3rd reading in the Lords
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Lord BradshawLiberal Democrat- Quote
- moved Amendment No. 1:
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- 15:09
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Lord BerkeleyLabour- Quote
- My Lords, my name appears on the two amendments tabled today. I, too, have had meetings with the Minister for Railways, Tom Harris, and officials. In the past 24 hours, we have made a great deal of progress. The first concern that prompted this amendment was that the Channel Tunnel rail link would be different from the rest of the network and that access to it for passengers and freight—I declare an interest as chairman of Rail Freight Group, although I do not think that freight is of particular interest here—could have been skewed in favour of one particular operator. The second concern was about the level of charges and who would set them. There is the charge applicable for maintaining the track, and then there is the cap, which is the extra charge that can be put on to help defray the capital cost, which the Government have guaranteed. I hope that my noble friend will be able to give me assurances on both these issues. The first one is the cost of maintenance. Allowing the new infrastructure manager to maintain the track, without any form of regulation, is a dangerous path to go down. Railtrack was regulated and it failed. The Office of Rail Regulation has had to put strong pressure on Network Rail to cut its costs by 31 per cent in the past five years, and the regulator will probably have to do much the same in the next five years. To say that these companies would reduce their costs just because of market pressure, without any regulation, is a dangerous road to go down. I hope that my noble friend can give me some comfort on that.
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Lord HanningfieldNon-affiliated- Quote
- My Lords, I have put my name to this amendment. Although this is a short Bill, it has provoked some interesting discussions. We have all had the interests of rail users and taxpayers at heart in the debates on amendments that have been tabled. As everyone knows, I have always had a lot of sympathy with the points made by the noble Lord, Lord Bradshaw, and, particularly, the noble Lord, Lord Berkeley. His is one of the experts in this House on rail and one always has to listen very carefully and thoughtfully to what he says. I, too, met the Minister, Tom Harris, recently. I also received a letter yesterday from the Minister in this House and I hope that in his reply he will reiterate some of the points he made. Some of my concerns were perhaps helped by the letter, which described a framework that puts a cap on excess charges and, in particular, sets out a clear supervisory role for the Office of Rail Regulation. These debates have been important and, I repeat, they were for the benefit of rail users and taxpayers. We all want to maximise any sale receipts—and I hope that some of them will be reinvested—for the benefit of the rail network, which we have talked about in several of our debates. I support this amendment and hope that the Minister will alleviate some of those concerns, as he did in the letter he sent to me yesterday.
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- 15:15
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Viscount Montgomery of AlameinCrossbench- Quote
- My Lords, I speak on behalf of my noble friend Lord Tenby, whose name is also attached to this amendment but who unfortunately cannot be here today. He has asked me to apologise to the House and to say a few words on his behalf. The noble Lord, Lord Bradshaw, got it right—independent regulation should be independent. The idea that the Government should be involved in regulating is not very sensible when you have appointed an independent regulator. So I entirely agree with what has been said by the noble Lords, Lord Bradshaw and Lord Berkeley. I agree with the noble Lord, Lord Hanningfield, that nobody knows more about railways than the noble Lord, Lord Berkeley, who speaks regularly on the subject. If the noble Lord, Lord Bradshaw, decides to press this amendment, I shall certainly support him in the Lobby.
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The Earl of Mar and KellieLiberal Democrat- Quote
- My Lords, I, too, want the Channel Tunnel rail link to be a success. I remember the frustration of seeing the timetable showing that trains from Edinburgh would end up in Paris and I look forward to the time when Scotrail runs such services. In support of the amendments, first, I continue to believe that the Channel Tunnel rail link should be regulated by the Office of Rail Regulation. Secondly, I believe it is wrong to set a precedent of disconnecting the emerging high-speed rail network from independent regulation.
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Lord DykesCrossbench- Quote
- My Lords, briefly, I add my support for this amendment and I thank my noble friend Lord Bradshaw and other colleagues. I also thank the noble Lord, Lord Berkeley, who knows more about the Channel Tunnel and the history of it than any other person that I have met in this place or elsewhere. I will be very brief, just a few seconds—I apologise profusely to the Minister, I hope he will forgive me for the discourtesy—because the meeting time of our Select Committee this afternoon has been changed from 4.15 pm to 3.30 pm. I have to be there at the beginning. If the Government make the right decisions on this amendment and indeed on the Bill, this is the chance for the United Kingdom to play a full part in the development of the future European high-speed rail network. One thing does lead to another, particularly with trains and railway lines. There is a lot involved in this and a lot at stake. This amendment would be very helpful indeed and I hope that the Minister will give it a positive response.
