Transport Bill

– in the House of Lords at 8:30 pm on 17th July 2000.

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House again in Committee (on Recommitment).

Clause 178 [Local licensing schemes]:

[Amendments Nos. 240A to 242 not moved.]

Clause 178 agreed to.

Clauses 179 and 180 agreed to.

Clause 181 [Workplace parking places]:

[Amendments Nos. 243 to 247 not moved.]

Photo of Lord Berkeley Lord Berkeley Labour 8:52 pm, 17th July 2000

moved Amendment No. 247A:

Page 108, line 44, at end insert (", or

( ) a member of the public").

Photo of Lord Berkeley Lord Berkeley Labour

I should like to move Amendment No. 247A, which by nature is a probing amendment. It continues with a theme established in earlier amendments that there should be a minimum number of exceptions to any rules covering workplace parking

On reading the clause, there appears to be some difficulty in achieving a simple solution as regards which workplace parking locations are to be covered and who will be "relevant persons". Can my noble friend tell me whether city centre car parks--multi-storey or otherwise--owned by local authorities or private car park companies would be covered? Similarly, will out-of-town supermarket car parks be so covered? Those are only two examples. It is clear that both of these forms of parking facilities contribute significantly to traffic generation in the same way as office car parking.

Can my noble friend explain whether public car parks and supermarket car parks are covered? If not, why not? As I have said, this is a probing amendment. I beg to move.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

I am relieved to hear that my noble friend has tabled this as a probing amendment. However, it concerns an important issue; namely, the scope of the workplace parking levy.

Our response to the consultation paper, Breaking the Logjam, made it clear that we intend that the levy will apply to workplace parking only. That is because our most serious congestion problems are associated with peak period commuting to work.

I accept what my noble friend Lord Berkeley has said; namely, that customer parking provided for the public at retail and leisure facilities or in public car parks can contribute to local congestion, both in town centres and in other areas. However, the effects are not usually concentrated in peak periods, unlike the effect of people driving to work. The Government are not persuaded that a levy on non-workplace parking is the most effective way of changing customer travel patterns.

We have said that we shall be looking to major retail and leisure operators to work with local authorities to build on the initiatives that some major retailers have already taken to tackle over-dependency on the car. These could include providing bus shelters, funding bus priority measures on the surrounding road network and providing secure cycle parking. Retail outlets could extend or introduce easy and affordable home delivery services.

I can assure my noble friend that we expect real progress to be made in this area. We have asked the Commission for Integrated Transport to consider the case for changing the scope of the levy; I think that it would be best to wait for the commission's recommendations before taking a final decision on extending the scope of the parking levy. This approach will also provide greater flexibility in deciding how any legislation for a levy on customer parking might be drafted.

The amendment would extend the definition of "relevant person" to include members of the public. This would mean that parking at a premises by a member of the public would fall within the scope of the levy, but only if it still passed the test at the end of Clause 181(1), which the amendment would not change, of,

"for attending a place at which the relevant person [or member of the public] carries on business".

Changing the definition of "relevant person" as provided by the amendment will not extend the scope of the levy to include customer parking.

I do not believe that the levy should apply to members of the public for the reasons that I have outlined. I therefore hope that my noble friend will agree to withdraw his amendment.

Photo of Lord Berkeley Lord Berkeley Labour

My Lords, my noble friend has quite rightly pointed out the deficiencies of drafting in my amendment. I am sorry that the Government are not taking this opportunity to put in place powers to extend levies to supermarket and other parking facilities, perhaps to be implemented only later. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 247B and 247C not moved.]

Clause 181 agreed to.

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

moved Amendment No. 247D:

After Clause 181, insert the following new clause--

:TITLE3:LICENSING SCHEME: COMPENSATION FOR COSTS

(" .--(1) A licensing scheme under this Part shall make provision for compensation to cover costs in implementing such a scheme.

(2) Where levies are imposed under section 177(2)(a) and (b) the occupier of the premises or specified person shall be entitled to appeal to the licensing authority for compensation for the cost of implementing and managing any such scheme.

(3) Compensation shall include--

(a) the cost of advertising the scheme on the premises or in the vicinity;

(b) the cost of any equipment installed to manage or implement the scheme; and

(c) the cost of implementing any changes to a licensing scheme.

(4) Any consultation carried out under section 184 shall include information about any proposed compensation, or not, which forms part of a proposed scheme or varying of a scheme under this Part.").

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

Not among the least of the joys of sitting on this side of the Committee--with which noble Lords sitting opposite will be all too familiar and to which we shall render them once again in due course--is the freedom to exercise a certain intellectual anarchy. That is a real bonus, although I miss the discipline of constructive thought.

The point behind making those introductory remarks was to enable me to approach a subject from a number of different angles. Occasionally, as is the case with the amendment before the Committee, I seek to try to help the Government.

The purpose of the amendment is to make it easier for a local transport authority to introduce a workplace parking scheme. Generally speaking, the target of such a scheme is not the occupier of the premises who will have to pay the charge but the person who drives to work. We have the wonderful concept of a new tax that will be imposed on one person in order to affect someone else. I find that slightly interesting.

The amendment would make it possible for a local transport authority to say to an employer in its district that, because it is intended that the charge should fall on those who drive to work, it will provide at the entrance to the firm's car park either credit card operated gates or cash operated gates, or that employees can purchase a monthly licence, or whatever. It would enable an authority to pay for the installations and subsequently take the money and do the accounting.

It is not my business to make the charges more palatable or acceptable. It is my belief that they will prove to be pretty unpalatable and that the government may reap the benefit of their being unacceptable. This amendment might help that process, which I should welcome.

It is a serious point. If the target of the workplace parking levy is the person who drives to work and not the person who occupies the premises and runs the business, it may be worthwhile considering a concession on the face of the Bill under which a local transport authority is enabled to put in the necessary infrastructure so that the actual target, rather than the legislative target, is the person affected by the introduction of the charges. That would probably help the Government forward greatly. I beg to move.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords) 9:00 pm, 17th July 2000

That is an interesting interpretation. As it was the noble Lord who brought the amendments forward, he is entitled to his own interpretation. It is not quite what the amendments say. As I read them, they are about compensation to the owner of the premises. There is reference to a specified person, but no reference to the circumstances in which such a person would be specified; there is no regulatory power to specify a person in terms of the cost of implementing and managing any such scheme. That could apply, whether or not the charge was made on the occupier of the premises or the individual car driver occupying a car parking space. Read literally, the amendment is neutral as to whether the charge is paid by the car driver or the employer. Be that as it may, it is an interesting argument in either case.

It is also the case, I am afraid, that the amendment as drafted would mean that there would be nothing to stop the person responsible for paying the workplace parking levy seeking compensation for the actual cost of paying the workplace parking charges. In other words, you pay the charge and you get it back in compensation, which would rather nullify the whole procedure. I can see that the noble Baroness, Lady Hanham, thinks that that is a very good idea. Noble Lords might well have pressed on with opposing the Question that Clause 177 shall stand part.

There is a serious point behind the amendment that I want to address, whoever will ultimately pay the charge. It is the question of keeping the burden of administrative costs to business to a minimum. We are seized of that; we do want to minimise the administrative burden.

The levy will simply require the occupier of a premises or any other person who may be prescribed to apply to the licensing authority for a licence to cover workplace parking needs. The cost involved in handling licence applications, issuing licences and enforcement schemes will be met by the licensing authorities from the gross revenues raised by the workplace parking levy. That means that the only administrative burden placed on businesses will be the requirement to estimate the workplace parking needs and to submit the licence application. In most cases that will be fairly obvious and it should be a straightforward task. But at larger premises, as may be imagined, the number of parking spaces is not the right measure--because parking spaces can be laid out tightly or loosely. Occasional inspections may be necessary in order to see how many people were there at the peak, which is the test used in the Bill; and in certain circumstances there might be an electronic gantry at the car park entrance to count workplace vehicles in and out. It might be to the advantage of the employer to do that.

I should emphasise that licensing authorities have no powers to insist that businesses install and pay for any equipment that is used for counting vehicles. So compliance costs in all these matters are, by definition, met by businesses. Local authorities do not meet the cost imposed on businesses when businesses satisfy demands for the payment of rates. We do not believe that businesses should be able to claim compensation from licensing authorities for complying with workplace parking levy schemes.

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

As so often, the Minister has been extremely helpful in responding to the amendment. One of the reasons for tabling it is that discussions have taken place about this kind of issue. In one or two places, people considering whether or not to introduce a scheme have held discussions with employers to see whether things can be done to make the imposition of the charges more acceptable or more administratively possible.

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

We have to be careful about what is imposed, compelled, left out or not permitted.

I am grateful to the Minister because I suspect that when I read his reply I will find that he has enabled me to devise a better amendment. It would be surprising if that were not the case because he has done precisely that himself in the past. I will need to consider carefully all that has been said but beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 182 agreed to.

Clause 183 agreed to.

Clause 184 [Licensing schemes: consultation and inquiries]:

[Amendments Nos. 248 to 259 not moved.]

Clause 184 agreed to.

Clause 185 [Matters to be dealt with in licensing schemes]:

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

moved Amendment No. 260:

Page 112, line 10, leave out ("may") and insert ("shall").

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

Clause 185 deals with the contents of licensing schemes and licences. Subsection(4) states:

"In setting the charges imposed by a licensing scheme under this Part, regard may be had to the purposes for which any of the net proceeds of the licensing scheme may be applied".

Regard "may" be had? Everything the Government have said reinforces that regard to the purposes shall be had if not must be had. We are back to the wretched business of the meaning of words. The Minister who replies will doubtless say that this is one of those wonderful occasions when "may" means "must". The problem for us ordinary mortals is that we have difficulty understanding when "may" means "must" and when it means "may". That may be pedantic but it is an important point. If regard is not paid to the purposes to which the money will be applied, the public will rightly be angry. I am sure that is not what the Government intend and it would not be helpful. I beg to move.

Photo of Lord Whitty Lord Whitty Parliamentary Under-Secretary, Department of the Environment, Transport and the Regions

The issue is not the word "may", "must", "shall" or "should" but whether we should highlight this aspect of a plan from others. Of course schemes will raise revenue but that is probably less than half the story. The introduction of charges will also have an effect on traffic levels, congestion, pollution and delays.

Under the amendment, local authorities would be required to have regard to the purposes for which the net proceeds were to be spent. That provision is, at best, unnecessary. Schedule 12 already provides that local authorities will be required to prepare plans setting out how net revenues from charges will be spent. If that provision is highlighted elsewhere, it could be interpreted as meaning that the emphasis when setting charge levels must be on funding local transport improvements rather than tackling congestion. We do not want to risk giving the impression that we are precluding local authorities from setting charges geared primarily to tackle traffic congestion that have as a side benefit the funding of transport improvements.

Clause 185(4) was drafted to make it possible for local authorities to set charges and so raise revenue to fund local transport improvement, and that is why "may" is used in this context. Charges should not be set only on that basis. I remind the noble Lord that as a condition for the approval of individual schemes by the Secretary of State there must be full consultation on the detail. No doubt that will also focus on those matters on which the money is to be spent. The amendment would reduce the flexibility of local authorities. We want to give them the right to design and implement schemes which can best deliver transport objectives which suit their local circumstances. I hope the noble Lord recognises that to pick out this item when the requirement is already available elsewhere along with other requirements is not helpful and may give the wrong signals.

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

I almost regret the Minister's response. I suspect that he has set me a dreadfully large amount of homework to verify the facts of the case. The difficulty is that we are dealing with the meaning of words in the English language. As to the relative importance of particular bits of this Bill and unheard of and unseen regulations--even worse, guidance--the position may well be as the Minister says. I shall do my best to check it. If I have a cold towel round my head and appear wan, as the Minister is wont to do on occasions, people will understand how that comes about. I am grateful for the Minister's reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 185 agreed to.

Clause 186 [Licensing schemes: exemptions etc.]:

[Amendments Nos. 261 and 261A not moved.]

Clause 186 agreed to.

Clause 187 [Licences]:

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative 9:15 pm, 17th July 2000

moved Amendment No. 262:

Page 113, line 1, leave out subsection (3).

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

If I have read it correctly, as drafted the Bill provides that workplace parking levy licences should last for not more than 12 months. I am open to correction, but I believe that that is how the provision is drafted. That is slightly strange. I see no reason why it should not last for two years, five years or 10 years. My driving licence, which I have held for a number of years, does not expire until I am 70. I am immensely grateful to DVLA, or whoever was responsible for the regulation, for making it possible for me to avoid the need to reapply for my driving licence every year. I suspect that if I had to do so I would lose it. There are licences and licences. To put the opposite case, I am aware that a television licence lasts for only 12 months.

In this case we are considering, among other things, the confidence of those who have to pay this levy. It may well be that in particular circumstances they prefer the licence to last for longer than 12 months. After all, if it lasts for only 12 months there is nothing to prevent the local transport authority at the end of the period saying that it intends to raise the levy by 10 per cent. Some may regard that as an unreasonable proposition; others may believe that it is acceptable. I do not think that that is reasonable. If in arriving at a scheme an authority wishes to create licences which last for a period longer than 12 months I believe that it should have the ability to do so, and that is the purpose of the amendment.

Amendment No. 263 deals with variations of a licence. While it is a very small point, it is a matter of good business practice. The amendment requires applications for a variation in a licence to be heard within 30 days. I do not know whether that is an achievable target, but it should be. The reality is that across the country there may well be many businesses whose car parks have a capacity much greater than will ever be required under normal circumstances. Unless one has a very brutal system in which the licence is calculated on the basis of the maximum capacity, it may well be that there will be spare capacity. A car park with a capacity of, say, 1,000 spaces may have a licence for only 900.

Business circumstances change and it may be that an employer will want to increase his capacity because of expansion. It is not then unreasonable that the application should be heard within a reasonable timescale. I am not adamant that 30 is the appropriate number of days but if the Minister would accept the principle of what is intended to be a helpful amendment and return with another figure or an adjusted amendment, I should be delighted. I beg to move.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

I have sympathy with Amendment No. 262. It would be helpful if in reply the Minister could tell us why any limit has been introduced and why it is one year.

Photo of Lord Whitty Lord Whitty Parliamentary Under-Secretary, Department of the Environment, Transport and the Regions

There appears to be some confusion. We are dealing with a licensing system, which means that some people are charged for their parking places. It is not a direct or indirect form of parking control in the sense the noble Lord implies.

The effect of Amendment No. 262 would be to remove the condition that a licence cannot be granted for more than a year. Our intention is to safeguard business by ensuring that the licensing authority cannot require a business to take out and pay for a licence for several years at once. Amendment No. 262 would remove that protection.

Amendment No. 263--and here the confusion arises--proposes,

"within 30 days or will be deemed to be granted".

I shall explain what I mean by the provision not being a parking control. The Bill does not allow authorities discretion over the number of vehicles covered by a licence, or whether a licence will be given. If an employer asks for and pays for a licence for 100 people, 100 vehicles will be covered by the licence. If the employer subsequently expands, as the noble Lord suggests, and asks for a further 50 that, too, must be granted. There is no discretion on local authorities as to whether they should grant or not, or whether when the year is ended they should renew or not.

We are seeking a price effect, not a rationing effect, and therefore there is a misunderstanding behind the amendments. The first would remove the safeguard for business and the second is unnecessary.

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

Will the Minister deal with the point suggested by my suspicious nature. A licence which lasts only for one year can be renewed the next year for the same number of vehicles but at a different charge.

Photo of Lord Whitty Lord Whitty Parliamentary Under-Secretary, Department of the Environment, Transport and the Regions

That is always possible. It is also open to the employer to reduce the number of cars if the new charge is not acceptable to him. That, in a sense, is the point.

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

We are entering interesting territory. My noble friend points out that it is also possible for a business to decide to move to a different location. That might be an unforeseen consequence. The law of unforeseen consequence is universal and arises with monotonous regularity. Businesses do not have to relocate in this country, so the unforeseen consequences could have a degree of unpleasantness that none of us would want.

I shall study what the Minister said. There ought to be a position somewhere between the shaky quicksand on which he is standing and the more solid quicksand on which I am standing. They are both quicksands, but there ought to be a point at which there is an acceptable solution to the dilemma. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 263 not moved.]

Clause 187 agreed to.

Clauses 188 and 189 agreed to.

[Amendment No. 263A not moved.]

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

moved Amendment No. 263B:

Before Clause 190, insert the following new clause--

:TITLE3:GREEN TRANSPORT PLANS

(" . Local authorities shall promote the drawing up by employers of Green Transport Plans and stipulate that these are discussed at an early stage with employees and their representatives.").

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

Amendments Nos. 263A and 263B were originally written together and I believe that they hang together in a certain way. However, Amendment No. 263B adds a highly practical dimension in saying that, in the context of introducing either of the charges, local authorities should,

"promote the drawing up by employers of Green Transport Plans and stipulate that these are discussed at an early stage with employees and their representatives".

In other words, the congestion charge and the workplace levy would be brought forward by firms in the context of green transport plans.

I do not believe that the right reverend Prelate who spoke earlier was totally wrong when he said that the effect of the new charges will be not only to provide a means of paying for public transport; they will change people's behaviour. It is obvious that that is what we are doing: through the price mechanism, we are changing people's behaviour. When, for example, one puts up the price of strawberries, the result is that fewer people eat strawberries. I do not believe that I need to tell anyone that that is how price mechanisms work. That was the contention in the preliminary discussion which led up to the White Paper.

Be that as it may, it is employees who are being called upon to change their behaviour. It is they who in many cases will pay the congestion charges and I suspect that, in one way or another, in many cases they will pay for the workplace levy as well.

I part company with the dire predictions of the Official Opposition but I believe that these two measures will come as a shock to many firms. I believe that trade union support for them, which we have been developing, will be a vital part of their reception. This type of issue is on the agenda of a trade union and sustainable development advisory committee, chaired jointly by Michael Meacher and John Edmonds.

I believe that it is fair to say that very little has happened so far with regard to green transport plans. There have been some notable exceptions; for example, the round of discussions in government departments and in the Civil Service, and all credit to them. However, a new stimulus is needed and a clause such as this could act as a vital catalyst if the issues are to be developed in a serious way. After all, the repercussions could involve the staggering of hours of work and the pooling of travel for some firms, and so on.

Terms and conditions of employment will be affected both directly and indirectly through the extra charges. Although the amendment does not attempt to prescribe in detail how the consultations in a firm should be carried out with employee representatives, I have no doubt that in many workplaces that will be the make or break factor as to whether the scheme is a success--as I very much hope that it will be--or a failure.

Finally, although in many respects the national line of the TUC and the CBI is largely supported, both sides need a push to find a better way of ensuring that these matters are discussed in the workplace. It cannot be left to people's common sense in the hope that they will work it out for themselves. Experience shows that that does not happen. People will not march down Whitehall demanding that the charges are introduced; nor do I expect the converse. We do not wish to be wise after the event. That is why I hope that the Minister will be able to give a sympathetic response. Perhaps this particular form of words can be improved upon, but I hope that the amendment's essential ingredients will be incorporated into the Bill. I beg to move.

Photo of Lord Berkeley Lord Berkeley Labour 9:30 pm, 17th July 2000

My noble friend has given an excellent and comprehensive summary of the aims of the amendment to which I have put my name. I do not need to repeat what he has said, but I have one other point to make on individual taxation, which is very important in selling the concept to employees.

The issue is a matter for the Treasury, but it comes up in your Lordships' House quite often. I still believe that the tax system encourages people to use their cars. Many people are given company cars and, regardless of whether they are given free petrol, the perception is that it is more advantageous for most of them to drive to work than to buy a season ticket for the train or bus, for which they have to pay out of fully taxed income.

I hope that, as part of the new 10-year plan for transport, the Government will have the courage to look at this continuing anomaly in the tax situation relating to transport for individuals.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

I should like briefly to support the amendment. It has many merits, not least the interesting light that the experience of the noble Lord, Lord Lea of Crondall, in the trade union movement threw on his argument. When I was a member of Surrey County Council, we began a sort of green transport process, particularly in connection with a large development site. Heathrow airport has got rid of a good deal of its employee parking and introduced a number of bus services for employees. Those are two straws in the wind. Employers or managers of large companies are interested in the idea, because it can benefit them and enable them to get what they want, as well as bringing benefits to the local community. I hope that the Minister will give the amendment a fair wind.

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

I have a feeling that I should not speak in support of the principle of the amendment, but it follows on from amendments that we have discussed earlier in the Bill. It is a good idea. The noble Lord, Lord Lea of Crondall, mentioned discussions within government departments about the issue. Many thoroughly commercial enterprises already have such schemes. They should be encouraged in any way possible. I shall be amused and interested to see whether the Minister is as encouraging to his noble friends as he has been to us when we have advocated good schemes. I do not intend to launch a torpedo into the amendments by saying that, because I hope that the Minister will take them seriously and will do what he can to support them.

Photo of Lord Whitty Lord Whitty Parliamentary Under-Secretary, Department of the Environment, Transport and the Regions

Without showing undue favouritism to my noble friend, I have some sympathy with the amendment. It is important for local authorities to encourage green transport plans among employers in their area and for employers to consult properly with their staff and unions in developing such plans. Local authorities are well placed to do that, so we support the underlying aim of the amendment. However--the noble Lord, Lord Dixon-Smith, will recognise these words--I have yet to be convinced that it is appropriate to include the amendment in primary legislation.

Local authorities are already being asked to promote travel plans through the local transport plan process. Existing LTP guidance asks local authorities to set out how they will encourage the widespread adoption of travel plans by employers, who will need to consult their work forces, and to consider setting targets for take-up and for modal shift. The extent to which local authorities include those aspects within their local plans will have clear implications for the bids which they put in under those plans.

In addition, our draft planning policy guidance, PPG13, on transport includes a system of transport assessment to encourage travel by sustainable modes to and from new developments. That means that developers may also be required to produce travel plans with their applications for planning permission. In turn, they will be encouraged to consult widely not only with local authorities but also with those who represent the staff.

I am less pessimistic than is my noble friend Lord Lea. I go round the country seeing some of those green transport plans and there is a lot of innovation and enthusiasm for them among employers and employees alike. We have highlighted that by producing several guides on travel plans which underline the importance of consulting employees and unions at the outset of the plan development. We have distributed those plans and the earlier guidance to local authorities and there was quite a good take-up to encourage good practice.

Therefore, I am at one with the aim of the amendment but I remain unconvinced that it should be on the face of the Bill. However, I hope that with those assurances my noble friend will not press the amendment.

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

I am grateful to my noble friend for his response. The key point about the amendment is not so much the promotion of green transport plans per se but is in the context of the introduction of either a congestion charge or a workplace levy.

I suggest that when those two measures are brought forward priority must be given to discussion with the workforce. That is best done in the context of green transport plans. I hope that the Minister will consider what I have said and I shall obviously want to read carefully what the Minister said. I hope it means that we may be able to produce an appropriate form of words for Report stage. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 190 agreed to.

Schedule 12 [Road user charging and workplace parking levy: financial provisions]:

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

moved Amendment No. 264:

Page 219, line 10, at end insert--

("and includes the amount of any VAT charged on road user charges or workplace parking levies").

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

The noble Lord, Lord McIntosh of Haringey, will recognise immediately why this question was asked. He answered a question from the noble Lord, Lord Islwyn, as to whether the Government have any plans to introduce VAT on toll charges. The first purpose of tabling this amendment is to find out whether the workplace parking levy or congestion charges are tolls within the meaning of the Bill. But I suspect that when he replies the Minister will tell us that under the definitions in Euroland they must be so. I shall be interested in that point.

If that is so, when we introduce those charges we are not simply introducing a local charge or levy in order to support local schemes and produce local benefits. They are also producing a nice little 17.5 per cent supplement on behalf of the Treasury. Most people do not think initially that that is what is happening. It is extremely important that we should be quite clear that that is what the situation is.

A congestion charge of £1 per day, or whatever it may be, is not a congestion charge of £1 per day because you happen to be in that town and that is what the charge is. It is £1.17½ and the 17½p will go to the Treasury, although we say that the benefit should remain a local one.

I suspect that in his response the Minister will say that the amendment is not practical politics because VAT is VAT and belongs to Customs and Excise. That may well be the reality. However, if by a freak of good fortune the Minister can tell me that I am completely wrong in my presumptions, those charges will not be subject to VAT, and that therefore I need not concern myself, or that VAT will be payable, the Government will make arrangements to see that the effect on the local chargepayers of the VAT will be returned to the local transport authority, in both instances I shall be delighted. Dare I say that the public will be rather less concerned at what is going on? I shall not say that we would all go on our way rejoicing. I do not think we are in that situation. However, at least we would be in a better situation than the one in which I suspect we are. I suspect we are in one of those lovely situations where the taxpayer pays and nothing can be done about it. I beg to move.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

I am not sure that I am necessary. The noble Lord, Lord Dixon-Smith, puts up his case and demolishes it straightaway. I do not think I need to intervene. Perhaps I shall.

Let us make clear the position on VAT. At present we have the advice of the Advocate General; that is, that VAT should be charged on tolls. The European Court will make its judgment on 12th September. As the noble Lord, Lord-Dixon Smith knows, because it was raised in this House, with four other countries concerned we have been strongly arguing the case against imposing VAT on road tolls.

