Showing every spoken contribution, including 5,575 under 12 words. Hide short remarks
My right hon. Friend has been a staunch defender of Ukraine for many years in this House. Would he agree with what President Zelensky said yesterday, as reported in <em>The Sun</em>, when he advised this Government to prioritise UK defence spending and to do so without further delay? Does Zelensky know something the Government do not?
Further to that point of order, Madam Deputy Speaker. If I caused any offence, I am sorry, but I was reacting to the fact that the hon. Gentleman effectively said that the people on the Conservative Benches could not read, which I humbly suggest is not very polite.
It is a pleasure to sum up for His Majesty’s Opposition this afternoon. Perhaps I can begin on a consensual note by pointing out that yet again, as we are debating these important economic matters, including the defence of the realm, there is no Member of Parliament from the Reform party present. They have taken no part in this debate at all. We know that they do not do Thursday afternoons, and they certainly do not do defence either.
No, I think it is because they are desperately trying to find someone—anyone—to go to one of their press conferences. Now, according to the Red Book, working-age welfare spending will increase to £221.5 billion in 2031-32. That is almost a quarter of a trillion pounds and an increase <span id="539" class="column-number" data-column-number="539"></span>of over £57 billion since 2024-25. The Prime Minister famously said at the Dispatch Box just a few weeks ago that “national security…cannot come at the expense of social security.”<span id="vol790_col1036" class="cross-reference" data-house-id="1" data-column-number="1036" data-volume-number="790" data-external-id="27366963-96CC-4751-A325-AA825B94E732">—[<em>Official Report</em>, 9 September 2026; Vol. 790, c. 1036.]</span> That really is a segue to what I principally want to say this afternoon. What the Chancellor announced yesterday was not a detailed programme for how to spend 3% of GDP on defence, but just a plan to have a plan—which is not really a plan at all. He promised to “begin work”—his words—on how this would be achieved by the time of the spending review next year. The Labour Government have already had two years to answer this question, so why do they need a further year now? When Labour published the strategic defence review in June 2025, all three authors of the review, led by Lord Robertson, a respected former Secretary-General of NATO, were absolutely adamant that the bill for implementing their recommendations was a minimum of 3% of GDP on defence. Unless and until the Government definitively commit to spending that money, it is very difficult for our armed forces realistically to deter a war with any aggressor, and in particular the Russians—not the Trussians! At the time of the SDR, we were told that that level of detail would be provided in the subsequent defence investment plan. The House was promised this in the autumn, then by Christmas, then by the new year, then in the spring, and it was finally published only in late June 2026. Nevertheless, when the DIP was eventually published, the Government kicked the can down the road for a second time and still failed to provide a definitive date for when, and crucially how, this country would spend 3% of GDP on defence. Indeed, the then Defence Secretary, now the Chancellor, famously resigned, seemingly on a point of honour, because the Government had failed to give a date for 3%. I have here his resignation letter, dated 11 June, and I quote from it directly: “After explaining to you that I would not be able to accept a DIP settlement that does not give our Forces the resources they need, I am now left with no other option than to submit my resignation as your Defence Secretary.” It is also worth recalling that the then Veterans Minister, the hon. and gallant Member for Birmingham Selly Oak (Al Carns), resigned in company with him, partly over this and also because of his very severe reservations about the Northern Ireland Troubles Bill—a wicked Bill—which he famously described as “unfit for purpose”. Once the previous Prime Minister then fell, miraculously, having resigned as Defence Secretary, the right hon. Member for Rawmarsh and Conisbrough (John Healey) was immediately reincarnated as the Chancellor of the Exchequer. However, he then found himself with the boot very much on the other foot. Given his understanding of defence, and the solemn terms in which he wrote his letter, it was not unreasonable to assume that, having now seized control of the bridge at the Treasury, he would be ideally placed to meet his own request to name the date for 3% and how to finance it. Otherwise, why did he resign? I am therefore genuinely deeply saddened to see that, yesterday, he failed his own test. All we were given was an offer to produce a plan for 3% in the Government spending review, which will take <span id="540" class="column-number" data-column-number="540"></span>place next year. In other words, a man who seemingly resigned on a point of honour, when he had the perfect chance to put that problem right, completely ducked it. All that Labour has done is kick the can down the road for a third time. Our armed forces therefore cannot realistically plan because they do not know how much money they will really have to spend on this nation’s defence, and they are now going to have to wait at least another year before they do. The House need not take it from me; Chris Mason, the political editor of the BBC, in summarising the Budget on the 6 o’clock news last night, said, “The biggest questions this Government still faces, such as the long-term funding of defence, this Budget didn’t answer.” In fact, it is even worse than that. When the Defence Secretary agreed the SDR, he also signed up with the Treasury for almost £11 billion of efficiency savings. This was a Labour deal—a Faustian pact—between two warring Government Departments, but the effect of those in-year efficiency savings, or “spending cuts” in pub English, is now proving debilitating for our armed forces. The in-year cuts were some £2.5 billion in the previous financial year and £3.5 billion this year, 2026-27. One of the reasons it took nearly a month to get HMS Dragon to sea was that maintenance cuts occurred under the efficiency savings programme. We now see the vast bulk of the Royal Navy tied up alongside the quayside, partly because of maintenance issues but also to save money. For many months, we had a period in which not a single one of our nuclear attack submarines was at sea. The Minister might intervene and chide me for discussing submarine movements on the Floor of the House, but