§ 9.1 p.m.
§ Lord Filkin
rose to move, That the draft order laid before the House on 21st November he approved [11th Report from the Joint Committee]. The noble Lord said: My Lords, in moving the order I speak also to the regulations.
The first instrument is a contracting out order made under the Deregulation and Contracting Out Act 1994. This simply allows a highway authority, if it wishes, to delegate the operation of certain existing functions involving utility street works to another body, for instance a private sector contractor.
The first of those specific powers involves the keeping of information which the highway authority holds on individual works. The second set of powers relates to the cost of moving utility apparatus already located in highways so as to allow major highway, bridge or transport schemes to be carried out. The final set of functions under the order relates to powers under Section 74 of the New Roads and Street Works Act. As noble Lords will know, these powers allow highway authorities to set up schemes to levy charges on undertakers whose street works overrun an agreed deadline. Those powers were activated in April 2001 and are not connected to the regulations.
The aim of the regulations is to permit pilot schemes to be operated to test powers to allow highway authorities to levy charges on utilities when the utilities carry out works on the highway.
The Government are very aware, as I am sure the House is, of strong public concern at the level of disruption caused by street works carried out by statutory undertakers. In April of this year, we activated powers allowing highway authorities to charge undertakers whenever works overran an agreed deadline. We have appointed consultants—Halcrow—to monitor the effect of these powers. They are due to provide Ministers with a full report by May 2002.
343 We have already made clear that if these powers do not lead to a sufficient reduction in disruption, we are prepared to activate further powers. Those new powers—"lane rental" as they are commonly called—allow authorities to levy a daily charge on utilities from the start of each works, regardless of whether or not they overrun.
We intend keeping the lane rental powers in reserve for the time being as regards national application. However, we think that it would be sensible for the powers to be tested locally so that local authorities, utilities and the Government can gain experience from the operation of the pilot schemes. Were the House to approve the regulations, authorities wishing to operate pilot schemes would need to submit formal applications setting out the details of their proposed schemes. Should we be content with their proposals, then they would need to be approved by order. We would expect Camden and Middlesbrough to be ready to start operation of their schemes in the early part of the new year.
The regulations set a maximum charge of £1,000 a day for each works. But we intend that pilot authorities should not be able to set charges of more than £500 a day for initial street works, with a higher charge if they have to come back to do reinstatement work as a result of rushing the initial works. I beg to move.
Moved, That the draft order laid before the House on 21st November be approved [11th Report from the Joint Committee].—(Lord Filkin.)
§ Viscount Astor
My Lords, I am grateful to the Minister for his explanation of the order. A few years ago there were only five utilities; now I am told that there are several hundred. Some who live in London believe that their street is dug up once a week by a different utility. If there are several hundred utilities, it will be two more years before digging comes to a halt.
The Minister introduces a new regime. I was interested to note that the National Joint Utilities Group claims that the Government's lane rental proposals would cost the sector £1.2 billion annually and would acid £55 to each household utility bill, an equivalent of 8.5 per cent increase in council tax as local authorities would retain lane rental receipts. Can the Minister assure us that during this trial period no costs borne by the utilities will be transferred to the consumers? How much do the Government estimate that the two councils will receive during this trial period? How much have local authorities claimed to date in overruns with regard to utilities digging up the streets? I idle Minister does not have the figures, I shall be delighted if he will write to me.
Having studied the issue somewhat briefly, I note that when a road is newly laid in other countries, utilities are either prevented from, or have to pay more for, digging up that road immediately. There is no doubt that the road does not last if it is continually being dug up. Are the Government considering such a policy?
344 We support the order. We agree on the policy regarding overruns. However, if we introduce these costs, charging utilities for laying cables albeit for a trial period, we need to know that the consumer will not have to pay more for those services as a result.
§ Earl Attlee
My Lords, I thank the Minister for explaining the order. I, too, am happy with the measure in principle. However, I suspect that the Minister will strike me off his Christmas card list because I believe that the order is defective. I suggest that the Minister does not move his order today.
