Marine Navigation (No. 2) Bill

Stephen Hammond Excerpts

Friday 19th October 2012 Commons Chamber

[Sheryll Murray]

I would be more than happy to meet the RYA, which I know has concerns about the general rules of direction. I would like to reassure it, and I am sure the Minister will back me up. A number of ports already operate under general rules of direction, which must be consulted on fully before they are in place. If a competent harbour authority does not take note of responses to consultation, it could be subject to judicial review. I should like to meet the RYA—we need to get the clause right.

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

I am listening to my hon. Friend’s request and would like to put it on the record now that I am sure I would be delighted to join that meeting.

[Sheryll Murray]

I am grateful to the Minister. When the association holds its events, it can have designated areas of the sea where those events will not be disrupted by other leisure users sailing through a regatta, for instance. I would be more than happy to meet members of the association.

I am confident that my Bill would benefit the UK maritime sector and I am grateful to the British Ports Association and the UK Major Ports Group, which have provided me with considerable support and advice on the Bill. The ports industry is one the UK’s hidden success stories. It is an incredibly competent, competitive and customer-focused industry that operates largely out of the public eye, because of its efficiency and the safety of its operations. Despite the lack of awareness of the ports industry, our whole way of life depends on its success. Some of the anomalies in the current maritime legislation that I seek to correct in this Bill may seem arcane, but I have tried to show that the industry that the changes will assist is far from irrelevant. I humbly ask hon. Members to support the Bill today.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

The hon. Member for South East Cornwall (Sheryll Murray) is right in her concluding remarks about the importance of the ports industry to the UK and its economy. We take for granted the significance of ports around the country, but collectively they do an enormous amount of work to ensure that the goods we rely on—both imported and exported—are managed sensibly.

Ports are under wildly varying forms of ownership, and some of them need a tougher regulatory regime than others because of the sea conditions they experience. Some estuaries are particularly difficult and some are incredibly busy. For example, I used to live on the south coast, and Southampton in particular is incredibly busy and clearly needs a regulatory regime that is fit for purpose. Other, smaller ports need a much lighter touch that will meet their needs. In the north-west, the River Mersey is very complex to navigate and needs a pilotage system that is strong and robust. That is especially necessary at certain states of the tide, when serious seas are running out in Liverpool bay. I have been out in the bay both when it has been as flat calm as the carpet in front of us and when the ship has virtually stood on its end with every wave. In such environments, entering a river mouth needs careful handling by expert pilots and we should give credit to pilots in our ports for the fantastic work that they do.

Over recent years, there have been some changes that are controversial in local areas, as well as some that have been adopted with the support of local pilot associations. I have received a significant amount of correspondence from a constituent who is a lawyer and has periodically given advice to the local association. He has one fundamental objection to the Bill, and with the House’s indulgence, given that these issues are so important to the safety of our seafarers and others operating in and around our ports, I will put it on the record and invite the Minister to respond as positively as he can. He is familiar with my constituent’s correspondence, because much of it has been directed at him.

The substance of the objection surrounds clause 2(1), which would broaden definitions used in the Pilotage Act 1987. My constituent asserts that this is an

“obvious and gross reduction in the standards applicable in compulsory pilotage areas that…cannot be (and is not) lawful, for all of the reasons raised since the Bill was introduced.”

Those reasons are set out elsewhere in correspondence. He wrote to the Prime Minister expressing his concern on 30 September:

“The Parliamentary Under Secretary of State at the Department for Transport has made it clear that HM government intends to remove regulatory burdens and to relax standards in compulsory pilotage areas. The point which he fails to address (as mentioned in my letter of yesterday’s date, herewith) is that the governmental intention contravenes all known law, in particular the following provisions:-

1. The common law obligation to maintain the highest possible standards in compulsory pilotage areas. This obligation was confirmed and acknowledged by Lord Bingham the Lord Chief Justice in the Court of Criminal Appeal in April 2000 when allowing a reduction in penalty to Milford Haven port authority following its admission of guilt in the SEA EMPRESS incident of 1996. Lord Bingham noted with approval that efforts had been made to improve standards.

2. In a report published in April 2002, “The New Humber Pilot Service”, the Department for Transport, Local Government and Regions confirmed that the obligation identified in the SEA EMPRESS case is strict and onerous.

3. The declaration of the International Maritime Organization (representing the maritime concerns of the United Nations Organization) that developed standards in pilotage (and not merely in compulsory pilotage areas) should be not merely maintained but enforced. This declaration is in Resolution A960 of 2004, to which the United Kingdom is a signatory.

It follows necessarily that any relaxation of standards in a compulsory pilotage area (as HM government now specifically proposes) is unlawful; and that the obligation to maintain standards remains accordingly strict and onerous. This you should know. The Department for Transport has known it since 2002 at the latest.”

[Stephen Hammond]

Let me try to help the hon. Gentleman. His constituent is a prodigious and prolific writer, and he has written to the Department along similar lines. Clause 2 deals with pilotage exemption certificates. Clause 2(1)(a) and (b) substitute “master” and “mate” with

“a member of the crew”.

The provisions are, of course, still subject to section 8 of the Pilotage Act 1987, which clearly states that a competent harbour authority can issue a pilotage exemption certificate only when it is certain that the applicant’s

“skill, experience and local knowledge are sufficient for him to be capable of piloting the ship”.

That is why the Government are confident that what we are doing does not represent what the hon. Gentleman’s constituent has written to say. Moreover, when combined, the provisions in the Bill will strengthen the allocation of exemption certificates, as they will enable competent harbour authorities to withdraw them much more speedily, if for any reason they are no longer confident of the certificate holder’s skill, experience or local knowledge. I hope that the hon. Gentleman will accept that reassurance, but if he wishes to pursue the matter further we can do so in Committee.

[Andrew Miller]

That is an extremely helpful statement to have on the record. However, I want to pursue the Minister a little further before I relax my guard, because it follows from what he says—I hope that he will correct me if I have misunderstood this—that the exemption for an individual cannot be granted willy-nilly. I know that there has been discussion in the Department and that people have talked about different ranks on the ship, but it is not a question of what rank the person holds; it is a question of their qualifications and competence to undertake the task in question. As I understand it, that is measured by two things: first, the individual’s ability to meet the requirements of the port authority in question; and, secondly, that the exemption is for that specific vessel and that vessel only. I would be grateful if the Minister put on record his agreement that the exemption under those circumstances would not even, for example, extend to a sister ship, and that it must meet the standards that are normally in place for the port in question.

[Stephen Hammond]

I am obviously disappointed that the hon. Gentleman feels the need to have his guard up when I am at the Dispatch Box, but let me reassure him that the position that he has just outlined is indeed correct. The exemption does not refer to rank—it refers to qualification—and it does refer to the specific vessel.

[Andrew Miller]

And the specific port?

[Stephen Hammond]

indicated assent.

[Andrew Miller]

That is very important. I would suggest to the hon. Member for South East Cornwall, who has moved that the Bill receive its Second Reading, that, for the sake of clarity and ensuring absolutely no ambiguity, there is an argument that clause 2(1) should be gently amended in Committee to make things so clear that no court could misinterpret what the Minister and I—and, indeed, the hon. Lady—clearly understand to be the correct position.

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[Andrew Miller]

If the hon. Gentleman is not right honourable, he ought to be. I accept his comments; I was jesting when I said that he represented the RYA. Anyway, he raised a legitimate point about harbour authorities. As I said, there is a complex range of port and harbour authority models, from local authority to private ownership. I want to be certain that a privately owned port, operating in the context of the Bill, is not empowered to act as judge and jury in relation to what happens within its remit.

Yesterday evening I had a very constructive discussion with the hon. Member for South East Cornwall and some of the Minister’s expert officials, and I am extremely grateful for that. I think I understand the position, but, again, I should like further clarification. I assume that it would not be in a harbour authority’s gift to block a vessel’s access unilaterally, unless it was so oversized that it could not get into the port or its cargo could not be handled appropriately there, and that only rarely could a privately owned port authority take restrictive action against the owner of the ship or the cargo.

[Stephen Hammond]

Perhaps I can help the hon. Gentleman. First, the obligation that is placed on harbour authorities is placed on all of them, irrespective of the mode of ownership. However, as the Bill clearly states, harbour authorities will be responsible for consulting on any harbour direction that they propose. They will be obligated to identify the correct interested parties, and they must invite them to comment on the proposed direction. If any individuals or groups feel that they have not been adequately listened to in any consultation, they are of course entitled to challenge that direction legally.

[Andrew Miller]

That is an extremely helpful intervention. I appreciate that the Minister, for understandable reasons, does not want to be the regulator in this structure, but I am trying to seek reassurance that the small player is not disadvantaged by the mighty corporation here. Can the Minister give comfort to small yachting associations or small ship owners by indicating that if they felt they were being disadvantaged by the regulatory regime being imposed in a particular port, the might of his Department would be there, as a last resort, given that the vehicle of judicial review is a bit pricey, to support David over Goliath—although David did well on his own?

