Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) (No. 2) Regulations 2019

Debate between Baroness Kramer and Lord Davies of Oldham

Tuesday 1st October 2019 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I agree with my noble friend Lady Bowles that the Explanatory Memorandum needs to be updated to reflect the current circumstances and the current attitude towards our future relationship with Europe. Frankly, that is necessary in order to be fair to the industry, which will be reading all this with a great deal of attention, because the various aspects of this statutory instrument obviously have a very big impact on its businesses, what they are able to do and how they need to adjust to cope with any kind of Brexit, should it happen. I want to pursue a slightly different direction from my noble friend, however, and ask about the divergence that seems to be embedded in this statutory instrument. I ask for a very particular reason: your Lordships will be well aware that the London Clearing House is now well set up in Paris as well as in London; that there has been a major shift by many of the big banks to centre a lot of their trading activity through Paris; and that undoubtedly, should Brexit happen, that will be enhanced and there will be increased activity in Paris covering essentially the same business range when it comes to derivatives and over-the-counter derivatives. There will be an equivalent central counterparty functioning almost as a rival body, so the embedded divergence in this statutory instrument becomes important, perhaps as a bellwether for the future, and I would like to probe the Minister on it.

It strikes me, first, that paragraph 2.8 explains:

“Some of the provisions of the REFIT amendment to EMIR do not become applicable until after 31 October 2019 … Therefore, this instrument does not make amendments to those provisions”,


to incorporate those changes, as it were. I would love to know the content and significance of those amendments and how they will impact the shape of the industry. The CCPs or the regulators will need to behave in a different way if we have an embedded divergence that would come into effect in a matter of days. I would find that information rather helpful and perhaps the Minister would be kind enough to enlighten me.

That brings me to paragraph 2.16. As my noble friend Lady Bowles said, it states:

“EMIR, as amended by REFIT, allows the Commission to suspend the clearing obligation for up to twelve months in three-month increments”.


The new equivalent power, to be handed to the Bank of England, chooses to allow the Bank to suspend for up to 12 months—in other words, not following the pattern of three-month increments. It sounds like a minor difference, and it possibly is, which raises the interesting question: why choose to embed a divergence? Could it leave us in the rather peculiar situation that one CCP in Paris—ironically, under the same ownership as the CCP in London—could be operating under different rules when it comes to suspending obligations? Is that a situation we want to see? Is this to be an area of competitive rivalry? What will the impact be? It seems to me that encouraging companies or funds to play regulatory arbitrage is never the healthiest strategy to pursue. Perhaps the Government could explain, because I would just like to understand it better.

There is another odd area where apparently, inconsistency will remain in the future. Paragraph 2.17 explains that within the European Union,

“Any suspension of the clearing obligation that impacts classes of derivatives with a trading obligation must result in the trading obligation also being suspended to avoid a conflict”.

That seems entirely logical, but apparently that is not going to carry over into the UK. There will be no automatic suspension of the trading obligation. It sounds like the FCA will then be responsible and the Bank will then have to notify the FCA of its intention to make the clearing obligation suspension, rather than the link being an automatic one. It strikes me as cumbersome and inefficient and I wonder why it is being chosen.

Perhaps the Minister, as he finishes, will just explain this. Although the embedded divergencies are minor, they certainly can be played by financial institutions. Given the rapid growth of Paris, picking up business that was almost exclusively being done through London, it is probably best for this House to understand.

[Lord Davies of Oldham (Lab)]

My Lords, I apologise to the noble Lord, Lord Bethell, and to the House for having missed the first couple of minutes of his significant words, but I think I could pick up from the way in which he developed his theme exactly the position of the Government on this complex area. The Minister’s answers to the questions and anxieties of the two noble Baronesses from the Liberal Democrat Benches will certainly help us to understand his position.

I hope that the noble Lord is enjoying his Front-Bench debut on the EU exit SIs. It has been a fairly onerous task. As far as my own contribution is concerned, my noble friend Lord Tunnicliffe, who normally joins me in economic debates, is unfortunately not able to be here today, otherwise he would have added to the absolutely excellent work that he has done over a long period of time in successive discussions on these almost endless SIs. However, I thought it right that he should have a certain amount of time off, and he has gone to an event at which his wife is a star figure who is being given an award, so I am not surprised that he is on duty there rather than here today. However, he has had the advantage of having scrutinised about 50 of these Treasury SIs—and of course the Minister will have taken steps to catch up with all that.

This instrument makes several changes to both the Financial Services and Markets Act 2000 and relevant pieces of retained EU law to ensure consistency with the UK’s obligations under the EMIR REFIT regulation, which came into effect earlier this year. We do not regard these changes as controversial, and therefore we support the instrument. However, we will look for elucidation and clarification of certain parts of how it will work. I am grateful to the noble Baronesses who have already spoken for having identified important areas in which the Minister needs to respond.

Financial Services (Implementation of Legislation) Bill [HL]

Debate between Baroness Kramer and Lord Davies of Oldham

Committee: 1st sitting (Hansard): House of Lords
Tuesday 8th January 2019 Lords Chamber

[Lord Davies of Oldham]

My Lords, I can be brief because we have already had at least four debates this afternoon on the exact issues that this amendment and Amendment 11 in my name and that of my noble friend Lord Tunnicliffe deal with. It all revolves around the fact that we are not prepared to give the Government and the Treasury primary powers over issues that would normally require primary legislation just because this Bill has some exceptional qualities to it. It does indeed have exceptional qualities, as has been pointed out on all sides. It is meant to have a lifetime of a bare two years. The vast majority—I will withdraw that remark; I cannot qualify it. Some people who have spoken today have sought to make some improvements to the Bill but I do not have the slightest doubt that they hope that the Bill will never be necessary and that we will not crash out of the European Union without an agreed position.

Two debates ago, the noble Baronesses, Lady Bowles and Lady Kramer, did exactly what we seek to do with this amendment—that is, to identify just where our limits are with regard to the intention in the Bill and to point out that it is misconceived because it attributes to the Treasury powers that we ought not to allow it to have. We thought that we had spotted the area where the debate would flare up most significantly in Henry VIII powers terms, but in fact these issues have already been discussed without the need to mention that moniker too often.

I therefore move this amendment on the basis that the Committee and the Minister know only too well the strength of feeling on all sides that this Bill cannot be a Trojan horse to allow the Treasury and the Government to introduce measures that they would ordinarily introduce through primary legislation but which they are trying, through the enabling quality of this Bill, to introduce through statutory instruments and Treasury adjustments. We have debated this matter long and hard. We all know where we stand and I therefore beg to move, although I do not expect too much in the way of contributions in support.

[Baroness Kramer]

I will just say from these Benches that we agree.

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[Baroness Kramer]

I want to make one very quick comment to add to those of the noble Lord, Lord Sharkey. There is a real danger that the pattern within this Bill becomes a precedent, and that for future financial legislation we in effect see this process of Treasury decision enacted through statutory instrument. This sunset clause would make that impossible. It would make sure that this was, in effect, a one-off, and that there was a return to normal practice following the end of four years.

[Lord Davies of Oldham]

My Lords, it is time to be kind to Ministers when one gets to this end of the Bill. My advice to the Minister is to indicate what a logjam of SIs there would be four years on from the consequences of this strategy. I understand entirely, and sympathise very much with the intent behind the amendment, but if I were the Minister I think I would point out a few of the practical difficulties.

Class 4 National Insurance Contributions

Debate between Baroness Kramer and Lord Davies of Oldham

Wednesday 15th March 2017 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, I am fairly sure that the House will not be taking the Statement in quite the positive way in which the Minister clearly hopes. Conservative Party Budgets and U-turns seem to come hand in hand these days, but this is one of the outstanding ones. Scrapping the centrepiece of the Budget in less than a week is going some, even by Conservative Chancellors’ standards. When Chancellors make really egregious mistakes they are always compared with Hugh Dalton, who was fired almost immediately on the spot for the leak to the lobby correspondents as he walked in to deliver his Budget. When I think about other errors that Chancellors have made, this one comes pretty close to that. As the Chancellor has obviously been in close contact with the Prime Minister, I imagine that his hair has stood on end these last few days—brushed well though it normally is.

The changes announced today amount to a £325 million revenue loss in 2018-19 and a further loss of £645 million in 2019-20. They raise a number of questions, not only about the obvious gaping hole left in our country’s finances but also about the critical relationship between the Prime Minister and the Treasury. After all, we all know there is a connecting route between Nos. 10 and 11; they are adjacent properties. It therefore seems that the Prime Minister is bound to have been consulted on the Budget.

What we need to know is this. In his letter to Conservative Back-Benchers, Philip Hammond said:

“The cost of the changes I am announcing today will be funded by measures to be announced in the Autumn Budget”.


That is not good enough. At a time of already considerable uncertainty over our future relationship with the EU and the terms that we will obtain, and the impacts that that will have on trade and the whole issue of business confidence in this period, this is just about the last thing we need—a mess-up on a Budget.

If past Budgets or Autumn Statements are anything to go by, waiting for months only to hear that welfare spending or local council funding has been cut even further is not acceptable, yet we know both of those have been in the Government’s firing line in recent months. Furthermore, can the Minister assure this House and the public that the £2 billion announced for social care will be safeguarded? Informed opinion thought the emergency needs of social care were £2 billion a year, so we were already critical enough about the Chancellor’s decision to award it £2 billion over three years—that is, about one-third of what is necessary. The House will want an assurance today that that money at least is to be safeguarded.

The Prime Minister has said it was the Government’s decision to U-turn on national insurance contributions, but whose decision was it to put it in the Budget in the first place? In the consultation, were people not aware of the manifesto commitment? Surely the Government are not seriously saying that the Chancellor spoke to no one except officials before the Budget was produced. What about these other significant figures, his Treasury Ministers, who line up with their boxes in photographs and take pride in the Budget? No one among them appears to have recognised the manifesto commitment, leaving the public suspecting that it was the Prime Minister who put the Chancellor right. There will probably be consultations over a number of issues in the future and if they are at the informed and perceptive level of the construction of this Budget then we are all in for a rather bumpy ride.

This after all was one of the Chancellor’s major announcements in his first Budget. Surely he must have consulted people. We and indeed the country are at a loss as to why no one recognised what is now regarded as an important block—namely, that at the last general election the Conservative Party made a series of promises, not all of which have been fulfilled, though the ones that have been fulfilled are the ones that we on this side of the House find most onerous. It turns out that as far as this Budget was concerned this promise was the critical one, yet the Chancellor went blissfully on to deliver the Budget.

As the IFS has made clear with regard to self-employed people on low incomes, the NICs uprating was only ever small in comparison with the more significant changes that the Government are making to universal credit, yet this is the one that has shaken the Chancellor. I hope the Minister recognises that the self-employed will remain worried about what they will be taking home at the end of the month following this fracas. On the abolition of NICs 2, which the Chancellor has today confirmed will go ahead, how will the rights previously obtained by class 2 contributions be ensured?

There is now a gaping hole in the Budget and the Chancellor needs to reassure the nation that he will cope with the financial problem represented by this blunder. Finally, if no action on NICs 4 is to be taken in this Parliament, what on earth is the purpose of Matthew Taylor’s work? If there is such a block on action on this one crucial area—the Government have after all emphasised how crucial it is in terms of changing patterns of work—until after the next general election, we are all left to wonder just what will be the purpose of that work.

[Baroness Kramer (LD)]

My Lords, what a climbdown. And what a spat between No. 10 and No. 11. The Chancellor has always had a tin ear, but did the Prime Minister not recognise that the NICs change was, in effect, a tax increase on the plumber, white van man, the entrepreneur and women working from home because of children—people who are typically “just about managing” and whose income fluctuates, is low and is often unreliable?

Yesterday, in the Budget debate, the noble Lord, Lord Willetts, spoke of the now discarded NICs change as a way to combat companies that, to benefit from tax arbitrage, push people out of employment into less certain self-employment. I suggest, as I did then, that if the NICs changes had been focused on those companies seeking that tax arbitrage, rather than on the self-employed—manifesto pledge or no manifesto pledge—the response would have been very different. Were the Tory Government following their usual pattern of protecting big companies and big business and hitting the little people?

It is crucial, as I think everyone in this House would agree, that the increase of £2 billion for social care remains, inadequate though it is, being spread over three years. How will the Government fill the gap in the public finances when the Chancellor is so constrained by expected blows from hard Brexit? Can the Minister give us today a guarantee that it will not be filled by more severe spending cuts parts of the public sector already under extraordinary pressure? Do the Government agree that the whole Victorian structure of business and employment taxes needs re-examining? The former BIS Secretary, Sir Vince Cable, is chairing such a review for the Liberal Democrats. Will this Government, among their many reviews, take on frankly a review of similar scope, because it is vital?

When spreadsheet Phil decides to shoot from the hip, we surely have a Government puffed up in hubris. I am afraid that this exactly reflects the arrogance that led the Government to hard Brexit. If they have a tin ear over their own self-employed, how bad is the tin ear that they will take into EU negotiations?

Bank of England and Financial Services Bill [HL]

Debate between Baroness Kramer and Lord Davies of Oldham

Tuesday 3rd May 2016 Lords Chamber

[Baroness Kramer (LD)]

My Lords, perhaps I may pick up on the point made by the noble Lord, Lord Flight. The FCA is one regulator. We understand that there is great pressure to move on this issue now because the FCA had lost so much confidence and so many people have questioned whether it is genuinely an independent regulator. However, the PRA, turning into the PRC, is an equal, if not more critical, regulator of our banking system, and of course appointments to the Bank of England—particularly that of governor—are also crucial. Therefore, can the Government tell us why they have not broadened out this change in approach, which is surely just a modernisation and a recognition of the significant interest that Parliament and the country have in these appointments?

[Lord Davies of Oldham]

My Lords, after those contributions I can keep my own fairly short. However, like the noble Baroness, Lady Kramer, I would have thought that this change would have applied in the whole approach of this Government and would have been taken into account when the Bill was drafted. Not only have the Government had strong representations from the Official Opposition and the Liberal party—we debated this matter very vigorously in this House—but it is clear that the Treasury Select Committee had very strong views on this. Ministers are all too well aware of the fact that the Treasury Select Committee contains members of all parties, several of whom enjoy very high reputations indeed—not just the chairman, although he too deserves his high reputation. How is it, then, that the Government should have thought that they could ignore the proper position of the Select Committee in relation to this appointment?

Of course we welcome the sinner who repenteth, and the Minister, I have no doubt, will indicate in a moment how carefully he has considered all issues. But it does somewhat surprise me that it needed such a weight of parliamentary opinion, to say nothing of opinion from outside too, before the Government recognised that they could not possibly put forward this appointment without there being a substantial degree of parliamentary scrutiny.

Bank of England and Financial Services Bill [HL]

Debate between Baroness Kramer and Lord Davies of Oldham

Tuesday 19th January 2016 Lords Chamber

[Baroness Kramer (LD)]

I very much join in the thanks, particularly to the noble Lord, Lord Bridges, for the way in which he conducted the work of the ministerial Front Bench. He was always open to meeting and kept us incredibly well informed—frankly, above and beyond the usual. I extend those thanks to the noble Lord, Lord Ashton of Hyde, and to the whole of his Bill team for the generous way in which they handled this piece of legislation. The Government listened, particularly on one key issue which these Benches were concerned about—oversight of the Bank of England —and the Bill will now be stronger for that.

I have to say, very briefly, that there were areas where the Government did not listen, and we will all live to regret two of them. One is the decision to end the reversal of the burden of proof, which would have had a big impact on the culture of banking, and for the better, and the other is the concern we raised over the independence of the FCA. Both those concerns have been very much underscored by the recent disclosure that the FCA has cancelled its review of the culture of banks and by the timing of the way it did so, just a few weeks after the Bank of England parachuted an executive director into the FCA to supervise this area. So we have concerns, which I am sure will be picked up in another place and by the Treasury Select Committee. But I very much thank those who worked on the Bill and who did so with great graciousness.

[Lord Davies of Oldham]

My Lords, I, too, thank the Minister and his colleague, the noble Lord, Lord Ashton, for the way in which they have conducted the progress of this Bill. We particularly appreciate that the Minister was concerned to arrange meetings at which we could discuss fully, outside the processes of the Chamber, crucial aspects of our anxieties. We were greatly exercised over the issues of the court and its powers and the oversight committee, so we also particularly appreciated the fact that a meeting was arranged for us by the Minister with the chairman or chief officer of the court. That was extremely helpful and it aided us in our consideration of the Bill. So I thank him and his team for their work on the Bill.

I also indicate to the Minister that, as a Lords starter, the Bill has further scrutiny to undertake. He will be well aware that my colleagues in the other place will subject the Bill to intensive scrutiny and will seek to find areas where perhaps the Government can be persuaded to think again, not least on the reverse burden of proof and their position with regard to the court. But this has been a constructive exercise. I suppose that it is the Minister’s maiden Bill and I congratulate him on his achievement as the Bill is about to pass.

Bank of England and Financial Services Bill [HL]

Debate between Baroness Kramer and Lord Davies of Oldham

Tuesday 15th December 2015 Lords Chamber

[Baroness Kramer]

My Lords, our one concern with this amendment was that it could in some way compromise the statutory objectives of the FCA as laid down by Parliament. The Government wrote to us with an assurance that that was not their intention. Today, the Minister read into the record the text of the letter. He said that the recommendations would not compromise, modify or override the FCA’s statutory objectives in any way. Given that a Minister’s statement in Hansard is a weighty commitment, we are satisfied with the amendment.

[Lord Davies of Oldham]

My Lords, I was going to make almost exactly the same contribution and my question was exactly along those lines, so I am happy to endorse what the noble Baroness, Lady Kramer, said and look forward to the Minister’s response.

Spending Review and Autumn Statement

Debate between Baroness Kramer and Lord Davies of Oldham

Wednesday 25th November 2015 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, I am delighted to see the Minister in his place making one of his more constructive speeches in the House. I will give him a chance to answer a few questions, but before I get on to that I shall put the Statement into some kind of context.

The Chancellor was obviously buoyed by, as he saw it, some successes in recent months. However, I shall ask the first obvious question: whatever happened to the long-term plan? For years we heard nothing but Conservative Members of Parliament talking about the long-term economic plan. We all know what the conclusion of that plan was meant to be: the elimination of the deficit during this year. The deficit has not been eliminated this year; in fact we are £69 billion in debt. It is quite clear that the Government have jettisoned the long-term economic plan in favour of a second version, which is that we will have a surplus of £10 billion in 2020. Even the Institute for Fiscal Studies gives the Government only a 50:50 chance of hitting that target, so we wonder what credence we should give the Chancellor following his speech in the Commons today.

There were two significant climbdowns: one was no further cuts to the police force—here, some credit is due to the Opposition, who made it clear to the Government that further cuts were quite unthinkable in the present context—and the other was a credit to this House and a direct reflection of its holding the Government to account and asking them to think again. Having thought again, they jettisoned that original totally unfair and improper policy. We very much welcome both climbdowns in the Chancellor’s Statement.

We still need to consider a range of fundamental economic failures, though, and I shall be addressing those in specific questions to the Minister. Is not the productivity gap between the UK’s performance and the rest of the G7 countries’ at its widest since 1991? That shows this country in a very poor light, and of course the Government must take responsibility for a great deal of that against a background of what is recognised as an absolutely chronic balance of payments position under this Government. That can be remedied only if we invest in the development of skills and begin to export more successfully.

Every hour worked in Germany, France or the United States is worth one-third more in terms of achievement than an hour worked in Britain. This must be because the Government have been so content over the past five years to see wages fall—we all know how dramatic and persistent that fall has been over this period—and have neglected skills development and run, essentially, a low-wage, low-skill economy, which cannot be the future of the United Kingdom.

The Government are always negative about public sector investment. In the railways, for example, even a successful public sector-run franchise, the east coast main line, was jettisoned in favour of a free and open competition—as long as no British public institution could compete. However, state railways from France and Germany were welcome to take over part of our railway system. Of course, the same is happening with our nuclear power stations—we are making ourselves dependent upon investment from the People’s Republic of China. It is interesting to see that the Conservative Party now finds itself in cahoots with a very significant state-run society.

Public sector net investment in 2009-10 was at 3.2% but is now down to 1.5%. It is therefore not surprising that certain aspects of public work and investment are at a very low level. That is shown, for instance, in the quality of our roads. Are the Government comfortable with the fact that our roads are rated below the standards of Spain, Portugal and—wait for it—little Croatia? The only areas in which the Government have shown a commitment to investment are projects they inherited: Crossrail and HS2. It will be noted that although they sustain these projects, the Department for Transport is to take its 30% cut, which will be effected by cuts in “administration”. If one believes that, one can believe most things.

Overall, investment in skills has been woeful. It is clear that the business department is being cut to the bone. The number of jobs lost there is very significant, and it is clear that training and development is to be vested solely in the enterprise of private industry, to which the state has very little to contribute. Yet industry is crying out for the skills of young people. That is particularly true in the construction industry, which of course enjoys the reputation of translating investment into jobs quickly, and can meet a need in circumstances where our housebuilding programme is at its worst peacetime level since 1920. What a record the Government have on housing our people!

Then of course there is the whole question of the National Health Service. We are delighted that the Government have indicated that they know they need to increase investment in the National Health Service. We are also pleased that they recognise that alleviating pressure on hospitals can be achieved through increasing social care places. However, 3,000 beds have been lost in recent years and there is no indication that they will be replaced quickly. Of course, the promise that local authorities can increase council tax provided that they spend the money on care homes is to be welcomed.

As for the police, I can find no reference to what the Government will in fact do about the police, except that that there are 17,000 fewer officers since they came to power. They have indicated that they will not put any further pressure on police by cuts, but there is no indication of what money will be devoted to the police force and where it will come from.

I therefore want the Minister to answer three questions. First, if the Government wish to promote infrastructure, does he accept that public sector net investment has halved as a percentage of the GDP under the Government? Can he accept such a deplorable state of affairs? Secondly, we know that we need to boost productivity. Is the Minister concerned that the gap between productivity per hour worked in this country and in the rest of the G7 is so very wide? Thirdly, the Chancellor said that he has balanced the books, yet the deficit is set to be very substantial this year.

