Highways (Financing) Bill

Caroline Nokes Excerpts

2nd reading
Thursday 15th October 2026 Commons Chamber

Second Reading

[Madam Deputy Speaker (Caroline Nokes)]

The reasoned amendment in the name of Mr Richard Holden has been selected.

--- Later in debate ---

[Justin Madders]

We are working on projections and what we know about the road network now, and overcapacity at Dartford in particular needs to be addressed. On whether automated vehicles reduce congestion, we need to see what happens in practice.

The regulated asset base model will be applied to trunk roads in England. That model is not new—it was used to fund the Thames tideway tunnel and Sizewell C—but this is the first time it will be used on a road network. For our roads, it starts by granting a licence for a specific highway project to a private investor. The framework for that licence is set in this Parliament. The framework starts with construction and goes through to operation and maintenance. Any infrastructure project under this model will therefore start as it should, with a sound legal and regulatory foundation.

The Office of Rail and Road will then act as the independent economic regulator. It will have a wide range of powers in the public interest, including monitoring performance, obtaining information, issuing penalties and, if necessary, taking enforcement action and revoking a licence. These public interest safeguards are vital and will never be compromised. There can also be no disparity between the operation of a privately funded highway and one managed by National Highways, so I can assure the House that the Bill means that roads operated under the new licensing regime can be held to the same standards as the rest of the strategic road network. Even when difficulties arise, the framework ensures that road users are protected and there is continuity of service on the network.

Finally, the Bill allows a private operator to make a regulated return on their investment. Any charges or tolls will be levied under strict conditions set out by the Office of Rail and Road, which will be required to consider the interests of road users. Let me be crystal clear: the Bill is not and will never be national road pricing by the back door, and it is not and will never be a way to charge motorists across the wider network. The provisions in the Bill apply only to roads brought in under the financial and legal framework that we are debating today.

Let me be clear: that framework is not open ended. Licences may only be issued for new road projects, capacity enhancing improvements or the continued operation of a previously licensed road, and any road specified in a licence must be a trunk road in England. This is about strategically important routes, not minor improvements to the road network. Government policy is that tolling will normally be used only for costly river and estuarial crossings, and nothing in the Bill is set to change that.

I will now turn to the second major feature of the Bill. Some of the legislation governing toll collection dates back to the 18th century. It is high time that was updated, so that we can unleash the benefits of modern technology on our roads. Many of us have at some point experienced long queues at toll booths. It adds unnecessary delay to journeys, and drivers will rightly wonder when regulations will catch up with technology. Free-flowing tolling systems do not require vehicles to stop at traditional booths, and by allowing payment after use, they ease congestion and shorten journey times. The Bill does not mandate a certain approach to toll collection, but simply allows new technologies to be adopted and creates a modern statutory framework for enforcement practices. I have little doubt that drivers will welcome measures that can remove friction from their journeys.

It is no secret that our desire to push forward with this legislation stems from the lower Thames crossing. That crossing will almost double road capacity across the Thames to the east of London. It will improve journey times and it will tackle chronic congestion at Dartford, which is bursting at the seams. Its 2.6-mile dual tunnels under the Thames will be the longest road tunnels in the country, and the largest in Europe by diameter, and it will set the standard for carbon-neutral construction. In short, it is exactly the sort of ambitious and world-leading infrastructure project that Britain should be building.

We have been clear that the regulated asset base model is our preferred financial approach for the lower Thames crossing, but the Bill is not about the lower Thames crossing’s design, nor does it grant development consent. That work has already been done. It simply creates the financial framework that can deliver the lower Thames crossing, as well as appropriate future road projects.

I finish by reminding colleagues what lies at the heart of the Bill: recognition that too many people, in too many places, remain held back by poor connectivity, and a recognition that each congested road and every delayed journey stifle productivity. The Bill does not ask the House to choose between public and private finance as a matter of ideology, but it puts another tool at our disposal for delivering the infrastructure that Britain needs. This financial model will not be used in every case, but it does set out one practical approach, guided by a financial framework set by Government. There will be a compliance regime enforced by an independent regulator. Private capital is provided by investors, and public safeguards are protected at every stage. That is the balanced model that this Bill will deliver, and I commend it to the House.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Shadow Secretary of State.

--- Later in debate ---

[Mike Reader]

I would not want to speculate on the Government’s timetable. What is important is that the Bill goes through, and then we will go through the licensing arrangements to find the right partner to deliver this project, as well as the finance, obviously. However, the delays that happened under the previous Government—the first failed development consent order, where they completely ignored the local community, and the second DCO ending up in the courts because of challenges brought forward by the environmental lobby, as my hon. Friend the Member for Dartford (Jim Dickson) said—were not dealt with, and I am really disappointed that the Opposition are playing that card now when they campaigned against the Planning and Infrastructure Act 2025, which brought forward many measures that would have solved the problems that the lower Thames crossing had.

The question of risk is another important one. A RAB model moves construction risk on to the people who are financing, building and delivering the scheme, but the treatment of risk in the delivery of a major infrastructure project can make the difference between success and failure. The question is: who holds that risk? The Competition and Markets Authority’s review of the civil engineering sector rightly identified that the transfer of risk from tier 1s, from financers, and into the supply chain can make a big difference to a project’s solvency and how it is delivered, particularly for major projects. We have to make sure that the licensing arrangements established by this Bill make provision for Government to require equitable risk management and risk treatment within the delivery of projects, as well as prompt payment through the supply chain, so that when billions of pounds of investment are involved, that money flows through quickly into the supply chain and does not get stuck at tier 1 level.

I have a couple of questions for the Minister to round off my speech—I am very grateful for his and his predecessor’s engagement on this Bill. The Secretary of State told the Transport Committee that the process for setting tolls in the first settlement period, which would answer the question asked by the right hon. Member for Rayleigh and Wickford (Mr Francois), would be set out as the Bill progresses. Will the Minister confirm that that is still the case? The standard licence conditions will be set by the Secretary of State without parliamentary procedure, so will the Government commit to publishing the core principles for investor returns and price reviews before any licence is granted?

The Bill puts new requirements on the Office for Rail and Road. I have had relatively good experiences with that organisation, but this is a new skill and capability that it needs to have, so what are the Government going to do to strengthen the ORR’s capability to manage these contracts effectively?

Turning to existing roads, to address the point made by the shadow Secretary of State, the Government have already confirmed in a written answer that they have no plans to use these powers to toll roads that are currently free. I welcome that, but since there is confusion, could the Minister put that question beyond doubt in his closing remarks from the Dispatch Box?

Some will say that this is a pay-per-journey model that will change Britain’s roads, but I do not believe it is. It is a way of getting the biggest schemes—the schemes that get stalled for years, if not generations—off the drawing pad and into delivery. I fully support the Bill.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Liberal Democrat spokesperson.