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Baroness Darcy de Knayth: I do not know whether the noble Baroness, Lady Thomas, wishes to say anything. I thank her for her support, especially after her gracious concession about consultation. I also wish to thank the noble Lord, Lord Renton, for his warm and strong support.

I thank the Minister particularly for his response, because it would be good news if we could learn more about the national exemptions before Report. I think that he agrees that the important point is that the London scheme should be the same as the national scheme and that we avoid the orange badge mess that we have had to date. I thank the Minister very much for the content and the manner of his response. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 308A to 310A not moved.]

Lord Brabazon of Tara moved Amendment No. 311:


Page 253, line 17, leave out from beginning to ("be") in line 19 and insert ("The net proceeds of any charging scheme shall").

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The noble Lord said: With respect, I do not believe that we have covered this issue properly and I wish also speak to Amendment No. 325. The amendments deal with the 10-year period of hypothecation which we have not dealt with so far.

As presently drafted, as your Lordships will be only too well aware, the Bill allows hypothecation of the net proceeds of parking charges and, in Schedule 19, of non-residential parking charges to be applied to relevant transport purposes, but for only 10 years. The amendments would remove the 10-year period and would allow the hypothecation--a dreadful word, but one that seems to have entered into popular use--to continue longer.

The Government were able, after much discussion, to get the principle of hypothecation agreed for 10 years. It is almost the first time that that has happened. I gather that it is not the first time that the Treasury has agreed to hypothecation, but it is certainly the most significant. The issue is major flows of money into major improvements in the London transport system. Earlier, we discussed the PPP for the London Underground. It appears that such schemes may last for upwards of 30 years. If the revenue from parking and congestion charges is to be of maximum use to Londoners, one of the principal purposes will be to make improvements to the London Underground by assisting with the PPP process.

I put it simply. If this can be assumed only for 10 years, whereas the period for the PPP is up to 30 years, that is not good enough. There may be other schemes which would take longer than 10 years to introduce. For example, the building of the Cross-Rail line or the Chelsea-Hackney line would take a great deal longer than 10 years to finance. Therefore it is essential that we have this revenue stream available to the promoters of such a scheme for longer than 10 years.

A number of amendments have been tabled. The noble Baroness has tabled an amendment providing for 35 years. I prefer my amendment for its simplicity. It merely states that it should last forever. I may receive criticism for the "forever" but it is open to anyone to come to this House and another place to change it back again. In the meantime, I beg to move.

10.30 p.m.

Baroness Thomas of Walliswood: I hope that I am right in thinking that we have now moved to the group of amendments beginning with Amendment No. 310A. I endorse what the noble Lord said. Even a double decker bus has a longer lifespan than 10 years. Some have been on the roads for heaven knows how long. No doubt they have long outlived their being financed. They have simply pottered gently around the roads of London free of such finance. Nevertheless, 10 years is absurd if we speak of the financing of major projects.

The noble Lord mentioned a number of them. Amendment No. 311XA and the others grouped with it aim to increase the ring-fencing period from 10 to 35 years. We think that that is a more reasonable period. Within that 35 year limit, the authority might choose to

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adapt the financing scheme to suit the expenditure of capital. That would be sensible. However, I do not believe that a 10-year maximum limit makes sense when we are talking about major investment of moneys in capital schemes.

Lord Whitty: Like the noble Baroness, I am confused by this somewhat cavalier approach to the groupings. However, we have a coherent debate led by the noble Lord, Lord Brabazon of Tara, so let us be thankful for that.

How long one hypothecates is an important issue. To establish this degree of hypothecation was a ground-breaking step. Although the noble Lord said in a slightly exaggerated way that hypothecation was a popular term, I am not sure that it is spoken of in clubs and pubs around London. Nevertheless, it is not that popular among those who control public finances. To establish this breakthrough is an important step, and an indication of the commitment of the Government to exactly the intentions that the noble Lord purports to support. If we are introducing these schemes--he is against them--he wants us to spend all the finance on transport. So do we. To say that it is a maximum 10-year period, as the noble Baroness said, is not precisely the truth. It does not reflect accurately where we are.

