Highways (Financing) Bill
Public Bill Committee, 29 October 2026.
Emma Lewell (Labour, South Shields)
We are now sitting in public and the proceedings are being broadcast. Before we begin, I remind Members to switch all electronic devices to silent, and that tea and coffee are not allowed in the sittings. We will first consider the programme motion on the amendment paper and then a motion to enable the reporting of written evidence for publication, and a motion to allow us to deliberate in private about our questions before the oral sessions begin. In view of the time available, I hope that we can take those matters formally and quickly, without a debate.
Emma Lewell (Labour, South Shields)
Copies of written evidence that the Committee receives will be made available in the Committee Room.
Examination of Witnesses
Emma Lewell (Labour, South Shields)
We are now sitting in public again and the proceedings are being broadcast. Before we start hearing from our witnesses, do any Members wish to make a declaration of interest in connection with the Bill? No one does, so we will hear evidence first from the Automobile Association and the RAC Foundation—welcome. We must stick to the timings that are in the programme order that the Committee has agreed. For this session, we have until 12.05 pm. Will you please briefly introduce yourselves for the Committee?
Emma Lewell (Labour, South Shields)
I call the shadow Minister.
Greg Smith (Conservative, Mid Buckinghamshire)
It is a pleasure to serve under your chairmanship, Ms Lewell. Good morning, gentlemen.Q
On one level the Bill, particularly on Second Reading and in other narratives that have come out since it was first published, seems to be presented as answering the question: how do you solve a problem like the lower Thames crossing? But it equally has a lot of other provisions—perhaps it is due to badly drafted clauses or perhaps it is deliberate—that seem to allow tolling and road pricing to extend further than the lower Thames crossing. Is that something your organisations are concerned about, and do you feel enough focus has been given to parts of Bill related to everything other than the lower Thames crossing—to the general motorists in this country?
Greg Smith (Conservative, Mid Buckinghamshire)
Q That is very helpful. I want to dig a bit deeper on that because I think the part of clause 3 that you are referring to is where it says:
“A licence may also provide for the holder of the licence to secure the maintenance, operation or improvement of any other highway”.
Is it the view of your organisation and members that people would expect that to be about an entirely new road or perhaps a dualled road where there is currently a single carriageway, rather than making what many might consider a relatively minor improvement, such as—I do not know whether this is an improvement—adding smart motorway cameras?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Lastly, where a new scheme is being proposed under the provisions of this Bill, is enough thought being given to other nearby existing roads and to those who rely those nearby roads—businesses, homeowners, people who live there, schools, hospitals and so on—and are they being properly consulted on this? Too often in this world, the new, shiny thing gets all the attention without due regard to existing infrastructure. Do you feel that that has been adequately explored?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q It is a pleasure to see you in the Chair, Ms Lewell. Thank you to the witnesses for coming in. I will follow up on some of the questions from the shadow Minister, but in terms of the operation of clause 3(1)(c), it refers specifically to the maintenance of the licensed area, which is the part of the highway where capacity is being increased as part of the legislation, so it is not a general maintenance issue across the whole network.
There is a narrative that the Bill is a Trojan horse for widespread road charging. We have made it very clear that the operation of this legislation will be for specific and limited circumstances. Is there something more that we can do or say to reassure you that there is no secret plan to widely use this?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q I have just one more question. You mentioned the importance of having an independent body to oversee the interests of road users, and you referred to the potential tension between the needs of the investors, road users and other stakeholders who may have an interest in this. What more would you like to see from the ORR to deal with your concerns in that area?
Emma Lewell (Labour, South Shields)
I call the Liberal Democrat spokesperson.
Olly Glover (Liberal Democrat, Didcot and Wantage)
It is a pleasure to serve on another Bill Committee with you in the Chair, Ms Lewell. One of my key concerns about the Bill is that a lot of it is about stuff being decided by regulations and secondary procedures, and by the ORR. There is a real concern about making sure that rights of consumers—the people who are going to be charged to use these roads—are protected. Do you have any suggestions, in addition to what you have already said, about better safeguards that the Bill could have to make sure that tolls are set and continue to be maintained at an affordable level for the people who will use these roadsQ ?
Olly Glover (Liberal Democrat, Didcot and Wantage)
Let me make a brief comment. On your point about some of the things that are dependent on the Bill, such as the licence, not yet being specified, we had a similar debate during the passage of the Railways Bill through the Commons. I think the Government ultimately decided to at least start publishing some of those things alongside it, so I hope the Minister might give some thought to that.
Jim Dickson (Labour, Dartford)
It is a pleasure to serve under your chairship, Ms Lewell. Thank you to both of our witnesses for being here. You will not be surprised to know that, as the Member of Parliament for Dartford, I have residents who are hugely inconvenienced by the overcapacity of the current Dartford crossing every day and who really welcome the plans, which have been advanced very well under this Government, to build the lower Thames crossing.Q
One concern for them is that there might be perverse incentives via the tolling to use one crossing rather than another. Do you have views about how we could make sure that does not happen and what the ORR would need to do in negotiation with the licence holder? Do you have any views about local resident discount schemes, including how well they have worked elsewhere and whether they should be a necessary part of any future arrangement, although that may not be in the Bill?
Mike Reader (Labour, Northampton South)
I want to clarify something, because it is important that we do not speculate. To deliver a scheme under the regulated Q asset base model, it has to have a certain scale and it needs to be developed with that in mind. You said that the model could be used for other schemes. What other projects under development in the Government’s infrastructure pipeline are you referencing?
Mike Reader (Labour, Northampton South)
Q There may not be other schemes. The engineering challenges with the A303 probably outweigh any benefits of using finance through RAB. Could you both set out whether you think independent regulation under this model would give stronger consumer protection, particularly in the light of evidence you have given, Edmund, that the M6 toll and Dartford have perhaps not been managed in the best interests of the public? Will independent regulation be a better solution for taxpayers?