[Stephen Hammond]

David certainly did do well on his own. The key point that I re-emphasise to the hon. Gentleman is the obligation that harbour authorities, of whatever size, have to parties of whatever size to ensure that they have identified all those legally obligated and interested parties. I am prepared to look at that assurance again in Committee, but I think it is in place.

[Sheryll Murray]

Will the Minister give way?

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[Sir Peter Bottomley]

As directed, I am very grateful. My hon. Friend reminds me that the first woman named in the New Testament is Tamar, who appears in the second verse of the first chapter of St Matthew.

My hon. Friend makes the sensible point that people want to do sensible, important and serious things. The Minister has received a letter from the Royal Yachting Association. I will not read it, but I think I am right in saying that it would prefer not to have clause 5. It was withdrawn from what was effectively this Bill when Lord Berkeley introduced it in another place, but it has turned up again. No one is complaining about that, but the question is whether it should stay in. Without making any threatening noises, I shall say that I am sure the Bill would have as easy a passage without it as with it.

We must then consider what is the alternative. One option is for clause 5 to remain as it is, surviving Committee and Report and going to another place, but there are alternatives—it is either in, out or modified.

The RYA put to the Minister a suggestion for its modification for him to take advice on. My hon. Friend the Member for South East Cornwall, in consultation with the Minister and his advisers—I am sure they are working closely together—might want to see whether the RYA’s suggestion could have what I might call a moderating effect.

If I may, I will spell out what I understand to be the RYA’s position. Clause 5 would modify the provisions on harbour revision orders. As we all know, some harbours already have the power to issue them, obtained through statute or in other ways. Clause 5 would enable harbour authorities in this jurisdiction or the Scottish nation to give general directions to ships, including recreational craft. Members might not expect this, but when I come across the Solent into Portsmouth harbour, my open canoe is classed as a ship, which is a bit grand. That is even better than the promotion that the hon. Member for Ellesmere Port and Neston gave me when he confused me with my wife.

The power in clause 5 is expressed as applying to ships within, entering or leaving a harbour, and relates to their movement, their mooring, the nature and use of their equipment and the manning of them. As I have been reminded, a pre-consultation requirement is included, stating that a harbour authority should

“consult such representatives of users of the harbour as the authority think appropriate.”

We understand that it will do that properly.

Contravention of a general direction would be a criminal offence. That is not new, but it might apply if a new harbour revision order came in.

[Stephen Hammond]

I will try to be as helpful to my hon. Friend as I was to the hon. Member for Ellesmere Port and Neston (Andrew Miller). As my hon. Friend points out, there is a requirement of pre-consultation. Prior to any consultation, the Department would issue directions as to what should be consulted upon. I believe that that potentially covers some of his objections.

[Sir Peter Bottomley]

We are making progress, and I am grateful to my hon. Friend.

I assure my hon. Friend the Member for South East Cornwall that I will not take all that long, but to aid the process I point out that a number of individual authorities have obtained powers of general direction over the years, starting at the time of les événements, when the permissive society was invented in 1968. Such powers of direction have generally taken the place of byelaws. Unlike directions under clause 5, which harbour authorities could issue, byelaws have to be confirmed by the Secretary of State and are subject to what most people would regard as clear checks and balances in addition to consultation. The current byelaw process involves consultation, so there is nothing new about that. The consultation element is in place already and will remain. The question is about the checks and balances that exist. I am not thinking of accusing any harbour authority of having malevolent wishes towards recreational users or other classes of ship.

I pay tribute to what the RYA does in training young people on the water in motor vessels and sailing craft. It has become a better and better organisation that does more and more good for more people, and if other organisations could do the same thing by training up the young and helping them to become first assistants and then qualified instructors, there would be far more value and purpose among our people on land as well as at sea.

The RYA has become increasingly concerned in recent years about the potential of powers of general direction to be exercised indiscriminately and in a manner that is unnecessary and harmful to the lawful exercise of recreational and other rights. Not every campaign the RYA takes up is wrong—in fact, nearly every campaign I have seen it run was right, and I admire the way in which it works with the British Marine Federation. They provide in partnership, without overlap, a seamless approach to the law and the use of our waters.

Let me give a list of some of the questions considered by the RYA about the powers of general direction, and whether they are fully merited. There are some powers that everyone can accept, but whether they are sufficiently merited to be unqualified or without the moderation that I hope the Minister will mention is a matter for debate.

Making general directions involves the creation of new criminal offences, which local harbour authorities may be seen as ill-equipped to do. Even democratically elected local authorities, in their other roles, do not normally have powers to create criminal offences, and the Bill contains none of the supervisory safeguards usually imposed on law-making bodies. This may be political theology or philosophy, but why should a harbour authority be different from a local authority?

The powers of general direction can be seen as running counter to the Government’s localism policy by granting an unelected harbour authority law-making powers that are not subjected to democratic checks and balances and full transparency. Most of us could argue that because harbour authorities exist for a particular purpose, and because those who are appointed to harbour authorities are there to provide expertise and a contribution, we should not be too worried about that. One should put it on the record that those people are not democratically elected, and the localism agenda is not just about saying that we are not going to do things in Whitehall—or in my day, the Department for Transport on Marsham street—but that things will be done locally by locally elected people. I do not criticise the harbour authorities for not being elected, but there is a distinction.

Under the power, general directions could be made over the wide areas used by recreational and commercial traffic in a disproportionate manner, without proper risk assessment or consideration of the full implications or possible alternatives. They could be used to impose significant and potentially burdensome restrictions on the navigational use of recreational craft. Many harbour authorities have jurisdiction over substantial areas going out to sea, not just partially enclosed harbour areas. Again, I do not want any hon. Member who arrives late to the debate to think that I am attacking the harbour authorities. I am just asking what protections there could be, and whether we need a system in which the potential for things to go wrong could be anticipated and perhaps built into the legislation.

There have been past examples—this is not about harbour authorities and harbour revision orders—where some in government picked up the idea, wrongly in my view, that small recreational craft could start contributing to light dues. We all get the benefit from navigation, but how on earth do we get a person—me in my Mirror dinghy, or one of my sons, daughters or granddaughters in their craft—to contribute to that? There is a question of where to draw the line, but at some stage it must be drawn some way away from ordinary recreational craft that might, under this legislation, be regarded as ships.

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[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

We have had a fascinating 90-minute nautical exploration this morning. We were safely taken out of harbour by my hon. Friend the Member for South East Cornwall (Sheryll Murray), and I am pleased that she has been able to introduce this Bill because I met her several times when I had this role in opposition and she was campaigning for the fisheries industry. She and her family have devoted their lives to the marine and maritime industries through both tragedy and good times, and I congratulate her on her success in the ballot.

With the hon. Member for Ellesmere Port and Neston (Andrew Miller), we skirted round choppy waters—we avoided sailing right into them—and I shall say more about his contribution in a moment. My hon. Friend the Member for Thurrock (Jackie Doyle-Price) is of course right that my role should not be to neglect this issue, but nor should it be to get in the way of the maritime industry. I shall address her remarks about clause 7 later in my speech. I know that the knowledge of my hon. Friend the Member for Worthing West (Sir Peter Bottomley) about the maritime environment of the Isle of Wight is extensive. He could pilot anything into certain parts of Seaview and Bembridge. But he is right, of course. If his autobiography is as well written as “The Riddle of the Sands”, it will go down as a literary tribute. If he will allow me, I will address some of his remarks when I discuss clause 5.

The maritime industry carries out its activities every day without fanfare or demand, but, as was pointed out at last night’s event, where I drank copious amounts of tomato juice, all too often, as people eat their lamb or take their car to the continent for holiday, or if they are wealth creators in manufacturing, it is taken for granted that the finished goods will either be imported or exported around the world, while the mechanism by which that occurs is not always appreciated. Far too many people take the maritime industry for granted, but I know that many in the House, including those who have contributed to this debate, do not. It is an industry that works come rain, wind or shine.

I was delighted to attend the British Chamber of Shipping event and to visit Felixstowe this week to see a port operating and securing the future of UK plc. I recognise the vital contribution that the industry makes to the UK, its living standards and its prosperity, and it is right that nothing be done to hinder the safety of anyone working in it. Everything in the Bill is intended to ensure their safety. I recognise the hard work that the employees and those who work self-employed at ports and on the ships contribute every day to keeping this country moving and competitive. I also recognise the managers whose freight operations ensure the most streamlined and efficient operation of ports. That is important not only for the maritime industry but for our country as a whole.

With that in mind, I thank my hon. Friend the Member for South East Cornwall for introducing her Bill. I am aware of its antecedents and the hard work done then. The Bill will not only ensure that the UK’s impeccable safety record is maintained but, more importantly, will help to make the industry ever more efficient in its day-to-day activities and ensure that we have an industry fit for the 21st century.

I do not intend to speak at length about every clause, because my hon. Friend has already put the case extraordinarily eloquently. A few issues have been raised during the clause-by-clause examination, about some of which I hope I have reassured hon. Members sufficiently to ensure the Bill’s safe passage to Committee, but none the less let me put on record some comments about each clause. Clauses 1 to 4 cover pilotage, the pilotage exemption certificate and the removal of pilotage powers that are no longer required. My hon. Friend has given a detailed account of the pilotage profession, its high level of proficiency and independent thinking, and the knowledge of the ports, their waters and local conditions that all pilots require.

