HL Deb 11 December 1989 vol 513 cc1141-79

Debate resumed.

4 p.m.

Lord Ezra

My Lords, I should like to begin by expressing appreciation to the noble Lord, Lord Shepherd, for the excellent and comprehensive way in which he introduced the important report on transport infrastructure which we are debating. Furthermore as a member of his committee, I should like to pay tribute to the manner in which he conducted our affairs. Undoubtedly, without his careful, understanding, but at the same time firm, when necessary, conduct of the business, the report could not have been produced. Both he and the noble Lord, Lord Nugent, made some important comments on the transport situation, in the Community and in the UK, to which should like to return in due course.

I should like to divide my remarks into two parts: the question of transport strategy so far as it concerns the Community on the one hand and the UK in particular on the other. Those are the two parts with which we dealt in our report.

So far as concerns the Community, there was not the slightest doubt in our mind that transport played a crucial role in the emergence of the single market. For my part, I regret that transport has not been treated in the same manner as the remaining preparations for the single market. Whereas we had the energetic and effective leadership of the noble Lord, Lord Cockfield, to set off the whole process of the preparation for the single market in the famous White Paper which he produced setting the scene in broad terms, in detail and progressively, we have nothing approaching that so far as concerns transport.

The Commission has made recommendations, but, as the noble Lord, Lord Shepherd, said, there is the feeling that in the process of time the Commission's role in seeking to introduce an effective European transport strategy has been emasculated. The word "emasculated" was one that we both used, one of our witnesses having used it. The word was used in the sense that while the Commission had initially made some positive proposals, the way in which the Community operates in some respects has led to a diminution of the impact of those proposals.

Thus, we felt that a sufficiently comprehensive view was not being taken of the transport situation within the Community. It is for that reason that we recommended —and I fully support the recommendation —that the commissioner dealing with transport should have that as his single portfolio and that he should be strengthened in his standing and in the resources of which he disposes in order to produce the kind of strategy which we strongly feel now needs to be produced to complement the work going on in other respects in preparation for the single market.

Every country in the Community has its interests which complain about inadequate transport facilities. We might think that we are the only country where that happens; it is not so. There is congestion in all the major cities. There is a lack of relationship between one mode of transport and another in all the member states of the Community. This is a Community-wide problem. As the noble Lord, Lord Shepherd, said, we began by considering how to link ourselves more closely with the EFTA countries on the periphery of the Community. Now we must also seriously consider the emerging East European countries. If anything, the issue is wider and deeper than it was when we started.

So the first major recommendation which we hope the Government will seriously take on board is a strengthened approach to the question of transport infrastructure at Community level. We decided —I believe rightly —against the creation of a European infrastructure organisation. The noble Lord, Lord Shepherd, said that if we had that sort of organisation it might work against the operation of the Commission itself. Transport must be seen in relation to all other developments within the Community; it must not be treated in isolation or separately. In turning down the proposal for a separate infrastructure organisation, we nevertheless concluded that the Commission itself should play a more vigorous, positive role in the formulation of a transport strategy for the Community.

What we said about the Community is a mirror image of what we felt about the UK when we looked specifically at its position. It was our feeling, as the noble Lord, Lord Nugent, said, that the transport question has been treated over the years as a bit of a Cinderella. It is perfectly true that in more recent year additional resources have been made available. However, I should like to refer to the important report prepared and issued last month by the CBI, entitled, Trade Routes to the Future, which analysed carefully this country's transport situation as it relates to its members who represent British industry. The report stems from the important issue of congestion to which the noble Lord, Lord Shepherd, referred. The CBI's estimate of the annual cost of congestion to the nation is £15 billion. That £15 billion happens to represent about three times what we spend on transport from public funds. So, while relatively less than is necessary is spent from the public purse, we have to spend quite negatively on congestion from the private purse.

There is a serious, adverse environmental aspect of congestion. It is calculated that about 45 per cent. of CO2 emissions in this country come from motor vehicles. There is no doubt that those emissions are increased as a result of congestion and of vehicles taking longer to reach their destination and their engines having to be kept running during waiting periods. Both from an economic and from an environmental point of view, therefore, it may be thought that we ought to do something much more urgent about this question of congestion than has been done so far.

Dealing with a problem so widespread raises the whole question of whether we have approached transport policy in this country in the right way over recent years. The noble Lord, Lord Nugent, referred to the fragmentation of transport management and policy in the different centres of the country. We found that there has been a fragmentation in thinking generally about transport in Britain. We consider —this is one of our main recommendations —that there should be a much more positive and concerted approach to the whole transport question.

We have had numerous debates in recent years in this House on the issue of transport. Invariably in those debates many of us have been led to ask why particular transport problems have been dealt with in isolation. Transport is one aspect of the national life that cannot be dealt with in isolation. By its very nature, the very definition of transport is movement. One is moving from somewhere to somewhere else. One is moving quite often from one mode of transport to another. If ever there was a need for concerted thinking and a co-ordinated strategy it arises in the transport sector. We consider that it needs to be done at Community level; all the more does it need to be done at national and local level.

This is, therefore, the nub of the whole issue so far as we can see it. The CBI has not only identified the problem but has come forward with some positive proposals. Its proposals costed out as representing something like an expenditure of £2 billion to £3 billion a year in addition to what is already being spent over the next decade or so. This is a relatively small amount compared with the £15 billion that we are losing annually on congestion. I assume, therefore, that those of your Lordships who are participating in this debate will feel that the advantage should certainly lie in trying to resolve this problem by taking on some of these additional commitments rather than by allowing the problem to become worse and worse, which it inevitably will do if urgent action is not taken.

When we look at the problem, for the short period of time that is left before we enter the next century there could then be a much more serious transport crisis than we face at the moment. Perhaps one of the things we should be doing in the consideration and elaboration of a transport strategy is considering the relationship between the various modes of transport; the increasingly urgent need to have more attractive public transport on the roads in order to reduce to some extent the increase in the number of cars and the need to increase the transference of traffic from road to rail. It is said that even if done on a large scale it will have relatively small impact, but at least let us try.

We move by rail in this country a much smaller proportion of freight than they move in the rest of the Community. Let us develop that more. Let us encourage people to travel more by rail by giving them a better service. We all use the railways from time to time, some more regularly than others. All I say is that unfortunately I have apprehensions every time I use the railway because, although potentially it could be such a comfortable, expeditious form of travel, all too often untoward circumstances develop which for the most part seem to be related to lack of sufficient resources to make it work well. We must therefore very seriously look at this at a time when a new chairman is taking over.

I should like to pay tribute to the existing chairman, who has done a remarkably good job. He was given a remit by government which he has carried out admirably. The fault is that I do not believe the remit was the right one. He was asked at all costs to save public expenditure. That has been done in a relativelty successful way but at the expense of the efficiency and effectiveness of the service. It might well be, therefore, that there ought to be some relaxation in that regard.

All told we have here not only a very important report in itself but one which touches on a vital issue within the Community at large and in Britain in particular. I hope, therefore, that not only will we, as a result of today's debate, be drawing increased attention to be problem but I trust that this debate will continue until an effective combined strategy for all forms of transport is developed.

4.16 p.m.

Lord Mountevans

My Lords, it will be very difficult to follow the last two sentences of the noble Lord, Lord Ezra. He has put everything that many of us intended to say today in an absolute and concise nutshell.

The report that we are discussing is an excellent one; it is timely and indeed essential. The noble Lord, Lord Shepherd, in introducing it paid tribute to his committee, to his specialist adviser and to his clerks. As an occasional spectator —not as a witness and not as a bystander —of that committee, may I add a compliment to his chairmanship. The way that he ran his committee is reflected in this marvellous tome that we are discussing this evening.

Perhaps I might look at some of the conclusions reached by your Lordships' committee. I start with that in paragraph 152 which calls for an integrated approach and that in paragraph 158 which calls for a concerted one. I wish that either in Britain or in Europe we had that integrated or concerted approach to transport planning—not to the operation of public transport, which is a subject for another debate on another occasion. Whether one attends the CBI conference, as I did in Harrogate last month, whether one travels frequently or whether one just walks from Regent's Park to your Lordships' House, one is aware that congestion is a problem. It is not perhaps the problem that our newspapers shout about; it is not eternal. There is spare space on our roads. There is spare space on our trains, but for how much longer? Unless we think, think quickly and act quickly congestion will become a massive problem.

Let us look at where we are going in regard to that integrated approach. In this country we had a very welcome White Paper earlier this year on roads. It envisages a considerable increase in investment. We had a subsequent discussion document on proposals to produce private funds for road construction —another very welcome document. We have in the Autumn Statement a change in the rules relating to how local authorities may contribute to maintaining and indeed constructing local roads, with again some overtones of privatisation. Those are strategic documents, but how strategic one asks especially when one knows that in recent years, in the middle of this decade, the Department of Transport was switching funds from road maintenance to road construction and back again more or less on a day-by-day ad hoc basis, robbing Peter to pay Paul.

British Rail's objectives might be an answer to today's problems. I am certain that they will be announced next week. They are objectives concerned with quality of service and the public service obligation grant. No one has yet addressed themselves to the fact that there cannot be objectives of service unless you get your PSO grants right.

The European Committee of Transport Ministers is not an EC body. It is outside the remit of the report of the Select Committee. However, the committee includes our European neighbours and has observers from Eastern European countries. The committee states that mobility is essential for economic development. It is pleasing to know that the transport ministers echo the report of your Lordships' committee. The same European ministerial body agreed to co-ordinate international activity in order to back national initiatives. Is that really co-ordination? Some of the initiatives are great from the British point of view but absolutely useless the moment one crosses the line somewhere between Dover and Calais.

The Commission makes other recommendations; for example, that the customer should pay. That is fair. My view of subsidy is that there should be once-off capital grant, as is the case in France. The noble Lord, Lord Shepherd, mentioned the French attitude towards transport infrastructure that is otherwise privately funded or funded by once-off government grant, by the resources of the operator and by private investment.

I have said that I should like to draw all of these things together. To show that we lack integration, I take the example of the CAA's very welcome investment of £600 million in equipment to give Britain better air traffic control. This means that in Britain, other things being equal, one can fly more or less when one plans to fly and fly safely. However, when one gets to the magic line halfway across the Channel one may not get anywhere. It is the old story of building motorways that get you from city to city quickly but do nothing about the problems in city centres.

There is the old problem of people sitting at Gatwick Airport for one or two days at a time. A friend of mine, an executive director of I3ritish Rail, was about to go on holiday. "One week in Tunisia", he said. I said, "Ah yes, but by the time you have spent two days in Gatwick and two days in Tunisia, it is not very long. Why do you not go for a fortnight?"

