HL Deb 08 February 1995 vol 561 cc254-90

5.30 p.m.

Lord Ewing of Kirkford rose to call attention to the needs of industry for an effective transport infrastructure policy in the United Kingdom and the European Union; and to move for Papers.

The noble Lord said: My Lords, I am grateful for the opportunity to introduce this debate on an effective transport infrastructure policy in the United Kingdom and the European Union. In a spirit of co-operation, let me open my remarks with the comments made by Dr Brian Mawhinney, the Transport Minister, on 7th December last year: I wish to see an end to the shouting and insults—sometimes even the actual violence"— in view of the weekend's events, that sounds more like a prediction than a wish— —that have characterised arguments about transport in recent years. I want a ceasefire; a fresh start. We need to move back to properly informed, rational argument, with respect for opposing views, in a manner more fitting to the democratic traditions of our country. My aim is to define the questions and seek to pose them in as sharp and clear a way as possible. I hope others will contribute to that process and, more importantly, will then help shape the answers to those questions".

It is in that spirit that today I want to make my contribution to the debate. The Government must be aware of the deep concern of British industry and commerce—in 1995 we must include tourism in that—about the condition of the transport infrastructure of the United Kingdom or, in this case, Great Britain. In comparison with, for example, Germany, the Netherlands and France, Great Britain does not come out particularly well. To be fair, in terms of access to our airports and seaports, we are in the top half of the European Union league. But, in terms of our rail network and road infrastructure, we are well in the bottom half of it.

Reading first the Department of Transport's statement on a transport infrastructure, followed by the Scottish Office's statement on a transport infrastructure and then the Welsh Office's statement on a transport infrastructure, it strikes one forcefully that none of them—neither the Department of Transport, the Welsh Office nor the Scottish Office—says in its statement of aims that we ought to develop good transport links with the European Union. That is an astonishing omission for the United Kingdom Government to make—to omit from their transport objectives the need to create good transport links or transport corridors with the European Union.

The statement from the Department of Transport does not even mention the need to use good transport links to develop the economy of the country. To be fair to the Scottish Office and the Welsh Office, in their statements—I suspect that it is because they cover a whole range of subjects rather than transport only—they both refer to the need to use good transport links as a means toward developing the economic prosperity of Scotland and of Wales. They include in that a specific reference to the need to develop tourism. I find it astonishing that the Department of Transport does not mention the need to develop the economy through using the transport routes.

Let me begin from the position that we need to develop a proper transport infrastructure to the level that is environmentally sustainable. One of the features of the developments that take place in Germany, France and the Netherlands is the way in which the environmental lobby is taken into the discussions and consultation process when transport infrastructure programmes are being decided. The outcome is a consensus. We do not have that in this country. Regretfully, we seem always to be in conflict when we seek to develop a transport infrastructure. In the three other comparitor countries to which I refer, there is a consensus which is simply not to be found in the United Kingdom.

I know Dr Mawhinney well. He is someone for whom I have great respect and I believe that he means what he says. When we come to decide the transport infrastructure, which is the centrepiece of this debate, it is essential to include the environmental lobbies.

I do not argue that we should litter the British countryside with new roads. However, the figures available from Germany, France, the Netherlands and the United Kingdom show that our roads are more heavily congested than the roads in those other three countries. It is not mentioned in any of the material that I have studied, but in the Netherlands heavy goods vehicles are not allowed on the roads between 6 o'clock on Friday night and 6 o'clock on Sunday night. Our roads therefore appear to be much more heavily congested in comparison with roads in the Netherlands. Indeed, many of our main transport groups are taking. roads way beyond the capacity for which they were intended when they were first constructed.

Part of my argument is that we should examine the existing network and consider the possibility of additional lanes. We must examine how to develop the existing network. I do not for one moment suggest that we should litter the countryside with new roads. But we certainly cannot sustain the present position. In the Midlands of England and the west central belt of Scotland the roads are very heavily congested. We must look at that situation.

Another aspect of the argument that appeals to me is the way in which other European Union countries—again, I refer to the three comparitors: France, the Netherlands and Germany —can say roughly what their transport infrastructure will look like by the year 2015. For obvious reasons, there has been slippage in the Netherlands. But those countries can say broadly what the transport infrastructure will look like by the year 2015. There is simply nothing like that in this country.

I hope that the Government are serious about having an open debate and seeking consensus, which I believe to be in everybody's interest, from whichever political party or economic standpoint they come. It is in the interest of us all to achieve consensus on this important issue. If the Government are serious about achieving that consensus, they cannot afford simply to publish a document which states their policy. Brian Mawhinney is serious about this matter. We need to have a debate. If the Government are to publish anything, it needs to be a Green Paper giving an outline of the views that they hold at the present time—something on which we can build a debate that I hope will lead towards consensus.

Our rail network is smaller per head of the population than that in any other European country. One of the main functions of our rail network is the transport of large numbers of people to and from work, which helps to develop the economy. The Minister must surely come to terms with the fact that one factor inhibiting economic growth in this country is the inability of people to get to work in reasonable journey times. That is not unimportant. There is nothing worse than leaving the house at 7 o'clock in the morning and not reaching one's office until half-past nine. That is not a reasonable journey time. Therefore, in my view, we must develop a rail network that will transport people to and from work in reasonable journey times.

We have the new development in manufacture and retail of what is called "just-in-time" production, where the goods are produced just in time to be delivered to the consumers, to the retail outlets. If that system is to work, then we must provide a good transport infrastructure in order that the just-in-time approach can be successful. There is no point in producing these goods just in time if what happens then is that they arrive three days late. That takes the heart out of the system and that is something that the Government should consider in their discussions.

I turn briefly to the question of ports and to the state of our merchant shipping fleet. It is a worrying feature that in the mid-1980s our merchant shipping fleet was the oldest in Europe and now it is the oldest in the world. No other country in the world has an older merchant shipping fleet than the United Kingdom. The Government must look at that in terms of an integrated transport infrastructure linking us effectively to Europe.

I turn to air travel. I mentioned once before in your Lordships' House the need to develop effective rail links, particularly from the world's busiest airport—Heathrow. It is an astonishing fact that even in 1995 Heathrow Airport is not yet linked into the main rail network. We really should be looking ahead at the possibility of replacing many of the domestic flights. Is it necessary to go from Heathrow to Manchester by plane? If the airport was linked into the main rail network people could go from London to Manchester by train and the airports would be left free to deal with the kind of international traffic for which they were originally built. Much of the airport capacity is being taken up by domestic flights. When we talk of second runways at Manchester Airport, when we talk of additional capacity at Heathrow, that is not to meet international traffic needs; it is to meet domestic traffic needs. That does not help in developing a proper infrastructure which would link us in with Europe.

I close my remarks, because time is short, by reminding the Minister of something we are all inclined to forget: even though we want to be at the heart of Europe—here I speak for myself—geographically we will always be on the periphery. Of all the European Union countries, the United Kingdom has the most to gain by the creation of the infrastructure for which I am arguing today and has the most to lose if we do not create it. Therefore in opening the debate I trust sincerely that I have built the platform on which we can have a constructive debate; that the Government will take away the comments that are made and consider them in a constructive fashion; and that this will be the beginning of the creation of a meaningful integrated transport infrastructure for this country. My Lords, I beg to move for Papers.

5.43 p.m.

The Earl of Caithness

My Lords, I agree with much of what the noble Lord said, except for the point on integration. I too would like to express the importance of a good transport infrastructure for this country. It is essential for our goods to be able to travel around the world and to their destinations quickly so that our industries remain competitive and this country remains a good place in which other countries can invest. That was one of the bonuses of the 1980s; let us continue it through the 1990s.

I agree with the noble Lord, Lord Ewing, to whom we are extremely grateful for initiating this debate, that the present infrastructure is not as good as it should be despite the billions of pounds that have been spent on it, and that it should be improved further. I therefore look to take his argument forward. Having reached that stage, let us pose the key question: who will pay for all of this? I do not believe that it should be the taxpayers. I do not believe that the taxpayers should have to fork out more and more money. Taxpayers have done very well in the past but if we are to maintain the infrastructure, or bring it up to the standard we would like, we must involve the private sector.

I need to stress two points in this regard. First, if we are to involve the private sector, there must be a great deal more consistency in the Government's policies. We have seen Roads. for Prosperity; we have seen the road programme enhanced and, sadly, we have seen the road programme cut back. We have seen investment decisions made when times were good only to have them trimmed. That is not a background into which the private sector will willingly come. Too many private sector companies have been led on by government to make a lot of investment into a project only to find it turned down at the last moment. That is not healthy.

How do we involve the private sector? There are opportunities in the rail network. The Channel Tunnel is an incredible success and provides the unique opportunity this country needs to transport more freight on the railways. It is fairly uneconomic within UK Limited by itself; but if we can reach Europe by rail with our freight, then there opens up a huge new opportunity waiting to be taken.

In the future will those infrastructure improvements be undertaken by Railtrack in the private sector or are there opportunities to involve other private sector bodies? I can understand that Railtrack may want to keep it all to itself as a private sector body, but that, too, would be a missed opportunity.

Notwithstanding the opportunities presented to us by the Channel Tunnel, most of the freight in this country will go by road. In this regard again I stress the importance of consistency. My noble kinsman Lord Thurso drives from Thurso as far as Perth. With a sigh of relief he gets onto the dual carriageway heading towards Spain but then comes to the block at Newbury. It is a tragedy that that is the only section of non-dual carriageway between Perth and Spain. It is ludicrous; it is time wasting; and it is costly for our industry. If any noble Lords wish to sit in a traffic jam, try Newbury at five o'clock on a Friday evening.

The other areas that concern me are the sudden changes where road schemes that were to be public sector financed are put on to Design, Build, Finance and Operate. Again, construction firms have gone a long way, and spent a lot of money, in getting their tenders right only to have their feet chopped from under them. We must have more consistency. Regrettably, the private finance initiative did not work as well as many of us would have liked. The Birmingham North relief road is an example of something that went horribly wrong and again a lot of money was wasted. But the Design, Build, Finance and Operate initiative stands a much better chance of success.