Mike Reader (Labour, Northampton South)
Q On that point, for the investor to get a return, it is on them to keep tolls at a reasonable level and the road open. It would be counterintuitive for them not to fix roadworks quickly, because they want people to go through to pay the toll, and you do not want to set a high toll if that would put off your users.
Alison Griffiths (Conservative, Bognor Regis and Littlehampton)
ToQ continue the conversation on the ORR, as shadow Rail Minister, I am struck by the fact that in the Railways Bill, the role of the ORR is significantly downgraded, but in this Bill, the balance seems to tip the other way. What is the right balance to make sure both that the ORR has the independence we talked about and that we get the right results for consumers and road users?
Alison Griffiths (Conservative, Bognor Regis and Littlehampton)
I used to work at RAC.
Tristan Osborne (Labour, Chatham and Aylesford)
It is a pleasure to serve under your chairmanship, Ms Lewell. I have two questions. First, the Bill looks specifically at the crossing, but there are other infrastructure upgrades—as an MP in north Kent, my example is the A229 Blue Bell Hill upgrade. There are key junctions where congestion is a problem. In your view, does the Bill take into account the other, wider infrastructure upgrades that might be necessary?Q
Secondly, this week, the Public Accounts Committee, which I sit on, released a report on the RAB model for Sizewell, which there are concerns about. Do you have a view on that model? I appreciate that you have indicated that the model will not be used elsewhere, but is there an educated view on whether an alternative model might have worked better?
Peter Prinsley (Labour, Bury St Edmunds and Stowmarket)
IQ am the MP for Bury St Edmunds and Stowmarket in Suffolk, where we have a lot of problems with our roads and no motorways. I think the general public are anxious about the price and what it is going to cost for them to take their vehicles through this new tunnel. On what you said earlier about there being very little choice—people will use this tunnel if it is there—there is a fear that the public will be held to ransom. That is the problem. How are we going to deal with that? What do you anticipate the price of taking my car through this tunnel will be when it opens?
Peter Prinsley (Labour, Bury St Edmunds and Stowmarket)
Q And you would like to see that written into the Bill?
Emma Lewell (Labour, South Shields)
That brings us to the end of the time allotted for the Committee to ask questions to this panel. On behalf of the Committee I thank our witnesses for their evidence.
Emma Lewell (Labour, South Shields)
We will now hear oral evidence from Logistics UK, the Road Haulage Association and M6toll. For this session we have until 12.45 pm. Will the witnesses briefly introduce themselves for the record, please?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Good afternoon, gentlemen. Can I start with Ben and Declan from the logistics and haulage sectors? There were a lot of questions during the last panel about the overall cost of the lower Thames crossing and any other schemes that might get a licence through the provisions of this Bill. I know from my role as a shadow Minister doing roundtables with Logistics UK and visiting haulage firms in my own constituency that margins are very tight in the sector right now. Equally I get that the juxtaposition of margins is even worse if you are stuck in traffic and cannot get across the Thames or to wherever it is you want to go. Can you comment on where the breaking point is for the sector? If a toll for an HGV, for example, came out too high, there would be a perverse incentive for haulage operators to use existing other routes to avoid that. Is there a risk that we end up building these things too expensive, the toll is too high, and the haulage sector finds itself in a worse position?
Greg Smith (Conservative, Mid Buckinghamshire)
Q On the inflationary impact of that example, I think on Second Reading there was largely cross-party consensus on the need for the lower Thames crossing. That is not a point on which there is a political divide. Where the Bill opens up wider questions is on the “what else” bit—how many more schemes under this model could come to pass in future? Without wholesale change to other things, such as fuel duty, road fund licence and so on, there will be an inflationary impact if we suddenly end up with lots of schemes used by general motorists as well as the haulage sector. There will be a tipping point, where the inflationary impact—with the pass-on of tolls to customers—becomes high. Do you have any modelling on that?
Greg Smith (Conservative, Mid Buckinghamshire)
Q That is a point I fully understand. Declan, will you add your thoughts and your organisation’s perspective? I will add one rider to the question I asked Ben: the previous Government removing tolls from the Severn bridge was pretty well received by general motorists and the haulage sector. That is where I am coming from—to get an understanding of where the tipping point is.
Greg Smith (Conservative, Mid Buckinghamshire)
Q That is incredibly helpful. Given that the affordability of tolls is so critical to your members, do you believe that there should be a presumption or something even stronger locked into the Bill that, within the bounds of safety and meeting the correct standards, there should be due regard to ensuring that schemes are built as cheaply as possible? For example, the lower Thames crossing is already being made more expensive by banning the use of diesel plant to build it. Should there be a presumption that things should be built, within safety and other due standards, as cheaply as possible?
Greg Smith (Conservative, Mid Buckinghamshire)
Q That is incredibly helpful. Mr Whelan, you have a niche interest around the M6 toll elements. Do you feel that the Bill delivers for an existing toll road operation? Is there anything you feel is missing from the Bill?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q Good afternoon, gentlemen. It would be quite helpful to hear from Mr Garratt and Mr Pang in a little more detail about the current importance of the area for the whole of the logistics network. In particular, it might be useful for Committee members to hear what the current arrangements are when hazardous items have to go through the tunnel, because that is a big challenge at the moment.
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q I have one further question for you both. You have talked about the impact of increased tolls. In terms of the overheads for the organisations you represent, could you give us a sense of what proportion tolls would be of the costs of running a business? Is there any way you can equate that to the delays that congestion causes? Is there a balance or a trade-off there?
Justin Madders (Labour, Ellesmere Port and Bromborough)
That is very helpful. I wonder whether the other two witnesses have anything to say from the other side of the road, so to speak.
Olly Glover (Liberal Democrat, Didcot and Wantage)
Q Could you say a little more about what you think can be learned from the M6 toll in terms of how we might look to improve or amend the Bill? That is perhaps the largest geographical manifestation of tolling at the moment, and the most similar to the presumed application of this Bill to the lower Thames crossing.
