Roads Provision (Hansard, 22 May 1989)

§ Mr. Channon

I have today published, with the agreement of my right hon. and learned Friend the Secretary of State for Scotland and my right hon. Friend the Secretary of State for Wales, a consultation paper entitled "New Roads by New Means—Bringing in Private Finance". It covers England, Scotland and Wales. Copies have been placed in the Library of the House.

The Government are committed to providing a transport infrastructure suited to the needs of a modern economy. We showed that commitment in the plans contained in the White Paper, "Roads for Prosperity", published on 18 May, which dealt with roads in England. The White Paper was largely concerned with publicly-financed road schemes, but the private sector is playing an important and growing role in providing transport infrastructure. I see great potential opportunities for the private sector to finance and build more of our roads and bridges, complementing our greatly expanded road programme. My aim is to make full use of the innovation, enterprise and management efficiency of the private sector in improving the road network and in providing better value for money for taxpayers and road users. Our consultation paper proposes a way forward.

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We have already started. From the international partnership on the Channel tunnel to local partnerships with councils on road schemes, the initiative and flair of the private sector have been making their impact. We already have an example of the successful involvement of private finance in a major national road scheme. The Dartford-Thurrock bridge, the first privately financed road scheme this century, is our starting point. The private sector is also tendering for the second Severn bridge.

This is a new field. There have been uncertainties for potential promoters. The consultation paper addresses these issues. For example, it describes a new approach by the Government to the question of additionality—the possible effect of private financing on the Government's total roads expenditure, which has been of considerable concern to the private sector. We give the assurance that we will not subtract the cost of privately financed roads from public sector provision on a scheme-by-scheme basis. This decision on additionality reinforces our belief that private sector schemes will provide the opportunity for more roads than would otherwise have been built.

The Government are concerned to achieve the most cost-effective provision of roads. Where appropriate, this will involve comparing privately financed schemes with their public sector alternatives. In future, however, no such comparison will be required unless the road scheme concerned is already in the programme or enjoys a high degree of monopoly.

The consultation paper proposes measures to make it easier for roads financed by contributions from developers to be built. It also concludes that new procedures are needed to authorise privately financed tolled roads. It makes detailed proposals for those new procedures, which would require primary legislation.

Privately-financed tolled roads will take the form of concessions, broadly similar to those for the Channel tunnel and the Dartford-Thurrock bridge. I would usually grant a concession after a competition. Competitions will help to ensure the best value for road users. In addition, EC law will require that concessions should be the subject of competitions. For these reasons, exclusive rights will not usually be conferred on promoters; but commercially confidential innovations will be protected, and originators of ideas will be given a place on the short list for the competition.

There will he an order-making procedure to authorise the roads and the tolls to be charged. The promoter would ask me to make the necessary orders. Where there are objections, there would be public inquiries to ensure that full regard is paid to the environment, and to protect the rights of affected individuals. The promoter would consult widely before applying for the required orders. All relevant orders would be considered at the same inquiry.

The Government will keep up the momentum of the private finance initiative. "New Roads by New Means" announces our intention to establish an early competition for a privately financed scheme to increase road capacity in the Birmingham-Manchester corridor.

I can also announce today that I intend to hold a competition for the Birmingham northern relief road.

"New Roads by new Means" is a consultation document. We are asking for comments by 14 July. I want to encourage people with ideas to come forward and help me to take this exciting initiative forward, and so to improve the road network still more for industry and motorists.