Finally, the Government are ending their onslaught on tax credits, for which we are duly grateful, and this House takes a great deal of credit for that achievement. The House acted constitutionally and properly and caused the Government to think again. However, this spending review and Autumn Statement indicates that only a £3.385 billion saving will be rendered in respect of tax credits. In fact the Government have always maintained that £4.4 billion would be saved. Are the public to find that other billion in this next year?

[Baroness Kramer (LD)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Davies of Oldham, but I confess that he disappointed me today. He did not throw anything, so we have missed out on the drama of the other place. I was also somewhat disappointed in the Budget. It is less generous than it appears on first viewing: we still have a £12 billion cut in welfare. If I understand it correctly, that will now happen as people transfer into universal credit. I am sure that the Minister will advise noble Lords about that—it would be good to understand how it will work. Of course, I am absolutely delighted that the Chancellor reversed his plans to cut tax credits for poor working people. I think, with some interest, that had the Chancellor been a Member of this House a couple of weeks ago, when the relevant statutory instrument was debated, he would have supported neither the Conservative nor the Labour Motion, but the Liberal Democrat fatal Motion.

We are also pleased with the upfronting of money for the NHS in this Budget, especially the investment in mental health. That is welcome, but can the Minister confirm whether that £600 million is new money for mental health and does not contain any former promise within it? We are supportive of stamp duty on buy to let and very supportive of the increased spending on infrastructure. We note that the Chancellor partially explained that that was because borrowing is now cheap. That is what we have been saying for weeks, so we are very glad that he has listened to that argument.

However, if I lived in a deprived community, I would be exceedingly concerned today. Perhaps the Minister can help us. Although the Government have said there will be no cuts in the policing bill, I am somewhat confused. Does that mean that the grant levels for policing will continue to be the same from central government, or is part of the money to be replaced by a precept raised locally, by police and crime commissioners? I did not follow that and therefore do not understand what might be happening. If I am in a deprived community and find that I have an additional bill on my council tax for policing, I am almost certainly going to have an additional bill on my council tax for social care, because, as Members of this House will know, the most vulnerable elderly tend to live in the most deprived communities, with the narrowest council tax base. Therefore, paying for social care through an additional precept on council tax will be very tough for those communities. I would indeed be worried.

I would also be worried in another sense. The Chancellor significantly slashed the revenue side—that is, the operations budget—of the Department for Transport. Immediately in my head went up the warning sign that much of that is spent on bus grant. Again, with local authorities under great financial pressure, are we looking at either losing a lot of our bus services outside the big urban centres, where the systems can wash their face themselves, or are we looking at additional council tax being raised to pick up bus services?

The repatriation of business rates is something that we have always supported in principle, but I did not quite follow that; again, perhaps the Minister can help us. If I understood the Chancellor correctly, the equalisation will disappear. As this House will know, business rates have been centrally collected and then redistributed on the basis of need. As that is eliminated, will we again find that our most deprived communities, with the least capacity to generate new business and new business rates, will be the ones that suffer, while somewhere such as Kensington and Chelsea or Westminster will be in heaven? I hope very much that the Minister can support us, because one knows that, with Budgets, the devil is very much in the detail.

Perhaps the Minister can help us also on further education. What I heard was a real-terms cut in the further education budget, which will be protected only in cash terms. In this House, we have all discussed—indeed, the Minister himself has discussed—the significant problem of the lack of skills that is holding back economic growth. Especially now, as we are constraining migration, it is really important that British people have lifelong learning. Apprenticeships and universities have a huge role to play, but the underpinning in our ever-changing world, where people constantly need to update their skills, means that further education is absolutely critical. Have we just heard a cut in that sector?

Perhaps the Minister can help us with this policy of equalising per pupil spending in schools. It sounds on the surface not to be an issue, but does this mean that schools, for example, in London, in some of our most difficult communities and which have delivered outstanding success, are about to have a cut in their per pupil spend based on this equalisation? We really need to know and understand the detail of that.

I will make just two more comments. Although there were many measures to support new ownership, the private rental sector was ignored. We have 1.6 million people on the waiting list for social housing who will obviously not be helped, and so many in generation rent, who spend half their income on rent, have not been helped either.

My last point is that this Budget relies on a £27 billion find by the OBR in increased tax receipts and low interest rates. I point out that both could change or disappear. Given the constraints of the fiscal charter, what are the consequences for this Budget if that should happen?

Bank of England and Financial Services Bill [HL]

Debate between Baroness Kramer and Lord Davies of Oldham

Wednesday 11th November 2015 Lords Chamber

[Lord Davies of Oldham]

My Lords, I shall also speak briefly and, largely, to endorse the arguments put forward by the noble Lord, Lord Sharkey. The impact assessment does not give a rationale for why the Government have made this decision, which we seek at this point. It would be useful to understand the reasons for the decision having been taken; without such information, we are not quite clear as to the advantages. Who was consulted on this, and what are the benefits to consumers and regulators? Surely it would put more pressure on the regulators to identify wrongdoing. Have the Government conducted investigations that take any of this into account? The Minister has a chance to reassure both of us who have spoken in this short debate on the reasons for the Government’s position.

[Baroness Kramer (LD)]

My Lords, I shall say a brief word. My noble friend Lord Sharkey and the noble Lord, Lord Davies of Oldham, have both been very calm on this issue, but I shall admit that, frankly, I am outraged. The obligations that exist for so many people in the public sector to report misconduct—on teachers, police officers and members of the NHS—are taken as absolute requirements. There is no question of whether they are costly; it is understood that the importance of propriety and integrity in all those activities is crucial. I suggest that, after the years that we have been through following the financial crisis, no one should doubt that integrity in this sector is absolutely vital.

When we sat on the Parliamentary Commission on Banking Standards, we discussed whistleblowing extensively. Every single institution that we talked to and everyone we could identify had in place mechanisms for whistleblowing; the problem is that none of them was effective. The kind of issues that were reported through whistleblowing systems were situations such as when someone had noticed someone sliding a £5 note out of a cashier’s desk—they were on that kind of scale. So none of the major abuses, whether it was PPI, the LIBOR scandal, the mishandling of credit issues or money-laundering, came to the surface through any kind of whistleblowing system. This measure—the statutory requirement to report a breach when someone sees or recognises that it is happening—is one of the few mechanisms that we could conceive of to try to counter that particular set of problems. Without exception, everybody who gave evidence to the parliamentary commission talked about the importance of making whistleblowing much more effective. So far as I can see, there is no replacement to this requirement that is effective, that has been proposed—and, frankly, if there is a burden, surely any burden is significantly smaller than living with the consequences of sustained and ongoing abuse.

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[Baroness Kramer]

First, I thank the noble Lord, Lord Naseby, for allowing me to put my name to his very fine amendment, and also for drafting it in such a way that I could arrange the conversation beyond just the matter of mutuals. I very much support his comments on mutuals. They are important to our past, our present and our future.

The noble Lord commented on the regulatory scope available to the PRA in dealing with the sector, which I believe is governed by CRD IV, the relevant European directive. He will know that there is a great deal of scope for flexibility under that directive precisely to recognise the various needs of mutual—and similar and smaller—institutions across quite a wide range of facets. It is a flexibility of which the PRA has essentially not availed itself. Since those flexibilities were largely negotiated by the UK with the domestic variety in mind, it seems a little extraordinary that we have not taken advantage of them. I recommend to the Government that they might want to have an appropriate conversation with my soon-to-be noble friend Lady Bowles, who will shortly be coming to this House. She was a member—in effect, chair—of ECON, the Committee on Economic and Monetary Affairs within the EU. She can provide some helpful advice and direction on this issue.

I have said many times in this House, and I shall repeat it again today, that in the UK we are missing a layer of banking. In Germany, regional government—the Länder and municipalities—are able to sponsor banking institutions. The financial institutions provide the backbone to Germany’s small and medium-sized businesses, the Mittelstand. During times of recession that banking layer provided ongoing support to those companies because they understood them and their remit was such that they had to find their routes to profit from within that scope of geography and companies. It has been a very successful model and we have no equivalent here in the UK.

In the United States, which we also very much recognise as a competitor, local community and regional banks also play a much more significant role in supporting both individuals and small businesses. The community development movement in the US, which is very much local, has something in excess of $30 billion of assets under management. It is highly significant. It comes out of the US history of local banking, strengthened by the Community Reinvestment Act which was introduced in the late 1970s, largely as a civil rights measure, to deal with the red lines that major banks had drawn around ethnic minority communities, as they were not lending into those communities. That has been balanced out by the Community Reinvestment Act. It provided the Obama Administration with a very significant route to channel funds to small businesses during the recession in the US and again played a very significant role in making sure that those small businesses could be resilient.

By contrast, following the financial crisis, the major mainstream banks in the UK largely withdrew from SME funding. The Government tried to support various programmes and schemes, including the growing but still small P2P industry, to fill something of that gap and vacuum. However, that does not overcome the fact that we still do not have the appropriate layer of banking to provide the community and local perspective which enables companies to rely on ongoing support from financial institutions in both good times and bad.

I think that if you spoke today to the Federation of Small Businesses, it would say that even though we are in recovery, most of the mainstream banks have not returned to lending to SMEs and, where they do, it is frequently property lending, or at least property is required to provide collateral for what should be cash-flow loans, and that the banks are still fairly slow to come to decisions. Having been on this House’s sub-committee on SMEs and export finance, I know that it was evident that small businesses found it extremely difficult to source any kind of financing for exports. Even when they had a long history of exports and were well established, it was still very difficult and very expensive to find that kind of financing in the UK. Therefore, it is reasonably self-evident that we are missing a layer of banking. Frankly, the regulator has never addressed that issue but has always waited passively for the market to come forward rather than taking positive action itself.

A combined report from Newcastle and Coventry universities was recently published and states:

“In 2013, the unmet demand of individuals and businesses excluded from mainstream finance (‘the finance gap’) was estimated at around £6 billion per annum”.

That is a huge figure and it seems to me that the regulator must begin to pay attention to it.

During the passage of the Financial Services Act 2012, the noble Lord, Lord Sharkey, and I proposed a measure to require the banks to disclose their lending practices in detail and by postcode. That led to a voluntary framework for the disclosure of bank lending which came into effect in December 2013 and was supported by HM Treasury and BIS. According to a recent letter sent to the Treasury from the Community Investment Coalition, it is starting to have a real impact. The letter states that in 2014,

“Coventry University and Newcastle University were commissioned by Big Society Capital, Citi, the Community Investment Coalition and Unity Trust Bank to analyse the data and assess its value in supporting increased market competition and interventions to overcome financial inclusion”.

That is a very interesting report. It is supported by a sibling report, as it were, from the University of Sheffield, which looked at mortgages.

The only conclusions one can come to from reading those reports is that lending across the UK is incredibly haphazard. The data do not yet allow sufficient fineness of analysis, if you like. I hope very much that the Government will look at whether or not more measures are necessary to provide appropriate data to the degree required to enable proper analysis to take place. However, it is very clear that different parts of the country have very different experiences as regards access to lending. Strangely enough, in the London area, for example, access to lending for small businesses seems to be very much less than one would expect compared with other parts of the country. It will be very helpful when we finally have those data because they will expose where the system continues to fail. Regardless of that, I hope the Government will see that there is a role that must be played by the regulator as well as by the Government in ensuring that the patchiness and inadequacy of banking facilities for small businesses and individuals is countered. I ask the Government to look seriously at the amendment moved by the noble Lord, Lord Naseby, because it begins to tackle that particular set of issues.

[Lord Davies of Oldham]

My Lords, I congratulate the noble Lord, Lord Naseby, both on his amendment, for which he has secured widespread support, including from this Bench, and on the way in which he detailed the key arguments behind it, which I know the Government will take seriously. It is somewhat unnecessary for me to fill in any of the interstices that the noble Lord, Lord Naseby, may have left—which were not many—because the noble Baroness, Lady Kramer, has certainly emphasised the significant point, which is that British banking needs to be a good deal more diverse than it is at present.

After all, the Competition and Markets Authority disclosed its findings last month from its review of competition in the retail banking market and found—predictably—that the four largest banks had long dominated the British scene, stifling competition that would give consumers and businesses a better deal. We all know the limited success that has been obtained by the various reforms to make the switching of accounts easier. The British people, I am afraid, are somewhat inured to minor blandishments when it comes to their bank accounts, so there is a need for much more imaginary thought at the centre on how we can make our financial provision more diverse.

We have support from the Treasury Select Committee. The chair, Andrew Tyrie, has written to the CMA to ask it to report back before the Budget in March next year regarding the 8% surcharge on bank profits. He wants to know what impact that has had on the big four and what implications it has for the wider banking sector. It is clearly the case, he believes, that one size does not fit all. That phrase has obtained throughout this short debate and is one to which I entirely subscribe. The Minister will be all too well aware that the Building Societies Association has made it clear that the problems encountered by financial mutuals in recent years almost certainly would have been fewer if there had been greater diversity in the sector.

I think that the case for this amendment has been made strongly. No doubt the noble Lord will be withdrawing it on this occasion but the purpose of this debate is to give the Government the chance to show a constructive response to what we all recognise is a real issue with regard to British banking. The noble Baroness, Lady Kramer, cited the German position. Is it not somewhat extraordinary that even under the so-called northern powerhouse, our great cities do not have individual banks? They no longer have individual building societies, either. That says something about the structure of finance in this country, which surely the Government should address in the context of a Bill about the most significant banking structure of them all—the Bank of England.

Greece

Debate between Baroness Kramer and Lord Davies of Oldham

Monday 29th June 2015 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, I thank the Minister for repeating the Statement made by the Chancellor in the other place. I think that we can dispense with those last few remarks comparing the British economy with the Greek position and suggesting that it is government action in the past four years that has prevented our position from being the same. We all know the particular and extremely difficult circumstances of Greek society and its economy. These are very serious times for Greece and for the eurozone, of which of course it is a member, and there are risks for Europe and indeed for our country if urgent resolution cannot be found.

The main immediate fact is of course that the Greek banking system is now closed. I shall focus my response, first, on the impact on British citizens and, secondly, on the implications for our economy and financial system. Understandably, exporters, pension funds and the many British visitors to Greece need to know that the UK Government have a thorough contingency plan. I must say that in the Statement today there is a fair amount of wishful thinking rather than clear evidence of a plan.

I turn first to the impact on British citizens. As the Minister has indicated, some 150,000 British citizens would have been expected to go to Greece in July, although of course that number may now reduce. However, it will still be a very large number because people have made their plans. How will people travelling to Greece this summer be able to obtain full information and updates about the best way to plan and proceed with their arrangements? An obvious piece of advice the Government can give is this: “Go there absolutely loaded with euros and make sure that you look after them carefully”. That is wise advice, I am sure, but it is not much solace to the British traveller. What we want to know is what discussions have British officials had with the Greek authorities and banks to ensure that UK citizens are able to withdraw sufficient funds. What is the Minister’s assessment of the number of British citizens with resources deposited in Greek banks who will be anxious about what this means in terms of their ability to access their funds? For many, the British embassy in Athens and the consular staff will be the first port of call. Can the Minister give us an assurance that the embassy is sufficiently staffed and has the resources to cope with what inevitably will be a flood of anxious calls and representations?

I turn now to the impact on our economy and financial system. What discussions have the Treasury and the Bank of England had with financial institutions both here and across the European Union about the implications for our financial system, and what structures are in place to monitor closely any emerging risks? It is clear that if there are wider ramifications for the eurozone economies in the months ahead, there will be greater risks for UK business, trade and, of course, our economy. What assessment have the Government made of the number of British firms and the volume of exports that are potentially at risk? Billions have been invested from eurozone economies in bailouts and considerable hardship has been felt by the Greek people, who are facing economic distress. Does the Minister agree that it is important that the institutions should continue to seek opportunities for a negotiated settlement with the Greek authorities during the week ahead? Time is of the essence. Does he also agree that it is important for the Greek Government to accept their part in charting a course towards a long-term resolution?

This is surely a time for all parties to pursue a responsible approach for Greece and for the wider European economy, for much is at stake.

[Baroness Kramer (LD)]

My Lords, watching the events in Greece is like watching a car crash in slow motion, and we on these Benches hope very much that steps will be taken over the coming days and weeks to avert what is undoubtedly a lose-lose outcome for essentially everyone involved. I have a few questions for the Minister.

Everyone in the House will be concerned for British citizens who are travelling in Greece. For tourists, the advice is to carry cash. I understand that that seems to be the most obvious solution, but I do not think that anyone would recommend it for themselves or their family because it exposes one to extraordinary risk. What conversations are taking place with our consular officials in Greece to see if they can provide some better advice, and if this continues beyond a few days, on looking to work with financial organisations? American Express and Thomas Cook are organisations that come to mind in terms of going back to some of the older methods of payment like travellers’ cheques, which were used before the days of credit cards.

Can the Minister give an assurance that the UK banks have passed stress tests which look not just at the immediate fall-out of the impact on the Greek banks, but on banks in other parts of the eurozone which might be the victims of knock-on effects by predatory financial traders, and indeed of the normal actions of the market looking for other weak spots? Can he also assure me that conversations have been held with the bank regulators? At times of volatility, and this crisis could lead to one, there is an obvious opportunity for misbehaviour in the financial system. We have another burgeoning crisis in the US swap market and one would hate to see those bad behaviours use the opportunity to take advantage of the volatility that may result from this crisis.

Does the Minister agree with the Financial Times that this,

“is a soluble problem merely cloaked in an aura of impossibility”?

Although the British Government have pointed out that they are not directly involved because they are not members of the eurozone, surely this is the time for the Government to make strenuous efforts and urge all parties back to the table. Does he not also agree that this crisis in Greece offers up some broader lessons, one of which is that EU Ministers and Governments will not put up with endless game playing? As a consequence, as he looks at the EU’s own negotiations on reform, will he ask the Government to make sure that they do not focus on synthetic issues—quite frankly, like whether there are phrases about ever-closer union—but on real issues such as the standing of non-eurozone countries and whether they are on a par with others? Perhaps he will speak to members of his own Cabinet who think that playing with a no vote in a referendum is a way to strengthen Britain’s negotiating hand. That is the kind of childish behaviour that we have just seen get Greece into extraordinary difficulties. This is a time when everyone needs to act like a grown-up.

RBS

Debate between Baroness Kramer and Lord Davies of Oldham

Thursday 11th June 2015 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, I am grateful to the Minister for repeating the Statement. He could have spared us the reference to the long-term economic plan, which seems to vary and inflate almost from day to day in terms of the length of time that it occupies and the objectives that are set for it.

I am pleased that the Statement recognises that the taxpayers who bailed out RBS during the global financial crisis want value for their money and are somewhat suspicious of any rush to sell. That is why they will be suspicious of the Government’s actions at this time. RBS is still restructuring its business and it is very difficult to see the outcome. It is still awaiting a US settlement for the mis-selling of subprime mortgages. In case noble Lords have forgotten, the global crisis started with subprime mortgages in the United States. Banks started to collapse long before a Labour Government were ever considered to have overspent as the basis for the global crisis. I hope that we will have no references to that in this short debate on the Statement.

The Chancellor said two years ago that he would countenance the sale of RBS only when,

“the bank is fully able to support our economy and when we get good value”.

Does the Minister really think that these tests have been met? While we have always supported the eventual return of RBS to the private sector, it is surely essential that the Treasury gets back as much money as possible to help pay down the national debt, and therefore to limit the impact on the wider population of the costs involved. RBS of course had to be bailed out with great urgency but it does not have to be sold off at the same speed. It is not the case that the Governor of the Bank of England is telling Ministers that the price is right now. He makes it very clear in his letter that questions of valuation are entirely for the Government; it is their judgment which is, rightly, at stake.

On the specifics, can the Minister clarify exactly what the Government accept as a break-even share price for the bank? A potential £7.2 billion loss might be understating things because the Rothschild calculation, which is the basis for that figure, has netted off the fees that the Government have received from the bank since 2008.

When it comes to Lloyds, the Treasury has already pledged that shares sold through the Government’s trading plan will not be sold for less than 73.6p—the price the Government paid for them. That is the red line for Lloyds. What is the equivalent red line for this premature sell-off? Why cannot the Minister give us more detail about precisely when the sale will commence? What impact does he predict that that will have overall on the debt reduction?

It is important that we do not allow the Government to state that RBS losses can be put against the gains that will potentially be made in other areas such as Lloyds. RBS was purchased by the public in dire circumstances and taxpayers have every right to insist that the Government get their money back. But we are not too confident that the Government can do this; we saw their recent effort regarding the first part of the sale of Royal Mail, and look what a mess they made of that, with a loss for the public purse.

Finally, it may be noted that the Chancellor made his statement to the banking community last night, and the Minister repeated constantly in his contribution what the Chancellor said to the bankers. They are an important section of the community, but I do not think it does this Government any credit when Parliament is treated in such a mean fashion: when a junior Minister—a junior Minister—speaks in the other place and a Whip speaks in this place. Much as I have regard for the talents of the noble Lord who is addressing us, he will recognise that this Statement deserved a Treasury Minister speaking here, and that the Chancellor ought to have spoken in the other place earlier today.

[Baroness Kramer (LD)]

My Lords, I have been away from the markets too long over the last two years, at the Department for Transport, to know whether this is the right time to be selling off either RBS or Royal Mail. However, first, although I only skimmed it, I did not find that Rothschild’s report to be terribly enlightening. Secondly, if this is a fire sale to fill holes in the budget because the Government are foundering on trying to find that impossible £12 billion in welfare cuts, and have handcuffed themselves in terms of raising taxes through their commitment to a law to prevent them from doing so, that is absolutely the wrong answer. This should not be used to fill other holes in the bucket unless we are getting the best possible value for these two assets.

I want to make a final try to persuade the Government to take a much more constructive approach to returning RBS to private hands. The Government should be breaking this bank up, into either regional or community banks, to begin to remedy a critical missing layer in our banking system. The Government carried out a half-hearted review—I know how much they resisted even doing that review—of alternatives to simply passing this back as is, as it were, to the public. They used an investment bank to do the review, which was exactly the wrong choice—an institution which cannot understand the dynamic. This should go out to the public: there should be a discussion with small businesses and a general consultation to try to decide how we can best return RBS to the private sector.

