National Infrastructure Commission: Baseline Report

Lord Berkeley Excerpts

Thursday 2nd December 2021 Grand Committee

Asked by

[Lord Berkeley]

To ask Her Majesty’s Government what plans they have to address the concerns in the report by the National Infrastructure Commission, The Second National Infrastructure Assessment: Baseline Report, published in November.

[Lord Berkeley (Lab)]

My Lords, it gives me great pleasure to be able to introduce this short debate on the national infrastructure assessment. As noble Lords will know, my noble friend Lord Liddle has had to scratch for transport reasons; he asked me to pass on his apologies. I declare an interest as an officer of the All-Party Group on Infrastructure and a member of the Institution of Civil Engineers.

This is a really good time to debate the infrastructure assessment. It is a baseline report, as we all know; it is the basis for the future work the NIC will be doing. It is also really good that the Government have expanded its remit to cover the transition to net zero and climate resistance, as we have been speaking about that a great deal in your Lordships’ House.

I will try to cover briefly where we are today on infrastructure, where we should be today—if I think that is different—and where we might be in 30 years’ time. Somewhere in this report, it states that we need

“bold action, stable plans and long term funding”,

which sounds just wonderful but might not always happen. At least we are trying.

The baseline report lists some of the successes. It is worth reminding ourselves that broadband circulation around the country has been good in most places and renewable electricity is getting better—we have spoken about electric vehicles. I question how much better flooding has got; drought resilience is not something we need to look at this week, but so be it. On the other hand, some good things have happened there as well.

One of the most important things the NIC has been asked to do is social research. It says that it has got better between 2017 and 2021, which is good news. I suspect there is still a great deal of work to be done there, particularly on things such as clean water and sewage, and probably on energy supplies as well. It also says that some things are not going quite so well, including emissions from electricity and heat, which are still too high—I think we know all that. Emissions from transport have not been declining; I will come back to that, as that is very serious. Asset maintenance is not so good. Five million properties are currently at risk of flooding—that is serious, and is still going on today, as we have recently heard. There is also the pollution from water and sewage. Then there is urban transport connectivity, which I will come on to.

One of the most interesting things which has come out of a briefing from the Institution of Civil Engineers is that only 10% of British adults think that the right conditions are in place for infrastructure to transition to net zero—10% is not very good. Only 31% of British adults think that the Government have a plan for net zero; they should be worried about that, and perhaps the Minister will have views on it.

However, going forward, I hope that the NIC and the Government will take forward some of these issues. I will cover just one or two of them. I will start with net zero, which noble Lords have been debating quite frequently. Other topics include transport, rail electrification—that is in the new policy document from the Government; whether it is enough we can debate—towns, transport within towns, the 20-minute city, which I shall come on to, and new road building and whether we should be doing it. We should not forget that, if every car becomes electrically driven in a few years’ time, there will still be traffic jams. They will be electric traffic jams rather than petrol or diesel ones, but they will still be traffic jams—and, again, that is why I think public transport is so important.

The NIC says that road and rail freight seems to be going quite well, especially with decarbonisation. I would question that, actually, because I think that the technology of making heavy goods vehicles not use diesel or petrol is still in its infancy. I used to be chairman of the Rail Freight Group, and rail freight has had quite a good time over the pandemic. But there needs to be an awful lot more, and really we should be electrifying the railways and trying to cover freight moving in the last mile or so to its destination, which we manifestly do not do at the moment unless we use petrol or diesel.

Turning to energy, there are problems with the sourcing of it, and with its distribution and use. Again, we have debated that frequently over the past few months. What worries me about that is that if we use electrical power to heat most of our homes, and we use electrical power to drive our transport, on road or rail—I think we have to leave air out of this, because it is a complete failure—the forecast is that we will need 10 times the amount of electrical energy that we have now. I view that as extremely serious. We can debate how it is generated, and whether it is a good thing to generate hydrogen from electricity or use electricity as it comes; that is another debate that has to come. We have another debate here on Monday evening about plug-in chargers and things like that. But the 10-times figure is one of the most serious issues we have to address.

