'(1) The Secretary of State may make a scheme for the transfer of the whole or part of any undertaking of the operator of any network, or any property, rights or liabilities of any such operator, to another party on the application of—

(a) the operator of the network; 

(b) any local transport authority; or

(c) the National Assembly for Wales.

(2) Schedule [Transfer of network assets] (which makes further provision about transfer schemes) has effect in relation to schemes made under subsection (1).

(3) In this section, ''local transport authority'' means—

(a) a county council in England;

(b) a council of a non-metropolitan district in England comprised in an area for which there is no county council;

(c) a Passenger Transport Authority for a passenger transport area in England; or

(d) a county council or county borough council in Wales.'.

—[Mr. George Howarth.]

Brought up, and read the First time.

I beg to move, That the Clause be read a Second time.

With this it will be convenient to discuss the following:

New schedule 1—'Transfer of network assets—

TRANSFER SCHEMES: GENERAL

Transfer schemes: general

1 (1) A transfer scheme under this Schedule may—

(a) define the undertaking or part of an undertaking and property, rights and liabilities to be transferred to the transferee—

(i) by specifying or describing the property, rights and liabilities in question;

(ii) by referring to all (or all but so much as may be excepted) of the property, rights and liabilities comprised in a specified part of the transferor's undertaking; or

(iii) partly in the one way and partly in the other;

(b) provide that any rights or liabilities specified or described in the scheme shall be enforceable either by or against the transferor or transferee (or both of them);

(c) impose on the transferor or transferee an obligation to enter into such written agreements with, or execute such other instruments in favour of, the transferor or transferee or such other person as may be specified in the scheme;

(d) make such supplemental, incidental, consequential or transitional provision as the Secretary of State considers appropriate.

(2) An obligation imposed by a provision included in a transfer scheme by virtue of paragraph (c) of subparagraph (1) above shall be enforceable by civil proceedings by the transferor or transferee or other person mentioned in that paragraph for an injunction or for any other appropriate relief or remedy.

(3) A transaction of any description which is effected in pursuance of such a provision as is mentioned in subparagraph (2) above—

(a) shall have effect subject to the provisions of any enactment which provides for transactions of that description to be registered in any statutory register; but

(b) subject to that, shall be binding on all other persons, notwithstanding that it would, apart from this subsection, have required the consent or concurrence of any other person.

(4) No right of reverter, right of pre-emption, right of forfeiture, right of re-entry, right of irritancy, option or similar right affecting land shall operate or become exercisable as a result of any transfer of land—

(a) by virtue of a transfer scheme;

(b) by or under an agreement or instrument made or executed pursuant to any provision of this Schedule or pursuant to any directions given, or requirement imposed, under this Schedule; or

(c) pursuant to an obligation imposed by a provision included in a transfer scheme by virtue of paragraph (c) of subparagraph (1) above;  and, without prejudice to paragraph 12 below, any such right or option shall accordingly have effect in the case of any such transfer as if the transferee in relation to that transfer were the same person in law as the transferor and as if not transfer of the land had taken place.

(5) Subparagraph (4) above shall have effect in relation to—

(a) the grant or creation of an estate or interest in, or right over, land, or

(b) the doing of any other thing in relation to land, as it has effect in relation to a transfer of land; and any reference in that subparagraph or in the following provisions of this paragraph to the transferor or the transferee shall be construed accordingly.

(6) In any case where—

(a) any such right or option as is mentioned in subparagraph (4) above would, apart from that subparagraph, have operated in favour of, or become exercisable by, a person, but

(b) the circumstances are such that, in consequence of the operation of that subparagraph, the right or option cannot subsequently operate in favour of that person or, as the case may be, become exercisable by him, such compensation as may be just shall be paid to him by the transferor or the transferee (or by both) in respect of the extinguishment of the right or option.

(7) Any dispute as to whether any, and (if so) how much, compensation is payable under subparagraph (6) above, or as to the person to or by whom it shall be paid, shall be referred to and determined by an arbitrator appointed by the President for the time being of the Royal Institution of Chartered Surveyors.

(8) If it appears to the transferor that a person is or may be entitled to compensation under subparagraph (6) above, he shall—

(a) notify that person that he is or may be so entitled, and

(b) invite him to make such representations as he wishes to the transferor not later than fourteen days after the date of issue of the document containing the notification required by paragraph (a) above, or, if the transferor is not aware of the name and address of the person concerned, shall publish, in such manner as he considers appropriate, a notice containing information about the interest affected and inviting any person who thinks that he is or may be entitled to compensation to make such representations to the transferor within such period (being not less than 28 days from the date of publication of the notice) as may be specified in the notice.