I am not—I am discussing the absence of submarine movements on the Floor of the House. We have also seen Army exercises cancelled on Salisbury plain and flying hours reduced for some of our RAF pilots. These are exactly the wrong things to be doing if we are trying to send messages to Vladimir Putin, a former KGB colonel, to deter him from further adventurism—for instance, in the Baltic states. Yesterday, the Labour Chair of the Defence Committee—I am afraid I am going to quote him again—excellently summed it up by saying that “some of the key decisions on defence spending have lamentably been delayed until next year’s spending review. There is a cost to inaction. Investment in our nation’s defence and security cannot be kicked into the long grass. Our adversaries are not bound by fiscal years and spending cycles.” He should know. Yesterday we even learned from the depths of the Budget Red Book that the Chancellor has effectively cut the overall MOD budget by £1 billion in each of the next two years by pocketing reduced spending estimates on MOD pensions for the Treasury, rather than allowing the MOD to retain the cash and spend it on bolstering our defences. The Treasury has described these two £1 billion cuts in the defence budget as an “accounting adjustment”. Well, it is Enron accounting. It is smoke and mirrors, and it only helps our adversaries, not our armed forces. On defence housing, there is a similar story. I served for some five months on the Armed Forces Bill Committee, and we were told repeatedly that the money for housing would not be raided for short-term efficiency savings. <span id="541" class="column-number" data-column-number="541"></span>In fact, the hon. and gallant Member for Birmingham Selly Oak told us in the Select Committee on the Armed Forces Bill on 18 March: “The £9 billion has been ringfenced; it has absolutely been secured for defence housing. Nothing in the DIP process will stop us getting on with the job of making these improvements and getting the job done. We have made that commitment to not just the armed forces community but the nation. We have said it in the House, and we will see it through.” That is completely unambiguous, so imagine our anger when we then saw a letter from the permanent secretary to the Chair of the Public Accounts Committee, dated 25 September, which said not only that some £850 million of that money will be deferred to the next Parliament, but that an additional £1 billion of upgrades to single living accommodation for soldiers will be deferred as well. What the Government have done is cut nearly £2 billion of that investment in this Parliament, in a desperate attempt to meet exactly the Treasury-imposed efficiency savings target that, for five months, they swore blind to us they would not do. The Defence Secretary, who opened this debate, neglected to mention the MOD’s £3.5 billion efficiency savings target for this year. He talks about being ready for war within 1,000 days, while at the same time imposing crippling cuts on the operations and training of our armed forces, who are there to deter war in the first place—si vis pacem, para bellum. The Budget totally failed to answer the question of how the Government will actually spend 3% of GDP on defence, and they are listening in Moscow, Beijing, Tehran and Pyongyang. This is a dereliction of duty by a Government who will the ends but do not will the means, who talk tough but act weak, who have let down the people of this country and will not defend them properly, and who must be held to account at the ballot box for their abject failure in defence of the realm.
I am sure the right hon. and learned Lady can confirm to the House that she is a Treasury Minister. I have here the press release issued by—the Treasury—which says, “Exclusive. Chancellor John Healey tells Krishnan Guru-Murthy Labour will not bring welfare bill—”
I apologise, Madam Deputy Speaker. I was reading the press release, but I accept your admonition. Anyway, it says that the bloke who is in charge of the Treasury has told Krishnan Guru-Murthy that Labour will not bring the welfare bill down in this Parliament and the Economic Secretary to the Treasury—to give the right hon. and learned Lady her correct title—has just said that it will. Who is right? Is it the right hon. and learned Lady, or is it her boss? They cannot both be, can they?
Like others in this House, I think it is fair to say that this whole process has been a shambles. Like many in the House, I come from a local government background, and I feel sorry for my councillors, my council and my residents for what they are having to go through. Having said that, the previous decision for Hertfordshire was wrong, so I appreciate that the Minister has taken the opportunity to reassess what Hertfordshire will do. Given that my community is a collection of small towns and villages, and we do not have a mayoralty, how will he ensure that my community is properly represented, whatever the outcome for Hertfordshire?
Earlier this week, the all-party parliamentary group on rail had presentations from representatives about access to both airports and seaports. They made the suggestion that modest electrification projects linking seaports such as Immingham to the main line would greatly improve rail freight distribution. Do the Government have plans for such schemes?
St Andrew’s hospice in Grimsby and Lindsey Lodge hospice in Scunthorpe provide an excellent service to my constituents, as does the hospice movement across the country. Hospice UK held a drop-in session earlier this week. It outlined research that found that modest additional funding to the movement could save the NHS considerable amounts in emergency treatments. Can the Leader of the House find time for a debate, so that we can explore how the hospice movement can actually save money for the NHS, as well as provide excellent care for our constituents?
North Lincolnshire and North East Lincolnshire, the two unitaries serving my constituency, are unanimous in wanting to maintain the status quo, as are the four MPs across the area. The Minister’s predecessor announced that that would be the case. Could he enlighten us as to why he is further delaying and continuing the uncertainty?
Like my hon. Friend the Member for North Cotswolds (Sir Geoffrey Clifton-Brown), I agree that merging six district councils and one county council into one unitary authority for 650,000 people is a good idea—it has a lot of efficiency. In Worcestershire, we have 630,000 people, six district councils and one county council. How on earth did the Minister come to the conclusion that it was a good idea to split the county council in two and have a north-south divide in a county smaller than Gloucestershire?