Paragraph 161 of the report of the Select Committee discusses additionality. There seems to be some confusion about this matter. Two weeks ago the news agency tapes in the corridor carried a story about a new EC document which appeared to suggest that in regard to freight there should be a free-for-all and strict market competition, but that in passenger terms the railways should be allowed subsidies. I have only read the document in French, and French is not my mother tongue. It suggests that one should separate infrastructure costs and operating costs. It also suggests that the accounts of railway companies in particular should be transparent and easily read. I am not convinced that subsidy should be paid. It should be a matter of need and not of right — which is the policy of Her Majesty's Government at the moment. If subsidy is paid, it should be easily recognisable.

I should like to look at the evidence given by Mr. David Kirby to whom a modest tribute is due, if I may follow the example set by the noble Lord, Lord Ezra. David Kirby is to retire shortly. He has run a good railway. He has done the most that he can do with the objectives that were set. Perhaps the objectives were not always right. He has done a good job. He said that British Rail's accounts were transparent and that one could not break up the subsidy. In fact, one can.

I was looking this morning at an interim statement published by Swedish State Railways which, as every noble Lord who follows these matters knows, is vastly more subsidised than British Rail. There is no mention of subsidy at all. One could not possibly break up the figure given to the Government from the operation.

Returning to the subject of additionality, I wonder whether we are getting that right. Additionality should be a matter of top-up and not, as central government see it, a matter of replacement. I recall asking a Question —I am not sure whether it was the first oral Question to which the noble Lord, Lord Brabazon, responded as a Whip or whether it was his first oral Question as a Transport Department Minister—concerning the London to Leeds and Edinburgh railway electrification. At a cost of £350 million it is by far the largest railway infrastructure project I can think of. I asked the noble Lord whether this massive investment would be at the expense of investment elsewhere in British Rail. He told me that it would not. However, in practice EC money is in there.

The Select Committee queries the legality of the attitude of the British Government to additional funds from Europe. It could be argued that because the EC put money into the East Coast route electrification—there are signs at Doncaster and press cuttings from the Newcastle newspapers showing the handing over of the symbolic cheque—this investment did penalise. If the money produced by Europe was taken out of the central pot and then devoted to the National Health Service, to defence or to the many other calls that the Government have upon their funding, that would be unfair. It would have been better if the £60 to 80 million had been invested in transport, not least because transport investment is running at record levels. That is a catch-up situation. Transport investment in the railways appears to run in 25 year cycles. Following the modernisation plan of 1955 unprecedented amounts of money, in terms of those days, were spent. Then there was practically no investment at all. Suddenly, the 1955 equipment had to be replaced. That is why we now have a three-year commitment to record levels of expenditure on British Rail.

Historically roads have not had their share and have gone to the back of the list in terms of investment. That is why we need the record investment that we have now. We do not need it in order to get ourselves ready for 1992 or for anything beyond that; we need to spend the money to catch up with things that we should have done 10 years ago.

The report of the Select Committee contained a proposal about privatisation. Her Majesty's Government have done extremely well in getting private sector funds into transport infrastructure. The list is long. Looking at the matter in British Rail terms, one would take Heathrow and Eurorail. They are both very welcome.

The CBI looks for private investment, but it makes two points. First, the rate of return is not particularly good. It was said at the CBI conference that one can get a quicker return on one's money by leaving it in the Alliance and Leicester than by investing it in roads. Why is that? Is it because the Private Bill procedure in Parliament is too cumbersome?

We have before us examples of Bills that are in trouble—Bills that were mounted by various bodies in good faith. They happen to be quite relevant because a disproportionate number of Private Bills are transport Bills. Both Houses are looking at this matter. The right honourable gentleman the Leader of another place is looking at this matter and promises to come forward with proposals. I dearly hope that he looks at the report of your Lordships' Select Committee and notices what I call the French law of national benefit. This is the parliamentary procedure which enables the entire legislative and planning inquiry procedure, not to be eliminated, but to be concentrated or telescoped.

From conception to opening the French can build one of their by now unjustly famous TGV routes in eight years. That is 200 miles of TGV route. It has taken almost the same time for us to build the one and half mile branch which is essential for the viability of Stansted as the third London airport. The one and half miles of the Stansted branch was not a planner's nightmare. It is worth recalling that not a single house had to be demolished in order to build that little stretch of railway line. But parliamentary procedure stretches the whole time out. Undergrounds were build in vastly less time. I suppose if one wanted a really strong example one would point out that it actually took the Allies some three years from the battle of Stalingrad to defeat the Axis powers. What conclusion can I draw from that? There was a will to beat the Axis powers. I wonder whether there is a will to build the transport infrastructure that we need in this country.

Paragraph 165 of your Lordships' report says that the Channel Tunnel should be a catalyst. In a way that almost draws together much of what I have been saying for the last 14 minutes. It will be a catalyst but only if we get all our procedures right and if we get the financing right. Perhaps we should be looking at more private financing. Perhaps we should be looking at the United States tax exempt bond as a means of securing additional funds. And no additionality, please, my Lords: we need additional funds.

Many transport infrastructure projects in the States—airports, metropolitan railways, the spur roads from city centres out to the suburbs—are built by tax exempt bonds. The tax exemption is given by the federal treasury. Nobody has sat up —I must be boring, my Lords, Nobody said that this cannot be done, and of course it can be done. As the noble Lord, Lord Nugent, reminded us, you can have your house but you shall not reach it. The tax exemption is there when we have our house; it is not there when we seek to reach it.

The other thing about the tax exempt bond is that it is guaranteed. This is a matter for local projects. It would not solve the problem of the London-Cheriton link. But it is guaranteed as to principal and interest by the local authority, or authorities, concerned if they have the authority of a public referendum to do so.

This is the golden age for railways. That is in several of the European documents and it is in this document as well. It may well be in the document that the European transport commissioner was due to deliver last week, on I think the 5th December about what shall we do for our railways. It must become a golden age for roads because otherwise we will come to a standstill in the fullness of time. It must become a golden age for both of them because they must be brought together. They should not be seen as purely competing one with the other. If we are to achieve our objectives, and particularly the objectives set out by the CBI in its report about the sheer cost of congestion, we must look at road and rail and, indeed, water and air together.

What we must not do is to follow the example of the Winchester bypass. Well before I was born the Winchester bypass was a state of the art road before the last war. It was becoming somewhat inadequate in the 1950s. It was under congestion pressure in the 1960s. It was being discussed and debated in the 1970s. The problem had not been resolved by the 1980s. But I just hope that, on some future occasion when we debate transport, somebody will be able to pay a compliment to the Government by saying, "You have solved the planning problems. You have solved the finances, and now in the 1990s we have a decent Winchester bypass".

4.33 p.m.

Lord Mulley

My Lords, I should like to join other noble Lords who have very properly congratulated my noble friend Lord Shepherd and his committee on this excellent report. I was particularly touched by the idea of my noble friend Lord Shepherd that Ministers as well as commissioners should have a rather longer period of office. It happens —and they were called Ministers in those days —that I was twice Minister of Transport and the total of the two terms was rather less than two years.

It also is the case that just prior —and it took a little doing—to the 1970 election, which brought my first period of office to an end, I published a road plan for the future development of motorways and trunk roads, which in 1989 is far from having been completed. It is very rare that the opportunity occurs to correct the noble Lord, Lord Nugent of Guildford, but when he drew attention to the problem of the M25 he got it half right. I had some responsibility for the plan at the time, and in fact there were to be two other roads, an inner ring road and an outer ring road for London. Then there was the M25, which was specifically designed to permit traffic coming from the North or the South, or the East or the West, that did not want to enter London at all, to go round to its destination.

The idea—as I have since discovered—that friends of mine would use the M25 as a means of getting from Tottenham Court Road to Heathrow Airport had not occurred to anybody at that time. But the noble Lord was right of course in saying that it was an emotive question of homes before roads. Although I had a short period of office I learned that you could never be right in planning roads. If you knocked down houses that obviously was a monstrous thing to do, but if you happened to find somewhere where you could build a road where it was absolutely untouched countryside, somewhere on that route the most unusual natural habitat would be discovered and there would be another and different set of pressure lobbies to prevent you going ahead with that.

In short, everyone wants to have a motorway within a mile of their home, but not any closer than a mile. Somehow I do not feel that one could design the road structure to give satisfaction to everybody on that basis. That is one of the reasons why it is much easier to talk about an integrated road plan and planning for Europe than it is to achieve it. But it is right that your Lordships' committee should give great importance to this subject, particularly with the imminence of 1992. As has already been said, and no doubt will be said again, the transport infrastructure is basic to a sensible system of economic trade and the movement of goods and people.

I should also like to say a word of appreciation to our committee. As one who has taken no part in its deliberations, I think I can properly say that I do not think that the European Communities Committee is as much appreciated in the other place, in the Government, or in the country generally as it ought to be. Without what your Lordships do—and do so well—many pieces of paper and many directives and so on from Brussels would never in fact be properly examined or, if thought appropriate, brought to the attention of Parliament.

That of course is one of the worries about extending the powers of the Commission. That is the only real element in the report about which I have a reservation. I do not for a moment think that the commissioners are always able to do the right thing. Some of the ideas about having special funds and the rest of it are an attempt by the Commission—and we have seen many others in recent years—to extend its powers. This is an extension that I would watch with great suspicion.

I admire the properly independent attitude that our own commissioners have taken over the years. One of our commissioners is now quite properly asking awkward questions of the Government, but I wonder whether some of his colleagues would ask similar questions of their governments if the circumstances justified it. Equally very properly no doubt—but I think it makes us ineffective—we do not become involved in the inner politics of all the European institutions to ensure that we get our chaps into the right jobs. We do not give any of our international civil servants the kind of support that is given by many other countries. For those reasons I am dubious about extending the Commission's jurisdiction. In 30 years it has never managed to have sight of the accounts of the ports, or been able to evaluate the extent of the subsidies which some of the member countries give to their ports. That is an important matter.

I should like to congratulate those concerned on the timeliness of the debate. It follows last week's meeting of the Council of Transport Ministers which showed signs that it was grasping the nettle, as so many noble Lords have said it should, in order to get things done. I understand and appreciate that our committee was not concerned with the aviation aspects of transport but an agreement on that matter was reached last week and we should welcome it.

An interim step was taken towards cabotage, a problem known to anyone involved in road haulage. If one is to have an open market it is necessary that the vehicles belonging to one country should be able to pick up goods in another and take them to a third. They should not be limited to the permits which allow money to move between their country and only one other (which is the case under the bilateral arrangements) and there should not be limited pick-up arrangements within certain member countries as exist at present. I hope that in reply the noble Viscount will tell the House what the cabotage agreement adds up to and also—and this is our expectation—that the interim period will not be excessively long.