Small and medium-sized companies find it difficult still to access credit, and that credit is vital to economic growth and absolutely vital for productivity, which the noble Lord, Lord O’Neill, has often talked about. On Monday, we had the debate on trade and investment, and noble Lords brought out the difficulties for small and medium-sized companies in raising export finance. Leading economies that successfully grow their small businesses, such as Germany, the United States and Switzerland, have some form of regional and community banking. We are missing this layer, and here would be a great opportunity. Of course we have new players—challenger banks and peer-to-peer lending—but RBS, broken up, would really shift the landscape. Surely keeping RBS as it is continues the too-big-to-fail and too-big-to-manage problems that we all bemoan. Although it is guilty of plenty of scandals, RBS largely failed the old-fashioned way by making appalling loans.

The taxpayer is not going to make money on this sale, so why not use it to achieve something much more important than immediately money—a shift in the banking landscape that would underpin growing prosperity? Once this opportunity is lost, it will never return.

I will make one last comment, on the fair and effective markets review. I need time to go through that in detail, but the RBS losses are a reminder of the depth and the consequences of the banking crisis. We all always knew that when the crisis itself passed, the banks would begin their special pleading, sweetened with a little blackmail, to reverse both the penalties and levies that they faced and the regulation that has now been introduced. I ask the Government not to go wobbly on us. We need the Government to stand tall and carry through on the recommendations of the Parliamentary Commission on Banking Standards and others to give us a secure banking system.

Equality Act 2010: Wheelchair Users

Debate between Baroness Kramer and Lord Davies of Oldham

Tuesday 17th March 2015 Lords Chamber

[Baroness Kramer]

My Lords, I cannot give the general national numbers but Transport for London has brought something like 28 prosecutions in relation to guide dogs and taxis and has succeeded in at least 20 of those cases. Action is being taken but, as I say, broader issues need to be captured.

[Lord Davies of Oldham (Lab)]

My Lords, why does not the Minister fess up and acknowledge that the Government have made a complete shambles of taxi regulation? The only way in which we got effective regulation of taxis and any sense out of the Deregulation Bill, which the Government introduced ahead of the Law Commission’s final position, was through Cross-Bench and Labour amendments which the Government eventually effected. Now we have another Act of Parliament on which consultation is still taking place after five years. The record is disgraceful and the Minister should acknowledge that.

Infrastructure Bill [HL]

Debate between Baroness Kramer and Lord Davies of Oldham

Monday 9th February 2015 Lords Chamber

[Lord Davies of Oldham (Lab)]

I do not need to add much because my noble friends have emphasised certain weaknesses in the Bill as we are considering it today. That is not for want of trying. Both my noble friends—and I, from the Front Bench—were concerned about the issues that they have just emphasised. My noble friend Lord Whitty was concerned that road safety will not get the prominence in the Bill it surely deserves while my noble friend Lord Berkeley emphasised the significance of the Office of Rail Regulation. We all welcome the fact that there will be the possibility of a change of name as we could not see how the Office of Rail Regulation could intelligently deal with the road sector and operate under its present name. It is going to do so for a while, but at least the Minister has now ensured that there is provision for change at a later stage.

We support the thrust of Amendments 1 to 5, which we were pressing on the Government not so very long ago. We are still concerned that the Bill does not improve significantly the overall British performance with regard to roads, which clearly are a very important part of the national infrastructure. We know that other countries are more successful in establishing infrastructure. Those of us who from time to time are privileged to drive on the continent often appreciate the difference that obtains there. Even the French have begun at last to approximate to British standards of road safety. There was certainly a deficiency in the past. We support the five-year roads investment strategy that is underpinned by the Bill. It sets a long-term transport planning strategy to give the road sector the same certainty that the railways have. However, we have no evidence that justifies the main thrust of the Bill, which is unamended by these amendments, and the Bill is still overwhelmingly concerned to move the roads authority to an arm’s-length position. We were not persuaded of that argument through all the days of Committee and Report and I am not sure that those in the other place were persuaded about that fundamental part.

We are broadly in favour of Amendments 1 to 5. The Minister took a very serious and empathetic approach to explaining how TUPE was to be fulfilled with regard to the Bill. I understand Amendment 44 and could not endorse it more whole-heartedly. However, I am not quite sure what Amendment 45 is doing there and I therefore ask the Minister to spell that out in greater detail.

We are pleased at the progress that has been made. We think it was a long time coming, because we were debating this Bill several months ago and there is not much in these amendments that we had not articulated or advanced in argument at that time without winning too much support. We are pleased with the amendments that are before us and will be supporting them.

[Baroness Kramer]

My Lords, to clarify, both Amendments 44 and 45 mirror TUPE arrangements. I confess that I am no specialist on TUPE, but I understand from those who are that for the purposes of the transfer of staff from the Highways Agency to Highways England, these amendments simply make it clear that staff will in effect enjoy the same level of protection that is available in the circumstances where TUPE arrangements would normally be in place. This is a reassurance that was asked for and one which has been very gladly given.

In terms of safety, the noble Lord, Lord Whitty, will be aware that there are very few duties on the new strategic highways company, Highways England. One of those duties is to have regard to the safety of users of the highways. That is a strong statement in the Bill. He will be conscious that there is great emphasis on safety in the directions and guidance, and that the road investment strategy has a great focus on safety. Highways England has been set a target of reducing the number of people killed or seriously injured on the network by 40% by 2020. Many of the RIS schemes are specifically focused on safety improvements—for example, improvements to Junction 10 of the M25 to create a freer flowing interchange with the A3 because that junction currently has the highest casualty rates on the network.

--- Later in debate ---

[Lord Davies of Oldham]

My Lords, I join the two noble Lords who have just spoken in very much welcoming these amendments. Throughout the passage of this Bill there has been very consistent pressure from the cycling organisations. They have established their case against a background, which we are all too aware of, where cycling is still too dangerous a pursuit in certain parts of the country, particularly in our great cities.

I always think of Lord Dormand, who was in this House for a number of years. When he was in the Commons, he used to cycle from Westminster to the National Executive Committee meetings at Walworth Road. That meant a journey around Parliament Square, the roundabout at the far end of Westminster Bridge, and Elephant and Castle. I thought that it was the most dangerous journey in the world as a cyclist, which is why, every week he threatened to do the journey, I sought to dissuade him. He always made the journey and always lived to tell the tale.

However, subsequently there has been an increasing number of cycling accidents, if not on trunk roads, often on large roundabouts, which are difficult to negotiate with a very slow vehicle such as a bicycle as you go past a number of exits from which other vehicles will make definitive and often rapid moves. We have a lot to do to make cycling safer, but I am pleased that the Government have been persuaded of the case that the cycling organisations, the general public and we on these Benches have pushed as hard as we could. We are delighted with the outcome that the Minister has described.

[Baroness Kramer]

My Lords, I join others in this House in saying that I am personally delighted with these amendments. As your Lordships’ House will be aware, when the Bill started here, there was slight frustration because the Cycling Delivery Plan was out to public consultation and we were somewhat limited in what we could do in those circumstances. That consultation has been completed, the Government will shortly give their response to it and the strategy itself will follow in due course. The plan is for all of England, not just the trunk roads, and it is anticipated that there will be a great deal of work with local authorities, local enterprise partnerships and all the other stakeholders as this progresses. This is another good example of co-operative working, across Benches and across both Houses.

Motion agreed.

Motion on Amendments 7 to 11

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[Lord Davies of Oldham]

I apologise to the House because I am going to make a very technical and limited statement. We very much approve of this group of amendments but we have one concern, which has been articulated by those who know a great deal more about beavers than I know about anything. Consequently, we listened to their advice with the greatest care. It has come from a number of well intentioned sources—by “well intentioned” I mean those who want to ensure that our environment and natural life flourish. We are concerned about the welfare of species.

Our concern is that the European beaver—a native species that has established populations in the UK—has been excluded from the species control order. The classification of the beaver under Part 1B of Schedule 9,

“Animals no longer normally present”,

is regarded as bizarre. It lists them alongside the wild boar, hence our anxiety. It seems strange that, despite European beavers being recognised as a native species to the UK and a natural component of British river systems, they will need a licence from Natural England to continue to exist in the wild.

The Minister will know that we proposed an amendment in Committee, which was supported by a number of NGOs including Friends of the Earth, that the Government’s definition of invasive, non-native species should correspond to the European Union habitats directive, which was adopted in 1992. That will clarify exactly the status of the European beaver. I hope that the Minister can reassure me that that representation is a worthy one and is taken account of by these amendments.

[Baroness Kramer]

My Lords, I have a number of clarifications, which I hope will satisfy your Lordships. Yes, the definition of owners includes trusts and limited companies. We found that places including, I think, Epping Forest and some National Trust properties would not have been covered. It was important to make that amendment and give that clarification.

On Wales, Welsh Ministers are considering this issue and will make their decision shortly, but your Lordships will know that it will be necessary in that process for the Welsh Government to debate an amended legislative consent Motion, which we await. In the mean time, it is still an offence under Section 14 of the 1981 Act to release a beaver into the wild in Wales, so I do not think there should be concerns about release as a result of the changes that we have made here.

It is important to recognise that where we have species that are formally resident—I know people do not like the phrase, but it describes the situation quite well—it is important that we consider releasing them only under licence. The beaver is perhaps a very good example. First, we do not know for certain that they are Eurasian beavers, although vets will be able to answer that question. More importantly, in continental Europe the species is afflicted with a really very terrible disease—a parasite known as EM. I do not wish to trouble your Lordships, but essentially the beaver is a carrier, and many mammals, including human beings, can be devastated by this parasite, which effectively eats your organs from the inside out. It really is important that this country remains EM free and that the parasite does not get out into the general population of foxes and other creatures, because the consequences would be very undesirable.

There is therefore very widespread agreement that the licensing process is the right approach, and where we reintroduce animals we want them brought in in the right way and to the right place with all the consequences considered. The reason for the delay in testing the beavers is fairly straightforward: they have had young kits which have been nursing, and now that the kits are weaned it is much safer to find the animals and bring them in for testing. We expect that to happen shortly.

I hope with that range of reassurances, your Lordships will be very comfortable supporting the Motion.

--- Later in debate ---

[Baroness Kramer]

My Lords, the consultation that will come under the Public Bodies Act is obviously an important step in the process to allow for full discussion of the kinds of issues that the noble Lord, Lord McKenzie, has discussed today. At the moment the commissioners simply meet on an annual basis. They note the loans issued and review the annual report prepared by the officials. I think this House would agree that sometimes it is important to recognise reality and make sure that the formal arrangements match the actuality. We hope that this is a step in that direction.

[Lord Davies of Oldham]

Before the Minister sits down, perhaps I may just add my congratulations to the Bill team on dealing with a Bill that has been one of the more absurd creations of government in recent history. The Department for Transport has been responsible for invasive species and for fracking. Long after Christmas time—if ever there was a Christmas tree of a Bill, this is it—we got a suggestion that we would have clauses on the Electronic Communications Code. It was once said in the other place, “Take away this bauble”. If that part of the Bill had arrived here, I would have repeated that phrase in relation to the clause. I congratulate the Minister on having piloted the Bill through, but I hope it is not a precedent for how the Government in fixed-term parliaments produce a measure that has everything in it including the kitchen sink.

[Baroness Kramer]

My Lords, I shall just say in passing that I take comfort in the fact that the work we have done in the Bill is of genuine value. I know that particularly from the transport areas in which I have been engaged. I really appreciate the input that has come from this House but I also think that the Government have taken the leadership in, for example, underpinning future funding of our road strategy. Fracking has an important role to play, but the framework necessary for it has been forwarded by this Bill on a wide range of matters that might have been overlooked. Something as simple as the mayoral development orders will let local authorities use that mayoral capacity to achieve the kind of housing projects that they want very much for their areas and their residents. It may be a complex Bill with many different items in it but I do think that we will be better for it. I thank the House.

Transport: London Bridge Station

Debate between Baroness Kramer and Lord Davies of Oldham

Tuesday 13th January 2015 Lords Chamber

[Baroness Kramer]

I agree with everything that my noble friend has just said.

[Lord Davies of Oldham (Lab)]

My Lords, I do not. The noble Lord and the House are aware that the developments at London Bridge were planned and started under the previous Administration. The Minister rightly says that Network Rail is the one part of the railway system that is directly under the control of Ministers who are directly answerable. How frequently do Ministers meet the planners of Network Rail when these crunch occasions can clearly be foreseen? It seems that not enough work is done when difficulties begin to arise and Ministers should realise that the buck stops with them.

[Baroness Kramer]

My Lords, meetings are very frequent at all levels. Obviously Network Rail is the entity with direct understanding of its own operations and interfering in the day-to-day operations would not be appropriate for a government department. The ORR plays a key role in all of this. However, the Secretary of State, for example, meets Network Rail every week. All through the system there are regular meetings. However, there are many lessons to be learnt from the experiences of the past couple of weeks, which, frankly, have been inexcusable. We need to make sure that they are not repeated.

Roads: Young Drivers

Debate between Baroness Kramer and Lord Davies of Oldham

Monday 12th January 2015 Lords Chamber

[Baroness Kramer]

My Lords, as I say, we have not ruled anything out, but we think telematics are a useful direction to pursue because they let us target problem driving, so that many other youngsters who are driving well still have the scope to reach various education and social events. As for the question of general speed limits in cars, I have never addressed that, but I will try to find the noble Lord an answer and write to him.

[Lord Davies of Oldham (Lab)]

My Lords, is this the only Government who perceive a Green Paper as green grass into which they can kick difficult areas? In March last year the Minister made a commitment to produce this Green Paper. Subsequently it was quite clear that we would not see it before Christmas. We know the nature of the grass leading up to the next general election. This Government have no intention at all of tackling this significant road safety issue, and they stand condemned on that fact.

[Baroness Kramer]

My Lords, the review of telematics will be a two-phase study, and we should see the first phase in April. That will lay out what further work needs to be done. At the moment we do not have the evidence base or the research that we need to make sure that we are coming up with the most appropriate solution.

Transport: Shared Space Crossings

Debate between Baroness Kramer and Lord Davies of Oldham

Thursday 8th January 2015 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, one of the sites that received enormous attention was Exhibition Road, between the museums in South Kensington. Over Christmas time I sought to escort three grandchildren, all under the age of 10, out of the Science Museum to the V&A. They moved out into a road which was absolutely tenanted by pedestrians, because the museums are enormously popular, but the other side of the road was temporarily free of pedestrians and then one car and one taxi went past at about 30 miles per hour—the speed limit is meant to be 20. We cannot possibly have a situation where the speed limit is not maintained and surveyed carefully in these spaces; otherwise, pedestrians are greatly at risk.

[Baroness Kramer]

I would be very happy to try to encourage enforcement. That is obviously part of the programme which should be in place.

Railways: Pacer Trains

Debate between Baroness Kramer and Lord Davies of Oldham

Tuesday 9th December 2014 Lords Chamber

[Baroness Kramer]

The railway has certainly been exceedingly successful since its privatisation, and that is reflected in the increased number of passengers. I am delighted at the drive that we have under way to bring on the kind of rolling stock that adds the capacity that we need.

[Lord Davies of Oldham (Lab)]

My Lords, I am sorry that the Minister had not heard that Transport for London is looking at the possibility that certain rolling stock, driven by electricity at the present time, can be converted to diesel. That is why the north of England is shuddering at the prospect that that is where these trains might well end up. After the Chancellor made his Statement, the first thing that the Government did was to delay the decision on the franchise for the north. That is a clear case of built-in delay to get rid of these wretched Pacers, when Northern travellers have among the worst conditions in the whole of the United Kingdom. Is it not clear that the only certain way in which Northern passengers will get taken for a ride is by the Treasury and the Chancellor?

[Baroness Kramer]

My Lords, your Lordships will be aware that this is a pretty small delay. You will also be aware that there was a great response to the consultation for this line. It was entirely right of the Government to take the time necessary to work through a lot of very thoughtful responses and to make sure that the invitation to tender achieves the best possible outcome for passengers.

Transport: Women’s Safety

Debate between Baroness Kramer and Lord Davies of Oldham

Tuesday 25th November 2014 Lords Chamber

[Baroness Kramer]

My noble friend is absolutely right: the Law Commission has provided some instructive direction on this. We received the Law Commission’s report in May. We will be following up on that and providing our response shortly. As she knows, the situation on licensing is somewhat different in London from elsewhere.

[Lord Davies of Oldham (Lab)]

My Lords, why are the Government pressing ahead with Clause 12 of the Deregulation Bill? It supposedly frees us from red tape but actually reduces the safety checks on minicabs. Will the Minister review the Government’s approach—there is still time in the legislation—in the light of the recent case reported by the Daily Mail this weekend of a young woman who was taken from Leeds to Bradford where she was attacked and raped? Will the Minister accept that this is not just a triviality about red tape; it is about reducing the chances of gang rape? The criminals involved got sentences totalling 68 years.

[Baroness Kramer]

My Lords, as the noble Lord, Lord Davies, knows, even under the deregulated mechanisms, whenever a taxi or private car licence is issued there will be a CRB check every three years. I have also written to all the authorities to remind them that they should be working with their local police so that wherever there is an accusation or a crime they are immediately informed and can take appropriate action—and I do not just mean in a taxi cab, but where someone is accused.

Infrastructure Bill [HL]

Debate between Baroness Kramer and Lord Davies of Oldham

Wednesday 19th November 2014 Lords Chamber

[The Minister of State, Department for Transport (Baroness Kramer) (LD)]

My Lords, I agreed on Report to come back with amendments on two aspects over which noble Lords had concerns. I tabled Amendment 1 in recognition of noble Lords’ preference for the strategic highways company’s duties to be stated in legislation. It places a duty on the company in relation to the environment, safety and co-operation, noble Lords having expressed the strongest concern that that should be made clear. We have already made considerable change in taking on board concerns that were raised in Committee and on Report. It is the Government who must set broad policy on the environment and road safety and noble Lords will be aware that we have already amended the Bill to include an obligation on the Government to have regard to the environment and safety of users of the highway when setting or varying the road investment strategy. We are now taking this further by placing a duty on the company to consider those matters, meaning that the company itself is obliged to consider the impact of its operations on environment and safety.

Moreover, your Lordships will know that we have made changes to the powers of the monitor—the ORR—to hold the company to account and to measure and report on the company’s performance and whether it is meeting its duties, including on the environment and safety. I remind your Lordships that, in parallel with these high-level duties, we are using statutory directions and guidance from the Secretary of State to steer the company in the way it exercises its functions. We have extensively redrafted these prior to Report to reflect your Lordships’ concerns and these same issues are covered in great detail there.

In addition, your Lordships will note that we have also done even more than relying on statutory direction or guidance to ensure that the company co-operates. It now has a clear duty to co-operate in the areas of highways and planning with local authorities, devolved Governments, operational partners—such as the police and emergency services—other transport operators, and other bodies with a significant stake in the long-term development of the network.

I tabled Amendment 16 in recognition of your Lordships’ concern that there may be more than one strategic highways company provided for in Part 1 of the Bill. I have explained to the House that the Government have no plans to create more than one company and that the Highways Agency—in its new status as a government-owned company—will be the only company appointed when we bring these provisions into force. I recognise that further reassurance is needed on this point and therefore propose an amendment requiring parliamentary approval if the Secretary of State wishes to make an appointment order under Clause 1 which involves moving away from a single company structure. This strikes a balance in providing the flexibility for future Governments to move to a different structure—for example, a regional structure—should it be needed or desired, without the need for further primary legislation on the point, while meeting your Lordships’ desire for further discussion and approval by Parliament on the detail of how a multiple company structure would work in practice before allowing it to proceed. I hope that this provides a sensible compromise between your Lordships’ concerns and our desire to maintain a potentially useful option for the future, and for this reason.

In summary, I hope your Lordships recognise the effort we have made to ensure that there can be no doubt about what responsibilities the company has or how it will be held to account and that we have advanced considerable changes to meet the views expressed in this House. I beg to move.

[Lord Davies of Oldham (Lab)]

My Lords, I am grateful for these amendments, which certainly improve the Bill. I congratulate the Minister on the way she has conducted herself at the various stages of the Bill and on bringing forward these amendments in response to the arguments put forward in Committee. Those arguments were put forward particularly forcefully by my noble friends Lord Whitty, Lord Faulkner and Lord Berkeley. As the Minister will know, we started off with a great many reservations about the nature of the Bill and we are very pleased that the Government have gone some of the way towards making it slightly more difficult for multiple strategic highways companies to be set up. Amendment 16 ensures that Parliament will have a say on this, which is very much to be welcomed. I particularly appreciate Amendment 1, which ensures that the strategic highways company has regard to the environment and to the safety of users of the highways. These were issues about which we were very concerned on the Opposition Benches and we are pleased that the Minister has seen fit to propose amendments to the Bill as it then was.

However, it is still the case—as I am going to speak only once I hope the Minister will forgive me for moving a little further on—that there are questions which the Government have not adequately considered. An example is the needs of local roads in dealing with the challenges of huge numbers of potholes and the projected increase in traffic. The fact is that it is not the strategic system which creates the majority of problems for road users but local roads. The same applies to safety, where the Government have presided over a large reduction in road safety budgets and further action may be required. Among others, I obviously mention the issue of cyclists. That may seem marginal in a Bill that is predominantly concerned with strategic highways but, if one is talking about safety, one has to look at the growing use of cycles on our roads. That is greatly to be welcomed in many respects—provided that cyclists obey the law, I hasten to add—but we must also ensure that we do not get the kind of significant increase in cycling accidents that we have seen in recent years.

Airports: London

Debate between Baroness Kramer and Lord Davies of Oldham

Tuesday 4th November 2014 Lords Chamber

[Baroness Kramer]

My noble friend knows intimately the history of airport development in the south-east. I am afraid that I can make no further comment until the final report comes from the Davies commission in the summer of 2015, at which point I will be delighted to comment.

