Railways: East Coast Main Line

Baroness Sugg Excerpts

Tuesday 30th October 2018 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, passengers across the east coast main line, including in Newcastle and Edinburgh, will benefit from the introduction of new trains by London North Eastern Railway, delivered through the Government-led intercity express programme. These new trains will transform passenger journeys, providing more seats, more frequent services and faster journeys. LNER is working closely with Hitachi Rail Europe, Network Rail and other industry partners to bring these trains into service as soon as possible, with a full rollout scheduled to be complete by 2020.

[Lord Beith (LD)]

My Lords, the noble Baroness did not say very much about when these particular sections of the line will have the service. Because these new trains apparently interfere with the outdated signalling and points system on the east coast main line—and also, bizarrely, because the regulator thinks people might use the interconnecting things to climb on top of the trains—the introduction north of York has been delayed. In what year will each of these sections of the line get new trains, and for how long will the service depend on worn-out HST trains which are 40 years old?

[Baroness Sugg]

My Lords, I am happy to give some more information on the timings. The first trains were due to enter service in December this year, but LNER has recently announced that these will not be introduced until early next year. There remain challenges relating to electromagnetic capability, ORR approvals and train design. Of course, this is disappointing for all involved, but when introduced the trains will provide more seats and faster journeys. As I said, the full rollout of the east coast fleet is still scheduled for completion in 2020.

[Baroness McIntosh of Pickering (Con)]

My Lords, my noble friend will be aware of my interest in this. I congratulate the Government on their involvement in this programme. Can my noble friend put a date on when the trains will actually run the full route to London? How will this coincide with the improvements to King’s Cross station that have been announced?

[Baroness Sugg]

My Lords, I am afraid that I am not able to give a definite date. We are trying to introduce the trains as soon as possible, but there remain issues that we need to work through. LNER has said that it hopes to start introducing the trains early next year. On my noble friend’s point about King’s Cross, we are carrying out essential works on King’s Cross to replace the expired track and signalling to ensure that we can see the full benefits of the east coast main line enhancements.

[Lord Rosser (Lab)]

It was from the government Dispatch Box that we were told on 23 May this year that:

“The good news also is that we fully expect the new intercity express trains to be introduced on the east coast main line from the end of this year, as planned”.—[Official Report, 23/5/18; col. 1032.]


Is this episode yet another example of the reality that, in our fragmented railway system, no one is in overall charge? No one is ultimately accountable for the performance or lack of it of our national railway network and, as a result, no one accepted responsibility for ensuring that the new trains would start running on the planned date. If the Government disagree that that is the case, then which individual or body was accountable for ensuring that the new trains would start running on the planned date on the east coast main line?

[Baroness Sugg]

Well, that was not me. The noble Lord is quite right to say that in May I gave reassurance that those trains would come into service. At the time, that was very much what we were planning. However, as I said, there have been emerging issues on that which we need to work through. It is not unusual with delivery of a whole new infrastructure—and this is a £2.7 billion investment, which we should welcome—that there are some compatibility issues. We are working through them. On the noble Lord’s point about the rail system, it has been well over a decade since we have seen a large change in the rail network and, while we have seen record private investment and the doubling of passenger journeys, of course it has had its challenges. The time is absolutely right for a comprehensive review, and that is what the rail review will do.

[Lord Cormack (Con)]

My Lords, I thank my noble friend for the help that she has given in recent weeks to try to ensure that we have a happy resolution to the better, promised service—I repeat, promised service—between Lincoln and London. Is she confident that she will be able to join me on one of those trains during the course of 2019 with those colleagues from all parts of the House who have already accepted my invitation?

[Baroness Sugg]

My Lords, we have discussed this specific service many times, and I know that it will disappoint my noble friend, as it does me, that we are unable to guarantee that those services will be introduced in May 2019—and I am not able to give an exact date either. I know that that will also disappoint the people of Lincoln because those extra services will enable more people to visit that great city. However, I can absolutely reassure my noble friend that both LNER and the Government are committed to more trains to Lincoln and we will deliver them as soon as possible.

[Lord Steel of Aikwood (LD)]

My Lords, next year, when the new sleeping cars are reintroduced to the railways, will they be run on the east coast line to Scotland as well as the west coast line?

[Baroness Sugg]

There are some issues with trains to Scotland at the moment, so I am afraid that I am unable to give that guarantee. We are working very closely with the Scottish Government to deliver that.

[Lord Watts (Lab)]

My Lords, how can the Secretary of State keep his job? What has happened to ministerial accountability for this shambles?

[Baroness Sugg]

My Lords, we are overseeing, as I have said many times, record investment in our railways: £48 billion over 2019 to 2024. Obviously, with all these improvements, that has given us challenges, but we should not lose sight of the benefits that are being seen through this investment. The Azuma trains alone will have 15% greater capacity, and once the full fleet is in service they will deliver a 28% increase in morning peak services. There will be improvements in accessibility, and they will be more reliable, with more storage room. That is what we should aim for.

[Baroness Brinton (LD)]

My Lords, the Azuma train appears to have fewer disabled spaces than the current high-speed trains. Can the Minister confirm that first, that will be rectified, and secondly, that passengers will not be able to store suitcases in the wheelchair spaces? Becky Whitworth could not get on a train because the entire space was filled with cases.

[Baroness Sugg]

My Lords, I understand that the new trains will have improvements in accessibility, with more wheelchair spaces, which will not include flip chairs. There will also be universally accessible toilets. However, I will write to the noble Baroness on her specific question.

Railways: Fares

Baroness Sugg Excerpts

Monday 29th October 2018 Lords Chamber

[Baroness Randerson]

To ask Her Majesty’s Government what steps they are taking to modernise rail fares.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, the Government are taking steps to modernise rail fares, including making smart ticketing available for most journeys by the end of this year and requiring alternative, more flexible ticket products to be offered to part-time commuters through recent franchise competitions. We also welcome the industry’s plans to roll out the 26-30 railcard, while the rail review’s recommendations will support the delivery of a railway that is able to offer good-value fares for passengers while keeping costs down for taxpayers.

[Baroness Randerson (LD)]

My Lords, I welcome that progress so far but we are told that in the Budget there is to be £30 billion for roads, while there is no hint of relief for beleaguered train passengers. Does the Minister agree that the Government should abandon the RPI-related hike in regulated fares, which comes as an unwelcome annual new year gift, and maintain fares—at least until the efficiency of the railway improves—by freezing them at their current level? The Chancellor is apparently holding fuel duty for the ninth successive year. If he can freeze fuel duty, surely he can freeze rail fares.

[Baroness Sugg]

My Lords, I certainly do not want to predict what my right honourable friend will say in the Budget shortly but we are well aware that rail fares take a large part of people’s income. That is why we are capping fares in line with RPI for the sixth year running. We want to see fares linked with CPI in future but we do not think it is fair to ask people who do not use trains to pay more than those who do. Taxpayers already subsidise the network by more than £4 billion a year, meaning that 54% of our transport budget is spent on the 2% of journeys that the railway accounts for.

[Lord Watts (Lab)]

My Lords, the Government say that they have cheap rail tickets for young people and for old people. What about the hard-pressed people who are trying to get to work and paying extortionate rail fares?

[Baroness Sugg]

My Lords, we all want to see a fares system that delivers tickets at a reasonable price for everyone. The noble Lord rightly highlights the 26-30 railcard and the discounts for older people. We are looking at how we can make fares fairer. The Rail Delivery Group recently consulted on easier fares, looking at fare structures and ticketing to simplify things for passengers; it received over 20,000 responses and is currently analysing those findings. We look forward to seeing its report.