Justin Madders (Labour, Ellesmere Port and Bromborough)
With its wheels.
Jacob Collier (Labour, Burton and Uttoxeter)
Both yourselves and the previous witnesses have talked about stronger independent regulation being something that you would support. Obviously, we have the M6 toll, which is a current operator. How well do you think current regulation works for the M6 toll? Is there anything that we need to change that is relevant to this Bill? Those questions are probably for Ben and Declan.Q
Alison Griffiths (Conservative, Bognor Regis and Littlehampton)
Q This is predominantly for Mr Whelan, but Ben and Declan, if you wish to weigh in, please do. For the M6, have the economic and operational outcomes that have been delivered over the last 20 years been what was envisaged? On the role of the ORR, does the regulation outlined in the Bill provide sufficient certainty for private investors?
Jim Dickson (Labour, Dartford)
Q Ben and Declan, you have set out very clearly the effect on your sector of the Dartford crossing being hugely over capacity. I have talked about how it affects hugely my residents’ quality of life and air quality. It has been suggested by some that we do not need the project and should look at modal shift instead of, rather than alongside, the solution of the lower Thames crossing. What do you think would happen if the lower Thames crossing was not built—what is your scenario over the next decade?
Jim Dickson (Labour, Dartford)
Q It has been suggested that the requirement to sign in separately to use each tolled arrangement in the UK—the Mersey tunnels, the Tyne tunnel, the M6 and elsewhere—is a burden on a whole variety of road users. Mr Whelan, what do you think of the opportunity to create interoperability among tolled arrangements, thereby making it better for the logistics industry and consumers who use multiple tolled arrangements?
Douglas Lumsden (Conservative, Aberdeen South)
Mr Whelan, we heard from the previous panel about the potential to offer discounts to local residents. Does M6 toll do that at presentQ ? How would that work?
Douglas Lumsden (Conservative, Aberdeen South)
Q Which one is that?
Douglas Lumsden (Conservative, Aberdeen South)
Q What does that do?
Douglas Lumsden (Conservative, Aberdeen South)
Q Mr Garratt, you mentioned that you would like ministerial assurance that the Bill will not be used more widely across the rest of the country. Is ministerial assurance enough, or would you like to see something in the Bill to ensure that it is not a Trojan horse, as the Minister says it will not be?
Douglas Lumsden (Conservative, Aberdeen South)
Q We have heard that moving to a smart motorway and using the hard shoulder could increase capacity, meaning that tolls could be charged.
Douglas Lumsden (Conservative, Aberdeen South)
Q Mr Pang, do you have any concerns?
Emma Lewell (Labour, South Shields)
That brings us to the end of the time allotted. On behalf of the Committee, I thank our witnesses for their evidence.
Examination of Witness
Emma Lewell (Labour, South Shields)
We will now hear oral evidence from Transport Action Network. We have until 1 pm for this session. Will the witness briefly introduce themselves for the record?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Good afternoon. As you look at the totality of the Bill, including the elements around the lower Thames crossing, do you think the Government are joined up enough in looking at where new schemes, be that the lower Thames crossing or anything else that might come to pass, are delivered in respect of the existing infrastructure, local roads and intersections, and, as we just heard from the haulage sector, things like roadside driver welfare facilities? Does the Bill risk bringing nice new shiny things to the strategic road network without the necessary back-up to the existing intersections and roads that the new schemes will rely on?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Are you suggesting that those areas of the country that currently have a mayor should be locked into the Bill as key consultees, in planning speak, before anything can go ahead?
Greg Smith (Conservative, Mid Buckinghamshire)
Absolutely right—do not leave the rural areas out.
Greg Smith (Conservative, Mid Buckinghamshire)
Q Looking at the whole national scene, if you take it as read that there is no change to road fund licences, fuel duty and so on as the core funding for the road network, where is the tipping point in terms of the number of additional toll roads across the network that will just make driving unaffordable—for a haulage sector that is using longer routes every day of the week, and for the average motorist that maybe does not travel that far every day but needs to make those journeys to see relatives, go on holiday and so on across the strategic road network?
Greg Smith (Conservative, Mid Buckinghamshire)
I am mindful that this is a shorter session, so I will stop there.
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q I will briefly follow up on your comments. Obviously, this Bill is designed to cover the trunk roads network. It is correct, isn’t it, that mayors currently do not have any specific control over those?
Olly Glover (Liberal Democrat, Didcot and Wantage)
Q On that theme, do you have any concerns that the financing arrangements proposed in the Bill and its general intentions could affect the balance of investment between strategic roads and local transport networks?
Mike Reader (Labour, Northampton South)
Q If tolling is used, what is preferable—a statutory regulator with enforceable licensing conditions, or an unregulated commercial tolling arrangement?
Mike Reader (Labour, Northampton South)
Q My question was not whether the regulator is independent. It was whether, in general, your preference is for a regulated tolling arrangement or an unregulated commercial tolling arrangement. Which is better for the public?
Mike Reader (Labour, Northampton South)
Q For as long as I have known of LTC, although the previous Government perhaps suggested that it would be delivered by public funds, it was always assumed that it would end up going down a public-private partnership route. Surely, this model delivers cheaper finance and better certainty for investors. Therefore, under a specific RAB model for the lower Thames crossing, what you suggested about investor uncertainty may not be true.
Jim Dickson (Labour, Dartford)
Q Thank you very much for being here to give evidence. The Transport Action Network is on record as being against the lower Thames crossing, under any circumstances and however it is funded. Do you recognise that, as the Committee heard in evidence this morning from the logistics lobby, and as I have heard from my residents, there are not many other ways to deal with the congestion? Are you still against the scheme? What is your alternative to deal with the manifest problems that the Committee has heard about, and that I hear about every day?
Jim Dickson (Labour, Dartford)
Give us a summary.
