source of energy for the UK via fracking? It is important to consider all the environmental costs. It is unknown by many in Britain, as we have been told here by visiting American politicians, that in the energy Bill proposed by President Bush he explicitly said that the costs of water and water clean-up would not be ascribed to the energy. It is therefore really important that all the environmental costs should be ascribed to the energy benefits or costs of fracking. It would be useful to have that point clearly made. The assumption in all the discussions is that you put a pipe down in the ground and oil or gas will come up out of the pipe. But the point about the experience of America is that, once you start really forcing the structure of the ground well below, you can get a release of gas coming up through other cracks, and some of these—as you can see when you look at the photographs from North Dakota—are very serious indeed. You can see flames popping up in between the nodding donkey gas extractors. There are still significant features of the chemistry of shale that need to be understood, when the shale is there in the presence of water. I visited a chemistry lab at the University of Leicester where they are studying this, and they pointed out that there were still important research questions to be assessed.

Another feature of Part 4 is the encouragement to build more energy-saving houses, as the Minister explained, with technology solutions that should of course include not only new sorts of emission but also ventilation and insulation, which are serious problems. Noble Lords might be interested to know that there is a nice book in the Library, which I edited, called London’s Environment, published in 2005, in which we described in great detail the excitement of the House of Lords committees at that time about what was happening in some of the new housing developments, in BedZED and Woking, some of which were looked at by many other countries. The Minister was right to imply that much of this technology is known, but the question is now to push this out and to ensure that it is available to social houses. I am afraid to say that some social housing is particularly bad with regard to insulation and ventilation, and this causes ill health, so housing for the whole community must be at an appropriate level.

Clause 26 in Part 4 has this very important development, which has been quite widespread in other European countries, in involving community investment in renewable energy. In Denmark, it had a great impact on involving people in their local wind farm installations. As the Bill describes it at the moment, it is a question of the community investing in the generation; there is no discussion that I have seen about generating local electrical networks. Woking was a borough run with no overall control, and some people say that that is why the Woking experiment or development worked so well—but that is a political point. It was at any rate extremely innovative, and Mayor Livingstone said that he wanted to make London look like Woking. That did not quite happen, but it was an ambition. One important point that was made was that the people in Woking could use a local electrical network and then the price of electricity that they paid for was much reduced. I suspect that the scheme being envisaged here is that community people might benefit to some extent from the income to the generators, but will they get cheap electricity out of their electrical plug to their kettle? I am not so sure about that. It is very important to have this done in an integrated way.

Finally, it is very important that if communities are to be involved in fracking, as has been suggested—I think that the Minister suggested that—they must also contribute to the costs. As others have emphasised, these costs include roadways and destruction of the local bio-environment, as well as the costs of the water supply and clean-up and recycling. So it is not just a free lunch. There will be quite considerable investment in all of that—but I believe that if the community is involved the right answer might be obtained.

Photo of Lord Purvis of Tweed Lord Purvis of Tweed Liberal Democrat 6:20 pm, 18th June 2014

My Lords, the briefing notes accompanying the Bill say that its purpose is to:

“Bolster investment in infrastructure by allowing stable long-term funding, deliver better value for money and relieve unnecessary administrative pressures. The Bill would increase transparency of information provision and improve planning processes, allowing us to get Britain building for our future and compete in the global race”.

I do not think that any noble Lords who have taken part in this debate could disagree with those motives. Indeed, we have had an interesting debate on whether or not the Bill will deliver what this country desperately needs—a modern, efficient infrastructure to allow the economy to continue to grow.

When I served in the Scottish Parliament, my constituency had the unenviable record of being the largest area in Europe not served by a railway line. That is being corrected as the Borders Railway is finally being restored following its closure in 1969. I was intimately involved in that process during my time in the Scottish Parliament. I had the unenviable record of serving on the Scottish parliamentary committee that approved the Edinburgh tram scheme, which I confess I did not readily admit to Edinburgh taxi drivers when I was a passenger in their cabs. Therefore, I am fully aware of the complexity involved in bringing to fruition the infrastructure that we need.

The Borders Railway was a difficult project which the Scottish Government had wanted to fund—I think erroneously—through what they claimed was an innovative funding route, but which I was concerned was an untested and unsure funding route. However, the Government ultimately changed their position on that and are now using the regulated asset base for United Kingdom funding. I am pleased to note that the Scottish National Party is using United Kingdom infrastructure funding support to deliver a Scottish infrastructure project. The tram scheme, which the Scottish Parliament approved but was not subsequently built in full, is costing £125 million a mile. Some people refer to gold-plated infrastructure projects, but, as regards that scheme, the track itself could be said to be gold-plated. Our national objective is to ensure that the private and public sectors have the necessary professional capacity in this regard as well as proper planning and legislative frameworks. One thing that has not emerged in the debate so far is the factor which can make an infrastructure project—whether it involves transport, housing or energy—successful or a source of difficulty, as with the trams, and that is the professional capacity of the teams that put these projects together. If this Bill is to be successful, the projects which it seeks to deliver in a more efficient way will be delivered only if there is that professional capacity.

I wish to devote the rest of my remarks to an issue that was referred to in the gracious Speech and in the Minister’s introduction to this debate—offshore oil and gas. However, that issue is not included in the Bill. I will not draw the conclusion drawn by the noble Lord, Lord Adonis—namely, that we will have to legislate for that aspect on the hoof. The Wood review reported to my right honourable friend Edward Davey on 24 February this year. That review is a substantive piece of work with significant consequences for the whole of the United Kingdom oil and gas sector. Given the timeframe within which the Wood review reported to the Government, it is understandable that amendments to the Bill on that issue will have to be tabled during its passage through Parliament. Agreement will have to be reached with the industry to ensure that the legislation is as robust as possible. The clear commitment that was given by the Government in accepting Sir Ian Wood’s conclusions and recommendations in full has been welcomed by the industry. Similarly, the statement in the gracious Speech that this year’s legislative programme will contain measures to allow for “maximising North Sea resources” is also welcome.

Photo of Lord Hunt of Chesterton Lord Hunt of Chesterton Labour

The noble Lord seems to be proposing a new constitutional principle, whereby the Government say that they have an idea but they are not sure what it is, so they say, “Here is a Bill. When we have done some more thinking on it, we will introduce it”. This could be applied across the board. That is not how Parliament works. Is this a new procedure being advocated by the noble Lord’s Benches, in which case could he give us his own little background constitutional paper as to how Parliament should work on this basis?

Photo of Lord Purvis of Tweed Lord Purvis of Tweed Liberal Democrat

The noble Lord obviously has more experience in this House than I have. I am a mere new Member. However, as a mere new Member, I have been an observer of parliamentary procedure for long enough to realise that it is perfectly common for a Government to table amendments, which on occasion have been substantive. Indeed, over many years the party opposite has tabled amendments on substantive points. My point, which the noble Lord unfortunately did not take on board but which I hope others will and will be more charitable in understanding it, is that when legislation is being brought forward which will make a significant contribution to the success of the British economy, it is best done after proper and due participation and consultation with the sector which it will legislate. That is why the Government have indicated that they will bring forward measures before Committee, as the Minister said in her opening speech, to which the noble Lord no doubt listened.