[Lord Davies of Oldham (Lab)]

My Lords, are the Government sustaining pressure on Sir Howard so that an incoming Labour Government will be able to consider the report immediately after the general election? Another easy question for the Minister: how much did the unrealistic and abortive idea of “Boris Island” cost?

[Baroness Kramer]

My Lords, Sir Howard Davies’ report will not be ready until the summer of 2015 and it is beyond my telepathic capabilities to anticipate its contents. I cannot answer for the Labour Party.

Infrastructure Bill [HL]

Debate between Baroness Kramer and Lord Davies of Oldham

Monday 3rd November 2014 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, I can keep my own contribution relatively brief because my noble friends Lord Whitty and Lord Berkeley have presented the case with great clarity. I am also grateful to the noble Lord, Lord Jenkin, for pointing out that we are dealing today with a position that is only six days old—the latest change from the Government to this crucial part of the proposals in the Bill. That is to say nothing of the fact that the fracking aspect of the Bill came months after we had considered it in Committee, which was then held up until the Government had concluded their consultation in the summer. So this is not a Bill distinguished by forward planning from the Government, or by a clear rationale of what they are about. However, I suppose I should thank them for having another shot at improving the Bill.

We are pleased to see changes reflective of the representations made in Committee from this side of the House, but we are no clearer on why delivering long-term certainty for roads investment requires a top-down reorganisation of the Highways Agency. The Cook report told us that it is stop-start funding problems that are leading to inefficiencies of between 15% and 20%. Is there any real evidence proving that changing the legal structure of the Highways Agency will, in itself, improve efficiency? Perhaps top-down reorganisation is the metier of this Government in challenging areas. The Minister will be aware of the strength of the concern on our side that this looks like the first step to privatisation. We continue to have that anxiety. Why is the section on the company’s licence for commercial activity and charging for services still unfinished?

We are concerned about the cost implications. There is still no clarity on whether the SHC will be able to reclaim VAT in the same way that the Highways Agency does at present. In Committee, the Minister said that the SHC would not be required to pay VAT, which is exactly the case with the Highways Agency now. That soon cleared up the issue. However, it did not clear up the issue at the other end, because the Minister in the Treasury, David Gauke, in answer to a Question from my honourable friend in the other place, Richard Burden MP, said:

“New bodies are not automatically covered by the … provisions. However, the Department for Transport and HM Treasury are considering this issue”.

HMT is quite important, here, with regard to revenue and dispensations to other departments. It does not seem to be as clear on the matter as the Department for Transport is maintaining that it is. If the new strategic highways authority is no longer able to recover VAT in the same way, that could lead to losses of a considerable amount—as much as £400 million annually. That would be £4 billion over 10 years, which would dwarf the figure of efficiency gains of £2.6 billion that it is proposed will come from the legislation. If the VAT issue is not resolved, therefore, the justification for this reorganisation is even less substantiated.

Turning to Amendment 4, which is in my name, the Minister used two arguments in Committee to reject our attempts to clarify whether the Government envision having more than one company. One argument was that this is only standard legal drafting and there should be no cause for concern. The Minister went on to say that it might be necessary if one wanted a more regional structure for the equivalent of the strategic highways company. Can she not confirm that the Highways Agency is already structured regionally? There appears to be confused thinking within the Government about how many companies there will be, which is why many are concerned that the Government are not being entirely open about their plans for the future.

It is clear that our main reservations about the major government proposal in the Bill have not been assuaged. As my noble friends have indicated, there are other questions, too, to which the Minister needs to respond to convince us that this proposal is acceptable.

[The Minister of State, Department for Transport (Baroness Kramer)]

My Lords, this is obviously a very wide and long group of amendments, which cover quite a range of issues. I do not want to put words in noble Lords’ mouths. but I think that we have progressed to the point at which at least we have a common goal in terms of setting up a structure that will ensure certainty of funding for highways in the way that we have managed to enjoy, and benefited from, with the railways.

Clause 1 allows the Secretary of State to appoint a strategic highways company, thereby conferring duties and functions on it to operate as a highway authority. If we were to drop this clause—there is a stand part debate in this group of amendments—it would be a fundamental change to the model and we would lose many of the key benefits of certainty over funding and plans which, as we have heard today, has been widely supported.

Our aim is to create a different model to deliver road infrastructure. Crucial to this is having a legal body separate from government responsible for our strategic road network and delivering a road investment strategy in the most cost-effective way. We consider the most effective model is a company created under the Companies Act 2006. Let me explain the rationale. We have decades of experience of the fact that the current arrangements—I point this out to the noble Lord, Lord Davies, who will remember the history of the department—have not encouraged a long-term approach to planning infrastructure or provided secure funding. Stop-start has indeed been a definition of a large part of their history and has come with high costs in terms of the efficiency and quality of our infrastructure. For long-term funding certainty and planning, it is crucial for the Secretary of State to be able to have a transparent and binding relationship with a separate legal entity. If the delivery body were to remain the Highways Agency and remain within the DfT, inevitably it would be easy to change funding and plans.

Setting up a strategic highways company as a new company operating under company law with a well established governance and financial framework will reinforce the clarity and robustness of the relationship. We have seen from international experience, for example in the Netherlands and Sweden, that where road delivery bodies have been given long-term funding certainty and a more independent relationship setting out requirements, large efficiency savings have been possible. A company would be constrained to one that is limited by shares and wholly owned by the Secretary of State, ensuring that any company is 100% owned by the Government and remains in the public sector. We have not only no intent but no interest in turning this into a privatisation. That is not part of our agenda and does not achieve the goals that we want.

Let me again take this opportunity to explain that we have no plans to appoint more than one company. We have already made clear that the Highways Agency, in its new legal status as a Government-owned company, will be the only company appointed. The use of plural “companies” in legislation was to allow flexibility for further companies in the future, including how companies would work together: and that is what Amendment 11 seeks to remove. Subsequent provisions in the Bill which refer to a company could therefore refer only to the strategic highways company or to each such company.

We are doing this in part because we recognise that future Governments may want flexibility to create more companies: for example, to give more accountability, to allow a company to look after a specific cluster of roads or area of roads or to promote comparisons and efficiency. Those are not our goals, but they might be those of a future Government. Reference to more than one company would prevent future Governments making change as needed. However, it is not something that we are seeking, so if noble Lords feel strongly on this issue and do not want to give that flexibility to future Governments—even though it is standard in virtually every piece of legislation that this House has seen referring to “companies” and “company” because, as I explained, in law the singular is the plural and the plural is the singular—I could offer a compromise that might reassure noble Lords.

I would be very happy to return at Third Reading with an amendment that would require any Government to seek parliamentary approval to establish additional companies beyond the initial one. I wonder whether this would satisfy noble Lords. It would certainly meet our intent. We see no future Government related to us who would wish to run this in a different way, and this would allow Parliament to have the voice that perhaps noble Lords are seeking.

Turning to the requirement for a licensing regime, we have been and are clear that we do not want to privatise the strategic highway network. Therefore, given that licensing regimes in the traditional sense, which is reflected in quite a number of these amendments, apply to commercial operators, we have been trying to avoid precisely that kind of licence. I find it strange that your Lordships are now pressing for amendments that follow that commercial model. Since we do not intend to privatise, the commercial model is not relevant to our proposals for this company.

In sectors such as rail, aviation, energy and water, the licence is a means of access to an economic activity where there are potentially multiple operators in a commercial market that may seek to apply. Our strategic highways company is funded by government, with no option for a separate revenue income. All its powers and duties to operate as a highways authority already exist in legislation and it is by virtue of their appointment that these powers are switched on.

--- Later in debate ---

[Baroness Kramer]

I will just pick up on a point about “foreign-owned”. There is obviously scope for any country to decide that it is going to own an industry. We have certainly done that in the past: we have owned airports, steel companies and railways; you can go on through the list. We made a decision, as a country, that that could be done better by the private sector, but it is still entirely open to any country that it wants to own a series of businesses.

We have made a decision that that is not where we need to put our money. I have plenty of other places where I would much rather put the £140 million that I have just described than on the franchise bids alone, never mind all the overhead costs that would go with them. As I have said, this business, even when it is done well, is also a high-risk, thinly margined business. If one were to decide to go in for buying shares or into commercial ventures with taxpayers’ money, I suggest that one could choose many other businesses with higher returns, or other ways to spend the money. I would put money into services for the public rather than into owning shares in a company that would go out and compete with the private sector. That is the argument that I am making in all this.

We have a successful railway. It is delivering for the British people. We intend to place more and more demands on it. We have private sector companies that can deliver what we need, provided that we negotiate effectively and hard. It seems to me that that is where our energy has to go: delivering for the British people rather than being caught up in an idea of who owns what.

[Lord Davies of Oldham]

My Lords, I am grateful to the Minister for her considered and lengthy reply. She will have noticed that she was acting alone in the House, as there was not a supporting voice anywhere—expect that my noble friend Lord Snape, with his considerable knowledge of railways, asked a few questions and expressed anxieties about not returning to the days of nationalised railways, when losses were made and low investment was the order of the day. There is nothing in the amendment or in any proposal conceivable to the Opposition which suggests that.

We have had the illustration of two private companies failing on the east coast main line, and one successful directly operated railway under public auspices producing considerable degrees of success which match the achievements of any on other lines. All we seek is for the Government to think about the possibility of that continuing. That is all that the amendment involves: recognition of ready and conspicuous success under the formula and an eagerness to see that it should persist. It is only dogma on the other side that leads them to indicate that there are so many complexities about running a private railway that one could not anticipate the expertise existing anywhere in any state-operated organisation—except, perhaps, in the German, French and Dutch states, which make successful bids and operate.

I merely ask the House to recognise that this is a modest amendment to keep the ball in play for the huge success in recent events on the railway. The Minister has addressed herself to every issue except that success, which we want to confer. Accordingly, I beg leave to test the opinion of the House.

--- Later in debate ---

[Baroness Kramer]

At this point, I cannot remember the exact location of each item, but I will go back. However, we now have the monitor there to enforce the RIS or the strategic highways company’s compliance with it, as well as with the contents of the draft licence or statutory guidance.

[Lord Davies of Oldham (Lab)]

I very much support the point made by the noble Lord, Lord Jenkin. The Minister is right; we have not spoken to Amendment 24, so I do not expect her to comment on it in great detail. However, I hope that she will indicate in her response to this group of amendments—it has been helpful thus far—that she will meet our point: that there is such great complexity about this interrelationship that things will not be rushed. It would be sad if, in pushing things hard to get the Bill on to the statute book and to be acted upon, we pre-empted in a rush what ought to be a long-term perspective on the road investment strategy. We expect the SHC very much to be involved in that new role.

[Baroness Kramer]

I now have a reply, thanks to that helpful intervention and the time associated with it. Clause 3(5) places a duty on the strategic highways company and the Secretary of State to comply with the RIS. So we have that covered. Our concern about removing subsection (6) of Clause 3 is that, without it, the Secretary of State could actually pick and choose when to set a strategy. Frankly, we do not want to give that scope to the Secretary of State—and I am sure that your Lordships do not either.

Your Lordships also propose that the first strategy be set in accordance with the process we have set out in Schedule 2. We have been clear that this time around we are following a compressed timetable. Indeed, we all want to have a strategy in place for day 1 of the company’s operations—but a company that does not yet exist cannot participate in the way that Schedule 2 envisages. If we were to wait until the passage of the Act, we would be in the position of forcing the company to operate without a strategy, delaying much-needed investment in the network. I hope your Lordships will not press that amendment. This is just to deal with the fact that we are pushing ahead with the strategy that I expect your Lordships will see very shortly. However, the assent to the Bill and the creation of the company will come afterwards so it would not be possible the first time around to pursue the proposals in that amendment.

--- Later in debate ---

[Lord Davies of Oldham]

My Lords, I pay tribute to the Government for having listened carefully to what was said in Committee, where pressure was exerted from this side of the House for greater clarity of the functions of the highway company. We are grateful for the progress that has been made in the indications from the Government that they accept some of these arguments. But Amendment 15, to which the Opposition are also committed, does not offend in any way in the manner that the noble Lord, Lord Jenkin, indicated. What it says is that the highways company shall be responsible for the road safety performance of the network. We are talking about the strategic network and it is essential that we recognise that we want enhanced performance over road safety, because in recent years there have been anxieties about the decline in safety for our fellow citizens on the roads.

The noble Lord, Lord Jenkin, said that the same criteria as for railways were being applied. What is indicated in the amendment is that the Office of Rail Regulation will be concerned with the monitoring role, and that is where the overlap occurs. It is not contended on this side of the House, as he will recognise, that there could be any anticipation that the same degree of security could be achieved on roads as on a carefully regulated railway. We are very proud in this country of the excellent safety figures of the railway network, leaving aside level crossings, which, as we know, are a perennial problem for the railway. Regarding roads, it is clear that we want all the factors—a fact which the noble Lord, Lord Jenkin, enumerated—and we want enhanced performance in those areas. Clearly the strategic highways company has a very important role to play. That is why we support Amendment 15.

[Baroness Kramer]

My Lords, on the previous grouping, I was pleased to make it clear that the Government have taken on board the thoughts of this House in putting, basically, the duties around road safety, the environment and co-operation in the Bill. While safety is obviously always at the forefront of our minds, it now seems that given the language in the statutory directions and guidance and what will go in the Bill, we have both belt and braces. If we were to follow the amendments recommended by the noble Lords, Lord Whitty and Lord Berkeley, we would put on constraints which, frankly, would remove flexibility on how to approach these issues and make the strategic highways company somehow responsible for issues that it could not possibly control. My noble friend, Lord Jenkin, was eloquent in describing that.

One of the principles of the entire roads reform programme is to give the company operational freedom to achieve its objectives. Amendment 15 runs entirely counter to that, and could lock out potential benefits by forcing the company to focus on an important but narrow aspect of road safety; namely, road infrastructure safety ratings. That is a restraint on effective management for the purposes of safety, not a support to it. Both those issues—the constraints that this would impose and the fact that a significant number of these issues are simply not under the control of the SHC—seem to argue for the withdrawal of the amendment and for the use of the belt and braces which we have already agreed will be in place. There is no need to seek a legal requirement to appraise different types of intervention on the basis that some of the amendments propose, because they are already in the Bill. The company will continue to use the department’s transport appraisal guidance, which ensures that interventions are considered on a consistent and proportionate basis.

I come now to the duties of the monitor. In Committee, and just now, your Lordships were persuasive about the need to help improve road safety and the environment. As noble Lords know, we have said that we will move an amendment on that, and your Lordships have been able to see the much stronger and detailed language now in the guidance and direction. Therefore, this amendment should be seen as not only requiring the Secretary of State to have regard to safety and the environment when setting or varying the strategy, but also indirectly generating objectives on those areas that the company would be bound to pursue—thus subject to the independent scrutiny of the watchdog and the monitor.

In Committee, your Lordships made it very clear that consultation over and above the work carried out by the company through the route strategies and the engagement that the Government will carry out as they set or vary the strategy is needed. To provide reassurance that we will engage with the public and shareholders, we are happy to include this requirement in the Bill as well. Government Amendments 28 to 31, if accepted, would add this requirement and some of the necessary consequential changes.

New powers for the monitor contained in other amendments, which we will discuss later—I believe reference was made to Amendment 48 in a later group—would place the ORR in a different role in relation to the new company. In our original drafts of the Bill it was an advisory body; it is now able to act in the manner of an independent regulator. A regulator has formal duties, which it must work within when carrying out its activities. The ORR’s role on the roads demands the same approach. The ORR itself has asked for a set of duties to be included in the Bill, so it has a firm basis from which to act.

--- Later in debate ---

[Lord Davies of Oldham]

My Lords, I speak to Amendment 33, which asks the watchdog to look after the interests of cyclists and pedestrians. As we know, and as the department has recognised, a strategic road network can often be a barrier for pedestrians and cyclists. That means that there are many potential users of the network who may wish to use it to cycle to work but currently cannot.

The legislation would not allow Passenger Focus to consider their views. The chief executive, Anthony Smith, has been quoted as making clear his view that, given the legislation, Passenger Focus could focus only on actual users of the strategic network along with, perhaps, a second tier of fleet managers marshalling its use. While he quite understood the concerns around the remit, any change must be a matter for government and the legislative process. This is therefore our chance to effect that change, against a background in which the Government continue to respond to the increasing pressure for the use of cycles by saying that they are very much in favour of such growth.

Of course, the greatest deterrent to cycle use in our towns and cities and on connecting roads of any significance is danger. Because we do not set out to protect cyclists adequately, our present figures are dreadful in comparison to many other European countries. In the UK, 2% of journeys are made by bike, compared with 10% in Austria, 19% in Denmark and 27% in the Netherlands. Some 22% of all journeys in the UK are of less than a mile, but a fifth of these are in a car. Some people are, of course, obliged to use a car for a journey of less than a mile. However, the great deterrent to using the far more efficient and effective cycle is that people consider cycling to be dangerous.

The Government promised to support cycling but, of course, Cycling England, the pressure group for cyclists, was shut down; the body which co-ordinated policy and action on cycling, which had a £60 million annual budget, was shut down; and the Government also abandoned the cycling towns and cities initiative which we, as the previous Administration, had initiated—and it was delivering results. The proportion of people cycling at least once a month in England dropped from 15.3% to 14.7% in the year to October 2013. No one is going to say that that is a dramatic drop, but it is movement in the wrong direction when there are calls on all sides, to which the Government subscribe, for cycling to be encouraged. There was a decline in all regions in the United Kingdom.

I am therefore seeking with this amendment for the Government, who alone can take the legislative initiative on this—that is quite clear—to give a voice to cyclists and pedestrians, and to ensure that we make some progress on the aim of improving the use of cycling, and even walking over short distances. In order to achieve that, certainly with cycling, we must overcome the anxiety of the public that cycling on so many of our roads is just not safe enough.

[Baroness Kramer]

My Lords, I begin by addressing Amendment 49, which relates back to my original amendments on changing the powers to fine. As I said earlier, the ability to provide overarching governance is a necessary part of a regime in which the ORR is undertaking independent enforcement activity. This is especially true on fines. We want fines to be independent and fair, but we also want to make certain that they do not jeopardise the ability of the company to deliver what it has promised under the RIS. In future, it may also be helpful to have a mechanism to clarify the rules around fines. In the Railways Act these are subject to very detailed instructions, and without the subsection that this amendment removes there would be no way to do this if it were judged necessary.

I now turn to the watchdog. I am aware that the House recognises the value of that role. I am keen that we keep sight of what is important about the creation of the watchdog: the establishment of an organisation that will represent the interests of road users, whose voice must be listened to by those in government. That is something that will make the roads operator publicly accountable in a way that it never has been seen before.

I would like to make a distinction between what the new system of road governance achieves overall, and what role the watchdog plays within that system. Overall, we agree wholeheartedly that the impacts on communities around the network, and on those who walk and cycle in the vicinity, are very important. Environmental enhancements and measures to improve conditions for walkers and cyclists will be important parts of the road investment strategy when it comes into force. I will be discussing a number of issues around cycling in a later group, where a number of cycling-related investments are clustered. That may well answer some of the questions that have been raised at this point.

We expect that the policing of this will belong to the monitor and not to the watchdog. The ORR has monitored Network Rail’s environmental improvements for many years and has the necessary expertise to do the job well. By contrast, looking at the watchdog, Passenger Focus is an organisation focused firmly on gathering, understanding and promoting the views of transport users. It is not an expert in examining environmental impacts or issues, and while it is expanding its remit it does not plan to do so at the expense of its widely praised focus on users’ interests. The purpose of this organisation, whether now or in its new guise as Transport Focus, should be to put forward the views of the people who use the network. Anything else would dilute its ability to do the job well.

I should stress that users include both walkers and cyclists, as Amendment 52 ensures that the definition of “users of highways” includes cyclists and pedestrians, although I must make it clear it is not limited to them. Those who might use the network but do not feel able to are already being heard through the work that Passenger Focus is doing to engage with walking and cycling groups and find out what they feel to be the main barriers to using the network. I can assure your Lordships that this will remain an important part of Transport Focus’s remit. The same is true of potential freight users and potential motorists. All users, of every kind, will contribute to the route strategies that determine the priorities for future investment plans.

I am pleased that we are creating an organisation dedicated to listening to road users’ views, but I would be less happy creating an organisation that tells road users what their views should be. Transport Focus must be free to say what users actually think, and not what we might like them to, otherwise it will not have any credibility with the travelling public. That means we must catch the other issues that your Lordships have raised—including modal shift and environmental impact—elsewhere in the governance system. We have already discussed the new environmental duties on the monitor, and I hope our road investment strategy will do even more.

The proposal to widen the scope of voluntary agreements between the watchdog and local highways authorities is an interesting one. In practice, I believe that the existing wording, “protecting and promoting” the interests of users, is already broad enough to cover anything that a local authority might want the watchdog to do, and more clearly matches their remit as specified in subsection (1).

I therefore hope that your Lordships will feel able to support the government amendments and not to press the others.

Infrastructure Bill [HL]

Debate between Baroness Kramer and Lord Davies of Oldham

Monday 3rd November 2014 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, I will be brief because the two speeches from my noble friend Lord Faulkner and the noble Lord, Lord Jenkin, on the noble Baroness’s own Benches have established a strong case. Of course we all appreciate the strenuous efforts that have been made to meet the points made so forcefully in Committee, but it seems clear that the Government’s reservation is ill founded and the Minister ought to give an undertaking to the House that she will make every effort prior to Third Reading to ensure that we finally wrap this matter up.

[Baroness Kramer]

My Lords, I point out to the noble Lord, Lord Davies, that his Government failed to change any of these clauses and we are now getting to grips with a long-standing issue.

I first pick up on the issue raised by the noble Lord, Lord Faulkner, who described a case that obviously outraged the House. That is exactly a situation that can no longer stand, given the amendments that the Government are bringing forward. An officer would not be in the position in which, in the absence of a warrant card, he would be vulnerable. The amendments that we have brought forward would precisely deal with that issue for an officer in plain clothes using a warrant card who was attempting to prevent an injury. That incident is clearly covered.