The other reason why there are problems, and why transport has been among the least successful aspects of the economic developments of the Community is the enormous differences in attitude between the various member countries. I am sure that the Prime Minister is unaware of the fact that she is not the only Minister sitting around the table at the Council of Ministers looking after her national interests. All the other members are doing so and have been doing so for the past 30-odd years. It is not delicate to mention the fact that that is what they are at but it becomes most apparent when one attends a meeting of the Council of Transport Ministers. The conflict between our Dutch friends and their German neighbours is one instance.

One of the problems with the railways is that, apart from grants, we are subsidising our railways in ways in which the Germans have not. Although the German Government give enormous subsidies to the German railways they have not written off so much debt. It you write off debt and transfer it to a different part of the national budget that is as much a subsidy as if you leave it on the company accounts and it has to pay the interest on the loans. I hope that the Government will give up the idea of trying to privatise the railways. I hope that they will not cancel debts and so forth here and there in order to make the railways an attractive proposition as they appear to have done with the water industry. However, after privatising sewerage there is probably no limit as to where the present Government may wish to go.

No doubt the noble Viscount will tell me if I am wrong, but I understand that someone has added up the amount of debt written off by the Government and the grants given prior to the recent privatisation appeal. The total appears to be substantially more than they expect to receive from the sale of the shares of all the authorities. That would be a bad way of trying to deal with the railways. We must accept the fact that to obtain an efficient road system there must be subsidies. One of the problems with the railways is that 19th century technology is being prepared for the 21st century. It is extremely labour intensive and therefore uneconomic in terms of operation. However, the alternatives provided by the roads have other drawbacks, as noble Lords have already mentioned.

During my second short period at the Department of Transport I had the privilege of attending a meeting of the Council of Transport Ministers. We were then—as is now the situation—concerned with trying to obtain more permits for our hauliers. We were handicapped and had a penalty because we joined late. A further penalty was added by our colleagues because we would not agree to the maximum weight requirements that they wanted for freight vehicles. As noble Lords know, there exists a special derogation which will last until 1998. I never understood exactly why that was necessary because it is more a question of the way in which vehicles are constructed rather than their weight. The enforcement of the legislation is perhaps more important than the rules and regulations.

Drivers' hours were also an issue. During our talks about the introduction of tachographs I had problems with our transport unions which were on strike, or threatening to strike, while employers in the Netherlands blocked the country's frontiers with lorries. On that occasion it was the employers and not the workers who were taking action. The workers were keen to have drivers' hours regulations enforced, whereas the employers were not and did not wish to have tachographs. To some extent that aspect has been settled.

Other questions still remain. For example, there is the difficulty with procedure. Two enormous problems that we have are the Private Bill procedures, which are archaic and make no sense, and, even worse, the public inquiry system which must take place before the building of a road. The building of several roads has been held up for a year after a lengthy inquiry, much of which was spent on discussing the Saudi Arabian oil reserves during the next century. The inspector may take a year to write his report and if, alas as has happened on a few occasions, he is physically assaulted during the inquiry there must be an adjournment and even further delay.

The Government are responsible for transport and, therefore, I cannot understand why measures cannot be introduced if not in government Bills then in hybrid Bills. Candidly, one cannot go on. If the Commission is trying to plan our road and rail system, how will it cope with our current parliamentary procedure or are we to abandon it? Those are some of the problems which one must think about most seriously.

As I say, I very much hope that the target of 1993 for free movement of freight in Europe will be possible. I remember that perhaps the high feature of my tenure of office was obtaining 200 extra permits from the Italian Government. I fear that the gentleman concerned had an even shorter tenure than myself. He was rather eccentric and insisted on wearing his raincoat not only throughout the meeting but also throughout lunch on a hot summer's day. Sitting next to him I managed to persuade him to give me another 200 permits for Italy. He turned over the menu and wrote on the back. I am told that the embassy had some difficulty when it took it to the department in extracting the necessary permits. I was hoping that I might have to go in person to collect them because, after all, it is no hardship paying a visit to Rome. However, happily we had managed to make some progress. The committee reported that these measures had been improved after hard negotiation, and I can assure your Lordships that not only myself but also my successors have gone through the mill.

I have worries about enforcement and implementation. When I spoke in the debate in another place prior to our entry into the Community I said that I have only these reservations: that this country with its traditions and competent Civil Service would probably be the only country which both in law and in spirit would implement all the directives which came from Brussels. In many cases I feel that they are just put there and never enforced because, as is well known, the enforcement of Community legislation and regulations is a national and not a Community responsibility. Unless there are enormous improvements in some countries in drivers' hours, weights of lorries and so on, all the planning and resolutions from your Lordships, the Council of Ministers or the Commission itself will not achieve what we wish to achieve.

While I should very much like to see a more corporate approach not only in transport but also in other matters, we must realise that the way in which we operate in Europe is to be taken from the Treaty of Rome itself. People should read the preamble, which is like Beethoven's Ninth Symphony in prose, and compare it to the reservations made by the six original members; for example, Germany wanted a special reservation for some years so that it could import bananas from Ecuador. The way forward in Europe is to subscribe wholly to the objectives but while doing so to take care of one's national interest.

4.56 p.m.

Lord Lucas of Chilworth

My Lords, it is always a pleasure to follow the noble Lord, Lord Mulley, but he will forgive me if I do not agree with quite a lot of what he said. I start by underlining what the noble Lord, Lord Shepherd, said in his glowing tribute to the staffing of your Lordships' committee. However, I think it right that as a member of that committee I should pay an equally glowing tribute to the noble Lord, Lord Shepherd, for the guidance and general manner in which he allowed us to conduct the inquiry. Essentially, the inquiry was to look at and report on a number of directives from the Commission but at the end of the day it turned itself into an inquiry into what was happening, and perhaps what was not happening, on land both in the Community and in the United Kingdom. I say "on land" because specifically we left aside the water-borne traffic and travel problems and the air problems which are to be dealt with on another occasion.

Naturally, as I see it, our report fell into two parts: the Community and Commission element and the United Kingdom. In dealing at the outset with the Community and Commission element of the report I say to your Lordships that I shall quote from the full report, the £18 version, and not the slimline version which is on offer at £6.40.

I turn immediately to Part 7 of the report at page 34. At paragraph 155 the conclusion of your Lordships' committee was that: The Transport Commissioner should have transport as his only portfolio and must have sole responsibility for presenting transport proposals to the Commission". Paragraph 156 talks of the Council of Ministers adopting a more corporate attitude to transport. I believe that those two paragraphs say fairly well all that is to be said.

That is endorsed from the evidence which we had from Dr. Albrecht Frohnmeyer who was head of transport infrastructure at DG VII. At paragraph 66 of the report on page 17 in response to a question from the chairman, Dr. Frohnmeyer says: We think that the present situation of the Community network is not yet satisfactory. For 30 years now we have had a Community transport policy but not yet a real Community transport infrastructure policy". He goes on to say: I think we must distinguish what we call the Community interest network for transport, which is really the basic framework of European main communications, and then the networks for road, rail and inland waterways, which are more of national interest or of regional interest". We asked Dr. Frohnmeyer about his responsibilities and at paragraph 73, page 19 he says: For the time being the intervention of the Community is limited by very scarce funds. At present we do have for transport infrastructure about 60 million ecus per year, which is certainly not very much for the whole Community and all infrastructures of all Member States, whilst the Regional Funds can certainly do much more with about 3 billion, 3,000 million, ecus per year, which will be topped up to 6". Finally from Dr. Frohnmeyer's evidence I quote from page 23 at paragraph 97. Again in response to a question as to his staff he replied: I have three senior officials, two junior officials and three secretaries. I have promises to get two more senior officials". The head of the department of transport infrastructure is there telling us that for 30 years there has really been no policy as regards transport infrastructure, a budget of only 60 million ecus against expenditure of between three and six becus, distributed through another agency, another directorate general, with a staff of eight. Even the noble Lord, Lord Mulley, cannot say that that is an extension of the Commission's activities in our affairs.

Throughout the inquiry the evidence we heard was critical and sometimes despairing over rail and road links with the Community. There is little planning for the long term and, more importantly, the Commissioner responsible has his hands fairly tied by virtue of insufficient staff due to inadequate resources, to which we, as a member state, are a contributor. Hence there is our conclusion at paragraph 155. Against that background I cannot wonder that individual member states have built up their road and rail systems across continental Europe based very largely on their own individual perception of what is needed and what is in their best interests in order to take advantage of the single European market.

We can all appreciate that the bulk of trade in the single European market will be between continental European member states and adjoining countries because of the physical nature of the area and the proximity of the countries as regards political and practical dimensions which come into play. It is little wonder then that the Community of European Railways states at paragraph 118 that it is trying "to build a common framework".

Notwithstanding the fact that British Railways is part of the Community of European Railways it is excluded because there is no way in which it can make the connection. That is a sad reflection on the situation. If we look at the present position within the Community we see that Commissioner Karl van Miert is now in pole position concerning transport. He is well known to have a predilection towards expansion and a greater use of the rail system both for people and goods. Against the background of the remarks I have just made concerning the geography of the countries and the fact that more goods are carried by rail across longer distances in continental Europe than could possibly be carried in the United Kingdom, it is not unreasonable to suppose that Commissioner Karl van Miert may devote his scant resources in the direction of the railways.

Quite obviously that will be to the grave disadvantage of the United Kingdom because, sad to say —though it is the fact —we have no real entry to that rail system. The amount of money that was dedicated was cancelled about a month ago. Against that background British Rail had to withdraw its proposed Bill —I shall come back to the planning issue later —so it must be between five and seven years before we can make a connection to the rail system of continental Europe. We cannot get on to whatever trans-European road network is being built at such a staggering rate in the various member states because we do not have here a strategic network.

That takes me to the second part of my point which is implicit in the report; namely, the position in the United Kingdom. Dwight D. Eisenhower is credited with having said: Neither a wise man nor a brave one lies down on the tracks of history to wait for the train of the future to run over him". It is for others to judge whether there are wise and brave men in the Treasury or in the Department of Transport. I suggest that that is exactly what has happened in the past 20 or 30 years. The wise and the brave have lain down and waited for the train of the future, which has arrived and very nearly run over us. I am suggesting—and it comes out in evidence—that our Department of Transport has failed to act or show any sense of urgency in these matters over the past few years.

