Thursday 15th October 2026
(1 day, 12 hours ago)
Commons ChamberHighways (Financing) Bill 2026-27 View all Highways (Financing) Bill 2026-27 Debates Read Hansard Text
16:31 - The House divided: - Ayes: 76 / Noes: 231 - Question accordingly negatived.
The Parliamentary Under-Secretary of State for Transport (Justin Madders)
I beg to move, That the Bill be now read a Second time.
I realise that the Bill may seem rather dry at first glance, as it primarily covers how we finance major road building. Financial frameworks, licences and regulators might not get the hearts of the public—or, dare I say, even of hon. Members—racing, so I hope the House will allow me to start with why all this matters, not just for the future of this Government’s second largest infrastructure asset, but for the future of the country. Members from across the House will, I am sure, know the importance of the strategic road network—4,500 miles of highways that frankly punch above their weight. It represents less than 3% of our road network by length, and carries a third of motor vehicle miles and two thirds of lorry miles. If trade is the lifeblood of our economy, the strategic network represents our national arteries, transporting almost all the goods that we rely on for our way of life. Indeed, it does even more, by unlocking house building, connecting people with opportunity, and underpinning the integrated transport network that we want to build.
Mr Mark Francois (Rayleigh and Wickford) (Con)
The Minister mentioned roads unlocking house building. Labour wants to build 100,000 houses in south Essex, from Grays to Shoeburyness, so why did it cancel the widening of the A12 some months ago? Last week, it cancelled upgrades to the A127, too. It makes no sense to build all those houses, but if we are going to do that, it is insane to cancel the road upgrades that we need to accommodate that building. Why did Labour do that? None of this is joined up, is it?
Justin Madders
I will happily address why certain schemes have been cancelled. It is because the Conservative party put far more schemes into the programme than it put in funding for, so any understandable frustration ought to be directed at the right hon. Gentleman’s colleagues. Much of the strategic network is over 45 years old.
Mr Francois
I am sorry, but the Minister cannot get away with that. Labour cancelled the widening of the A12, which had been planned for years, and it cancelled the upgrades to the A127. Please answer my question. How can Labour propose building 100,000 houses while cancelling strategic road programmes? It does not make sense.
Justin Madders
The bottom line is that the previous Government committed to far more schemes than there was funding for, so we had to evaluate which were the least value for money and the least advanced. It is nothing more than that. The right hon. Member may be frustrated, but perhaps the previous Government should not have made promises that could not be delivered.
Demand will only go in one direction. Road vehicle mileage is set to rise on the strategic road network by 12% over the nine years to 2035. Climate change continues to bare its teeth across our transport infrastructure, and our strategic roads are no exception. All those challenges bear down on a network that holds up our economy every day. That is why I am proud that the Government published the third road investment strategy earlier this year. It committed not only £27 billion to future-proofing our roads, and to resurfacing a quarter of our entire network, but to three major enhancement schemes in the north of England, on which it will work even closer with local leaders. It proved to MPs like me that road investment can address regional inequalities, and is compatible with our promise of greater devolution. When we talk about growth and power in every postcode, that is exactly what we mean.
That is the context in which I present the Bill. I have mentioned what we have already delivered, but in truth, much more needs to be done. Delivering the roads this country needs to connect our ports, our major cities and our communities requires substantial investment over many years, and across several Parliaments. Public investment will, of course, continue to play a vital role, but we can go further when private investment is harnessed to meet public goals. When Government and the private sector come together in partnership, and when we balance certainty for private investors with safeguards for the public interest, we give ourselves more tools to build the modern infrastructure that Britain needs. The Bill creates such a tool, and does so in two ways.
Dr Peter Prinsley (Bury St Edmunds and Stowmarket) (Lab)
I welcome the measures in the Bill to invest in our road system, but will the Minister comment on the technological advances to vehicles over the next decades? Most vehicles will eventually become self-driving. That will mean much less congestion, and vehicles will communicate with each other, so there will be much simpler junctions and fewer accidents. What account are the Government taking of the technical changes to vehicles?
Justin Madders
We are working on projections and what we know about the road network now, and overcapacity at Dartford in particular needs to be addressed. On whether automated vehicles reduce congestion, we need to see what happens in practice.
The regulated asset base model will be applied to trunk roads in England. That model is not new—it was used to fund the Thames tideway tunnel and Sizewell C—but this is the first time it will be used on a road network. For our roads, it starts by granting a licence for a specific highway project to a private investor. The framework for that licence is set in this Parliament. The framework starts with construction and goes through to operation and maintenance. Any infrastructure project under this model will therefore start as it should, with a sound legal and regulatory foundation.