Then there are a whole host of environmental issues. I was rather surprised that the NIC thinks that carbon capture and storage is a good idea, because I do not believe it has been demonstrated to work yet. How long will it last and what happens when it does not last any more? I may be being naive on that, but I am not convinced it is a proven technology.

The Government have an enormous amount of work to do on resilience, including on floods and storms —we had a debate about the storms in the north-east today—as well as on drought, energy, transport and the general quality of life. But what I do not understand is why we are still building on flood plains. It seems to be utterly crazy. We may be short of land—that is a different issue—but building on flood plains so that you get flooded is absolutely crazy. I am not going to speak any more about sewage, because we have talked enough about that.

However, it is interesting that the solution for Southern Water, which is one of the worst offenders and has been highly fined, is to sell the company to Macquarie bank, whose track record is that it owned Thames Water around 10 years ago and increased its debt by £2 billion and got fined £20 million itself. Does the Minister think Macquarie bank is the best possible investor to manage Southern Water and all the problems which we know it has had recently?

The last big issue, on the communities themselves, is that there has been a lot of talk recently about how far people want to travel to work, shop, go to school or whatever. Something called the 20-minute community is being talked about quite a lot. It does not just have to be in London or the suburbs around it; it can be anywhere. Maybe the NIC will start looking at something like this when it looks at the quality of life paper, which I believe will come out next year.

Finally, it is very easy to talk about building things—I am a civil engineer, so I love building things, if they are the right things. However, we also have to look at the cost and upset and everything of building new things compared with adapting existing things, which may cause less trouble and hassle. I will bring my remarks to a close. My last point is cost and deliverability. We all know the problems there, but building things small needs to be looked at. Couple that with the question of whether we will have to change our lifestyle as we go towards net zero or whether we can carry on the way we are—you can even drive to Waitrose for a box of matches.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

My Lords, I congratulate the noble Lord, Lord Berkeley, for securing this debate. He is known with great respect throughout the House for his pursuit of certain causes célèbres, including matters relating to transport to the Isles of Scilly. I also know he is a long-standing advocate for the benefits of infrastructure and his speech indicated his clear focus on all the key issues, many of which I will be attempting to touch on this afternoon.

The Government recognise the transformative possibilities of infrastructure benefit here. That is why we have committed £130 billion to economic infrastructure since the publication of the National Infrastructure Strategy last year. However, it is fair to say that in past decades and under past Governments, the UK’s infrastructure has been plagued by stop-start public funding and policy uncertainty that has conspired to undermine private investment. In 2015, to help resolve these issues, the Government established the National Infrastructure Commission—which I will refer to as the NIC—to provide independent, expert advice. My noble friend Lady Neville-Rolfe was right to ask why it took so long. I hope to reassure the noble Lord, Lord Tunnicliffe, that the Government have a robust approach to infrastructure. We are focused not merely on capital spending but on long-term infrastructure planning, improving project delivery and supporting private investment. I will try to touch on those points as I go through my remarks.

I remind your Lordships of the crucial role of the NIC’s first national infrastructure assessment. Published in 2018, it set out a recommended long-term strategy for the country’s infrastructure over the next 30 years. That work directly underpinned our National Infrastructure Strategy, which we published last year. Alongside the strategy, the Government published their formal response to the commission’s 2018 recommendations, partially or fully endorsing the vast majority. Already those recommendations are becoming reality. For example, earlier this year we launched the UK Infrastructure Bank in Leeds, which is expected to unlock more than £40 billion-worth of infrastructure investment. Just over a month ago, the UKIB made its first investment with a £107 million loan to Tees Valley Combined Authority. Only yesterday we announced its first private sector investment, in subsidy-free solar energy.