It is clear in the two sets of evidence that came before the Committee that there is complacency in its attitude. In his evidence to the Select Committee on Transport in another place on 6th December, my right honourable friend the Secretary of State said—I admit I take this a little out of context—that the full roads report mentioned in Roads for Prosperity (which set out the full road programme) came before Parliament in the summer. In your Lordships' House the Minister for Transport, my noble friend Lord Brabazon of Tara, said that the full road programme would be published in the autumn; the Secretary of State now says that perhaps it will be published in January. If that is not complacency, I do not know what is; if that situation does not display a lack of urgency, I do not know what does.

A lack of appreciation of the necessity to build these roadways from the production heartlands —namely, the Midlands and the North —is costing money. The noble Lord, Lord Ezra, quoted the CBI figure of £15 billion. Not only does this lack of appreciation hinder the resurgence of those towns and cities in the Midlands and the North; it adds to the congestion in the South-East.

A number of noble Lords have spoken about additionality, The Minister had something to say on this at page 19 of the report when he was giving evidence. We asked him about additionality: Mr. Portillo responded that the Government did 'take into account the money that comes from Community funds'. This was only right, because Community funds are merely funds which are provided by Member States into a pot and redistributed". Dr. Albrecht Frohnmeyer and others, including county surveyors, some of the motoring organisations and the British Road Federation, have all drawn attention to this additionality. The truth of the matter is that any money that comes from Commission funds is discounted in our own spend. That may sound a little over-vigorous against the background of the Government's notification of spend. Record spend was envisaged in the White Paper and again in the Autumn Statement.

I ask my noble friend the Minister two questions on this matter. How much of that is new money, and how does he really see it being spent? Before another PES round another cool economic wind may blow around and cut back that spend. We should be looking at the long-term investment, and only a hurricane should blow us off that spend course.

My noble friend Lord Nugent of Guildford mentioned planning, besides the noble Lords, Lord Mulley and Lord Mountevans. I take note of what Sir William Frances, chairman of the Black Country Development Corporation, had to say in a recent speech to the all-party Roads Campaign Council. He said that you can build a road in four years from conception to finish if you do two things—have consideration and respect for the rights of individuals before you start building. It is not necessary to protect ad infinitum rights which are now long overdue for review.

The noble Lord, Lord Mountevans, talked about the Winchester by-pass. We could have built a tunnel through the chalk hills above Winchester years ago, as the noble Lord, Lord Nugent, suggested. The cost was said to be prohibitive. By now we would have had a return on the investment, and by the turn of the century we would have been in credit on the deal. There is confusion and more confusion, which is repeated right across this country.

We are on the periphery of Continental Europe. That is so in a number of areas, some of which I do not want to discuss today, but they will come up again. Noble Lords will know what I mean by that. Unless we build our own highways and our own bridges into Europe, and into the single European market, which is only two and a half years away, we shall succeed only in erecting a barrier. Our competitors will be able to climb over it. They will cross the sea and they will come to the ports. We cannot even get out of the Midlands with a lorry-load of goods. That barrier will not keep them out, but assuredly it will constrain and restrict our manufacturing industry and commercial services sector to our ultimate detriment. Barriers to trade have never kept anybody out. They have always locked somebody in. We are in grave danger of locking ourselves in.

5.12 p.m.

The Earl of Shannon

My Lords, I wish to make only a short intervention in this debate. Unlike most other speakers, I was not a member of sub-committee B. Nevertheless, I am most grateful to the noble Lord, Lord Shepherd, and his sub-committee for this well considered report and for the way in which he presented it to the House this afternoon. He highlighted many of its important conclusions. It is difficult to make any observations about the report without referring to those conclusions, although they may have already been mentioned by other speakers.

Many noble Lords will welcome the publication of this report on the European Commission's policy on transport infrastructure in Europe. The sections dealing with the transport policy in the United Kingdom are therefore of the most especial interest. Transport has an important role in the life of our citizens. If it is persistently underfunded or neglected by government the consequences can be very serious and damaging. It is disappointing but no doubt a true reflection of the real state of affairs that the Select Committee's report all too often mentions the United Kingdom as the country which has got it wrong. Few of us would dissent from that view, given the committee's conclusions about the inadequacy of United Kingdom ground level transport infrastructure, the need for a more positive and co-ordinated approach by government and for urgent action to relieve congestion. I well remember making exactly these same points more than 20 years ago when opening a debate in your Lordships' House on the subject of the roads programme. There is nothing new in this field. Incidentally, I suddenly remember that in the debate I was given an immense amount of help by the noble Lord, Lord Shepherd, in another capacity. I must again express my gratitude to him.

Congestion is an enormously costly and serious problem. It is a key indicator of the health of a nation's transport system and the effectiveness of its transport policy. If our roads and railways are underfunded, or where investment in public transport lags behind investment in roads and private motor traffic, congestion will inevitably arise. In London the symptoms of congestion are widespread. I refer to crowded buses, tubes and trains, to clogged up roads, to the fact that journeys take four or five times longer than they ought, to missed and cancelled appointments and so on. The financial implications are vast if we could ever really quantify them. We have heard that the CBI estimates the cost to be of the order of £15 billion. I wonder whether an accurate estimate would not consider this very much below the real figure.

Practically everyone is affected by congestion and has been for some considerable time. Congestion will be a problem for large cities even if they do not have it already. What is new, however, is the spread of transport congestion to many other communities. Road and rail congestion are now quite widespread over the south of England and in the towns and cities of most other parts of the country. Few of our fellow citizens have escaped the impact of such congestion. The CBI is not the only organisation to prepare a report on this subject. The profession most heavily involved in transport matters is civil engineering. In July the Institution of Civil Engineers, in addition to giving evidence to sub-committee B, published its own report on congestion. I have a copy with me and it is available in the Library if any noble Lord should wish to peruse it and study the statistics and valuable conclusions contained in it.

It is worth reminding ourselves of those conclusions. First, and most importantly, it says that congestion will become worse if we do nothing about it until such time as road users can no longer make the journeys they want, or the noble Lord, Lord Nugent of Guildford, cannot even reach his home. Congestion will act as the regulator of traffic. That is totally unacceptable. What then can we do instead? The Select Committee report recommends the need for a more positive and concerted approach to tackling transport prroblems in the United Kingdom. If that means anything, it means a co-ordinated approach to transportation in which all modes are considered together—road, rail and air.

The report of the Institution of Civil Engineers highlighted the fundamental importance of this co-ordination. The absence of co-ordination is a fundamental weakness in our approach to new proposals which are not tested against this criterion. The Department of Transport needs a special group charged with co-ordinating transport and reporting directly to the Secretary of State. In the various regions of the United Kingdom special regional groups would also be established to co-ordinate local transport provision. The need to integrate transport provision with land use policies is also absolutely vital. It is sometimes very badly done, so that new offices or factories are built without any thought being paid to those who will work in them or how such people will travel to them. Thus congestion occurs. A very good example of this, which one can now mention, is the docklands area.

There are of course longer term measures. However, in the short term other measures must be tried. I endorse the report of the Select Committee recommending far wider application of traffic management techniques such as computer-controlled traffic signals. The problem of congestion needs to be addressed on a broad front and a whole host of measures should be considered, ranging from flexi-time working, much tighter parking controls and radical measures of which road pricing has the greatest long-term potential.

But any funds which accrue by this means must be devoted entirely to transport. We do not wish to create another—now sadly demised—road fund, where money was subscribed for roads through a little round piece of paper, like the one we have on our motor cars, which used to be known as the road fund disc. The road fund was far too attractive to succeeding governments. They started to pinch pieces out of it for other uses. Finally, however, one government suffered a pinch of conscience and decided not to continue with it. Therefore the whole fund was scrapped and they took the lot.

In the long run there has to be a shift towards public provision of transport in towns and cities, accompanied by road pricing. Public transport should be seen to be good so that the public will prefer to use it rather than their own vehicles.

Finally, we must not forget the vast impact which the completion of the Channel Tunnel in 1993 will have on the transport infrastructure of this country. I shall not explore the controversial issue of a high speed rail link to London because it has been raised on many occasions. But like previous speakers I should like to emphasise the need for another rail link. In the long run this may be more important for the economic wellbeing of this country. But it has been virtually ignored by much of the discussion of the Channel Tunnel. I refer to the need for a London bypass—a fast freight route linking the Channel Tunnel with the Midlands and the North which avoids London. Industries in the North and in the Midlands must have direct access to the markets of Europe. The Institution of Civil Engineers is not alone in saying that this is essential if the benefits of the Channel Tunnel are to extend beyond London and the South-East. The report of the Select Committee agrees with that conclusion.

Issues of the greatest importance have been raised and there is no doubt that the Government must seize upon them and act now, please. I do not want to have to make much the same speech again in another 20 years' time.

Lord Rugby

My Lords, Perhaps I may ask the noble Earl one question before he sits down. He referred to road, rail and air. However, did his studies include canals?

The Earl of Shannon

My Lords, in answering the noble Lord I must now declare an interest as I am a vice-president of the Inland Waterways Association. As he probably well knows, we built our canals rather a long time ago. Therefore the lock chambers are very narrow. We produced a type of boat known as the narrow boat to cope with those lock chambers.

When one considers the economic use of canals for commerce one has to relate the amount of goods which can be carried to the number of man-hours necessary to carry them. If the lock chambers are so narrow—and on our canals there are only 7-foot chambers—we are restricted in the amount of goods which one person can effectively carry.

I do not believe that the bulk of our canals can be used in the same way as they are on the continent. There one sees enormous barges travelling up and down with only one small family living aboard but carrying hundreds of tonnes of goods. Such a situation would not be feasible in practically all of our canals. Therefore, they have very little future commercially, but they have enormous potential for leisure and other uses.

5.25 p.m.

Lord Greenhill of Harrow

My Lords, from common departmental experience in Whitehall I know the noble Lord, Lord Shepherd, to be a modest man. I do not wish to embarrass him by repeating the well deserved compliments of other speakers. However, I shall say how agreeable it was to serve on a committee under his chairmanship, for which he was so well qualified.

The committee's important function today is, I believe, to draw attention sharply to the unwelcome truth of the highly unsatisfactory situation of transport in the United Kingdom. It is attributable to the low status given to it by successive governments of both parties. Governments have in railway parlance been asleep at the switch for many years. The report calls for them to take urgent action: they must wake up and catch up. That of course will entail money. But surely it is hard to imagine a more worthwhile investment for the present and for future generations.

As time is passing and since another debate is due to follow us, I should like briefly to underline three points which deal with matters which are in the power of our Government to put right. There is little chance of more money but there is room to speed up the implementation of projects which have already been agreed.

