European Rail Market: EUC Report

Lord Brooke of Alverthorpe Excerpts

Thursday 14th June 2012 Lords Chamber

[Lord Brooke of Alverthorpe]

My Lords, I commence by thanking the noble Baroness, Lady O’Cathain, for keeping us on the rails all the way through this exercise, and keeping us pointed in the right direction in a non-bullying way. I thank, too, our clerks, who gave us such great assistance during the course of the committee, and I particularly thank colleagues who have left the committee since we concluded the report, as well as the new ones who have joined us. I also express my gratitude to all the people who provided evidence to us, both orally and in writing, which was very useful indeed.

It is some months, of course, since we concluded the exercise, the report appeared and we got the Government’s response. It is quite interesting to see what has happened in the mean time. I have gone back and reread our report and the Government’s response, and I have also picked up on one or two things on the internet that have happened. I see, first, that there has been quite a major breakdown—a health and safety issue in April in the tunnel. Secondly, immigration, a topic which we touched on, has moved up the agenda significantly since we addressed the issue last year. I think we found that, in retrospect, the Minister’s response at that time was somewhat complacent. She said that we will have sorted it out by the time that we get round to Deutsche Bahn extending the run through to Amsterdam and into Cologne; whereas the reality is that, as has now been indentified, many people have been using the existing train system under current arrangements to come into the country illegally. This needs to be addressed with urgency from a variety of standpoints, as we have already heard.

[Lord Berkeley]

Is the noble Lord aware that Deutsche Bahn has said that it is not going to go ahead with its service until the immigration situation is sorted out?

[Lord Brooke of Alverthorpe]

I was not aware of that, my Lords, but it is a very important and significant point indeed. This will presumably be quite an obstacle to making progress and introducing the new extended lines for which many noble Lords have been calling.

More recently, and thirdly, we have seen the announcement—the noble Baroness, Lady Scott, mentioned it, and I think that my noble friend Lord Berkley may have said more on it—about allowing Eurotunnel to take over SeaFrance’s cross-channel vessels. This takeover occurred within a matter of days and raises, as the Financial Times says, significant implications for competition and, in turn, charges, which I will come back to in a moment. My major point is about the charges.

Fourthly—and this is good news—I see that the number of foot passengers travelling through the tunnel over the past few weeks has increased significantly, largely because of people wanting to come and participate in the Jubilee celebrations. All those of us who want this to be a successful venture will hope that that will continue into the Olympics and beyond. Those are the changes that have occurred since we concluded our report.

In two years, a major celebration will take place. In 2014 we will celebrate 20 years since the Channel Tunnel first opened and all the worthy work that my noble friend Lord Berkeley did on its construction. It was a truly amazing event when the tunnel opened. It was a great venture, a great vision and the fulfilment of the marvellous technical expertise that went into it. However, regrettably, as others have said, as yet we have failed completely to deliver the fulfilment of that vision. This came from the evidence of the people who came before the committee. They were almost unanimous in saying that the tunnel has not delivered all that was hoped of it and that there is still a long way to go, even though it is such an amazing piece of infrastructure that is capable of delivering such public good, not just for the UK and France but over a much wider front throughout Europe.

The witnesses—even those from Eurotunnel, with their projections—were also unanimous in saying that we still do not have enough foot passengers travelling on the train and we are well short of how much rail freight there should be. The figures are very low indeed in comparison with the original projections. Indeed, as my noble friend Lord Haskel pointed out, they have been falling off in recent years, which is of great concern. Interestingly, our witnesses all felt that this was not good enough. They all felt that we should be trying harder and going for growth. I was very pleased that the noble Baroness, Lady O’Cathain, introduced the debate by pointing to the importance of growth in this context, both for this country and for Europe.

Our report endeavours to be constructive, to identify the areas in which performance has been falling down and to suggest a significant number of solutions to the problems. I regret that the Government’s response was not as positive as it might have been. I rather sensed that our chairman felt the same. Their response did not have the enthusiasm and energy that the committee showed in addressing the topic. This came through both in the public performance of Ministers and their supporters when they came before us and in the written document. No doubt the noble Earl, Lord Attlee, may put me right on that when he responds in his usual way.

I found it quite surprising that, when we took evidence from the Minister, she encouraged us by saying that our report would provide a push in the right direction. That hardly indicates a strong commitment. I hope that we will get some movement on this over the next two years, so that when we get to 2014 we will have seen some substantial changes.

