Douglas Lumsden

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1. 29 Oct 2026·Parliament·Douglas Lumsden

   Highways (Financing) Bill (First sitting)

   <strong>Q</strong><strong><QNum HRSContentId="{BB43BE6E-C42C-449E-9D6B-CA258205E46B}"> </QNum></strong> Mr Whelan, we heard from the previous panel about the potential to offer discounts to local residents. Does M6 toll do that at present? How would that work?<span id="20" class="column-number" data-column-number="20"></span> <em><strong>Michael Whelan:</strong></em> We have done that. About two and a half years ago we put in place a new toll system—we spent £20 million on it—and that enabled us to introduce new toll pricing. We reduced prices for locals to £4, and we have held that there for the two and a half years. We have not increased it. That is something we are conscious of and have actively looked at, as well as having new products, some with discounts and some without. Interestingly, the account product that does not have a discount is our most popular one.

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2. 29 Oct 2026·Parliament·Douglas Lumsden

   Highways (Financing) Bill (First sitting)

   <strong>Q</strong><strong><QNum HRSContentId="{03F7364F-793C-4838-A6AD-FC96AC8D2C70}"> </QNum></strong> Which one is that? <em><strong>Michael Whelan:</strong></em> The Lite account.

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3. 29 Oct 2026·Parliament·Douglas Lumsden

   Highways (Financing) Bill (First sitting)

   <strong>Q</strong><strong><QNum HRSContentId="{315490A8-E145-4D01-A324-8F6421A5B142}"> </QNum></strong> What does that do? <em><strong>Michael Whelan:</strong></em> It provides an easier way to get a receipt. It also provides the ability to drive through what we call our breeze lanes, on which the gates will open automatically if your account is in good status.

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4. 29 Oct 2026·Parliament·Douglas Lumsden

   Highways (Financing) Bill (First sitting)

   <strong>Q</strong><strong><QNum HRSContentId="{873A7891-A7BE-4671-A14C-CAAEFE1BB63A}"> </QNum></strong> Mr Garratt, you mentioned that you would like ministerial assurance that the Bill will not be used more widely across the rest of the country. Is ministerial assurance enough, or would you like to see something in the Bill to ensure that it is not a Trojan horse, as the Minister says it will not be? <em><strong>Ben Garratt:</strong></em> Our sense is that the way in which the Bill is drafted is relatively strong. That is why we are seeking assurances on the record, rather than amendments. We do not want it to be used as a Trojan horse to spread this across the country, but there is a particular case for it on this particular route. Given the wording at the moment, to have assurances would be proportionate.

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5. 29 Oct 2026·Parliament·Douglas Lumsden

   Highways (Financing) Bill (First sitting)

   <strong>Q</strong><strong><QNum HRSContentId="{869FFEE8-7AEF-4486-8A7B-4F455485C558}"> </QNum></strong> We have heard that moving to a smart motorway and using the hard shoulder could increase capacity, meaning that tolls could be charged. <em><strong>Ben Garratt:</strong></em> Again, it would be good to get an assurance that that will not be the case, but that is not our reading of the Bill at the moment. That does not mean that others could not interpret it differently at some point, when looking at it in the future. That is why we are seeking a strong assurance that this is about adding actual new trunk road capacity and not doing things like what you just said.

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6. 29 Oct 2026·Parliament·Douglas Lumsden

   Highways (Financing) Bill (First sitting)

   <strong>Q</strong><strong><QNum HRSContentId="{AB901A24-1CAA-47BA-9559-6EBCB660CC8D}"> </QNum></strong> Mr Pang, do you have any concerns? <em><strong>Declan Pang:</strong></em> We are concerned about how the Bill could be applied to introduce tolls. We want greater reassurances from the Department about that. Clause 81 in particular gives the Secretary of State the power to direct any road to be made a trunk road, so we are concerned about what could be brought into scope. We want greater reassurances.