It is a pleasure to serve under your chairmanship, Sir Roger. I will speak in support of new clause 34, which is about prioritising brownfield for development. We always hear from the Government that they want to protect the green belt. I often laugh when they say that, because there is nothing in legislation: they never want to put anything on the face of the Bill or issue anything to protect the green belt. Labour’s favourite think-tank, the Institute for Public Policy Research, has found that 1.4 million brownfield sites have been left unbuilt since 2007. As I said on Second Reading, that number is rather close to the Government’s commitment to build 1.5 million homes, which they have all but admitted they will not meet.
I am slightly bewildered. I have great respect for the hon. Gentleman, who invited me in a debate in the Chamber to visit a pub in his constituency. I did not take him up on the offer, but maybe I should have, because I could have corrected him on a lot of the things he has just said. I am slightly bewildered by the nonsense that has just been spoken. I was a council leader. The planning system is not why these houses do not get built. When I speak to developers in my constituency, lots of them say that it is now difficult to employ people because of the day-one employment rights that this Government have brought in. Lots of businesses speak to me about the increase in national insurance contributions. The Opposition have a plan to take £50,000 off the cost of building a new home, which will include social homes and increase the supply. This Government have done nothing to increase supply; all they have done is attack local councils for giving out planning permission. Local councils get punished when they do not have a five-year land supply, which is something that they have very little control over. The Government need to do much more to develop brownfield sites.
I thank the hon. Member for his kind words; I have great respect for him too. He makes an interesting point, but it is a wider issue than that. It is about appropriate development in the right place, followed up by infrastructure. I agree that brownfield sites are usually in the centre of towns. As I said on Second Reading, we are all fed up with driving past sites with all the hoarding up. The sites have planning permission: either they have gone through the planning committee, and the local council has said, “Yes, we will give permission based on these circumstances,” or unfortunately it has not, but permission has been won on appeal. It creates a certain feel in a town centre when someone goes down and sees all the hoarding up on the brownfield sites. In the heart of my constituency, in Cheshunt, we have a care home waiting to be built. It is a long-overdue facility in the local community that we really want to see built, but it has been left empty for years and years, and we just see the hoarding up. It creates a real sense of loss of pride in a place when someone goes down to the town centre and sees site after site like that. We have sites in Hoddesdon that got planning permission in 2014 and have only just started moving through this process.<span id="109" class="column-number" data-column-number="109"></span> Lots of things affect house build-out rates, but this Government could do much more to give powers to local councils to get these brownfield sites off the ground, because there are thousands of sites across the country that have planning permission but remain unbuilt.
I know that the Minister has a lot of expertise in this area. One example is that when standard planning permission is issued, a developer might get three years to build. As we have seen in my local area, that does not necessarily mean that something gets built; it just means that they have started on site. That could be digging a hole or building the first wall; nothing is actually produced at the end of it. I would like councils to have a “use it or lose it” power, which would mean that someone cannot necessarily finish building just because they have started digging on site.
I think we have to explore all options. I want to protect as much of the green belt as possible. We all have brownfield sites in our constituency that we want used to meet the social housing targets and bring down waiting lists. Unfortunately, the Bill talks about stopping the right to buy. I just want to put it on the record that if we do that, the people who bought those houses will still be in them. Those people, and the waiting lists, will not magically disappear if we get rid of the right to buy.
As I say, we need to explore all options, and I want brownfield sites to be built out first. I want to protect as much of the green belt as possible. That means looking at how to use areas that have planning permission and have already gone through the planning process—areas in our town centres that residents drive past all the time. The Government need to look at those sites, because there are loads of unbuilt planning applications; we have all had consultations and spoken to our residents about them. All options must be on the table. We see this in our constituencies all the time. People come to see me at my local surgery to ask why a site has not been built out. We desperately want a care home built on a brownfield site in the middle of Cheshunt <span id="110" class="column-number" data-column-number="110"></span>town centre. It would be good if the Government gave local councils tools to enable those sites to get built out quicker.
Absolutely. New clause 34 says that the Government must bring forward a strategy for brownfield sites, which could include a multitude of options. When they do so, the Opposition will look at the benefits of all the items in the strategy, which could include a “use it or lose it” power. That is one example that the Government could review to see what could happen. The new clause is about using brownfield sites first. I do not think that anyone disagrees with that, so it would be good if the Government accepted it. If they do, the Bill might actually be about building more social housing. At the moment, it does nothing of the sort.
I thank the Minister for giving way; he is always very generous with his time. Does he believe that the Regulator of Social Housing has enough powers to deal with the issues that he describes? That is just me, in a good spirit, asking a genuine question about how he thinks it is operating.
