CONCESSION AGREEMENTS (Hansard, 22 May 1991)

§ Mr. Thomas McAvoy (Glasgow, Rutherglen)
I beg to move amendment No. 2, in page 2, line 15, at end insert— '(5A) The Secretary of State shall issue a code of practice giving guidance on the matters to be dealt with in the concession agreement; and in entering into a concession agreement a highway authority shall have regard to any such code of practice.'. As you asked us to make progress, Mr. Deputy Speaker, I, too, intend to be brief.
The effect of the amendment would be to require the Secretary of State to issue a code of practice on the contents of concession agreements. A highway authority entering into such an agreement would have to have regard to the contents of the code. This would apply whether the highway authority was the Department of Transport or a local authority.
The concession agreement is the kernel of parts I and II of the Bill—it is the document which gives a company the right to charge a toll on a road in return for having built it and undertaken to maintain and operate it. The concession agreement is defined in the first line of the first clause in the Bill.
It is inevitable, therefore, that the concept of the agreements has been the subject of amendments at every stage of the Bill's parliamentary process. Amendments have been primarily aimed at agreements. They have attempted both to define the basic content of the agreements and to probe the Government's mind on what issues can legitimately be included in agreements—subject, inevitably, to the acceptance of both parties to an agreement.
The subjects that we have raised in debates include environmental responsibilities; links between the concession road and the local highway network; design and 987 construction standards applying to the road maintenance arrangements; the provision of service and refreshment facilities; and arrangements for the reversion of the road to the public sector.
In response to debates Ministers have fought shy of attempting to define the likely contents of an agreement in the Bill. For example, in Committee the Minister said that the concession agreement was a contract between the highway authority and the successful concessionaire. It is a long, technical document containing what would normally be classified as information in commercial confidence. He went on to argue that he hoped that the hon. Member for Lewisham, Deptford does not expect too much from the concession agreement. It is an important document, but it should not be prescriptive."—[Official Report, Standing Committee E, c. 50–51.] Presumably the Minister did not mean that the agreement should not be prescriptive—as a contract, it must, by definition, be prescriptive—but that the Bill should not be prescriptive about the contents of agreements. If so, the Minister's argument has some validity. The contents of an agreement must inevitably reflect local needs and circumstances; and the content of agreements is likely to change and develop over time.
But there is also a strong case for some guidance or ground rules on the context in which individual agreements would be formulated. The contents of concession agreements are bound to be the subject of negotiation between a highway authority—in most cases the Secretary of State—and the prospective concessionaire. It is important that the travelling public and other authorities are protected against the possibility of the highway authority giving too much away to the concessionaire in an effort to secure the company's agreement to construct the road.
A code of practice along the lines proposed in the amendment would set out the ground rules against which individual agreements could be judged. It could also contain advice that would be of use to both highway authorities and companies considering entering into an agreement. A code of practice would also be capable of being amended and updated in the light of experience.

§ Mr. Freeman
In this Bill we are responsible for more codes of practice than in any other piece of legislation in the past 10 years. I accept the spirit of what the hon. Gentleman said. Clearly some guidance will be needed at the outset. I give an assurance that a circular will be issued to all local authorities at the outset.
On a prescriptive code of practice, I hope that the hon. Gentleman agrees that one probably needs some experience of operating toll roads. It would not be sensible to issue any non-statutory code at the outset. We trust local highway authorities to have the good sense to get on with the task, if they are minded to introduce toll roads. I hope that some of them will. However, I am under no illusions that initially the initiative will rest with the Secretaries of State for Transport and for Scotland. I do not rule out a code of practice, but not at the outset. To begin with, there will be a guidance circular. If its provisions need to be encapsulated more precisely in a code of practice later, so be it.

§ Mr. McAvoy
How would the environmental aspect be encompassed in a circular?

§ Mr. Freeman
If the hon. Gentleman is referring to the circular that is to be issued at the outset, I hope that he will bear with me if I do not detail all the elements that will be included in it. However, I can give him a clear assurance that all the environmental aspects will be covered—in particular, environmental assessment, the procedure for consultation and the procedure for taking into account the views of those who have an appellate right to express their opinions about the construction of a particular road. These are absolutely central issues. I hope that there is no political divide on the importance of a proper and full environmental assessment. I hope that, having heard those comments, the hon. Gentleman will feel able to withdraw his amendment.

§ Mr. McAvoy
I am grateful to the Minister for his co-operative attitude. The assurances that he has given are most welcome. Therefore, I beg to ask leave to withdraw the amendment.