Functions under local or private legislation

2 (1) A transfer scheme may provide that any functions of the transferor under a statutory provision—

(a) shall be transferred to the transferee;

(b) shall be concurrently exercisable by two or more transferees; or

(c) shall be concurrently exercisable by the transferor and one or more transferees.

(2) Subparagraph (1) above applies in relation to any function under a statutory provision if and to the extent that the statutory provision—

(a) relates to any part of the transferor's undertaking, or to any property, which is to be transferred by the scheme; or

(b) authorises the carrying out of works designed to be used in connection with any such part of the transferor's undertaking or the acquisition of land for the purpose of carrying out any such works.

(3) A transfer scheme may define any functions of the transferor to be transferred or made concurrently exercisable by the scheme in accordance with subparagraph (1) above—

(a) by specifying the statutory provisions in question;

(b) by referring to all the statutory provisions which—

(i) relate to any part of the transferor's undertaking, or to any property, which is to be transferred by the scheme, or

(ii) authorise the carrying out of works designed to be used in connection with any such part of the transferor's undertaking or the acquisition of land for the purpose of carrying out any such works; or 

(c) by referring to all the statutory provisions within paragraph (b) above, but specifying certain excepted provisions.

Provision of information

3 (1) Where the Secretary of State proposes to make a transfer scheme under section [Transfer of network assets], he may direct any person to whom this paragraph applies—

(a) to furnish him with such information as the Secretary of State considers necessary to enable him to make the scheme; and

(b) to do so within such time (being not less than 28 days from the giving of the direction) as may be specified in the direction; and the persons to whom this paragraph applies are the Office of Rail Regulation, the transferor, any network operator, any station operator, any franchisee, any franchise operator and any wholly owned subsidiary of any of them.

(2) If a person fails to comply with a direction under subparagraph (1) above, the Secretary of State may serve a notice under subparagraph (3) below on that person.

(3) A notice under this subparagraph is a notice signed by the Secretary of State and—

(a) requiring the person on whom it is served to produce, at a time and place specified in the notice, to the Secretary of State or to any person appointed by the Secretary of State for the purpose, any documents which are specified or described in the notice and are in that person's custody or under his control; or

(b) requiring that person to furnish, at a time and place and in the form and manner specified in the notice, to the relevant authority such information as may be specified or described in the notice.

(4) No person shall be required under this paragraph to produce any documents which he could not be compelled to produce in civil proceedings in the court or, in complying with any requirement for the furnishing of information, to give any information which he could not be compelled to give in evidence in any such proceedings.

(5) A person who without reasonable excuse fails to do anything required of him by notice under subparagraph (3) above is guilty of an offence and shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale.

(6) A person who intentionally alters, suppresses or destroys any document which he has been required by any notice under subparagraph (3) above to produce is guilty of an offence and shall be liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum;

(b) on conviction on indictment, to a fine.

(7) If a person makes default in complying with a notice under subparagraph (3) above, the court may, on the application of the Secretary of State, make such order as the court thinks fit for requiring the default to be made good; and any such order may provide that all the costs or expenses of and incidental to the application shall be borne by the person in default or by any officers of a company or other association who are responsible for its default.

(8) Any reference in this paragraph to the production of a document includes a reference to the production of a legible and intelligible copy of information recorded otherwise than in legible form; and the reference to suppressing a document includes a reference to destroying the means of reproducing information recorded otherwise than in legible form.

(9) In this section ''the court'' means the High Court, in relation to England and Wales, and the Court of Session, in relation to Scotland.

Approval of transfer schemes

4 (1) The Secretary of State shall not make a transfer scheme except after consultation with the transferor. 

(2) It shall be the duty of the transferor to provide the Secretary of State with all such information and other assistance as he may require for the purposes of or in connection with the exercise, in relation to a transfer scheme, of any power conferred on him by this section.

TRANSFER SCHEMES: SUPPLEMENTARY

Allocation of property, rights and liabilities

5 (1) The provisions of this paragraph and paragraph 6 below shall have effect where a transfer to which this Schedule applies is a transfer of all (or of all but so much as may be excepted) of the property, rights and liabilities comprised in a specified part of the transferor's undertaking, but shall not apply to any such rights or liabilities under a contract of employment.