Paragraph 5(4), on page 5, specifies the maximum charge allowable. It states:The charge shall, in respect of any set of street works notified in a single notice in any street specified by reference to the National Street Gazetteer, he of an amount determined by the approved authority in accordance with the formula cXd, where—c is such amount, not exceeding £1,000, as the authority decides is appropriate; and d is the duration of the works".The problem is that no units are specified for the duration of the works. Therefore, the units could be hours, days or even weeks. The order does not state what the units are. Presumably, paragraph 5(4) should read:…where d is the duration of the works in days or part thereof".I therefore suggest that the Minister does not move his order today but redrafts it to make it clearer. Alternatively, if he wishes, he can move it today and amend it at a later date.
We know that there is some concern in the utilities industry about this order. If the House approves the order today, the industry will want clarity. I intend to help by tabling suitable Questions for Written Answer to discover what the units are, unless, of course, the Minister can help me on that point. If the Minister moves the order today, I shall not oppose it. However, I do not understand what are the units for the duration of the works.
§ Lord Bradshaw
My Lords, we support the order. We believe that much of the protest we have received from the utilities is quite false. Most of the work is done by contractors who work for utilities. They go about their work in a totally irresponsible way; they often put the public to great inconvenience; and it is time that something was done to stop them. I, too, have received lobbying—most of which amounts to special pleading, for which I have little time—that needs to be dismissed.
I caution the Minister about the use of the word "emergency". As your Lordships will know, I am a member of a local authority and can assure your Lordships that on many occasions the word "emergency" is invoked when local authorities try to get utilities to do works when they want them to be done rather than when the utilities want them to be done. The layman has no means of knowing whether a water, gas or electricity defect is an emergency or whether the work is being done simply for the convenience of a subcontractor of the utilities 345 involved. Though that matter needs to be addressed, it is not a reason for opposing the order. The order is otherwise supported.
§ Lord Filkin
My Lords, I am grateful to the House for its broad support. I, like other noble Lords, have received a number of representations on this matter. When the Government consulted on it, it was noticeable that virtually everyone apart from the utilities, whether the AA, the RAC, local authorities or consumer organisations, was very strongly in favour of the introduction of these powers. But, naturally, the industry to have the burden imposed on it in the first instance was opposed to them.
The question on whom the final bill, if there are such bills, will fall needs to be set against a recognition that the public already incurs very substantial bills as a consequence of the social or economic cost imposed by street works delays. The Transport Research Laboratory has estimated a cost in excess of £2 billion per year as a consequence of these works—a very substantial sum of money.
As noble Lords know, the central argument is that a financial incentive will encourage a shift in behaviour to try to make the organisations manage these functions more energetically. In view of the late hour, I shall not go into any more detail on that.
The noble Viscount, Lord Astor, asked for confirmation that in the trial period there will be no transfer cost to consumers. The answer is that it is extremely unlikely, for two reasons. First, there are many complex regulations within the framework and it would not be possible in the short time of the transfer for such a payment to go through in all cases. The second, more fundamental reason is that in two local authorities the cost must be seen as de minimis, compared with the nation-wide scale of works that we are discussing. I should be surprised if the utilities or the regulator currently seriously entertained such a venture.
How much do we estimate that local authorities will receive? The short answer is that we do not know. The purpose of piloting the arrangement is not to use a blunderbuss until we know that it is necessary. We will also learn from the two local authorities—this will be highly researched—about the effects on speeding up 346 street works and on utilities, and whether we can perceive that there might ultimately be an effect on consumers. The question was excellent. The research will grapple to find guidance about the likely impact of such an approach.
How much has been claimed on overruns so far? There has been some publicity of the figures from Westminster and elsewhere, but I could give a fuller answer if I write to the noble Viscount.
The noble Earl, Lord Attlee, asked one of the most complicated questions that I have sought to answer from the Dispatch Box. I am pleased to say that the answer is relatively simple—in one word, it is, "days". I shall set that out in more detail, but that is the unit as determined by the schedule to which the noble Earl referred.
§ Lord Filkin
My Lords, without detaining the noble Earl further by flicking through the order for some minutes, I shall give him an authoritative response by writing to him to explain the provenance of the unit.
I thank the noble Lord, Lord Bradshaw, for his support. I note his point about the use of emergency powers in this respect. The Government are alive to the potential risks in that regard. We can look forward to some interesting debates when we begin to get evidence about the first charging systems and the two pilot trials. I hope that the noble Lord, Lord Peyton of Yeovil, will be in his place for those debates—he is one of the House's great experts on the matter. I commend the order to the House.
§ On Question, Motion agreed to.