[Lord Naseby (Con)]

Will my noble friend clarify the situation? Her Majesty’s Treasury announced recently that for those of us who have savings certificates— many millions in the country—the interest on them is no longer to be done on the basis of RPI but CPI. Against that background, is it not sensible for Her Majesty’s Government to consider any rail increases based solely on CPI in the future?

[Baroness Sugg]

My Lords, as I said, we certainly want to move towards the more commonly used CPI measure of inflation but, to be sustainable, income and costs to the rail industry must change in parallel. We are seeing increasing costs across the whole network but for the sixth year running, as I said, we are capping regulated fares in line with RPI. The Secretary of State has written to the rail industry and the unions, asking for their help to move rail to CPI and reduce costs, so that those savings can be passed on to rail users and to taxpayers.

[The Lord Bishop of Winchester]

My Lords, the modernising of rail fares is one aspect of a range of changes needed in our rail service. The Transport Secretary has announced £1.3 billion of investment in spacious trains yet despite this there is still overcrowding, cancellation and delay. Staff operating train services are also unhappy and just last week, on the South Western Railway line that I use regularly, I am afraid that there were regular cancellations and further overcrowding. Can the Minister outline what action will be taken between now and the implementation of the rail review reforms in 2020 to address the urgent issues of rail cancellations, delays and significant overcrowding?

[Baroness Sugg]

My Lords, since privatisation, UK railways have seen a period of incredible growth and passenger journeys have more than doubled. The industry has not been able to keep up with that demand, which is why we are looking at the rail review. It will consider all parts of the rail industry, from the current franchising system to industry structures. That will not stop us continuing to invest in the meantime and seeing more trains with more capacity come on to our lines.

[Lord Rosser (Lab)]

As has been said, the issue is the level of fares. The Government’s line is that their annual new year present to rail users of a fare increase is to finance their rail investment programme. In fact, that is not the case. The reason for the Government’s high level of fare increases each year is to ensure that we remain the European railway network with the highest, or nearly the highest, percentage contribution towards the running costs of our network coming from fares paid by passengers and the lowest, or nearly the lowest, percentage from the Government. That is why our fares are so high. Will the Government confirm that in any new modernised rail fare structure that will unfortunately continue to be the position?

[Baroness Sugg]

My Lords, as I said, we are aiming to move from RPI to CPI. We are continuing with record levels of funding, with around £48 billion expected to be spent on the network from 2019 to 24, but rail fares will continue to play a role in delivering improvements. We are delivering the biggest rail modernisation for more than a century, and it is meaning faster journeys, longer trains, longer platforms and more seats.

[Baroness Ford (CB)]

Will the Minister say whether the Government have any plans to standardise rail fares for people with disabilities? At the moment adults with epilepsy, for example, have free rail travel in London but in many other parts of the United Kingdom they have to pay the full fare. I declare an interest as the national president of Epilepsy Action. Will any action be taken to standardise policy and make it more consistent across the country?

[Baroness Sugg]

I agree with the noble Baroness that consistency will be very important. The Rail Delivery Group is looking at how we can simplify fares. I will take the point the noble Baroness raised back to the department and will perhaps write to her.

[Lord Snape (Lab)]

My Lords—

--- Later in debate ---

[Lord Bradshaw]

The Minister said that fares for those from 26 to 30 will be reduced by one-third with the new young people’s railcard. This is an example of the industry at last realising there is such a thing as market pricing and elasticity of demand. Instead of having a tariff which fits everybody, it should fit the market.

[Baroness Sugg]

My Lords, I absolutely agree. This is an excellent example of industry and government working together to deliver a new product that will benefit passengers.

Railways Investment: North of England

Baroness Sugg Excerpts

Monday 29th October 2018 Lords Chamber

[Lord Greaves]

To ask Her Majesty's Government what proposals they have for new investment in the railway network in the north of England.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, through projects such as HS2 and Northern Powerhouse Rail, we are investing in the economy of the north by bringing its cities closer together and improving the region’s link to the Midlands and the south. Alongside an increase in funding for maintenance and renewals in 2019 to 2024, we have committed substantial funding for new enhancements to provide more capacity and improve journey times.

[Lord Greaves (LD)]

My Lords, but when improvements take place in the north, they run many months late and cause chaos. Meanwhile, the railways in the north of England are near breaking point. They are utterly congested, with tiny trains at peak periods often running late and too often not turning up at all. Do the Government not understand that people in the north are losing all confidence in the ability of the Department for Transport, based 200 miles away down here in London, to sort out our problems? Is it not time that the decision-making and resources to run our railways in the north were transferred to Transport for the North, which at least consists of people who live and work in the north and even use the trains?

[Baroness Sugg]

My Lords, I am sorry that that is the noble Lord’s experience. Between 2015 and 2020, the Government will have spent more than £13 billion improving and modernising northern transport, which is a record level of investment. However, I agree that passengers in the north have suffered unacceptable disruption and delay in recent times. We continue closely to monitor performance and, where operators are at fault, we will not hesitate to act. We have appointed Richard George, who previously served as the chairman of the board of many franchises, to oversee implementation and changes to improve the current situation in the north. On devolution of powers, we set up Transport for the North, which co-manages the Northern and TransPennine Express franchises alongside the Department for Transport as part of the Rail North Partnership, to ensure that decisions are taken in the north.

[Lord Alton of Liverpool (CB)]

My Lords, is the Minister aware that, even before the bungled timetable was implemented on Northern services, it had become abundantly clear that the project was in deep trouble? Up to 310 trains each day were then cancelled, the regulator concluding that nobody took charge. Why was it that nobody took charge? Who will be held responsible for those failures, and how will she build capacity in the north of England to ensure that this does not occur again?

--- Later in debate ---

[Baroness Sugg]

My Lords, we have commissioned the independent Glaister review to look into those issues. The interim report made clear that a key cause of the Northern Rail timetable disruption over the summer was delays to Network Rail’s engineering works, but I agree that there are lessons to be learnt, and we look forward to the final report so that we can act to improve matters.

[Lord Haselhurst (Con)]

My Lords, as a Yorkshireman and someone who represented a seat in Greater Manchester in the other place, I have been a consistent supporter of improved investment in rail infrastructure in the north. Does my noble friend agree that this cannot be done entirely without regard to key projects in East Anglia, particularly those affecting the Great Eastern and West Anglian lines, which are key to the region being able further to the contribution it makes to the national economy, which in turn directly and indirectly affects the north as well?

[Baroness Sugg]

My Lords, the new East Anglia rail franchise has seen £1.4 billion invested to deliver more carriages and faster, more frequent journeys in that part of the world. I very much agree with my noble friend that transport investment is indeed a wealth generator, and that is why we are investing record amounts in transport across the country. That is without taking into account any transport announcements we may hear from my right honourable friend the Chancellor in the Budget shortly.

[Lord Snape (Lab)]

My Lords, will the Minister reflect on the point made by the noble Lord, Lord Greaves, on the future resources and funding for Transport for the North? For that matter, will she look at the passenger transport authorities in other conurbations as well, which would also seek the same powers and funding as those enjoyed by Transport for London? After all, people travel on trains outside the Greater London area, whether or not Ministers and civil servants actually realise that.

[Baroness Sugg]

I can reassure the noble Lord that we are well aware that people travel on trains and use transport outside London. Our record on devolution is strong; we have established Transport for the North and have devolved significant powers to metro mayors across the country. That ensures that the north has more influence than ever on crucial decisions on transport investment. We have given TfN unprecedented powers to influence decisions on transport investment in the north and to set out the north’s unified strategic transport plan, which the Secretary of State must take into account.

[Lord Shutt of Greetland (LD)]

My Lords, to bring matters back to the north, the Minister mentioned Northern Powerhouse Rail. I have the feeling that the northern powerhouse is something akin to the American dream. Can we understand what it really means, and is there anything such as a route yet planned as to where it will go, which places may be served and when it may happen?

