Clause 13 — Railway Functions of Passenger Transport Executives

Railways Bill – in the House of Commons at 7:15 pm on 6th April 2005.

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Lords amendment: No. 1.

Photo of Tony McNulty Tony McNulty Minister of State, Department for Transport 7:17 pm, 6th April 2005

I beg to move, That this House
disagrees with the Lords in the said amendment.

Photo of Michael Lord Michael Lord Second Deputy Chairman of Ways and Means

With this we may discuss Lords amendment No. 2 with Government motion to disagree, Lords amendment No. 3 with Government motion to disagree, Lords amendment No. 4 with Government motion to disagree, Lords amendment No. 5 with Government motion to disagree, Lords amendment No. 6 with Government motion to disagree and Lords amendment No. 7 with Government motion to disagree.

Photo of Tony McNulty Tony McNulty Minister of State, Department for Transport

I am sure that the House authorities are entirely in order in putting the provisions together in this way, but it makes it sound as if there was a good deal of disagreement with the other place. I want to put on record the fact that I commend the other place for the way in which it has scrutinised and ultimately dispatched the Bill—and with a good deal of agreement.

There is but one real issue on which we disagree in this set of amendments and it is about passenger transport executives and their ability to have co-signatory status. The existence of seven Lords amendments and seven disagreements with them does not mean that there was untold disruption or disagreement with our noble Friends in the other place.

I have said before and it has been explained clearly in the other place that the Government cannot accept these amendments. As the noble Lord Davies of Oldham said earlier today, they raise a matter of principle about which the Government are clear. There is a new role for the PTEs and it is required because the current system was built for a different time and does not fit in with the new framework set out in the White Paper.

Throughout our deliberations, all sides have made it clear that the context for the debate is the rail White Paper, not all of which has necessarily been picked up in the Bill. Central to the new structure set out in that document is the role of the Secretary of State in setting the strategic direction and the amount of national funding that will be invested in the railways. The system that the PTEs are seeking to retain is totally inconsistent with that principle and more reminiscent of another time.

The Government have listened carefully to the concerns raised here and in another place about PTEs. As I have said, we have moved considerably from our original position. In the original citation in the rail White Paper concerning this aspect of PTE functions, we were minded to remove all their ability to have co-signatory status. We have moved away from that and the PTEs, with the agreement of the Secretary of State, can have a role to play.

We considered the proposal made in another place for a 60-day window for PTEs to delay before the signing of a franchise. We are unconvinced that that would deliver anything other than costly delay and an opportunity for PTEs to seek to reopen negotiations at the eleventh hour. Potentially, each month's delay in completing a franchising process could cost hundreds of thousands of pounds of taxpayers' money. Clearly, that would be inconsistent with our strategy to deliver efficiency and value for money in the rail industry.

I want to make it very clear, to this House and to the other place, that we feel that we cannot compromise on co-signing or co-specification. Basically, the amendment would allow PTEs to dictate to the Secretary of State—who is responsible for rail across the whole country—what services should be provided in their areas. The right to co-sign puts the PTEs on an equal legal footing with the Secretary of State, despite the fact that the Secretary of State provides the overwhelming majority of funding, with PTEs merely contributing at the margins. Such a system would not make sense: it would merely encourage confrontation and retain the adversarial approach that has been prevalent since co-signatory status was introduced in 1993.

I wish to reassure the House that the provisions are not about removing the important influence and input that PTEs have into the rail services in their areas. That is why the Bill, as introduced, means that the Secretary of State will be under a duty to consult with the PTEs before issuing an invitation to tender for any franchise that includes services to, from or within a PTE's area. This will be a full and detailed consultation, giving the PTEs a clear opportunity to set out the needs and ambitions of their areas.

Once the baseline specification for a franchise, including services in PTE areas, has been set, the PTEs will also have the right to amend the services in their areas—that is, buying additional services, or reducing services and retaining the savings. That will give them much greater flexibility to make choices about the balance of transport in their areas than currently prevails and allow them to make rational decisions based on financial accountability.

Equally, our proposals will not change the mechanism by which PTEs can secure certain rights, such as rights to information, or the right to insist on the train company's involvement in concessionary fares or integrated ticketing. Such rights and responsibilities will continue to be included in franchise agreements as long as the Government are confident that they are necessary and add value. That will remain the case whether or not PTEs are co-signatories.