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7. 29 Oct 2026·Parliament·Douglas Lumsden

   Highways (Financing) Bill (Second sitting)

   <strong>Q</strong><strong><QNum HRSContentId="{CE9D449B-78F3-4804-B120-A01AD813070F}"> </QNum></strong> We heard from an earlier panel that the operator has limited incentives for cost control and that there is a risk of taking “costs off the book without any level of scrutiny.” Do you understand what they are talking about in that? <em><strong>Will Godfrey:</strong></em> I think “without any level of scrutiny” is something I would take issue with, certainly as I would see the arrangements working. We have had good discussions with old colleagues of mine at Ofwat about the arrangements they had, for example, for the Thames tideway tunnel. There, both the rhythm—by which I mean the frequency of reporting, monitoring and scrutiny of costs during construction—and the importance of having a dependable, expert, independent technical assurer on the costs are really important for making sure you have that right level of visibility and scrutiny. I would question the nature of unchecked costs. I am not denying that cost pressures would arise, but that is the whole point of having arrangements like an independent technical assessor.

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8. 29 Oct 2026·Parliament·Douglas Lumsden

   Highways (Financing) Bill (Second sitting)

   <strong>Q</strong><strong><QNum HRSContentId="{62BA81A3-8AC9-4226-AE43-F4EDB9157FAD}"> </QNum></strong> Is it true that there are limited incentives for cost control? What is the incentive for the operator to keep the costs down? <em><strong>Will Godfrey:</strong></em> I will go to both costs and schedule. There are instruments that you can bring in through a licence—such as cost-sharing rates. The point I was trying to make earlier is that you do not necessarily design a price control—at the moment, if there is a cost shock, it just goes through to end-user prices, so cost-sharing arrangements are one example. You can also bring in thresholds to make sure that the company is incentivised to remain on schedule as well.

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9. 29 Oct 2026·Parliament·Douglas Lumsden

   Highways (Financing) Bill (Second sitting)

   <strong>Q</strong><strong><QNum HRSContentId="{78111477-0441-4D0A-AF19-B1697F1BDD48}"> </QNum></strong> If an operator in future was not making any money and was going under, who would step in? Would it be you? <em><strong>Will Godfrey:</strong></em> Before we get to that point, it is worth bearing in mind whether there are other potential investors willing to buy out the company that is struggling. There may be particular reasons why—maybe it was not well managed or well financed. There is the potential in principle for someone to come in through normal mergers or acquisitions and take responsibility. In the event that the company is really struggling against a particular settlement, that is a challenge for a regulator to manage. There are certain provisions on the limit, where things ultimately are pushed to the point of non-recoverability, which are envisaged within the Bill. One of the jobs of the regulator is, first, getting that first price control settlement right. As I say, at the moment that is being set by the Department, but getting that projection on the allowed cost is key—get it right at the start. Then, that rhythm of regular monitoring is really important to make sure that you anticipate that point. What you do not want to be doing, particularly with a construction project like this, is to get to that point with some element of surprise. What you need to do is keep that regular rhythm of monitoring and scrutiny, so that you can act before you get to that point that the company has nowhere to go.

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10. 29 Oct 2026·Parliament·Douglas Lumsden

    Highways (Financing) Bill (Second sitting)

    <strong>Q</strong><strong><QNum HRSContentId="{04343CE7-7C19-497F-9ADB-DD359EAB0DC4}"> </QNum></strong> I guess you could step in and increase the costs and have them earning more to try to keep them on a sustainable footing.<span id="46" class="column-number" data-column-number="46"></span> <em><strong>Will Godfrey:</strong></em> At certain points it is possible that a regulator could introduce things like cost limits, beyond which there was then a redetermination of a price allowance, but not necessarily one that was a simple “costs have overrun by CX, therefore tolls increase by the same amount.” It would not be an automatic pass-through; it would be subject to that efficiency and economy test.

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