The first point I should like to make is that the Government will need better machinery to ensure that the transport ministry is staffed and equipped to give transport problems an appropriate priority. It is easy to criticise officials, but in their defence I should point out that it is very difficult for officials to be enthusiastic and constructive if they feel that Ministers are not backing them. This is what has previously happened.

Secondly, I should like to point out that we are indisputably behind our Community partners in the planning and practice of road and rail transport. We should be ahead in the field. Our country is geographically on the periphery of Europe, but this unalterable disadvantage must not be compounded by inadequate communications with continental Europe. If we lag behind we shall lose out to our competitors and be compelled to move our plants across the Channel. We can never be in the heart of Europe, but we can get nearer to it by more efficient organisation.

Military requirements did much to inspire the building of the German autobahn network. They made its construction a priority task. We have no military considerations to take into account, but we do have the vital claims of our export industries which would justify giving this a near military priority.

With a higher priority for our transport infrastructure must go improved and more rapid planning procedures. Indeed, this has been mentioned by previous speakers. Our present system has merits, but it must not pay unjustifiable respect to minority lobbies and accept unreasonable delays.

The noble Lord, Lord Mountevans, referred to the Stansted rail link. Indeed, one can think of Stansted Airport in this respect. However—and I hope that I am not criticising fellow Members of this House when I say this—it seems to me that there is now an extraordinary delay in meeting the very self-evident requirement for a rail link from Paddington to Heathrow.

The second point that I wish to make concerns the Channel Tunnel which of course has huge potential advantages. However, undue concentration upon it breaks one of the fundamental rules of any efficient transport system: it greatly reduces its flexibility. The report refers to that point briefly in paragraph 139. It states: It is essential that ports on both sides of the Channel have good connections to road and rail networks". In other words, the tunnel must be backed up by good and cheap ferry services west of Dover and on the east coast. We must not attempt to suck all traffic into Dover where a temporary hold up would have the most devasting results.

My third point relates to the future of British Rail. The report did not deal with it and was not called upon to do so; but in paragraph 137 it recognises the particular difficulties faced by British Rail, given the uncertainty over its future. The report makes no recommendations. That uncertainty cannot be quickly removed. The new chairman to be said in the press recently that he would need a year before he could complete his review and make considered recommendations. That year begins in July.

Her Majesty's Government and Mr. Reid could say now, without committing themselves to any particular solution (privatisation or the continuation of nationalisation) that the British Rail system will be centrally directed and controlled so that in any negotiations and discussions with the Community of European Railways our representative can speak with authority for the whole of the British system and not be weakened by any regionalisation in the United Kingdom.

The new chairman will not need to be reminded of the vital importance of staff attitudes. When I worked in the London North Eastern Railway before the war, having come straight from university, under the chairmanship of the grandfather of the noble Viscount, Lord Whitelaw, I was struck by the pride that the staff took in their work. That was at a time when a signalman working in a busy signal box had one week's holiday per annum and a wage of less than £4 a week.

Mr. Reid is, I believe, a Scot. He will therefore at least have the advantage of being able to communicate without difficulty with the brogue of Mr. Knapp, the chairman of the NUR. do not see how the report will induce the Government to put more money at the disposal of those wishing to improve our transport system. It may do. If we do not obtain more money, I hope that the report will at least focus attention on the problems and give an opportunity for thought on how best we can solve them.

5.33 p.m.

Lord Tordoff

My Lords, we now come to the closing stages of this interesting debate. It would be otiose if I were to repeat all the thanks that have been offered this afternoon to the noble Lord, Lord Shepherd, his colleagues, the clerks and so on; but I warmly second everything that has been said.

It is an important study on the important issue of the infrastructure, a word which has been used on many occasions from these Benches by my noble friend Lord Ezra with varying degrees of success and response from the Government. Those transport regulars who are in the House today can be excused a somewhat wry smile at the way the first two sentences of paragraph 116 came out. They express alarm at the weight of evidence in favour of improving the infrastructure. Many of us who customarily speak in transport debates from all parts of the House are glad to have reinforced the views that we have expressed for many years. Some of the members of the committee are what I would describe as transport regulars. They express alarm at the weight of evidence and we should note that we are talking about evidence and not opinions. There is a great deal of evidence which must be judged in that light.

The evidence clearly shows the inadequacy of the transport infrastructure in the Community and especially in the United Kingdom. What is the Government's response? In so far as we can ascertain it we find that in paragraph 124 on page 29, when summing up, the committee says: Our own Government has argued that the common interest in transport policy is mostly centred on liberalisation of markets and the increase of competition". That, if I may say so, is a typical piece of government theology. It is the usual assertion we receive from the Government who fly in the face of the evidence presented to them. From these Benches, we believe in liberalisation and competition; but the committee is right to strike the correct balance in the argument by saying at the end of that same paragraph: It cannot be too strongly emphasised that an expanding, competitive market in transport services depends on adequate infrastructure, coordinated across the Community and beyond its frontiers". From the way in which way things are happening in Eastern Europe at the moment, when one talks about "beyond its frontiers" I wonder whether it will be easier to move goods and people from Moscow to the Ruhr than it will be from Liverpool or Glasgow.

The Government believe in non-intervention in these matters and rely almost entirely upon the pressure of market forces. The difficulty is that the unmodified effects of totally free competition lead to short-term decisions, long-term deterioration and regional imbalances. That is why we are in the situation that we are, because the weakest go to the wall. That is nowhere more obviously seen than in the balance between road and rail. We all know what the situation is there: while it may be necessary to invest more in our roads, our rail system has been starved for many a long year.

There is a great need for intervention and a need to alleviate the environmental problems associated with the increasing movement of people and goods. If the report has a weakness, it is that it places insufficient emphasis on environmental impact studies. There are one or two minor references to the point but it is a dimension that has not been fully taken on board within the report. In the future it will become increasingly important that we try to see what will be the impact of new roads and railways, and movements in general, on our environment. What will be the result of the need to reduce emissions of hydrocarbons and CO2 on future transport arrangements?

The decisions needed to get right that equation need to be taken now to affect what will happen in the early decades of the next century. Integration and co-ordination are needed, as everyone has said today. Problems are not sensibly confronted by a big bureacracy. I agree with paragraph 125 that the European infrastrucutre agency is undesirable. Answers will not emerge by chance. Paragraph 132 gets it pretty well right. It says: Joint ventures between the public and private sector must be considered at both a Community and national level. There is no likelihood of widespread private funding of road and rail construction because of the complexity and long payback periods of projects. Private companies will only become involved if there is assurance of a satisfactory return on projects or a Government guarantee". It is that lack of government guarantee that very often holds us back. This underlines the problems that we face with the Channel Tunnel. Paragraph 138 says it all: [It] should be a catalyst to economic growth and the regeneration of industry in the UK as a whole". That has already been mentioned. I emphasise the words "as a whole", not just in the South-East. The government refusal to inject public money into the development of the Channel Tunnel project—and I have said this often enough in your Lordships' House—seems to me to be at the root of so many of our problems, both in terms of the kind of tunnel that we shall have and also in terms of the links to the tunnel that we shall not have at the moment. The Government's insistence on forcing Section 42 into the legislation when the Bill was in your Lordships' House has led to enormous uncertainty and, I believe, to a tremendous missing of opportunities.

The committee is absolutely right about rail links, but I question one other point in the report and that is the priority for a motorway to link the Channel Tunnel with the South-West and Wales. I should give priority to the electrification of the rail lines to Wales and the South West. That seems to me to be more important as a first step than to build another motorway in that direction.

Paragraph 137 seems to me to be extremely damning: No final plans are yet available to the Committee showing how freight traffic will be handled on completion of the Channel Tunnel". I agree with all that has been said. The noble Earl, Lord Shannon, who spoke a moment ago about links around London to the North and to the Midlands for freight, was absolutely right and I have argued that on many occasions in your Lordships' House. But I think that there are other parts of the country, specifically the South-West where I now live, where the economy is in difficulty. The volume of manufactured goods is not as high there as in the Midlands and the North but there is a need to stimulate activity to mop up unemployment. If we are not careful we shall be totally left out of any links to the Channel Tunnel.

We should also press ahead with freight terminals. The answers I have received in the past both from the Government and from British Rail have been disappointing. British Rail now seems to be moving forward in this direction and freight terminals and freight interchanges between road and rail are now getting on to the drawing board. I suspect at the moment that not enough interchanges are being considered and I am sure that the Government need again to put some of the taxpayers' money into that part of the infrastructure. It cannot be left entirely to British Rail on purely commercial considerations in the short term to set up this infrastructure. It is in precisely in these areas that the Government need to intervene.

They also need to do something about improving the west coast ports' container handling facilities. I still believe, again in the face of muted responses from British Rail, that those ports can be re-vivified by better handling facilities in places like Liverpool, Plymouth and Milford Haven. It is possible that containers can be taken ashore there and put on to trains to the Ruhr and Milan faster than they can be trans-shipped through Rotterdam and Hamburg. This is an enormous opportunity but the Government need to inject capital into the infrastructure.

I fear however, that I am extremely pessimistic. We shall hear tonight, I am sure, how very well the Government have done for us in the White Paper and in the Autumn Statement. I am afraid that the Government will go on favouring road against rail. Even when there is extra cash available, the Government block it, as we have heard in regard to additionality.

We read what Mr. Portillo said in evidence in reply to my noble friend Lord Ezra at page 248, question No. 728. I shall not read it out now but it is quite clear from the quotations which have already been given that for the first time a Minister virtually admitted that there was no additionality. I have never heard that before quite so clearly spelt out. We have all known it, but Mr. Portillo came as close as anybody I have ever heard to saying, "Of course, we don't really count it as additionality". What happened when he returned to his department I do not know. Nevertheless, that is on the record. I believe that it is disgraceful behaviour and, as the noble Baroness, Lady Llewllyn-Davies, drew to his attention, it is probably illegal. It is badly stated there. It is at least honest, but I believe it is daft.

What happens? Noble Lords may not be aware, but British Rail qualified for Euro-funding for some re-signalling work in the Newcastle area. That was part of the east coast mainline project. It also qualified for some Euro-funding for the Folkestone to London high speed link. However, the Government insist that this has to be set against BR's external funding limit. That puts BR in a position where it is much more in its short-term interests to look again at other projects that give it a better return than to accept the money from Europe because it is money chasing out other money. That is the way in which this works and it is why projects which could be funded from Europe are not being funded.

People in this country complain about the bureaucracy in Brussels but, by gum! they are novices compared with the Treasury. If the people in Brussels wish to learn about bureaucracy, they should come over here and see what is happening in the Treasury.