We do not yet know the judgment of the court. However, it is the case that normally it is in line with the advice of the Advocate General. We will not know the position about road tolls and congestion charges until we hear the terms of the judgment. I refer not just to the effect of the judgment on road tolls but the way in which it is expressed and whether anything is said which guides us as to whether congestion charges will come under the same judgment. We shall have to consider carefully the text of the judgment of the European Court before we decide what has to be done in this country to implement it.

However, I can tell the noble Lord, Lord Dixon-Smith, that we agree that the revenue from charging schemes should be hypothecated to transport projects. The imposition of VAT, if it were to happen, should not reduce the funds available to authorities. We shall be working on the exact mechanism for that as schemes are developed. In other words, the Treasury will not take the 17.5 per cent; it will go back to local transport schemes. Bearing that in mind, the local authorities will make decisions about charging levels in the knowledge that if that is to be the case, VAT will have to be part of the charge.

The amendment also covers VAT charged on workplace parking. We do not expect workplace parking levies to be subject to VAT. If the noble Lord, Lord-Dixon Smith, wants to go away rejoicing, I am happy for him to do so.

Photo of Lord Swinfen Lord Swinfen Conservative

Before the Minister sits down, perhaps I may ask whether the local authorities will get back the whole of the amount or will the Treasury make an administration charge and keep some for themselves?

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

I am genuinely grateful to the Minister. He has given a most helpful reply which, for once, sends me on my way rejoicing. If we had not tabled the amendment and I had not pressed the question, we would not have received his well-defined answer. That helps us all forward. Perhaps the Minister would like to have a word with me afterwards. I wonder whether we will have the benefit of the judgment of the European Court before we meet to consider the Report stage of the Bill, which I take it will be in early October, or might just be in the last day or two of September.

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

Then when we have the benefit of the judgment, the Minister will understand if we find some way of persuading him to reveal what its consequences might be in relation to this Bill.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

I was cautious to say that we will have to consider the judgment carefully. I cannot promise that we will have reached a firm conclusion as to what the judgment means and how we interpret it before we come to Report stage.

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

I am grateful to the Minister. I do not want to spoil what I can only regard as a happy occasion. But he will understand if we are anxious to receive the answer.

This has been a useful discussion, for which I am extremely grateful. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative 9:45 pm, 17th July 2000

moved Amendment No. 265:

Page 221, line 34, leave out paragraph 9 and insert--

("9. The appropriate national authority may by regulation make provision for paragraph 8 to apply with the substitution for the number for the time being mentioned in sub-paragraph (5) of that paragraph of a number of years greater than ten.").

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

This is simply another of my consistent moves to try to increase the time for which money is available to local authorities when they have taken the initiative in raising it. The amendment provides that the number of years should be greater than 10, which is what the Bill states. I believe that is perfectly reasonable. But I suspect that the Minister, in his response, will tell me that, though the Government will produce a 10-year plan, 10 years is longer than they foresee it being needed. It will therefore all need to be reviewed before that time is up.

This is an important amendment. It is consistent with what we have been arguing elsewhere. I beg to move.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

I am grateful to the noble Lord for those words of explanation in support of his amendment. While I am not able to accept the amendment, it is clear that we are agreed that the hypothecation arrangements set out in Schedule 12 to the Bill are important.

Amendment No. 265 would provide that regulations under paragraph 9 of Schedule 12 could only provide for the extension of the guaranteed period of hypothecation beyond the 10-year period if the revenues raised were spent on improving local transport. The effect of the amendment would therefore be the indefinite hypothecation of the revenues raised for new charges for local transport spending.

The arrangements that we included in our Greater London Authority Act and have extended to this Bill, represent a breakthrough by guaranteeing hypothecation. We recognise that that is a crucial factor in the success and acceptability of each and every scheme. The Bill therefore provides that every penny of the net revenues raised from local authority charging or licensing schemes brought forward within 10 years of the commencement of this schedule will be retained locally and ring-fenced for transport spending for each scheme's initial period.

The expectation is that the initial period will be 10 years from the implementation of a scheme. But Schedule 12 also enables the appropriate national authority to guarantee the hypothecation of charging revenues for more than 10 years for individual schemes. That flexibility could be particularly valuable if the local authority wants to undertake a PFI deal and the private sector required a guarantee that a revenue stream would be available for more than 10 years.

The Bill allows for the arrangements for the retention and use of charging revenues to be reviewed in 10 years' time. That is for the simple reason that spending charging revenues on transport in perpetuity might not deliver value for money improvements in the medium to longer term once substantial improvements to local transport have been put in place. It may well be that the review recommends that 100 per cent hypothecation of charging revenues for transport spending should continue for all schemes for a further period. I can assure Members of the Committee that the Bill explicitly allows for hypothecation for transport spending to continue after the review, though clearly I cannot pre-empt the outcome of the review.

I hope therefore that the noble Lord will reconsider and agree not to press his amendment.

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

I am grateful to the Minister, who has once again given a helpful reply. He will be aware that I know from too much past experience that the funding of large-scale highway improvements often runs for 20 to 25 years, and sometimes even longer. So this is a very important consideration. As I said, I am grateful to the noble Lord for his response, which I shall study in Hansard with care. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 12 agreed to.

Clauses 191 and 192 agreed to.

Clause 193 [Information]:

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

moved Amendment No. 266:

Page 115, line 21, after ("subsection") insert ("(1), (2) or").

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

If I have interpreted it correctly, the Bill as drafted provides that information that has been obtained from another authority--or, indeed, the Government--in the course of performing functions is only protected from disclosure by the contractor to whom it has been disclosed by the charging or licensing authority in order to set up the scheme and enable it to work. We believe that there is a gap in that provision because there is always a problem with what one might call "commercially protected legislation". Its inadvertent release can have unforeseen and sometimes very damaging consequences for the business that willingly supplied such information in order to help matters move forward.

The purpose of this amendment is to expand the protection that presently exists against its release by a contractor to cover the Government, the local transport authority or anyone else who has the information and who might inadvertently release it. That is not an unreasonable request. Amendments Nos. 267, 273 and 274 are also included in this group. They are all more or less identical and bring us back to what the noble Lord, Lord Clinton-Davis, would call the common law provision. However, I do not apologise for advancing it. If information is released inadvertently and proves to be damaging, these amendments provide that compensation will be available to the person or business so damaged.

These are old-fashioned principles with which none of us has any difficulty and which I believe we all accept. I thought that we should table such amendments in order to be absolutely certain that in passing this legislation the situation is adequately protected. If it is not, the possibility of obtaining information which may well be essential to the creation of some of these schemes will be endangered. I know that the Minister would not wish such a situation to arise; indeed, I can see the look in his eyes. I beg to move.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

Once again, I am pleased to be in agreement with the noble Lord and his intentions, although I hope to persuade him that his concerns are already met. We envisage that the disclosure of information by public bodies may be essential for the fair and effective enforcement of a charging or licensing scheme; for example, the name and address of the registered keeper of a vehicle may need to be passed on to a charging authority by the Driver and Vehicle Licensing Agency.

If the charging or licensing authority contracts with a private company to carry out the enforcement of a scheme, the authority will need to be able to pass on such information to its contractor. Subsection (4) of Clause 193 makes clear the caveat that any information passed on in this way under subsection (3) may only be used for, or in connection with, the charging or licensing scheme.

Amendment No. 266 would extend the caveat in subsection (4) to subsections (1) and (2) also. However, the wording of those two subsections already makes clear that disclosure of information by public bodies or internally within a charging authority may only take place for, or in connection with, a charging or licensing scheme. I can therefore assure the noble Lord that his concern is already specifically catered for.

I also agree that where information is wrongly disclosed people should be able to claim compensation for any damage caused. However, this is already catered for under the common law through our existing judicial system to which anyone who feels that they have been caused damage in this way could resort. Proceedings under common law provide appropriate remedies for claimants against persons who have wrongly disclosed information.

I believe therefore that it is not necessary to add this safeguard to the primary legislation through these amendments. I hope that with that reassurance the noble Lord will agree to withdraw the amendment.

Photo of Lord Dixon-Smith Lord Dixon-Smith Conservative

I am grateful for the Minister's helpful reply. I do not think that there is a great deal between us. I shall need to study carefully the Minister's comments. In these amendments, as in earlier amendments, one is dealing with a common law situation. However, resorting to the law can be expensive. That is an unfortunate fact of life. It may be necessary to resort to the law to decide what compensation should be paid. Once again we are creating a situation where the lawyers may have a ball. However, I am grateful for the Minister's helpful reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 267 not moved.]

Clause 193 agreed to.

Clauses 194 to 198 agreed to.

Schedule 13 [Amendments of Schedules 23 and 24 to Greater London Authority Act]:

[Amendments Nos. 268 to 274 not moved.]

Schedule 13 agreed to.

Clause 201 [Membership and chairing]:

Photo of Lord Swinfen Lord Swinfen Conservative

moved Amendment No. 275:

Page 119, line 14, at end insert (" , and

(c) at least one person representative of disabled people").

Photo of Lord Swinfen Lord Swinfen Conservative

In moving Amendment No. 275, I wish to speak also to Amendment No. 284, which stands in my name and with which it is grouped. Amendment No. 276 in the name of the noble Lord, Lord Berkeley, is also in the same group.

The purpose of Amendment No. 275 is to require that at least one authority member represents the needs of disabled people. Amendment No. 284 requires that disabled people be consulted by the authority in drawing up its strategies.

With such an important and new authoritative body as the Strategic Rail Authority promises to be, it is essential that it reflects the interests of all existing and potential passengers. Few would disagree that it must therefore cover the needs of those with disabilities. It is therefore excellent that included in the functions of the authority is the task of having regard to the needs of disabled people, as mentioned in Clause 206(3).

It might, however, be argued that, by chance, someone with a particular interest in disability will be among those appointed to the authority and that this particular function can be informed and overseen by that person. This may be the case but the idea has three serious drawbacks. First, I argue that the interests and needs of people with disabilities are complex and are not always well understood by those with only a casual knowledge of disability. For that reason we need an expert in the authority to whom everyone--other members of the authority and the public at large--can refer.

Secondly, where meeting the needs of disabled people is left to chance, where no one has a specific responsibility to attend to those needs, it is often the sad case that those needs are overlooked. Correcting the omission later, which the Disability Discrimination Act will in due course require, will then involve a higher cost than would otherwise have been the case.

Thirdly, in so many organisations we frequently see progress for disabled people made by a particular individual and that progress stop--or even go into reverse--when the individual moves on to another appointment. Such stop/go progress can only be avoided by appointing a specific individual to the authority with the responsibility of having regard to the interests of people with disabilities. Such an appointment has the overwhelming benefit of institutionalising those interests.

I would also argue that the number of disabled people is such--some estimates suggest that 6 million people in this country have impaired mobility--that this important function needs to be the specific responsibility of a particular member of the authority. If that were to be the case, as the amendment proposes, we would ensure that the functions spelt out in Clause 206(3) are effectively, efficiently and economically performed. I beg to move.

Photo of Lord Berkeley Lord Berkeley Labour 10:00 pm, 17th July 2000

In speaking to my Amendment No. 276 I shall refer briefly to Amendments Nos. 275 and 284, to which the noble Lord, Lord Swinfen, has spoken. I believe that my noble friend has already beaten us to it because on 13th April he appointed seven members to the board of the Strategic Rail Authority, one of whom has great experience of dealing with travel for the disabled and one of whom "will represent passenger interests". This is greatly welcome. My amendment and the amendments of the noble Lord, Lord Swinfen, seek to put this on a statutory footing. I certainly welcome what my noble friend has done and I hope that it is bearing fruit.

In the interests of equity--and here I declare an interest as chairman of the Rail Freight Group and, to repeat what I have said previously in Committee, an adviser to Adtran; perhaps I should add that my wife works for the Strategic Rail Authority which, I think, technically is the British Railways Board--it would be reasonable to seek one person to be appointed to the Strategic Rail Authority who has experience of the needs of rail freight. In my view, if it is good for passengers, it is good for freight.

It is very important that there should be someone on the authority who has experience of working in a local transport authority. We are aiming to produce a Bill for integrated transport policies and, as the Committee discussed several days ago, local transport plans are very important. I think they have some way to go before they reach a standard which will be uniformly acceptable and it would be very useful to have someone on the board with experience of local transport planning, local government transport policy development and so on.

I do not feel strongly about whether my noble friend considers it appropriate to place this requirement on the face of the Bill. But if has he appointed someone to represent the interests of rail passengers and someone to represent the interests of the disabled, it would be equitable if he appointed someone to represent the interests of rail freight and another person from a local transport authority.

Photo of Lord Addington Lord Addington Liberal Democrat

Perhaps I may speak briefly. My name appears alongside the name of the noble Lord, Lord Swinfen, on Amendments Nos. 274 and 275. The noble Lord, Lord Swinfen, put the matter clearly when he said that the amendment would institutionalise responsibility for the disabled. We know that if one takes one's eye off the ball for any amount of time one can easily make a mistake. The classic example is where escalators are put in which suit certain types of disabled people but do not suit others. We go on from there. One has to keep constantly vigilant to make sure that this does not happen.

The noble Lord was right when he said that because one has someone initially in place who knows about these matters and he is not there, it is assumed that the matters are dealt with and checked. People make mistakes like that. I know there will be an argument against the idea of listing any one particular person. But unless we get strong reassurances that people will constantly keep vigilant there is a grave danger that certain areas of good practice may ultimately be eroded by time.

Photo of Baroness Darcy de Knayth Baroness Darcy de Knayth Crossbench

I can make an even briefer speech in support of the amendments. My name never did get on the amendment because I was too slow off the mark. I should like to support what both noble Lords have said on Amendments Nos. 275 and 284, particularly the part reinforced by the noble Lord, Lord Addington.

Photo of Earl Attlee Earl Attlee Conservative

I congratulate my noble friend Lord Swinfen on introducing his self-evidently desirable amendment. We have heard many helpful comments, particularly about the need for constant pressure for good practice. I hope that the Minister will be helpful to us on the amendment.

Photo of Lord Whitty Lord Whitty Parliamentary Under-Secretary, Department of the Environment, Transport and the Regions

We entirely sympathise with the objectives of the amendment. My problem is that we do not wish to see the Strategic Rail Authority, or other authorities within the transport areas, being represented in the sense that the amendments of the noble Lord, Lord Swinfen, and of my noble friend Lord Berkeley would imply. We expect to see members with experience of exactly the kind of areas that have been referred to--disabled people, rail freight, local government and so on. But in practice members of the board will often wear several hats and not, as the amendment would imply, represent any one particular organisation or group. To put these requirements in the amendments on the face of the Bill would cut across the aim of having an overall representative body. We are concerned at the under-representation of women, ethnic minorities and disabled people in relation to public appointments as a whole and to transport appointments in particular. Those considerations will be taken into account when choosing members.

Amendment No. 284 would require the SRA to consult representatives of disabled people before formulating a strategy and from time to time as part of keeping a strategy under review. Clearly, it would be sensible for the SRA to consult and to do so taking into account the views of those organisations representing disabled people. But, as we have argued before, it is not necessary, or indeed desirable, to put on the face of the Bill long lists of organisations to be consulted. The list would grow and some organisations will always be omitted in error.

However, I can meet the noble Lord to some extent. The SRA will need to consult many organisations about many matters. I am happy to give an assurance that in the directions that we give to the SRA under Clause 206 and the guidance we give to the SRA we include general guidance on consultation with the Disabled Persons' Transport Advisory Committee--DPTAC. That will be clear in the guidance. It will achieve the objectives intended by Amendment No. 284. With those reassurances to both the noble Lords, Lord Swinfen and Lord Addington, that these procedures will be followed, I hope that the noble Lord will feel able to withdraw his amendment.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

Before the various Members of the Committee who have spoken to the amendments tell us what they are going to do with them, as it were, I wonder whether the noble Lord could come back to the part of Amendment No. 276 which refers to the need to have someone on the SRA with experience of local government. I thought that the point made by the noble Lord, Lord Berkeley, was a very good one. Elsewhere in the Bill we are encouraging local government to co-operate in various ways--ticketing is just one--with the rail services.

My experience is that it is quite difficult for local government to talk to the railway industry. The two bodies are so different, their approach to life is so different and the way they are constituted is so different that misunderstandings can be caused. The suggestions that there should be someone with experience, or that in appointing people the Government might give weight to the fact that one of the candidates had experience, in local government are sensible.

Photo of Lord Whitty Lord Whitty Parliamentary Under-Secretary, Department of the Environment, Transport and the Regions

I said that we would expect membership of the board to include, among the other areas covered by the amendment of my noble friend Lord Berkeley and those covered by the amendment of the noble Lord, Lord Swinfen, members who have experience of local government. What I was objecting to was the representative nature implied by the amendments. Certainly, we would want people who had experience of that kind and indeed experience of disabled people and their needs.

Photo of Lord Swinfen Lord Swinfen Conservative

It is not my intention to press the amendment today. I shall read with care what the Minister has said. However, I am not sure that I agree with him. The fact that a member of the board may be representative of a particular group does not mean to say that he cannot take an intelligent and wise interest in other matters that come before the board. The noble Lord has only to look at himself and bear in mind the wide range of matters with which he himself deals in this House. The same could be said of nearly every Member of this House. They have their strong points, but that does not mean to say that they do not take an interest in everything else that goes on, or at any rate in a wide range of what goes on, and deal with those matters intelligently and sensibly. I hope that the noble Lord will take on board what I have said and that he will consider this matter further before we reach the next stage. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 276 not moved.]

Clause 201 agreed to.

Clauses 202 and 203 agreed to.

Schedule 14 [Strategic Rail Authority]:

Photo of Earl Attlee Earl Attlee Conservative

moved Amendment No. 277:

Page 232, line 3, at end insert--

("( ) Full details of staff numbers shall be published in an annual return.").

Photo of Earl Attlee Earl Attlee Conservative

In moving this amendment it may be convenient if I speak also to Amendments Nos. 278, 279, 280, 281 and 281A. We are concerned that both the SRA and the office of rail regulator are planning considerable increases in staffing and resources. Those increases need proper scrutiny to ensure that the costs of regulation do not increase to a point where they divert resources away from running the railway system. Clearly, the more staff the SRA employs the more it suggests that it intends to take a role in the day-to-day running of the railway industry rather than follow a more strategic remit.

According to the DETR annual report, the SRA plans to increase its staff from 126 to 237. While it is taking on some more responsibilities, an increase of almost 100 per cent since 1998 needs close examination and continued scrutiny to ensure that this rise is not intended to continue inexorably. The rail regulator is also planning an increase in staff from 130 to 180. We would be concerned if that increase were to continue in the same way.

I turn to Amendment No. 278. Examination of the schedule provides an opportunity to explore the funding of the SRA. The precise nature of the funding provision of the SRA remains vague. As Keith Hill said at the Committee stage in another place:

"The fine details of the SRA's financing structure are still being developed".--[Official Report, Commons Standing Committee E, 28/3/00; col. 1144.]

It is now time that these fine details were resolved.

One of the key advantages of privatising the railway industry was that it was taken out of the uncertainties of the public sector spending round and it was allowed to plan for the long term. The SRA, and therefore the railway industry, will not have that certainty unless a long-term commitment is made by the Government to provide adequate funding. The Government are now planning public finances on a three-year rolling basis. It is therefore not unreasonable that the SRA should have the same certainty. A stable framework for long-term future funding is vital for the railways when most projects last for several years.

On privatisation, a long-term programme of subsidy to the railways was established and written into the franchise agreements. This is now under threat. It is clear that the Treasury is going to take a close interest in the funding of the SRA and, as currently drafted, the SRA will have to go to the Treasury for every separate project, having to make the case for extra borrowing approval. That cannot be satisfactory. It will go against the interests of the train operators, Railtrack and passengers if the SRA ends up as a new version of British Rail, dominated by short-term planning and dependent on the vagaries of the public sector spending round. This was the disease that was cured by the 1993 Act.

Perhaps I may turn to Amendments Nos. 279 and 280. These follow on from our general concerns about SRA funding, but focus on its borrowing limits. The amendment is designed to allow Ministers to explain more clearly the funding arrangements for the SRA. The SRA appears to have four methods of funding: grants from the Government; loans from the Government; borrowing; and income from franchises. Ministers have set a borrowing limit of £3 billion, but it is unclear whether that includes the £1 billion inherited from BR. Furthermore, it is unclear what limits will be put on spending and in what circumstances the SRA will be able to borrow instead of using its grant funding. It is important that the Government clarify exactly what will be the balance between different sources of funding and the role of the Secretary of State in determining that balance.

During his replies in Committee in another place, the Minister, at col. 1158, was unable to give further details of how this would work, saying that the Government could not,

"anticipate those decisions [of the SRA] in any further detail."--[Official Report, Commons, Standing Committee E, 28/3/00; col. 1158.]

At that point we said that we would return to this issue. Considerable sums of taxpayers' money are involved here. It is entirely appropriate that the travelling public should know how the SRA is to operate and spend its money. We hope that the Minister will now be able to give the Committee further details of the operation of the SRA.

Paragraph 16 of Schedule 14 obliges the Secretary of State to specify rules and principles according to which the Strategic Rail Authority must exercise its functions in relation to financial and employment matters. Amendment No. 281 would remove that obligation. The authority ought to be able to make its own financial and employment rules. It is an unwarranted interference on the part of the Secretary of State to dictate to the authority on such issues. It is another example of the Government's urge to control everything in sight.

I turn now to Amendment No. 281A. Part III of Schedule 14 provides that the Secretary of State shall prepare a financial framework for the SRA. My amendment would reduce his role to that of merely approving it. I beg to move.

Photo of Lord Berkeley Lord Berkeley Labour 10:15 pm, 17th July 2000

I should like to comment briefly on the amendment tabled by the noble Earl, Lord Attlee, in respect of the staff numbers of the rail regulator. I shall not comment on the SRA. If the rail regulator believes that he needs extra staff, as was suggested by the noble Earl, I believe that that is more than justified. The regulator is now faced with making periodic reviews of Railtrack's access charges. Railtrack is alleged to be £4 billion over budget on the West Coast main line on a £2 billion base cost. Furthermore, the regulator is still trying to secure from Railtrack the production of a register of assets. It seems not to know what it owns, how big are the tunnels and how heavy are the bridges. The regulator has a great deal to do to catch up which, in my view, should have been done many years ago, at the start of privatisation.

I would certainly support any extra staff or funding that the regulator felt that he needed. I also think that the industry needs this.

Photo of Lord Whitty Lord Whitty Parliamentary Under-Secretary, Department of the Environment, Transport and the Regions

The noble Earl, Lord Attlee, is slightly inconsistent in his approach. On the one hand he wishes us to specify absolute control over the number of staff for the SRA and in another breath he says that the Secretary of State should not interfere with the financing of the SRA and its decisions.

Perhaps I may look at the staffing issue first. As my noble friend Lord Berkeley has said, we are giving the SRA a significant additional role and we expect it to be able to assess with the rail regulator the requirements for the staffing of those bodies. That means that the authority will need to assess how many staff it needs to carry out its duties. We have given it the power under the Bill to do so, and we should not disturb that.

So far as concerns Amendment No. 278, the noble Earl suggests that he is trying give some civility of framework for the SRA. In fact, the time horizon for the authority will be considerably longer than the three years suggested by the noble Earl. My noble friend Lord Macdonald will soon be publishing the 10-year plan for transport which will provide the overall planning framework for the railways and other transport modes. Within this broad structure, the authority's three-year budgets will be set, along with three-year budgets for other DETR spending programmes in future spending rounds. Plans for replacement of the franchises, for example, will look to a 20-year time-scale. Each franchise will include commitments by the SRA to pay subsidy or by the franchisee to make premium payments to the SRA over the whole lifetime of the franchise. Each franchise will be signed off by Ministers and, as part of that signing off, will need to give the authority appropriate assurances about funding to cover franchise commitments. Therefore, the long term is clearly catered for and Amendment No. 278 is unnecessary.

The effect of Amendments Nos. 279 and 280 would be to remove the borrowing limits for the authority. The main way in which the authority will receive its funds is through grant-in-aid from the Secretary of State. Nevertheless, the authority may need to borrow and that is why we have given the limit to such borrowing. There is no magic about the £3 billion figure, there are no secret calculations to show that that is what the authority will be borrowing. Quite simply, the £3 billion relates to the existing borrowing limit for the British Rail Board, one of the bodies that will be wound up into the authority. It seems sensible for that limit, which as the noble Earl implied is not currently exercised to its full degree but remains on the statute book, to be retained and carried forward into the SRA. We want the authority to have the flexibility to borrow if necessary.

Amendment No. 281 would remove the requirement for the Secretary of State to prepare a financial framework and Amendment No. 281A would make the Secretary of State's role simply one of approval rather than engagement in the preparing of it. Neither amendment would be helpful. Some sort of financial framework is needed to achieve this, and it is not sufficient assurance in terms of responsibilities to Parliament and probity of public finance for the Secretary of State, who is responsible for the SRA, simply to approve the framework by a rubber stamp. Therefore, I do not believe that the amendments are helpful, and in some cases the objective of stability of funding would not be better achieved by the noble Earl's amendments as distinct from what is already on the face of the Bill. Therefore, I hope that the noble Earl will not pursue them.