In fairness to the Government, perhaps in retrospect we should have invited the Mayor of London to give evidence. He would have talked about growth, London and the importance of getting jobs for London. We would have pointed out to him that the Channel Tunnel has an important part to play in such growth. Had we persuaded him that it was an issue on which he should campaign, we might have made more progress with the Government, given the unusual way in which he can bring pressure to bear on them. Maybe that is something for us to bear in mind in future.

I come back to the importance of the report. The Government have made some progress in addressing the governance of the IGC. This has been slow but at least the introduction of representatives from the Office of Rail Regulation, and the enhanced role that is envisaged for them in future, is a step in the right direction and very positive. I was certainly very impressed by the evidence that we heard from those representatives who are now on the IGC. They identified areas in which questions were raised about the performance of Eurotunnel. Mr Kogan, in particular, asked whether Eurotunnel’s charges were justifiably high or inexcusably high. I believe that that is at the heart of the whole issue of whether we move forward with the tunnel. He also raised questions about the absence of a performance regime for Eurotunnel. In the UK, any company of that size that did not have a performance regime in place would be severely criticised. Again, this is an area where Eurotunnel needs to move forward and ensure that it is open and clean about where it is going. Mr Kogan told us that the IGC had been working on some of these issues for two years. As he appeared before the committee last October, now it is close to three years.

I have looked at the latest reports on the internet. The last report that the IGC produced related only to 2010 and did not appear until September 2011. We are still waiting for the report on 2011. In particular, I will leave the Minister with a question which he might not be able to answer today. The Government’s response to paragraph 141 states:

“The IGC is currently investigating the level and appropriateness of Eurotunnel's charges and its Joint Economic Committee published a report on the first phase of its work in October 2011. Further work is underway but will take some time because of the complexity of Eurotunnel’s accounting structures and financial flows. Until those investigations are concluded, and on the basis of the evidence currently available, we would recommend caution in assessing whether the level of the charges is appropriate”.

I have looked at the website but can find nothing about what is happening on that front. I have done some research elsewhere to find out what is happening. It is now close to three years since this work was first put in place. If the Minister cannot reply today, will he please reply to the committee in writing and tell us when we can expect that research to be concluded so that we can see it? On that basis, I believe that we will have a foundation on which we can move forward profitably.

Aviation Policy

Lord Brooke of Alverthorpe Excerpts

Monday 14th May 2012 Lords Chamber

[Earl Attlee]

My Lords, no.

[Lord Brooke of Alverthorpe]

My Lords, can the noble Lord say how many international flights have migrated from the hub at Heathrow to Schiphol, Charles de Gaulle and Frankfurt since the coalition came to power?

[Earl Attlee]

My Lords, that is a rather detailed question and I do not know whether I will be able to get the answer even by writing, but I will try. I should emphasise that Heathrow is still well connected to the rest of the world, especially China, if you take into consideration direct flights to Hong Kong, which is connected to 45 other Chinese cities.

Transport: Automatic Number Plate Recognition

Lord Brooke of Alverthorpe Excerpts

Tuesday 24th April 2012 Lords Chamber

[Earl Attlee]

My Lords, my noble friend is right about the advantages of ANPR technology. It detects a considerable number of unlicensed vehicles. I was out with the police last week and we caught an uninsured driver. It is not the only technique available. Under continuous insurance enforcement, the DVLA is able to issue fixed-penalty notices to anyone who operates a vehicle that is not insured and not declared to be off the road. That will also be a very effective deterrent.

[Lord Brooke of Alverthorpe]

My Lords, if we have so many facilities for tracking these people and bringing them to charge, why is the system not operating? What will the Government do to use the facilities properly? Will they not consider employing people who are unemployed to chase these people, which will make the system cost-effective at the same time?

[Earl Attlee]

My Lords, I said that I was out with the police very recently using this technology and we detected an uninsured driver. However, we need to be careful that when we interfere with motorists, and possibly seize or clamp their vehicles, the people doing that work are properly trained and qualified to do so.

Planning: Ancient Woodland

Lord Brooke of Alverthorpe Excerpts

Tuesday 13th March 2012 Lords Chamber

[Earl Attlee]

My Lords, the short answer to my noble friend is: the end of the month.