I give a wholehearted welcome to the report. I have expressed my doubts on a couple of minor points which I believe are important. I hope that we receive something more than a courteous reply from the noble Viscount. We shall certainly get that from him and we shall get a straight bat, the Government will look at the report, consider it and in due time they will come up with the reply, "Yes, that is very interesting but we can't do it".

I hope that we can go a little further than that and a little further than the Autumn Statement. We have heard some powerful speeches this evening from all round the House. In my view the Government should listen to the remarks of the noble Lord, Lord Greenhill, about the unacceptable state of the infrastructure and that we are indisputably behind our competitors.

The noble Lord, Lord Lucas, talked about complacency and confusion. He asked a very pertinent question: how much of the money in the Autumn Statement is new money? We deserve an answer to that. I am sorry that the noble Lord, Lord Nugent, is not in his place—I beg his pardon, not in his usual place. He said quite rightly, I believe, that the Channel Tunnel links could not be left to British Rail alone. Her Majesty's Government must take responsibility for getting the Channel Tunnel finished. The uncertainty which exists at the moment is extremely worrying. It can only be sorted out if the Government are prepared to forget about that section of the Act and come in and take action. People on all sides of the House have called for intervention by the Government on a scale that I fear they will not like. However, market forces alone will not settle the problem.

Last week I went to a press conference where the leader of my party, the right honourable Member for Yeovil, talked about congestion in London, of which we have been speaking tonight. He mentioned the publication of a report submitted to him by a group of people. It suggested a form of road pricing which I think is unique and which my party will certainly consider; namely, that people moving into heavily congested city areas should pay an extra licence fee. However, that licence could be converted into free parking and free riding as an alternative to bringing one's car into a city centre. Mr. Ashdown said that to do nothing was not an option. We cannot cope with any of these problems if we simply sit back and do nothing. The report which is before your Lordships today points in a very definite direction. I commend it to the House.

5.50 p.m.

Lord Underhill

My Lords, I consider this debate to be a most important one. Transport has gradually become a more important subject for debate in your Lordships' House. I wish to try to avoid going over some of the details which I have already raised in our debates on congestion, the development of British Rail and the Channel Tunnel and other matters. However, that does not alter my view of the importance of the report. I join with other noble Lords in expressing appreciation for the splendid work of the committee and for the way in which the report was presented by the noble Lord, Lord Shepherd. The way that he presented the report gave us all a thorough understanding of its contents.

It is interesting to note that both the responses that I have received in the past few days from the two motoring organisations, the RAC and the AA, welcomed the report. Generally the organisations were in favour of the recommendations put forward. The noble Lord, Lord Tordoff, referred to the weighty evidence. I have not had an opportunity to read all the 288 pages of the supplementary evidence. However, I have picked out what I wanted to pick out according to the subject matter but not with any idea of scoring points on particular issues.

Heavy evidence is given from responsible organisations to back up the report and its recommendations. The very first paragraph of the introduction to the report stresses the importance of the subject matter. It states: Transport infrastructure is critically important to the development of the Single European Market. Without an adequate network of road, rail and other transport links, Europe's business could be clogged in traffic jams on the roads, lost on an inefficient rail network or unable to fly in congested airspace.". I stress that the report is concerned with Europe's business and not just that of the UK. That concern and urgency are firmly expressed in the first conclusion at paragraph 151 of the report which states that, transport infrastructure in the Community as a whole, and in the United Kingdom in particular, is inadequate and underfunded". That view has been endorsed by the speeches of a number of noble Lords. The report mentions the United Kingdom falling behind other states in transport funding. Evidence is given in the report of the considerable assistance given by other member states to various aspects of public transport. Some of the figures given, particularly the one mentioned by my noble friend Lord Shepherd on the relationship of GDP to transport spending, are referred to in the report. Paragraph 72 makes it quite clear that the evidence was received from the Commission and was based on figures supplied by the CBI. Therefore we are dealing with factual evidence, not just with guesswork.

It is interesting to note in paragraph 77 the comments made in the evidence given by the Department of Transport on the difference in the criteria for the appraisal of road and rail projects in the United Kingdom. I shall not go into that matter, but those differences in the appraisal of road and rail projects are dealt with in that paragraph.

It is also encouraging to note that, although the report naturally stresses the importance of the considerable development that is needed in road transport, particularly in view of the anticipated considerable increase in car ownership—I believe that that worries almost everyone in your Lordships' House—motoring organisations have emphasised the need for balance among the various transport modes. If that kind of statement is being made by the motoring organisations, it cannot just be pushed on one side.

Numerous references are made in the report, and have been made in speeches, to integration, cohesion and co-ordination. I am almost tempted to ask whether everyone appreciates what those terms mean. At my party's conference, motions are carried every year on integrated transport but I am certain that when hands go up people are not quite certain what those terms mean. But the report emphasises that there should be strategic planning in the United Kingdom. In paragraphs 47 and 48 the report makes a couple of important statements. Paragraph 47 refers to the pressure that important organisations have brought to bear for proper transport plans to deal with all the various regions of the United Kingdom. Paragraph 47 states: But the DTP were not prepared to carry out a study of the regional impact of the Channel Tunnel, because it would be difficult to isolate its effects from other influences on the industrial growth of the regions and it was not expected to have a significant influence on the regional distribution of industry and employment". I wonder whether a single noble Lord in this House accepts that statement. Paragraph 48 states: There was accordingly a call for the DTP to produce a strategic plan for the future, taking account of developments in Europe and their impact on the United Kingdom as a whole". Therefore, no one is suggesting that we are asking the Commission to work out a plan for the United Kingdom. We are asking the Department of Transport to produce a proper plan and to take into account various other important developments.

The report states that the committee considered the White Paper on roads. The committee had to do this because of its importance. Paragraph 49 states that several witnesses pointed out that local authority roads were not mentioned in the White Paper although these were vital not only in their own right but as feeders of traffic to and from trunk roads. They further pointed out that the roads mentioned in the White Paper carried only one-third of the total United Kingdom traffic. That point was taken up by the Minister responsible for public transport, Mr. Portillo. His name has been mentioned a number of times this afternoon. He stated in paragraph 51 that the White Paper concentrated on inter-urban roads. It was further stated that the contribution that could be made by local roads would best be achieved through the changes made in the transport supplementary grant.

It so happens that only a few days ago I read a Department of Transport press notice issued since the report was prepared. It stated that the transport supplementary grant in future would cover certain aspects of work on local roads, but there would be a corresponding decrease in the rate support grant. I hope the Minister will explain exactly why that is proposed.

As has been emphasised in previous debates, it is vital that the infrastructure in the UK should be ready for 1992 and also for the opening of the Channel Tunnel in 1993. All noble Lords will await with keen interest the British Rail plans for the regions which are expected in the near future and also the final determination on the question of the fast link.

I emphasise that there must be adequate roads to the ports as well as to the tunnel. There must also be good access to airports. I understand why the committee felt it necessary to concentrate on roads and railways, but the question of access to airports is equally important. Any strategic planning undertaken by the Department of Transport and the Government must cover all transportation modes. It is no good placing the emphasis on roads or on rail.

Decisions on roads covered by the White Paper must be taken to their conclusion within the foreseeable future. It is no good drifting on and changing the proposals for road development in a future White Paper.

I was interested to note a 1988 report of the International Union of Railways which includes the railways of the 12 Community states and of countries outside the Community. The report states that that body is already considering plans for a network of high speed rail links in Europe as a whole, not just within the 12 Community states. That is an important development.

Most organisations gave evidence in support of Community action. Some expressed bitter disappointment that the projects that were listed in the Commission's original five-year plan have now been scaled down. I use the term "scaled down" rather than the stronger term which has been used by other noble Lords. That scaling down was apparently the result of criticisms made by the Council of Transport Ministers. However, the Department of Transport view, and also that of the Government, is apparently that the Commission should have only a limited role. That is made clear in paragraph 32 of the report. That attitude was emphasised by Mr. Portillo, Minister for Public Transport, who said that the: Government remained firmly opposed to a major role for the Commission in financing projects". Looking at the evidence, I agree with the report that there is little enthusiasm for a European infrastructure agency. I would go along with that criticism. I also support the committee's view—and I am pleased that most noble Lords who have spoken also do so—that the Commission member concerned should have transport as his sole portfolio and not also have other responsibilities. It is very encouraging that a number of organisations support that view, including the motoring organisations.

As distinct from what the committee reported, I believe that there is a serious case for considering an infrastructure fund. We do not want a bureaucratic agency, but there are possibilities for an infrastructure fund which could help to finance the essential large-scale projects which should be undertaken in various parts of Europe. I am sorry to say that again Mr. Portillo was firmly against even consideration of such a fund.

If we agree that the Commission should have that important role, how is it to be financed? The Department of Transport and the Government argue that infrastructure should be financed: almost exclusively by national governments with very little involvement from the Commission". I am almost tempted to suggest that the Commission should have a look at its agricultural fund, but that would be to make a political point outside the scope of this debate. The Commission is not necessarily opposed to the principle; it is opposed to the principle in this case.

Evidence from the department and the Government suggests that already half the regional development fund is already used for transport infrastructure. I have not been able to ascertain from the figures how much finance is involved. If the noble Viscount has that figure perhaps he could give it in his reply.

I also support the committee's very strong view that the Commission's proposal for the territoriality of the principle of charging excise duty on heavy goods vehicles should be rejected—not only rejected but withdrawn. I hope that the Commission will take note of that strong emphasis in the report.

Paragraph 64 has been emphasised and I should like to stress the point from the Opposition Front Bench. It is stated that the Government take into account the money that comes from Community funds. I am very pleased that the RAC and the AA, which have communicated with us since the report was issued, also support the committee in its criticism of the matter of additionality.

British Rail has pointed out that its record level of investment is helped by Community funding on certain projects but that that is neutralised because of the additionality rule under which European funding is set against BR's external financing limit. That leads to the necessity for BR to reduce internally funded investment. In case the Minister decides to point out to me that British Rail's investment is at its highest level for 25 years, I should point out that not only is BR merely catching up but also that it is not government money. BR is investing money which it has attracted from its own resources, from fares and from sales of property and other assets. It is not government money at all. Yet the Government frequently boast that BR investment is at its highest level.

The committee suggests that we must also take a very careful look at speeding up planning procedures. One has to be extremely careful here. We must not take away the opportunity for bona fide objections from those with a genuine interest to be taken into account. At the same time, as the report indicates, we badly need to take a careful look at our planning procedures. It has been suggested that if only clear decisions could be taken on the question of adequate compensation, that might make a difference in some of the planning inquiries.

I have been very interested to note that in its response the RAC regretted that the report fails to take adequate note of the environmental and safety aspects of transport infrastructure developments. That point has been echoed by the Automobile Association in its response. It is important to note that it is the motoring organisations which have drawn attention to those omissions from the committee's report.