(2) Any property, right or liability comprised partly in the part of the transferor's undertaking which is transferred to the transferee and partly in the part of that undertaking which is retained by the transferor shall, where the nature of the property, right or liability permits, be divided or apportioned between the transferor and the transferee in such proportions as may be appropriate; and, where any estate or interest in land falls to be so divided—

(a) any rent payable under a lease in respect of that estate or interest, and

(b) any rent charged on that estate or interest, shall be correspondingly apportioned or divided so that the one part is payable in respect of, or charged on, only one part of the estate or interest and the other part is payable in respect of, or charged on, only the other part of the estate or interest.

(3) Any property, right or liability comprised as mentioned in subparagraph (2) above the nature of which does not permit its Division or apportionment as so mentioned shall be transferred to the transferee or retained by the transferor according to—

(a) in the case of an estate or interest in land, whether on the transfer date the transferor or the transferee appears to be in greater need of the security afforded by that estate or interest or, where neither appears to be in greater need of that security, whether on that date the transferor or the transferee appears likely to make use of the land to the greater extent,

(b) in the case of any other property or any right or liability, whether on the transfer date the transferor or the transferee appears likely to make use of the property, or as the case may be to be affected by the right or liability, to the greater extent, subject (in either case) to such arrangements for the protection of the other of them as may be agreed between them.

6 (1) It shall be the duty of the transferor and the transferee, whether before or after the transfer date, so far as practicable to arrive at such written agreements and to execute such other instruments as are necessary or expedient to identify or define the property, rights and liabilities transferred to the transferee or retained by the transferor and as will—

(a) afford to the transferor and the transferee as against one another such rights and safeguards as they may require for the proper discharge of their respective functions; and

(b) make as from such date, not being earlier than the transfer date, as may be specified in the agreement or instrument such clarification and modifications of the division of the transferor's undertaking as will best serve the proper discharge of the respective functions of the transferor and the transferee.

(2) Any such agreement shall provide so far as it is expedient—

(a) for the granting of leases and for the creation of other liabilities and rights over land whether amounting in law to interests in land or not, and whether involving the surrender of any existing interest or the creation of a new interest or not;

(b) for the granting of indemnities in connection with the severance of leases and other matters; and

(c) for responsibility for registration of any matter in any statutory register.

(3) If the transferor or the transferee represents to the Secretary of State, or if it appears to the Secretary of State without such a representation, that it is unlikely in the case of any matter on  which agreement is required under subparagraph (1) above that such agreement will be reached, the Secretary of State may, whether before or after the transfer date, give a direction determining that matter and may include in the direction any provision which might have been included in an agreement under sub-paragraph (1) above; and any property, rights or liabilities required by the direction to be transferred to the transferee shall accordingly be regarded as having been transferred to, and vested in, the transferee by virtue of the scheme.

Variation of transfers by agreement

7 (1) At any time before the end of the period of twelve months beginning with the transfer date, the transferor and the transferee may, with the approval of the Secretary of State, agree in writing that—

(a) as from such date as may be specified in or determined under the agreement, and

(b) in such circumstances (if any) as may be so specified, there shall be transferred from the transferee to, and vested in, the transferor any property, rights and liabilities specified in the agreement; but no such agreement shall have effect in relation to rights and liabilities under a contract of employment unless the employee concerned is a party to the agreement.

(2) Subject to sub-paragraphs (3) and (4) below, in the case of an agreement under sub-paragraph (1) above, the property, rights and liabilities in question shall be transferred and vest in accordance with the agreement.

(3) Any transfer effected in pursuance of an agreement under sub-paragraph (1) above shall have effect subject to the provisions of any enactment which provides for such transactions to be registered in any statutory register.

(4) The following provisions of this Schedule shall have effect as if—

(a) any reference to a transfer to which this Schedule applies included a reference to a transfer effected in pursuance of an agreement under sub-paragraph (1) above;

(b) any reference to a transaction effected in pursuance of paragraph 6(1) above or of a direction under paragraph 6(3) above included a reference to such an agreement; and

(c) any reference to a vesting by virtue of a transfer scheme included a reference to a vesting by virtue of such an agreement.

Right to production of documents of title

8 (1) This paragraph applies where, on any transfer to which this Schedule applies, the transferor is entitled to retain possession of any document relating in part to the title to, or to the management of, any land or other property transferred to the transferee.

