My Lords, I beg leave to ask the Question standing in my name on the Order Paper. Before doing so, I draw attention to my non-pecuniary interest, which I have declared in the Register of Members’ Interests.

The Question was as follows:

To ask Her Majesty's Government whether they will ensure that in future all service personnel will be paid the correct salary on time.

My Lords, the vast majority of service personnel are paid correctly by the joint personnel administration system. Since the first full pay run of this system in April 2007, the accuracy rate has been 99.3 per cent against the submitted data. Joint personnel administration marks a significant step in modernising the Armed Forces. The complexity of the services and their pay structures mean that pay errors have occurred in the past. Error rates under joint personnel administration will reduce further as familiarity with the new system grows.

My Lords, what is the exact number of service men and women who have been disadvantaged by not receiving their correct pay entitlement over a prolonged period, stretching into months? Will the Minister not only confirm that these errors will be stopped immediately, but also give a guarantee that they will not be repeated, in view of the great irritation caused not just to the service men and women but to their whole families?

My Lords, the noble Lord is right that there have been some underpayments and some months have been worse than others. For instance, a report in the Sunday Times on 9 December, to which the noble Lord may be referring, gave a figure of 16,000 to 17,000 people with incorrect payments. This was not a basic salary payment but a home-to-duty travel expense to reserves who were attending their training nights, so we are talking about figures of £20 to £30. We have looked at what has caused that: it was caused by a system change to prevent duplicate entries resulting in overpayments. However, the payments were made in full in the following months. We have learnt the lessons and the system has been rectified to allow those retrospective claims put in for home-to-duty training.

The noble Lord asked me to give a reassurance that this will not happen in future. I am afraid that I cannot give him a complete reassurance, but lessons have been learnt and we hope that we will minimise risks of mistakes in future.

My Lords, this is obviously very important for the individuals concerned. Have the Ministry of Defence and the Government thought of any recompense to those who have been affected adversely? I was surprised to hear the Minister quoting from a newspaper; surely what we want to hear in this House is what the Government think the figures should be.

My Lords, I should say to the noble and gallant Lord that I was quoting that newspaper because that is where other newspaper articles have come from about a seemingly catastrophic situation which, when you look at it, is not so at all. I quite agree with the noble and gallant Lord that our soldiers, airmen and naval personnel should get their pay and allowances on time, as they are putting their lives on the line for this country. They should be getting the correct and accurate payment—I absolutely agree with that. As I have said, lessons will be learnt.

Noble Lords might like to know that out of 300,000 possible personnel being paid, 322 suffered from underpayment in September last year; in October, the figure was 50 and in November it was 311. None of them should have been underpaid, but it is a small percentage of 300,000.

My Lords, to follow up on that question, if anybody is financially embarrassed by underpayment, will the Government undertake to guarantee that they will be assisted and that embarrassment will be removed? That is quite simple.

Absolutely, my Lords, and as soon as an underpayment comes to light, assistance is given. Payment is made as quickly as possible, often at unit level so that the member of the armed services can get it as quickly as possible. The payment information system needed improving and is being improved. For example, reservists may want to access the information line in the evenings when they are doing their training. The access line for information on pay will be open in the evenings from next week.

My Lords, I accept the Minister’s assurance that the new personnel system has certainly improved efficiency and regularity, but does she agree that this is not a new issue? Indeed, in the early 1990s, when I was in Bosnia as chairman of the Armed Forces’ Pay Review Body, I can remember that the whole of our visit was taken up with the issue of personnel not being paid the correct amount. There were no arrangements in place at that time to give people cash payments. This Government introduced cash payments to help people in that situation. I agree that it is not acceptable for people not to be paid, but it is not new and the situation is improving.

My Lords, I very much agree with my noble friend and recognise the authority with which she speaks on this issue. The new system, the JPA, has successfully been rolled out on time and on budget to all three of the services. It is a major IT change programme—one of the biggest in the world, I am told—so I hope that nobody downloads it and puts it in the post.

My Lords, I do not recognise the bland statements made by the Minister. On a visit to a ship last year as part of the Armed Forces Parliamentary Scheme, I was told in no uncertain terms that virtually everybody on board had had the wrong payments and that it was a continuing process. What is the Minister's answer to that?

My Lords, we recognise that with any new system, particularly one supporting a large, complex payroll, there will be mistakes. Mistakes should not be tolerated, but should any come to light they must be dealt with as soon as possible.

My Lords, does the Minister agree that this problem is particularly irksome to members of the Reserve Forces and that many have decided to leave the forces as a result?

My Lords, I do not necessarily agree with the last part of that suggestion, but reservists have found this system more difficult for two reasons. First, the data held in the old legacy systems were not as good as for regular service personnel. Secondly, as the noble Lord will know, their principal pay as reservists is attendance-based. The system has now caught up with that, but there were glitches in the past.

asked Her Majesty’s Government:

How many NHS prescribable medicines are restricted to Scotland and not available in England.

My Lords, English GPs are able to prescribe any licensed medicine on the National Health Service unless it is listed in Schedules 1 or 2 of the National Health Service (General Medical Services Contracts) (Prescription of Drugs etc.) Regulations 2004. Scotland has similar arrangements backed up by separate legislation. There are no significant differences between the two countries in this area of policy. Hospital consultants are not affected by these statutory restrictions.

My Lords, in the light of the Minister’s Answer, is she aware that Scotland’s equivalent to NICE licenses medicines some nine months before England? Does that not result in the fact that England is subsidising Scotland? Is it not about time that we had a real National Health Service and that drugs were prescribable across the whole of the United Kingdom and not parts of it?

My Lords, we live with the realities of devolution, whether or not the noble Lord likes them. Devolution means that the operation of systems for assessing new drugs in Scotland is a matter for the devolved Administration. That is where we are. In respect of the timescales, NICE has introduced a new, swifter single process and that is now almost as fast as the Scottish process, and is more robust.

My Lords, does my noble friend agree that it is perfectly reasonable for any part of the UK to choose its own priorities, but what is more important is that each part of the UK should receive a fair distribution of public expenditure?

Yes, my Lords, it is perfectly fair that each part of the United Kingdom should be able to address its own needs, but there must be fairness in the receipt of resources. I am confident that that is the case.

My Lords, given the natural divergence in provision that occurs with devolution, local decision-making and local commissioning decisions, are the Government giving any consideration to reviewing their attitude to co-payments so that patients are able to pay for rare drugs which are not being commissioned without having to pay privately for the whole of that episode of care?

No, my Lords, the Government are not giving any further reflection to the system of co-payments because we believe that such a system would risk creating a two-tier National Health Service, and I am sure that is not what noble Lords wish.

My Lords, does the noble Baroness agree that it is good news when Scotland decides to operate part of its National Health Service quicker, as it has with regard to the prescription of drugs, and England follows by speeding up its process? Such competition does no harm at all.

My Lords, we always welcome competition.

My Lords, is my noble friend aware that this is not the only difference between Scotland and England in this kind of provision? Scotland is moving towards free prescriptions, as is already the case in Wales. There is free personal care for the elderly. This is perfectly okay within devolution as long as it comes within the overall block grant, which is decided on a very clever formula, which was devised by a very clever man who now sits in this House and has some very clever ideas for the future. As long as that is done, that is perfectly okay. But if we constantly attack what is happening in Scotland and pretend that advantages are given to the people of Scotland when that is not the case, we shall play into the hands of the SNP, which wants to break up Britain, which would be devastating not just for Scotland but for the whole of the United Kingdom.

My Lords, I entirely agree with those comments.

My Lords, as a Scot living in England, I ask the Minister whether she agrees with me that Scotland has always put a higher priority on the health of its population.

No, my Lords, I do not agree with the noble Baroness in this instance. Healthcare throughout the United Kingdom is rather good, and the quality of healthcare in England and in all parts of the United Kingdom has always been very good.

My Lords, can the Minister clarify her answer to my noble friend? Was she really saying that the newspaper reports that we have all read over the past few years that indicate that life-saving drugs are available in Scotland that are not available to patients in England are completely incorrect? Is she saying that it is only a matter of timing, or is there a difference? How can it be justified that the Government’s policy in England should be sustained by the votes of Scottish MPs, whose constituents benefit from the advantage of the health service in Scotland?

My Lords, I will respond to the first part of the question, which relates to the original Question. Only one drug has been recommended by the Scottish Medicines Consortium—the equivalent of NICE—that has not been recommended by NICE for patients in England. That drug is Fludara, for the treatment of chronic leukaemia. I believe that all other drugs are available in Scotland, England, Wales and Northern Ireland.

My Lords, does the Minister agree that since each Administration regularly conducts strategic reviews of the health inequalities in their countries, which are different, it is entirely logical that they will have different spending priorities for drugs?

My Lords, absolutely.

My Lords, will the Minister answer the second part of the question asked by my noble friend Lord Forsyth? Does that mean that all the newspaper reports are wrong?

Yes, my Lords, the newspaper reports are incorrect.

asked Her Majesty’s Government:

What steps they are taking to improve the conditions of the internal rivers and their flood plains in England and Wales.

My Lords, we are committed to sustained investment in effective management measures for the alleviation of flood risk, the improvement of water quality and the enhancement of amenity and ecology where those are necessary. All those activities are based on risk.

My Lords, I thank the noble Lord for his Answer. I am a riparian owner in north Oxfordshire, which is classed as a low flood-risk area yet saw some of the worst of the flooding in 2007. The Environment Agency shows more concern for the bats, voles and otters than it seemingly does for the management of our river systems, unlike the National Rivers Authority, which used to do such an excellent job. Is not the Environment Agency conflicted in carrying out those two delegated tasks? Do not the needs of humans come before wildlife?

My Lords, I understand the annoyance of the noble Lord, and I have seen his correspondence with the Environment Agency regarding his situation, but I do not think that his conclusions are accurate. The Environment Agency policy is based on risk, and its defences protected at least 100,000 people during the recent floods. Some 95 per cent of flood defences are in good order, and during the recent floods 99.8 per cent of those defences held. New defences that it put in place last summer protected 7,500 properties from flooding in the Burton-on-Trent area. There is an alleged conflict between the role of the Environment Agency and others in clearing the watercourses, but some of the easy answers are not always so easy, such as arguments about further dredging, which can actually make matters worse. If you are not careful, you will cause flooding in areas up-river. There is a balance to be struck, but I have looked at this and visited flooded areas—some of my initial reactions have been similar to those of the noble Lord—and the fact is that the Environment Agency is doing a good job and has our full confidence.

My Lords, given the fact of sea-level rise, it is widely recognised that the Thames Barrier will not fulfil its reasonable function much beyond another decade. Can the Minister tell us where the Government are in terms of upgrading the barrier and where that money will be found?

My Lords, I cannot, except to say that it is well known that at some point the Thames Barrier will have to be either replaced or reinforced. The timescale is, I think, rather more than a decade, although the barrier is being used more than planned. There is no doubt that work has to be done some time within the next 30 years. When I looked at the Question, I asked about internal rivers and what the alternatives were, but I have not been briefed on coastal areas and sea-level rises, I am afraid.

My Lords, when the noble Lord answered a question of mine a while ago, he said that if ditches, dikes and streams were kept clear, towns and cities would be flooded. He now seems to have changed his mind and says that areas upstream of these places will be flooded. Can he explain why there will be floods if watercourses are kept clear? Is not the problem that the drainage systems in towns and cities are not built to accommodate all the housing and factories that are affected there, rather than keeping the watercourses clear?

My Lords, no, I have not changed my mind. The work of the Environment Agency and other related organisations is actually based on risk. They have analysed the country; they look after some 40,000-odd miles of riverbank with huge capital programmes and are putting their efforts where the risk is greatest. It is true in some urban areas that surface water is the greatest problem, which relates to there being too much tarmac and not enough concern being given at those urban levels. That is not really the work of the Environment Agency. Some areas are classed as low-risk and, therefore, these days the agency may not do as much work there as it used to do—as in the case raised by the noble Lord who asked the Question, and he knows why that is so.

My Lords, would the Minister not agree that the key to reducing flood risk was in the proper engineering and maintenance of watercourses? If that is the case, what funds have the Government made available for that task and are they considered adequate by the agencies and authorities concerned?

My Lords, to the best of my knowledge, yes. As is known, capital expenditure has been doubled in the past 10 years to £650 million in 2008-09 and will go up to £800 million in 2010-11. I am reliably informed that if it was £1 billion, the authorities could not spend it next year; there is a programme for this activity. We have the interim report of Sir Michael Pitt following the lessons learned from the floods last year. Later this summer there will be a final report. We have accepted all the recommendations—there is no argument about that. There is more work to be done, and there is no doubt that an increase in capital expenditure on flood defences is needed.

asked Her Majesty’s Government:

What proposal they have to amend the Licensing Act 2003 in light of the British Market Research Bureau survey of live music staged in England and Wales published on 17 December 2007.

My Lords, the survey was commissioned by the Department for Culture, Media and Sport to assess live music provision in 2007 in venues whose primary activity was not the staging of live music. While the survey suggested that there had been a fall in live music in such venues since 2004, it found that the Licensing Act was not a major factor. Nevertheless, the Government are looking at how the regime might be adjusted to encourage more live music by, for example, allowing licensing authorities more discretion over exemptions for low-risk music events. We expect to issue a full public consultation later this year.

My Lords, I thank the Minister for his reply. The fact is that, despite what the Government said during the passage of the Licensing Act—that there would be an explosion of live music—there has, as he said, been an overall decrease, of 5 per cent, in live music performed in venues across England and Wales. While the Government have said that they are looking at proposals to rectify this sad state of affairs, could he be specific about what they are?

My Lords, as I indicated, we are consulting on ways in which we can reduce burdens in certain areas. I emphasise to the House that the drop in live music is not great. Some had predicted that the Licensing Act would have a very significant effect and it clearly has not. A very substantial proportion of those venues that do not put on live music actually have licences. What is reflected is the response of pubs and restaurants more to the market than to the obligations under the Licensing Act.

My Lords, over 100 years ago, a landlord, without an entertainment licence, could lawfully keep a piano for the amusement of his customers. Today, he could be fined £20,000 and sent to jail for six months. Does the Minister really believe that the Licensing Act and its criminalisation of thousands of innocuous and historically exempt gigs is an effective regime for the 21st century?

My Lords, the noble Lord produces a wonderfully extreme illustration of the Licensing Act. Of course, such condign punishments would be directed at major venues that had produced a huge public nuisance and caused widespread dismay. The pub piano scarcely falls into that category. I assure him that in the consultation that the noble Baroness urges us to undertake, we want to ensure that it is exactly the piano in the pub corner and so on that is outwith the licensing obligations.

My Lords, as this consultation goes forward, will my noble friend ensure that particular attention is paid to the impact of the Licensing Act—and, indeed, other influences—on small, informal venues that are used by young artists, particularly young classical artists, early in their career? They are very dependent on venues such as churches and small halls being available. It is most important that the Act has no adverse impact on those venues, whether advertently or inadvertently.

My Lords, that point is well made by my noble friend. In response to this survey, my right honourable friend in the other place, James Purnell, the Secretary of State, announced that he is making £500,000 available over two years towards setting up pilot, professionally equipped, community rehearsal spaces for young people. This is an area of concern and we are addressing that. There are areas where some unexpected consequences or developments in the past four years need to be attended to. We will use the consultation to address the kind of issue raised by my noble friend and others.

My Lords, instead of reinventing the wheel, can I suggest to the Minister that he reads the Committee stage of the Bill that led to this Act, where he will find speeches by the noble Lord, Lord Colwyn, and my noble friend Lord Redesdale? They warned of exactly this problem but faced a wall of complacency from the then Minister, the noble Lord, Lord McIntosh, which is mirrored by the Minister’s complacency today.

My Lords, my noble friend Lord McIntosh expressed the same degree of confidence in advance of the Act that I am able to express today; namely, that those who foresaw that the Licensing Act would have a devastating effect on live music have been proved wrong. I would be the last to suggest that the two contributors to our useful debates identified by the noble Lord were in that category, but there were foretellings of doom that have just not been fulfilled in the developments since the Act.

My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That it be an instruction to the Grand Committee to which the Child Maintenance and Other Payments Bill has been committed that they consider the Bill in the following order:

Clause 1

Schedule 1

Clauses 2 to 12

Schedules 2 and 3

Clauses 13 to 16

Schedule 4

Clauses 17 and 18

Schedule 5

Clauses 19 to 41

Schedule 6

Clauses 42 to 54

Schedule 7

Clause 55

Schedule 8

Clauses 56 to 60.—(Lord McKenzie of Luton.)

On Question, Motion agreed to.

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved accordingly, and, on Question, Motion agreed to.

House in Committee accordingly.

[The LORD SPEAKER in the Chair.]

Clause 19 [Targeted greenhouse gases]:

[Amendment No. 100 not moved.]

moved Amendment No. 101:

From these Benches, I certainly support this approach in principle in this instance. Our own view, as we debated yesterday, is that the Government should bite the bullet now and include all the Kyoto-listed greenhouse gases. That remains our point of principle and belief. Having said that, I fully accept that there may in future be other gases that are internationally designated or are particularly important to the UK economy. We would certainly welcome this extra degree of accountability and transparency in this area.

Presumably the targeted gases will have to be internationally scientifically agreed, will they not? There is no point in the United Kingdom saying “This gas must be targeted”—not being a chemist I cannot even name one gas, except CO₂—when nobody else does it at all.

I welcome the noble Earl back to our debates. If he looks at Clause 64, he will see listed the six Kyoto gases we are talking about. There is no dispute about the particular gases.

The effect of Amendment No. 101 would be that the Secretary of State could designate other greenhouse gases as targeted gases only following a recommendation of the Committee on Climate Change. Amendment No. 106 would mean that the Secretary of State would be able to define the base year for any greenhouse gas designated as a targeted gas under Clause 19 only following a recommendation of the committee. The effect of the amendments would be that the Government would have no discretionary powers; they would have to follow the committee. We have now discussed on at least four or five occasions the principle of why the committee should not be an executive body and why it is therefore unnecessary to seek parliamentary approval again where we have already made provision for orders to be made through the affirmative resolution procedure. It would not be useful for me to cover exactly the same ground, other than to say that the points which have already been made apply. That is why we do not accept the amendments.

We are, as before, genuinely willing to consider how we can improve the transparency of the whole process. We will shortly come to Amendment No. 105 on Clause 20. That will give us a chance to debate how these powers may be used. I can honestly say that I will have a more useful answer on Amendment No. 105 than the one I have just given.

I am tempted to move on quickly. I await with bated breath the Minister’s further contributions. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 102 not moved.]

moved Amendment No. 103:

I have one supplementary question to ask, following on from my noble friend Lord Cathcart. The Oxford English Dictionary gives three definitions of “expedient”. The first is, “‘expeditious’ or ‘speedy’”; the second is “Conducive to advantage in general, or to a definite purpose; fit, proper or suitable to the purposes of the case”; and the third, in a depreciative sense, is, “‘Useful’ or ‘politic’ as opposed to ‘just’ or ‘right’”. I quote in particular an example given in the OED of a predecessor of mine as Member of Parliament for Westminster, John Stuart Mill, who said:

“The expedient, in the sense in which it is opposed to the right, generally means that which is expedient for the particular interest of the agent himself”.

I realise that in Humpty Dumpty’s view, the words could mean anything one chose them to mean, but which particular interpretation do the Government have in mind?

I have yet to be compared to Humpty Dumpty in this House, but there is a first time for everything. I very much hope that I can offer Members of the Committee reassurance on this probing amendment, which I am sure is helpful. I thank the noble Earl for tabling it and allowing us to have this mini discussion.

Clause 19(3) allows the Secretary of State to make any consequential amendments to the Act as may be necessary or expedient as a result of including further greenhouse gases within the UK’s targets and budgets. However, the ability to make consequential changes to the Act is already extremely limited. Any amendment would have to be genuinely consequential to the inclusion of other greenhouse gases. It could not be used to do anything unrelated. I appreciate that it is important to put that on the record now. For example, the power would not allow the Secretary of State to amend the level of the 2050 target or the level of carbon budgets, as specific arrangements are set out in other parts of the Bill for those actions. In addition, the Delegated Powers and Regulatory Reform Committee considered the provisions of the Bill and did not raise any particular concerns about this power.

I turn to the question regarding the Oxford English Dictionary definitions of “expedient”. As far as I am aware, we are working on the third definition of the word, seeing it as useful, or just or right. If on reflection, having read the discussion and taken further advice, I need to come back to the noble Lord with a more specific definition, I will undertake to do that as soon as possible before the next stage of the Bill.

Before my noble friend rises to respond, I have to say that I am mildly surprised by the Minister’s answer. However, I look forward to her further investigations.

I thank my noble friend Lord Brooke for the three useful definitions which emphasise my point. I also thank the Minister for her explanation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 104 not moved.]

Clause 19 agreed to.

Clause 20 [Base years for targeted greenhouse gases other than CO₂]:

moved Amendment No. 105:

The noble Earl raised the issue of Bali and talked about the onset of a new US Administration and what they might do. I have a calendar on my desk that tells me that there are 377 days to the end of George Bush, so we have a 377-day countdown on the issue that the noble Earl raised. I cannot comment on what a new US Administration might do, but I understand the reason why questions are raised about subsection (2). As I said earlier, Clause 20 builds on the provisions of Clause 19 and allows the Secretary of State, when including further greenhouse gases in the targets and budgets under the Bill, to designate the base year for those gases.

This power is necessary to take account of international practice. For example, the Kyoto Protocol currently allows countries to choose 1990 or 1995 as the base year for emissions of industrial gases. This flexibility was allowed internationally because not all countries have reliable emissions data for those gases for 1990. The UK has therefore chosen to use 1995 as the base year for those gases for the Kyoto Protocol. Clause 20(2), the subject of this amendment, is therefore intended to ensure that we are able to take a consistent approach between our domestic targets and our Kyoto targets. If we decided to include those industrial gases in our domestic targets, this clause would allow us to include them on the same basis as they are included in our Kyoto targets.

It is also possible—the noble Earl raised this point earlier on—that at some time between now and 2050 an additional gas or gases may be identified by the international community as contributing to climate change. It is possible that there could be no reliable data for emissions of that new gas—I shall call it “gas X”—in 1990. If that gas is included in the international climate change framework with a different base year, it would be helpful for our domestic approach to mirror what happens internationally.

Amendment No. 105 would remove that flexibility. It is not there for a fiddle—the noble Earl did not use that word, but he is right to ask the question. The removal of that flexibility would not be a good idea, which is why we cannot accept the amendment. However, recognising the arguments behind the noble Earl’s point, we are very happy to consider whether the safeguards in Clause 20 can be strengthened. The drafting is being looked at. We want to ensure proper scrutiny of this power. The Bill already provides that any orders made under this clause would need to be made by the affirmative resolution procedure. However, we are happy to look again at whether there are ways in which we can provide further reassurance to the House and to those outside that these powers would not be used inappropriately. We are at one on that and are happy to take this away and look at it again.

I thank the Minister for his full explanation and for looking again at redrafting this provision. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 106 not moved.]

Clause 20 agreed to.

Clause 21 [Carbon units and carbon accounting]:

moved Amendment No. 107:

I say at the outset that I am more than happy to take the amendment away to consider it, so that gets me off to a good start today. We had an interesting session last night about types of carbon units. The noble Duke read them out: the assigned amount unit, the emissions reduction unit—I also have the certified emissions reduction—the removal unit and then the EU allowance. We are considering whether to use the existing accounting system under Kyoto and in the EU Emissions Trading Scheme, where most of those are found, or whether to create a new accounting system.

