My Lords, I rise primarily to support the noble Lord, Lord Berkeley, as I did in Committee, in his efforts to get the Luxembourg Rail Protocol to the Cape Town Convention implemented in the UK. As we have heard, some steps have been
taken, thanks to the good offices of the Minister and of Alex Chalk in the other place, but sadly they have not quite done the trick. I refer to my business interests in the register, including the UK-ASEAN Business Council, and a new role as chair of Crown Agents, which curiously, I find, did a great deal of work on rail and rolling stock during its long history.
I see two advantages to the protocol that was signed by the UK as long ago as 26 February 2016—obviously a very different world then. First, it will reduce the risk to creditors, which in turn will reduce the cost of financing new and current rolling stock—everything from engines to equipment and parts, data and manuals. Whether these are for a new line that is being built or for existing lines, by lowering creditor risk the protocol will assist in lowering the cost of new, more efficient, locomotives and wagons for freight and passenger transport. As the noble Lord, Lord Berkeley, has just said, an Oxera study to be published this week suggests a saving to the rail sector of about £130 million a year. This is quite significant when rail funding is under pressure, and particularly desirable as part of a move to net zero as we seek to combat climate change.
Secondly, it would help British rolling stock manufacturers seeking to develop new markets outside of the UK. There is an urgent need, for example in Africa, for more railway equipment both for urban transport—light rail, metro and trams—and for intercity rolling stock. The markets are there for British exporters, but the Governments and their operating agencies do not have the resources. I am talking about countries such as Namibia, Egypt, Ethiopia, Kenya, Uganda, Zambia and South Africa. The lack of resources has been a major constraint, and in a number of cases, operators have bought Chinese rolling stock instead, even when it is less suitable, because it comes with Chinese state-backed financing.
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The answer is to bring in private capital through leasing or secured financing structures where UK-based manufacturers will draw on the considerable expertise of the UK financial services community to finance their sales of railway rolling stock and equipment around the world. Without this protocol, many of these sales will not happen or financing will be so expensive because of the risk involved as to make such projects uneconomic. With the protocol, operating both in the UK and in the export states, I understand that the export credit agencies will be able to offer better financial terms for exporters. Under an agreement at the OECD, export credit agencies reduce their risk premiums by 10% when the Aircraft Protocol to the Cape Town Convention applies, so British adoption of the Luxembourg Rail Protocol should cost the taxpayer nothing.
I am supporting this measure because it could make a real practical difference to skilled UK businesses and financiers and improve the lives of many people on new or improved railways and trains as we leave the EU. A way must be found, one way or another, to ensure that the protocol is not further delayed, and that the merry-go-round the noble Lord, Lord Berkeley, referred to stops, so I look forward to hearing what the Minister has to say.
Finally, many of the proposed amendments do not offer a practical advantage for discernible UK interests, like the railway interests to which I refer, and I wonder whether this Bill is the place to include them all. This is a continuity Bill first introduced in 2017, and we need to get it on to the statute book.