(2) Where this paragraph applies—

(a) the transferor shall be deemed to have given to the transferee an acknowledgement in writing of the right of the transferee to production of that document and to delivery of copies of it; and

(b) section 64 of the Law of Property Act 1925 (c. 20) shall have effect accordingly, and on the basis that the acknowledgement did not contain any such expression of contrary intention as is mentioned in that section.

Perfection of vesting of foreign property, rights and liabilities

9 (1) This paragraph applies in any case where a transfer scheme provides for the transfer of any foreign property, rights or liabilities.

(2) It shall be the duty of the transferor and the transferee to take, as and when the transferee considers appropriate, all such steps as may be requisite to secure that the vesting in the transferee by virtue of the transfer scheme of any foreign property, right or liability is effective under the relevant foreign law.

(3) until the vesting in the transferee by virtue of the transfer scheme of any foreign property, right or liability is effective under the relevant foreign law, it shall be the duty of the transferor to hold that property or right for the benefit of, or to discharge that liability on behalf of, the transferee. 

(4) Nothing in sub-paragraphs (2) and (3) above shall be taken as prejudicing the effect under the law of the United Kingdom or of any part of the United Kingdom of the vesting in the transferee by virtue of a transfer scheme of any foreign property, right or liability.

(5) The transferor shall have all such powers as may be requisite for the performance of his duty under this paragraph, but it shall be the duty of the transferee to act on behalf of the transferor (so far as possible) in performing the duty imposed on the transferor by this paragraph.

(6) References in this paragraph to any foreign property, right or liability are references to any property, right or liability as respects which any issue arising in any proceedings would have been determined (in accordance with the rules of private international law) by reference to the law of a country or territory outside the United Kingdom.

(7) Duties imposed on the transferor or the transferee by this paragraph shall be enforceable in the same way as if the duties were imposed by a contract between the transferor and the transferee.

(8) Any expenses incurred by the transferor under this paragraph shall be met by the transferee.

Proof of title by certificate

10 (1) In the case of any transfer to which this Schedule applies, a joint certificate by or on behalf of the transferor and the transferee that—

(a) any property specified in the certificate, or

(b) any such interest in or right over any such property as may be so specified, or

(c) any right or liability so specified, is property, or (as the case may be) an interest, right or liability which was intended to be, and was vested by virtue of the scheme in such one of them as may be so specified (and, if it is the transferee who is so specified, that the property, interest, right or liability has not been transferred back to the transferor by virtue of an agreement under paragraph 7(1) above) shall be conclusive evidence for all purposes of that fact.

(2) If on the expiration of one month after a request from either the transferor or the transferee for the preparation of such a joint certificate as respects any property, interest, right or liability they have failed to agree on the terms of the certificate, they shall refer the matter to the Secretary of State and issue the certificate in such terms as he may direct.

(3) This paragraph is without prejudice to paragraph 18(6) and (7) below.

Restrictions on dealing with certain land

11 (1) If the Secretary of State is satisfied on the representation of the transferor or the transferee—

(a) that, in consequence of a transfer to which this Schedule applies, different interests in land, whether the same or different land, are held by the transferor and by the transferee, and

(b) that the circumstances are such that this paragraph should have effect, the Secretary of State may direct that this paragraph shall apply to such of that land as may be specified in the direction.

(2) While the direction mentioned in sub-paragraph (1) above remains in force—

(a) neither the transferor nor the transferee shall dispose of any interest to which they may respectively be entitled in any of the specified land, except with the consent of the Secretary of State;

(b) if, in connection with any proposal to dispose of any interest of either the transferor or the transferee in any of the specified land, it appears to the Secretary of State to be necessary or expedient for the protection of either of them, he may—

(i) require either the transferor or the transferee to dispose of any interest to which he may be entitled in any of the specified land to such person and in such manner as may be specified in the requirement; 

(ii) require either the transferor or the transferee to acquire from the other any interest in any of the specified land to which that other is entitled; or

(iii) consent to the proposed disposal subject to compliance with such conditions as the Secretary of State may see fit to impose.

(3) A person other than the transferor and the transferee dealing with, or with a person claiming under, either the transferor or the transferee shall not be concerned—

(a) to see or enquire whether this paragraph applies, or has applied, in relation to any land to which the dealing relates;

(b) as to whether the provisions of this paragraph have been complied with in connection with that, or any other, dealing with that land; and no transaction between a person other than the transferor or the transferee on the one hand, and the transferor, the transferee or a person claiming under either of them on the other, shall be invalid by reason of any failure to comply with those provisions.