There is a further role for the Government. My right honourable friend the Chancellor of the Exchequer has done a good job in educating the public sector into thinking on a better basis. But there is a huge job for the Government to do in educating the private sector. I know that the Government and the public sector talk a different language from the private sector. If one is to persuade companies of all sizes—the big, the medium and the small—involved in DBFOs, they must know what it means by "transfer of risk". They must know what "value for money" means. The Government must be aware that the private sector must make a return on the money it invests. These things are not clear. The more I talk to people the more uncertain they are what the end result will be. I fear that a lot of companies will think this is a good idea and run with it, only to have the rug pulled from under them at the end because they did not know what the transfer of risk really meant.

So this is a wider point than just transport; it is the whole of the private sector finance initiative. The private finance panel is doing an excellent job, but it does need to produce a brochure of the underlying philosophy of what they are trying to do and what it actually means. That will save a lot of tears later on.

I move from roads to airports. I am grateful for the answer my noble friend gave me on RUCATSE with regard to airport congestion in the south-east. It was an answer to an extremely difficult problem; an answer that was never going to suit everybody.

The noble Lord, Lord Ewing, talked about how he would like to see a greater consensus in this country. I, too, would like to see that when it comes to development, but I do not think it is likely to happen. Although we have the same population as France and the old West Germany, our country area is much, much smaller. When it comes to development—and there must be development—there are too many interests at stake, which they do not have in France and the old West Germany. That applies even more so in the East, which badly needs development. So I always see conflict. This is where the Government must be bold, must be brave, and must make a decision and stick to it.

Having ruled out a third runway at Heathrow, and virtually ruled out a second runway at Gatwick, I hope that they will turn their attention to the possibility of feeder relief airports in the south-east which can do an equivalent job. I am happy to declare an interest here as a consultant to Redhill Airport, which has the potential for relieving Gatwick of its smaller aeroplanes. I have to be very careful in what I say because that is subject to planning.

I will move on from that to another opportunity—Northolt. If ever there is a wasted asset in this country it is Northolt. What is the cost of keeping that airport for the RAF and a few private sector flights? The attempt to involve the private sector was not a great success—it was half-hearted, to be complimentary towards it. I should like to see Northolt put into the private sector, with a special arrangement taken for the RAF. Making Northolt the domestic runway for Heathrow would solve the problem raised by the noble Lord, Lord Ewing, about allowing greater capacity on the two runways at Heathrow. I hope my noble friend will take on board that rather new initiative. I know that he has his mind on it, and I hope that he will take it very seriously.

I hope my noble friend will confirm that it is the Government's intention to privatise the operational arm of NATS. It has extremely difficult decisions to make as judge and jury. It has to set standards. But it is also an operator in a large number of cases, and there is growing concern that it is finding that role too difficult to manage at a proper distance. With London City Airport, right up to the last minute NATS said that it could not be combined with the existing London pattern, and yet it is the operator of London City Airport and fitting into the London pattern.

We have problems when it comes to Manchester's second runway and Liverpool, and we also have a potential problem in the south-east. I hope that the Government will get to grips with this problem and separate the two arms of NATS in order to allow the Government arm to set the standards and the operational arm to get into the private sector and compete with others on a fair and equal basis.

I agree with much of what the noble Lord, Lord Ewing, said about seaports. I discussed shipping two weeks ago and I will not bore your Lordships again with that particular issue. But, on that point, I hope that my noble friend will bear in mind that our ports are suffering heavier burdens than continental ports, which are much more subsidised than ours, and ensure that when it comes to trans-European networks British taxpayers' money is not given in subsidies to European ports.

The private finance sector in this country has an immense part to play. I commend the Government most strongly for what they are doing. There are potential flaws, but I hope that they will now seek to get those flaws right, before there are tears later.

5.54 p.m.

Lord Houghton of Sowerby

My Lords, I am sure that we all welcome the noble Earl, Lord Caithness, back to our debates.

Noble Lords

Hear, hear!

Lord Houghton of Sowerby

My Lords, it is a great pleasure to hear such a constructive contribution on a very difficult problem.

Let me say straightaway that, as a resident living near Redhill, I am dead against what he is trying to achieve for the development of Redhill Aerodrome. We have enough from Gatwick, we have enough from London Airport and we have had enough from the Redhill Air Club, which ran a fleet of Tiger Moths—all more than 50 years of age—and made a great clatter and rattle on a Sunday afternoon.

I occupy a privileged position in this debate, and I hope I am not going to spoil it. This is pie in the sky. The canvas painted before our eager eyes by my noble friend in opening this debate—on which I congratulate him very warmly indeed—was a comprehensive and knowledgeable sketch of a world problem, and was a rare treat indeed.

A great deal of this traffic and road transport infrastructure is on its way to India. There are other groups of countries besides Europe. Radical change is taking place in India. Road makers, technicians, communications experts and all those necessary for the development of a country from an agrarian way of life to an urban way of life are on their way to India. This is supported by American capital of such volume that it cannot all be absorbed in capital expenditure at the present time, with the result that they have about 20 per cent. inflation.

I am a bit of a cynic about transport because when I was a member of Harold Wilson's Cabinet he asked me to preside over a Cabinet committee into transport policies. Apparently we did not have any, and it was desirable that our views on transport should be made known. All I was given was the party formula, which was for an integrated system of transport. That is all I had to work on. By the time we had finished with the quarrel between the National Union of Railwaymen and the Transport and General Workers' Union over a supply line to a porthead in the south-east of England, we realised that there would not be an integrated system of transport.

That is history, but some of the problems remain. The canvas which my noble friend has drawn before our eyes this afternoon sought to show what may be achieved in the next century. I doubt it very much. I do not think that the world will develop along those lines because the resources will not be available for it. With the demands of so many people for a better standard of living—people want to reap the benefits of their higher skills and the signs of prosperity around them—how much can be devoted to this vast reconstruction of the world's communications in anything like a reasonable space of time? I wish that there was an encouraging message on the accomplishments that was anything like the complete picture which my noble friend has drawn. The noble Earl, Lord Caithness, by directing his attention to the number of items, schemes and needs, certainly brought some improvements within our grasp. But that is only part of the problem.

I shall conclude what I have to say because I am under a very strong emotion. I can think of the word "transport" at the present time only in terms of the brutality that we are imposing on millions of our animals as we transport them along the roads of Europe for slaughter at the other end. This is becoming a major political issue. What is the transport infrastructure for? What is it to carry: more and more animals around the world, more human cargo around the world? What is the outcome? How much happier are people going to be? The Government have to face the fact that transport at the moment means only one thing to a great many people: they do not like to see what is being done to our young animals when they are transported to Europe. Better roads to cart more of them there? Better slaughterhouses to kill them when they get there? This is becoming a national emotional issue. The Government will have to take notice of it.

I cannot go on any longer without noble Lords realising that I am almost completely out of order. But I got up to give the House that message and I am going to take every opportunity I can of repeating it. That is all I have to say.

6.2 p.m.

Viscount Thurso

My Lords, what a difficult one to follow! When I listened to the noble Lord, Lord Ewing of Kirkford, I was filled with hope at this beautiful vista that he painted for us of a better Europe with better communications, more development, and industry getting about its business without let or hindrance. I would like to go back to thinking in those terms during this debate.

There is no doubt that an effective transport infrastructure is vital to any industry, indeed to any firm, or to the success of any individual manufacturing plant. It is vital to existing industries and existing industrial communities but it is, if possible, even more important to developing areas, developing industries and developing trade between countries. It is no good making a better mousetrap if the world cannot find a path to your door to buy it or if you cannot find a satisfactory and economic means of delivering it to would-be buyers.

It is obvious therefore that if industrial firms cannot find an existing transport infrastructure that suits their convenience they will seek to set up something which does. This usually means putting their own lorries, vans and cars on the road regardless of the effect it may have on the road system and the transport infrastructure enjoyed by other people. Your Lordships will, I hope, forgive me therefore if I examine this proposition in the light of what I know of my home area, the northern Highlands of Scotland.

In Caithness we are engaged in trying to carve out a future for ourselves in the aftermath of the shutdown of the fast reactor at Dounreay. Our search for industry wherewith to replace the employment lost by the closedown and to strengthen an economy weakened by the closedown is made much more difficult by a lack of effective transport infrastructure policy and the problems which arise as a result.

One piece of infrastructure which had been put into place to serve Dounreay is now of little further use and of no help in developing most of the industrial projects which we could hope to attract. I refer to the strengthened national grid power line. You cannot send boxes of fish or freezer cabinets down a power cable, yet these are two industries which are being successfully developed on an important scale. What therefore have these industries done to ship in their raw material and ship out their product?

The successful white fish industry is a direct result of infrastructure improvement. Scrabster Harbour Trust, on which I have the honour to serve as a management trustee, had the wisdom to foresee the possibilities of developing the port and the fish marketing arrangements. With the aid of loans from the Scottish Office, it constructed a new basin for fishing boats from ports all over Britain—Grimsby and Buckie to name but two—whose catches now constitute a multi-million pound trade both in fish sales and in consigned catches which go to other markets for ultimate sale. The harbour trust has provided the infrastructure to bring in the raw material of this trade but the story of how it is shipped out is not so happy.

At one time refrigerated fast fish trains left Thurso every night bound for Billingsgate, and a very satisfactory arrangement it was. But the Beeching axe put a stop to that. Now all this vastly increased fish trade has to go on refrigerated lorries. One haulier alone sends 10 38-tonne articulated lorry loads on average per day down the A.9; obviously, on average 10 articulated lorries return with or without a load.

The problem is that all this trade must use the A.9 as it is the only road out of Caithness going directly south down the east coast. As it leaves Caithness it takes the form of an extremely steep series of hairpin bends at Berriedale which are difficult enough to negotiate in a private car. To the driver of a 38-tonne articulated lorry who does not know the road it sometimes proves impossible. The other day a lorry load of pipes bound for Rockwaters oil pipeline manufacturing plant just north of Wick got stuck on the top of a hairpin like the plank of a seesaw. In the large queue of traffic trying to go south which quickly built up were a number of unfortunate people with Apex tickets from Inverness to London in their pockets. None of them made it to their flights except one enterprising person who walked to the other side of the blockage and did some sort of a deal whereby someone took him to Inverness. However, British Airways were merciful—I suppose they wanted to keep their trade—and did not penalise the rest of the ticket-holders. My noble kinsman Lord Caithness will therefore realise that if I can negotiate the bend at Berriedale I am not put off by trying to get through Newbury.