--- Later in debate ---

[Baroness Sugg]

My Lords, we are working closely with Transport for the North to help transform the economy of the north of England through Northern Powerhouse Rail. That will significantly improve the capacity, frequency and journey time. I can reassure the noble Lord that we are fully committed to Northern Powerhouse Rail. We have invested money into Transport for the North, and are looking forward to its business case which will be published at the end of this year, and which will set out details of routes and indeed costs.

[Baroness Neville-Rolfe (Con)]

My Lords, I have some very good experience of travelling by train in the north. However, does my noble friend agree that the pricing of rail tickets is very confusing—even making it difficult for our excellent parliamentary travel office? There are different levels of service and different interpretations, for example, relating to what represents “off-peak” in different franchise areas. Could new investment, whether in the north or elsewhere, include sorting that out?

[Baroness Sugg]

My Lords, I agree with my noble friend that we need to do more to simplify rail fares. I mentioned in the earlier Question the easier fares consultation carried out by the Rail Delivery Group. Train operators are obligated to sell the most appropriate fare available, but there is a wide range of tickets on offer and we have made a commitment to removing that complexity and the perverse pricing we sometimes see from ticketing. We would like to see online retailers give passengers much clearer information at the point of purchase and, as I said, we look forward to the findings of the RDG consultation.

Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2018

Baroness Sugg Excerpts

Monday 29th October 2018 Lords Chamber

Moved by

[Baroness Sugg]

That the draft Regulations laid before the House on 23 July be approved. Considered in Grand Committee on 24 October

Motions agreed.

Department for Transport (Fees) (Amendment) (EU Exit) Regulations 2018

Baroness Sugg Excerpts

Wednesday 24th October 2018 Lords Chamber

Moved by

[Baroness Sugg]

That the draft Regulations laid before the House on 19 July be approved. Considered in Grand Committee on 17 October.

Motion agreed.

Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2018

Baroness Sugg Excerpts

Wednesday 24th October 2018 Grand Committee

Moved by

[Baroness Sugg]

That the Grand Committee do consider the Civil Aviation (Insurance) (Amendment) (EU Exit) Regulations 2018.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, these draft regulations will be made under the powers conferred by the European Union (Withdrawal) Act 2018 and will be needed if the UK leaves the European Union next March without a deal. The regulations amend EU regulation 785/2004, which sets out insurance requirements for air carriers and aircraft operators, and the domestic legislation made to implement this regulation.

EU regulation 785/2004 requires air carriers and aircraft operators to be insured in respect of passengers, baggage, cargo and third parties and against other risks such as acts of war, terrorism, hijacking, acts of sabotage, unlawful seizure of aircraft and civil commotion. It also requires air carriers and aircraft operators to demonstrate their compliance with the minimum insurance requirements set out in the regulation and makes provision for exceptional situations where a failure of the insurance market means that carriers are not able to demonstrate that they are adequately insured in respect of all the risks specified in the regulation.

The withdrawal Act will retain in UK law EU regulation 785/2004 in its entirety on exit day. The draft instrument that we are considering makes the changes necessary so that the EU regulation continues to function correctly after exit day, alongside the domestic Civil Aviation (Insurance) Regulations 2005, which were made to implement the EU regulation. This is essential to ensure that the regulatory regime in place after exit continues to make the UK a safe place for passengers to travel by air.

The changes that the draft legislation makes are technical in nature. Both the risks against which air carriers and aircraft operators must be insured and the levels of insurance required, which are measured in special drawing rights—an international reserve asset created by the International Monetary Fund—remain the same.

To illustrate some of the proposed changes: they ensure that the scope of the retained EU legislation is correct so that it applies to “the United Kingdom” rather than,

“a Member State to which the Treaty Applies”,

and ensure that EU processes set out in the regulation, which will not apply to the UK after exit, are replaced with equivalent domestic processes. The EU regulation also makes provision for certain legislative functions. For instance, Article 7 sets out the minimum insurance cover in special drawing rights per accident for aircraft according to mass, and the EU regulation provides that the values in Article 7 may be amended where this is required as a result of changes to multilateral treaties, such as the 1999 Montreal Convention.

As the EU legislative procedure prescribed in the regulation will not apply to the UK once it has left the EU, this SI makes provision for the Secretary of State to amend these values by regulations if, and only if, required as a consequence of changes to international treaties. To ensure that any use of these powers is subject to appropriate scrutiny, we have provided that any such regulations must follow the affirmative resolution procedure and be approved by both Houses of Parliament.

We remain confident of securing an agreement on aviation with the EU. Across Europe, people benefit from liberal aviation market access, and we are focused on securing the right arrangements for the future so that our aviation industry can continue to thrive and passengers across the UK and the EU can continue to benefit from high levels of connectivity and choice. However, irrespective of the outcome of negotiations, it is crucial that we prepare our regulatory and legislative framework so that it continues to enable the UK’s aviation industry to operate safely and effectively in all scenarios. I commend these regulations to the Committee.

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate my noble friend on moving these regulations. I will take the opportunity to raise a number of personal concerns. I declare an interest in that when I was an MEP, I was Conservative spokesman for aviation in the European Parliament for a number of years, and at the time I met my husband, he was working for Delta Air Lines.

I imagine that the list my noble friend gave is not exhaustive, but there are increasingly incidents of drones—indeed, there has been a near miss. Is this currently covered by the EU legislation, and will that also transfer? Is this an opportunity that my noble friend and the Government may wish to look at in order to increase the cover? As I understand, there was a near miss involving a passenger aeroplane at a London airport, which would have had devastating consequences. I remember once looking at my insurance policy when I lived in a rented flat in Brussels, and one of the exclusions was from a plane falling from the sky. I wondered what the chances were of that happening, until a cargo plane did just that at Amsterdam airport, and the consequences were obviously absolutely devastating, not just for the passengers on the plane but for those in the apartments underneath.

I do not know whether this is the correct time to ask, but can my noble friend confirm that we will continue to have reciprocal cover, so that we will recognise the insurance cover of European carriers and other international carriers who use our airspace, emanating from EU airports? I understand that that is covered at the moment, but reading the specialist press, there seems to be some concern about whether this will carry on.

As my noble friend will be aware, there is deep concern among the airline industry, and no doubt airports as well, that we will continue to enjoy use of European airspace, and that our membership of EASA, the European Aviation Safety Agency, will continue. Does that fall within the parameters of these regulations or will my noble friend have another opportunity to update those of us who are concerned?

In her latter remarks, my noble friend said that the value of the insurance cover will continue to be reviewed. From memory, these values are set by either the Geneva or the Warsaw convention. Is my noble friend able to tell us when these values were last reviewed and whether in future we will continue to review the values of the insurance cover on a multilateral, reciprocal basis with our existing EU partners and others, such as Norway and Iceland, with which we will have reciprocal arrangements—I imagine that through the EEA they are already members of EASA—or is it the intention of the Government to do that on a bilateral basis? I believe that would be highly regrettable.

--- Later in debate ---

Does that mean that no passenger representatives were consulted, bearing in mind that this is about insurance?

[Baroness Sugg]

My Lords, I thank noble Lords for considering the draft regulations. Many questions have been asked and I will do my best to get through all of them, but if I do not I will follow them up in writing. As I have said, the regulations just make the changes necessary to ensure that the retained EU legislation setting out the insurance requirements continues to function properly. They do not change that legislation.

My noble friend Lady McIntosh asked about the level of insurance. The regulations do not change the prescribed level of insurance in any way. I agree with my noble friend that drones are a real threat and that is why we are taking action. We have brought in height restrictions and flight restrictions close to airports, but there is more to do on that. We will bring forward a draft Bill which will look at police powers, among other things.