Emma Lewell (Labour, South Shields)
As there are no further questions from Members, I thank Mr Smyth for his evidence. That brings us to the end of this morning’s sitting.
(Afternoon)
Examination of Witnesses
Emma Lewell (Labour, South Shields)
We are now sitting in public and the proceedings are being broadcast. Before we start to hear from our witnesses, do any Members wish to make a declaration of interest in connection with the Bill?
We will now hear oral evidence from the Centre for Policy Studies and Britain Remade. We have until 2.35 pm for this panel. Would the witnesses please briefly introduce themselves for the record?
Greg Smith (Conservative, Mid Buckinghamshire)
Good afternoon, gentlemen. Thank you for appearing before us.Q42
Clearly, this is a Bill of two halves: there is the specific stuff on the lower Thames crossing, and then it is a pretty open-ended book for other projects going forward. Can I have your initial assessment of whether this is the right model to solve both the question of getting the lower Thames crossing built and issues relating to future trunk road projects that may be required or identified in the country? Will it actually deliver value for the motorist and haulage businesses using the scheme? Do we even know that it will deliver to certain metrics? No one can give us an answer yet on what the toll would be on the lower Thames crossing, for example.
Greg Smith (Conservative, Mid Buckinghamshire)
Q Can you just expand on the example you have given from France? How could that be integrated into the Bill, or does the Bill just get it so badly wrong on that front that it will end up costing British motorists more?
Greg Smith (Conservative, Mid Buckinghamshire)
Q I will bring in Sam in a second. How much more will banning diesel in the plant to construct the lower Thames crossing add to the construction cost, which will ultimately come out in the toll people are charged to use it? Are there any other things you have identified that will put the cost up?
Greg Smith (Conservative, Mid Buckinghamshire)
Q That is helpful. Clearly, the Bill is predicated on tolls being charged upon completion, for use to create that payback. You have clearly looked at France. Having driven to the Alps at Easter, I know from bitter personal experience just how much you pay at every toll booth there: they are beautiful roads, but it costs hundreds of euros to travel a single trip of that sort of distance. Where is the British tipping point? How many more toll roads—those could be built, but there is also concern that road charging could be expanded to other roads under the Bill, because of some of its wording—would the economy bear, without major changes to fuel duty, road fund licence rates, et cetera?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q Good afternoon, gentlemen. Mr Hopkinson, you have expressed concerns about the limited incentives for cost control—presumably that is mainly in the construction part of the scheme; obviously, we are talking about the lower Thames crossing here. The Bill gives the ORR the ability to set licence conditions on economic allowances and expenditure controls, and provides for the investors to make a reasonable return. Those safeguards are set out. Do you not consider those sufficient and would you like to see something in addition?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q But you would accept that in that model there is no control from the regulator?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q As you rightly point out, there are a number of opportunities for licences to be terminated. I would suggest that risks on revenue for too high a toll charge would apply equally in this model as they would in concession models.
Sam, you spoke about the planning delays and have set out the significant costs and delays because of that. In terms of the lower Thames crossing, is it your understanding that those risks are now past?
Justin Madders (Labour, Ellesmere Port and Bromborough)
We hope the Bill will address those concerns.
Olly Glover (Liberal Democrat, Didcot and Wantage)
Both of your organisations and many others have highlighted how the UK is not great at delivering infrastructure quickly and efficiently. Do you believe that the Bill in its current form has the potential to accelerate the delivery of major road projectsQ ?
Tristan Osborne (Labour, Chatham and Aylesford)
Under the French model which you have cited as a template, 91% of roads are owned by privatised companies, and that is very different to the UK. They are extremely controversial and many accuse companies in France of price gouging. We have concerns about asset management and the valuations. You have said that the RAB model is potentially ideal, but is there any element of it that you can say is better than the French concessionary model? What teeth would you give the regulator to make it so, if we were to go down that route? What is missing from the RAB model that would make it more effectiveQ ?
Alison Griffiths (Conservative, Bognor Regis and Littlehampton)
I will build on some of what the shadow Minister, myQ hon. Friend the Member for Mid Buckinghamshire, said about tipping points. My question is to both of you, so please feel free to answer in whichever order you prefer. The shadow Minister was referring to things such as fuel duty, I am acutely conscious that the cost base of the lower Thames crossing project is going up and is as yet unknown, and we do not know what the toll will be.
In a situation such as we have at the moment, where diesel is at £2 a litre and the sustainable version another 50p on top of that, costs are going right up not only for the build, but for the corporate budgets of the haulage companies and for everyday individuals, who have to manage their household budgets. If the cost goes up to a level beyond the right balance of pricing that is commercially viable for the operator, or absorbable for the family or the business, what happens?
At the moment, I am worried about a white elephant across the Thames. In such circumstances, in the end all the costs would get absorbed by the taxpayer and this model goes up in smoke. I am keen to hear from you how concerned I should be about that and what alternative models there are elsewhere.
Alison Griffiths (Conservative, Bognor Regis and Littlehampton)
Q Should we put in greater stipulations on how costs are incurred? This goes back to some of what the shadow Minister was talking about, that the Bill should stipulate that the road is not overspecified—although safety should remain absolutely paramount—while things such as the use of sustainable diesel are not a necessary part of the Bill. Should that be in the Bill?
Alison Griffiths (Conservative, Bognor Regis and Littlehampton)
Q Ben just said he did not think that we should be stipulating cost-effectiveness in the Bill—I am paraphrasing, to be fair. My challenge back to that is: why not? If I sit and look at the effectiveness of regulation in other sectors, I come from the private sector—
Emma Lewell (Labour, South Shields)
Order. That brings us to the end of the time allotted for the Committee to ask questions. On behalf of the Committee, I thank our witnesses for their evidence.