Photo of Earl Attlee Earl Attlee Conservative

I thank the Minister for his reply. He mentioned the 10-year transport spending plan. Will that be set in stone? What will happen if the economy suffers a setback, tax revenues are reduced and savings then have to be found?

Photo of Lord Whitty Lord Whitty Parliamentary Under-Secretary, Department of the Environment, Transport and the Regions

The noble Earl echoes questions that have been put to his leader in another place about tax guarantees and other unwise commitments previously made by the Tory leadership.

So far as concerns the 10-year plan, the resources will be committed. Clearly, there will be some flexibility in the application of those resources as transport modes and priorities change. But the resources will be announced by my noble friend and they will be committed. The SRA will have its appropriate share of those resources.

Photo of Earl Attlee Earl Attlee Conservative

I thank the Minister for his reply and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 278 to 281A not moved.]

Schedule 14 agreed to.

Clause 204 [Purposes]:

Photo of Lord Beaumont of Whitley Lord Beaumont of Whitley Green

moved Amendment No. 282:

Page 120, line 10, at end insert (", and

(d) to oversee the specification of rail services in metropolitan areas, responsibility for which it shall delegate to the appropriate Passenger Transport Executive, or in the case of Greater London, Transport for London").

Photo of Lord Beaumont of Whitley Lord Beaumont of Whitley Green

This amendment would add to the purposes of the appropriate authority. Throughout the passage of the Bill, we have argued sometimes and agreed often about the necessary level of devolution. My previous amendment today sought to lift that from local to regional level. The amendment gives specific responsibility to the metropolitan areas, so that they may have their own say at a lower level of democratic responsibility than the rest of the clause covers. I beg to move.

Photo of Earl Attlee Earl Attlee Conservative

Under Clause 244(2), the directions and guidance given by the Secretary of State will override the requirements of passenger transport executives in relation to franchises. The Government should not interfere with the legitimate requirements of PTEs, which have the local knowledge necessary to ensure that franchises are properly specified. It is no business of the Government to give directions or guidance that conflict with the local expression of needs.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions) 10:30 pm, 17th July 2000

The amendments relate to the rights, powers and duties of passenger transport executives, which have wide powers under Section 34 of the Railways Act 1993. In respect of each passenger service in their area, they will be able to give notice to the SRA specifying the level and quality of services needed to meet public requirements in their areas.

Section 34 provides that the SRA will need to ensure that the level and quality of services--including fares--specified by the PTE are included in the specification. PTEs can be a co-signatory with the SRA to any franchise agreement in respect of such services, which gives them a unique and prominent role in franchising.

We do not need to modify the executives' powers to specify services in their areas and the Bill does not do so. However, local transport needs may have, from time to time, to be balanced against the broader national picture. I hope the Committee accepts our general view, which is entirely consistent with the policy to create a new strategic framework, that if there is a conflict between local and strategic considerations, the latter should prevail.

That brings me to the detail of these amendments. Amendment No. 282 provides for the SRA to delegate responsibility for specifying rail services in metropolitan areas to the appropriate PTE or, in the case of London, to Transport for London. However, the SRA would continue to oversee the process. I hope that the noble Lord, Lord Beaumont of Whitley, will forgive my saying that the words "oversee" and "delegate" are somewhat ambiguous. They might be taken to describe the current arrangement: the PTEs specify what is required but the SRA oversees the process in terms of its wider implications.

However, I suspect that the noble Lord has something a little more radical in mind; namely, a reduction in the ability of the SRA to intervene in the specifications made by the PTEs. Amendment No. 361 would have a similar effect and remove the requirement for the SRA to disregard PTE specifications which were contrary to directions and guidance given by the Secretary of State or (for Scotland) Scottish Ministers. As I hope I have explained, I do not believe that we should go that far. The SRA would be able to set aside the PTE's specification if, but only if, to accept it would be contrary to the guidance given by the Secretary of State or Scottish Ministers, or it would have an adverse effect on passenger or goods services, or it would cost the SRA money. The SRA might still accept the PTE specification even if it would have an adverse effect on passenger or goods services or add to SRA costs. In this respect the SRA will have discretion.

In the event of a conflict between local and national demands there is an opportunity under the dispute resolution provisions in the 1993 Act for the Secretary of State, who is ultimately accountable to Parliament for local and national railway services, to determine where the balance lies. We believe that that makes the balance between local and national interests just right.

The noble Lord's amendment also contains provisions in respect of London where the position is somewhat different. Transport for London will not have powers equivalent to the PTEs to specify services to be provided under franchises. On the other hand, the Mayor has power to issue directions and guidance to the SRA in relation to rail services in London which the PTEs do not have.

Without going into unnecessary detail, train services within London are so interwoven with regional and national services that a separate power for TfL to specify local services would be inappropriate. On the other hand, the Mayor will have a much broader influence through his directions and guidance in which he will be able to reflect the contribution that railways can make to his broader responsibilities for the economic and social well-being of London. That careful distinction would be undermined by the amendment, which would give the Mayor detailed powers to specify services alongside his broader powers of direction and guidance. We believe that that would tip the balance too far in the direction of local over national interests in respect of what is the heart of the national rail network.

I turn to Amendment No. 362, which affects the dispute resolution provisions that I mentioned earlier. If any dispute arises between the SRA and PTE in relation to a franchise agreement, or a proposal for such an agreement, either party may refer the dispute to the Secretary of State for determination under Section 34(17). The Secretary of State will be able to consider the arguments and give to the PTE or the authority such directions as he considers fit. That may include a requirement under Section 34(19) for the authority or PTE to enter into a franchise agreement on such terms as the Secretary of State decides.

Amendment No. 362 is not desirable because it would remove a helpful new provision which was added in Committee in another place. This provision clarifies that any disagreement between the PTEs and the SRA as to what should be specified in a franchise agreement will be a dispute for the purposes of Section 34(17) and that the Secretary of State will be able to resolve it as he sees fit. The clarification was inserted in the Bill following representations made by the PTEs that Section 34 of the Railways Act does not make sufficiently clear that the Secretary of State can direct the SRA regarding what should go in the franchise agreement.

I have no doubt that the authority and PTEs will continue to work together in the current franchise replacement negotiations to achieve a franchise settlement which reflects both local and national needs. The directions and guidance to the SRA by both the Secretary of State and the Scottish Ministers will be published and the PTEs will be able to take account of them in drawing up their statements. Therefore I do not expect that in practice conflict will arise between those statements and the directions and guidance. But Clause 244 ensures that in the unlikely event of an irreconcilable dispute between the authority and a PTE regarding a franchise specification, the Secretary of State can intervene.

I hope that in the light of those explanations the noble Lord will withdraw the amendment.

Photo of Lord Beaumont of Whitley Lord Beaumont of Whitley Green

The burden of that answer appears to be that mother knows best, but I am not sure that mother always does know best. Nor am I sure that I agree with the main idea put forward--that in a clash between the overall strategic national plan and the local plan the strategic national plan should prevail.

I take account of what the Minister said about the wording of my amendment and I shall re-examine the London situation. I understand that it is more complex than I had presumed when I tabled the amendment. However, unlike the other amendments standing in my name today, I shall probably bring this one back at a later stage. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

moved Amendment No. 283:

Page 120, line 10, at end insert--

("(d) to identify unmet needs for railway services; and

(e) to expand the railway network where appropriate").

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

The amendment adds two more purposes to those of the SRA: first, that of identifying the unmet needs for railway services and, secondly, the expansion of the network appropriately. It does that by adding two paragraphs to Clause 204(3).

Merely satisfying the existing need will not be sufficient for the railway to play its part in an integrated transport system which is designed to be sustainable and to reduce traffic on the roads. But nor is the simple determination to grow the service any good unless there is a similar determination to expand the network to match the services. Arguably, some of the railway's greatest problems, from delays to overcrowding, since privatisation stem from that simplistic approach.

These are modest proposals. The network is to be expanded appropriately; that is, in the light of measured need. I am not suggesting expansion for the sake of expansion. Furthermore, we are talking about the need for all railway services, not merely passenger services. Therefore, the requirement from the freight industry must also be addressed and responded to appropriately. I beg to move.

Photo of Lord Berkeley Lord Berkeley Labour

I support the amendment. The purpose of the integrated transport policy is to encourage people to use public transport. There is much evidence that a large proportion of the population has never been on a train. I had a horrible experience when I worked for Eurotunnel and ran a tourist attraction. I had to encourage people to come to look at it and we used to have about 300,000 visitors a year, including many school groups. We had a couple of old passenger coaches in which we had education work. Day after day, people turned up and asked, "What's that?". We said, "It's a railway train". Many people in this country do not know what a railway train is or how to use it. To the uninitiated, it is pretty frightening.

I shall be moving amendments later so I shall not bore the Committee now by speaking about them twice. However, we must make the railway system simple and attractive for people. I believe that the intention,

"to identify unmet needs for railway services", alongside, it is hoped, a provision relating to buses, is very important if we are to attract large numbers of the population who have cars and intend to use them. We must try to wean them off their cars and on to public transport.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

The amendment seeks to add two more to the fundamental purposes of the Strategic Rail Authority; that is, that the authority should identify unmet needs for railway services and that it should be able to expand the network where appropriate. The Committee will not be surprised to learn that we consider the amendment to be unnecessary. One of the three high-level purposes of the SRA is already,

"to secure the development of the railway network".

For the record, I can assure the Committee categorically that that includes examining the possible expansion of the railway network and the need for new network to meet demand where appropriate.

I can also assure the Committee that we have carried through that high-level purpose to the basic level of giving the authority the powers that it needs to do the job. As can be seen in Clause 210, it will have very wide funding powers to encourage, promote and, where necessary, fund the development of the network. Where necessary, the authority can even go so far as to promote a Bill in Parliament to facilitate growth. Therefore, if a private Act is needed, it can help or co-ordinate that. The authority can also go to the rail regulator and request that he directs facility owners to enhance facilities or provide new facilities. Therefore, it could be well within this power to request a new station or a new stretch of track.

Therefore, the Committee can rest assured on the legal framework. However, I suspect that, as usual, the noble Baronesses in whose names the amendment stands are being more subtle than simply considering the legal framework. These reassurances were given in another place and they want to know more of the Government's and the SRA's intention.

Some cogent and relevant points were made in another place. With regard to the balance between rural and urban needs, concern was expressed that the congested urban centres should not receive all the investment. It was pointed out that there was a need to look at transport in the round to see whether re-openings of lines would make sense. There was the possible need for new stations and the needs of commuters, as well as those of long-distance travellers.

We accept that those are all strategic issues relating to what we want from a railway network, how best it can meet the needs of the community, of changing demand and of settlement patterns, and how the network should be structured and taken forward. Local problems were also brought forward in another place. However, a much wider point was made: we must get right the quality of service in order to encourage people to move from their cars and on to the network.

All that requires a strategic examination of the network, which the SRA will bring. It needs a champion who can look at the needs of local areas and relate them to the overall network and to the overall problems and start to address them with solutions. Some solutions are already in place; for example, the franchise replacement process, which I hope will deliver substantial new investment.

The SRA's strategic plan produced under Clause 205 will address network priorities to enable growth, although clearly it will be for local authorities to consider more local schemes. The shadow SRA has already commissioned studies to consider the need for new infrastructure. The South Trans Pennine Integrated Transport Study, which involves the shadow SRA, Railtrack and the local authorities, will consider the case for restoring the Matlock to Buxton line as part of a core east to west route from Derby to Manchester.

The shadow SRA is also encouraging rail passenger partnership fund bids for the funding of new facilities or re-openings where they meet the published planning criteria. One example is an Edinburgh cross-rail scheme, which involves the reinstatement of a short section of the former Waverley route to serve two new park-and-ride stations.

I assure the Committee that these possibilities and any concrete proposals will be considered seriously. Where they are justified, we shall ensure that the mechanisms are in place to ensure that they can take place. I hope that with those reassurances the noble Baroness will feel able to withdraw her amendment.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

I thank the Minister for his detailed and reassuring response. I shall read it with great interest. The next stage in the progress of the Bill is so far distant that it is impossible to think about what anybody will do then, but it is unlikely that I shall bring the amendment back. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 204 agreed to.

Clause 205 [Strategies]:

[Amendment No. 284 not moved.]

Photo of Lord Berkeley Lord Berkeley Labour 10:45 pm, 17th July 2000

moved Amendment No. 285:

Page 120, line 26, leave out from beginning to first ("by") in line 28 and insert--

("The Authority shall formulate a strategy for securing the provision of services in various parts of Great Britain for the carriage of passengers and freight").

Photo of Lord Berkeley Lord Berkeley Labour

I shall speak also to Amendment No. 427. I thank my noble friend the Minister for responding today to a question that he was, quite reasonably, unable to answer on the final amendment in Grand Committee. He has confirmed that if Eurostar or EWS cease to operate cross-Channel services, the assets will be ring-fenced. I am most grateful to him for that helpful information.

The amendment would add a regional dimension to the duties of the SRA. It is a consequence of the intention in the Bill to withdraw Section 40 of the Channel Tunnel Act 1987. My Amendment No. 427 was designed to keep that section in, but I was just trying to have my chicken and eggs in the same thing--or whatever the right expression is.

Noble Lords:

Have your cake and eat it.

Photo of Lord Berkeley Lord Berkeley Labour

To have my cake and eat it. Thank you very much.

The history of regional services to the Channel Tunnel is rather sad. Some 15 years ago, both Houses had to fight very hard for the Government to accept any obligation to consider the regional aspects and encourage passenger train services from the regions. That is how Section 40 of the Act came in.

Regional interests have pressed the Government to update that. I was disappointed by the latest study, which came from the consultants, Arthur D. Little. It said that there were not enough passengers to justify a regional service, even from Birmingham or Manchester, because the service was too infrequent. It did not look at the original idea of splitting the trains in two, so that we could have double the number of trains but still maintain safety through the Channel Tunnel. It did not look at running domestic passengers on international trains, which many people, even in the security service, say would be possible. It then said that there was no economic case. I do not find that surprising, given what I have just said, together with a load of other items with which I shall not bore the Committee.

It is true that the Channel Tunnel trains are expensive. Maybe there is not an economic case, but there is no economic case for many of the passenger franchises in this country today. They would not survive without subsidy. The inter-city routes tend to make money, but many of the others do not. If it is acceptable to subsidise most passenger services in this country, we should at least consider making a similar arrangement for regional Eurostar services.

My aim in the amendment was to get the SRA to pick up an idea that successive governments have failed to take forward, to the detriment of the regions. I hope that the SRA will pick up the idea and see what can be done to try to make the services work, at least in the medium term. I beg to move.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

I certainly support the objectives of the amendment in the name of the noble Lord, Lord Berkeley. Would it not be wonderful to board a train, as one used to be able to do on the north coast of France, and get into a carriage marked "Dover, Paris, Rome" and just be moved around the system so that you started the journey in Manchester and ended it in Rome? Such long journeys, particularly for tourism purposes, would bring quite different categories of passengers back onto the railways.

That is a rather frivolous response to a serious amendment but nevertheless, it has an extremely attractive and important aspect to it.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

I have some sympathy with the amendment's intention in relation to Channel Tunnel services, even if I do not accept that the provision should be added to the Bill. It is right that the SRA should have a strategy which would best serve rail travellers and freight operators seeking to get to the Channel Tunnel from beyond London. We have recognised that by explicitly providing for the authority to be under a duty to prepare such a strategy.

Considerable thought is being given to the best resolution of the regional Eurostar question. The Department of the Environment, Transport and the Regions commissioned the Arthur D Little report, which was released in February. The British Railways Board is currently exercising its functions under Section 40 of the Channel Tunnel Act 1987 to prepare a plan stating the measures which should be taken for Eurostar services serving various parts of the UK and it may take account of the ADL report in its considerations. The SRA will then have a duty to prepare a strategy under Clause 205(4).

We want to give the authority the flexibility to consider appropriate ways of meeting changing demands for cross-Channel travel. It may be that it will conclude in accordance with its Clause 205(4) duty as currently formulated that direct regional Eurostar services or an additional freight link should be provided. But it may also include considering how regional passengers and freight operators could benefit from better integration of domestic and international services. Indeed, we are encouraging domestic train operators and Eurostar (UK) Limited to ensure that convenient through-ticketing is developed for passengers travelling to the Continent from outside the South-East. In addition, by 2007 regional rail users will be able to travel on high-speed trains into Euston and King's Cross for easy connections to international services departing from St. Pancras.

The SRA will also want to be able to consider the best use of the available capacity on the national network, and whether economic, social or environmental benefits would justify a subsidy to certain international through services. It will also have to recognise that certain parts of the country cannot be served by direct through services, as the ADL report confirmed.

The original clause here provides for a strategy that will address actual passenger and freight needs and certainly does not preclude the operation of regional services through the Channel Tunnel.

On freight, there is already an established international freight market through the Channel Tunnel which originates from throughout Great Britain. The recent decision by the Transport Council to liberalise access for international freight operators across member states' networks should strengthen the growth in that market. What is needed is a strategy which can help augment growth in this market. The original clause provides for such a strategy and would accompany the strategies developed under Clause 205(1), which would include reference to the promotion of freight traffic on the network.

We want the SRA to be looking widely at all options for encouraging international traffic and not tie it to securing international services if it does not consider that to be an appropriate option. I hope, then, that my noble friend will withdraw his amendment.

Photo of Lord Berkeley Lord Berkeley Labour

I am grateful to my noble friend for that very full explanation. I believe that he has satisfied me on nearly every count. I shall certainly read Hansard carefully. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 205 agreed to.

Photo of Lord Berkeley Lord Berkeley Labour

moved Amendment No. 286:

After Clause 205, insert the following new clause--

:TITLE3:PERFORMANCE MEASURES AND MINIMUM STANDARD LEVELS

(" .--(1) The Authority shall publish regular performance measures on all scheduled passenger services.

(2) For franchised services, the Authority shall maintain a public performance measure covering all scheduled services.

(3) For services not subject to franchising agreements, the Authority shall procure from operators and their employing authority equivalent information and publish it alongside those of franchised services.

(4) For international services, performance information applies to the UK part only.

(5) Exemptions from performance measures may be granted to heritage railways.

(6) The Authority shall publish minimum standard levels for each franchise operator together with levels of performance at which penalties apply and at which a franchise holder may be--

(a) deprived of his franchise, or

(b) prevented from applying for other franchises for specific periods.").

Photo of Lord Berkeley Lord Berkeley Labour

In moving Amendment No. 286 I shall speak also to Amendment No. 286A. My concern in tabling the amendment is that in the past I have perceived a great gulf between what the previous government and the franchising directors have said about what a wonderful passenger service they were creating and what it is like to travel on such a service.

We are getting better now at measuring delays, cancellations and overcrowding. However, one still reads pretty horrendous stories. I am a little concerned at the response from my noble friend to a Written Question I tabled which asked what levels of poor service to passengers would exclude franchise operators from being awarded new or extended franchises. My noble friend responded, stating that past performance is one of many criteria that will be taken into account. Is that enough?

The SRA has recently put on its website a rather better and more comprehensive performance measurement, certainly of cancellations and delays. I thought that it would be useful to try to structure an amendment to put that on the face of the Bill. I refer to paragraphs (1) and (2) of Amendment No. 286. I hope that it will also include overcrowding, which can be solved simply by building more trains. That may sound trite, but I think that is so.

I also think the provision should be extended to services which are not subject to franchise agreements. I refer, for example, to Heathrow Express. I expect it is very reliable but there is no reason why the SRA should not report on it. It should be required to provide reports. I refer also to Eurostar. I suppose I tabled the amendment having got up early one morning to catch the 6.15 train from Waterloo only to find that it had been cancelled. I wondered who measures and publishes performances of the Eurostar trains.

I felt that heritage railways should probably be exempt. Then I thought that, possibly in paragraph (6) of the amendment, there must be a standard below which the franchisee should not, under any circumstances, be awarded another franchise. I do not know what that standard would be. However, if we are to attract more people on to the railways, we should give them information, comfort and the knowledge that they will get from A to B with as much reliability that we can achieve.

I turn briefly to Amendment No. 286A. This idea goes back to Amendment No. 283, tabled by the noble Baroness, Lady Thomas of Walliswood, concerning unmet needs for railway services. The Railway Reform Group produced an interesting document suggesting that many more people would be attracted to using the railways if there was a clockface departure timetable throughout the day, including the rush hours.

That happens in the Netherlands and Switzerland. It has proved extremely successful in attracting more people to rail on the basis that they do not need to consult a timetable. For people who are not used to them, timetables can be difficult to read. If trains to London, Manchester or Derby depart at a certain time past the hour or half hour throughout the day, that would provide a useful means of attracting more people to use the trains. This adds to the matters which the Strategic Rail Authority should be considering to encourage more people to use rail. I beg to move.

Photo of Earl Attlee Earl Attlee Conservative

I rise to speak to Amendment No. 287, tabled in my name, in this grouping. Clause 206(2) sets out the objectives of the authority in exercising its functions. It includes the promotion of through ticketing between passenger service operators. However, it does not appear to cover through ticketing across different forms of transport. The amendment makes explicit the need to promote such through multi-mode ticketing schemes. It also provides for the promotion of integrated information and ticket booking facilities.

The integration of information and booking facilities is a vital element in a modern, integrated transport system. With the sophisticated technology now available, it should be possible for passengers to obtain from one outlet information as to the scheduled times of trains, up-to-date information on their running, the range of fares and the cheapest fare for the particular journey, similar information on the bus and other connections and the ticket itself. It should be a major task of the authority to encourage such systems.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions) 11:00 pm, 17th July 2000

These amendments all have the laudable aim of making journeys easier and standards more transparent. For various reasons though we consider them unnecessary or undesirable.

I shall start with the amendment in the name of my noble friend Lord Berkeley. He is totally right that good information about the standards that the railway service providers are delivering is worth while, even though I do not agree that the amendment itself would be helpful. The shadow Strategic Rail Authority publishes regular bulletins of performance information, including the standards set and outputs against them. It has set a public performance measure for franchised services which includes the performance of all trains, on all days, with no exceptions. That is a clearer, more meaningful measure than the previous Passenger's Charter.

Franchise agreements include a threshold level of operational performance below which the franchising director has the power to terminate the agreement automatically. And franchise operators' current performance is a key factor that is being taken into account by the shadow SRA when considering bids under the franchise replacement process. Obligations to publish performance information for franchised services, and to take current performance into account when re-negotiating existing franchises, are included in our instructions and guidance to the franchising director. We expect to publish similar requirements for the SRA.

The existing level of standard setting, monitoring and reporting in respect of franchised operators therefore already covers what my noble friend wishes to put in the Bill. I do not believe that the amendment is necessary. Moreover, to add this level of detail to the Bill would be restrictive. The details of publication of information is properly a matter for the SRA to manage, with any directions and guidance from the Secretary of State as he may deem necessary.

The amendment also covers non-franchised services and for those a different set of circumstances applies. There will not be the same public interest, in a regulatory sense, to put a requirement on the authority to publish performance information on a statutory basis. That is consistent with the position in other transport industries such as aviation.

Amendment No. 286A is rather different in nature and would mean that, when promoting through journeys by rail, the SRA would also have to promote what are known as "clockface timetables"; that is to say, timetables and connections on the basis of regular patterns of service. The SRA will be a strategic body. Because of its responsibility for franchising, the SRA will have a major influence on the timetable. Franchisees must deliver a timetable that incorporates the agreed passenger service requirements (PSRs), including connections where those are franchise conditions. However, it would not be appropriate for the SRA to have the specific duties in respect of the timetable contained in Amendment No. 286A. That level of detail is for the industry to undertake within the regulatory and contractual framework.

At a more practical level, services should relate to demand rather than a specified regular pattern. Co-ordination of a regular timetable on a national basis would be an onerous task, with no guarantee of success. Regular patterns may disadvantage customers on less well used services. Where a regular pattern of service is desirable, the industry's timetable planning process should be sufficient to achieve the benefits for the passenger. The National Timetabling Conference, set up by the industry after the first Rail Summit, is providing a mechanism for balancing the previously fragmented process for timetable planning. The important thing is to maximise capacity through good "slot management".

Amendment No. 287 would mean that when promoting through journeys by rail, including through ticketing, the SRA would also have to promote inter-modal ticketing and the integration of the railway information and ticket booking facilities. I welcome the approach to integrated transport of Members opposite. Under Clause 204(c) it is a primary purpose of the SRA to contribute to the development of an integrated transport system. There is therefore no need to specify on the face of the Bill all the aspects of integration to which the SRA is to have regard.

I can assure noble Lords opposite and my noble friends that integrated ticketing and integrated information are a vital part of integrated transport. The SRA will promote such schemes, which are growing in number. For example, we have asked the franchising director, when he examines franchise replacement bids, to give due weight to the extent to which integrated transport measures both within the rail network and between rail and other transport modes can be achieved, including integrated public transport information.