I mention all of this to illustrate the fragility of a transport infrastructure which is ill-thought-out and unco-ordinated. Why could the pipes not come up by rail or by sea? Why are the flights at Wick so inadequate? Why do more people and consignments not use the existing railway? Why is the railway not brought up to date?

In looking at these questions it must be noted that many consignors have deserted the railway because it has not been modernised at the same time as the roads have been greatly improved. One must ask the Government, who are responsible for both: is this in the public interest? The question is all the more pertinent in the light of widespread condemnation of pollution due to too many vehicles using the roads. There should be greater use of the railway. But how can one use the railway when it refuses to be used?

All the livestock markets in the north were originally set up beside the railway—but Dr. Beeching put an end to that by refusing to accept green field traffic. This was a source of great disappointment to farmers and stockmen who knew how much kinder and better it was to use the railway for the transport of stock than the road. So now, whether we like it or not, at sale times our roads are crowded with huge, four-deck stock lorries with four-deck stock trailers, adding to the refrigerated articulated lorries carrying a fish trade which has already been turned off the railway.

Post Office trade which used always to be carried by rail or air is now brought in one articulated lorry carrying parcels, three vans carrying letters and one special van carrying Data Post per day; a similar number are sent south. Add to that number the two or three articulated lorries per supermarket chain (the Co-op and Safeway) as well as the lorries of the wholesalers who supply the smaller shops and businesses and licensed premises, most of whom used to send their goods by rail until the railways unilaterally stopped carrying goods. You can see that there is not much room left on the roads for the tourists with their caravans about whom everybody complains during the summer season.

Now, anyone starting a manufacturing business in the north has to find a road haulier or else run his own transport on the roads. That is why our most successful manufacturer in Caithness, Norfrost, had to set up its own haulage business in order to ship out its product. It sends on average some 10 articulated lorries south daily with a like number returning.

Successful though our road haulage firms are, they are inhibited from achieving maximum efficiency by restrictions which are imposed upon them. If they invest in a trailer capable of carrying the full legal EEC permitted load of 48 tonnes, why are they then restricted to a mere 38 tonnes? This means that as soon as they have gone through the Channel Tunnel they are carrying some 10 tonnes less than their French competitors. In that context one must remember that they have to give up a tonne or so of payload to safety equipment which has recently been made mandatory.

If in a little and sparsely populated place like Caithness, our transport structure is in such desperate need of modernisation and co-ordination, how much greater must the need be in larger and more populous areas of the country which are grappling, like us, with the loss of traditional industries and which need all the help which the Government can give them to replace the lost jobs and develop new industries and new trade. I am grateful to the noble Lord, Lord Ewing of Kirkford, for giving us this chance to debate this matter in your Lordships' House, and I support him in his call.

6.12 p.m.

Lord Elibank

My Lords, I propose to confine my remarks tonight to rail and road transport, not because marine and air transport are not important, but the crisis in our transport system is largely one of the roads. That applies to industry and industrial transport as much as to private transport. Indeed, industry is subjected to the same dilemma which confronts all of us—the clash between freedom to move goods where we want and how we want, and at the same time preserving an unpolluted environment and a quality of life acceptable to our citizens.

My other general point is that we are going to retain our present infrastructure for quite some time. In my view the road building programme has been quite rightly curtailed. We can hope for developments on rail and certainly we hope to see the Channel Tunnel link built, which would be a notable advance. Apart from one or two items like that, the infrastructure which we have today is very largely the infrastructure which we shall have in certainly 10 years time and probably 20 years time. So the problem is not developing the infrastructure so much as making better use of that which we have.

The almost knee-jerk reaction when one talks about moving goods is to say, "Move them from the roads to the railways". The Royal Commission on the Environment took a look at that and, despite the declining percentage of goods moved by rail in recent years, the commission felt that, with the right management policies, a decline to 6 per cent. could, over a 20 year period, be boosted to something like a 20 per cent. improvement. That would be a very significant advance in rail freight, but it would still leave 80 per cent. to be transported largely by road, although air and merchant shipping would play their part.

When one looks at the possibilities for further rail transport, there are limiting factors. I believe that we are all familiar with them. Goods carried on short journeys simply cannot be justified by rail, except in the case of very specialised loads such as coal. So one needs a journey, usually of hundreds of miles, to justify moving freight by rail. That has been almost impossible in this country because rail journeys are not more than 200 to 300 miles at the very most. But with the advent of the Channel Tunnel there is every hope that that distance can be extended to a 1,000 or more miles. Then rail freight will become a real competitor with the roads.

I congratulate the Government on making sure that the rail link passes to the north of London and comes into St. Pancras where there is a very real prospect of making proper rail connections to the Midlands, the north and Scotland. I hope that we shall make good use of the Channel Tunnel, and develop our rail freight trade as best we can.

The Government have taken a number of measures to try to encourage the movement of goods by rail. They have introduced two types of grant—the freight facilities grant and the track access grant, which are specifically designed with this kind of movement in mind. Unfortunately, the amounts involved are small and, perhaps even more sadly, the take-up—at least when I was last informed of the amounts involved—is also rather small. It seems unlikely that these two grants will make a particularly strong impression on freight traffic.

The really key factor to rail freight is the combined terminals. These have to be efficient, manned 24 hours a day and cheap. I believe that in the past British Rail has looked on freight transport as an unfortunate competitor. It has not gone out of its way to attract road freight onto the railways, using the various ways in which that can be done. This has to be a partnership between rail and road if it is to work as well as possible. One can only hope that the new privatised organisations will take this on board with rather more enthusiasm than British Rail seems to have done in the past.

I would now like to deal with one particular aspect of road transport which has come to my notice fairly recently, but with which some of your Lordships may be fully familiar. I refer to natural gas vehicles. They are a fairly old development. Some of your Lordships will remember seeing vans running around after the war with large balloons on the roof. Then natural gas faded from the transport scene and, although I am sure development carried on, I, as a casual observer, only noticed it again some 18 months ago.

Natural gas has many and considerable advantages as a fuel. I have some figures and I shall only bore your Lordships with three or four of them which I have obtained through the courtesy of my noble friend Lord Brabazon of Tara as the president of the relevant institution. Natural gas vehicles reduce emissions of carbon monoxide by 76 per cent., nitrogen oxide by 83 per cent., and non-methane hydrocarbons by 88 per cent. compared with petrol vehicles. They give extremely low particulate emissions compared to diesel vehicles. Carbon dioxide emissions per vehicle kilometre are reduced by 25 per cent. compared to petrol vehicles. That is a tremendous reduction in pollution. In addition. the fuel can be piped along normal gas pipelines, thus eliminating the need for vast fleets of tankers and lorries.

However, there are disadvantages. The obvious disadvantage is that at present most natural gas vehicles can run for only 200 miles on pure natural gas or for approximately double that distance if the engine is designed to take both natural gas and petrol or diesel. That means that the vehicle must return to a refuelling point, usually by evening. The fuel is therefore extremely suitable for large fleets of lorries and coaches which often do just that: after a day's run, they return to a common terminal. There is no problem setting up a fuelling depot in a vehicle terminal.

Such vehicles are being developed as motor cars for private citizens, but it is a chicken-and-egg situation. Until there are enough such vehicles, it is not worth having refuelling depots, but until there are enough refuelling depots, it is not worth people buying such cars. For the immediate future, therefore, the use of natural gas will be confined to heavy vehicles, buses and coaches. I should like to congratulate the Government on the fact that in the last serious increase in fuel duties in the recent Budget, although duties on petrol and diesel were sharply increased, no extra duty was imposed on natural gas.

Finally, by way of a general comment on the use of our existing infrastructure, perhaps I should point out that anybody who considers our transport network must be struck by its under-utilisation at night. One of the reasons for that—perhaps the main reason—is the multiplicity of rules preventing heavy vehicles entering urban areas. One can well understand the reason for that, but that area of use should be investigated. The obvious route seems to be to compel manufacturers to make quieter engines. If they are given enough time and, if necessary, some financial incentive, it seems possible that the noise level of heavy vehicles could be reduced to approximately that of the motor car. If that happened, heavy vehicles could use urban areas at night and the distribution of retail and industrial products could be speeded up; better use could be made of our roads and our citizens would find driving on them much more pleasant and convenient.

As I have said, one or two things need to be done. The danger is that most of the steps that are required in relation to industrial transport will cost money. The challenge to freighters is to try to avoid passing on those additional costs to the customer.

6.23 p.m.

Lord Dean of Beswick

My Lords, I join in thanking my noble friend and colleague Lord Ewing of Kirkford, and in congratulating him on his wide-ranging speech. He has given us plenty to think about. I imagine that most noble Lords will have received the CBI report, Missing Links—Setting National Transport Priorities. It is a discussion document of nearly 50 pages of information and points of view. It provides answers to some of our questions.

However, in order to get another view, I contacted the Institution of Highways and Transportation, which has made one or two comments—not criticisms, but suggestions—about where it feels that the CBI's report . requires further consideration. The institution stated: The report should be welcomed since it highlights the historic under-investment in United Kingdom transport infrastructure". The institution continued: plans like Roads to Prosperity have no status (other than policy)". That means that there is no commitment to ensuring that such plans are achieved.

The institution continued: The Secretary of State wishes our road network to 'sweat' before new construction—i.e: increase the through-put. This will lead to greater congestion and road wear. The UK has a particular weakness in lack of maintenance of our existing transport infrastructure. The Private Finance Initiative is not making progress in raising funds for investment—for a variety of reasons". The institution stated that it was, unsure about the CBI suggestion that a national transport strategy be developed. How would this work within a privatised framework? The aims of the private sector may not match those of the government". I recall that only a few weeks ago the Prime Minister said in another place that he would give the public a railway system that would be the envy of Europe. I do not believe anybody who tells me that the private sector will suddenly come up with bucketfuls of money to build a super railway system which is in advance of that in France. I do not think that such an offer is on the table. I do not think that there is any possibility of it happening.