I now come to the committee's conclusions. The first is that there is an urgent need for an integrated approach to transport planning in the Community which would cover links beyond the Community's external frontiers. That is stated in paragraph 152. I have mentioned that the International Union of Railways is already moving in that, direction. We should be encouraged by that main conclusion of the committee.

The committee also concludes that there is a need for a more positive and concerted approach to solving transport problems in the United Kingdom. There is universal criticism by the responsible organisations of the inadequacy of transport in the United Kingdom. I am also pleased to note the growing emphasis on the fact that any one single aspect of transport cannot be considered on its own. All modes of transport must be considered and land use must also be taken into account in order to deal with this important problem.

This is an important report. It emphasises the importance of a cohesive strategy and of an integrated approach. The reports of our Select Committee on the European Communities are usually considered very thoroughly by bodies attached to the Community and by the Commission itself. We must now ask that the Government themselves give consideration to the report. I hope that the Minister when he replies will be able to tell us exactly what the Government and the department propose to do with the report because it deals not only with widespread development within the Community but also with essential development inside the United Kingdom.

6.10 p.m.

Viscount Davidson

My Lords, I should like to begin by expressing my gratitude to the Select Committee for a most interesting and useful report and in particular to the noble Lord, Lord Shepherd, for initiating this debate and elaborating on the Select Committee's finding. I am also grateful to the three other members of the committee who have contributed to this afternoon's discussion. At the same time I very much regret that some noble Lords who had put down their names to speak in the debate have been struck down by the flu virus. I wish them a speedy recovery. I agree with the noble Lord, Lord Shepherd, that the timing of the debate is fortuitous, coming as it does only four weeks after my right honourable friend the Secretary of State announced the major boost for transport investment—over £3 billion for road and rail over three years.

Formally, this afternoon we have been discussing the Select Committee's response to certain specific EC documents to which I shall return in a moment. In fact, as usual we have had a wide-ranging debate, taking us over a whole range of transport and indeed economic policies. That will not surprise those of us who know well the passions that transport arouses in your Lordships' minds and elsewhere. Nevertheless, I want to focus on certain selected issues arising specifically from the Select Committee's report and more especially from the Commission's proposals.

To begin with, perhaps I may deal with the report itself. Many of the committee's conclusions are ones with which the Government are in complete agreement, in particular the principal conclusion in paragraph 164 that: Urgent action is required now to relieve congestion and to increase the efficiency of the transport of people and goods". In paragraph 158 the committee calls for: a more positive and concerted approach to solving transport problems in the United Kingdom. There must be a commitment to continuous funding to ensure speedy implementation of plans in the White Paper 'Roads for Prosperity' ". I shall explain in a moment how that action is already in hand. We agree that there is scope, as stated in paragraph 162, for: Joint ventures between the public and private sector … at both a Community and national level". Turning to the European Community aspect, we agree that the European Regional Development Fund already provides an adequate mechanism for funding transport infrastructure projects without the need for a separate budget heading (paragraph 159); that there is little to commend a European Infrastructure Agency (paragraph 157); and that the Commission's current proposals for charging excise duty on heavy goods vehicles should be withdrawn and reconsidered (paragraph 160).

Let me go back to the first point—the need to spend more on our national transport infrastructure. Indeed, this is probably the most important point to emerge in this afternoon's debate. Noble Lords have variously stressed roads, railways, airports and sea ports as vital contributors to the national wealth by making the carriage of goods and people more efficient and hence more competitive. They—rightly in the Government's view point to the competitive pressures that will arise after completion of the internal market in 1992. In that they are following many commentators ranging from the CBI to the Royal Institution of Chartered Surveyors which have made closely similar points earlier this year. Increased expenditure on improving the national transport infrastructure is, it is claimed, the way to meet the challenges of 1992.

Thus far, that is an analysis which the Government share. That is why they have already announced massive increases in public expenditure on renewing and extending the nation's transport system. Over the coming three years, there will be an additional £3 billion beyond what was planned last year for all forms of transport. For individual sectors that means increases of up to 100 per cent. more. The average is over 60 per cent. more.

For railways, that marks the biggest investment programme since steam traction was abolished a generation ago. BR's investment programme will be up by over £600 million to £3.7 billion over the next three years—over 75 per cent. in real terms above the level for the previous three years ending March 1990.

Over the next three years we shall spend £4 billion on road construction—50 per cent. more in real terms than in the previous three years to March 1990. That preparatory work for the motorway widening and other schemes announced in May in the Roads for Prosperity White Paper will build up substantially through the period with schemes starting to come on stream in the mid-1990s.

On the London Underground—that essential tool to the continued existence of London—additional investment will make an important contribution to carrying additional passengers and relieving congestion. I have in mind particularly the purchase of 85 new trains and new signalling equipment for the Central Line and the completion of the Beckton and City extensions of the Docklands Light Railway.

New plans, new projects, increased expenditure—all these are signs of a speedy government response. As recently as 1984, all the figures pointed to a continuing decline in the use of rail transport and to lower growth rates in road transport. Within less than five years, we have seen the trends change and the Government have responded quickly and effectively. The reason they have been able to do so is that the projects now included in the expanded programme are good value for money. They are soundly based on a careful analysis of what demand requires and what the market will pay for.

That is a key point and the one on which the Government must part company with those who go on from the links between transport infrastructure and economic development to argue for a planned, integrated transport system, either at national or even Community level. It is not always clear precisely what is meant by such terms as "integrated" or "planned". Some, including the Select Committee, argue for a centrally identified and financed network of roads and railways, linking "peripheral" areas and filling in "missing links" in the network. What is the point of constructing those projects if no one uses them? That may well be the reason why such links are "missing". If the market has failed to attract enough interest to finance those links, why should some central planners know better?

Some go on to argue that construction of such networks should be accompanied by measures to direct freight and passengers from road to rail. Some noble Lords have done so tonight. There may be reasons why this should be done—relief of congestion or preservation of the environment—but the general direction of traffic to any particular mode must necessarily distort the economics of transport. By definition, that leads to inefficiency and loss of competiveness. That is the very reverse of what everyone argues we should be trying to achieve and the resulting protectionism and beggar-my-neighbour policies are the very negation of what the Community stands for.

If I may briefly illustrate my point, the classic examples of integrated, centrally-planned economies are in Eastern Europe and the third world. Many of us who have travelled to those areas will be only too familiar with the grandiose boulevards linking national monuments, the incomplete motorways, the international airports that see only a handful of flights a day, contrasting with the poverty and inadequacy of the means of transport that struggle to move their nation's real business. These are extreme examples, but only too familiar ones. The fact that they come from the poorer countries is no coincidence. It is the misallocation of resources by central planning in place of market-driven forces that have kept those nations poor.

Lord Tordoff

My Lords, can the Minister quote any instance this afternoon or this evening when anyone in this House has suggested that kind of central planning? Have we not all said that there must be some intervention, but that market forces must also be allowed to play their part?

Viscount Davidson

My Lords, I was arguing a point. I have just said that these are extreme but only too familiar examples. When one argues a point, one may argue from an extreme position.

With that in mind, I turn briefly to the ideas of the European Commission and the papers which were the starting point of the Select Committee's consideration. There are six of these. They are listed at the beginning of the report. I do not want to dwell on all of them, but I should mention just one which encapsulates the Commission's thinking. The paper numbered 7325/88 (COM(88)340) invited the Council of Ministers to endorse a much more ambitious programme of EC funding for transport infrastructure in Europe than we have ever seen before. The programme has been slightly revised by the Commission over the last year, but, even so, it is far from clear just what criteria have been used in deciding what projects should benefit, or the basis of any cost-benefit analysis that might have been applied. The paper totally ignores the fact that for many years the Community has had a perfectly good means of making grants to transport infrastructure projects—where, exceptionally, there has been a particular need—through the European Regional Development Fund.

We see no need for a centrally-planned network of cross-border routes. We see no need for the Commission to expand its bureaucracy to do something that national government and private enterprise are quite capable of doing. And we see no need for the introduction of uncommercial practices in the direction of transport to particular modes. It is disappointing to have to rebut once more the ambitions of those who claim to know better than the transport system's customers where their best interests lie.

It is therefore, good to have the Select Committee's support in arguing against the need for a separate transport infrastructure fund, against the creation of an infrastructure agency, in favour of public and private sector joint ventures and in favour of commercial rail operations and transhipment facilities. These meet precisely the Government's point: the best way of achieving an efficient, integrated but above all competitive transport system is to seek market-oriented solutions, to avoid planning where possible but also to recognise that there may be scope for central intervention to meet limited but specified objectives.

Such specific objectives should, in our view, concentrate above all on setting the right regulatory conditions in which a free market in transport can operate. As the noble Lord, Lord Mulley, reminded us, at the meeting of the Council of Transport Minsters in Brussels a week ago an interim regime was agreed which will introduce on an experimental basis the ability of road hauliers to undertake cabotage for the first time—that is, to move goods from one place to another within another member state. We also made good progress in liberalising air transport, thereby bringing forward the day when air fares in Europe will be as cheap as they are in the USA. I shall come back to that at a later stage in my speech.

We also want to simplify and speed up procedures at frontiers within the EC, although the Government agree with the Select Committee's recommendation in a separate report that member states must continue to be able to make certain selective checks at borders. I should like to take this opportunity to inform the House that the noble Baroness Lady Serota, has just agreed that the Commission's proposals in this matter have now been modified to meet the committee's and the Government's concern.

Let me now turn to specific points raised by noble Lords in the course of this debate. The noble Lord, Lord Shepherd, drew attention to the achievements of our Victorian predecessors in building up the nation's infrastructure. I could not think of a better example than the way in which free enterprise and entrepreneurial competition have built up a comprehensive transport system. The Victorians did not work to a master plan and nor should we, and nor should the Commission.

The noble Lord went on to draw attention to the varying levels of infrastructure imvestment in Community countries. Those figures are striking, but they conceal an equal variety of definitions and bear little relationship to the matching figures for economic growth in the countries concerned.

There are two points to be made. First, percentages of GNP are relative. Due to this country's economic revival in the 1980s, GNP rose dramatically. Using percentages of GNP does not reflect a true position of relative spending over the period. Secondly, I refer to the Government's recent announcement in the Autumn Statement. The national road programme has been doubled and so will the roads vote be by 1992–93. We are spending £5.7 billion in three years to March 1993 and a further £2 billion should be spent on local roads. British Rail investment is at its highest level for 25 years and will increase further still, particularly on rail freight and London commuter services. We are also investing heavily for the Channel Tunnel.