Examination of Witness
Emma Lewell (Labour, South Shields)
We will now hear evidence from the British Vehicle Rental and Leasing Association. We have until 2.55 pm for this panel. Could the witness please introduce themselves for the record?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Good afternoon. I am grateful to you for being here this afternoon. I am impressed by what it says in your bio; your organisation is responsible for a significant number of vehicles on British roads at the moment. The obvious opener to that is: what is the reaction from your customer base to the change to a RAB model for the lower Thames crossing and potentially other projects in the future that might mean more toll roads on the British strategic road network?
Greg Smith (Conservative, Mid Buckinghamshire)
Q I do not know if you heard some of this morning’s evidence, but we had a question this morning around whether there should be a national scheme with a single log-in, as opposed to every scheme having its own charging mechanism, if you are going to have barrierless tolling. In answering that question, can you give your thoughts on the impact that will have not just on schemes built under the RAB model proposed in the Bill but all the other road charging we already have?
For example, here in London, we have the congestion charge. It is dressed up as an environmental scheme, but we all know it is just road charging. Equally, other schemes are popping up. Arriving at my party’s conference in Birmingham, I remember saying to a passenger in the car, “Quick, panic—look up whether I have to pay a charge for this new clean air zone”—or whatever it might be. Is one of the things you are looking for in that answer something that simplifies the experience of the British motorist across schemes built under this model, as well as everything else?
Greg Smith (Conservative, Mid Buckinghamshire)
Q I will ask my last question. Clearly, your organisation, sitting across your members who supply the vehicles, would be in trouble if the number of vehicles on the road started going down. Have you done any modelling on where the breaking point or tipping point—call it what you will—would be on top of existing fuel duties, the new 3p a mile for battery cars, road fund licences and so on in terms of the overall volume of additional toll roads that this Bill could enable?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q You said a little about how consistency across the country would be helpful for your members. I just want to take you one step back: is the principle of barrierless charging one that your organisation would support?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q The regulation-making powers in the Bill will hopefully address those concerns if there is adequate consultation as we move forward.
Emma Lewell (Labour, South Shields)
I call Olly Glover.
Olly Glover (Liberal Democrat, Didcot and Wantage)
I am all right, Chair—I will defer to other colleagues.
Emma Lewell (Labour, South Shields)
If there are no further questions from Members, I will thank the witness for his evidence and we will move on to the next panel.
Examination of Witnesses
Emma Lewell (Labour, South Shields)
We will now hear oral evidence from the Office of Rail and Road and National Highways. We have until 3.35 pm for this panel. Will the witnesses please introduce themselves briefly for the record?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Good afternoon, gentlemen. I appreciate your giving your time today.
Given the significant new responsibility that the Bill will give to the Office of Road and Rail in particular, is the organisation suitably equipped to take on a new licensing regime? Does it have a skills base that has looked at other parts of the world or other sectors that have adopted a RAB model? Does it have the necessary interactivity with road users to ensure that early projects do not end up with more teething problems than anybody would have wanted? I am not saying that anybody would want teething difficulties, but we know that that happens when big change comes about.
Greg Smith (Conservative, Mid Buckinghamshire)
Q I am grateful for that answer. This is not a criticism of anyone in the ORR right now, but as we see with so many projects, under whatever model they are built, unexpected things happen; things do not go according to plan. Often, hindsight is that wonderful thing: “Oh, I wish we had just…” What preparation work is the ORR doing, or what additional resource does it need from the Department for Transport, to ensure the lower Thames crossing, as the guinea pig for this new model, does not end with those “Oh, I wish we had…” questions being asked? That might be very significant for Mr Dickson’s constituents, who might suffer from unintended consequences, as much as they clearly want the lower Thames crossing—that is not a point of political difference—and could end up impacted if the regulation and the licensing regime do not work as Ministers, in good faith, expect.
Greg Smith (Conservative, Mid Buckinghamshire)
Q Will, you mentioned construction in your answer—this is a question to both of you. When organisations are considering regulation, licensing or any factor around the construction of anything at all, but we will take the lower Thames crossing as the example today, do you need much greater freedom within that to license something along what many would call common sense principles, certainly when it comes to cost control? For example, I think it is pretty obvious that the banning of diesel in construction plant is going to make the project more expensive. Where do you sit, both from experience of other projects and looking forward, on factors like that? You might find yourself in a difficult place between what Government want and what the ultimate licensee wants, and having to find a happy medium on that.
Greg Smith (Conservative, Mid Buckinghamshire)
Q Just to confirm, for people watching out there who think diesel is £2 a litre, is that plus VAT?
Greg Smith (Conservative, Mid Buckinghamshire)
Q But it is more expensive than diesel.
Greg Smith (Conservative, Mid Buckinghamshire)
Q Does the equipment exist out there to build the lower Thames crossing purely on battery electric?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Do you have any comments, Mr Godfrey?
Greg Smith (Conservative, Mid Buckinghamshire)
Yes.
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q Good afternoon. You probably heard witnesses earlier express a little scepticism about your ability to deal with the potential cost inflation or exaggeration—whatever word you want to use. You have obviously both been involved in this project from its inception, particularly in terms of construction, and you are running the existing crossing, so you know what the running costs and maintenance costs are. Would you say that, because of that, the scope for being blinded by PowerPoint, for want of a better description, is probably more limited than it could be?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Do have anything to add, Mr Godfrey?
Olly Glover (Liberal Democrat, Didcot and Wantage)
Q Over the decades, we have often heard the wisdom that private finance is better than the Treasury, because it helps to keep things off the Treasury books and avoids constraints from public sector financing. But with some of those private finance initiatives, the whole-life costs can end up being quite a lot higher and being a burden on the taxpayer in a different way. What metrics do you feel that the Government should use to determine whether alternative finance arrangements, rather than direct Treasury funding, deliver better value for money for individual road schemes? What criteria should there be for deciding that?
Olly Glover (Liberal Democrat, Didcot and Wantage)
Q Any thoughts from you, Mr Palmer, using your rich and wide-ranging career experience?