The Office of Rail and Road will then act as the independent economic regulator. It will have a wide range of powers in the public interest, including monitoring performance, obtaining information, issuing penalties and, if necessary, taking enforcement action and revoking a licence. These public interest safeguards are vital and will never be compromised. There can also be no disparity between the operation of a privately funded highway and one managed by National Highways, so I can assure the House that the Bill means that roads operated under the new licensing regime can be held to the same standards as the rest of the strategic road network. Even when difficulties arise, the framework ensures that road users are protected and there is continuity of service on the network.
Finally, the Bill allows a private operator to make a regulated return on their investment. Any charges or tolls will be levied under strict conditions set out by the Office of Rail and Road, which will be required to consider the interests of road users. Let me be crystal clear: the Bill is not and will never be national road pricing by the back door, and it is not and will never be a way to charge motorists across the wider network. The provisions in the Bill apply only to roads brought in under the financial and legal framework that we are debating today.
Let me be clear: that framework is not open ended. Licences may only be issued for new road projects, capacity enhancing improvements or the continued operation of a previously licensed road, and any road specified in a licence must be a trunk road in England. This is about strategically important routes, not minor improvements to the road network. Government policy is that tolling will normally be used only for costly river and estuarial crossings, and nothing in the Bill is set to change that.
I will now turn to the second major feature of the Bill. Some of the legislation governing toll collection dates back to the 18th century. It is high time that was updated, so that we can unleash the benefits of modern technology on our roads. Many of us have at some point experienced long queues at toll booths. It adds unnecessary delay to journeys, and drivers will rightly wonder when regulations will catch up with technology. Free-flowing tolling systems do not require vehicles to stop at traditional booths, and by allowing payment after use, they ease congestion and shorten journey times. The Bill does not mandate a certain approach to toll collection, but simply allows new technologies to be adopted and creates a modern statutory framework for enforcement practices. I have little doubt that drivers will welcome measures that can remove friction from their journeys.
It is no secret that our desire to push forward with this legislation stems from the lower Thames crossing. That crossing will almost double road capacity across the Thames to the east of London. It will improve journey times and it will tackle chronic congestion at Dartford, which is bursting at the seams. Its 2.6-mile dual tunnels under the Thames will be the longest road tunnels in the country, and the largest in Europe by diameter, and it will set the standard for carbon-neutral construction. In short, it is exactly the sort of ambitious and world-leading infrastructure project that Britain should be building.
We have been clear that the regulated asset base model is our preferred financial approach for the lower Thames crossing, but the Bill is not about the lower Thames crossing’s design, nor does it grant development consent. That work has already been done. It simply creates the financial framework that can deliver the lower Thames crossing, as well as appropriate future road projects.
I finish by reminding colleagues what lies at the heart of the Bill: recognition that too many people, in too many places, remain held back by poor connectivity, and a recognition that each congested road and every delayed journey stifle productivity. The Bill does not ask the House to choose between public and private finance as a matter of ideology, but it puts another tool at our disposal for delivering the infrastructure that Britain needs. This financial model will not be used in every case, but it does set out one practical approach, guided by a financial framework set by Government. There will be a compliance regime enforced by an independent regulator. Private capital is provided by investors, and public safeguards are protected at every stage. That is the balanced model that this Bill will deliver, and I commend it to the House.
Madam Deputy Speaker (Caroline Nokes)
I call the Shadow Secretary of State.
Mr Holden
I have read the Bill. Clauses 33 and 81 could lead to road charging schemes right across the country. The Minister seems not to have read his own Bill. What safeguards are there? How much will his plans to ban diesel add to the cost of construction? Does he know? Would he like to tell us? No, he is not going to say.
The shadow Ministers, my hon. Friends the Members for Mid Buckinghamshire (Greg Smith) and for Bognor Regis and Littlehampton (Alison Griffiths), will take the Government to task on the Bill and go toe-to-toe in Committee, defending motorists against unlimited tolls and endless charges. That is why we have tabled our reasoned amendment that calls on the Government to see sense, keep costs for motorists down, get this project built and deliver the growth that we desperately need in this country.
The Parliamentary Under-Secretary of State for Transport (Simon Lightwood)
I thank right hon. and hon. Members from across the House for their thoughtful and constructive contributions to today’s debate. The House has heard a range of views this afternoon. Some Members have spoken about the opportunities that the Bill presents, and others have rightly pressed the Government on how users will be protected, how local communities will be treated, and how we can ensure that major infrastructure is delivered in a way that provides value for money.