Reciprocal cover on insurance is required under international treaties. That will continue to be the case. Our continued membership of EASA is a matter for negotiations, but we have made our position clear that it is in everyone’s interest that the UK should remain part of EASA. We have played a leading role in it and will want to continue to do so.

The noble Lord, Lord Berkeley, asked whom this insurance will cover. It will apply to all aircraft flying into the UK, including EU carriers, third-country carriers and UK carriers. Everyone who flies into the UK will be required to hold this insurance as a condition for their permit to operate in the UK. The noble Lord is right to point out the number of pieces of secondary legislation coming our way. There will be around 14 aviation SIs to get through.

[Lord Berkeley]

The noble Baroness mentioned international treaties. Will those need to be redone because we are leaving the EU or are they ones to which the whole world is signed up and so there will be no change? In other words, did we sign up to them or did we sign up to them through the EU?

[Baroness Sugg]

We signed up to the international treaties as a member state—as the UK—so we will not need to rejoin them. Obviously, EASA is a separate group of which we are a member as part of our membership of the EU, but we have signed up to the Montreal convention, for example.

Regarding the member states negotiations mentioned by noble Lords, sadly I have not been on a Europe-wide trip negotiating bilaterally with member states. We are working closely with the Commission on agreeing a liberal deal, and that kind of multilateral level agreement is our primary objective. We want to be as ready as we can be for when we leave the European Union, and so the noble Lord was quite right to point out that we have approached member states, but our preference would definately be a multilateral deal on that.

Turning to the questions from the noble Baroness, Lady Randerson, regarding the minimum level required and how low we could go. Just to be clear, it is not about reducing cover in any way. Article 7 sets out the minimum insurance for special drawing rights and that is carried across, so we will still have that same minimum level. I can assure all noble Lords that the amendments to regulations will be made only in response to an international treaty change.

[Baroness Randerson]

Can I ask for a little more clarification on that because the Minister said in a previous answer that these regulations are not changing the prescribed level of insurance in any way. Yet by freeing ourselves from the EU prescribed level, is it not up to us if we wish to change the level? I am happy to accept the Minister’s assertion that the Government have no plans to do that, but would these regulations enable the Government to change the prescribed level if they wished to in the future?

[Baroness Sugg]

I think with all the SIs we are doing, we are literally transcribing EU law into UK law and treating it the same way, as the UK, as we would as a member of the EU. I think any change of policy in the future is not going to be part of these SIs, it would be done as a separate policy decision and debated in the normal way in both Houses. All these SIs are specifically correcting deficiencies which will exist after the withdrawal Act to ensure we have the correct regulatory frameworks. They are not changing; any changes to the minimum requirements would be done if and only if there is a change to international treaties. Some of these SIs do have executive functions which are being carried across; that is why we are giving the reassurance that any time an executive function is used, it will be in the affirmative way.

I will say more about the minimum insurance cover as several noble Lords have mentioned it. Article 6.1 gives member states the power to set a level of minimum insurance cover in respect of the liabilities for passengers, baggage and cargo, and that is lower than 250,000 special drawing rights per passenger for non-commercial aircraft with a maximum take-off mass of 2,700 kilograms or less. In answer to the question asked by the noble Baroness, non-commercial just means that no money has changed hands for the flight. That applies primarily to light and experimental aircraft, and cover must be at least 100,000 SDRs per passenger. The UK has exercised that power, as have other member states, and set the lower minimum of 100,000 SDRs within the Civil Aviation (Insurance) Regulations. This SI does not give us an option to set it lower—not that we would want to—it just carries across the minimum level. I hope I have assured noble Lords that this is not an attempt to change that in any way. We have no intention of doing so.

In answer to questions on airspace, this is not dealt with in the same way as an air services agreement; it is an International Air Services Transit Agreement which accompanies the Chicago Convention. Almost all EU member states are separate signatories to an IASTA, meaning they allow overflights and will continue to do so whether or not we are a member of the EU. On the devolved Administrations, obviously aviation is primarily a reserved matter and civil aviation insurance is fully reserved in respect of all three devolved Administrations, but of course we are continuing to engage with them on all aviation matters.

There were a couple of questions from the noble Lord, Lord Rosser. I think the last exceptional failure of the insurance market was in response to 9/11. We are working closely with passenger representatives throughout the development of our position on EU exit and aviation in preparing these SIs.

[Lord Rosser]

If the Government are having discussions with passenger representatives, why did it not say so in the consultation outcome paragraph?

[Baroness Sugg]

I apologise that it did not. I will be looking at what we say in the consultation paragraphs in future to ensure that there is proper information to give assurance to noble Lords. I personally, my officials and indeed the Secretary of State regularly meet with industry and passenger interest groups to ensure that we are getting this right as we leave the European Union.

As I say, I hope I have answered the majority of questions. I apologise if I have missed any but there were quite a few, so I will follow up in writing. As I have said, we remain confident that we will reach an agreement with the EU, but of course it is important that we prepare our legislative framework in case we leave the EU with no deal. That is what this SI is doing. The regulations do not make any changes to the substance of the insurance requirements that air carriers and aircraft operators are expected to meet, but they are essential to ensuring that the retained EU legislation which sets out these requirements continues to work effectively in the UK immediately after exit day. That is what these SIs are designed to do. We need to ensure that we have the right regulatory and legislative framework to provide passengers and industry with choice, connectivity and value for money irrespective of the outcome of the negotiations. I beg to move.

Motion agreed.

Merchant Shipping (Monitoring, Reporting and Verification of Carbon Dioxide Emissions) (Amendment) (EU Exit) Regulations 2018

Baroness Sugg Excerpts

Wednesday 24th October 2018 Grand Committee

Moved by

[Baroness Sugg]

That the Grand Committee do consider the Merchant Shipping (Monitoring, Reporting and Verification of Carbon Dioxide Emissions) (Amendment) (EU Exit) Regulations 2018.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, the draft regulations that we are considering will be made under powers in the European Union (Withdrawal) Act, and are needed if the UK leaves the EU in March without a deal. The regulations will amend EU regulation 2015/757 on the monitoring, reporting and verification of carbon dioxide emissions from maritime transport. The effective monitoring and reporting of carbon dioxide is an important step towards achieving a more environmentally sustainable shipping sector. The emissions data gathered will help the international community to develop more effective measures to reduce greenhouse gas emissions from ships.

The EU regulation established rules for monitoring, reporting and verifying CO₂ emissions from ships above 5,000 tonnes that make voyages starting or finishing in a port in an EU member state. Shipping companies have already prepared monitoring plans and have been collecting data since 1 January this year. Ships within scope are required to carry a valid document of compliance from 30 June 2019. The EU regulation applies only to ships visiting ports that are under the jurisdiction of an EU member state. Currently, it would therefore cease to have effect when the UK leaves the EU.

The changes made in the regulations are therefore necessary to ensure that the monitoring, reporting and verification requirements of the EU regulation continue to apply to ships serving UK ports. If we failed to correct the EU regulation, ships calling at EU ports would still need to report under the EU system but those trading between the UK and non-EU ports would not need to report. Not only would this create an uneven playing field between companies but the evidence on greenhouse gas emissions would be weakened.

The UK is a strong supporter of global action to tackle climate change. In April this year we helped lead a high-ambition coalition to secure agreement at the International Maritime Organization on an initial strategy on greenhouse gas emissions. That included an historic first emissions reduction target for ships of at least 50% by 2050, which is an important step forward in tackling emissions from international shipping, one of the last major sectors not to have an emissions reduction plan.

--- Later in debate ---

Let us take the reference to business. If we do not yet know what this revised reporting regime is going to be, how can we assert so confidently that there is no significant impact?

[Baroness Sugg]

My Lords, I thank noble Lords for their consideration of these draft regulations. Again, I will endeavour to answer as many questions as I can; those that I cannot, I will follow up in detail in writing. Shipping, like other modes of transport, has a responsibility to control emissions. That is what we are doing with this SI, which replicates the current EU regulations.