Clearly, my knowledge does not compare with my hon. Friend’s in this matter, and I cannot add much, other than by observing that pilotage is a tradition and an industry stretching back almost 3,000 years to ancient Greek and Roman times, when pilots were local fishermen employed by ships’ captains to bring vessels into port. UK pilotage custom, practice and legislation are more modern than they were 3,000 years ago and are governed by the Pilotage Act 1987.

Many ports and harbours have a long and distinguished tradition dating back hundreds of years, but I will resist the temptation to give a history lesson on every port and harbour, and their distinguished traditions. As several people have pointed out, however, trading patterns change and ships are much larger than they used to be. Change is driven by improvements, economies of scale and advancements in ship-building technology. It is clear that where a port or harbour operates purely for leisure craft or small shipping vehicles, the need for pilotage might have been overtaken by events and knowledge might have improved. I welcome the proposals, therefore, to enable facilities to relinquish some of their obligations under the Pilotage Act.

Let me turn to the exemption certificates. My hon. Friend the Member for South East Cornwall identified the Pilotage Act 1987 as the umbrella legislation that covers marine pilotage operations. I agree with her assertion that the 1987 Act could benefit from an update in relation to such certificates, because it is some 25 years since it was passed. None the less, it is clearly right to address the concerns that have rightly been expressed on behalf of the pilots association and by the hon. Member for Ellesmere Port and Neston on behalf of his constituent. I hope that I have been able to reassure the hon. Gentleman in respect of section 8 of the Pilotage Act 1987, which clearly states that competent harbour authorities can issue exemption certificates only when they are certain that the applicant’s

“skill, experience and local knowledge are sufficient for him to be capable of piloting the ship”.

I hope that in my other interventions I was able to reassure him on the other issues he raised.

Competent harbour authorities are responsible for the operation of their ports. They know the types of ships that call, they know the geography of their sea beds, they know their tidal patterns and they know their ports. Currently, competent harbour authorities are responsible for the pilotage services provided at their facilities. They can choose the pilots who provide the services at their ports, requiring specific skills and experience of those who ply that trade. Competent harbour authorities can already issue pilotage exemption certificates to masters and first mates who know a port well. Such certificates enable an individual to bring a ship into a specified facility without the need for a pilot, and the requirements for the holder, in terms of knowledge, skills and experience, are the same as for full-time pilots.

I therefore believe that competent harbour authorities are well placed to decide which members of a ship’s crew they issue a pilotage exemption certificate to. Competent harbour authorities are, after all, experienced in this field and know the navigable hazards of their facilities best. Moreover, we should enable competent harbour authorities to recognise the skills and knowledge of those who have driven themselves to achieve the required standards, through the granting of a pilotage exemption certificate. Clauses 1 to 4 further strengthen competent harbour authorities’ administration of the certificate process, enabling the easier withdrawal of certificates and introducing stronger pilotage reporting requirements. The proposals therefore clearly seek to strike a balance between right deregulation and maintaining high standards of maritime safety.

Clauses 5 and 6 deal with some of the issues that the hon. Member for Ellesmere Port and Neston raised, as well as those raised by my hon. Friend the Member for Worthing West. Let me try to give my hon. Friend some reassurance. As he rightly said, the Royal Yachting Association has indeed expressed a number of concerns. Some were similar to those it expressed in 2008. My Department has looked at a number of them, and we will be responding in Committee. None the less, although we have discussed the issue of consultation and guidance from the Department, I think the crux of what my hon. Friend was saying today is this. In the response to the 2008 consultation, the Royal Yachting Association proposed that an independent adjudication procedure and process be provided in the Bill. Where I think he wants reassurance is on the question of why the Bill does not do that, for which there are several reasons. First, the Bill is not only about marine safety, but about simplification and deregulation. There is little evidence that the authorities that already have the power to give general directions do so unreasonably, although to be fair, my hon. Friend acknowledged that point.

[Sir Peter Bottomley]

Indeed, and my hon. Friend will acknowledge that, with the Department’s approval, some revision orders or powers to harbour authorities include the independent report element, so I think it is a score draw at the moment.

[Stephen Hammond]

Just as I was standing in front of an open goal!

As I have said, harbour authorities will be required to consult users and stakeholders before making general directions, and it would be sensible of them to hold informal discussions with those bodies before the formal consultations. The Department will provide guidance. Some Members asked whether the process of judicial review was too expensive, but it exists none the less. I have agreed to meet representatives of the RYA with my hon. Friend the Member for South East Cornwall and my officials, and I hope that we shall be able to give them even more reassurance before the Committee stage.

[Sir Peter Bottomley]

I am grateful to my hon. Friend, and I am sure the House is as well. The RYA representatives may say that they are looking forward to the meeting as well, and are expecting the Minister and my hon. Friend the Member for South East Cornwall to agree to what they want. I hope that all parties will be asking themselves what they are trying to achieve, and what is the best way of making a minor modification to the clause if it is not to be dropped altogether.

If it is felt that the clause should be retained—for the purpose of simplification, as the Minister sensibly said—it might be worth considering provision for an independent report. No one is suggesting that there should be an independent report on every possible harbour revision order, because most are uncontroversial; the need arises only when an order becomes controversial, or when there is a clash of interests.

[Stephen Hammond]

I have listened carefully to what my hon. Friend has said, and I shall ensure that my officials and I go to the meeting in the spirit that he desires. He is right to say that everyone wants to deal with the clause constructively.

As I said in an earlier intervention, and also a moment ago, some harbour authorities have powers of general direction through private Acts of Parliament or through the harbour revision orders, while others do not. Such general directions are used to control vessels and improve safety. The Bill enables the Secretary of State for Transport to make an order giving a named harbour the power to make general directions in respect of ships. I think that that is a welcome measure, which will have the potential to place all harbour authorities on a similar footing in terms of order-making powers to control their harbours using general directions. As for the harbour closure proposals, it seems sensible to me to allow port and harbour facilities that are no longer economically viable to be closed in order to prevent a continued financial drain on their owners.

[Sir Peter Bottomley]

Many navigation authorities are on inland waterways, which may not be within the scope of the Bill. Might they constitute inactive responsible authorities, and might they be covered by the clause? I do not expect the Minister to answer my question immediately, but perhaps he would be kind enough to write to my hon. Friend and me at a later stage.

[Stephen Hammond]

I will indeed.

My hon. Friend the Member for Thurrock made an extraordinarily powerful speech about clause 7. She not only guided us through the history of the Port of Tilbury authority—I shall use that information for a question in my constituency pub quiz later—but drew attention to the Bill’s antecedent of 2008, and welcomed the present Bill.

As my hon. Friend said, knowledge of the powers of the port police and what should be required of them in the 21st century is limited. She gave examples of the anachronistic nature of the law as it applies to them: it certainly does not cover the needs and requirements of the 21st century. She rightly observed that their role often went well beyond their present tightly defined remit, involving traffic control, the ability to work with local police forces in trying to control episodes of disorder, and the additional resource that they provide in other contexts as and when directed by local forces. They should, of course, also feature on the roll of honour celebrating the great performance of public servants and volunteers during the Olympics. She rightly recognised and forcefully made the point that clause 7 will put the ports police on the same footing as other police. It is right that it does so, and I look forward to the clause being widely welcomed in Committee.

The Bill does not limit itself to the matters of shipping and port activity; it also seeks to enable the general lighthouse authorities to trade more freely in the commercial sector. My hon. Friend gave us a pub quiz question, so before I comment on that legislation, may I, in that same spirit, tell her some things of which she may not be aware? The oldest lighthouse in existence is indeed in these islands, at Hook Head, in south-east Ireland—the tower, with additions and modifications, dates back to Norman times; Trinity House has been in existence for 500 years; the Northern Lighthouse Board recently celebrated the bicentenary of its iconic Bell Rock lighthouse; and the Commissioners of Irish Lights provides marine aids to navigation across the whole of Ireland—it is symbolic of what the UK and Ireland can achieve through working together. The enactment of this clause will not only enable the general lighthouse authorities to minimise their operational costs through the generation of additional income, but will help the Commissioners of Irish Lights in its drive to be self-funding in the Republic by 2015-16.

I, too, am aware of the commercial activities that the general lighthouse authorities undertake. They also pool their limited spare capacity to undertake commercial work where they can, a good example of which is the help they give the Met Office in maintaining deepwater buoys. The clause that my hon. Friend has promoted will enable the three general lighthouse authorities to enter into commercial agreements more easily, and trade on their good names.

I take the stricture of the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) about the phraseology of clause 10; he rightly says that it refers to a previous Bill. I take his point, and nothing should be inferred from that phraseology. Clauses 10 and 11 are the other substantive clauses in this Bill, and they represent a sensible approach to tying up administrative loose ends for the lighthouse authorities and removing some of the bureaucracy involved in making new regulations on manning or crewing requirements, which is costly for both private enterprise and the Government.

