Clause 7 - Exercise of delegated functions

Infrastructure Bill [Lords] – in a Public Bill Committee at 4:45 pm on 16th December 2014.

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

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

We have not tabled amendments to clause 7, but we would appreciate a brief debate on whether it should stand part because there are a number of matters that we would like to probe.

To what extent will the proposed new corporate status of Highways England affect the question of professional indemnity? Currently, as civil servants, Highways Agency staff are covered by Crown indemnity if they do or do not do something that is subsequently found to be negligent. As I understand it, Highways England will no longer be part of the Crown, but a company registered under the Companies Act 2006. That is something I referred to in the previous group of amendments.

As with the previous issue on corporate staff and so on, I would be grateful for more clarity on the costs of moving over to the new structure. I have to say that the Government have form on this matter—not the Minister as an individual, but the Government more corporately. For example, I have been asking them since the beginning of the year whether the Highways Agency’s VAT exemption—worth £400 million a year and therefore increasing the estimated costs of transition—would apply  to the new company. I understand that the Minister has written to one of the hon. Members who raised this issue before, but I would appreciate some clarity on that because we could be talking about some quite significant sums of money.

In the other place, the Minister was really quite adamant that the exemption would apply, but when I tabled my parliamentary question on this matter, the Treasury, which came back with the reply, did not give me that kind of assurance. In fact, it did not give the assurance until an announcement in the autumn statement just a few weeks ago. Has the Minister estimated the cost of carrying out and carrying through full public liability insurance and professional indemnity insurance for the work force and the structures they commission and approve?

There are two issues there: one is, can we have some clarity in relation to VAT? Secondly, on the question of crown and professional indemnity, what is the position and cost associated with that?

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

Briefly, may I assure the Committee that clause 7 does not affect employer liability or professional indemnity for Highways England staff. The clause establishes clear accountability for statutory functions where Highways England has contracted out work to the private sector. Although the staff will move from a Crown body to a non-Crown body, there is no change in the respect that I have described. There is a letter in the Library of the House from the Treasury, which was placed there at the time of the autumn statement, saying that the company will indeed be VAT exempt.

Question put and agreed to.

Clause 7 accordingly ordered to stand part of the Bill.