I turn to the baseline report for the Second National Infrastructure Assessment, which is of course the main subject for today’s debate. The report highlights some areas where the Government have made significant progress, so let us start with that. First, on the delivery of gigabit-capable broadband, I mention briefly that, only yesterday, my flat was upgraded to full-fibre broadband, and the speed is much faster—that is just a bit of self-indulgence. The report draws attention to the fact that coverage is now at over 62% compared to just 10% in November 2019. The noble Baroness, Lady Bakewell of Hardington Mandeville, mentioned that rural broadband connectivity is lagging behind. The Government recognise the importance of gigabit-capable connectivity to people across all areas, but particularly in rural parts. We have committed £5 billion to support gigabit-capable coverage in the hardest-to-reach-areas where possible, so that is an ongoing programme and the noble Baroness raised a good point.

Secondly, on the transition to renewable forms of energy, the report points out that the share of electricity generated from renewable sources has grown from less than 10% in 2010 to almost 40% in 2019.

Thirdly, on our ambition for electric vehicles, the report mentions the Government’s pledge to end the sale of new petrol and diesel cars and vans in 2030, with all new vehicles required to be 100% zero emission from 2035. The noble Baroness, Lady Randerson, stated that there was not enough funding for buses along the same theme. I reassure her that £3 billion of new funding over this Parliament will be dedicated, to double the amount given since the 2015 spending review levels. The £525 million for zero-emission buses in this Parliament is in addition to wider support, including a green uplift in the bus services operator grant, and £1.2 billion of dedicated bus transformation funding.

The noble Baroness, Lady Randerson, also suggested that more needs to be done on long-range charging and charger ratios. The Government are making significant investments in electric vehicle charging, including £1.3 billion at the spending review 2020. That includes funding for a rapid changing fund to reduce people’s anxieties around long-range charging by rolling out thousands of rapid charges across our strategic road network. The UK has more rapid chargers per 100 miles than any country in Europe, according to a report. However, of course the noble Baroness is right to make that point, and there is always more to be done there—we all know that as drivers on our roads.

Fourthly, on drought resilience, which was raised. The report underlines that we have endorsed the commission’s recommendation that we increase drought resilience to reflect a one-in-500-year event.

Another positive aspect of the report is the NIC’s social research, which was raised by the noble Lord, Lord Berkeley. Understandably, people will always call for more and better infrastructure. However, this research shows growing public confidence that infra- structure will meet people’s needs over the next 30 years—this is perhaps excepting the views on net zero raised by the noble Lord. I will need to check back on that.

Of course, we recognise that the report also highlights some concerns, including nine key challenges on which the NIC will focus in its second national infrastructure assessment. I want to focus my remarks around three important elements of these, again raised during this short debate: net zero, flooding and transport.

First, although net zero was mentioned in rather positive terms by the noble Lord, Lord Berkeley, we recognise the report’s concerns about our journey to net zero, including in respect of decarbonising our electricity system and heating. That is why we have recently published our net-zero strategy, setting out how we plan to achieve our 2050 goals, in particular by leveraging up to £90 billion of private investment in green infrastructure by 2050.

The Government have also published the Heat and Buildings Strategy, which lays out our vision for a sustainable and affordable transition to a low-carbon heating sector. We are providing £3.9 billion over the spending review period for heat and buildings decarbonisation, including £1.8 billion for low-income households and £450 million for the new boiler upgrade scheme, which financially incentivises home owners to install heat pumps.

We have also provided significant funding to decarbonise transport. This includes confirming £6.1 billion at the spending review to support the policies and strategy in the transport decarbonisation plan. We have invested £620 million in the transition to EVs, building on the £1.9 billion committed at the previous spending review.