I took particular note of what my noble friend Lord Ewing said about airports. Being a Mancunian, I have always been deeply interested in the development of Manchester Airport and, indeed, played some part in that some years ago. A couple of weeks ago there was a presentation in the Cholmondeley Room about why Manchester Airport requires a second runway. The presentation sought to explain how the airport authority is trying to allay the fears of those who are currently expressing opposition to a second runway. An excellent case was made. There is no question but that if the north-west is to make progress and to be able to compete equally with other parts of Europe, Manchester requires a second runway. We are not talking only about transport within the United Kingdom, but about Manchester's ability to expand its worldwide capabilities. When this country's trade starts to revive, the north-west will be one of the busiest areas of the country yet it is at present under-provided with transport links.

Our railway system being what it is, what British Rail calls its "West coast mainline"—that running from Manchester to Euston—is grossly under-resourced if it is to be able to deal with the traffic that is expected to come through the Channel Tunnel from Europe. I am not making a party political point. I believe that that is the general view of those of all political parties in the north-west. That railway line needs radical improvement if it is to be able to cope with foreseeable developments.

Manchester has gone out of its way and has bent over backwards to meet the anxieties of those in the area who are worried about the development of a second runway. Manchester has gone as far as anybody could expect in that regard. If that proposal is accepted, I believe that construction could start within a matter of months rather than years. That is what the area needs. When that proposal lands on the Secretary of State's desk, as it will, I hope that he will expedite it quickly and let Manchester and the north-west have that second runway. There is no other international airport to match Manchester. There is nothing else between London and Manchester.

I was concerned by my noble friend's reference to the merchant navy. It is a strange fact that until 30 years ago —immediately after the last war, between the wars, and before the First World War—we were the world's leading maritime nation. If this country had no aeroplanes, we would be in effect a landlocked nation because we now have so few ships. We do not have a merchant navy. We have gone from the top of the league 30, 40 or 50 years ago to the bottom. All that we keep being told is "the market determines it". I suspect—and I do not think I shall be alone in saying this—that if the situation ever arose where this country was threatened again and needed goods brought to this island in defence of the realm, we would not have the ships to deal with that situation. That needs to be looked at very quickly.

People ask whether the present road system is adequate. If I may speak on a personal note, I live on the border of Stockport and Denton, which is just on the outskirts of Manchester. I live on a main road which has a rather restricted part, where there is a small stone bridge. Traffic has to go over the bridge, and about three weeks ago there was a crash which caused damage to the bridge. The bridge has been closed for three weeks. That added one hour and a half on my journey from home to your Lordships' House. Therefore, instead of travelling direct to your Lordships' House, I had to go all the way round Manchester. Juggernauts from the Continent are also having to be turned back because of the problem. This has happened in this day and age, and it is not for the first time. It does not inconvenience me, but what must it be costing industry? In the Stockport section alone there is a huge industrial estate which is developing and thriving. So what must the cost be to the manufacturers who are moving goods in and out of that estate? One could go on giving more and more examples of such cases.

However, I am also concerned about the railway link to and from the Channel Tunnel. It has had a sad start, because it has not covered itself in glory. One hopes that things will improve because if the venture fails, a lot of finance will be lost and it will do a lot of damage to the proposed infrastructure of this country. So it is up to the people involved to get it right as quickly as they can.

Last but not least—although it might be a little removed from the subject of this debate—now and again in your Lordships' House, we have had questions about roll-on, roll-off ferries. I think the noble Lord who is going to reply answered a Question only a few weeks ago about the safety of these ferries, and he spoke as if everything was all right.

However, it was only a few weeks ago that a totally independent group of people compared the safety factor of ferries with that of normal liners and the survival chances of passengers when ships were in distress. They said that a ship which was on fire in the Indian Ocean had 100 per cent. of people saved because there was time to abandon ship, whereas once roll-on, roll-off ferries are in difficulty, everything happens very quickly. People who have no axe to grind say that the system is flawed and needs to be altered.

I close by saying that while this is not particularly relevant to this debate tonight, it is something which ought to be lookedat as a matter of urgency because—God forbid!—it could happen again. It is certain that something will happen again at some time because there have been two recent accidents—the one in the Baltic and at Zeebrugge—and these things do happen. Irrespective of the expense that is involved, I believe that the operators of such ferries will have to look again al what can be done. Once again, I want to thank the noble Lord, Lord Ewing, for his opening remarks, which were very enlightening and opened the door to diiscussion on many points of view.

6.34 p.m.

Lord Mountevans

My Lords, I too am very grateful to the noble Lord, Lord Ewing, for giving us this opportunity to debate transport and infrastructure at home and abroad. I agreed with quite a lot of what he said, save perhaps in the Dutch context where, no matter however much one plans ahead, politicians can interfere. For example, in the last general election in Holland a major party did well by promising a massive increase in road fuel taxes to pay for railway investment. Alas, that fell by the wayside as a consequence of the political problems of proportional representation. Similarly, when the noble Lord prayed in aid the Greens, I am sure he will be aware that the press this weekend has reminded us that the Greens have a heavy burden to carry in terms of the flooding problems that hit Holland last weekend.

I also found myself greatly in agreement with my noble friend Lord Caithness on how we must bring the private sector in through the PFI. My own particular concern about getting it wrong is that it seems to me tragic that the Bill that will enable the high speed link to the Channel to be built, and will define it, will go through long after we have asked the consortia who wish to get involved in the project to pug: their bids on the table. That really seems to me to be a matter of the cart before the horse.

As ever, I am concerned about the railways, in which I declare an interest, and also, to a lesser extent, aviation. Though rarely a road user, I would very much like to see more freight transferred to rail. Infrastructure usage costs for current and potential freight users have increased as a result of the restructuring of the railways, and these increases can be justified only if they are used largely to pay for the maintenance or renewal of the system. The PFI, hopefully, will take care of new investment.

I fear that these increases may actually restrain transfer of freight from road to rail because the charges are quite steep. They can be offset, however, by grants made under Sections 137 and 139 of the 1993 Act. The first section broadly restated the old Section 8 rules about grants towards the capital costs of sidings, wagons, cranes and other capital investment in infrastructure.

Section 139 facilitates grants towards the payment of Railtrack access charges, and is a most welcome development since it extends considerably the old Section 8, provided, as my noble friend Lord Elibank says, that we have enough money available. However, in evaluating the case for a grant a value is assigned to the lorry miles that would be saved if the traffic switches to rail. For local or single carriageway roads, this value is between £1 and £1.50 per lorry mile. However, for dual carriageways and motorways the value is only 5 pence per lorry mile.

Rail's strength lies in the trunk haul and the majority of flows which might switch are, I suspect, largely routed over the major roads. This poses road investment problems, and also problems in regard to the environment of congestion and noise. The grant differential makes the switch to rail much less attractive, and I wonder whether the Government would consider a more generous value—say, £1 per lorry mile for main road miles avoided rather than 5 pence. I feel that this, allied to the Channel Tunnel, could make an appreciable difference in persuading people to transfer freight from road to rail, not least those who so concern the noble Viscount, Lord Thurso.

My second point builds upon experience with other utility privatisations and the tendency for increased charges to go to finance dividend streams at the expense of new projects or the renewal of the infrastructure. Wearing my tourism hat, the case of the Cornwall beaches and sewage springs to mind. Elsewhere, many US railways have run into trouble by diversifying away from the core businesses and by putting excess emphasis on deferred maintenance to enable them to invest outside.

As regards new projects such as the Channel Tunnel rail link and CrossRail, I believe that if the Treasury can get the ground rules right the PFI has a part to play, if it ever gets off the ground. My real concern is regular maintenance and renewal—a matter for Railtrack, and one to be funded by the higher access charges I have already mentioned, together with a contribution which I believe should come from government in recognition of congestion and environmental benefits.

The train operators need to be assured that the money generated by higher charges is spent on renewal and replacement of track and signalling, and is not used for diversification or ever-growing dividend streams once Railtrack is in the private sector. The regulator has a part to play in that, as have the Government, but how will the latter ensure that the necessary maintenance and renewal continue at the level paid for at access charges? Will it be through licence conditions, contractually, or by direction? Will Railtrack's rail industry plans include renewal proposals?

I turn now to aviation and, in particular, navigation and air traffic control in Europe. European charges are universally agreed to be far higher than those in America or Asia. That applies to all levels of fares. It gives the airlines higher cost bases, inevitably passed on to passengers in the form of higher fares. They are fares which do not stand comparison with those available in other parts of the world. European costs are higher because we have individual national systems. In a way, our air traffic and navigation control systems are reminiscent of where the railways were 70 years ago when a train was passed from one signal box to another and then to another, whereas nowadays it can be cleared for, perhaps, 100 miles under a modern signal centre.

That leads to inefficiency over flight routings, in the use of radar and data co-ordination, particularly across national frontiers. Those technical problems are sometimes compounded by industrial unrest and low productivity. The former—industrial unrest—will have had a bad effect on many of your Lordships' journeys in Europe. We need a Europe-wide approach to the technical and managerial problems. Will my noble friend the Minister tell us what steps Britain is taking to secure such an approach?

I turn, finally, to the problem of runway capacity in the south-east. While it is adequate at present, we cannot put off that issue indefinitely. Lead times are long, not just for the statutory procedures but for construction. They are long for terminal capacity and access. I seem to remember that when the Heathrow Express Railway Bill went through the House it was planned that it would be opened by now. Instead of which, we are now talking about 1997 or 1998.

Access is especially important not just for airport users but for the residents of the area around the airport, particularly Heathrow, and those who have non-airport related employment in the vicinity. I hope that the proposed Terminal 5 will be built. I am not asking my noble friend to abuse the statutory powers of his honourable friend, but we should consider both mainline and London Underground access. In more general terms, as the noble Lord, Lord Ewing, said, we should be considering a westbound access from Heathrow towards Reading as that would take a great deal of pressure off the M.4. That comes into an infrastructure policy, localised though it may be. Such a link would, I believe, cost some £325 million and fit neatly into the CrossRail electrification to Reading, if that ever gets off the ground. The present Heathrow Express route is not built to deal with diesel traction.

By happy coincidence, £325 million is the sum expected to be raised by Her Majesty's Government in a year by the airport departure tax. Would not the use of the one to pay for the other be an excellent and effective example of transport infrastructure policy?

6.45 p.m.