In the debate on the gracious Speech in another place, the Prime Minister gave a strong indication to my honourable friend Sir Robert Smith, the Member for West Aberdeenshire and Kincardine, in relation to the oil and gas industry:

“My hon. Friend speaks very powerfully for his constituency and for that absolutely vital industry which, as he says, is vital not just for Scotland, but for the whole of the United Kingdom. We are going to make sure that the recommendations of the Wood review are included in our infrastructure Bill, which is a key Bill at the heart of this Queen’s Speech”.—[Hansard, Commons, 4/6/14; col. 27.]

The Prime Minister was right: this is a vital sector. Therefore, I hope that during the passage of this Bill we will give due consideration to the impact which that sector makes to the whole United Kingdom economy. It is 50 years since the first licences were issued. Some 42 billion barrels of oil have already been produced and up to 20 billion more could still be produced. The United Kingdom continental shelf production meets 60% of UK oil demand and 50% of UK gas demand and directly and indirectly supports 450,000 jobs across the UK. It paid 9% of all UK corporate taxes in the last financial year, which is 2% of all United Kingdom tax receipts. Decommissioning relief introduced by this Government represents around 1% of our GDP.

The Government intend to include measures in the Bill to take forward the recommendations of the Wood review. The Bill provides us with an excellent opportunity to ensure that the UK continental shelf is able to face the very complex and difficult challenges which lie ahead. Although more than £14 billion was invested in the continental shelf in 2013—a record amount—production has fallen by 37% between 2010 and 2013, and production efficiency has fallen from 80% in 2004 to 60% in 2012. Rising exploration costs and falling success rates have led to fewer wells being drilled. This was the background to Sir Ian Wood being asked by my right honourable friend Edward Davey to carry out a review into how the UK continental shelf can maximise economic recovery for the whole of the United Kingdom.

Sir Ian Wood’s four recommendations are significant. Two of them in particular require legislative change in this Parliament; and both will, I hope, be the source of proper scrutiny when the Bill passes through Parliament. One is to create a new arm’s-length regulatory body to ensure that there is collaboration in exploration, development and production across the industry. Although it will be arm’s-length from the Government, they will be a partner. My right honourable friend Danny Alexander, the Chief Secretary, only last week indicated at the Oil and Gas UK conference that the Government accept this recommendation in full. He also announced that the authority should be called the “Oil and Gas Authority” and be based in Aberdeen. As regards the other recommendation of Sir Ian Wood, my honourable friend said that it will ensure that protocols and processes will be in place for dispute resolution and for ensuring that there is better co-ordination and collaboration among the industry, and that the licensing regime will be rationalised. All these measures will require proper and full scrutiny by Parliament. That is why the signal in the Queen’s Speech and the Minister’s announcement are significant.

Another area that has been touched on is taxation and revenue. The Government have stated that the new oil and gas authority will carry out a wholesale review of the ring-fenced tax regime for the oil and gas industry. This has the potential to be a hugely significant piece of work, which will have repercussions not only for the Scottish economy, where the oil and gas sector represents nearly one-third of the entire GDP, but for the United Kingdom as a whole.

Finally, I seek further clarification from the Minister. It was welcome that she indicated that it is the Government’s intention to bring forward amendments before Committee, but is it the Government’s intention that those amendments will cover all the recommendations of the Wood review on the relationship with industry, how clear they will be on the funding of the authority, and how that authority will take forward its work on the fiscal review? Sir Ian Wood gave a clear steer that he wanted the new authority and regulator, and his recommendations, to be taken on board so that the industry can look forward with confidence to a strong and clear regulatory regime and licensing for the future of the sector. It is the Government’s intention; I hope that it is Parliament’s will and that no further constitutional theory needs to be put forward to ensure that the future of the oil and gas sector is as strong as it can be, so that we can rely on it well into the future.

Photo of Lord Judd Lord Judd Labour 6:33 pm, 18th June 2014

My Lords, I want to tackle rather a different dimension to the Bill but, at the outset, I remind the House that my home is in a national park and that I am a vice-president of the Campaign for National Parks and a patron of Friends of the Lake District. I am also a strong supporter of the CPRE.

There is a great deal to be said in favour of an infrastructure Bill. Infrastructure is of course fundamental to a strong economy and an effectively functioning society. However, the economy and the supporting infrastructure are never ends in themselves but are part of the means by which we achieve a society worth living in. That brings us straight into the realm of qualitative considerations.

Surely we all agree that the countryside, including as it does the national parks, areas of outstanding natural beauty and the green belts, not to mention biodiversity, is a priceless asset. It enriches the soul, provides indispensible opportunities for the physical and challenging activity so vital for a healthy nation, and is in many ways the lung system of the United Kingdom. The countryside provides the contrast that is psychologically vital amid the pressures, stresses and demands of our otherwise high-octane life. Access for everybody to the experience it provides should at all times be a key priority in public policy. My formative years were during the war and immediately afterwards. I was deeply impressed as a youngster by the way that great post-war Government never forgot that reality, amid all the other challenges of recovery.

It is in that context that I raise certain points for clarification. I hope that the Minister will be able to clear them up at Second Reading or, if not tonight, by letter, which would, presumably, be placed in the Library. Why really is the Highways Agency to be turned into strategic highways companies? Is it genuinely and primarily about delivering a higher-quality and more effective service for the implementation of public policy? Or is it really, when everything else has been stripped away, another Treasury-inspired, ideological determination to reduce the size of the state?

Value for money is of course critical. Could not maximum economic efficiency and cost savings, however, be achieved by better management within the present system, rather than by this questionable legislation? The Transport Committee in the House of Commons is not convinced. Bodies such as the CPRE are deeply anxious and—like, I suspect, many others in this House—I share the doubts of both. The story of the railways and other public utilities is hardly altogether universally reassuring. What matters most is the effectiveness and quality of service provided, not simply the profitability of the undertaking. Undeniably, profitability can be one indicator—although, all too often crude and deceptive—of efficiency.

We still need far more detailed information, and I have been interested to hear other noble Lords stressing this point. We are going into legislation once again in the absence of all the detailed information that should be available. Can the Government clarify whether the terms of reference for the proposed roads watchdog will include a requirement to consider the needs of local communities and the enhanced protection of the natural environment, and not just the interests of road users? If not, why not? Similarly, what about co-operation between the new company, local authorities and other transport bodies? What are the implications for present requirements under the Localism Act 2011 and the network management duty in the Traffic Management Act 2004? Will not the role of the roads monitor need to be expanded to include adjudication when there are policy differences between the highways company and, for example, city regions? After the first road investment strategy, is parliamentary responsibility to be abandoned? Where is the provision for parliamentary oversight of future road investment strategy? Why does the schedule provide only for consultation for varying an RIS but not, as I understand it, the setting of new ones in the first place for each five-year period?