As regards integrated ticketing, my noble friend Lord McIntosh of Haringey referred in Grand Committee to examples of multi-modal ticketing schemes in over 130 towns and cities, so such schemes are already quite commonplace. We should like to see them extended. As for integrated information, later this year we shall be launching a single telephone service to give people timetable information on all forms of public transport. That will meet another of the commitments in our transport White Paper.

I fully understand the points made by noble Lords opposite that, having moved towards integrated ticketing and integrated information, the next step is to bring the two elements together to provide passengers with a one-stop shop.

Commercial factors are already encouraging train operators to address the problem that rail information and ticketing is not readily available from a single source. A number of train companies' Internet sites already provide a combined information and booking facility. Examples of online booking services offering discounted tickets and information include those offered by First Great Western, First North Western and Virgin.

As far as concerns government action, a single telephone service for public transport timetable information is a good start. We shall build on this in the future, continuing to work with operators and local authorities to exploit the Internet. The Government's objective is a comprehensive travel information and retailing service. In the light of my response, I hope that noble Lords will not press their amendments.

Photo of Lord Berkeley Lord Berkeley Labour

I am most grateful to my noble friend for his comprehensive reply. However, I was surprised when he said--I believe I recall his words correctly--that he did not think there was a public interest issue in knowing about how many cancellations or delays there were for Eurostar or the Heathrow Express. It seems to me that members of the public are very interested in knowing whether or not such trains run on time. It is perhaps something that will have to be done through persuasion, if there is no legal means of doing so. I believe that that could be a big hole in a totally integrated transport service. But having said that, I am grateful to my noble friend and beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 206 [Manner of exercise of functions]:

[Amendments Nos. 286A and 287 not moved.]

Photo of Lord Berkeley Lord Berkeley Labour

moved Amendment No. 288:

Page 121, line 4, at end insert--

("( ) to promote measures designed to facilitate the transport of goods by rail and its integration with other transport modes,").

Photo of Lord Berkeley Lord Berkeley Labour

There are four amendments tabled in my name in this grouping. Amendment No. 288 is designed to provide the same information requirement of the SRA--namely,

"to promote measures designed to facilitate the transport of goods by rail"-- as set out in the previous paragraph of the clause in respect of passengers. I tabled this amendment as a matter of completeness.

I turn next to Amendment No. 289. I felt that experience in the industry during the past five years has shown that, if and when growth occurs, there is a distinct danger that there will not be enough people, equipment or trained staff to enable such growth to take place. The best example is probably in signalling. Two years ago, Railtrack announced such a shortage of signalling staff that it had to have its signal systems designed in Australia. However, a year later the signalling industry in this country was laying off staff for lack of work. Indeed, we are not quite sure where we are at present.

It would be nice to think that the SRA could try to encourage--I put it no stronger--a reasonable level of development of businesses by gently increasing orders, if that is appropriate, be it in signalling or in anything else. It would be of great benefit to the industry and is something that would fit in very nicely with the strategic role of the SRA.

Amendment No. 292 is another attempt to ensure that the SRA and the local authorities work together in the local transport plans and that they consult widely and try to achieve consensus. It also seeks to ensure that the SRA is given a clear duty to acknowledge the close relationship of its policies with those of local transport plan producing authorities, and to co-operate with them.

Amendment No. 293 puts the same argument in respect of regional transport strategies. It is terribly important that everyone works together. The SRA is on top, so to speak, but it is important that it works together with the regional and local authorities. I beg to move.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

I support the amendments. They give an indication of what one hopes to see, not so much in the strategy itself but in the way in which the SRA conducts its business on a day-to-day basis. They represent patterns of behaviour, attitudes and approach which would enormously help in reducing the boom/bust syndrome which has bedevilled rail development in the past few years.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

These amendments seek to add to the areas that the authority must consider when exercising its functions with a view to furthering its purposes.

Amendment No. 288 would require the authority to facilitate the transport of goods by rail and the integration of goods with other transport. As I have said, we have already given the SRA specific purposes to promote the use of the railway network for the carriage of passengers and goods and to contribute to the development of an integrated system of transport. It will then have to develop particular strategies to carry out those purposes and everything which it does will need to be with a view to furthering those purposes. An obligation to promote measures designed to facilitate the transport of goods by rail and its integration with other transport modes seems somewhat superfluous. It would not add to the existing obligations on the authority to have proper regard to freight.

Amendment No. 289 would require the authority to enable persons providing services and equipment to the railways to plan their businesses with a reasonable degree of assurance. I have sympathy with the needs of the supply industry, even if I do not believe that we should add the amendment to the Bill. Clearly we want healthy businesses to supply service providers, to keep our railway running and to help it grow. The authority will give strategic direction to the industry, which has been lacking since the industry was privatised. This will provide certainty to business and enable both operators and suppliers to plan their businesses with more confidence.

I do not believe that it would be appropriate to extend the authority's remit in the Bill specifically to include railway suppliers. Suppliers are commercial businesses which are not subject to the regulatory framework that applies to the operators. Their success depends upon the general health of the railway industry and the ability of railway operators to develop and maintain effective business with suppliers. The Bill gives the authority a wide remit to develop and promote the railway, and gives it specific obligations in relation to how it regulates operators. Provided operators' businesses can be planned with a reasonable degree of assurance--and with the longer franchises that the Shadow Strategic Rail Authority is seeking, they will be able to plan their businesses over a more credible timescale--the operators should be able to plan effective business with suppliers, and give some degree of the assurance to the suppliers which my noble friend seeks.

Amendments Nos. 289A and 292 require the authority to facilitate the implementation of, and to have regard to, local transport plans. Amendment No. 293 requires the authority to have regard to the regional transport strategies. Of course, we expect the SRA to formulate its strategies and to exercise its functions in the light of local transport plans and regional strategies. However, the process needs to be a two-way one, so that local plans and strategies are consistent with the national framework. This is a task for local authorities as well as the SRA. This is why it is preferable to deal with the relationship in our guidance on local transport plans, and in directions and guidance to the SRA, rather than on the face of the Bill as the amendments seek to do. There are, of course, a lot of plans to which the SRA should have regard and it would be inflexible and unwieldy to try to specify them all in the Bill. Moreover, it would cast doubt on the status of any which were not so specified.

The authority's role will be to promote rail use within an integrated transport system. This is a national role. Consistent with this national framework the SRA will take account of the views of local and regional bodies. This will involve extensive consultation to identify the opportunities for rail.

I can assure noble Lords that this process of consultation is already under way and the shadow SRA is devoting considerable effort to developing relationships with local authorities. The shadow authority is starting to receive local transport plans and to assess them, and will continue to consider all local transport plans now that the new regime is in place. On franchise replacement, the Franchising Director has an extensive programme of consultation. Local authorities' aspirations are being cross-checked against franchise owners' bids. The shadow SRA is also involved in giving written and oral evidence on regional planning guidance and in developing a dialogue with regional development agencies. I hope that, given those considerations, my noble friend will withdraw the amendments.

Photo of Lord Berkeley Lord Berkeley Labour

As ever, I am grateful to my noble friend. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 289 and 289A not moved.]

Photo of Earl Attlee Earl Attlee Conservative 11:15 pm, 17th July 2000

moved Amendment No. 290:

Page 121, line 19, after first ("it") insert ("and").

Photo of Earl Attlee Earl Attlee Conservative

In moving Amendment No. 290 I shall speak also to Amendments Nos. 291 and 296 to 299.

Clause 206 gives the Strategic Rail Authority power to invest in bodies corporate. Amendment No. 290 seeks to remove this power. The authority is supposed to be a strategic planning body. What on earth is it doing taking shares in companies? There is no discernible need for such investment in order for the authority to be able to perform its duties. Worse, to acquire shares in this way could give rise to serious conflicts of interest.

Turning to Amendment No. 296, Clause 210 is a crucial clause in the Bill. It provides wide-ranging powers for the SRA to give financial assistance and secure improvements to the railway. Through this amendment, we aim to find out from the Government what exactly this role involves. Our concern is that the clause has a potential to undermine the commercial judgments of Railtrack and the train operators. The Strategic Rail Authority must take a strategic role, and we are concerned that this clause allows it to interfere in the day-to-day operation of the railway.

We are also concerned that the Secretary of State will have considerable powers to give directions to the SRA. The clause is so broadly drawn that we need Ministers to clarify exactly when they would give such directions and we seek assurances that the Secretary of State's involvement would be only in limited circumstances. Perhaps it would be helpful if the Minister could give some examples.

Amendment No. 296 would ensure that any involvement by the SRA would be on the basis of competitive tendering, ensuring that it does not step in at any opportunity but only when there genuinely is no alternative or when necessary to deal with a possible market abuse situation.

Amendment No. 297 follows on from the previous amendments and seeks to limit the wide powers of both the Secretary of State and the SRA and to ensure that the railway industry retains the commercial freedom to run and develop the railway. We are seeking a reassurance that the Government are not intending to use this clause to intervene in the day-to-day running of the railway. We believe that privatisation has brought considerable improvements to the running of the railway and levels of investment have doubled since British Rail days. That can continue only if there is stability and the railway industry is left to make its own judgments on the interests of passengers, to whom it is closest. I beg to move.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

These amendments challenge the SRA's powers to give financial assistance to the railway industry. Perhaps I may deal first with some specifics and then turn to the wider issues.

Amendment No. 297 would remove the power of the authority to give grants, make loans, give guarantees and invest in bodies corporate. Bluntly, this would emasculate the SRA. We intend the authority to be the main conduit for franchise payments, for freight grants and for the rail passenger partnership scheme, all of which are inherited functions that involve paying grants. In addition, it must be able to support the industry, should this be necessary, when there is no other viable source of strategic investment.

Amendment No. 296 would require the authority to run a tendering exercise for any financial assistance which it gives. But this is unnecessary and to some degree inappropriate. The authority already has a duty to exercise its functions in the most economic and effective manner. That may often involve a process of competitive tendering; sometimes it will not--for instance when the SRA pays freight grants in accordance with a published grant scheme.

Amendment No. 299 is a requirement that any agreements made by the SRA must be consistent with its strategies. This also is unnecessary because Clause 206(1) requires the authority to exercise its Clause 206 powers in accordance with the strategies it has formulated.

Amendments Nos. 290, 291 and 298 would remove the power for the authority to enter into agreements, or other arrangements, to invest in bodies corporate as a means of financial assistance. That restriction would be undesirable because it would limit the flexibility available to the SRA and reduce its ability to invest in the railway itself, or to get others to do so.

Amendment No. 298A would insert a provision that the authority may only put terms on its financial assistance provided that these,

"do not interfere with commercial practices which are essential to industrial investment".

That is unnecessary as Clause 206(2)(f), which determines the manner in which the authority must exercise its functions, states that it must,

"enable persons providing railway services to plan the future of their businesses with a reasonable degree of assurance".

That incorporates the concept behind the amendment and would protect commercial practices.

Flexibility is at the heart of the clause. We want to ensure that public sector financial support is available from the SRA when it is needed in whatever form is most appropriate to the particular case. That is why the powers in the clause are wide and extend to grants, loans, guarantees and direct investment.

I should make it clear that we do not envisage any change in the existing system of franchise payments to passenger train operators. That is how the core of all public funding reaches the railway network and it will remain so. But the franchising system was originally designed to support a "steady state" railway. It is not necessarily the only way, or perhaps in some cases even the best way, to promote investment in, and development of, the network. We want the SRA to be able to develop new approaches to investment where they seem worthwhile and we want the Bill to enable it to do so.

I am reluctant to offer specific examples. But there is nothing unique about the idea that investment by the public sector in projects may help to lever in private funding. In principle, it provides some degree of assurance to investors and can help to bridge any gap between the scale of investment required and the likely returns on that investment. That may be particularly relevant in the railway industry where major capital projects require all the investment up front and pay back literally over decades. I ask the noble Earl to withdraw the amendment.

Photo of Earl Attlee Earl Attlee Conservative

I am extremely grateful to the Minister for that response. I shall read carefully what he has said. I may return to the matter. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 291 to 293 not moved.]

Clause 206 agreed to.

Clause 207 [Directions, guidance and advice by Scottish Ministers]:

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

moved Amendment No. 294:

Page 121, line 45, leave out ("or with the Authority's financial framework").

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

In moving Amendment No. 294, I shall speak also to Amendment No. 295. Clause 207 allows Scottish Ministers to give directions and guidance to the authority in relation to passenger rail services which start and end in Scotland and for passenger rail services which either start or end in Scotland, and advice to the authority in relation to services which either start or end in Scotland and are provided under a franchise agreement. The authority can decide not to comply with these directions. Amendment No. 295 adds at the end of Clause 207,

"Where the Authority propose not to comply with the directions or guidance of Scottish Ministers they shall notify the Scottish Ministers of this and their reason for so doing", and,

"Where Scottish Ministers do not agree with the reasons given by the Authority for not complying with their directions they may refer the matter to the Secretary of State".

There has been correspondence between the Minister's colleague in another place, Mr Keith Hill, and the passenger transport authority most closely associated with the amendments. I understand that that passenger transport authority is satisfied that the amendments have gone as far as they can go. But for the benefit of those who may want to know more, and to know more from the public record, about what has happened in relation to the amendments, I should be most grateful if the Minister could, as it were, read into the record some of the reasons that his colleague gave to that passenger authority for not accepting the amendments and the assurances that he was able to give on that matter. I beg to move.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

As requested, it may be helpful to explain why the devolution provisions in the Bill are constructed as they are. We have given considerable thought to the issues raised, which, as has been said, were also raised in another place, but we and the Scottish Ministers remain assured that the present construction is both the most workable and the most effective in terms of devolution.

The Committee will be aware that railways remain largely a reserved matter. The reason for that is to ensure that there is a Great Britain strategic policy framework for railways. That is a very real concern. The fragmentation brought about by privatisation left the industry with no direction and no ability to develop the network as a whole to respond to increasing demand, still less to encourage demand. The problems which that structural weakness has created are one of the main reasons that we need Part IV of the Bill. Where devolution is appropriate--for example, for roads--we have provided for it, so it should not be thought that the reservation for railways is due to any lack of confidence in devolution; far from it. In the case of railways, even within the reserved framework we have agreed an appropriate level of devolution, but we must not lose sight of the overarching need for a national infrastructure in order to ensure that we meet the needs of the whole nation.

It was against that background that, during the passage of the Scotland Act, the "McLeish settlement" was agreed. That settlement, among other matters, provided for the Scottish Ministers to have power to issue directions and guidance to the SRA about passenger services which start and end in Scotland--essentially the services currently provided by Scotrail. The settlement also promised that the Scottish Ministers would have the power to give directions and guidance on Scottish sleeper services, provided that there was no impact on other passenger or freight services or on the non-Scottish budget. Furthermore, it was agreed that the Scottish Ministers should be able to give what was then called "non-binding guidance" on other cross-Border services. In the Bill that is called "advice". I am happy to say that the Bill delivers on those promises.

In all cases it was agreed that the powers of the Scottish Ministers should be exercised "within the GB policy framework". It was agreed between ourselves and the Scottish Ministers that the best way to preserve the GB policy framework was to ensure that directions and guidance from the Scottish Ministers were not inconsistent with directions and guidance from the Secretary of State. That is not a watering down of the McLeish settlement. Scottish Ministers will be addressing Scottish specific issues and they are content that we have delivered on the McLeish settlement.

I turn to the specific concerns addressed by the amendments. Amendment No. 294 would remove the requirement that the SRA may not comply with the Scottish Ministers' directions and guidance when those conflict with the authority's financial framework. Amendment No. 295 would set up a new structure so that where the SRA decides there is a conflict between the Scottish Ministers' directions and guidance and those of the Secretary of State, the Secretary of State is brought in to arbitrate.

I should like to address Amendment No. 295 first. The concern, I understand, is that it is felt that the unelected authority should not be able to judge between two conflicting sets of directions and guidance from elected Ministers and act, thereby, as "judge and jury". However, I consider that this is a misapprehension. The SRA can in no way act as judge and jury. The Bill is crystal clear: the SRA must carry out the Scottish Ministers' directions and guidance unless they are inconsistent with those of the Secretary of State, in which case they must not carry them out. There is no discretion here; no power of an unelected body over an elected one. The SRA simply looks at the facts and takes a view of what it must do on the facts and only on those facts.

In reality, I expect that this position will never arise because the Secretary of State and the Scottish Ministers are not likely to be giving directions, guidance, or advice without first talking to one another. If, however, there is any doubt about a matter, the SRA will always be able to ask the Secretary of State or the Scottish Ministers for clarification. However, should the SRA interpret its directions, guidance or advice in a way in which no reasonable body could, anyone adversely affected may seek a remedy in the courts. This is far more effective devolution than giving additional arbitration powers to the Secretary of State. I can imagine how that suggestion would play in the Scottish Parliament.

Moreover, as I have already suggested, the case of conflict between two sets of directions and guidance is hypothetical and all parties will be able to ensure that it does not happen.

Amendment No. 294 looks to the financial framework and takes away the provision that the authority may not carry out the Scottish Ministers' directions and guidance where they conflict with the SRA's financial framework. Perhaps it may help noble Lords if I explain that the financial framework is another form of direction from the Secretary of State. It has been separately mentioned in the Bill because it does not deal with strategies and only indirectly with the manner in which the SRA is to carry out its functions and the other directions and guidance powers are linked to the SRA's strategies and functions.

The financial framework will be a type of direction which specifies the rules and principles which the authority is to observe when exercising its functions in relation to financial and employee matters. It will incorporate such housekeeping matters as salaries, pensions and budgetary management. It will be an essential document in order to ensure the proper working and accountability of the authority as a non-departmental public body, and, frankly, it is normal good management practice for these matters to be directed by one person. As the SRA remains a reserved body, it is proper that the Secretary of State be the person to give directions about these issues. This is entirely consistent with the McLeish settlement and the Scottish Ministers are content with this approach. As the matters covered are housekeeping, I can reassure noble Lords that the possibility of any inconsistency with the Scottish Ministers' directions and guidance, which are about railway services, is very remote.

1 apologise for the length of my reply, but I was invited to respond so that these matters could be placed on the record. I hope that, with those reassurances, the noble Baroness will feel able to withdraw her amendment.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat 11:30 pm, 17th July 2000

I am grateful to the noble Lord for his wide and precise response to my question and for the fact that he was willing to read it into the record. I beg leave to withdraw the amendment.

Photo of Lord Lyell Lord Lyell Conservative

Before the noble Baroness withdraws the amendment, perhaps I may ask for clarification. As one who uses sleeper and other rail services which begin and end in Scotland, can he enlighten me on whether there is any possibility of a clash taking place between Scottish Ministers and the Secretary of State as regards aspects such as financing, particular services and timing?

The Minister will remember that I served on a committee that looked into the redevelopment of Waverley station in Edinburgh. We were told that, over the coming four to five years, Great North Eastern Railways were hoping to double the number of trains departing from Waverley for King's Cross.

Can the Minister tell me whether it would be possible for clashes to occur as regards departures and so forth between the Secretary of State and Scottish Ministers?

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

I do not think that at this late hour it would be prudent to speculate on where future clashes might occur. The noble Lord has already pointed out that the areas where that form of guidance will be most appropriate will be on which days and times services will run, stopping places and so forth. Those are the normal operational functions of a train service and would be subject to discussion, consultation and resolution.

Amendment, by leave, withdrawn.

[Amendment No. 295 not moved.]

Clause 207 agreed to.

Clauses 208 and 209 agreed to.

Clause 210 [Financial assistance etc.]:

[Amendments Nos. 296 to 299 not moved.]

Photo of Lord Berkeley Lord Berkeley Labour

moved Amendment No. 300:

Page 123, line 16, at end insert--

("( ) The repeal of sections 137 and 139 of the Railways Act 1993 (as set out in Schedule 30) shall not come into effect until similar or wider schemes have been brought into operation; and the Authority shall consult the industry on the content of such schemes.").

Photo of Lord Berkeley Lord Berkeley Labour

In moving this amendment, it may be for the convenience of the Committee if I speak to Amendments Nos. 340 and 341.

Amendment No. 300 is a probing amendment. Sections 139 and 141 of the Railways Act 1993 provide the framework for giving freight facilities and track access grants for rail freight. Schedule 30 to the Bill repeals those sections. The amendment seeks confirmation from my noble friend the Minister that they will not be repealed until similar provision--it is to be hoped bigger and better--is put in their place and that consultation will take place first. I understand that the SRA is about to begin consulting on such provision. Nevertheless, it would be sad if there were a one or two-year gap between the repeal of Sections 139 and 141 of the Railways Act and the introduction of replacement provision.

Amendment No. 340 is of more substance. It proposes a rail freight council alongside the rail passenger council although much smaller. The amendment states that the council should be statutory and that it should provide representation for the industry.

The reason behind the amendment is that, whereas the passenger councils are statutory consultees and can find out about things, in the rail freight industry the only people who find out what is going on are the train operators, and not all train operators. There is a particular piece of information about terminals which is available only to members of the so-called "10 per cent club"--those who have 10 per cent or more of the business. In other words, the customers, the hauliers, the logistic service providers and others have no right to consultation on matters affecting the provision of the services. They must rely on their own efforts or the pressure of trade organisations such as the Rail Freight Group or the Freight Transport Association. But neither of those organisations has a locus.

The approach is not working. I shall not bore the Committee with too many examples; perhaps I may give just two. The last site which might have been suitable for a railroad interchange at Holyhead was a passenger siding. The local authority wanted to close the siding under a compulsory purchase order and build a new road to the port, which we thought odd as the Welsh authority's policy was to encourage rail freight. We only heard about it through some friends on the passenger consultative committee and we are still pursuing the matter. There is no locus for anyone in the freight industry to protest against that proposal, any more than there is in relation to the sale of infrastructure.

A network change proposal may again seem somewhat abstruse to Members of the Committee, but there is a proposal to close a rail freight terminal in Aberdeen and build two more in its place. The one that is being closed is directly next to the port, and the port says that it wishes to start rail freight. Again, the only two organisations that are consulted on that proposal are Railtrack and EWS railway, both of which, I believe, have a commercial interest in the new development.

That is not good enough if the wish of the Government is to get more freight onto the railways. It will mean more operators and more customers. It is a wide-ranging and a disparate industry--in the nice sense of the word. Therefore, I tabled the amendment with a view to trying to create something along the lines of the passenger council but very much smaller with a small secretariat and the members of the council not being paid, which I thought was appropriate.

Amendment No. 341 is an attempt to put into words a duty on Railtrack and others who may wish to close lines, services or anything else to consult with the rail freight council, assuming it exists, before the closure. That sad experience is all too common at present. I beg to move.

Photo of Earl Attlee Earl Attlee Conservative

I support the noble Lord, Lord Berkeley, in his Amendment No. 340 and wish that I had thought of it myself. He has made some powerful arguments and I look forward to the Minister's response.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

I share the envy expressed by the noble Lord, Lord Attlee, of the excellent scheme thought up by the noble Lord, Lord Berkeley.

Photo of Baroness Wilcox Baroness Wilcox Conservative

I tabled Amendment No. 357A on behalf of private consumers, to deal with concerns raised recently that current legislation is inadequate for ensuring that passengers are properly informed and consulted about service alterations. There was a reluctance recently to display notices at railway stations in relation to Thameslink 2000 closures--as had previously been the custom and practice. Although the authorities were eventually persuaded, some notices were in less than satisfactory locations. That episode highlights the lack of a statutory requirement to ensure notification of service changes.

Although changes may be advertised in local newspapers, the posting of notices at stations is optional. How many people read their local newspapers to learn of changes to their rail services? Such information should be available at the point at which the public regularly use the service. Passengers ought to be fully informed about changes to publicly funded services and have the opportunity to comment.

Photo of Lord Whitty Lord Whitty Parliamentary Under-Secretary, Department of the Environment, Transport and the Regions 11:45 pm, 17th July 2000

Amendment No. 300 relates to payments and grants for freight and seeks to keep the 1993 Act regime, which is to be repealed by this Bill, in place until the authority has set up a new scheme--which it will have the powers to do under Clause 210. It is the intention of the Government and the authority that there should be no hiatus in the provision of grants for freight, so I am happy to give my noble friend the reassurance he seeks.

I have greater difficulty with Amendment No. 340, for the establishment of a rail freight council more or less along the lines of the rail passengers council. Rail freight is not in the same position as rail passenger services, yet the amendments would give the proposed freight council much wider powers than those in the Bill for the rail passengers council.

The nature of freight services and the relationship between the customer and the service provider is different from that of passenger services. Freight operators already have a strong incentive to listen to their customers and resolve any problems they may encounter. The role of the rail passengers council and committees will be to speak up for passengers. Freight services tend to be used by private companies that are better placed to represent themselves and to take up complaints directly with the freight operator concerned. My noble friend is a good example of vocal advocacy for the industry. I do not see an equivalence between freight and passenger services in the way that my noble friend suggests.