Lord Haskel

My Lords, perhaps I may welcome the usual robust contribution to our debate of my long-standing and long-lasting noble friend Lord Houghton. After his contribution, and the contribution of other noble Lords, I do not need to rehearse again the needs of industry. It is sufficient to say that we do not have factories where iron ore goes in one end and cars come out at the other. To be competitive, European industry is highly decentralised. Transport is crucial to that and to the growing trend towards long-term relationships between customers and suppliers, which result in cost reductions. That is central to the ability of European industry to be competitive. The other crucial aspect of European industry's competitiveness is service. Of course transport plays an important role in that.

Over the past few decades it has become clear that in the UK the development of the motorway network has led to a great improvement in industry's productivity. However, rising congestion and growing environmental concerns probably mean that our road development has gone as far is is possible. Of course, there are some common-sense additions to the inter-urban network and completion of some missing links, but nothing major. The major future development must be on the railways, and it is here that I should like to concentrate

The eminent transportation economist David Aschauer has stated that spending on the public rail network has twice the potential to increase productivity as spending on roads. That is a message which seems to have been heard loud and clear on the Continent. The conclusion comes from figures complied for the World Economic forum's 1994 competitiveness report. It gives a mixed picture, as my noble friend lord Ewing reminded us. We rank in the bottom half of the European Union on the quality of road and rail infrastructure, but in the upper half on air infrastructure and access to ports. In the attitude survey there was particular dissatisfaction with the rail infrastructure, which is not surprising. Britain's rail system is not in a happy state. Privatisation will not solve the problem. The study showed that the cost of running our railways compares well with other European countries. What is lacking is investment to stop the infrastructure crumbling away. So where is the logic in a privatisation plan which guarantees subsidy for investment in the infrastructure for only two years ahead but guarantees the subsidy to the train operators for up to seven years ahead? Surely the Government have got this the wrong way round. Nor is it apparent to anyone how the fragmentation of the system will help investment.

The creation of 25 passenger train operating companies, some running as little as one line, with all the problems of co-ordination of timetables, tickets and travel to distant destinations will make the system more complex. Also, the number of people involved in shaping the new railway system is hardly conducive to investment. We have Mr. Salmon selling passenger franchises; Mr. Swift regulating the new railway companies; Mr. Horton running the track; and Sir Bob Reid working out his notice and looking after those parts of the railway yet to be privatised. Somewhere in this comes the Transport Secretary. Obviously, he has found it difficult to understand the new arrangement. Although he keeps repeating the promise of through ticketing, apparently he no longer has the power to enforce it. He can only provide "guidance".

All this fuels fears that the purpose of privatisation is merely a way of reducing state spending on railways. Investment has been predicated by the Secretary of State to continue at about £1 billion, but £850 million a year is required to keep the network in a steady state. In the present state of decline and uncertainty it is difficult to see even how that figure can be even remotely approached.

Gearing up for a serious programme of investment requires a long and continuous process of project preparation and tendering. In fact the early stages of the procurement process are almost non-existent. There is virtually no tendering for new rolling stock, and that is essential if /he age profile of the existing fleet is even going to be maintained. Manufacturers fear that there will be no new orders placed before 1997.

The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen)

My Lords, infrastructure?

Lord Haskel

My Lords, I shall deal with infrastructure in a moment. Manufacturers fear that no new orders will be placed before 1997 at the earliest by which time the rolling stock supply industry will have disappeared. Even orders for basic track components are falling away—and this at a time when there is widespread concern about the state of the infrastructure and obvious arrears of maintenance. All that has grave implications for safety. How long can we carry on with the imposition of speed limits when maintenance is overdue? For too many years we have been satisfied with mediocrity on the railways.

The suspicion that the Government are not interested in investment in the railways is fuelled by their lack of interest even in schemes to get heavy goods vehicles off the road and to transport goods more efficiently to the European Union by rail, via the Channel Tunnel. The noble Lord, Lord Elibank, spoke about that in explaining the need to make better use of our existing network.

Perhaps I may give an example. Currently, three-quarters of the unit load traffic between Britain and the Continent is carried on semi-trailers by road. Common on the Continent is the service whereby the semi-trailers are loaded on to rail wagons known as "piggybacks". The major part of the journey is then done by rail. That has the effect of taking a lot of heavy traffic off the roads. Bridges and tunnels are generally lower and narrower in Britain than on the Continent and station platforms are closer to the tracks. The generally accepted view is that piggyback would be impossible in Britain.

However, with the support of DG7, under the pilot actions on combined transport programme, a study was carried out to see whether the service could be extended from the Channel Tunnel through the major industrial areas to Scotland. I have the report here. On the steering committee were local authorities, Eurotunnel, French Railways, British Rail and various transport organisations. I do not see the name "Department of Transport".

The study shows that adapting bridges and tunnels so that standard four-metre high road trailers can be carried on special rail wagons from Scotland to the Channel Tunnel should cost less than £100 million. That has the potential to take 400,000 long-distance lorry journeys off the road. Perhaps I may put that into context; it is about half the cost of widening the 12 kilometres of the M.25 motorway between junctions 12 and 15, which the Government were seriously studying.

I am sure that the project would not have been ignored by the Government if they had had a coherent transport framework covering all forms of transport and not favouring roads to the detriment of rail. It is their strategy of standing back that has resulted in the lack of investment. Many noble Lords have called on the Government to create a consensus but there is no framework in which that consensus can take place.

While the Government stand back, all that we shall have is vested interests shouting at each other. The one which shouts loudest wins. That is no way to encourage a strategic approach to the needs of industry for a transport infrastructure. The Government must accept that they have the major role of setting up the framework within which the strategic consensus can be reached. Perhaps the Minister will tell the House whether his department has any plans because industry must plan for the long term even though his department is unwilling to do so.

Investment in transport infrastructure is a long-term business and requires an act of faith. We on these Benches understand that. Since the mid-1980s we have had plans to seek a broad consensus on transport. More than two years ago we announced plans to enter into joint public and private financing arrangements to invest in the long-term improvement of our transport infrastructure to help make our industry become more competitive. Last week Tony Blair reiterated our commitment to that by stating that, the railways should be retained as a proper integrated public service".

6.55 p.m.

Lord Bruce of Donington

My Lords, I thank my noble friend Lord Ewing for raising this most important issue and, from my point of view, for setting it within its European context, in which I have an interest.

Your Lordships may have read an excellent feature in last Sunday's Observer in which the thoughts of Commissioner Kinnock were set out in detail. You will have noted that the whole spirit of my right honourable friend's approach to the matter was one of obtaining a consultative consensus before taking any premature action along any particular line. That is well in accord with the method of thinking that your Lordships might consider appropriate in respect of a problem of this kind. All manufacturing life depends essentially upon movement; upon moving goods and services from one place to another.

Commissioner Kinnock put forward proposals for the investment of approximately £300 billion in the European network during the next 15 years. It would be idle to suppose that we in this country will not be required to contribute an appropriate share. But one thing is absolutely certain: that the money when expended, whether by means of investment or grant, must be kept under far stricter control both in regard to the total and the apportionment between countries.

There is an overriding problem. All economists and most politicians on all sides appear to assume—and probably assume correctly—that economic activity will expand considerably, if at sustainable levels, during the next few years. Everyone talks of expansion. Doubtless we shall make our own limited—to avoid controversy—and sustainable contribution towards this. But undoubtedly it will need more movement of goods not only within the country but to and from this country.

Therefore, whatever strains we have talked about today—and there have been many notable contributions on that matter—one can safely assume that the stresses will increase rather than decrease and that the refurbishment of the infrastructure and its extension must take account not only of existing production but perhaps of future expanded production. Those are extremely important factors.

Moreover, I venture to suggest that it is not appropriate only to consider the main networks, to which most consideration has been given, in particular at the European level. Not only the finished product requires speedy export from and import into this country; the raw materials and self-assemblies which make up the finished goods must also be taken into account. In the main, those come from inside the country and do not necessarily need the existing main road and rail networks.

Moreover, there is also the question of the staff and the workers. Not only raw materials but also working people are vital to the process of production and they have to get to their place of work. It is not only a matter of the modernisation and expansion of the infrastructure upon main lines; it is also a matter of the interim part—the local infrastructure and the local means of travel. That has a particular impact on the environmental questions which have been so admirably dealt with in previous speeches in this debate. Not only do air pollution and noise pollution—which are part of the environmental factor—have to be taken into account, but also what we will call the general balance of life in the environment. That should be uncorrupted in the sense of its ordinary balance not being unduly disturbed so that people, when they are not at work or when they are going to work, can have a reasonable environment in which to do that. All these are important matters.

I venture to suggest to my noble friend that it is not even safe to consider the matter within its European context. One has to go a little wider than that. One has to consider —this is becoming increasingly evident now—that one of the most likely areas of the expansion of export of manufactures from this country is likely to be to the Pacific Rim itself and to the other developing countries. That gives an added emphasis to the remarks, that fell from the lips of my noble friend, Lord Dean of Beswick, when he referred to the deplorable shipping situation in which we find ourselves at the present time.

The Commission's idea of the importance of investment is roughly 60 per cent. rail, 30 per cent. road and 10 per cent. the rest, including air travel and canals. In this latter connection I would venture to draw your Lordships' attention to the fact that up to now, and for the past 20 or 30 years, it has been the practice of manufacturing industry to use the main trunk roads, and to some extent the railways, as their interim store both of raw materials going into their factories and in terms of assemblies and sub-assemblies which go to make up the finished product. Instead of having a build-up within the factory itself, and a consequent extension of the acreage which they occupy, owing to very high interest rates—which are no longer 2 per cent., as they were at one time—and indeed general land values and rentals, it has become cheaper to use the roads as a work-in-progress store rather than establish buffers within the factory walls and build up stocks. Therefore the roads are not only being used for transport purposes; they are being used as a store.

That in itself tends to produce some congestion factors because as congestion builds up the question of delivering straight onto the end of the factory line becomes more difficult and therefore increases the cost. In view of the fact that the build-up time has commenced and a flow of traffic can be ensured continuously, we may well consider whether a far greater use ought not to be made inside the United Kingdom and indeed elsewhere—I have in mind southern France as well—of the canal system. Although such a system is slow and the build-up takes a long time—perhaps 10 or 12 days—once the flow starts and continues, it represents an economy rather than when goods are caught up in congestion on roads or even on rail.