My noble friend Lady McIntosh and the noble Lord, Lord Berkeley, asked about monitoring and enforcement. I will go through the main requirements of the current regime. By August 2017 ship owners had to send the monitoring plan for their vessels to an approved verifier. That plan includes information such as the fuel consumption of the ship and how it will be monitored. It will be done in many different ways. The noble Lord described an interesting way of monitoring, which I had not come across. It will be up to the owners of vessels to explain how they are doing the monitoring and to get that approved. From January this year, ships have had to collect CO₂ data on their voyages for the calendar year. That data is collected and recorded separately for each voyage. By 30 April 2019 ship owners must submit their accumulated yearly data to the verifier. By 30 June each year after the reporting period, the document of compliance for the ship will be issued by the verifier and will be valid for 18 months from the reporting period.

[Lord Berkeley]

I am grateful to the Minister for her explanation. Can she explain who they submit these documents to?

[Baroness Sugg]

Yes, absolutely. They are issued by the independent verifiers and then checked by the MCA. On compliance and enforcement, the existing regulations bring in fines if people fail to comply. That also allows for the detention of non-compliant ships that come into UK ports. Inspectors from the Maritime and Coastguard Agency will ensure that ships have the correct documentation and will do the enforcement on UK-flagged ships. Other ships using UK ports will also be liable for inspection as part of the port state control regime. Non-compliant ships can be detained and their owners prosecuted via the courts and fined. The enforcement will stay the same, it will just be done under the UK regulation rather than the EU regulation.

I hope I have answered the point made by the noble Lord, Lord Teverson. Rather than it being about greenhouse gas emissions or carbon, it is about the fuel consumption and reducing that over time.

[Lord Teverson]

I am trying to understand whether this is about just carbon dioxide monitoring or greenhouse gas monitoring because if it is just carbon, it is not compatible with UK carbon budgets, which include national shipping. There is a big difference. It seems a fairly straightforward question to me—yes or no? The Minister is welcome to write to say yes or no.

[Baroness Sugg]

I probably will have to write to the noble Lord with details on that. The current monitoring system is about fuel consumption by vessels. When collated, that information will help inform future policy on the reduction of emissions, which will obviously cover greenhouses gases and carbon. I will take up the noble Lord’s offer of writing to him in detail on that.

The noble Lord also asked about the documents of compliance. We want to ensure that the MRV system works as smoothly as possible after we leave the EU so we have taken the decision to recognise all EU MRV certificates issued by other member states as being equivalent to our own. We have the capacity to issue our own but we have already stated that we will recognise those from member states and we hope, of course, that the EU will mutually recognise ours.

We will also ensure that there is no duplication of reporting for ships travelling between the UK and EU states. If a ship notifies us that it has submitted all its verified voyage data to the EU we will not require it to provide us with a duplicate report. We are trying to minimise the burden on businesses as we leave the EU.

[Lord Teverson]

I thank the Minister and I will not intervene again. I welcome the fact that we will recognise EU documentation. That is an excellent decision that will reduce bureaucracy. Do we need to invent a new IT system ourselves and have we managed to do that? I suppose that that is the key point here.

[Baroness Sugg]

No. We already have the ability to issue these certificates so a new system is not needed.

Reference was made by the noble Lords, Lord Teverson and Lord Rosser, to expulsion orders. It is not the Government’s policy to ban or exile ships from a port unless there is an immediate risk to safety, as both noble Lords said. Neither of those conditions would apply to the requirements under this regime. It is a reciprocal requirement that will no longer be relevant when we are not a member state. There will be a practical problem in that when we exit the EU, there is no requirement under the European regulations to notify non-EEA states that a vessel has been banned from an EU port. There is actually no mechanism if we leave without a deal either for us to tell the EU or vice versa. That is why it has not been replicated. However, there is no reason why we cannot share data in the future. As we made clear in the White Paper, it is in our interests and those of the EU that we should continue to co-operate through the EMSA. However, that will be subject to negotiations.

The question of reporting was raised in the other place and I will certainly forward the letter from my honourable friend Nusrat Ghani on this to the noble Lord, Lord Rosser, and others. On the assessments of the impact of the maritime sector on carbon dioxide, we have not retained the paragraph on that in the draft regulations because that obligation applies specifically to the European Commission rather than to member states or to the UK in particular. It is necessary for the effective functioning of the MRV system, so the Secretary of State has taken over responsibility for what was previously held by the Commission. There will be an obligation on the Secretary of State to publish the results of the CO₂ data which we will receive annually from ships in much the same way as the Commission will be doing with the other 27 member states. We will just be taking on the responsibility to publish the data, which obviously will be made available to all those who are interested in it.

Under our domestic legislation, the Secretary of State would not be required to conduct a similar biennial review of the impact on the global climate. The fact that it is not in retained EU legislation of course does not preclude us from undertaking such a review and we are keen to maintain our position of leading the way in this area. I have already spoken about our leading role in the agreement with the IMO in April.

The noble Lord, Lord Rosser, mentioned the IMO system which will take effect on international voyages from 1 January 2019. The systems are very similar in that they both apply to vessels of 5,000 gross tonnes and over, but there are a few differences. The European regime which we are carrying over applies only to voyages undertaken to carry passengers and cargo for commercial purposes rather than other maritime activities such as dredging. It requires more information such as on the cargo being carried by the vessel and more transparency in terms of disclosing data. It also includes a more robust verification process. Ideally, we want to see the IMO and EU systems become aligned while maintaining the environmental integrity of the overall scheme. That is something that we will continue to work on with our international partners in order to achieve it going forward. However, as I said in my opening remarks, at the moment we are allowing the systems on UK-flagged vessels to collect the data so that they are able to report to both systems easily enough.

I hope that I have covered the points which were raised, but if I have not gone into them all in detail, I will certainly write to noble Lords. I hope that noble Lords will agree that the objective of the regulations, which is to maintain an effective regime to monitor emissions from ships, is the right thing to do.

Motion agreed.

Department for Transport (Fees) (Amendment) (EU Exit) Regulations 2018

Baroness Sugg Excerpts

Wednesday 17th October 2018 Grand Committee

Moved by

[Baroness Sugg]

That the Grand Committee do consider the Department for Transport (Fees) (Amendment) (EU Exit) Regulations 2018.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, these draft regulations would be made under the powers conferred by the European Union (Withdrawal) Act. They form part of the work being done to adjust our existing legislative framework in readiness for our leaving the European Union. The draft regulations, if approved, will make amendments to three Department for Transport fees orders to correct deficiencies in the orders arising from the withdrawal of the United Kingdom from the EU. This will be done by removing references to the Secretary of State carrying out functions to comply with EU law. Those functions will continue but under domestic law rather than EU law.

The fees orders themselves do not set fees, nor do they amend, raise or lower fees. They set out in secondary legislation the matters that can be taken into account when setting fees for delivery of the functions specified in the orders. For example, for any of the functions prescribed in the orders, account can be take of the proportion of the cost in providing staff, premises, equipment and facilities that are attributable to the carrying out of the relevant function. The actual fees for the functions listed in the orders, such as for driving licences, are contained in other secondary legislation. Generally, before any change can be made to the fee level in that other legislation, the Minister must first have the agreement of the Treasury, then conduct a consultation with representative organisations of those affected and consider the impact on stakeholders. The Minister must take account of that impact in deciding whether to proceed. Only after this process has been followed can the SI to change the fee be laid before Parliament.

