Power of Secretary of State to require entry into access contract

I beg to move amendment No. 51, in clause 32, page 22, line 40, at end insert—

‘( ) Any person who suffers loss by the directions under this section shall be entitled to be compensated by the Secretary of State.’.

Clause 32 is another example of measures that we have seen consistently during the course of the Bill, in which the Government give themselves more power to direct the private sector to comply with the needs of Crossrail. As we have said before, this is an exceptional undertaking and, therefore, it is an exceptional Bill, which requires exceptional powers. We have said several times that such powers are often wholly necessary. We have seen such measures in previous Bills, as the Minister often reminded us last week.

However worthy the clause, I doubt whether the Minister will fail to reflect our amendment. Do the Government want to be seen to be digging up the centre of London without due regard to people maybe adversely affected by the project? I certainly applaud the exhaustive work done by the Select Committee in listening to the concerns of individuals and businesses on which the project will have an impact. For the same reason, I welcome the clauses providing for compensation to be paid to the railway asset operator, who may suffer financial loss as a result of Government intervention. We are therefore surprised and concern that there is no provision for compensation in the clause.

My amendment proposes that at the end of line 40 in clause 32, we insert the words:

“Any person who suffers loss by the directions under this section shall be entitled to be compensated by the Secretary of State.”

The clause enables the Government to force an owner of a railway facility to open it up for the purposes of  constructing Crossrail. It provides that the ORR must approve the terms of any such imposed contract except, crucially, the terms relating to financial charges. In other words, the Government can demand to enter into an access contract with the facility operator but they can also decide how much they would pay for the privilege. The matter is apparently not open to negotiation, nor to independent scrutiny via the regulator, which strikes me as unfair.

The purpose of my amendment therefore is to ensure that facility owners do not suffer financial loss as a result of any Government intervention. If a facility owner is forced to enter into a contract with the Government under terms which mean that they get less than they would normally get for such a contract they should be appropriately compensated to make up the difference. As I said at the outset, I accept that a project of this nature requires the Secretary of State to take on certain exceptional powers, but I do accept that the private sector or the private citizen should necessarily suffer as the clause implies they will. I look forward to receiving some reassurance from the Minister.

I, too, seek clarification from the Minister on the point made by my hon. Friend the Member for Wimbledon. The hybrid Bill Committee spent a lot of time making sure that people would be fully compensated and that compensation codes would be written into the whole Crossrail process. Indeed, we listened to many petitioners who thought that they were not as well supported respect as they should be.

The general thrust of the Committee’s work was that those people should be protected, and in our report to the House we made that point again and again. They think that the Government, not deliberately but often as a result of insensitivity, can roll over them without paying regard to their concerns or their need to be properly considered. I was proud to be a member of that Committee for that very reason, because our work was a perfect example of good government working in the way that it should. I should like to know whether the Government can demand to enter into an access contract with a facility owner and can decide, as my hon. Friend said, how much they will pay for the privilege. If they can take such action, it would run counter to the general thrust of the Select Committee, which would be a matter of concern.

May I associate myself with the comments made by my hon. Friends the Members for Northampton, South and for Wimbledon? There is likely to be a new regime on large-scale planning applications which the Government will wish to push through Parliament, and I do not want to prejudge the nature of the debate both in the House of Commons and in another place. However, I have some sympathy with the Government’s view that some large-scale developments, whether Crossrail, airport expansion or nuclear power sites, are vital construction projects, and we simply cannot allow the long public inquiries and enormous delays that affected similar developments in recent decades.

Obviously, one of the great difficulties is that we have a culture in the House that gives individuals the right to have their say. There is also a process of legal and  sub-judicial inquiry. One of the attractive aspects of the French scheme—I accept that France has a completely different legal system—is the notion that certain projects are in the national interest. Of course, the flip side is that individuals who suffer receive compensation, no questions asked. In the case of Crossrail, that would be residents who live nearby.