Construction of agreements, statutory provisions and documents

12 (1) This paragraph applies where, in the case of any transfer to which this Schedule applies, any rights or liabilities transferred are rights or liabilities under an agreement to which the transferor was a party immediately before the transfer date, whether in writing or not, and whether or not of such nature that rights and liabilities under the agreement could be assigned by the transferor.

(2) So far as relating to property, rights or liabilities transferred to the transferee, the agreement shall have effect on and after the transfer date as if—

(a) the transferee had been the party to it;

(b) for any reference (whether express or implied and, if express, however worded) to the transferor there were substituted, as respects anything falling to be done on or after the transfer date, a reference to the transferee;

(c) any reference (whether express or implied and, if express, however worded) to a person employed by, or engaged in the business of, the transferor and holding a specified office or serving in a specified capacity were, as respects anything falling to be done on or after the transfer date, a reference to such a person as the transferee may appoint or, in default of appointment, to a person employed by, or engaged in the business of, the transferee who corresponds as nearly as may be to the first-mentioned person;

(d) any reference in general terms (however worded) to persons employed by, persons engaged in the business of, or agents of, the transferor were, as respects anything to be done on or after the transfer date, a reference to persons employed by, persons engaged in the business of, or agents of, the transferee.

13 (1) Except as otherwise provided in any provision of this Act (whether expressly or by necessary implication), paragraph 12 above shall, so far as applicable, apply in relation to—

(a) any statutory provision,

(b) any provision of an agreement to which the transferor was not a party, and

(c) any provision of a document other than an agreement, if and so far as the provision in question relates to any of the transferred property, rights and liabilities, as it applies in relation to an agreement to which the transferor was a party.

(2) In relation to any such statutory or other provision as is mentioned in sub-paragraph (1) above, references in sub-paragraph (2)(b), (c) and (d) of paragraph 12 above to the transferor and to any persons employed by, persons engaged in the business of, or agents of, the transferor include references made by means of a general reference to a class of persons of which the transferor is one, without the transferor himself being specifically referred to.

14 (1) On and after the transfer date for any transfer to which this Schedule applies, any statutory provision to which paragraph 2(3) of Schedule 6 to the Transport Act 1962 (c. 46) applies if in so far as the provision in question relates to any of the transferred property, rights and liabilities, shall have effect as if— 

(a) any of the references modified by paragraph (a) of the said paragraph 2(3) were, as respects anything falling to be done on or after the transfer date, a reference to such person as the transferee may appoint; and

(b) any of the references modified by paragraph (b) of the said paragraph 2(3) were, as respects a period beginning with the transfer date, a reference to so much of the undertaking of the transferee as corresponds as mentioned in the said paragraph (b).

15 (1) The transferee under a transfer to which this Schedule applies and any other person shall, as from the transfer date, have the same rights, powers and remedies (and in particular the same rights and powers as to the taking or resisting of legal proceedings or the making or resisting of applications to any authority) for ascertaining, perfecting or enforcing any right or liability vested in the transferee by virtue of the scheme as he would have had if that right or liability had at all times been a right or liability of the transferee.

(2) Any legal proceedings or applications to any authority pending on the transfer date by or against the transferor, in so far as they relate—

(a) to any property, right or liability vested in the transferee by virtue of the scheme, or

(b) to any agreement or enactment relating to any such property, right or liability, shall be continued by or against the transferee to the exclusion of the transferor.

(3) This paragraph is without prejudice to the generality of the provisions of paragraphs 12 to 14 above.

16 (1) If, in the case of any transfer to which this Schedule applies, the effect of any agreement (and, in particular, any agreement under the Railway Road Transport Acts of 1928 mentioned in paragraph 1 of Part II of Schedule 2 to the Transport Act 1962 (c. 46))—

(a) which was executed before the passing of this Act, and

(b) to which the transferee is by virtue of this Act a party, depends on whether the transferee has power to carry on any activity, it shall be assumed for the purposes of the agreement that any activity which requires the consent of the Secretary of State under the Transport Act 1962 or the Transport Act 1968 (c, 73) has been authorised by such a consent.

17 (1) References in paragraphs 12 to 16 above to agreements to which the transferor was a party and to statutory provisions include, in particular, references to agreements to which the transferor became a party by virtue of any transfer scheme under the Railways Act 1993 (c. 43) and statutory provisions which applied to the transferor by virtue of that Act.

(2) The provisions of paragraphs 12 to 16 above shall have effect for the interpretation of agreements, statutory provisions and other instruments subject to the context, and shall not apply where the context otherwise requires.