Clause 21 states that carbon units can be counted only if they represent a reduction in greenhouse gas emissions, removal of greenhouse gases from the atmosphere or an amount of permitted emissions of greenhouse gases with a capped system. That mirrors the international carbon accounting rules, where those are the only types of carbon units allowed to be used.

I accept the strength of the argument. I cannot accept the amendment, but it is obviously important that any carbon units used under the Bill are of the right standing and environmental rigour. There is no question about that. We will certainly consider this point in advance of Report.

Which units are used in carbon trading? It is so obvious that it must be the same all the way around. We cannot have rods, poles, perches and centimetres et cetera all mixed up. This is too important to have those sorts of misunderstandings. How does a carbon trading system work? I ask that purely for information.

There are four types of carbon unit under the Kyoto Protocol and there is the EU allowance under the EU Emissions Trading Scheme that is unified within the European Union. They are all internationally accepted.

I am sorry to go on, but I do not think that I am probably the only person who totally fails to understand this. How different are these units, one from the other?

That is difficult because I can explain some but not all the units. While I am reading out these descriptions, perhaps I can get one on the EU. Under Kyoto, the assigned amount unit is issued by all developed countries which have targets; the emissions reduction unit is issued under joint implementation which relates to emissions projects in developed countries; the certified emissions reduction is issued under the clean development mechanism which relates to emission projects in developing countries; and the removal unit relates to land use, land-use change and forestry activities in developed countries. That explains the four units under Kyoto.

Under the EU Emissions Trading Scheme, my note says simply “EU allowance”. I would imagine that the noble Earl might be able to explain this better than I can.

I almost could go around the Chamber and say, “Hands up anybody who understood a single word of what that was saying”. Surely we are trying to make sure that the X amount of muck that goes into the air is reduced. How we measure it should be simple and comprehensible to everybody. Again, hands up anyone who understood that, because I certainly did not.

There was a hand up at the back. To put it crudely in black and white, under that list of units, some units are measured differently in developing countries as opposed to developed countries. It depends on the nature of the business and the environment—for example, whether it is deforestation or water. Therefore, there is bound to be a different set of parameters for developing countries and developed countries. Presumably they all work out to be the same, but the calculations are done differently. Some issues have been industrial and some are related to land use, but the end unit would be the same amount of carbon. The calculation of how it is arrived at would be different, but the unit would be worth the same amount of carbon.

Perhaps I may join this little party. I am sorry to ask my noble friend if he remembers that at Second Reading I raised the issue of tonnes. I have asked a lot of people and no one can give me a good explanation. Will he tell us whether, under his reference to “industrial”, there is a connection between these units and gigatonnes and tonnes of carbon dioxide?

I am getting into deep water here. I do not have the answer to that. I simply say to my noble friend that the tonne of carbon dioxide, which is probably the end result of what we are talking about, is arrived at in different ways and is calculated from different sources—for example, by developed countries and developing countries. If it is done under emission projects in developed countries as opposed to the clean development mechanism, which is specific only for developing countries, the tonne of carbon at the end is still a tonne of carbon, but it is arrived at differently. That is the only explanation given. Obviously, the calculation in terms of land use changes whether it is being used for deforestation or for growing other kinds of crops. Ultimately, the calculation of how it is arrived at will be different, but a tonne of carbon is still what one is trying to get to in the end.

I thank the Minister for the masterclass in this difficult area, one that I certainly do not understand. One of the key things to remember is that EU ETS carbon units are part of a cap and trade system in that they are limited and can be brought down, while there is potentially an infinite supply of the other units under joint implementation and the clean development mechanism. Once projects have been audited by the United Nations procedure, you can have an infinite allowance for them. The issue is that the units cannot be completely intertradable. If one could be substituted for another, all the caps on the EU ETS, which is why they have value, would effectively suffer from inflation and lose that value.

I want to bring up the issue of the different currencies we are talking about here, even though they all revolve around a tonne of carbon equivalent. Later in the Bill the Government introduce the carbon reduction commitment, which will itself have more units of its own. Given that it too will be a cap and trade system, I would like to ask whether it would not be much better if we kept to that commitment and did not invent another currency at that point. But I am assuming that for this part of the Bill, the CRC units will not be internationally tradable in any way. Presumably you cannot stop investment banks using them as a sort of derivative or whatever, and I am not sure how the CRC units would be treated in the UK carbon account. However, that is probably a matter for later in the Bill.

Before we finally leave this subject, I feel that we are in danger of reopening a debate that we have already had. The answers given by the noble Lord are absolutely satisfactory in themselves in that they give us an understanding that these units, while they may each have a different calculation base, in fact all result in the same tonne equivalent of carbon. That is enormously helpful. However, the discussion has also highlighted the fact that these different sorts of units, unless we are very careful, will mean that because of interchangeability we will be able to meet all kinds of targets by preventing or not permitting carbon dioxide emissions to take place in other countries. If the units are tradable, we may be able to meet our targets without reducing our own emissions at all.

I have nothing further to add, but that was the central theme of our earlier debates on buying allowances. Obviously there is consensus around the Committee that it is not a good idea for the Government to get out of this issue by simply buying allowances and then not changing anything we do in this country, so what the noble Lord said was absolutely right.

I am told that a briefing sheet has already been provided for Peers that explains further how to assess whether the UK has met its carbon budget. It is Climate Change Bill briefing paper No. 2. The masterclass can continue at one’s desk or over a cup of tea later.

This debate has been a useful way of opening up the area. However, I wonder whether we would be better saying that the carbon units we were most interested in were those approved under the UN Kyoto agreement. I know that there can be a problem in pinpointing things too much, but at the moment the position is much too open. So far as I understand it, we are signed up to the EU ETS, and presumably we will be able to trade carbon units throughout the EU. The noble Lord, Lord Teverson, talked about a cap and trade system. I believe that some people reckon that European countries will be able to buy in energy reduction units from the joint implementation. But until we have a deeper understanding, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 108:

Obviously, as the noble Earl says, the amendments in the group concern the scope of the regulations on the carbon accounting part of the Bill. I note his initial term. I am sure that parliamentary counsel would have a far more elegant response than I have to his description of unparliamentary language, but there is a practical reason for it.

On Amendment No. 108, Clause 21(2) allows the Secretary of State to make regulations for carbon accounting and, as set out in the Explanatory Notes to the Bill, the intention is to establish an accounting system broadly similar to that which is used to keep track of the United Kingdom’s assigned amount units and other units issued under the Kyoto Protocol. Under that system, carbon units can be moved between accounts. They are tracked through a registry which is similar to an online banking system. Each account holder has an account where their allowances are stored, transferred to or received from other accounts. The registry also tracks which allowances have been used for compliance purposes and we intend to adopt a similar approach under the Bill. However, Amendment No. 108 would essentially prevent this by removing the Secretary of State’s ability to keep track of carbon units and there would be no way of knowing whether or not the Secretary of State held the carbon units he claimed to hold. The amendment would therefore undermine the transparency of the Bill.

As I said, we have a well established system for tracking carbon units under the EU Emissions Trading Scheme. It has an excellent record and has so far been licensed to 16 countries in addition to the United Kingdom. It is a well tried and tested system and therefore the use of the language “to register or keep track of” probably conforms to legally accepted practice.

Turning to Amendment No. 109, it is possible that the accounting regulations under Clause 21 may involve duties being placed on the Secretary of State and, as a matter of legal drafting, it is not usual to talk about these duties being “conferred” on the Secretary of State. The duties could be related to the need to register and keep track of carbon units—for instance, the carbon accounting regulations will need to reflect any decisions to bank or borrow under Clause 13—or to the establishment of a body to administer the carbon accounting scheme, which we will discuss when we come to Schedule 1. The establishment of such a body could involve a number of functions being imposed on the Secretary of State such as the appointment of members and other related matters.

On Amendment No. 112, the carbon accounting regulations are likely to be very technical and detailed and to require frequent updating. Clause 23, to which the amendment refers, takes a proportionate approach to the requirements for parliamentary scrutiny which is in line with the recommendations of the Delegated Powers and Regulatory Reform Committee as to what constitutes an adequate level of parliamentary control. The body appointed as the scheme administrator is only one aspect of the way in which we will manage our carbon accounts and there is no obvious reason why this aspect should be given a greater priority. However, I understand the importance of the issue. In addition, the Merits of Statutory Instruments Committee will scrutinise any orders made to transfer administrative responsibilities and would be able to report on any order which it considered to be of interest to the House—or, indeed, an order that it thought was inappropriate. That kind of scrutiny removes the possibility that any order made using this power could go unnoticed.

It is a complicated Bill and many orders will flow from it, both from the Government and from the recommendations of the committee. It is important, if I can use the word, that we keep track of them all and that none of them slips through. But we have got sufficient procedures in place to make sure that nothing goes by unnoticed and, as I say, the Delegated Powers and Regulatory Reform Committee accepted what was in the Bill.

Instead of using the words “keeping track of”, would it not be easier to use “tracking”? It would save two words.

I thank the Minister for his explanations on Amendments Nos. 108 and 109. I was slightly disappointed by his response to Amendment No. 112, because the authority of Parliament is part of the triangle and we wanted to see Parliament being much more part of the decision-making process. However, at this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 109 not moved.]

Clause 21 agreed to.

Clause 22 [Net UK carbon account]:

moved Amendment No. 110:

Clause 22 is crucial, because it relates back to Clause 1, around which the Bill revolves, and defines the UK carbon account. The lack of the required definition makes the Bill obscure, suggesting that it is our intention to reduce not greenhouse gases in the UK but a net UK carbon account. The definition could perhaps be set out earlier in the Bill, so that it would be easier for the general public to understand it.

I do not understand why—I am sure that there is a good reason—Clause 22(1) states:

“In this Part the ‘net UK carbon account’ for a period means the amount of net UK emissions”.

Why does it refer to “net UK emissions”? It should be the UK’s emissions, plus what we buy in and minus what we take out—perhaps I have got that the wrong way around. I do not understand why the clause refers to,

“net UK emissions of targeted greenhouse gases”,

because “net emissions” does not have an understandable definition. The Bill should refer just to “emissions”.

Before the Minister responds to that, perhaps I may add my pennyworth. Clause 12(2)(a) states,

“state the amount for the year of UK emissions, UK removals and net UK emissions of that gas”.

We are therefore talking about “net” after “UK removals”, which raises the question how one measures UK removals. We had a spirited discussion about how one measures emissions, and recognised that one reduces that eventually back to carbon. “UK removals” or any removals will become a much more critical issue as we take into account the brave decisions taken at Bali, which cover deforestation—that is greatly needed. However, if ever there was a need for the science to catch up with the aspiration, here it is. We all recognise that we have very little idea of UK removal rates. We are talking about carbon sequestration, mainly, and the ability of different forest systems and soils to sequestrate, according to different land management systems. Eventually, if we are to bring deforestation into carbon accounting, which in a global sense we would certainly hope would be the case, we will simply have to be able to measure much more precisely than we can at the moment what we mean by removals.

I do not expect the Minister to answer or to give us a masterclass on this, but I draw attention to the fact that most of us do not understand how we will measure precisely UK removals.

I thank the noble Lord for his excellent explanation of my question. I am now fully satisfied that it has been answered.

I was going to be much more mundane in answering the noble Lord’s question by saying that he needs to read Clause 22(1)(a) and (b). I do not know why it is done this way round; only parliamentary counsel could answer that. It has been drafted so as to say that,

“net … emissions … for the period”,

will be “reduced by the amount”, and “increased by the amount”. One would normally think that you would get the net after you had done the additions and reductions, but the Parliamentary Counsel Office has drafted it that way and I am sure that, knowing the expertise of that office, it has done so for a good reason. If I am wrong, I shall write to the noble Lord.

Amendments Nos. 110 and 114 relate to how the emissions will be calculated. That will be complicated; it is certainly not the easiest thing to explain across the Dispatch Box. We appreciate the sentiment behind Amendment No. 110, but it would not bring clarity to the issue. Clause 22(1) defines the net UK carbon account as the total net emissions of greenhouse gases in the UK, taking into account carbon units that are to be credited to or debited from the net UK carbon account. The general convention under the United Nations framework, within the EU and in domestic practice, is for greenhouse gases to be measured in terms of tonnes of carbon dioxide equivalent. This is set out in more detail in Clause 65.

Amendment No. 110 would define targeted greenhouse gases in terms of carbon units. However, carbon units are defined in Clause 21(1) in terms of greenhouse gases, and we believe that this is the best way in which to approach the issue. Ultimately, the problem we are seeking to tackle is caused by greenhouse gases, not by carbon units.

While that is being digested, I turn to Amendment No. 114. Clause 24 defines the terms “UK emissions”, “UK removals”, and “net UK emissions” of greenhouse gases. These are to be determined consistently with international carbon reporting practice, which is defined in Clause 66 as,

“accepted practice in relation to reporting for the purposes of the protocols to the United Nations Framework … or such other agreements or arrangements at European or international level as the Secretary of State may specify by order”.

We touched on that matter briefly yesterday. This is a tribute to the British Civil Service, because I have an update to a note on a debate that we had last night, in which we discussed the amendment proposed by the noble Baroness, Lady Miller of Chilthorne Domer. We discussed the clause yesterday in the context of her amendments, but that has been looked at again overnight and I reassure the noble Baroness that there will be very clear separation throughout between the emissions that take place within the UK and the carbon units which represent activity and which took place outside the UK. If the noble Baroness would find it useful, officials would be more than happy to discuss the point further with her.

Again on Amendment No. 114, I reassure noble Lords that UK emissions and removals of greenhouse gases will be determined in accordance with international practice—for instance, the Intergovernmental Panel on Climate Change greenhouse gas inventory guidelines, which the UK is required to follow under the United Nations framework convention on climate change. This is not something that the Government have invented on the back of an envelope.

The UK already produces an annual emissions inventory, which is produced to a high standard in line with international reporting practice. I explained last night how that was done. The amendment would mean that UK emissions could be determined only in accordance with international agreements. It is not clear that that would always allow us to keep up with international best practice as it develops over time. For example, best practice could continue to evolve between formal international agreements, because this is obviously a continuing issue that is being debated around the planet. I hope that that explanation is sufficient for the noble Lord to withdraw his amendment.

The Minister is being as helpful as he possibly can, but I noticed when he was explaining that even his brow was furrowed with concentration to grasp the extreme complexity of this system of measurement. If we are going to make it clear to the public, we must, if we can, have the correct language in the Bill, more as a tribute to the late Lords Brightman and Renton who used to go on about clarity in legislation. When you see clever people such as the noble Lord, Lord Rooker, and other clever people in this Committee really struggling with the meaning, how on earth will people outside the House, who are not trained in law, get their heads around this incredibly complicated and very important issue?

Before the Minister answers that question, may I add a supplementary? My noble friend has just said that it is important that people understand this. What it all adds up to is that it must be clear to individual members of the public at the end of the day because they will suffer low emission light bulbs and so forth. They will feel this on their skin and want to know exactly what is being done. Amendment No. 110 quite simply says that the net UK carbon account should be expressed in terms of carbon units. It does not make sense for an account not to be expressed in terms of the units that it is worked out in. Could the Minister not try to amend the wording so that, at the end of the day, people can see we aim to arrive at a net total of carbon units expressed in carbon units? That makes sense; then we need not have these elaborate explanations which we all find so difficult to follow.

I know that we are legislating for and on behalf of the public, but the idea that a copy of the Bill will go through every letterbox is palpable nonsense. What needs to go through every letterbox— and that is the sort of thing that should happen—is information in language that is easy to understand and that people can connect with their daily activities about the actual effects and consequences of the changes that will come about because of the Bill. The drafting of legislation must be done under our procedures in a specific way.

The reasons for that are well known. The courts are out there and through the structures that we are setting up we are requiring business and individuals to change their behaviour in due course, and that must be done in a fair way. The legislative process does that. How the legislation is translated to inform the public is, I say with respect, another matter altogether. We need an overhead projector and a chart so that we can understand what we are doing as we legislate, but we cannot include the way we operate in legislation. I am sorry: I am defending the status quo, which I never thought I would do, because it needs modernising, which is why we have the legislative programme. I understand that we must do things in this way, but how it gets translated to the public, business, industry and other organisations is another matter altogether. Better brains than we have on this Bill must be used to translate that information to make it meaningful and understandable to the public. Otherwise, we are wasting our time.

What we are all trying to do is to bring the letterbox issue as near to the statute as possible because otherwise the only people who really benefit are my learned friends, and they are quite well enough paid already.

I thank the Minister for defining the basis on which we are looking at the matter when he spoke about the IPCC and the Kyoto agreement. I almost feel that we ought to have that in the Bill to explain that that is what we relate this whole to. It is difficult to get the public to understand this because we are talking about generating carbon which has not been emitted. You cannot say, “I have captured that carbon and there it is, you can weigh it”. We are not even giving people bits of paper but credits on an international database. There is a worry about whether these things are properly verified at source or whether somebody in the depths of a jungle somewhere is churning them out and feeding them into the database.

The Minister needs to explain in a little more detail—perhaps not tonight but some other time—why the net UK carbon account referred to in Clause 22 does not mean that in future somebody might think that it applies only to carbon. We have tabled this amendment because we want to make sure that these other gases can be included in the net UK carbon account at the levels at which they are internationally recognised as having a carbon equivalent. At the moment there is a slight danger that the Bill’s wording does not allow for that.

I shall take that away and look at it but I believe that I said yesterday that some 85 per cent of our emissions comprised carbon dioxide. There are other gases but the others are assessed on equivalence. However, there must be clarity in the legislation and I am certainly happy to look at the matter again.

I thank the Minister and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 111 and 111A not moved.]

Clause 22 agreed to.

Clause 23 [Consultation and parliamentary procedure for regulations]:

[Amendments Nos. 112 and 113 not moved.]

Clause 23 agreed to.

[Amendment No. 113A not moved.]

Clause 24 [UK emissions and removals of greenhouse gases]:

[Amendment No. 114 not moved.]

Clause 24 agreed to.

Clause 25 [Emissions from international aviation or international shipping]:

moved Amendment No. 115:

I agree with a great deal of what the noble Lord has just said in moving his amendment. He said that these were very complicated issues, and indeed they are. In the Joint Committee, as he will well remember, we spent a great deal of time considering these matters. On the fact that no emissions are included in the carbon count from international aviation, the Joint Committee said:

“We consider this to be a serious weakness which, in view of the significant likely growth of such emissions, has the effect of reducing the credibility of the 60% carbon reduction target. Given the clear expectation of the Secretary of State that international aviation emissions could be included in the net UK carbon account once they are incorporated within the EU ETS, we expect the Government to take all necessary steps to ensure that this is achieved. The draft Bill should be amended in such a way that it requires both the Government and the Committee on Climate Change to include separately international aviation emissions within the scope of their monitoring and reporting, including projections of future emissions—in a manner similar to the parallel reporting we are recommending in relation to non-CO₂ greenhouse gases”.

We went on to make other parallel recommendations. The final one was that,

“the Government should make it a priority to address these issues, and both it and the Committee on Climate Change should include international shipping emissions within their annual projections and reporting processes”.

In the first place, is it not incumbent upon the Government to try to get an agreement through ICAO and the IMO?

Exactly, but a noble Lord on the Cross Benches with great experience of foreign affairs commented in the Joint Committee on the tortoise-like progress of those discussions in the international arena. The noble Lord who has just intervened has particular knowledge and experience of the timescales involved in such discussions. After all, in this Bill we are trying to give a lead and do things before there are agreements. It seems that at the very least, on Report, this clause should be amended so that it places on the Secretary of State and the committee the task of urgently examining the way in which this should be dealt with. It seems a serious omission from Clause 25 as it stands that no role is given on this matter to the Committee on Climate Change. Surely one of the priorities for the Committee on Climate Change and for the Government should be to address the issue. I shall certainly put forward—I should have done it sooner so that we could have discussed it today—an amendment for Report to make it a priority for the Government and for the Committee on Climate Change to examine the issue, to examine the problems as they exist and to come up as quickly as possible with solutions.

One other factor that needs to be looked at as we discuss this issue was a matter of concern to the Joint Committee: once we have agreed that the definitions are right, what would the effect be? Would the effect of including aviation in the reported numbers, targets and budgets—I leave shipping on one side for the moment—be to put extra pressure on reducing the emissions from all other sources? Because we were adding something, did that mean that we would then have to make further reductions elsewhere, or, as the witnesses from the government departments seemed to argue, did we simply increase the grand total and go on from there? The Joint Committee felt that that issue also needed some urgent consideration, analysis and clarification from the Government in relation to their intentions.

I support the various amendments put forward because they deal with an issue which needs to be raised. I do not believe that they solve the problem and I do not expect that my noble friend, when he comes to speak about his amendments, will think that he is solving the problem. These issues are complicated, but surely we need to emphasise today the importance of getting aviation and, as soon as possible after that, shipping included in the budgets and targets, and the importance of the Government and the Committee on Climate Change addressing that jointly as a matter of priority.

I thank my noble friend Lord Crickhowell for his contribution. I always like his blend of cautious impatience, if I may put it like that. However, I do not share his pessimism about the outcome of this debate. It may not be necessary for an amendment to be tabled on Report. These Benches are party to this group of amendments, except Amendment No. 118, and we think that the exclusion of international aviation from the Climate Change Bill is illogical and, frankly, not easy to understand. Amending this clause should surely be a priority for anyone concerned with ensuring that the Bill works.

Due to the seriousness of the issue, I want to reiterate, for the record, the scope of the problem. Aviation is the fastest growing source of greenhouse gas emissions in the UK. The Department for Transport projects that aviation will emit 17.4 million tonnes of carbon in 2050—equivalent to 26 per cent of the total UK carbon allowance—in the unlikely event that the target stays at a 60 per cent reduction. This of course means that in the face of an 80 per cent target, aviation emissions will account for more than half the UK’s carbon emissions. The difficulty with aviation, as has been pointed out by the noble Lord, Lord Crickhowell, is that it also has a range of non-CO₂ effects on climate and emits a number of gases. Additionally, emissions at altitude multiply their impact.

In its 1999 report Aviation and the Global Atmosphere, the Intergovernmental Panel on Climate Change put the multiplier effect at two to four times the actual emission because it is emitted at high altitude. If this is taken into account and aviation remains excluded, aviation will account for well over the total UK allowance by 2050, assuming a target of 80 per cent. That is painting the most dramatic picture but it shows the key role that solving this problem has in achieving a reduction in carbon emissions. It is simply too serious to ignore and it is illogical. If the goal is to reduce the contribution that the UK makes to global warming by genuinely reducing carbon emissions, how can the Government ignore one of the biggest contributing factors? To use a simple analogy, it is like passing a drink-driving law that sets a limit on the alcohol level but then excludes whisky from being counted.

The inclusion of international aviation has been recommended by major environmental lobbies and, as the noble Lord, Lord Crickhowell, said, by the Joint Committee on the draft Bill. Is the Minister content to ignore those recommendations? As it stands, the illogical exclusion of international aviation from the carbon budgets could lead to the Bill being interpreted in a rather perverse way in the sense that carbon emissions could be reduced by encouraging people to fly as opposed to going by road or any other form of transport. As the Bill is currently drafted, a policy that would help to reach the budgets would be to close the Channel Tunnel, for example, and transfer passengers on to international flights where the emissions would not count. I am not suggesting that that will happen, but it is the issue in a nutshell. We live in an integrated transport world and if we want people to make proper decisions to reduce their carbon footprint at a personal level, international aviation must be included in the system.