It gives me no pleasure whatsoever to say that from start to finish, this Government’s approach to local government reorganisation has been nothing short of a farce. The Government first promised to publish their English devolution White Paper in November 2024. It was delayed until December 2024, with affected councils given three weeks over Christmas to decide whether or not to delay local elections. Last year, after the right hon. Member for Ashton-under-Lyne (Angela Rayner) was forced to resign from the Cabinet, her successor—and, as it turns out, her predecessor—assured us that reorganisation was not taking, and would not take, any longer than planned, and that elections scheduled for May 2026 would go ahead. The Government confirmed that twice in November 2025, yet the very next month announced that elections in some parts of the country would be pushed back as far as 2028. Two weeks later, again in the run-up to Christmas, the then local government Minister invited another wave of postponements. In January this year, despite having promised not to delay elections in November, the then Secretary of State announced legislation to postpone 29 elections. The next month, days before the Department was due to answer for its behaviour in court, those postponements were withdrawn. Naturally, the taxpayer was left to pick up the tab for all those delays—a bill that runs into the tens of millions of pounds. That U-turn was announced during recess, so that Members of Parliament had to wait to question Ministers. In March, there was another set of announcements and another set of legal challenges. In June, it was revealed in a pre-action letter issued by the Department that Ministers had ignored official advice over reorganisation plans. In July, just days before the right hon. Member for Makerfield (Andy Burnham) became Prime Minister, the previous Secretary of State announced a whole new set of reorganisation plans, with many Members given essentially no time to scrutinise the <span id="465" class="column-number" data-column-number="465"></span>sweeping changes that were set to be imposed on their areas. We still have not seen the advice that informed those decisions, so will the Minister confirm today, in the interests of transparency, that that advice will be published? In September, following updated and privileged legal advice, the current Secretary of State withdrew decisions for Essex, Hampshire, Norfolk and Suffolk, and paused plans in most of the rest of the country. What a complete joke! Today the Minister talks of giving councils clarity, yet goes on immediately to say that all options and proposals remain under consideration, and that he approaches all decisions with an open mind. He cannot be serious. We are two and a half years into this process, and the Government had years in opposition to plan it. Why have these decisions not yet been made? How can we still be at the stage of keeping an open mind, and what clarity exactly have we gained from the statement? The vast majority of councils are none the wiser after what we have heard today. The Minister talks of allowing the process to “run its course” and of giving “full and proper consideration” to each decision, but can he set out what will be taken into consideration? What role have party political objectives played in determining new local government boundaries? Have the Government received, at any point during the process, legal advice that indicates that political considerations were given undue weight in deciding new council boundaries? When can councils that have been left in the dark by today’s announcement expect some kind of verdict from the Government? Which areas will hear by Christmas, and what does “early next year” actually mean? Given the Government’s record on meeting their own deadlines, I am sure that the Minister will forgive me for my scepticism. The real-world results of this endless delay are plain to see. People across the country are left without any sense of which council will be providing services in the year and years to come, while councillors and council officials have spent millions of pounds of taxpayers’ money planning and preparing for new authorities that might never materialise. Notwithstanding the announcement that the Minister has made on funding, will he provide an estimate today of the total cost of this Government’s shambolic local government reorganisation? How much of that cost is being eaten by legal fees? The money spent on this farcical reorganisation process should have been spent instead on resurfacing roads, collecting bins and maintaining parks—core local government functions that people care about. For all the Prime Minister’s talk about local government, this whole approach to devolution has shown nothing but contempt for local democracy. Local voices have been ignored in the drawing of new council boundaries, and have been overridden by party political considerations. Again and again, the Labour Government’s approach to local government has been about imposing more government, pushing up tax, and stacking the deck in a cynical effort to gain political advantage. They should be ashamed.
I agree that the Government quite like cost-benefit analysis. Perhaps they could do a cost-benefit analysis of the hon. Member’s proposal for a cost-benefit analysis before deciding whether to support it. That is just a suggestion.
Greedy corporate interests have stripped out more than £200 million from our Isle of Wight ferry services in the past 10 years. I am grateful to the Minister for setting up local roundtable meetings, but they are at risk of becoming a talking shop, and the ferry companies do not appear to be taking them seriously. Can he give us an assurance locally that if the ferry companies do not take this opportunity to improve services and reduce prices, the Government will consider taking steps to force their hand?
Will the Leader of the House give the House the forthcoming business?
I thank the Leader of the House very much for that update. As the House will be aware, this is a day of very mixed feelings as we mourn the deaths and injuries sustained in the Spanish high-speed rail disaster yesterday. In a far happier vein, it is impossible not to celebrate the triumphs of Harry Kane in the Ballon d’Or—the first British winner for 25 years—and of giant-killing Fleetwood Town in conquering Arsenal in the Carabao cup. Just in time for Halloween, we learn that the SNP Government in Scotland have assembled an army of nearly 800 ghost workers on the public payroll, costing taxpayers £27 million a year. The jobs have vanished, but the salaries remain. One of those people has been non-working in the NHS for 17 years. That is the SNP in a nutshell. Needless to say, the Scottish Government have no plans to change that state of affairs, and with hundreds of people being paid to pretend that they have jobs, it is the perfect metaphor for this Labour Government. So to the Chancellor of the Exchequer, who spoke after the usual orgy of pre-briefings to the media yesterday. To his credit, he avoided some of the more lunatic ideas of his colleagues. He tried his best, but frankly Harry Kane or Fleetwood Town—hell, Fleetwood Mac—would have done better with that Budget. It was a Budget for a May general election, not for the future of Britain. As Helen Miller from the Institute for Fiscal Studies put it, <span id="440" class="column-number" data-column-number="440"></span>there was “lots of fiddling”, but no “clear, coherent vision”. It means that disposable household incomes are falling, the tax burden is at a historic peacetime