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Lord Bassam of BrightonLabour- Quote
- My Lords, when we embarked on this piece of legislation, I remarked to friends and colleagues that I thought that it was an uncontroversial little Bill that might bring some light to the shade. It might help us further to develop the excellence of high-speed travel and help us with the disposal of the asset, which is the core of what the Bill is about—we may generate some useful and valuable funds for the continued investment and expansion of our rail system. However, I realised shortly after we embarked on the Bill that it would be a fraction more controversial than I imagined. Here we are at Third Reading and the controversy has continued apace. I think that all noble Lords who have spoken this afternoon and on other occasions have done so with the best interests of the rail network at heart. It is to the great credit of our House that so many noble Lords take such a profound interest in the growth, development and expansion of the rail network, which as we know is increasingly successful and doing extremely well. I hope that the comments that I make this afternoon will help. I am grateful to all those noble Lords who have spent time with me, reading correspondence that I have originated, who have seen the Minister, my honourable friend Tom Harris, or who have spent time with the diligent officials, who have put a lot of thought into how we approach this issue. It may be worth remarking at the outset that when in the mid-1990s—1996, I think—the original legislation went through relating to the development of the financial arrangements for the Channel Tunnel and the rail link in particular, the system of regulation that was put in place by, I think, Brian Mawhinney, now the noble Lord, Lord Mawhinney, was so uncontroversial as to provoke no comment from him and no debate at all on the issue. Clearly, things have moved on and noble Lords, and perhaps some Members in another place, take a slightly different view. Therefore, I was surprised that the question of who regulated in the early phase of the new arrangements was so controversial. There has been a lot of debate and it has been very welcome, but for the rest of this afternoon’s discussion on this matter I shall endeavour to keep my comments to points that have been raised. I shall try to provide more explanation than we may have done in the past and I shall deal with some of the issues that I know still concern some noble Lords. As I explained at the outset, this is an enabling Bill that clears the way for the restructuring of London and Continental Railways and the eventual sale of its component businesses, notably High Speed 1. The proceeds from that sale will be used to offset the investment made by taxpayers in underwriting the cost of constructing the new high-speed line. Despite the heat of the debate, I believe that more unites us than divides us in this House, particularly in relation to the objectives of this enterprise. Those objectives are summarised thus: to maximise value for money for the taxpayer from any sale; to encourage the greatest use of the line; to secure its efficiency of operation; and to do so in a way that provides a level playing field for all operators and not just the incumbents. That final point is important. The Government do not want to see artificial barriers to entry, whether they are barriers of price, access or safety. The Government agree that, as far as possible, the operation of this line should be subject to the normal regulatory supervision. They also agree that the best value for taxpayers is likely to be secured by maximising stability and certainty for bidders, commensurate with the transfer of risks and incentives that we wish to achieve. The amendments would do that by replicating on the new line the regulatory arrangements that apply to the national network. The Government well understand the thrust of the amendments but believe that they are unnecessary. In practice, the difference between us is as follows. The Government wish to retain the right to set the cap on the maximum access, price or investment recovery charge that can be levied for access to the High Speed 1 railway. They intend to set the cap prior to the sale of High Speed 1 and it would not then be changed without the express agreement of the owners of High Speed 1 and the Secretary of State. The amendments would transfer the whole responsibility for setting the charging framework to the Office of Rail Regulation. There are three reasons why the Government wish to retain the single element of control. First, the price of access to High Speed 1 is a critical element of the sale process—it is a significant determinant of the value of the railway. The Government carry the financial risk for this and they have a duty to taxpayers to maximise value from the asset that they have underwritten. The Office of Rail Regulation does not have such a duty and we would not wish to be drawn down the path of giving new duties to the ORR—that is what the amendment would achieve—to ensure that an independent regulator arrives at the answer that we all want. Secondly, in this context we do not believe that the ORR would offer additional certainty to bidders for High Speed 1. The timing is uncertain, the range of possible outcomes, all of which might be equally valid in regulatory terms, are similarly uncertain and any revisiting of the charges, such as by periodic review every five years, is entirely outwith the bidders’ control.
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Lord AmpthillCrossbench- Quote
- My Lords, before the Minister sits down, I wonder whether he will forgive me for a brief intervention, simply because I happened to chair the committee that looked at the original Bill, which this Bill amends. I was also chairman of the committee that looked at the father to the Bill, on the Channel Tunnel. Both were hybrid Bills. I merely wish to inform the Minister that I feel inclined to support the amendment as proposed by the noble Lord, Lord Bradshaw. As the Minister recognises that regulation is required, he might defer to the views that have already been expressed by this House in putting forward what I consider to be reasonable recommendations.
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- 15:30
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- Lord Bassam of BrightonLabour
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- My Lords, I am grateful to the noble Lord for his intervention. He played an important part in the earlier developments of the Channel Tunnel rail link. I think that I have answered the questions about independence. What I have been trying to do this afternoon is to provide a measure of reassurance that that is where we all wish to end up. For the purposes of the sale of the assets relating to the Channel Tunnel rail link, however, we require at this stage to maintain the system of regulation that was put in place in the 1996 Act and which, as I said at the outset, sparked no controversy at all.
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- Lord BradshawLiberal Democrat
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- My Lords, with respect to the last intervention, I believe that the Minister has dealt satisfactorily with the arrangements in Section 21 of the Channel Tunnel Rail Link Act 1996, because the agreement will be superseded by a new concession agreement. I thank him for his detailed explanation. He has given me satisfaction on almost all the points that were raised. I apologise to the House if it thinks that we have been somewhat long-winded but in fact we have passed this Bill in a very short time. I thank the officials, the Minister, the Minister in another place and colleagues who put their names to this amendment. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn. [Amendment No. 2 not moved.]
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- Lord Bassam of BrightonLabour
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- My Lords, I beg to move that this Bill do now pass. Moved accordingly, and, on Question, Bill passed.
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