To ask Her Majesty's Government what steps they have taken to prepare for public control of a railway franchise in the event of a train operating company defaulting on its franchise agreement.

My Lords, Section 30 of the Railways Act 1993, as amended by the Railways Act 2005, places a duty on the Secretary of State to ensure that passenger services are maintained in the event of a franchise failure. The Government have well developed contingency plans in place should a franchisee default on a franchise. These plans draw on the experience gained from the termination of the Connex South Eastern franchise in 2003 and the resolution of GNER's financial position in 2006.

My Lords, I thank the Minister, but will he give me an assurance that a truly professional team of people is available to him in the event of a default of a franchise and that those people will know that they are going to operate the franchise for a long time, rather than the short time that South Eastern Trains was given, where the people running it were swept aside?

My Lords, the time was not that short for South Eastern Trains. The Strategic Rail Authority took over the franchise at the end of 2003 and ran it until April 2006, which is a fairly lengthy period. On the competence of those who will take on this role, my department has a call-off contract with First Class Partnerships, which is an organisation established by former senior British Rail managers, providing strategic, commercial operations, engineering and infrastructure rail consultancy and advice to leading rail companies, investors in rail, Governments and regulators around the globe. I have looked at the CVs of the principal officers of First Class Partnerships, whose experiences bear a remarkable resemblance to those of the noble Lord. Clearly, they are very well placed to take on these responsibilities.

My Lords, can my noble friend confirm that it is not his intention to allow franchise holders who may get into trouble mid-term to renegotiate the terms of their franchise? Does he agree that, if they were able to do so, that would send out entirely the wrong message for future franchise bids because the winners would be those who told the biggest whoppers about their projections rather than those who offered the best value for money?

My Lords, my noble friend is correct in every aspect of his question.

My Lords, in a time of considerable financial stress, some train operating companies may well be tempted to make unwelcome economies from the point of view of the travelling passengers, such as the shortening of trains, the early closure of stations, compulsory redundancies and so forth. Will the Government undertake to monitor that carefully and to take appropriate action if necessary?

My Lords, I can give that assurance. Those operating the franchises are expected to abide by the terms of their contracts, which set out their obligations in considerable detail, including their obligations in the provision of train services.

My Lords, can my noble friend confirm that, if one franchise hands the keys back, so to speak, all the other franchises operated by the same holding company will also be terminated? On that basis, can he assure the House that First Class Partnerships has enough people to run three or four franchises for an extended period, which might be required? Would there be any chance of their being allowed to go on to the end of the franchise period, as many of us asked for when Connex was being operated by the Government, because it was a rather good service?

My Lords, on cross-defaulting, we would take a decision on a case-by-case basis. We would certainly not expect to have to run a large number of franchises.

My Lords, which franchises on the Minister's red list are more vulnerable to failure, those recently awarded or those that have been in place for longer?

My Lords, it would not be appropriate for me to give details of individual franchises and our assessment of them. That is commercially confidential information. However, I can tell the noble Earl that no franchise operator has come to the Government saying that it expects to be in default of its obligations under its franchise.