Are the Government establishing—again, if not, why not—new arrangements for environmental regulation covering carbon emissions from the strategic road network and its total land take, licensing conditions to reduce the environmental impacts of existing roads, and the management of demand, rather than settling just for reducing the harm caused by new roads? Why is the opportunity not being taken to support a wider range of highly necessary environmental and social objectives by, for example, a commitment to increase funding for walking and cycling? Where is the statutory commitment to enhancing the well-being of biodiversity and landscape—one of the UK’s finest and most important public goods? Why is it not firmly there in the Bill?

If a principal purpose of the RIS is intended to be greater long-term certainty for the future funding of major roads, will the Government guarantee that this will not be at the expense of reducing funding for local road maintenance, road safety and alternatives to road building such as public transport and, of course, walking and cycling? As things stand, there is no certainty that the local sustainable transport fund will be available beyond 2016. Since its inception in 2011, it has supported improved public transport provision in a number of national parks, but there is still much more that could be done.

It is proposed that the Secretary of State should have discretion to allow non-material changes to be made to nationally significant infrastructure projects without developers having to resort to the process of seeking development consent. That is a very broad power. It may make a lot of sense in some circumstances, but will the Government provide more detail about how the power would be exercised in practice, and about what the checks and balances would be?

The Bill would allow certain types of planning conditions to be automatically discharged if a local authority fails to make a decision in a prescribed time. Is that always acceptable? In the real world, planning departments are already under great pressure, accentuated by recent cuts, in getting local plans into place. The right to appeal against the planning condition already exists. Why is this additional power required? Again, how will it work in practice, and what would be the checks and balances?

The statutory purposes of the national parks are to conserve and enhance natural beauty, wildlife and cultural heritage and to promote opportunities for public enjoyment and understanding of their special qualities. Section 62 of the Environment Act 1995 requires that:

“In exercising or performing any functions in relation to, or so as to affect, land in a National Park, any relevant authority shall have regard to”,

its statutory purposes. As the proposed highways company will no longer be a public body, it is not clear whether the Section 62 duty would automatically continue to apply. Will the Government give an unqualified reassurance that the duty to have regard to national park purposes will apply to the new government-owned company and tell us precisely how? Indeed, I hope any Government committed to a UK worth living in would look to all departments to ensure an enhanced and strong future for the countryside, national parks, areas of outstanding natural beauty, green belts and our biodiversity system.

Where this Bill relates to housing, I take second place to nobody in my total conviction that we desperately need a concerted drive for an adequate number of decent, affordable houses. However, I equally take second place to nobody in my conviction that these houses must never be built in such a way that they impinge on and endanger those priceless dimensions, including the UK’s biodiversity, which are there to be inherited and enjoyed by the people living in those houses. The challenge in social planning is not the countryside versus housing—that is an oversimplified and very misleading notion—but the countryside and houses. Housing must be situated in brownfield sites and numerous other places, not least used or underused government land, which should be prioritised for homes. Lack of imagination, inertia and short-sighted profiteering are too often the real enemies.

Photo of Lord Skidelsky Lord Skidelsky Crossbench 6:44 pm, 18th June 2014

My Lords, a Bill on infrastructure that is mainly to do with the rearrangement of Whitehall agencies and minor improvements in planning application procedures invites the question of what the relationship is between its provisions and the promotion of investment in infrastructure.

My first point is that cutting public capital investment has been an integral part of the Government’s strategy for reducing the budget deficit—in fact, the only successful part. Gross public sector investment fell from £69 billion in 2009-10 to £45 billion in 2013-14 and has barely started to creep up. That is always how it happens. Cutting capital spending is much easier than cutting current spending. Private sector investment has not taken up the slack. Business investment remains 20% below its pre-crisis peak. These are permanent losses: infrastructure not built or improved in the past four years. My first question about the Bill is: to what extent does it replace or improve the assets forgone?

I read in the CBI briefing:

“'We fully support the introduction of the Road Investment Strategy which will, for the first time, set out a long term investment plan for the major road network. We believe this strategy will ease business concerns over stop/start investment and help build confidence in the supply chain about the future pipeline of work”.

I go along with that. But it is important to note that there is so far no road investment strategy. According to Schedule 1 to the Bill, the Secretary of State must provide a strategic highways company with proposals for a road investment strategy within one year. Further, there is nothing in the Bill that says the Secretary of State must co-ordinate the road investment strategy with the rail investment strategy, or with any other investment strategy affecting transport. For example, how will the road strategy mesh with the railway strategy, particularly HS2? How will it square with the Government’s energy policy? These are some of the blank pages mentioned by the noble Lord, Lord Adonis. What we need, surely, is an integrated transport strategy, covering roads, railways, air transport and shipping, with attention to energy use and environmental issues. Is any government agency charged with oversight of transport needs as a whole? I do not know. If not, I would support the Labour Party’s proposal for an independent national infrastructure commission to identify our long-term infrastructure needs. That surely is sensible. If there is a gap, the Bill should be amended to secure this aim.

My second question is: how much will the strategic highways company be allowed to spend? According to the Roads Minister, Robert Goodwill, the Government aim to spend £10.7 billion on major road improvements in the next five years. This will presumably be the sum allowed to the highways company—or will it? Is it identical to that sum? Can the Minister confirm my understanding of that, or have I got it wrong? If it is so, it seems odd to give the company £10 billion to spend before anyone has worked out what it is to spend it on. Perhaps that is another blank page.

My third question is: how will the new independent company be financed? Four years ago I proposed a national investment bank, capitalised by the Government, that would be allowed to borrow a conservative multiple of its assets. The model was very much that of the successful European and Nordic investment banks. What I envisaged then was up to £100 billion of infrastructure investment over five years, largely financed by borrowing. Instead we got the green bank, with capital of £3 billion and no borrowing power at all. Apparently, a continuation of this rather dismal set-up is envisaged now, as revealed in an unpromising exchange in the other place on 11 December 2013. I quote from Hansard:

Richard Burden: To ask the Secretary of State for Transport whether the proposed Government-owned company replacing the Highways Agency will be able to borrow at (a) government or (b) private industry rates”.

Mr Goodwill replied:

“The new company will be funded directly from public funds and therefore it is not expected that external borrowing is going to be a requirement for financing activities. However the Department is still working on the detailed financial arrangements”.—[Hansard, Commons, 11/12/13; col. 220W.]

And it is still working, as far as I know.

The Labour Party seems equally cagey about borrowing for investment. It proposes to spend £10 billion to build 400,000 affordable houses in one year—something that the noble Lord, Lord Judd, endorses, as I do—but how is that going to be financed? We are not given a clue. There is a promise only to “bring forward” housing investment, but of course housing is one thing that one should be able to finance by borrowing because one has a stream of income to service the debt.