I am asking that we take a broad and general view of this. We have already rejected the fashionable assumption for which the noble Lord, Lord Lawson of Blaby, at one time was responsible, of assuming that manufactured goods really did not matter much any more and that it was the total export effort from the country that really mattered. Quite clearly that is no longer the case. I have no doubt that we will have a formal recantation of the matter in due course, particularly in the light of the Select Committee report of your Lordships' House on employment and overseas trade which has been referred to many times.

One thing for certain is that the whole matter has to be considered at length and in public very quickly. All these factors ought to be discussed. It is for consideration whether a special Cabinet sub-committee ought not to be formed, comprising senior representatives from the Department of Transport, the DTI, the Treasury, the Department of the Environment and—if I may suggest, in deference to the emphasis given to the matter by the noble Lord, Lord Ewing—also the new Minister for Europe, Mr. Davis. His excellent feature in last week's European may attract a good deal of interest in view of the constructive manner with which he is dealing with the whole question of our relationships with Europe. But certainly we must have a public policy to cover all these matters, and it should be a matter for full public consultation—if necessary taking some time—accompanied eventually by a consultation paper, which can then be discussed free of any comparatively trivial considerations as to the value of further privatisations in any particular field. Let the national interest prevail within its European context and ultimately within its world context.

7.7 p.m.

Lord Ezra

My Lords, I always find it a matter of great interest to listen to what the noble Lord, Lord Bruce of Donington, has to say. I am a little apprehensive when he gets onto his favourite subject of Europe but I must say that on this occasion on the whole I thought he was relatively mild on the subject. Indeed, I even got the impression that he supports the views of his right honourable friend Mr. Kinnock who has set out how he saw the transport policy in the European Community. Perhaps we can discern a little change in that direction.

I reiterate the gratitude expressed by others to the noble Lord, Lord Ewing, for introducing the debate. I cannot think of anyone better qualified with his great knowledge of transport on the one hand and European affairs on the other. He painted a broad canvas for us which stimulated the wide-ranging and constructive debate that we have had so far. He referred in particular to the call which has been made by Dr. Mawhinney, the Secretary of State for Transport, that we should now engage in a national debate on transport. I fully agree with that. I think that is a very good idea and it is very timely. Unfortunately to engage in a debate of that sort as regards the whole country, you have to have some sort of framework. We cannot just meet casually and start talking about transport. Of course we do our best in this House. If Dr. Mawhinney wanted to pursue the question as regards this House he could see that over a period of years we have debated transport. In fact, we debated the report on transport of the committee of the noble Lord, Lord Elibank, in October.

However, I think Dr. Mawhinney was thinking beyond the confines of your Lordships' House. If we are to launch into a wide-ranging national debate on transport it has to be sparked off by the Government's own views on the subject, setting out the priorities and the options. So we need, as the noble Lord, Lord Ewing, rightly said, a Green Paper. It is worth recalling that the last Government White Paper on the subject of transport policy was published in 1977. There have been documents since then dealing with various aspects of transport, but as far as I can tell no document dealing with the whole area of transport policy. So it is about time we had one.

In order to help Mr. Mawhinney in his endeavour, I should like to suggest some of the issues that should be set out in the Green Paper which we might debate. We have been helped in that consideration by the very interesting document issued by the CBI, to which a number of noble Lords have referred. I have here a copy of the document which is entitled Missing Links—Setting National Transport Priorities. It compares transport performance within the UK with that in three of our European neighbours; namely, Germany, France and the Netherlands. The noble Lord, Lord Ewing, the noble Lord, Lord Dean of Beswick, and other noble Lords referred to the report.

Let us have a look at how we compare with those other countries and the issues which arise. I do not do so in any negative, critical way; I am merely trying to suggest what came out of the report and the policies that we ought to be looking at, although some may not apply here.

I should like to identify four issues which seem to me to be relevant to any debate on transport policy. The first is the question of past investment, to which a number of noble Lords have referred. It is unfortunate that when a comparison is made between our transport investment and that of our continental partners, particularly in the case of rail, we show up very badly, indeed dramatically so. The CBI report shows that in the period between 1985 and 1991 expenditure in France was 37 US dollars per capita; in Germany it was 27, in the Netherlands 25 and in the UK it was seven. It seems out of all comparison that we should have as little as 7 dollars per capita compared with expenditure in the region of 20 dollars in the other countries. Therefore, we have to do a great deal to catch up even before we can compete on level terms.

Next, we have to look at the question of a coherent strategy. We often talk about the need for a coherent policy. Can we or can we not have such a policy? Most noble Lords who have spoken in the debate have suggested that we ought to have a go at creating a coherent policy, however difficult that might be.

One must be struck by the way in which those other countries have gone about this. They have not looked at transport in isolation. They have not looked at different modes of transport in isolation. They have tried to bring together their forward views on transport within their overall economic and social objectives, particularly on a regional basis.

For example, in France they have a policy called the Aménagement du Territoire—which, although it is difficult to translate the term, means the development of the country's social and economic resources particularly with regard to the regions. That policy has been developed over a number of years and takes a forward look to the year 2015. They are trying to make sure that the transport network is developed in response to the economic and social needs of the different parts of France so as to arrive at reasonable solutions in that period. The sort of problem to which my noble friend Lord Thurso referred in the north of Scotland as a result of the closure of the Dounreay operation would automatically have been taken into account in the development of that policy. We lack a wide-ranging approach of that sort.

In Germany there is also emphasis on the integration of different modes of transport. An interesting aspect in Germany is the development of combined transport terminals, to which they are devoting nearly £2 billion out of state resources.

Next, I should like to talk about our lack of long-term thinking in this matter, which I have already touched on. Most of those other countries are thinking in terms of transport developments integrated with social, economic and regional requirements 15 to 20 years ahead. Should we not be doing the same and beginning to consider the problem in the same way?

Finally, I turn to the question of a consensual approach. A number of noble Lords who have spoken, including the noble Earl, Lord Caithness—whom I am delighted to see here speaking in the debate—emphasised the difficulty of reaching a consensus. The noble Lord, Lord Houghton, in his remarkable address full of his usual vigour, also expressed from his past experience how difficult it is to get agreement. That may be true, but we ought to work at it. The Government ought to set an example with a Green Paper and set out the economic, social, expenditure and environmental issues and then initiate a structured debate over a period of time. That is what those other countries have done.

I conclude by saying that this is an extremely timely debate. We not only have the Secretary of State saying that he wants there to be a national debate, but we have had the opportunity of taking a first look at the subject in the House this afternoon. I very much hope that we shall hear from the noble Viscount, Lord Goschen, when he replies, that the concept of a debate launched by his right honourable friend is a serious proposition from the Government and that they will be taking the necessary steps to enable it to be initiated on the basis of a Green Paper or other document issued by the Government.

7.16 p.m.

Lord Clinton-Davis

My Lords, the House is indebted to my noble friend for having initiated this debate in a very impressive speech. The debate has been unusual in that in many respects there has been a remarkable example of consensuality. We have also heard a variety of different ideas. The noble Earl, Lord Caithness, who recently held ministerial office in the department, pleaded for more consistency on the part of the Government. He was right to do that. The concept of an integrated transport policy has always stuck in his gullet and continues to do so, but in that he seems to be in a very small minority these days.

We also heard a most eloquent plea on the part of my noble friend Lord Houghton about the transport of animals, an issue which concerns him deeply. He has warned us that we shall hear a great deal more from him on that subject. I look forward to that.

It has been a timely debate because we have been able to focus on the CBI discussion document. I share the views of the noble Lord, Lord Ezra, that it is a very worthwhile document. I do not agree with every element of the points put forward. I believe that some of the remarks about the environment are not helpful. We have also been able to concentrate to some degree on the programme recently announced by Commissioner Neil Kinnock.

The common denominator in those two themes is, as my noble friend Lord Haskel pointed out, that the industries of Europe and the United Kingdom equally need efficient, safe, reliable and integrated transport systems, supported by a far more modern system of infrastructure. That is critical if we are to achieve the benefits of the largest internal market in the world and also expand our trade beyond that market, as my noble friend Lord Bruce pointed out. This is not just a European Union matter.

The interests of our industry and an effective transport system are, of course, inseparable. Our industries across the country need to be able to market and move their products across the European Union and beyond. Our people need to be able to rely on the quickest and most efficient way of transport causing, always, the least environmental damage, as my noble friend Lord Ewing underlined. My noble friend made another important point: that in the development of those policies there needs to be a far greater involvement with the environmental non-governmental organisations.

The purpose of the persuasive CBI document is, of course, to be constructive. In being constructive, it is necessary to underline the faults that have occurred in our own country so that their effects might possibly be mitigated; and we can wherever possible learn from the past and change course. It stresses the need for two important objectives—the strategic objective has been referred to during the course of the debate—recognising that transport is vital in terms of our whole economic effort.

However, it also refers to the need to foster a more consensual policy. I believe that it is worthwhile reporting that Brian Gould, when dealing with transport matters in another place quite some time ago, made precisely that plea on behalf of the Opposition. It was reiterated by my honourable friend, now Deputy Leader of the party. It was not reflected in the issue of rail privatisation. We did not even have the benefit of a Green Paper when a highly controversial policy was put forward. It was not dealt with in the days of the motorway madness of the 1980s.

The criticisms that have been made by the CBI replicate in many ways those which have been made by the Labour Party over a number of years. They are fierce, challenging and deserve serious consideration from the Government.

Of course it is right to say that the picture is not wholly bad. The Government have introduced the idea—it is not before time—of the Private Finance Initiative. It is fair to point out—the Minister must concede it—that that initiative followed the same ideas announced by the Labour Party some years before. But we still have a long way to go. Neither party can claim that the results of those considerations are perfect.

The trouble is that there is no real transport policy in this country. The different modes are viewed in isolation, not as being complementary. That is the thrust of successive transport commissioners, including myself, over many years. Vacillation on the part of the Government over the past 15 years has led to appalling delays in the provision of essential infrastructural projects. Britain is undoubtedly left in the slow lane compared with our neighbours—a point made forcefully by the noble Lord, Lord Ezra. We know that the high speed train travels across northern France at 186 miles an hour, whereas in the Kentish countryside the train has to move at an average speed of 50 miles per hour. It is no accident that that has occurred.