My noble friend's amendment would also give the rail freight council power to specify that it must be consulted on any matter which it considered relevant to its duty. That is a very wide remit, which goes beyond any equivalent powers in relation to passenger services that are enjoyed by the rail passengers' council or its committees. To make such a council a statutory consultee on all matters relating to rail freight--major and minor closures, infrastructure sales, network changes and so on--goes rather further than the equivalent on the passenger side and may place an inappropriate and onerous burden on the authority. Therefore, I cannot accept my noble friend's amendments as drafted.

Amendment No. 341 goes on to require the authority to consult the rail freight council on proposed closures. It would give the authority a statutory power to require Railtrack to retain infrastructure, or take whatever steps are necessary to ensure that the infrastructure can be reopened. The authority is charged with supporting freight interests. It will be able to take freight interests into account when considering passenger-related closure proposals. The authority will be able to define its own reasonable requirements of Railtrack in respect of the strategic capability of the network. The setting up of controls on freight assets and their disposal can be pursued through existing routes: the track access conditions and the existing conditions of Railtrack's network licence.

In addition, the rail regulator is currently considering a new licence condition which would impose on Railtrack controls for the disposal of relevant assets, including the disposal of land. Therefore, I believe that the objectives of my noble friend's proposed new clause are already met through the Rail Regulator.

Amendment No. 357A tabled by the noble Baroness, Lady Wilcox, would require the authority to publish notices of proposed railway closures at all the stations. We have some sympathy with this amendment, but there is a problem. The Bill makes the authority responsible for publishing proposed major closures. However, the difficulty in requiring the authority to publish notices is that it does not have power to do so without the station operators' consent. There are mechanisms within the existing framework to require operators to co-operate. Perhaps they should be examined further. However, the amendment makes me a little uneasy in that it places a statutory burden on the SRA to do something which it will be able to do only subject to a franchising provision, or licensing mechanism, which does not appear on the statute book. I prefer the arrangement to be symmetrical, whether it is done within or without the legislation. However, the noble Baroness makes an important point and, with her agreement, I should like to take the amendment away for further consideration.

With those reassurances, I hope that my noble friend will withdraw his amendment and that we may return to the amendment tabled by the noble Baroness.

Photo of Lord Berkeley Lord Berkeley Labour

I am grateful to my noble friend for his usual comprehensive response, particularly his observations on Amendment No. 300. As to Amendment No. 340, I am sorry that I went over the top and tried to propose stronger measures than those possessed by the body concerned with passengers. My noble friend said that there was a strong incentive for operators to listen to their customers. That is true of passenger operators. Some Members of the Committee have said that that does not always happen. I believe that that is why there is a rail passengers' council. The same applies to freight. As we have heard in other debates, there are a large number of small operators out there. There are some large and small train operators. However, the small customers need a voice.

I shall read my noble friend's response carefully. I may well return to this matter at a later stage with a slightly different amendment. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 210 agreed to.

Schedule 15 agreed to.

Clause 211 [Securing of services by franchising]:

Photo of Lord Tordoff Lord Tordoff Principal Deputy Chairman of Committees

In calling Amendment No. 301, I should point out that, if Amendment No. 303 is agreed to, I cannot call Amendment No. 304.

Photo of Earl Attlee Earl Attlee Conservative

moved Amendment No. 301:

Page 123, line 36, at end insert--

("(2C) The Authority shall not exercise its powers under subsections (2A) and (2B) unless necessary for the purpose of its existing powers under section 30."").

Photo of Earl Attlee Earl Attlee Conservative

In moving Amendment No. 301, it may be convenient to speak to Amendments Nos. 302 to 306. We are concerned that Clause 211 gives the SRA stronger powers to run trains. It goes further than the provisions of the Railways Act 1993 and appears to provide for more state interference in the running of the railway. The amendment would ensure that the SRA would have such powers only as a truly last resort.

Amendment No. 302 deals with subsection (2), which enables the authority to vary or revoke the designation of services as eligible for franchises. It provides that such power may be used only for the purposes of enabling the authority to provide or secure the provision of services in the circumstances set out in subsection (5). The authority should not have carte blanche to remove sectors of the railways system from the franchising process. Such power should be used only in circumstances where the authority is permitted by the Bill to provide services direct or to secure provision of them.

I turn to Amendment No. 303. Section 26(1) of the Railways Act 1993 allows the Secretary of State, when the authority selects the franchise, to direct otherwise. The amendment removes that power. The Secretary of State should not be able to substitute his choice of franchisee for that of the authority. That would expose him to all kinds of difficulty, especially as under subsection (3) he also takes power to direct how the appointment is to be made so that the proper tendering process can be bypassed. This provision has not proved to be necessary and, given that it is open to abuse, it should be removed.

If the amendment is not agreed, perhaps my Amendment No. 304 may be helpful to the Committee. New subsection (3) gives the Secretary of State wide powers not only to substitute his choice of franchisee for that of the authority but also to detect the method of selection of the franchisee. Amendment No. 304 limits the powers of the Secretary of State to prohibit the authority's choice of franchisee to where he has evidence that the person selected is not suitable to be a franchisee. In that case, the authority must give the franchise to another tenderer or retender.

If the Government insist on keeping the right to direct the authority not to grant a franchise to the person of its choice, the right should be exercisable only where there is firm evidence that the person chosen is not suitable to be a franchisee. Nor should the Government then set about selecting a franchisee themselves or dictating how one should be selected. It should be left to the authority to appoint one from the other tenderers or to retender.

My final amendments in the group are Amendments Nos. 305 and 306. New Clause 26(1)(b) allows the authority to provide services direct where a franchise comes to an end and no new franchise agreement has been entered into. This gives the authority the power to provide all services direct by not renewing franchise agreements when they expire. The amendment limits these powers to an interim period before a new franchise is granted.

Assurances from the Minister that there is no intention to renationalise the rail network ring hollow when such wide powers are included in the Bill. The circumstances in which they can be exercised should be spelt out. I beg to move.

Photo of Lord Whitty Lord Whitty Parliamentary Under-Secretary, Department of the Environment, Transport and the Regions

I detect a serious note of paranoia behind the noble Earl's intervention in the debate. He believes that the powers in the clauses are designed for renationalisation of the network. As he has already cast suspicion on previous assurances, I do not suppose that any further assurance from me would convince him.

However, if he reads the clause he will see that we are genuinely talking about the SRA operating services of last resort when all else has failed. We are not talking about backdoor renationalisation.

Apart from the noble Earl's general concern, Amendments Nos. 301 and 302 reflect a misunderstanding. They seek to tie the provisions for the designation of services eligible for franchising to the process through which the authority must travel before it becomes the operator of last resort. In fact, the two issues are rather separate.

It is a prerequisite of eligibility for franchising that a service is designated for franchising. We want designation to go further than the requirement so as to indicate not only that a service is eligible for franchising but that it should be performed as a franchised service. That is because of the benefits of franchising over open access as a mechanism for consistent service delivery. Therefore, we are amending Section 23(1) to provide that a designated service should be performed as a franchised service.

However, the current franchising map should not be set in stone. That is why the SRA needs the powers in Clause 211(2) to de-designate and re-designate services. It is that developing situation that the SRA must operate. There is no connection with the SRA's powers to operate those services under Section 30 as a matter of last resort. That section can come into play only when a designated service goes through the franchise process and that process fails to throw up an acceptable proposal or when an existing franchise operation fails. Therefore, the connection that the noble Earl makes does not really exist.

Amendments Nos. 303 and 304 would revoke the existing power of the Secretary of State to relax the strict requirement that franchisees must be selected from those who submit tenders. Alternatively, Amendment No. 304 restricts the Secretary of State's power to make such direction to circumstances where a franchisee is not suitable for the job.

This is a complex process. Before letting a replacement franchise, the franchise director proposes to obtain a direction from the Secretary of State which will allow him to award the replacement franchise without being at risk that an unsuccessful tenderer will argue that the process is not compliant with Section 26. Amendments Nos. 303 and 304 would remove the flexibility which Parliament considered necessary in 1993 and would be a significant hindrance on the SRA's ability to continue the franchising replacement programme. I do not believe that that is what the noble Earl intended but that is the effect of his amendments.

Amendments Nos. 305 and 306 seek to qualify the duty of the authority to provide services in the absence of a franchise where a franchise process is under way or proposed.

The authority's Section 30 duties, which are adapted more or less directly from the Railways Act, are there so that, should the private sector fail in its ability to provide services or fail to deliver value for money, the public sector may step in. After all, we must ensure that the trains continue to run and that there is good value for public money. It must be right that the SRA can refuse tenders where they represent poor value for money. In any negotiation it must be possible to walk away and simply say no. Without that possibility, in effect the train operating companies could make any demands that they saw fit. However, it is only possible to say no if there is an alternative public sector capacity.

The previous government accepted that in 1993 by continuing to allow the British Railways Board not only to pick up failed services but to submit a public sector bid to perform a franchised service. We intend to wind up the BRB. Therefore, there must be an alternative structure for last resort operations. That is what we provide in Clause 212(4) and (5).

With regard to Amendment No. 306, the duty in the amended Section 30(1)(b) of the Railways Act is the same as the franchise director's current duty to secure a failed service until it can be performed again under franchise. It is not necessary to spell out that the SRA has a mind to re-tender because that is implied. Unless there is a direction from the Secretary of State that the SRA must not seek to re-franchise the service, the SRA will need to look continuously to the opportunity to re-tender because the designation that the service should be performed by franchise will remain. If the SRA were to exercise its duties under this section in a manner which suggests that it rules out a re-franchising process, it would be acting unlawfully.

The duty in the amended Section 30(1)(a) will apply where a franchise competition has taken place but has proved unsuccessful, either because there were no tenders or because the tenders represented poor value. In the latter case, there will already have been two franchise competitions, because the Secretary of State cannot intervene to reject tenders at the first attempt.

The market would have been tested exhaustively and failed. At that point, the Secretary of State can be asked to revoke an SRA direction. It would be unlawful for him to be motivated by any prospect other than the fact that the franchising situation had failed. He could not be motivated simply by an overriding desire to place or keep the service in the public sector.

I hope that I have met the noble Earl's underlying suspicions. They are not appropriate. The clauses provide the SRA and the Secretary of State with a way of delivering a service when the tendering process has failed to produce an effective service.

Photo of Earl Attlee Earl Attlee Conservative

I have listened carefully to what the Minister has said about the amendment. I shall read Hansard even more carefully. He will not be surprised to hear that I shall probably return to the issue in due course, but in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 302 to 306 not moved.]

Clause 211 agreed to.

Photo of Earl Attlee Earl Attlee Conservative 12:00 am, 17th July 2000

moved Amendment No. 307:

After Clause 211, insert the following new clause--

:TITLE3:TENDERS AND FRANCHISE AGREEMENTS: RELEVANT CONSIDERATIONS

(" . After section 26 of the Railways Act 1993 there shall be inserted--

"Tenders and franchise agreements: relevant considerations.

26A. In preparing and issuing an invitation to tender under section 26 and entering into a franchise agreement the matters to which the Authority may have regard to, and make provision for in the invitation to tender and the franchise agreement, include the following--

(a) what arrangements the prospective franchisee has or will make with bus and other transport operators in respect of bus and other transport services that connect with the franchisee's services;

(b) what facilities the prospective franchisee will provide, and at what times, for carriage of cycles on trains and on any substitute bus service provided by the franchisee when a train service is not operating;

(c) whether a reservation facility is made available in respect of cycles;

(d) whether any fee is payable for carriage of a cycle and, if so, whether such fee includes carriage on any other train (including a train not operated by the franchisee) as part of the same journey;

(e) what facilities are available for the disabled;

(f) what arrangements the prospective franchisee has made or proposes as regards the matters set out in section 17(9)."").

Photo of Earl Attlee Earl Attlee Conservative

I shall speak also to Amendments Nos. 316 and 357. The new clause would enable the authority to use the franchising process more proactively to promote and secure a truly integrated transport system. Too often, rail passengers find themselves stranded on arrival at the station, because there are no connecting services. Train operators should be encouraged through the franchising process to explore with bus and other transport providers the possibility of connecting services. Train operators should also make proper provision for disabled people.

Cycling as a means of transport is environmentally friendly and healthy and should be encouraged. The Government's downgrading of the previous government's targets for increasing cycle journeys was a retrograde step. It is difficult for cyclists to use trains, because there is not enough space and spaces cannot be reserved. Bus services laid on when track maintenance interrupts a journey do not allow for cycles. Cyclists often find themselves paying a fee for their cycle every time that they change trains.

Train operators should also be encouraged to make appropriate arrangements with Railtrack for the provision at the station of the facilities referred to in our proposed new Section 17(9) of the 1993 Act. As the authority dictates the terms on which the train companies operate, it should be encouraged to use the franchise system to address those issues.

Amendment No. 316 addresses operators' concerns about Schedule 17 and the uncertainties caused by giving the regulator more powers to change licences. It is a key to the financial viability of the train companies that the franchise agreements are fixed and cannot be changed unilaterally for the duration of the franchise. That gives operators and investors certainty, which is critical for making the significant long-term commitments that are necessary for ordering rolling stock. The amendment would provide that certainty and ensure that licences are not changed arbitrarily.

The Minister in the other place said that he had much sympathy with the amendment, but was unable to meet the concerns expressed. We committed ourselves to return to the issue. We hope that Ministers have reconsidered how they might address the concerns.

On Amendment No. 357, Section 17 of the Railways Act 1993 enables the regulator to secure access for an applicant to a railway facility, such as a station, and such facilities as ancillary services, whether provided or procured by the facility owner. The proposed new subsection provides that such ancillary services can include those listed.

If a transport system is to be truly integrated, people arriving at stations need information not only as to the train services but also connecting bus and other services. They need to be able to buy tickets which cover their entire journey, preferably by means of new technology which combines fare and travel information with the provision of a ticket. They need somewhere to wait in comfort and safety, especially at night. If disabled, they need good access and facilities.

Those matters are relevant to the arrangements between train operators and Railtrack and it should be made explicit that they fall within the ambit of the regulator's powers in relation to access contracts. I beg to move.

Photo of Lord Berkeley Lord Berkeley Labour

moved, as an amendment to Amendment No. 307, Amendment No. 307A:

Line 27, at end insert--

("(g) what facilities are available for selling network rail tickets;").

Photo of Lord Berkeley Lord Berkeley Labour

In moving this amendment, I shall speak also to Amendment No. 321 and the other amendments in the group.

I rather think that Amendment No. 307 moved by the noble Earl, Lord Attlee, has a lot to commend it. But it is rather sad that he had to include all that information about cycles, mainly because the system for carrying cycles, as he said, is chaotic at the moment because there is no overall policy. My amendment was one way of trying to resolve the problem and his is another way. I expect that my noble friend will say that they are both unnecessary.

Perhaps I may just talk a little bit about cycles. As the noble Earl knows, reservations for cycles are necessary on some trains. On Virgin trains, it is £3 for a compulsory reservation. If you miss that train and want to catch the next one, you must pay another £3.

Thames Trains has some very good cycle luggage spaces. You do not have either to reserve or to pay for them. You just cannot use them in the rush hour. That is probably reasonable, given the crowds.

I am tempted to follow the example of the noble Lord, Lord Dixon-Smith, and read out a long list. I have a lovely leaflet produced by the National Rail Guide called Cycling by Train which tells you all about every train operator, including those who are not franchised, like Eurostar and Heathrow Express. It tells you what you can and cannot do. I shall not do that at this time of night. But it is a very good guide. I do not know how you obtain those leaflets if you are not a parliamentarian. I believe that the laissez-faire attitude of the past five or six years on cycles must be changed so that there is a policy. The SRA should be under a duty to enforce a policy which is consistent and intelligible to those who might wish to take bicycles on the train.

Amendment No. 307A deals with facilities available for selling network rail tickets. Again, it is back to the same old question of the ease with which one can buy a ticket. If you go to Oxford, like I do, there are two options: Thames Trains or Great Western. Thames Trains fines you if you do not have a ticket before you board the train. It is a £10 fine if you get caught before Reading and nothing afterwards. Great Western welcomes the purchasing of tickets on the train. Who, apart from aficionados like me, would know that?

It is even better because, after five years, Thames Trains has brought in a slot machine which enables you to use a credit card to buy a ticket, which is quite useful. The French have had that network-wide for at least 10 years. But, of course, you cannot buy senior citizen railcard tickets from the machine so you have to queue for those tickets. I could go on about this for a long time.

Half the trouble, and it applies to buses as well, is that those who make the rules do not buy the tickets. I have a very interesting Written Answer from the Minister dated 29th June when I asked him how many employees of the rail regulator and the SRA in shadow form receive free or discounted rail travel tickets from train operators, because it goes without saying that those people will not need to buy their own tickets. The answer was four from the rail regulator and 39 from the Strategic Rail Authority.

Perhaps I have an odd way of looking at life, but I wondered how keen they would be to ensure that easy selling of tickets would be a number one priority for the new franchises. I ask the question but believe that noble Lords included should know how to buy their own tickets. They should not always go down to the House of Commons travel office. It is good practice to buy tickets. We should buy second-class and queue. We can then make a fuss about it when it does not work. I beg to move.

Photo of Lord Addington Lord Addington Liberal Democrat

I have listened to the debate and am convinced that important points have been raised. I find myself in considerable sympathy, particularly with the first amendment tabled by the noble Earl, Lord Attlee. I look forward with interest to the Minister's reply.

Photo of Lord Whitty Lord Whitty Parliamentary Under-Secretary, Department of the Environment, Transport and the Regions

Amendment No. 307 would give a list of relevant considerations when the authority tenders for, or enters into, a franchise agreement. Many of the issues raised are clearly relevant to what the authority will have to take into account. However, here we are concerned with structures and powers. Those structures and powers already exist.

The first part of the appropriate structure is the directions and guidance from the Secretary of State, which already exist. They address franchise renegotiation and cover issues such as multi-modal travel, bicycles and disabled passengers. The second part of the structure is how the authority then translates both the directions and guidance of its duties under the legislation. Duties under the legislation consist of both the primary purpose under Clause 204 and the manner in which the authority exercises its function. Those are wide-ranging and incorporate the interests of all users, including, for example, disabled persons and bicycle users.

Members of the Committee may be unhappy about the way in which in the past the authorities have carried out their duties to take these matters into account. However, the powers and structures are there and augmented in the Bill. I should, perhaps, mention the amendment to the amendment, to which my noble friend Lord Berkeley referred, which relates to ticketing. I think that we all recognise some of the problems with ticketing to which he and others have referred. However, the arrangements for selling network tickets are licence matters which already apply to train operators. They are required to provide impartial and comprehensive information and ticketing systems. That includes giving passengers details of the cheapest, as well as the most direct and quickest, journeys available to them. Again, therefore, the structure and powers already exist.

I turn to Amendment No. 321 which concerns bicycles. The amendment provides for by-laws to be made. However, the powers already exist for the authority to regulate the conduct of those who wish to take their bicycles on the train. Again, therefore, the amendment provides for structures and powers which already exist.

Amendment No. 357 in this grouping is a comprehensive new clause which wraps together many of the issues raised. We are not convinced that the access contract would be the most appropriate place for this type of benefit. The access agreement is a bilateral contract between two parties. When a particular ancillary service is tailored to a particular contract, in those circumstances it may well be an appropriate medium for delivery.

However, many matters which have been identified in the amendment and discussed in the debate, for example ticket facilities, are more in the nature of general public interest rather than individual interest by the parties to the bilateral agreement. That suggests that the more appropriate way to deal with them would be either by the licensing system or a franchise. Such a provision would then be able to be applied across the network and enforced by the regulator. In other words, there are a number of different arrangements for securing the benefits described in the amendment. It would not be appropriate for the legislation to prescribe that they should all go into an access agreement as opposed, for example, to a licence.

Finally, Amendment No. 316, which is rather different from the rest of the group, would prohibit the SRA from seeking consent from the rail regulator for a reference to be made to the Competition Commission to seek modification of consumer protection conditions if the modifications related to matters already contained in a franchise. We have looked carefully at the operating companies' concerns that the SRA should not be able to reopen in a proposed licence modification consumer protection matters agreed or not agreed as part of the franchise replacement process.

Following representations we provided that only the regulator can modify a licence where the licence holder agrees. Where the licence holder does not agree, the SRA would need to obtain the regulator's consent for referral to the Competition Commission. The practical effect of the Bill therefore is that the position in reality will not be very different from that which applied under the Railways Act 1993. The rail regulator can already seek to modify licence conditions.

We therefore understand the train operators' concerns but consider that they are exaggerated. Licence changes relating to consumer protection are already in franchise agreements. The issues have rarely been raised so far and we see no reason why they should be more frequently raised in the future. Nor do we see a case for ruling out the ability to seek licence changes in the public interest. The SRA should be able to act where the regulator may act at present under the 1993 Act, with all the safeguards in place that this Bill provides.

I hope that on this rather disparate group of amendments Members of the Committee will accept my reassurances that, by and large, the Bill already covers such issues.

Photo of Lord Berkeley Lord Berkeley Labour

On the amendments on cycling and ticketing I was pleased to hear my noble friend say that the powers already exist. My only question is: why is nothing happening? Could not there be a little bit of enforcement after five or six years? Perhaps my noble friend could helpfully send a copy of the debate tonight to those whose duty it is to enforce the various issues. In the meantime, I beg leave to withdraw the amendment.

Amendment No. 307A, as an amendment to Amendment No. 307, by leave, withdrawn.

Photo of Earl Attlee Earl Attlee Conservative

The Minister found that a difficult point to respond to. The Minister described ticketing as "a problem". The noble Lord, Lord Berkeley, perhaps has a better appreciation of the situation. I have certainly seen passengers become almost incandescent trying to buy tickets, particularly at Victoria station. Even at Westminster station the machines that are supposed to take notes are, frankly, pathetic.

Again, I shall read carefully what the Minister said. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 212 agreed to.

Clause 213 [Securing provision of substitute bus and taxi services]:

Photo of Earl Attlee Earl Attlee Conservative

moved Amendment No. 308:

Page 128, line 4, after ("may") insert ("by means of competitive tendering").

Photo of Earl Attlee Earl Attlee Conservative

Clause 213 gives the authority the power to secure road transport where railway services are temporarily disrupted or discontinued. Amendment No. 208 imposes a requirement to tender out such services, not only where the service is discontinued as provided in subsection (4), but also where services are temporarily disrupted.

Competitive tendering is the most appropriate way of securing efficient and cost-effective services. It is a transparent process which is not only fair, but is also seen to be fair. In those circumstances it should be adopted; otherwise over-cosy arrangements may develop.

There should be no objection as regards urgency. The authority should, as a matter of planning, ensure that appropriate arrangements are in place in advance of any disruption and that quotations can, in any case, be obtained from the various potential providers quickly. Clearly, if arrangements have not been made in advance, the contracts would be made "in distress". It is unlikely that they would be robust, fair or even economic. They would frequently be made under the "old pals' act", with all that that implies. I beg to move.

Photo of Lord Swinfen Lord Swinfen Conservative

Amendment No. 309 has been grouped with my noble friend's amendment, and I shall not be moving it. However, Amendment No. 330, which seeks to insert a new clause after Clause 222, has also been included in the group. The noble Lord, Lord Morris of Manchester, has asked me to say that had he been present in the Chamber at this hour he would have supported the amendment. Indeed, he is sorry not to be able to be here because he has attached his name to the amendment. Moreover, the noble Baroness, Lady Darcy de Knayth, who has also attached her name to the amendment, has had to go home because her new electric wheelchair is giving her some problems.

Amendment No. 330 requires that train station operators provide facilities for licensed taxis at their stations. The licensed taxi has a vital role to play in an integrated transport policy. It provides the link between termini and the passenger's final destination, be it work or home. For elderly and disabled people the licensed taxi is often a real necessity for it can provide wheelchair accessibility and lots of space. It also provides the customer with the security of a regulated fare and a driver who has local knowledge, so customers are guaranteed that they will not get lost.

At the moment, there is nothing to stop train operating companies offering exclusive contracts to mini-cab firms for the use of railway forecourts. In this situation, licensed taxis are able to drop off passengers at stations but are prevented from picking up passengers or, as I understand they say in the trade, "ply for hire". There are already examples of such an arrangement at Cambridge and Eastbourne where taxi ranks are forced to be some considerable distance from the station. Unless this amendment is accepted, there is a real danger that this trend could develop countrywide.

To understand why this would be damaging to the disabled community, we need only to look at the Disability Discrimination Act. When regulations are brought forward under that Act, all licensed taxis will have to be accessible to wheelchair users. Indeed, this has been the case in London since 1st January. However, as the Committee will know, mini-cabs are not covered by the Act and are subsequently free from any obligation to be wheelchair accessible. This is the central point. If licensed taxis are not guaranteed access to forecourts, what is a disabled passenger to do when he or she arrives at a station and no accessible vehicle is available?

Why should elderly and disabled passengers not be guaranteed, as able-bodied passengers are, a suitable vehicle? Surely, this goes completely against both the spirit and many provisions of the Disability Discrimination Act and of this Bill, aimed at ensuring that disabled passengers are guaranteed the same level of service as able-bodied people in a truly integrated transport service.

There is an even more damaging knock-on impact for the taxi service in local communities. In many small towns, station forecourt work represents the main source of income for the licensed taxi driver. If the station operator or Railtrack enters into one of these exclusive contracts with mini-cab firms, why would a local taxi driver go to the expense of adapting his vehicle to be wheelchair accessible, or go to the expense of buying a completely new taxi?