The clauses provide for any scheme for road user charging, addressed by the first of the noble Lord's amendments, or for workplace parking charges, addressed by his second amendment, to be established any time within the next 10 years. Any scheme that is established in the next 10 years will last for 10 years. So a scheme established after nine years would be still running after 19 years. Furthermore, that would not necessarily be the end of the process, because we are saying simply that there will be a review after 10 years. One could be deeply pessimistic about how that review will be conducted, but I shall be optimistic. If the schemes have worked and we are beginning to generate a substantial new resource with transport infrastructure, I have no doubt that there will be popular and political pressure to extend the schemes further.

Baroness Thomas of Walliswood: I must reassure the noble Lord that I am perfectly well aware of the details in the Bill in respect of the length of time that is--I think, correctly--allocated to a scheme and not the length of time that all schemes might be supported.

Lord Whitty: I am sorry, but I was picking the noble Baroness up on the reference to a 10-year maximum. That is not the period for which all schemes would run and it does not mean that schemes would be necessarily cut off after 10 years because there is a review period.

However, I recognise that the noble Baroness has proposed a limit of 35 years whereas the noble Lord wants the schemes to run for ever. There must come a point--somewhere between 10 years and for ever--when it is not value for money to plough all the resources back into transport. If that money were available, it should be used on other aspects to improve the quality of life in London or the scheme should be dropped or the charges reduced. There must logically be

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a point at which the beneficial and good-rate-of-return investments in transport end. That is the point of having continual reviews. In the event, we may run the schemes for 35 years, but we will have made an assessment after 10 years about how much further we will go. That is the proposition before us.

There are other ways of generating revenue that runs beyond the 10-year period. For example, it would be particularly valuable if the mayor wished to undertake a private finance initiative deal and the private sector required a guarantee that revenue schemes would be available for more than 10 years. The Bill gives the Secretary of State the power to guarantee the hypothecation for more than 10 years in those circumstances. So there is a greater flexibility than is immediately apparent from our current position. I hope that a closer understanding of what is provided in Schedules 18 and 19 will reveal that we recognise that some of the expenditure of money--whether it is on vehicles or infrastructure--may take longer than 10 years to achieve. The question is how the process will be monitored and controlled, not that it will need to go beyond 10 years in some circumstances.

With that slightly lengthy explanation, I hope that the noble Lord will feel able to withdraw his amendment at this stage.

Baroness Thomas of Walliswood: Before the noble Lord tells us what he is going to do with his amendment, I must say that I found the Minister's reply very interesting--especially in its latter stages. I will give it very close attention because I think that some of his comments put a slightly different gloss on what I had understood from reading the Bill. If we return--I might be bold and say when we return--to the matter at a later stage, it will be with the benefit of having studied the Minister's reply with great care.

Lord Brabazon of Tara: I agree with the noble Baroness, and I certainly do not intend to press the amendment this evening. However, I shall almost certainly want to return to it.

I am grateful to the Minister for his reply. He is correct to say that the hypothecation is ground-breaking stuff. I do not like hypothecation--the word, not the meaning--any more than anyone else, but that is what we must use. Let us not argue about that. There are two points that arise immediately out of this discussion. If we are to impose a 10-year limit and if the Government wish the mayor--whoever he or she may be--to introduce these two charges, the mayor will think twice about doing so if he or she does not know for certain that Londoners will get the benefit of the levies for more than 10 years. If I were in that position, I would do so. On the other hand, if he had a guarantee that the money would last much longer, he would be able to introduce it to the public with a good deal more confidence than he could under the provisions as they now stand.

The Minister said that it would be and probably will be for longer than 10 years. If something begins in nine years' time, it will be 10 years after that, so it is 19 years. That is all very well, but if one goes to the bank in order to borrow £1 billion for, say, 20 years against

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building CrossRail and says to the bank, "We are fairly certain we have a revenue stream for the first 10 years but after that it is up to the Secretary of State whether we have the money any longer", I am afraid that the bank will give a depressing reply.

If all this is so successful that people stop using their cars, convert to public transport in a major way, congestion is ended in London and everything is wonderful, presumably the mayor can decide not to operate congestion charging and there will be no more revenue to be hypothecated. Therefore, the situation the Minister described does not arise. There is no question of the charging going on for ever and ever and the money being wasted on other things or not being immediately spent on public transport. It will always be up to the mayor to remove the congestion or workplace parking charge.

This is a serious issue. It is important for the mayor and for Londoners and we shall almost certainly want to return to it at the next stage. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 311XA to 311ZAE not moved.]


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