The functions contained in the fees orders are all in the areas of road vehicles and drivers. They are carried out by three of the Department for Transport’s executive agencies: the Driver & Vehicle Standards Agency, the Driver & Vehicle Licensing Agency and the Vehicle Certification Agency. The functions that are relevant to the draft regulations are: driver licensing, vehicle registration, international road haulage permitting, vehicle type approval certification, the approval of tachograph calibration centres, international road passenger transport authorisation, licensing to operate public service vehicles, licensing to operate goods vehicles and, lastly, enforcement against UK and non-UK drivers and vehicles that break the law on these matters. The fees orders relate to both EU and domestic law, and the regulations before the Committee are concerned only with amending the EU-related aspects of the orders.

In conclusion, the amendments contained in this instrument are to ensure that the fees orders recognise EU exit but otherwise maintain the status quo. I commend the regulations to the Committee.

[Lord Berkeley (Lab)]

My Lords, I am grateful to the noble Baroness for outlining these regulations with such brevity and clarity. I have a couple of questions, though. As she said, they cover international agreements, driving licences, vehicle registration, public service vehicle operation and licences to operate goods vehicles. I believe we have added licences for trailer operation, or something, which we discussed in some legislation—I cannot remember its name now—a few months ago.

The Minister mentioned non-UK drivers. Does this change mean that the charges are going to go up? Did the European Union previously have any control or oversight or a role in setting these charges? It is always very easy to say that the costs of doing it are going up. There may have been some control or advice from Brussels as to how these things should be assessed and charged.

Lastly, the noble Baroness mentioned that there might be some changes to the licences of non-UK drivers. The impression I get is that licences from other member states will no longer be valid in this country. How do drivers get new licences and are they going to be charged a rate seen by most people to be reasonable—or is it going to be one of these Home Office ones that make you pay £500 to try to dissuade you from coming? I hope it is the former and not the latter. I look forward to the Minister’s comments.

--- Later in debate ---

[Lord Rosser (Lab)]

I thank the Minister for explaining the purpose and content of the SI, which we will not oppose. In the light of concerns that have been expressed about the possible effect on fees in future and other possible impacts, will the Minister gives us some clarification on the consultation? Paragraph 10 of the Explanatory Memorandum states:

“A consultation is not considered necessary as the amendments are minor and technical in nature and do not impact upon either business or the individual”.


Does that mean that there has been literally no consultation, or have some bodies or organisations been consulted? If so, which organisations or bodies have been consulted about this SI and its contents?

As the Minister said, the regulations amend the Department for Transport’s fees orders covering the road traffic field. Fees orders do not set fees but specify functions and their costs which may be taken into account in setting fees. These regulations amend those orders by removing references to the Secretary of State having functions to carry out to comply with EU obligations or requirements on the basis that we are withdrawing from the European Union. Those functions referred to in the fees orders will no longer be carried out under EU legislation but will continue to be carried out by the Secretary of State under domestic law as provided for by the European Union (Withdrawal) Act 2018. As the Minister said, the functions currently carried out by the Secretary of State under EU legislation are those relating to international road haulage permits, type approval certification, tachograph calibration centres, international road passenger transport authorisations, driver licensing, vehicle registration, licences to operate public service vehicles and licences to operate goods vehicles.

The SI relates to a situation where we have withdrawn from the European Union. It would appear that it covers a no-deal situation and our intended departure on 29 March next year. What is the position if there is a deal approved by Parliament and that deal entails a transition period with continued membership of the customs union and/or the single market for an unspecified time or other provisions that do not provide for a clean break on 29 March next year? What is the need for this SI in that scenario? We may not in reality have withdrawn from the EU because we would still be bound to accept that some or all of its legislation applies to us. We would not be able to alter it unilaterally and we would also be bound by any subsequent amendments made to that legislation by the European Union pending our full withdrawal.

What then would be the relevance of an SI, such as the one we are now considering, coming into effect on 29 March next year, which asserts in paragraph 2.4 of the Explanatory Memorandum:

“The relevant EU related functions specified by the Fees Order will, after EU exit, no longer be carried out in pursuance of EU legislation”,


when, if there is a deal, these functions could have to be, including to the extent, for a possible period of time unknown, that we would also have to abide by EU legislation that was further amended by the EU without our agreement? Would it not be better, with a decision on a deal apparently close, to withdraw this SI and wait until we know whether there is a deal and, if there is, produce an SI which reflects the reality and terms of that deal? It is, after all, not the fault of this House if the Government are having difficulty adhering to their intended timetable for progress in negotiations with the EU, as appears to be the case. It would be helpful if the Minister could spell out what the impact of a deal with a transition period could be on the provisions and relevance of this SI, and whether during the transition period agreements could be reached or arrangements made that could have an impact on the terms and relevance of this SI.

I turn to one other point. The Haulage Permits and Trailer Registration Act gave the Secretary of State the power to introduce regulations to charge fees for international road transport permits if a new permit scheme is required, as UK-issued Community licences will no longer be valid in the EU if we leave, unless an agreement is reached otherwise. The Government have previously said that any permit fees would only cover the cost of any new scheme and that the detail on fees would be consulted on later in 2018 when the outcome of the negotiations was clearer. Has the consultation started, or has the lack of clarity at the moment over how the negotiations with the EU will end precluded the commencement of the consultation?

Since an issue of concern is that hauliers or taxpayers will incur additional costs if a new scheme is required, does that not underline the importance of continuing with the Community licensing system? Once again, would it not therefore be better to be discussing this SI once the outcome of the negotiations was clearer and the SI itself could reflect that outcome? The SI is not intended to come into force for another five and a half months, yet we are being asked to agree to it now when it is not clear to what extent we will or will not be continuing to follow EU legislation, including any subsequent amendments to the legislation, after the SI is intended to come into effect on 29 March 2019.

[Baroness Sugg]

My Lords, I thank noble Lords for their consideration of these draft regulations. As the noble Baroness said, I am afraid they are the first of many EU exit transport regulations. The purpose of these regulations is indeed to make minor and technical amendments to the three pieces of legislation that we are discussing, by amending the language used to take account of EU exit, but otherwise to maintain the status quo.

As I said in my opening remarks, the regulations themselves do not set, raise or lower fees. The fees orders are supplementary to existing powers that the Secretary of State has in other legislation, and that other legislation sets the fees. The regulations do not in any way extend the powers of the Secretary of State or relate to a change in the fees.

I turn to the questions that were asked. The noble Lord, Lord Berkeley, mentioned the Haulage Permits and Trailer Registration Act, as did the noble Lord, Lord Rosser. We have consulted extensively with the industry on that and we will be discussing the regulations under that Act soon. There is a government response to the consultation, which I will forward to the noble Lord, explaining where we are on fees. We will be discussing that soon.

As I said, the regulations do not set or change the fees themselves but merely set out what can be taken into account, so charges absolutely will not go up. There has been a role for the EU Commission in setting the charges in the past but there will not be after exit.

For the non-UK driver—an issue raised by the noble Lord, Lord Berkeley—EU driving licences will continue to be recognised in the UK post Brexit, as set out in some of our recent technical notices, so the charges for getting a GB driving licence will not change.

On the question of devolved Administrations, which the noble Baroness, Lady Randerson, mentioned, we are working closely with them throughout our entire SI programme—obviously more so on some which are directly relevant than on others, but on every one we are working closely with them. Some of the fees orders’ functions are GB-wide—for example, driving licences, as Northern Ireland has its own regime and its own legislation to set its own fees—while others relate to the whole of the UK.

[Lord Berkeley]

The Minister mentioned that driving licences from EU member states will still be valid. That was in the technical note and I should have mentioned it; I am sorry. What about licences for vehicles? Are we involved in quotas and the like? If so, how would that work? Will a Bulgarian vehicle need a licence to operate in the UK?

[Baroness Sugg]

That is very much subject to negotiations. We hope to agree a mutually beneficial deal with liberalised access to continue as it is for haulage firms. Bilateral permits exist. In the event of no deal, we will work bilaterally with the countries involved to agree permit systems. We are very keen to pursue continuing the access that we have at the moment, which would be reciprocal. That is what we are working towards.