The noble Lord, Lord Shepherd, asked about road improvements on roads to ports. I have a list of all the schemes within the current trunk road problem but rather than read them out I shall write to the noble Lord with the full details.

Lord Tordoff

My Lords, I am sorry to interrupt again but could the noble Viscount tell us how much the Government are investing in the Channel Tunnel?

Viscount Davidson

Not without notice, my Lords.

Lord Tordoff

The answer is nothing, my Lords. That was the whole point of Section 42 of the Act.

Viscount Davidson

I shall write to the noble Lord. My noble friend Lord Nugent of Guildford drew attention to the conflicting priorities which individual citizens face when they leave their houses and get into their cars. No doubt if we were debating housing and not transport we would hear about the undesirability of sacrificing houses for roads. There is no single answer to every problem, but we can all agree that transport has been a Cinderella—to use his phrase—for too long. That is why we are increasing investment so substantially. Let me reassure the House that having now put Cinderella back on centre stage the Government intend to keep her there and make sure that she stays at the ball.

I shall draw the attention of my right honourable friend the Secretary of State for Transport to my noble friend's speech. I assure your Lordships that he will read the Official Report on this debate with great interest. I am not sure whether my influence stretches further than that.

The noble Lord, Lord Ezra, rightly drew attention to the recent CBI report and to its focus on congestion. The Government recognise this problem. That is why the road construction programme is being immediately stepped up. That is the reason that BR's investment programme is now at the highest level for a generation and that is why we are again embarking on the expansion of the London Underground after a pause of 30 years. I must, however, take issue with the figure for emissions that the noble Lord mentioned; I believe the noble Lord, Lord Tordoff, mentioned this also.

The Energy Select Committee in another place in its recent report cited a figure of 16 per cent. for the proportion of emissions generated by cars and lorries. With regard to the transfer of traffic from road to rail, the Government welcome the efforts of BR to win traffic but it is doubtful whether that will be the panacea for congestion that the noble Lord suggested.

Lord Ezra

My Lords, on the question of emissions, which is an important question, it is categorically stated in the CBI report that the figure was 45 per cent. Has the noble Viscount taken this up or will his department take this up with the CBI so that we can have clarification?

Viscount Davidson

My Lords, I shall ensure that that is done if it has not been done already. Referring to what the noble Lord, Lord Ezra, was saying with regard to encouraging the transfer of traffic from road to rail, I have to remind him that road and rail, by and large, serve different markets. For most traffic the one cannot readily be substituted for the other. They also cover different scales of activity. Roads are responsible for 12 times more passenger travel and 10 times more freight movement than rail. A 50 per cent. increase in rail traffic would reduce road traffic by less than 5 per cent. and that might only be temporary. However grants are available from the Government under Section 8 of the Railways Act 1974 to encourage transfer of freight to rail in cases where there would be worthwhile environmental benefits.

The noble Lord, Lord Mountevans, ranged widely over transport policy and drew attention to much of the Select Committee's report. I hope he will forgive me if I select just two of these for specific comment. First, there is the arcane but important question of additionality which was mentioned by my noble friend Lord Lucas of Chilworth and also by the noble Lord, Lord Underhill: in planning public expenditure the Government consider all expenditure undertaken by departments, nationalised industries and local authorities. This is essential for the management of the economy because Community-funded investment makes calls on the supply of goods and services in the UK, as does investment funded from other sources.

Because the Government take account of the likely allocation of Community funds when planning public expenditure, Community funding means that expenditure plans are higher than would otherwise be the case. However, it is not possible to identify Community funding separately in detail in the public expenditure plan. The Government will need to know the details of Community funding much earlier than they do if precise account is to be taken of it. However, just because the extra cannot be identified, it does not mean that it is not there.

The noble Lord, Lord Mountevans, and the noble Lord, Lord Mulley, also raised the problems of planning procedure in this country compared with some of our partners in the Community, and I am well aware of the current problems in certain places.

On Private Bill procedure my right honourable and learned friend the Lord President of the Council and my noble friend the Lord Privy Seal are considering the debate in both Houses which took place in the last Session regarding the report of the Joint Committee on Private Bill Procedure. These are difficult and complex matters, but the Government are seized of the need to respond to the report as soon as possible. My right honourable and learned friend has given assurances in the other place with regard to this. The House will know that there is an impasse at present on certain Bills which your Lordships have carried over from the previous Session and upon which we await concurrence from the other place. This too is being considered urgently. We recognise that procedures could be speeded up, but in saying that I should remind your Lordships that sometimes delay is the inevitable price we pay for living in a democratic society.

The noble Lord, Lord Mulley, rightly and wittily drew attention to the problems facing anyone who wants to build an infrastructure project. That is not a source of complaint; it is merely a fact of life. He very helpfully drew attention to two of the major fruits of last week's Transport Council in Brussels which I have already mentioned. There was indeed useful and important progress on aviation liberalisation and, as the noble Lord said, a major interim agreement on road haulage cabotage. I can now go slightly further in reply to him on that. One of the key points concerning that agreement is that it should be an interim agreement. It provides for a 40 per cent. increase in the number of permits compared with the present figure. (I think that means that I do not have to go to Rome, unfortunately, as he could not go to Rome.) It is also time limited. We wish to move to the final stage of full liberalistion in the field of cabotage in 1993. Let me assure your Lordships that the Government will continue to press for full liberalisation in all fields of transport.

I was grateful for the noble Lord's remarks concerning implementation. It is no matter for complacency that we have the best record of implementing EC legislation. Indeed, we cannot demand that other states should liberalise their practices unless we are prepared to set a good example.

My noble friend Lord Lucas of Chilworth painted a gloomy picture of our isolated railway system. I am sure that he will not be surprised if I take a more optimistic view. The tunnel will provide an entry to the Continental rail system with immediate effect from the day it opens. British Rail will very shortly be publishing its plans, showing how it will provide through services from the Continent to the rest of the UK. I believe that these plans will do much to reassure those who are concerned about British Rail taking advantage of the new opportunities presented by the tunnel.

In regard to the question of urgency, in the mid-1980s we were looking at very much lower growth rates than we are now. In four short years we have prepared, and announced this autumn, a massive increase in investment of £3 billion. That is 60 per cent. more in real terms compared with last year's plans. That sum is for the next three years, but the Government are firmly committed to meeting these growing needs as long as it is worthwhile to do so.

Plans for spending on new trunk road construction in England, over the periods 1990/91/92/93 at the sum of £4 billion represents a real increase of 50 per cent. compared with the three-year period ending 31st March 1990.

The noble Earl, Lord Shannon, mentioned that traffic congestion is a growing evil and one which we all know and dislike. I can assure the noble Earl that the department is working with transport operators, local authorities and others to combat congestion and improve transport conditions, especially in London, for all travellers. We have a five-pronged approach to improving the movement of traffic: improving trunk roads to take traffic around London; supporting an increasing number of borough road schemes; using new technology to improve traffic management; encouraging better parking controls, and promoting a safe, efficient and attractive rail and Underground system.

I should also like to pick up the noble Earl's comments on road pricing. I was interested to hear the noble Lord, Lord Tordoff, say that this might become a plank in the Liberal Party's platform. However, we do not like the principle of pricing or rationing. It presents serious practical difficulties. The idea is much discussed but there are few schemes in operation anywhere in the world. Only a handful of cities make a charge and none of those is remotely comparable in size with London. We do not think that pricing in the central area only would have much impact on London's road traffic problems. A scheme to cover all London would be extremely complex to introduce and could involve charging over 660,000 vehicles in a morning peak hour alone.

The noble Lord, Lord Greenhill, drew attention to the importance of confirming the future of British Rail. The Government are not asleep at the switch, to quote the noble Lord's expression. The Government wish to ensure free and fair competition between transport modes, and this is the best way to ensure that operators provide the service which people want at the right prices. I repeat that the BR investment is at the highest level for a quarter of a century. I have already given the figures to your Lordships.

The impact of major civil engineering works on the environment was an important point made by the noble Lord, Lord Tordoff. Virtually all such schemes require detailed impact analyses to be made. The views of the public need to be explored and given proper consideration. That is why lead times in some cases can be long, although we are attempting to ensure that they are no longer than is absolutely necessary.

The noble Lord, Lord Underhill, spoke eloquently in favour of a centralised transport planning. I beg to differ.

Lord Underhill

My Lords, I never referred to centralised planning. I referred to co-ordinated planning, strategic planning and cohesive planning. I have not suggested that one body should decide the way in which I should travel.

Viscount Davidson

My Lords, I apologise to the noble Lord, I withdraw my remark immediately. I do not think that I can speak any further on that point —which is probably the noble Lord's loss more than mine.

Contrary to what the noble Lord, Lord Underhill, said—and I hope that I have got it right this time—the Government agree that it is essential to improve local roads. We have a large programme of improvement by means of joint enterprise between local and central government, which contributes a transport supplementary grant. This grant has been increased by 15 per cent. Moreover, local authorities can choose how much extra spending from receipts or revenue to undertake, whereas, with regard to national roads, provision is an absolute constraint.

Finally, let us be in no doubt about the fundamental nature, and cause, of the situation before us. Our roads, airports and airways have become increasingly crowded over the 1980s. We have seen undeniable signs of worsening congestion. I have this afternoon tried to set out what the Government are doing to improve the situation.

However, there is one principal reason why we have been debating this issue today; why the volume of traffic using our roads has increased from 271.4 million vehicle kilometres in 1980 to 363.13 million vehicle kilometres in 1988; and why some 82.3 million people used British airports in 1988 compared with 50.4 million in 1980. That reason is the phenomenal growth and development of business activity and prosperity in this country over the last 10 years. Let us never forget this fundamental cause and effect. Certainly we have problems—and I have explained how we are dealing with the problems —but they are, after all, problems caused by success. Many parliamentary colleagues overseas—especially those in those countries known for centralised planning and state invervention in transport—would be only too glad to have such problems, problems which this Government are determined to resolve.

Lord Shepherd

My Lords, speaking at this late hour I shall confine myself to two matters. I should like to thank all my noble friends and other noble Lords who have participated in this debate, and also I should like to thank the Minister for his contribution.

The wish of the noble Earl, Lord Shannon, that he may be speaking 20 years hence on the subject of transport is only too likely to come true. All I can say to the noble Viscount, Lord Davidson, is that there is precedence within the European Scrutiny Committee for it to go back over its report to compare what has happened with the replies that have been given by Ministers in relation to those reports. I promise the noble Viscount that two years hence we shall be back discussing this matter. I hope that he will be sitting somewhere else and that we shall have someone else to go after.

On Question, Motion agreed to.