Before I turn to some of the specific points, I want to return to the more fundamental question: why is the Bill needed? The answer is straightforward: the Government believe that we should have a wide range of tools to deliver nationally significant infrastructure, and that we should avail ourselves of those tools to offer the best deal for taxpayers and to help us provide the connectivity that our economy needs. The immediate context for this legislation is the lower Thames crossing, and the House knows the importance of that project. Dartford is operating well beyond the volumes that it was designed to carry. It has become a critical pinch point on the strategic road network, affecting commuters, businesses, supply chains and communities across large parts of the country. The lower Thames crossing will provide additional capacity, greater resilience and a new strategic connection across the Thames.
Simon Lightwood
I have a lot to get through, and I have heard a lot from the right hon. Member already. [Interruption.]
The Bill provides the statutory framework needed to support the Government’s preferred financing approach for delivering this project. It does not grant development consent—
Madam Deputy Speaker (Judith Cummins)
Order. The right hon. Member knows very well that it is at the Minister’s discretion whether he gives way.
Simon Lightwood
The right hon. Member had numerous opportunities to intervene, which were accommodated by the Under-Secretary of State for Transport, my hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders).
As I was saying, the Bill does not grant development consent, alter planning requirements or remove scrutiny; it provides a financing framework for delivery. However, this Bill is not simply about one project. At its heart, it is about ensuring that the Government have another option available when that is the right solution for delivering nationally important infrastructure. This infrastructure very likely could not exist without this new mechanism or something like it.
It is worth remembering what this Bill is and is not. The Bill does not create the concept of privately financed toll roads. Parliament has already provided a route for private companies to finance, construct and operate toll roads through the concession arrangements under the New Roads and Street Works Act 1991. That route remains available today, and in the right circumstances it can work effectively. The M6 toll is an example of that approach. The principle that private capital can play a major role in road infrastructure is therefore not being invented by this Bill, but the Bill creates a different model.
For some roads, a concession arrangement may be entirely appropriate. Where users have clear alternatives, commercial incentives can play an important role in protecting users’ interests and encouraging good performance. Some infrastructure, however, performs a very different function. Some roads are nationally significant strategic assets that form critical trade corridors and support economic activity far beyond the communities through which they pass, and for many users there may be limited practical alternatives. In those circumstances, the Government believe there is a strong case for independent regulation sitting alongside private investment.
That is why the Bill places the Office of Rail and Road at the heart of that framework. The ORR will oversee performance, scrutinise costs, protect users’ interests, monitor financial resilience and hold operators to account. It will have substantial enforcement powers, including to intervene where performance is inadequate. The Bill also provides important safeguards to ensure continuity of service if a licence holder encounters serious financial difficulties. The purpose of the Bill is not to enable private charging where none has existed before; it is about expanding the Government’s toolkit to better address the range of possible circumstances.
Furthermore, the Bill will help modernise the way tolls are collected and enforced on existing toll roads. Some operators have already moved on free-flow tolling, but the legislative framework has not kept pace. In some cases, existing arrangements are not working as effectively as they should, while in others the necessary powers simply do not exist to enable such a transition. It is right that the law keeps pace with advances in technology, and this Bill provides a clear route for operators to move to a modern tolling system while ensuring that enforcement remains effective.
That brings me to the predominant theme in this debate. Today we have heard just how important local services are to communities across our nation. This Government back local people to make the right decisions for their communities, and we are striving forward with ambitious plans for devolution that will drive growth in every postcode. Fundamentally, this Bill is designed so that users make a contribution towards the costs of major infrastructure from which they derive substantial benefits. Toll revenue should meet the efficient costs of constructing, operating and maintaining the infrastructure for which users are being charged. It would not be right to expand this proposition to a form of centrally imposed local taxation.
I thank my hon. Friends the Members for Thurrock (Jen Craft) and for Gravesham (Dr Sullivan). The Prime Minister has personally committed the assistance of No. 10 North to the campaign of my hon. Friend the Member for Gravesham to find a suitable way to bring back the Tilbury-Gravesend ferry, and we remain open to working with local leaders on similar issues.
The clear theme in this debate has been whether this framework will provide regulation strong enough to protect users and avoid the failings seen in other sectors, including the water sector. We have learned those lessons and the Bill equips the ORR to be a strong and effective regulator from the outset. The ORR already has substantial experience of overseeing road and rail. Its new chief executive, Paul Smith, brings extensive regulatory experience from the UK’s aviation, energy and payment sectors, as well as from senior regulatory roles in Australia. Under this framework, the ORR will monitor licence holders’ financial resilience and long-term performance closely, and the regime will incentivise the right behaviour. Where an operator falls short, there will be meaningful consequences. Ultimately, the ORR will have the ability to suspend tolling while issues are resolved. The Bill also provides a clear backstop for this nationally important infrastructure where necessary.