Nor will the Government's approach reduce the PTEs' ability to maintain their constructive and beneficial relationships with the train operating companies. Centro, the West Midlands PTE, did not co-sign the Chiltern franchise, but it has managed to build an excellent, productive relationship with that TOC. The Government's approach does not attempt to limit local decision making as has been suggested but merely places that in its proper context.

Photo of Bill Cash Bill Cash Conservative, Stone

Does the Minister accept that the amendment's provisions in respect of bus substitution services also affect clause 29, which deals with station closures?

Photo of Tony McNulty Tony McNulty Minister of State, Department for Transport

I accept the inference that there is a relation between the two, but I struggle to see any connection with the Lords amendment or the Government's motion to disagree. However, I understand the hon. Gentleman's point, and suggest that he raise it again at another point in the debate.

The new arrangements for PTEs will create a more efficient, more accountable and less adversarial framework for delivering rail services in key metropolitan areas. I am by common consent a man of consensus who seeks compromise when it is available. To graft on to the post-Railways Bill rail industry a power that prevailed from 1993 only in the immediate wake of privatisation does not make sense and I need to say that as clearly as possible.

We are seeking modernisation of the relationship between the powers, local decision making and so on of PTEs and the train operating companies and others. That is not a denigration of local democracy in any way, shape or form. There is confusion about that. Hon. Members should be clear that we have sought compromise but there is no scope for it because the 1993 powers for co-signatory status simply do not fit in with the post-White Paper world.

This is a matter of principle, as my noble Friend Lord Davies explained clearly in the other place earlier today, on which the Government are unwilling and, indeed, unable to move. In that context, the House should be clear that to lose the Railways Bill because of this matter would be unfortunate, not least because of the level of consensus on the Bill in this and the other place.

Photo of Gwyneth Dunwoody Gwyneth Dunwoody Labour, Crewe and Nantwich

The speed at which my hon. Friend was moving caught me on the other side of the building. As he is a dear little pussy cat, rather like me, and one of the problems has been misunderstanding, could he make it absolutely clear that the Government have no intention of removing the link with local government and local decision making and that they just want the best solution for everyone concerned?

Photo of Tony McNulty Tony McNulty Minister of State, Department for Transport

I agree absolutely with my hon. Friend and endorse every word she said. This is not in any way, shape or form about impinging on PTEs' local decision-making process or a secret agenda—that was suggested at least once in the other place—ultimately to get rid of PTEs. It is about how in the commercial realm passenger transport authorities through PTEs relate to train operating companies and local rail services in their areas. Any decisions they make about much of what they already do are more readily contained in agreements with the ability to add to franchises. None of those abilities is taken away.

Photo of Peter Luff Peter Luff Opposition Whip (Commons)

This is one of those dangerous questions to which I do not know what the answer will be, so I hope that the Minister can help me, although that may not be helpful to my party. He may know that I am concerned about the impact that the specifications available to the West Midlands PTE can have on services in the peripheral area. The great power of the PTE sometimes means that local authorities such as Worcestershire and Herefordshire do not receive the services they would like to the conurbation because they are outgunned by the PTE. What impact, if any, would the amendment have on that?

Photo of Tony McNulty Tony McNulty Minister of State, Department for Transport

The short answer is none in any direct sense, but the wider position to which the hon. Gentleman referred of those parts of the west midlands region that are not part of the West Midlands PTE area would prevail. Nothing that we are doing in seeking to look at the co-signatory, co-specification status of PTEs vis-à-vis franchises would impact on that relationship which, I freely accept, may sometimes be not as satisfactory as those in Hereford, Worcester and areas peripheral to the PTE area would like. I am sorry, but the Bill does not solve that issue.

If we lose the Bill, we will lose the biggest devolution of Executive functions to Scotland since the Scotland Act 1998. We would have continued uncertainty and unnecessary expense in the rail industry for those who depend on it and uncertainty in the financial and commercial markets for investors. The substantial stakeholder involvement throughout the process, from the rail White Paper to the Railways Bill, has been marked by considerable agreement in the rail industry, not only about the direction those documents give us and the certainty it affords, but that there should be a degree of consolidation afterwards, without constant changes to relationships and structures. To have the Bill fall on that item, for it all to come a-crumbling down and start again, would be a matter of regret, not least—if I may return to my opening statement—because this place and the noble Lords have dealt with so much of the Bill in fine order.

