Clause 5

Channel Tunnel Rail Link (Supplementary Provisions) Bill – in a Public Bill Committee at 12:00 pm on 4th December 2007.

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Meaning of “development agreement”

Question put, That the clause stand part of the Bill.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I want to have a small debate on the clause because, as I mentioned when I spoke to my amendment to clause 3, I have concerns about the wide-ranging impact of clause 5. I am grateful to the Minister and his officials who, during the suspension, clarified one of the points that I raised during the evidence-taking session about the rail link and rail services on it. I now accept that the clause deals with the rail link, rather than with the services.

None the less, I wonder if the Minister could provide us with a few more examples and explanations. Adding the words “or operation” to the development agreement will have a significant impact on every clause in the Act that relates to development agreements. Rights and obligations provided for in those clauses will be extended, so that they will apply not only during the construction phase but once the rail link is operational. I voiced my concerns about the possible implications of that change during our discussion on clause 3.

I would like to ask the Minister whether there are any other provisions in the 1996 Act which relate to development agreements, and which this measure would retrospectively change. Can he be clear what the impact of those changes might be? It is a wide-ranging change, and I wonder whether the measures in the clause might not have been obtained more prudently by making some specific, rather than general, provisions. The development agreement was supposed to deal with the construction phase, which is now complete. We are now into the operation phase. The clause could potentially be used extremely widely, and I wonder whether the Minister could give some reassurances about the intentions of its operation, perhaps give some examples, and indeed tell us where it will potentially impact on other provisions in the 1996 Act.

Photo of Tom Harris Tom Harris Parliamentary Under-Secretary (Department for Transport)

Further to the hon. Gentleman’s explanation of an earlier discussion during the evidence session, I gave an undertaking to report to the whole Committee and to clarify the issue raised by the right hon. Member for East Yorkshire and the hon. Member for Wimbledon on the development agreement. For the record, the 1996 Act defines a development agreement as

“an agreement...in relation to the design, construction...or maintenance of the rail link”,

which is defined as the HS1 infrastructure. It does not cover train services. In that respect, the 2005 Act is irrelevant. I hope that that clarifies the matter for the  Committee. I apologise that due to unusual circumstances, I have not been able to put it in writing for every Committee member.

I shall try to address the points made by the hon. Member for Wimbledon. He can seek further clarification if I fail to do so. The clause will amend the definition of a development agreement in section 56 of the Channel Tunnel Rail Link Act 1996. London and Continental Railways designed and constructed HS1 in accordance with the terms of the development agreement that it signed with the Secretary of State in February 1996. The development agreement contains the terms of the concession to operate the railway and will continue post-construction. To reflect more clearly the fact that the 1996 Act provisions referring to the development agreement apply where relevant to agreements relating to operations, the clause will amend the definition of a development agreement to include the word “operation”.

It is proposed to amend the current development agreement as part of restructuring so that it focuses on the railway’s operation. If the definition of a development agreement in the 1996 Act were not amended, it would be more uncertain whether the revised agreement fell within the definition. The effect of a court finding that the revised development agreement did not fall within the definition could be serious. Under the 2005 regulations, the Secretary of State is required to set a charging framework for access charges to HS1 through the development agreement as defined in the 1996 Act. If there is found to be no development agreement as defined, there will also be no effective charging framework, giving train operators greater scope to challenge access charges levied by the HS1 operator. I hope that that clarifies the matter.

Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I think that the Minister is encouraging me to say, “Definitely.” I think that he has clarified the point, but after reading the Hansard report, I may come back to him. I think that he is saying that we need to amend the development agreement so that the charging regime can stay in place through the operational phase. If that is the short summary of what he said, it clarifies the point, and I am grateful to him.

Question put and agreed to.

Clause 5 ordered to stand part of the Bill.