I should like to end by trying to clear up a common confusion about the role of borrowing in the Government’s budget. According to current orthodoxy, all borrowing, for whatever purpose, is bad and the ideal state of affairs to which every prudent Government must strive is an annually, or at least cyclically, balanced budget. However, that has nothing to do with the theory of public finance, which has always made a distinction between current account and capital account spending and the deficits allowable on each. A pure current account expenditure is for a good or service which gives rise to no government-owned asset that will produce future value. It should therefore always be covered by taxation. On the other hand, capital account expenditure is the purchase of a durable asset. If that purchase gives the Government command over a prospective future stream of returns whose present value is greater than or equal to the present cost of acquiring the asset, borrowing is justified because it does not give rise to a new debt.

The noble Lord, Lord Lawson, has argued that the current/capital distinction does not have the same meaning in the public as in the private sector because, in general, capital investments by the state do not produce a cash return to service debt interest. However, that is not always so—it is too sweeping. Some capital investments, such as utilities, railways and undergrounds, do produce a cash return. Others, such as roads and bridges, can be made to do so by road pricing or tolls. Even if the Government choose not to charge for the use of schools or hospitals, they can work out a shadow price in deciding whether to make the investment, setting aside revenues from tax to meet the service debt charge. Provided the expected returns, actual or imputed, equal the cost of acquiring the asset, borrowing will be justified since the additional debt will be self-liquidating.

I think that the Liberal Democrats are slowly buying into that distinction. For example, they have promised to borrow to invest in capital projects, but they would not revive Gordon Brown’s golden rule, claiming that Labour slapped the words,

“‘capital spending’ on anything and everything”.

Thus, they would not include under capital spending new schools or hospitals but only schemes which “boost economic growth”. But why should building roads and houses boost economic growth more than building schools or hospitals? Then they have a new debt rule which seems to make no sense, but at least goaded, I suspect, by the Secretary of State for Business, they are moving in the direction of making that distinction between capital and current spending which the Conservative parts of the coalition have rejected.

A House of Lords Second Reading on a limited roads Bill is not the place for a disquisition on the theory of fiscal policy and I apologise to the House for burdening it with one. However, it is important to make the point that dysfunctional public accounting conventions should not stand in the way of giving the nation the infrastructure which it needs and which only the public sector can make or underwrite.

Photo of Lord Bradshaw Lord Bradshaw Liberal Democrat 6:54 pm, 18th June 2014

My Lords, I have probably been the victim of more reorganisations than many of your Lordships. All of them have promised large economies and they have always promised a better future, but they have usually resulted in more expenditure and another reorganisation. So the idea that reorganising things is necessarily going to produce a revolution is wrong.

I am also concerned about the idea that this government-owned company will somehow take the influence of the ministry out of the equation. I am confirmed in that by the fact that at Reading station, where huge infrastructure work is being progressed by Network Rail, signs on the wall have just appeared saying “Department for Transport” to show that the ministry is really still in control. It is a sort of sinister creeping of bureaucracy into that company, and I think that the same may be the case with a road company.

Another thing that I would like to touch on is the way that this company is being presented as an analogy to Network Rail. It is not really an analogy. Network Rail has responsibility for the whole of the railway infrastructure as well as safety, whereas this company will have responsibility for the busiest 2% of the road network. However, there is no commitment to deal with the other 98% of the road network.

I am in favour of necessary road building where there is a strategic and a safety case for it, as there is with the A1 north of Newcastle going up into Scotland, as I have said before. However, we have to recognise that the local road network, including a lot of trunk roads, is in a sore condition. It needs substantial structural maintenance. I am not sure how much of the money promised for the proposed new highways company will in fact find its way into capital expenditure, because we have been told that a large part of the network will be resurfaced in the next few years. Most of us think that resurfacing networks is not new building; it is probably catching up following neglect of the past rather than looking to the future.

I very much endorse the point made by the noble Lord, Lord Skidelsky, that it is important to distinguish clearly between capital and revenue. It is also quite reasonable to borrow for proper capital expenditure, which should have a rate of return.

I want to look for a moment at local authorities, whose road expenditure is discretionary. It is expenditure that gets raided whenever schools or other local authority services, such as social services, need more money. I believe that local authorities need proper guidance on how they should repair their highways, and of course they need to be brought within the consultation machinery for any investment strategy. I also believe that the utilities do enormous damage to our highways network. They push their way in, often without regard for the motorist or the lorry driver. They declare states of emergency where I believe that such emergencies do not exist. The sanctions they suffer as a result of overruns and so on are quite ineffective in bringing any discipline. I hope that the Minister will say something about how the utilities can be brought within a reasonable discipline in their access to the highway, because they cause enormous damage.

I am concerned about the justification for new road building or for any roadworks. I believe that the benefits are much wider than the present system tends to show. Millions of small but unpredictable and imperceptible time savings are one of the major inputs to the economic appraisal of our road network. A better way is necessary to probe the economic value of improvements, which might be in housing, employment or land values, rather than the funny money used to justify it now. Is any work being done to bring the present system up to date?

Is the Minister satisfied with the present system of looking at the way in which roads are destroyed by heavy lorries, to which reference has already been made? It was probably about 30 to 40 years ago that it was decided that the damage inflicted by a heavy lorry on a road surface was the fourth power of the axle load. Cars inflict virtually no damage, which is the case with the M6 toll road, and lorries inflict huge damage, which is shown by what goes on on the M6. It is time that that also is revisited so that we are satisfied that we are apportioning the cost of roads fairly between the motorist and the heavy goods vehicle.

I was very pleased to hear the noble Viscount, Lord Hanworth, and the noble Lord, Lord Skidelsky, put in a good work for road pricing. I believe that it is the best way to ration any scarce resource. It has been maligned in the press, which gives the impression that everyone will pay more. Vast numbers of people in rural and far-flung areas will pay very much less. The busy parts of the roads cause the problems, to which a proper pricing policy should be applied. I am a veteran of driving over the bridge from Copenhagen to Malmo and Stockholm, which is financed in that way. It is a painless system which works. People who say that it does not work are wrong.

Finally, I endorse the remarks made by the noble Lord, Lord Berkeley, about level crossings. In my view, the next major railway accident will be on a level crossing. It will probably be followed by a judicial review, which will take another X number of years to come up with the recommendations that the Government already have before them. I ask them to look closely at whether the Bill can be amended in any useful way to deal with that problem.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Communities and Local Government) 7:04 pm, 18th June 2014

My Lords, as others have described, this is a hotchpotch of a Bill with important chunks still missing—perhaps more than we thought—and key related consultation processes still running their course or with conclusions yet undisclosed. In infrastructure parlance, the Bill could hardly be called shovel ready. Therefore, we have an intensive job to undertake to evaluate its impact on growth, and to address how it contributes to increasing housing supply and to mitigating the housing crisis that we face in this country. I propose to focus my efforts on Part 3, which relates to planning and land.