I am sure that Members do not want that to happen, so I hope that they will join me in disagreeing with the Lords in this amendment and sending that message back, with thanks for all they have done so far but a gentle disagreement on this issue.

Photo of Greg Knight Greg Knight Shadow Minister (Environment, Food and Rural Affairs) 7:30 pm, 6th April 2005

First, may I associate the official Opposition with the Minister's opening remarks? We, too, thank the other place and congratulate the Lords on the way that they dealt with the Bill. The concordat between the Front Benches ends there. I do not agree with the conclusions that the Minister reached about passenger transport executives, as I shall make clear.

Passenger transport executives were created in 1968 by the late Barbara Castle and although they are children of a Labour Government I pay tribute to their work up and down the country over the years. The Lords amendment to which the Minister takes exception seeks only to keep the status quo. I cannot understand why he finds it so objectionable. It seems bizarre that a Government who have been urging us all to embrace regional government and devolved powers want to take away some of the powers and influence of PTEs.

In the past PTEs may, on occasion, have delayed the decision-making process. We accept that, as did Members of all parties in the other place who supported the amendment, because it contains a 60-day limit during which the concerns must be dealt with. Such a delay is not a long period, but it would allow PTEs to have their say and reflection to take place. PTEs should continue to be co-signatories.

The Minister referred to the history and I can confirm that it was the last Conservative Government who, in 1993, gave PTEs that power, even though I think that every PTE was Labour-controlled. That goes to show that the Conservative party, when in office, is willing to be fair and to give people a platform for dissenting views, even if they are members of a different political party. It is bizarre that a Labour Government are trying to take that power away from mainly Labour PTEs.

Members on both sides of the other place spoke in favour of the amendment to which the Minister is asking us to disagree. I hope that the vast army of Labour MPs who are no doubt watching our proceedings on their office monitors as they enjoy their last week as Members of this place will join us in the Lobby to speak up for, and vote for, local democracy.

Many local people give much of their time and energy in the interests of rail services in their region. That local democracy is worth supporting. Of course, we accept that some PTEs are better than others, but overall we believe that they have been a force for good and that the Minister is not being entirely straight with the House when he uses the threat that agreeing with the Lords would put the future of the Bill at risk. The Minister has got the decision wrong. He should think again, so I urge my right hon. and hon. Friends to vote no to give him the extra thinking time that he so clearly needs.

Photo of John Thurso John Thurso Shadow Secretary of State for Transport, Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Scotland)

May I say at the outset and by way of very short preface that this is a good Bill? It contains a great many things with which I agree, not least the point that the Minister raised of devolution to Scotland. It is an important piece of devolution that will allow my colleague in the Scottish Executive to deliver good transport solutions on railways for the Scottish people. Therefore, I am with the Minister in the statement that he made that the Bill should not be lost.

I am pleased with some of the compromises. Indeed, I also associate myself with the remarks regarding the way in which the other place has worked on the Bill that have been made by the other two Front Benchers. I am pleased that the Government have seen fit to compromise, where sensible, both in the compromises that have already taken place and the one that may be promised later today. As Mr. Knight just said, that does not mean that we should roll over and agree to the Government's view on Lords amendment No. 1. The Government have got this wrong and it would be worth their while thinking again.

I am sorry that the Government have chosen to reject Lords amendment No. 1 and its consequential amendments because the proposal made by my noble Friends and supported by Lords on both sides of the House, not least by those on the Government's Back Benches, is reasonable and seeks to address a deficit in the Bill.

I listened with great care to the Minister's comments. He is always reasonable and he dealt with us very reasonably in Committee. I understand his argument, but he has not persuaded me. I do not understand why, when we are seeking to give people the right to consider decisions locally, it was not possible to find a way in which that expression could be put into the Bill.

The arguments have been well rehearsed in the House throughout all the debates on the Bill and pretty well rehearsed in the other place during most of its stages there. The issue is simple: PTEs in England have a responsibility—I would say, a right—to deliver sound transport solutions in their areas. Rail must be a key part of those solutions and, prior to the amendment made in their lordships' House, the Bill removed from PTEs their involvement in the rail process, taking that entirely to the Secretary of State for Transport—apart from an ability to consult—thus removing rail from the responsibility of PTEs.