The Bill has had widespread support. A number of issues have been raised, on which I hope we have been able to reassure hon. Members. If not, I hope that we will be able to do so in Committee. So I commend my hon. Friend the Member for South East Cornwall for introducing this legislation and I commend her Bill. I hope that hon. Members will agree with my assertion that it should be taken forward to Committee, and I look forward to its passage on to the statute book.

Oral Answers to Questions

Stephen Hammond Excerpts

Thursday 18th October 2012 Commons Chamber

[Nick de Bois (Enfield North) (Con)]

4. What recent representations he has received on investment for a third railway track between London, Liverpool Street and Brimsdown.

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

My hon. Friend refers to a small scheme involving a piece of extra track in the Brimsdown area. The Mayor of London wrote to the Secretary of State this week commending the alternative, but more expensive, scheme, which would also facilitate economic regeneration.

[Nick de Bois]

The Minister will know that the project enjoys substantial support from Network Rail, north London boroughs and the Mayor’s office. It is crucial to the development of north London, including for potentially up to 33% of new homes, and for more than 20,000 jobs. Will he meet me to discuss support for financial frontloading with resulting payback from local authorities, developers and stakeholders? Any expression of support would be welcome.

[Stephen Hammond]

I will of course be delighted to meet my hon. Friend and any other colleagues he feels would be appropriate.

[Sir Alan Haselhurst (Saffron Walden) (Con)]

Accepting that half a loaf is better than no bread, will my hon. Friend nevertheless acknowledge that a much more substantial scheme for improving track capacity on that line is the only way to provide commuters and passengers travelling to or from Stansted airport with the kind of service that by now should be seen as essential—and may I join the meeting?

[Stephen Hammond]

My right hon. Friend knows that the second high-level output specification package—HLOS 2 —commits Network Rail to providing extra capacity to meet peak demand in that area. Part of that will be done by having new trains between London, Bishop’s Stortford and Cambridge, and another part is sorting out the capacity constraints south of Broxbourne, which will help his constituents. I would of course be delighted if he joined the meeting.

[Peter Aldous (Waveney) (Con)]

5. What funding he has allocated to improve railway stations.

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[Mr Lee Scott (Ilford North) (Con)]

13. What steps he is taking to address careless driving.

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

On 14 June, the Government consulted on proposals to make careless driving a fixed penalty offence, under which drivers who commit less severe examples of the offence, such as driving too close to another vehicle, would be offered educational courses. We hope that that will reduce the instances of careless driving in the not-too-distant future.

[Mr Scott]

Does my hon. Friend agree that one of the greatest causes of careless driving, even though it is a penalty offence, is people who use mobile phones near schools and more generally, causing accidents? Will that problem be looked into further, because it seems to be spreading?

[Stephen Hammond]

My hon. Friend is right. The use of a mobile phone will qualify for an increased fixed penalty, if that is what the consultation decides. In more serious cases, that offence can be prosecuted with considerably greater penalties.

[Mr Edward Leigh (Gainsborough) (Con)]

15. What recent progress he has made on updating rolling stock on the east coast main line.

--- Later in debate ---

[Tim Loughton (East Worthing and Shoreham) (Con)]

16. If he will commission a feasibility study for a Worthing/Lancing bypass due to traffic congestion on the A27.

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

The Department has no current plans to undertake a feasibility study into proposals for a Worthing/Lancing bypass. We have been clear that the funding is currently focused on delivering schemes already in the Highways Agency’s investment programme.

[Tim Loughton]

I welcome my hon. Friend to his new position. With it, he inherits the issue of the lack of a Worthing bypass, which predates his parliamentary career and mine. Worthing is the largest town in Sussex. The major house-building programmes that are planned for my area all feed out on to the A27. The situation will only get worse. Will he come down and sit in the traffic on the A27, as have his predecessors, to see the problem for himself? Will he agree to put back on the agenda a value-for-money study of one of the busiest roads in the south-east of England that needs investment?

[Stephen Hammond]

My hon. Friend is, as ever, generous in his remarks of welcome. His invitation is equally generous, and I do not think I can refuse it.

[Mr Speaker]

I call Mr Graham Evans. Not here.

--- Later in debate ---

[Mrs Linda Riordan (Halifax) (Lab/Co-op)]

T4. The Caldervale line is in urgent need of new rolling stock as the current units are totally inadequate for the 1 million passengers who use Halifax station every year. Will the Minister inform the House when those passengers will get the new trains that they badly need?

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

The hon. Lady knows that the northern hub package will certainly improve opportunities for the Calder valley line between Leeds and Manchester Victoria. The high-level output specification announcement confirmed the go-ahead for the Castlefield corridor scheme. She knows that the 2012 Budget set aside a package of measures to increase line speeds and look at the rolling stock.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

T7. Are there any plans in the Department to begin to look at the commercial condition and strategic future of Britain’s smaller ports, such as Fleetwood and Glasson dock in my constituency?

[Stephen Hammond]

My hon. Friend knows that the Government’s national policy statement on ports, published in January, designated and underlined the importance of the contribution made by smaller ports. I was delighted to visit the national smaller ports conference in Windermere two weeks ago and to address it. It is, however, for Associated British Ports to promote the commercial opportunities at Fleetwood, rather than the Government.

[Jim McGovern (Dundee West) (Lab)]

T5. First, I congratulate Dundee youth council on its “It’s no fare” campaign, which seeks to lower bus fares for young people. Will the Minister liaise with his counterpart in Holyrood in Edinburgh to ensure that apprentices and students can get to their place of work or study for the lowest price?

[Mr Dominic Raab (Esher and Walton) (Con)]

T8. For completeness, I should declare that my wife works for Google, albeit in a capacity unrelated to this question. Google, Audi, Ford and Volvo are among the firms pioneering driverless cars, which could cut road accidents by up to 90% while freeing up time that could unleash massive productivity gains. Several US states are testing the technology. What action is the Department taking to explore the viability of that innovation in this country? [R]

[Stephen Hammond]

The technology for driverless cars is, as my hon. Friend says, advancing very quickly. As the Secretary of State just said, our key priority is safety and I want to ensure that those systems are safe and reliable before allowing them on to UK roads. There is of course great potential for UK technology to be at the forefront of these developments and departmental officials are liaising with leading UK researchers in the field.

[Alison McGovern (Wirral South) (Lab)]

T9. In June, the then rail Minister told me that the Government were “making progress on the Thameslink procurement”.—[Official Report, 12 June 2012; Vol. 546, c. 67WH.]In August, The Guardian reported that the contract for new trains would be delayed until the autumn, and it is now the autumn. The delivery of new trains for Thameslink frees up electric rolling stock to move north, but any delay puts that in jeopardy. Will the Minister meet me and Merseytravel to guarantee that we will not end up with an electrified line from Manchester to Liverpool but no electric trains?

Penfold Review

Stephen Hammond Excerpts

Tuesday 18th September 2012 Written Statements

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

Today I am publishing an interim response to the consultation that closed on 24 August detailing proposals to streamline the process of applying for the stopping up or diversion of a highway, where this is required for the purpose of property development.

This interim response is considering only option 1 of the consultation. The remaining options and consultation responses will be considered and a full response, including proposals for a way forward, will be published by the end of November.

The foundation of all three of the main policy options is a speeding up of the process by allowing stopping up and planning applications to run concurrently, namely option 1.

The large majority of respondents, comprising three main groups, namely developers, local authorities and those affected by stopping up decisions, gave broad support for allowing stopping up and planning applications to be made concurrently, with agreement that it would speed up the process and reduce burdens. We will seek an early legislative opportunity to implement this change.

The Government committed to improving the stopping up application process in the 2011 autumn statement and this will help to deliver the Government’s growth agenda, by removing unnecessary burdens faced by businesses, speeding up the application process and removing unnecessary bureaucracy. The change will play a useful role in encouraging investment and therefore growth in local communities.

This interim response to the consultation document will be available in the Libraries of both Houses and on the Department’s website.

West Coast Main Line

Stephen Hammond Excerpts

Monday 17th September 2012 Westminster Hall

[Rosie Cooper]

I think that is a real option. I understand from the grapevine that First does not intend to brand the west coast main line “FirstGroup”, but that there is a great possibility that it will be called Horizon. We might be in that kind of territory; I am not sure.

If there is a failure to reach an agreement before 9 December, it would mean instituting a directly operated railway service on the west coast, matching the current system on the east coast. The Government’s own guidance says that 120 days are required to get that kind of operation in place, and here we are 90 days away from the end of the current west coast franchise. Will the Minister enlighten us on how that will be achieved to ensure the smooth transfer of services to the DOR, if necessary? There is much to consider and address: safety matters; employment and contracting issues; even the simple thing of setting up a website to sell tickets. What would be the associated costs of the DOR in the initial set-up and the monthly costs thereafter? Those costs would be incurred by the taxpayer because of the Government’s failure to handle the situation adequately.

We must consider the staff. Come 9 December, they will have no idea for whom they will be working—FirstGroup, the DOR, or perhaps even Virgin. As part of any transfer of a franchise, there is a responsibility for the incumbent to work with the new operator.