The noble Baroness is quite right that many of our goods are moved by small businesses and we are reliant on them for that. I agree that an increase in charges would adversely affect them but, as I said, the regulations do not change the fee or regulate businesses. The fee orders determine what the Secretary of State can consider rather than regulate small businesses. That is why it is noted as such.

The noble Lord, Lord Rosser, asked about consultation. We are working closely with all our transport stakeholders on the Brexit regulations. We have spoken to them about all the different SIs. This SI will not affect stakeholders. All it will do is remove the obligation on the Secretary of State to take note of the European Union.

On the impact of a deal, which we are all working hard to achieve, the SI will come into force on exit day, which is defined in the withdrawal Act as 29 March 2019. Ultimately, the coming into force of the SI will depend on the outcome of the EU negotiations and any new legislation arising from that outcome. If the UK reaches a withdrawal agreement with the EU, that agreement is expected to provide for an implementation period. We have announced that in that event, we will introduce to Parliament a European Union withdrawal agreement Bill as a primary means of implementing the agreement. Exit day would remain 11 pm on 29 March 2019 but the coming into force of the SI may be reviewed and delayed until the end of the implementation period. The SI may not be needed, but it is part of our readiness work, as are the SIs to come, which we strongly believe we should be doing as a responsible Government. Noble Lords are aware of the number of upcoming SIs and the limited parliamentary time, so we will spread them out between now and exit day to get through them. Obviously, if a deal is reached and an implementation period is agreed, that will affect that.

[Lord Rosser]

Can the Minister say something about what is said in the regulations under “Citation and commencement”? She said that the regulations will come into force on exit day. We have been told repeatedly by the Government that we will exit the European Union on 29 March next year, but I sense from what she just said—I am sure that she will correct me if I am wrong—that the reference to exit day may not apply to 29 March 2019 if a deal is done, so the Government accept that we may not withdraw from the European Union on that day. Is that the Government’s position?

[Baroness Sugg]

As I said, exit day will remain 11 pm on 29 March 2019. When this SI comes into force is currently defined in the withdrawal Act but should a deal be reached where we get a withdrawal agreement, the implementation day of the instrument could change through the subsequent Bill that the Government will bring forward to implement the withdrawal agreement in UK law.

[Lord Rosser]

I am not sure whether the Minister has responded to my point, but I asked whether there was any possibility that during the transition period, agreements could be reached or arrangements made that could have an impact on the terms and relevance of the SI. Is it the Government’s position that even if there is a transition period, nothing will happen then that could have an impact on the relevance of anything in this statutory instrument?

[Baroness Sugg]

The expectation is that with the withdrawal agreement we will have an implementation period. During that period we would be covered by current EU laws and therefore this secondary legislation would not come into effect. Obviously I cannot give a guarantee of that because we do not yet know the outcome regarding the withdrawal agreement and it has yet to pass through Parliament, but the expectation is that during the implementation period we would continue as we are and the SI would not come into force until the date agreed through the withdrawal agreement Bill that will be coming through the House.

[Lord Rosser]

Is the Government’s position that in any discussions during the transition period nothing would be agreed that might have an impact upon the relevance of this SI and necessitate it being altered, other than its effective date?

[Baroness Sugg]

I am afraid I am not able to give a definitive answer to the noble Lord’s question. As I said, we have yet to agree a transition or implementation period with the EU. As we do not know those terms, I am not able to answer the question. However, our expectation is that throughout that period we will continue as we are, so this SI would not come into effect until a date set out in the EU withdrawal agreement Bill.

I take the noble Lord’s point that the negotiations and discussions on that agreement are ongoing, and the outcome of those may of course affect what we do in future. However, due to the number of regulations that will have to be discussed in order to ensure that our statute books are fit for 29 March should we not reach an agreement, we think it is the responsible thing to do to keep going with this programme and start these discussions between now and exit day.

I reiterate that the detail around the delivery of the specified functions and the prescription of the fees that can be charged for delivery are set out in other legislation. Making this proposed instrument would merely enable the continuation of the current fee-setting process by removing references to the EU after we leave, so things would absolutely continue as they are.

Motion agreed.

HS2: Budget and Costs

Baroness Sugg Excerpts

Tuesday 24th July 2018 Lords Chamber

[Lord Berkeley]

To ask Her Majesty’s Government when they intend to update the cost estimate and business case for HS2 Phase One.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, HS2 cost estimates and business cases are periodically updated as the scheme design is progressed to ensure that the scheme remains affordable and viable. HS2 Ltd is currently developing an updated phase 1 cost estimate, to be finalised prior to the completion of the phase 1 full business case accompanying the authorisation of notice to proceed in June 2019. The Government remain confident that the phase 1 cost estimate will remain within the SR15 funding envelope of £27.18 billion.

[Lord Berkeley (Lab)]

My Lords, I am grateful to the noble Baroness for that Answer. It is good that HS2 is regularly updating its budget, but it is a pity that no one knows about it. The last public budget given was in 2013, which is five years ago. Since then, we have had reports of the land purchase costs going £2 billion over budget and well behind, while a report in the Sunday Times last weekend by the consultant to the Infrastructure and Projects Authority using Treasury figures said that the project is up to 60% over budget and was in a “precarious” and “fundamentally flawed” position. Many other reports have also cited increased costs and delays. How can Ministers go on saying that they do not recognise the figures that are coming from all these different sources? Indeed, the Minister has almost repeated that today. Is it not time that we had a review of this project in costs and programme terms, because spending £100 billion with no budget for five years is surely not a good use of public money?

[Baroness Sugg]

My Lords, I thank the noble Lord for his question, and I greatly respect his lifetime of experience in the rail industry. I am also grateful for the noble Lord’s continuing scrutiny of HS2. As I have said, we continually update the cost estimates, but we do not share the details of those estimates as they are commercially sensitive. However, the headline figures will inform the business case as published in 2019. I understand that the article in the Sunday Times was based on an end-of-role report from a few years ago, and of course we do not comment on leaked documents. HS2 does not recognise or agree with either the analysis or the figure it contains, while the Infrastructure and Projects Authority recently described the HS2 programme as on target to be completed on time and on budget.

[Lord Framlingham (Con)]

My Lords, can I beg the Minister to do all she can to persuade the Government to abandon this insane vanity project? It is causing misery to thousands of people along the proposed route whose lives it is damaging. It is cutting great swathes through our environment, including damage to ancient woodlands up and down the country. All the billions it is costing would be much better spent on improving the whole of the railway network throughout England and Wales to the benefit of many people.

[Baroness Sugg]

My Lords, what is needed is a step change in railway capacity, and HS2 will deliver this way beyond what would be delivered by improving existing lines. I am afraid to inform my noble friend that the Government are committed to delivering HS2. It remains on track, with strong cross-party support. The new railway line will bring huge economic benefits that will be felt across the country.

[Lord Adonis (Lab)]

My Lords, I hope that the Minister will stand by HS2 as one of the great things that is happening in the country at the moment. In this dismal decade of Brexit and austerity, two of the shining lights that people will remember are the Olympic Games and HS2. One of the leading figures responsible for delivering both of them is Sir David Higgins, who will stand down as the chairman of HS2 Ltd at the end of this month. Will the Minister convey to Sir David the thanks of this House and the country for his brilliant work on our behalf in helping both to deliver the Olympic Games and to equip us with 21st century infrastructure? It is about time, after the intervening 20th century, that we started to mirror once again the great achievements of the Victorians.

[Baroness Sugg]

My Lords, I pay tribute to the part that the noble Lord played in HS2. I will certainly pass on his good wishes to the outgoing chairman. This is one of the biggest infrastructure projects that our country has ever seen. Eventually, more than 100 million people are expected to use HS2 trains when the network is fully completed.