The CBI, in its submission to us for today’s debate, identified that the Planning Act 2008 has already helped to boost investor confidence by creating a fast-track approach with clear milestones and decision-making points. That is not to say it cannot be refined and improved in the light of practical experience, which Clauses 17 to 19 purport to do as part of a wider implementation plan following the recent consultation. As my noble friend Lord Adonis said, we can support the changes relating to the appointment of an examining authority and the flexibility of two-person panels, although it remains to be seen whether the savings proposed will materialise.

We intend to probe the proposals for a new process of making development consent orders but are in accord with what the Bill is seeking to achieve. We note that a consultation is to be launched on a revised process but not until August of this year, which means that we are unlikely to have the benefit of the Government’s response by the time we conclude Committee or even all stages of the Bill. Perhaps I may ask the Minister why this cannot be expedited.

The provisions in Clause 20 are altogether more concerning. As we have heard, the clause would permit the deemed discharge of a planning condition such that a local planning authority would be unable to take enforcement action or stop development. As the Minister identified, the need to improve the approach to planning conditions was flagged in the Killian Pretty review commissioned by the previous Government and acknowledged then as needing to be addressed. We propose to examine whether the approach in Clause 20 is the best way of doing so.

Certainly, we would view with great caution anything which undermines the role of the local planning authority in the planning process. We have already seen in the Growth and Infrastructure Act opportunities for developers to bypass a designated local planning authority and, on the basis of a government consultation just concluded, for the criteria for designation to be tightened. That same consultation also covered possible changes to affordable housing contributions and the proposal to introduce a new 10-unit threshold for Section 106. Will the Minister tell us when we might expect the Government’s response to this part of the consultation because its implications for an already dire affordable housing situation could be very grim, particularly for rural communities—a point to which I think the noble Lord, Lord Cameron of Dillington, referred? Is it proposed that this Bill would cover this issue?

Perhaps the Minister might also say when we might expect the Government’s response to the allowable solutions consultation to pave the way for zero-carbon homes and details of how the small builders’ exemption is to work in a way that does not fundamentally undermine the policy. When will we see this legislation?

I acknowledge the briefing from the RTPI, which sets out the position on planning conditions with its usual clarity and focus. It recognises the concerns over the growth and breadth of planning conditions and we would agree with its view that the need for conditions attached to planning consent should be necessary and proportionate, and that they should be discharged safely and expeditiously so that development can proceed quickly.

We are reminded also of the essential role of planning conditions, which is to make an otherwise acceptable planning application acceptable; that is, to support development. We share the view that the widespread use of Clause 20 could undermine local planning authorities’ attempts to approve more marginal applications, thus having the perverse effect of holding back approvals. The extent of the conditions to which the clause could apply is also unclear and there is the fundamental matter of whether it applies to conditions laid down on behalf of statutory consultees. If so, how is it to be assured that such consultees expedite their work?

The RTPI suggests that the intention is to focus on inconsequential and burdensome information requests. Perhaps the Minister would clarify whether that is the position. Where would that leave conditions which focus, say, on the management of construction works, which can play a vital role in ensuring the health and safety of workers and the public? We would be concerned about artificial timescales being applied to the operation of these provisions that do not fairly reflect the resource position of councils, many of which are struggling to maintain their planning departments.

We would also wish to explore the need for protections where it might be the actions or inactions of developers that are frustrating the ability of the local planning authority to respond within a given timeframe. We would prefer these matters to be taken forward by joint working between developers and local planning authorities rather than via another centralising measure.

We hear that the Government's public sector land programme is to be facilitated by enabling existing arm’s-length bodies to transfer land directly to the HCA rather than first to the parent department. We can see the intrinsic merit of this change in reducing bureaucracy and speeding up the release of land for new homes. However, we need to be reassured that with the parent department out of the loop there will be no loss of accountability and transparency in determining what land is to be released for development. The Minister will be aware—she referred to it in her opening speech—of concerns expressed about the designated sites and irreplaceable habitats and the Public Forest Estate being sold off. Similar issues arise in respect of the ability of the HCA, as well as the GLA and mayoral development corporations, to transfer land without the easements, rights and restrictions that they have suspended being revived.

Our briefing note suggests that this is doing no more than replicating the position of those currently purchasing from local authorities and other regeneration bodies. The Minister called it an oversight. Nevertheless, concerns have been raised about the extent to which these powers might interfere with the public interest and we will need to probe theboundaries of these proposals and whether specific exemptions would be appropriate. Again, the Minister may have dealt with this by referring to the fact that these impact only on private and not public interests.

Clauses 23 and 24 bring us to another area of considerable controversy. These measures involve the transfer of responsibility for local land charges from local authorities to the Chief Land Registrar, the maintenance of a fully electronic register of land charges and the extension of the powers of the CLR to provide wider property services. These changes have been the subject of a consultation conducted by the Land Registry that closed on 9March, with some 70-odd pages of government response being delivered just a couple of days ago—which was not the most helpful timing. So far as one can gather from an initial reading of the government response, it is effectively rubber-stamping the original proposals, although the 15-year cut-off for digitalising the charges register is to be removed.

However, wider concerns arise from a parallel BIS consultation—to which there has as yet been no formal government response—that promulgated the creation of a separate Land Registry service delivery company distinct from the office of the Chief Land Registrar, which would remain responsible for policy. Although the consultation sets out several possibilities for ownership and control of the service delivery company, there is a growing suspicion that the agenda is for it to be privatised, and that, the consultation notwithstanding, the Government have already discounted the service remaining in public ownership. Will the Minister categorically confirm today that this is not the case and that it is not proposed to privatise this service?

We have seen no compelling case for the privatisation of a government agency which, as my noble friend said, routinely returns good profits to the Treasury—some £98 million last year—and references to greater flexibilities to operate around pay and recruitment have a familiar ring. The botched sale of the Royal Mail gives us no confidence that the Government will secure value for money on a privatisation.

The matter of corporate structure and ownership is not currently in the Bill, but it inevitably overhangs consideration of the proposal for a central land charges register and the transfer from local authorities, and the fear that it is being fattened up for privatisation. For those reasons, we have called for a proper independently run consultation on the central register proposition. These things are important. The Land Registry plays an essential role in the functioning of the property market. Its principal purpose is to keep a register of title to freehold and leasehold land and charges throughout England and Wales, and to record dealings in such land. Local land charges are the mechanism whereby purchasers can seek information about a property. The integrity, ease and efficiency of these arrangements are of paramount importance and it is against these requirements that propositions for change should be judged.

We are entirely supportive of a programme of continuing improvement of the service offered, including embracing digitalisation, although the Law Society points out that this is not the most pressing issue in the conveyancing world. Despite acknowledged improvements in recent times, there is more to be accomplished in terms of consistency of approach across local authorities, quicker turnaround times and more transparent charging, and we need to examine alternative approaches to achieving this as well as that proposed in the consultation.