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

The hon. Lady has been speculating quite a lot about the steps that the Secretary of State may or may not take as a result of a comment that he made yesterday. Let us be clear: he has a statutory duty under section 30 of the Railways Act 1993 to provide or secure the provision of services. As he made clear, that would be a temporary measure should the franchising arrangements not come into place.

[Rosie Cooper]

Is the Minister saying that any offer from Virgin to run the service at no cost and the best-value operation will affect his decision? I will ask him some questions about the associated costs should we set up a DOR.

I understand that two mobilisation processes are running side by side. Will the Minister tell us how that is working in practice? What are the associated risks and costs that arise from the lack of clarity? What assurances can he offer staff that their positions will be secure and the situation resolved?

The Minister has partially intimated the answer to the question that I am going to ask. If a DOR is to run the service, will it have the contract for a defined period, or will another mobilisation process be undertaken where an operator is awarded the contract? What will be the cost of that process?

One of the reasons for securing this debate is the manner in which the Department has handled the entire process, from the timing of the announcement to the consistent reluctance to answer hon. Members’ questions. We keep being told that this Government are open and transparent, and I want to believe that. We are told by the Department that it is confident in its decision on the west coast franchise. If I accept that both those statements are true, why have Transport Ministers not had the courage of their convictions and been willing to come to the House to make a statement to allow scrutiny of the process and the decision? There is a claim that one of the bidders had submitted questions to the Department seeking clarification on certain matters, but it has yet to receive a response. We are basically being told by the Department, “Trust us. Trust what we are telling you.”

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

I congratulate the hon. Member for West Lancashire (Rosie Cooper) on securing this debate. It is obviously an important debate and it is, of course, historic; as she will recognise, this is the first debate held on a Monday afternoon in Westminster Hall under these auspices. I have joy in responding to it on behalf of the Government—I am delighted to do so—but I would probably not have quite the same joy if my hon. Friend the Member for South Staffordshire (Gavin Williamson) suggested that I might be here every Monday afternoon from 4.30 pm to 7.30 pm. Mr Davies, it is also a pleasure to serve under your chairmanship.

We have had a fascinating debate. I thank a number of hon. Members, including the hon. Member for Garston and Halewood (Maria Eagle), for their kind comments and for the questions that they have put. I will attempt to answer those questions. Of course, some of them tempt me to go down a line that, if I were to take it, would probably mean I had the shortest ministerial career in history, and I do not propose to do that this afternoon. However, where possible, I will be as helpful as I can. Where I can, and at the right time, I will answer some questions now, and where I can, and at the right time, we will look at perhaps responding more fully in writing.

It has been a very interesting debate. The hon. Member for Halton (Derek Twigg) said that all politics is local, and that has certainly been proved by a number of the contributions today, including his own: I listened very carefully to the comments about Runcorn, the number of passengers and the more frequent service. I remember well the cold morning in Rugby; well done to my hon. Friend the Member for Rugby (Mark Pawsey) for continuing to press the case of Rugby rail users. I will respond to the questions put by the hon. Member for Ynys Môn (Albert Owen) later in my speech. May I also just say to my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw) that, as I understand it, he will be able to use his rail cards on off-peak journeys in future? He also made a number of representations and I am delighted to tell him that I am sure the Minister of State, my right hon. Friend the Member for Chelmsford (Mr Burns), will be listening to his concerns avidly. As usual, my hon. Friends the Members for Shrewsbury and Atcham (Daniel Kawczynski) and for Montgomeryshire (Glyn Davies) made the case on behalf of their constituents powerfully. And my hon. Friend the Member for Morecambe and Lunesdale (David Morris) wanted more than a “Brief Encounter” with the west coast main line at Carnforth; I understand that point entirely. There were a number of other contributions that I wish to pick up as we go through.

As the hon. Member for West Lancashire said, the petition had more than 172,000 signatures. Beyond any question, the franchise process is of genuine public interest, and quite rightly so. After all, whether someone is a fare payer or a taxpayer, they have a stake in our railway networks and an interest in ensuring that they provide real value for money, as well as services that are accessible, reliable and safe. The Government clearly want the railways to succeed in that regard, which is why we are investing more than £18 billion in the railways over the spending review period.

It is important to mention at the start the Government’s objectives for the railways, which were set out in the rail Command Paper this May by my right hon. Friend the Member for Putney (Justine Greening), who was then the Secretary of State. As I am sure a number of hon. Members will remember, it was subject to extensive debate on the Floor of the House. Our aim as a Government is to work closely with the industry to ensure that our railways are financially sustainable and consumer-focused. That approach is essential if we are to ease the burden on the taxpayer and improve value for money for fare payers. We are also building on the work done by my right hon. Friend the Member for Chipping Barnet (Mrs Villiers), which looked specifically at reforming rail franchising.

I note the remarks made by the hon. Member for Garston and Halewood about George Muir. I remember discussing with George his comments on rail franchising. He was in a minority of one at the time, and I think he probably remains in a minority of one, certainly within the Association of Train Operating Companies community.

On rail franchising, the Government set out three key principles in January 2011. First, we believe that franchises should be longer, expanding the opportunity for operators to invest in improvements, as well as enabling them to strengthen their working relationships with Network Rail and other key stakeholders. Secondly, we set out that we should see demanding outcomes for operators to deliver, but give them more flexibility to decide how best to achieve those outcomes. Finally, we said that the specifics of each franchise would be decided on a case-by-case basis.

The procurement of the new inter-city west coast franchise was, as everyone would expect, a thorough and extensive process, which a number of hon. Members have stated. The process was transparent to both Parliament and the public. The first public consultation was held 18 months ago. In May 2011, the then Secretary of State, my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond), came to the House and gave an updated timetable, including the extension that was partly announced to ensure the success of the Olympics. He provided an updated timetable for the procurement, alongside a draft invitation to tender.

There was then a second public consultation on the train service specification. All bidders were explicitly encouraged to submit bids that contained proposals that reflected consultation with stakeholder groups, including local groups along the route of the franchise, many of which were spoken about today, and Passenger Focus. Following that consultation, the formal ITT was launched and placed on the Department’s website this January. As is now known, following that, four bids for the franchise were received: from Abellio; FirstGroup; a joint venture between SNCF and Keolis; and Virgin Trains, a joint venture between Virgin and Stagecoach.

[Daniel Kawczynski]

The Minister is talking about timetables. Does he agree that the date that the bids would be announced had been well known for a considerable time?

--- Later in debate ---

[Derek Twigg]

I do not want to pursue the matter for too long, because time is short. If the Government’s projections for GDP, which the bids were based on, is low—the Minister has not said whether one bidder put in a lower projection, despite the Government’s figures—will the Government have to give money back to the successful bidder?

[Stephen Hammond]

My understanding of the GDP process currently in place is that there would be either payments back to the Government or payments from the Government. I will write to the hon. Gentleman about that.

I make it clear that GDP was only one of the external factors; it was not the only external factor. To ensure that the Government are further protected, a profit share mechanism has also been introduced. The mechanism will enable the taxpayer to benefit from a share in any super profits that the franchise generates while continuing to provide an incentive for the franchisee to outperform.

The hon. Member for West Lancashire asked a number of questions about the Government’s preparations, should the franchise end without a new franchisee being in place. I make it clear that the existing contractor has a contractual obligation to support handover activities. On the 120 days to which she referred, a departmental mobilisation manual is being used by both parties in every franchise to ensure that a franchise handover process is in place, and the activities and time scales required to effect a transfer are set out. The Government are confident that the Department is putting in place the right contingencies in the time scale, should the process not be completed. We expect the legal issues to be resolved so that contingency plans will not be necessary.

[Rosie Cooper]

We have very little time, and I implore the Minister to answer my questions on the detail of the guarantee and on the contract negotiations. I also implore him to answer the question asked by my hon. Friend the Member for Halton (Derek Twigg). They are important and pertinent questions that go to the heart of protecting taxpayers’ money, and, sadly, the Minister has not answered any of them. I know we have gone round the houses, but the Minister has not answered the questions at the heart of the debate.

[Stephen Hammond]

I am sure the hon. Lady has listened to my contribution, and I am sure she has taken notes, but I have made it clear that, where I am able to answer questions because of the ongoing judicial process, I have answered them. Equally, I have given a guarantee that after the judicial process, where the Department is able to answer those questions, we will provide a written answer. As I am sure she knows, I cannot make a statement that would prejudice the judicial process.

[Mark Pawsey]

Given all that we have heard in this effective debate, does the Minister agree with the majority of Government Members that the interests of rail users, taxpayers and railway staff will be served by the contract going ahead?

[Stephen Hammond]

The Department is confident that we have taken the right decision in the interests of taxpayers and passengers. We expect to sign the contract soon, but we intend to defend the judicial process robustly. Of course, as I said at the outset, it is right that Parliament should scrutinise the franchising process, but there is a right time.

I make it clear that this is not a political decision; it is a commercial decision taken in line with the franchise and procurement processes set out in the reforms of the then Secretary of State, my right hon. Friend the Member for Runnymede and Weybridge. There may be a desire for more extensive parliamentary scrutiny of the process and the bids, but commenting too deeply and changing our decision now could fundamentally undermine any future Government competition, and it would be wholly inappropriate for me to do so.