The amendment, which I hope is helpful, at least begins to point in the direction in which I suspect the Government want to go with projects such as Crossrail. In other words, they wish to streamline the entire planning system, and I have some sympathy with that view. Clearly, we need to seek out precisely what is intended and we have always had an eye towards local opinion forming. However, the other side of that equation must surely be that those individuals whose rights are subverted in some way qualify immediately for compensation. The amendment, I hope, would at least provide a step towards that—a template that the Government must look at to ensure the balance between the protection of local desires, needs and rights and the broad interests of the country.

There is no doubt that the broad interests of London, the south-east and, indeed, the country require that Crossrail be built rapidly and to high specification, and that it be up and running at the earliest stage. However, there is little doubt that the lives of hundreds of thousands of people will be inconvenienced. In relation to clause 32, we are really discussing the extent to which the Secretary of State will take powers beyond those envisaged in the Bill. Those individuals who suffer should be fully compensated for whatever rights they have to forego in the public interest.

I hope that the Minister will give serious consideration to that point, even if he feels that the wording of the amendment is not quite right, because we need to get this important debate right if we are to ensure that the large-scale construction projects to which the House will be committed in the coming decades are built properly and to specification, but in a way that minimises the dissatisfaction of the many people who will suffer as a result.

I have no doubt that the amendment is well intentioned, but I spent the best part of two years serving on the hybrid Bill Committee and, as the hon. Member for Northampton, South reminded us, that Committee spent a considerable time looking at issues of compensation and how land and property owners would be affected by Crossrail during construction and once it was operational.

We looked in considerable detail at those whose land and property might be taken for the Crossrail project, those who might be affected by the railway passing under their property and the extent to which the existing law and regulations would provide them with adequate compensation. In broad terms, we concluded that the compensation code, about which most of us knew very little when we embarked on the process, was widely based and appropriate for the overwhelming majority of situations that would emerge during construction. There were one or two particular examples  to consider, such as the Smithfield market traders, who might not have got adequate compensation under the code due to a rather peculiar and long-standing arrangement for their leases, but that was very much the exception.

While I am sympathetic to ensuring that people get compensation, I can say that those Members who served on the hybrid Bill Committee were in general reassured that the ways in which the code would operate would be adequate for the overwhelming majority of circumstances. Therefore, the amendment is unnecessary. I hope that the Minister can reassure us that the clause is sufficient to ensure that the compensation code will apply in the circumstances that have been envisaged here and be more than adequate, as we concluded it will be, in other circumstances.

I think that I can offer reassurance to all Members who have expressed concern about the clause. First, I draw their attention to the fact that it stands within the part of the Bill entitled “Railway matters”, which sets out a framework for the operation of Crossrail services following the construction of the Crossrail tunnel.

Subsection (1) states:

“The Secretary of State may give directions to a facility owner requiring him to enter into an access contract”.

The facility owner in that regard is the owner of the rail network—in other words, Network Rail is the intended facility owner. I can understand why colleagues may have thought that that wording referred to owners of private enterprises on the tunnel route, but that is not the intention of the clause.

Clause 32 deals with the situation in which agreement cannot be reached with the infrastructure owner for an access contract for Crossrail passenger services that for at least some of their journey use part of the central London tunnel. It makes use of the section 18 procedure under the 1993 Act for agreements that have already been negotiated, but the process is modified so that the ORR must approve the contract’s duration and the non-financial terms that address directions made by the Secretary of State.

The ORR will set appropriate financial terms for the access contract so that the infrastructure owner is appropriately paid for the access it provides. Clause 32 forces it to sell parts for use by Crossrail services, rather than selling them to another operator or leaving them fallow. If that requires contracts between the infrastructure owner and other operators to be amended, it is dealt with under clause 33, which considers compensation. As regards the payment of money between the rail owner and the train operator, the ORR must consider whether to undertake an access charge review, which would ensure that the access charges could be reset as necessary.

As to the payment of money between the Crossrail project and any affected train operators, I expect any further compensation necessary to be dealt with under the normal industry process or adaptations agreed with the ORR, as I explained at our last sitting in response to the debate on amendment No. 46.