[Lord Brooke of Alverthorpe]

Like other noble Lords I have been waiting patiently for the noble Earl to respond to the other question from the noble Lord, Lord Redesdale, about whether he will contribute to the fund that has been established.

[Earl Attlee]

My Lords, I am a classic impoverished Earl.

Railways: Great Western Franchise

Lord Brooke of Alverthorpe Excerpts

Tuesday 6th March 2012 Lords Chamber

[Earl Attlee]

My Lords, the right reverend Prelate asked several extremely complicated questions, and I think it would be better if I wrote to him. However, I have confidence in the whole franchising process. We are determined to strike the right balance between the needs of all stakeholders. As I said in my response to the Question asked by the noble Lord, Lord Berkeley, there is a conflict between stakeholders that needs to be resolved.

[Lord Brooke of Alverthorpe]

My Lords, I will keep my question brief and simple. Will the Minister confirm that the present rolling stock on the line is quite inadequate, and that it would be totally unreasonable to expect it to continue to be used until electrification in 2018? In the circumstances, and with reference to his first Answer, will he confirm to the people in that part of the country who use the line that the franchise will invite new rolling stock?

[Earl Attlee]

My Lords, first, we need to be careful about being too specific about which rolling stock should be used. To do so would compromise the negotiations between the train operating company and the rolling stock company. However, a new fleet of IEP trains is expected to be provided for the franchise for InterCity services. This project was initiated by the previous Administration. The new operator is expected to take responsibility for the provision of other rolling stock on the franchise.

Cyclists: Accidents

Lord Brooke of Alverthorpe Excerpts

Wednesday 8th February 2012 Lords Chamber

[Lord Roberts of Llandudno]

My Lords—

[Lord Brooke of Alverthorpe]

My Lords—

Localism Bill

Lord Brooke of Alverthorpe Excerpts

Thursday 30th June 2011 Lords Chamber

[Lord Brooke of Alverthorpe]

My Lords, I hope that you will forgive me for intervening as I did not speak on Second Reading. Under this heading, I wonder whether the Minister can clarify whether there is an exemption on petitioning and on moving to have a referendum on car-parking charges. I discovered that my area in London recently increased car-parking fines to £130—a phenomenal increase. I gather that many of these increases are taking place in different locations on similar scales around the country. I wonder whether this will provide the opportunity for the citizen to petition against those, or indeed move for a referendum.

[Lord McKenzie of Luton]

My Lords, I shall speak briefly to the amendments, and say that we are with the noble Lords, Lord Best and Lord Lucas, on this. It is an opportunity for the Government to set out quite broadly their view on the exclusion, not only for particular planning applications but for the broader role of planning briefs and everything that goes with the planning process. Like the noble Lord, Lord Best, I think that we should congratulate the Government on their earlier concessions. That has helped our deliberations to move on a lot.

I say to the noble Lord, Lord True, that of course it must be right that people have the opportunity to engage and influence their neighbourhood and place. That is just what the neighbourhood planning provisions in the Bill are designed to do, with a referendum attached to that. We have some amendments coming now suggesting that there should be earlier consultation in the process of those engaged in developing plans, so we are with you on that. That is within the structure of the Bill. The noble Lord, Lord Best, made an important point about LDFs. We need to get on with that as so many of them are not yet completed. We have a lacuna, with regional spatial strategies going before many of these plans were in place, and the data associated with all of those are in danger of disappearing. We propose to deal with that by transition arrangements but that is a debate for another day, if not another week at the rate we are going. I hope that the Government will take the opportunity to clarify, as far as they are able, the scope of the exemption around planning as that is hugely important.

--- Later in debate ---

[Lord Taylor of Holbeach]

Again my noble friend makes a valuable contribution and points out how complex this is going to be in terms of definition. I would like to thank him for his contribution and my noble friend Lord Lucas for tabling the original amendment which has given rise to this debate. I hope I can persuade him to withdraw it, but I think the noble Lord, Lord Brooke, wants to come back.

[Lord Brooke of Alverthorpe]

I am grateful to the noble Lord for helping me to differentiate between charges and fines. I was indeed referring to fines and, as somebody asked me which was the borough, I say that it was Wandsworth. It has the lowest council tax in the country, but some of the highest fines and charges. Was he saying to me that, in his view, an attempt to have a referendum in that area would probably be ruled out?