I guarantee that my ministerial colleagues and I will continue to keep the House and the Transport Committee updated on developments, subject to any constraints of legal or commercial privilege.

[Philip Davies (in the Chair)]

I call the hon. Member for West Lancashire (Rosie Cooper) to wind up the debate. I am sure she is aware that we are due to finish at 7.30 pm.

Select Committee Inquiry (Aviation Strategy)

Stephen Hammond Excerpts

Thursday 13th September 2012 Commons Chamber

[Mrs Ellman]

I can confirm that the terms of reference for the inquiry, which are now being published, will include the particular issue that the hon. Gentleman has raised.

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

I hear the hon. Lady’s comments on hub airports. I am sure that her inquiry will wish to reflect on the new Secretary of State’s announcement last week that an independent commission was being set up to look at all these proposals. I am sure that that will be within its terms of reference. The Government will very much welcome the Select Committee’s report, and we look forward to reading its findings. She will of course understand that, in welcoming it, we might not necessarily be able to give an unequivocal welcome to its findings.

[Mrs Ellman]

I welcome the Minister to his new position. My colleagues on the Transport Committee and I look forward to questioning him on this issue. He is correct to point out that the Prime Minister announced last week that an independent commission would be set up to look at these issues. However, that commission is not expected to produce its final report until 2015, so any decision based on its recommendations will be postponed until the next Parliament, at the earliest.

Petrol Prices (Wyre Forest)

Stephen Hammond Excerpts

Wednesday 12th September 2012 Westminster Hall

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

Although it is a surprise to be here this morning, Mr Howarth, it is a pleasure to serve under your chairmanship, on what is my first outing representing the Government, and to respond to the debate secured by my hon. Friend the Member for Wyre Forest (Mark Garnier). I thank him for his kind words. I remember well the day in Wyre Forest, although he forgot our trip on the steam train, in addition to the driving centre. I am pleased, too, to see my hon. Friend the Member for Redditch (Karen Lumley) and the hon. Member for Strangford (Jim Shannon) here today, as it shows the interest in this matter from communities beyond Wyre Forest.

I am surprised to be here this morning, because the debate has been misallocated to the Department for Transport. Many of the comments made by my hon. Friend the Member for Wyre Forest were about competition and fuel price policies, but neither is the Department’s responsibility. Therefore, I apologise if it is not appropriate for me to answer all his points, as the responsibility to do so lies with the Department for Business, Innovation and Skills.

I was pleased, but not surprised, to hear my hon. Friend say that he is a free marketeer and that he does not wish to see the market regulated. As he knows, the petrol retail market is not economically regulated now. As with standards and competition policy, there are legal restrictions, and it is for the Office of Fair Trading to investigate breaches and enforce those. I will come on to the OFT’s investigation in a moment, but clearly, the existing situation is right, and the market operates on that basis. Like my hon. Friend, I do not wish to see economic regulation.

This debate goes to the heart of the fact that, in this time of economic difficulty, high fuel prices are putting a lot of pressure on households and businesses. Businesses are working hard, as are the Government, to ensure that motoring remains affordable for all. We have taken extensive action to ensure that motorists are supported. In the 2011 Budget, the Government cut the fuel duty by 1p a litre, and we have scrapped the previous fuel duty escalator, replacing it with a fair fuel stabiliser. That mechanism, which was effective from Budget day 2012, is designed to ensure that the burden of higher oil prices is better shared between oil companies and motorists through the increased taxation of oil and gas production when oil prices are high. When oil prices are above the trigger price of £45 a barrel, fuel duty will increase by the retail prices index only. When they are below that trigger, it will increase by RPI plus 1%, but that happens only when prices fall below the trigger point for a sustained period. My hon. Friend will remember that, in the autumn statement 2011, the Government deferred the 3p a litre fuel duty increase until August 2012. In June this year, the Chancellor of the Exchequer announced that that increase would be further postponed.

The Government are acutely aware that the high price of oil is a burden for people at this difficult time. As a result of our actions, motorists are being helped, and frankly, if that help had not been in place, whatever the price pertaining—whether petrol is more expensive in Wyre Forest than in Birmingham, or in Redditch than in Cardiff or Strangford—the reality is that the price would be 10p higher than it is now. The existing situation is a direct result of the Government’s action.

[Jim Shannon]

Even allowing for the Government’s steps, which I very much appreciate, in 2008, the price of a barrel of oil was $147, and the price at the pump was £1.04 a litre. In 2012, the price is about $100 per barrel and the price is £1.39 a litre. I am not a mathematician, but even taking into account those extra charges, that does not add up. I know that the responsibility does not lie with the Minister, but it illustrates to many of people inside and outside the House that oil companies are making exorbitant profits, and there is a need for the regulator to take control.

[Stephen Hammond]

The hon. Gentleman has put an interesting point about mathematics on the record. He tempts me to pre-empt the OFT investigation, which I would be ill-advised to do. I advise him and other hon. Members present to see what that investigation says. None the less, I hope that he takes the point that the Government are taking action because we recognise the burden of cost. In a moment, I will say a little about the Government’s concerns in relation to market transparency, because that is the line that he is going down, and I understand that.

The road fuel retail market in the UK has always been an open market, not an economically regulated market. The Government consider that to be very much in the wider interests of consumers. Regulation is undertaken by independent competition authorities. However, my predecessor made the point clearly that the Government are concerned about the lack of transparency in the market. As has been expressed not only in this debate but more widely, many people are concerned about fuel prices. They are concerned that the recent reductions in crude oil prices are not being seen at the pumps either at all or as quickly as motorists would like.

The Government have made their position very clear. The previous Secretary of State for Transport, my right hon. Friend the Member for Putney (Justine Greening), spoke several times about motoring costs, as did the Secretary of State for Business, Innovation and Skills and the Secretary of State for Energy and Climate Change. We have made the point that it is in our mutual interest for motorists and businesses to be confident that they are being treated fairly. That is important for the long-term benefit, and that point has been made several times.

When wholesale costs are coming down, those reductions should be passed on transparently and without unnecessary delay. Certainly, the aim of the fair fuel stabiliser is to ensure that action as well. Many members of the Government—the previous Secretary of State for Transport and other Secretaries of State—have made the point that motorists have the right to expect that when there are changes in the crude oil price—they can see those changes on the evening news—they will be reflected at the pumps. There is a duty on the fuel retailers to reflect that. The Department for Transport is on the record as saying that we want not only to see that happening, but to see it happening more obviously, so that there is greater transparency.

The previous Secretary of State put pressure on the fuel retailers to ensure that there was some transparency in their pricing policies. I was delighted to hear from my hon. Friend the Member for Wyre Forest that at least one of the major retailers of petrol was prepared to engage with him; it is to that retailer’s credit that it did so. Of course, being a financier of some repute in his previous life before first entering the House, he will recognise that those are quite normal pricing strategies. Whether his constituents see them as equitable or fair is another question. He will recognise that what that retailer said to him was not that different from what can be found in almost any economics manual.

As I said, the Government are clear that there needs to be transparency in this market and that we need to see that transparency being enacted. We also need to be clear that the industry is giving confidence to consumers. That is why both the Department for Transport and the Department of Energy and Climate Change wrote to several industry organisations, challenging them to ensure that there is transparency and encouraging them to work with the Government to take that forward.

The continuing and increasing public concern about the inability of some fuel retailers directly to reflect the reductions in crude oil prices in pump prices is the reason why on 5 September the OFT, which is, as my hon. Friend knows, the independent authority with responsibility for reviewing markets and enforcing the legal standards that relate to competition in this market as well as other markets, issued a call for evidence to help it to identify whether there are competition issues and a lack of transparency.

My hon. Friend mentioned that he thought that there might be anecdotal evidence of collusion, price undercutting and an attempt to drive out local independent retailers. He would therefore want to recognise—I think that he did so in his speech—that it is right and proper that the OFT gets on with its job and identifies whether there are competition issues overall in the sector or in parts of it.

The Government have made it clear that we fully support the call for information on the road fuel retail market. We clearly recognise the importance of fair pricing to cost-conscious motorists. It is clear that the OFT has been given a brief to explore what are a number of claims about how the road fuels sector is operating. I congratulate my hon. Friend, because almost everything that he spoke about in his speech is in the terms of reference for the OFT’s work. That is why I made the points about collusion, transparency, price fixing and driving out local independents. All those points are explicitly set out in the OFT’s terms of reference.

The Government have asked the OFT to call for evidence, and it is getting on with that. It has said that it will publish its key findings in January, alongside recommendations for action if it believes that to be necessary. It will obviously be appropriate at that time for the Government to make some response. It would clearly be inappropriate for the Government to pre-empt the outcome of that consideration and to speculate on what the next steps might be. Therefore, if my hon. Friend will indulge me and perhaps speak to the relevant Department in January about the outcome of the OFT’s work, I hope that he will get satisfaction. It is vital to the Government that we increase consumer confidence in this area. That is why the Government have asked the OFT to investigate. It is why Secretaries of State have been putting on pressure to ensure that the wholesalers ensure that there is retail price transparency.