The noble Lord, Lord Berkeley, and my noble friend Lady Neville-Rolfe stated that there was no road map for net zero and that the UK was not reducing emissions fast enough. I note those two points. In response, I would say that the UK reduced emissions faster than any other country in the G20 between 1990 and 2019. The UK reduced its greenhouse emissions by 44% compared to just 5% for the G7 as a whole. In June 2019, the UK became the first major economy to legislate for an end of contribution to climate change by 2050. As I mentioned earlier, the recently-published net zero strategy sets out a clear pathway to reach net zero and level up the UK by supporting up 190,000 jobs in the mid-2020s and up to 440,000 jobs in the 2030s.

[Lord Berkeley (Lab)]

On progress on greenhouse gases and zero emissions, where does the into-the-UK part of international aviation come in this? At the moment, I get the impression that it is dumped and seen as not part of our problem. It is part of our problem.

[Viscount Younger of Leckie (Con)]

I agree with the noble Lord that it is part of the problem. I suspect that he may be referring to the air passenger duty and other matters. I shall write separately to him on that important matter, because I think it is fair to say that there is a balance to be struck between allowing people to travel and being sure that our aeroplane sector is fit for purpose in terms of achieving our climate change goals. I think that was probably the gist behind his question.

On flooding, we recognise that action is needed to improve surface water management as flood risk increases, so we have commissioned the NIC to conduct a study into the management of surface water flooding in England, including the role of nature-based solutions. In addition, the Government have updated their partnership funding arrangements, enabling more surface water schemes now to be delivered via their £5.2 billion investment programme.

Finally, I turn to urban connectivity, as part of the wider transport issues that I mentioned earlier. We recognise the challenges in respect to this highlighted by the report. That is why in the Budget we committed £5.7 billion over five years for London-style integrated transport settlements that will transform local networks in eight English city regions, and we have announced £1.2 billion over the spending review period for bus transformation deals.

The noble Lord, Lord Berkeley, asked whether the Government should consider the challenges and costs of delivering major infrastructure projects. He is quite right to highlight this. That is why the Chancellor set up Project SPEED to ensure that spending decisions are informed by deliverability concerns.

Moving quickly to next steps—with the Committee’s indulgence, I will go on beyond my time, but not too far—our work to create an infrastructure revolution is a remarkable cross-government effort. The Government have an established process for formally responding to the NIC’s recommendations. Once it has published the second national infrastructure assessment in the second half of 2023, we will respond as soon as practicable, although, as I have shown today, we are already engaging on these issues.

The noble Baroness, Lady Bakewell of Hardington Mandeville, asked about flood defences and where the £5.6 billion is being invested. Funding is distributed consistently across the country to wherever the risk is greatest and the benefits are highest. Defra published its flood and coastal erosion risk management investment plan in July 2021, as she may know. It provides an indicative regional breakdown of spend, including between £620 million and £750 million of investment in the north-west and £680 million to £830 million in Yorkshire and the Humber.

The noble Lord, Lord Tunnicliffe, asked about funding and urban connectivity. The Government have provided £4 billion of additional emergency funding to support TfL through the pandemic to address urban congestion. We have announced £5.7 billion to support transport networks.

I will conclude with a few ad lib-type remarks, as I want to pick up on an interesting point made by the noble Lord, Lord Berkeley, about our reflection on going to Waitrose to pick up a box of matches. We should be sure, as part of this debate on the NIC, of the vision we are looking at. This is probably not government policy, but we should look ahead—probably not too far—at how we might get our box of matches. Surely we would order a drone, which would deliver it to us. Or, if we were going to go to Waitrose, we would talk to our watch and ask a car—not our car but any driverless car—to come to our door. We would then get into the car with a coffee and a newspaper, be driven to Waitrose to buy our box of matches and then be driven back. The car would then disappear into the ether. We would then take our box of matches—perhaps rather cynically, I wonder what it might be for. Perhaps it is to light your fire in the drawing room, which adversely affects CO₂, so maybe we should not go there. Anyway, the serious point is that we need to think quite positively about the changes that will definitely come to the way that we live. The noble Lord, Lord Berkeley, spoke about society and our way of life. He makes an extremely good point.

To conclude, this is an extraordinary moment—