The Government maintain that the international aspect makes it hard to establish how to include those emissions, but they are already reported. Indeed, the Bill includes a report of our contributions without including them in the budgets. Will the Minister explain that discrepancy?

I am grateful to the noble Lord. I intervene briefly, and say, first, that as I have not spoken on this Bill before—not in public anyway—I welcome it greatly. Some of us have argued for it over a period; it is profoundly important and very much a step in the right direction. Secondly, I declare an interest as the campaign director for Future Heathrow, which is a coalition of trade unions, business organisations, airlines and others associated with the airline industry, although I am not speaking about that particularly today. Like many others, we have given attention to the issue of climate change in aviation.

I congratulate the noble Lord, Lord Teverson, on the way in which he introduced the amendment, as he is basically on the right lines. He recognises the difficulty of including it straightaway in carbon trading. I was slightly surprised by the noble Lord, Lord Taylor, on the Conservative Front Bench. If I understood him properly, particularly if he forces the amendment to a Division, we will have to assume that any future Conservative Government would immediately include aviation and shipping in carbon trading, regardless of what else is done in Europe or the wider world. The implications of that are very serious.

I speak as someone who has been concerned about climate change for 20 or more years, when I wrote my first article about it. Those of us who are worried about it recognise that there are two dangers. One is the danger of doing absolutely nothing and carrying on as we have done for many years, and the other is going into panic mode and closing down industries or creating crises for major and growing industries because we have not thought through the consequences. Sometimes the figures given across the board, by people both for and against, can be misleading. That perhaps serves as a warning on this amendment and clause. Late last year, the Mayor’s office was issuing figures which showed aviation in London to be particularly bad, because it had counted the aviation emissions from the aircraft’s point of departure to its arrival in London, and counted that as a London emission. Yet the train emissions were counted only as far as the GLA border. That sort of thing ultimately undermines people’s confidence in statistics on these complex issues.

The noble Lord, Lord Teverson, was right that aviation and shipping must be included. Some people underestimate how fast industry is now moving on this. People underestimate across the board the willingness of people, both individually and as members of organisations, to make a major effort on climate change. I was impressed, as I am sure others were, when the cement industry suddenly stood up in class and said, “Hey, don’t forget we’re a bad boy, too!”. It announced it when none of us knew it. Similarly, the aviation industry and, now, the shipping industry—although I know less about that—are working hard to reduce their carbon emissions.

Yes, the answer is to get an international trading agreement which includes aviation and shipping, but we must first get it in Europe. You could argue a case for aviation and shipping being included for Britain and the rest of the world outside Europe, although it would not be that convincing. But if you try to exclude the European Union and just go ahead and do it, as the noble Lord, Lord Taylor, seemed to suggest, the implications for major industries in Britain would be severe. We must face that. It is a matter of getting the balance right. UK aviation is the second biggest aviation industry in the world, second only to the United States; it is cutting edge technology and we ought to be proud of what it is doing and its efforts to address climate change. Half a million people work in the aviation industry. They do not think that climate change is not happening. They are not people who do not care about their kids’ futures or their own futures. They are not people who do not care about the future of the planet. They do care, and noble Lords would be surprised how many of them are thinking hard about this issue. We ought to give them credit for that.

I do not support the amendment as it is, but the noble Lord, Lord Teverson, understands the problems here. I would certainly like to hear, and I am sure the Minister will want to tell us, how we engage with the European Union and elsewhere to try to get shipping and aviation counted. I suspect that it will be slightly easier within rather than outside the European Union. Having said that, it will not be easy in the European Union either. That is another of the great problems of our day. International organisations like the EU, and the wider ones, govern so much of our lives and yet our influence on them is slow to work. Any country, no matter how powerful, is slow to get agreement because they must do so with the slowest ship in the convoy.

Does my noble friend agree that UK or European legislation cannot address this issue by itself? Is it not essential, because of the international nature of shipping and aviation, that we try to get international agreement?

My noble friend, with his knowledge, has managed to sum up rather more rapidly than I some of the things I have been trying to say.

My last point is that the noble Lord, Lord Taylor, should be careful of these figures that say aviation will contribute half of our carbon output by 2050. Yes, if aviation does nothing about it, sits back and continues with things as they are, using existing aircraft, that will probably be true. However, no one pretends that that will happen. It is difficult to predict the pattern of development, but there is much more that we, and particularly Europe, can do. I do not want to digress because I would then go down other paths that are not directly relevant. But, for example, we are still operating dog-leg flights, instead of direct-line flights, all over Europe simply because there are so many air traffic control organisations operating within Europe. The same geographical area is covered by just four air traffic organisations in North America. There are about 50 in Europe and one can see that in continental flights, all of which dump more carbon into the atmosphere.

The answer to the problem is international. I very much want to hear the Minister describe how we are working on it, but it would be unrealistic merely to state in the Bill that we are going to make this provision regardless of what others do. I also want to sound a note of warning. The danger with climate change in the public perception is that the public either think that it is too big for them to do anything about and so give up; or, when the figures are contradictory and confusing, and unrealistic or unjustifiable claims are made, again they just give up.

When I saw adverts for the carbon-free train to Europe, I was very struck and thought, “Terrific, but don’t tell anybody that when you travel across France 80 per cent of the electricity for that train comes from nuclear power”. The green movement is not too enthusiastic about that. I do not have a problem with nuclear power—I think that we need it—but my point is that the figures we use and the way in which we use them are important. We must accept that climate change and carbon emissions are major problems and that we must do what we can as individuals and organisations, and as a country. However, as regards this clause, my noble friend on the Front Bench and the Government must work within the European Union and with international organisations.

Whether we can agree with the noble Lord, Lord Soley, that it would be unrealistic to pass these amendments to the Bill depends on one’s confidence on the timescale both at European and international levels. We would all accept that the ideal solution would be international agreement, but perhaps we should look at the fora within which such agreements are being discussed. We have had for some time, at the United Nations Framework Convention on Climate Change, and particularly at the conference in Bali in December, discussions on allocating international aviation emissions. My impression is that we are still some way from resolving that framework discussion until well after 2012.

Furthermore, the International Civil Aviation Organisation met in September 2007. It is seeking to produce international comprehensive measures to address aviation emissions. The Government, in their comment on this in response to the pre-legislative scrutiny, said that the discussions had not been as conclusive as they would have wished. In fact, they said that they had produced an outcome that was not as ambitious as they would have hoped. That leaves the European dimension, and we are pressing for the inclusion of aviation in the EU Emissions Trading Scheme as soon as possible—ideally within phase 2 in 2008-12.

If I had confidence that any three of these initiatives on the European and international scale were going to achieve reasonably quick results, perhaps I would be less supportive of these proposals. But until I hear evidence from the Minister that any of them have much prospect of success, I would be willing to support these rather brave—rather heroic, I admit—amendments.

There is an important issue on this. I do not like phrases such as “giving a lead”, “showing an example” or “sending a message” because they are slightly political clichés which are flavour of the month. However, if we set an example by including this provision, we can look firmly in the face those people we are telling not to chop down trees. It is difficult to say to people in poorer countries which do not have their own airlines, “Don’t chop down your trees, but we will go on flying to your beach on an easyJet holiday to sit and look at it”. Technology will solve these problems. We are going to be able to find technical methods of driving motor cars and producing power stations that will not produce carbon dioxide. We have to challenge the world to be as technologically brilliant as we know it can be. However, Ministers have accepted that we must use a bit of stick and carrot.

We cannot do other than keep this provision in. I agree with the noble Lords, Lord Teverson and Lord Soley. No one is saying anything very different—it is just a question of degree—but we ought to keep this in because it is at least a start. The next cliché concerns acorns and oaks, but the noble Lord knows what I mean.

It is an illusion to believe that accepting these amendments will solve the problem. It will not. Problems are difficult and complex. The noble Lord, Lord Taylor of Holbeach, to whom I always pay due regard, alleged that the Government are ignoring the effects of international aviation. That is far from true. Apart from by Ryanair and some companies outside Europe, this situation is being taken seriously. All airlines in this country have said that they have to address this problem and are doing so as best they can, but international legislation is needed to do anything serious about this. That is why the Government are rightly expressing the view that we have to do something positive in ICAO and the IMO about these issues. It is patently untrue that they are doing nothing. It is right that they do not act with enormous speed, but it is instructive to understand—I come to the contribution made by the noble Earl, Lord Selborne—that we are making some progress. Already Australia, which was implacably opposed to any advance, has come into line and there is reason to believe that China and India will also do so. We should not write them off as being implacably opposed to any advances.

Domestic aviation and shipping are already included in the permitted emissions. It follows that we are concerned with international activities. I do not think that any responsible Government of any hue could act outside those international aviation and shipping bodies initially. I am concerned that the Government have said that, despite the best efforts they are making, they will act to include aviation and shipping if no agreement is forthcoming. I ask my noble friend to embark on that in rather more detail, because I found it very difficult to comprehend that argument. What limit is being placed on it? Are we talking about 2012 or 2015? What are we saying?

I was concerned by the remarks of the noble Earl, Lord Onslow, in which he implied that curbing aviation would be some sort of example. I draw his attention and that of the Committee to the speech made by the high commissioner for Ghana a couple of months ago in which he commented on the nature of the debate emerging, where there would be curbing of air transport of products that contribute greatly to the development of his African country and a number of others. That is part of the general story. Aviation is part of the modern world; it is part of enabling many countries to participate in globalisation, increased growth in their economy and standards in health and so on.

We should also recall that aviation is and is likely to remain a small proportion of total emissions produced by the burning of fossil fuels. If we envisage, as I hope we do, a prosperous and clean future for our country and for all the countries of the world, it will probably be based on clean forms of power, especially nuclear power and renewables. If that is the case, in this prosperous and international future, carbon emissions may be associated with transportation. But if the only emissions are associated with transportation in a modern way and with the high growth of technology, we would easily be able to meet the 70 per cent cuts that we are looking for in emissions. We must keep in mind the total world picture that we envisage for the future, which was the subject of our debate yesterday. We do not want to go back to a world that is different; we want to move forward. Therefore, we should keep this point in mind as we consider aviation.

In my experience of meteorology, I have worked very closely with other countries on aviation and meteorology, and there have been good examples. I have just mild reservations with the noble Earl, Lord Selborne, with whom I normally agree on almost everything in environmental matters. There were some extremely interesting examples of the way in which international civil aviation, meteorologists and vulcanologists came together in the 1990s to introduce better warning systems that greatly improved the safety of aviation. ICAO is a responsible body which works with other international bodies. It will take some time. We are dealing with the long-standing 1944 Chicago Convention, and should work within that framework. Partly because meteorology is an essential part of aviation, meteorology and climatology work together, and environment, meteorology and climatology work together. This is a strong forum for that and we should have confidence in the Government’s use of it to help to promote their general objective.

I hesitate to join this discussion after so many contributions because virtually everything has been said and the logic is impeccable. I have one plea. We should not burden the Committee on Climate Change with this problem. We have heard enough now to be aware that the implications go far wider than its remit possibly could, although it will have a very powerful lever to use. As long as the matter of aviation in particular is excluded, the problems for the rest of the economy are commensurately greater. The real question behind this is whether technological change can see us through the rest of the issue. While one cannot be absolutely certain about anything looking this far ahead, it is almost certainly the case that it can.

However, there is a further problem which it is worth introducing at this stage. Many people are inclined to believe that we can do so much by economising in energy. Two years ago, our Economic Affairs Committee produced a report on energy efficiency in the British economy. It contained a very interesting graph, which has stuck in my memory. For anyone who chooses to look it up, it is on page 27. The graph related the economic performance of our economy to the energy cost of a unit of output. Over the previous 30 years, we enormously improved our energy efficiency per unit of output. That trend will continue. But some economists have come up with a rather embarrassing economic theory, which suggests that as we develop more efficient ways of using energy, so we also develop new ways of using energy. The graph had one line indicating economic output rising and another indicating units of energy per unit of economic output falling. The third line on the graph showed actual energy usage. It showed that as we became more energy efficient, we used more energy because we thought of new ways of using the energy that we had saved.

I throw that into the discussion not because it is particularly relevant to this item, although it seems to be the only place where I might get a change to raise it, but in order that we appreciate the depth of the technological change which is going to be required if we are to begin to have any hope of meeting the targets we are setting so blithely without thinking about the consequences, and the changes that will have to take place if we are to succeed.

I have a great deal of sympathy with the arguments which have been made by the supporters of this amendment, but on the whole I am inclined to leave the clause as it is, simply because it is a very complicated matter. We all agree that we have got to do something about aviation, but I certainly take the point made by the noble Lord, Lord Soley, that merely to extrapolate the present rate of growth and assume no technological advances is not a reasonable way of looking at the future. However, we have to do something.

It is worth bearing in mind that the Secretary of State would have to make water vapour a designated gas because a significant contribution made by aviation to the greenhouse effect comes from the water vapour associated with it. That is only because water vapour is emitted at high altitudes, whereas when it comes out of a car exhaust, it does not have that much effect. So there are complications. Indeed, given the complications—getting a major international agreement and incorporating it into international carbon trading arrangements—I wonder whether in the short term we could do something at the EU level. Although it may be untidy, I know that there have been discussions between our Government and the German Government in particular on the question of whether we should not preferentially tax aviation fuel within the European Union. We could do that without involving the significant number of international aviation bodies that I suspect would otherwise be involved. As I say, it would be untidy, but there are shorter-term ways of tackling the problem. I therefore suggest that we leave the clause as it is.

I rise because my name is added to the amendment. The issue is that, as many noble Lords have pointed out, this is the elephant in the room when we talk about the amount of CO₂ being emitted by aviation and shipping. We have only to look at a map of the shipping lanes in the English Channel to see that it is one of the busiest waterways in the world, while projected flight paths across British and European air space make us realise the amount of carbon being emitted. The noble Lord, Lord Oxburgh, has made the salient point that this is such a complicated issue that we should leave it out of the Bill. However, the purpose of including it is to address a major point that has been raised, that of the flag of convenience. If we do not register the emissions, which Government will do so? We will find that certain airlines start registering their business in Panama just because it is easier to register emissions in areas which have low emission rates at present, thereby reducing their potential tax burden.

The purpose of these amendments is clear. The Government could answer the point that while this part of the Bill covers “carbon targeting and budgeting”, if we leave out this massive quantity of carbon being emitted in European airspace, is there a point to the Bill at all? We would be leaving out a major aspect of carbon dioxide emissions, and that is a fundamental weakness. I understand why the Government have taken the position they have and I believe that the noble Lord, Lord Rooker, will reject the amendment. However, I hope very much that even if the Government disagree with this proposal, they will provide that these emissions should at least be recorded in this country if they are emitted in the English Channel or in British air space.

We should not forget the implications for us of these emissions. The noble Lord, Lord Crickhowell, discussed the issue of bunker fuel emissions from shipping. Bunker fuel is the dirtiest substance imaginable and the cause of most of the acid rain that falls in this country. Those emissions come from international shipping. We should not underestimate the effect on our environment that this enormous level of transportation is having.

The point that the noble Lord has just made about the busiest shipping lanes in the world brings out the difficulty with which we are confronted. The question is: how much of that shipping has anything to do with this country? A great deal of it is pouring goods into the continental ports, and it is exactly that kind of problem of definition with which we are confronted in the Bill.

I owe my noble friend on the Front Bench an apology for rising before he did when he has put his name to the amendment. I heard him press the case but, much as I should like to see a reference to aviation emissions in the Bill, I did not hear him explain how they will be defined and measured and therefore placed in budgets and targets. That is precisely why I suggested that there was a role for the Committee on Climate Change, which would be able to form judgments about the practicality of moving forward in this area. Simply passing these amendments would achieve very little because that would not produce a practical solution to the question of how to define the emissions and ensure that they are emissions and carbon contributions which relate to this country and for which we should be responsible. It would not provide an answer to how we avoid getting landed with burdens that should fall on other countries.

Friends of the Earth produced the rather interesting example of Switzerland—a landlocked country, which receives goods that pass in ships and aircraft through our waters and airspace. How are we to deal with exactly that kind of international sharing problem? It is no good saying, “Well, we’ll include them”. We are entitled to demand—and I think the Joint Committee demanded this—a system for reporting the measurable factors in the aviation field that can arise, even if at this stage we cannot include them in the budgets and targets. We should find a way of reporting the scale of the emissions so that, when we can move forward to agreed international ways of acting, we can move quickly to bring them into a practical solution.

Therefore, my anxiety about my noble friend’s position is that he finishes up with a clause which demands something that is almost impossible to produce. I do not know who would say, “These are the factors that can go into the budgets and truly represent what the British should be contributing”. That is why I think we need a system for looking at this matter and why we should press the Government and the Committee on Climate Change to address these issues urgently, even if we cannot find an immediate solution.

Has anyone made an effort to produce a scheme, or the skeleton of a scheme, which could be worked on? Is anything happening at all?

Only in the sense that the Europeans have produced a scheme which deals with one particular aspect, but that is only a partial solution. Therefore, the answer to my noble friend is probably that there is no practical scheme or solution at present, and that is our difficulty. I hope that we can continue to press the Government for urgent action, and I wish that I could see a way of including what we want in one nice comprehensive and quick process, but I fear that I cannot.

What has characterised the discussion so far is that everyone in this Chamber seems to agree that aviation emissions are an issue and that they need to be addressed. That is a common point. The question is: how should they be addressed? If I have one disagreement with the noble Lords from the two Front Benches who have put their names to the amendment, it is that the tone of their introduction implies that, because those emissions are not included in the Bill, the UK or the Government do not care about them and nothing will be done unless they are included in the Bill. We know that is not the case. For some time now this has been the subject of intensive negotiations in Europe. The Minister will no doubt tell us in more detail when he replies. On 20 December the European Council reached an agreement—the draft is now toing and froing and is to be dealt with by the European Parliament—to introduce a European scheme in 2012. I ask the movers of the amendment: what on earth is the point of seeking to put something in the Bill and asking the Committee on Climate Change and the Government to start doing something when a scheme is going to be introduced in 2012 for the whole of the European Union? If each of the 27 member states were of the same mind and passed legislation this year—all with different schemes, all applying to different airlines—it would be chaos.

As members of a legislative Chamber of this Parliament, we owe it to people to tell them that this is best tackled at a European level. The issue is being tackled, it is being addressed, and robust and workable proposals have been agreed by the Council of Ministers. As I said, I am sure the Minister will speak to that. So it is not the case that the Government are sitting on their hands and that nothing will happen: the European scheme will start in 2012.

It makes no sense to try to put something into the Bill in this form. If it was in the Bill—whatever the figures were—targets would have to be included in the first three budgets; by law, the climate change committee or commission, depending on what it is called, would have to include them. What is it going to include? Which flights? The noble Lord who introduced the amendment said that you would not include all departures and all arrivals. Why not? That is the proposal in the European scheme. His noble friend referred to overflights, many of which do not land here but simply overfly United Kingdom airspace. This is not the way to make legislation.

My first point is that things are being done. It is not reasonable to convey and portray to the people who watch these debates and read about them in the press and Hansard that nothing is being done about this. To say that if it is not in this UK Bill it means that aviation is not being tackled is simply not true.

The noble Lord, Lord Woolmer, has repeated that charge two or three times but it is not the case. I specifically mentioned, as he has, quite rightly, the EU ETS agreement and the European Council, of which the UK Government are a part. I clearly understand the message and I intervene only because the noble Lord has mentioned it about three times. I am not saying that the Government are complacent or that they are not taking the matter seriously. In fact, it is already on the face of the Bill. All we are saying is let us get on with it now because it is so important.

I had in mind the noble Lord, Lord Taylor. A careful reading of Hansard tomorrow will certainly show the vigour with which he expressed his views on this point.

The whole issue of what flights to include is a real one. In due course, shipping will present the same problem in spades, if not an even more difficult problem. I am addressing why the amendment is not logical or workable. When the European scheme is introduced, and if it takes the form that is being proposed—that is, to include all arriving and departing flights—it is possible, if not likely, that it will be challenged by America, China and India at the very least. They are very powerful countries, which will object to the scheme covering departing and arriving flights. It is rather like being taxed on imports and exports, because one is effectively importing and exporting services. If this country tried unilaterally during the first three or four years to impose something, without the security of it being done by the whole European Union, which is a much stronger negotiating force with America, China and India—

The noble Lord is talking about taxation and trading. This section of the Bill refers to measurement. We are more interested in measuring the outputs than in taxation. The amendment does not suggest anything that has to do with taxation.

Amendment No. 115 states, “leave out ‘do not’”. I was drawing an analogy with other goods and services. By introducing restrictions and allowances for departing and arriving flights, we would be taking a decision that related to citizens and airlines of other countries coming here, as well as to airlines departing this country. We know that European proposals are the subject of vigorous discussion with the United States, China and India, which is another reason why the Government’s proposed way forward, through the European scheme, is much more sensible and will bear early results.

Should the climate change committee include aviation emissions in targets, which I think we all agree would be the consequence of the amendment, if it is not possible for the Government unilaterally to do something about them? If something is included in a target, the Bill requires the Government to produce policies to address it. What policies do the movers of the amendments believe that the Government and climate change committee can between them put together in the next four years to do something about it before the European scheme is introduced? One should not through these amendments include aviation emissions in targets at this stage—when the European scheme comes in, it will be a different issue—if it is not possible to do something about it.

There is widespread agreement, both outside and inside Parliament, that aviation and shipping emissions are important and have to be addressed. We are discussing in these amendments whether the Bill should be changed so that those emissions are included now, which means in the first three- or four-year budget periods, by the climate change committee, with the Government having to produce policies within a few months to address it. They are not good amendments.

The Government’s proposed alternative in the Bill is to wait until a European scheme is introduced. Some two or three years ago, Sub-Committee B of the European Union Committee, whose chair I had the honour of occupying before my noble friend Lord Mitchell took it over, looked at the emissions trading scheme and aviation. It was the view then of members of the committee that we should join in. Since then, the Government have taken the lead among member states in advocating pushing forward those changes. I hope that the amendments are not supported. If they are withdrawn, I hope that it is done in a way that indicates confidence that the European ETS is the way forward.

We have had an excellent debate in just over an hour on a crucial issue. Some of the speeches made the point about the practicalities, which were not mentioned by those who tabled the amendments. I almost apologise for coming forward with some of those practicalities; however, this is not an intellectual argument but one in which we decide how we measure and get agreement. I shall do my best to respond to many of the points.

It was made clear early in the debate that everybody understands that emissions from domestic aviation and shipping are already included in the Bill and that it is only international aviation and shipping that we are talking about. At the moment, there is no international agreement on how to allocate these emissions to individual countries, which is why they are excluded from the UK’s targets under the Kyoto protocol and the Bill.

I have some general points that are very important for the context of the debate—because, obviously, we will return to this matter. First, the Government believe that unchecked growth in aviation and shipping and in emissions from these sectors is unacceptable. We are working to ensure that those sectors meet the full cost of their climate change emissions and that they play their role in achieving climate stabilisation. However, as virtually every speaker has said, the issues are complex. These are by definition international industries governed by international rules, which require global solutions. For example, when a plane flies in from Sydney to London and refuels at Dubai, how do we allocate the emissions?