I again congratulate my hon. Friend on securing this important debate. I have no doubt that the message about his standing up yet again for his constituents in Wyre Forest will ring through Wyre Forest tonight via the local press, and I congratulate him on that.

Rail Investment

Stephen Hammond Excerpts

Monday 16th July 2012 Commons Chamber

[Justine Greening]

I have to say that I did not know that snails were that fast, but I believe we need to try to get off this hook of above-inflation rail fare rises every year, which is one reason why we are looking at the efficiency savings programme that Roy McNulty first outlined. Today’s investment in electrification will be a key part of that as well.

[Stephen Hammond (Wimbledon) (Con)]

In my right hon. Friend’s time as Secretary of State, a new Victorian era of rail investment is not only being promised but delivered. Does she agree that removing some of the bottlenecks is key to capacity? Will she use some of the £700 million that is available so that users of the Wimbledon loop will gain the full benefits of Thameslink?

[Justine Greening]

I am sure that we will look closely at the case my hon. Friend has made. I know he has worked very hard, alongside other local MPs, to see local railway services improved. Wimbledon itself is a key railway hub for his local area. It plays a really important role, and I am keen to see what we can do to improve it.

Transport and the Economy

Stephen Hammond Excerpts

Tuesday 28th February 2012 Commons Chamber

[Stephen Hammond (Wimbledon) (Con)]

It is a great honour to follow the Chair of the Select Committee, the hon. Member for Liverpool, Riverside (Mrs Ellman).

I want to comment principally on the “Transport and the Economy” report. The report recognises, of course, that for many years transport was like Cinderella, as it rarely came to the fore and was not regarded as one of the key parts of Government policy. That was true for many years, but there has been a sea change and there is recognition both in the report and in the actions of the previous Government and this Government that the performance of an economy can be directly related to transport.

Transport can undoubtedly boost growth and increase competitiveness, and one of the best policy interventions a Government can make is to ensure that the infrastructure allows industry to thrive. Some of the infrastructure not only benefits industry but improves the quality of life of a number of our citizens, although clearly it can be provided in a number of ways that differ not only physically but financially. Efficient infrastructure will allow efficient and cost-effective movement around national, regional, sub-regional and local networks—I think that that is implicitly recognised in the report. The fact that transport can boost the economy—the report questions its efficacy in some areas, which I wish to discuss later—is also self-evident.

Any report that links transport and the economy is welcome, but having read both the report and the Government’s response and having listened very carefully to the hon. Member for Liverpool, Riverside, I would like to address one or two areas of slight concern and some surprise. For instance, as the hon. Lady conceded, we are discussing this report some time after its publication and so a number of its explicit recommendations have, to the Government’s credit, been covered in a number of ways. Indeed, it seemed to me that the Government were already covering a number of the report’s recommendations at the time.

Let me pick out recommendation 5 as an example. It states:

“The Government must explain the nature of the economic solutions that it is seeking to deliver through transport spending and how the schemes that it is supporting will achieve these aims.”

By the time the report had been published, however, the Government had already set out those things through their transport business case. They have also set out quite clearly in their business plan some of their objectives for transport spending, as well as a vision for a transport system that is an engine for economic growth, and they have attempted to provide a greener, cleaner and fairer solution for our communities.

Moreover, during the previous Government's period in office, many of us on both sides of the House recognised that the formula that the Department for Transport was using to analyse a number of its schemes beyond the basic benefit-cost ratio, NATA—the new approach to appraisal—had a number of deficiencies. We should recognise that the Government have set out a more embracing framework for analysing infrastructure spending. Clearly, there are the four areas to consider: the economic case; whether there is commercial viability; whether a scheme is financially affordable; and, perhaps most importantly, whether a scheme is achievable. That sort of framework, beyond what was previously in place, should provide a greater degree of rigour, for there is now more than one test. There are not only the tests in NATA or the benefit-cost ratio but a number of tests which, added together, will give a transparent and more rigorous approach to the analysis of economic transport investment. I hope that such an approach will stay in place for some time, because one of the problems with transport investment has been that for an awfully long period in this country’s history there was complete inconsistency in approaches to what a scheme could deliver. I support what the Minister has put in place, and I hope he will ensure that it is enshrined and embedded for a long period.

I was somewhat surprised at the report’s conclusions about regional strategies and the removal of regional strategic development and development agencies. I listened very carefully to the speech of the hon. Member for Liverpool, Riverside and I almost intervened, but as I hoped I would have the chance of catching your eye, Madam Deputy Speaker, I saved my remarks. I listened to the hon. Lady’s comments about what regional development agencies were doing for transport spending. However, I think the previous Transport Committee concluded in one of its reports—I forget which one—as did commentators up and down the country, that the variability among what RDAs delivered regarding transport was vast. It is fair to say that what the regional development agency did in the north-west in some of the delivery and spending on transport projects was well appreciated and supported. However, in other parts of the country, particularly the south-west, the RDA was felt to be failing almost everybody it attempted to help.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Does the hon. Gentleman acknowledge that the arguments and strategies developed by The Northern Way, which brought together three RDAs in the north of England, made a huge contribution to the development of the High Speed 2 project and the northern hub?

[Stephen Hammond]

Indeed I do, and I thank the hon. Lady for making that point because it helps me to make my next point. One thing that this Government have recognised is that, although there was some mix of RDAs, the reality is that a differing of approach in different areas will be the solution.

I also think it is quite clear that the report has prejudged the efficacy of local enterprise partnerships. It seems to me that all the initial evidence, anecdotal though it is because they have been in place for so short a time, shows that they are taking their responsibilities towards transport seriously.

[Mrs Ellman]

I thank the hon. Gentleman for his comments. The report reflected the evidence that was given to the Committee. In taking this further, the Prime Minister and the then Secretary of State recognised the potential gap that would be caused by the removal of the previous regional structures. Indeed, efforts are being made to replace them through other means, but the comprehensive picture and the total results of the changes are as yet unclear.

[Stephen Hammond]

Indeed, but the previous solution was a template solution, a one-size-fits-all solution, a “this is the way we must do it” solution, which did not necessarily reflect the economic realities. As the hon. Member for Penistone and Stocksbridge (Angela Smith) pointed out, in the north of England it was not one regional development agency, but a collaboration of three. As I observed earlier, in certain parts of the country structures well below the regional level developed and delivered more efficient transport solutions.

I hope that in reading the report the Minister will not be deflected from the idea that solutions of differing sizes will fit different parts of the country, and that LEPs have been in place for a relatively short time. Just as regional development agencies were able to collaborate and co-operate, there is little doubt that LEPs will be able to do the same. It is also true that in certain parts of the country integrated transport authorities and passenger transport authorities will provide the lead in regional structures. The clear message must be that there are differing appropriate sizes and structures.

[David Mowat]

I agree that the jury is out on LEPs and that the RDAs were not a panacea in this area, but the real point is that neither the RDAs nor the LEPs can compete with the velocity of spending which is so skewed away from the regions and towards London and the south-east. For example, when the Chancellor announces £30 billion of spend, of which 80% was in London, that dwarfs the amount available to the RDAs or the LEPs. The real issue is how we fix that problem, rather than tinkering with the LEPs, which I hope, as I am sure does my hon. Friend, will work in time.

[Stephen Hammond]

I certainly agree with the latter point. It is beyond the scope of my comments this afternoon to go into the differing amounts of regional money. I accept that there clearly is some imbalance in subsidy between varying regions of the country. It is important to analyse what that can deliver and its efficacy. It is interesting to speculate what Crossrail might bring to London in future, as opposed to what the northern hub might bring to the north. I suspect that the benefits of the northern hub might be greater than those of Crossrail. We will wait and see. I am sure the Minister and the DFT will continue to reflect on that.

As a practitioner of the dark art of economics, I know that different economists will always have differing views on everything. Reading the report, I was struck by the comments of the former chief economist at the DFT. Although those may have been made only in response to the question that he was asked, it seemed to me to miss out quite a lot when he said that if one looks at the history of the British economy, it is clear

“how little the underlying rate of economic growth has varied.”

He went on to add that transport had done very little to affect the overall growth rate of the British economy. That seemed to miss out the fact that we have had wildly varying periods across history.

The witness's analysis went back almost 200 years. Over that time, we have had wildly differing levels of infrastructure investment, and there have been periods when the growth rate of the UK economy has been well in excess of the 2% that he mentioned. His analysis also failed to consider the impact of under-investment, which is a well known phenomenon, how that would have dragged down the underlying potential growth rate of the economy even in a period when investment had resumed, and the potential growth rate had there been consistent investment. Although the analysis that Mr Riley presented to the Committee may or may not be valid, it seems to me that it falls foul of the law of averages. I think that the analysis should look at the potential for economic growth with a consistent approach to investment.

[Richard Harrington (Watford) (Con)]

Having listened carefully to my hon. Friend’s argument and seen some of the evidence that was given to the Committee, it seems to me that, although it could be argued that investment in transport might not be such a direct factor in economic growth, we must also consider what would happen if we did not make that investment and this country fell further behind, which I think would lead to economic shrinkage.