[Lord Taylor of Holbeach]

I can say to the noble Lord that the first indication I had about the correct response had a simple two-letter word: no—that it would not be possible. However, I sought further elaboration and gained a slightly more elaborate response, though the short answer is probably correct—that this would not be a subject on which a local referendum could be held.

Postal Services Bill

Lord Brooke of Alverthorpe Excerpts

Wednesday 4th May 2011 Lords Chamber

[Lord Brooke of Alverthorpe]

My Lords, I support my noble friend Lord Stevenson. I do not think that there has been any conversion on the part of the Labour Party. I was an employee when NATS was a PPP. I was an employee share representative acting on behalf of the employees and I was a partnership director. It is true that the employees had 5 per cent of the shares, which is less than what is on offer at the moment, but the Labour Government’s policy was to try to develop more employee involvement than there had been in the past. I suspect that, had they stayed the course with the previous Bill, we might have seen the emergence of something like that. There were certainly plenty of private discussions about the possibilities. Indeed, prior to the Bill being presented, some of us had conversations with Royal Mail about the prospects of creating a trust for employee shares, and we tried to be quite innovative in our approach. Some of us identified that one of the major issues facing postal employees was problems over home ownership. If we created employee shares within the company, while those shares would not be on the open market but would be kept within the trust, why could an arrangement not be created whereby the share ownership was offset against support from building societies to assist employees in purchasing or part-purchasing their homes? Royal Mail looked into that at one stage. Therefore, I welcome what the Government are trying to do. Perhaps the Minister, with all her powers of persuasion, can get round the Treasury and convince it that it should move from 10 to 15 per cent.

It has been pointed out to me that this offer is the biggest ever to be made during the course of a privatisation. I believe that if we check the records to see what happened with the bus industry, where deregulation and privatisation took place on a great scale around the country, we will find that many employees and managers had the opportunity to purchase shares in many of the bus companies in the country. Indeed, in some instances, they took them over 100 per cent, some of them also being put into trusts and some into ESOPs. Therefore, I believe that there is a precedent for offering a level of ownership higher than 10 per cent. I suggest that the Minister has a look at the bus industry if she needs some supporting evidence for her arguments in persuading the Treasury to go beyond the 10 per cent offer.

Secondly, I believe that there should be a trust, although I shall not repeat all the arguments that have been made before. There is a natural temptation for some people to get their hands on the shares and perhaps to dispose of them fairly quickly, as we have seen happen in several privatisations, but I believe that a trust provides a means for an employee to be more permanently committed to the company and to the welfare and profitability of the company in the long term. I hope that the Government will come forward with proposals on a trust.

Thirdly, that leads me to the final point made by my noble friend Lord Stevenson concerning representation on the board. I hope that shares will be issued on the basis of equality, regardless of people’s grades within the company, so that the managing director will get no more shares than a postal worker. Equally, I hope that, if there are instances in which votes have to take place within the trust, each vote will carry the same weight and value. In particular, an opportunity should be created—probably for the first time; certainly my Government did not do it—for there to be an employee director on the company that would be created under the privatisation proposals to represent the interests of the employees’ shares.

This is a chance for the Government to be progressive and to effect some changes in a new way. I see that on 7 June Mr Francis Maude is to speak to a gathering on employee ownership in the Strangers’ Dining Room in the other place. Perhaps he will float what the Government have in mind regarding further changes in the nature of ownership within the public service, with a greater push for employees to have a greater stake in the ventures in which they are involved. This could be linked up with what is happening in Royal Mail.

[The Deputy Speaker (Lord Brougham and Vaux)]

My Lords, I should have announced that, if this amendment is agreed to, I cannot call Amendment 17 due to pre-emption.