Third parties affected by vesting provisions

18 (1) Without prejudice to the provisions of paragraphs 12 to 17 above, any transaction effected between the transferor and the transferee in pursuance of paragraph 6(1) above or of a direction under paragraph 6(3) above shall be binding on all other persons, and notwithstanding that it would, apart from this sub-paragraph, have required the consent or concurrence of any other person.

(2) It shall be the duty of the transferor and the transferee, if they effect any transaction in pursuance of paragraph 6(1) above or a direction under paragraph 6(3) above, to notify any person who has rights or liabilities which thereby become enforceable as to part by or against the transferor and as to part by or against the transferee; and if, within 28 days of being notified, such a person applies to the Secretary of State and satisfies him that the transaction operated unfairly against him, the Secretary of State may give such directions to the transferor and the transferee as appear to him appropriate for varying the transaction.

(3) If in consequence of a transfer to which this Schedule applies or of anything done in pursuance of the provisions of this Schedule 

(a) the rights or liabilities of any person other than the transferor and the transferee which are enforceable against or by the transferor become enforceable as to part against or by the transferor and as to part against or by the transferee, and

(b) the value of any property or interest of that person is thereby diminished, such compensation as may be just shall be paid to that person by the transferor, the transferee, or both.

(4) If it appears to the transferor that a person is or may be entitled to compensation under sub-paragraph (3) above, he shall—

(a) notify that person that he is or may be so entitled, and

(b) invite him to make such representations as he wishes to the transferor not later than fourteen days after the date of issue of the document containing the notification required by paragraph (a) above, or, if the transferor is not aware of the name and address of the person concerned, shall publish, in such manner as he considers appropriate, a notice containing information about the interest affected and inviting any person who thinks that he is or may be entitled to compensation to make such representations to the transferor within such period (being not less than 28 days from the date of publication of the notice) as may be specified in the notice.

(5) Any dispute as to whether any, and (if so) how much, compensation is payable under sub-paragraph (3) above, or as to the person to or by whom it shall be paid, shall be referred to and determined by an arbitrator appointed by the President for the time being of the Royal Institution of Chartered Surveyors.

(6) Where, in the case of a transfer to which this Schedule applies, the transferor or the transferee purports by any conveyance or transfer to transfer to some person other than the transferor or the transferee for consideration any land or any other property transferred—

(a) which before the transfer date belonged to the transferor, or

(b) which is an interest in property which before that date belonged to the transferor, the conveyance or transfer shall be as effective as if both the transferor and the transferee had been parties to it and had thereby conveyed or transferred all their interests in the property conveyed or transferred.

(7) Sub-paragraph (6) above applies in relation to the grant of any lease of, or any other estate or interest in, or right over any such land or other property as is there mentioned as it applies in relation to a transfer of any such land or other property; and references in that sub-paragraph to a conveyance or transfer shall be construed accordingly.

(8) If, in the case of any transfer to which this Schedule applies, it appears to the court at any stage in any court proceedings to which the transferor or the transferee and a person other than the transferor or the transferee are parties that the issues in the proceedings—

(a) depend on the identification or definition of any of the property, rights or liabilities transferred which the transferor and the transferee have not yet effected, or

(b) raise a question of construction on the relevant provisions of this Act which would not arise if the transferor and the transferee constituted a single person, the court may, if it thinks fit on the application of a party to the proceedings other than the transferor and the transferee, hear and determine the proceedings on the footing that such one of the transferor and the transferee as is a party to the proceedings represents and is answerable for the other of them, and that the transferor and the transferee constitute a single person, and any judgement or order given by the court shall bind both the transferor and the transferee accordingly.

(9) In the case of any transfer to which this Schedule applies, it shall be the duty of the transferor and the transferee to keep one another informed of any case where either of them may be prejudiced by sub-paragraph (6), (7) or (8) above, and if either the transferor and the transferee claims that he has been so prejudiced  and that the other of them ought to indemnify or make a repayment to him on that account and has unreasonably failed to meet that claim, he may refer the matter to the Secretary of State for determination by him.

Interpretation

19 (1) In this Schedule ''statutory provision'' means a provision whether of a general or of a special nature contained in, or in any document made or issued under, any Act, whether of a general or a special nature.'.

ÌMr. HowarthÌ: The new Clause and schedule would help to bring about vertical integration or full local decision-making, and because I described what was meant by that earlier in the proceedings, I hope to be brief.