[Stephen Hammond]

I thank my hon. Friend, who more than eloquently makes the absolutely correct point—the final point in my analysis of the economic situation—about the economic analysis presented by Mr Riley.

One of the other learned gentlemen who gave evidence, Professor Goodwin, spoke of the potential for investment not to be transformational, but to be strategic—I am not sure whether he was playing with semantics. He did not like the word “transformational” but said that there was an element of strategy—I think “strategic” is the word he used. He is right that there has been a continued over-egging of the ability of certain single projects to produce the sort of result that some people hope for.

However, if we look at the sheer size of certain schemes and the investment that this and previous Governments have made that complements and adds to what is already in place, and/or if we look at the smarter changes and smarter choices in transport packages, we will see that there is a real chance for transport and infrastructure investment to be transformational. I suspect that some of the moves on work travel packages, which aim to increase access to work, and some of the major electrification projects, which are combined with other minor schemes in parts of the south-west, will in five or six years’ time be considered transformational. In that regard, the evidence given to the Committee probably fails to recognise transport’s ability to be transformational and, more importantly, to enable economic growth.

Moreover, the point that neither of those two learned gentlemen discussed—this is where I disagree with the analysis of the hon. Member for Liverpool, Riverside—is that if transport is part of a cluster of other investments, including increases in education, access to work, economic development zones and others, its ability to contribute to the potential for economic growth is far in excess of what that would have been had the investment been made on its own. A number of people will have made a better analysis of the cluster theory than I have, but that is broadly what it says. Yet again, if transport is combined with other Government policies, its ability to have a significant impact should not be underestimated.

I will finish with a few other remarks. I warmly welcome and support the conclusion that using transport to support and stimulate the economy and to attempt to reduce regional economic disparities is surely right. The test of the Government in that regard must be whether they are showing any understanding of those challenges. In a time when the key overriding economic priority must be to reduce the economic deficit and ensure that the public finances are put on a more stable profile, this Government are undertaking a number of measures which recognise those challenges and provide economic support in relation to it. We have seen that, significantly, through the Minister’s sponsorship of several local transport plans and investment programmes, and they are having on a small scale quite a huge impact on bus routes, local transport—in terms of local rail—and other issues.

Equally, the support for major projects throughout the regions, such as the northern hub, which has been mentioned, the electrification of the south-west main line and the investment in the east coast main line over the past 10 years, strikes me as sending a clear message that this Government recognise the need to maintain transport infrastructure spend.

As the Chairman of the Transport Committee pointed out, the Department for Transport has done relatively well from the overall comprehensive spending review debate, and that represents the Government’s understanding of the need for and importance of transport infrastructure.

I have spoken principally about rail in my last few remarks, but it is clear also that we neglect at our peril the need to maintain and upgrade our roads, and some smaller road schemes will have a bigger impact than some major, strategic ones, so the £3 billion that the Government are putting into local road schemes over four years is likely to have a positive impact on local, regional and overall economic growth.

I welcome the report, which has sponsored a debate about transport and the economy. I welcome also the Government having evidenced by their actions their understanding of the need for infrastructure in order to support economic growth and the quality of life of our citizens. I am sure that the Minister, in his winding-up remarks, will say that this is not just the start but a continuing policy of the Government.

Rail Fares

Stephen Hammond Excerpts

Wednesday 11th January 2012 Commons Chamber

[Maria Eagle]

Our position is that we would have continued in this Parliament, as we did in 2009, to put a stop to the power train operating companies have to fiddle the fares—

[Stephen Hammond (Wimbledon) (Con)]

Will the hon. Lady give way?

--- Later in debate ---

[Justine Greening]

That is an over-simplification. However, the hon. Gentleman is right to point out that Sir Roy McNulty identified in his report a need for the different parts of the rail industry to work together much better. Network Rail is already doing that with many of the train operating companies. That was to be a key way of driving costs down—not through worsening services but by running the system better in the first place.

[Stephen Hammond]

If we are comparing privatised or denationalised and nationalised railways, perhaps the Secretary of State would like to reflect on the point of history that, in the last 15 years of British Rail, fares rose faster than in 15 years of denationalised railways.

[Justine Greening]

As ever, my hon. Friend, for whom I have huge respect and who is obviously an expert in the House on the subject, makes an incredibly powerful point. It is worth complementing that with the point that we also experienced unprecedented increases in passenger demand since privatisation.

--- Later in debate ---

[Stephen Hammond (Wimbledon) (Con)]

I direct the House to my entry in the register. It is a great pleasure to follow the hon. Member for Glasgow South (Mr Harris), who is the joint chair of the rail group and was of course a distinguished rail Minister.

The motion makes four contentions. First, it is critical of the scale of fare increases overall. Secondly, it contends that the scale of rail fare increases has added disproportionally to the increase in the cost of living for us all. Thirdly, it says that the flex mechanism should be stopped, and fourthly that the profits of the rail companies are too high. I wonder whether, in my short contribution, we might look at some of the facts rather than the hyperbole.

First, as the hon. Gentleman pointed out, there can be no discussion of rail fares without accepting that there is always a balance between what is funded by the taxpayer and what is funded by the fare payer. Successive Governments since 1945 have chosen to subsidise both the operating and the capital costs of rail expenditure, so there has been an implicit subsidy of fares from the taxpayer. That equation has been long recognised. It was Lord Adonis who, in the later years of the Labour Government, decided that the balance had swung too far from taxpayer support and needed to swing back to the fare payer. Therefore, if we want to start talking about why rail fares are increasing and taxpayer subsidies are decreasing, let us all be absolutely clear. History shows that the change in the slant of that equation happened post 2004, and certainly accelerated from 2006, so that the £10.5 billion overall operating costs of the industry are now split, with 62% coming from the fare payer and 38% from the taxpayer. The bulk of that change happened between 2005 and 2010.

Secondly, when it comes to the system of regulated and non-regulated fares, it was the last Government who introduced the policy of RPI plus 1, which is why regulated fares are increasing this year by RPI plus 1. Are Opposition Front Benchers saying that they have changed their attitude towards regulated and non-regulated fares? Are they saying that they will not operate RPI plus 1 in future? The motion is of course stoically silent about that. Let us look at the relative contribution of different sectors to the increase in our cost of living. The motion’s claim does not bear too much examination, for it is not rail or bus fare increases that are contributing most to our increased cost of living. The World Bank global food index has gone up 19% over the last year, while Green Flag says that the costs of motoring and car insurance are up 21%. The average fare increase this year—I accept that it is an average; we will come to that point in a moment—is 5.9%, so the motion fails when it says that there is a disproportionate increase from transport.

As my right hon. Friend the Secretary of State has already pointed out, no one wants to see excessive price increases. Also, I accept that we are talking about an average and that some people have seen rather larger fare increases, but that is also the point about flex, is it not? Flex is a weighted average increase—a device, introduced by the last Labour Government and suspended for one year only, to manage demand. If the Labour Opposition are going to get rid of flex, they have to say whether the shadow Secretary of State will write to every commuter whose rail fare increase was less than the average and tell them why she is doing it. Is she going to put in place another tool or mechanism to manage demand? Let us not forget that although she talked about demand in peak hours, rail markets, like many other markets, are localised markets around cities or in rural areas. That is why the last, Labour Government agreed and negotiated differing peak hours with the rail companies, to ensure that localised demand could be managed over peak and “shoulder” hours. If she is going to get rid of flex, she has to stand up and say how she will accept that challenge and demand.

Finally, there is a lot of talk about the huge profits earned by the rail companies, but their operating profit margin has been absolutely constant over the last 10 years, at approximately 3%. Let us look at some of the other companies around—say, that mouthpiece of the Labour party, the Daily Mirror, whose operating profit margin is 16%. It is absolutely clear—it is also implicit in RPI plus 3—that any extra contribution will go back into the rail industry, not the profits of the rail companies. Today’s motion is interesting, but it fails the test of fact. That is why I hope the House will reject it.

High-speed Rail

Stephen Hammond Excerpts

Tuesday 10th January 2012 Commons Chamber

[Justine Greening]

One of the things that we have always tried to balance is getting assurance about what our lead proposals are so as not to cause unnecessary blight and trying to share information with residents as soon as possible. I believe that we will be able to start informally consulting local groups later this year and in 2013. We will do the formal consultation—the sort that the hon. Gentleman has seen on the first phase of this route—in 2014.

[Stephen Hammond (Wimbledon) (Con)]

I commend my right hon. Friend on her statement. Will she assure me that she was aware that the chief executive of Manchester city council said last week that this was a most significant decision for the north of England’s economy? Will she confirm that she still expects the monetised value of the scheme overall to be in the order of £50 billion?

[Justine Greening]

I can confirm that when we look at the key people pushing for this scheme, we notice that the key economies and great cities in the north will see the benefits. The monetised total value is upwards of £40 billion, even £50 billion. Ultimately, however, we must recognise that that calculation takes place over a 60-year time frame. Anybody building the railways back in Victorian times would never have counted the benefit we get from them today, which is very real, and the potential benefit of HS2 is significant.