I suppose that I have been in the department for only a year, but I am conscious of the constant attempts to raid the BTP for many other services, and the view of a lot of the forces across the country that the BTP ought to be an available resource. We are absolutely clear that changing the language in the way in which the noble Lord, Lord Faulkner, suggested would make this a far easier task. It is crucial for the future of rail transport that there is a genuinely dedicated force. I point out again that it is paid for by the railway industry, which adds to its concern that its force would be available to operate in any neighbourhood on any issue. I ask it to make a judgment; police forces make judgments the whole time, and the judgment that we are asking the force to make is well within the scope of its competence on the few such occasions that arise, without the general change that has been requested. I think we have gone as far as we can on this and I also ask your Lordships to rethink the position they are taking, because it is genuinely important that we keep the British Transport Police dedicated to the railways in the way that it is at present.

Railways: East Coast Rail Franchise

Debate between Baroness Kramer and Lord Davies of Oldham

Tuesday 28th October 2014 Lords Chamber

[Baroness Kramer]

My Lords, I cannot comment directly on an issue that will obviously be under consideration but I will take back my noble friend’s comments with pleasure.

[Lord Davies of Oldham (Lab)]

My Lords, the Minister may have sought to reassure the House that she had some form of consultation with the trade unions but did she have any consultation with the half a million additional passengers that are being carried on the line under the successful operation of DOR? Surely she will accept that only a Government who are addicted to dogma would dispense with a company—an organisation that has run the line so successfully—and put it out to bidders, of which the successful one may well be the state-owned company of another country’s railway.

[Baroness Kramer]

My Lords, it is certainly true that other countries have chosen to invest and own companies across a wide range of industries. This is a particularly difficult industry in which to do that. Its fixed costs are extremely high. It costs something like £7 million to £10 million to put in a bid, with no assurance of winning. It is certainly a high-risk industry and the margins, as the noble Lord will know, even for an effective and profitable company, are quite fine. It is an entirely valid decision not to enter into actually running companies when there are private options that have delivered very successfully up and down the country.

Infrastructure Bill [HL]

Debate between Baroness Kramer and Lord Davies of Oldham

Tuesday 14th October 2014 Grand Committee

[Lord Davies of Oldham (Lab)]

My Lords, I will briefly intervene, not because I have the expertise of my noble friend Lord Berkeley; if he believes that he may be pushing at an open door as regards the Minister’s response, that is very good news indeed. My qualification for speaking about level crossings is that I live on the border of Hertfordshire and Essex, in one of the flattest parts of the country, the Lea Valley. The railway line there is plagued by the problem that it has a very large number of level crossings of all kinds, from the latest state-of-the-art crossings in some parts, to those where people open a little gate and run for it, dragging the dog behind—because they usually have a recalcitrant animal as well—and take risks getting across. Incidents on the line are constant.

I know that my dear friends at RoSPA—the Royal Society for the Prevention of Accidents—indicate that there are only nine deaths per year and that limited numbers of people are injured. We have 6,000 level crossings, and they are not all on the line that I know so well, but as my noble friend Lord Berkeley has emphasised, there is no doubt that because of the improved efficiency of the railway line—which is not just for local stations but is also the Stansted line, and which therefore supplies an important service to Stansted —very fast trains cause greater problems when you have some crossings which to all of us look exceedingly casual.

There was a tragic case only two weeks ago, when one of the most experienced local cyclists—someone who had travelled all over the world on his bike and raised lots of money for charities, who rode his bike all the time and was very advanced in years—decided that he could beat the train. Of course, this happened on one of our crossings, which is a bit posher than some, with an automatic gate that comes down on one side, and an automatic bar that comes down on the other side. However, if you are prepared to take the risk, you can wiggle between the two, and this poor fellow took the risk and got hit by a fast train.

We need to address this issue. We all know that with so many crossings, it is quite unrealistic to expect the problems to be resolved overnight. We are also aware at the present time that the whole responsibility falls on Network Rail. The costs and responsibility for safety all rest on Network Rail, while it is quite clear that other users create so many of the problems. That is why, at the very least, there should be some sharing out of the costs where it can be established that the local authority responsible for the road access may well not have played its part as fully as it ought to have done.

I am therefore looking forward to the largely positive reply from the Minister; it is an absolute delight to anticipate such a response. I emphasise that we were somewhat disappointed that there was nothing in the Queen’s Speech about a Bill, given that there was a small number of Bills—and rather pot pourri Bills as this one is to a certain extent—covering a range of issues. We were concerned that there was nothing about a level crossing, but I am very glad that my noble friend has raised the issue with this amendment, and I look forward to the Minister’s response.

[The Minister of State, Department for Transport (Baroness Kramer) (LD)]

My Lords, I am very grateful to the noble Lord, Lord Berkeley, for raising this issue. I know that he speaks also for the noble Lord, Lord Bradshaw, who has had to leave. I welcome the opportunity to discuss this matter. It is an area in which the Committee rightly takes a very keen interest.

As we all know, the UK has the best level crossing safety record in Europe. We want to ensure that it is maintained and, of course, to see that it is improved. We are absolutely not complacent about level crossing safety. The noble Lord, Lord Davies, rightly pointed out that, as we run more trains and operate many of our lines at full capacity, the issue becomes more acute. He mentioned that the relevant cost fell on Network Rail. I can understand why people say that other road users should pay for the provision we are discussing. I do not want to fight over who is going to pay. When it comes to taking a decision on a closure, we need to move forward in an accelerated fashion. Therefore, I will accept a little injustice in order to make sure that we are really efficient when we need to be. I do not think that is what is inhibiting the system although I take the point that the noble Lord makes.

This amendment is about the law surrounding level crossings. At present, the legislative framework surrounding the management and operation of level crossings is, frankly, antiquated and complex. I have been passed a note informing me that 10,000 Acts apply to level crossings. I did not even know that we had 10,000 Acts. That is the most extraordinary figure and it says it all. Indeed, that complexity is the reason why we, or, rather, the Government of the day, requested the Law Commission and the Scottish Law Commission to undertake a review in 2007. The review was initiated in 2008. I take this opportunity to place on record my thanks to the Law Commissions for the tremendous amount of hard work which has gone into developing their report, and recommendations which were published in September 2013. The examination of 10,000 Acts is demanding work.

The Committee will appreciate that this is a highly complex area which touches on a wide range of issues including railways, highways, health and safety, planning, land and criminal law. The Law Commissions’ 86 recommendations represent the culmination of five years of investigation. Following legal and policy analysis, the Department for Transport has published its response. I apologise that noble Lords have not had a little more time to read it. I suspect that the noble Lord, Lord Berkeley, was always going to be the most dedicated reader and I congratulate him on going through it. The response indicates which of those 86 recommendations we intend to accept, reject or implement in a modified format.

We accept the case for reform which the Law Commissions have presented and have accepted the majority of their recommendations. However, in some key areas—for example, closures and the application of the Health and Safety at Work etc. Act, as the noble Lord, Lord Berkeley, mentioned—the Department for Transport’s response indicates that we believe we need additional policy and legal consideration. This arises very much as a result of talking to the industry. The Committee will understand that some level crossings are site specific and that that creates additional complexity. However, we believe that we have to pursue these issues because in some cases there may be alternative proposals that work rather better.

On closures, the department needs to be convinced that the process recommended by the Law Commissions would shorten timescales and cut costs, which it is meant to do. We need convincing that that is what it would do. Stakeholders from both road and rail have voiced concerns about the possible implications and have pointed out to us areas where there is lack of clarity. We need to explore those further.

I very much understand that this is a probing amendment but I am told by those who understand procedure that it is a real oddity to put in a piece of legislation a clause which would legally commit a future Government to introduce a complete Bill. Although I know that is not the purpose of the amendment, technically there is an issue there. I should also draw the Committee’s attention to the fact that the Law Commissions’ recommendations contain significant devolution elements which we must and will discuss further and reach agreement on with the Scottish and Welsh Governments before implementation could proceed. As I said, we are also aware of stakeholder concerns about some of the recommendations. They must be addressed because this is highly practical, operational stuff and we have to get it right.

We want to move quickly, but we recognise that there is work to be done, and we are trying not to set ourselves an artificial deadline. However, I am very concerned that this does not get kicked into the long grass—as, I suspect, are all of your Lordships who have spoken.

We have said that we will come forward with an action plan. We will produce it by the end of 2014. It will be an outline of where we think further work is required and how it can be taken forward as a priority. I point out that that action plan will address some of the specific issues raised. The noble Lord, Lord Berkeley, asked whether most of this requires legislation. Unfortunately, it does, but we will look for those areas where we do not need legislation, because that will give us a little flexibility. There are also additional complications that flow from our need to get the Law Commission to consider whether it can simplify some of its recommendations. The action plan will cover that issue as well.

I hope that the noble Lord, Lord Berkeley can agree that this is the best way forward; I hope that he will feel comfortable to withdraw his amendment, because it seems to me that we are all pretty much on the same page on this important issue.

--- Later in debate ---

[Lord Davies of Oldham]

My Lords, I, too, congratulate the noble Lord, Lord Jenkin, on putting forward a very useful amendment. However, as he indicated, in terms of the level of expertise available among staff currently devoted to aspects of this kind of work in the Treasury and the fact that we would also need some legislation, the whole proposal will produce enormously beneficial results but not next year, nor probably after that. It would take some time before we had the full range of expertise indicated in the noble Lord’s amendment.

He is absolutely right on one thing: of course the country is not prepared to take time over these issues because the consumer is all too well aware that they are bearing the costs of a great deal of interest by the companies. What the companies reflect is what they classically reflect in the private sector—the massive increases in pay for their directors and chief executives since they became independent operators, a significant increase in profit and a whopping price rise for the consumer, who has very little capacity to avoid such price rises.

We know that consumers are meant to move around among the energy companies—we know how easy that is with regard to water, for example, and other areas where the natural monopolies obtain. The noble Lord, Lord Jenkin, has identified what we on this side of the House have emphasised for several years: that the operation of a great deal of these services to the public through such private companies, some of which are natural monopolies, has produced a most distressing situation for people who we all know are seeing nothing in the way of increase in their own resources, with low wage levels, and are meeting ever increasing costs. I therefore strongly support the amendment and congratulate the noble Lord, Lord Jenkin, on making this great effort to produce an outline of what is necessary. However, we will expect the next Government to move more directly even than this proposal.

[Baroness Kramer]

My Lords, I am afraid that I wear a number of hats with this Bill. While much of the advice has come from the Treasury, I also speak at other times for Defra. I therefore speak as a government Minister across the breadth of a number of issues. I can assure the noble Lord that my noble friend Lord Deighton will be happy to meet him. I hope that he will take advantage of that opportunity, because it is important to share the thoughts that he has expressed eloquently today.

The noble Lord, Lord Whitty, said that departments pay little attention to the consumer and that it is a small part of what they do. That may have been true of the departments that he was part of in his time in government, but if he came today to the Department for Transport, he would hear almost nothing but the words “passenger”, “traveller” and “consumer”. They are key in the way that we have been shaping policy, and I think that one can see it in the response of a lot of the transport industry, which is now beginning to put passengers at the heart of what it does. Historically, that might well have been absent and one might have accused much of the industry of being engineering-biased, but I assure the noble Lord that it is certainly not the case in today’s world.

The Government fully recognise the importance of ensuring that infrastructure investment is delivered in a way which protects consumer interests and is affordable to current and future customers. I think that we can say that a lot of the pressures today are caused by the fact that investment in infrastructure essentially disappeared off the radar screen for virtually a generation. We want to be sure that we do not do that to future generations. It is central to government policy and to the work of economic regulators, such as Ofwat and Ofgem, operating in each sector.

However, the Government disagree with this amendment and have some serious reservations about trying to aggregate across sectors for infrastructure costs. Bang our heads as we might, we cannot think of a way in which one could do this that could be robust or meaningful.

Let me try to be practical about this. Different consumers in different parts of the country consume different amounts of travel by rail or air—I am now talking about transport, because it is my area—and different amounts of water and energy, all differently priced. Consumers also use very different amounts of these services depending on their needs and preferences, which makes any attempt to aggregate across sectors, to depict a typical household or clusters or types of household, pretty much impossible. Once one starts trying even to estimate an average, it becomes meaningless.

It is the sector-by-sector assessment of their customer base which regulators do in detail that we think is the effective way to assess consumer impacts and affordability. I am thinking of new transport infrastructure, which would obviously be included in this package. It might give the Committee some understanding of how it is near enough impossible to do this in an aggregate way. Transport investment affects personal affordability in many ways and affects different social groups in different ways. For example, if we bring in a smart motorway scheme, it leads to reduced congestion and you could argue that it leads to reduced fuel bills. On the other hand, because there is reduced congestion, more people may well use the road, so because they are travelling their fuel bills go up. However, it may be that they are making that journey because they now have access to a job or to additional business. You surely ought to net out that benefit in order to come to a conclusion on the additional cost caused by that additional piece of motorway. Getting this sorted out is virtually impossible.

HS2 is probably the biggest piece of infrastructure seen across Europe. We have said that there will not be premium fares, so what number do you put in for the burden on the consumer? Is it the standard fare? You were not including it when that standard fare was being used on the existing line. Is it the additional revenue? Then again you are netting out benefits. To try to unravel this into something that would let you have a formula that would make any real sense is near impossible. It is not really a sensible way in which to try to look at this. When we think about capturing cumulative effects in a way that has some meaning, it seems impossible to work your way through the human behaviours and their responses to infrastructure to get you to something that you want.

Back in the department, when we are trying to decide whether to fund a scheme, we try to look at this complex picture. How does the scheme impact on the individual, the environment, the economy or personal health? What happens, in terms of safety, to accident levels and to various other societal benefits? It is based on in-depth, long-standing scientific evidence about how people and businesses value different things. It is just a much more complex picture when we try to put this together into a scheme business case.

The fact that I am saying that cross-sector aggregate measures look at something too complex to come up with a meaningful answer does not mean that the Government fail to take affordability extremely seriously. The Government are taking targeted action on some of the costs that have been discussed today. We have introduced a range of measures to help hard-working families with the cost of living, which is surely what we are all trying to get at. For example, increasing the tax-free personal allowance has a big impact on the cost of living for individuals. Freezing fuel duty has a big impact on the cost of living, as does helping local authorities to freeze council taxes. Those are mechanisms for trying to deal with this set of issues and link in no way to the kind of cumulative cost assessment that is being discussed in this amendment.

Targeted action on bills includes action at the last Autumn Statement, in which the Government announced a series of steps saving the average household around £50 on its energy bills. We recently announced an extension of the freeze on rail fares. Last year, that saved season ticket holders around £70 over 2014 and 2015. It is completely separate from trying to calculate the specifics of a specific infrastructure investment. It has been possible because the Government have a long-term, credible economic plan.

For example, Ofgem undertakes detailed and regular assessment of energy market customers, the affordability of bills and consumers’ ability to pay. Ofgem has published a strategy on consumer vulnerability which set out to understand and identify the causes of vulnerable situations in the energy market and to reduce the likelihood and impact of such situations. It regularly monitors and publishes data on energy disconnections for debt and other issues related to supplier dealings with domestic customers. Suppliers are required by their licences to avoid disconnecting consumers who are of pensionable age, disabled or chronically sick in the winter months—the “winter moratorium”. Ofgem also requires the big six energy companies not to disconnect vulnerable consumers at any time of year, and to reconnect a customer as a matter of priority and usually within 24 hours, if they are later found to be vulnerable. Regulators take these assessments and monitoring of consumers very seriously indeed and see it as an absolutely core part of their role.

Infrastructure Bill [HL]

Debate between Baroness Kramer and Lord Davies of Oldham

Thursday 10th July 2014 Grand Committee

[Lord Davies of Oldham (Lab)]

My Lords, I shall also speak to Amendment 73, with which Amendment 72 is grouped.

As I thought to construct a speech on this issue, I found myself in the most extraordinary philosophical and political position. All my political life, I have seen the lines of conflict over issues drawn in the following way. Going back to Finance Bills in the 1970s, for instance, I recall that the Labour Government were always accused of drawing up excessive invasive powers—in particular for tax authorities to appropriate property—and the Conservative side was always expressing the rights of the landowner and the liberal proposition that the state should be kept at bay. In fact, on one famous occasion, I remember a Conservative member of the committee telling me, “If this amendment to the Finance Bill is carried, there will be the knock on the citizen’s door and it will be the knock of the French revolutionary of 1789 saying, ‘Ouvrez, au nom de la République!’”, such were the terrors that were being visited upon the British in 1976. I had the temerity—I was a PPS at the time—to suggest that the historical analogy did not quite hold up, not least because the French Republic was not declared until 1793, and therefore he was four years premature in suggesting that the revolutionary was asking for entry in the name of “la République”—after all, Louis XVI did not meet his death until 1793.

However, with this issue here, the position is exactly reversed. The current Government are producing a power of entry that we regard as being quite exceptionable and needing some mighty justification. I do not know whether this proposal in the Bill has emerged from a Conservative Party that has gone soft on supporting landholding interests or from the malign influence of those in the Liberal wing of the coalition, who have decided that they should have regard to the landed interest. However, we are agin this proposal, and I shall go on to explain, as clearly as I can, why. It seems quite unnecessary to give an authorised person,

“to determine whether to offer to enter into a species agreement with a person”,

this excessive right to demand entry. Surely powers of entry must be handled delicately. As a liberal-minded socialist, I would say that powers of entry should always be handled delicately, because the citizen in a democratic state has rights. There needs to be a balance between the interests or rights of the property owner and the rights of environmental authorities wanting to eradicate invasive non-native species.

Of course, we are all with the Bill in its attempt to tackle what we all recognise is a very severe problem, but the authorised person would be seeking to obtain an agreement. It does not seem right, therefore, to allow a power of entry at an early stage in the process before the property owner might even be aware of the need to enter into a species agreement. The persons concerned have not got anywhere near the negotiation stage; as far as one can see, they have not even necessarily identified that there is a problem at all, but there could be this knock on the door from the authority.

In England and Wales, the entry on to private property by any person is a trespass, unless consent is given or the entry is otherwise authorised by statute or by common law. It is also the case, of course, that this concept is enshrined in Article 8 of the European Convention on Human Rights, which provides a right to respect for private home and family life. In this respect, Article 8 can only be interfered with if it is prescribed by law as a legitimate aim and is necessary in a democratic society. It is particularly difficult to describe species control agreements as a pressing social need for action. After all, if the concept anticipates an agreement as the achievement of the policy, what is the pressing need for forthright rights of entry? Moreover, the Home Office’s powers of entry gateway, which regulates powers of entry, sets out tests which must be satisfied, including “Necessity”, “Proportionality” and “Safeguards”. Such powers should be used only when necessary and not routinely, but these powers in the Bill are routine—they come in at first base, as it were, and condition the nature of action.

Will the Minister justify how allowing a power of entry on to someone’s land merely to decide whether to enter into an agreement fulfils the requirements set out in the European Convention on Human Rights? The property holder is going to be asked to enter into an agreement. Of course I recognise the problem that may arise if agreements cannot be achieved and if the threat to the wider society is significant—none of us is going to underestimate the damage which some invasive species can do. We all know that it would be absolutely pointless if one householder dealt with Japanese knotweed alone. The capacity of one householder to deal with Japanese knotweed alone beggars the mind, but if he did succeed in dealing with Japanese knotweed alone it seems absurd to suggest that agreement would not be necessary. Next door would have to be involved; otherwise, one would not have a solution and one would be more likely to have a situation in which the problem was extended.

It may be thought that I am being excessive in challenging the Government on these issues and recalling other occasions when these issues have been raised, when the boot has been on the other foot and I watched Labour Ministers wrestle with arguments from landowners and Conservatives. The crucial issue is that the Law Commission review addressed this issue and highlighted the fact that concerns were raised regarding potential overuse of powers of entry. It concluded that there should be a formal safeguard against potential overuse of powers of entry. Of course, we subscribe to the objectives of the Bill with regard to tackling the problems caused by invasive species, but we believe that we are entirely justified in probing the limits of the power of entry as regards when and how it will be used. I beg to move.

[The Minister of State, Department for Transport (Baroness Kramer) (LD)]

My Lords, I resist Amendment 72, as circumstances may arise in which Natural England has reason to believe that a non-native invasive species is present on someone’s land but the owner denies access to verify this. However, without that verification, one cannot proceed to issue a control order. If there is no voluntary agreement, the landowner can avoid the imposition of a control order. Typically, Natural England will approach the landowner and give him at least 48 hours to respond. The reason for having this tight benchmark is that sometimes one can determine whether a non-native invasive species is present even when one is off-site. However, that cannot always be done, as sometimes the species is tiny and is therefore difficult to pick up in, for example, an aerial photograph.

The expectation is that arrangements will be voluntary and collaborative with rare exceptions—for example, in emergencies. The Committee will know about Asian hornets. We have almost the equivalent of an alert system around the country, watching out for the arrival of Asian hornets. I am advised that, if they are found, eradication needs to take place very rapidly, possibly within 48 to 72 hours, or they will pose a threat to native bees, with all the consequences that flow from that. Therefore, on occasion, it is absolutely necessary to move fast. It would be problematic to provide a landowner with a mechanism to resist even entering discussions about a voluntary agreement and therefore to avoid triggering the process that would eventually lead to a control order. I fully recognise the issues that have been raised. However, given the purpose of this legislation and the implications of allowing a rapidly increasing invasive species to get out of control, I ask the Committee to recognise that this power is necessary and I ask the noble Lord to withdraw the amendment.

Amendment 73, which is also in this group, is slightly different. It would require an environmental authority to ensure that, whenever it exercised a power of entry, it must leave the premises as effectively secured as they were on entry rather than, as stated in the Bill, to do so when the premises are unoccupied or the owner is temporarily absent. We want very much to ensure that unoccupied premises or premises where the owner is absent are left effectively secured. As regards Amendment 73, we take the point that there might be grounds for a more general application of the provision. One of the things we are concerned about is the need to think through the language that is used, as we do not want to encourage people to “booby-trap” premises, as it were, with expensive systems that would then have to be replaced. Therefore, I am sympathetic to the intent of Amendment 73 but, given the importance of being able to control invasive species, we need to retain the powers in the Bill, which would be negated by Amendment 72.