We are working at international level; it is not as if we are waiting for things to happen. We are working through the United Nations framework, the International Civil Aviation Organisation and the International Maritime Organisation to achieve agreement on the best way forward. However, we recognise that we cannot wait indefinitely for this, so we have tried to lead the debate in Europe on including aviation in the European Union emissions trading scheme. Noble Lords will be aware that EU environmental Ministers reached agreement on that just before Christmas; the deal agreed at the Environment Council is a step forward and will place a fixed cap on total aviation emissions. Those emissions over the cap, set at the average of the 2004-06 levels, will be covered in one of two ways—either through reducing emissions in the sector or through the purchase of reductions that can be produced more cheaply and easily by other sectors. The deal that was agreed will now go to the European Parliament and we are hopeful that there will be a final agreement before the end of this year.

The inclusion of aviation in the European Union emissions trading scheme was supported by all 27 member states. That will come into effect in 2012 and will apply to all flights between EU countries as well as those taking off from or landing in an EU member state. This is a considerable prize and a move forward, but we need to be careful that whatever we do at UK level through this Bill does not undermine the agreement that we have in Europe, which is certainly one of movement.

The question of international shipping is even more complex, as the Joint Committee recognised in its report on the draft Bill. Shipping companies can and do easily reregister vessels between countries, or buy fuel at alternative locations, including from tankers moored in international waters. Although I do not have the figures—I can provide them later on—I can illustrate the difficulties by the fact that the amount of shipping fuel sold in the United Kingdom has remained broadly the same since 1990, but we know that shipping levels in and out of the UK have increased significantly over that period. Therefore, on what basis should the UK's share of international shipping emissions be calculated and what policy levers could be used to reduce those emissions, which would not simply displace the problem somewhere else?

During the debate, I was asked about recording emissions from planes in UK airspace and ships in UK waters that may or may not land here. In response to the Joint Committee report, we have committed to report on UK emissions from international aviation and shipping. That is precisely why Clause 12 (5) is in the Bill. We did not debate that last night because everyone was thinking that as we were going to have the debate today anyway, it did not make sense, but that is why that clause is in the Bill. We can keep the commitment to the Joint Committee to report on UK emissions from international aviation and shipping.

The figures will be based on fuel sold within the UK, which is in line with international guidance from the IPCC, and we would not report on emissions from UK waters or UK airspace. Even that method has practical difficulties, which I will come on to.

One further point that is worth raising, which I dug deep out of the Q&A, is that there is no agreed international methodology for attributing international shipping emissions to individual countries. I have four examples. Allocation based on fuel registration or fuel sales may not be robust because shipping companies can easily reregister or buy fuel at alternative locations, as I mentioned. Allocation based on fuel consumption requires detailed commercial information on vessel efficiency, which is not available. Allocation incorporating the location of vessel activity certainly adds to the complexity and cost. Allocation based on the destination or origin of the vessel's cargo raises further issues of complexity, for example, for container ships with multiple destinations and the cost of data collection, not to mention the practicalities of how you collect data. You cannot do that on your own: there has to be international agreement.

Forecasting future shipping emissions is hampered by data constraints because, typically, we forecast the future using models from the past. Historic data needed, for example, on fuel consumption by UK vessels are not available. In addition, historic trade statistics provide some insight useful for modelling historic shipping emissions, but since 1992, they are no longer collected within the European Union. There is a range of practical problems regarding shipping, so it is hardly surprising that there is no agreed international methodology on this issue.

The Joint Committee itself said that:

“We recognise that both the methodology required to allocate international shipping emissions to individual countries, and the policy mechanisms which individual governments could use to constrain emissions from this sector, may need further thought”.

You can say that again. Certainly, that will be the case.

We also need to make sure that decisions on whether to include these emissions are based on the best possible analysis of the economic and environmental impacts. The Government's view is that the best way to do this is to get independent advice from the Committee on Climate Change. That will ensure that we are ready to take a decision quickly when the time is right. That is why we will ask the Committee on Climate Change to look at the implications of including international aviation and shipping emissions in the UK's targets as part of its overall review of the UK's 2050 target. We have already said that that will be the committee's first task, alongside its advice on budgets, so we will have that analysis quickly.

I now speak way outside the brief, because I have no negotiating role. We are asking the climate change committee to do several things: to look at the 60/80 target and to look at this matter. I got the message from previous debates, as did the rest of the Government, that noble Lords are not comfortable with the 60 per cent figure in the Bill. However, I plead with noble Lords, even on Report, not to include in the Bill any measure on international aviation and shipping but to leave that matter to the Committee on Climate Change. Noble Lords may want to include other things in the Bill but such a measure would cause us the most damage internationally. As regards changing the figure, clearly there is international consensus on other figures. I am not inviting noble Lords to defeat the Government. I have been told, “Don’t let them include aviation and shipping in the Bill”. But to be able to make a case for that, one has to show willingness elsewhere. We need to be practical and not include such a measure, because of the agreements that we have secured in Europe which are due to go through the European Parliament. We do not want to upset that because all 27 countries have signed up to them, but noble Lords can decide other matters.

Having listened to this debate, I believe that there is consensus on this issue because nobody putting forward the case for the amendment explained how it would work in practice. This is not a case of a noble Lord saying, “I’m changing the Bill. You’re the Government; you go off and make it work”. In this case, we cannot do that. We need global agreement to overcome some of these practical difficulties. However, I hope I have also made the point that we are not standing idly by. The UK Government are actively involved in pursuing this. As I said in my opening remarks, unchecked growth in aviation and shipping emissions is unacceptable. When the EU Emissions Trading Scheme’s rules on aviation have been finalised, we will ask the Committee on Climate Change for its advice on a methodology. We need to know whether there is a methodology for including international aviation emissions that is workable, compatible with the EU Emissions Trading Scheme and takes account of progress in the United Nations framework and the wider international context. We shall need to know the impacts of adopting such a methodology. That is the point that we shall need to put to the Committee on Climate Change, which is dealt with in the next part of the Bill. The committee has been behind the rationale of every clause, but we have not yet reached the part of the Bill where it is set up. That is why I cannot accept these amendments. I and my Defra colleagues shall be more than happy to facilitate meetings between noble Lords and Department for Transport Ministers before Report, if there is a desire to nail Transport Ministers.

Can I draw from that that, deep in the bowels of the ministry of transport, somebody is devilling away at trying to produce a scheme which everybody acknowledges is fiendishly complicated? Please do not think that those of us who instinctively prefer to have the measure in the Bill underestimate the complications, which are obviously vast.

This runs across more than one department. As I say, the Government are already involved in international negotiations on this matter in Europe. That is absolutely crucial. The climate change committee’s secretariat is already in being. We need the climate change committee to be established as soon as possible. Its members will have expertise. We want to put this matter before them. However, it is not as though we start with a blank sheet of paper. We have already started discussions with the International Civil Aviation Authority and the International Maritime Organisation on how we can tackle this. We have an objective to tackle international aviation and shipping emissions, but it must be a practical measure that is adopted globally. We are not waiting for a solution to turn up. As I say, we are already involved in discussions on this. I cannot say how many people are working on this, but work is already under way.

What we are trying to do, once we have the Committee on Climate Change set up, is have a body that is trusted by Parliament and by the public to look at the methodology and take account of what was agreed in the European context, so that we do not disturb what has been agreed by the 27 countries of the EU Emissions Trading Scheme. That is the basis on which we cannot accept the amendments, but I hope that I have made that case in a wholly positive spirit.

I thank the Minister for the fullness of his response. I have two questions. At the end of his speech, he mentioned that the committee would have as its priority the seeking of advice on methodology. What happens if it comes up with no methodology; in other words, if it cannot find a solution? Where would that leave us on the Bill? He also said that data were not available on the way that international emissions work. Presumably, those data would need to be found before the committee could attempt to give advice on methodology. I am slightly perplexed. I think all of us wish to have international aviation included, accepting that it will, we hope, be agreed at European level. I am worried that we are nearly not tackling the issue at this stage because it is insoluble. Can the Minister come back on that?

Not really, because on the first point we ought to leave it to the committee anyway. Let us not assume that it will not be able to do anything. We are putting a lot of trust in the committee, and we ought to leave it to give the Government and Parliament advice on methodology. We should start off on the basis of leaving it to come up with a methodology.

What I said about data was in the context of giving examples of there being no agreed international methodology on attributing international shipping emissions. I gave four examples of why it might be difficult. I also went on to talk about the forecasting of future emissions being hampered by data constraints, because there are missing historic data on shipping emissions. Since 1992, those data are no longer collected in the European Union. Trade statistics do not necessarily collect information on the mode used or the route taken which would help maritime modelling. There are some gaps there in the data. I have just given an example that means that sometimes the data are lacking for what we want now as opposed to what we were collecting in the past.

I have not intervened in the Committee before, but I have been listening to the Minister and I reinforce what he said in respect of shipping. Shipping is not unaware of its obligations in respect of emissions and a lot of work is going on in all sorts of different areas to try to reduce emissions at sea. A committee of the International Maritime Organisation is looking at the matter urgently and is expected to report some time later this year.

The problem is that shipping is a very complex operation and there is no one size that fits all in terms of reducing emissions. There are a lot of proposals on the table, such as reducing the sulphur content in fuel or burning distillate fuel, which puts more pressure on the oil refineries. Another alternative that has been taken up on the west coast of America in California is cold ironing, which is using shore power when a ship is in port. That still requires power to be generated somewhere else. It is a very complex situation, and I take comfort from what the Minister has said.

I am extremely grateful to the noble Lord, Lord Greenway, for bringing in a practical voice, so it is not just me as a hack politician reading out some of the difficulties. We are hearing the practical realities of the industry.

I thank the Minister for his response. If the amendments have served no other purpose, they have at least provoked the Committee into a good and thorough debate on a central and important issue. We have to have a very good reason for not including aviation and shipping in this part of the Bill. Let us hope that the Minister’s advocacy of what the Government are doing is transmitted into action so that it reinforces our decision not to pursue the amendments. The debate has been excellent, and we have heard some really good and invigorating speeches drawing attention to the importance of the issue.

This has been an excellent, and long, debate. The best comment was that of the noble Lord, Lord Crickhowell, who charged me with talking about the problem but not coming up with a solution. I thought, “That is the best description of the Climate Change Bill as a whole; it describes the problem but does not come up with the solutions”. We all accept that because that is around policies that flow from the obligation to get to percentage changes.

I say to the noble Lord, Lord Crickhowell, and to the Minister, that we have to be a little careful about getting too tied up with the fact that no one here has come up with a formula. We could all do that, and I expect that many of us here could come up with quite a reasonable formula. Even the Committee on Climate Change, if it pontificates for five years, or the international organisations, will come up with solutions none of which will be perfect and none of which will perfectly describe the equitable distribution of the emissions between nation states; because there is not a perfect solution or formula. What concerns me and many noble Lords is that if we attempt for too long to find a perfect formula we will get nowhere.

There is also confusion, which we had earlier in debates on the Bill, about emissions trading systems and actually doing the accounts and the budgeting on emissions. They are importantly related things, but they are not the same. I welcome entirely that the EU ETS will take account of international aviation emissions in 2012, subject to all sorts of threats of litigation from the United States. That is a trading scheme. I take the Minister’s point that it would always be better if how we measure those allocations for that purpose was the same as how we measured it for the purposes of this Bill and accounting, but the amendment is about accounting and budgeting; it is not about trading. The two are separate. I would love the definitions to be the same, and I think that is a serious question.

With respect, that is a little too woolly. If you do the counting and find a way of doing it, you try to avoid trading.

Perhaps I am misunderstanding the noble Lord, but we already have all sorts of targets in other areas, around which there is no trading. Trading is a separate activity. You do not have to have trading and targets. You have to have measurement to have trading, but you do not have to have trading with measurement.

Coming back to the comments made by the noble Lord, Lord Soley, on the aviation industry, I am certainly not in any way—he did not accuse me of this—a headbanger against the aviation industry. I see it as an important industry now and for the future. One of the experiences that I have had was in the south-west at a major regional airport. Its investment plans took into consideration all aspects of legislation. I asked those people whether they had taken the Climate Change Bill into consideration and they said no. That was a multinational organisation. There is still the requirement or need for top management to understand that this will be a pressure in the future. At the moment I do not see that evidence in some practical investment decisions.

I have not often seen the Minister quite so passionate about a plea as he was in this matter. We feel very strongly about this area, which I am sure he understands. From these Benches I would welcome between now and Report an opportunity to talk through with his department those practical areas so we can ensure that we are not involved in political rhetoric here but are trying to solve a common problem. On that basis—I stress that we see this as a core issue—I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 116 not moved.]

moved Amendment No. 117:

These Benches also identify with this amendment. I hope that the Minister, in keeping with his response to the previous debate, can accept it. Discussions on the introduction of changes that involve aviation or shipping should be subject to debate in a proper and full way. That would be very much in keeping with what the Minister was trying to impress on us—that he felt that government decisions would be in accordance with the spirit of the debate on the previous amendment.

I need not take long. I recognise the arguments and, in fact, agree with them. I am in no position to accept the amendment because this is the Committee stage. We need to look back and I am happy to take this away and come back with something positive at Report stage. I could not be clearer than that.

I thank the Minister for a late Christmas present. We on these Benches rarely receive such a response. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 118 not moved.]

moved Amendment No. 119:

On this related matter I have come armed with an incredibly long speech, much of which was covered by what I have already said. We cannot accept the amendments as they stand. What I would say goes with the grain of what we have said about the committee and the way we want it to work. As we have said throughout the consideration of the Bill, we do not want the committee to be executive. Amendment No. 120 would, in effect, give the committee a veto. We could not accept that. However, I am prepared to take the matter away and consider what role the committee might have as regards the thrust of the amendment.

I do not wish to be repetitive in terms of what Britain is doing internationally and we want the committee to take account of what we are doing internationally as well. While we do not think that the committee should be executive or that it should have a veto, on the other hand there is a case for reconsidering whether the committee might have a wider role than that provided for in the Bill. On that basis, I am happy to take the matter away. Otherwise, I am going to go over a lot of detail of what I have just said and that would be superfluous. I am not trying to cut short the debate. The caveat is that we certainly would not agree to the committee having a veto, but we certainly are prepared to look at the circumstances in which we can consider a better role for the committee in this context.

Perhaps I can comment on that. It seems to me quite important, when considering the role of the committee, that the Government should look at the different kinds of advice that it can give. I was taken aback earlier when the noble Lord, Lord Taylor, withdrew his amendment. It seems to me that on a strictly technical matter—such as what is a greenhouse gas—the committee should give very clear advice which the Government should follow. On matters where policy is concerned, it is important that the committee simply gives advice and that the Government put in their political considerations. It is important that there is not one rule which fits all the sorts of advice that the committee can give. On some sorts of advice it really should have the dominant role but on others it should play a subordinate role.

I note what the Minister has said on this. When he talks of the committee not having an executive role, I think he understands the nub of the difference on this issue. In much of our thinking, we see the Committee on Climate Change as being the driver of government across the departments. That has been a point of difference in many of the debates that we have had. Perhaps I may take him back to the discussions that we had on the previous sets of amendments which I felt summarised very well the necessary practical approach that the Government had to bring to the inclusion of aviation and shipping. At that stage, he made a key point: that he felt he needed to use the Committee on Climate Change to provide the information and the determination of these matters to guide the Secretary of State in what to do. In his response he recognised that, in many ways, the Government need to bring into the decision-making process another party, which is what these amendments seek to do. I do not know whether the Minister has any comment to make on what I have just said.

I know the precise point I made on the previous debate, on the point to which the noble Lord has just referred, because the paragraph in front of me was in bold. If officials want me to use certain words they print them in bold, and years ago I made a pledge that anything in bold I would repeat word for word—for the rest, I do not make it up as I go along, but I do not simply read out the essays, well drafted though they are. That is serious because that was the issue of trying to find a methodology to advise the Government.

At the end of the day, we believe that the elected Government should be responsible for taking the decisions. That is why the role of the Committee on Climate Change is crucial. Because of the expertise, the stature, public confidence and the acceptability of the committee that will be put together, we would get to a point where advice is given and one would have to be very unwise not to accept it. I cannot say that that will always be the case, but that can become de facto over a period of time. It is the same in this case, not as regards an executive role but as regards the stature of the committee. That is why it is crucial that we get its role, functions and membership right. We would not want the committee to have a veto, but, on the other hand, we would like to take this matter away and, between now and Report, have a look at it and come back with something that is a little better than we have now.

With that assurance from the Minister, I am happy to withdraw the amendment. I thank him very much for the opportunity to discuss aviation and shipping between now and Report.

Amendment, by leave, withdrawn.

[Amendment No. 120 not moved.]

Clause 25 agreed to.

I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

My Lords, I beg to move that this Bill be now read a second time.

This substantial piece of legislation before us today will, if enacted, provide the necessary powers for the construction, maintenance and operation of Crossrail, a new east-west railway linking Maidenhead and Heathrow with Shenfield and Abbey Wood through new tunnels under central London.

Crossrail will provide a new fleet of trains, operating a peak service in both directions through central London of 24 trains an hour, carrying an estimated 200 million passengers a year. Crossrail has a strong transport economic case and, in addition, we estimate that it will generate cash benefits to United Kingdom GDP of at least £20 billion. Others have suggested that these benefits to the national economy could be substantially higher. As such, Crossrail is a project of national significance as it will benefit not only London but the country as a whole. Crossrail will facilitate the continued sustainable development of London’s primary finance and business service activities located in both the City and Docklands, including employment growth of up to 30,000 jobs by 2026. Again, as Sir Rod Eddington made clear, supporting London’s economy should be a national priority, fuelling economic growth across the UK.

Crossrail will significantly increase the capacity of the rail network into and across London, thereby relieving congestion and overcrowding on the existing national rail and Underground networks while, at the same time, supporting economic development and regeneration. Crossrail is expected to attract some 80,000 additional jobs to regeneration areas.

The Crossrail route and the stations it will serve were carefully chosen through a rigorous optioneering process. I will describe the key elements of the project in a little more detail. As the House knows, Crossrail involves construction of new heavy rail tunnels under central London. From Maidenhead, Crossrail services will use the Great Western line before entering the new tunnel just outside Paddington, where a new station is to be built under Eastbourne Terrace. After that, trains will serve large new stations interchanging with the London Underground at Bond Street, Tottenham Court Road, Farringdon and Whitechapel, where there will also be a connection with the Mayor's London Overground. At Farringdon, Crossrail will intersect and connect with the north-south Thameslink route. There will be a new Crossrail station at Liverpool Street which will provide interchange with the Underground and national rail network.

To the east of Whitechapel the railway splits. One limb of the tunnel emerges near Pudding Mill Lane near Stratford and joins the Great Eastern line. From that point, Crossrail trains will serve existing stations as far as Shenfield in Essex. The other limb heads south-east, passing through a major new station to be built in the North Dock at the Isle of Dogs before continuing via Custom House and then through a new tunnel under the Thames. The route passes through a new station at Woolwich before terminating at Abbey Wood in south-east London. From there, passengers will cross the platform to connect with North Kent services.

As well as the new tunnels, Crossrail will require very substantial investment in track and stations on the national rail network to the east and west of London. For example, the junction with the Heathrow airport rail spur will be completely remodelled and a new layout will provide grade-separated access to Acton depot.

With permission, perhaps I can spend a short time explaining why this Bill is hybrid and how the process adopted for the Bill will differ from those for public Bills. The hybrid Bill process is used for projects that are of such exceptional scale or nature that they require the Government to assume the role of promoter. Hybrid Bills have been promoted periodically for rail and other major projects and the ability to use a hybrid Bill was retained when the private Bill system for railway works was replaced by the order-making process under the Transport and Works Act—TWA. Hybrid Bills work—the Channel Tunnel rail link and the Channel Tunnel projects attest to this—but their use is rare, mainly because of their consumption of the scarce resource of parliamentary time. Indeed, next month the Crossrail Bill celebrates its third anniversary.

On this occasion a hybrid Bill is more suitable than the TWA process because the Government themselves are behind a scheme of national importance. The parliamentary process also enables detailed scrutiny of those modifications to be made to primary legislation that are desirable to ensure that a project of this scale and complexity can be completed satisfactorily.

I shall explain briefly how the Government intend to take forward the Crossrail project if the Bill is enacted. Last October, my right honourable friend the Prime Minister announced that a funding package for Crossrail had been identified—something that had eluded successive Governments. This is an enormous project, which we expect to cost about £16 billion in cash prices—that is prices projected forward to the years in which the expenditure takes place. A huge amount of work has been done to arrive at that cost estimate and it has been independently verified. We believe that the estimate is robust. Much remains to be done to deliver the funding, but we are confident that the package announced is workable and can make Crossrail a reality.

The way in which the project will be funded and managed is set out in a heads of terms document agreed between my right honourable friend the Secretary of State and the Mayor of London’s transport authority, Transport for London. As part of our commitment to openness about the project, the heads of terms were published on 26 November 2007, and copies are available in the Libraries of both Houses. The Department for Transport and the mayor are joint sponsors of Crossrail. Since the end of 2004, DfT and TfL have been 50:50 joint owners of Cross London Rail Links Ltd—CLRL—the company that has developed the current project. The key issue for both sponsors has been to make sure that there is strong discipline on how the project is delivered. That has underpinned our approach to the governance of the project. The current proposal, as set out in the heads of terms, is that DfT and TfL will form a sponsor’s board to supervise the project. DfT and TfL will execute a series of formal agreements that will specify how the project will be taken forward.

CLRL will continue as the project delivery vehicle and will become a wholly owned subsidiary of TfL, but with the level of independence it needs to focus solely on delivery of the Crossrail project for its joint clients—TfL and DfT. CLRL will have a board dominated by independent non-executive directors chosen for their skills in delivering projects of this size and will be free to appoint a world-class team at market rates. Crossrail is a massive public undertaking and the Government take very seriously the need for strong stewardship. Our aim is to see new cross-London rail services running on time and on budget. Everything we are doing to establish the governance and structure of the project is intended to ensure that that aim is met.

Should the Bill be enacted, a single programme of construction beginning in 2010 will see the first Crossrail services coming into operation in 2017. We expect the full Crossrail service, including those services on the south-east section of the route to Abbey Wood, to be introduced on a phased basis over about 12 months, starting in 2017. The start and subsequent build-up of services will be phased in this way to allow time for rolling stock and railway systems’ testing and to ensure reliable performance. As we move closer to contracts being let, we will keep the precise timetable for delivery of the project and its different elements under careful review.

It is clear that Crossrail will not be completed until after London hosts the Olympics in 2012, and it never formed part of the Olympic bid. Crossrail works will not affect the ability of London to host a successful and smooth-running Olympics. We are confident that both projects can be delivered successfully through sensible planning and co-operation.

I began this speech by talking about the many benefits that Crossrail will bring. However, it cannot be denied that the project will also have some adverse impacts. It is after all not possible to build a large public transport infrastructure project in a densely populated area, such as the very centre of London, without it impacting on those living and working on or near the intended route. These impacts will include noise disturbance and adverse consequences for townscape, landscape, visual amenity and heritage sites. The Government do not take these environmental impacts lightly and have put in place a complex package of controls, mitigation and compensation measures to reduce and alleviate them.

For example, various provisions in the Bill require detailed consents and approvals to be obtained from relevant statutory bodies, such as local planning and highway authorities. Another important control is provided by the environmental minimum requirements, which will place a number of obligations on the nominated undertaker—the person or persons who will in due course be nominated to construct the project—and which will include a range of undertakings and assurances addressing environmental concerns.

When the Bill was first introduced in the other place in February 2005, a lengthy environmental statement was produced to describe the likely significant environmental impacts of the Crossrail project. Since then, further statements have been produced in light of changes made to the project or where additional information became available after the production of the original statement. The Government invited comments on each statement and by August last year more than 400 responses had been submitted. These responses have been published in two Command Papers—one in July 2005 and one in November last year.