The new clause and schedule would allow the Secretary of State to make a statutory scheme for vesting all assets, property rights and liabilities of a network operator—by that, we really mean Network Rail—in a successor authority or company. Network Rail is not specifically mentioned in the new clause for technical reasons. I am very supportive of the Government's proposals to restructure the railways, particularly their objectives for a more efficient, more accountable and improved railway designed to support and sustain long-term economic growth and to promote social inclusion throughout the country. They are rather grand objectives, but they are appropriate.

The new clause and the new schedule would bring significant benefits in achieving those objectives. There would be much merit and little disadvantage if the Government took a general reserve power to allow the Secretary of State to make transfer schemes involving network assets. That would provide Ministers with a powerful tool with which to deliver a range of bespoke improvements across the network, such as micro-franchises, where opportunities arise in the future. I am using what seem like marketing-men expressions, such as ''micro-franchises'', but they have a real application. I will explain later what I mean by that. The new clause and the new schedule would enable vertical integration and full local decision making in circumstances where Network Rail does not co-operate with the Government's wish to see such things happen.

In addition to the scheme transferring property that forms part of the Merseyrail network, Network Rail undoubtedly has a series of contracts with landowners, tenants, subcontractors, suppliers, utilities and other third parties, which currently support its functions in relation to the Merseyrail network. That applies to any other line where similar arrangements might be sought and put in place. Those contracts will need to be transferred to Merseyrail in order to obtain full vertical integration and local decision making.

Improvements across the network include opportunities on Merseyside that are not at present part of the vertical integration and full local decision-making proposal. I include in these—I mentioned them earlier—the extension of the Merseyrail network to Headbolt lane in Kirby in my Constituency and to Wrexham. We are very ambitious. My hon. Friend the Member for Manchester, Blackley (Mr. Stringer) and I have a vision of city regions. We are now proposing,   through Merseyrail, that the city region stretch into north Wales and of course into west Lancashire, as I referred to earlier.

The reserve power would enable the Government to sanction and deliver projects similar to those that Merseyrail ambitiously wants to pursue. The fear is that without the reserve power, the ability of the Government to ensure that such projects are delivered would be seriously weakened. The power to transfer network assets would enable the Government to overcome the problems of bureaucracy, which I know bedevils the Minister's Department. It would prevent conflicts of interest from slowing down projects or preventing them from taking place, and it would help to avoid the adversarial relationships that have done so much to damage the UK's rail network in the recent past.

It is a rather lengthy new schedule and it is a complicated new clause. I do not know why, but I suspect that my hon. Friend the Minister will tell me that all these things can happen without my new clause and new schedule. If he cannot satisfy me on that point this morning, I will take solace in the fact that he has offered to meet to discuss these matters. No doubt he will provide fuller and better particulars on that occasion. I wait with massive interest to hear what he has to say on the matter.

I seem to rise only not to disappoint my hon. Friend, in the sense that we feel that all that any PTE seeks to achieve can be achieved, as I said earlier, in the context of the law as it prevails at the moment. However, my concern about the new Clause and the new schedule goes beyond that, as we are almost getting into the realms of the punitive—and the punitive in the context of relations with a private sector third party. That troubles me. That is not the relationship that we are seeking with Network Rail.

If Network Rail—because that will be the body on which there will be the most direct impact—exhausts negotiations with any PTE in the normal fashion, and they do not come to fruition and the output is not productive, the new clause would allow the Government to enforce the transfer of those assets from Network Rail to the rail operator or, in this case, the PTE. That is not the road we want to go down. To pursue the example of Merseyrail, we do not know whether an appropriate business case can be established in order to go down the route suggested by my hon. Friend; whether in all practicalities Merseyrail has the funding and resources to move in that direction; and whether, having exhausted negotiations with Network Rail, there will be an impasse or a negative result.

The overall thrust—the terminus, as it were—of the new clause and new schedule, which is the potentially antagonistic relationship with a third party, such as Network Rail in this example, is not the direction in which we want to travel. Many of the ambitions of Merseyrail and other PTEs, which I applaud, can be achieved within the existing framework, so I ask my hon. Friend to withdraw the motion. I do not doubt   that when I see Mr. Scales on Thursday and PTE chief executives subsequently, this and other matters will be raised. I am happy to reflect on whatever they discuss and come up with, but the new clause and new schedule do not represent the way that we want to go; nor are they necessary for many of the PTEs.