Of course, the government proposals are not without risk. Local land charges involve inquiries of local authorities of the land that they hold. The search comes in two parts; entries on the register of local land charges and the answers to queries put to local authorities—form CON29, I think it is called. The Bill would centralise the register but the CON29 inquiries would remain directed at local authorities, so we would need to scrutinise the consequences of this fragmentation, particularly as the two sets of inquiries are invariably made together and the answers to each can be interdependent. Answers to entries on the register might comprise details of conservation areas or listed buildings. Answers on CON29 might include the planning and building control history and whether nearby roads are maintained at public expense.

It is understood that the CON29 facility is non-statutory. Have the Government given any thought to what would happen if hard-pressed local authorities terminated their services? As the LGA points out, centralisation makes it more difficult to integrate advice on planning, highways and other locally regulated services. Moreover, there are likely to be adverse financial implications for councils, which will lose income from land charge fees but still have to deal with local queries and manage data co-ordination.

The Bill before us is incomplete and incoherent. It has some useful provisions that will help speed up infrastructure provision and facilitate the much-needed building of housing. However, it fails to deliver a long-term step-change plan to tackle our housing crisis or to provide a vision for doing so. That will have to await a change of government.

Photo of Lord Davies of Oldham Lord Davies of Oldham Shadow Spokesperson (Transport), Shadow Spokesperson (Treasury) 7:18 pm, 18th June 2014

My Lords, this has been a most informative and splendid debate, although perhaps a little too long for such a modest measure. I shall try to keep my remarks to the absolute minimum. My noble friend Lord McKenzie has dealt with Part 3 of the Bill. He will lead for the Opposition in Committee on those issues and he has clearly spelled out the anxieties that we have about aspects of Part 3. I reinforce the obvious point that he mentioned about the loss to local authorities of revenue from the charges that they can make, which go to the Land Registry. As there is a fairly well founded rumour that the Government are bent on eventual privatisation of the Land Registry, the Minister will not be at all surprised that the questioning on those aspects of the Bill will be fairly intense in Committee.

I turn to the last issue in the Bill—fracking—although there is not much to say about it in relation to the Bill, because there is not a great deal there. We appreciate that the consultation that the Government are carrying out on this does not conclude until August and we are quite content to wait to see the government proposals as a consequence of that consultation. However, it indicates what a rag bag of a Bill this is that government proposals about one of its more important features are scarcely before the House today.

I listened very carefully to the noble Lord, Lord Jenkin, on community electricity clauses, as I always do on energy matters. I also appreciated the contribution of the right reverend Prelate the Bishop of Derby and his optimism about what could be done on this, which we share. I understand the noble Lord, Lord Jenkin, exactly when he says that nearly everything in any Bill relating to energy seems to be dealt with by regulation. It looks, from the outline of the Bill, that what we will have to probe is the exact nature of the regulations that will give effect to what is intended. We obviously support the broad concept, and our questioning and probing in that area will be constructive.

The question of invasive and non-native species was raised first, I think, by the noble Lord, Lord Teverson, and several other noble Lords expressed their concern. We need legislation in this area. The Government have sought to do what they can in the past on these matters, but we are aware of the great threats that obtain. As a Minister, I was personally concerned with Japanese knotweed five years ago. I was informed by the scientific establishment, not only in the department but in government, that we had cracked it in terms of the science and that all it needed now was careful analysis of the process of implementation and restricted experimentation in a limited area. Here we are, five years on, and neither I nor my noble friend Lord Dubs can get a meeting with a responsible Minister. That may be because the responsible Minister does not have a great deal to say about the progress on Japanese knotweed.

Japanese knotweed is important because it affects land in a very invasive way and harms households. It is a transport issue, too, because it costs Network Rail a considerable sum each year to keep the railway track free of knotweed, which can do such damage. We also know of a number of other threats to our environment, and therefore I of course welcome these provisions in the Bill very warmly indeed. The Minister will no doubt appreciate that she will be questioned about a whole range of plants and species of which she knows precious little at present, I would guess, but about which she will no doubt be primed as we make progress through the Bill.

In so far as the Bill is about infrastructure and transport, it is about roads. Even when it refers to rail, it does so in terms of rail taking some responsibility for the monitoring of roads. However, we have very real doubts about the role of the Passengers’ Council and whether it provides an adequate forum for public response. As the noble Lord, Lord Bradshaw, indicated, the rail system is very different indeed from the road system, as is the nature of the customers on it.

The House will recognise that there are severe reservations about the Bill. The Bill purports to be about infrastructure, but that idea has been demolished by several contributions, in which the noble Lord, Lord Skidelsky, played his full part by indicating that the Government are very far from having any sensible infrastructure policy at all. They are of course proud of the fact that they are continuing with HS2. They are also indicating that they may get around, eventually, to dealing with the A14, which drags on along its interminable path amid its failure to get adequate improvement. However, the idea that the Government have an infrastructure policy and that, if they have, this Bill is a central part of it is quite risible. All noble Lords who spoke in the debate expressed criticisms that show the inadequacy of the Bill in these terms.

That is why I hope the Minister will recognise that we will probe very hard on the Highways Agency and the role that it is to adopt. It is true that the chief executive of the Highways Agency is buoyant with optimism about the extent to which he will have extensive powers to pursue his clear objectives. Just where that fits in with the Government’s responsibility to Parliament, I am not quite sure. We regard the proposals in the Bill for the scrutiny of what the Highways Agency is intended to do, if it gets the role outlined in the Bill, and the processes there as wholly inadequate, and we will be pressing the Government very hard indeed on those issues.

The roads system in this country needs considerable attention but, as noble Lords have pointed out, the Bill is concerned with only 2% of roads. My fear is that the Bill will arrive at the other end with Members of Parliament not too far from a general election and facing pressing issues related to the inadequacy of the roads in their constituencies. Trunk and long-distance roads will be of less concern to the other House than what has happened with the failure to maintain and keep up our roads, particularly following the ravages of last winter, and the problems of potholes.

We are destined to participate in some very interesting exchanges in Committee. The Committee will have a great deal to discuss, which will all be done in a constructive spirit, because we realise that the Government intend to address issues that the nation wants addressed. The problem is that this Bill is a wholly inadequate vehicle.

Photo of Baroness Kramer Baroness Kramer Minister of State (Department for Transport) 7:27 pm, 18th June 2014

My Lords, this evening really has been a testament to the range of knowledge in this House. I thank all noble Lords, but give a special note of thanks to two who have not spoken in the debate, my noble friends Lady Verma and Lady Stowell, who are supporting me in taking the Bill through the House and whose support, both moral and in terms of knowledge, is frankly invaluable. I will try to respond to as many questions as I can, but there have been so many that I already know that failure is stamped upon me, and I will follow up in writing where I am unable to cover issues here on the Floor.

