Arbitration

I beg to move amendment No. 74, in clause 62, page 37, line 39, leave out subsection (5).

The clause is important because it deals with the process of arbitration and, in essence, it is a strong clause although hon. Members will have detected from my remarks throughout the Committee that I would like it to apply more widely.

The amendment would omit subsection (5) as I fail to see what it would add. It allows the Secretaries of State for Transport and for Communities and Local Government to combine to issue rules about the procedures that govern the process of arbitration.

The system for appointing an arbitrator is already set out clearly in the clause and I would have thought that the detailed rules of engagement should thereafter should be left to the arbitrator. If the Government intervene, it could be problematic; one of the parties to the dispute, namely the nominated undertaker, is an appointee of the Secretary of State and the others could be the Secretaries of State. How would the other party react if they knew that the adversary was writing the rule book?

I invite the Minister to clarify exactly why he thinks the Secretaries of State need the powers that I believe could, yet again, jeopardise the independence of the arbitration process, which other than that seems to be robust and appropriate.

The Bill contains provisions for various matters to be referred to arbitration. For example, if the parties agree, disputes with highway authorities under schedule 3 and with various statutory undertakers under schedule 16 can be referred to arbitration. Subsection (5) allows the Secretaries of State for Communities and Local Government and for Transport acting jointly to make the rules governing such arbitration. The hon. Gentleman’s amendment would remove that power.

Subsection (5) follows a similar provision to the Channel Tunnel Rail Link Act 1996. It address the possibility that it may be necessary to have special tailor-made provisions to address the settling of disputes arising under a scheme of the complexity, size and importance of the Crossrail project. Two Secretaries of State will have responsibility for that, rather than just the Secretary of State for Transport, and they will have to ensure that such rules are consistent with the principles of natural justice.

I am not saying that it will not be necessary to make such rules; however, it is important that the Secretaries of State should have the power to do so should it be considered that the need arises. The amendment would remove the power of the Secretaries of State for Communities and Local Government and for Transport to make rules about procedure in relation to arbitration under the Bill. The clause was applied successfully to former Conservative Secretaries of State and it worked extremely well under the Channel Tunnel Rail Link Act 1996. I therefore hope that the hon. Gentleman will seek leave to withdraw the amendment.

I cannot think of any circumstances in which the clause could be invoked. Surely, the reality is that if there is arbitration it is because both parties agree to it. If the procedure is in some sense up in the air, and it has to be enforced by Secretaries of State against the will of one or perhaps even both parties, that runs wholly counter to the notion of what arbitration is, and should, do. Arbitration is about parties getting together on the basis that they agree not only on its application but presumably on the procedure for it. That is why my hon. Friend the Member for Wimbledon thinks that subsection (5) is redundant, and I agree with him. Nothing that the Minister has said has convinced us otherwise. One hopes that the provision will never be invoked, and I suspect that it never will be, because if such a dispute began the parties would not wish to go to arbitration, still less accept an arbitration procedure that was pushed upon them by Secretaries of State.

May I clarify the position? The clause does not propose that the Secretary of State for Communities and Local Government and the Secretary of State for Transport should determine the result of arbitration; it is about those two Secretaries of State agreeing a procedure for arbitration.

That goes to the nub of what we have discussed several times in our deliberations. The Secretary of State wants to take powers that will enable them to become party to a dispute and seek arbitration, yet at the same time try to affect the arbitration process or even make a judgment in the arbitration.

I have several times tried to convince myself of the validity of the Minister’s explanations, but I struggle even more in relation to this particular clause. My hon. Friend the Member for Cities of London and Westminster made a telling intervention—it might conflict with other requirements on him but he made it nonetheless. Nothing that the Minister has said has reassured me that the provision is necessary. The Channel Tunnel Rail Link Act—an excellent piece of work by Conservative Secretaries of State—was used as a model for the Bill. However, as has been said, that does not mean that it should be slavishly followed. Consequently, I am not inclined to withdraw the amendment.

Question put, That the amendment be made:—

The Committee divided: Ayes 5, Noes 8.

Question accordingly negatived.

Clause 62 ordered to stand part of the Bill.

Clauses63 and 64 ordered to stand part of the Bill.