[Lord Davies of Oldham]

My Lords, I am grateful to the Minister for her sensitive approach to Amendment 73. We will look again at the wording of that amendment to see whether we can persuade her to change her mind on that matter. It seems a pretty obvious thing to require that, if an authority moves in for the very good reasons that it would have in those circumstances, it should leave the place in the same order that it found it. Otherwise, it seems that we are giving extraordinary powers to those who carry out this action.

--- Later in debate ---

[Baroness Kramer]

My Lords, those of us who were privileged to participate in the Defra visit the other day—an opportunity that many of your Lordships took up—will have been very impressed to see the care and control and the deliberate and constant testing and assessment that Defra uses before enabling any biological controls to be used for some of these invasive species. Obviously, that is one direction that is under examination for Japanese knotweed, that much-hated plant, but it sits outside the scope of this legislation, which focuses very much on new invasive species that are not ordinarily resident and where there is a potential for eradication to succeed. The Bill has a narrower target, but other pieces of legislation sit alongside it that tackle, for example, invasive non-native species that are a threat to plant and animal health. So the Bill sits within a much broader context.

The amendments focus on the need for wider consultation on the code of practice. It has always been the Government’s intent to engage a great deal with expertise, with stakeholders and with others on the code of practice, which will be a substantial and complex document that will certainly need a great deal of thought and care. We continue to think about how we should carry out that engagement, and we would like to take a little more time to consider those issues, including the option of undertaking a full public consultation on the code. I can commit that I will have a response on the issue before Report, but I assure your Lordships that it is our intent to have that kind of intensive engagement, including with a number of parties that have been named today. We would like to take this away and think a little more on it, as the code of practice will be complex. However, it is indeed the Government’s wish to be able to tap into that expertise and thinking in order to make the code as effective as possible.

On that basis, I hope that the noble Lord will feel able to withdraw the amendment.

[Lord Davies of Oldham]

My Lords, I am grateful to the Minister for her thoughtful and constructive response, and I certainly beg leave to withdraw the amendment.

Vehicles: Heavy Goods Vehicles

Debate between Baroness Kramer and Lord Davies of Oldham

Tuesday 8th July 2014 Lords Chamber

[Lord Davies of Oldham (Lab)]

My Lords, the noble Baroness’s answers were rather too long for the House. However, they were not too long for me, because I agreed with them.

[Baroness Kramer]

I thank the noble Lord, Lord Davies of Oldham, for his support.

Infrastructure Bill [HL]

Debate between Baroness Kramer and Lord Davies of Oldham

Tuesday 8th July 2014 Grand Committee

[Lord Davies of Oldham]

My Lords, I have sufficient sympathy with these amendments that I hope we will be able to attract the noble Lord, Lord Bradshaw, to our later amendments, which are concerned with regulating the industry, as opposed to being just a monitor. I noticed that he left out Ofsted in his list of Ofgem and the other “Ofs”. I guess he did not want to plunge the Committee into a debate about the efficiency of a regulator that changes its mind about the categorisation of certain schools in Birmingham in the space of a month or so. We are not going to deviate from transport and particularly roads at this stage. However, I hope he will recognise that our sympathy with his amendments will become much more apparent when we discuss the real issue of regulation.

[Baroness Kramer]

I thank your Lordships. I want to make clear that the Office of Rail Regulation in its role as a highways monitor would advise the Secretary of State on these issues. Perhaps it would be helpful if I took your Lordships through the thought process that took us to the current arrangement of enforcement, because we recognise that there are different ways to approach enforcement.

In looking at the system of fines we followed quite a usual practice, which is to keep the setting of performance standards and objectives together with the enforcement of that performance regime. That tends to be the line most experts in this field would recommend, because it means the enforcer, having been involved in setting those standards, has confidence that the regime as a whole is fair and that enforcement is justified. It is quite difficult for a body that is not setting those standards to then enforce them. Given that the company’s funding will come from the Secretary of State, it seemed to us right that he should be the one to set the performance expectations for the company and consequently to enforce them, following the general principle that I just described. That is the role that we have set in place here.

There have been other views. For example, I note that the report of the Transport Select Committee in the other place recommended giving greater powers to the monitor, closer to the functions discharged by a regulator. It is quite clear, as we have discussed before, that the role that the ORR would play with regard to the SHC is, by definition, different from its role in rail. For example, it is clear that there are no passengers who are paying fares, as there are with rail; there is no equivalency with the roads that would be under the responsibility of the SHC. There is no competitive arrangement between the various operators. For example, there is not the relationship that exists between Network Rail and the operators, which obviously has its tensions. We looked at it as rather a different role, and that is why we came up with the structure that we have here.

I agree with the comments that have been made on fines. Any fines that are paid by the SHC—I hope that it would not get to the point of paying fines, but it happens—will come out of the money that the company can spend on improving the road network. We have always assumed that the fines would be much more reputational in nature, rather than a heavy punishment. They are much more aimed at signalling poor performance, rather than transferring large sums of money out of the company. Obviously we want constant improvements in the road network.

The noble Lord, Lord Bradshaw, asked again about changing the title to be used from the Office of Rail Regulation to the office of transport regulation. I think that we have said that one of the interesting things about the role that the ORR will have—a role in relationship to rail and a role in relationship to road—is that it may, over time, lead to more thought about how the various modes interrelate. However, at this point we do not think that we are at that stage. It will be interesting to see how this monitoring role evolves. We will need to see how the SHC carries out its work and how that process evolves, so there may be a point in the future when that name change is appropriate.

I also point out that there is nothing to prevent a name change. It is not provided for in the Bill because the body has an advisory role with regard to roads, but it is open to the ORR to use a different trading name if it so chooses. Therefore, if it wanted to call itself a transport regulator, it could choose that as a trading name.

--- Later in debate ---

[Lord Judd]

Perhaps the Minister could clarify one point. I thought that the noble Lord, Lord Jenkin, gave a marvellous example of imaginative thinking by people who were given a task and who realised that fulfilment of that task was related to the public perception of what the organisation was about, and so the title should have conveyed the spirit of what it was about. However, I am not quite clear whether the Minister said that it would depend on secondary legislation or whether the power already exists. That point should be clarified. If it does depend on secondary legislation, it would be a pity not to have a wider concept at this stage. I should like to think that everyone working on the Bill is saying, “Here’s a great opportunity to open up the imagination about the responsibility of all concerned”.

[Lord Davies of Oldham]

My Lords, I assumed that the Minister was indicating that of course there would need to be legislative change if the title of the Passengers’ Council were changed. I am reluctant to get too much involved in proposals at this stage because we have a fair legislative trail ahead of us. We have this stage of the Bill as well as two later stages to consider the matter. The Bill will then go to the Commons, which I think will be pretty articulate about the unsatisfactory nature of the present name and will propose changes. As I understand it, the Minister was saying that it is quite possible that the council will recognise the necessity for change, particularly if it is endorsed in the Commons, and that there would still need to be legislative change, but that it would be secondary legislation when we could all pile in again. I do not think that we need worry too much about the degree of definitiveness that we need to arrive at at this point, although there have been some very useful suggestions from those who have spoken to the amendments.

[Baroness Kramer]

So many of your Lordships have been really helpful on this point. I clearly have not been very clear. Passengers’ Council is the legal name. If the legal name were to be changed, that would require a change in secondary legislation under the Transport Act 2008, so that is entirely possible. However, the Passengers’ Council already uses a trading name that is different from its legal name; it uses the name Passenger Focus, just as English Heritage has a different legal name—I fear that I do not know what it is—but clearly its trading name is English Heritage. A body such as the Passengers’ Council can adopt one or more trading names. I suggest that we leave it to the Passengers’ Council to decide whether it uses “Road User Focus” or another name as its trading name for this role. If your Lordships have suggestions for a change to the legal name or for a particular trading name, I will gladly pass them over and make sure that they get to the right ears at the Passengers’ Council. I am sorry if I am confusing matters.

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[Lord Davies of Oldham]

My Lords, we come to a very serious part of the Bill. I doubt whether there is any Minister who does not quail at the thought that the Delegated Powers and Regulatory Reform Committee might offer a smidgen of criticism of a Bill that the Minister is setting out to defend. I see a no more trenchant onslaught of the Bill than the second report of the Delegated Powers and Regulatory Reform Committee. I suppose that as soon as we all saw the report, we ought to have anticipated that there would be government amendments compliant with the requirements of the main recommendations in the report, but we were not certain. That is why we have tabled Amendments 61A and 61B, which are committee recommendations.

The committee expressed itself in very forthright terms indeed. It was quite explicit about the Henry VIII powers in the Bill, and its certain condemnation that that attempt should be successful. There is no need for me to read out the full report. Its indictment is clear enough. It says in its crucial paragraph 4:

“We draw these powers, and the deficiencies in the explanations for them, to the attention of the House. We recommend that, unless the reason for their inclusion and their intended purpose can be fully explained to the satisfaction of the House, the words ‘otherwise modify’ and ‘(whenever passed or made)’ should be omitted from clauses 13(5), 14(2) and 28(2); and that, if the words ‘otherwise modify’ are retained in clause 14 or 28, the same words should be inserted in clause 29(2)(c) so that regulations made under that clause in reliance on them will require the affirmative procedure”.

The committee seeks excision of certain parts of these clauses. In other respects, it is determined that it should be affirmative procedure. That is what my amendment seeks to achieve. I beg to move.

[Baroness Kramer]

My Lords, most of these amendments concern the comments made by the Delegated Powers and Regulatory Reform Committee in its report on the Bill. I do not think there is any disagreement on the points that have been raised. The amendments tabled by the noble Lord, Lord Davies and Lord McKenzie, address comments made by the committee by providing that the references to modifying legislation should be removed, leaving the powers in Clauses 13, 14 and 28 as powers to amend, repeal and revoke legislation.

The Government prefer to take a slightly different tack, retaining the power to modify, but adjusting Clause 29 so as to ensure any modification of the application of an act is subject to the same affirmative resolution procedure as applies to the amendment of an Act. As the Select Committee report noted:

“Non-textual modifications of primary legislation are capable of making changes which are no less significant than textual amendments”.

We prefer our approach, simply because it can be preferable, in some circumstances, to modify the application of an Act so as to cover additional circumstances, rather than by making textual amendments. As the power will be subject to the affirmative procedure, Parliament will have the opportunity to scrutinise any use made of the power, which will include consideration of whether a non-textual amendment approach would be inappropriate in the particular circumstances.

The government amendments also address the point raised by the committee regarding future legislation. It provides that repeals, amendments and modifications of primary legislation under these powers can be made only in respect of Acts passed before the end of a Session. I am sure that is much the same as the intention behind the amendment laid by the noble Lords, Lord Davies and Lord McKenzie, which remove the words “whenever passed or made” from the relevant clauses.

Amendment 97, the final amendment in the group, addresses a different point. It adjusts the extent of a provision so as to ensure that not only do Clauses 13 and 14 extend to the whole of the UK, but Clause 15, which defines some of the terms used in Clauses 13 and 14, also does so. It was always our intention that the definitions in Clause 15 should apply to Clauses 13 and 14 in all jurisdictions. This technical amendment makes that slight correction.

I hope noble Lords agree that the government amendments are an appropriate response and will agree to withdraw their similar amendments accordingly.

[Lord Davies of Oldham]

My Lords, the Government have made a shot at giving a response, but I do not need to point out to the Committee the difference between compliance with what the Delegated Powers and Regulatory Reform Committee suggested and a dependence on affirmative procedure in crucial parts of the legislation. We all know the limitations on affirmative procedure. Of course it is an important dimension that gives a chance for effective reassessment, but it is not the same as getting the statute right. I am not going to press the amendment in Committee, but I am by no means sure that my colleagues in the other place will feel so inhibited. The Government will therefore have to work quite hard to establish the fact that they are not taking advantage of the situation in a way that is to the detriment of parliamentary scrutiny of the legislation we are considering. For the moment, and with some reluctance, I beg leave to withdraw the amendment.

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[Lord Davies of Oldham]

My Lords, like the noble Lord, Lord Jenkin, I have heard my noble friend Lord Faulkner wax lyrical persuasively on this issue, and I have heard the noble Lord, Lord Bradshaw talk about it on many occasions. It is clear that the case stands—and stands mightily proud. We have had this argument long enough for a Government to see sense on this. All that I can say to the Minister at this moment of decision is that I shall be showing the utmost loyalty and commitment to my noble friend. The Minister has a noble friend on her side arguing the same case. I advise her to follow my example.

[Baroness Kramer]

I point out to noble Lords and the noble Lord, Lord Davies of Oldham, that this issue appears to have been on the table for some 15 years. How interesting it is that the Government for most of those 15 years did absolutely nothing to resolve the issue. The noble Lord may wish to hesitate slightly in being critical.

[Lord Davies of Oldham]

I was not being critical at all. I was being anticipatorily hopeful.

[Baroness Kramer]

I say to the noble Lord, Lord Faulkner, that we have a great deal of sympathy with the issues that he has brought forward. The question is whether, from an entirely practical perspective, we are able to resolve all the various policy implications and clearances in time for inclusion in the Bill—not least by working out whether we need legislative consent from the Scottish Government; obviously, there is that additional layer of complication over the BTP and devolution issues. That would all need to be resolved.

Given that situation, we have particular concern that the BTP has all the necessary powers needed to take enforcement activity at level crossings. I can say that we will give this issue careful consideration and will review the current arrangement to consider how best to address this anomaly, including whether amendments are required to the various Acts and sections that the noble Lord, Lord Faulkner, described. As I say, at this point, it is not clear that we can resolve all this in time for inclusion in the Bill, which is my primary concern. I therefore ask the noble Lord to withdraw his amendment, but we will consider it and see what is possible within the timeframe that we have to work with.

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[Lord Davies of Oldham]

My Lords, I have a great deal of sympathy with the main outline of the speech of the noble Baroness, Lady Parminter. I was a little less keen on the pasty that was identified as being available in Cornwall. I recall my brother-in-law, who is an expert on birds, arriving in Cornwall in the early 1990s and seeing a chough, which I did not see. He was certainly well versed in the significance of choughs to the Cornish position.

The purpose of the amendment that I have tabled is to get some sharpness of definition in the crucial area that we are concerned with. We all know that the issue of invasive species is of great significance. It is one of the causes of the loss of biodiversity and much of the world, and we have seen indications in this country of the extent to which that occurs. The annual cost of invasive non-native species to the economy is put at £1.3 billion, so we are not talking peanuts here.

I shall mention my own experience of this. I heard someone—I think it was the noble Lord, Lord Teverson—suggest that we could not mention Japanese knotweed. I am going to mention Japanese knotweed quite often. My acquaintance with the problem of Japanese knotweed was to see a person lose the value of their house, in an ordinary suburban area with absolutely no suggestion of any threat at all except of Japanese knotweed. The plant effectively reduced the price of their house from £350,000 to £50,000 in value. They simply had to get out of that house as they did not think that they could afford the costs of controlling the knotweed.

That was my introduction to local difficulties, but when I was in the department I became acutely aware, and I am sure that the Minister is well versed in this, that whenever a group of people come together to discuss Japanese knotweed, the railway industry is going to be there in force, as indeed it was on every occasion when we discussed it, simply because of the sheer cost to the railway system in this country of keeping the wretched plant at bay.

We are not talking about trivial issues as far as the nation is concerned when it comes to certain aspects of non-native species in this country. For agriculture alone, the cost in England and Wales seems to be getting on for £1 billion. That is an awful lot of money being spent in seeking to control a plant. In the European Union, the annual cost of non-native species is €12 billion. We were gratified to hear at the Defra briefing this morning of the extent to which there was international movement and action on this, and that the European community was playing its full role in this. There were one or two interesting exceptions that we heard about, which raised an eyebrow or two; many of us thought that the Danish scarcely merited the kind of exemptions that we in this country could hardly get for particular products and local parts of the economy; nevertheless, the Danes had obviously put up a good case.

However, I want to emphasise that we have to get this right. I know when I say those words that it is not possible to get it right, because it is a continual battle against change, some of it produced by climate change, which accelerates the difficulties.

We support the clause. The reason we want to probe the Minister is obvious enough; the noble Baroness, Lady Parminter, did the task for me. Red kites were reintroduced at Woburn, not far from where I live. The first arrival of a red kite on a tree, resting and then taking off in all its glory is something that I treasure. Of course I applaud the reintroduction of certain species, but I heard what the noble Lord, Lord Cameron, said about his anxiety about beavers. That shows the differences there can be between different parts of the community. People I have been talking to thought that beavers might help to restrict floods because they build dams to do so, whereas the noble Lord, Lord Cameron, thought that beaver dams might accelerate the problems. There you are, you pays your money and you takes your choice on that.

Before the Olympic Games, an absolute fortune was spent on clearing the site of my dear friend knotweed. The site had to be cleared of a lot of other very noxious things indeed. One of the great expenses of the Olympic Games was getting the site clear, but Japanese knotweed featured in that and cost £70 million to remove.

We must not underestimate the challenges which such species present. My amendment is tabled in order to get, and I am certain that the Minister will oblige the Committee by giving, a clearer definition of what the noble Baroness, Lady Parminter, asked for in the first place.

[Baroness Kramer]

My Lords, the noble Lord, Lord Davies, is absolutely right: £1.8 billion is the estimate of the cost, a lot of it falling on agriculture but a significant amount on transport, of invasive non-native species.

It is important to understand that this measure is one part of a much broader range of measures. It is particularly focused on tackling prevention, and then early detection and rapid response, so that we do not always find ourselves, as we have with the grey squirrel, for example, in a position where an invasive species has so taken hold that we are now able to consider only control. I think that every one of your Lordships would regard that as an important strategy.

The questions raised by the amendments centre on definitions. On the sensible advice of the Law Commission, the definition of non-native used in this part of the Bill is consistent with that already used in Section 14 of the Wildlife and Countryside Act 1981. Part of that is a list, and part of it is a broader definition. It is drafted to regulate the release of formerly native species. It is clearly not a list that matches what we are intending to do with control orders, because control orders give us the ability to go in to make sure that a species may be eradicated—that eradication is possible. There are also other lists, as noble Lords who came to this morning’s meeting will know, because the European Union will be creating a core list some time in 2015 and regional lists will follow. So we have a whole range of lists. The important element in all of this for the purpose of the control orders will be a code of practice that will overlay the lists. That should be available in draft form to your Lordships by Report.

The list in Schedule 9 referred to by my noble friends Lady Parminter and Lord Teverson contains species that we would not attempt to eradicate, with rhododendron ponticum being a good example. There are species on the list that we would attempt to eradicate, such as the monk parakeet, but a lot of the work under control orders would focus on species which have not yet arrived here and therefore are not on any list at all. The code of practice will provide the relevant mechanism for working out a complex situation where a number of lists are developed for a whole range of purposes.

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[Lord Davies of Oldham]

My Lords, I have quite a lot to say about this next amendment so I shall speed up as I respect the fact that time is moving on. The clause centres round the sustainability of new species control agreements and orders. The Government’s capacity to take an intelligence-led approach to prevent non-native species becoming established in the UK has been significantly reduced. We valued the presentation at Defra this morning and the work that the department has done, but the cuts that have been sustained in some of the scientific establishments concern us, particularly the ecological science services at Kew. One should not underestimate the difficulties that flow from the reduction of that activity.

The Government have failed to implement the ballast water convention in spite of evidence that non-native invasive species transported in ballast water tanks pose a significant biosecurity risk. There is enough evidence for us to take these issues very seriously, and I hope that the Minister will indicate that there is a possible change in the Government’s perspective on their actions. The Woodland Trust has also raised concerns regarding the ability of environmental authorities financially to support species control agreements and orders. Many of the environmental budgets are already stretched but eradication control of invasive species is vital and needs to be adequately prioritised and supported. That is the burden of the opening statement made by the noble Baroness, Lady Parminter.

The Government need to face up to the fact that the cost to agriculture and fishing is growing. Climate change is probably a key reason why the number of invasive non-native species arriving in the UK is increasing. The Government must reassess the work of the GB Non-native Species Secretariat in the light of this evidence. After all, the House of Commons Environmental Audit Committee report made it clear that for an eradication campaign to be successful and cost effective it needs to be timely and informed by good evidence and sufficient funds to sustain it until complete eradication is achieved. None of us underestimates the challenge represented by that comment by the Environmental Audit Committee. The Government need to engage with the EU’s work in revising the plant and animal health regulatory frameworks to ensure that the result is a unified approach to biosecurity threats between these regulatory frameworks and the invasive species framework. Some of us were reassured this morning about the degree of co-operation within the European Union. It is obviously a germane time for us to take the fullest possible advantage of good will among the nations of Europe.

Prevention is definitely cheaper than eradication, and it is in the best interest of the environmental authorities to have annual assessments to put in place goals and objectives that would, in turn, allow them to plan their capacity to carry out species control operations. It is also extremely important that we continue to monitor the development of these species control orders and to analyse effectively their ability to hit their targets.

The Bill does not allude to the monitoring of this new scheme and how we can track its progress and achievements. We need that. Not all of us—certainly not many of our colleagues—will have the same kind of opportunities vouchsafed to those of us who went to Defra this morning. We need to ensure the wider public is well informed about progress. An annual assessment would look at which species have been identified, which would be subject to species control orders, how many have been carried out, the success of the scheme, and an evaluation of the scientific evidence surrounding invasive species, animal welfare and so on.

There is clearly a great deal to be done. The amendment seeks to identify the fact that the Government are not doing enough at the present time. I beg to move.

[Baroness Kramer]

My Lords, I need to be rapid in my response, so let me simply say we think an annual assessment of species control orders is too frequent, as we estimate there is only one control order a year. However, we agree that an assessment of how these provisions are working is required. The code of practice will make clear that this assessment should form part of the five-yearly review of the GB invasive non-native species strategy.

We do not accept Amendment 67, which states that there should be a requirement on the Secretary of State to ensure that the environmental authorities,

“have the necessary capacity to carry out species control operations”,

because, at the rate of one order a year, it is entirely feasible for this to be met from existing resources. The environmental authorities are already resourced with this kind of activity in mind.