In addition, the Select Committee process, which is of course unique to a hybrid Bill, provides a forum in which those with private interests specifically affected by the proposals can have their concerns heard. A number of changes to the project were made during the Select Committee process in the other place that are aimed at reducing the environmental impacts, including certain locally significant changes to the route made for the protection of petitioners. I am sure that those victims—or rather volunteers—who are to serve on the committee will not need reminding that the Select Committee in the other place sat for 21 months and heard some 200 petitions. The Bill is a better piece of legislation as a result of that committee’s careful and detailed scrutiny.

Prospective members of the Select Committee can take comfort that the promoter and petitioner are incentivised to work together to try to resolve a concern so that the issue does not have to be heard by the committee at all. Over half of the petitioners in the other place did not appear before the committee, and of the 200 or so who did, the vast majority did so on a considerably reduced number of issues. A good example of this co-operative approach was the change to the tunnelling strategy.

Crossrail requires the construction of 21 kilometres of twin bore running tunnels under central London. The original Crossrail tunnelling strategy required 16 tunnel drives from five different work sites. This included the use of an intermediate tunnel-boring machine launch site at Hanbury Street in the Spitalfields area of London. It is fair to say that this proved extremely contentious. A major review of the construction programme in 2005, as well as a desire to address the concerns expressed about the environmental impact of using the Hanbury Street site in this way, led CLRL in 2006 to develop a revised tunnelling strategy that reduced the number of tunnel drives to 10, focused tunnelling activity at three work sites and, crucially, avoided the need to launch tunnel boring machines from the Hanbury Street site, thus reducing the impact on that area. The Select Committee welcomed the revised tunnelling strategy. That acts as a good example of what can come from the Select Committee approach.

There are other examples of how the project has changed as a result of the parliamentary process. As those who have followed this project over the past three years will know, the Crossrail Bill, as deposited in 2005, sought powers for the construction of a rolling stock maintenance depot and associated stabling sidings on a site south of the Great Eastern line at Romford. Concerns were expressed by the London Borough of Havering, local residents and others about the impacts of the proposed depot. As a result, the promoter spent many months in the first half of 2006 looking into whether there was a viable alternative depot strategy that would remove the need for facilities at Romford. Having considered the revised depot strategy which proposed the relocation of the main Crossrail depot from Romford to Old Oak Common, the committee agreed that the proposed depot should be relocated.

As noble Lords will know, Liverpool Street station is one of the capital’s major railway stations as well as being an extremely busy London Underground station; 123 million travellers use it each year. The Select Committee heard from petitioners who expressed concern that the proposed ticket hall arrangements would result in congestion. The committee considered a great deal of evidence on this issue and were sympathetic to the argument for enhancing ticket hall facilities. As a result, the committee asked the promoter to find a way that was acceptable to all sides. Eventually, a solution was agreed for an additional ticket hall together with enhancements to the existing facilities, which included an extended gate line. The necessary amendments to the Bill were promoted, and it is accepted that the additional enhancement will ensure that Liverpool Street station is able to remain an efficient transport hub for years to come.

One of the main concerns regarding the project is potential noise disturbance caused by Crossrail trains running in tunnels. To protect those who live above the shallowest sections of tunnel, the Select Committee asked us to ensure that floating slab track—an enhanced form of railway track that reduces the noise transmitted through the ground—was fitted in all tunnels that pass under residential property at a depth of 15 metres or less, as a means of keeping noise and vibration to a minimum. To protect certain sound-recording businesses based in Soho, who argued that they operated extremely noise-sensitive equipment, the committee asked us to ensure that floating slab track was also fitted in the tunnels immediately under Soho. The Government accepted both of these decisions, and also gave an assurance that consideration would be given to the use of a better track-form technology than floating slab track, if such a technology became available before detailed design.

Finally, the committee heard extensive evidence from the London Borough of Greenwich about the case for adding a Crossrail station at Woolwich, and pressed the Government in July 2006 to promote an additional provision for a station. DfT worked with CLRL and Greenwich Council to come up with an affordable way of adding a station to the project. Following Greenwich Council's proposal to revise its spatial plan to allow a higher density of development at Woolwich, outline agreement was reached in March 2007 between the department and Berkeley Homes—the developer of the Woolwich Royal Arsenal site—under which Berkeley Homes would build and fund the basic station box structure. Furthermore, we intend to develop a proposal for fitting out the station to full operational status, funded solely by local developers and businesses that stand to benefit, and at no additional cost to the public sector. In the light of that outline agreement, the Government brought forward amendments to the Bill for a station at Woolwich in May last year.

Aside from the sheer scale of its construction, one of the greatest challenges that Crossrail presents is how to operate services at a high frequency on a new railway as well as on the existing lines east and west of London. Crossrail will be an important addition to the national rail network, providing much needed additional commuting capacity. Crossrail services will subsume existing suburban services on the Great Eastern and Great Western lines, and there will also be some complementary outer suburban services. Crossrail services will run on the “slow” lines in normal operation and will not affect “fast” line services—for example, those serving the south-west and south Wales.

Although most of the capacity of the new central tunnel will be taken up by Crossrail services, use of existing networks outside this will be shared with other passenger and freight operators. Dedicated use for Crossrail services was ruled out because it would have created an unacceptable impact on other users, particularly freight users. Given shared use of the network, careful planning has been needed from an early stage on how to timetable services so that they fit together. There is not room on the Great Western line for all Crossrail services planned for the central tunnel, and this was one of the reasons why many Crossrail services will terminate at Paddington.

To facilitate the creation of the new Crossrail service, extensive railway powers were included in the Bill. It is fair to say that these powers have proved controversial within the rail industry, even though they are intended to be largely reserve powers. To deal with these concerns, the Government have pressed ahead with negotiating an access option under existing industry processes. This would grant future access rights for Crossrail services to Network Rail’s network. Following a successful negotiation with Network Rail, the access option is currently before the Office of Rail Regulation to consider approval. The Office of Rail Regulation will reach its decisions in the light of consultation responses it has received and on the basis of its existing duties.

Supporting the access option is a great deal of timetable and other modelling work, which has involved the relevant freight and passenger train operator interests. Timetabling and the impact on freight were raised extensively by petitioners in the Select Committee in the other place. Although the broader questions of the operation of Crossrail are matters of general public policy, there is a large level of interest in such matters and the issue will doubtless be raised with the Select Committee in this House, taking account of the most up-to-date modelling work and, hopefully, also the Office of Rail Regulation’s decision on the access option application.

I hope that the House will agree that the project has changed fundamentally and for the better since the Bill's introduction, but we accept that there may be individuals and groups who are directly affected by the project and continue to have concerns. A further petitioning period has just begun; the deadline is 30 January. Petitioners can make representations to Parliament and may then appear before the Select Committee to make their case. Your Lordships can rest assured that the promoter continues to work closely with those affected by the project. We hope that by negotiating seriously we can satisfy the concerns of many.

I conclude by thanking all those who have prepared and worked on the project to date, and prepared and helped me to enjoy making this first speech on a subject which I am sure is close to many of our hearts. The Bill will bring much good. If the project runs to time and budget, in 2017 it will provide me with my 64-year moment. I commend the Bill to the House.

Moved, That the Bill be now read a second time.—(Lord Bassam of Brighton.)

My Lords, I, too, am pleased to have the opportunity to speak on the Bill. The House has waited a good while to be given the chance to scrutinise it. First and foremost, I pay tribute to the Select Committee in another place, which has provided a good deal of precedent for which I am sure we are all grateful. It seems very timely and appropriate to be discussing grand transport projects. The opening of the impressively renovated St Pancras and the improved train journeys on High Speed 1 from that station demonstrate the capability and great potential for big transport improvements.

The case for Crossrail is clear. I do not dispute that, and we support the construction of Crossrail. Obviously, however, there are things that we will want to discuss in the process. London and the south-east are the beacon of the country's economy, and make a disproportionate contribution to the UK's public finances, often without receiving commensurate public spending. The region has for too long relied on an old transport network running at full capacity and I am pleased to be able to contribute, perhaps, to changing this. It is unfortunate that we have had to wait quite so long for a project which has had many false dawns. We only hope that it is going to happen now. All these false dawns have obviously contributed immensely to the total cost.

When considering the impact of Crossrail, I have often thought of the daily journey many commuters make from my region in Essex into the capital—which I often make, too. Unfortunately, all too often, the trains on this line into Liverpool Street are totally packed and subject to congestion-related delay. Once they have arrived—as the Minister said—they will have to complete their journeys across London through a busy Underground station and along the Central line, which is often very busy indeed.

Crossrail proposes that a commuter can catch a train in Shenfield and remain on that same train through central London and beyond, thereby relieving capacity on other parts of the transport network. I particularly like the analogy made in another place that Crossrail could be the “heart bypass” for the region, which sums up the situation very well.

There has been much discussion in another place about the termini of Crossrail, but I do not propose to get into that debate. The Minister made several comments about it which I am sure will be taken up. What appears concerning, however, is that only some of the Bill’s provisions will apply to future extensions of the line. The current route and legislation has been subjected to extensive parliamentary scrutiny, so it makes good sense that petitioners should be able to do the same in the case of any future extension.

I agree with the argument that Crossrail should not be at the expense of other rail services. Crossrail will be a stopping metro service and cannot interfere with the fast lines into the main London stations, which are already subjected to frequent delays due to congestion. Of course, in the case of the eastern branch, many commuters will choose to use Crossrail, rather than the non-stop services from Shenfield, for the benefit of getting across London more quickly. I would be interested to hear from the Minister the implications and planning made in the light of that. He talked a lot about the extension of Liverpool Street station. I do not argue against it, but it might be that many passengers get off before that station and use Crossrail to cross the top of London. I do not know whether enough thought has been put into that.

There has also been discussion in another place about the clause in the Bill which allows the Office of Rail Regulation to prioritise Crossrail construction over other services both during construction phases and when services are up and running. I should imagine that that needs careful consideration, and my opinion remains that a grand project such as Crossrail cannot afford to interfere with other services. They are life blood to many people as regards their work and everything else. Assurances are all well and good, but as evidenced by the first day of services this new year and the work carried out at Liverpool Street station, rail improvement works have a tendency to be somewhat unpredictable. During the recent months and years, my major concerns have been about the problems of construction and the way in which people can live and operate during that time. I would like further assurances from the Minister on that.

A major overhaul in the form of Crossrail has the potential severely to disrupt passenger services. Even within the project, I notice from the heads of terms document published in November that there will be service-level commitments to BAA for the Heathrow branch and Canary Wharf for the Isle of Dogs station, and the possibility of this being at the expense of the other branches is concerning. I therefore repeat my concern about the implications for the pattern of transport while the work is contracted.

On another point, I am intrigued that zones 7, 8 and 9 have just this month been added to the remit of Transport for London, covering as far north as Watford, in Hertfordshire, on the new London overground railway. Is this the sign of things to come? A note in the heads of terms between TfL and the DfT is that it has not yet been decided whether there will be one or multiple operators on the Crossrail route. Will the entire Crossrail network be amalgamated into TfL’s zonal structure, and, if so, what consequences will this have for non-Crossrail services operating in parallel to Maidenhead and Shenfield?

Finally, the impact of Crossrail on freight movement throughout the south-east remains largely unconsidered. The noble Lord, Lord Berkeley, will refer to that later in the debate. I hope that the matter can be debated satisfactorily in the later stages of the Bill. Each year, more than 5 million tonnes of aggregates are delivered into London by rail. Having this disrupted and moved to road transport would have consequences both in terms of congestion and carbon emissions.

The main point of scrutiny has to be the finance and funding of the project. It is imperative that the funding structure is robust. While the announcement in October was welcome, although I understand that it is not yet definite, it would have perhaps been better for the purpose of scrutiny in another place if a decision had been made earlier. I am pleased that the Government have accepted the Lyons recommendation on supplementary business rates, one of the bases of Crossrail funding, but we all know that there is not yet legislation to enable that. Only today, I read a letter from the Mayor of London to the Transport Secretary of State, saying that he anticipated getting the extra business rate in 2010. As no legislation is going through Parliament to enable the business rate to be implemented, let alone consultation and all the other action that needs to be taken to enable the business rate to be used to fund Crossrail, I would like to know how it is to be funded. I am not against it, but I would like to know the mechanics of it. Quite a bit of confusion therefore remains about how the project will be funded, certainly in the first instance.

I am also anxious that in recent times government projects have often seemed to cost much more than was suggested, and the long delay in announcing Crossrail has only added to that. I very much hope that the £16 billion funding requirement will remain broadly that, although I am not heartened by the fact that the price tag on the proposed Woolwich station has seemed to fluctuate according to whether the station was in favour or not. I hope that the overall costing is better thought out and more robust from the outset. It is important that factors such as grants and proceeds from developers and sums raised from the sale of land are properly scrutinised. I notice that a new clause was suggested on Report in another place to make it a requirement that updates are regularly delivered to Parliament on funding and costing. Such a transparent and public approach seems to be entirely sensible.

In summary, Crossrail has the potential to supply a much-needed capacity to a rail and transport network that is deserving of upgrade. I support the Bill and look forward to seeing its improvement following its passage through this House.

My Lords, like the noble Lord, Lord Hanningfield, and most other people, I welcome the Bill. The sooner it is got on with the better. It has taken a long time to get this far and I do not want anything I now say to affect the construction of the tunnel and of Crossrail.

However, there are problems outside the tunnel, as has been said by the noble Lord, Lord Hanningfield, and the Minister, where the trains from the tunnel share tracks with other trains. I also have reservations relating to the disbalance of services between east and west, with a lot of trains terminating at Paddington and returning in an easterly direction. That is not good railway practice as it means that trains are running very much under load in one direction. In addressing the issue, and realising that it is outside the Crossrail Bill, I urge the Minister to consider whether Maidenhead is a suitable terminus in the west. It is probably one of the highest cost areas around London and any attempt to establish a train depot, or anything that requires lots of staff at Maidenhead, will be very difficult. I say that from my experience on the Thames Valley Police Authority, where we had great difficulty in maintaining staffing at places such as Slough and Maidenhead because as soon as officers went there, they moved to London where wages were higher. Therefore, now it has been decided to invest a lot of money in Reading station, will the Minister assure us that the westerly terminus for trains should be at Reading? Reading people would then have the opportunity of travelling on a wider range of services than they would if the trains terminated at Maidenhead.

There is the problem of Heathrow. What trains are going to serve Heathrow? Will people in Canary Wharf, for example, be happy to travel on an all-stations train to Heathrow? I do not think they will be, yet Heathrow Express is expecting people to change at Paddington from Crossrail trains to the Heathrow Express to complete their journey. That does not seem to be a good arrangement. I ask that further negotiations take place with the people concerned with servicing Heathrow to produce something that is more attractive than what is proposed.

A further matter that the Government should consider is an extension to Crossrail towards Milton Keynes. Milton Keynes has been designated as a growth area and more and more people travel from there into Euston, and people who change at Euston on to the Underground will tell you that it is the most appalling, heavily crowded place. It would be reasonably simple to extend certain Crossrail trains to Milton Keynes. I realise we are talking about the long term, but the long term as far as railways are concerned is probably a century because railways last a long time. I do not see any means of serving London efficiently without taking account of the fact that these extensions are necessary and that Crossrail only partly does the job.

There is also the problem of whether people from places such as Maidenhead would be happy if all their trains were all-station trains because that would extend their journey times. If they are not, how are the semi-fast trains from further out to be encompassed in the timetable?

Freight is a serious problem and is presumably the reason why the noble Lord, Lord Berkeley, has tabled his Motion. As the noble Lord, Lord Hanningfield, said, 5 million tonnes of freight arrives each year, mostly on the Great Western main line. London is extremely dependent on that freight. It provides all sorts of building materials, which are very much in demand in London and cannot be brought into London in any other way. I counted them up today, and I think there are five aggregates terminals on the final eight miles when coming in to Paddington. Those trains are big and heavy and move slowly. Can the Minister give us an assurance about the underpass at Acton? Is there money somewhere for that to happen? If it does not happen, there will be conflict between the people running freight trains, those running Crossrail and, presumably, the people from further west who want to get into Paddington. From my very recent experience, I can assure the Minister that mainline trains use the relief lines because the main lines are too often unserviceable.

There is also a need for more cross-country routes for freight. As there are further developments at Bathside Bay and at Harwich, there will be an increasing flow of traffic to the north. At the moment, that traffic has to come down through Shenfield, I believe, and go round on the North London line. We know that the North London line will not be available for freight very much, and we also know that, as the noble Lord, Lord Hanningfield, said, there is not much capacity between Shenfield and London. Can the Minister give me a really copper-bottomed assurance that the diversionary routes from the Haven ports through Peterborough to Nuneaton will be ready in time and are not just something that might happen?

Like the noble Lord, Lord Hanningfield, I am concerned about Clauses 22 and 44. I believe that they fundamentally change the relationship between railway companies, the Government and the Office of Rail Regulation. I heard the Minister say that the powers are only reserved powers, but the problem is that they are in the Bill. Once they are there, we do not know whether they will be used. If there are reserved powers, one can presumably conceive of them being used. I want some assurance that they are not a means of letting Crossrail trains have some sort of priority over Great Western trains, both long-distance and outer-suburban trains, and freight trains. In the railway industry, there is a system—it was not designed by me—for access allocation. It is reasonably fair and is accepted by the present players in the railway industry, but if one particular player is given preference over the others, it would be unsatisfactory.

I am also concerned about whether everybody appreciates the enormous disruption that will be caused by Crossrail. I am afraid there is no way round it, but I hope sufficient cognisance has been taken of the fact that there will be a lot of disruption and that it will presumably be at exactly the same time as the demand for things such as aggregates to build the tunnel and its surrounding works reaches its peak. That will be a great problem for people commuting from the west of England, south Wales, Bristol and Reading into Paddington and into Liverpool Street. People are entitled to some sort of assurance that the interests of existing users will not be undermined by the interests of other people.

I have outlined a series of problems, but we welcome the Bill and want Crossrail. However, we need answers regarding some of these problems because they are of great concern to many people.

My Lords, hurrah that we have got this far on Crossrail. Building Crossrail matters hugely to me personally, and it should matter to anyone who cares about the UK economy. I could talk about the subject for hours, but I shall spare noble Lords that this evening.

To keep the UK competitive, we need London to succeed, and for London to succeed, we need a world-class transport system. London is critical to the UK’s global competitiveness. The UK’s global strengths are those where London leads: the service sector and financial services. The vast majority of recent export growth has come from those sectors. The UK’s regional centres—Edinburgh, Manchester, Cardiff and Birmingham—win business off the back of London winning European HQs. While the HQ may be in London, the HR or IT function may be elsewhere. An example is the Bank of New York. It has been in London for several years but it has recently taken office space in Manchester.

London is a great success. It has traded with the world for centuries and that, together with its openness to other cultures, has led to it being ranked number one in the MasterCard worldwide centres of commerce index. However, that means that plenty of cities out there are ready to eat our lunch, and London’s Achilles’ heel is its infrastructure. Its sewers, its water mains, its Tube system, its roads and even its bus routes are more than 100 years old. They need renewal. The failure of Governments since the war to invest in infrastructure risks holding back London, and therefore the UK. Mayor Bloomberg of New York commissioned another study from McKinsey, to look at how world financial centres compared with each other. London came out with many advantages, but transport was raised again as a problem.

Not only are we running to catch up with current demand, what is more, London is growing. Our Tube and rail system cannot cope with current demand. For the first time, the Tube carried more than 1 billion people last year, and another record was set on 7 December 2007, when the Tube carried 4.2 million passengers in just one day. There is no elbow room at all.

Crossrail will provide part of the solution, but we need it pronto. By the time Crossrail is built, there will be about another half a million workers in London. In a stroke, Crossrail will provide 40 per cent of the extra rail capacity needed. It will transport 72,000 workers per hour into and out of central London.

Crossrail failed in the early 1990s due to recession and lack of funding commitment from the Treasury. The commitment to economic development and pace of change in India or China means that we can ill afford that 15-year delay. Let us at least get on with it now.

Crossrail will not be ready in time for the Olympics, but its promise will help to secure the vital legacy for the East End. Transport is critical to the regeneration of the Thames Gateway. It would have been good if Crossrail had been built by 2012, but it cannot be. More important is securing the longer-term legacy for one of the UK's most deprived areas. Just the realistic promise of Crossrail—the spades already in the ground—will catalyse regeneration from 2012 onwards.

National and London governments are to be congratulated on resolving the funding of Crossrail: this is a momentous step. It is good value for government. For their £5 billion, they get about £12 billion back in tax receipts and about a £30 billion contribution to UK GDP. Business is backing it with billions; businesses are even asking to be taxed. Why? Because it is good for London and they know that, ultimately, it will be good for business. The business community pressed for resolution of the funding for many years. It asked that it not be done in a final flurry. Unfortunately, the funding was indeed put together at the last minute, but a very able team was put on the case in the past few months. On the business contribution, some sectors will be hit harder than others by the supplementary business rate. I am thinking in particular of the retail community. Perhaps there is a case for an offset against the Crossrail levy for those occupiers who are already contributing to business improvement districts and the improvement of the public realm, especially before Crossrail is actually open.

Now that the project looks like becoming a reality, it is essential that it is governed and run in such a way as to maximise its chances of success. It needs to be managed on time and on budget. Major projects such as Terminal 5, Arsenal Emirates and the Channel Tunnel Rail Link have all been much more private sector in their governance than Crossrail is proposed to be. The fact that Crossrail is in the public sector will worry the business community. It will worry about political interference, scope creep and deadline disciplines. However, there is a good argument for Transport for London to own Crossrail, because of the complex interface with the London rail and Tube system. None the less, Transport for London needs to be absolutely confident that it has the internal structure, staff calibre and capacity to deal with those complex issues efficiently and effectively.

The heads of terms have been well designed, with clear allocation of risk and clear trigger points for when government—either national or London—can step in. I welcome the proposal to put business non-executive directors on the Crossrail board, and note the advertisements in the FT today for those roles. That should help to deliver both independence and project management expertise and disciplines. If the project is to be delivered on time and on budget, I urge those directors to resist interference with the scope once the project has passed through both Houses of Parliament.

In conclusion, is the Crossrail project perfect? No. The Crossrail team has done a good job of refining the scope and of managing the project through the legislative process to date. Any substantial alternative to Crossrail, however, will set us back five years. What is more, that alternative will be imperfect in five years’ time. We have to make the best decision that we can now with the information that we have available.

My appeal to noble Lords, if you will excuse the puns, is: let us not derail the project with excessive scrutiny but exercise the proper fine tuning of the engine. I am delighted that Crossrail has cross-party support. It is desperately needed. It is needed now. Full steam ahead.

My Lords, like other noble Lords, I very much welcome the Crossrail project. It is certainly good for London, as my noble friend said, and it is good for the surrounding area served. I do not think that that means that we should not scrutinise it, as the noble Baroness just suggested. We need to scrutinise it professionally and properly but not waste too much time on it. We need to get the right result at the end.

Like the noble Lord, Lord Bradshaw, I have concerns about the link between Heathrow and Canary Wharf. It is quite ridiculous that the only way that you will be able to get from one to the other is by an all-stations service, but what is more important is that the infrastructure is not being built to enable that to happen later. I can see why it may not want to be done now. It is fine for the Government to say, “Yeah, we advertised. We have financed the Crossrail project and it means that you can get from Canary Wharf to Heathrow in the twinkling of an eye, but actually, you will have to change trains at Paddington and go down three escalators and round several bends”. That is a bit sad. I do not know whether my noble friend can look at that again.