Postal Services Bill

Lord Brooke of Alverthorpe Excerpts

Wednesday 6th April 2011 Lords Chamber

[Baroness Kramer]

My Lords, I hesitate to rise on this occasion because there have been so many detailed, coherent and powerful speeches, but perhaps I may make two brief comments. I would ask the Minister, as he looks at the potential amendments to Clause 28, to recognise that it is an extraordinarily powerful clause. Everyone in this House is concerned that Royal Mail should have an effective future and that we should have a secure universal service provider. Moreover, everyone in this House is aware that Postcomm in its approach to regulation has played a role—it has not been the only factor but it is certainly a critical one—in bringing Royal Mail, frankly, to its financial knees. If I were a potential investor I would ask myself how that regulatory environment was going to change because I certainly would not want to put my head into the same noose that Royal Mail has had to face for the past decade or so. Clause 28 therefore signals a fundamental change in the outlook, priorities and focus for Ofcom, particularly by for once looking for financial sustainability. So I urge the Minister, in looking at a variety of complex and interwoven evidence, to continue to recognise the importance of sustaining a balance between competition and the future of the universal service provider. But let us not lose what this clause has finally brought to the picture.

My final brief comment is that concerns have been expressed around the Committee that one of the responses Ofcom might make to financial pressures in the universal service provider would be to restrict the scope of the universal service. It seems to me that that would be very hard to do, given the language used in this clause and in Clause 30. I know that it was only meant to get the debate going, but I am rather taken with Amendment 24H tabled by the noble Viscount, Lord Eccles, which would require paying attention to the underlying costings. That would drive in the direction of recognising that price might be the mechanism to use to ensure Royal Mail’s financial future rather than reducing the scope of the USP.

[Lord Brooke of Alverthorpe]

My Lords, I shall speak briefly in support of Amendment 24PB, which has already been spoken to by my noble friend Lady Dean. I await the Minister’s response with interest because that will give an indication of the Government’s view not just on how they will tackle this particular piece of legislation, but their more general view on the problems we face in many other areas of society related to indebtedness. It will also be an indication of whether we are learning the lessons of history. I go back to NATS which, when it was privatised, was very highly geared indeed. My old friend the former Chancellor and then Prime Minister was even prepared to contemplate a gearing of 129 per cent, but in the event it was limited to 110 per cent, which was still an extraordinarily high gearing to bear for the airlines group that bought the major part of the company.

We privatised in order to bring in capital, to bring in to a degree the economic disciplines of the private sector, and to bring in private sector management that we hoped would result in better performance. Capital was a vital part of that, so if you end up with a company potentially coming in which has borrowed most of the money to purchase your concern and then finds that it is unable to provide the capital needed to effect changes in the operation of your concern, you are in real difficulties. That was the experience with NATS. It ran into the September 11 debacle fairly quickly and then had to go running back to the Government for a form of bailout. We know perfectly well from our experiences over the past decade that if utilities go to the wall, they have to be bailed out. We know also that in defining utilities, we find that a substantial part of the private sector itself ends up as a form of utility, which is what the banks are. They could not be allowed to go to the wall so they had to be bailed out. Let us hope that the report that is coming out on the banks will teach us some lessons from history that we can use to good effect.

BAA was purchased on the basis of very high gearing indeed, and there is a big question mark over the extent to which the capital that went in has been used to its fullest effect. We know perfectly well that those who suffered from the poor performance of BAA just before Christmas because of a lack of capital investment in equipment will feel that BAA did not deliver as it should have done. Instead, BAA has spent much of its time trying to make profits to repay the capital it borrowed at very high interest rates. When we come to changing the status of Royal Mail, there is no way that we should be looking at a company that is very highly geared.

The noble Baroness, Lady Dean, has made in this amendment a modest attempt—it is not very prescriptive—to put right the wrongs that we have experienced in the past. When we move to talk in a different context about the private sector, perhaps these are the frameworks that we should lay down for changes there, too. The Americans certainly know that, when utilities have been privatised, there should not be gearings of more than 60 per cent. I hope that we can look for similar changes in this legislation.

Airports: London

Lord Brooke of Alverthorpe Excerpts

Wednesday 16th March 2011 Lords Chamber

[Earl Attlee]

My Lords, we do not support any proposed airport in Kent or the Medway.

[Lord Brooke of Alverthorpe]

My Lords, does the Minister agree that aviation is one of the most successful industries in this country? In the light of what he just stated, what are the Government doing to grow it, or does he propose to reduce it? Can he also explain how much is saved by forcing more and more business from Heathrow to Schiphol, Charles de Gaulle or Frankfurt? What is the saving in green terms?

[Earl Attlee]

My Lords, I agree with the noble Lord’s first question about the importance of the aviation industry, but we do not want massively to increase the use of aviation, we want to keep it where it is. We must constrain our aviation emissions.