The noble Lord, Lord Adonis, opened the debate. I think he was grudgingly supportive of the Bill, but I have to say that some of his comments seemed to ignore the fact that he was part of a Government for 13 years who invested very little in infrastructure. To talk about lack of investment in new power generation, suddenly having found the light when the coalition Government are in place and seen the need for investment, was a little strange, I thought. I will not reiterate the very extensive investments that the coalition Government are making but, as I said earlier, there has been £100 billion for roads, railways, building affordable homes and boosting the internet, as well as a lot of private money going into areas such as power generation. I thought the noble Lords, Lord Teverson and Lord Jenkin of Roding, answered the question so well that I will just pray in aid their comments and add mine from the Queen’s Speech rather than continue with that point.

More generally, I say to the noble Lord, Lord Skidelsky, that we are taking on one of the largest infrastructure investment projects in a generation, as I have just described. The purpose of the Bill is to ensure that there are delivery mechanisms that are fit for purpose to deal with that. That is the theme that links the various parts of the Bill and by definition the range is broad.

The noble Earl, Lord Lytton, asked whether infrastructure was more than roads. My goodness, just looking at the Bill makes it very clear that it is. Of course, there are many other avenues of opportunity. We have talked extensively about our investment in rail, sustainable transport and a wide range of other necessary infrastructure.

I will say a word on procedure, if I may. It is difficult to go through this in detail without taking up too much time. We are very much looking forward to detailed scrutiny. Many noble Lords, including the noble Lord, Lord McKenzie, just a moment ago, gave a very clear indication of wanting to go through the Bill in great detail in Committee, and we welcome that. We think that is a very important part of the role of this House.

I will provide some clarification for the noble Lord, Lord Jenkin of Roding. It is our intent, subject to the usual channels—and I say this to those who have looked at Forthcoming Business—that further time will be allocated after the Summer Recess to ensure effective debate on all the clauses of the Bill. We recognise that that is important. I reassure noble Lords that, where important decisions have not yet been finalised, the House will be given clear guidance and information about our intentions in Committee. A number of people asked why the consultation will start in June or August. Obviously, the secondary legislation documents that are to be consulted on will be very important in informing the debate in Committee and the other stages in this House.

Photo of Baroness Miller of Chilthorne Domer Baroness Miller of Chilthorne Domer Liberal Democrat

Before my noble friend leaves the point of procedure, perhaps she shares my disappointment that the noble Lord, Lord Hunt of Chesterton, who brought up procedure, is not in his place to hear her remarks on the procedure of the Bill.

Photo of Baroness Kramer Baroness Kramer Minister of State (Department for Transport)

I hope that my noble friend will encourage him to read my comments.

Moving on to more substantive issues, we had actually very little discussion of shale gas. My noble friend Lord Teverson spoke about geothermal extraction. I think that is rather positive. There is clearly an appetite in this House to ensure that this is a successful project. I know that many people are waiting for the detail, and that is exactly right. I would encourage anyone with an interest in this area to look at the consultation that is under way until 15 August because they may wish to participate in it as well as use it to inform themselves of what may happen, since the Government will not be making their final decisions until that consultation is complete and its implications are understood. We do not want to prejudge.

My noble friend Lord Teverson asked for more information on geothermal. I suspect that he knows this area far better than I do, but I remind him that geothermal power projects are eligible for support through the renewables obligation, and that under the contracts for difference the department has set a final strike price for geothermal power of £145 per megawatt hour until 2016-17 and £140 per megawatt hour thereafter. Indeed, there are a lot of measures to exploit geothermal, of which I think everyone recognises the potential.

In the same vein, my noble friend Lord Purvis mentioned the Wood review. We recognise that the oil and gas industry in the UK is of national importance and will be a vital part of the energy mix. While investment levels in the UK continental shelf are rising and near-term prospects are strong, there are new challenges for exploration and production. The environment is, frankly, very different from the circumstances when production peaked approximately 15 years ago. We will be responding very shortly to the Wood review. Details of how this will be carried forward will be available in Committee—I think my noble friend might have thought it would be later but it will be in Committee.

On zero-carbon homes, my noble friend Lord Teverson constantly reminds us that as well as talking about the supply side for energy we must focus on the demand side. This part of the Bill is absolutely critical in this area, and we will see those clauses before the Summer Recess. We recognise, as I suspect all noble Lords did in their speeches, that making all homes zero-carbon “on site” is sometimes not physically feasible or cost-effective for housebuilders. There are technical limits. Of course, we will be exploring the whole issue of allowable solutions. My noble friend Lord Teverson said he was concerned that we were focusing on potential exemptions for small sites, but we must recognise that small housebuilders face a very different economic framework from that faced by the big housebuilders, lacking economies of scale. But it is an important industry throughout the UK and we rely on it heavily for housebuilding in this country, and we must always keep in mind that the industry needs to be successful.

On roads reform, there was a very wide range of questions. A number of noble Lords, including the noble Lords, Lord Whitty and Lord Adonis, and my noble friend Lord Bradshaw—and there may have been others—talked about the importance of ensuring that reforms to the Highways Agency were seen within the context of spending on local authority roads, particularly the maintenance of those roads. It is obviously a very important point. Your Lordships will know that the Government are investing more than £6 billion in this Parliament—£12 billion in the next—on highways maintenance for strategic and local roads, enough to resurface 80% of the national road network and fill 19 million potholes a year on local roads. I also want to make it clear that there are benefits from that integration between the strategic highways network and local roads that come from our proposals for changes to the Highways Agency. The licence agreement for the reformed Highways Agency will include a duty to co-operate that will foster and improve partnership working with local authorities.

The new company will be a traffic authority and have the same legal responsibilities to ensure that traffic runs smoothly on its own network and the local network. These changes will strengthen the interplay between local authorities and the Highways Agency.

Photo of Lord Adonis Lord Adonis Shadow Spokesperson (Treasury)

The Minister just referred to the “new company”. Many noble Lords in the debate asked whether we are talking about a company or companies because the Bill says “companies”. Do I take it from what the Minister just said that it is the Government’s intention to set up just one highways company?

Photo of Baroness Kramer Baroness Kramer Minister of State (Department for Transport)

Yes, it is the Government’s intention to set up just one company. It is standard template language in legislation, I understand, to create the option of further entities. It has no sinister meaning at all behind it. The intention is for a single company, but of course the lawyers always think about what-ifs in the most extraordinary way. I guess we did not really kick back against that but, yes, it is one company.

A number of your Lordships seemed to think that we might be looking at privatisation. Indeed, I was not sure whether or not the noble Lord, Lord Adonis, was proposing that, but we are certainly not proposing it on this side. This will be a company with a single shareholder, the Secretary of State. Any change to that would require primary legislation, so there is no backdoor mechanism.

Photo of Lord Adonis Lord Adonis Shadow Spokesperson (Treasury)

For the record, my Lords, I was not.