We do not support Amendment 68, which would remove the requirement for agreements made in relation to a dwelling to be made only by the Secretary of State or Welsh Ministers. We believe that this is an appropriate additional safeguard for the more intrusive use of powers under this regime.

I hope that that reassures the noble Lord, Lord Davies, and that he will withdraw his amendment.

[Lord Davies of Oldham]

My Lords, that reassurance is noted. I beg leave to withdraw the amendment.

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[Baroness Kramer]

My Lords, Amendment 69 clarifies that there is no requirement on an owner, or provision for an environmental authority, to carry out any operations contained in a species control order until the 28-day period for making an appeal has expired. It also clarifies that, where an appeal has been made within the 28-day period, the owner need not carry out the species control operations and the environmental authority will not do so until the appeal has been determined.

The amendment merely clarifies our original intention in the Bill. Without it, the order could potentially require an owner or allow an environmental authority to carry out the operations contained in a species control order before the period for making an appeal has expired, or before the appeal is determined by the First-tier Tribunal. However, the amendment does not apply to emergency species control orders made under paragraph 9(2)(c) of this Schedule. Where a species control order is made because it is urgently necessary, the environmental authority may carry out the operations immediately. However, the First-tier Tribunal has the power to suspend the order should an appeal be made by any owner.

Amendment 70 ensures that the environmental authority must notify all owners of the premises that it is aware of, and not just the owner specified in the order, that a species control order has been made. It is necessary because any owner of the premises has a right of appeal against a species control order within 28 days of notice being given that the order has been made. However, as currently drafted, there is no requirement on an environmental authority to notify all owners That could potentially lead to another owner of the premises being unaware that a species control order had been made and thus being unable to exercise their right of appeal. This amendment merely clarifies our original intent.

[Lord Davies of Oldham]

My Lords, it is fairly rare for the Government to produce amendments unless they have been prompted to do so by a critical opposition. On this occasion, we were not the critical opposition. I am happy to accept the amendment.

Infrastructure Bill [HL]

Debate between Baroness Kramer and Lord Davies of Oldham

Thursday 3rd July 2014 Grand Committee

[Lord Davies of Oldham]

My Lords, I imagine that the Minister will have little difficulty in responding to this amendment. She is obviously going to continue to deny that privatisation is anywhere on the horizon as far as the Government are concerned—so that is one defence. Secondly, I hope that she recognises that there would need to be significant parliamentary action if privatisation of a significant company such as this were carried out. I am therefore anticipating the Minister quite enjoying responding to this amendment, which I am glad my noble friend has aired.

[Baroness Kramer]

My Lords, I will indeed enjoy responding to this amendment. It would seem from the speeches I have heard that our purposes are the same. The question is: whose language does it better? In this case, I go with the language in the Bill, which is rather more efficient in that it does not require an Act of Parliament to, as it were, “gut” the highways authority should it cease to be owned by the Secretary of State; it just does it. Obviously, if such a thing were to happen, we would put in place a transitional process to bring the staff back over; those kinds of things would only be sensible. The language in the Bill achieves what the noble Lord, Lord Whitty, intends but does it rather more effectively than the subsections he has designed. Let us go for quick action and ensure that we have the maximum strength, which we have in the Bill. I therefore ask that the amendment be withdrawn.

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[Lord Davies of Oldham]

Well, my Lords, that is a bumper that whistled past the Minster’s ears. It is an interesting little challenge. I have no views on what the noble Lord, Lord Bradshaw, has said, except that I usually consider what he says to have a modicum of very good sense.

I support my noble friends’ amendments. My noble friend Lord Whitty made a persuasive case for the opening amendment. My own amendment would merely establish a consistent theme for us in this legislation: we want to see the Office of Rail Regulation playing a significant role in the road network. It should publish guidance and have powers to require efficient use of the road network. That is what it does for rail. As the noble Baroness will have noted a few moments ago, I was seeking to extol the virtues of a degree of integration between these two critical features of our transport infrastructure. This is one modest step towards that. The Office of Rail Regulation should promote not just efficient spending but efficient management of the road network. It has earned the approval of many of us through its work on the rail system. There is surely merit in it doing so for the road while furthering the prospects of integration between two main features of our transport infrastructure, which will be an abiding theme of the Opposition’s position on the Bill.

[Baroness Kramer]

My Lords, your Lordships have raised a number of important issues around the powers that are transferred to the new company. The purpose of Schedule 1 is to transfer to a strategic highways company appointed under Clause 1 the statutory duties imposed on, and the powers exercised by, the Secretary of State in his capacity as highway authority. The functions and responsibilities are already expressed in legislation, but they are transferred to the new company on its appointment. These are all the functions that it needs to operate. That may help in understanding why I regard Amendment 4 as an unnecessary addition to the Bill.

Amendment 4 takes us to Clause 13, under which the Secretary of State may transfer additional functions other than an excluded function to a strategic highways company. I think the noble Lord’s purpose was to make road safety functions capable of transfer to the company. We absolutely appreciate the importance of road safety, but we do not require the amendment because, in our view, the only road safety functions which would ever be appropriate to transfer to a strategic highways company would be those which relate to highways. For example, the Secretary of State is responsible for issues which relate to drink driving and the standards that are required of vehicles. In other words, many aspects of road safety are not to do with the highway itself. It would not be appropriate to transfer that range of responsibilities over to the SHC, but only those parts which relate to the highway itself. This is already enabled within the legislation before us.

On a wide range of these issues, I draw your Lordships’ attention to the licence, a draft of which was issued on 23 June and which covers in great detail many of the issues which have been raised here. There is always a question of whether you put things in the Bill or in the licence. We are constantly adding to and refining the kinds of actions and responsibilities that we want an entity like the new SHC to carry out. We would lose a lot of our flexibility were we to put this in the Bill rather than use the licence mechanism. With the combination of the transfer of duties already provided and the licence, a wide range of these powers are already covered.

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[Baroness Kramer]

My Lords, through these amendments, the noble Lord, Lord Davies, and others seek to ensure that the impact of the road investment strategy on the various local road networks and other transport infrastructure is considered. This is an important argument, and I need to be clear that, through the licence, we are requiring the strategic highways company to have an asset management strategy. Understanding the condition of its assets is absolutely key to this.

The condition and performance of the local road network are, as the noble Lord, Lord Jenkin, clearly outlined, matters for the local highway authority. Frankly, we would not wish to include in the Bill a requirement to survey the condition of local roads, because its focus is the strategic road network. We are not anxious to usurp authorities’ powers. I share the assessment of the noble Lord, Lord Jenkin, that the tasks are currently well carried out by local authorities, which, I suspect, would not want to surrender a lot of resources and have the task taken over by a centralised body.

That said, we want this new company to co-operate with its partner road networks. The route strategies, with which I think many of your Lordships will be familiar, are a key source of information in developing the road investment strategy. They provide local authorities and, by extension, local highway authorities with a mechanism to work with the new company and thus ensure that the impact on the local road networks of interventions on the strategic road network is considered. We think that that will be an extremely effective mechanism and it is well provided for in the legislation as it stands.

In addition, as part of the changes elsewhere in the Bill, the company will, as I have said before, become a traffic authority. That is new and means that it will be subject to the network management duty—a legal obligation on all local traffic authorities to ensure, among other things, that traffic flows smoothly from one jurisdiction to another. At present, the Highways Agency is not subject to this requirement, so this will be a new guarantee of co-operation.

I could start to list the kind of support that we are offering for local roads but, setting aside our significant financial contribution, I also want to make it clear that we are supporting efforts by local authorities to share knowledge and best practice under the highways maintenance efficiency programme, as well as encouraging co-operation and common procurement. There is therefore a gathering momentum to achieve much more co-operation and partnership working, which will continue under the new arrangements.

I talked earlier about aligning road and rail investment strategies, so I will not repeat that. Instead, I shall use this occasion to underscore how much we recognise that there is significant value in Network Rail and the new strategic highways company working together on the kinds of issues that your Lordships have listed. However, we do not think that you need a legislative mechanism to try to prescribe how those two companies should work together. We would find it extraordinary if they chose not to, and I doubt that the Secretary of State would permit them to ignore each other in that way.

It is entirely appropriate that the road investment strategy and the new company’s response to it will have due regard to the national network’s national policy statement—that is a mouthful. However, it would not be appropriate to create a formal link between what is a planning document and what is, in effect, a funding and investment plan. The two documents align but there is not a hierarchy between them.

On that basis, looking through the details of the amendments, we think that the underlying issues that are of concern to your Lordships are already addressed. Therefore, we feel that the amendments are not needed and we hope very much that the noble Lord will feel comfortable in withdrawing the one he has moved.

[Lord Davies of Oldham]

My Lords, I will back off from my amendment in relation to local authorities out of deference to the representation from the noble Lord, Lord Jenkin, although I should say that I back off for today, because that is not the perspective that we have of certain aspects of the work of local authorities. However, I shall back off if the Minister will take on board the obvious thrust of these amendments: both those in the group we are considering at the moment and those in the previous group, which the noble Lord, Lord Whitty, introduced, are concerned with the fact that the strategy has to take into account broader issues than road provision has done in the past and that it will need to have that written down and enforced. It is all very well for the noble Baroness to say, “Yes, as a matter of course those who are planning the roads will take into account these other factors”. No, they will not. In the past, we have seen that such factors have clearly not been taken into account.

Not the least significant of all those factors, especially for many British people, is the question of increased emissions. We have seen precious little activity, as far as roads are concerned, on emissions. An attempt in the previous group of amendments to introduce that into the categorisation of the work which the new system must take into account was rather brushed aside.

--- Later in debate ---

[Lord Davies of Oldham]

My Lords, I can be very brief. I fully endorse the statements made by my noble friend Lord Whitty. I once had the privilege of being president of the Royal Society for the Prevention of Accidents. That was a year in which I contributed little but learnt a very great deal indeed. I do not think that the consciousness of the need for safety on our roads has increased as much as we might have expected, given the work that has been done by estimable authorities such as RoSPA. Therefore, I hope that the Minister will take these amendments very seriously.

[Baroness Kramer]

This set of amendments seeks to make the road investment strategy cover several specific areas, including carbon reduction, traffic volumes and environmental performance, and to place safety at its heart—the area where we have had most discussion, which has been fascinating. I reassure the Committee that the Government take all these issues very seriously. It seems to me that where we may differ is on whether or not these important values are enhanced in implementation by including them in the Bill rather than in the road investment strategy and in the licence. I am inclined to believe that the RIS and the licence are the most powerful documents to drive forward the behaviours that we are looking for, so I shall explain the role that those documents play.

We are concerned about ending up with a long list sitting in legislation and describing what the road investment strategy should look at, because, as everyone in this Room knows, there is always the problem of what happens with the item left off the list when that is significant. One can try to say that those that are not named are of equal significance and are equally elevated, and that one is not primary over the other, but that is not always an easy argument to make. I am concerned, particularly since we want this to be a long-lasting document, that there will be issues which we consider to be of equal importance to safety and the environment and that we would be in a difficult situation if we insisted on those additional significant priorities. I am therefore hesitant to go to the face of the Bill. It is helpful to have the information that we have on both the RIS and the licence, and the other documents.

Let me focus on safety, because it is a very important issue to the Government. As the noble Lord, Lord Whitty, said, our roads are pretty much the safest in the world, but we can never be complacent. The strategic highways company will have a responsibility for the safety of the road network, but, as I pointed out previously, there are key safety responsibilities—including driver licensing, training and education, the regulation of driving such as drink-driving and drug-driving policies, enforcement, dangerous and careless driving and, as the noble Lord underscored, the important issue of vehicle standards—that must stay with the Secretary of State and not transfer to the new company. That is to put the broad construct, which would not work effectively if those responsibilities were not kept with the Secretary of State.

As we go through these complex documents, it is worth noting that safety is already embedded in the strategic roads “system”. For example, the Design Manual for Roads and Bridges sets minimum standards for road safety, and safety is covered within the appraisal. The noble Lord, Lord Whitty, asked whether the appraisal formulas were exactly as they should be. That is surely not something that we are going to address in primary legislation; it is a working issue that needs to be addressed at a much more practical level. In wide areas of appraisal—I have looked more at financial and cost-benefit appraisal issues—we are constantly trying to update the way in which we look at those issues. I cannot see that it can be driven through primary legislation; it is part of being responsible. The importance of safety is already included in the draft licence and will be a key consideration in the road investment strategy. For example, the RIS will require performance specifications that embed safety issues.

The noble Lord, Lord Whitty, referred to legal liabilities. I think that it is clear that the SHC is responsible for the road but not the driver, but I do not think it would be right for me to try to speculate on legal liability.

Embedded in the amendments are important issues of environmental protection such as climate change and biodiversity. Again, they are well covered within the licence by broader existing legislation. Again, if we are looking at who is responsible for what, a lot of those issues refer to the vehicle fleet, and that must be with government rather than with the new company.

Therefore the view we take is that the issues that are raised are very important, but that they are carefully covered and encompassed by the language we have in both the primary legislation and supporting documents. Therefore once again, amendment is not necessary to achieve the goals which those sponsoring these amendments have in mind.

--- Later in debate ---

[Baroness Kramer]

My Lords, I have to be quite quick to be sure that I finish before rising time, so these will be somewhat abbreviated responses. A strange hare may have been started running by some of the language used here. The commercial activities that the SHC engages with, such as selling salt supplies to the local authorities, is all piddly ante stuff, to be taken care of in the governance documents rather than the RIS, which I think is the relevant place for it.

As for funding road infrastructure, the power to retain decision-making over tolls or tariffs for the Secretary of State, under the amendment to Clause 6, is just not necessary, because all the powers to make decisions over tolls or road usage remain with the Secretary of State, who is not minded to enter into road pricing—although that may distress some noble Lords who have spoken here tonight.

It would be possible for the Secretary of State to permit this body to raise its own financing, but he would have to give that permission. Given the way in which the Government work, there would have to be Treasury support for that. This Government certainly are not minded to do it because, as the noble Lord, Lord Whitty, said, borrowings would go into the public sector borrowing requirement. Therefore, to pay higher pricing for financing that could be obtained by the Government themselves borrowing directly is not something that this Government are minded to do for their road infrastructure. This project commits long-term funding, which will come overwhelmingly from the Government. An exception might be possible if there were a discrete road project, which might be PFIed, although nothing in that range is being contemplated at the moment.

Looking at all those issues, while it may disappoint Members that we are not engaging in plans for road pricing or extensive borrowing by the HCA in the public markets, I still ask the noble Lords to withdraw their amendments and understand that this is really a policy issue and that the Government have made appropriate decisions in determining these issues.

[Lord Davies of Oldham]

My Lords, this was a probing amendment and it certainly hit its target. Let us be conscious, certainly on my side of the Committee, that this Bill is known as a Lords starter. We therefore have no guidelines from the democratic House as to whether road pricing would ever appear on the agenda; it certainly does not appear on the agenda of my party. I take at full value the points that the Minister has made today on behalf of the Government and I beg leave to withdraw the amendment.

Eurotunnel: Structure and Charges

Debate between Baroness Kramer and Lord Davies of Oldham

Wednesday 7th May 2014 Lords Chamber

[Baroness Kramer]

As my noble friend Lord Bradshaw knows, part of the agreement that predated the infraction, which is the subject of this Question, is that the Channel Tunnel Intergovernmental Commission will be replaced by the Office of Rail Regulation for the UK side of the tunnel and by its equivalent, ARAF on the French side. Their powers will be enhanced and they will put in place a charging strategy. My noble friend will be aware, however, that when the tunnel was built, to achieve that financing, certain concessions and rights were given, which obviously predate the relevant European directives. We recognise that we must honour those contractual commitments, although they have changed somewhat over time, as has the EU. I do not want to give too strong a commitment to my noble friend Lord Bradshaw, but I can say that the issues he raises are being looked at seriously.

[Lord Davies of Oldham (Lab)]

My Lords, the Minister can bask in the congratulations to the Government and all those involved on the progress that has been made recently on the operation of the tunnel. Will she concede that progress has been due partially to the threat from the European Commission to take infraction proceedings against the British and French Governments unless there was improvement? In the areas of improvement that are scheduled, is she able to include the possibility in the near future of train services to Frankfurt operated by Deutsche Bahn?

[Baroness Kramer]

My Lords, I am aware that a number of train companies are now looking at potential services through the Channel Tunnel. We would obviously welcome that as it expands the range of choice for people in the UK who wish to use the train. It would obviously create another avenue for tourism into the UK. As we build HS2, which will extend high-speed lines in the UK, it will enhance the use of high-speed and rail travel to the continent as well. I understand that there are no significant barriers; it is a matter of finding appropriate commercial arrangements, which I would leave to the commercial parties involved.

Airports: Heathrow

Debate between Baroness Kramer and Lord Davies of Oldham

Monday 31st March 2014 Lords Chamber

[Baroness Kramer]

The link from the west is crucially important. More was said again today in the announcement about Network Rail and we are always delighted to hear congratulations.

[Lord Davies of Oldham (Lab)]

We all know that the Government congratulate themselves on having kicked into the long grass the crucial issues of what to do about an additional runway in the south-east. But Sir Howard Davies produced an interim report in 2013, which had some constructive suggestions. I cannot for the life of me understand why the Government are similarly inert about those issues. For instance, one of his recommendations was that we should establish an ombudsman to identify the irritation, difficulties and problems associated with noise at Heathrow. Why on earth do the Government not act on that? After all, we know that the big problem with regard to the location of the additional runway is people’s anxiety about noise.

[Baroness Kramer]

The noble Lord is right that there are many interesting suggestions in the interim report. The Government will respond to that shortly, but they are substantial recommendations that deserve a great deal of consideration before we come to a conclusion. As I said, we will respond shortly, but unfortunately I am not in a position to do that today.

Disabled People: Blue Badges

Debate between Baroness Kramer and Lord Davies of Oldham

Wednesday 26th March 2014 Lords Chamber

[Baroness Kramer]

I have to confess to being slightly confused by the noble Lord’s comment if he is suggesting that carers can use the blue badge when they are not with the person who has the need. The relevant test would be that the person who is in need of the blue badge is indeed there. That is possible thanks to the new mechanisms which have been provided. I am sure that the noble Lord will join me in saying that misuse cheats everyone who needs and deserves a blue badge.

[Lord Davies of Oldham (Lab)]

My Lords, I am sure that the Minister will agree that the introduction of the PIP has been carried out somewhat chaotically, with people waiting for ages for a decision on their application. Have the Government yet found time to identify the possible number of those who were eligible for a blue badge but who are unlikely to qualify under the new scheme?

[Baroness Kramer]

I do not have those numbers yet because this is sufficiently new. Currently, more than 2.5 million people hold blue badges and the vast majority of them will qualify under PIP. I should say again that local authorities will make determinations on a case-by-case basis of those people who apply for a blue badge under other eligibility criteria. We will have the information eventually, but the answer is not available at this point in time.

Aviation: Fume Events

Debate between Baroness Kramer and Lord Davies of Oldham

Tuesday 18th March 2014 Lords Chamber

[Baroness Kramer]

Incidents on aircraft flights, including any fume event which in the opinion of the airline, any member thereof or any passenger,

“endangers or which, if not corrected, would endanger an aircraft, its occupants or any other person”,

are required to be reported under the mandatory occurrence reporting scheme, known as MORS, which is run by the UK’s independent aviation regulator, the CAA. An investigation carried out by the operator would then typically follow. If the CAA was not satisfied with that investigation, it could ask for further work to be undertaken. It is a CAA responsibility to monitor for trends and unrecognised safety threats.

[Lord Davies of Oldham (Lab)]

My Lords, I have some sympathy with the Minister as I have on occasions from that Dispatch Box also produced responses that did not satisfy the noble Countess, Lady Mar, nor many other Members of the House. I therefore ask the Minister this question. If she is able to give the degree of reassurance that she has given about the monitoring that we carry out, but if the issue is a great deal wider than that—she made no reference at all to how other countries attack this or to the European position in general—will the Government at least push the authorities into examining this matter further? The consequences of getting it wrong would be quite disastrous.

[Baroness Kramer]

My Lords, the noble Lord will be very well aware that the CAA, which is responsible for monitoring and safety, keeps not just this issue but many others under review. I feel confident that if the CAA had sufficient concern that it felt that there needed to be urgent research, it would inform the department of that and would be pushing on those issues. As I said, there has been very substantial research in this country and in other countries which has led to firm conclusions. Given that, it is hard to see what direction additional research could possibly go in.

Railways: Line Resilience

Debate between Baroness Kramer and Lord Davies of Oldham

Monday 10th March 2014 Lords Chamber

[Baroness Kramer]

I assure your Lordships that there is constant monitoring, and a cross-departmental ministerial recovery group now meets weekly to discuss flooding issues. We take it in turns within my department to attend that meeting and make sure that the process is ongoing. It is also accurate to say that responsibilities have been divided up among a number of us to make sure that monitoring is effective; my responsibility will be as the ministerial representative for flood recovery for Gloucestershire and Worcestershire. Similarly, others have regional responsibilities and I will make sure that we report back as we get information through that process.

[Lord Davies of Oldham (Lab)]

My Lords, the Minister knows that the floods have already cost something like £170 million. We are aware that the Prime Minister says that money is no object, and we will bear that in mind when the costings come through. However, how will Network Rail cope with the additional funding that will be necessary, either for the alternative line to which my noble friend Lord Bradshaw referred or for making the Dawlish line absolutely secure? Is the Minister being somewhat premature in praising Network Rail without convincing everyone that its funding will be adequate?

[Baroness Kramer]

Perhaps I can give the noble Lord some reassurance. Network Rail has estimated the cost of resilience projects—not recovery, which is handled separately—at £31 million. It is putting £5 million of its existing funding into the pot, and new money of £26 million is going towards that. If, when we get the interim report, we are starting to look at something much bigger—effectively, new construction—we will need to sit down and plan that properly.