Not wishing to end on a sour note, I think that I am grateful for the explanation that my hon. Friend the Minister has just given me, and I look forward to the discussions that he will have with Mr. Scales and, presumably, some of us beyond that. Beneath that brittle and sometimes adversarial front, my hon. Friend is really just an old softy. The idea that he would not want to get punitive with anybody—I have in mind in particular the hon. Member for Christchurch—is a little fanciful, and I am sure that he is concealing the softy in him very well, but we saw just a little chink in the armour today. With that, I beg to ask leave to withdraw the motion.

Motion and Clause, by leave, withdrawn.

Question proposed, That the Chairman do report the Bill, as amended, to the House.

Despite the odd high point and fit of pique, our deliberations have been in good heart. That is at least in part because of the good order in which you have kept us, Mr. Amess, for which I am enormously grateful. I am equally grateful for Mr. Griffiths' attendance when you could not be among us. I am very disappointed that I am still yet to be party in any capacity to the glory that would be serving under the chairmanship of the right hon. Member for Bromley and Chislehurst (Mr. Forth). I am sure that we all look forward to that experience with ''relish''.

I thank all members of the Committee for the way in which they have conducted themselves—in a serious and informed fashion. I make no apologies for occasionally turning up the heat and being adversarial. I am at heart, despite being a Minister, a political animal and a politician. I know that I do not suffer fools gladly, and I apologise for that, in some regard.

Name the fools.

No, I shall not. I apologise not for the focus or substance of my responses, but for the manner of them, which sometimes goes over the top. Despite feeling about 70 years old, I am still ever so slightly passionate about my politics.

There has been good order and a good spirit. I thank my hon. Friends and fellow Ministers. I certainly thank—although I am not sure that it is in order for me to do so—the army of officials from the civil service and the Bill team who stand behind me. It is the strength, substance and expertise of such a team that make the Minister look good. If I have looked good in any way during our deliberations, it is because of that army behind me, rather than because of me.

And when the Minister looks bad, it is his own fault.

That is what they will tell me.

Finally, I remind members of the Committee that the Bill is only part of our vision for the railways industry. If I have been a tad miserly about accepting amendments, however well informed, that does not mean that at least a goodly core of them will not inform our deliberations in implementing the whole rail review white paper, and not simply the Bill.

I thank everybody for their humour, consideration and courtesy, and, once again, particularly yourself, Mr. Amess. I am pleased that, like the railways industry in the future, we have reached this stage well ahead of schedule, certainly to timetable and at an appropriate speed as we bumped along.

May I, on behalf of those on the Opposition Benches, associate myself with those remarks? I want to place on record our appreciation of the fair and temperate way in which you, Mr. Amess, and your co-Chairman, Mr. Griffiths, have chaired our proceedings. I also thank the Minister for showing us more of his Leslie Phillips persona and less of the bovver boy persona—a trend that I hope continues in future discussions and debates.

I also want to place on record my appreciation of the fact that the Committee has had two experienced, capable and competent Whips, who have helped our proceedings to run smoothly. I say to the Government Whip, the hon. Member for Stirling (Mrs. McGuire),   that I think that we would be at this point in our proceedings even without the programme motion. I hope that she will reflect on that for future occasions.

If I have any regret, it is not about the lack of interrogation of the Minister or our contribution to the Committee, but that some members of the Committee, having had the honour of being appointed to it, regularly failed to attend. However, I thank all those who did attend and who played a constructive part in our proceedings.

May I say how much I and my hon. Friend the Member for Southport (Dr. Pugh) have appreciated your chairmanship and that of Mr. Griffiths, particularly the latitude that you allowed us over the clauses on closures? Your decision in that regard proved a wise one and allowed the dispatch to which the right hon. Member for East Yorkshire has referred. Therefore, we are grateful for that.

I thank the Minister for the way in which, in the main, he has handled the points that have been put forward. It is a very important Bill. The future of our railways is important to everybody. Broadly, as we said at the beginning, we support the Bill and have appreciated the way in which it has been taken through. We have had extremely good debates. I am sure that some points will be picked up at later stages, and probably in Another place, but in the main the Bill is better for having come through a good Committee and ahead of schedule.

I thank all hon. Members who have spoken for their kind and generous remarks. I and my co-Chairman, Mr. Griffiths, would simply say that it has been a real pleasure to chair this Committee. I thank all those who have assisted us with our proceedings, and particularly the Clerk for his fine advice.

Question put and agreed to.

Bill, as amended, to be reported.

Committee rose at eleven minutes past Eleven o'clock.