[Baroness Randerson (LD)]

My Lords, Sir Terry Morgan is the new chair of HS2, following a very efficiently run spell at Crossrail. Could the Minister confirm whether Sir Terry’s remit includes a complete review and reassessment of existing HS2 plans in view of the doubts that are being expressed about the cost envelope?

[Baroness Sugg]

My Lords, I am sure that the incoming chair will absolutely look at the details of the project very closely. As I said, HS2 is preparing a full business case, which will be the robust and comprehensive assessment of the scheme. That will inform the next phase of the project, when we assess whether it is correct to continue.

[The Lord Bishop of Leeds]

My Lords, would the Minister agree that there is a problem if you can get up north 20 minutes quicker but you cannot get anywhere once you get there, and that any business case will have to take on board massive infrastructure improvements in the north of England?

[Baroness Sugg]

My Lords, I very much agree. Of course HS2 will benefit the north, but we are also looking at the connectivity of rail across the north and working closely with Transport for the North to deliver that.

[Baroness Young of Old Scone (Lab)]

My Lords, in view of the escalating size of the HS2 costs and considering what we hope will be today’s publication of the new National Planning Policy Framework giving increased protection for ancient woodland, will the Minister commit to the minimal cost—peanuts, indeed—of the Whitmore tunnel, compared with the total scale of the project, to reduce by 60% the destruction of ancient woodland by HS2 phase 2a?

[Baroness Sugg]

My Lords, in phase 1 we are creating nearly three times as much new woodland compared with the non-ancient woodland affected by HS2. Ancient woodland is, of course, irreplaceable. To compensate for that loss, we have committed to using best-practice measures such as enhancing linkages between woodlands, reusing the ancient woodland soils and creating new mixed deciduous woodland alongside the track.

[Lord Cormack (Con)]

My Lords, my noble friend has made a splendid debut in her job, but I wish that she did not have to defend the indefensible. Will she please consider the enormous cost of this cost envelope, tell the House how many jobs are being provided and spend the summer reflecting on the wisdom of this vast project?

[Baroness Sugg]

My Lords, as I said, we are confident that phase 1 will be delivered within a funding envelope of just over £27 billion. During construction, HS2 will generate 25,000 jobs and 2,000 apprentices. It will also support growth in the wider economy, which will be worth an additional 100,000 jobs.

Railways: CrossCountry

Baroness Sugg Excerpts

Wednesday 18th July 2018 Lords Chamber

[Lord Beith]

To ask Her Majesty’s Government what steps they are taking to ensure that the Cross Country rail franchise, when re-let, continues to provide regular services to stations north of Newcastle.

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Sugg) (Con)]

My Lords, the Department for Transport launched a public consultation on 7 June to seek views on the CrossCountry rail franchise and to identify options for improvement. We will consider the responses fully before making any decisions on that route but, as stated in the consultation, there will be at least one CrossCountry train per hour north of Newcastle, to Edinburgh or beyond. The options for intermediate stops to stations north of Newcastle form part of the consultation.

[Lord Beith (LD)]

Does the noble Baroness realise that CrossCountry is a key provider of train services from Berwick, Alnmouth and Morpeth, leading to 475,000 passenger journeys a year? Does she recognise that there are worrying suggestions in the consultation document to which she referred of,

“fewer calls at some stations”,

and fewer trains between York and Edinburgh? In his foreword, the Secretary of State states that his priority is to reduce crowding. Will he do that with longer trains, or by telling people in Northumberland to get into their cars while the trains whizz through the stations without stopping?

[Baroness Sugg]

My Lords, the consultation does indeed ask for passenger views around the stops that the noble Lord mentioned, as for other intermediate stops across the country. We want to address overcrowding, which will be done through additional rolling stock but there are other ways to look at that too. Of course passengers have conflicting demands: some will want quick express services and others will want a stopping service to get around locally. The point of the consultation is for passengers to tell us what they want from that service. I certainly do not want to alarm the noble Lord or the people of the north-east. I know how much the services are valued, and of course passenger views will be properly reflected before setting the minimum requirements for the new operator.

[Baroness Randerson (LD)]

My Lords, the railway in the London area is very congested, in terms both of routes and of the trains themselves, as we all experience on a daily basis. Does the Minister agree that it is vital that CrossCountry routes that bypass London should be not just maintained but strengthened? The idea of reducing CrossCountry services is totally counterproductive. I am sure that she agrees that the Government do not wish to be known as Beeching mark II.

[Baroness Sugg]

My Lords, I certainly agree with the noble Baroness on that. Part of the problem is the increasing demand from passengers travelling into London on our railways. We want to ensure that the CrossCountry service continues to provide other options for passengers so that they do not have to travel into central London.

[Lord Clark of Windermere (Lab)]

When the CrossCountry franchise is considered, will the Government ensure that the company winning the bid has sufficient trains and, more importantly, sufficient drivers and guards to run those trains, unlike Northern in Cumbria?

[Baroness Sugg]

My Lords, as I said before, one of the things we will be expecting the new franchise operator to deliver is more rolling stock, to deal with overcrowding. I say from recent experience that we will be looking closely at the train drivers that it has available.

[Lord Lexden (Con)]

Will my noble friend do her best to ensure that rail services to Lincoln remain as good as possible, so that we can all take up the invitation given to us recently to visit my noble friend Lord Cormack and take up the lavish hospitality I know he wants to give us?

[Baroness Sugg]

My Lords, it is unexpected to get a question about Lincoln from other noble Lords. I reiterate that the Government are looking forward to the new service to Lincoln and I welcome my noble friend to join my other noble friend on its maiden voyage.

[Lord Wrigglesworth (LD)]

If I can take the noble Baroness back to the north-east, is she aware that the sorts of problems raised by my noble friend are endemic in public transport throughout the north-east? It has the highest level of unemployment and having a good public transport system to enable people to travel round the whole region is essential to get those figures down. What are the Government planning to do to improve public transport throughout the whole region?

--- Later in debate ---

[Baroness Sugg]

My Lords, I agree that we need to invest in our public transport to enable people to get to work on time. Between 2015 and 2020 we are investing more than £13 billion to improve connections across the north to get people to work and to visit family and friends. We have also seen recent announcements for the Tyne and Wear Metro in the previous Budget and investments in roads to deliver that commitment.

[Lord Tunnicliffe (Lab)]

My Lords, the Question was almost certainly provoked by the CrossCountry public consultation, to which the Minister alluded. The Question has also provoked me into reading it. Excellent document as it is, I am sure she will agree that it will create many more demands than there will be resources to meet them. It will also create an enormous number of trade-offs. Have the Government developed the appropriate algorithms and criteria to resolve these trade-offs and, if those trade-offs are seen to be not the revenue-maximising solution, will the department accept some revenue sacrifice in the interest of passengers?

[Baroness Sugg]

My Lords, I am sure the noble Lord and other noble Lords agree that, when setting these requirements, it is of course important that we speak to passengers to understand what they want from the service. The decisions on services will be informed by the consultation responses. We will assess the ideas against the department’s objectives for the franchise, and will undertake financial and economic assessments to make sure that we deliver the best possible service for passengers and value for money for both passengers and taxpayers. On sacrificing revenue, we do not make the decision solely on the basis of returns. We will always put passengers first but we need to be mindful of value for money for the taxpayer.

[Lord Cormack (Con)]

My Lords, I thank my noble friends Lady Sugg and Lord Lexden for what they said and reiterate the invitation. I also ask that the first three trains are called “St Hugh of Lincoln”, “Lexden” and “Sugg”.

[Baroness Sugg]

I thank my noble friend for his repetition of the invitation. Happily, it is not in my remit to name new trains.