high, and growth forecasts are falling, with not even the whiff of a strategy for growth yesterday. Worse still, as noted economist Paul Johnson pointed out, the Budget implied back-end loaded spending cuts in “most areas of public service spending of 2.6% per year between 2028-29 and 2031-32.” His verdict was that this is “not honest politics, nor is it honest economics”. Those are his words, Mr Speaker, not mine, and I think it is well known that Mr Johnson is not a Conservative. There is something even more troubling here. Britain is walking a fiscal, monetary and security tightrope, but yet again, the Government’s response has been to postpone difficult decisions, spin the plates, ladle on the fudge and hope that nothing goes wrong. Now we have persistent speculation, despite attempted rebuttals, that the Prime Minister may call a general election—what an extraordinary abdication of responsibility that would be. The message would be this: yes, Britain faces profound economic and international uncertainty, so let us add a little extra disruption to that with an entirely unnecessary election, more than two years before one is required and, while we are at it, let us reopen the constitutional turmoil of another EU referendum to boot. The British people would surely say, “We gave you Labour people a majority of more than 170 to sort out the country’s issues. You have replaced your own Prime Minister and your Chancellor. You have failed to deliver the change you promised, and now you want another election because you are simply too frit to make the decisions required.” Britain needs growth, stability, financial strength and national security. Instead, it is getting short-term fixes, deferred decisions and political manoeuvring. This is not a strategy for governing Britain; it is an absolute failure of leadership. The Chancellor could not even meet his own test for defence spending, over which he supposedly resigned. The Prime Minister has talked endlessly of his desire to “rewire the state”, and the Chancellor said the same in terms yesterday. We have a huge debt burden, stretched public services, rising interest rates and growing defence commitments. There is the escalating threat of external shocks—Ukraine, Iran, inflation, AI, trade wars, extreme weather, another pandemic—so will the Leader of the House now explain, in his usual candid way, without prevaricating or blaming others, why those two men have demonstrated absolutely zero interest in actually taking any of the serious decisions required to address those issues?
<Question HRSContentId="{7AAAE1AE-D109-4DF0-9805-8D424F26E507}">T2. <QuestionText HRSContentId="{B0829464-45D7-4B47-B3A2-D5017828F7D7}"></QuestionText>Unlike my constituents, Mr Speaker, you are lucky enough not to have to suffer the weekly misery of South Western Railway. I surveyed my constituents recently and asked them what they wanted from the first nationalised rail service, now that we are paying for it. Their priorities were clear: they want more services from Liphook, more carriages at Haslemere, faster journeys from Farnham and any access at all from Whitehill and Bordon. Will the Minister commit to meeting me to get those four rather simple things done soon?</Question>
<strong>Q</strong><strong><QNum HRSContentId="{916422EC-6EE9-4808-9561-BA7D13EA9492}"> </QNum></strong> It is a pleasure to serve under your chairmanship, Ms Lewell. Good morning, gentlemen. On one level the Bill, particularly on Second Reading and in other narratives that have come out since it was first published, seems to be presented as answering the question: how do you solve a problem like the lower Thames crossing? But it equally has a lot of other provisions—perhaps it is due to badly drafted clauses or perhaps it is deliberate—that seem to allow tolling and road pricing to extend further than the lower Thames crossing. Is that something your organisations are concerned about, and do you feel enough focus has been given to parts of Bill related to everything other than the lower Thames crossing—to the general motorists in this country? <em><strong>Edmund King:</strong></em> Obviously if you look at the need for the lower Thames crossing—the congestion and the environmental issues currently at Dartford—it is easy to see that some alternative solution is needed. But, as you rightly say, this Bill is not just about the lower Thames <span id="5" class="column-number" data-column-number="5"></span>crossing; it could allow that finance model with other schemes. It might have been easier if it was concentrated on the lower Thames crossing because then you could have brought in more restrictions and safeguards on tolls for motorists. As the Bill stands, on the one hand you have the Office of Rail and Road as the regulator for it, and then you have drivers who are the consumers, whether they are individual motorists or heavy goods vehicle drivers. To some extent, there might be a conflict between those two. The ORR has to ensure that the licensee makes money from it so it can be viable, but at the same time, it regulates tolls for the drivers. You could argue that there might be a conflict in that at times. When we looked at similar schemes before—I did a paper on road miles with an economist, which looked at the broader issue of road pricing—one thing we called for was an independent body to oversee tolling and ensure it is fair. I certainly think that the responsibility of the ORR when it comes to tolls could be strengthened and given more independence within the Bill. <em><strong>Steve Gooding:</strong></em> Clearly, the Committee will want to look very closely at clause 3, which I think is the key thing here. Yes, we looked at it and wondered whether this was a way of creating a framework that could then be applied to the existing road network and the existing motorway network. Clearly, the provisions relate to the trunk roads—the National Highways roads. I think the way clause 3 is drafted tightens that down to where capacity is being added, but we want the Committee to look at how much capacity is being added in order to make that a valid use of the powers in the Bill. Is it simply, for example, playing tunes with the speed limits or maybe adding a lane? What is it? In those circumstances, would we really be contemplating transferring sections of the existing national road network over to a private company? I do not think that is the intention, but the intention is not always the actuality.
<strong>Q</strong><strong><QNum HRSContentId="{E5C7CB7B-C985-4181-868A-379FA3EE0308}"> </QNum></strong> That is very helpful. I want to dig a bit deeper on that because I think the part of clause 3 that you are referring to is where it says: “A licence may also provide for the holder of the licence to secure the maintenance, operation or improvement of any other highway”. Is it the view of your organisation and members that people would expect that to be about an entirely new road or perhaps a dualled road where there is currently a single carriageway, rather than making what many might consider a relatively minor improvement, such as—I do not know whether this is an improvement—adding smart motorway cameras? <em><strong>Steve Gooding:</strong></em> Our understanding of it, and this is why I think the Committee will want to make sure this is clear, is that the subsections of clause 3 relate back to each other. It is not relatively minor maintenance of itself that would enable the licence to be awarded. In our reading of it, it has to be linked back to enhancement and capacity—but perhaps the Minister will want to make that clearer.