Olly Glover (Liberal Democrat, Didcot and Wantage)
Q I have a quick follow-up on something you said earlier, Mr Godfrey, about the importance of getting the licence right. You perhaps cannot answer, but let me ask the question in a slightly mischievous way. There was a debate about the Railways Bill and how it was important to see ancillary documents that it referred to while considering it, because those documents had a lot of implications for how the Bill would operate in practice. Would you view the licence and the code, which this Bill stipulates that the ORR must create, as operationally critical to how the Bill would be implemented in practice?
Tristan Osborne (Labour, Chatham and Aylesford)
Q The recent independent regulatory review of the ORR included a section specifically about the Thames crossing. Paragraph 5.58 of that review indicated that there are resource concerns:
“There are, however, likely to be gaps such as those relating to construction phase price controls, project specific
I know you said that you had confidence in that area, but that report was published just last month. Can I get some clarity? Are you saying that the report is not entirely right and that you are confident that the three aspects it raised will be covered going forward?
Shivani Raja (Conservative, Leicester East)
It has been really clear today that cost control is a crucial element in the success of this project. Should there be safeguards for motorists within the regulatory framework where, for example, unexpected charges arise or costs are excessive?Q
Shivani Raja (Conservative, Leicester East)
No, that is fine. Do you have anything to add, Mr Palmer?
Mike Reader (Labour, Northampton South)
Matt, I think you have already answered my first couple of questions: the legal requirement on climate was set in 2022 in the original direct consent order, and the requirement to use alternative fuels to diesel is not a significant cost driver in a scheme of this scale. However, reflecting on a conversation that you and I have had previously, I was wondering about the cost impact, and the impact on the project generally, of delays caused by uncertainty of finance. Would a Bill like this enable future schemes to have certainty of financing arrangements, and therefore get on site and be delivered more quickly? Is that a fair assumptionQ ?
Mike Reader (Labour, Northampton South)
Q For those who are concerned that the capital cost of this scheme continues to rise, and it has risen since I was first involved in it many years ago, what mechanisms have you put in place specifically with your contractors to drive down cost in delivery?
Mike Reader (Labour, Northampton South)
Q Will, I do not know whether you heard the earlier evidence and the thoughts about how the ORR needs to scale up and strengthen to deliver this. Do you have any reflections and what have you fed back to the Government about what the ORR needs to be able to do its role effectively on this project?
Douglas Lumsden (Conservative, Aberdeen South)
We heard from an earlier panel that the operator has limited incentives for cost control and that there is a risk of taking “costs off the book without any level of scrutiny.” Do you understand what they are talking about in thatQ ?
Douglas Lumsden (Conservative, Aberdeen South)
Q Is it true that there are limited incentives for cost control? What is the incentive for the operator to keep the costs down?
Douglas Lumsden (Conservative, Aberdeen South)
Q If an operator in future was not making any money and was going under, who would step in? Would it be you?
Douglas Lumsden (Conservative, Aberdeen South)
Q I guess you could step in and increase the costs and have them earning more to try to keep them on a sustainable footing.
Jim Dickson (Labour, Dartford)
One of the things that has come through from other witnesses today is the need for pace on this project—the status quo is appalling for my residents but every bad for the economy and for various sectors. Matt, would you say that the need for us to pass some legislation, then have an equity competition and then appoint the funders is slowing down your work to make sure that the project continues and completes on time—and hopefully on budget and on spec as wellQ ?
Jim Dickson (Labour, Dartford)
Q Is this largely the result of having had considerable allocation of Treasury funding already, in order to be able to make a start and, essentially, mobilise and begin the project in the way described?
Alison Griffiths (Conservative, Bognor Regis and Littlehampton)
Q I want to come back to the question of hydrotreated vegetable oil. Mr Palmer, you suggested that there was parity/comparability in costs between white diesel and HVO. I have spent a little time in the last few minutes looking at Google, Claude and ChatGPT, and not one of those sources suggests that is the case unless you count HVO being 10% to 30% more expensive as comparable. So I want to push back and ask you to be more precise on the additional cost base of using HVO in construction across the course of this project, both to date and in your estimates going forward.
Alison Griffiths (Conservative, Bognor Regis and Littlehampton)
Q That is comparing yourself to another contractor. That is not what I am asking. I am asking about what your costs are of white diesel versus HVO—a completely different comparison.
Alison Griffiths (Conservative, Bognor Regis and Littlehampton)
Okay. So when you said that the costs were comparable, you did not know whether that was the case, because you had not actually gone to market with that.Q
Alison Griffiths (Conservative, Bognor Regis and Littlehampton)
I just want to correct the record, though; when you say that the costs are comparable, actually they are not.Q
Alison Griffiths (Conservative, Bognor Regis and Littlehampton)
As I say, when I asked each of these sources specifically about construction projects—I have not asked them about retail; I asked them about construction—they have been clear that there are substantial additional costs to using HVO. I just wanted to make sure that that was clear.
Emma Lewell (Labour, South Shields)
If there are no further questions from Members, I thank the witnesses for their evidence.
Emma Lewell (Labour, South Shields)
We will now hear evidence from Wates Construction and John Laing. We have until 4.10 pm for this panel. Could the witnesses please briefly introduce themselves for the record?
Greg Smith (Conservative, Mid Buckinghamshire)
Gentlemen, good afternoon. Bearing in mind that the Government have been clear that they need to leverage private investment to get the project built, how attractive to you, as private sector entities in the construction world, are the provisions of the Bill introducing the RAB model for the production of the lower Thames crossing and potentially others?Q
Greg Smith (Conservative, Mid Buckinghamshire)
Q Is there anything in this Bill that is a red flag for you—a provision that you look at and think, “If that was different, it would be a more attractive prospect from an investing perspective.”?
Greg Smith (Conservative, Mid Buckinghamshire)
Q I understand the answer. Clearly, you and your company have a lot of experience in big construction and these big projects. What are the biggest lessons to be learned that we might be able to write into this Bill when it comes to cost control?