Lords amendment No. 1 is reasonable, because it seeks to reintroduce into the Bill some way in which PTEs can fulfil that duty and recognises the Government's right desire to ensure that decisions are made timeously and expeditiously. The Lords put into the amendment a 60-day limit, thus permitting a reasonable compromise between no involvement whatsoever and a far too lengthy system, which is precisely what the Government wish to avoid.

The Minister talked of months of delay in the process. All the processes that I have seen for franchise letting tend to take many months and I really do not think that any franchise process would take less than three to five months to undertake. To give at the beginning of that process a notice that there are 60 days in which a PTE can become involved would not necessarily disrupt that process.

The Minister also said that the proposal would not fit in with the post-White Paper world. I do not accept that. As he knows, I support the provisions of the White Paper and am happy that they should be legislated for, but I do not see why the Lords amendment could not be accommodated in some way. I therefore have to say to my right hon. and hon. Friends that we should vote in favour of the Lords amendment or, at the very least, give the Lords an opportunity to make the Government think again.

Photo of Bill Cash Bill Cash Conservative, Stone

I am interested in the provision because it pertains, among other things, to the question of station services and bus substitution services, which are a direct matter of concern in my constituency. I accept that the Minister has not yet taken over the responsibilities of the Strategic Rail Authority, but we had a constructive meeting last Saturday with the SRA about Stone and Norton Bridge stations, the famous station at Wedgwood and the one at Barlaston that are on the line that is now subject to closure. However, the SRA cannot now make any assumptions about what is in mind for those stations.

The problem is that enormous inconvenience will be caused to my constituents if the stations on that line are closed. There is a petition and strong campaign—with which, as you might imagine, Madam Deputy Speaker, I am fully associated—to keep the stations open. I am glad to say that there was a constructive atmosphere at the meeting last Saturday, but the matter needs to be sorted out.

Bus substitution services would come within the framework of clause 13. If a franchise agreement were issued, the Secretary of State would have to consult the executive about a range of matters including station services. I note that station services are defined in clause 13(9) as

"services provided in connection with any such service for the carriage of passengers by railway".

That is an issue of grave concern to my constituents. When the Secretary of State takes over the role, I will want to know for sure that there would be no question, when he consults the executive in that area, about his sticking with what the SRA has clearly indicated at that important meeting: the stations at Stone, Norton Bridge, Wedgwood and Barlaston would be kept open. It is an important matter for my constituents, not least because the service is part of the community in that area.

I looked up this afternoon the private Act that gave rise to the creation of this railway in 1846. It has been pivotal to the community for the whole period since then. In a positive and constructive sense, we would also like to look forward, as I said at the meeting, to cross-country trains—

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. I have been fairly generous with the hon. Gentleman, but I hope that he will now confine his remarks to the amendments.

Photo of Bill Cash Bill Cash Conservative, Stone

Yes, indeed, Madam Deputy Speaker.

The amendment says that the statement to the Secretary of State should specify

"any minimum level of quality with respect to the operation of any station within the area in question which may be required by any such franchise agreement."

In that context, a minimum level of quality would include that stations are kept open. I am anxious to ensure that that happens when there is the transfer from the SRA to the Minister. Of course he will then be directly accountable to the House for the exercise of those functions.

There is a power to close stations in clause 29 and subsequent clauses. If stations were closed, it clearly would not be possible for meaningful consultation to take place under clause 13 between the Secretary of State and the executive of an area, which is why I support Lords amendment No. 1. Proposed new subsection (1A) would specify that there would have to be a statement on the minimum level of quality of the operation of a station in an area that could be required under a franchise agreement.

In a nutshell, I am simply concerned that Stone station and the other stations that I mentioned remain open, that the service of the railway operators to my constituents is maintained and that positive and constructive development of the railway line to Birmingham, Manchester and the locality is continued. I do not in any way resile from the fact that I believe that we will win the general election, but none the less I look to the Minister who has present responsibility for the matter—although not, I hope, for much longer—to maintain the stations for the benefit of my constituents.

Question put, That this House disagrees with the Lords in the said amendment:—

The House divided: Ayes 198, Noes 63.

Division number 155

See full list of votes (From The Public Whip)

Question accordingly agreed to.

Lords amendment disagreed to.

Lords amendments Nos. 2 to 7 disagreed to.