The net result would be fewer and fewer accessible taxis to serve disabled and elderly members of the travelling public. It is not, of course, acceptable to take the view that as station forecourts are private property, the property owner has the right to deny or restrict access to taxis. The Disability Discrimination Act imposes conditions on other private property; that is, retail premises and places of employment, and taxis have the special qualification of themselves being subject to regulation under that Act.

This amendment has widespread support. I understand that the Royal Association for Disability and Rehabilitation has written to the Minister pressing for the amendment to be accepted. The chief executive of the Disability Alliance has written to the London Taxi Board supporting the new clause and stating,

"We have disabled people amongst our staff and on our Board of Trustees and they often encounter problems with inaccessible minicabs on railway forecourts, resulting in them having to go some distance in a wheelchair, often with luggage, to reach an accessible cab which is not allowed into the forecourt".

I think that I have probably said enough to emphasise my point. I hope that when the Minister replies I shall, for once, have something acceptable to listen to.

Photo of Lord Burnham Lord Burnham Conservative

As my noble friend has suggested, the proposed new clause relates to the problems of taxis and parking. Can the Minister help us in any way by giving an assurance that railway stations will be required to produce adequate car parking for all those who wish to use railway station facilities? The right honourable gentleman the Deputy Prime Minister asks us not to use our cars, but unless car parking facilities are provided for those who wish to travel to their destinations by train, that will be difficult.

Photo of Lord Addington Lord Addington Liberal Democrat

My name is also added to Amendment No. 330. The noble Lord, Lord Swinfen, has done an excellent job of explaining it. We place upon licensed taxi operators the responsibility to ensure that their vehicles are accessible to those with disability problems. However, we do not place such a responsibility upon minicabs. I take the liberty of reminding the Minister of a discussion we had some nine and a half hours ago--yesterday now--at Question Time. It became clear that minicabs are not covered by much of the legislation which has been introduced to make taxis more accessible to the disabled, to wheelchairs, guide dogs and hearing dogs. Surely if we are to place an extra responsibility on a group, they should benefit from that.

In my city of Norwich the forecourt of the station is the main point from which taxis operate. They are the traditional hackney cabs. That forecourt seems to be the main thrust of all activity. If they were not allowed to work there, the whole basis of the local economy for taxi drivers would be removed.

I hope that we shall be given a positive response. Once you have told a group such as taxi drivers that they must help the disabled, they must be allowed to do so; otherwise, we make a nonsense of part of the legislation.

Photo of Lord Whitty Lord Whitty Parliamentary Under-Secretary, Department of the Environment, Transport and the Regions 12:30 am, 17th July 2000

There is a danger in this argument of mixing up the question of accessible transport for the disabled with access for the taxi trade to particular venues. There are arguments on both issues but they should not be confused.

We are concerned here with the responsibility within the railway system for the station operators to provide accessible transport. In this instance it is the responsibility not of the taxi firms or the minicab firms but of the station operators--as indeed it is in terms of parking provisions, a point raised by the noble Lord, Lord Burnham, although local authorities can have some influence on that.

So far as concerns access for the disabled, since October 1999 Section 21 has required all service providers to adjust any practice, policy or procedure which makes it impossible or unreasonably difficult for disabled persons to make use of the service. So if, for example, a station operator's policy on access for taxis prevented disabled people from getting access to or from the station, there would be already the potential for a claim under the DDA.

Photo of Lord Swinfen Lord Swinfen Conservative

Surely when the rail operator has delivered the disabled person by rail to the station, and that disabled person is ready to leave the station, the rail operator is then discharged of his responsibility. There is a difficulty if the station operator has a contract with a local car hire firm or minicab firm that only its vehicles can wait at the station forecourt. This is why I want this new clause in the Bill so that taxis can be there specifically for disabled and elderly people. It will also help people with large amounts of luggage, which very often do not fit easily into small minicabs.

Photo of Lord Whitty Lord Whitty Parliamentary Under-Secretary, Department of the Environment, Transport and the Regions

The noble Lord is again mixing up the two issues. The responsibility is on the station operator to provide access to and from the service he provides. If his contracting arrangements with a local minicab firm cut across that, it is his responsibility; there is a potential claim against him and he must put it right.

Moreover, as the DDA comes into play from 2004, station operators will have to take reasonable steps to remove, alter or provide reasonable means of avoiding any physical features that make it impossible or unreasonably difficult for disabled people to use a facility. That means that station operators should start looking now at their infrastructure to make sure that it is reasonably accessible to disabled people, however they may arrive at the station. It is not only a matter of arriving at the station but being taken from the station, and therefore the noble Lord's point about the end of the operator's responsibility is not the case.

It may be the case for other reasons that the station operator has made an exclusive contract, but if that contract cuts across that duty then the DDA makes provision for that circumstance. Section 33 of the Act will allow the Secretary of State to designate transport facilities where an operator has entered into such a contract. The result of that designation would be that any provisions relating to accessibility requirements for taxis would have to apply equally to the private hire vehicles which fulfil that contract. In that way, passengers arriving at a station can be sure that they can call on an accessible vehicle to take them on their way.

I have sought to explain that the DDA ensures the accessibility of taxis, as we discussed earlier; it also makes a provision for disabled passengers to move between taxis and trains. Where the station operator is failing in his duty to provide either an accessible taxi or an alternative, the responsibility is on the station operator, and the Secretary of State has reserved powers in this respect. I do not think it would be appropriate to tackle the issue the other way round, as the noble Lord's amendment seeks to do--that is, to define what is and is not in the appropriate contract for the station operator.

I return to the amendments standing in the name of the noble Earl, Lord Attlee. Amendment No. 308 would require the SRA to seek competitive tenders before securing the provision of substitute services by road. Such services will normally be procured by train operators. Procurement in these cases is a commercial matter for train operators. The SRA will procure substitute road services only if it is acting as an "operator of last resort". Frequently, the provision of substitute services will have to be done at very short notice as a result of an emergency. Circumstances could arise where substitute rail services need to be secured by the SRA in an emergency if it is operating as an "operator of last resort" and there is an accident or emergency engineering work. In such cases, there clearly would not be time to seek tenders.

We debated the issue in Grand Committee when my noble friend Lord Macdonald tabled Clause 246. He said then that Clause 246 was an attempt to find a happy medium between the practical concerns of the train operators and the need to ensure that in emergency circumstances a suitable vehicle is there to transport disabled passengers in an appropriate manner. That statement was correct. I hope that the clause we inserted in Grand Committee--Clause 246--is an honourable and acceptable advance. I hope that the noble Earl can accept those explanations and withdraw his amendment.

Photo of Lord Burnham Lord Burnham Conservative

Will the noble Lord, under the terms of the clause, require the rail operator to provide adequate--I mean adequate--car parking facilities for those using that rail network?

Photo of Lord Whitty Lord Whitty Parliamentary Under-Secretary, Department of the Environment, Transport and the Regions

No, not in the terms the noble Lord requests. The provision of car parking is primarily a matter for the station operator. That can be influenced by the local transport plan because the number of cars affects traffic movements throughout the town or wherever. In some cases it would not be appropriate to attract further car movements--for example, to a city centre station--even if the transport operator was prepared to do so. In other circumstances--for example, in parkway stations--it may be appropriate to try and encourage the operator, either through the LTP or through the franchising arrangement, to provide more parking space. But there is not a blanket answer to the noble Lord's question.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

I am at a loss to understand why the Minister is so emphatic in his rejection of the idea of providing accessible taxi services away from stations. There is no confusion in the minds of noble Lords who have put forward the amendment as to what is being talked about. The amendment is about having available in the station forecourt, for hire, a vehicle which is accessible to people with mobility problems. The noble Lord, Lord Addington, added a few other subjects which arose in the course of Question Time recently.

I do not understand the accusation of confusion. We are not confusing means with ends or ends with means. The end is to have accessible transport. The means is to make it possible for accessible taxis, which in most cases means black cabs, to pick up passengers at stations. These exclusive deals between station owners and mini-cab services make that impossible. It is the exclusivity of the deal which makes it impossible. Anyone who has been to Cambridge knows exactly what I am talking about. Anyone who has arrived at Gatwick also knows what I am talking about. If you arrive at Gatwick on an aeroplane and are wheeled, you had better have a huge bus-type minicab, which I am sure costs twice as much as an ordinary minicab, to meet you, because one will not be there waiting. I do not think that this is such a difficult issue. I wish the Government would give some ground on it.

Photo of Lord Swinfen Lord Swinfen Conservative

Before my noble friend decides what to do with his amendment, perhaps I may say that, because it is so late, I shall not press my Amendment No. 330 when we come to it later on. However, I did get the impression that the Minister's reply was somewhat muddled. I am not sure that he did not contradict himself while he was replying to my amendment. I shall read with considerable care what he said. I warn the noble Lord that I will be returning to this matter at the next stage of the Bill. In my view, it is an extremely important matter. There are stations--I suspect that it is an increasing number of stations--which have come to exclusive contracts with minicab firms to the detriment not only of disabled people but people who have mobility problems of all kinds, including people travelling with large numbers of children and a great deal of luggage.

Photo of Earl Attlee Earl Attlee Conservative

I am grateful to all Members of the Committee who have spoken in the debate. I refer in particular to the noble Lords, Lord Swinfen and Lord Addington, who spoke to their Amendment No. 330, which raises important points about station forecourts. The groupings on this issue seem to be rather peculiar. I blame myself. I did not check them carefully enough this morning. Perhaps it is a smokescreen to cover my Amendment No. 308. However, I am sure that we will return at a later stage to Amendment No. 330.

I was rather disappointed with the Minister's response. I thought that he was converted to the market. I was thinking in terms of model contracts negotiated by the SRA which could then be drawn on by the train operating companies. It is important that we have these contracts in place so that the necessary contractual arrangements are made, especially for the disabled. We need to ensure that the right kind of transport equipment is available. There is no point in contracting for a coach that is too big to enter a station forecourt. Does the Minister not want to move at all? He does not. I beg to move.

On Question, Whether the said amendment (No. 308) shall be agreed to?

Their Lordships divided: Contents, 12; Not-Contents, 39.

Division number 2

See full list of votes (From The Public Whip)

Resolved in the negative, and amendment disagreed to accordingly.

[Amendment No. 309 not moved.]

Clause 213 agreed to.

Clause 214 agreed to.

Schedule 16 [Transfer to SRA of Franchising Director's functions]:

[Amendments Nos. 310 to 315 not moved.]

Schedule 16 agreed to.

Clause 215 agreed to.

Schedule 17 [Transfers to SRA from Rail Regulator]:

[Amendment No. 316 not moved.]

Photo of Baroness Wilcox Baroness Wilcox Conservative 12:52 am, 17th July 2000

moved Amendment No. 316A:

Page 261, line 16, leave out (""Strategic Rail Authority (in this Act referred to as "the Authority")"") and insert (""Secretary of State"").

Photo of Baroness Wilcox Baroness Wilcox Conservative

I confess to being slightly confused by the grouping. I can only hope that it is because somewhere among the different amendments to which I shall speak is a prize for me. I hope that the Committee will bear with me. Amendments Nos. 316A to 316G relate to independence for the rail passenger councils from the strategic rail authority. Amendments Nos. 337A and 338B refer to disadvantaged passengers. Amendment No. 338A refers to duties to provide information and access.

Amendments Nos. 316A to 316G to Schedule 17 are among a number of amendments standing in my name relating to the powers of the body that speaks for passengers of rail services. My amendments have the support of the recently relaunched rail passengers council and have been promoted by the National Consumer Council. As I indicated on Second Reading, I seek to measure the rail passenger council against the government-funded National Consumer Council blueprint, which sets out the key characteristics of a consumer body.

Rail follows a pattern seen in other sectors where a competitive market does not operate fully and there are regulatory and consumer advocate bodies. Consumer organisations--whether for energy, postal services or rail--need a range of powers to keep the companies and regulators on their toes. That is particularly true of rail, where the long-suffering passenger usually has no alternative when things go wrong.

The Utilities Bill and Postal Services Bill this Session have enhanced the role of consumer bodies for those sectors by making them independent; giving them a remit for disadvantaged consumers; and imparting powers to access and publish information. While that legislation may not be ideal, it is significantly better than the provisions in the Bill.

The amendments to Schedule 17 may appear technical but are aimed at enshrining the independence of the rail passenger council from the SRA--transferring all responsibility for establishing, appointing, administering and funding the council and committees to the Government. Regulatory and consumer representative bodies have distinct roles, so it is important that they are--and are seen to be--independent of each other. The rail passenger council network must have the freedom to take and advance its own position, which may at times be critical of the regulatory body and incompatible with sponsorship by the SRA--with its regulatory powers and ability to be a service provider in its own right. The relationship between the authority and the council should be constructive and professional.

At some point in future, when the personnel and atmosphere have changed, the council may find its activities compromised by a lack of independence. The council's first responsibility and accountability should always be to the passenger. It is difficult to reconcile that objective with the fact that the council's staff will be employed by the SRA, which will also determine the council's budget.

The Bill improves the powers of the passenger body but nowhere near far enough. On Second Reading, the noble Lord, Lord Whitty, stated:

"It is important that the rail passenger council has an independent view".--[Official Report, 5/6/2000; col. 1035.]

I hope that the Government will build on that position. If wider powers and enshrined independence are considered necessary in other sectors, they should be necessary in rail. I beg to move.

Photo of Earl Attlee Earl Attlee Conservative

My amendments in the group build on the amendments in the name of my noble friend, Baroness Wilcox. Subsections (7B), (7C), (9B) and (9C) allow the Secretary of State to limit the scope of the activities of the rail passenger council and committees. Amendments Nos. 338 and 339 remove that power. The council and committees have been entrusted with various general duties and should be allowed to get on with their work without the Secretary of State telling them those parts of the service in which they can or cannot become involved. If the council and committees are not allowed to deal with the overall picture, their effectiveness could be severely impaired.

I turn to Amendments Nos. 342 and 343. Subsections (6) and (7) allow the public to be excluded from sections of meetings not only where the items to be discussed are genuinely confidential but also if the rail passengers' council or committee so decides in accordance with an order made by the Secretary of State. In the interests of open government, neither the Secretary of State nor the rail passengers' council or committee should have power to make meetings of a public body closed. Any grounds in addition to those already specified in legislation on which they can be closed should be spelt out in the Bill so that they can be subjected to proper parliamentary scrutiny.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords) 1:00 am, 17th July 2000

As the noble Baroness, Lady Wilcox, told the Committee, these amendments are based on similar provisions in other regulatory Bills this Session. Having taken part in the Financial Services and Markets and Utilities Bills I recognise a good number of the arguments. However, the regulatory structure of the rail industry is not the same as for the utilities. Therefore, I should perhaps say a word about the structure of the rail industry.

Under the 1993 Act OPRAF and the rail regulator share consumer protection functions. That has not worked very well. Therefore, we are consolidating the consumer protection functions in the strategic rail authority. That clearly distinguishes the position here from that in other regulated utilities. I accept that the roles of consumer protection and economic regulation need to be kept separate. That principle was in the earlier legislation, and under these new arrangements they will be. The rail regulator is the economic regulator. The SRA is the strategic body for the industry, with a specific remit under Clause 206(2)(a) to protect the interests of users of rail services. In its armoury it has strong levers to influence the performance of the passenger companies through the franchising process. That is not an undesirable conflict; it is a valuable opportunity for the passenger voice to be registered at first hand.

I turn to the specific amendments. Amendments Nos. 316A to 316G would transfer a number of the rail regulator's existing duties in respect of the rail passengers' council and committees to the Secretary of State rather than the SRA. They would make the chairman of the rail passengers' council responsible for appointing the chairmen of the rail passengers' committees, which is currently the responsibility of the Secretary of State. In the light of what I have said, it is clear why I do not believe it would be appropriate for the Secretary of State to be given these duties. The authority is the regulatory body with statutory responsibility for the protection of railway passengers' interests. It is only right that it should also be the sponsoring body of the rail passengers' council and committees.

The statutory independence of the RPCs is clear. They have clearly defined statutory duties which the SRA will have to take into account in its dealing with them, and they will be free to express their independent views under the sponsorship of the SRA, as they are at present under the sponsorship of the rail regulator. But they will have an integral role within the SRA. They will be close to the decision-makers and well placed to ensure that the SRA's decisions take into account the real issues affecting passengers.

The amendments also propose that the chairman of the rail passengers' council should become responsible for appointing the chairmen of the committees. This is the responsibility of the Secretary of State, and we believe that that should remain the position. The committee chairmen also serve as ex-officio members of the rail passengers' council. I accept that the council chairman has an interest in new appointments. I am aware that currently he is given an opportunity by the regulator to comment on prospective candidates. All of these committee chairmen posts are advertised locally and are open to interested rail users. The appointments are made on merit in accordance with the guidelines of the Nolan Committee.

Amendments Nos. 337A and 338B would add to the duties of the rail passengers' council and committees by specifically requiring them to take into account the interests of groups of passengers who are disadvantaged or who have special needs. I recognise those categories from the Utilities Bill, but I do not believe that it is necessary to put them on the face of this Bill. After all, gas and electricity utilities are used by everybody, but rail passengers, while a significant body of people, are not the same as the general population. The rail passengers' council and committees have a duty to represent all passengers and to deal with genuine problems. They will have the freedom to reflect these special needs as appropriate.

Amendments Nos. 338 and 339 would remove the power of the Secretary of State to exclude from the remit of the rail passengers' council and the rail passengers' committee specified services or to restrict their remit in respect of specified services. We intend those to be used only in the marginal cases of heritage lines, such as the Bluebell Line, which are not part of the national network and where the powers of the rail passengers' committee would not be appropriate, particularly as regards the lines run by voluntary enthusiasts. That is the only purpose of the exclusion.

Amendments Nos. 342 and 343 take away from the Secretary of State the power which this Bill gives him to make an order defining circumstances when the public may be excluded from meetings of the rail passengers' committee and the rail passengers' council. Those bodies have asked us to include the exclusion provision for those items on the agenda needed to preserve confidentiality and to discuss issues relating to their management; for instance, individual pay or disciplinary matters. There is no intention of using them in any wider sense.

Amendment No. 338A sets out a set of duties on the council to make proposals, provide advice and information and represent the views of passengers. That is already covered in Clause 227(4). The wording of the amendment would have some odd results with which I shall not weary Members of the Committee.

Amendment No. 338A also relates specifically to the rail passengers' council's access to information. It would empower the Secretary of State to make regulations limiting the type of information to be provided and to establish a body to arbitrate in cases of dispute. The council needs access to information about individual complaints, but that is provided by the passenger licence which requires licenceholders to provide the rail passengers' committee with reasonable information for the proper performance of its functions. I expect the SRA and the regulator to co-operate with requests from the council for information. We will be issuing instructions and guidance to the SRA on this matter under provisions elsewhere in the Bill.

I respect the origin and motivation of the noble Baroness's amendment, but I believe that the regime for passenger representation, which is set out in the Bill, is consistent with other legislation and the needs of rail passengers.

Photo of Baroness Wilcox Baroness Wilcox Conservative

I thank the Minister for his response, particularly in relation to something I had not even read! It related to the information and I apologise that I did not outline the point.

I have had a response but not the response I would have liked. The Bill's weakness as regards information suggests that the Government do not really intend the rail passengers' council to be an independent voice in the same way as the GECC should become. I am sorry about that.

I listened to the Minister's response to my amendment, but at this late hour I shall withdraw it and reserve the right to return.

Amendment, by leave, withdrawn.

[Amendments Nos. 316B to 316G not moved.]

Schedule 17 agreed to.

Clause 216 agreed to.

Schedule 18 agreed to.

Clause 217 [Functions relating to Board's property]:

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

moved Amendment No. 317:

Page 130, line 2, at end insert--

("provided that before disposing of any land the Authority shall, in consultation with the local transport authority and other interested persons, consider what potential for rail or other transport related use such land might offer, and protect the land accordingly").

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

Clause 217 relates to the transfer of property and other rights and liabilities from the board to the Strategic Rail Authority. Before I go further, perhaps I may say that I welcome that transfer because it is possible that the land and other rights will be used in a way which is related to the purposes of the SRA rather than purely to property portfolio purposes.

Nevertheless, in recent years we have seen large-scale and continuing disposal of such property. If we want to expand the rail network, as we discussed earlier, it is important to ensure that nothing is disposed of which could be used at a later date. That is the purpose of the amendments, which, I confess, are rather infelicitously drafted. I believe that the noble Lord, Lord Berkeley, whose almost identical amendment is grouped with mine, has the right end of the stick, drafting-wise.

However, I believe that we should consider these issues seriously. I hope that the Minister will be able to reassure me that my hopes for the role of the SRA, as the holder of the property portfolio, are not misplaced. I beg to move.

Photo of Lord Berkeley Lord Berkeley Labour

I support Amendments Nos. 317 and 318 and speak to my Amendment No. 319. As the noble Baroness says, there is a remarkable similarity between them.

As many Members of the Committee will be aware, there is a long history of problems with regard to British Rail land. Even if we ignore the fact that a great deal of the land that was of any use probably has now been sold, I believe that as a result of activities in the past two or three years the situation has improved. However, of the land that remains in the ownership of the British Rail Property Board, probably only 10 per cent is of use for passengers or freight. It is to that that I address my remarks.

First, my amendment suggests that Clause 217(4) should be removed because I am not happy that the terms of Clause 217 should not apply to Clause 206, which relates to the manner in which the authority exercises its function. I believe that land which is of use for rail should be used in furtherance of the authority's objectives and functions, and so on.

I was heartened by comments made by my honourable friend the Minister with responsibility for railways in the other place, Keith Hill, who indicated that he believed it right that the SRA should be able to hold land if it was likely to be required for use within approximately a 20-year horizon. That seems to me to be strategic, and I hope that the Minister here will confirm the strategic view that was expressed at that time. Therefore, the first part of my amendment refers to the need for consultation and a little strategy before land is sold.

The second part relates to an issue which I believe can be described in one or two examples. If a piece of land is retained by the SRA and an organisation wishes to acquire it for transport use, be it a car park, a station, a rail freight terminal, a branch line or whatever, the suspicion remains that the SRA, while allowing the organisation to buy it, will require the land to be sold at the highest price that could have been obtained if it had been sold for office or commercial development.

I do not believe that that is confined to transport. I believe that it is a Treasury rule covering all departments that the highest price must be obtained for a piece of land, regardless of its use. Only 100 or so sites may fall within that category, but they are important sites. It would be nice to think that the SRA could agree with the industry and others and get a commitment from Ministers that they would be free to deal with the issue without having to get the highest price relating to commercial development.

I hope that that was a helpful comment. I look forward to hearing what my noble friend has to say.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions) 1:15 am, 17th July 2000

I understand noble Lords' concerns to ensure that surplus land is not lost by default. The aim of the amendments is to give some statutory protection to land that will pass from the British Railways Board to the SRA. Amendment No. 319 would have the further effect of permitting the SRA to dispose of land and property required in furtherance of its purposes at prices reflecting its transport use.

Clause 217 deals with property, rights and liabilities of the British Railways Board that are not needed by the SRA for the exercise of its other functions. In other words, the disposal arrangements under Clause 217 apply only where the SRA considers that land does not have a railway potential. There is therefore no statutory impediment to the SRA retaining land that has a reasonably foreseeable railways use. Clause 217 enables the Secretary of State to give the SRA a direction about how land that could serve a transport use other than railways is to be disposed of or otherwise dealt with by the SRA. That could include a direction to consider alternative transport use before disposal.

There would need to be a strong case for supporting the industry by disposing of land at less than open market value rather than by the more transparent way of using the SRA's broad financial powers under Clause 210. Cases in which there is a conflict between transport use and land value will be considered by the SRA on an individual basis.

I recognise that the sales programme of the British Railways Board caused alarm in some quarters. That is why we suspended sales of remaining BR land in July 1998 and asked BR to undertake a review of its land holdings, which was completed last September.

The review showed 1,400 sites, of which only 200 had physical characteristics that would make them suitable for transport use. Transport groups and local authorities subsequently registered an interest in more than that number of sites. Many of the remainder are small, disparate sites, or ones with development problems such as poor access. A large number are remote from operational railways and have no conceivable transport use.

Following the review, we put in place new procedures that ensure that possible transport uses are identified, give priority to transport use and enable essential transport needs to be safeguarded. BR's Rail Property Limited acts as agent for sales and the shadow SRA scrutinises sites for strategic purposes.

Since we lifted the suspension of land sales, Rail Property Limited has initiated the first phase of sales by issuing formal notification of its intention to market 600 sites. Registrations of interest were invited from transport organisations and local authorities. They are now being considered by the shadow SRA.

Some land sales are going ahead where no transport interest is registered in the land, where the land is being sold for transport use or where the British Railways Board is legally committed to a sale.

The shadow SRA is currently reviewing sites where a potential transport interest has been identified and is consulting, particularly with freight interests. The SRA will consider very carefully any potential freight sites and will not seek to sell them ahead of others in the portfolio, except where there is clear demand from transport operators for freight use.