Essentially, any existing operator that has to change its access to the existing rail network—not the Crossrail network—as a result of Crossrail services running will be forced to enter into a revised access charge regime.  That means that, in the first instance, the existing operator will pay fewer or less access charges than it would normally pay without Crossrail services being there.

Further to that, if the operator suffers a loss of business economically as a result of losing a particular path to a Crossrail service, it will be up to normal industry procedures to ascertain what compensation has to be paid to that train operating company. That will be dealt with under clause 33 but according to normal accepted industry procedures, which have already been proved to work quite well.

Following that explanation, I urge the hon. Member for Wimbledon to withdraw the amendment.

I listened carefully to the Minister—certainly to the latter part of his explanation on how there will be compensation under clause 33. However, I bring him back to the beginning of his speech and the fact that the facility operator post-construction is bound to be Network Rail. The intention is that it should be Network Rail.

It may be the intention for the facility to be one that is owned by Network Rail, but that is not what the Bill says. The Minister should therefore either agree to the Bill saying “Network Rail facility” or, if he intends the provision to be wider, accept my amendment. If he is not prepared to consider amending the Bill in that way, I shall test the Committee’s view on the amendment.

I accept that “the facility owner” is an ambiguous term, but it has been recommended for the purposes of the Bill and, although I am speculating, given that Network Rail is currently the private owner of the infrastructure, I do not expect that situation to change at any point in the next 10 years during the construction of Crossrail. However, if it were to change, that would have a knock-on effect on the existing legislation. Simply to talk about the owner of the infrastructure is far less ambiguous than the hon. Gentleman suggests. However, if he is going to ask the Committee to vote on the amendment, I must challenge the premise, which he stated clearly, of compensating private owners along the route of the Crossrail tunnel during construction.

I have already made it quite clear that this part of the Bill refers to the operation of passenger services following the construction of Crossrail. The hon. Gentleman’s concerns about the lack of compensation arrangements for private owners who might be inconvenienced by construction do not apply in this case. I again urge him to withdraw the amendment.

Again, I have listened carefully to the Minister. The amendment does not say anything about construction. It talks about the loss suffered by direction under this part of the Bill, if directed by the Secretary of State. It was the Minister’s presumption that it deals with construction. It could be relevant during construction, but it could also be relevant to the operational phase.

From our many visits to railway stations up and down the country, the Minister and I know that at a number of stations—I cannot think of one on the Crossrail route—Network Rail is the prime operator, but certain parts of the infrastructure around the station  are owned by heritage groups and others. They might be the facility operator at some stage. To facilitate Crossrail, it might be necessary to use their lines and their paths.

The Minister seems to imply that compensation is in some way wrong. In the spirit of the Bill, we have accepted that exceptional powers are needed that will sometimes override the private interest for the public good, but that there should be some payment for that overriding. Therefore, I am not minded to accept his explanation unless he can reassure me that he has accepted that “facility owner” is an ambiguous term. Unless he proposes to clarify and redefine that matter on Report, I will test the will of the Committee on the amendment.

I hope that this is the last time that I contribute to this debate. First, “facility owner” is the conventional term used in all rail legislation, and it has been used in previous rail legislation. Secondly, it is important to respect existing industry practices. Any conflict between train operating companies over pathways is already provided for in existing industry processes. It is not up to the Committee to start taking the existing processes to bits. They already have the support of all the train operating companies, the ORR, the Government and Network Rail.

The hon. Gentleman is in danger of taking the Committee into a vote on a misinterpretation of what the clause means. I absolutely agree with him that if the industry process did not already exist, it would be important for the Government and the Bill to make a point of ensuring that a compensation process did exist. However, as the industry processes already exist, and as the industry itself is not asking for any change to them, I fail to see the point of taking the issue to a vote. If he does so, I shall urge my hon. Friends to vote against the amendment.

After the Minister replied and at the outset of my remarks, I said that we accept that there are normal industry processes and that those are dealt with under clause 33, as he also pointed out. This is a particular issue about a particular subsection. I listened carefully to what the Minister said. I shall withdraw the amendment, but give notice that we might table a similar proposal on Report. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 32 ordered to stand part of the Bill.