Schedule 2 - Road investment strategy: procedure

Infrastructure Bill [Lords] – in a Public Bill Committee at 4:00 pm on 16th December 2014.

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Photo of Richard Burden Richard Burden Shadow Minister (Transport) 4:00 pm, 16th December 2014

I beg to move amendment 16 in schedule 2, page 82, line 17, after “relate”, insert—

“(d) the circumstances in which the Road Investment Strategy will allow the strategic highways company to undertake commercial services or charge for services”

I have spoken before about how the model put forward in the Bill has fuelled suspicion that the reform leading to the establishment of Highways England could be the precursor to a bigger change in our roads network. We know that the Prime Minister wanted to secure private sector investment in the roads network and he cited pension and sovereign wealth funds as possible sources. We also know that the Government were looking at getting users to pay for new road investment. That was the case in particular in relation to the A14. That led to a huge outcry—including from some hon. Members on the Committee—because if a toll had been introduced on the A14, the real fear was that that would have pushed traffic on to local roads and undermined local jobs and businesses. We know that that was on the Government’s mind, even after having received assurances that it was not.

The proposal in relation to the A14 has been withdrawn: that is in the roads announcement and the roads strategy, which is good. It is interesting, however, that the original proposal that the Government deemed too expensive and that therefore required tolling would have cost £1.3 billion, while the £1.5 billion of investment that we are now talking about is apparently not too expensive—work that out, because I cannot. That indicates that we need to have some clarity on the long-term future, but I do not think that the Government’s proposed licence for the company provides that.

The licence contains a section named:

“Commercial activity and charging for services.”

However—surprise, surprise—that section is “still under consideration”. I do not think that recent Government statements provide clarity either. The Department’s response to the Select Committee on Transport’s better roads inquiry said:

“The Government will consider tolling as a means of funding new road capacity on the strategic road network. New road capacity would include entirely new roads and existing roads where they are transformed by an improvement scheme.”

To me, that is not clear. I am not really sure what the Government are saying about charging and what they are ruling in and what they are ruling out. New road capacity is defined as both a completely new road and a transformation of an existing road. What would be considered a transformation? Presumably, one thing that could be considered a transformation is what is happening to the A14.

We do not have clarity. We did not have clarity in the response to the Transport Committee, nor do we have it in the Bill. Paragraph 125 of schedule 1 amends the Transport Act 2000 to allow the Secretary of State to apply tolls on roads operated by a strategic highway company. The power is not limited to roads where charges are currently levied. In clause 6, there are also extensive powers for the company to outsource and delegate its functions, which a number of people, not least unions such as the Public and Commercial Services union, are warning could permit appointment operations on 10-year contracts.

Amendment 16 tries to clarify under exactly what circumstances a new company could charge for services or undertake commercial activity. Under what improvement  schemes are—or could—tolls be considered, now and in the future? What are the Government’s criteria for what counts as transformational improvement? Are those criteria publicly available? If not, why not?

We already know that 11 of the 69 schemes announced at the beginning of December are being funded—I think this is the term in the roads announcement—“subject to other contributions”. What if that other funding is not found? What if those other contributions do not come in, or do not come in on the scale anticipated? Will tolls be considered for road upgrades in that situation?

The Government also expect that the licence holder will not be able to receive sponsorship or advertising without the Secretary of State’s approval. Perhaps the Minister can clarify why that is only an expectation. If the company is accountable to the Secretary of State in the way the Minister has assured us is the intention, why is it simply an expectation, not a requirement?

The Government have said that some of those issues will be clarified in the framework document. That is good to know, but we are where we are in Committee today and, at the moment, they have not been clarified. This schedule is where we have the opportunity to consider the matter, so I look forward to the Minister’s clarification on those issues today. What is going to go in the framework document? What are the answers around the question of tolling and raising money? What is the answer in relation to advertising? What do the Government mean by “transformational improvement”?

By accepting the schedule in its current form, would we be accepting that the new highways company could introduce tolls not simply on new roads, but on existing roads where an improvement, renovation, repair or change was regarded as transformational? The strategic highways network is talking about strategic change to roads and we are talking about step-changing roads. That has been the tenor of today’s discussion; we are talking about big changes in the way our strategic road network is delivered. Given that, it seems that the term “transformational improvement” could apply to a great many road schemes. I hope the Minister can provide some clarity on those matters.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

Again, we can deal with that fairly quickly, not least because, although I understand why the hon. Gentleman has raised the matter, I do not think there is quite the spectre that he described as implicit in the proposals. Let me be crystal clear: the Government remain firmly committed not to introduce pay-as-you-go road charges or tolls on existing roads. We will not make any changes to existing law on tolls and road charging, and we are not giving the company any power to issue its own tolls or other charges on road users. I could finish there but I think that would be impolite.