London Underground: Industrial Action

Debate between Baroness Kramer and Lord Davies of Oldham

Monday 10th March 2014 Lords Chamber

[Baroness Kramer]

I do not have a breakdown of how the 3% is divided up although I assume that tourists are a significant part of that number. If tourists can turn to someone on the platform—someone who is clearly in a uniform, who is able to help them and who possibly has access to another language, where necessary, if that might make it easier—and ask that person about their journey and be directed, that could make London Underground very attractive to them. It is similar to what the Games makers did during the Olympics.

[Lord Davies of Oldham (Lab)]

My Lords, does the Minister agree that it is incredibly impolitic to raise the issue of trade union rights at this time, when in fact the second potential industrial action of this dispute was called off? The dispute is now before ACAS; both sides are talking constructively and we hope for a successful outcome. If there is going to be political point-scoring, all of us can do that. After all, in 2010 the Mayor of London said:

“This Mayor takes his promises to Londoners extremely seriously. Every station that has a ticket office will continue to have one”.

[Baroness Kramer]

I believe that debate in this House and in this country as a democracy is always good, no matter the timing of it. I join your Lordships in hoping for a very successful outcome to these negotiations.

Shipping: Passenger Safety

Debate between Baroness Kramer and Lord Davies of Oldham

Wednesday 15th January 2014 Lords Chamber

[Baroness Kramer]

I can assure your Lordships that, from a UK perspective, this measure meets a very high standard of safety. Both the safety required of the boats themselves and the quality required of the life rafts have been very closely examined. I have learnt in this House that the word “benign” can be wrongly used, but I think that these are generally benign waters.

[Lord Davies of Oldham (Lab)]

My Lords, the Minister is still trying to convince the House that there is virtue in pitching British safety standards below the minimum of European safety standards. Why on earth should that be done unless it is just some doctrinaire response to Europe?

[Baroness Kramer]

Perhaps I may explain, because I think that there is some confusion here. The EU directive which would require an additional life raft is not intended for this kind of vessel; it is for steel vessels and for large-scale ferries, so it does not apply to most of these craft because typically they are fibreglass, and so on. We want to be sure that we are getting an appropriate exemption for future replacement of existing craft. As I said, the EU directive is not intended to deal with this kind of craft; they are expected to be handled through an exemption process.

Railways: High Speed 2

Debate between Baroness Kramer and Lord Davies of Oldham

Wednesday 18th December 2013 Lords Chamber

[Baroness Kramer]

My Lords, we are looking at this infrastructure project in an exciting way. Rather than treating it within a transport silo, we are looking much more at the regeneration possibilities. The idea raised by the noble Earl has real potential and I will definitely take it back.

[Lord Davies of Oldham (Lab)]

My Lords, in the spirit of Christmas, I have two presents: two easy questions for the Minister at this stage. Will the HS2 jobs and skills strategy, to which she referred, be published and, if so, when? Will she also clarify a little more how we will protect the skills developed through Crossrail—to which she also referred—and ensure that they will be available for HS2?

[Baroness Kramer]

My Lords, there is never an easy question from the noble Lord, Lord Davies, but I do appreciate it. As he knows, the noble Lord, Lord Deighton, is going round the country with a series of consultations looking at the economic growth issues, of which skills are a very important part. Work is happening through many strands: HS2 itself, the work of the noble Lord, Lord Deighton—whose report is expected in the spring—and other more general work with the industry. I will see whether there is a way to pull these strands together into a more comprehensive piece that would give the noble Lord the picture he is seeking.

I have now completely forgotten the second issue. Would the noble Lord mind telling me?

[Lord Davies of Oldham]

I was concerned about Crossrail.

[Baroness Kramer]

Crossrail has done two crucial things on skills. It has played an important role in the tunnelling academy and we want that to carry over. It has also been excellent at engaging with British companies in the supply chain. By number, rather than value, 97% of contracts have gone to British-based contractors. We hope to see that repeated by using the same techniques of outreach.

Dartford River Crossings

Debate between Baroness Kramer and Lord Davies of Oldham

Thursday 5th December 2013 Grand Committee

[The Minister of State, Department for Transport (Baroness Kramer) (LD)]

My Lords, I am pleased to address this Question for Short Debate which the noble Lord, Lord Hanningfield, has secured on the Government’s plans for a new river crossing in the lower Thames area. We have had very thoughtful comments from the three noble Lords who have spoken today, often bringing up issues which have been raised within the consultation. The noble Lord, Lord Hanningfield, was right to say that this is an issue not just of local consequence but with much broader implications.

The noble Lord, Lord Hanningfield, said that he had seen the bridge built in just four years. Many of us who deal with infrastructure today think longingly of timetables such as that. However, he may be interested to know that the Government are piloting ways in which to accelerate the building of infrastructure. There are four pilots: in Surrey, on the M3 managed motorway between junctions 2 and 4a; in the West Midlands, at M6 junctions 10a to 13, which is also managed motorway; in Derbyshire, at the M1 junctions 28 to 31; and on the A160/A180 Immingham dualling scheme. We will see whether there are some good lessons to learn so that we can start to speed up the delivery of these infrastructure projects, because, as the noble Lord pointed out, that would make sense.

I know that noble Lords are concerned to know the nature and timing of the Government’s plans for a new crossing. I shall try to address that towards the end of my remarks and I hope to provide at least a measure of satisfaction.

Noble Lords will appreciate that there are serious issues at stake in reaching decisions on where to locate a new crossing and whether it should be a bridge or a tunnel. The department is carefully considering the issues reinforced during the consultation and it intends to announce the next steps shortly. I know that that response has been promised by the end of the year, before which I note that there are only three weeks left. I will allow noble Lords to draw conclusions from that statement.

I shall set out the scale of the challenge and what we have done to date. The noble Lord, Lord Hanningfield, reminded us of the history. Fifty years ago, a tunnel was opened between Dartford and Grays. Today, the Dartford-Thurrock crossing comprises two tunnels and one bridge which carry about 140,000 vehicles daily across that part of the River Thames. The noble Lord, Lord Hanningfield, basically said that they carry much more than they were designed to carry. They were designed for 135,000 vehicles, so they are definitely over that, but there is a little comfort in knowing that the current level is not hopelessly over. Of course, we recognise that this is a crucial part of the strategic road network linking London, Kent and Essex, as well as international destinations, with the rest of the UK.

In addition, the existing crossing is located in the area known as the Thames Gateway, which, as the noble Lords, Lord Hanningfield and Lord Berkeley, pointed out, has very ambitious plans for redevelopment and growth, which we obviously want to promote. The noble Lord, Lord Davies, gave us a very personal experience of surviving congestion at the Dartford-Thurrock crossing. I shall think of him and his son trying to decide which of them would be able to get through to the other more easily because the traffic was flowing northbound or southbound but not the other way.

[Lord Davies of Oldham]

Anything more sophisticated than the toss of the coin would be an advantage.

[Baroness Kramer]

I think a lot of forecasts are as accurate as tosses of the coin. Let us see what we can do about this. Journey time reliability is important, and this is consistently one of the worst performing links in the strategic road network. We think it is going to get better, not worse.

Successive Governments at national and local level have commissioned studies on congestion and possible new river crossings. The most recent report for the department, done in 2009, identified short and medium-term measures to improve traffic flows. It also concluded that a new crossing is needed in the long term and shortlisted potential locations: option A, at the existing Dartford-Thurrock crossing; option B connecting the A2 with the A1089; option C connecting the M2 with the A13 and the M25 between junctions 29 and 30; and a variant of option C connecting the M2 with the A13 and the M25 and additionally widening the A229 between the M2 and the M20. From the start, this coalition Government have been determined to act and promises made as early as the first spending review in 2010 are now being realised.

Next year will see the introduction of free-flow charging. That will please the noble Lord, Lord Davies. I know he has been waiting for that. Motorists will no longer stop at each end of the crossing to put money into a slot machine or hand it to an attendant. Believe it or not, getting this technology right has not been quite as easy as it sounds, and nobody wants to install a technology, have it go wrong and create that kind of inconvenience. Although it was hoped to bring it in late this year, it will now be coming in 2014. I believe October is the target date.

Railways: British Rail

Debate between Baroness Kramer and Lord Davies of Oldham

Tuesday 12th November 2013 Lords Chamber

[Baroness Kramer]

The comments of my noble friend totally resonate. It is utterly disgusting. It speaks to the fact that customer service has not always been at the centre of the railways, because I think customers are very concerned about this issue. Beginning in 2017, the current InterCity 125 trains will all be replaced by the new Class 800/801 intercity express trains from Hitachi, which will solve that problem on the intercity lines. It is a tougher issue on the local diesel trains, which are gradually going out of service, and we could use some help from the industry in tackling that problem.

[Lord Davies of Oldham (Lab)]

The Question was whether the Government would mark the passage of the legislation. Is this the legislation that, within 10 years, saw the bankruptcy of Railtrack? Is this the legislation that saw the franchise fiasco on the line from Paddington to south Wales a short while ago? Is this the legislation that insists that a publicly operated company, which produces £47 million of profit to invest in the railway and hands £800 million back to the Treasury as extra profit, is disbarred from competing for the franchise against German and French state railways?

[Baroness Kramer]

My Lords, Network Rail plans to invest £38 billion into the system between 2014 and 2019, which will shortly bring into the system Crossrail, the upgraded Thameslink, a northern hub cross-Manchester link that will provide electrification linking the core centres of the economy in the north, the West and East Midlands and Yorkshire. Today, the south of England has 75% of passenger miles on electric trains. I assume that the noble Lord was talking about the east coast main line franchise and, as he knows, it was always intended by the noble Lord, Lord Adonis, that this would be in public control only temporarily. He said:

“I do not believe that it would be in the public interest for us to have a nationalised train operating company indefinitely”.—[Official Report, 1/7/09; col. 232.]

The public sector—DOR—has done an excellent job of stabilising the system, but now returns it to a period of investment, which requires private sector engagement.

Railways: Passenger Demand

Debate between Baroness Kramer and Lord Davies of Oldham

Thursday 31st October 2013 Lords Chamber

[Baroness Kramer]

My Lords, the Government—and I—regard HS2 as a vital project. As I said, the underlying rationale is capacity. We are out of capacity on critical lines going north out of London and those are essential for the economy. We must also continue to build the economy of the north of England rather than just constantly focus on the south. I believe that the project has found a good balance between the environmental challenges—of course, they are many—and value for money. This is an absolutely essential project and most of those in this House who specialise and focus on transport and rail will confirm the view I have just expressed.

[Lord Davies of Oldham (Lab)]

My Lords, why is the public operation of the east coast main line not allowed to continue or bid for the franchise when bids from the German and French state railways appear to be welcome?

[Baroness Kramer]

My Lords, I am delighted to find that HS2 has now become so uncontroversial that questions on other topics enter into this brief exchange. I just repeat what I said on the future of the east coast main line. It has gone through a period of being stabilised by the Government. That has meant that new investment has not come in on the scale that passengers on that route require. We wish to see a strong future for the east coast main line.

Government Spending Review 2013

Debate between Baroness Kramer and Lord Davies of Oldham

Wednesday 3rd July 2013 Grand Committee

[Lord Davies of Oldham]

My Lords, I was making a point that the noble Lord ought surely to take into account. Far from there being an environment in which foreign investors will necessarily find a place to invest in the future, as long as we are extremely uncertain about our relationship with the biggest market that we service, Europe, it is bound to cause anxieties among investors.

I also noted what the noble Lord, Lord Higgins, said—he is also my noble friend when we are on the golf course. He was very concerned to address some real points to the Minister with regard to the future of interest rates and the assumption made about future public expenditure. The Minister must address that point in his reply.

I appreciated the point that the noble Lord, Lord Shipley, made about local authority finance and being able to identify local resources. One product of the debate on Scottish independence and the referendum will be to identify those issues as far as Scotland is concerned. That is bound to give a stimulus to the broad argument that the noble Lord is putting forward about the resources available to the various localities of the United Kingdom and the needs that may be identified. I would have thought that that is bound to take a significant step forward as a result of the debate on next year’s Scottish referendum.

The noble Lord, Lord Flight, entertained us all with the Hayek versus Keynes debate. Although the noble Lord said that growth before the Second World War was considerable, he may have noticed that full employment in this country did not return until we went into wartime defence production. It is quite clear that under the Hayek principles you can certainly run an economy with a considerable level of unemployment. However, that word has not been manifest in this debate at all because the fact that we have significant levels of unemployment is a limited consideration for all those on the Conservative Benches concerned with how to manage the economy. We have people coming out of our colleges and universities who are highly qualified by any standards and who, in the past, would have expected to find a choice of jobs. They are facing a situation where the market is such that there are no jobs available. That is why I was grateful that the noble Lord, Lord Flight, identified the thinking behind the Conservative position and, to a more limited extent, the Liberal Democrat position with regard to what the Government are doing at present.

It took the right reverend Prelate to introduce morality into this debate. Why is it that the only person who is prepared to talk about those people who suffer the real costs of what is being carried out in the name of austerity is the right reverend Prelate? He identified the shock we all felt in the Chamber yesterday when it was suggested by a Conservative Minister that food banks are supply-driven and nothing to do with people’s needs. People’s needs have occasioned the development of food banks, which are necessary, but our great shame. Nor is there any understanding on the Conservative side about what it is to lose one’s job at present. It is quite okay to say, “We will cut public expenditure by making sure that there is a week in which one cannot claim jobseeker’s allowance”, but what do noble Lords think the morale of a family will be when someone loses his job against a background where the chances of getting a fresh job are very limited indeed? Why is it that, within that framework, it is thought that a really effective cut is to make sure that an application for support cannot be made until a week has elapsed?

[Baroness Kramer]

Can the noble Lord, Lord Davies, confirm that, during the years of the Labour Government, job centres were prohibited from referring any client to a food bank?

[Lord Davies of Oldham]

I am not well enough equipped to answer that question, nor am I quite sure of the point of the question.

[Baroness Kramer]

I shall try to be helpful. Like many people, I take the view that we live in a country where food banks should not be necessary, but unfortunately they have been necessary for a long time because the same issues of delays over benefits and various kinds of crises have affected those at the bottom. As I understand it, during the Labour years, job centres were not permitted to refer clients to food banks. As noble Lords know, you can go to a food bank only with a reference from an appropriate person: a job centre, a doctor or a limited number of other people. You cannot just turn up and make a claim. Today, job centres offer vouchers where they think there is need, but that need is not very different from the need that existed before. Food banks were just not announced.

[Lord Davies of Oldham]

Food banks are developing in almost every constituency in Britain because the so-called supply-driven factor has been occasioned by the demand of real necessity at present. It is a vastly different situation from that which obtained a decade or even five years ago.

I would ask the Minister to take on board the very important points that have been made by his noble friends today in supporting the coalition. Will he also, at some point in his remarks, address the question of morality? Why is it, for example, that his supporters are concerned to promote a bedroom tax that ensures that there is a desperate issue for impoverished people as to whether they will be forced to move but that when a mansion tax is proposed by the Liberal Party, there are all sorts of anxieties that people who are reasonably well off might be obliged to move and about what an affront to fairness that would represent? The mansion tax would be aimed at properties of very considerable value and at people who know they well might come under attack rather than the very large numbers of people who, under the bedroom tax, are being forced to move from their homes, the schools which their children attend and even the localities in which they have lived for very many years. I hope the Minister will address some of those points.

Financial Services Bill

Debate between Baroness Kramer and Lord Davies of Oldham

Wednesday 24th October 2012 Lords Chamber

[Baroness Kramer]

I have a couple of comments —they are really questions—on both amendments. Amendment 193F, as the Minister has said, essentially extends the Banking Act 2009 special resolution regime to investment firms. In the next two groups there are similar amendments extending that same resolution regime to holding companies and clearing houses. I am sure the Minister does not want me to speak three times on the same point, so perhaps he could extend his comments to those two groups as well.

I share some of the concerns expressed by the noble Lord, Lord Barnett, that we are getting a set of amendments which, by definition, will have to change fairly significantly because this area is being driven by European directives. Even the definition that we are using for an investment firm is a European directive. It is very difficult to understand how this works when the context and framework will be constantly changing. Perhaps the Minister could help us understand how that process is going to happen. With ring-fencing likely to change the way in which we look at and define an investment firm, that is one obvious set of problems. It may end up being different under European law from the application in the UK, because we may draw lines at different points. We may choose ring-fencing, and others separation. I cannot see how this set of language manages to comprehend all those complexities.

It is not just me who is concerned; I know that I have raised this issue before. This time, the BBA is very concerned about marching all the troops up the hill in one direction, finding that there has to be substantial change, and marching them all the way down and back up in another direction. I cannot understand why we are doing this now when we will have clarity in just a few months’ time.

I also want to raise a question which I have asked before but to which I have not had much of an answer, under Amendment 193BA. Again, it concerns the central clearing houses and the central counterparties. I am trying to understand if that amendment deals with an issue that concerns me: the waterfall of the resolution and whether, at the end of that waterfall, it is permissible under the legislation to tear up contracts. That is a reading which the Minister will know that the industry has asked about. When he talks about the protection of client assets, does that apply to contractual relationships—for derivative contract or whatever else—where the clearing house may not be able to meet its obligations because it has got into difficulties and has been put into a resolution procedure? I am unclear whether the legislation establishes that that contract may be torn up as the last resort in the resolution process. That is a big issue that needs general discussion, if that is right. It would be extremely helpful if the Minister could give us some clarity on that.

[Lord Davies of Oldham]

My Lords, the Minister has a few interesting issues to respond to, but I must say that I am very much on the Government’s side with regard to these two amendments. After all, they are the result of consultation. We agree with the Government that investment firms and clearing houses have the potential to cause instability in the financial system and that therefore, including them within this scheme to ensure their orderly resolution or, perhaps, wind-down in the event of failure, is obviously sensible.

I am slightly embarrassed by the fact that, although 35 years ago, as his PPS, I was used to agreeing with every word that my noble friend Lord Barnett uttered as a Member of Parliament, I have to say to him today that I do not quite agree with the line which he has adopted. I entirely recognise that we will be enmeshed in many of these issues in the not too distant future with another significant Bill but, on the whole, when the Government have a good and constructive idea, it is best for the Opposition to seize it with both hands as early as possible, and that is what I want to do.

Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011

Debate between Baroness Kramer and Lord Davies of Oldham

Thursday 20th October 2011 Lords Chamber

[Baroness Kramer]

My Lords, let me join others in welcoming this order laid before us. Like others, I think that the only regret is that we had not seen it perhaps a little sooner, but I am delighted that it has come now. I am also delighted to be able to look at it in the context of the Government’s commitment to credit unions. A project is now under way between the Post Office and ABCUL—a sort of industry spokesperson for credit unions more broadly—to find ways for the Post Office to be the front-door platform for many people to access their accounts through the Post Office structure. That would have been inadequate were these other steps not being taken to expand the capacity of credit unions.

I am particularly delighted that we now have a new definition of the common bond, which will take a real constraint away from credit unions and their capacity to build membership and to serve the community. The United States has long had much greater flexibility. Whereas in the UK the figures from ABCUL suggest that the current amount of assets under credit union management is £790 million, in the United States—even allowing for the difference in population size—some $900 billion of total assets come within the credit union structure. We are looking at a completely different dimension, which I hope the UK will be able to move towards. As the noble Lord, Lord Kennedy, has said, many people who are financially excluded can see a route into financial inclusion through credit unions that they would not find in the high street banks.

I also am encouraged by the expansion of the groups which a credit union can serve to include corporate bodies, partnerships and unincorporated associations. We have many small businesses which once again cannot find a satisfactory financial relationship through existing high street banks. They need other sources and mechanisms. Again, if we look at the United States, it is interesting that the ability to serve small business has long been part of the credit union framework. In 2011 alone, the Obama Administration are using that credit union network to push $300 million in additional credit directly to small and very small business in a way in which we have no capacity to do here in the UK. For the kind of activity that we are seeing through credit easing—obviously, that is a much broader programme—in the United States that is able to happen far more easily and fluidly through mechanisms such as the credit union and the much wider world of community development banks. We can now begin to move towards having that potential here in the UK.

With the new classes of shares and the ability to deepen investment, we are coming now to the point where there is a recognition that more diversity and provision that focuses on people who are financially excluded, and on businesses that are micro and small, is all to the positive for the growth that we need in our economy.

I join others in welcoming this order laid before us by the Government today. I express apologies from my noble friend Lord Newby, who had expected to be standing here but, because of the time, unfortunately could not cancel another commitment. I welcome this move by the Government.

[Lord Davies of Oldham]

My Lords, the Minister greeted my arrival at the Front Bench with a slightly wintry smile earlier. Whether he thought I was late, though I assure him I was descending from the rarefied atmosphere of the Back Benches, which is why I was slightly delayed, or whether he anticipated that this debate had some hidden horrors, I am not sure. He will, however, by now have appreciated the fact, from the contributions both of my noble friend Lord Kennedy and of the noble Baroness, Lady Kramer, that this measure is most welcome and Her Majesty’s Opposition are delighted to see it being presented today.

As noble Lords have already spoken about the virtues and possibilities of the credit union and the Minister himself paid due tribute to their work, it would be otiose of me to expand on that matter and, as I am given to brevity, noble Lords will appreciate that I will take as read the reason why this order should commend itself to the House. However, I have some questions to ask, which I hope the Minister will be able to respond to. What does he expect the removal of the limit on non-withdrawal shares to be? Will this result in dominant members of a society emerging? What steps will the FSA be taking to ensure that societies do not become subject to such dominance whereby a small number of individuals might establish a very considerable influence with regard to these non-withdrawable share holdings?

On credit unions, could I ask about the removal of the common bond, which is the whole point of a credit union, because it provides the self-regulatory strength of mutual knowledge and understanding? What does this mean as far as the future of the credit union is concerned? Does it mean that credit unions will be just another form of financial organisation rather than the distinctive sort of organisation which is being commended in the speeches made so far today in this short debate?

Finally, what does the Minister expect to be the impact of bodies corporate joining credit unions? Will this not lead to small commercial enterprises exploiting the financial strength of the credit union to further the interests of their own businesses? In other words, would credit unions become tied to businesses instead of being independent? After all, one business which might supply 10 per cent of the assets of the credit union will undoubtedly be a powerful force within it.

We welcome this legislation, but I would be grateful if the Minister could give me some assurance on those limited anxieties.