Greg Smith (Conservative, Mid Buckinghamshire)
Q I understand that. Clearly there are factors that no Government, company or entity can predict—global conflicts and so on—that will impact all that. However, what I really want from you, to improve this Bill as it goes through its parliamentary stages, are the things that you actually can control. In your experience of all those projects that the company has been involved with over the years, what are the things that can be controlled or you can put sensible steps in place to mitigate, that could improve this model too?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Mr Forsdyke, that is your cue. I am really looking for those practical things, from the years and decades of experience that you and your company have, that can improve the Bill.
Greg Smith (Conservative, Mid Buckinghamshire)
Q An example of that came up in the previous discussion. Something not any contractor’s hands is the ruling about no use of diesel in construction plant for this. It may well be that the construction sector, for perfectly noble environmental reasons, wants to use HVO or other sustainable fuels in its operation, but in your experience as a contractor, and Mr Truscott’s as an investor, is it true to say that if the project was allowed to use diesel rather than HVO in construction plant, fuel costs would be cheaper to the tune of something like 20p to 25p per litre?
Greg Smith (Conservative, Mid Buckinghamshire)
I appreciate that that is outside the contractor’s position. That is why I came with the question.
Greg Smith (Conservative, Mid Buckinghamshire)
Q But my point is that this is not a concession model. The model that we are talking about has to have a payback from the tolls that are ultimately paid by motorists, haulage companies, small business people running their vans, or whatever it might be. Therefore, it is not a question of whether the public purse, the taxpayer, can bear it, direct from Treasury; it is a question of where the payback comes in terms of the tolling. If it is cheaper to build in the first place by not using a more expensive fuel, surely that is where that question comes.
Greg Smith (Conservative, Mid Buckinghamshire)
Fair enough.
Emma Lewell (Labour, South Shields)
Minister?
Justin Madders (Labour, Ellesmere Port and Bromborough)
No questions.
Emma Lewell (Labour, South Shields)
Olly Glover?
Olly Glover (Liberal Democrat, Didcot and Wantage)
Q This Bill proposes use of alternative financing models. Do you have any thoughts on the principles that should be used to make sure that risk is appropriately allocated among Government, investors, contractors and the eventual road users, to keep the project deliverable and affordable for all those parties?
Olly Glover (Liberal Democrat, Didcot and Wantage)
Any thoughts from you, Mr Forsdyke?
Olly Glover (Liberal Democrat, Didcot and Wantage)
Fair enough.
Tristan Osborne (Labour, Chatham and Aylesford)
Q This question links to the independent review. I questioned the ORR on this. Obviously, you are sitting on the other side of the table, and you are looking to extract as much as you can from an investor perspective. You represent one side of the spectrum, and the regulators are on the other side. There has to be a working partnership between you both. Obviously, the efficiency of a project finance model such as the one for this crossing relies on certainty and predictability for investors, and regulators being there to ensure the stability of the regime. Obviously, we do not have a regulator that manages this at the moment. Where does investor confidence stand regarding the ORR? Do you think investor confidence is there for this model to work going forward?
Alison Griffiths (Conservative, Bognor Regis and Littlehampton)
Q I want to go back to comments that both of you have made. Andrew, you said that you can count on one hand the number of projects that finish on time and on budget, and that is despite the extensive experience that you both have. Roger, you said that cost overruns come from uncertainty. I had a 30-year private sector career. One experience I had negotiating contracts was that when the customer was creating unrealistic expectations or poor procurement was taking place, where you had a competitive environment and people were trying to win the contract was where you ended up with cost and time overruns. Are there any lessons the Government should be learning about how we procure these types of contract so that we get the best possible outcome at the best possible price, but without cost and time overruns?
Alison Griffiths (Conservative, Bognor Regis and Littlehampton)
Q Can anything in how the relationships are built with the procurement teams be changed to shift that?
Jim Dickson (Labour, Dartford)
Q I agree with your earlier point that it is really important that the tolls are kept affordable in every way, not only for the haulage industry but for motorists and other vehicles. Presumably one aspect of that will be this being an attractive project for which lots of interest is generated in the market, and therefore we get lots of potential bidders—
Jim Dickson (Labour, Dartford)
In terms of investor attractiveness, how would you rank the scheme globally against other schemes of similar size, or other comparable schemes? Do you think we are set to have a competitive and very interested set of players looking to bid?
Jim Dickson (Labour, Dartford)
That is very helpful.
Douglas Lumsden (Conservative, Aberdeen South)
Q Andrew, I think you said earlier that one of the issues was uncapped cost overruns for the contractor. What is the consequence of that? Does it scare some contractors away?
Douglas Lumsden (Conservative, Aberdeen South)
Q What do we need to do to change that?
Douglas Lumsden (Conservative, Aberdeen South)
Q But it does not drive away investors as it is just now, does it?
Douglas Lumsden (Conservative, Aberdeen South)
Q Okay—so it is something we need to look at urgently.
Emma Lewell (Labour, South Shields)
If there are no further questions from Members, I thank the witnesses for their evidence. We will move on to the next panel.
Examination of Witness
Emma Lewell (Labour, South Shields)
We will now hear oral evidence from the Minister. We have until 4.30 pm for this panel. Will the Minister please briefly introduce himself for the record?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Minister, we had this discussion on Second Reading, but I want to ask you again after you have had a few days to reflect on it. You said clearly at the Dispatch Box that you do not want to bring in road pricing and tolling on other roads, but the Bill still leaves a little bit of a lawyers’ paradise where it could be argued that that power would exist, either for you, for the current Secretary of State or for any future Secretary of State. Will you amend the Bill to properly rule out, in statutory form as opposed to a commitment at the Dispatch Box, it being used to extend tolling and road pricing to other roads?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Thank you, Minister; I appreciate your clarity. You are right that we will explore that further during line-by-line scrutiny, because I have genuine concerns that some of the drafting leaves that backdoor open. I want to ask another question that we did not get any clarity on in the Second Reading debate. I appreciate that this is a decision for future licensing authorities or the ORR to come to, but what would be an acceptable window for the toll on the lower Thames crossing?