<strong>Q</strong><strong><QNum HRSContentId="{CFC51A3E-52B8-4083-B342-FE3B143A2929}"> </QNum></strong> Lastly, where a new scheme is being proposed under the provisions of this Bill, is enough thought being given to other nearby existing roads and to those who rely those nearby roads—businesses, <span id="6" class="column-number" data-column-number="6"></span>homeowners, people who live there, schools, hospitals and so on—and are they being properly consulted on this? Too often in this world, the new, shiny thing gets all the attention without due regard to existing infrastructure. Do you feel that that has been adequately explored? <em><strong>Edmund King:</strong></em> You can say that in relation to the lower Thames crossing, because in that part you know the two elements—one is the current Dartford crossing; one is the new crossing—and you can look in that area. But if you look at the Bill more generally, it is very difficult to say because we do not know where it will be applied. Clause 3(1)(a) does say “construction of a highway specified in the licence”, but we obviously do not know where that highway is or what the competing interests are with housing, the economy, routes and so on. In terms of this Bill, it is difficult to say unless a concrete scheme is being considered. <em><strong>Steve Gooding:</strong></em> It is within the duties that are being placed on the Secretary of State to consider where these powers will be used: there are duties in relation to having regard to users of the network, for example. It could be made more explicit. After all, we are talking about a national asset here, and if faced with a toll and an alternative, people might well choose the alternative, with negative traffic impacts in the round. That would have to be taken into account.
<strong>Q</strong><strong><QNum HRSContentId="{62574D40-EF52-4C01-B2AB-FE069F84BB70}"> </QNum></strong> Good afternoon, gentlemen. Can I start with Ben and Declan from the logistics and haulage sectors? There were a lot of questions during the last panel about the overall cost of the lower Thames crossing and any other schemes that might get a licence through the provisions of this Bill. I know from my role as a shadow Minister doing roundtables with Logistics UK and visiting haulage firms in my own constituency that margins are very tight in the sector right now. Equally I get that the juxtaposition of margins is even worse if you are stuck in traffic and cannot get across the Thames or to wherever it is you want to go. Can you comment on where the breaking point is for the sector? If a toll for an HGV, for example, came out too high, there would be a perverse incentive for haulage operators to use existing other routes to avoid that. Is there a risk that we end up building these things too expensive, the toll is too high, and the haulage sector finds itself in a worse position? <em><strong>Ben Garratt:</strong></em> It is a tricky question. What we know is that the current situation and reliance on the Dartford crossing costs the logistics sector, as well as other users of the crossing, a lot in terms of the congestion that comes from that. The cost of sitting in traffic is estimated at £200 million a year. That is based on the time sitting doing nothing, but does not take into account the wider cost to the logistics sector and supply chains of goods not arriving on time. It is just based on the wasted time of the driver. We also know that reliability, or lack of it, is a cost borne by the sector that is then passed on. When we speak to our members, they tell us that what they want is a reliable transport system so they can factor in how much a job is going to take—how much <span id="13" class="column-number" data-column-number="13"></span>time, how many drivers and what they should charge for it—and unreliability means it is much harder to do that. As a sector we potentially have more assets than we need to cover the same amount of ground, which is why it is really important for the sector that capacity increases and why we support, therefore, the delivery of the lower Thames crossing. In terms of a breaking point it is quite tricky because the reason that the sector has a low margin—between 1% and 3%—is because it is a highly competitive sector. It is a feature of the sector rather than something we would say we complain about. It is because there are lots of logistics businesses all competing with each other to deliver the best price. When there are cost pressures on the sector over the medium to long term, it generally keeps that margin where it is, but it results in the overall cost being passed on to the public. Unless it is priced ludicrously, the risk is more about the overall cost being passed on to the public rather than it breaking the operators, as it were.
<strong>Q</strong><strong><QNum HRSContentId="{10DAD023-6368-46FE-8260-9509BD9D5F6A}"> </QNum></strong> On the inflationary impact of that example, I think on Second Reading there was largely cross-party consensus on the need for the lower Thames crossing. That is not a point on which there is a political divide. Where the Bill opens up wider questions is on the “what else” bit—how many more schemes under this model could come to pass in future? Without wholesale change to other things, such as fuel duty, road fund licence and so on, there will be an inflationary impact if we suddenly end up with lots of schemes used by general motorists as well as the haulage sector. There will be a tipping point, where the inflationary impact—with the pass-on of tolls to customers—becomes high. Do you have any modelling on that? <em><strong>Ben Garratt:</strong></em> No, we do not. We would say that the inflationary impact is a balance between the direct input costs—paying a toll, fuel duty and taxes—and the indirect costs of congestion. As a sector, we want to keep those two things in balance, but one of the things that we do want is more investment in the transport network—road, rail and beyond—because some real hotspots are causing congestion and therefore passing the cost on. This is one of them, but it is not the only one. We need to make sure that is in balance. We are not disputing building this particular crossing, but not building things in general has a cost in itself. It is about making sure that this is fair, and therefore about considering the different ways of paying for it. Traditionally, such things have been done under general taxation, which we all pay for, but given the fiscal situation, we as a sector are not against a toll approach, a private finance approach, for this particular crossing. This crossing is one heavily used by the logistics sector. For us, it is a key part of the trading route between Scotland, the midlands and the north, and Europe; it is not simply an issue for the east of London, Essex and Kent. We want to see it happen and, as a sector, we are prepared to help pay for it. We just want to make sure that the toll takes into account the different vehicles, and that the different toll rates for different vehicles take the sector into account. The toll should not be based just on the weight of vehicle, and wear and tear; we need to take into account the economic value that the logistics sector provides to the rest of the country. Ultimately, we all pay for that in a way that is slightly different from other road users.