Photo of Baroness Kramer Baroness Kramer Minister of State (Department for Transport)

A number of other noble Lords asked whether the body would go out and seek private finance. It could do so only with the authority and approval of the Secretary of State, so it is no different from the current situation of the Highways Agency. The Government do not anticipate that that is what it will do. Quite frankly, borrowing through government costs significantly less, and this is an on-books entity. That is not something that this is meant to facilitate, if that is helpful.

Photo of Lord Skidelsky Lord Skidelsky Crossbench

Does the Minister expect that the Government will in fact borrow for their trunk road programme?

Photo of Baroness Kramer Baroness Kramer Minister of State (Department for Transport)

I am expecting that the Government will borrow to fund the SHC—I hesitate to use the words “in exactly the same way”, but they will have a commitment, if you like, to the funding stream as a result of the roads investment strategy. They will fund the SHC in the same way as they would in effect have funded the Highways Agency. It is not a change. I understand that the noble Lord, Lord Skidelsky, would like to see the entity going out directly to the bond markets itself, but that is not anticipated; it could do so, but only with the approval of the Secretary of State.

Photo of Lord Skidelsky Lord Skidelsky Crossbench

But it is anticipated that the Government will fund it by their own borrowing; is that right?

Photo of Baroness Kramer Baroness Kramer Minister of State (Department for Transport)

The noble Lord is talking to someone who does not understand quite how the government books work, but I do not recognise government borrowing being segregated into line items. However, I will follow up on that and write to the noble Lord before I tangle us in something that I have not explored in such detail. If the noble Lord is looking for imputed returns, we can discuss all that later.

The noble Lords, Lord Whitty and Lord Judd, raised the issue of Passenger Focus as a consumer watchdog. It strikes me as a superb representative of the road user. One of your Lordships suggested that the AA or other existing bodies act as a voice for the road user, but they tend to act as a voice for a limited number of views, typically those of car drivers. There are many other road users, and it is important that a much broader sweep, including cyclists, get represented. Using Passenger Focus, with its consumer skills, strikes me as a very important mechanism.

The noble Lord, Lord Whitty, and others also asked whether the Office of Rail Regulation was an appropriate body. It will act as a monitor, not as a regulator; that is an important distinction. The logic follows these lines. The SHC does not require an economic regulator in the way that Network Rail does. It is not dealing with track access charges and the users of the system are not paying in the way that passengers do, so there is really no role for an economic regulator here. There is not a number of TOCs all in competition with each other and with a complex relationship with Network Rail. It will advise the Secretary of State, who will then be able to enforce. It will monitor the operations of the new company.

Photo of Lord Berkeley Lord Berkeley Labour

The noble Baroness is absolutely right in what she says. On the other hand, one of the roles of the rail regulator is to regulate the efficiency and costs of Network Rail. Would it not be a good idea to have some independent monitoring of this new company’s costs in the same way?

Photo of Baroness Kramer Baroness Kramer Minister of State (Department for Transport)

The monitoring will indeed be there. That is crucial because of the way in which the SHC is being constructed.

The noble Lord, Lord Adonis, asked: where on earth do you get those savings from? It is covered in detail in the impact assessment and business case published by DfT on 6 June. It is important to understand that certainty of funding, which will come out of the road investment strategy, combined with the arm’s-length relationship, gives us a structure which is similar enough to the structure which has worked effectively in the rail industry. For example, the Government have committed £24 billion to road investment until 2021. Far more detail on all of this will come out of the road investment strategy.

The road investment strategy is set up in such a way that once established, if a future Secretary of State wants to change it, he or she obviously could—we cannot bind a future Parliament—but it would have to be done transparently, publicly and with consultation. Such pressures are an inhibitor which provides enough satisfaction to the industry to understand that it can look with reasonable certainty over the long term for the funding to be available. That leads to efficiency. We expect the SHC to approach asset management in a different way because it has such clear strategy and certainty of funding. It will also be set up as a company, with the roles that companies have, with its directors and chief executive. The sole shareholder will be the Secretary of State. I think that it will achieve its purpose. One could go over the top and try to reinforce that, but the question is: is that sufficient for the purpose to be achieved? If it is, that is the point at which we should stop.

Yes, the SHC will be subject to the Freedom of Information Act, so there should be no concern on the issue. I have addressed the issue of multiple companies. My noble friend Lady Miller of Chilthorne Domer mentioned—I am told that I have only two minutes left. Is that seriously true? If I have only two minutes left, I shall do one thing which is terribly important. I switch completely to address the issue that has been floating through the media and mentioned today: concern that land transfers could affect the Forestry Commission and the national parks. I addressed that issue briefly at the very beginning of my speech. I am looking hard to find the comments; if anyone can hand them to me I will love them for ever.

Photo of Lord Adonis Lord Adonis Shadow Spokesperson (Treasury)

While the noble Baroness wrestles with her papers, I invite her to respond to another big concern raised in the debate, which is that there were discussions in government about privatising the Land Registry. Are there are indeed such discussions?

Photo of Baroness Kramer Baroness Kramer Minister of State (Department for Transport)

I can tell the noble Lord only that there will be no such clauses in this Bill. I can provide that absolute clarity.

Photo of Lord Adonis Lord Adonis Shadow Spokesperson (Treasury)

Are there any discussions about privatisation of the Land Registry at a later date?

Photo of Baroness Kramer Baroness Kramer Minister of State (Department for Transport)

There will be a response to the consultation, but it is not the intention of the Government to provide for that in the Bill or, as far as I know, in any future legislation.

Photo of Lord McKenzie of Luton Lord McKenzie of Luton Shadow Spokesperson (Communities and Local Government)

If it is not the intention to seek privatisation by this mechanism, can the Minister confirm that it is not the Government’s intention to seek it in any other legislative arrangement?

Photo of Baroness Kramer Baroness Kramer Minister of State (Department for Transport)

I certainly have no knowledge of any other intentions. As I said, there will be a proper response to the consultation. That may be helpful in clarifying any remaining questions for the noble Lord, Lord McKenzie.

I confirm that the Government are committed to England’s public forest estate and national parks remaining secure in public ownership for the people who enjoy them and the businesses that depend on them. The measure that we discussed for the HCA is about transferring surplus land from government agencies. The public forest estate and our national parks are in use; they are therefore not surplus and none will therefore be transferred to the Homes and Communities Agency. This measure does not apply to them.

Photo of Lord Judd Lord Judd Labour

I am very grateful to the Minister for taking up the issue of national parks, but I point out that although she has covered one important aspect, she has not covered the aspect of the responsibility of government and government departments to respect and enhance the purposes for which the parks exist.

Photo of Baroness Kramer Baroness Kramer Minister of State (Department for Transport)

I think at this stage I have to say that I will write to respond to questions. I apologise that I have used slightly more than the 20 minutes I am allowed but I very much appreciate the debate that has taken place.

Bill read a second time and committed to a Grand Committee.