Land decisions will be taken in the context of the SRA's emerging strategy. The shadow SRA is developing procedures for the rigorous evaluation of the potential of sites. I am pleased to announce that the shadow SRA intends to appoint a new advisory board to review sites and advise on potential transport use. The advisory board will have an external chairman and members reflecting freight, passenger and local authority interests. I hope your Lordships will welcome that robust, independent source of advice.

The SRA will withhold sites from the sales process where potential strategic transport use can be established that is consistent with local transport plans. That will allow time for detailed consideration of future ownership and use and for obtaining any necessary planning consents. I hope that those assurances answer the concerns expressed about whether the sales process has identified all relevant sites, and the fear that it could pre-empt this year's local transport plans.

My noble friend Lord Berkeley said on Second Reading that he was not sure that the Minister's message had got through to the shadow SRA. I assure him that it has. That is demonstrated by the careful way in which any disposals are being considered.

I quote a few illustrations. Sites such as Menstrie and the Abbeyhill Loop are being offered for sale to Railtrack, and sales of all sites on the proposed Oxford to Cambridge route have been suspended until a decision is taken on this important proposed new rail scheme. I can assure the Committee that the shadow SRA is taking a strategic approach. The proposed property advisory board will assist this task.

Those arrangements strike the right balance between disposing of surplus land and ensuring that key sites for future transport use are identified and safeguarded. I hope that, in the light of these explanations and assurances, the noble Baroness will not press her amendment.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

That was an extremely full and interesting response. I am delighted to hear in particular of the possibility that the old Oxford-Cambridge line may be reinstated in all its glory. I remember it well.

What the Minister said deserves careful study. It makes me regret all the more that the idea of a Strategic Rail Authority was not brought into legislation some years ago because we might then have avoided some of the nonsenses which arose out of a purely commercial attitude to land, which was exhibited by the BRB. But we cannot look behind us; we must look ahead. For the moment, and probably for good, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment Nos. 318 and 319 not moved.]

Clause 217 agreed to.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

moved Amendment No. 320:

After Clause 217, insert the following new clause--

:TITLE3:("Review of British Transport Police functions

:TITLE3:REVIEW OF BRITISH TRANSPORT POLICE FUNCTIONS

.--(1) The Authority shall review and, within a period of two years from the day on which this Act is passed, publish a report on the discharge of police functions on railways and on the London Underground.

(2) In carrying out a review under this section the Authority shall consult Transport for London and any other body which appears to the Authority to have an interest in the provision and use of railway services and the London Underground.").

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

The purpose of this amendment is to seek a review of policing on the mainline railways and the London Underground and to determine how the needs of policing may be met most efficiently in future.

In a way, this is a left-over from the rail privatisation process when the matter of policing of the rail system was left in limbo. In the future, one might, for example, consider the continuation of a national force, such as the British Transport Police is today, or the transfer of responsibilities to local forces with the present funding of £93 million being used to meet the cost. Alternatively, some rail services may prefer to use private security officers for the tasks of monitoring such matters as bad behaviour at railway stations or painting on railway property and so on.

There will also be a need to take into account the recommendation of Professor Uff following the inquiry into the Southall rail accident because he said that it was unacceptable that a technical accident investigation should be directed or controlled by the British Transport Police because there was a lack of expertise and depended on outside advice. Most of the deficiencies which he found in parts of that investigation were caused by those inadequacies.

The matter of the future of the British Transport Police should not be allowed just to drift along. It should be addressed now so that when a suitable legislative opportunity arises--perhaps associated with other police legislation--some properly thought-out proposals for the railway and Underground policing are ready to be put into action. I beg to move.

Photo of Lord Berkeley Lord Berkeley Labour

I support this amendment. I was not expecting to but in the past week I have been deluged with information from freight train operators saying that a large number of incidents have taken place in which their drivers were bricked; that is, having bricks thrown at the cab through the open window.

There have been incidents in Merseyside, Tyneside and many other parts of the country. Like everybody else, train drivers have a right to be able to go about their work without risk of injury. The latest incident was an attack by 20 youths with bricks in Tyneside. Luckily, the driver was not hurt. When he reached his destination he reported the incident to the British Transport Police and asked for an escort on the way back. The alleged reply was, "You haven't been hurt so you won't get an escort". I cannot believe that was true.

It is indicative that whereas before the police had to deal with contained areas of this potential problem, it is almost as if the complete route network will be affected in future by vandalism. We all know that as train speeds increase, the consequences of vandalism could be very serious. The review is important. In the mean time I would support anything we can do to ensure that the police have enough resources to carry out these duties.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

I recognise the problems which have given rise to the amendment. I have three basic answers. First, the British Transport Police Committee already produces a report every year on BTP policing of the railways and London Underground. Although it is produced by the committee rather than the SRA, it follows the format that Home Office police forces use. It includes details of BTP's main activities and developments, and statistics on the force, including crime figures for the area. The Committee will continue to produce the report when the British Transport Police move to the SRA from the British Railways Board.

Secondly, the police committee invites Her Majesty's Inspectorate of Constabulary to undertake a primary inspection of the force every three years with a detailed assessment of the police's operational and organisational performance by an independent expert body. That report is published. A copy is sent to railway businesses and other interested parties. That is in line with Home Office forces and will continue under the SRA.

Finally, the noble Baroness, Lady Thomas, referred to the need for an independent national police authority. I can confirm that we have announced our intention to create an independent national police authority when a legislative opportunity arises. It is likely to be given many of the duties now required of a Home Office police authority, including consulting the community regarding policing and preparing an annual report on how that policing has been carried out. We shall consider again at that time the position on inspections of the force.

It is probable that those requirements will be placed on the BTP authority in the legislation to bring them into line with Home Office forces. That is the correct place for such statutory requirements. I hope that that convinces the noble Baroness that we are very much concerned with the issues to which she referred in moving the amendment.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

I thank the noble Lord, Lord Berkeley, for his support and, more particularly, the Minister for an interesting response. I am sure that my noble friend will read it and consider what to do. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 19 agreed to.

Clause 218 [Power to make bye-laws.]:

[Amendment No. 321 not moved.]

Clause 218 agreed to.

Schedule 20 agreed to.

Clause 219 agreed to.

Schedule 21 agreed to.

Clauses 220 and 221 agreed to.

Clause 222 [Regulator's power to require provision etc. of railway facilities]:

Photo of Earl Attlee Earl Attlee Conservative 1:30 am, 17th July 2000

moved Amendment No. 322:

Page 133, line 1, leave out ("a period") and insert ("such reasonable period as is").

Photo of Earl Attlee Earl Attlee Conservative

In moving Amendment No. 322, with the leave of the Committee I shall speak also to Amendments Nos. 323 to 329.

New Section 16D leaves it to the regulator to specify the period within which representations under Clause 222 are to be made. Amendments Nos. 322 and 323 introduce an objective rather than a subjective test. It is extremely important that any person at risk of receiving a direction should have adequate time to make representations. There should be some protection against the regulator imposing an unrealistic timetable.

Subsection (7) gives the regulator a wide-ranging power in connection with an application for a direction to provide, improve or develop railway facilities to require,

"the person specified in the application, the applicant, or any other person", to provide information. Amendments Nos. 324 and 325 remove that power in relation to "any other person". The power given to the regulator is far too wide. It is appropriate that the applicant and any person the target of the direction should be open to such a requirement, but not the whole wide world.

Amendment No. 326 requires the regulator to use the information obtained under subsection (7) only in connection with the proposed direction and to compensate any person providing information for its wrongful disclosure. As the Bill is drafted there is no restriction on the purpose for which information obtained can be used, and no penalty for improper disclosure. Information may be commercially and price sensitive and should be properly protected. As with unlawful disclosures of information that must be provided under other sections of the Act, compensation should be available for any person suffering loss as a result of such disclosure.

Subsection (2) enables the regulator to require the applicant for a direction to reward or make payment to the recipient of the direction. Amendment No. 327 limits such power to cases where the regulator is satisfied that the recipient will not otherwise be adequately rewarded, as set out in new Section 16E.

It is right that no one who is forced by a direction to provide, improve or develop a railway facility should lose as a result. The Bill however requires the consent of the authority to any application for a direction and runs a serious risk of creating an investment bottleneck as a result. An applicant should only have the burden of reward or payment to the recipient of a direction imposed on him if the person directed is not otherwise going to receive adequate reward. Otherwise applications will not be made and the investment bottleneck will worsen.

Finally, subsection (5) gives the regulator complete discretion to determine the amount of compensation paid to the recipient of a direction on its variation or revocation. Amendments Nos. 328 and 329 specify that the amount of compensation represents the actual loss to the recipient. Any other basis for compensation would be unfair, either to the recipient of the direction or the applicant. In those circumstances there is no case whatever for leaving the amount to the discretion of the regulator. I beg to move.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

I am aware that Members opposite wish to oppose the whole of this clause and that that will be the most appropriate opportunity for me to address any concerns on the fundamental principles of what the clause does and why we consider it necessary. With the indulgence of the Committee I should therefore like to confine my remarks to the amendments before us.

We recognise that a direction is a powerful tool, possibly requiring a lot of work from a facility owner to carry out and possibly requiring him to change his business and investment plans for a period. That is why the safeguards of procedure exist in the Bill, so that the regulator can be assured that he is requiring action from the right person and that those affected have been consulted.

Amendments Nos. 322 and 323 change the periods for written representation from a period specified by the regulator to a "reasonable" period specified by the regulator. These amendments are really not necessary. I can assure the Committee that the regulator, as a matter of public law, must always act reasonably and this general rule would apply to the period for a written representation. If he gave an unreasonable period to respond to a notice, then he would be open to legal challenge.

Amendments Nos. 324 and 325 add the authority to those persons from whom the regulator can request information to help him determine an application. This seems to us not only unnecessary but also, I fear, inappropriate. The Rail Regulator and the SRA are both regulators, and both have an equally important role to play. This is a relationship of equals, distinct and complementary. It would, I feel, be wholly wrong for the regulator to be able to direct the SRA. If this were truly necessary, then it would be for the Secretary of State to direct. However, noble Lords will not be surprised to learn that we do not, in fact, consider these provisions necessary. This process is not initiated by the regulator, but either by the SRA or with the support of the SRA. It will, therefore, be the SRA that is keen to promote a scheme as part of its strategic plan for the network. This power will only ever be used when the improvements cannot be obtained by other means and the SRA will have to be fully behind them.

Amendment No. 326 is also unnecessary. It states that the regulator may not use information given to him for the purposes of the direction; that he may not disclose such information; and that he would be liable for compensation should he disclose information. The issue here is of course commercial confidentiality and the need to protect sensitive information. We are aware of the importance of such confidentiality and it would be improper for any public body to misuse information. But, in common with other regulated utilities, the matter is already dealt with: in this case in the Railways Act 1993 into which the provisions in Clause 222 will be inserted. Section 145 of the Railways Act provides that information obtained under that Act shall not be disclosed without consent. It also makes such disclosure a criminal offence. There are exceptions to the prohibition on disclosure, such as disclosure of information to other regulators for the purposes of their functions, but that is wholly appropriate and the same as for other utilities.

Amendments Nos. 327, 328 and 329 look at variation or revocation of a direction. In another place, the Opposition raised the case in variation or revocation where the facility owner had already carried out work, which, because of the variation or revocation, proves abortive. They argued that, in such a case, compensation should be payable. We agreed and amendments to provide compensation were put forward and accepted on Report in another place. However, I welcome the opportunity to be able to assure the Committee that the Bill now provides compensation if work proves abortive. The regulator will be able to determine the appropriate level of such compensation.

I shall now deal briefly with the effect of new Section 16G(4) and (5) to the Railways Act 1993, to which these amendments relate. Where the regulator gives a direction under new Section 16A of the Railways Act to develop a facility he must be satisfied that the facility owner will be adequately rewarded for it through a combination of payments by the applicant, future receipts, and so on. There may be circumstances where the applicant seeks to vary a direction, either wishing to extend or to cut back on the facility. This does not change the presumption that the varied facility must be the subject of an adequate reward--hence new Section 16G(4).

Sometimes, however, the facility owner may have put a large amount of work and resources into a facility in pursuance of a direction which will be wasted work if the direction is varied or revoked. In the case of a variation, the adequacy of the reward under Section 16G(4) relates to the new facility and not what was originally planned. Therefore, it is difficult to apply Section 16G(4) to liabilities that may have been incurred in connection with the original facility but are of no relevance for the new facility. Where a direction is revoked, Section 16G(4) may be of no use at all.

It is because of this that we amended Section 16G to give the regulator an additional power to determine liabilities, incurred in accordance with the old direction, which have been wasted. I am sure that Members of the Committee will agree that the principle of this is right. I can assure noble Lords that these amendments are unnecessary, as a result of the changes that we have already made.

Amendment No. 327 provides that the regulator cannot order compensation under Section 16F(5) if the facility owner is to be adequately rewarded under Section 16G(4). I agree with this. It is why Section 16G is expressed in terms of a discretion for the regulator. He will only exercise the power where he needs to, such as where something is not caught through the adequate reward mechanism of Section 16G(4). It would be unreasonable to exercise the power if it amounted to double compensation and it is not necessary to express this.

Amendments Nos. 328 and 329 require that compensation should determine what loss has been, or is likely to be, suffered and set off any sums received against this net from this benefit. I assure the Committee that the regulator will be in the business of assessing the appropriate level of compensation and this will constitute the wasted works less any receipts. Again, these amendments are unnecessary. It would be unhelpful to limit the regulator's discretion by specifying a formula. The regulator will look at all the circumstances of a variation or revocation and act in the most appropriate way. With those explanations, I hope that the amendments will be withdrawn.

Photo of Earl Attlee Earl Attlee Conservative

I am grateful for the Minister's informative response to my amendments. With the usual caveat, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 323 to 329 not moved.]

On Question, Whether Clause 222 shall stand part of the Bill?

Photo of Earl Attlee Earl Attlee Conservative

This key clause goes to the heart of the new powers which the Government are taking in this Bill. It gives the regulator powers to direct investment. This seems to be unwarranted interference in the operation of a private company and is of considerable concern to Railtrack. Ministers have said that this power will be used only as a last resort, but we do not see why it is necessary at all.

There are some limits on the power, which is some comfort, but it remains the case that the regulator has only to ensure that "adequate return" is provided for this compulsory investment. Nowhere is it set out how the regulator is to determine what an adequate return is, or even where the capital is to come from.

This clause seems unnecessary and gives powers to the regulator and the SRA which have the potential to be used unwisely. The current incumbents may proceed with caution but their successors would not be bound to take a similar approach. We remain uneasy at the extent of these powers to direct a private company where it must make its investment. We therefore oppose the Question that Clause 222 stand part of the Bill.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

Clause 222 is a new power for the rail regulator to give a direction to a person in a position to do so to improve an existing facility or to provide a new facility. This power can be exercised only on an application from the authority or a third party with the consent of the authority. This power will ensure that improvements can be made to the network where the authority considers that they are in the public interest.

The clause is not designed to replace the normal commercial judgments and investments of facility owners such as Railtrack or EWS. Nor does the new section preclude voluntary arrangements between a facility owner and someone wishing to agree terms for an enhancement. The clause will enable a facility to be built which is in the public interest. In such a case the SRA can invest in the facility and the clause provides the element of compulsion necessary to ensure that an investment takes place.

The clause does not replace Condition 7 of Railtrack's licence which requires Railtrack to make reasonable enhancements. However, Condition 7 applies only to Railtrack and not to other facility owners. In the case of Condition 7 only the regulator can enforce a direction and third party rights arise only in the event of a breach of a final or provisional order. Under this clause, in contrast, the applicant will be able to take action to enforce the direction and third parties may also be able to take action if they are prejudiced by non-compliance with the directions.

There may well be cases where the SRA considers that there is a strategic need for a new or improved facility and the person in control of the facility may have a short-term view not wishing to make the investment or may have other priorities. It is in these cases that this clause will provide the balance between the interests of facility owners and the long-term strategic needs of the railway.

An improvement may be sought by a third party applying direct to the rail regulator, but they must have the consent of the SRA. This will ensure that there is a genuine interest wider than the commercial interest of one part and that it fits with the wider aims of the authority. In all cases the rail regulator must be satisfied that there will be adequate reward for the improvements or new facilities. This will depend on the facts and circumstances of the case. It means that the regulator will take a view that the facility owner will not be out of pocket. This does not mean that the facility owner must be remunerated for the facility in advance. We have made it clear that the regulator is able to take into account indirect receipts and other benefits that are likely to accrue to the facility owner. Where the rail regulator agrees to revoke or vary a direction to provide facilities, he must ensure that there is adequate compensation, as appropriate, for the work that has already been carried out.

The person who is to be directed must be consulted. While he will have to do everything reasonably practical to carry out the direction, a person will not remain liable if he does not have the necessary powers or rights. For example, it may be reasonable for a person directed to use all reasonable endeavours to apply for planning permission, or even to promote a Transport and Works Act order, but it may not be reasonable to say that he has failed to comply with the direction if planning permission is refused.

There are some cases where it would be disproportionate to apply this power--for example, in the case of heritage railways, which are not part of the strategic network. We have therefore given the Secretary of State the power to exempt certain railway facilities from the power.

This is a power that we would only expect the SRA to request as a last resort. As a check, the final decision belongs to the rail regulator. He will be operating under his duties in Section 4 of the Railways Act 1993, including the duty to act in a way which he considers will not make it unduly difficult for the holders of network licences to finance their activities.

We agree that it is normally the duty of the railway industry, facility owners, franchise holders and others to invest sensibly for the development of the railway, but there may be cases where investment which should occur does not. It is reasonable in those cases for the regulator to have the power to ensure that vital improvements are carried out where there is no voluntary means of securing them.

Photo of Lord Berkeley Lord Berkeley Labour 1:45 am, 17th July 2000

Before my noble friend sits down, does he agree that although condition 7 of Railtrack's licence requires it to provide for the reasonable requirements of its customers, there is a let-out which states that it does not need to do anything that would put its finances in jeopardy. There have been an awful lot of requests for investment to Railtrack, which has not happened. I believe that it is essential that the clause remains in the Bill for that very reason. If the SRA, in trying to be strategic, says to Railtrack "Will you invest?"--and it says "No"-- there is nothing the SRA can do about it without this clause.

Secondly, if the industry is lucky enough to get a few crumbs from the announcements tomorrow and later this week--which I hope it does--that investment has to be invested where the Government want it to be, presumably through the SRA. I certainly believe that this clause must stand part of the Bill.

Photo of Earl Attlee Earl Attlee Conservative

I am grateful for the Minister's explanation. Perhaps I can just tempt him to give me an example of where the power would be used. The noble Lord, Lord Berkeley, appears to have got closer, but I cannot picture a situation where the power would be necessary.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

Again I do not want at this time of night to indulge in trying to invent speculative cases. I rest on the assurances that I have given to the noble Earl. I ask him to withdraw his objection to Clause 222 standing part of the Bill.

Clause 222 agreed to.

[Amendment No. 330 not moved.]

Clause 223 [Amendment of objectives]:

[Amendments Nos. 331 and 332 not moved.]

Clause 223 agreed to.

Clause 224 [Penalties]:

Photo of Earl Attlee Earl Attlee Conservative

moved Amendment No. 333:

Page 138, line 22, at end insert ("; and

(d) the desirability of providing a financial incentive for the owners of the railway network to run more trains and for a fair division of responsibility for train delays, but no policies may be adopted that will have the effect of imposing disproportionate penalties or materially altering the parameters within which an existing franchise was granted").

Photo of Earl Attlee Earl Attlee Conservative

In moving Amendment No. 333 I shall speak also to Amendments Nos. 334 to 337 and 371.

This amendment is designed to allow us to explore the new provisions for the imposition of fines and penalties. We all accept that as a last resort there needs to be a penalty regime to punish breaches of obligations. However, these powers are wide-ranging and it is in the interests of both the railway operators and the travelling public that policies on enforcement are clear and issued in advance.

In particular, there needs to be guidance on the proportionality of any such fines. There has been concern about the provision for unlimited fines contained in the Utilities Bill. It appears that similar powers are contained in the Bill and there is no indication of the scale of any such penalties. We seek the assurance of the Minister that any fines and penalties will be reasonable, proportionate and based on clarity over the breach of obligations.

There is a clear risk that, if such clarity is not forthcoming, the provisions in the Bill would allow a maverick regulator to pursue an unreasonable course, which would then be challenged in the courts, wasting the resources of the railway company and that of the regulator, to the detriment of the travelling public.

It is important that there is sufficient time for representations in relation to penalties to be made. The timescales in the Bill are short and Amendments Nos. 334, 335 and 336 bring the timescale into line with the time for representations in relation to orders under Section 56 of the Railways Act 1993.

Subsection (1) gives the appropriate authority two years in which to serve a penalty notice. Amendment No. 337 reduces this period to one year. One year should give the appropriate authority time enough to impose a penalty notice. Any authority that takes longer than one year, which is in any event more than adequate, to deal with a contravention is not doing its job properly and the Bill should not encourage such slacking by allowing such an over-generous time for imposition of penalties.

Under new Section 57B the authority and the regulator are to publish policies in relation to penalties. That paragraph stipulates that failure to publish such policies does not invalidate any penalty imposed. Amendment No. 371 allows for adjustment of any penalty imposed before publication if it is excessive by reference to such policy.

If a penalty is imposed before the relevant policy has been formulated, it may turn out in the light of any such policy to be wildly excessive. That could lead to vastly differing penalties imposed for the same default. It is rightly Parliament's intention that penalties should be governed by published policies and that anyone who suffers as a result of a delay in publication of those policies should have a remedy. I beg to move.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

These amendments all impact on the enforcement regime which the Bill enhances from the provisions in the Railways Act 1993, specifically because past regulators have complained that they did not have sufficient tools to ensure that problems are put right both effectively and speedily. I agree that it must be fair to train operating companies and facility owners, but it must also be fair to the users of the railway.

Noble Lords will also have in mind that enforcement is the end of the process. It means that an operator or facility owner has already failed to meet its contractual or licence obligations. The regulator and the SRA propose to improve the positive incentives to drive performance, whether by replacement franchises or as a result of the periodic review of the access charges for Railtrack. The enforcement regime is the other side of the equation.

Amendments Nos. 334, 335 and 336 all impact upon the timetables laid down for various parts of the enforcement regime and extend the timescales. There is a balance to be struck here. Yes, we must allow for reasonable periods but, equally, the enforcement regime must have the teeth to be effective. Our intention has been to speed up the enforcement in appropriate cases. We consider that the timescale for notice requirements for any modification of a proposal to impose a penalty is open to expedition because a modification could be more than trivial, but nevertheless easily and quickly dealt with. For example, the regulator or the SRA may wish to draw attention to some additional facts which justify the imposition of a penalty which they consider to be beyond dispute.

But we are not casting the framework in stone. The periods which we have specified are minima which the authority or the regulator would need to extend where this would be appropriate. It would normally be appropriate to extend the timetable if the operator were being required to respond to a substantial series of new proposals to impose a penalty. If the regulator or the SRA imposes an unreasonable timetable on the facts of the case it will be open to challenge. But we want the process to be flexible. As regards the 14 days for paying penalties, of course operators will have the opportunity to apply for an extension under Section 55(8) and an unreasonable refusal can be challenged. That benefit was not in the Railways Act.

These arguments hold true for all these amendments. I repeat, the periods are minima. But if there is a serious ongoing breach, for example, we want the regulator and the SRA to be able to drive enforcement action at the most appropriate speed with regard to the nature of the breach, the complexity of the facts and the nature of any modifications.

Amendment No. 337 would reduce the time limitation period beyond which a breach of a franchise or licence may not be penalised from two years to one year. On the face of it that seems perfectly reasonable as it would bring the limitation period into line with that provided for other utilities in the Utilities Bill. However, this is one of those occasions when we have had to look at the different circumstances of the railways industry. We consider that in this case the longer two-year period is more appropriate.

Railway projects are different because they can be very large infrastructure projects which can have very long lead in times. For example, capacity improvements on the east coast main line which are currently under discussion will be a long-term project. It could be a year before it becomes apparent that a breach has even occurred. Once the rail regulator or the SRA is aware of a breach it needs to investigate it so that it is content that a contravention truly has occurred. That will take time. On balance, we think that a two-year limitation period is fair. It will mean that companies cannot be penalised for actions long in the past and it will therefore allow them to plan their business with certainty. But it will also allow time for a breach to become apparent and be investigated, so that even the big projects have an effective means of enforcement.

Amendment No. 371 addresses the transitional provisions in the Bill and would require that, where a penalty is imposed before the SRA or the rail regulator has published its statement of policy towards penalties, any penalty should be repaid, if, and to the extent that, it would have been materially lower under the policy. While I can understand the concern behind the amendment, I do think that it is unnecessary. The firm intention is that both the SRA and the regulator will have policies in place from the time of commencement, and the rail regulator is preparing such a draft policy in concert with his review of access charges. But policies will be illustrative and not determinative of the amount of the penalty. What determines the penalty is that it must be of a reasonable amount and that will be the case whether or not a penalty policy has been published. When our provisions are commenced the regulator and the authority will be under a duty to prepare a policy statement within a reasonable time. What this transitional provision says is that if, while a penalty policy is being prepared, an incident occurs which must be penalised, and that penalty is in every respect reasonable, it cannot be impugned on the technicality that the regulator's or the authority's policies have not been formally published.