<strong>Q</strong><strong><QNum HRSContentId="{6184434A-6A5F-46F9-8C59-0947DDA58B5C}"> </QNum></strong> That is a point I fully understand. Declan, will you add your thoughts and your organisation’s perspective? I will add one rider to the question I asked Ben: the previous Government removing tolls from the Severn bridge was pretty well received by general motorists and the haulage sector. That is where I am coming from—to get an understanding of where the tipping point is. <em><strong>Declan Pang:</strong></em> The cost and affordability of toll rates is a significant concern for us. As you all know, the majority of those in the haulage sector are small and medium-sized enterprises. Small businesses, many of them microbusinesses, are the major users of the trunk road network, so their interests need to be front and centre of how toll rates are set. At the moment, we also have quite a fragile situation in the haulage sector—a particular rate of mergers and acquisitions, as well as a high rate of insolvencies—and that difficult climate has certainly been exacerbated by higher input costs and fuel costs. That should certainly be considered when the Bill is looked at. In the Bill itself, we are particularly concerned about the affordability of tolls and the transparency of how those tolls will be set, as well as the wider impact of the financing model. We would very much like MPs to think about and look at how tolls will be calculated, how they might increase over time, and how the ORR, as the regulator, will assess the affordability of tolls, because we do not feel that that is clearly set out, as the Bill stands. Lots of concern is about whether the Government have plans to use the Bill powers to introduce tolls on roads that are currently free. We certainly seek additional assurances on that point from the Minister.
<strong>Q</strong><strong><QNum HRSContentId="{B0784823-70F8-4D3B-A607-4C8173B84EF1}"> </QNum></strong> That is incredibly helpful. Given that the affordability of tolls is so critical to your members, do you believe that there should be a presumption or something even stronger locked into the Bill that, within the bounds of safety and meeting the correct standards, there should be due regard to ensuring that schemes are built as cheaply as possible? For example, the lower Thames crossing is already being made more expensive by banning the use of diesel plant to build it. Should there be a presumption that things should be built, within safety and other due standards, as cheaply as possible? <em><strong>Declan Pang:</strong></em> Absolutely. The costs of constructing these schemes are essential in terms of reducing the level of tolls. We particularly think that the Bill as drafted is quite open ended in terms of the phrases it uses. As a previous witness said, affordability should be part of it, rather than just “fair and transparent”. We would like to see that included. We are very supportive of Jim Dickson’s amendment on the rates as well. We would like to see more consideration given to affordability for businesses. <em><strong>Ben Garratt:</strong></em> I agree with everything Declan said. In the assurances space, clause 1 talks about the ORR having regard to economy. That also comes up in other clauses of the Bill. We would like assurances that that includes an understanding that freight and supply chains are a part of “economy”. It is quite a broad term otherwise.
<strong>Q</strong><strong><QNum HRSContentId="{DB6B53E8-1B62-4ABE-89C1-5212D4E3E996}"> </QNum></strong> That is incredibly helpful. Mr Whelan, you have a niche interest around the M6 toll elements. Do you feel that the Bill delivers for an existing toll road <span id="15" class="column-number" data-column-number="15"></span>operation? Is there anything you feel is missing from the Bill? <em><strong>Michael Whelan:</strong></em> Our specific interest in the Bill is part 7, which will enable us to introduce free-flow tolling. At the moment, on the M6 toll, we have barriers where you need to slow down, stop and pay. Part 7 of the Bill is the first step for us to enable free-flow tolling, which will help my freight and logistics friends sitting to either side of me—they will not have to slow down and stop. That has many benefits, including time savings. The M6 toll is a very reliable route compared with the alternatives, so it further increases that reliability through increased time savings. It will also mean reduced carbon dioxide emissions because of less stopping and starting.
<strong>Q</strong><strong><QNum HRSContentId="{77A4BC7E-CC8E-4F06-8DB2-661164376FC1}"> </QNum></strong> Good afternoon. As you look at the totality of the Bill, including the elements around the lower Thames crossing, do you think the Government are joined up enough in looking at where new schemes, be that the lower Thames crossing or anything else that might come to pass, are delivered in respect of the existing infrastructure, local roads and intersections, and, as we just heard from the haulage sector, things like roadside driver welfare facilities? Does the Bill risk bringing nice new shiny things to the strategic road network without the necessary back-up to the existing intersections and roads that the new schemes will rely on? <em><strong>Ralph </strong></em><em><strong>Smyth</strong></em><em></em><em><strong>:</strong></em> It is a very good question. I point first to the second national infrastructure assessment, which was published three years ago. That said that by the end of 2026—so where we are now—the Government should publish an integrated strategy for road and rail. If you can see how you are going to improve the rail links and the road links, that would join up better and give confidence about where there should or should not be, for example, a change to the roads. The other dimension is the local angle. We have heard recently in the media about how mayors might be given more of a say on water, for example, but the Bill goes in the opposite direction. It actually weakens or removes the mayoral input on transport. Transport has been the totemic issue of devolution and, oddly, the Bill removes that. A special new category of highway is created that is not subject to something called the network management duty, which is about joining things up in long-term planning and in short-term operations, such as where there is disruption. My concern is that for some of the schemes talked about, like the lower Thames crossing, it is going to be difficult to attract the private sector to invest without making it easier—for example, without reducing the risk of mayors getting in the way or trying to promote a railway line that would actually abstract some of the traffic.