As other noble Lords have said, there is also the question of what will happen during construction. We can talk about that in future, but it is essential that the existing surface lines are kept open.

Obviously, I am going to talk about rail freight and the effect of Crossrail. I will speak at the same time to my Motion on the Order Paper, which I emphasise is not a wrecking Motion at all. I look on it as an insurance scheme, just to make sure—I shall come on to explain why—that the Select Committee, if your Lordships agree that the Bill should go to a Select Committee, looks at the issues set out on the Order Paper.

It is not appropriate for me to divide the House on that, because I declare an interest as chairman of the Rail Freight Group, and this is a procedural Motion, which could lead to difficulties, but it is a very important Motion and I hope that my noble friend will look on it with favour.

The problem for me is that we do not know exactly what will be the effect of Crossrail on freight, because the timetable is not finished. I do not know for how many years people have been trying to write a timetable to add freight in 10 years’ time—the official government forecast for freight in 10 years’ time, which the industry has developed. It has not yet been fully integrated with what Crossrail wants and with what the other passenger operators want. It has been done by different people over the years. TfL had one view; Crossrail had another; government had a third view.

One of the problems that the freight industry found when petitioning to the Commons was that no one could agree the basis on which they were going to have a discussion. If you are going to spend hours or days saying, “This is my timetable, and this is the result. That is your timetable and that is the result”, that is very time-consuming and extremely wasteful. It is very depressing that the timetable is not yet finished when the Select Committee will probably start its hearings sometime in late February. I hope that my noble friend will say that it will be finished and that we will have information on the effect of future growth of freight when the Crossrail project opens, so that we can see what fits and what does not. Then we can decide collectively what to do about that.

My noble friend said that Crossrail will increase the capacity on the surface lines, but that is not yet demonstrated because the timetable is not finished. I hope that it will be, because, if it is not, there will be problems and we will then have to look at the solutions. What are the solutions? There are three easy solutions on the Great Western and the Great Eastern. The first is to have fewer Crossrail trains. The second is to provide a diversion, which the noble Lord, Lord Bradshaw, has mentioned, certainly for Great Eastern trains. The third is to build more infrastructure. Again, I hope that the Government will give assurances on this at the Select Committee or somewhere else.

The noble Lords, Lord Hanningfield and Lord Bradshaw, mentioned aggregate traffic. On the east side, the biggest container port, Felixstowe, which has permission for expansion to be even bigger, is our major import port for containers. I know that the Government are very keen on this and that our new trade Minister, the noble Lord, Lord Jones of Birmingham, keeps on talking about the importance of good trade links. But freight will not be able to go by rail because the diversion rail route will not be finished and Crossrail will block the Shenfield route. We will need to have some good assurances from the Government that these diversion works will be done.

I said that the House of Commons Select Committee suffered from having a lack of credible timetable information. I should like to draw the attention of the House to one or two of the issues that came out in its report, which probably support my argument that this Motion is necessary. I shall give only two quotes, so that we do not spend too much time on this matter. Under “Register of Undertakings and Assurances”, paragraph 36, the committee states that the Crossrail Bill is complicated and that:

“The public needs to have a clear understanding of the impact of the Bill, how each area will be affected by it and what action will be taken by the Promoter to mitigate any impact. We look to the Committee in the House of Lords to ensure that further clarity is achieved before the Bill reaches Royal Assent”.

I do not think that we could argue with that.

The second quote is under “Freight”. It is of course the last chapter and is the only one that refers to freight, but I am used to that. Paragraph 141 states:

“The Committee is persuaded that the freight industry faces an increasing challenge … The Committee was concerned about the uncertainty regarding the Access Option”,

which I shall come to. It continues:

“We look to the Committee in the House of Lords to ensure that Access Option and any other remaining issues relating to the freight industry are adequately evaluated”.

As I have said, the Motion is an insurance policy. I am sure that the committee, under normal circumstances, would do this anyway. That is its job. However, if it chooses not to, there is nothing that the House can do about it. That is why this Motion is important.

My noble friend also commended the work of the Select Committee on how many petitioners had their petitions resolved without having to petition themselves. Clearly, that is the best way to do it. I have been involved in a few of these hybrid Bills previously. For that, it is necessary—I shall make no further comment—for both sides to be prepared to negotiate and there has to be proper information on which they can negotiate and get a clear decision.

To conclude on the assurances given by the Government and the Commons Select Committee, there was only one assurance affecting freight, which I think that the noble Lord, Lord Bradshaw, mentioned—the Acton Yard dive-under. Surprise, surprise, it was left out of the list of assurances published by the Select Committee. I have complained that the one assurance for freight is left out, which is why I have a question. We have to be careful that every stone is in place and that no stone is left unturned, and everything else.

Clauses 22 to 45, which other noble Lords have mentioned, are my other main concern. My noble friend said that they are reserve powers, but reserve powers can be used. Of course, we will talk about this in Committee, but these issues are critical to many petitioners and it is important that they are also in this Motion. As other noble Lords have said, this goes to the heart of the railway structure and the normal railway processes that Ministers have said will be used by Crossrail in the development of its option agreement and other things. This goes back to Section 4 of the Railways Act, which says that fairness, transparency and certainty are what the private and public sector operators want, and that it is part of the duties of the Secretary of State and the ORR.

Section 4(5)(b) of the Act puts an obligation on these organisations not to make it unduly difficult to invest in the railway, which is important for passengers as well as freight. Ministers also state regularly that they want to encourage rail freight. Paragraph 9.5 of the railways White Paper states that,

“the Government has made it clear that it will ensure that policies and regulations do not put unnecessary obstacles in the way of future freight growth and that, in specifying passenger services, the needs of the rail freight industry are considered”.

I am not sure that that is happening with Crossrail now. When companies want to invest in railway terminals, passenger trains, freight trains, locomotives or whatever, they expect to operate them and hope to make some money on them.

The Crossrail option application is very interesting. Hutchison Ports (UK), which I have already mentioned, is preparing a similar option application to run freight trains from Felixstowe. As part of its planning application it has committed to spending about £100 million on upgrading the line and it naturally wants to be sure that it can run trains on it rather than having other people block it. I look on the applications from Hutchison and Crossrail in exactly the same light, and I hope that the regulator will too. If there is not enough capacity, the regulator has to share it out.

That is a normal industry process. The problem is that the promoters of Crossrail do not appear to accept that. If there is not enough capacity for the trains that Crossrail, Great Eastern or Great Western want, they do not plan to increase the investment in capacity or to reduce the number of trains. They want other people’s services to be cut. That is what the powers under Clauses 22 to 45 say.

That is also in the option agreement. If the Government do not like the regulator’s determination of the option agreement, they will direct the regulator to “steal” capacity from existing users of the networks so that Crossrail can have it. Will the Government give Hutchison Ports the same powers for what it wants? The last time I asked the answer was “no”. But it is just as important because the UK economy depends on efficient ports, just as Crossrail is important for London.

We do not talk often about the effect on other passenger services, because the franchises probably will be changed by the time Crossrail opens. I do not expect to see many of the passenger operators complaining, but people who live in Bristol, Ipswich, Reading, Cardiff or wherever could find their passenger services cut because there is primary legislation which allows Crossrail to increase the number of stopping trains from Maidenhead to Paddington any time during the day or night. That is a total interference with industry processes. This Motion is designed to make sure that the committee looks into these things. It is very serious to give powers to remove other operators’ capacities that are so fundamental and have such potentially serious consequences for the rest of the UK.

Finally, and I am sorry for taking up some of your Lordships’ time, we have to reflect on the role of the Government in all this. I understand why my noble friend the Minister said that the Government are the promoters of the scheme, and that is fine, but I think that we have two Governments in this place. We have the Government who are the promoters of Crossrail, believing the project to be so important that they can expropriate by primary legislation any capacity they need on existing lines and appear to ignore the future growth forecasts for other parts of the passenger and freight network, and we have the other half of the Government in the form of the Department for Transport, which seeks to ensure that the passenger franchises operate in a cost-effective manner by getting lots of passengers on to their trains and thus take them off the roads. In a rather naïve way, I would expect the franchising department in the Department for Transport to petition against this Bill in the Select Committee. Of course that will not happen, but what is the difference between the Department for Transport’s franchising department and a private freight operator or other operator? I believe that each half is equally important, and it is wrong that one half should seek to take away capacity from the other. Perhaps my noble friend can assure me that the two halves do talk to each other occasionally and that there will be real benefits for the whole country.

I am disappointed in the detail that we have so far. There are questions on capacity and construction programmes to which some two and a half years after this Bill went into the Commons we still do not have the answers. I look forward to my noble friend’s response, but I warn him that there are going to be some long and interesting debates in the future stages.

My Lords, I am delighted that the rules of the House are sufficiently flexible to allow the noble Lord, Lord Berkeley, to make those points despite the expertise and interest which he has. I have not addressed the argument about freight access and other points he mentioned, but he has raised some very important issues.

I join others in welcoming the Bill but, as many have said, it is long overdue. I recollect a meeting held, I think, 20 years ago with the then chairman of Crossrail, Sir Christopher Benson, when he was struggling from a small office just off Victoria Street to try to get the show on the road. It seems to be a recurring feature of major infrastructure projects in this country that they take decades for even the most desirable and much needed developments to move from concept to completion. I mention the Channel Tunnel Rail Link, which took from 1987 to 2007 to complete—20 years for something that had been planned to follow on immediately after the building of the Channel Tunnel. I shall refer to the CTRL again in a moment.

However, here we are today with the Crossrail Bill. Crossrail has been in contemplation since the early 1980s and is due to open in 2017. I only hope that the Bill does not have to spend as long in the Select Committee of this House as it did in another place. I know the feeling when one has a long involvement in such a project. An honourable Member of another place who, having spent all those years in its Select Committee, said that he felt compelled to volunteer to serve on the Standing Committee as well, and had to be restrained.

I want to concentrate the rest of my contribution on what is not in the Bill; namely, the financing arrangements. I am encouraged to do this because both the Minister and my noble friend on the Front Bench had something to say about them. I am extremely grateful to the staff of our Library, who have made available to me some of the documentation of what appears to be a hugely complex package, many of the details of which still have to be worked out; the Minister frankly conceded that. Indeed, I was told when being briefed by Crossrail yesterday that the lawyers are still hard at work putting the detailed flesh on to the heads of terms, and especially on important agreements such as the agreement between the Department for Transport and the Mayor of London’s office, and the agreement between both of those bodies and CLRL, which stands for Cross London Rail Links Ltd, the prospective nominated undertaker.

Referring again to the Channel Tunnel Rail Link, there is one remarkable contrast. Ministers have been pleased to cite the CTRL as a precedent for this Bill, but in one respect it was anything but. In the case of the Channel Tunnel Rail Link, the finance package was agreed before the Bill actually got into Parliament at all. With Crossrail, the Bill was introduced nearly four years ago, while the Minister, Ruth Kelly, did not announce the heads of terms until 26 November last year, less than two months ago. She did so in a Written Statement which starts, if I may say so, on an unhappy note:

“I am today placing in the House Library a copy of the ‘Heads of Terms for Crossrail’”.

The librarians have told me that no paper copy was deposited in the Library either at the other end or in this House. Where it is deposited is on the department’s website, so the staff have been able to run it off and make copies for me—it is a formidable document. But I find it slightly off-putting when a Minister can put something in a Written Statement when in fact it is not going to happen. Maybe the librarians and I are both wrong, in which case I will apologise, but that is what I was told.

The substance of the package shows that not only is it complex, but it is also clear that to take effect, further legislation will have to go through Parliament. In other words, the Bill before us, although very substantial, is actually only part of the story.

The finance is envisaged as coming from a variety of sources. As the Minister told us at the beginning of the debate, the cost at 2016 prices is estimated at £16 billion. Of that, the Department for Transport grants will be £5 billion, but the department is also going to,

“be responsible for procuring contributions from the City Corporation and BAA”.—[Official Report, Commons, 26/11/07; col. 4WS.]

I should like to look briefly at those, bearing in mind that it is the Department for Transport which is to be responsible for procuring their contributions. Last October, the City Corporation offered £200 million from its own resources, which by any standards is a very substantial sum. Furthermore, the corporation has agreed to lead—here I quote from a briefing note I have received—

“an exercise which aims to raise a further £150 million in private contributions from the financial City”.

The first question I have to ask the Minister is: how far has the City got in raising that £150 million? It has already given £200 million of its own resources; has it been successful in raising this further sum from other sources?

I understand that the BAA contribution is linked to the extension out to Heathrow, the Heathrow spur; I do not want to add to what has already been said about that. The question about that contribution is: what is it actually going to be? Has it yet been quantified and agreed, and can one now assume that it is firmly on the table, as it were?

The second major slice of the funding, which is put at £7.7 billion, is to come from the Mayor of London through Transport for London and the Greater London Authority. But I turn again to the Written Statement from the right honourable Ruth Kelly:

“The Mayor … has indicated that he would raise this from a combination of debt raised on the back of a new levy on National Non-Domestic Rates in London, TfL prudential borrowing, developer contributions along the Crossrail route and other sources. A letter from the Mayor setting out how he envisages doing so is also being placed in the House Library”.

I have a copy of it but it was not in the Library. The Statement continued:

“For TfL to raise this funding, there will need to be changes to existing legislation—both to allow the NNDR levy and to facilitate the planned contribution from developers through a new planning charge”.—[Official Report, Commons, 26/11/07; cols. 4-5WS.]

Therefore, there is much to be done there.

I turn to the mayor’s letter dated 4 October addressed to Ms Kelly, from which I note several points. First, the mayor assumes that the new statutory powers will be needed to raise a supplement to business rates across London, not merely on the line of the route but throughout the whole of London. At 2p in the pound on properties with a rateable value above £50,000, he assumes that that will raise £3.5 billion. Secondly, he assumes that this new legislation will need to be in place so that, as my noble friend has already said, the money can be raised no later than April 2010. There is not a lot of time if all the machinery is to be put through by then.

Thirdly, the mayor assumes that if the new powers are delayed or prove insufficient, the Government will step in to tide over the GLA with grants and guarantees. However, here the small print is rather important. The copy that I have has very small print indeed and I hope that noble Lords will forgive me if I hesitate over it. Number (iv) of the assumptions says:

“In the event that this”—

that is, the NNDR—

“is delayed for any reason, or that the legislation provides insufficient powers, then provided that the Government is satisfied that appropriate funding from this source will still be forthcoming, the Government will provide an additional grant to the GLA equal to the equivalent amounts that would have been received from such a supplement, and will provide temporary guarantees”,

and so on. I hope that noble Lords noticed the proviso, which I shall read again:

“provided that the Government is satisfied that appropriate funding from this source will still be forthcoming”.

The obvious question is: when will the Government bring forward the legislation for the extra 2p in the pound levy for the NNDR? However, what will happen if that proviso cannot be satisfied and if the funding from the supplementary rate turns out not to be forthcoming? We must have an answer from the Minister on that. Will there be a further charge on the general taxpayer?

I note that this part of the package has already aroused strong opposition—not surprisingly, as people do not like paying extra business rates. The Federation of Small Businesses, the British Chambers of Commerce and the Institute of Directors have declared their opposition to the supplementary business rate in principle, although I think it is fair to say that the British Chambers of Commerce, which is a very responsible body, has recognised that there may be a case for a supplementary rate in special instances. Mr David Frost, the director-general of the BCC, said:

“If, however, Local Authorities are given the flexibility to introduce a Supplementary Business Rate it is essential that businesses are given a vote. If a Supplementary Business Rate is to provide funds for an infrastructure project that business believes is necessary”—

Crossrail may be a very good example of that—

“and if there is a clear project plan with ring-fenced funds tied to the scheme with the money raised being wholly additional, then the business community may well vote yes in a ballot”.

Therefore, I have another question for the Minister. Will the legislation make provision for businesses to vote on a proposed supplementary rate?

Finally, some of the finance is to come from specific entities that will benefit directly from Crossrail—for example, Canary Wharf and Berkeley Homes in Woolwich—and from developers through a new community planning charge. I thoroughly support that; it seems to be absolutely right. Some years ago, I saw a presentation in Tokyo by one of the banks with substantial property investments. It produced a graph showing the value of land in the vicinity of new railway stations. The graph was astonishing, with very high peaks wherever the buildings were within walking distance of a station. Therefore, it is entirely right that developers with plans neighbouring the new line should pay a significant development charge. It should be linked to the benefit, and no doubt that will happen in due course.

I have put several questions to the Minister and I hope that he will have answers to them. I apologise for going on but, in conclusion, I draw the House’s attention to a very interesting publication, which I read last year. I refer to a notable booklet produced by the Institute of Economic Affairs called They Meant Well: Government Project Disasters. It is written by Professor David Myddelton and is a study of six large-scale government, quasi-commercial projects over the past 85 years starting with the R101 airship and finishing with the Dome. In each case, Professor Myddelton describes in detail how serious mismanagement, combined with a lack of clarity about objectives and an unwillingness to be held accountable, led to a great waste of taxpayers’ money. They Meant Well should be compulsory reading for everyone involved in this major Crossrail project. There are many lessons to be learnt. At this point, I would not dream of quoting any of them but they are there to be studied.

Crossrail is long overdue. It is an enormously important addition to London’s transport infrastructure. We know that a great deal of care has been taken over the planning, that the skills of the tunnellers and engineers who will build it are being honed and advanced and that new technology for the tunnelling will be used. The detailed complexity of the heads of terms, to which I referred, suggests that very careful forethought is being given to the project. It would be very sad—I hope that it will not happen—if the verdict on Crossrail was “They meant well”.

My Lords, I am occasionally tempted to support this Bill because, as the noble Baroness, Lady Valentine, said, it concerns an important project for the City and will be one of the important engines of the UK economy, and because it introduces and puts investment into a very low-carbon form of transport. I am also tempted to support it not least because many other capitals—I think of the Paris RER system—have much better public transport arrangements than ours and provide much easier access to places of work.

I also have a rather sentimental family connection to the project. When I first heard about Crossrail, I was living in Cornwall and said to my father, who lived in Witham in Essex, “Do you know, I’ll be able to get on one train and go all the way through to visit you both? That’ll be great, won’t it?”. He looked at me wisely, as fathers do, and said, “Son, by the time that happens, I’ll be dead”. I talked to him about that in the mid-1980s and he died in 1994, but I do not think that even he would have believed that it would take 23 years after his departure, as is being predicted tonight, for it finally to happen, although I know that he would applaud it.

I am sceptical about the plan, partly for a very selfish reason in that I still live in the south-west. On a number of occasions, I have asked—not through the House but of people involved in the project—what guarantees there are regarding the increasingly vital passenger links into Paddington from not just the far south-west but south Wales, let alone the commuter belt of the Thames Valley and Bristol. Will users of those links be able to commute to Paddington relatively unencumbered, not only during construction, which will take a considerable time, but once Crossrail is operating? Will there still be sufficient train and passenger movement over that line so that the west of England, Cornwall and south Wales are not cut off from communication links with the south-east and London?

This is not an imaginary problem. In the past month we have seen relatively small rail engineering projects—small in comparison with Crossrail—on the west coast main line and on lines into Liverpool Street cause total disruption because passenger movements into London were badly managed. My noble friend Lord Bradshaw mentioned copper-bottomed guarantees. I do not know whether the Government have a number of those that they can roll out today, but I would dearly like the Minister to give something between an assurance and a guarantee that during construction there will not be a closure of Paddington or a major decline in services from the south-west, although I do not understand from the detail of the project planning that has taken place so far how that is to be prevented. Following the speech of the noble Lord, Lord Berkeley, and given the growth in demand for track capacity, I am concerned whether, post project, services from the Thames Valley, the south-west and south Wales will be available in sufficient capacity to provide a vital transport link for, particularly, the south-west.

At the moment there is some growth in air travel from the south-west into the south-east and, obviously, in car journeys. But government policy on climate change and other matters—on which I congratulate the Government for their objectives if not their policies—is there to try to increase rail travel and to reduce internal air travel and car usage.

I hope the Government understand the great concern that we have in the south-west. I spent some 17 or 18 years of my career in the freight industry, mainly the road freight industry. Surely the great success of the rail freight industry after a long decline must not be allowed to be an impediment to the growth in passenger transport. This is an important area for the non-carbon transport of freight and passengers.

On behalf of the people of the south-west, south Wales and the Thames Valley, I look forward to a robust assurance from the Minister about this long-term, grave issue, about which many in that part of the country feel there is little understanding. Although we understand that the project is important to London, the people west of London cannot be forgotten during the passage of the Bill.

My Lords, like the noble Lord, Lord Teverson, I am a regular Paddington user. I declare an interest as a member of the stakeholder group of First Great Western passengers.

Travelling from Cardiff to London, I appreciate when the train takes the strain, but I also know how maddening it is when trains do not run on time or even do not run at all. I therefore appreciate the Motion and the speech of the noble Lord, Lord Berkeley. I seek assurance from the Government that, during the construction phase of Crossrail and thereafter, the travelling public in the country’s western region will not find their already frail and, in some parts, overloaded rail infrastructure degraded or the improvements that are in hand compromised.

This route is essential for the economies of the south-west and Wales. The noble Baroness, Lady Valentine, referred to the London economy and I seek assurance that the regenerative projects of Wales are recognised and will be respected during construction so that they are not jeopardised.

In his opening remarks, the Minister explained that there will be major construction activity at Paddington and its approaches, around the maintenance depots at Old Oak Common, at Acton Yard and between Airport Junction and Maidenhead. Unless carefully managed and resourced, this level of activity could have a significant deleterious effect on operator performance on the Great Western main line.

The noble Lord, Lord Hanningfield, referred to serious problems at Rugby and Liverpool Street over the new year, which were attributed to shortages of skilled technicians and poor project management. Where will the large numbers of skilled rail engineers and technicians to work on the Crossrail project come from? Are large training programmes being established? If they are not around now, they will certainly need to be around to build Crossrail.

Given the recent events on the national network, will the Minister explain how the existing passenger operations will not be severely disrupted during the construction phase? If there are serious delays, how will existing train operators be compensated for any disruption so that, where passengers are affected by the works, they may be rightly compensated, particularly now that they are having to pay very high fares? Surely the train companies should receive compensation for something that is completely beyond their control.

Stations such as Paddington and Reading are already under great pressure due to high levels of activity. By my calculations, about 18 million passengers pass through Reading station. I know that First Great Western, whose customers comprise 83 per cent of this traffic, is developing proposals with the Department for Transport to acquire an additional 50 vehicles to improve capacity on Thames Valley fast and local services and to address the predicted growth in demand on the routes into Paddington. Crossrail will not be the answer to the present rising demand because it will come too late. Once the increased capacity trains are running, it is important that the pathing capacity remains available so that they can run during the construction period and beyond. I ask the Minister how the scheduling of the works for Crossrail will facilitate the introduction of new train capacity. For example, if works to lengthen the platforms for the Crossrail services are undertaken early, longer trains could, prospectively, be operated for the benefit of customers before 2017.

The rail freight companies have certainly lobbied hard to protect their existing and prospective customers with the commencement of Crossrail. Yet in this country passengers and freight share the tracks. I wonder how the slow freight lines will be altered and how this will impact on the passenger transport and hence the local economies to the west of Paddington.