Dr Lauren Sullivan
Gravesham will be one half of the centre point. Yes, it is a nationally significant infrastructure project, but the people of Gravesham need to ensure that there is accountability, so that the things we saw and learned in Dartford do not happen there. Will there be local representation and local voice, so that the ORR can look at what can make it work better?
Simon Lightwood
There will indeed be a stakeholder group and opportunities for people to feed into that.
My hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury), the Chair of the Transport Committee, was right that transport works best when there is a clear sense of direction and purpose. The Government are committed to providing that through a coherent programme of investment, reform and delivery that will create a more reliable, integrated and sustainable transport network. Indeed, that is exactly why we published our “Better Connected” strategy in April, which set out for the first time a single vision of how roads, rail, buses and active travel should work together to serve the people and places across England.
I want to address directly the reasoned amendment before the House, because it goes to the heart of what the Bill is and what it is not. To be honest, it is as if the Opposition have pleaded with ChatGPT to find any conceivable reason why they could disagree with the Bill. The first thing to note is that while the immediate context for the Bill is, of course, to aid the delivery of the lower Thames crossing, the Bill is about far more than that, so I will not be talking about the budget or project timelines. I will not dwell on the frankly shocking hypocrisy of the Conservative party, which oversaw ballooning costs to HS2, lecturing this Government on financial management. There are other times and places for that kind of discussion. Let me simply say this: the project is progressing, with construction activity already under way. Decisions on the project continue to be subject to rigorous scrutiny, with value for money remaining at the heart of decision making. The project already has its necessary planning approvals, which included the approval to charge tolls for use. In bringing forward the Bill, Parliament is not changing that approved scheme; it will just be providing another option in a suite of tools that the Government have to fund major road projects.
I am confused, Madam Deputy Speaker, because I do not understand why the Opposition want to withdraw from the Aarhus convention at this stage of the process for the lower Thames crossing. The main thing the convention does is to allow public participation in the planning process and ensure that environmental information is made available. It protects public access to reasoning and decision making during the planning process. That stage has already passed in the case of the lower Thames crossing. Withdrawing from the convention now, on behalf of the lower Thames crossing, would do absolutely nothing. The environmental information has already been produced. It has already been scrutinised publicly and published. That stage has passed, so it would not save money now.
The third thing to note is that, as I have just explained, there are already Acts that have been approved by this place that allow the Secretary of State, and indeed local government, to introduce new road schemes that involve charging or tolling without recourse to parliamentary approval.
Finally and most importantly, I must address what can only be described as misunderstandings contained in the reasoned amendment. It is important that this House takes its responsibilities for clear and fair communication with the public seriously, and I want to address that head-on. The Bill provides a mechanism for new infrastructure to be funded through future tolls in a way that regulates the potential impact on road users and provides certainty for investors. It also allows for existing physical tolls to be replaced by free-flowing virtual toll systems. The Opposition support both those measures as far as I understand. There is nothing else in the Bill: it has got nothing to say about applying new tolls on existing roads; nothing to say about wider road-user charging; nothing to say about low-traffic neighbourhoods, 15-minute cites or who shot JFK! There are no conspiracies here. I know the Opposition like to whip up the culture wars whenever they see the opportunity, but their rantings and ravings about the war on motorists, in this place and outside it, are obviously wide of the mark.
What sensible hon. Members will see in the Bill is a common-sense approach to managing our road infrastructure, now and in the future—nothing more; nothing less. Frankly, our constituents would be better served if we scrutinised what was in the Bill, rather than harping on about things that are not. Ultimately, the debate comes down to a simple question: should the Government have another tool to help deliver nationally significant infrastructure; a tool that enables practical partnership with the private sector that, in the right circumstances, can offer a good deal for taxpayers and users, and that comes with a strong regulatory protection. I believe that the Government should have that tool.
The Bill does not require the Government to use that model in every case, it does not place private finance above public finance, and nor does it ask the House to make an ideological choice between the two. It simply ensures that where private investment can help deliver nationally important infrastructure, with strong, independent regulation and robust safeguards for users, the Government have the option. That is pragmatic, proportionate and, above all, focused on delivery. I commend the Bill to the House.
Question put, That the amendment be made.