<strong>Q</strong><strong><QNum HRSContentId="{0D85CB98-0C26-4941-A0B7-8E0AEC2E635A}"> </QNum></strong> Are you suggesting that those areas of the country that currently have a mayor should be locked into the Bill as key consultees, in planning speak, before anything can go ahead? <em><strong>Ralph </strong></em><em><strong>Smyth</strong></em><em></em><em><strong>:</strong></em> I would not want to leave out the rural areas where there are perhaps not mayors.
Absolutely right—do not leave the rural areas out. <em><strong>Ralph </strong></em><em><strong>Smyth</strong></em><em></em><em><strong>:</strong></em> Quite. The problem is the bigger context and the discussion about rewiring the state. That is talking about removing consultation, so simply a duty to consult to give your views might not be worth much.<span id="22" class="column-number" data-column-number="22"></span> The problem is that it needs to make economic sense for the investors. The M6 toll did not make a profit for 20 years. You are going to have to tilt this, particularly for very big schemes like the LTC, to make it attractive for investors, and that could mean making things less affordable for drivers and there being less involvement for mayors, despite transport being one of their big issues.
<strong>Q</strong><strong><QNum HRSContentId="{D32803B9-5C01-4AC1-B2FB-90DD6DDE603D}"> </QNum></strong> Looking at the whole national scene, if you take it as read that there is no change to road fund licences, fuel duty and so on as the core funding for the road network, where is the tipping point in terms of the number of additional toll roads across the network that will just make driving unaffordable—for a haulage sector that is using longer routes every day of the week, and for the average motorist that maybe does not travel that far every day but needs to make those journeys to see relatives, go on holiday and so on across the strategic road network? <em><strong>Ralph Smyth:</strong></em> The tipping point depends on the sector and the type of journey. For discretionary journeys, like seeing a relative, a sudden increase in toll might have an impact quite quickly. If you are commuting and doing the same journey every day or if a haulage firm is doing the same routes, it might take longer for a response to happen. As we are talking about tipping points, I will also talk about climate change, because some figures from the Environment Agency have shown that by 2050—not long after some of these roads might be built—about half the UK transport network will flood regularly. That obviously means a lot of disruption and a lot of increased costs for the operator or owner of the assets. Those things will also affect, given where we are going, our use of roads, railways and everything else.
I am mindful that this is a shorter session, so I will stop there.
<strong>Q</strong><strong><QNum HRSContentId="{7578D5F3-4B44-4112-AD8E-E86F49DB3CF7}">42</QNum></strong> Good afternoon, gentlemen. Thank you for appearing before us. Clearly, this is a Bill of two halves: there is the specific stuff on the lower Thames crossing, and then it is a pretty open-ended book for other projects going forward. Can I have your initial assessment of whether this is the right model to solve both the question of getting the lower Thames crossing built and issues relating to future trunk road projects that may be required or identified in the country? Will it actually deliver value for the motorist and haulage businesses using the scheme? Do we even know that it will deliver to certain metrics? No one can give us an answer yet on what the toll would be on the lower Thames crossing, for example. <em><strong>Ben Hopkinson:</strong></em> We have quite serious concerns about the regulated asset base model. This will certainly be<strong> </strong>the first time it is been used for roads. The main issue is that there are quite limited incentives for cost control within a regulated asset base. If you are the private contractor, you have significant incentives to increase the capital expenditure on the regulated asset base to make it as large as possible, because that means you get as large a return on your investment as possible. The organisation standing in the way of that is the Office of Rail and Road in this case, and it has never overseen a RAB before. It would not even be able to look at other organisations or regulators that have overseen a RAB for roads, because there are none internationally. We have a better model through concessions. France has built more miles of motorway this century than the UK has in total. It has done that with the private sector working through concessions. Under a concession, there are strong incentives for private contractors to keep <span id="28" class="column-number" data-column-number="28"></span>their costs as low as possible, because it directly impacts their bottom line, which is completely the opposite for a RAB model.
<strong>Q</strong><strong><QNum HRSContentId="{5A4541C5-7CF6-43BF-8B01-FF3486409EA6}"> </QNum></strong> Can you just expand on the example you have given from France? How could that be integrated into the Bill, or does the Bill just get it so badly wrong on that front that it will end up costing British motorists more? <em><strong>Ben Hopkinson:</strong></em> The Bill is focused on delivering a RAB model. It is a completely different set-up to use a concession model. There is a second challenge with RAB in so far as the Department for Transport does not really bear any of the costs either. That is why you get it doing things like banning diesel construction vehicles for the lower Thames crossing. That is a policy goal it has otherwise that does not actually lead to a better overall road. It is an example of “everythingism”, where it has plenty of different goals, none of which is necessarily delivering the best road project for motorists at a very reasonable cost.