Stations from Paddington out are already nearing capacity at times. On the First Great Western network, Maidenhead is the seventh busiest station, with a throughput of 4 million passengers a year, and Slough is the fourth busiest, with its 5.7 million passengers annually. Currently customers at these stations have a high-frequency service to and from London with high-speed trains stopping there. Will provision of such a level of services be sustained when Crossrail is introduced? How will Crossrail affect the population? Will they be forced on to stopping routes? How will the current franchise holders be affected?

Who will operate the branches to important commuter towns such as Windsor, Greenford and Marlow? The agreement with Transport for London says that the Crossrail train operating company will incorporate,

“certain existing local services currently operating into and out of Paddington and Liverpool Street stations, in so far as this profiling is strictly necessary to operate the Services running through the Central Tunnel”.

This implies that the diesel train operated branches could be excluded from the electrified Crossrail network and remain within the Great Western franchise. There needs to be clarity on this, so that the development of services for those branches can be continued by the Department for Transport and the franchise operator, without uncertainty hanging over the issue. Will the Minister clarify this point and, in doing so, say what will become of the through services that some branches have to and from Paddington and whether they will be accommodated by slow lines? It is essential to know whether the branch lines will be electrified, as suitable new rolling stock will have to be secured.

Finally, can the Minister comment on any announcement on the extension of Crossrail to Reading? This year, the key decisions have to be taken on the layout of the new Reading maintenance depot, the remodelled station and the scope of the construction works. To secure best value for the taxpayer, avoid abortive costs and secure the best offers from contractors, whether and to what extent Crossrail will run into Reading must be clear. Management of this important project needs meticulous attention to enhance, and not damage, the economies to the west of London. As someone who lives in Wales, I am concerned about damage to its economy, since we have now established an improved passenger service in and out of south Wales.

My Lords, it is a pleasure to follow the noble Baroness, Lady Finlay of Llandaff. In the lych-gate of the Anglican church at Caerwent in Gwent, where my late grandfather was a vicar at the outbreak of the last war, there is a memorial to the leader of the tunnellers of the Severn Tunnel from his colleagues. Notwithstanding the words uttered by the noble Baroness, Lady Finlay, that seems a good Welsh omen for this evening’s business.

“Underground” is one of those rare words that end with the same three letters as they begin. My former constituency of the Cities of London and Westminster was the very nexus of the London Underground system, with 26 stations within its boundaries. It is no surprise, therefore, that Crossrail, the subject of this Bill, will run straight through it. I am not an enthusiast for the word “stakeholder”, but I am delighted that the Corporation of London, which contributed to the original funding of the Underground in the 1860s, is also contributing handsomely to the funding of Crossrail, both directly and indirectly, which I presume makes it not just a stakeholder but a fully paid-up stakeholder.

In this Bill, London history is repeating itself, as so often. The City as the country’s financial and trading centre had a long start over Westminster as the country’s centre of government, but neither has ever been challenged since in its respective role. They are, and have always been, inextricably linked by their very closeness. It is not an accident that the last battle in London prior to the Blitz in 1940 was fought, in the reign of Bloody Mary, on the very line of route and communication between Westminster, which was not then yet a city, and the City of London.

I therefore suspect that, subject to some of the things that were said earlier in the debate, there is not much disagreement in your Lordships’ House this evening about the principle of the Bill and its seeking to improve east-west transport links in central London and beyond, although I have to qualify that remark by drawing attention to the need for answers to the financial questions raised by my noble friends Lord Hanningfield and Lord Jenkin of Roding. The Bill has had its gestation problems, to which others have alluded, with at least one false pregnancy. However, provided that all goes well, including with the queries of my noble friend Lord Jenkin, progress on this project in the next decade promises to be much swifter than the evolution of previous centuries. That is essentially due to the sheer scale of the enterprise.

The present intended budget exceeds the combined current budgets of the 2012 Olympics and Heathrow’s new Terminal 5, and falls not far short of the combination of the envisaged cost of the Olympics and the actual cost of the 31-mile Channel Tunnel. Its intended budget, again subject to the exploration of my noble friend Lord Jenkin, is recorded in as many digits as a London BT telephone number, even when the numbers of billions of pounds have reached double figures. Agreement on it through this Bill would be, in the words of 1066 and All That, “a Good Thing”, as earlier speeches in part have demonstrated. The big bang in the City in 1987 launched the process by which London’s pace of economic growth began for the first time in the recent era to exceed that in the rest of the country. That momentum now has a truly international significance. My speech is therefore not on the principle.

There are, I acknowledge, things that are different from what happened in the past. I had a constituent in Covent Garden who, from a private sector career in the exploitation of international transportation, became a professional, self-funding witness at any number of transport inquiries or consultations. His private interest was military history and his pursuit of that subject afforded him many opportunities to inspect international transport arrangements across the world. It was he who pointed out to me that there is a global trend, at least in the northern hemisphere, arising from climatic characteristics, which I do not see climate change as altering, towards universality in placing really major airports to the west of the cities that they primarily serve. Thus, in the 21st century, Heathrow is a new central factor in London’s importance and, therefore, in that respect, Crossrail is a potential a fortiori major infrastructure asset and facility, subject to the practical considerations that other noble Lords have raised.

However, if the principle of the Bill is common ground, there will remain under the hybrid Bill procedures details to be resolved in securing success for the enterprise. In that sense, I echo other noble Lords who have spoken. I realise that a hybrid Bill is not precisely the same as a private Bill, but the Select Committee element is the same. I had experience of participation, at least behind the scenes in your Lordships’ House, in a recent private Bill, the London Local Authorities Bill. The chairman of the Select Committee on that Bill, the noble Baroness, Lady McIntosh of Hudnall, said that there were issues in it that were of concern to the committee but that the committee could deal only with those issues brought before it. The Motion of the noble Lord, Lord Berkeley, speaks to that point. Between the Select Committee and Third Reading in your Lordships’ House, the promoters of that Bill, in an action that I understand was unprecedented, withdrew the whole of Part 4 on the ground that the Government’s attitude to it had changed in not one but several departments.

I do not suggest for a moment that that will be repeated with this Bill, but the narrative that I have recounted implies some inattention to the implications and details of the Bill during its earlier consideration by a series of government departments. The central principle of this Bill will be better served if the Government recall the adage that for a ha’p’orth of tar the ship was lost or, even worse in the eyes of my former constituent, that for the loss of a nail an empire was lost. My noble friend Lord Jenkin of Roding gave an example of a commitment given by the Secretary of State for Transport that was not fulfilled in the engine room of government. The noble Lord, Lord Berkeley, made reference to a key assurance on rail freight that was omitted from the Select Committee report.

I shall give a tiny example of my own. Between pages 104 and 128 of the Bill, which encompass Schedule 6, five numbered plots of land, scheduled for compulsory purchase—one of them twice—in the basement of Smithfield Market and the ramp to it, still appear in the legislation, even though agreement has been reached in all five cases to take them out because they are no longer needed. Momentum to create Smithfield Market did not occur until the 1360s, when butchery in the City was banned from residential areas, but people there have still had six centuries or more to get used to the ways of the world. One of the hazards, however, of major projects is blight, one of the causes of which is uncertainty. It would therefore be helpful if the Minister indicated how these cruces, where agreements have been made but have not yet been reflected in the Bill, will be handled and tidied up legislatively.

Provided that the financial uncertainties to which my noble friend Lord Jenkin referred and the questions that have been raised in relation to the hinterland to the west of Paddington are resolved, my attitude in the ultimate analysis is optimistic. I once asked my former constituent whose private interest was military history—I mentioned him before—how he selected the campaigns or battles across the world that he went to examine on the ground. “That’s quite simple,” he said. “I invariably choose British disasters. They are much more interesting than British victories”. My confidence that we shall not have on our hands in engineering terms the sort of mishap that took my friend across the world is based not only on the qualities that caused the new Jubilee line stations to win the prize for the relevant year’s best new buildings but, most particularly, on the extraordinary achievement very close to your Lordships’ House, when over a significant period Transport for London kept Westminster Underground station running normally for District and Circle line tube trains while, at the same time, in one direction Portcullis House was being built over their heads and deep in the other direction, at various levels, the infrastructure for the Jubilee line at Westminster was being constructed. That was a feat of Victorian proportions and an excellent omen for the great project to which we are seeking to give a further push in this Bill tonight.

My Lords, I welcome the Crossrail Bill for the benefits that it will bring to all parts of the metropolis and its businesses. However, I am disappointed that the more ambitious Superlink scheme did not find favour with the promoters, as I think that in the longer term it would be more financially beneficial.

The choice of Maidenhead and Shenfield as the termini of the proposed route is ludicrous, although I understand that Reading is now being considered as a more practical western terminus for the scheme and that some provision has been made for this in the current planning of the redevelopment of the Reading station. I hope that the Minister can confirm that this is the case.

As I said in our transport debate on 29 November, Crossrail should merely be the precursor of a major east-west route from Newbury, Swindon and Banbury through to Ipswich, Colchester and Southend. Such a choice of destinations would greatly relieve the provision of train paths for Crossrail trains, as they would merely replace the existing paths currently terminating at Paddington and Liverpool Street. The new proposal to terminate at Reading is a modest move towards this goal. For instance, why could there also not be a direct service from Heathrow to Stansted? It could easily be inserted into this scheme when it comes to fruition.

Obviously, the above implies electrification of the outer suburban lines terminating at Paddington to the aforesaid railway stations, including some of the minor branches, but this should be actively pursued anyway, particularly considering our current energy situation. Electrification gives much greater diversity of energy supply, be it from coal, gas, nuclear or a green source. Not only that, but electric traction has a much lower carbon footprint than the existing diesel-powered stock.

I should be interested to know what signalling system is proposed for Crossrail, and whether it will use the European Rail Traffic Management System or something more conventional carrying less risk.

Noble Lords should not think that I do not support Crossrail. I just think that it should merely be the precursor of a major east-west rail corridor similar to the north-south route provided by Thameslink.

I remind the House about the success in building the CTRL on time and to cost. As a regular user of the east midland main line into St Pancras, I know that there has been minimal interruption at St Pancras due to the extensive track rearrangements that have occurred.

I had hoped to be on the Crossrail Select Committee together with the noble Lord, Lord Brougham and Vaux, but we are both barred by our membership of the All-Party Crossrail Group.

I wish the Bill well, and hope that some of my comments come to fruition.

My Lords, it is a great pleasure for me to join every other noble Lord who has spoken in this debate to give the Bill my full support. It is not every day that legislation comes before your Lordships' House to build a new railway, and it is a measure of the nation's growing confidence in rail as a means of transport that Crossrail enjoys such widespread support in all political parties, on all Benches, among the business community and within local government in London.

During Third Reading of the Bill in another place on 13 December, Tom Harris, the Minister for Railways, said that Crossrail would add 21 per cent to rail capacity to the City and 54 per cent to that to the Isle of Dogs,

“thereby relieving congestion and overcrowding on the existing national rail and underground networks. It will support the development of London as a world city and in its role as the financial centre of Europe and the United Kingdom”.—[Official Report, Commons, 13/12/07; col. 553.]

I agree with that. Indeed, if we are serious about maintaining and enhancing economic activity in London, there is no alternative to building Crossrail. By 2016, the Underground is likely to be carrying 25 per cent more passengers than today, which is an average of 3.4 million each day. I also endorse what others have said about the value of running 24 services an hour in the peak in both directions through central London, and of carrying 200 million passengers a year in a new fleet of express mainline trains. The benefit to cost ratio of Crossrail will be an excellent 1.8:1, and I see that the Government estimate that Crossrail will generate cash benefits to the UK gross domestic product of at least £20 billion—and it could be much more.

Thirty years ago, less enlightened and shorter-sighted local and national politicians—and the planners who advised them—believed that the country could largely do without its railways, and that the solution to our transport problems lay in building miles and miles and miles of new trunk roads and motorways. Those days are now happily behind us, and the railway is seen as the best option. Crossrail will, I suspect, be just one of a number of major new rail projects that we shall see built or at least started in Britain over the next 20 years.

I have one or two practical questions on some details of the Bill, which I hope my noble friend Lord Bassam may be able to answer either today or later in writing. First, can he assure me that the tunnels through central London will be built to a gauge which would permit, at a later date, the opportunity to run double-decker trains and thereby hugely increase capacity? I am sure that he would agree that it would be short-sighted to close off that option for later capacity enhancement.

Secondly, I note the ingenious and welcome funding formula, about which the noble Lord, Lord Jenkin of Roding, spoke so clearly, and the grants from the Department for Transport, Transport for London, and £2.5 billion from other sources, including contributions from Network Rail, the City of London Corporation and from some of the businesses which will benefit from the line's opening. Is the funding package made on the premise that there will be premium fares for the services carried on it, or is it intended, as I very much hope, that Crossrail will be seen as an integral part of the Transport for London network, with Oyster cards and other travel cards freely available on it, and not be subject to the sort of sky-high premium fares charged on the Heathrow Express?

In reading some of the Hansard reports of proceedings in the other place on this Bill—and I confess that the Christmas Recess was not long enough for me to be able to study all of them, because the debate went on for a very long time there—I found that some interesting issues and questions emerged. One or two have been referred to this evening. There were two significant and welcome improvements; one was the plan for better passenger facilities at Liverpool Street and, as my noble friend said, the inclusion of a new station for Greenwich. But there were also some very serious arguments for extending the line westwards to Reading and eastwards to Ebbsfleet. Both propositions enjoyed very wide support in the other place—and, indeed, my noble friend will have noticed that there is substantial support for the Reading option in this House today.

I first came across the Crossrail scheme when I was advising the British Railways Board in the 1980s. At that stage, none of us had ever heard of Ebbsfleet, and it was certainly never envisaged that it would become the most important intermediate station between London and the Channel Tunnel. But now the logic for taking Crossrail to Ebbsfleet rather than finishing at Abbey Wood, seems unanswerable. The argument for Reading, rather than Maidenhead, to be the western terminus is even stronger; I agree completely with the noble Lord, Lord Bradshaw, and the noble Baroness, Lady Finlay, on that matter.

The Government have already agreed that more than £400 million should be spent on improvements at Reading station. Those will include four more through platforms and at least one additional bay platform, and the corresponding junction improvements. Given that Reading is already the second busiest railway station in Britain outside London—only Birmingham New Street has more trains and more passengers—it seems perverse for it not to be the western Crossrail terminus. An interchange there would work so much better than at Maidenhead, and the benefits for travellers from the Thames Valley, from the south-west, to which the noble Lord, Lord Teverson, referred, from south Wales, as the noble Baroness, Lady Finlay, said, from the Cotswold Line—I declare an interest as the president of that line's promotion group—and from places south and west of Reading such as Newbury and Basingstoke, would be enormous. The benefits from a terminal at Maidenhead would be very small in comparison.

There are signs that the Government now agree. Tom Harris in the other place said on 23 October:

“I accept that the arguments for extending Crossrail westwards to Reading are persuasive. However, it is not the Government’s intention to redraw the Bill as it stands at the moment”.

Noble Lords should note that “at the moment”. He went on to say that,

“it will be up to any future Government to decide, if they so wish, to extend Crossrail. We have already safeguarded the route from Abbey Wood down to Ebbsfleet, and we are considering whether similar action should be taken with regard to the route west from Maidenhead to Reading”.—[Official Report, 23/10/07; Commons, col. 205.]

A nod's as good as a wink, and we need not feel inhibited in this House during the Bill's later stages and be prevented from proposing amendments which would enhance the benefits of Crossrail by getting the eastern and western terminuses right—at Ebbsfleet and Reading.

The Minister in another place said that extensions could be achieved by means of Transport and Works Act 1992 orders, but it would be much more satisfactory if both places were named in the Bill. It would be a proper use of this House's powers to revise and improve the Bill in that way when we have the opportunity to do so.

This is a good Bill and a welcome development, and I wish it and the Select Committee—which I hope will not be spending four years on it—every good fortune when we look at it in detail later on.

My Lords, I declare an interest as a vice-chair of the All-Party Crossrail Group which has been an attentive follower of the progress of the Crossrail project and of this Bill for a number of years. As a group, we are certainly pleased to see that, at long last, encouraging progress is being made to realise this project, which is widely accepted as essential to improving London's transport network. I am afraid that that was why I was barred from sitting on the committee, as my noble friend Lord Methuen said—we would both have liked to.

I begin by congratulating the members of the Select Committee on the Crossrail hybrid Bill in the other place on the efficient and judicious way in which they dealt with petitions against the scheme. The committee faced a total of 466 petitions lodged against the Bill, and heard from some 200 of them—an impressive record. Concerns from residents along the route included issues such as protection from noise and construction impacts, the times of day when work would be undertaken, and shielding from lighting. Representatives from the rail industry also expressed concerns about the integration of the Crossrail project with the existing network and the implications for rail freight, which has already been mentioned.

I hope that the commitment given in the other place will have provided appropriate solutions to the majority of these concerns, although I am sure that some of these issues will be brought up again in Committee in this House. I only hope that satisfactory progress is made to ensure that the construction of this much needed project can begin as swiftly as possible.

I am sure that we have all, at one time or another, experienced the overcrowding, reliability problems and delays which currently affect London's transport network. Much of London’s transport infrastructure is old but is used by millions of passengers every day. There is urgent need for extra capacity within the system. Crossrail will meet that need by increasing the number of trains, improving the quality of service and reducing overcrowding, particularly on the Underground.

The project will release pressure at some of London's busiest transport hubs by letting passengers avoid busy interchanges at Liverpool Street, Paddington, Waterloo and London Bridge. Commuters travelling to Farringdon from Romford, for example, will no longer need to change trains, releasing platform capacity at Liverpool Street, which will allow additional trains to use the station. It will allow passengers to travel directly from Heathrow Airport, to the City and beyond. It will also reduce overcrowding at Paddington station and will be a key part in supporting and developing London's position as a global financial centre.

The benefits of Crossrail, as has been said, will be felt much more widely. It will enable the growth of new communities in the Thames Gateway. It will create jobs and help businesses in central London and elsewhere to employ more people and will help secure London's position as a global city. It is often suggested that investment in Crossrail is at the expense of investment outside the capital, but it is well proven that investing in London is the best way of supporting the UK economy. The benefits of Crossrail will be felt nationwide.

I was pleased that the Government were recently able to provide confirmation of the funding package for Crossrail, bringing to an end the uncertainty surrounding their commitment to the project. I urge the Government to now move swiftly to clarify their proposals on supplementary business rates and a statutory planning charge so that all those who stand to benefit from Crossrail are clear about the contribution that they will be expected to make to the project.

With great respect, I must say that the Motion in the name of the noble Lord, Lord Berkeley, is to my mind totally wrong. The only way that he can achieve what he wants to is to petition the Bill. As I understand it, members of the committee cannot ask for evidence to be put to them. They can only hear what is put to them by the petitioners. I hope that he will withdraw his Motion. If I was on the Committee, I would feel a little hurt and insulted to be told what to do.

Finally, I urge the Government and noble colleagues to work together to allow the Bill to pass swiftly through the House. The Crossrail project has been a long time in development and I hope to see its enabling Bill enacted as soon as possible so that London and the rest of the country can begin to feel the benefits of this essential infrastructure investment.

My Lords, when Gordon Brown was interviewed by Andrew Marr on his morning programme last Sunday, he gave the same answer to nearly every question. His recent short-term difficulties, we learnt, would soon pale into insignificance because he intended to concentrate on long-term policies. His premiership was going to be judged by the difficult decisions that he was going to have to make on Britain's long-term issues. There were long-term decisions on education, housing, Afghanistan, Pakistan and global warming, but, significantly, there was no mention of any long-term vision for transport. How, for instance, will we travel from one part of Britain to another in 2025? With the intended reduction of carbon emissions, it cannot be the same way as today, yet the Government do not seem to have any co-ordinated transport policy for the future.

All major new transport initiatives seem to be decided independently of each other and, in many instances, feel like some sort of short-term fix, brought on to alleviate one particular problem, with the result that when one project has eventually been completed, time has caught up with it and it has now become inadequate for purpose. The Crossrail project may be no exception.

However, I am sure that most of us want Crossrail to go ahead. In fact, many of us wanted it to go ahead many years ago. So, at this stage there is some reluctance among its supporters to propose major improvements and amendments to the Bill for fear of delaying it further. That is a restricting factor for those of us who really want something more ambitious.

Crossrail is a one-off. It is almost entirely devoted to relieving congestion in London and in particular,

“to bringing travelling relief to many, many commuters”.

We all applaud that and accept it as a very worthwhile objective, but with it comes the ominous government statement that,

“it is the only new line that can be built for the next 20 years”.

I am not sure whether that means the only new line in London or the only new line in Britain. I am hoping that the Minister may enlighten us on this. But whatever it means, it is a gloomy prediction.

Eighty per cent of the Crossrail budget is to be spent on tunnelling under London and establishing the new underground stations. Surely if we are going to take the trouble of undertaking such an expensive exercise, it should be there not only for the benefit of those coming in and out of London but should also be a conduit for travellers from Kent and Essex to pass through London to the west and for those living well to the west of London to reach places east of London. But in order to do this there would need to be provision in the Bill—at the moment there is no such provision—to make connections with many other existing lines, not just the ones proposed in the present scheme.

I am also concerned about the proposed line into Heathrow Airport. The new line is intended to come only into terminal 5. Many people have already mentioned that this would mean having to change at Paddington and go on the Heathrow Express if you wanted to go to any of the other terminals. Surely it needs to link up with all five terminals. Surely that makes sense. I would also like assurance from the Minister that there is nothing in the Crossrail plans that could prevent future development of a high-speed rail network linking Heathrow with the north or with the Channel Tunnel.

We all welcome Crossrail—at least most of us do, although some in the west may not welcome it so strongly—but I fear that once it is completed in 2017 or thereabouts, passenger traffic in London will have increased to such an extent that by then it will prove less than adequate for the purpose for which it was intended.

My Lords, as most noble Lords have stated, Crossrail has been a very long time coming, and has not been without issues along the way. I am sure that the debate about its route and possible extensions will continue well beyond its in-service date when services begin in 2017.

As the shadow Rail Minister in the other place put it in the remaining stages debate on 13 December, the Conservative Party’s position had been clear throughout the Crossrail Bill’s parliamentary stages. We have always supported Crossrail in principle but we needed to be certain of the funding and we needed to know for certain that the funding package was robust. Furthermore, the shadow Secretary of State for Transport has said that,

“the Conservative Party acknowledges the strong business case for Crossrail”.

I am therefore delighted that the Bill has now reached this House with all-party backing.

I wish to highlight the wide-ranging support the project has attracted, not only from all sides of the Houses of Parliament, but from leading businesses, business organisations and trade unions. One need look only at the Campaign for Crossrail website to see the great and good supporting the project. This is not surprising when we consider how vital Crossrail is for the UK economy, especially for financial and business services and tourism. To maintain London and the UK’s competitiveness and growth, London needs further transport infrastructure investment. First, we need the Tube PPP to be fully implemented as soon as possible. But we need this only to stand still. For the step change needed in transport capacity from east to west and vice versa we need Crossrail very much and we need it up and running as soon as possible. I hope that the Minister can assure us that the current in-service date for the project of 2017 will not slip.

As the Minister explained, Crossrail’s economic benefits are forecast to be high. It will enable the continued growth in the number of high value added jobs in the financial and business services sectors in central London. The creation of these jobs will benefit not only London’s labour market but the whole of the UK. I make the obvious but important point that people in these jobs will go on to spend their wages, and pay taxes, to the overall benefit of the economy. These jobs could not be created without Crossrail’s ability to solve decisively the problem of how to transport large numbers of people swiftly to and from London’s most productive areas—the West End, City and Canary Wharf.