Both the requirement for a penalty to be reasonable, which includes the idea of proportionality, and the requirement for a policy to be formulated are additional protections for railway operators in the Bill. There are no such requirements under the Railways Act.

Amendment No. 371 also misunderstands the nature of the policies. These will not comprise a firm tariff of penalties but rather constitute guidelines, at a fairly high level, of what the regulator and the authority will take into account in deciding whether to impose a penalty and what will go into the calculation of that penalty. The policies will not be so specific that a penalty imposed before publication could be reopened immediately after publication in the manner suggested by the amendment.

Amendment No. 333 would affect the statement of policy made by the rail regulator and SRA towards penalties and require them to include the need for a financial incentive for owners to run more trains and for a fair division of responsibility for train delays. It would also require that policies must not impose disproportionate penalties or materially alter the parameters within which a franchise was granted. Setting aside that train operating companies are not owners--and so this would bite only on Railtrack and other facility owners and therefore be ineffective--I think that the Committee will agree that the general aims are perfectly good ones for a penalty policy. However, we consider that the amendments are unnecessary and do not address the issue in the most helpful form to achieve the aims of a better and more efficient railway. As I have said, we are increasing positive incentives to improve the railway through such things as franchise replacement, which must be the most appropriate way to tackle these aims.

Before I complete my remarks, I should like to take this opportunity to inform noble Lords of two related matters on which we propose to table amendments on Report. They both arise from developments on the Utilities Bill which we propose to follow. First, we propose to amend the Bill to provide that no penalty imposed by the regulator or the SRA may exceed 10 per cent of turnover of the licence holder, licensee or franchise operator. Turnover will be determined in accordance with an order made by the Secretary of State, subject to an affirmative instrument.

Secondly, we propose to amend the Bill to ensure that the regulator or the SRA does not impose a licence penalty on the licence holder until it is satisfied that the most appropriate way of proceeding is by the regulator under the Competition Act. This will deal with the issue of double jeopardy.

I hope that noble Lords will welcome this announcement and that, with my earlier explanations and reassurances, the noble Earl will feel able to withdraw his amendment.

Photo of Earl Attlee Earl Attlee Conservative 2:00 am, 17th July 2000

I am a little disappointed that the Minister thinks that my amendments are unhelpful. All of my amendments are designed to be helpful. I thank the Minister for his explanation of why my amendments appear not to be perfectly drafted and I thank him also for giving advance warning of the amendments that he intends to table at a later stage of the Bill. In the meantime, subject to the usual caveats, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 334 to 337 not moved.]

Clause 224 agreed to.

Clauses 225 and 226 agreed to.

Schedule 22 agreed to.

Clause 227 [Freight assistance by Scottish Ministers and Welsh Assembly]:

[Amendments Nos. 337 to 339 not moved.]

Clause 227 agreed to.

Clause 228 agreed to.

[Amendments Nos. 340 and 341 not moved.]

Schedule 23 [Finances and procedures of rail users' consultative committees]:

[Amendments Nos. 342 and 343 not moved.]

Schedule 23 agreed to.

Clauses 229 and 230 agreed to.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

moved Amendment No. 344:

After Clause 230, insert the following new clause--

:TITLE3:DIRECTIONS REQUIRING GRANT OF LEASE

(" . In the Railways Act 1993, omit section 17(5).").

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

I wish to move the amendment standing in my name and those of my noble friends. Amendment No. 344 would insert a new clause after Clause 230 which comprises only a simple phrase, seeking to delete Section 17(5) of the Railways Act 1993. Section 17 states that:

"Nothing in this section authorises the Regulator to give directions to any person requiring him to grant a lease of the whole or any part of a railway facility".

The amendment addresses the use and running of railway stations. It would provide that the regulator may intervene to ensure that adequate space is made available in railway stations for the provision of facilities for passengers, rather than being allocated by Railtrack for commercial trading.

Railtrack currently manages 16 major stations and seeks to take over many more when the current franchises expire. This is a matter of concern to the train operating companies and to ATOC. The amendment would enable an appeal to be made to the regulator if a proposal to redevelop a station is disadvantageous to passengers or to franchise train operators.

An example of the way in which the redevelopment of a station can be disadvantageous is where non-money-making functions, such as the provision of lavatories, rest places for staff, or other facilities, are removed to the furthest corners of the railway station, while places to eat or sell things which provide a good commercial return and for which rental can therefore be charged, to the benefit of Railtrack, are situated in the more prominent parts of the station. The disadvantages to passengers are perfectly clear. I beg to move.

Photo of Lord Berkeley Lord Berkeley Labour

In supporting the amendment, perhaps I may make a couple of points. The important thing is that the train operators believe that they are closest to their customers and have a better knowledge of what customers want at a station. The amendment would also bring some competition into the operation of stations rather than giving them all to Railtrack. It would mean that they could appeal to the rail regulator, as the noble Baroness has said.

Concerns may arise in regard to Railtrack's financial position, but that would be protected by the rail regulator's obligation to ensure that Railtrack is able to finance its activities. We do not feel that there is a problem. I understand that some negotiation is going on between Railtrack and ATOC at the moment. It may well be that by the time the Bill reaches its Report stage the matter will have been resolved. At present, there is a strong feeling among the train operators, which I support, that the amendment is highly desirable.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

Amendment No. 344 repeals a prohibition on the regulator directing a person to grant a lease of a railway facility or part of one. The aim is to bring leases within the regulatory umbrella, but we think that a more complicated amendment would be necessary to achieve this effect. However, I shall concentrate on the underlying principle rather than any technical omissions.

The current regulatory regime is based on the concept of permission to use railway facilities. It is not directly concerned with "ownership". The amendment therefore seeks to add a new regulatory regime on top of the existing public interest controls through licensing and access arrangements.

We gave careful consideration to the representations that we received from the Association of Train Operators. On balance, we have concluded that the regulatory controls under the Railways Act, as amended by this Bill, are sufficient to protect the public interest.

Even if there is no lease, train operators can secure the rights they need to operate their business through access agreements with Railtrack. The terms of such agreements have to be approved by the regulator, who also has powers of direction under the Railways Act.

The current station access conditions require Railtrack and other station facility owners to reach agreement with or consult various parties before changing arrangements at stations. The regulator can also control the operation of stations through the granting of licences.

The Bill clarifies that the regulator has the flexibility to determine that matters in access agreements might better be dealt with alternatively, or as well as, in a licence. This would have the effect of moving enforcement for the matter from the parties to the regulator, subject to the consent of the licence holder or following a referral to the Competition Commission. The regulator is considering changes to the station access regime and the enhanced powers in this Bill may be of assistance.

I understand that the train operators' concerns surfaced after reported statements by Railtrack. I shall therefore move on to this aspect of the train operators' case for legislative change.

Following representations from train operators, Railtrack has moved to reassure them, the shadow SRA and the Government of its intentions. I am pleased to inform the Committee that, after extensive discussions with ATOC, Railtrack has made a commitment to the shadow SRA that it will offer leases on broadly comparable terms to such operators as the franchising director--in future the SRA--nominates during the franchise replacement process. The agreement will provide a mechanism to resolve the terms, in the event that the parties cannot agree. It will cover all of Railtrack's franchised stations and leased areas on major stations for the replacement of every franchise in the country. Railtrack's commitment will be made effective through either a memorandum of understanding or a legally binding agreement between Railtrack and the franchising director.

The creation of a new power for the regulator to direct the granting of a lease would be a fundamental shift in railway regulation. It should not be undertaken lightly. The existing matrix provides a high degree of regulatory influence and control. We believe that the controls under the amended Railways Act, supplemented by the new assurances given by Railtrack, are sufficient to protect the public interest in stations.

I hope that, in the light of that information, the noble Baroness will withdraw the amendment.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

That was a full response--so full, I did not follow every word. I will carefully read the Minister's comments, then consider what to do next. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 24 [Review of access charges by Regulator]:

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

moved Amendment No. 345:

Page 283, line 24, after ("agreement") insert ("in respect of such access").

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat

This schedule is an addition and allows an appeal to the Competition Commission against the decision of the rail regulator on a periodic review of access charging. Amendment No. 345 confines an appeal to the access charge and does not allow the commission to probe issues such as performance regimes. Amendment No. 349 adds other beneficiaries to those allowed to appeal against the determination of an access charge. At present, the right of appeal is confined to the facility owner, Railtrack. Beneficiaries would be added, among which would be Freightliner. I beg to move.

Photo of Lord Berkeley Lord Berkeley Labour

I support both amendments. There is wide interest in this abstruse but important matter of clarification. Also, it seems extraordinary that a beneficiary cannot appeal when the facility owner and other parties can do so.

Photo of Earl Attlee Earl Attlee Conservative

Several of my amendments are in this group but, although I am bright eyed and bushy tailed, we ought to make progress.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

I do not know whether that means I should respond only to Amendments Nos. 345 and 349. The group concerns access charges and the Competition Commission's right to veto proposed licence or access charges. The Bill brings the railways regulatory regime closer into line with equivalent utilities regimes. I do not recognise Amendment No. 345 from the speeches made in favour of it, because it would restrict the scope of the access review mechanism to charges for access, which would be too restrictive. Access contracts cover charges for access but also a number of ancillary services such as signalling and timetabling--without which access would be meaningless. Payment for those services should be capable of review.

Amendments Nos. 347, 349, 351 and 352 would give train operating companies the right to object to the regulator's proposed decision on the access charge review. The companies' rights are effectively preserved by the new arrangements. They do not currently have a right to object to the findings of a review because that is principally a matter between the regulator and Railtrack. TOCs are customers of Railtrack and, in determining the access charge, the regulator effectively supplants what would otherwise be a commercially unequal negotiation between a monopoly supplier and its dependent customers. We have put in place arrangements which prevail in other utilities. We do not believe that it is right to extend to train operating companies the right to a review notice.

Without referring to any other Conservative amendments, I should like to deal with Amendment No. 348 which corrects a cross-referencing error. I am grateful to the noble Earl, Lord Attlee, for noticing that error. I am pleased to accept the noble Earl's amendment, even though he has not spoken to it.

Photo of Baroness Thomas of Walliswood Baroness Thomas of Walliswood Liberal Democrat 2:15 am, 17th July 2000

We should congratulate the noble Earl for his victory. Perhaps if none of us said anything about our amendments they would all be accepted. That would be a very novel way to conduct the Committee stage. I cannot be quite as bright-eyed and bushy-tailed as the noble Earl because obviously I did not make clear the purpose of Amendment No. 345. Its purpose is not to confine the review of access charging simply to access charges but to the appeal against the review. However, at this late hour I shall not press the amendments. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 346 and 347 not moved.]

Photo of Earl Attlee Earl Attlee Conservative

moved Amendment No. 348:

Page 284, line 39, leave out ("17(6)") and insert ("17(7)").

On Question, amendment agreed to.

[Amendments Nos. 349 to 356 not moved.]

Schedule 24, as amended, agreed to.

Clauses 231 and 232 agreed to.

[Amendment No. 357 not moved.]

Clause 233 [Transfer of Regulator's functions to Secretary of State]:

[Amendment No. 357A not moved.]

Clause 233 agreed to.

Clauses 234 to 238 agreed to.

Schedule 25 agreed to.

Clause 239 agreed to.

Clause 240 [Licence modifications following Competition Commission report]:

[Amendments Nos. 358 to 360 not moved.]

Clause 240 agreed to.

Clause 241 [Competition functions of Regulator]:

Photo of Earl Attlee Earl Attlee Conservative

moved Amendment No. 360A:

Page 155, leave out line 32.

Photo of Earl Attlee Earl Attlee Conservative

Clause 241 threatens market uncertainty in the business of raising finance for new railway rolling stock and thus jeopardises future investment in new trains. The Government introduced Clause 241 into the Bill in another place. There was little, if any, debate on it and this is the first opportunity for Parliament properly to consider it.

Clause 241 is said to "clarify" the powers of the rail regulator under the Competition Act 1998. It deals with powers over railway competition issues not explicitly covered by the Railways Act 1993. They are the areas in which the rail regulator exercises concurrent functions with the Director General of Fair Trading. The Competition Act 1998 gave the rail regulator concurrent functions with the DGFT over "railway services".

Clause 241(3) replaces "railway services" with the term "services relating to railways" and specifically defines them in paragraphs (a) to (d) as railway services; most importantly, the provision or maintenance of rolling stock; the development, maintenance or renewal of a network; and the development, provision or maintenance of information systems. There is no need for the clause, in particular paragraph (b). That clearly applies to the rolling stock companies (ROSCOs) which own the existing rail rolling stock and lease it to the operators. The ROSCOs are the source of investment in the trains.

The regulator already believes that he has the powers contained in paragraph (b). He has said that he is going to question the train operating companies later this year to check that the rolling stock suppliers are not acting uncompetitively. The ROSCOs accept that they are covered by the Competition Act term "railway services". Any anti-competitive practice would be covered by that Act and the rail regulator would exercise concurrent functions in any OFT inquiry into their market.

The ROSCOs have published codes of conduct agreed with the regulator. The codes set out how they will behave towards new and existing customers, particularly if rolling stock moves from one operator to another in the event of a franchise changing hands. If Clause 241 does not represent an extension of the powers of the regulator, there is no need for it. If Clause 241 does represent an extension of the powers of the regulator, the additional regulatory risk will affect the international sources of funding which the ROSCOs use to raise new capital for the trains. It would drive up the cost of capital, make capital harder to obtain and make financing new trains more difficult. And no one has been consulted about it.

ROSCOs have already raised £2.4 billion for investment in new rolling stock. Over the next 10 years, £10 billion will have to be found to replace ageing trains and provide new trains to meet the 50 per cent growth in the number of rail passengers, which everyone, including the Government, want.

All that will have to come from private investors, who need a stable regulatory environment. At the least, Ministers should state explicitly that Clause 241 does not conceal a hidden agenda for greater interference in the rolling stock market. It must guarantee that a regulator will not use this clarification to extend his powers into detailed interference in the operation of the rolling stock market. I beg to move.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

I listened carefully to the noble Earl, Lord Attlee, and I can assure him that there is no hidden agenda. The amendment would remove the provision and maintenance of rolling stock from the list of services where the rail regulator has concurrent powers with the Director of Fair Trading under the Competition Act. Since 1st April, the rail regulator has had powers under the Competition Act 1998 in relation to anti-competitive agreements and so forth, which relate to the supply of railway services. It is widely assumed that agreements for the maintenance and provision of rolling stock by the rolling stock leasing companies relate to the supply of railway services and in our view that is the correct interpretation.

However, as the Railways Act 1993 defined "railway services" narrowly as "passenger goods, light maintenance, station and network services", and rolling stock services are none of those, it would not be beyond the wit of the law to argue that agreements relating to railway services should be narrowly construed to mean agreements for railway services and therefore exclude rolling stock services.

We want to put the position beyond doubt, with clarification that services provided by the rolling stock leasing companies, and also railway engineering and information services, fall within the orbit of the regulator's jurisdiction under the Competition Act 1998. I hope that that is the assurance for which the noble Earl was looking.

Photo of Earl Attlee Earl Attlee Conservative

I shall study carefully what the Minister said. With the usual caveats, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 241 agreed to.

Clauses 242 and 243 agreed to.

Clause 244 [Passenger Transport Executives]:

[Amendments Nos. 361 and 362 not moved.]

Clause 244 agreed to.

Clause 245 agreed to.

Clauses 246 to 248 agreed to.

Schedule 26 agreed to.

Clause 249 agreed to.

[Amendment No. 363 not moved.]

Photo of Earl Attlee Earl Attlee Conservative

moved Amendment No. 364:

After Clause 249, insert the following new clause--

:TITLE3:INFORMATION ABOUT CAPACITY AND REGIONAL FINANCIAL PERFORMANCE

(" . The Authority shall exercise its powers under section 80 of the Railways Act 1993 to obtain information (and publish the same in such manner as is calculated to bring it to the attention of those with an interest in such information) at such intervals as it may consider appropriate regarding--

(a) spare capacity in respect of railway facilities and network installations, and

(b) assets, revenue and profits by reference to such regions as the Authority may consider appropriate.").

Photo of Earl Attlee Earl Attlee Conservative

In moving Amendment No. 364, I wish to speak also to Amendment No. 365. If the railway service is to improve and expand, new operators should be encouraged to come onto the scene. In order to encourage them, information about where spare capacity and commercial opportunities exist should be made available. It has been suggested that Railtrack's monopoly over track and signalling could be open to tender on certain stretches of the existing network. This new clause will oblige Railtrack to split its figures in order to reveal the assets and make clear the revenues and profits on a regional basis. That better accounting will help in negotiations for the upgrading of lines.

Amendment No. 365 is designed to ensure that Railtrack's maintenance of track and other facilities is monitored closely and that it is named and shamed for failings in that respect. I beg to move.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

I contend that these amendments are not necessary. These matters are already within the jurisdiction of the Rail Regulator and he is dealing with them. He has a consultation process under way in relation to a set of licence modifications under Sections 12 to 15 of the Railways Act 1993. Those relate to the setting of access charges by Railtrack, the information that it provides annually to the regulator about its activities in relation to the network management statement, and matters concerning the condition, capacity and capability of Railtrack's assets.

The six separate regional supplements to the network management statement focus on regional investment expenditure and on the role of the rail network in the economic and social development of each region. They reflect the development of regional transport strategies and local transport plans. In November last year the regulator announced that he also intended to consult about a further licence condition requiring Railtrack to establish and maintain a comprehensive and reliable register of its assets.

Those actions cover the elements that the amendments would require. Therefore, the amendments duplicate existing work of the Rail Regulator. I hope that the noble Earl is reassured by that and that he will withdraw his amendment.

Photo of Earl Attlee Earl Attlee Conservative

I thank the Minister for his response. I shall read it in Hansard and, in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 365 not moved.]

Photo of Earl Attlee Earl Attlee Conservative

moved Amendment No. 366:

After Clause 249, insert the following new clause--

:TITLE3:PERMISSION TO CONSTRUCT OR OPERATE NEW RAILWAY FACILITIES ETC

(" .--(1) Any person may apply to the Authority for permission to construct or operate new railway facilities or new network installations and the Authority may grant such permission on such terms as it may consider appropriate.

(2) A permission granted under subsection (1) shall not obviate the need for the applicant to obtain the appropriate licence from the Regulator and such other permissions and consents that may be necessary for the purpose of constructing or operating such railway facility or network installation or to enter into any access contract that may be required in connection therewith.

(3) In the event of a dispute between the applicant and any relevant facility owner or installation owner as to the charges payable to such facility owner or installation owner under any access contract required, either person may refer the matter to the Regulator whose ruling as to such charges shall be binding on the applicant and the relevant facility owner or installation owner.").

Photo of Earl Attlee Earl Attlee Conservative

This amendment is designed to allow any company that wishes to build new lines not provided by Railtrack to apply for permission to the Strategic Rail Authority or to the Secretary of State. That could allow micro-franchises to be set up to run local trains in rural or urban areas. It would also allow companies to build cheap rail lines for the transit of freight. I beg to move.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

This proposed new clause is--a splendid word for this time of night!--otiose. The authority does not have the standing to give permission to any person to construct or operate facilities. Depending on who the applicant is and what permitted development rights already exist, a person may have no need to gain permission from a public authority. If existing powers and rights are not sufficient, then procedures to gain those are already in place under the Transport and Works Act. Applications for orders under that Act are made to the Secretary of State for the Environment, Transport and the Regions. The authority can make its view known to the Secretary of State and may appear at any public inquiry.

The other provisions in the amendment are already incorporated in the Railways Act 1993. Section 6 of that Act requires the operator of a railway asset to have a licence or an exemption. Sections 17 and 18 cover the need for regulatory approval of contracts for access. The ruling of the regulator over access charges is already covered by Section 17 of the 1993 Act.

The new clause could not serve a useful purpose. There is already a well used procedure to allow persons to construct and use railway facilities. I hope that with that explanation the noble Earl will be able to withdraw his amendment.

Photo of Earl Attlee Earl Attlee Conservative

I thank the Minister for his response. It is disappointing when the Minister does not support an amendment, but I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 250 agreed to.

Schedule 27 [Minor and consequential amendments about railways]:

Photo of Earl Attlee Earl Attlee Conservative

moved Amendment No. 367:

Page 312, line 13, leave out paragraph 19.

Photo of Earl Attlee Earl Attlee Conservative

I shall speak also to Amendments Nos. 368 to 370. Paragraph 19 appears innocuous but it gives the Secretary of State the power to grant exemptions from licences at any time, whereas under the 1993 Act such exemptions could be granted only when the Act came into force and were a tool in setting the system up. An ongoing power as proposed in the clause could be abused. The amendment would remove it.

Amendment No. 368 would delete sub-paragraph (3), which removes the obligation on the Secretary of State to publicise any exemption granted from Sections 17 and 18 of the 1993 Act to those persons to whom it applies. It is difficult to see the point of removing that requirement.

On Amendment No. 369, if a rail operator has been substantially prejudiced by a failure to comply with the procedural requirements on making a penalty order, Section 57(2) allows a court to impose a lesser monetary penalty rather than quash the order. A schedule defect should not always lead to the voiding of the substantive action. The court should be able to decide when the operator has been so severely prejudiced by the procedural defects that the penalty should not be allowed to stand and when the prejudice is not so severe and a reduction in the penalty is more appropriate.

Amendment No. 370 would restore the provisions in Section 80(6) of the 1993 Act that anyone failing to provide information as required under that section is guilty of an offence and liable to a fine. The Bill would weaken the regulatory system by deleting that provision. Why should it not be an offence to fail to provide information to the authority? We would support protection against improper disclosure by the authority for the person being required to provide information and compensation if it is improperly disclosed. However, we see no point in having a requirement to provide information if there is no sanction for anyone refusing to provide it. I beg to move.

Photo of Lord Macdonald of Tradeston Lord Macdonald of Tradeston Minister of State, Department for Transport, Minister of State (Transport), Department of the Environment, Transport and the Regions, Minister of State (Department for Environment, Transport and the Regions)

By revoking Section 7(10) of the Railways Act 1993 we are restoring to the Secretary of State the power to grant licence exemptions. That power originally ceased on the coming into force of Section 6 of the Railways Act. Under that power the Secretary of State made the Railways (Class and Miscellaneous Exemptions) Order 1994 which gave a broad range of licence exemptions.

While the rail regulator has the power to make exemptions, he does not have the power to make whole classes of exemptions. There may well be cases in the future in which class exemptions are appropriate. An important feature of the Secretary of State's power--as opposed to the regulator's--is that he must grant exemptions by way of an order made by statutory instrument subject to parliamentary scrutiny and a negative resolution procedure under the Railways Act 1993.

Amendment No. 368 would reinstate a requirement on the Secretary of State to publish facility exemptions. The publication requirement in Section 20 is being revoked because it is considered to be otiose.

When the Secretary of State makes an exemption, he does so by way of a statutory instrument. All public general statutory instruments must be published and sold under Section 2 of the Statutory Instruments Act 1946. That contrasts with the position when the regulator produces an exemption other than by way of a statutory instrument and where a specific duty to publish is necessary. So the removal of a Railways Act provision does not relieve the Secretary of State of the obligation to publish any exemptions which he makes. I hope that the Committee will be reassured by that.

Amendment No. 369 is unnecessary. Provisions relating to financial penalties are now wholly consolidated in new Sections 57A to 57F as introduced under Clause 224 of the Bill. The power of the court on appeal to substitute a lesser amount for a penalty imposed by the regulator or the SRA has been moved to Section 57F(4)(b) and the old power in Section 57(2)(b) is a necessary consequential repeal.

Amendment No. 370 would remove criminal liability for a failure to provide information to the SRA in response to a request. In the interests of better regulation we always look closely at whether it is appropriate to criminalise actions where there are other more appropriate sanctions. If a person fails to respond to a request by the SRA to provide it with information, the SRA can under Section 80(8) of the Railways Act ask a court to order the delivery of that information and if the person concerned refuses he could be penalised for being in contempt of court.

We consider this to be a more appropriate sanction than criminalisation. That should be kept (as it will be under Section 87(7)) to cases where the person may have deliberately falsified the information which is provided to the SRA. This is a gentle deregulatory measure, therefore, and does nothing to weaken the ability of the SRA to seek information that it needs under Section 80.

I hope that, with those explanations, the noble Earl will withdraw his amendment.

Photo of Earl Attlee Earl Attlee Conservative

The word "deregulation" was magic to me. I look forward to reading the details of the Minister's reply in Hansard. With the usual caveat, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 368 to 370 not moved.]

Schedule 27 agreed to.

Clause 251 agreed to.

Schedule 28 [Transitionals and savings about railways]:

[Amendment No. 371 not moved.]

Schedule 28 agreed to.

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

House resumed.

House adjourned at twenty-two minutes before three o'clock.