My Lords, In moving Amendment 1, I will also speak to the other amendments in my name in this group and comment on some of the others too.
I had hoped that after a lengthy discussion in Committee the Government would have come up with their own draft to address the deficiencies of this part of the Bill, and to clarify the relationship between and responsibilities of the Secretary of State and the various bodies covered by it. Regrettably they have failed to do so. However, they have produced a lot of new documents, many of which are very informative. I thank the Minister for that and for the various briefing sessions that she and her officials have held since that date. However, I have to tell her that, in relation to the issues I am about to raise they have, if anything, confused the situation.
For the benefit of newcomers to this debate, this part of the Bill is intended to place roads investment in a new context by creating a road investment strategy for England and by hiving off the Highways Agency into rather more arm’s-length companies—the strategic
highways companies. I very much approve of the first aim but I am not all sure that the second aim concerning the companies is right.
Noble Lords who are long in the tooth will remember that, going back a bit, I was a roads Minister. It is a pretty dreadful job and is always subject to representations by Members of Parliament and others on which roads should take priority, how much more should be spent and so forth. I would welcome a consistent road investment plan with a strategic direction sustained over a number of years as part of a wider sustainable transport policy. The key point for the Government appears to be that the road investment strategy in the Bill will be somehow free from short-term changes, albeit that some of the documentation that the Minister has provided us with, including the draft licence to which I shall return, says that the Secretary of State can vary the strategy at any time, and, of course, the Treasury still decides the funding—so good luck with that.
In principle, I support the road investment strategy but am unclear why it is absolutely necessary for it to be delivered by new strategic highways companies, and why a corporatised Highways Agency would do the job so much better than the present system of delivery, especially since the Government seem to have denied themselves ways of making a company more effective than the Highways Agency. I do not particularly support all these issues but the Government have clearly said that this is not a stage towards privatisation. Indeed, the Bill makes that clear, and I agree. However, they have also said that the company cannot raise its own capital, with which I disagree as that could smooth out any predations by the Chancellor. The Government also say that it is not allowed to engage in anything approaching road charging, although I note that that part is not yet included in the draft licence to which I referred, so watch that space.
Therefore, the benefits of having a separate company are a little unclear. Nevertheless, I recognise that there could be significant advantages in establishing a company, such as coherence of approach, an ability to engage in contractual innovations and possibly less direct pressure from MPs and other vested interests, although I am sure that the Minister will not be entirely free of that. Such a company could develop a long-term strategy on road safety, to which I will return on later amendments, and on issues such as telemetrics in traffic control, traffic management, road design and meeting environmental standards. However, it will deliver only if that company is itself set in a coherent institutional framework, which is normally the case for any large state-owned company. We need clarity of accountability, including the accountability of Parliament. Regrettably, the Bill does not provide for that.
The Bill refers to the possible appointment of a number of companies as strategic highways companies. The Government have made it clear that they are in reality talking about only one company. However, the Bill talks about the possibility of more than one. When questioned, the Minister and officials rather darkly referred to legal advice from counsel, even though it is clearly contrary to the policy and intention of the Government to have more than one company
involved. Amendments 3 to 7 in this group, the first of which is mine, seek to ensure that the Bill makes the intention absolutely clear, and therefore we will be able to judge the Government against that.
More profoundly in the long term, the operation of a new set-up has a lack of clarity about the relationship between the Secretary of State, the company and the monitor or regulator. There is going to be an enhanced Office of Rail Regulation, in which presumably some changes will be made, and there is the matter of accountability to Parliament. The Bill refers to appointment of a company, but during the proceedings in Committee, the Minister, on many occasions, when questioned about the relationship between the Secretary of State and the company, referred us to the licence, which was then already in its sixth draft, and is now a lot longer at 35 pages.
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The interesting thing about referring to the licence in terms of answering all questions in this area is that the licence is not mentioned in the Bill, nor are we told how or on what basis the licence should be granted and enforced. If we are to have a new licensing system, we need to know who is responsible for granting and enforcing the licence. Is it the Secretary of State? Is it the regulator—the ORR, presumably? How is it to be enforced? Even this has become more obscure since Committee; for example, Clause 5 deals with fines on the company if it fails to meet its objectives, but I see that government Amendment 32 would delete Clause 5, so I am not quite sure where we stand on that.
The Minister, of course, has said we are not actually setting up a licensing system. She said that in a letter to me. As the letter spells out, the Government want to set out, in a single document, all the relationships between the company and the Government. All the queries in the Committee were also directed at the draft licence, which, as I say, does not appear in the Bill.
This single document, to which the Minister refers, must be the draft licence. This interpretation of licence seems to go closer to what is described in Clause 4, on directions and guidance from the Minister, than what is usually thought of as a licence. In most regulatory regimes, there is a difference between a licence to operate—whether from the Secretary of State or the regulator, which is a relatively stable document—and ministerial directions and guidance, which are more flexible and can reflect changes in circumstances or in policy. Putting all this in a draft licence, unreflected in the Bill, adds to the confusion.
There is also the issue of responsibility and accountability to Parliament. What are the Secretary of State’s duties now to be in relation to the strategic roads company? Is the strategic roads company, under state ownership still, no longer susceptible to current levels of parliamentary scrutiny, as, I remind the noble Lords, used to be the case with the old nationalised industries? How, in future, is the remaining parliamentary scrutiny to be conducted? My Amendment 51 deals with that.
We need to see clearly the respective roles of the Secretary of State and the department and chair of the board of a new company, ORR as monitor as
regulator. Little is clear as the Bill now stands. These amendments, therefore, seek in a tentative way to try to rectify that. Amendment 1 sets out the role and responsibilities of the Secretary of State in general in this area. Amendment 2, in the name of my noble friend Lord Berkeley, deals with the whole issue of the company. Amendment 2B deals with the licensing system and puts it on a basis which is closer to the rail licensing system. Amendments 3 to 7 deal with the issue of a single company. In a later group Amendments 9 and 10 deal with the functions of the corporation of the new strategic highways company.
These amendments are intended to make clear the Government’s broad intentions, which anybody reading the Bill would find it hard to divine. I am not saying that these amendments are perfect. I had, as I say, hopes that the Government would come up with some themselves. Unless they do, however, and the Minister says today that at a later stage during the passage of the Bill—at Third Reading or during its passage through the Commons; this Bill started in the Lords and has not yet been through the Commons—the Government are determined to make this at least substantially clearer, as I have argued, I despair of the proposition. I am quite taken with the potential of the idea of a standalone company, but it needs to be properly embedded in a system of regulation, oversight and parliamentary accountability.
If we do not provide for that in the Bill, the better course would be to start again. The amendments in the names of my noble friends on the Front Bench would effectively do that by deleting this clause from the Bill. If the Minister wishes to avoid us going down that road at some stage, she needs to come up with a proposition of her own which meets the rather large deficiencies in the Bill. I beg to move.