London is the most productive part of the UK economy. Oxford Economics stated in February 2007 that London was subsidising,

“less affluent areas of the country to the tune of more than £13b a year. The average person living or working in London pays about £1,740 a year more in tax than (s)he gets back in public spending on infrastructure such as roads and schools”,

and rail.

I draw the attention of the House to the comments of Mervyn Davies, chairman of Standard Chartered and chair of the UK Business Council, who said he is,

“delighted the Government, the Mayor and the business community have all recognised that Crossrail is a priority if the competitiveness of the UK’s financial services industry is to be maintained”.

Similarly, Miles Templeman, director-general of the Institute of Directors, has highlighted that,

“good transport links … are an essential pre-requisite for a thriving economy”,

and Stephen Hester, chief executive, British Land, said:

“Crossrail is important to the future of London: it will ensure the continued regeneration and development of the Capital—the key motor in the UK economy”.

I now turn to another interest of mine. Crossrail will go a long way to help to increase incoming tourism to the UK and indeed outgoing tourism from the UK. It is a shame that it will not be here in time to ease the journeys of those travelling to the Olympics. When we were talking about Crossrail five or six years ago, it was still hoped then that if everything came through it would be ready for the Olympics, but clearly it will not. It will be important in developing the Olympic legacy and bringing business to the East End. It is still needed to improve visitors’ experience of travelling to and around London so, we hope, visitor numbers will continue to grow. An obvious question to ask here, as has been mentioned, is which of the various Heathrow terminals Crossrail will serve. In an ideal world, somehow Crossrail should serve all the Heathrow terminals, not just the soon to be opened terminal 5. I wish the discussions between BAA, BA and the Cross London Rail Links—CLRL—the very best.

Sir Nicholas Serota, director of the Tate family of galleries—Tate Britain, Tate Modern, Tate Liverpool and Tate St Ives—made this point better than I. He said:

“In the globalised world, a strong transport infrastructure is essential if we are to continue to attract international business, tourists and students to London. Crossrail offers the opportunity for a dramatic improvement in movement for visitors and Londoners”.

That sentiment is echoed by Michael Day, chief executive of Historic Royal Palaces, Tim Scoble, chief executive of Thistle Hotels, and Simon Vincent, area president of Hilton Hotels UK and Ireland, to name but three other supporters.

Once the route is finalised, I am confident that the property and hotel sectors will use Crossrail as an opportunity for further investment with the upgrading of existing assets and the building of new ones on or near the route. Indeed, interestingly this is already happening. The Department for Transport has sanctioned a deal with Greenwich Council that would see developer Berkeley Homes foot the bill for construction of an underground station box at Woolwich, in return for the rights to build 2,500 homes above and in the vicinity of the station. Berkeley would also contribute to the costs of fitting out the station, but would be reimbursed by CLRL for any savings that CLRL would make through avoiding extra works at Woolwich when it constructs the line.

Turning to the costs in general for the whole project, what assurances can the Minister give the House that the costs of this project will not escalate? While I recognise that they are jointly responsible, the Government have not had the best track record when it comes to keeping projects on time and on budget, be it the aircraft carriers or preparation for the Olympics. In October 2007, the Government agreed that they would step up to the plate as the financial backer of last resort. Will the Minister confirm this commitment to the House today? Now that Crossrail east to west is properly under way, can we have an assurance that the Government will start thinking soon about Crossrail north to south? I wish the Bill a smooth passage and I look forward to travelling on Crossrail in 2017.

My Lords, after two and a quarter hours it is time to begin summing up. This Bill provokes me with my parallel experience of being a neighbour and landowner adjacent to another railway project, the Stirling-Alloa-Kincardine railway, which is dependent on the Stirling-Alloa-Kincardine Railway and Linked Improvements Act 2004, in favour of which I campaigned. I look forward to its completion and the fulfilment of the benefits that it will provide for Alloa, Longannet power station, the Forth rail bridge and the rail network in central Scotland. There are parallels. However, since there are outstanding issues for me over the extent of compulsory purchase, the delays in the restoration of land temporarily compulsorily leased and of access partially denied by operations and by the parking of contractors’ vehicles, I look with some interest at the Crossrail Bill and the project, because it is much bigger.

From the railway operation point of view, two things give me apoplexy; the plan to use Maidenhead as the western terminus as opposed to Reading and the shortage of other connections and, secondly, the disgraceful approach planned for rail freight operations, or perhaps non-operations. I hope that the Minister will revive me from my apoplectic state on those issues.

Recalling how the leadership of the Stirling- Alloa-Kincardine project was transferred from Clackmannanshire Council to Transport Scotland, I am interested to hear who the client will be, who will be the eventual owner of the new infrastructure and how that transfer will be worked out.

Going back to the Stirling-Alloa-Kincardine railway story, there was a silly situation whereby Network Rail wanted to charge EWS and other freight operators additional track access charges, when the coal trains to Longannet switched from the Forth rail bridge to the new railway, on the grounds that the new railway was not part of the rail network when EWS originally acquired its track access licence. Will the Minister please assure everyone that this type of scenario will not happen in London?

Looking through the Bill, I notice a few items of interest. I welcome the planned absence of level crossings. How many burial grounds are expected to be disrupted? How many roads, bridle paths and footpaths will have to be stopped up? How much disruption of towpaths on rivers and canals will there be and how will that be mitigated? Powers exist to deal with trees adjacent to the line—a question close to my heart. Will the promoters themselves choose to deal with the trees or just issue orders to private owners? I shall stop there and raise a question about the restoration of land. I wonder whether it would not be better to allow 12 months, rather than the six months specified in the Bill. What about deemed planning consent for 10 years and compulsory purchase powers for five years? Are these periods long enough?

During the debate stress has been laid on other topics. The Minister correctly reminded future members of the Select Committee of their potential task of resolving individual interface issues. I recall doing approximately that as a commissioner for the Strathclyde tram inquiry under the now-devolved Private Legislation Procedure (Scotland) Act 1936.

The noble Lord, Lord Hanningfield, saw Crossrail as a “heart bypass” for the economic region and welcomed the project. He also questioned the range of operators there are to be on the new line and majored on the financing of the project. My noble friend Lord Bradshaw saw problems with the termination at Paddington of trains from the east and with the proposed Maidenhead train depot, which should be in Reading. He also said that Heathrow services were not yet well devised. The noble Baroness, Lady Valentine, saw many benefits for the United Kingdom economy and its south-eastern centre, and said that this was an unusual public financial venture.

The noble Lord, Lord Berkeley, called for a project that would work straight off, not after subsequent changes. He explained that his Motion for amendment was an insurance scheme. I think I understood that. Freight has yet to be fully integrated into the proposed timetable. He said that there was a risk that the Rail Regulator’s independence will end up being overruled. The noble Lord, Lord Jenkin of Roding, reminded the House of how long this project has been running—since the early 1980s—and pointed out that it is hoped to be open in 2017. He researched the funding of this project to a considerable degree and reminded the House that the Government should not get involved in quasi-commercial ventures.

My noble friend Lord Teverson continued to rue the lack of direct trains from the west of England and south Wales to east London and the inability of the current network to handle growth of rail traffic on these lines. The noble Baroness, Lady Finlay of Llandaff, was concerned also about the effect of the work in London on the south Wales economy—she is right—and on passengers merely coming to London, let alone those trying to go through the Crossrail tunnels. The noble Lord, Lord Brooke of Sutton Mandeville, had us all checking out the curiosity in the spelling of “underground”. It is amazing what amuses people like me. He also gave a broad, critical and historical review of the issues.

My noble friend Lord Methuen complained about the opportunity lost for a much wider through-train network. I agree with that. The noble Lord, Lord Faulkner of Worcester, praised the new and well placed confidence in the railway to provide solutions—especially in the context of ever-increasing patronage. The noble Lord, Lord Brougham and Vaux, praised the detailed work of the Select Committee in the Commons in dealing with individuals’ concerns. My noble friend Lord Glasgow noted that the Prime Minister seemed to have no long-term thoughts about transport—at least when he was speaking to Andrew Marr. My noble friend spoke up for a Great Britain-wide high-speed network. I remind my noble friend that there are, of course, four railway projects under construction in Scotland, so the “only one in 20 years” must refer to somewhere else. The noble Lord, Lord Luke, was concerned that funding supports the Bill which has wide support right across the economy.

In conclusion, the House will benefit from the Minister’s reply, which I will delay by only two final sentences. The Crossrail project will benefit all those who live and work in London and those who visit London. It is not just a London project but people from Scotland will benefit in the future, whether as sovereign neighbours or as junior partners, as they interact with London, undoubtedly a world city.

My Lords, this has been a very stimulating debate. I recognise, from having listened carefully to almost every word that was spoken, how broad the debate was and how interesting the contributions were. At the outset of the debate, I was grateful to see below the Bar of your Lordships’ House the Rail Minister. He sent me a very kind note. He also stayed to listen to the first couple of contributions. I am grateful, especially, as having listened to everything that everyone else has said, I shall now have an interesting conversation with the Rail Minister to reflect further on those contributions.

In broad terms, the House has welcomed the Bill. One greatly appreciates and understands why that is the case. We have waited a long time—some say too long—for this Bill to come along. However, during the debate, there were times when I had some Monty Python moments and I was reminded of the sketch that asks, “What have the Romans ever done for us?”. It made me think more about what was said.

The issues fell into a number of convenient packages: funding and guarantees; the disruption to existing services, powerfully argued over by the noble Lord, Lord Bradshaw, the noble Baroness, Lady Finlay of Llandaff, and others; the timeliness of the project, about which sceptical observations were made by the noble Lord, Lord Jenkin, and others; and pleas to extend the line from my noble friend Lord Faulkner, the noble Lord, Lord Bradshaw, and the noble Earl, Lord Mar and Kellie, who said he was in an apoplectic state about where the line finished or started, depending on one’s view. We had a very passionate plea for the project made by the noble Baroness, Lady Valentine, because of her absolute belief in and commitment to ensuring that we have a continuous process of economic regeneration. I believe that to be one of the most important reasons for this important Bill. Others, including the noble Lords, Lord Luke and Lord Brougham and Vaux, reflected on that. Others expressed their good will and confidence in the Bill itself and in the project as a whole, but they had points of criticism and critique. Great concern was expressed about freight and the way in which it will fit into the overall package, and I shall deal with that. The noble Lord, Lord Luke, stressed the importance of Crossrail for tourism and, like most of us, regretted that Crossrail would not be here in 2012.

There is a wide range of issues for me to deal with in conclusion. I shall try to deal with as many points as I can and some in greater depth than others. I shall start with the noble Lord, Lord Hanningfield, who, as ever, is a great defender of and advocate for his patch and his brief. He asked about disruption to the Great Eastern route during construction, a subject that had a recurrent theme during the debate, with other noble Lords being concerned about impact on particular parts of the country. Works on the existing Great Eastern line are relatively minor and similar in scope and impact to the normal run of maintenance and renewal that Network Rail routinely undertakes. CLRL and Network Rail have recently written to the noble Lord on that point and I hope that those reassurances have been well received. We do not believe that there will be undue impact on Great Eastern services.

The noble Lord also asked about capacity and whether sufficient thought had been given to the impact on Liverpool Street. I thought that I had demonstrated one of the aspects of that earlier. Services and station layout have of course been the subject of extensive passenger modelling, including assessments of the ability of the network to handle much higher loads than are currently forecast, and we are confident that that can be achieved. The noble Lord also asked whether petitioners would have an appropriate opportunity to be heard on Crossrail extensions. If there were to be an extension to Crossrail it would proceed under the normal procedure, which would give all the appropriate opportunities for those affected to be heard. There will not be procedural shortcuts as a consequence of the Bill.

My Lords, before my noble friend leaves that issue, he said that extensions could be looked at under the normal procedure. Is he referring to the Transport and Works Act or does he mean a change to the Crossrail Bill?

My Lords, of course our preference would be that it should be looked at through the Transport and Works Act, because that would ensure that there was no unnecessary delay in the current process. Of course, the petitioning procedure enables representations to be made on that issue, and one would expect that petitioning to take place; the process will allow that to happen.

I want to use some of the time to concentrate on the funding issue because a number of noble Lords raised it, and I want to explain our thinking a little more on this. The funding package laid out in the Comprehensive Spending Review splits the cost of the project equitably between the Government, Crossrail, fare payers and the private sector. I do not accept that the funding package is overly conditional, rather that the heads of terms agreement says that the DfT and TfL will find the required funding and puts them on risk to do so. Taxpayers will contribute around one-third of the cost by means of a grant from the DfT, which is just over £5 billion. As has been made plain, contributions have in principle been agreed with some of the project’s key beneficiaries along the route. The Canary Wharf Group will be responsible for delivering the Isle of Dogs station, and the City of London Corporation and the BAA have given assurances too.

On the issue raised by the noble Lord, Lord Jenkin, on the funding package, we have been negotiating with the BAA in particular on a number of matters, including a substantial financial contribution to the project, and we are confident of reaching agreement on all matters relating to the BAA in the near future. He and others raised the issue of the business rate and uncertainties. We have produced a White Paper on the subject of the supplementary business rate and our intention is to enable such proposals to be taken forward by bodies, such as the mayor. The mayor’s letter to the Secretary of State is a clear policy statement. It is right that there is much to consider before the mayor can act. Of course, the heads of terms document is an acknowledgement that discussions will be undertaken.

It is well known that the City of London Corporation has undertaken to facilitate the raising of funds. Obviously that is a matter for the corporation and its stakeholders. It is confident that it can achieve that target and we have to express confidence in it.

The other point of the noble Lord, Lord Jenkin, was about the ability of the businesses to vote on the supplementary business rate. I understand where he is coming from; he, like me, was keen to see the development of business improvement districts with their voting procedures. That issue is under consideration, obviously, as part of the preparation for the introduction of legislation, which will of course be the subject of debate in your Lordships’ House. That deals with most of the funding issues. The noble Lord drew a comparison with the Channel Tunnel Rail Link funding package. Of course, at the equivalent stage of that project’s development, the Channel Tunnel Rail Link was to be funded by the private sector as a PFI project, although in reality it was only after the Government stepped in to rescue the project in 1998—some two years after Royal Assent—that it received the necessary committed funding.

The noble Lord, Lord Bradshaw, raised diversionary freight routes for east coast port traffic. Two key freight enhancements have recently been accepted for transport innovation funding support. They will considerably assist rail freight traffic from the east cost ports. The intention is to press ahead with these because they are needed before Crossrail opens in 2017.

I have said one or two things about the proposals for extending the route, whether to Reading or Ebbsfleet. Our view, as I have already said, is that the idea of adding them on as part of the process of considering the Bill could unacceptably delay the Bill process. It would be better if we proceeded through the Transport and Works Act 1992 to consider those things at some later stage, if there is a real desire. I have heard what people said, but we must take funding issues into account. It is not right to say—as the noble Lord, Lord Faulkner, did, although I can understand why he made the argument—that the Minister had somehow given a nod and wink in another place; that was perhaps going a bit too far. But we have taken measures to safeguard the potential development of routes, as is well known. There is already some safeguarding in place for a potential extension to Ebbsfleet. I have heard what people have to say about the value of extending the route to Reading.

My Lords, can the Minister be categoric as to whether the Reading terminus is being seriously considered, or is it merely pie in the sky?

My Lords, of course it will remain a consideration. That is why we have taken measures to ensure that there is no obstruction to the development of that link at some later stage, if it is thought to be the right thing to do in transport and economic terms.

The noble Lords, Lord Bradshaw and Lord Hanningfield, and others asked about the impact on rail passenger services. It is not expected that, in normal operation, any services will be displaced to the fast lines. Long-distance passenger services will therefore be unaffected. I hope that offers reassurance to the noble Baroness, Lady Finlay of Llandaff. We are of course working closely with service providers to ensure that all our services dovetail with their schedules. Current modelling shows that the existing train timetable can be successfully redesigned with the planned level of Crossrail services, in part because of the enhancement works that are part of the project. This modelling is being refined still further at the moment. Some temporary impact on passenger and freight operators from Crossrail enhancements and network modernisation is unavoidable, as we would all accept, given the scale of investment that Crossrail will bring to the existing railway network. These works will be carefully planned by Network Rail. The detail will of course be a matter for it and it envisages undertaking the Crossrail works on the network. The detailed planning possessions will be managed through the normal industry processes nearer to the start of construction.

The noble Lords, Lord Bradshaw, Lord Berkeley and Lord Hanningfield, raised the issue of railway powers in the Bill. We have already issued a policy paper explaining that we fully intend to pull back the railway clauses in the Bill. We simply await the decision of the Office of Rail Regulation on the access option. I am more than happy to repeat that assurance. We are of course committed to using normal industry processes wherever and whenever possible to secure the appropriate rights of the operation of Crossrail services. In any event, decisions made by the Office of Rail Regulation, or by the Government, must take into account all the relevant and competing priorities.

My Lords, I thank the Minister for giving way. I want to make a specific point about the independence of the Office of Rail Regulation. Do the Government intend seriously to consider maintaining that, which is contrary to Clauses 22 to 41? Can we be assured that we will return to that issue after the Select Committee has considered the Bill so that we can address it again in Committee?

My Lords, of course, we respect the independence and value of the independent guidance and advice that the Office of Rail Regulation provides. I would have thought that the noble Lord would have judged us on our record in that respect. We work closely with the ORR and nothing I have said today or that is in front of your Lordships would preclude further debate and discussion on these matters when the Bill comes out of Select Committee.

The noble Lord, Lord Bradshaw, asked about the cost of grade separation at Acton yard and whether it was included in the cost estimate. Yes, it was included and I hope that that offers reassurance.

It is probably wise if I now spend a little time talking about the Motion for an instruction tabled by the noble Lord, Lord Berkeley. I welcome the opportunity to clarify some points on this issue and I am grateful for the noble Lord’s openness. I hope that what I say will reassure him and others on this point. I know that he is a passionate advocate for freight—it is well known in your Lordships’ House—and he is greatly respected for that.

The importance of freight has been reflected in the way in which the project and the Bill have been managed and, I assure the House, will continue to be managed. In my opening comments, I explained that to meet industry concerns the Government are seeking approval from the Office of Rail Regulation for an access option. I have referred to that on a number of occasions. This specifies what access Crossrail services can have to the main network, and it has been negotiated and agreed with Network Rail. A great deal of the timetabling work supports that and takes account of the interests of freight and other passenger operators.

It may be of assistance to your Lordships if I describe opportunities afforded to the rail freight industry to ensure that its interests are not overlooked. My honourable friend the Minister for Rail chairs a forum for railway stakeholders that freight interests, including the noble Lord, Lord Berkeley, attend. Network Rail chairs a timetabling reference group comprising the key railway interests, including EWS and Freightliner. At the request of the noble Lord, Lord Berkeley, his organisation, Rail Freight Group, joined that group some months ago. I understand that that has been received positively and is working well. It meets monthly, and discusses and seeks to agree timetabling work needed to support the access option application.

The Office of Rail Regulation consulted widely on the application for Crossrail access option, the freight interests responded and a hearing is expected in a few weeks’ time. The Office of Rail Regulation hopes to make its decision in time for the appearance of rail petitioners in the Lords Select Committee. The Select Committee in another place spent several weeks hearing evidence from rail petitioners, with the majority from freight interests. The noble Lord, Lord Berkeley, spoke to the Rail Freight Group’s petition in the committee. At page 35 of its special report, the Select Committee said,

“the freight industry faces an increasing challenge”,

but that it believes that,

“these issues are largely the responsibility of Network Rail and others rather than the Crossrail project”.

As the noble Lord said, it looked forward by concluding:

“We look to the Committee in the House of Lords to ensure that Access Option and any other remaining issues relating to the freight industry are adequately evaluated”.

Today’s debate and all the comments made about freight, particularly those made by the noble Lord, are on the record for the Select Committee to take into account as it considers appropriate. I shall ensure that those comments are drawn to the attention of the Select Committee, and it is my firm expectation that it will actively consider those issues. Nothing that has been said today in your Lordships’ House has persuaded me that anything other than that would be wise.

My Lords, I am grateful for what my noble friend said and I have no comment to make on it at all. However, looking at possessions for the construction of the link on the Great Western or Great Eastern, he said that that would be done under normal industry processes, which I welcome. However, Clause 32 gives power to the Secretary of State to override normal industry processes if he wants to. That is my problem. The Minister said he will pull back the railway clauses. If he gives us an assurance that he will remove Clauses 22 to 45 and the nasty thing in the back of the option agreement that says, “If we do not like the option agreement we will remove it and give directions”, that would be fine. However, they are still there, and that is my worry.

My Lords, I understand the noble Lord’s point. He has made it before and I respect his right to make it. These matters can be discussed during the passage of the Bill. Not only is there to be a Select Committee hearing, which will take some time and in which we will have the opportunity to discuss this in some detail, but we have the benefit—the fallback position—of Committee proceedings in your Lordships’ House, Report and Third Reading. The noble Lord is welcome and willing to take—as I am sure he will—every opportunity to raise the issue then. I sense that pretty much anything I say to him will not give him the absolute reassurance he seeks, but I can say that these matters will be actively considered. We recognise the concerns that have been raised. There is a balance to be struck in these matters. We think that we have it about right and I think that I have the confidence of the House in saying that—I hope that I have.

I am sure that we can expect petitions representing freight interests to be brought forward. I am also sure that the Select Committee would not need any further instruction from your Lordships’ House, because this is a given; it is going to happen. I am grateful to the noble Lord and other noble Lords for raising this matter; I shall do my bit to ensure that the committee actively considers it.

A number of other points were raised. I have now been talking for 22 minutes, but I am happy to go a little further if noble Lords really wish me to. I want to give assurances to those living in the south-west and Wales that they will benefit from Crossrail. They will be able to change at Paddington and make good use of the link into the city centre. The economic benefits of Crossrail extend beyond central London throughout London and across the nation. This is a project for the nation and all will benefit from it over time.

A project of this complexity will have an impact on the way in which the network works. We aim to limit the impact on services as much as we can. This is a well thought-through project. We are some years away from finalising all the detail. A number of detailed questions have been raised this evening, and I shall try to respond to them in correspondence. In particular, I look forward to writing to the noble Lord, Lord Brooke, about Smithfield Market plots, which sounds slightly sinister in one tone, but I am sure is not. I am sure that I can give him the reassurance that he wants. I shall also respond to the noble Lord, Lord Methuen, about signalling systems, because I know that he is much exercised by them. I shall similarly respond to the noble Lord, Lord Faulkner, about zonal systems and assure him more fully than I can this evening that existing ticketing options, such as Oyster, will apply, and that we will ensure that Crossrail is integrated into TfL's existing zonal system.

There were other points. I shall respond to those in writing, if I may, but I am grateful to all noble Lords who participated this evening. I think that the Bill, when it eventually returns to your Lordships' House, will receive very active consideration. I am looking forward to that and I am sure that it will be a great pleasure to us all, especially those who are enthusiastic about the railway system. I thank all noble Lords who have taken part and I wish the Bill well as it leaves your Lordships’ House to go to Select Committee.

On Question, Bill read a second time, and committed to a Select Committee.

had given notice of his intention to move that it be an instruction to the Select Committee to which the Bill is committed that it shall give particular consideration to, and report to the House accordingly on, the likely effects on rail freight train operators and their customers of the running of Crossrail trains over the existing surface railway lines, and of the implementation of the “Railway matters” clauses of the Bill.

The noble Lord said: My Lords, I shall not move the Motion.

Motion not moved.