Greg Smith (Conservative, Mid Buckinghamshire)
Q In terms of unlimited blank cheques, can I come to this point about cost control on any project, starting with the lower Thames crossing? We have heard evidence of other projects that have gone over budget. We have heard clear evidence that it is quite rare for a project to come in on budget. I think we can all understand the reasons for that, but within what can be controlled, are you willing to look again at the ban on diesel, which means an additional cost of between 20p and 25p per litre in using HVO, ultimately having a bearing on the construction cost of the whole project?
Greg Smith (Conservative, Mid Buckinghamshire)
Q We paid our price in 2024 for the mistakes we made. This Government have been in power for two and a half years, and the evidence I put to the representatives from Wates and John Laing confirmed that there is a differential in price. From looking it up, my estimate is a between 20p and 25p per litre difference between white diesel and hydrotreated vegetable oil. Given that we are now operating two and a half years into this Government, and we are looking at significant costs that will ultimately be borne by those who pay a toll to go on the lower Thames crossing, I gently and respectfully ask if you will look at this again to try to get the cost of this project—which the Opposition do want to see built—to come down.
Greg Smith (Conservative, Mid Buckinghamshire)
The market, Minister.
Greg Smith (Conservative, Mid Buckinghamshire)
I am grateful.
Jim Dickson (Labour, Dartford)
Q I am a very strong supporter of the Bill, because it enables major projects such as the lower Thames crossing to be funded, but the tolling issue is important. We cannot talk about individual toll levels, but we can talk about mechanisms by which reasonable—hopefully affordable—tolls will be set for both industry and individual motorists. Could the Minister enlarge a bit on how the ORR, with the legislation designed and passed by Parliament, will ensure that tolls fit the definition of “affordable” as far as possible?
Olly Glover (Liberal Democrat, Didcot and Wantage)
Q A witness said that one of my questions was best aimed at Government, so it would be churlish of me not to avail myself of the opportunity to ask it to you, Minister. What metrics should the Government use to determine whether alternative financing arrangements deliver better value for money for road infrastructure projects than direct Treasury funding? How are the Government thinking about that question?
Olly Glover (Liberal Democrat, Didcot and Wantage)
Q We hope that will end up being the case, because they have not all ended up marvellously—although you are right to say that some have gone well. You mentioned the Office of Rail and Road as the regulator. Why has it been selected as a regulator, given that the Railways Bill was rather shunted into the siding, some could say? Why the ORR rather than a different kind of regulatory arrangement?
Olly Glover (Liberal Democrat, Didcot and Wantage)
Q Yes, but it is for rail, which is also in its title. I alluded to the Railways Bill, and I am just interested in the different approach.
Olly Glover (Liberal Democrat, Didcot and Wantage)
That is an interesting answer, because railways also have both users and investors, but perhaps that is a debate for another day. I will happily let other people come in now.
Tristan Osborne (Labour, Chatham and Aylesford)
Q I have a question on the ORR. My line of questioning is about whether the regulator is ready. Obviously we had the independent report last month. I challenged on one particular finding of that. Is the ORR ready for this challenge? Is the regulatory landscape in a firm place where we can solicit investor interest next year?
Again, speaking to the investor spokesperson today, they said that regulatory certainty was absolutely critical for them. I want to understand the operational capabilities, the engagement between the DFT and the ORR, and whether or not we will have that structure and that robust regulatory regime in place, and how confident you are about that.
Douglas Lumsden (Conservative, Aberdeen South)
Q Minister, we heard from the last person who gave evidence, the investor, that he would not be able to invest because of the uncapped cost overrun risks. You heard that as well. Would you look at it again to make changes to ensure investors are not so scared away by that risk?
Douglas Lumsden (Conservative, Aberdeen South)
Q Will you not make any changes after hearing the comments today?
Mike Reader (Labour, Northampton South)
Q Minister, we have heard evidence that there is not a massive amount of competition for major schemes in Europe, yet competition is important to drive down the cost of capital. Do you think that the RAB model will help us to secure the best possible deal on the capital for building the lower Thames crossing?
Mike Reader (Labour, Northampton South)
Q In the passage of the Bill, do we have to be careful to separate what it is about—a financing regime and addressing some of the legacy challenges of tolling in the UK—and the construction decisions made by National Highways on the type of fuel it might use, which is probably the equivalent of less than 1% of the overall construction cost?
Mike Reader (Labour, Northampton South)
Q We heard some evidence about 343 projects, which I think Sam from Britain Remade referred to, which included a whole range of projects delivered around the world. I did a very similar study in 2020, with a similar number of projects—I need to look at whether a bit of plagiarism is going on there in that work! We are actually very good at delivering major road projects in the UK—the A14, the Silvertown tunnel and various others. We are very good at delivering major infrastructure projects on time in the highways space in the UK. I think people need to have a bit more optimism about the delivery of this project.
Mike Reader (Labour, Northampton South)
Q The Secretary of State told the Transport Committee that you would set out the process for setting tolls, which may address some of the concerns about what toll levels might be. Is that still the case? When will we see that during the passage of the Bill?
Mike Reader (Labour, Northampton South)
Q But the process for setting the tolls—will we see how they are to be set, with the key principles and how that is to be done, as the Bill progresses?
Mike Reader (Labour, Northampton South)
Q As the licensing conditions are not subject to parliamentary scrutiny, will you set out the core principles of what those licensing principles will be as the Bill progresses through Parliament?
Emma Lewell (Labour, South Shields)
As there are no further questions from Members, I thank the Minister for his evidence. That brings us to the end of the sitting. The Committee will meet again at 9.25 am on Tuesday 3 November to begin line-by-line consideration of the Bill.