The company needs the permission of the Secretary of State to take advantage of new commercial opportunities. That is right but it is also right that that is done through statutory directions and guidance, not through the road investment strategy, not least because to change or vary the road investment strategy is a highly involved process. If we needed to vary the strategy every time we wanted  the company to partake in a legitimate and sensible commercial activity, it would severely hamper the company’s ability to act flexibly and respond to changing circumstances. I am absolutely clear that we are not giving the company carte blanche to take radical decisions that contradict the commitments that I have given on commercial activities, charging, and other related activities. It is more about things such as regulations around which signs can be placed along the roadside; powers to decide on that remains with the Secretary of State, so Highways England would need to consult the Secretary of State for consent to do that. I am thinking about advertising and sponsorship, which might be another concern about commercial activity. Although I can understand why the hon. Gentleman has raised the issue, our intentions and, indeed, the Bill are more straightforward than perhaps he has assumed. On that basis, I invite him to withdraw his amendment.

Photo of Richard Burden Richard Burden Shadow Minister (Transport) 4:15 pm, 16th December 2014

Again, I do not doubt the Minister’s intentions but then I try to relate the assurances that he is giving to the fact that he is urging me to withdraw the amendment and I do not really understand that. If the amendment were trying to rule out altogether any question of Highways England charging for any services, clearly that would put the straitjacket on it that he was suggesting. If the amendment were trying to say that charging would only take place in the following circumstances, I would understand what he is saying because it is impossible while discussing a Bill to work out precisely the times and circumstances in which some kind of charge or sponsorship—some variation from the norm—would be justified. We could not do that in primary legislation. However, that is not what the amendment says. It says that what should be laid down in the Bill are

“the circumstances in which the Road Investment Strategy will allow the strategic highways company to undertake commercial services or charge for services”.

In other words, it says that when drawing up that strategy, the assumptions around where extra money will be involved—whether it could involve tolling or not—should just be looked at in the strategy, not in primary legislation. I really do not see the problem with writing that on the face of the Bill in the interests of the very transparency that, in clause 1, we were talking about as being so important. I appreciate that the Minister has absolutely no intention of allowing wholesale tolling or anything like that. However, I would like to make it absolutely clear that if there was going to be any such suggestion, it must be transparent.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

This is a last-ditch effort to persuade the hon. Gentleman not to press the amendment. The body would have to go to the Secretary of State before any such decision was made, as that decision would rest with the Secretary of State. The body would not have permissive freedom to take those decisions without being pulled back, as the Secretary of State will be answerable to the House for any such decisions. For my money, that is by far the best guarantee that we have. Because of the principles of sensitivity and proper levels of accountability and all the popular debate that takes place about road charging, that is the best guarantee we have of these things not happening by stealth, which is what I rather think the hon. Gentleman might suspect could happen were that not the case.

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

I appreciate the Minister’s last-ditch effort, but he could say that about any part of the road investment strategy. The Minister will be accountable for delivering the road investment strategy when it is drawn up. It will go to the Minister to be looked at, and Highways England will then be charged with the responsibility of taking it through, delivering on it and being held accountable for it. I do not see why the strategy should not have within it what the framework is and whether it really does or could envisage charging.

If the strategy allows the strategic highways company to undertake commercial services or charge for services, the Minister will have signed that off. There will be an obligation on the Minister to say, “Okay. This is something that the RIS could include.” I do not personally see a problem with having that on the face of the Bill. On that basis, I would like to divide the Committee.

Question put, That the amendment be made.

The Committee divided: Ayes 7, Noes 10.

Division number 2 Decision Time — Schedule 2 - Road investment strategy: procedure

Aye: 7 MPs

No: 10 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

Photo of Roger Gale Roger Gale Parliamentary Assembly of the Council of Europe (Full Member)

Amendment 13 was debated at some length with amendment 12. I am satisfied that the contents of schedule 2 have been adequately debated, so I propose to put it to the Committee forthwith.

Schedule 2 agreed to.

We are coming fairly shortly to clusters of clauses to which no amendments are tabled. My custom and practice is to call the number and, if no voice is raised, I shall simply put it formally without the Minister needing to move it or read a speech. If any Member on either side of the Committee wishes to comment on any clause, they are absolutely entitled to do so. I will make that plain as I move fairly fast; do not say that you were not warned.

Clause 4 ordered to stand part of the Bill.