The noble Lord referred to the difference in investment in France, Germany, the Netherlands and, indeed, Belgium. Those countries have moved far faster than we have in this country. It has been a deliberate policy on their part. They realised long ago that we pay heavily for congestion on our roads. Some time ago the CBI estimated that the direct cost to our industry, much of it small and local, was of the order of £6 billion a year, to which one has to add the indirect cost of the accidents—the health care for the injured, the fatalities and consequential losses to industry, as well as the heavy environmental costs which such congestion involves. Those countries have given a much higher priority to transport and transport planning than we have done. In this country we do not have a transport policy but a road-building programme—or we did have until a few days ago.

Since 1981 the French have built three completely new lines for their high speed trains, Italy one and Germany two. In 1993 Spain ordered its first high speed train from Madrid to Seville. We are not beginning to compete at present. Investment in our railways is abysmally low compared with Europe. Indeed, there is more investment in much smaller countries such as the Netherlands and Switzerland. In 1991 France invested six times more, and Germany something like five times more, than we have done.

What we have in this country by way of a policy is, as my noble friend Lord Haskel argued so persuasively, a demented ideology of privatisation. We support the injection of private finance into transport. We were saying so years before the Government thought of it. But, like the CBI, we say—it is an important point—that that should be in the form of new money from private sources and not instead of the public sector contributions. Is that the view of the Government? Since the late 1980s the Government have insisted on private sector finance as a precondition of major investment in public transport. That has led to substantial delays in the construction of vital schemes; and that has led to further losses as regards British industry.

What industry needs is an assurance that the transport network will keep pace with economic growth. It needs a clearer vision for transport provision. It needs to be clear that if, as the Government assert, there is to be a greater use of rail for transport of goods, there are sensible policies in place to achieve that aspiration. Those policies do not exist at present. Industry needs to know that our airport planning strategies can be completed rather more quickly because we face fierce competition from Schipol, Charles de Gaulle, and the new Brussels airport. As my noble friend Lord Dean pointed out, industry needs a more viable merchant fleet in place of our sadly neglected and geriatric fleet—all clearly linked to our poor investment policy in shipping where the private sector has been largely left to its own devices.

It is simply not good enough that the United Kingdom ranks in the bottom half of European Union member states in the quality of rail and road infrastructure. It is better placed on air infrastructure and access to ports; but in all four modes the United Kingdom comes off worse than France, Germany or the Netherlands.

I turn from that to the policies emerging from the European Union. Like my noble friend Lord Bruce (perhaps a little unusually but nonetheless pleasing for that) I welcome the priorities that have been announced by Commissioner Kinnock over the past few days on the development of road, rail, sea and inland waterway systems which, as he put it, should be integrated—I emphasise "integrated"—competitive, environmentally sensitive and safe. During the course of this year, his services will be producing a document setting out plans for the creation of a Europe-wide system of air traffic control. That is long overdue, blighted as it has been over the years by the issue of so-called sovereignty. They will be producing a strategy paper to ensure the survival of the rapidly diminishing and ageing European maritime industry with specific proposals coming forward in 1996. They will be producing a new "Citizen's Network" to make transport systems more attractive to the travelling public. There is to be a crackdown against cowboy operations on the roads and sea lanes of Europe; new proposals will be forthcoming to make better use of inland waterways—a crucially important means of transport of goods in many countries of the European Union—and wider use o f coastal and short sea shipping, both of which are extremely valuable with regard to environmental protection.

Perhaps most important of all, there is the further development of the trans-European networks whose object is to draw the Continent together by rail, road, air, waterway and telecommunications by the year 2015. In principle, the member states have agreed with that concept. But all the detail, and notably the ways in which the projects are to be funded, remain to be filled in. As Neil Kinnock put it, Transport is critical for economic development, regional advance, and the whole concept of community and the environment. It is central to the creation of wealth and employment and to the reduction of isolation and congestion". As the noble Lord, Lord Ezra, said, 60 per cent. of the emphasis is on rail projects of one kind or another. Three of the priority projects directly benefit the United Kingdom: the upgrading of the west coast rail line; the high-speed rail link joining the Channel Tunnel to London; and the upgrading of road connections between Felixstowe and Holyhead. All are centrally connected with the development of our links with the European Union.

So where do the Government stand on those issues? Are they to be a passive onlooker, wary of proceeding unless a precondition for the development of the schemes is the availability of private capital, wholly or substantially? Will they seek to maximise the flow of funds to the United Kingdom while frustrating the overall European Union infrastructure programme, saying that the budget is out of kilter so far as the rest are concerned? Or are they to be a government who will do their level best to bring these bold concepts to fruition? The entire TENs concept is boosted by the fact that my right honourable friend the commissioner chairs the Commission working group of eight commissioners, working on the plans for co-ordinating the efforts of the member states as they begin to undertake their own part of the trans-European network plans.

Of course it will be costly. There needs to be a marriage of public and private sector finance. We should consider the BOT proposals that were dealt with in the speech in the noble Earl, Lord Caithness, the "build, operate and transfer" ideas which are gaining a great deal of currency so far as the public and private sectors are concerned. The European Investment Bank has a vital role. Our minds must not be closed to any sensible means for producing that marriage between the public and private sectors.

These are not, in my view, to be seen as job creation schemes, although they will undoubtedly have a beneficial effect on job creation. Rather they are medium-term projects designed to enhance the competitiveness of the European Union, including Britain. So far, I regret to say, the Government have displayed little real sense of understanding or involvement in what these schemes mean. The next Government—a Labour government—will.

7.32 p.m.

Viscount Goschen

My Lords, I welcome this debate, initiated by the noble Lord, Lord Ewing of Kirkford, as an important opportunity to discuss the vital importance of transport infrastructure. I also welcome the fact that the noble Lord chose to open his remarks with a quote from my right honourable friend the Secretary of State calling for a wider national transport debate. I believe that that quote, which he put on the record, sets the scene very clearly indeed.

In deciding our transport policy the Government fully recognise the important—I would say vital—contribution of transport infrastructure to industrial competitiveness. But equally we must recognise the profound impact of transport on the environment. Growth in demand for transport services has increased the pressure on our infrastructure and forecasts of future growth in demand present a very serious challenge. Increasing public concern about the wider costs imposed by transport, particularly on the environment, are reflected in the increasing difficulty in getting major transport projects agreed. Our aim is to continue to improve the quality of and range of provision. But we must recognise that there is a balance to be struck between the environmental, economic and social consequences of transport.

This is not just a matter for the public sector; private finance and expertise is playing an increasing role in the delivery of transport infrastructure. I am very pleased to be able to welcome the remarks of the noble Lord, Lord Clinton-Davis, in support of the private finance initiative. Privatisation has been a major success in the transport sector. The privatisation of transport operations and the private finance initiative have enabled us to speed up progress on major schemes and to provide new services more quickly.

Public transport can play a valuable role in safeguarding the environment and our spending plans for the next few years focus on public transport and more efficient use of the existing road network. For example, we are funding 37 packages of measures proposed by local authorities outside London to encourage public transport and to offer attractive alternatives to car use. However, it is not simply a matter of switching public support from road to rail. Investing in rail, bus, trams and light rail can have a tremendous impact in certain areas, but it is important to say that research and practical experience has demonstrated that improved public transport is not enough in itself to solve the problems of traffic growth.

Over 90 per cent. of surface freight travels by road and we need an efficient trunk road system to enable industry and commerce to deliver the goods and services on which we all depend. The Government have a comprehensive programme in hand to improve these strategic links, focusing on removing congestion and providing urgently needed by-passes.

The level of continued investment is a practical demonstration of our commitment to the road programme and the many benefits it brings. More than £20 billion has been spent on motorways and trunk roads since 1979 and over the next few years public spending on these roads will remain on average higher in real terms than it was in the 1980s. This will also be supplemented by the imaginative use of private finance, such as the development of design, build, finance and operate (DBFO) schemes. We have already invited bids for the first four of these schemes and we are considering the suitability of another four.

However, our concern is not only with the economic benefits of better roads. The major new construction programme was reviewed last year. The prioritised programme that resulted seeks a sensible balance between the different economic and environmental considerations. We are now concentrating resources on making the best use of the existing road network. We know that a congested road network is more than a nuisance to truck operators. It costs them, and their customers, money. It costs businessmen money when they are stuck in traffic jams, which cause tremendous inconvenience to the general public. There are also other problems associated with congestion. It adds to pollution. That is why we are working hard to remove congestion, which can also create problems related to safety and cause pollution blackspots. It is important to make it very clear that the days of making very largescale additions to the network are gone.

Some people have suggested that the trunk road programme should be halted in the light of the report on transport and the environment by the Royal Commission on Environmental Pollution. We are examining the Royal Commission's arguments and assessing the costs of its proposals. There may indeed be some very hard choices to make.

The Standing Advisory Committee on Trunk Road Assessment's report on traffic generation has led to similar demands. In the light of that report, trunk road schemes will undergo extra assessment in the planning stages to judge whether or not the effect of induced traffic is likely to be significant. There will be a programme of research to improve traffic modelling techniques still further. But I do not believe that there is justification for halting the trunk road programme. The main factor that determines the level of traffic is normal economic growth.

The answer lies in focusing on schemes that assist economic growth, help to conserve the environment and deal with local congestion and accident black spots. It lies also in making much more effective use of the existing trunk road network. It means using ingenuity and the latest techniques and technology, making the most of past investment, and ensuring that environmental effects are kept at acceptable levels.

I believe it to be widely acknowledged that the United Kingdom has a very efficient rail network in comparison with its international counterparts. The Government invest a substantial amount in the railways, and that will continue. One focuses on the investment figures for the railway infrastructure over the past few years. The point has been made from all sides of the House. Investment has been at record levels in recent years. The 1992–93 total of £1.5 billion was the highest in real terms since 1961. Over the past five years over £6 billion of investment in today's prices has taken place. Investment will continue at over £1 billion this year. It is expected to be about £1 billion next year, of which 75 per cent. will be publicly funded.

These high levels of investment have resulted in major infrastructure improvements. Since 1979 224 stations have been opened or reopened, bringing passenger rail services back to areas which lost them in the cuts of the 1960s. So far £1,500 million in today's prices has been invested to ensure that the infrastructure is in place to run international services through the Channel Tunnel. This includes Waterloo international station that is designed to handle 6,000 passengers an hour. Current infrastructure investment projects include the Heathrow Express rail link, a major programme of resignalling of the London, Tilbury and Southend line to improve punctuality on this low-performing route, and the resignalling of Kent Coast lines as preparation for Channel Tunnel services.

British Rail privatisation and liberalisation will bring considerable benefits to industry and the travelling public. The advantages of privatisation have been demonstrated both in the transport sector and elsewhere. We now want railway customers to take similar advantage of these benefits. Railtrack has responsibility for rail infrastructure, and the privatisation of Railtrack is a key part of the privatisation programme. The Government believe that by making Railtrack more accountable to its customers, that is, the train operators, passengers will receive a higher quality service more attuned to their needs.

My noble friend Lord Mountevans asked about the role of the regulator in ensuring that access charges would be used properly for maintenance and renewals. In the access agreements that the regulator will approve, Railtrack will contract with the train operator to provide a specified level of service for a charge which the regulator will also approve. The level of access charges approved will provide sufficient revenue to cover Railtrack's operating costs and fund renewal investment. As a condition of its licence, Railtrack will he required to produce a 10-year investment plan which will also have to be approved by the regulator.

Privatisation will also lead to a more focused and commercial approach to investment as Railtrack is given every incentive to increase substantially its efficiency in the management and operation of its infrastructure. Privatisation will enable Railtrack to explore more widely sources of private finance to fund infrastructure investment schemes, freed from the inevitable constraints of public sector funding. We are committed to continuing to pay subsidy to support socially necessary but loss-making passenger services. In deciding on infrastructure investment priorities, Railtrack will be expected to take commercially-driven decisions based on its ability to secure contributions from train operators and whether it can make a real return on investment.

Private ownership and competition should also reduce operating costs through improved efficiency. We believe that this will be important in helping to attract freight away from road to rail, which is a theme that has run through the debate from all sides of the House. We want to see rail used for as much of the journey as possible. This was very much the sentiment expressed by the noble Viscount, Lord Thurso. Seventy per cent. of the international freight market is located to the north and west of London. The existing international service will keep these loads off the road until they reach their regional terminals. By the end of 1996 that will reduce lorry movements by up to 1 million per year. We are keen to encourage railways to offer new services if they sensibly can. So is the Commission.

The noble Lord, Lord Haskel, raised the issue of piggyback services. We have offered our support to the application of the Piggyback Consortium to research the possibility of providing special wagons and improving the infrastructure to carry lorry semi-trailers by rail. That is a private initiative. It would have been much harder to do in the old public sector railway. The consortium believes that this kind of move will help to get even more freight off the roads and onto the rail network.

I turn to the Channel Tunnel rail link. I believe this to be an excellent example of a project where the public and private sectors can work successfully together. The project will benefit from private sector initiative and management skills. The line would be built sooner than if it had to rely on 100 per cent. public finding. The Government are prepared to make a substantial contribution to it and shoulder their fair share of the risks associated with the project. The high level of private sector interest in the project is testimony to the success of the Government's Private Finance Initiative.

I turn to the important issue of air transport. This subject was dealt with by many noble Lords who spoke this evening, notably by my noble friends Lord Caithness and Lord Mountevans. It is important to recognise in this debate—which perhaps has cast a little more gloom than one may otherwise have expected—that air transport is an industry in which the United Kingdom plays a leading role. The quality of our airports makes the United Kingdom a world centre for commerce and tourism. There has been a colossal expansion in air traffic. Air travel has expanded over the past 30 years. The expected growth provides an opportunity for economic benefits as well as environmental challenges. The Government are firmly committed to enabling the development of additional airport capacity where it makes economic, social and environmental sense. The economic benefits to business and industry are clear, as are the increased opportunities for leisure travel.

It has been said this evening that the Government have recently announced their response to the working group on the Runway Capacity to serve the South-East report, known as RUCATSE. RUCATSE's analysis shows a strong case for additional runway capacity in the South-East, but more work is needed to inform decisions on any proposals that operators may bring forward for that additional capacity. I believe that that announcement, making clear that certain options should not be considered but calling for further work, has been widely welcomed as a sensitive and sensible approach to what is an extremely difficult and complex problem. It is one that we must get right for the benefit of the entire country.

During the course of the debate we touched briefly on the subject of regional airports. The noble Lord, Lord Dean of Beswick, mentioned Manchester and the proposal for a second runway. My right honourable friend the Secretary of State for Transport has a quasi-judicial role in this process and it would therefore not be appropriate for me to comment specifically on that proposal.

However, in general we welcome the growth of regional airports and recognise the benefits of liberalising services to and from the regions. Last October my right honourable friend announced the biggest liberalisation of transatlantic air services, allowing all US airlines to have open access to UK regional airports. However, even on the most optimistic assumptions, regional growth will only have a limited effect on demand for additional capacity in the south-east. Smaller airports can also play a valuable role —for example, in serving business aviation.

I turn to ports, which are vital to the health of the United Kingdom economy. Over 90 per cent. of UK overseas trade is carried through UK ports. The Government wish to see a strong ports industry, with our ports competing with one another and with ports overseas on a fair basis.

In recent years changes to working practices and access to private finance have led to substantial improvements in the efficiency of our ports. We want them to take a fully commercial approach in relation to their operations and developments. For new infrastructure they must shape their plans in the context of our intention to safeguard areas which are environmentally important and to avoid environmental damage. We wish to avoid grant aid, whether from the United Kingdom or Europe, which would distort competition between ports.

On a wider note, much has been made of comparisons' with our European partners. Many noble Lords, including the noble Lord, Lord Ezra, drew what I would call a pessimistic comparison and touched on the CBI report. It is worth mentioning that the CBI report showed that in a number of respects the UK performs well compared with other countries. It highlighted the strong performance of the UK civil aviation industry, the high efficiency of our rail network, the substantial recent improvements in the efficiency of our ports and the competitiveness in our distribution and logistic service.

The noble Lord, Lord Ezra, also drew comparisons in terms of investment. However, we must look at efficiency and competitiveness also. Other European governments may give more taxpayers' money to subsidise their railways but British Rail is one of the most efficient, ranking second only to the Netherlands in terms of train kilometres per employee. Therefore, BR is able to run an efficient railway at a much lower cost. For instance, I do not think it is widely known that InterCity has a better reliability and punctuality record than the TGV, the Italian railways and the German railways. It is important to bring out those points to put the situation fully in context.

Let me turn to the European issue. We are fully committed to the principle of the trans-European networks (known as TENs). We believe that they have a substantial role to play in strengthening the internal market and thereby the competitiveness of European business. The Commission's proposals for guidelines in three sectors—telecommunications and energy as well as transport—are now under consideration in Brussels. The current proposals for transport cover road, rail, combined transport, inland waterways, airports, ports and shipping navigation and air traffic control systems. The first part of the proposal deals with the general principles: the objectives, scope and priorities of the network for the selection of projects of common interest.

Those guidelines, when agreed, will designate projects of common interest. But while work has continued on the guidelines, the Christophersen group of personal representatives of heads of state and government, established by the European Council in December 1993, has been working to identify priority projects in transport and energy. In its final report to the Essen European Council in December, the group identified a list of 14 top priority projects in the transport sector. The transport projects were endorsed by the European Council and the member states were asked to make every effort to ensure that the projects were begun during 1996 at the latest. There are four projects of UK interest in that top priority list: the proposed new Channel 'Tunnel Rail Link; the West Coast mainline improvement; the upgrading of the railway link from Larne via Belfast through to the Republic of Ireland; and the Holyhead to Felixstowe road corridor (now referred to as the Ireland-UK-Benelux road link). We are pleased to have secured the inclusion of four important UK projects in the top priority list.

The clearest message that has emerged from the debate this evening is that there are no clear answers to the very complex problems that have been put forward. That is illustrated by the different approaches taken by noble Lords. Different emphases have been placed on road and rail transport, regional links, maritime priorities and so forth. Anyone who believes that there are simple answers to any of those problems cannot have considered the issues fully. The noble Lord, Lord Houghton of Sowerby, told the House that there was not much comfort in having to rely merely on the word "integrated". I believe that he was right to say that.

The Government's aim is to establish an efficient and competitive transport market to serve the interests of the economy and the community, taking due account of safety and environmental issues. We have set out our objectives in our sustainable development strategy; in the White Paper on competitiveness, and in our spending plans for future years. Future growth will present us with some difficult decisions. As has been said, my right honourable friend has called for a wider national debate on transport. Only then can we hope to meet the challenges that face us. I welcome all the contributions that have been made by noble Lords this evening.

Lord Ezra

My Lords, before the noble Viscount sits down, perhaps I may mention his reference to his right honourable friend's call for a wider debate. Is it intended to introduce that with a Green Paper?

Viscount Goschen

My Lords, my right honourable friend hopes to start off the wider national transport debate with a series of speeches. He has already met a number of important groups, including environmental groups, which seek to influence government policy on this issue. We shall have to see how the call for a debate develops. Decisions will then be made on whether any further action, such as the paper to which the noble Lord referred, needs to be taken.

7.57 p.m.

Lord Ewing of Kirkford

My Lords, perhaps I may say, with your Lordships' indulgence and permission and with great respect to the noble Viscount, that I hope when the debate develops that we will have much more open thinking than we have heard from the brief that has just been delivered in response to the debate. He came dangerously near to defending the status quo. The status quo is simply not good enough. We have to move forward. We have to develop our networks. Quite frankly, the brief was written for a debate which did not take place. The whole debate is still to take place.

Viscount Goschen

My Lords, when the noble Lord reads Hansard I think he will see that that is not the case. I put particular emphasis on the changes that have to be made and on the very severe problems that we shall have to face in catering for increased demand. I certainly did not endorse the status quo. I said that these challenges were difficult. They were complex problems which required very sensible and well thought out answers.

Lord Ewing of Kirkford

My Lords. I appreciate that the challenges are difficult. We need an open debate. Let me say to my noble friend Lord Houghton of Sowerby that I was worried about his pessimistic approach to obtaining consensus. One of my abiding memories of him dates from when I came to Parliament as a Member of the other House. In his role as chairman of the Parliamentary Labour Party he was able to hold the delicate balance between the late George Brown and the late Manny Shinwell in the great debates that were taking place in the Labour Party about whether or not we should join the EEC. If anyone can achieve consensus, it is my noble friend Lord Houghton.

I am grateful to all noble Lords who have taken part in the debate and to the Minister for his kindness and courtesy. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.